Independent Legal Opinion: GGRC Board Guilty Of Numerous Violations / $353,500 Assessment Is Null And Void

Independent Legal Opinion:   GGRC “Board” Guilty Of Numerous Violations / $353,500 Assessment Is Null And Void

The following is a copy of an email sent to Luther Parker, other “board” members and Joe Thomas on February 18, 2010 describing the legal findings of a real estate law firm concerning Gatlinburg Golf and Racquet Club – GGRC – and its subsidiaries RML and Ridge Resort Realty.

The findings of the law firm will probably change EVERYTHING about the way Deer Ridge is operated and managed.

Luther and the Board:

As I mentioned during the Special Meeting of February 6, 2010, I had personally hired a Knoxville-based real estate law firm to review many of the major conflicts and issues that have arisen between myself (and other owners) versus the Board, Joe Thomas and the decisions and policies you have been attempting to implement.

My instructions to the law firm, Howard and Howard ( www.howardhowardlaw.com/ ) and Senior Partner Lewis Howard, Jr. were to objectively and candidly evaluate these issues with the goal of determining the legal validity and the merits of our pursuing a lawsuit against GGRC and/or the individuals who make up the current board along with Joe Thomas, the general manager.  This firm does not currently represent us for any pending litigation – but may be hired should we move forward.

The full legal opinion I received from them is attached to this email – with each and every part shown and discussed below – with my comments for each section.  Note:  I am not an attorney and do not practice law – so these are my interpretations of the sections of the attorney’s letter – trying to convey the realistic meaning from the necessary legalese.

Executive Summary Of Attorney’s Findings

For those who prefer to start with an executive summary, here are the bottom line findings by the attorney with regard to GGRC and the actions of the “Board” and Joe Thomas:

• You are REQUIRED to charge all owners ONLY in accordance with the Master Deed Percentages for everything:  monthly assessments, water, cable TV, etc.   This means no more 82% overcharge to all 1-1 owners.
• You are REQUIRED to provide all owners with COPIES of everything they request including invoices, check stubs, bids, etc.
• You are REQUIRED to get BOTH the 75% positive vote by owners AND the 90% positive vote by mortgage holders of all condo loans at Deer Ridge.  Therefore, ANY monies you spend on walkway ramps will be your personal responsibility to pay.
• You are NOT allowed to ever have ANY special assessments – hence, the Asinine Assessment of $353,500 is NULL and VOID.  No owners are required to fund a penny of this money – and any monies received MUST be returned to those owners who have already paid.
• You and other board members are going to be liable to repay ALL overcharges to both current and past 1-1 owners, along with interest.  (This means you will be required to pay us back over $10,000 in our case – and more or less the same to other 1-1 owners – past AND present.)
• RML and Ridge Resort Realty are NOT legitimate – and must pay back every penny of GGRC’s money ever used for them – and these companies must be expeditiously sold.
• All “annual meetings” held in April are not official Annual Meetings – hence, all decisions, and votes made, INCLUDING board member elections, are NULL and VOID.  This means that Luther Parker and every other member of the “board” are, in fact, NOT members of the Board and have no power whatsoever including setting assessments, making special assessments, setting rules and regulations, agreeing to any contracts about anything, etc.  We will sue to have a special master appointed by the court.
• No board member or committee member may receive ANY compensation INCLUDING reimbursements for travel, meals, maid service, free storage or special remodeling of board member’s OR committee member’s units.  When we do our review of the books and records, we are going to add up every penny that has ever been paid and individually sue each of you for the full and complete reimbursement of all of this money.
• The entire current “board” has committed multiple ultra vires acts that were outside the scope of authority granted you by the Master Deed and Bylaws even if you were a legitimate board.  As such, these acts show gross negligence on your part and on the part of your “unified board that speaks with one voice.”   As noted in the attorney’s answer to Question 12, these illegitimate acts of yours are actionable with all monies recoverable from you and all other “board members” and Joe Thomas personally – probably on a “joint and several” basis. That means we are going to go after the FULL amount for each illegitimate act from you and each of the board members until we collect EVERY penny that was spent on decisions that were outside the scope of authority.  Based on my prior blog postings, I have already identified over $120,000 that has been spent without the proper Article XII approvals.

Those are pretty much the highlights – and as you can see, most of the above will have a MASSIVE impact on GGRC, RML, Ridge Resort Realty and each member of the “board” personally.  It will also rightfully put $10,000, more or less, back into the pockets of all PAST AND PRESENT 1-1 owners who join with us in the lawsuit against those responsible for our gross overcharge of fees.

The above issues are the way things SHOULD have been done all along – and we WILL hold those accountable who have capriciously and arbitrarily chosen to ignore the controlling documents of Deer Ridge and GGRC Regime.

You all will NOT be able to claim ignorance on these issues – all of these issues have been brought to your attention multiple times over multiple years.

What Say You Luther?

You are hereby put on notice to immediately resolve all of the above issues.

If you do not, one of our expected remedies will be to file a derivative action suit on behalf of GGRC naming each of you, individually, as defendants in that lawsuit.  This particular lawsuit will allow us to recover funds from all of you, individually, and require that the entire board be fired, with cause, for gross negligence.  And, since this will be GGRC suing you, none of you will be able to use any past or current attorney who has represented GGRC.

Another legal action we intend to take will be to immediately gain an injunction blocking the special assessments and inter-pleading any and all funds already received to a court controlled account.  Another legal action we intend to take will be a declaratory judgment suit over the above interpretations of the Master Deed and Bylaws.

Another legal action we intend to take will be for multiple past and current 1-1 owners, such as myself, to sue the board members, individually, for the 82% overcharge of all costs going back for years.  Other, additional litigation is planned as needed.  Bear in mind that we intend to also sue each of you for full recovery of all of our legal and court costs – and since it is fairly apparent we will win the issues, we expect to win on the legal fee recovery too.

Discovery motions will be immediately made that will require GGRC to turn over COPIES of ALL books and records related to GGRC and RML, et al.

So, Luther, are you going to continue to try to self-servingly block full and complete implementation of all of the above issues – or do you want to save everyone time, hassle and money by settling all of these issues here and now before we take the next steps?  If you attempt to delay the above by squandering GGRC money for legal fees to protect yourself and other board members and Joe Thomas, you will be held accountable for this waste of money also.

You have THREE DAYS to satisfactorily respond to this email before I move forward with the necessary steps to accomplish all of the above.  This process will start with a postal mailing to all owners, providing them with a copy of the attorney’s letter, advising them that they should not make any assessment payments and asking for them to join with me as co-plaintiffs against you and the rest of the “board.”

So, what say you, Luther?  How do you want to get to the inevitable Point B?

The Attorney Letter – And Analysis

The following dissects the letter from the attorney with snapshots of each part of the entire document.

This first image shows the law firm, date, attorney and that it deals with GGRC issues.  The letter responds to 13 sets of questions I posed with regard to Deer Ridge and the operation and management of GGRC, the property and with regard to RML.

This point discusses that all owners have a right to COPIES of all the books and records.  Wanting to make sure it was even more clear, I received the following email from the attorney:

This makes it crystal clear that ALL owners have a right to COPIES of books and records related in any way to GGRC.  Period.

Bear in mind that as soon as we file any of our planned litigation, we WILL produce a motion for discovery FORCING you to turn over COPIES of all of these documents.

Also, bear in mind, Luther, if we have to litigate this and go for a declaratory judgment, you will most certainly lose on this point.  This should not even be a point of issue with a Board that was open, transparent and honest.

So, based on the above, are you and the Board going to continue to interfere with the owners have their legal rights to copies of the GGRC et al books and records?

Luther, this is the crux of most of the intolerable abuse of power by Joe Thomas and the Board.  You all have claimed reliance on these two sections to blatantly ignore the requirements of the Master Deed and Bylaws.  As you can see, the attorney is saying exactly the same thing I have been telling you – Article III, Section 9(c) does NOT let you get away with your “arbitrary and capricious reallocation of ownership in the common elements or the common expenses.”  Likewise, the same thing for Article V – which means you cannot simply charge the same amount to all unit sizes for any of the expenses.

Luther, ALL allocations and common expenses, including the HOA fees, the water, cable TV, telephone, etc. MUST be charged in accordance with the Master Deed Percentages.  Period.  You all do NOT have a choice.  You all CANNOT be arbitrary and capricious. You MUST abide by the Master Deed Percentages.  This should not even be a point of issue with a Board that was open, transparent and honest.  So, based on the above, are you and the Board going to continue to be arbitrary and capricious – or are you going to IMMEDIATAELY adjust all costs to reflect the Master Deed Percentages?

Point 3 relates to your statement in the November budget meeting that, “an 82% over charge to the 30 1-1 owners was ‘fair and equitable.’”

Clearly, it is NOT.

So, based on the above, are you and the Board going to continue to be arbitrary and capricious – or are you going to IMMEDIATELY adjust all costs to reflect the Master Deed Percentages – and stop overcharging all 30 1-1 owners by 82%?

Uh oh.  Trouble in River City for the Board.  Could it be that special assessments are NOT authorized whatsoever???  See the interesting details below.

As you can see, all of those overcharges you guys have made for years can be recouped by me and all the other victims of your “arbitrary and capricious” wrongly calculated assessments.  For me, that adds up to over $10,000 and I want all my money back with at least interest.  It doesn’t look like I can get monetary damages – at least on this point – though it may depend on what type of litigation we pursue.

NOTE:  All 1-1 owners now, and in the past, will have a CLAIM for the board’s arbitrary and capricious overcharges – to get back your money and interest and probably legal fees to sue them!  If you want to join with me as a co-plaintiff, please email me ASAP!

Here is a BIGGIE – RML and Ridge Resort Realty are NOT legitimate, just as I have claimed for years.  RML was illegally formed by the board in 1987 with zero vote of the owners for one thing – but even beyond that point, it is NOT an appropriate use of any funds as described above.

We expect to file a derivative action suit, as GGRC, against you, individually, and all the board members and Joe Thomas, individually, to force the IMMEDIATE divestiture of both RML and Ridge Resort Realty and for reimbursements of any and all costs associated in any way with the formation and operation of these two illegitimate companies.

I personally want every penny of MY money back that was ever spent in any way to support RML and Ridge Resort Realty.

If you would like me, with my 15 plus years of real estate experience to help with the quick and IMMEDIATE divestiture of these companies, please let me know.

As I have claimed, all Annual Meetings held in April are NOT Annual Meetings as defined by the Master Deed.  And, since the Master Deed REQUIRES that the Board of Directors is ONLY elected at the Annual Meeting, you, Luther Parker, and the rest of this current “Board” were NOT properly elected and any and all decisions made by you all are null and void and without effect.  As such, I intend to file suit to have the Court appoint a Special Master to oversee all operations of GGRC and the immediate divestiture of both RML and Ridge Resort Realty.

Now, if you really hurry, since this is February 18th, you COULD get a quick 30 day notice out to all owners moving the April “Annual Meeting” to the first quarter as required by the Master Deed.  That would allow for the proper election of the new board without the need for a court-appointed Master.  However, if you wait or still try to hold the “Annual Meeting” in April, and I am successful with my point of law, this means that the Master would be running GGRC until the first quarter of NEXT YEAR.

So, what say you Luther?  Are you going to quickly try to abide by the controlling documents of our Regime – or are you going to toss it all into the court appointed Master’s hands?

There are SEVERAL very interesting parts to the attorney’s response to this Question 8.

First of all, just to be clear to Tom Reise – you guys are NOT in the “driver’s seat” and you cannot simply ignore the provisions of Article XII REQUIRING you to get the 90% vote of the mortgage holders of all condo units at Deer Ridge!   If you all proceed in ANY way with the demolition or construction of your aluminum walkway railings, you will be in direct violation of the Master Deed.  Period.  You have been WARNED.

The second interesting concept here is the one mentioned in one of my recent blog postings:  ultra vires acts.  I warned you all in that posting that you had each better talk with your individual attorneys because ANYTHING you do, or HAVE ALREADY DONE, that are outside the scope of authority granted you by the Master Deed and Bylaws, subjects EACH of you personally to be grossly negligent.  This means that you will NOT be able to rely on the D and O insurance to protect you, nor to use legal counsel of GGRC to defend you.

It also means that some owners, me included of course, can name you all individually in a derivative action suit.    You all need to really understand how a derivative action suit works – since that means we can sue each of you, on behalf of GGRC as our plaintiff.  Now, that sounds interesting.  And, it means that all the owners would get paid back from your pockets – not from GGRC’s bank account.  For me, that will be most fitting – considering the long term abuse of power that has existed at Deer Ridge.

Now, are you SURE you want to start spending YOUR money replacing those walkway railings?

Alas, this was the one point that did not YET go our way.   We are still investigating ways to get this one to happen too, but we may have to wait until we replace three of the current board members.  We also expect that Tennessee and other states will follow Nevada’s lead in REQUIRING all HOA board meetings be digitally recorded.

Now, things get very interesting.

NOTE TO ALL – BASED ON INDEPENDENT LEGAL OPINION,
IT LOOKS LIKE NO ONE IS REQUIRED TO FUND ANY PART
OF THE $353,500 ASSESSMENT!

That felt good to say.  This part was so amazing that I even went back to the attorney and asked for clarity.   He assured me saying he stands by this answer.  What this means folks is that the board, even if they were properly elected – which this one is NOT – can never do a special assessment.  They can only raise the monthly fees to properly build a reserve fund (the monies that were in the reserve fund as recently as three years ago have seemingly disappeared – probably in covering the negative cash flow from operations of RML.)

Additionally, even if it had been legal, the Board’s unwillingness to provide us copies of all the records tied to this Asinine Assessment would have invalidated the assessment.

If you would like to join with me in blocking your upcoming assessment, please let me know ASAP.  We intend on filing an injunction against GGRC and the Board from even attempting to enforce this assessment until full resolution of our lawsuit(s).

Clearly, the “Board” has not acted fairly and equitably with regard to me, or other full time owners at Deer Ridge.  Stay tuned for a LOT more about this.

Luther, we believe that there will be a massive amount of evidence that will show that you and the other “board” members and Joe Thomas have repeatedly committed ultra vires acts that were outside the scope of authority granted you by the Master Deed and Bylaws.  As such, these acts will hopefully show gross negligence on your part and on the part of your “unified board that speaks with one voice.”   As noted in the attorney’s answer to Question 12, these illegitimate acts of yours are actionable with all monies recoverable from you and all other “board members” and Joe Thomas personally – probably on a “joint and several” basis.

That means we are going to go after the FULL amount for each illegitimate act from you and each of the board members until we collect EVERY penny that was spent on decisions that were outside the scope of authority.  Based on my prior blog postings, I have already identified over $120,000 that has been spent without the proper Article XII approvals.  I am sure as we dig into the records, we will discover a LOT more.  Would you like to write us a check for the full $120,000?  Or, would you rather have Margie or David pay all of that for you?

This Question 13 answer is pretty crystal clear Luther.  No one gets a penny for serving on the Board.  This means NO reimbursement for anything including travel, meals, maid service, free storage or special remodeling of board member’s OR committee member’s units.  When we do our review of the books and records, we are going to add up every penny that has ever been paid and individually sue each of you for the full and complete reimbursement of all of this money.

For example, let’s talk about Margie since she seems to have been on the Board for years.   If she got $300 per meeting for travel and attended 5 meetings a year, which is $1,500.  Let’s assume other stuff added up to another $500 a year for a total of $2,000 a year in illegitimate benefits.  If she had gotten these ill gotten gains for say 10 years, this means that Margie will immediately owe us $20,000.

If this same amount was paid out to ALL board members and some committee members, the total amount that could be owned back could exceed $200,000.  That’s almost enough to get all the work done at Deer Ridge that REALLY needs to be done.

Of course, my personal intuition is that she and other board members have received a LOT more quid pro quo that will have to be paid back – but we will see.

Have You Noticed A Trend Here?

I assume you have noticed that I have been spot on RIGHT on everything I have been saying for years on my blog – and that your vilification, slander and libel contained in your diatribe letter you recently mailed to all owners was obviously full of lies and disinformation as a way to attempt to falsely discredit me.  This objective legal opinion validates virtually EVERYTHING I have been saying for years.  And, if need be, we will take the board members to court to prove it with finality.

I, along with many other owners, are sick and tired of the board’s “arbitrary and capricious ways” of illegitimately running GGRC and Deer Ridge – and I continue to be highly motivated to resolve these issues once and for all so that this property is finally properly governed by its Master Deed and Bylaws.

Luther, if you want these matters settled, you have three days.  The clock is already ticking.

Govern yourself accordingly.

Robert
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