A short but interesting open forum kicked off the June 23rd meeting of LHCC’s board. The Bemis case was on a few minds. A woman named Pat, a member of the Alliance to Save Lake Holiday, encouraged owners to send out emails to support the passage of Sen. Jill Holtzman Vogel’s now tabled special interest legislation. Pat’s effort to support a side in the case was confusing to some audience members, because Pat, as a member of the Alliance, is on both sides. She, like every Alliance and Friends of Lake Holiday member, is both a defendant and a plaintiff.

Here are some excerpts of the discussion:

Every member of the Alliance to Save Lake Holiday and every member of Friends of Lake Holiday has filed a cross-claim. That means every member of the Alliance and every member of Friends is a plaintiff against LHCC, the very organization they claim to be trying to save. The “Crossclaim against LHCC” for all Alliance members can be found buried on page 23 near the very end of their filing, and the cross-claim for all Friends members can be found in their pleading, “Cross Claim Against Defendant Lake Holiday Country Club Inc.” The cross-claims effectively repeat the arguments made by the original Bemis plaintiffs and make every party to the cross-claim a plaintiff.

These 2 groups include many former directors, every past president in recent memory, and every current director except Ken Murphy. In other words, in a case alleging that LHCC, run by its directors, has illegally collected assessments not authorized in the owners’ deeds, 10 of 11 current directors who are charged with collecting those assessments have adopted the position that LHCC has collected and is continuing to illegally collect assessments not authorized in the owners’ deeds. If that sounds ridiculous, it’s because it is.

Both current LHCC President Wayne Poyer and Tom Wallace, a former LHCC director, are members of the Friends group. When Wallace replied “only a few” in response to the comment about the position taken by current directors, he was wildly inaccurate. He also failed to mention that he himself is a plaintiff against LHCC. Was his distortion intentional? Or have pleadings been filed in his name that he doesn’t have knowledge of or agree with?

The exchange shown on the video triggered an email from a homeowner to Wayne Travell, the attorney representing the Bemis plaintiffs. The homeowner was troubled by Poyer’s statement that he did “what Judge Prosser asked him to do.”

This just didn’t seem right to me. I don’t know much about law, but it seems to me this is out of line.

Below is Travell’s reply:

Travell responded that “Mr. Poyer has never directly addressed the judge in open court nor vice versa.” He added that he does not believe the judge has engaged nor would engage in private communications with Poyer.

Wayne Poyer openly told his own neighbors at a public meeting that the judge in an active case asked him to take a particular course of action. Poyer suggested his status as a plaintiff was just a technicality. Former director Tom Wallace didn’t candidly acknowledge he is a plaintiff and distorted that 10 of 11 current directors share that position with him. Even Alliance member Pat failed to mention that she is a plaintiff.

How can homeowners separate fact from fiction with leaders like these?

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Sen. Jill Holtzman Vogel’s (R-27) emergency effort to amend Virginia’s Property Owners’ Association Act has been tabled for the special session still going on in Richmond. Her bill, SB6016 (our link is to a PDF redlined version of her bill provided to us by her office), Virginia Property Owners Association Act; reformation of declarations, was originally introduced in the Senate on Monday 6/23, where it was quickly referred to the Committee on General Laws and Technology. At a vote of that committee on Tuesday, the bill was reported out, or sent to the full senate. On Wednesday 6/25, the first vote on the measure in the full senate failed, but after a recess, a second attempt narrowly approved the measure by a single vote.

Following approval in the Senate, SB 6016 made its way to the House of Delegates, where it ended up in the Committee on General Laws. The next stop: the Housing Commission. And that’s where it stopped. Both we and others raised a number of concerns about the proposed legislation, perhaps the biggest of which was a serious question of constitutionality at the state and federal levels. The Housing Commission unanimously decided to table the bill for the remainder of this special session.

According to the Winchester Star, “Vogel repeatedly has stated that her bill is not related to an ongoing lawsuit against Lake Holiday Country Club Inc.” She continues to maintain this position. Bob Diamond, an attorney from Reed Smith representing Miller & Smith, and an attorney from Rees Broome, who happens to represent LHCC, were among the very few attendees commenting to the commission. Given their Tyson’s Corner offices are about 2 hours from Richmond, it’s an odd coincidence that attorneys for 2 defendants in a lawsuit happen to be about the only ones showing up to champion a bill that its chief senate patron said is “not related” to that lawsuit.

Start to nothing in 4 days. The legislative process is pretty quick in a special session.

We’ll discuss this further in due course.

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Virginia state senator Jill Holtzman Vogel (R-27) plans to introduce special interest legislation next week to amend Virginia’s Property Owners’ Association Act (POA Act) whose sole purpose is to affect the outcome of active litigation in Frederick County.

Vogel’s proposed legislation:

• Was originally drafted by the attorneys for Miller & Smith, a big northern Virginia developer and one of the defendants in the lawsuit;
• Is an attempt to get around 3 Virginia Supreme Court decisions over more than a decade;
• Is inconsistent with well-settled Virginia property law and at odds with the state constitution; and
• Will impact the property rights and values of owners in more than 9100 community associations throughout the state.

Vogel herself:

• Is a public policy lawyer, and by her own admission to plaintiffs’ counsel, does not have the knowledge or experience to hastily tinker with property law;
• Hasn’t had the time to fully evaluate the unintended consequences on property owners in more than 9100 community associations across the state;
• Repeatedly masks her efforts as a small “fix” to a definition in the POA Act; and
• Is trying to slip her legislation through in a very short special session of the legislature focused on transportation issues - a completely unrelated matter.

All that’s bad enough. What’s even more troubling is how she’s used the media to distort what’s behind her efforts and to distort how the plaintiffs regard her inappropriate meddling in active litigation.

Let’s be absolutely clear. The plaintiffs are not “super-excited” by Jill Vogel’s efforts. They’re very troubled a sitting state senator would even contemplate introducing legislation drafted by 1 side of an active court case to attempt to re-write Virginia law in an area where she has acknowledged she lacks both experience and background, let alone publicly commit to doing so. She exposed her own lack of background when she described the POA Act as “almost 40 years old.” The POA Act was first enacted by the Virginia legislature in 1989, making it 19 - not almost 40 - years old. It’s a clear abuse of the legislative process when poorly informed legislators try to pass legislation to tip a pending court case that could, if enacted, end up having widespread, unintended consequences and upset well-settled Virginia law.

The Winchester Star reported Vogel said:

I don’t want to mess up what the plaintiffs otherwise want to gain.

That’s disingenuous nonsense. Wayne Travell, plaintiff’s counsel, in a face-to-face meeting, in phone conversations, and in multiple email messages unambiguously communicated to Vogel that the plaintiffs opposed her inappropriate intervention. After reading Saturday’s Winchester Star, Travell emailed Vogel to express that he was “shocked” at what he read. Of Vogel’s characterization of the plaintiffs’ position, Travell wrote:

Nothing could be further from the truth.

Vogel chose to interfere in an active court case. Her interference was prompted by the request of 1 side, not all sides, and was accompanied by strong and repeated requests by plaintiffs that she abandon her ill-advised plan. Those facts don’t square at all with her own statement that she is not trying to “mess up” the plaintiffs’ position in an active case. That is exactly what her legislation is all about: messing up 1 side for the benefit of the other, which just happens to be that of a big developer.

Vogel committed to proposing new legislation before even meeting with counsel for plaintiffs, so she could not possibly have understood what plaintiffs “want to gain” before deciding to intervene. She accepted draft legislation from the lawyers for 1 side. Despite learning before the allegedly “open meeting” that counsel for the plaintiffs would not be allowed to attend, she went ahead and held her meeting anyway. Later that same night, the lawyers that drafted her legislation called her to say that their own language wouldn’t solve their legal problems, so she’d have to come up with something else to fix their troubles. For a legislative session that starts on Monday, June 23rd, Vogel has been unable to provide a copy of her proposed legislation at this writing - late in the afternoon on the day before.

Local attorney Mark Stivers told the Winchester Star that he believes LHCC is a property owners’ association that falls under Virginia’s POA Act. If he really believes that, why is there so much effort spent to change the law? If the law is on your side, why do you need to change it?

Jill Holtzman Vogel is interfering because the law is clear and settled. And the big developer that Jill Holtzman Vogel has decided to help out doesn’t like that.

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The news according to LHCC: a meeting, open to any property owner, will be held on June 18th to discuss the impact of the Bemis lawsuit on Lake Holiday. Mark Stivers will “moderate” the discussion.

A simple, polite request to offer an other perspective:

With the simple request unanswered, a renewed request sent by fax:

A terse reply, sent by regular mail:

The meeting is billed as a moderated, open discussion of the impact of the Bemis lawsuit. It will be just a one-sided, controlled series of speeches by Stivers and others to advocate their positions. When you have to lure people, including a state senator, to a meeting by promoting it as something it’s not and your views can’t withstand polite discussion, you’re on shaky ground.

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Whatever one may think of John Martel, he consistently manages to come up with great one-liners. Mind you, they’re not going to be heard on the big movie screen anytime soon. They’re just pithy observations on the problems at Lake Holiday. We took the title of this post from his remarks on the issue of ordering tote bags for new owners for the Welcoming Committee.

Too many bags were ordered at a price double what they should have cost because the wrong person ordered the bags.

Wayne Poyer described the mix-up:

A batch of bags was ordered which, based on the rate of people coming into the community, it’s going to last about 40 years.

As Martel said: “this has to stop, this has to stop.” We’ll go out on a limb and guess that the Welcoming Committee only welcomes new homeowners and not new membership lot owners with one of the too many totes ordered at an exorbitant cost.

The budget review was made a little more difficult when it was discovered that one of Mike Kilmer’s staff incorrectly coded an expense item as an income item. Robin Pedlar thought Kilmer’s firm was “overpaid.” According to Martel, the distribution of work between the LHCC office and Kilmer’s firm has created problems. His view:

It’s hard to sort out who’s doing what to whom.

Kilmer’s firm is paid $4250 per month (an annual rate of over $50,000), and the board was reviewing other cutbacks to balance the budget at the May 15th budget meeting. Despite that, Pat Shields didn’t think that meeting was the appropriate time to address the value of Kilmer’s services.

In the video of overpaying for too many tote bags, Robin Pedlar worried:

If this is indicative of how phony all the numbers could be, it scares me.

She was not alone in her concern about sloppy accounting. Wayne Poyer asked somewhat rhetorically:

How bad is our accounting?

Let’s look at one area, the relationship between delinquencies and receivables. In our videos 2008 1Q Delinquencies and How Bad Is Our Accounting , Treasurer John Martel gave the numbers on delinquencies: 114 homes (including trash assessments), 70 water/sewer lots, and 242 membership lots. Based on LHCC’s published assessment rates, this is a monthly delinquency of $30,748.08. Yet the difference between LHCC’s reported accounts receivable in March and April of 2008 is only $9,299.73. If the delinquency rate is actually that high, why didn’t accounts receivable go up by a larger amount? If it’s not that high, why is the board over-stating the delinquency rate and budgeting based on this over-statement? As Poyer himself remarked, the delinquency report “just doesn’t pass the nonsense test.”

Budget-related videos from this meeting also include a discussion of getting foreclosing banks to pay their dues and a brief review of Kilmer’s role (which includes a little spat between a frustrated Martel and Suzy Marcus). A few unrelated topics were addressed after the budget review: creating the nominating committee ; handling road violations, in which directors acknowledged that the roving patrol is not authorized to stop alleged violators ; and relisting lots for sale with Oakcrest .

If you find it odd that in all this budget talk, the name of Steve Locke doesn’t come up much, we do as well. Steve’s resume says he’s a certified financial planner and a former member of the Financial Management Task Force. He had little to say about changes to the budget, a topic that is very relevant to his background and experience. What is the point of serving on the board if you don’t have much to say on the topic most directly related to your background or work experience? Congratulations, Steve. You’re our Silent Sitter for the May budget meeting.

With all of the excitement about accounting and budgets (a subject that caused Robin Pedlar to comment a little past the half-way point of the budget meeting that “we’ve got to move faster or I’m going home”), we realized that we neglected to announce our Silent Sitter winner for the April 28th meeting. The most important topic covered at the April 28th meeting was a proposal to refinance the clubhouse balloon note. In a meeting where directors openly acknowledged they breached their fiduciary responsibility, Suzy Marcus sat in almost total silence. She neither objected to the characterization expressed by several board members that the board (of which she was a member) had in fact breached its fiduciary responsibility or raised any concern about the cost to fix that mistake. Important issues require the input of all board members. Congratulations, Suzy. You’re our Silent Sitter for the April meeting.

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