February 15, 2014 – Summary Judgement:  What is it and how will the decision impact FH?

In a summary judgment, one party (here, the POA) contends that all necessary factual issues are either settled, or so one-sided they need not be tried.  The motion is supported by sworn declarations and excerpts from sworn depositions, admissions of fact and other discovery, as well as a legal argument that no triable issues of fact exist, and that the settled facts require a summary judgement for the party making the motion.

The opposing party, (here, Drew and fellow plaintiffs) uses counter-declarations and legal arguments that there are “triable issues of fact.” If the judge has any doubts, he must deny summary judgment, and the case goes to trial.

DISCLAIMER: The contents of this report constitute the observations of the writer, only.

Attorney for the POA, Sean Partridge, began the proceedings with a protest. He read an e-mail exchange between Lee Bettis and him which discussed the length of the brief each attorney was to present. Mr.Partridge asked Mr. Bettis whether the brief needed to be restricted to the accepted 20 pages. Would Mr. Bettis object to 30 -40 pages? Lee Bettis replied that Mr. Partridge needed to clear that with the presiding judge, but that he, Bettis, would not consent to 30 – 40 pages, that the brief needn’t resemble Tolstoy’s War and Peace. The e-mail exchange implied an agreed upon 25 pages, to which Mr. Partridge complied. He protested that Mr.Bettis’ subsequent 85 page brief violated this agreement.

Judge Nobles resolved the issue by directing both lawyers to submit briefs no longer than 20 pages by Wednesday, 19 February. In response to Mr. Partridge’s request for clarification, Judge Nobles ruled that reproduced documents would not count towards the 20 page limit.

1. Basically, this is a suit filed by some homeowners who contend that FH-POA sought to purchase the amenities illegally. After MidSouth closed the Shoreline Golf Course, the Anchor pool, and the clubhouse, the community faced a crisis. The POA-BOD attempted to resolve this crisis by revisiting the question of the POA’s ability to purchase the MidSouth-owned amenities. The answer was unclear.
2. Atty Henry Jones had recently assisted a Raleigh POA governed by restrictions very similar to FH’s, to purchase its amenities using its POA dues. The decision was appealed, and upheld. Mr. Jones believed the FH-POA might legally have that same ability, but advised the POA to file a Declaratory Judgment to be sure. The resulting Wainwright Decision affirmed that the POA could not purchase the amenities using POA dues, and the matter was ended.
3. Partridge answered the plaintiff’s charge that the BOD illegally ignored previous opinions by asking, “Since when does any attorney’s opinion carry in a court of law?” He also stated that at the Declaratory Judgment, the plaintiffs claimed the issue of purchase was an “unanswered legal question.” Now, however, he said, they claim that the question of legality existed from the outset. “They have changed their stance!” he said.

After the Declaratory Judgment, the POA took no further steps to purchase. Although the plaintiffs claim the survey the BOD conducted was a step towards purchase, the POA never purchased, and never violated any law. The POA never violated the law.

• The plaintiffs claim POA tried to use ART and the later Hidden Creek Social Club as “straw men” (fronts) which would purchase, then give the amenities to the POA. Monies would come from monies raised, not from the POA. But POA never agreed to any maintenance fee, although DOR’s do allow the POA to “maintain” its properties.

• “Did the POA purchase using dues? The only thing one sues for is a successful
• conspiracy.”

Legally, a corporation can not conspire with itself unless one member gets financial benefit. Then, it’s a conspiracy of one. In depositions, not one of the plaintiffs could say that any one of the defendants had benefited. The defendants are are ALL volunteers.

There is no evidence that any received an improper benefit.

• No damages evident, either, since plaintiffs were legally obligated to pay dues. If they disagreed with the expenditure of those dues, they needed to file a shareholder’s derivative action, not claim conspiracy.
• The plaintiffs claim “malicious prosecution” — that the POA filed the Declaratory Judgment solely to harass Drez and Gumpel. Drez claims he and Gumpel were singled out and named on the suit, claiming all plaintiffs must be named in the DJ action. But it is not necessary to name everyone involved to determine an existing covenant.
• Drez has filed an abusive process claim against the POA, but “abusive process” requires an action to gain an advantage in a subsequent case. No advantage was gained here.
• Coho has filed an abusive process claim against the POA because he was arrested following his threat issued to Revonda Stewart. Coho admitted to making the statement, but claimed Revonda should have known he was joking. (He disputes the second threat, allegedly made to Nancy Harrison.) Coho signed a plea agreement: no weapon, no contact with POA for 6 months. Coho can not file an abusive process claim because he has no other matter pending between Coho and the POA.
• The Traffic Stop: 2009, after much theft of copper in the community, Revonda Stewart contracted with the sheriff to provide extra security. Captain Fulcher suggested three different traffic stops in different areas on different nights. That Thanksgiving, a bulletin told community of pending license checks. Wainwright decision occurred early December. On December 15, the first license check was held in the area where most of the copper thefts occurred. Clearly, the license check had no relation to the celebration of the Wainwright decision. POA Defendants were not told location of traffic stops.
• Plaintiffs claim of “negligent hiring” — nothing in Revonda Stewart’s past is similar to the traffic stop, so claim of negligent hiring invalid.
• No medical records support claimants’ assertions of “ill effects” from checkpoint which, all agree, lasted a few seconds to one minute. Also, an alternate access to community was available to those who chose to avoid the check.

Summary: All plaintiff complaints stem from the amenities question. When did all these actions become a “civil conspiracy?” Clients have a “right not to follow their attorney’s advice.” The POA exercised this right. No conspiracy here.

1. Defendants’ conspiracy began in 2008. From 1992-2010, multiple POA attorneys had

stipulated that the POA could not purchase amenities using dues. Even Henry Jones said he doubted that POA could purchase using dues.

• Amenities Resolution Team (ART) created secretly. Defendants all members of ART. Coho asked John King to write a letter saying the POA could not spend money to do due diligence to purchase.
• ART incorporates and is in existence from May – December, 2008. Defendant Larry Knapp then “infiltrates” BOD as secretary. Joint meetings occur between ART and BOD.

4, ART becomes Hidden Creek Social Club and sends “term sheet” to BOD proposing that ART/Hidden Creek Social Club purchase amenities, and give them to POA which would then lease them to ART/HCSC for $1 per year.

• Agreement among defendants Hill, Dumon, and Taylor that POA should purchase was continual, first as members of ART, then, as BOD members.
• POA controlled all through Chris Skrotsky. Each time she met with BOD, there was an agreement to “corrupt” a lawful entity — “ongoing agreement was not written, but was implied. Coho and Sluder continued to protest attempts to purchase.
• 12/09, Stewart invited Coho to a meeting. Coho admits to making threatening statement, but meeting continues for an hour after Coho threatening statement, so, obviously, threat wasn’t taken seriously.
• Stewart compiles an “enemies list,” according to one security guard.
• Community members who display celebratory signs after Wainwright decision are reported and told to remove signs.

1. “Red parade” held deliberately on day of Coho’s hearing, at which he agrees to stipulated restrictions.
2. “Red Brigade” organized by POA BOD prints bumper stickers announcing support for the BOD. Community members are urged to wear red as a show of support and to intimidate those who don’t support the BOD.
3. Nancy Harrison makes call to Captain Fulcher: “We want a road block.” It is placed to disrupt celebrants of Wainwright Decision. Fulcher claims,” She (Revonda Stewart) pulled the wool over my eyes” and determines no more license checkpoints.

Summary: “All part of a plan” : bumper stickers, red brigade, Strategic Studies Committee. It’s all part of a plan.