Don’t we all deserve equal protection by the rule of law?
Please, Sheriff NRED, don’t treat me like Sophia
I just have to ask you, personally,
…and I am speaking to you, Nevada State CIC Compliance Officials -NRED Administrator Chandra, Attorney Briggs, Ombudsman Foger, Compliance Chief Wheaton, and Compliance Audit Investigator II Pitch,
To think about it.
How do you get a 100% rejection rate of SCA homeowner grievances if there is a level playing field?
Are you aligned with your mission statement?
are you “keeping the peace” by enabling an abusive culture?
I invite you to consider the possibility that you have an institutional blind spot that creates a consistent bias against SCA homeowners – and maybe, against all Nevada HOA homeowners, that’s like putting a thumb on the scales in favor of HOA vendors or a powerful few.
One way to do it
The Jim Crow Southern Sheriff restored his personal, and a still popular, version of law and order by pistol-whipping Sophia as she faced the bigoted, bloodthirsty mob alone, begging fruitlessly for protection from the man sworn to provide it.
Excessive executive compensation is a huge trigger for lots of SCA owners. Unfortunately, the Board and GM have taken the tact that they can do whatever they want and they don’t have to answer to anyone.
And, worse for owners, our money is being used to pay an attorney who will say that
there are no limits on the Board’s power to decide what to pay for management,
that management has privacy rights so pay should be kept secret and
it’s okay to threaten owners with legal action if the pay is disclosed to third parties.
These problems could have been avoided if the Board had only known that
It just ain’t so.
What training should the Board have taken?
If the Board had taken the NRED training, Responsibilities of the Manager,they might have learned that they should have, at least, had a written agreement defining ALL the terms and conditions for the GM’s employment, including compensation, as required by NAC 116A.325 and by her Community Association Manager (CAM) license.
Verbal deals aren’t good enough
Why no GM management agreement?
Probably because NRS 116.31085(2) PROHIBITS the Board from adopting or amending ANY contract in secret.
Or maybe because the Board “work group” who negotiated the GM’s terms and conditions of employment didn’t have the right expertise.
In 2014 SCA had a fine management agreement with FSR. It is a mystery why the 2015-16 Board would think they could just “wing it” with a handshake deal the first time SCA was flying without a management company’s net.
Isn’t a written agreement required just when contracting with a management company?
No. A written agreement is needed whenever an association pays a licensed community association manager (CAM) for management services.
Whenever management services are paid, the manager must be licensed. The only exception is when the association is small, and the board is able to manage the property by itself without paying a licensed professional manager.
A little common sense please
Besides, how can owners be protected if a community manager licensee does not have to meet the requirements of the CAM license just because he or she is an employee of an association as opposed to being the employee of a management company or being an independent contractor?
How does NRED exercise its authority over HOA managers?
NRED regulates ALL community association managers in Nevada through “licensure, registration, education, and enforcement”.
NRED states there is no legal prohibition against an association handling its own affairs if it does not need to hire/contract with a professional, licensed manager. Any HOA board can control its business directly without paying a licensed managing agent.
The law ONLY requires that the manager must be a licensed CAM, and subject to all the regulations of the community association manager license, if the manager is COMPENSATED.
Which duties don’t require a CAM license?
NRED has published a list of the specific duties that can be performed by UNLICENSED employees.
This means that it is unlawful to COMPENSATE any individual manager, or any management company, to perform the higher level CAM duties unless all the requirements of a CAM license are met.
SCA must be managed by a licensed CAM
The duties performed by the SCA GM require a community association manager license. The CAM license is required unless those duties are performed by a volunteer who receives NO compensation.
SCA bylaws are also controlling
SCA bylaws 3.13, 3.18, and 3.20 define, and limit, the Board’s authority to employ and compensate a LICENSED CAM to manage the association.
Section 3.20 gives the Board the authority to provide compensation to a manager, and specifies limits on what the Board can delegate to the manager.
Section 3.13 (f) says compensation to a community manager must be under the terms of a management agreement.
3.13 (a) prohibits compensation that creates an appearance of undue influence or a conflict of interest.
What conflict of interest?
Doesn’t it seem that paying the GM double the market rate, as well as paying a second licensed CAM the full market rate, created a huge, ACTUAL conflict of interest?
Who is protecting owners?
Ultimately, it is the Board’s job to protect owners from being taken advantage of by licensed professional agents.
If the Board does not do this critical job, then it is up to NRED to enforce NRS 116 requirements on the Board and the enforce the provisions of the CAM license on the GM.
NRED has no authority over the attorney because the attorney has ZERO decision-making authority over the association despite how it may appear.
Don’t you wonder who Adam Clarkson is representing when he turned a blind eye to the failure of the Board to publicly adopt a management agreement with the GM with the NRS 116A.620 REQUIRED TERMS that would protect the association membership:
This is the third, and final, part of my 6/6/18 email to the NRED Chief Investigator and Ombudsman to clarify NRED’s process for ensuring that
1. the rights of homeowners in HOAs are protected,
2. Nevada statutes are uniformly enforced, and
3. Board members or agents suffer consequences if they fail to act as fiduciaries.
Justice delayed is justice denied
Justice delayed is justice denied
The length of time NRED has taken to address the complaints I submitted last September without response has unfairly diminished their credibility or, in some cases, rendered them moot.
This is unacceptable, particularly since these issues (election interference, concealing association documents, retaliation, harassment, unlawful removal from the Board for essentially political purposes are all issues of great import to protect homeowners in all Nevada HOAs.
Denial without prejudice? Hardly.
Denial “without prejudice” in one election interference case was nonsensical. A 10/20/17 complaint that Bob Burch was wrongly left off the removal election ballot because two pages with a combined total of 22 signatures mysteriously disappeared so allegedly, he was two signatures short of being placed on the ballot. On 12/11/17 the complainant (not me) was notified by Christina Pitch that the case was closed stating:Say, what?
Claiming that the Ombudsman’s attendance at the vote count of the ballots (ballots that did not include Bob Burch) was sufficient justification to deny the complaint that Bob Burch’s name was wrongly excluded from the ballot (due to 22 missing signatures) is a complete non sequitur.
NRED might as well have denied the complaint because Kilauea volcano erupted.
Further, Bob Burch was treated as a non-conflicted Board member at the November 1 recall vote count despite the complaint about his not being included on the ballot was still open until NRED’s December 11 rejection.
To say that this was not prejudicial to the claimant (meaning that he could file the complaint again after the point was moot) adds insult to injury.
Inappropriate use of association attorney
NRED appears to condone SCA GM and Board giving an inappropriate level of deference to association attorney Clarkson.
Those same 11/1/17 recall vote count owner meeting minutes show the tip of the iceberg of the completely inappropriate role Adam Clarkson took in the recall election process. Not only was there no Board approval:
to amend the adopted SCA Election and Voting manual,
to dump the volunteer Election Committee and
no Board approval to hire a CPA and
no Board approval to pay the CPA firm and the Clarkson firm over $100,000 in unbudgeted funds to take over (and bungle) the recall election,
No law gives an HOA attorney decision-making authority
There is substantial additional evidence that Clarkson unlawfully acts as a decision-maker, or as the GM’s attorney, rather than solely as a legal advisor to the full Board.
What more does NRED need?
In what form can I submit this evidence where I can be assured that it will be weighed by an independent trier of fact?
Freedom of information is non-existent at SCA
GM’s concealing association records and using the attorney to threaten owners for even asking appears to be condoned by NRED.
NRED gave two different responses to the draconian records request form revised by the Clarkson law group 2/28/18 to suit the GM regardless of the law or best interests of the homeowners.
NRED response 1 was pro-homeowner.
The first was an email response to a homeowner in March correctly stated the owner protections in the law,
“The “mandatory acknowledgement” form…is contrary to NRS 116, as such a document is not required by law.”
NRED response 2, as reported by Bob Burch, was pro-management.
The second NRED response was only reported verbally.
I haven’t seen any written response from the Ombudsman to the SCA Board, but the Board President has reported that NRED approved the unlawful “acknowledgements” on the document request form that restrict the homeowner from sharing legally accessed material with third parties. Could this really be true?
According to the Board, NRED has approved the SCA threatening homeowners that, if the information (released per NRS 116.31175) is disclosed to third parties, the owners may be subject to fines and penalties up to foreclosure.
These Clarkson-crafted “acknowledgements” are allegedly (according to Clarkson) binding even if the owner does not sign or agree. According to SCA, NRED says this is okay, just so long as the owner is not required to sign the acknowledgement.
Does NRED have a double standard?
Note that the document request form’s revision was not approved by an official Board action despite the requirement of SCA bylaws 6.4(a)(b) p. 24.)
The Board abdicated its duty to make records accessible to owners contrary to NRS 116.31175, and the GM never signed a management agreement acknowledgement per NRS 116A.620(1)(a)and (m) that the HOA records do not belong to the manager. Yet, NRED apparently issued a verbal ruling giving the SCA Board and management carte blanche to carry on.
Could this really be true?
And one last thing
Lack of transparencyallows SCA homeowners to be put at risk due to
inappropriate use of the attorney at triple the adopted budget, and
resistance to implementing sufficient checks and balances.
My insistence in attempting to address these problems led to the harassment and retaliation that was the true impetus of my removal from the Board.
Note that NRED has not responded to my 7/21/17 Form 781 complaint other than to refer it to the investigations division. The problems of withholding and concealing records have been exacerbated over the past year, and I have submitted additional documentation to the complaints in September, November and January evidencing this unacceptable pattern.
This is the second part of my 6/6/18 email to the NRED Chief Investigator and Ombudsman to clarify NRED’s process for ensuring that
1. the rights of homeowners in HOAs are protected,
2. Nevada statutes are uniformly enforced, and
3. Board members or HOA agents suffer consequences when they fail to act as fiduciaries.
Issa Anale’a didn’t make us wait as long as NRED
Why has NRED needed more than nine months?
Tomorrow, I’ll see what NRED Chief Investigator’s perspective is on the 6/6/18 email I am sharing below in Part 2 “Secret meetings”, in the previous blog, “Why so quiet?“, and in the final part 3, “In case you don’t think this is enough evidence”
Part 2: Secret meetings in general
The second complaint was that the Board deliberates in secret meetings. This complaint being dismissed perfunctorily is also problematic. It appears as if NRED condones a pervasive pattern at SCA of decisions being made by the Board, the attorney, the GM or individual directors without proper action by the Board in open session.
It also appears that there are no consequences if SCA Board is not compliant with NRS 116.31083, NRS 116.31085, or SCA governing documents.
NRED previously instructed SCA on this point
Previous NRED officials have issued letters of instruction (attached to previous email) to require statutory conformance (with owner protection laws) which SCA now ignores.
I, as well as other SCA residents, have alleged that, currently, many Board decisions are made improperly, i.e.,
in group emails,
in improperly noticed meetings,
private Board training (no notice, agenda or minutes) sessions which are
deemed “attorney-client” privilege while
simultaneously are deemed to NOT be executive sessions, but of which recording is prohibited:
meetings or email chains involving only a few Board members or which pointedly exclude dissenting directors
What does it mean when the NRED investigation of these complaints just stops without a finding?
Obviously, the SCA Board was notified that SCA has won by default, but apparently the owner who complained was not.
As Bob Burch said,
Both complaints were closed without any action being taken against the Association when the division determined that there was no good cause to continue with the investigation. In other words, we prevailed.
This is essentially what has occurred in 100% of the cases filed in the past year.
Is that NRED’s intent?
Does NRED really intend to say that this Board conduct, that has generated many owner complaints, is permissible despite the Board’s failure to meet the requirements of NRS 116.31183 or NRS 116.31085?
Or are you not convinced that the complainants accurately reported impermissible acts?
Does NRED’s investigative protocol permit your investigator to rely on information provided by the HOA, but prohibit further investigation by seeking additional information, or at least a response, from the complainant?
Whose call is it anyway?
NRED needs to be aware that at SCA, Board decisions are routinely made by the GM or attorney in policy areas in which the Board is prohibited from delegating by SCA bylaws 3.20 and 3.18 pursuant to NRS 116.3106(1)(d).
These wrong parties (the GM, the attorney, a subset of the Board) falsely claim the Board made decisions that the Board didn’t make correctly, or worse, didn’t make at all, e.g.,
hiring debt collectors without an RFP (competitive process),
increasing group exercise user fees,
failing to comply with the Election & Voting Manual in the 2017 recall election,
hiring a CPA without a contract or an RFP to do the volunteer Election Committee’s job,
paying that CPA and attorneys, at a $100,000+ un-budgeted combined cost, to usurp the recall election process,
over-expending the legal fees budget by $200,000+ in 2017,
taking punitive actions, without legal authority, against me as a Board member and unit owner, i.e., threatening letters and kicking me off the Board in retaliation for my complaints and records requests,
authorizing the use of owners’ money to pay for the association attorney
to appear in the GM’s divorce and
to withhold SCA records in discovery that had been previously released to OSCAR, the anti-recall group.
When the NRED investigation into these actions just stops, or maybe never even starts, what does it mean?
Is abdication and usurping of Board authority okay in NRED’s view?
Does NRED need more documentation and more specific examples to establish that this practice is occurring?
What else does NRED need to stop this?
Here is a link to a www.SCAstrong.com blog, “If they had only known, part 3” that gives some examples of GM decisions that resulted in election interference, hiring bankrupt or conflicted debt collectors without due diligence or following proper procedure, a biased selection of a restaurant vendor (that is not proceeding for unknown reasons, leaving SCA with no restaurant for 2 1/2+ years and counting).
I can also provide you links to the actual documents that are are evidence of these and other specific incidences if NRED needs more documentation to make a finding and prohibit agents from taking advantage of SCA.
Part 3: In case you don’t think this is enough evidence
Sorry for the big break in my updates about SCA shenanigans.
I’m in California for some family events,
and a new granddaughter due any minute
But, while we’re waiting for the next big thing, I’ll tell you
The real cause for pause
After a fun-filled trip to Mexico, I dragged myself to the May 24 Board meeting. I was immediately stunned by the President’s report that NRED had stopped investigating two complaints that impacted me.
I wondered if NRED’s practice was to rely on management or agents rather than get the whole story. I hoped not. But, I had a sinking feeling…
Ordinarily, I would have posted something right away, but I decided to talk to NRED’s new chief investigator, Terry Wheaton, first. Multiple attempts to set up a meeting were unsuccessful so I documented my concerns in writing.
It is even longer than my usual missives, so I’ll break it up for you. It was full of hyperlinks to the actual evidentiary documents. I will break the links in this public distribution, just in case, my transparency forces the SCA Board and GM to claim it is their fiduciary duty to pay the attorney $10,000+ to threaten to sue me to kingdom come.
Part 1 of email to NRED
Fwd: Issues related to dismissed and open investigations; NRED Letters of Instruction to SCA
I have not received a response to my request for a meeting with you, and I have been instructed not to contact the Ombudsman because all my intervention affidavits (IAs) and complaints against management have been referred to the investigations division. I understand you are new to your position and may not have seen the full measure of the issues that I, and other SCA owners, are asking your office to address.
The fundamental questions raised by this myriad issues are:
How does NRED fulfill its role in ensuring that licensed HOA agents (managers, attorneys)
act as fiduciaries and not for personal, political, or financial purposes?
do not take advantage of homeowners or disenfranchise voters to manipulate the composition of HOA Boards?
How does NRED use the negative experiences of this HOA to develop policy guidance that protects all of the 3,000+ HOAs and 57% of Nevada households that are in HOAs?
I am writing you now to document my concerns and request that you evaluate these documents before there is a final determination on my form 514a, 781, and three form 530 complaints (harassment/retaliation, recall election interference, and for removing me from the Board without complying with NRS 116.31036 on false and unproven charges that I had placed matters before the Board from which I stood to make a profit.
1. NRED investigations are closed without notice or reason
In March, I raised this concern to Christina Pitch in the email I am forwarding here. You can see her response. However, the pattern of NRED closing complaints without a clear, legally defensible, equitable resolution seems to be continuing.
At the last Sun City Anthem Board meeting on 5/24/18, the new President Bob Burch made the following claims in his President’s report which were extremely disheartening because I have received no communication from NRED about these issues which intimately affect me and about which I have formally filed affidavits and declarations.
Next, I would like to report that we have been advised by the Nevada Real Estate Division that two complaints filed against the Association have been closed. In one case, it was alleged that the Executive Board held an emergency meeting on July 18, 2017 to discuss employer liability and that the meeting did not meet the requirements for an ‘emergency’ under NRS116. In the second case, it was alleged that the Executive Board held secret meetings beginning in March or April 2017 in which appointments to committees were agreed upon and Association business was decided upon. Both complaints were closed without any action being taken against the Association when the division determined that there was no good cause to continue with the investigation. In other words, we prevailed. – Bob Burch, 5/24/18
What does “no good cause to continue the investigation” mean?
Does NRED condone or just not care?
Dismissed complaint 1: July 13 “emergency” executive session
In my view, having a Board meeting without notifying me for the other six directors to approve a cease & desist order against me was an unlawful abuse of authority and certainly not an emergency.
What does NRED think?
Does NRED’s closing the complaint investigation without disciplinary action against SCA mean:
That NRED says it’s okay for the GM to fail to give me, an elected Board member, ANY verbal or written notice that the Board I was elected to was being called into an “emergency” executive session two hours after I was standing in her office being denied access to ANY SCA records despite NRS 116.31175 and SCA bylaws 6.4(c)?
That NRED says it’s okay for a GM, an at-will employee, to use the association attorney at SCA owner expense to threaten litigation against SCA (her employer) and me, a Board member, personally for creating “employer liability” for asking for justification for her being paid double the market rate and criticizing her performance and judgment despite NAC 116A.345(5)?
That NRED says it’s okay for six Board members to meet without and issue orders against me, the seventh EQUAL, ELECTED Board member, to limit authority as a Board member, restrict my duties, TOTALLY restrict my access to information needed to make decisions as a Board member, and restrict my right to vote on an equal basis with the other directors despite the prohibitions in NRS 116.3103(2)(d)?
That NRED says it actually was an emergency as defined by NRS 116.31183(12) affecting the health, safety and welfare of the community for 6/7 of the SCA Board to meet to order me, the seventh, to stop asking for a verification of the GM’s former salary and to reprimand me, without legal authority, for asking the GM to reconsider a ruling she made to prevent equal time in SCA official publications for a proponent of the recall election?
That NRED says that six members of the Board constitutes a quorum, and they (6 of 7) can meet in executive session to make decisions for the Board as a whole or to take action against the seventh Board member even if the six directors prevent the seventh Board member, despite the limitations defined in NRS 116.31185 or NRS 116.3103(2)(d),
from attending their secret session,
from voting, or even
from knowing their secret meeting is going to occur ?
That NRED doesn’t care that the SCA Board failed to comply with multiple provisions of state law and SCA governing documents?
Or is NRED saying
these owner complaints are frivolous and aren’t serious matters worthy of at least a complete investigation?
That meeting, actually held on 7/13/17, had numerous flaws which I spelled out to NRED in form 514a on pages 4-5 and claims are supported by written evidence.
1. When SCA became “self-managed”, the GM/CAM were hired without of a management agreement. Not okay.
Absent a management agreement, the GM is an “at-will” employee and has no other rights than those bestowed by the SCA Employee Handbook.
2. RFPs are required for professional services not just construction or maintenance contracts per NRS 116.31086.
2. The GM wasted $85,000+ for an unknown CPA, Ovist & Howard, to take over the recall election:
without an RFP,
without a Board-approved contract,
without funding to pay for a CPA to do the recall in the adopted budget,
without the Board amending the Election & Voting Manual to strip the Election Committee of its duties, and
after the GM and attorney were both the subjects of active complaints that they were interfering with the independence of the Election Committee
which resulted in diminishing the integrity of the election process.
Guess who benefitted. (P.S. It wasn’t the owners.)
Four of the six Board members who allowed the GM to usurp the Board’s authority benefitted personally from unlawfully hiring a CPA to replace the Election Committee.
Owners’ right to lawfully petition for a removal election was besmirched by the subjects of the petitions who wrongfully blamed the owners who petitioned for their recall for the huge cost of hiring a CPA that was done solely, 100%, by the GM under their watchful, grateful eye.
“For every action, there is an equal and opposite reaction.” – Newton’s 3rd law
Hiring a CPA wasn’t the only way the GM sashayed in to usurp the authority of the Board, but to really take over, all dissent had to be crushed. These are things a properly trained Board would never have tolerated.
As the liaison to the Election Committee, I tried to get the GM, President Rex, and the attorney to leave the Election Committee independent and neutral to do their normal job during the recall.
I was removed as the Board liaison to the Election Committee by the very people accused of interfering with the Election Committee’s independence.
As a non-conflicted Director (not one signature, not one petition against me), I was one of the three Directors who should have decided
how the recall election was to be conducted,
whether the Election Manual should be amended for this one election
how best to protect the integrity of the election process
The GM and the attorney decided to relieve the Election Committee from its duties despite having no legal authority to do so.
I gave the Board notice of my intent to file a complaint of harassment and retaliation for all the actions they had taken against me in retribution for my recommending that the attorney and the GM be fired.
The Board took the law into their own hands and kicked me off the Board without notice, process or appeal.
Kinda the same way Putin handled the one serious challenger to his re-election.
3. Restaurant RFP mistakes
GM and one Director met with one competitor to give a leg up prior to RFP.
Board was not informed of GM + director actions until it was a fait accompli.
RFP issued to a hand-picked group of possible bidders
Bids were not opened at a Board meeting.
Bids were not not submitted on the same terms.
After the number of vendors dropped to two, the “operating parameters” were adopted.
Winning bidder who negotiated with GM in advance was allowed to change bid after the other bidder dropped out because the terms had been changed.
No other bids were sought nor considered.
4. Last two debt collectors shouldn’t have been hired without RFPs
Doesn’t it seem like it’s a problem that
HOA Lawyers Group became SCA’s debt collector without issuing an RFP to replace the defunct Alessi & Koenig, LLC?
The Clarkson Law Group became the SCA debt collector without a RFP?
The Clarkson Law Group, hired via the RFP issued to replace the Leach law firm as SCA legal counsel, used its “authority” as the SCA legal counsel to “rule” that its own selection as the SCA debt collector did not require a separate RFP?
Who cares about debt collection?
We all should. Debt collectors are the source of huge expenses for HOA owners because of the weird way the Nevada courts allow HOA foreclosures to extinguish the bank’s security interest. While you might think this is good for HOAs, it is actually only good for the debt collector.
Remember, abdicating debt collection is:
a huge cost to owners
a violation of SCA bylaws 3.20 and 3.18(a)
The cost of collection exceeds the amount recovered.
HOA homeowners pay for the debt collectors’ fight with the banks.
The loss of property value to each and every home in a Nevada HOA is, according to the UNLV 2017 study commissioned by the Nevada Association of Realtors, is 1.7% per foreclosure for delinquent dues.
and he has convinced them that the budget doesn’t matter when it comes to legal fees.
The Board, following Rex’s leadership, foolishly insisted that the 2017 Board training be conducted in secret by Adam Clarkson.
Despite the excellent free training programs available through NRED, the Board refused to allow owners to see how they were being trained to abdicate their decision-making authority.
And the the Board certainly didn’t want owners to be able to comment on the self-serving training that was provided by Clarkson so it was deemed “attorney-client confidential” even though the training packet began with a legal disclaimer.
NRED complaint still pending
The secret Clarkson training was a self-dealing disaster. It bordered on elder abuse, and my complaints about the abusive conduct at that July 25, 2017 “attorney-client-privileged, not-an-executive-session workshop” are still under investigation by NRED.
Naturally, Adam Clarkson is billing the association ($325/hour, thank you very much) to defend himself and the other perps from my complaints about being bullied and harassed in that session in retribution for my telling the lot of them that they needed to straighten up and follow the spirit as well as the letter of the law.
What was wrong with the way Clarkson trained the Board?
Setting aside the for the moment the attorney-led misconduct of the participants (shunning, threatening and bullying me), Adam Clarkson twisted the interpretation of the law so far as to assert that it was a violation of the Board’s fiduciary duty to act ON ANYTHING without the attorney’s blessing.
Reward for complicity
Adam Clarkson rewarded the Board members who fell for his money grab, by creating a punitive cone of silence around non-confidential, discoverable SCA records against the non-compliant Director. Clarkson has also given his blessing to the unlawful claims that
the GM controls which owner or Board member can access SCA records and can withhold records at will, including in violation of a court order
the GM, President or Secretary
can exclude a Board member from Board meetings, and
can prevent a Director from voting,
and can block a Director from placing items on a Board meeting agenda
and can falsify the minutes of those meetings
the President does not have to follow Parliamentary procedures and
can magically use non-existent “substitute motions” and
can block a vote on a Director’s seconded motion and
can prevent a nomination for an officer position that would compete with the President’s pre-selected slate.
Annual reporting of gifts is voluntary
What does “fiduciary duty” mean?
Adam Clarkson actually gave this self-dealing definition of fiduciary duty saying that being guided by legal professionals was required by law AS IF only lawyers were experts on every subject.
The legal requirement is actually to consult with appropriate experts of all types (not just attorneys) when it is prudent to do so. This means reserve specialists, HR experts, accountants, construction experts, not just attorneys. There is no legal requirement for a Board to delegate its decision-making authority to attorneys. In fact, it is prohibited by both NRS 116.3106 and SCA bylaws.
“Consult with appropriate professionals as necessary before making major decisions…”
And the definition of fiduciary really is focused on the duty of care that the fiduciary has to ACT SOLELY AND EXCLUSIVELY IN THE BEST INTEREST OF THE MEMBERSHIP.
A fiduciary is personally accountable for a duty of care and using good judgment to serve owners, not oneself.
It does not cut it to do (or not do) something that hurts the membership and then claim,
“The attorney made me do it.”
Defy the ruling of Judge (and jury) Adam Clarkson at your peril!!!
According to Adam Clarkson, attorneys are justified in verbally attacking and threatening a Director who tells the other members of the Board that:
attorneys don’t have the expertise to assist on ALL Board decisions and that
it is the individual Director’s responsibility to use common sense and ethical principles to evaluate courses of action to decide how to vote.
Give me a break. That’s idiotic.
We are actually paying $325/hour for that type of inane self-dealing pronouncement against a Director who tells the attorney to knock it off.
Guilty until proven innocent
“Unauthorized practice of law” for “advising other members that legal counsel is not necessary”????
“… will be deemed to have committed a prima facie violation of NRS 116.3103”?????
“Prima facie” = A factpresumed to be trueunless it is disproved.
Quid pro quo = “something for something”
“Guilty until proven innocent” is the Clarkson pro forma edict he uses to bully Board members who are not in his or the GM’s pocket.
At the same time, Clarkson has protected the interests and defended the unlawful actions of the GM and those Board members who unquestioningly have agreed to pay whatever he bills with OPM (other people’s money).
“Prima facie” = “presumed guilty”
Here’s what NRS 116.3103 actually says
Clarkson is wrong
Telling the Board that the buck stops with it, and not with the attorney, is NOT a violation of a director’s fiduciary duty.
It is a true statement made on an informed basis, in good faith, and in the honest belief that
getting attorneys out making decisions for management or the Board, and
preventing attorneys from self-dealing or
serving the personal interests of a few individuals over the interests of the membership
is acting in the best interests of the association.
“As I understand it, Ms. Tobin was prevented from running for the Board not because she has opinions that are critical of the Board and SCA management, but ONLY because she is involved in litigation against SCA from which she might stand to gain a financial benefit.” -David Berman
My unlawful removal from the Board was completely 100% done in retaliation for my complaints of harassment and retaliation.
I presented the issues formally to the Board, the attorney, the GM, and the former CAM and to blogger David Berman as statements of intent less than two weeks before they acted in concert, without cause, without authority and without due process to strip me of my legal rights and my Board seat and to disenfranchise the 2,001 voters who had put me in office.
While I was on the Board those interminable 116 days (5/1/17-8/24/17), the GM, the former CAM, the attorney, David Berman and 5 of the 7 directors acted in concert to marginalize me from day 1. (Art Lindberg should get a pass since he was the only one who asked the right questions. The attorney lied to him too., and the pressure to conform was very, very strong.)
They made my life miserable, shunning, lying, berating me, denigrating my contributions, making false accusations, publishing false and defamatory statements, and making it impossible for me to be an effective homeowner advocate as a member of the Board.
They only came up with the convoluted ruse that I had put matters before the Board from which I could make a profit because, even relying on Adam Clarkson’s tortured reading of the law, they couldn’t say they were getting rid of me because I was an outspoken pain in the ass.
Execution was a complete non sequitur
The 8/24/17 letter which constituted my walking papers, signed by Adam Clarkson, was the totally unlawful and unethical response to my notice of intent to file a Form 530 Intervention Affidavit alleging harassment and retaliation.
Before that letter came out of the blue, there were many disputes between me and five of the other Directors, the attorney, the GM and former CAM, most of which you will recognize. I was transparent and vocal as possible as I sounded the alarm on deferred attention to owners’ concerns.
It’s pretty obvious why I had to go
And it was not because I did, or even could, profit from being on the Board.
My profit = ZERO
Did I mention I never made a dime off SCA before, during or after my Board service?
How much did the attorney make for creating the ruse that I did?
Attorneys’ profit for 2017 = $300,000+
2017 legal fees for “Director Issues” = $40,000
January 2018 legal fees = $38,000
but they won’t admit how much of that was to unlawfully block owners knowing how much the GM’s salary was bumped up in 2018
Deny. Deny. Deny.
Accept no responsibility for ANY problems.
Then attack your accuser.
And kill her.
Sample of the problems I publicly said needed correction
No restaurant -Failing to comply with the CC&Rs and good business practices about the restaurant space study, letting only a couple of directors work on it, refusing to use an independent expert, too cozy with one bidder
Owner oversight committees – Refusing to allow appropriate owner oversight in areas where going to self-managed and changing legal counsel and debt collectors caused a high level of risk – personnel, compensation, legal services, insurance, investments; getting rid of the Golf Course Liaison Committee, the Communications Committee, and decimating Property & Grounds, making the GM the Board liaison to Pinnacle and other groups
Board agendas – Refusing to put my items on the Board’s open or executive session agenda as required by law, by Board policy equal to other directors
Secret meetings -meeting in secret without giving me or other owners the rights guaranteed by law or confining executive sessions to the four permissible topics
Excessive executive compensation – Refusing to conform to the law for access to data, to evaluate according to professional standards, or to fairly consider evidence to rebut the appropriateness of those salary levels; giving Tom Nissen excessive authority in this area and blocking me totally from it despite our differences in expertise or the appropriateness of substituting the judgment of ANY one director for the judgment of the Board; spending thousands on using the attorney to hide what her actual compensation is from the owners.
No GM performance standards – Not holding the GM accountable for meeting measurable, publicly-adopted performance standards
No management agreement – Violating SCA bylaws and failing to protect SCA by having no management agreement or even any written terms & conditions of employment. Although the GM is an AT-WILL EMPLOYEE, allowing her to usurp additional privilege to the detriment of SCA.
Unfair complaint process – Going beyond NOT having a customer-service rating system to aggressively attacking the 800+ owners who signed petitions and refusing to answer any of their complaints on their merits
Evicting FAS – The process for evicting the Foundation Assisting Seniors was flawed. They ordered me out of executive sessions. They did not act in the best interests of the homeowners. The GM was not held accountable for the failure. Civil action without required owner vote.
Debt collection process – Failing to do proper due diligence on debt collectors; refusing to evaluate the expensive, inhumane cost of collection for a more ocst-effective solution
Ill-advised recusal demand – Overreaching demand for me to recuse myself on ANY collection matter because SCA’s attorney/debt collector alleges there might be an “appearance of a conflict” for me, however remote, while ignoring the current attorney/debt collector’s obvious actual financial conflict and the fact that the last debt collector filed for chapter 7 bankruptcy without telling SCA and continued doing foreclosures by morphing into another LLC.
Bullying -On at least three occasions in executive sessions, using bullying, shunning, intimidation, threats and other demeaning and belittling marginalization tactics to try to make me conform with nonexistent policies or legal requirements
Failure to investigate – When problems are brought up, they are dismissed out of hand without conducting, or allowing, investigation on the merits
Inaccurate official records -Causing, or allowing the official SCA records to be corrupted and/or error-prone ALWAYS against the interests of homeowners and usually to protect individual members of the Board or management
Concealing SCA records from me alone, i.e., giving me incomplete executive session Board books, refusing to respond to ANY records requests
Abdication – Allowing the GM to use the association attorney as her personal attorney in violation of NRS and SCA bylaws
Election interference – Allowing the Board president, the GM, the CAM, David Berman, and the association attorney to interfere with the recall election process and to UNLAWFULLY COST OWNERS $90,000 BY STRIPPING THE VOLUNTEER ELECTION COMMITTEE OF THEIR CHARTER DUTIES to pay a CPA to do the EC’s job poorly.
Undue influence allowed – As it served the interests of the Board majority and management, David Berman, spokesperson for OSCAR, was allowed to have greater access to recall election information than I received as a director; he was allowed undue level of influence over the Election Committee to cut me out in retaliation for my attempting to protect the rights of the petitioners, including falsely accusing me what he himself was guilty of; misrepresenting himself as an attorney; falsely accusing me of releasing “personal director correspondence” further defaming me by creating the false impression that I had released a legally privileged documents (absolutely not!)
Sanctions without notice or due process -Having meetings to sanction me without notice and to enforce policies that don’t exist
Unlawful orders issued by the attorney against me, e.g., cease & desist from representing myself as a director, or asking questions that I was not “authorized” to ask particularly regarding personnel and GM compensation
GM’s frivolous litigation threats – Allowing the GM to threaten to sue SCA for damages and to threaten me with personal liability; refusing to indemnify me as a director; falsely claiming I had violated my fiduciary duty without any evidence, a hearing or a finding
Misinterpretation of “employer liability” – Allowing the attorney to represent the interests of the GM over those of the homeowners. Accusing me of violating my fiduciary duty because I criticized the GM’s performance and because I requested a salary verification from her prior employer.
Abdication to attorney acting in the GM’s or his own interest -Telling me that the attorney had the authority to declare that I, as one of the seven directors, could be excluded from the right to vote on, or even know about, matters under the Board’s decision-making authority, unless he approved it (which in most cases, he has never approved to this day).
Abuse of privilege -Allowing the attorney to declare ANYTHING to be “attorney-client privileged” regardless of the lack of its meeting the legal definition of privilege in NRS 49 or NRS 116.31085.
Falsification of litigation reports -Allowing the attorneys to publish false statements in the litigation reports to increase the appearance of a conflict or to defame me and refusing to correct after evidence was provided.
Several people have told me that their NRED complaints of GM election interference were summarily rejected without satisfactory investigation or explanation. They feel the rejections were unfair as the complaints were rejected for reasons unrelated to the substance of the issue raised.
For example, they reported that NRED did not independently verify the accuracy of the allegation that two pages of valid petition signatures were not counted which caused Bob Burch to be wrongly left off the recall ballot. I was told that NRED’s rationale for the rejection was the unrelated reason that the Ombudsman had validated the vote counting process for the other three directors who were on the ballot.
Limitations of enforcement agencies
We have to educate the NRED investigators on the specifics of the violations alleged in SCA owners’ complaints so investigators can understand the complaints within the context of needed homeowner protections.
We must not get overly discouraged even if it appears there is “zero enforcement” rather than “zero tolerance”. As we’ve seen nationally with response to sexual harassment complaints, that can change in a heartbeat.
NRED has all the problems faced by other enforcement agencies, like you’ll see below were exhibited by the SEC, – an inability to see the forest for the trees. Even if there is no corruption in NRED, they have limited authority, limited funding, and have to balance competing interests between monied stakeholders (attorneys, management companies, debt collectors, etc.) and the people who are supposed to be served (homeowners). NRED’s problems are compounded in Nevada by historic complicity in HOA corruption by attorneys and judges and the fear people have to speak up and be whistleblowers.
But, just as Rana Goodman helped to expose how guardianship abuses depended on complicity between attorneys and judges and unscrupulous public guardians, we have to shine a light on what is happening at SCA because Board/GM misconduct too requires lack of transparency and complicity by legal authorities to be sustained.
Why I am publishing my complaints in full
While I haven’t seen the other owner complaints or the rejection notices they received, this action by NRED raises a red flag for me. So far, I have received no word from NRED about the status of my complaints, but I am not willing to leave NRED’s investigative thoroughness to chance.
In light of this disappointing development, I am going to emphasize the way I use this website to expose evidence substantiating my claims. I am doing this primarily so the allegations and supporting evidence are in a usable format to assist the investigators. I believe that will reduce the chance that my complaints will be dismissed without a full investigation and a fair hearing.
As far as the chance of influencing the beliefs of the readers of this blog, I have low expectations. I don’t believe people who think I deserved what happened to me will easily change their minds, and when you read below about cognitive dissonance, I think you’ll see why.
What happened to me sets a bad precedent for ALL Nevada HOAs.
Kicking me off the Board was based on false and defamatory accusations and was simply a continuation of their retaliation against me for speaking out.
Such flagrant disregard of homeowners’ right to vote and choose who represents them on the Board absolutely cannot be tolerated or ignored.
Throughout my days on the Board, I was harassed, defamed and retaliated against for my having:
recommended that the attorney be terminated,
warned them about the theft and fraud of SCA’s former agents,
requested information about excessive management compensation and for
complained about violations of NRS and SCA governing documents, particularly in the areas of GM/CAM threatening frivolous litigation, abuse of privilege, misuse of attorney, concealing information and recall election interference.
If my removal from the Board is upheld, it will set the unhealthy precedent in Nevada that ANY majority of ANY Nevada HOA Board can remove any HOA Board member whose views they don’t like simply by falsely accusing her and then deeming her position vacant.
Good-bye, due process.
Good-bye, owner control of Nevada HOA.
Hello, unjust enrichment by attorneys and other HOA agents.
The Securities and Exchange Commission (SEC) let Bernie Madoff’s fake hedge fund grow to over $50 billion over decades despite repeated credible complaints.
Let’s hope NRED is more responsive than the SEC was to warnings and does not allow SCA Board, GM and attorney to act unlawfully in ways which allow SCA agents to be unjustly enriched or which allow a majority of a HOA Board to act unfairly for personal political advantage.
Remember Bernie Madoff?
Probably everyone does. Bernie was the former chairman of the NASDAC securities exchange. He had an impeccable reputation that allowed him to operate a hedge fund that grew over decades to $50 billion by 2008. Although it was a just a low-tech Ponzi scheme, it was successful as an affinity scam among wealthy Jewish communities, Madoff remained untouched by the regulatory Securities Exchange Commission (SEC) for decades.
But you probably haven’t heard of Harry Markopolos, the financial analyst who figured out Bernie Madoff’s fraudulent hedge fund at least a decade before Bernie turned himself in. Marcopolis submitted at least five formal written complaints to the SEC which the enforcement agency failed to investigate.
Had SEC done its job in 2000 when Markopolos told them Madoff was a fraud, less than $7 Billion would have been lost, and many fewer people would have been victimized. SEC still didn’t listen in 2001 when the fund had doubled. SEC still didn’t listen in 2005 when Markopolos documented 29 red flags on the then-$25 Billion fund. In 2008 as the global economy was in meltdown, and the Madoff fund had ballooned to $50 Billion or more, Bernie turned himself in to spare his family, never having been investigated, much less found guilty, by the SEC.
Markopolos’ book is aptly entitled, “Nobody Would Listen: A True Financial Thriller” as the true story of how the regulatory agency SEC was over-lawyered and using lawyers in areas outside their expertise. SEC, therefore, did not have adequately trained investigators who knew diddly squat about financial markets.
The SEC failed to act repeatedly on Markopolos’ extremely precise directions on what sources to check or what single phone call to make and what question to ask to verify the accuracy of Markopolos’ analysis.
Why didn’t SEC investigate thoroughly? Congressman Gary Ackerman grilled SEC attorneys after Bernie turned himself in to find out why SEC blew off credible complaints for a decade in this interesting CNN clip of the Madoff Congressional hearings.
What were they thinking?
Maybe lawyers were the wrong people were doing the job.
Maybe it’s was the financial conflicts of interest regulators had with the industry they were regulating.
Maybe Madoff’s reputation was so stellar and everybody was making money, no one wanted to question how he alone could get such stellar returns year after year.
But, whatever the reason, SEC investigators couldn’t see what was right in front of their face.
How does all this about Bernie Madoff and the SEC relate to SCA owner complaints being given short shrift by NRED?
Remember SEC’s failures and expect to find similar problems with NRED investigations.
Remember the SEC’s failure to listen to Harry Markopolos for a decade cost victims $50 Billion, and the SEC attorney still tried to weasel out of it, claiming “executive branch privilege“.
Remember nobody believed Bernie Madoff was running a scam. If you find yourself not believing what I tell you is happening at SCA is true, it might be simply because it is unimaginable, or it might be because it creates a lot of cognitive dissonance to think I might be right.
Remember that, while there are limits on what we can expect enforcement agencies to accomplish, a lot can change if a critical mass of people speak up.
We’ve just seen nationally how the pendulum swings when a tipping point is reached. The way sexual harassment complaints are now addressed has gone from zero enforcement to zero tolerance seemingly overnight.
A critical mass of SCA homeowners must insist that at SCA, there will bezero tolerance of misconduct by SCA Board members or SCA Agents, andzero tolerance of their harassment of, or retaliation against, whistleblowers.
Two things mar an otherwise brilliant job of bean counting:
How much are we paying for who to do what? SCA is now an employer with 80 employees costing $3.5 million -over 40% of operating budget, there should be a clearer accounting of cost of staffing by budget objective. The Board cannot hold the GM properly accountable nor can the owners be protected from such failures as excessive management compensation or featherbedding, if the accounting obfuscates these facts. And, more importantly, the Board is not holding itself properly accountable to the owners by letting the GM hide what SCA employees (particularly managers) are being paid and what they are being paid for.
Since Adam Clarkson became SCA Legal Counsel on May 1, there have been $185,010 expended for legal fees which was 411% 0f the $45,000 budgeted for legal fees over half a year. This is the same attorney
who told the Board the GM did not need its authorization to expend SCA funds for unbudgeted purposes.
who does SCA’s debt collection function in the least cost-effective and most draconian way available.
who, along with the GM, is responsible for additional unnecessary expenses of at least $73,000 for the recallelection which were STRONGLY objected to by the proponents of the recall.
Reviewing policies on voting may be really boring, but it is important to protect homeowner control over who represents us on the Board. There has to be a sound, uniformly administered system in place to prevent ANY election interference from tampering with ballots, abuse of power, or even unfair communications.
The largest HOA board election rigging scandal in Southern Nevada involved primarily attorneys who were supposed to be neutral outsiders who stacked HOA Boards to channel construction defects litigation. This Election and Voting Manual is intended to ensure that the SCA homeowners actually control who sits on the Board and that those Board members actually work SOLELY for the benefit of the homeowners.
Yet, it doesn’t matter what is in this or any other SCA policy manual if the Board doesn’t follow SCA’s own rules or if it allows the GM and/or the attorney to manipulate the process in favor or against certain owners.
Cherry-picking which laws to follow is a slippery slope
There are several areas where our election process is not in conformity with NRS or the SCA Bylaws. For example, SCA Board does not have a nominating committee as required by SCA bylaws 3.4a below. While there may be good reasons to not want to have such a committee, this is an example of how problematic it is to simply disregard a provision. The bylaws must be uniformly enforced and not simply disregarded. The narrow exception is when the bylaws explicitly conflict with a mandate in a Federal or state law.
Filling Board vacancies after a director is removed.
The final clause of SCA bylaws 3.6. requires a vote by the unit owner to fill a Board vacancy caused by a Board member being removed.
“Upon removal of a director, a successor shall be elected by the Owners entitled to elect the director so removed to fill the vacancy for the remainder of the term of such director.”
The proposed change to the Election Manual, below in green, apparently attempts to justify retroactively how Jim Coleman was appointed, but even the new provision doesn’t allow for an appointment to be made without any notice to owners, any candidate nominations, or the required vote of owners.
Note that there is nothing in either the existing nor the proposed versions of the Election Manual that gives the Board legal cover for what they actually did to remove me nor what they did to replace me nor what they might be contemplating to do in the next election (keep me off the ballot).
How they removed me from the Board by simply declaring my position vacant is not authorized in NRS 116, NRS 82, SCA governing documents or any existing or proposed Board policy.
By extension, that also means that there is no legal means by which the GM, the Board or the attorney could refuse to allow me to be a candidate for, or to serve on, the Board should I choose to run again.
Also, note that this manual includes the NRS provisions which the Board President and GM violated by using the Spirit to publish their one-sided argument regarding the recall without permitting equal time and access to the opposition. Complaints of these violations are currently being investigated by NRED.
These proposed changes don’t describe what the Board actually did nor do they conform to the bylaws. The Board is simply pretending they have the authority to act against laws and policies “upon the advice of Counsel”. We’ll see.
Complaints to the Election Committee are not fairly handled
The Election Committee complaint process is to informal and allows for problems at both ends of the spectrum. On one end of the spectrum, informal complaints may be submitted without evidence or substance which could just waste the committee’s time .
On the other end, there is substantial risk of unequal treatment occurring, or even being merely perceived, if there isn’t a good enough procedure defining accountability, investigation, documentation and notice requirements. It’s sloppy management, and it reduces the community’s trust of the election process. It also allows interference in the independence and neutrality of the Election Committee.
In the proposed draft, there is still no standard format for resolving complaints, no required documentation to be maintained in the official SCA record, and no notice of the disposition formally given to the complainant.
I recommend the process defined in the SCA CC&Rs and utilized by the Covenants Committee would be a good model for the Election Committee to employ to fairly investigate and document complaints regarding Board elections.
Board Communications Task Force
In June, I proposed a resolution to improve Board-owner communications , but couldn’t even get a second to the motion. Now, five months later, nothing has been done to increase transparency or meaningful utilization of owner expertise in governance.
Rex appointed a couple of Directors to be a Board Communications “task force” (with no owner involvement) and here are their recommendations:
Here’s what should be done immediately:
Either use SCA-TV to video broadcast Board meetings live or use some service like GoToMeeting.com to make the Board meetings accessible online in real time and interactive.
Take the password off the website.
Make the eblast mailing list opt-out instead of opt-in
Stop using Board work groups that withhold information from owners.
Expand the committee structure to utilize expertise of residents and have meaningful owner oversight and influence in governance.
Item 15B “Self-Management” is listed as New Business to be presented by Tom Nissen rather than the GM. The paragraph above the total back-up in the Board book to let owners know what the Self-Management item is about.
This raises a lot of questions about the Board’s failure to protect homeowners by hiring a GM without ANY of the defined terms and conditions of employment required in a management agreement.
Why is a Board member making a presentation on the transition?
Why doesn’t the GM whose compensation is $100,000 greater than other GMs at comparable Sun Cities like Summerlin make the presentation?
Why hasn’t the GM been held accountable for the development of the complete policy framework needed to protect SCA from legitimate risks and potential liability associated with becoming an employer or
Why hasn’t the GM held accountable for AT LEAST having written plans and timetables for getting the job done?
How will the Board – let alone the owners – even know if the job is done right and on time?
Why did the Board let the GM unlawfully conceal SCA records on the transition to self-management from one Board member in violation of our bylaws 6.4c when this information should have been easily available to any unit owner?
After the Board meeting, I’ll let you know if any of these questions have been answered. Or if there are just new ones.