In the email announcing the Rasmussen coup d'état (more on that later) on Thursday, February 19, 2015, Dave Rasmussen said that, as a reaction to "potential legal action" the Board (he and Jerry Biggart) "may be forced to issue a special assessment later in 2015 as this activity is an unbudgeted expense." In addition he said, while our officers are protected by Directors and Officers Insurance ("D & O Insurance"), if we are forced to file a claim, we anticipate our premium would be negatively impacted." Let's parse this statement out a bit.
First, if the Board had not sent the Larme Kurtz household a false and fraudulent fine assessment this whole mess would not have arisen. Shooting the messenger is one of the Board President's special talents, as anyone who has sent him a critical email or complaint knows. The sender gets an immediate and profane diatribe in response making it completely clear that there is no hope of an adult discussion of divergent views.
Second, our discussion of the potential ramifications of a lawsuit with the Board should not be considered making a threat of a lawsuit. Threats are clear and direct statements that if A doesn't happen, we will do B. We haven't done that because we have been hoping reason and common sense would kick into this mess at some point. In our Protest Letter (you have all received it) we were very careful not to make any threats. We also made no demands. All we did was ask that the invalid fine assessment be withdrawn (as lawyers would say, "with prejudice," meaning that the Board also wouldn't just turn around and make another assessment on the same facts the next day). Our point in doing this, as I explained in detail to Lynn Tarrence by phone, some time ago, was to give the Board an opportunity to come to their senses and withdraw the fraudulent fine assessment letter before our lawyers sent a "demand letter" that would have to be disclosed to the Insurance Company.
We have not asked our lawyers to send that demand letter so far. That means we haven't decided anything about our next step except that we are going to appear at the "Appeals Hearing" set for Saturday, April 11, 2015, at 10:00 in the Board Room. (That's when the Board, which fined us improperly, reviews its own findings (there aren't any) and determines if their earlier determination of violation was correct). We are holding our breath with suspense to see the outcome! You are all invited to attend.
Third, part one, it is important in all of this to know the rules of the game--instead of making them up on the fly. The Association's Bylaws forbid the Association from indemnifying (paying for the mistakes of) its Officers and Directors for costs arising out of each member's own bad faith or willful misconduct. I have to say I am not at all sure the Association should indemnify the Board for any costs its members incur for defending a clear act of bad faith and willful misconduct. As a Resident and member of the Association and a lawyer I would have to say I would have a huge problem indemnifying David Rasmussen one dollar of his defense costs in the potential litigation he is trying to scare us all about. What do you think about this language? Do you think the Board members have read it? I bet I could name a former Board member who read it or whose own lawyers read it.
Third, part two, now take a look at Section 4.9 of the D & O policy. Here is one of the many things that policy excludes from coverage:
4.9 [any event] based upon, arising from, or in any way related to … (b)
any deliberately dishonest, malicious or fraudulent act or omission or any
willful violation of law by any Insured; provided, however, this exclusion
shall only apply if it is finally adjudicated that such conduct in fact
occurred.
Hmmm, I wonder what this means about covering the Board's fraudulent fine assessment of the Larme Kurtz family? Well, we won't know until the situation is "finally adjudicated" and I have no idea what the means. It might mean bad news for the Board, for sure.
Our bottom line is that none of this is of any concern if the Board President could, for perhaps the first time ever, admit that he was wrong, out-of-line, and sorry that the January 16th letter was ever written and he promises to follow all the Rules strictly in the future.
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