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Maine Alliance for Road Associations

Pending lawsuit

  • 04 Aug 2021 1:54 PM
    Message # 10794518

    Several members including a realestate attorney reviewed the PWS and noted multiple instances of non compliance by our association. We are supposed to be a statuary  road association.We have no by-laws on voting. At meetings is by majority present. Some lots one vote some 2 votes. Out of 35 members only 7 to 10 lots vote. No absentee or proxy votes since first meeting. A board member brought a lawsuit against another member,not an NOC, for damage to road . Would have cost around $500 to repair.  Legal fees over $3000. Director said he was representing the association so we pay?  There is no minutes of any vote on this. I have been  elected as the new director  since the end of June and have been reseaching this mess by reading as much as possible with MARA's help .

    Any suggestions?

  • 05 Aug 2021 11:33 PM
    Reply # 10813724 on 10794518
    Anonymous member (Administrator)

    I am not an attorney and therefore cannot give legal advice or interpret law, so this is just my opinion based on personal experience.

    What a mess!  I would go back to the law itself, read it very carefully, and do just what it says.  Here's a link to the statutes -   Scroll through the statutes that follow by clicking the arrow in the upper right hand corner of that page. 

    First of all, you say you are "supposed to be" a statutory road association.  Is there any record of the initial meeting being called by warrant issued by a notary as required under section 3101 paragraph 2?  And were the owners of every parcel of land "benefited" by the road notified of the initial meeting?  If not, you may not actually be a legitimate statutory road association.

    The statute mentions bylaws, but I'm not sure it actually requires you to have bylaws.  It looks like each place where bylaws are mentioned in the statutes, there is an alternative to how the action in question may be handled.  I do know that some road associations (particularly smaller ones) seem to function just fine without bylaws.  The statute does say that each parcel represents one vote unless otherwise specified in your bylaws, so if you do not have bylaws stating that more than one vote is allowed, then no parcel should get two votes.

    As for whether proxy voting or absentee ballots are required, see the recent post on this forum entitled "Attorney Mary Denison's Opinion on Proxies and Absentee Ballots."  In short, the statute says they "may" be allowed, not they "must" be allowed (section 3101 paragraph 4.)  Voting is by a majority of members present OR... (section 3101 paragraph 5.)  My view is that if members can't be bothered to show up for a meeting once a year, they are trusting those who do show up to make the decisions for them.  If most of your members are paying at the rate determined at the meeting, without objection, they are expressing that trust.

    Your biggest problem is the lawsuit.  If there is no record of a vote of the membership to take the matter to Court instead of filing a Notice of Claim, I don't see how the membership can be forced to pay the bill.  There should have been a dollar amount approved in the budget before making such a large expenditure.  Section 3101, paragraph 7, lists the specific immunities of a commissioner, board, or lot owner.  I don't see the cost of a lawsuit in that list. 

    On the other hand, section 3102 talks about the commissioner's or board's power to recover an owner's proportion of labor, materials, or money through civil action.  It specifically says, "the decision to bring that civil action may be made by the commissioner or board or as otherwise provided for in the road association's bylaws."  So it would appear your board member may have had the authority to decide to bring suit without consulting the membership, unless your bylaws say otherwise.  In that case, the statute also provides for recovery of costs of suit and reasonable attorney fees - (but that would have to be included in your lawsuit as part of the claim.  Once the Court has made its decision, you can't go back and say you forgot to ask to recover your attorney fees.)  

    The question is, does a member's "proportion" under section 3102 include the cost of repairing damage done by that owner?   That may or may not also be addressed in your bylaws.  Some associations state in their bylaws that repairs of damage over and above normal wear and tear will be billed to the member who caused the damage.  If that is NOT in your bylaws or in your association's "formula" for determining each member's share of the cost, you may not be able to assess one member for the whole cost of the damage.  Under section 3101 paragraph 5, it would not be considered "fair and equitable" to charge one member $500 more than any other member unless your formula or your bylaws contain a provision for recovery for damage that applies to EVERY member who causes damage.  Also, under section 3102 you cannot assess one member for more than 1% of his property's municipal evaluation in any calendar year.  While I don't think that would prohibit forcing a person to pay the cost to repair the damage he did, over and above his annual assessment, you couldn't declare his assessment itself to be $500 if the value of his property was under $50,000.

    Lawsuits can get phenomenally expensive.  I hope your board member doesn't attempt to recover the cost from the association by filing another lawsuit!  If he threatens to do so, I would strongly suggest looking into getting the services of a professional mediator instead.  Or you could try putting it to a vote of the membership and see if they will have mercy on that board member by agreeing to chip in on the cost, and accept it as a lesson learned.  If it goes to court again, it could cost both parties more in attorney fees than either of them will gain.

    Last modified: 05 Aug 2021 11:41 PM | Anonymous member (Administrator)
  • 08 Aug 2021 10:25 AM
    Reply # 10880842 on 10794518

    Thank you for your in-site. I have been assured everyone had a chance to vote on original articles. With almost 30% members out of state and or 100 miles away absentee ballots were sent to all. I was living out of state at time and never received a ballot?  Five were returned. No record on vote except one no on all articles. Eight lots were present. Total 13 lots out of 35. Again no record of vote on articles just that motion carried. We had a new road association. Every one was told 20 of 35 members were present to support association. Actual lot count 14 lots. Future meetings had no actual warrant with what was to be voted on. Of course no absentee ballots. New business was voted at meetings and passed by show of hands. Some lots one vote some two votes. We have no by-laws on voting. Many association members found the methods use to be outside the PWS. That is why question on legal road association and or legal votes? I was told the board voted to pay for law suit[ no notice of claim on this matter filed] after member of board brought suit in his name. Association was to be paid back. No quarantee of course. At this point I am waiting to discuss all of this at a board meeting in September. May need an attorney to tell if any of the votes count? Association out of funds for road due to law suit. Any further thougts?

  • 09 Aug 2021 10:19 AM
    Reply # 10918900 on 10794518
    Anonymous member (Administrator)

    A couple of thoughts - first, do you have a record of the initial warrant drawn up and signed by a Notary?  If not, you probably do not have a legitimate statutory road association.  You say the notice was supposedly sent to all out of state members but you never received one.  Can you find out if the other out-of-staters all received one?  It's also possible that the notice got mistaken for junk mail and discarded.

    Second, what is the status of the lawsuit?  Is it still pending, or has a decision already been made?  If it has not yet had its final hearing, I would check and see if the complaint asked for attorney fees and costs.  If not, you may be able to file an amended complaint citing 23 MRS 3102 which allows you to recover "costs of suit and reasonable attorney's fees."    If that was already mentioned in the complaint, and it hasn't had its final hearing, you will want to make sure the attorney brings that up at the hearing.  But if the decision was already made and that was not included, there's not a lot you can do about it, other than divide the cost by the number of members and add it to your dues, perhaps spread out over a couple of years to make it more palatable. 

  • 09 Aug 2021 11:17 AM
    Reply # 10919866 on 10794518

    Yes there was a notery signed warrant. I am trying to find a copy. Yes attorney fees included. The out come at this point is uncertain. Other question is if votes count under PWS if we have no by-law on who can vote or how many times. Voting on new business was done at meeting by show of hands not by lots or notice to those not in attendence given a chance to vote by absentee ballote or at next meeting. Many members feel suprised at cost of  law suit and never were given the chance to vote on this and other matters that they never received notice on. Is a mess!

  • 10 Aug 2021 1:04 PM
    Reply # 10922873 on 10794518
    Anonymous member (Administrator)

    Here's hoping the Court awards court costs and attorney fees!  If not, certainly there should be an item in the proposed budget that gets sent to the members with the notice of Annual Meeting, so they are informed and have a chance to vote.  With an unexpected item that big, I would make an extra effort to call it to the attention of the membership and to allow proxy and/or absentee voting.

    If there was a vote and all were in favor, it wouldn't really make a difference if one person voted per parcel or two, but if there are some for and some against, it certainly could make a difference.

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