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2009 Board Cooperation Opportunity: Indemnification

Posted By bobfrank On May 3, 2009 @ 04:59 In Truth Squad, SCA Board, Community Affairs, Operations, Other | 1 Comment

Al Glickman recently said to me on another blog: “On occasion, such as the dispute over your legal fees, what seems best for an individual resident may not also be best for the community as a whole. In such instances, the board should rely on its attorneys for proper guidance. Everyone may not agree with the attorney’s counsel, but isn’t that pretty much what the board has done so far in this case?”

Al, sorry to have to break the bad news, but you have been seriously tricked. Can you “handle the truth”?  I challenge you to concentrate on the following. I was not an “individual resident”. I was an “elected Director” who had only served 4 months before being illegally attacked by my fellow directors and the association attorney.

You must understand that the law provides that ALL directors have unlimited legal protections (indemnification) against all attacks. Without such comprehensive protection, no one would be foolish enough to volunteer to be on the board! If a director is found guilty of willful misconduct at the end of the legal process, the director may be required to reimburse some or all of the association’s expenses.

But, prior to the conclusion of legal actions, the association is required to pay and/or reimburse ALL of the director’s legal defense expenses. The law does not/can not limit a director in any way from getting the best defense possible.  The SCA board can not deny paying my well-justified and well-documented legal expenses while defending myself. Without such Nevada protections, no homeowner would be willing to serve as a director and subsidize the costs of defending themselves against unproven charges.

In this special case, full payment is particularly valid and indisputable because my defense costs were solely in response to the board’s bogus/false charges. After over a year of investigations by the Real Estate Division and the Attorney General, all charges were dropped.

I was never found guilty of anything. I WAS COMPLETELY EXONERATED. The other directors and the attorney were 100% wrong.

So, is it not a “banana republic” idea to try to claim that a group of fellow directors can formally charge another director with law violations, and then vote to deny reimbursing the costs of my defense?  Think about it…. Does that make any sense?  Is that “American justice”?  How would you respond if similarly attacked?  How would current board members react when becoming respondents, and they were not satisfied with the low-cost attorney selected by the D&O insurance company?

You should know that association attorney John Leach knew in August 2007 that I was doing everything in my power to get him replaced. It was an ACE campaign pledge that only I and Barry Friedman had honored.

You also should know there were hold-over/previous directors who were desperately trying to keep attorney John Leach to protect them. He was a key source of their protection against being charged with financial misconduct on the such issues as (1) the hundreds of thousands of dollars of reserves money owed by the developer since May 2005, (2) the restaurant lease mismanagement with hundreds of thousands of dollars of uncollected rent money over a 2 year period, and (3) the board’s handshake agreement to forgive collecting the $1.375 million Co-Gen money from Pulte due in May 2005.

So, Al, how about trying to be the honest and sincere person you claim to be and deal with the facts in this case?

And, 2009 board members:  Under your promised mantra of “cooperation–not confrontation” it is time to settle this major dispute.  The legal obligation to pay will not go away until it is resolved, and the cost is increasing due to normal late penalties and interest.  Would it not be wise to deal with this matter now, instead of going through months of disharmony and investigation by outside agencies?

1 Comment To "2009 Board Cooperation Opportunity: Indemnification"

#1 Comment By admin On May 5, 2009 @ May 5, 2009

The following related comments were posted on Ron Johnson’s OP-ED blog in the past two days:

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Al Glickman said May 3, 2009 5:48 PM:

To Bob Frank,

I am certainly no legal scholar so I am probably not qualified to argue your legal case with you. However, it has been said that you refused to partake of the BOD’s D&O policy coverages by refusing to accept the attorney approved by the insurer to argue your case. If this is, in fact, true, and you can correct me if it is not, then it would seem that a pretty good case can be made that the association/BOD met its requirements and the only reason that you still have any outstanding legal debts is that you refused to accept what was legally yours to take. It’s hard for me to believe that the insurer would not give you a qualified attorney in order to keep its potential losses to a minimum.

Like I said, I am no legal scholar. However, if you were not offered some protection and an attorney through the D&O policy coverage than it would appear to me that you might have a valid claim.

Yes, as a director you should have been entitled and apparently were offered unlimited legal protections. The questions are: Did you or did you not refuse such protections and choose to go your own way? And, if so, why should the community be forced to pay for something that was already covered and offered to you that you refused to accept?

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Bob Frank said May 4, 2009 10:42 PM:

Al Glickman said: “However, it has been said that you refused to partake of the BOD’s D&O policy coverages by refusing to accept the attorney approved by the insurer to argue your case.”

My response: Mr. Glickman, that is possibly the most outrageous lie (of so many) I have seen or heard in the past two years.

Considering the $30,000 seriousness of the situation, I urge you to make a careful reference of who said that to you, when, where, and who might have overheard it to substantiate your statement.

If the new board continues to refuse to pay this obligation, and finally forces this matter to go trial or arbitration, you might have the opportunity to be deposed about your blog statement as it could be considered evidence of how desperate some individuals are to promote this fraud.

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Al Glickman said May 5, 2009 12:00 PM

Sorry Bob,

My only reference is that I thought I remembered hearing it at a board meeting in the past when the subject was brought up and discussed at some length. That’s it, unless my memory is going completely bonkers. Nobody said anything directly to me about the subject.

As I said in an earlier post, I’m no attorney, but if this is truly not the case, then it seems that you may have a valid claim.

Since I am only a neutral observer and have no direct stake in your dispute other than as a resident of SCA, I would prefer to not continue this dialogue any further.

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Bob Frank said May 5, 2009 8:57 PM:

Mr. Glickman said: “My only reference is that I thought I remembered hearing it at a board meeting in the past when the subject was brought up and discussed at some length.” “Nobody said anything directly to me about the subject.”

Sorry, Mr. Glickman, but your juvenile excuses are not credible. If fact, your “I thought I remembered” and frequent use of “I’m no attorney” statements may have destroyed any credibility you might have on matters of importance in the future.

You have been posting on this topic for weeks and you have made it clear that you either have no facts of any kind to back up your aggressive personal attacks on me; or, when the going gets tough you run and hide under the “I can not recall” excuse. Either way, your behavior has been despicable.

At your age, do you really think you can get away with such highly damaging postings for weeks on such an extremely serious and legally contentious matter with no consequences? Your postings have already proven you are NOT “a neutral observer and have no direct stake”. If this has to go to trial or arbitration, you are certainly one of the residents on the list of potential witnesses.

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