The headline could have easily said “again and again” as there are two similar suits a year apart.
In December 2018, Preston Tower resident Leonard Wennmohs sued Preston Tower’s HOA and management company Intercity Investments (ICI). He claimed that when he was Treasurer from 2015-2017, financial ledgers, updated monthly, had been made available to residents. Wennmohs alleged that under a new building manager (Rob Kennehan) the records became restricted. The suit alleged that not only were the books not available, but written requests were also required to see them (that were often ignored) and that he’d been told he’d be charged a fee to view the records.
HOA Bylaws Largely Ignored
The suit calls out the HOA bylaws that state the building is required to make available for owners’ review a monthly ledger, monthly receipts and expenditures, annual statement, and a common expense budget. The suit alleges the HOA and ICI are also required to publish a “set of dates and times that the Association or ICI will make the above-listed records available for review to all owners”
Preston Tower HOA and ICI answered that suit essentially saying everything was made available with the exception of legal bills, whose contents would expose private issues with other residents. Wennmohs could view them any business day. The reason for the appointment was to ensure someone was in the office. They say that the request form Wennmohs had an issue with was instituted while he was on the board, stating “He had no qualms with the form until he himself was asked to utilize it.”
Wennmohs’ response was to ratchet things up with a six-count indictment dredging up the building’s handling of the 2016 catastrophic flood and the lawsuit it generated (that they eventually lost). I’m not sure I see the connection except in behavioral trends.
The building answered again, reiterating their prior statements.
In July 2019, both parties agreed to settle. It’s unknown if any monies changed hands, but likely an agreement was struck to make documents more accessible was agreed upon. (Docs here, here, here, here, here.)
That’s a heck of a preamble…
On June 15, a similar suit was filed by resident Greg Gutman that states:
“Association management has turned into a fortress ignoring and stonewalling communications from those seeking answers or explanations, or having the temerity to express dissatisfaction with the manner in which Association facility is being operated.”
Gutman believes, “…in the past several years the association’s board of directors and its manager, Rob Kennehan … have failed in their duties to operate the association with due regard to prudent money management, the existence of nepotism, self-dealing, absentee management, transparency of their conduct, management of the Associations’ facilities and common areas and their duty of good faith and fiduciary obligations.”
In addition, and perhaps more troubling financially, Guzman accuses Association management of turning every “dispute or owner complaint” over to its lawyers to deal with “at a very high per hour price.”
Finally, he says board elections have been postponed (due to COVID-19?) but could have been handled. One assumes he means distributing and collecting paper ballots which could be left for an appropriate period of time before opening to ensure any virus was dead.
Echoing back to Wennmohs, Gutman argues that, “Association management has made it near impossible for owners to exercise their rights to examine the books and records of the Association to inform themselves on the issues that would impact on their votes in the board election process.”
As evidence, Gutman states he requested access to association records on May 31, which went unanswered even after “a number of reminders, inquiries directed to the association’s counsel, as well as repeated telephone calls and visits to the management office.”
He says a number of other residents received the same treatment.
The reason we find out about Wennmohs’ suit is because part of the discovery of this suit asks to see Wennmohs’ settlement to prove HOA and management have not abided by that settlement.
I have to say that I’m all for transparency and open records for those residents of an HOA who pay attention (the vast majority are on remote control unless there’s a special assessment or dues hike). As this was filed days ago, there has been no reply from the HOA/management.
On a separate note, the suit also claims damages resulting from the closure of the pool, conference room, and community room due to COVID-19. I suspect we will see more of these suits, but I wonder how many will be successful. My guess is that resident wins will be slim.
Anyway, two suits, two years, similar claims of financial record secrecy and inaccessibility. One settled out of court and the other has yet to have their day. Given reports, this appears to be Preston Tower’s seventh suit in seven years.