In 2008 the DC HOA in Casa Grande, AZ ran into huge debts. It had relied on the advice of its attorney, CAI member Charles Maxwell. In 2009 a homeowner filed for and was granted receivership by the Pinal County court. The court found that an unauthorized removal of some $665,000 from the HOA’s bank and ordered Receivership to protect the assets of the HOA. Now, the HOA is being run under the court ordered Receiver.
Last month, the Receiver filed charges of breach of fiduciary duty, breach of ethical duties, disgorgement, professional negligence, aiding and abetting, and breach of contract against the Maxwell & Morgan law firm as well as against Maxwell and his wife, personally.
“Aiding and abetting” is like colluding. “Disgorgement” is asking that the wrong-doers give up their illegally gained profits.
Except for the breach of contract, the above charges are torts — wrongful actions — permitting a claim for punitive damages, which the Receiver is seeking. Filing tort claims and seeking punitive damages against the HOA and the individual directors is the only effective means today that homeowners have against abusive boards.
Gee, maybe the legislature will see the wisdom of providing its own penalties for wrong doing by abusive HOA boards. Maybe CAI will think this is the smart way to go.
File! File! File tort actions and seek punitive damages before it’s too late!