2010-08-19 / Front Page

Appellate court sides with Lushmeadows

BY JILL BALLINGER GAZETTE EDITOR

After years of litigation that had racked up thousands of dollars in legal fees, the California Fifth Appellate Court has ruled in favor of the Lushmeadows Association in its lawsuit against Eugene Taggs, Jeffrey and Mary Alice Whalley and Norman Wray.

The court’s decision, issued two weeks ago, affirmed the Mariposa County Superior Court decision that Taggs and his fellow plaintiffs were responsible for paying homeowner association dues and that the association could enforce the CC&Rs. The protracted dispute drug on for years, with legal fees mounting as time wore on.

The appellate court not only found that the defendants were responsible for homeowners’ dues, but also awarded the association all legal fees associated with the case.

The whole issue began in 2006, when then-president of the Lushmeadows Association Lowell Young filed small claims court actions against a number of Lushmeadows homeowners for not paying their assessed association dues, which are $120 per year.

Taggs originally challenged the association’s legal right to assess any property owner in the subdivision. After Young filed the small claims actions, he asked the board of directors to pay some $35,000 in legal charges to attorney Ann Rankin. The board took out a deed of trust on its clubhouse, provided by Young, to pay the bill.

Many members of the association took exception to the action, and Young was removed from his post. A good portion of Rankin’s charges at that time were the result of telephone conversations to Young.

Taggs, the Whalleys and Wray counter-sued the association, and now it appears that they will be left footing a pretty big legal bill.

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The lawsuit was not initiated

The lawsuit was not initiated by Lowell Young who simply carried out the unanimous wishes of the LM Board and followed the current CC&Rs that required the Board to collect unpaid Association dues. State law also required the Board to collect dues from all the Lushmeadows property owners. After the small claims court refused to hear the case, the Board interviewed attorneys and hired Ann Rankin who was the most experienced attorney available. Most of the costs of the lawsuit came from the stalling techniques of the opposing attorney and preparing for the various court appearances by Ms. Rankin. Some of the costs of Ms. Rankin's office came from questions from Association members concerning the lawsuit and legal requirements of an Association. As President of the Association, Mr. Young made these phone calls and much of the business was conducted by email or fax machine. When the fees were over $30,000, the Board needed to obtain funds to pay the attorney. No bank would loan the Association any funds because of the lawsuit. Mr. Young offered the Association Board funds to pay the attorney in exchange for a first trust deed on the clubhouse property as security for the loan. The terms are more favorable than any financial institution would have made available for commercial property at that time. This loan may be paid off at any time without penalties.

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