The lawsuit filed against the BOD alleging the CC&R Amendment Voting process was unlawfully conducted, has resulted in a Temporary Restraining Order (TRO). A court hearing has been set for December 18, which is open to the public. The issued TRO prohibits the BOD from engaging in the following activities:
- Officially recording the amended CC&R’s
- Moving forward on any activity associated with the proposed SGCC Purchase Agreement. Such as, ballot solicitations, counting of ballots, or BOD mailings supporting its approval.
The Judge hearing the case has, however, permitted the BOD to vote on extending the deadline for ballot submittals and to negotiate with the SGCC on extension of the December 31st “Outside Closing Date”, which if not met would immediately terminate the agreement.
As a result of the TRO, the BOD issued the following directive:
“ Because there is a temporary restraining order in place, the Association and its agents are not allowed to undertake activities to encourage voting. We have to take a conservative reading of the temporary restraining order to be safe. Our attorneys advised us that the acts of a committee member or other volunteer may arguably be imputed to the Association, which means no committee members or Association volunteers should take any action to encourage voting in order to ensure that such activities do not potentially violate the temporary restraining order.”
This raises the question about the recent mailing homeowners received from Rob Ducca and Diana Hicks that contain information on the proposed Country Club Purchase Agreement, in which they argue for an Approval vote. The Ducca/Hicks mailings also included the SOA’s “Proposed SGCC Agreement Ballot” and an envelope for mailing it in. Given that Mr. Ducca is Chairman of the BOD’s Communication Committee and in frequent contact with BOD members, it is fair to assume that the BOD was aware of and approved inclusion of the SOA Ballots within the Ducca/Hicks mailing. If this is the case, and since the included SOA Ballot document contains a BOD recommendation to approve the Agreement, this could bring the NRS “Opposition Equal Space” requirement (NRS 116.31035) into play.
In a response to a homeowner email questioning any BOD involvement with the Ducca/Hicks mailing, the SOA’s attorney provided the following quote:
- “The board did not participate in or pay for the mailing. No board member reviewed the mailing or what was going to be said or contained in the mailing.
- The board did not approve the inclusion of the ballot in the mailing.
- The board believes the specific owners named on the outside of the envelope or others who do not represent the association compiled and sent the materials, including a copy of the ballot.
- The mailing, with the inclusion of the ballot does not trigger any rights under NRS 116.31035 because the association did not prepare, authorize, sanction, pay for or send the mailing.”
Logically speaking, only the SOA should disseminate ballots and conduct voting under a strictly controlled process. Although apparently not illegal, for others to do so should not be condoned by the BOD. For others to pass out ballots indiscriminately raises the concern about the potential for duplicate counting, conflicting results or improper handling. In response to this concern, the SOA attorney also provided the following:
- “The association has not sanctioned or authorized the handing out of any ballots by anyone. In fact there is a TRO in place prohibiting the association from doing so.
- The association has a mechanism in place to ensure each owner’s vote is counted only once. Additionally, such mechanism is set up so that only the first ballot that comes in from an owner will be counted. If a second ballot comes in from an owner who has already voted, such ballot will not be counted.
- There is a place on each ballot for an owner to sign. Therefore if an owner uses the original ballot provided to him by the association or if he uses a copy of the ballot, it will still have the owner’s signature, and as explained above if duplicates arrive only the first is counted. If any fraud is alleged, the owner can always testify as to how he voted.”
As a Committee Chairman subject to the above quoted BOD directive, hopefully Mr. Ducca conducted his mailings prior to BOD receipt of the TRO.