HOA has filed a $1 million lawsuit against one of its property owners for defamation, libel, slander, and false light invasion of privacy. The property owner has operated a blog that has criticized the actions of the HOA's general manager and boar
Gatlinburg, TN - April 23, 2010 - According to the Community Associations Institute, during 2009, Home Owner Associations, also known as HOAs, controlled nearly 25 million homes - or more than 22% of the 113 million total American households. This number is expected to grow to over 40% during the next few years.
However, many property owners complain that their Home Owner Associations operate as if it was a quasi-government entity with dictatorial powers that are not properly regulated at either the state or federal level. Often, these HOAs are illegitimately and improperly administered by members who abuse their position by ignoring the written regime documents that are intended to control the powers and actions of boards and managers.
Robert Goodman, a 62 year old, semi-retired executive with three kids in college, is convinced that he owns a property that is being grossly mismanaged by its general manager and HOA board. Goodman is an owner at Deer Ridge Mountain Resort, an 84 unit condo development in Gatlinburg, Tennessee.
When his HOA's board continually blocked all attempts at seeing the books and records or even getting the names of other owners, Goodman created a blog at www.DeerRidgeOwners.com so that all owners could easily participate in discussions about what was really happening at their property. Now, he is being sued for over $1 million by his own HOA because of that blog and its contents. A complete copy of the entire lawsuit is available for download at his blog.
Goodman said, "We've owned this property for nearly six years. I've made dozens of requests to get copies or view the Administrators' Book that is required by state law to show, in chronological order, the income, expenses and supporting vouchers for every transaction by the property's HOA. The general manager, who has essentially controlled this property for a decade, and the board of directors have refused to even show me or other interested owners the Administrators' Book. This is a direct violation of Tennessee state law 66-27-113."
"What conclusions would you reach if your bank or stock broker adamantly refused all requests to show you the books on your bank or brokerage accounts for 6 years? Would you conclude that something was very suspicious about the way your money was being handled? Would you be equally suspicious about the secrets that motivated their refusal? Those are the conclusions that I, and other owners, have reached regarding the management of our investment at Deer Ridge."
Goodman added, "Not only are they violating state law, the board has continually violated the written requirements of our own master deed and bylaws with multiple abuses of power including spending over $120,000 of owners' money on unauthorized projects. They continue to overcharge a third of all property owners by 82% for their monthly assessments. They also violated Tennessee state law by refusing to even provide a list of all owners and their addresses. I believe that this refusal was part of a concerted attempt by those in power to block any communications between owners so that concerns would not be raised about their questionable management and the misuse of our funds. It was only under threat of a lawsuit that I was able to finally get the owner list. This board and general manger are still trying to do all they can to interfere with our freedom of speech. This $1 million lawsuit against me shows just how far they are willing to go."
He continued, "I even went to the expense of recently hiring an independent attorney to provide us with a 13 point legal opinion just to make sure that our claims were valid. On 12 of the 13 points, the attorney found that our assertions were correct and the board was at major fault. Not surprisingly, the board completely ignored the entire legal opinion."
Goodman, who is an MBA, spent 15 years running his own real estate company and 16 years as a management consultant to thousands of start up companies CEOs worldwide. He knows something about management, real estate, finance, financials and due diligence - and he knows something about the Web and how to set up a blog.
"Virtually all of my business for the past 16 years has come from the Web. So, I already knew how to leverage the Internet with my knowledge of what is required to produce web content. Setting up the blog was easy. Adding all the content about all the many things that are wrong at Deer Ridge has taken man-months of time and effort."
"I am a big believer in the power of the Web - and the massive benefits it offers for democratizing information and making that information easily accessible. To me, it seemed like a natural way to let other owners know what was really happening at this property. The blog let me fully document multiple examples of how our rights have been blatantly abused by the power clique which has controlled this property for years."
The Deer Ridge HOA lawsuit alleges that Goodman is guilty of "defamation, libel, slander, false light invasion of privacy, procurement of breach of contract, and intentional interference with business relationships." The suit attempts to block him "from further publishing matters concerning Plaintiffs in such a way that casts Plaintiffs in a false light, from further inducing persons to breach contracts...and from further interfering with Plaintiffs' business relationships." It also attempts to force him to remove the existing content from his blog.
The HOA also is asking the Court to "assess compensatory damages against Defendant in an amount of no less than $250,000" and to "assess punitive damages against Defendant in an amount of no less than $750,000" along with costs and legal fees. The HOA also wants to "assess damages against Defendant in an amount of five hundred dollars ($500) per day for each day Defendant has published and/or continues to publish the statements described herein and/or any other libelous, defamatory, and/or false light statements, regarding Plaintiffs."
Goodman responded, "The claims in their lawsuit are so completely frivolous on every single point of issue - that sanctions against the plaintiffs' attorney may be involved. Once again, the board is wasting owners' money - in this case, tens of thousands of dollars of our money on this lawsuit - just to protect their own empire and their own secrets. The blog speaks for itself and has appropriate disclaimer language. Their $1 million lawsuit is simply a preemptive attempt at intimidation to quash my own lawsuit against the HOA and its board members. The blog made it clear that I intend to force them to abide by Tennessee state law and Deer Ridge law. We were already seeking an attorney to represent us in our claims on the dozen points contained in the legal opinion. Now, I need an attorney to handle both their frivolous claims and the original dozen points of issue - and get these matters finally settled for the benefit of all owners. Many of us want to find out what secrets the general manager and board are so desperate to hide from all the other owners."
Goodman added, "This case could have far reaching implications on at least two national issues: Firstly, what exactly are the rights to freedom of speech for blog authors everywhere - what can and cannot be published? Secondly, what is going to be done about the tyrannical and illegitimate abuses that HOA homeowners are forced to endure daily in many of the 305,000 HOA communities that house over 60 million Americans nationwide?" Goodman said he hopes that both the freedom of speech issue and the lawsuit gain the attention of the ACLU and the Electronic Frontier Foundation.
For the last issue, Goodman concluded, "Our state governments in Tennessee and many other states desperately need to develop new regulations with powerful enforcement teeth. They need to address the blatant abuse of powers at these fiefdoms that serve as quasi-governments for so many folks - and that adversely impact the rights of so many lives. Homeowners need a way of forcing their HOA to abide by the law - without having to spend a fortune on legal fees."
Contact: Robert Goodman
Email: Litigation @ DeerRidgeOwners.com