Attorney to Board: changing 11.06 "breach of the covenants"
Jul 7, 2016 12:39:40 GMT -7
Admin, chris, and 2 more like this
Post by leokeeler on Jul 7, 2016 12:39:40 GMT -7
Attorney Jon Hesse has informed the GLA Board of Directors if they attempt to use Covenant 2.07 to change the interest rate of 11.06 from 18% to 12% as written up in the Spring Newsletter, "that would be a clear evasion of the covenants and the "change" or alteration would be invalid and a breach of the covenants." See the RETYPED (due to Web Limitations) letter below and attached original PDF files.
his is why at the June 25th Board Listens meeting it was said that the vote on the Board's proposed changes to the Governing Documents would not occur on August 6th, and because of "legal concerns" no date could be predicted.
How has GLA Attorney Alanah responded to this and is there more we should know about?
TELEPHONE (406) 222-6037 FACSIMILE (406) 22-6040
EMAIL: jhesse@jm-hesselaw.com
(remainder of address omitted)
June 16, 2016
Charlotte Mizzi
President
Glastonbury Landowners Association, Inc.
P.O. Box 312
Emigrant, MT 59027
RE: “Temporary Change or Amendment” of Section 11.06 of the Restated Declaration of Covenants for the Community of Glastonbury
Dear Ms. Mizzi:
Please be advised thkat I represent Deborah Blais.
As you are aware, the restrictive covenants applicable to the property which Glastonbury Landowners Association (“Association”) regulates are the Restated Declaration of Covenants for the Community of Glastonbury dated September 26, 1997, and recorded at Roll 124, Pages 548-577 and pages 351-380.
As you are also aware, Section 2.05 of the Amendment of Covenants, states “the covenants in this Declaration may be altered, amended, modified, waived, abandoned or terminated in whole or in part at any time by the affirmative vote of at least fifty-one percent (51%) of the membership Interests of the Association in good standing at the time,” Indeed, the Association recognized that this provision was the means to amend the covenants because at pages 376 and 573 of the Restated Declaration of Covenants Patrick Wolberg, President of the Association and Edward L. Francis, Executive Vice-President of the Church Universal and Triumphant t, Inc. signed the Certification of the Votes showing that at least 50% of the landowners voted in favor of the amendment of the covenants with 74.8% of the landowners voting.
I understand that the Association desires to implement a “rule” which would “temporarily change or amend” the interest rate in Section 11.06 from 18% to 12% until such time as the Membership can vote on an amendment to Section 11.06 changing the interest rate from 18% to 12%. The Association wants to “temporarily change” that Section by using its Rule making authority under Section 2.07 rather than submitting the temporary amendment” issue to the Members as set forth in Section 2.05.
The question is, can the Association do that? The answer is no.
The Montana Supreme Court has long held that restrictive covenants are to be strictly construed, that they are to be construed under the same rules of construction as other contracts, and that the Courts are to read declarations of covenants in their four corners as a whole, and terms are construed in the ordinary or popular sense. See, Hillcrest Homeowners Association v. Wiley, 239 Mont. 54, 778 P.2d 421, (1989); Town and Country Estate Association v. Slater, 227 Mont. 489740 P.2d 668 (1987); Bordas v. Virginia City Ranches Association, 324 Mont. 263, 102 p.3d 1219 (2004) and, Windemere Homeowners Association, Inc. V. McCue, 297 Mont. 77, 990 P2d 769 (1999).
What the Association is doing is altering the Covenants before the Membership votes on the issue. The Membership may vote to not amend Section 11.06. Nowhere in Sections 2.05 and 2.07, or anywhere in the covenants, does it state that the Association can “temporarily amend or change” the Covenants by using its rule making authority or otherwise. The purpose of rules and regulations is to implement the covenants, not make substantive changes to the covenants. Only the Membership can makes substantive changes in the covenants.
Should the Association attempt to alter the Covenants, specifically Section 11.06, under Section 2.07, that would be a clear evasion of the covenants, and the “change” or alteration would be invalid and a breach of the covenants.
Thke question arises, why does the Association want to “temporarily change” the interest rate from 18% to 12%? Please answer this question. If it is because there is a belief that the 18% interest rate is usurious, it is my clients’ position that the 18% interest rate is not a usurious interest rate. If it is the intent of the Association to retroactively apply the change in the interest rate to individuals and entities that have failed to pay their assessments, that cannot be done and it would potentially open the Association to claims by Members who in the past were required to pay the 18% interest because they failed to pay their assessments when due. I can provide legal authority on these points alter.
-2-
In conclusion, if the Association temporarily changes the interest rate from 18% to 12%, that is a breach of the Covenants. Section 11.06, just like any other covenant, must be followed until the Membership votes to amend it.
If you have questions, please call or email my office.
Sincerely yours,
/s/
Jon M. Hesse
Attorney at Law
JMH/mm
CC: Deborah, D. Blais
Alanah N. Griffith, Griffith Law Group
AAttorney Hesse Ltr. Pg 1.tif (967.88 KB)
Attorney Hesse Ltr. Pg 2.tif (975.85 KB)
Attorney Hesse Ltr. Pg 3.tif (970.3 KB)
This is why at the June 25th Board Listens meeting it was said that the vote on the Board's proposed changes to the Governing Documents would not occur on August 6th, and because of "legal concerns" no date could be predicted.
How has GLA Attorney Alanah responded to this and is there more we should know about?
his is why at the June 25th Board Listens meeting it was said that the vote on the Board's proposed changes to the Governing Documents would not occur on August 6th, and because of "legal concerns" no date could be predicted.
How has GLA Attorney Alanah responded to this and is there more we should know about?
RETYPED
Jon M. Hesse
Jon M. Hesse, P.C.
ATTORNEY AT LAW
POST OFFICE BOX 1078
LIVINGSTON, MT, 59047
Jon M. Hesse
Jon M. Hesse, P.C.
ATTORNEY AT LAW
POST OFFICE BOX 1078
LIVINGSTON, MT, 59047
TELEPHONE (406) 222-6037 FACSIMILE (406) 22-6040
EMAIL: jhesse@jm-hesselaw.com
(remainder of address omitted)
June 16, 2016
Charlotte Mizzi
President
Glastonbury Landowners Association, Inc.
P.O. Box 312
Emigrant, MT 59027
RE: “Temporary Change or Amendment” of Section 11.06 of the Restated Declaration of Covenants for the Community of Glastonbury
Dear Ms. Mizzi:
Please be advised thkat I represent Deborah Blais.
As you are aware, the restrictive covenants applicable to the property which Glastonbury Landowners Association (“Association”) regulates are the Restated Declaration of Covenants for the Community of Glastonbury dated September 26, 1997, and recorded at Roll 124, Pages 548-577 and pages 351-380.
As you are also aware, Section 2.05 of the Amendment of Covenants, states “the covenants in this Declaration may be altered, amended, modified, waived, abandoned or terminated in whole or in part at any time by the affirmative vote of at least fifty-one percent (51%) of the membership Interests of the Association in good standing at the time,” Indeed, the Association recognized that this provision was the means to amend the covenants because at pages 376 and 573 of the Restated Declaration of Covenants Patrick Wolberg, President of the Association and Edward L. Francis, Executive Vice-President of the Church Universal and Triumphant t, Inc. signed the Certification of the Votes showing that at least 50% of the landowners voted in favor of the amendment of the covenants with 74.8% of the landowners voting.
I understand that the Association desires to implement a “rule” which would “temporarily change or amend” the interest rate in Section 11.06 from 18% to 12% until such time as the Membership can vote on an amendment to Section 11.06 changing the interest rate from 18% to 12%. The Association wants to “temporarily change” that Section by using its Rule making authority under Section 2.07 rather than submitting the temporary amendment” issue to the Members as set forth in Section 2.05.
The question is, can the Association do that? The answer is no.
The Montana Supreme Court has long held that restrictive covenants are to be strictly construed, that they are to be construed under the same rules of construction as other contracts, and that the Courts are to read declarations of covenants in their four corners as a whole, and terms are construed in the ordinary or popular sense. See, Hillcrest Homeowners Association v. Wiley, 239 Mont. 54, 778 P.2d 421, (1989); Town and Country Estate Association v. Slater, 227 Mont. 489740 P.2d 668 (1987); Bordas v. Virginia City Ranches Association, 324 Mont. 263, 102 p.3d 1219 (2004) and, Windemere Homeowners Association, Inc. V. McCue, 297 Mont. 77, 990 P2d 769 (1999).
What the Association is doing is altering the Covenants before the Membership votes on the issue. The Membership may vote to not amend Section 11.06. Nowhere in Sections 2.05 and 2.07, or anywhere in the covenants, does it state that the Association can “temporarily amend or change” the Covenants by using its rule making authority or otherwise. The purpose of rules and regulations is to implement the covenants, not make substantive changes to the covenants. Only the Membership can makes substantive changes in the covenants.
Should the Association attempt to alter the Covenants, specifically Section 11.06, under Section 2.07, that would be a clear evasion of the covenants, and the “change” or alteration would be invalid and a breach of the covenants.
Thke question arises, why does the Association want to “temporarily change” the interest rate from 18% to 12%? Please answer this question. If it is because there is a belief that the 18% interest rate is usurious, it is my clients’ position that the 18% interest rate is not a usurious interest rate. If it is the intent of the Association to retroactively apply the change in the interest rate to individuals and entities that have failed to pay their assessments, that cannot be done and it would potentially open the Association to claims by Members who in the past were required to pay the 18% interest because they failed to pay their assessments when due. I can provide legal authority on these points alter.
-2-
In conclusion, if the Association temporarily changes the interest rate from 18% to 12%, that is a breach of the Covenants. Section 11.06, just like any other covenant, must be followed until the Membership votes to amend it.
If you have questions, please call or email my office.
Sincerely yours,
/s/
Jon M. Hesse
Attorney at Law
JMH/mm
CC: Deborah, D. Blais
Alanah N. Griffith, Griffith Law Group
AAttorney Hesse Ltr. Pg 1.tif (967.88 KB)
Attorney Hesse Ltr. Pg 2.tif (975.85 KB)
Attorney Hesse Ltr. Pg 3.tif (970.3 KB)
This is why at the June 25th Board Listens meeting it was said that the vote on the Board's proposed changes to the Governing Documents would not occur on August 6th, and because of "legal concerns" no date could be predicted.
How has GLA Attorney Alanah responded to this and is there more we should know about?
