Opt-out of HOA lawsuit

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  • #373092
    kirbykins
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    Our HOA sued a third party based on a 39-37 vote of the membership. Is there a way to personally opt-out of the lawsuit in Idaho?

    #373093
    Dell
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    kirbykins,

    — Be aware that your HOA is most likely a corporation with articles of incorporation and CC&Rs that in total, require you to be a member as long as you own a lot within the boundaries of the HOA. You can confirm whether the HOA is a corporation by going to the Idaho Secretary of State (SOS) site and using the business lookup section. At the SoS site, you also want to confirm if the corporation is in good standing. “Good standing” (or not) might be quite relevant.

    — The corporation, not you or any other natural person, would be the plaintiff.

    — If the HOA brought suit pursuant to its governing documents (declaration, bylaws and articles of incorporation), then I see no way for an individual owner to “opt-out” from the suit.

    — But there are questions about whether the decision was made per the governing documents. Do the Bylaws require a vote of the owners before the HOA can file suit? Nationwide with HOAs, requiring such a vote would be unusual. Usually the board and the board alone has the legal authority to file suit. Though some boards might conduct an “advisory vote” (with no legal force) so owners can weigh in at least a bit.

    — In the two Idaho statutes that are most relevant (the Idaho HOA Act and the Idaho Nonprofit Corporation Act), I see nothing that helps.

    — Your best chances for halting the lawsuit likely lie in getting together others who feel as you do and trying to win a majority of seats on the board.

    — If you quote exactly what your bylaws and Declaration say about bringing suit, I might be able to say more.

    #373094
    kirbykins
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    Thank you for the quick reply. Yes, the HOA is a non-profit in the State of Idaho, and, yes, the HOA is the plaintiff. Alas, the articles of inc., by-laws, etc., are silent on the subject. Thanks again.

    #373095
    Dell
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    FWIW You could politely but formally ask the Board to vote on this (or provide evidence the board voted). Why? Because the Idaho¬†Nonprofit Corporation Act at 30-30-601 says, in so many words, that the board decides when to file lawsuits. Meaning the Board, and only the board, must have a formal, documented vote. Per the Idaho¬†HOA Act section 55-3204, the Board has the right to discuss potential litigation in executive session. But the board’s vote should be done at a meeting in open session.

    This might put some pressure on the board to comply with the law in general. As likely though is that the board will retaliate against you. Such is the nature of many HOA boards. Directors tend to be unskilled amateurs who nonetheless give many volunteer hours, without being paid a cent. It’s a terrible system.

    Else I would just note that sometimes bringing suit is appropriate.

    #373096
    kirbykins
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    Interesting…there was a “vote” by the membership but not certain about a board vote. I’m thinking they will say that was their vote, but it is something to check on. That is so true – it is a terrible system. Appreciate the info.

    #373097
    Dell
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    I agree about the board likely waving their collective hands and just saying the owners’ vote reflects the board vote. On the one hand, that’s foolish and can be risky. For one thing, it makes owners think they have the power to make decisions for which they do not actually have (not one bit) legal authority. But I also figure that, say, the defendant would get nowhere here arguing that the board had no authority to sue. After all, the HOA is using an attorney, correct? The attorney knows darn well that he/she takes his/her orders from the board, and not the owners, when it comes to writing up the initial paperwork for the lawsuit and filing it at the courthouse. This is enough lawful authority to make my point (about who has the legal authority to do xyz here) pretty irrelevant. At least, I do not think I would risk the wrath of the board to make a big fuss on the point. Not that you were so inclined.

    I know Idaho’s HOA statutes and case law pretty well. Idaho does not even have an ombudsman. So an Idaho HOA member would be usually stuck with lawyering up. The latter is a nightmare unto itself. As I noted above: Boards have too much unregulated power. They also tend to have the ego-boost of having their own attorney at their disposal. Boards can make one’s life a nightmare and get away with it. Why? Because to fight a board, usually one has to be able to afford an attorney.

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