By Deborah Goonan, Independent American Communities
What happens when homeowners choose to be politically involved in their HOA-governed community? Industry trade groups would have the public believe that HOAs encourage homeowners to be active participants in their community’s self-governance.
But, more often than not, IAC hears from owners who face backlash when they question the HOA board’s priorities or decisions.
Mike Glassic and his wife, Noreen Gorka, both Pennsylvania homeowners, know the pain of HOA conflict all too well. For ten long years, the couple has been fighting a legal battle against their Pocono area homeowners’ association.
What started the 10-year HOA lawsuit?
More than 10 years ago, Mike started a website to communicate with fellow homeowners, stillwaterlakes.com. The goal: to promote transparency in the Stillwater Lakes Civic Association (SLCA).
Established in 1976, Stillwater Lakes is a planned community in Coolbaugh Township, Monroe County, PA.
Mike chose to start his website to communicate his concerns with other homeowners in Stillwater Lakes. Both homeowners wanted the Association to provide details about their HOA fees. Noreen was serving on the civic association’s board at the time, yet her requests to examine financial records were denied by SLCA and NEPA/Wilkins management company.
Glassic registered the http://www.Stillwaterlakes.net domain in 2006, and registered the http://www.stillwaterlakes.com com domain in 2008. Both domains lead to http://www.stillwaterlakes.net.
Stillwaterlakes.net is openly critical of both SLCA’s board and management company. Glassic documents some serious concerns, accusing SLCA of keeping owners in the dark about important issues affecting their community.
For example, Mike documents the HOA board’s deferred maintenance of the swimming pool, private roads, and the sewer system. He objects to the board’s unilateral decision to commit members to a mortgage on the common property. He’s equally upset about HOA’s decision sell its first right of refusal on a parcel of common land, without a vote of HOA members.
At one point, the Association attempted to convert the HOA to a housing co-op, a move that would have fundamentally altered the property rights of all members.
Website lawsuit alleges trademark infringement
Not pleased about the critical website, SLCA (the HOA) sued both Glassic and Gorka in federal court (the U.S. District Court for the Middle District of Pennsylvania) alleging ‘trademark infringement.’
The lawsuit claims Glassic’s website published “inaccurate” information, and created confusion for “consumers” between the Activist website and Stillwater Lakes Civic Association’s official website.
Attorney Haros requested the court to temporarily shut down Mike’s website. He asked the court to order Glassic to add a disclaimer to his website, informing readers that it is not the official website of Stillwater Lakes Civic Association.
Glassic complied with that request — he says even before the lawsuit was filed. The website at stillwaterlakes.net now displays a disclaimer in the footer section of the site.
The HOA’s legal complaint also asked the court to force Glassic to surrender both domain names for his website to Stillwater Lakes Civic Association, and to stop using the SCLA acronym to refer to “Stillwater Lakes Community Activists.”
Incidentally, in March 2008, SLCA launched its own official website for the community, using the domain name http://www.mystillwaterlakes.com.
Nonetheless, Haros claimed that his client had been damaged, because Glassic secured their preferred domain names before the HOA.
Do HOAs have ‘consumers’ or not?
Be sure to note the legal reference to “consumers” — in reference to homeowners and potential home buyers — in the lawsuit excerpt above. Haros alleges that Mike’s activist website, with a similar domain name, might turn off potential home buyers. That, in turn, might harm the community association.
Talk about confusion! Haros’ legal complaint conflates the HOA corporate entity with the planned community and its attractive features.
Stillwater Lakes buyers purchase a home with a financial obligation to maintain common property, including the lakes and other amenities.
But Stillwater Lakes Community Association is not a ‘product’ or a ‘service.’ It’s a legal entity that exists to govern and manage the affairs of the community.
(Pixabay.com)CAI attorneys say HOAs don’t have consumers
Ironically, at the same time SCLA filed its federal lawsuit, the PA-Delaware Valley Chapter of Community Associations Institute (CAI), wrote a position paper, stating that HOA members are not ‘consumers’ for the purposes of regulation under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTLCPL).
The paper was drafted with the assistance of Young & Haros attorney, Gregory Malaska, an active member of CAI’s Pennsylvania Delaware Valley Chapter, and prepared by Attorney Stefan Richter, then Vice Chair of the CAI’s PA Legislative Action Committee.
Entitled Unfair Trade Practices and Consumer Protection Law — HB 538 and 977, the authors made the convincing legal argument that HOA members are not ‘consumers.’
Why not?
Think about it.
Unlike true consumers of goods and services sold by businesses in a free market, members of a mandatory housing association cannot legally opt out of paying homeowners, condo, or co-op association fees.
Under this logic, HOA members aren’t really ‘consumers’ of the Association. Members must pay their mandatory fees, whether the HOA performs its duties or not. If a homeowner fails to pay, the HOA can place a lien on their home, and collect that lien by foreclosing on the property.
But when homeowners are dissatisfied with the HOA’s ‘service,’ their only recourse is to sue their HOA, its board members, and its management company.
Essentially, HOA are members are de facto taxpayers in a privately-governed community.
But they’re not consumers of the Association.
(Pixabay.com free image)
Has the HOA industry set a double standard?
You bet!
In the face of regulatory legislation , CAI attorneys took the position that association-governing entities are private corporations, and that there exists a contractual relationship between the HOA and its members.
Incredibly, CAI even argues that HOA members are “equals” to their board members with their fiduciary duties. After all, they maintain, homeowners have the right to bring legal actions in civil court.
Once again, CAI fails to mention that the legal playing field is unbalanced. The truth is, the HOA board uses the collective purse of the Association to pay for legal fees and insurance policies to defend its board members.
The homeowner, by contrast, pays out-of-pocket, usually up front, for attorney fees.
More than a decade later, CAI and its esteemed attorneys stand by the same questionable legal theories.
Federal Lawsuit dismissed
Regardless of the legal double standard, the court denied Glassic’s attempt to dismiss the lawsuit. After that, the legal discovery process and litigation dragged on for a decade.
During that time, Glassic has continued to shed light on HOA issues at Stillwater Lakes on his Young & Haros Gripe Site.
According to a timeline maintained on that website, Mike notes that, during legal discovery, the HOA was unable to gather sufficient evidence that his stillwaterlakes.net website confused home buyers and homeowners.
Bottom line? SLCA’s lawsuit was officially dismissed, with prejudice, last month. The HOA cannot file another lawsuit on trademark infringement or similar grounds.
In January 2019, Glassic and Gorka filed a lawsuit against Stillwater Lakes Civic Association, Attorney Nicholas C. Haros, and his law firm, Haros & Young, LLC, and Attorney Gregory Malaska, alleging malicious prosecution.
But the homeowners’ lawsuit could be dismissed, too, if they are unable to obtain a new attorney.
Will ten years fighting a frivolous HOA lawsuit, and SLCA’s attempt to squelch free speech, result in nothing more than a legal stalemate? ♦
Sources:
Stillwater Lakes Couple Fights 10 year Legal Battle
Monday, August 19, 2019
By Justin Dorsey, Blue Ridge Cable 13
Official Stillwater Lakes Civic Association website
Stillwater Lakes Community Activists website
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