Question and Answers about the Lawsuit
By The RomeRock Association Board of Directors.
Who were the parties to the Lawsuit?
Lawsuit was filed by Plaintiffs: Neighbors for a Better Roaming Shores Inc., Barry O’Connell, Pat Long, and Joseph W Petraus. The suit was filed against Defendants: RomeRock Association, Dell Rogers, Rick Gainar, Ed Baitt, John Martin, and Tom Sopko. Date filed: March 20, 2014.
What was the Lawsuit About?
The Lawsuit was about how a Bylaw change was implemented. The Plaintiffs claimed a Bylaw was incorrectly implemented. The Bylaw was believed to be implemented as any other Bylaw. The Bylaw in question was Article 2. Section 16. This Article/Section essentially requires the Board of Directors to seek Member approval for borrowing or assessing over $500,000. This amendment is about borrowing and assessing, not about the dollar size or scope of a project.
Why wasn’t the Amendment just done again?
The Board believed the implementation of this Bylaw to be no different than any other Bylaw implementation including Bylaws done by O’Connell, Long and Petraus when they were Directors. The Board did not want other Bylaws to come into question if this Amendment had to be done over. Our legal counsel recommended not doing the Amendment over.
Can I see copies of the lawsuit and settlement documents?
Yes. These items have always been available through the Ashtabula Clerk of Courts. These items are now posted on the Association Website with this Q & A. The Bylaws and Rules can also be found on the Website.
Isn’t Mediation required by the Bylaws as a first step to an objection?
Yes. The “Mediation Bylaw”, which was implemented when Barry O’Connell was Board President, was not the first step chosen by the Plaintiffs. The Lawsuit was chosen as their first step. Mediation, as stipulated in the Bylaws, was subsequently ordered by the Judge.
What were the costs of this Lawsuit?
The defense costs which are the Association costs, were approximately $40,000; this is actual out of pocket costs, and does not include the time of the Board, time of office personnel, or the cost of the lead Attorney provided by our Insurance Company under Directors and Officers Insurance. This equates to approximately $36 per dues paying Active Member. The costs of the Attorney provided by our Insurance Company are estimated to be in the range of $18,000 to $20,000, and are in addition to the Association costs. All these costs were accumulated over a 27 month period. The Plaintiff’s costs are unknown to the Association.
Why was there a $25 One-Time Legal Assessment?
The Board believed that the reduction in maintenance of amenities caused by the Lawsuit was not fair to the general Active Members. As it is, the Legal Assessment only covered about $27,000 of the Lawsuit costs.
Why was it necessary to sue Board Members personally?
It is not understood why Neighbors for a Better Roaming Shores Inc, Barry O’Connell, Pat Long, and Joseph W. Petraus found it necessary to personally sue unpaid volunteer Board members. Nor it is not understood why other Board Members at the time, Gary Stamm and Rick Rumbaugh, were not part of the suit.
Why was there a Settlement Agreement and a Referendum Ballot?
As part of the court ordered Mediation, the Board agreed to the Settlement Agreement. We had three independent estimates that to take the Lawsuit to conclusion in the Courts, would cost the Association an additional $60,000 to $100,000. Total cost to the Association would then be in the neighborhood of $100,000 to $140,000. Although the Board believed it was on solid ground, the Board did not want to spend 10% or more of an annual budget for the Lawsuit. Hence, we reluctantly agreed to the Settlement that included the Referendum Ballot. The Referendum Ballot was a vote on whether to keep or do away with Article 2, Section 16. If Article 2, Section 16 were removed, the Board of Directors could bind the Members to unlimited amounts of money borrowing or assessing.
What was the result of the Referendum Ballot?
The results were 80 Yes votes and 426 No votes. This means that Article 2. Section 16 remains as a Bylaw. This means that the Board of Directors must seek Member approval for borrowing or assessing over $500,000. A simple majority of Yes votes cast could have removed this Bylaw.
Is it over?
The current Board believes that the Lawsuit is over and hopes that the Association can move ahead with the business of being a lake recreational home owners association.
The Board of Directors thanks you for your support and patience.
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