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When Conflict Comes Home: Homeowner Association Turns Into Mafia-like Protection Racket

Eye on Conflict Blog by Lee Jay Berman

In Hawaii, a Molokai couple won a $3.9 million verdict against their Homeowners’ Association (HOA) and individual defendants when the Maui jury found that they had been subjected to bullying, threats, harassment and intimidation from their own HOA Board members and others in the complex. Jim and Nancy Bevill were subjected to what their lawyer, Terry Revere, called a “campaign of intimidation” that spanned over 6 years and went as far as killing pets, vandalizing cars, death threats and constant intimidation at the Ke Nani Kai Condominiums in Maunaloa. Revere compared the Bevills’ experience to the equivalent of a John Ford western, where an isolated town is run by a villain and his collection of thugs. More details are here: http://aiminst.com/maui.

A nightmare, to be sure, the case lasted for 4 years – the trial alone spanning 8 weeks – and included an estimated $1.5 million in combined attorneys’ fees, with claims ranging from negligence to federal Racketeer Influenced and Corrupt Organization (RICO) Act violations. The Bevills’ complaint says that the board members treated the complex like their own “personal fiefdom”, using the resident manager and handyman as the “thugs” to enforce their rule, with the latter having a criminal record and claiming ties to organized crime.

The Bevills, who relocated to Hawaii from California in 2004, were awarded damages including $500,000 in general damages and over $3 million in punitive damages against the HOA Board and Association (generally not covered by insurance), as well as by three individual board members, the former resident manager, and the handyman.

It seems that the trouble all began when the Bevills brought in an independent handyman to complete renovations to their unit, over the objections and pressure of board members, who seemed to trade protection with the handyman. When the Board’s intimidation was unsuccessful, the Bevills soon found themselves at odds with the board, labeled as “troublemakers” and the target of escalated harassment, which included the handyman making lude gestures with his genitalia toward Mrs. Bevill when she was home alone.

Former 2nd Circuit Judge Joel August, who heard some of the case’s early portions, said that the outcome should serve as a strong example of why condo associations should resolve their disputes early and avoid protracted legal action, when possible. Apparently, Bevill made an offer to settle prior to trial for less than 10% of the eventual verdict, but the offer was rebuffed by the defense. “This case,” said August, “if nothing else, should be the poster child for the idea that alternative dispute resolution is the way to go.” He said that resolving this dispute through mediation or even arbitration would have been a “much smarter” choice.

California law has Civil Code Section 919 requiring homeowner certain disputes in associations to be mediated prior to filing any kind of administrative or legal action. Perhaps if Hawaii had such a law, this situation could have been resolved much earlier and ended much better.

While mediation doesn’t always resolve all of the conflict between people, it does offer those in conflict the opportunity to sit down with a neutral person to facilitate the dialogue and keep it positive and results oriented. For more on mediation, please check out Stories Mediators Tell [http://aiminst.com/stories].

Looking at the Ke Nani Kai HOA conflict, there was an opportunity for the Bevills to request mediation with the offending board members and contractor. Had mediation occurred early on, especially had it been required under the CC&R’s, things may have been manageable before they got out of control.

Once the lawsuit was filed, August said that both he and another judge tried to assist the parties in settlement discussions, but such attempts were unsuccessful. This is not surprising, given that the early resolution of conflicts brings the parties together to have discussions before emotions escalate as fully as they did in this conflict. The later the resolution attempt, the more difficult it is to get parties to see eye to eye and work together toward a resolution. As this case progressed, huge amounts of legal fees were expended, and the entire complex had divided down the middle. Once a case has become this volatile, attempts at resolution require an extraordinary amount of de-escalation before resolution can be attained.

                        author

Lee Jay Berman

Lee Jay Berman is a mediator based in Los Angeles. He founded the American Institute of Mediation in 2009, after serving as Director of Pepperdine's flagship Mediating the Litigated Case program from 2002-2009.  MORE >

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