Mendham Lakes Estates Member Continues to Try and Review All Books and Records But Is Consistently Resisted by the Recalcitrant Board

Thomas E. Maloney Attorney
Debby Strott, Daniel Rosen
and The Board of Trustees
MLEHOA
PO Box 173
Ironia NJ 07845

In Re: Continuous Attempt to Review MLEHOA Books & Records

Dear Board,

I am in receipt of your letter of October 14, 2009.

Though you vaguely refer to N.J.S.A. 15A, the Association by-laws and a particular case, you fail to provide a specific citation which you believe affords the Board, at its sole discretion, the right to deny the membership from reviewing the books & records. Just generally saying so does not make it so. In refutation of your self-serving opinion, in fact, The New Jersey Department of Community Affairs, Division of Codes and Standards, Bureau of Home Owner Protection’s “Association Regulation Initiative” states that access to financial records shall be granted to members. Section 16(d) of the N.J.S.A 46-8b-14(g) “empowers the Department, acting through the Bureau of Homeowner Protection, to enforce this right of inspection. The right of inspection includes the right to make copies.” I urge the Board to be open and transparent as much as possible and when a particular situation warrants discretion, the Board should offer some reason and not simply deny requests with no apparent logical explanation. Also, according to the New Jersey Department of Community Affairs the Non-Profit Corporation Act, Title 15A, which you refer to generally, requires audits which the Board has fought so hard against. Any member is allowed to review books & records of a Homeowners Association and The Association Regulation Unit has the authority under N.J.S.A. 46:8b-16(d) to ensure an association responds to membership requests to review and copy the financial records required to be kept.” Note the Association is required to maintain the accounting records, in accordance with Generally Accepted Accounting Principles (G.A.A.P.). Obviously, given the Board’s history of mishandling the books & records and Association operations, it has failed on both these responsibilities. This is irrefutable given the Board’s reckless behavior as exampled by not filing annual state reports causing the Association’s corporate status to be suspended, not collecting half the Association dues in a given year, etc. As you should be aware, N.J. law provides for more accountability to owners in common interest community. Condominiums and Homeowners Associations (HOAs) are governed in this regard by New Jersey's Planned Real Estate Development Full Disclosure Act ("PREDFDA"). The New Jersey Department of Consumer Affairs, Bureau of Homeowner Protection accepts complaints from Homeowners Association members as well as Condominium Association members utilizing the same law previously cited. According to Ms. Jane DiCristina Director of Association Regulation in the Department of Consumer Affairs, the standards for transparency for condominium associations are the same for homeowners associations. To be more specific and to quote her directly:



"We would support your right (or any other owner in the homeowner's association) to access financial information by using language from both the Planned Real Estate Development Full Disclosure Act and the Condominium Act."
-Ms. Janet DiCristina, Association Regulation, N.J.D.C.A.

You erroneously state in your letter that I was “never refused access to a review of the Association’s books of account”. While your memory may be faulty, the record is not. The stenographic transcript of the June 30, 2006 Motion hearing before Judge MacKenzie incontrovertibly shows the Board argued, through attorney Mr. Gregory Hyman that the Board was of the belief that it did not have to cooperate with my multiple books & records inspection requests over an period of almost one-year. As it turns out this opinion had no basis and was utterly rebuffed by the Court. To refresh your memory, below is the relevant verbatim exchange from the transcript:

Mr. Hyman: And the Board of trustees believed they did not have to respond to someone who was not in good standing.

Judge MacKenzie: Is there something in the bylaws that says that or is that –

Mr. Hyman: The bylaws are silent on that issue, your Honor, but that is the belief that they had.

---Source; Stenographic Transcript of Motion, June 20, 2006 before Judge MacKenzie; page 15 para.6

As it turns out what was your “belief” is not a legal basis for denying a member access to the Association’s books & records. I’m sure what was true in 2006 is true today. The Court dismissed your opinion or “belief” as it were, entirely and completely. Your recollection of the facts today is refuted by the transcript of what you argued three years ago. Note that this argument was totally rejected by the Court as it ordered the Association to provide access to the books & records. Notably absent in the Court’s subsequent order was any mention that it was at the Board’s discretion as to what could be viewed by a member.

The unsigned letter that you provided presumably from Thomas E. Sheridan seems to be in response to my request for the Association’s insurance loss run. However it is not sufficient as it is not a loss-run of the Association. Though I have asked twice for the Board to give Mr. Sheridan permission to answer any questions I may have, to date the Board has ignored my requests.

You continue to maintain that no cash deposits have been made. If you believe this is true, then the Board should not have a problem in asking the bank to provide all details regarding cash transactions –including deposit information related to the dates in question. Specifically, $1,000.00 on January 16, 2004, $1,500.00 on March 15, 2005 and $2,500.00 on March 30, 2005. I request the Board provide me access to this bank documentation for these dates.

Unless the Board can show that the information any member requests is privileged, the Board should produce any documentation requested. It is my opinion and that of many expert legal sources (specifically Mr. Christopher Florio, Co-Chair of Stark & Stark Community Association Group) that almost all functions of the Association, including documentation, should be open and available to the members of the Association as they relate to the general operation of the Association.

In both Judge MacKenzie’s July 13, 2006 Order and Judge Langois’ March 23, 2007 Order, the Board was ordered to allow me to “inspect the books & records of the Association.” The judges made no mention that what was to be provided should be determined by the Board.

As a reasonable matter, your contumacious in maintaining the unwarranted opinion that the books & records should not be provided to the membership, without you ever providing a logical reason for such an opinion, will not further any Association interests. In fact it will result in more Association time and resources being wasted simply to defend some specific Board member’s personal interests. Without the Board’s full cooperation in providing access to books & records to the membership, times when the Board is deficient in its responsibilities and fiduciary duties could go undiscovered at the Association’s peril. Such was the case when I discovered that the Board had neglected to file two consecutive years of annual reports with the State of New Jersey as required by law and the Association’s corporate charter and ability to conduct business in the State was revoked. It should be noted that the Board, in violation of its suspended corporate status, continued to operate in the State of N.J.

If the Board spent as much effort providing full access to Association’s books & records as it does fighting transparency and openness, these situations perhaps could be avoided.

Another spurious claim by Thomas E. Maloney ...just another example of why the MLE gets sued for some Board member's personal acts....Thomas E. Maloney, Jr. (and others for which the membership is currently paying the legal bills) is already facing one complaint of defamation from a homeowner and member of the MLE and now his false claims might cause another:

-------------
Sept 25, 2009

Mr. Tom Maloney
Secretary
Mendham Lake Estates Homeowner Association
7 Yorkshire Dr.
Mendham, NJ 07945

In Re: Continuous Attempt to Review MLEHOA Books & Records

Dear Board,

I have received your September 2, 2009 letter which was in response to my letter from three months prior.

As the Association’s by-laws and NJ law both stipulate all books and records of the Association are available for any member’s review, I will exercise my right to review the Association’s insurance policies and past ten years loss run report as requested. I continue to think it is incredible that you have made it so difficult for me, a member of the MLE current on all my annual dues, to view the records for which I paid my allotted portion. The request for the past ten years loss run report is a new request given after six months of waiting for a reasonable explanation of the basis supporting the Tom Maloney published comment that “the Melly lawsuit” was responsible for the Association’s deductible doubling which has yet to be answered. Notable, the insurance broker’s June 17, 2009 letter-written by insurance broker T.J. Sheridan months after Tom Maloney was asked by me to provide a basis for his assertion, did not cite the Melly lawsuit as responsible for the deductible change. For the record, the insurance broker’s letter didn’t mention the Melly lawsuit at all-thus refuting the latest attempt to provide a basis for Tom Maloney’s claim. After months of patiently waiting and reading a series of changing –and eventually debunked excuses from Tom Maloney, the Board generally and Tom Maloney specifically have not yet provided a legitimate reason for this claim. My request that the Board inform T.J. Sheridan to cooperate fully and answer all and any questions that I may have in regards to the deductible was ignored and not answered by the Board’s September 2, 2009 letter. This request is still outstanding.

If these Association documents will not be made available, the board should notify me before I schedule a meeting with Vincent Papalia so more time and resources are not wasted once again reviewing just partial books and records. The missing monthly statements of October 2003, December 2008, January 2004 and July 2005 should also be made available at this time. The reason for this request is simple, though not a prerequisite for any member’s request and review – a member should be able to view all of the funds going in as well as going out of any MLE account, especially if those funds are purported to be associated with short term loans that are not reflected anywhere else in the MLE records.

Your letter does not address why you won’t answer the question asked in my June 22, 2009 letter regarding large cash deposits of unknown origin and nature. Therefore the request is being made once again verbatim to the request made on June 22, 2009:

“There were also three sizeable cash deposits discovered during the Grand Jury investigation of $1,000.00 on January 16, 2004, $1,500.00 on March 15, 2005 and $2,500.00 on March 30, 2005. Please provide all documentation related to these cash deposits, including but not limited to, who deposited the funds on behalf of the Association, on behalf of which homeowners’ accounts the deposits made, all related documentation, etc.”

Please let me know if you are once again going to refuse to answer any questions about these cash deposits or if you will cooperate in providing an explanation with supporting documentation to the nature of the cash deposits.

Your letter also “calls” upon me to “issue a written apology and retraction of” my “false accusations made against Dan Rosen and the Board”. Strangely, your letter fails to cite any specific accusation that is false much less provide a refutation of anything I have said or written. These matters started when I discovered several irregular financial transactions and have sought for years to view the records which would explain the irregularities. For the record, the Board initially and unsuccessfully tried to argue that I did not have a right to see the books & records – this fallacious reasoning was unequivocally rejected by the Court. Therefore, it is obviously impossible to even consider your request. Please state explicitly what exactly you believe was false otherwise I shall assume that everything I have said and/or written regarding Association matters shall be considered by the Board to be true and accurate. If the Board is able to refute “an accusation” that I have allegedly made then I would be more than willing to correct the record. I am sure the Board, given its fiduciary responsibility to make sure everything it reports and publishes is true and accurate at all times, would be more than willing to do the same. The fact remains, six months have passed since Tom Maloney was asked to provide the basis for his claim that I was responsible for the Association’s deductible doubling and after he has made various attempts to provide a basis –none have turned out to be true. Therefore the Board is, for one last time asked to correct the record or you will leave me no other choice but to seek a court ordered remedy. This would unnecessarily cost Association money and resources for no reason other than furthering some personal agenda which is not in the best interests of the Association.

Your characterization that some of the information requested is “for materials that are not subject to review by Member pursuant to the By-Laws and New Jersey law”. However, you neglect to provide even a rudimentary explanation why or to cite a basis for such an opinion in any statute or case law. As stated above, I am a dues-paying member of the MLE and current on my annual assessment. Do you honestly believe that if we went before a Judge or any reasonable objective person, he or she would believe that I am obligated to pay my dues, I can be sued for not paying my dues, you can put a lien on my house for failure to pay those dues, but the Board does not believe I should allowed to see what you spend my dues for? No reasonable person would believe this reasoning either logical or fair.

I look forward to your cooperation and reply.

June 11, 2009
The Board of Trustees
Mendham Lake Estates Homeowner Association
PO Box 173
Ironia, NJ 07845

Mr. Tom Maloney
Secretary
Mendham Lake Estates Homeowner Association
7 Yorkshire Dr.
Mendham, NJ 07945


In Re: Claim on Association website

Dear Board and Tom,


As you know or should know a claim has been published on the Association website that states the following:

“Insurance premiums have increased normally, but the deductible on the Directors and Officers policy has increased from $2500 to $5000, as a result of the Melly lawsuit and applies to defense costs.”

-Respectfully submitted, Tom Tom (sic) Maloney, Secretary

On June 2, 2009 I asked Tom Maloney to provide the basis for this claim. In a response later that day Tom Maloney said the claim was made “...from the oral report to Members made by Debby Strott, the Treasurer. The Minutes accurately report the report of the Treasurer.”

On June 9, 2009 I asked Debby Strott if she made this claim as Tom Maloney stated. Debby shortly thereafter, denied making this claim.

Since no one has provided any basis to this claim that is published on the Association’s website, I think the only proper action is for the Board to correct the record. I’m sure the Board is very busy with all of its other affairs; therefore I suggest the following corrective course of action:

• First, the Board correct the erroneous claim on the website by stating this claim was made in error and should not have been made in the first place; merely deleting these baseless claim will not be sufficient;
• Second, the Board notify the Association membership and anyone else that it may be aware has or had access to the website in writing that the claim was made in error and should have never been made. This clarification should be very clear and unambiguous.

If the Board agrees with the above suggestion, then it would be appreciated if this clarification was first sent to me so there won’t be any further misunderstanding. Please let me know how you wish to proceed.

MLE Poll Results

The results of the March 4, 2009 poll (whether or not a business should be allowed to operate in the MLE) are the following:

YES: 31%
NO: 69%

I think it is important to add some of the commentary that was offered along with member votes. But first, defining terms is important and there it should be mentioned there was some confusion as to what a "business" , "home office" and "telecommuting" mean. "Telecommuting" is not the same thing as operating a "business" out of a home in the MLE-a business could have the MLE homeowner's address as the business address, could meet customers in the MLE home and have employees work there. It is important to make a distinction between a “Home Business or Office” (these two terms are synonymous) and “telecommuting”. These are separate and distinguishable activities. “Telecommuting” in today’s vernacular, is not a violation of either MLE rules & regs or the Township ordinances. “Telecommuting” defined as someone connecting remotely to their office or place of business.

Here are some member comments:

1) "Yes....can have one person sitting on the computer running an internet business..."
(MY NOTE: many people had similar comments to this one: they wanted to distinguish between someone sitting in their home and operating a business without having customers, employees and other characteristics of a more "traditional" business. I did not get a sense from their commentary that they really had an opposing opinion of how the character of the MLE neighborhood should be from many of those that voted "No") ;
2) "many people work from home offices and it is too restrictive to say that no business can be operated from the home within MLE";
3) "The Declaration, By Laws, and other accompanying documents are among the most ambiguous, "mistake-filled", and poorly written documents..."
4) "No..a business should not operate within MLE...";
5) "This is a residential community and the deed restriction was in place @ the time of my purchase. The dues structure is equal across all properties and was not designed to accommodate individuals who are avoiding business expenses by operating in a non-commercial area."

I thank you all for participating and I believe a consensus can be formed and a procedure implemented that will prevent what just happened with regards to 23 Kingsbrook Ct. variance.

State settles with Randolph church on alleged misuse of donations

BY PEGGY WRIGHT • AND ABBOTT KOLOFF • March 31, 2009



State Division of Consumer Affairs officials will hold a press conference in Randolph Wednesday to announce the settlement of an alleged misuse of donations by leaders of Church Alive Inc.

Church Alive officials acknowledged today that they agreed to pay back $120,000 in donations that had been made to refurbish their church building, on Route 10, which they later sold. But they denied any wrongdoing, saying they sold the building after about half of their members left the church.

“We weren’t able to make mortgage payments when those members left,” said Philip DuPlessis, a pastor at Church Alive, also known as Randolph Christian Church.

In a press release issued today, state officials said church leaders sold the church building and used the proceeds to buy a $1.6 million luxury home in Randolph and a 78-foot schooner, among other items. Tax records show that Church Alive purchased a home for that amount last year.

Jeff Lamm, spokesman for the state Division of Consumer Affairs, said the state would not elaborate on its press release until Wednesday’s press conference.

DuPlessis acknowledged the purchase of the home, saying it serves as a parsonage, home to the church’s senior pastor, Eric Simon, and his family. He said it also serves as a place where the church’s 75 members participate in leadership development and other activities.

“Our church members have full access and use of the building,” he said. “It’s an investment we made when we sold the (church) building. … We are very grateful we didn’t invest in the stock market.”

As for the schooner, he said the church purchased a small interest in the Liberty Schooner, based in Jersey City, used for outreach to children in urban areas.

DuPlessis said the church paid $150,000 to refurbish the Route 10 building before selling it to another church. Church Alive still uses the building for Sunday services, having signed a five-year lease, and will pay nothing the first two years, he said.

Church officials issued a prepared statement today, saying they signed a consent order with the state that refunds “some contributions made to the church building fund by certain former member-leaders.” It also said the church agreed to make changes in some current investments and to reorganize its constitution and bylaws to establish “stronger checks and balances.”

State officials scheduled a press conference for 11 a.m. Wednesday in front of the home purchased by the church last year at 14 Kingsbrook Court, Randolph. Consumer Affairs Director David Szuchman, investigators and attorneys are expected to attend.

MLE Poll

Dear Member,

While the current Declarations of Restrictions and Covenants for the Mendham Lakes Estates Homeowners Association (MLEHOA) currently prohibits businesses from being operated in the MLEHOA - (please see the February 21, 2009 post below for details including the Legal Opinion Letter describing this restriction), a poll question asking your opinion is warranted.

Do you think a business should be allowed to operate within the Mendham Lakes Estates Homeowners Association?

YES

NO

Please email "mellyfamily@optonline.net" with your response: yes or no.

Poll results will be published on this website.

What Tom Is Referring too...

Click to Enlarge

The letter that Tom Maloney refers to in the Oct 27, 2008 AGM Minutes


Tom Maloney in his Minutes of the Oct 27, 2008 Annual Meeting does not dispute the contents of this letter. He never tried to refute the facts stated in the letter (referred to in Tom Maloney's 10/27/08 Minutes) because he can not as they are 100% true. Dan Rosen till this day, still refuses to disclose what he bought with the Association's $3,030 check. Tom Maloney refused to answer why he didn't disclose to the Association what the police or the Prosecutor's office were telling him or even that the Association had been served with a Grand Jury subpoena, apparently Tom doesn't think the Association has a right to know. Tom, like Dan, refused to answer what was purchased with this $3,030.00 check Dan Rosen wrote to himself from the Association's bank account. If this $3,030 check was used for Association's legitimate business, why doesn't Dan Rosen or lawyer Tom Maloney simply explain what the money was used for?

At the 10/27/08 annual meeting, Tom Maloney answered "yes" when asked if he is representing Dan Rosen. The obvious question arises: When he conducts Association business as its Secretary and Board member is he putting the interests of the Association first or Dan Rosen?

Legal Opinion Letter on Running a Business in the Mendham Lake Estates (MLE)

Dear Members of the MLE,

As many of you know on January 26, 2009 there was a meeting of the Board of Trustees of the MLE. In this meeting, a question arose as to the interpretation of a specific clause of the MLE “Declaration of Covenants & Restrictions”[1]. This particular clause deals with the use of the homes in the Association.

It was suggested at this meeting that the Association get a legal opinion clarifying MLE Declaration of Covenants & Restrictions 10.01. After two weeks have elapsed and no word from the Board, I took it upon myself to ask Mr. Andrew Brewer of the law firm of Maraziti, Falcon & Healey L.L.P.[2] to issue a Legal Opinion Letter in this matter. This law firm is an expert in government, municipal and association law; it represents many N.J Township Planning Boards and various Associations around the State of N.J.

His opinion can be summed up in two points:

1) The MLE Declaration of Covenants & Restrictions does not allow any use of a member’s property for anything other than private residential use. It is therefore more restrictive than the Township’s ordinances. Hence its inclusion in the Association’s Declaration of Covenants & Restrictions which by definition is meant to be more restrictive than federal, state or local government laws and ordinances. Home office permits and use variances maybe allowed by the township upon application but they are not allowed by MLE governing rules.

2) Anyone using a home for anything else other than a private residence is in violation of their contractual obligations of the MLE.


The last point is highlighted to show this Opinion Letter is an interpretation of the MLE Declaration of Covenants & Restrictions 10.01 only and not meant to reflect an opinion on anything else.


--------------------------------------------------------------------------------

[1] Unit ownership is subject to certain restrictive covenants (deed restrictions). These are usually embodied in a recorded legal document called "Declaration of Covenants and Restrictions" which is recorded at the county Register of Deeds office. The declaration describes the nature of the project and establishes rules to govern the use of the units and common areas. For example, the declaration may limit the property to residential use, require that units be a minimum size and certain architectural style, etc.

[2] Neither he nor this law firm has, to the best of knowledge ever represented a member or the Association and does not currently have any interest in any pending matter connected to the Association or its membership.

Click to enlarge