HomeMy WebLinkAboutEssential background on Diamond Bar Village HOA and S & L Management.msgThe case against
Diamond Bar Village HOA and
S & L Association Management
On Thursday, February 20, 2020, I visited the City of Diamond Bar and talked with both Esmeralda Magallanes and Justin Jones, asking for help in dealing with people whom I consider to
be con artists who are stealing our money: Yvette Marie Allen and her bosses at S & L, John Sorah and Rosy Amlani, as well as the current directors, Larry Carmack, Stephanie Allen-Herms,
and Alice Liu.
Esmeralda Magallanes and Justin Jones were quite patient while I explained my two-year history of dealings with Diamond Bar Village HOA Board of Directors and S & L Association Management.
Justin urged me to send an email to several people at the city (they are cc’d here) explaining those details. I hope that this background will help enlist your help in deposing this
leadership at DBV and preventing the wholesale destruction of the property and value of DBV.
Summary
My mother, Sally Groves, has owned condominiums in the Diamond Bar Village (DBV) Condominium Complex and operated them as rental units since 1978. She currently owns two units. Since
my mother is 89 years old and in fragile health, she has given me a broad power of attorney over the condominiums that she owns. The condos are rentals, and constitute half of her
income. They are important to her. They are important to me, too, because I will inherit one of them.
When we first suspected malfeasance
In 2017, Sally Groves began to suspect malfeasance in the HOA, and she enlisted my help with requesting financials and other association records from the HOA.
By law, the HOA must produce records for owners within 10 business days or 30 business days, depending on the type of document requested.
However, it has now been over two years since the first requests were made, and we have requested records 6 times, with each instance consisting of many different documents. To date,
only about 25% of the financials and records have been produced. No meaningful examination of records can be done without complete financials and records.
I can send a more detailed explanation of these claims, including many exhibits of evidence.
Since the very beginning, the HOA has engaged in a series of delaying tactics designed to keep us from seeing the documents, running up our attorney’s fees by sending our lawyers endless
correspondence, misquoting the law, making false accusations, and in so many ways trying to discourage us from pursuing those records. We have consulted with two law firms, racking
up over $7,000 in legal fees.
On May 24, 2018, after extensive correspondence with our lawyers and the payment of money for the process of redaction, the HOA was finally forced to set up an in-person examination
of records. However, within 15 minutes, the HOA had shut down the examination for specious reasons and no records were copied. More alarmingly, at that meeting, the property manager’s
son (who works there as a maintenance worker) falsely accused me of “putting [my] hands on” his mother. A week later, in an obvious attempt to intimidate us from further pursuing documents,
HOA counsel wrote that they were considering pursuing a “workplace harassment lawsuit” against me because of what they called “assault and battery.” They claimed to have videotaped
the moment of the assault, but when that video was submitted in evidence in Small Claims Court, the judge wrote that he “found its credibility lacking.”
After that bizarre incident, I was wary of confronting the defendants except in court. I spent the summer studying the law, and in October, 2018, I filed a small-claims case to enforce
our right to see association records. In January, 2019, we appeared in court. We were warned by a lawyer who specializes in condo law that judges often don’t understand condo law,
and that turned out to be the case here. Despite the law being clearly in our favor, Judge Pro-Tem Anthony Moreno Peters ruled against our right to see those records.
However, I was not deterred, because legal experts and the law itself had told me that it was absolutely our legal right to see those association records. I also knew that the HOA would
not fight so hard to keep those records secret if there were not something damning in them. Therefore, we immediately sent another request to see the association records that had been
generated since our previous request, namely, records from March, 2018, to January, 2019.
On January 25, 2019, HOA sent a letter in response. The letter set an extreme hurdle to delivery of the requested association records—namely, that I pay for the HOA’s lawyer to be present
throughout the inspection “in order to minimize further intimidation”—a demand that had no basis in law and which would have amounted to at least $2,000+ hurdle, since the examination
would have taken at least six hours and lawyer’s fees are commonly $400 per hour and higher. As further justification for this financial hurdle, HOA asserted erroneously in a March
28, 2019, letter that I “attempted to bring in additional individuals to the [May 24, 2018] inspection who were not authorized….” The individual to which they refer is Yvonne Colaco,
who was a board member at the time, and had an “absolute right” to see association records at any time. The only alternative HOA offered was to deliver the records electronically via
email. That alone called into question the authenticity of the records.
In February, 2019, deadlines for producing association records were missed once again, and we sent an email documenting that. On March 7 (in a letter back-dated to February 28, 2019),
HOA delivered the membership list, which we had been requesting for 14 months. In HOA’s cover letter, HOA reiterated their desire to produce the records only electronically, once again
citing their bogus accusations of violence against me.
HOA finally delivered those association records on March 28, 2019. As might be expected, a large volume of the records were not delivered, and conspicuously missing were the records
that we most wanted to see. In addition, the cover letter erroneously asserts that HOA was providing “hard copy records,” when in fact only electronic records were delivered. HOA
concludes by claiming that our “continuing demands and claims concerning the records appear nothing more than harassment.”
I didn’t examine the records immediately because my mother went into the hospital around that time for a couple weeks. She was in the hospital twice more before the end of the year.
and I was busy with my own business. However, by November, I had a chance to examine the documents, and what they did deliver was astonishing. The records proved that S & L Association
Management (Yvette Marie Allen, John Sorah, and Rosy Amlani) were taking roughly $250,000 in management fees from Diamond Bar Village, which is more than ten times the fair market rate
for management of a complex of that size. However, they were hiding it. HOA was paying $81,000 to S & L directly (about four times the fair market rate). In addition, HOA was paying
over $100,000 to Yvette Marie Allen to be a full-time on-site manager (she comes in only 2 – 3 days per week). Furthermore, HOA was paying nearly $100,000 to her son, Marcus Allen,
who is working as a maintenance man, and not very well at that job, either. That represents an overpayment of roughly $70,000, and must be considered a de facto payment to S & L.
In all, these payments add up to nearly $250,000 per year in monies being paid to S & L.
DBV and S & L assert that they will need to levy a special assessment on the homeowners in order to pay for repairs, but if you do the math, you can see that such an assessment is not
necessary. All they have to do is reduce the management fees to a reasonable rate of $15,000 per year and we will have $235,000 more per year to spend on repairs.
Specific things that made us suspect malfeasance
My mother, Sally Groves, has been an owner since 1978, and several years ago, was elected to the DBV HOA board of directors. As such, she has regularly attended HOA board meetings.
However, in Fall, 2017, she became alarmed at the behaviors of the property manager and new HOA board members that were strange and alarming. During one board meeting, she had a shouting
match with Yvette Marie Allen and had a stroke. She had to be carried from the meeting by another homeowner.
One new board member, Yvonne Colaco, also became suspicious. In fact, Ms. Colaco was so concerned that she and I wrote a letter to the Los Angeles District Attorney outlining her suspicions
of criminal activity. The letter that was sent in August, 2018. (The district attorney declined to pursue the investigation because we had no documentary proof of theft, and without
association records, which HOA was unlawfully denying, we could provide no proof.)
However, Ms. Colaco’s letter is useful, since it clearly documents her concerns about suspicious behavior on the part of DBV HOA and S & L Association Management.
This behavior included:
1. Exorbitant spending. In 2018, the property manager had discussed purchasing new patio furniture for the complex, and was asking for an $8,000 budget. The pool is not much larger
than a standard backyard pool, and with that kind of money, the furniture would average out to about $1,000 per chair. In addition, the most recent HOA records reveal that over $300,000
was spent on grounds maintenance alone during the most recent nine months. This is an incredible figure for a complex with 150 units, averaging out to $2,000 per year per unit.
2. Depletion of the reserve account. Over a roughly year-long period after Yvette Marie Allen became property manager, the reserve account balance plummeted from $285,000 to only
a little over $2,000, which is basically nothing. This is an account that should be kept at responsible levels in order to respond to an emergency, should it arise.
3. Not paying maintenance bills for 10 months. In 2017, Yvette Marie Allen stopped paying the bills of the grounds maintenance company, Pro Tech, and only in November, 2017, did
she notify the board that they were $119,000 in arrears in payments to them, according to Ms. Colaco.
4. Preventing a board member from seeing financials/records. During Fall, 2017, and stretching into the winter in 2018, Yvette Allen consistently denied board member Yvonne Colaco’s
requests to view financials and other association records. As mentioned earlier, they also denied Colaco’s right as a director to be present for my examination of association records
on May 24, 2018. This is a direct violation of Corporations Code 8334, which gives directors “the absolute right” to inspect those records:
a. “Every director shall have the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind and to inspect the physical properties
of the corporation of which such person is a director.”
b. In fact, during one bizarre incident, Ms. Colaco entered the clubhouse in order to inspect the pay of the maintenance men, one of which was her son, Marcus Allen. Ms. Allen refused
to talk with her, locked herself in her office, and turned the radio up to full volume until Ms. Colaco left.
5. Denying Yvonne Colaco the right to run for the board again. Early in 2018, Ms. Colaco submitted her application to run for the HOA board once again. However, when the ballots
were printed, Ms. Colaco was not on the ballot. She was told that she had missed the deadline when in fact she hadn’t. Also, she was told that she could not be added to the ballot,
even though the ballots had not yet been sent
6. Owner intimidation. Yvette Allen, the property manager, is quite an aggressive and intimidating presence in Diamond Bar Village, and has at times even threatened owners with
physical harm. Others have been threatened with frivolous lawsuits, such as Walter Ponce and me. Ms. Colaco was also formally censured in order to stifle her dissent. As a result
of this intimidation, several owners have chosen to move off the property, including Ms. Colaco, who moved early in 2019.
7. Denying owners the right to attend meetings. In January, 2018, the HOA board banned me from meetings, despite the fact that I presented the board with a broad power of attorney.
They claimed that the law doesn’t allow people with power of attorney to attend board meetings, when in fact, the law clearly states the attorneys are not allowed to attend board meetings.
In order to fight this judgement, I would have had to physically challenge them at the board meetings, which would have invited violence, or take them to court, which would have cost
lots of money. We decided to pursue them in court only with regards to association records.
8. Asbestos remediation. In 2018, an owner reported to us a scheme that the management company seemed to be engaged in designed to create damage in individual homes specifically
so that they could repair that damage and take a kickback from the contractor. The on-site manager, Yvette Allen, talked and pushed her way into his home, examined the intact ceiling,
brushed her hand roughly against the ceiling, causing bits and pieces of it to fall to the carpet, and declared that asbestos was now exposed. As a result, she said, it would have
to be remediated. The owners were required to move out of the unit for three weeks while the remediation took place. We suspect that this was done in order to illegally take a kickback
from the work.
9. The management company was making all decisions. Since the moment they took over, Yvette Allen of S & L Association Management has been making all the decisions and regularly
hiding details from the board, especially Yvonne Colaco. Even when Ms. Colaco asked to see details, Ms. Allen has refused to divulge those details to Ms. Colaco.
10. Creating a slush fund. During the period that we were suspecting malfeasance, Ms. Colaco reported to us that the HOA board was increasing the amount of petty cash to be allowed
on hand for the management company from $300 to $5,000. We were eager to look at the financial details of this arrangement, but since the association records were always being denied
to us, we were never able to look into it.
The above bizarre behavior, as well as numerous other suspicious behaviors on the part of Ms. Allen and the HOA board, convinced me that the HOA might be committing malfeasance.
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David Groves
310-962-7051