Reply To: Some Changes, Some Prompt, “What Are They Thinking?”

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Reply To: Some Changes, Some Prompt, “What Are They Thinking?”

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Stephen Anderson

As I stated yesterday, I would be back today to more fully explain at least my reasons for voting to retain the Clarkson Law Group as the Association’s general counsel.  The Board issued an RFP for a general legal counsel last spring, because a number of board members were not that happy with CLG (I was one of those individuals) and wanted to see if we could find a general counsel more to our liking.  One of the primary issues that I had with CLG was due to what I would describe as poor communication. The RFP went out and from the list of those who submitted proposals, CLG, John Leach, and Michael Shulman were the three firms the Board decided to interview.

As this process was going on, we had a number of issues arise that required the involvement of our general counsel.  The Board requested that we begin to meet with CLG in person as the Board needed to be clear about the issues.  After meeting with CLG in person, I began to slowly change my mind and began to feel that our relationship had suffered in the past due to unclear communications.  It was the Board not being clear with CLG and also the reverse.  As we met in person and Adam Clarkson began to attend our Executive Sessions, an overall satisfaction began to grow and an appreciation of the depth and documentation of his legal opinions.  What were some of these issues:

  1. Villa issues around the repair of damage done to property by Common Area trees.  We became aware that tree roots were cracking garage floors, patios, driveways and other damage to property.  The Association needed to have legal clarity as to what the owners of the villas are responsible for and what the Association is responsible for.  Since there was no established case law in Nevada about tree root damage, Adam provided a legally well reasoned and researched legal opinion stating that the Association was responsible for the damage from the trees in the Common Areas.
  2. Common Area Block Walls – this is an ongoing issue.  However, with 54 miles of common walls of which some are showing cracks and other damage, it is important that the Association get this issue right.  The first step is to do a thorough inspection of the walls and all of the villages. This will be a multiple year project.  At our next Board meeting, there will be an agenda item to hire a forensic engineering company to complete the inspection of the walls in Black Mountain Village. The next step will be to move forward with a repair of the damaged walls as a test project as to what will guide us forward in the other villages. The legal work here will be to develop a form giving access to residents private property to inspect the walls.  Once the walls are inspected and damaged assessed, the Board then will need to have legal backing for a policy of how payment for the walls will be assessed.
  3. CLG is carrying out a major project regarding the legal structure of service groups, clubs, and committees.  For example, our CC&R’s make no mention of service groups.  This is just one example of where we need to develop a uniform structure that adheres to our CC&R’s and to NRS 116.  Part of this project is to review the proposed club structure developed by CLC.
  4. There also arise on a weekly basis issues that range from HR issues, ADA, and Fair Housing Act questions as well as how we comply with new NRS 116 provisions.

As time progress on, I began to change my views about CLG and was viewed favorably by other members of the Board.  I also began to see that CLG is a leader in the HOA industry in the state and has taken a leadership role in HOA lobbying and as an appointed industry representative on a state board.  The importance of this leadership was evident in his being proactive for his clients in asking NRED to delay implementation and provide greater clarity about a new provision in NRS 1116 requiring that all Association notices be sent both my USPS mail and by email.  Thus, would we have to stop all eBlasts as it would be cost prohibited to also mail them each week and further the content would be out of date by the time people got them in the mail.

Thus as time went on I changed my mind and looked at CLG in a favorable light due to satisfaction with his work, vastly improved work, and his leadership at the state level with NRED and HOA regulation.  In fairness to the other companies, John Leach is another leader at the state level and provides sound legal opinions.  Michael Shulman also fits into that mold.  In part all three companies were in their basic manner of doing business fairly equal.  No one firm clear stood out head and shoulders above the other.  So what provided the basis for my vote to retain CLG.

  1. My unfavorable opinions had change over time based on improved communication.  If fact I learned that I had errored in not asking for our legal counsel to meet with us on a monthly basis.  In our interviews with all of the firms this was cited as being usual and customary in working with their clients.  All of the firms interviewed made allowances for the time and rates charged to encourage having them at meetings.
  2. With both John Leach and Michael Shulman, the firms they represent are much bigger firms.  While this can have benefits at times, a concern is who is really doing our work and do those doing the work know all of the bits and pieces of the work being done? How well do the people doing the work know SCA?  With CLG we know who is doing the work, and that those doing the work have great knowledge of SCA.
  3. Conflicts.  One of the issues that was openly discussed especially with John Leach was the potential conflicts as his firm also represented Anthem Country Club and Anthem Community Council.  Certainly he provided clarity that in any dispute between SCA and these entities he would not be able to represent either.  This was not a big issue, but more of a small one but yet moving the needle.
  4. Why change?  A major question for me was that with the improved communication, satisfaction with the legal work, and the amount of issues that we have assigned to CLG with some requiring an ongoing presence, was the cost of moving to another firm. For ongoing projects such as the Villas and the Common Area block walls, this would have necessitated revisiting the work done to date and then confusion if the new firm felt we should go in a different direction. Last, one of the biggest challenges any Board faces is instability and what takes place with the Board electing half of the directors each year.  In my opinion if there were no overwhelming reasons to choose a new firm, then why do so.  Doing so only would result in another change and adjustment that just is not needed now.

While I realize that CLG is not the favorite of every resident, I see what he does as a result of being directed to do so by the Board.  It is the Board that gives the general counsel his direction or instructions of what the Board wants done.  That can change from Board to Board.  I further find no evidence for the claim that CLG directs the Board on what to do.  When the Board is faced with a decision the Board may ask for a legal opinion.  We will get it, discuss it, perhaps revise it, and change our instructions.  It is then each Director’s fiduciary responsibility to make their decision as to what is then in the best interests of the Association.

I hope that this helps for readers to better understand at least the basis for my decision to vote to retain CLG as the Association’s general counsel.  The term of the agreement is 5 years.  It is the same as the one we had with him previously.  There is no penalty for terminating the agreement early and either he or the Association can terminate without penalty if notice is given.  We actually issued the RFP with several years left on his existing agreement.