Affidavit of Fannie Mae Listing Agent Diana Mayfield

The sale of condominium 1104 by Fannie Mae was managed by Realtor Diana Mayfield.  Her involvement came about when the condo was foreclosed.  Ms. Mayfield was at that point contacted by Fannie Mae to research and market the property and to solicit offers through the Fannie Mae “HomePath®” program. (LINK)  She was believed to be knowledgeable and experienced in that process.

At the time of lawsuit settlement discussions in early 2015, Diana Mayfield was one of several people under consideration to be deposed for her involvement with the 1104 transaction.  (LINK)  The Defendants were interested in her testimony but gave her the alternative of an affidavit that covered the subjects on which she would have been questioned.  After some back-and-forth between her attorney (Ron Culler) and the attorney for the Defendants (Clay Culotta), she agreed to answer a set of twenty questions in lieu of a deposition called by the Defendants.

[This is the first release of this information to anyone besides the parties mentioned.  It was never submitted as evidence to the Indiana Office of the Attorney General (OAG) because negotiations progressed to the point of settlement.]

The highlights in Mayfield’s affidavit were…

Mary Lou Trautwein-Lamkin’s offer of $220,000 for condo 1104 was the highest and accepted by Fannie Mae on that basis.  (Items 9 & 10 in affidavit link)

Trautwein-Lamkin’s occupancy of 1104 was confirmed by Mayfield.  (12)

Trautwein-Lamkin met the requirements of a “co-purchaser”.  (13-16)

Mayfield was solicited by potential buyers and Sally Miller of the OAG for private information on other buyers.  Miller was provided with that information.  (18)

There were no agencies or entities investigating the sale of 1104 except for the Indiana Office of the Attorney General (OAG).  Fannie Mae did not investigate.  (19)

LINK

A cash offer for the highest dollar amount was the logical offer for Fannie Mae to accept.  And the legitimacy of Mary Lou Trautwein-Lamkin as owner-occupant was confirmed by Diana Mayfield.

The last two findings above address the failed attempt by the OAG and Kathy Bupp to affect the sale of 1104.  An earlier post on Bupp’s deposition referenced exhibits (1, 2, and 4) in which Bupp as a potential buyer questioned and tried to influence Diana Mayfield on the sale of condo 1104. (LINK)  All information on buyers and competing bids are confidential, and Fannie Mae is a federal agency funded by taxpayers with taxpayer money at risk.

Mayfield’s log (LINK: Exhibit 1) contained other references to communications with Sally Miller of the OAG.  As Mayfield attests, only the OAG conducted any type of investigation even though other agencies and entities had a business interest in 1104, including but not limited to Fannie Mae, Bank of America, the FBI and HUD, the Clark County (IN) Prosecutor, and the Jeffersonville (IN) Building Commission.  Despite Kathy Bupp’s efforts, no one besides the OAG investigated because no one suspected anything illicit was going on nor did anyone else come at the transaction with an agenda.

Condominiums 1103 and 1104

Frank Prell was a Harbours real estate investor who purchased condominium units and parking spaces to resell for profit.  At the time of Harbours conversion, all units were investor owned by the Developer, and there’s nothing in HOA governing documents limiting investor activity.  Mr. Prell was one of several individuals in the early 2000s who bought property from the Developer for that purpose.  By the time of the lawsuit, he had liquidated all of his Harbours assets.

The building’s original construction included mostly one- and two-bedroom units with floor plans ranging from around 1,000 to 1,500 sq ft.  There were 184 total units originally and about thirty have been combined into larger units.  1103 and 1104 were two such units located on the top floor/penthouse level.  Each measured 1,358 sq ft, and the combined size was exactly twice that or 2,716 sq ft.  An owner of two adjacent units does not need permission to combine them, but they must be recorded with the HOA as combined and with their combined square footage.  Unit square footage is prescribed in the governing documents and cannot be changed without an amendment.

Purchase and Renovation of 1103 and 1104

According to public records, these properties were purchased by Frank Prell on April 12, 2005 from the Harbours at Riverpointe, L.P.  Each property was two bedrooms and two baths with kitchen, living/dining area, and washer-dryer closet.  Shortly after purchase, Mr. Prell undertook their remodel, first removing the wall separating the condos and then redesigning the floor plan to provide a more spacious three-bedroom, three-bath unit.  A complete combination was achieved including electrical and plumbing.

Short, homemade videos are presented here which show the condos after they were combined.  The videos accurately present the quality of workmanship with which Mr. Prell and his subcontractors completed the renovation.

 

There was one formal contact between Frank Prell and the Harbours Board of Directors during the renovation.  He asked the HOA for permission to install new windows and doors as he discussed during his deposition (LINK: pp. 29-31).  He composed a letter to the Harbours Building & Grounds Committee dated September 16, 2005, and the request was approved by the Board.  (LINK)  In addition to the other three Defendants, the members of the Board on that date were Harvey Allen, Bobby Branham, Barb Hilb, Harry Leiding, William Mapother, and Sandy Wilson.  Mr Prell remarked in his deposition that other people were also aware of the renovation.  It is believed that Complainant Marty Haley was a member of the B&G Committee in 2005.

Marketing the Renovated Property

Evidence provided through discovery shows that the expanded condo was first listed for sale on August 4, 2006 at an asking price of $960,000.  At the time of sale to Mr. Prell, the individual units were listed  for $339,900 or a combined price of $679,800.  Profit for the renovated unit based on that $280,200 difference–$960,000 minus $679,800–would have been offset by the additional investment by Prell to renovate.  Those costs were likely half to two-thirds of the $280,000; and price reductions would have cut dollar-for-dollar into his profit.  Here is the progression of price reductions on the condo to try to sell it:

Frank Prell systematically lowered the price and tried different agents to market the property unsuccessfully and against a backdrop of one of the worst real estate recessions nationally on record.  It’s likely that at the lowest price shown, the condo was being advertised below the costs incurred to buy and remodel the units, i.e., the condo was being sold for a loss.

Short Sale and Redividing the Condos

In mid 2010, Frank Prell entered into discussions with Kevin Zipperle about a short sale/purchase of the combined condos.  This was at a point where Mr. Prell believed that the market value of the property had fallen to the level of the underlying mortgage debt, or about $550,000.  That was the total of the two mortgages–one on each original condo–at the time of purchase per recorded documents 200507158 and 200507160 in Clark County, IN.  His property taxes are estimated to have been about $13,600 annually applying a 2% investor rate to the purchase price of $680,000.  HOA and related fees on the condos were $10,300 and $11,100, respectively, in 2011 and 2012.  And mortgage interest costs would have been at least $15,000 per year.  Total annual carrying costs on the renovated condo were north of $40,000 while the property was up for sale.  Frank Prell remained current on his HOA fees and property taxes until he surrendered control of the unit.

A short sale is a real estate transaction in which the holder of the debt agrees to accept less than full repayment of the amount owed.  The debt holder in this instance was Bank of America (BofA) through it’s former subsidiary, Countrywide Financial.

Purchase contracts were originally submitted by Mr. Zipperle for the combined unit as well as the individual units since they were still recorded individually in 2010.  The first page of each contract is linked here.  (LINK)  It was unknown at the outset how BofA wanted to manage the transaction, individually or combined.  Subsequent contracts were submitted for each condo on an individual basis per BofA’s request.

After BofA was informed by Frank Prell that the two original condos had been combined, they required that a temporary wall be constructed between the two units to approve a short sale.  He was directed by BofA to rebuild a wall in order to have the condos appraised individually as they were still recorded.  The wall was not built to code because it was never intended to be permanent.  It was clad in 3/8″ drywall with exposed seams and screws and only lightly anchored in place at the top and bottom.  The wall contained no electrical or plumbing.  And once the short sale was approved, it was the intention to remove the wall and restore the appearance of a combined unit.

Ultimate Disposition of the Condos

At each submission, separate contracts were prepared for 1103 and 1104 with the expectation that they would both be approved or rejected by BofA.  By late 2011, the two sets of documents ended up on different paths within BofA.  Kevin Zipperle was notified that the contract for condo 1103 had been approved by BofA for short sale at a price of $175,000.  However, condo 1104 went to foreclosure through Fannie Mae with the temporary wall still separating the units.  At that point, Frank Prell had lost ownership control of 1104.  Mr. Zipperle purchased 1103 in February 2012 with the understanding that he would have to try to purchase 1104 at foreclosure auction and recombine the properties if successful.

Mary Lou Trautwein-Lamkin expressed an interest in the recombined property, and she eventually submitted her own offer for 1104 at the high bid of $220,000.  Her contract was submitted to Fannie Mae which auctioned 1104 according to their sealed bidding procedure.  At one point in her decision-making process, Ms. Trautwein-Lamkin submitted a contract jointly with Mr. Zipperle that was the subject of an earlier posting.  (LINK)  Once she had firmly decided that she wanted the combined unit, Ms. Trautwein-Lamkin submitted the purchase contract for 1104 in her name alone, and Mr. Zipperle agreed to sell her 1103 to which he had title when she purchased 1104.

Owner Occupancy Issue

The sequence of events are important in view of allegations made by the Indiana Office of the Attorney General (OAG) in their lawsuit…  Trautwein-Lamkin submitted her final contract to buy condo 1104 on July 6, 2012, and the key pages of that contract are linked here.  (LINK)  She promptly listed and sold the Harbours condo in which she resided at that time.  Mention of that is made by the Fannie Mae listing agent on the Owner Occupancy Certification (ref. “Unit 603”).  To expedite her move, Trautwein-Lamkin fairly priced 603 and sold it quickly on August 6, 2012.  (LINK)  The sale of 603 allowed her to meet the terms of the Certification, i.e., move into the recombined 1103-1104.

The OAG filed its lawsuit on August 30, 2012.  By that time, Mary Lou Trautwein-Lamkin had successfully purchased 1104 as the high bidder, sold the condo in which she previously lived, and completed all or most of her move into the her new residence as agreed with Fannie Mae.  These events weren’t orchestrated in response to the OAG suit; rather, they occurred before it and with no knowledge that the lawsuit was going to be filed.  There was never an effort by Trautwein-Lamkin or Zipperle, as alleged by the OAG, to buy the property during the period reserved for owner-occupant buyers without that intention on her part.

Indeed, had she not stepped in as the buyer of 1104, Zipperle would have continued to bid on the unit and moved into the combined 1103-1104, if successful.  In fact at the time of sale, Mr. Zipperle had lived in three different Harbours condos in the decade or so that he and his wife had resided there.  In 2012, he and his wife individually or jointly had title to five Harbours condos as either primary residence or investment.

OAG Story Telling

In order to pursue its intended course with condos 1103-1104 , the OAG had to first concoct a story about Kevin Zipperle’s involvement with the construction of a temporary wall built by Frank Prell to short sell his property.  (LINK: pp. 47-54)  It then had to try to prove that Zipperle, with the assistance of Mary Lou Trautwein-Lamkin, devised a way to “jump the line” to buy unit 1104: sidestepping Fannie Mae restrictions that favored owner-occupants as buyers.  This was according to a theory that Zipperle was only an investor and that Trautwein-Lamkin was a front to make the purchase.  At the time of this post, she’s about to start her seventh year residing in the property.

And as their previously discussed theory of  cohabitation demonstrated, the OAG would concoct a story to fill in any blanks for what it did not know.  They didn’t know the Fannie Mae requirements for joint auction bidders, they didn’t know who built the temporary wall and why it was built, and they didn’t know what the eventual plan was for the property.  As in so many other instances in their lawsuit, the OAG didn’t have accurate information in large part because they were listening to and believing the wrong people.

Deposition of Frank Prell

 

Frank Prell was deposed by the Indiana Office of the Attorney General (OAG) on July 1, 2014 at the law offices of Culotta & Culotta in New Albany, IN.  Mr. Prell was the only one of the four Defendants who had not served on the Harbours Board of Directors.  His deposition was the last taken of the four although the OAG had attempted to depose him a year earlier in March 2013.  At that time, Deputy AG Jennie Beller tried to exclude the other Defendants from attending which was the Defendants’ legal right to do.  She threatened a legal challenge while Prell’s deposition was postponed, but Beller never acted on her threat.

Here is the link to Frank Prell’s deposition transcript:

Prell Deposition

His deposition has been edited to remove personal information that was irrelevant to the lawsuit as well as the names of family members and third parties.  Some index references at the end of the transcript may be slightly off due to these redactions.

The majority of Mr. Prell’s deposition concerned the OAG’s interest in condos 1103 and 1104 and his involvement.  The OAG believed that a fraud was committed by dividing the properties after they had been combined.  The next posting will further chronicle the history of these two properties and where the OAG made mistakes in their analysis.

Deposition of Sharon Chandler

Sharon Chandler was deposed by the Indiana Office of the Attorney General (OAG) on May 20, 2013.  Ms. Chandler is a longstanding Realtor in Indiana.  Her deposition was the first taken by the OAG, and it was conducted at the southern Indiana offices of the Attorney General on Rolling Creek Drive in New Albany, Indiana.  Here is the link to her deposition transcript:

Chandler Deposition

Sharon’s deposition has been edited to remove personal information that was irrelevant to the lawsuit as well as the names of employees.  Some index references at the end of the transcript may be slightly off due to these redactions.

2018 HOA Election Results

The Harbours Condominium Association held its Annual Meeting on November 16, 2017 to vote on the 2018 budget and to elect three Board members as normal for the upcoming calendar year.  There was also an amendment proposal to allow electronic (online) voting in future elections.

This election for the first time was administered by the property management company currently employed, and the company did not allow mail-in votes with proxies, i.e., all proxy holders had to be in attendance.  Ballots were only distributed at the start of the meeting.

Voter turnout was high with 75% of total units casting votes for the budget and 79% for the amendment.  The budget passed by 90% of those casting votes.  While well over 80% of owners voting were in favor of the amendment, it barely missed the threshold of two-thirds of all eligible units.  That calculation worked out to 66.43%, meaning the amendment failed.

Two incumbents were reelected to the Board of Directors and one new director was elected from the membership.  Included with those running for a Board position was Tom Pike, one of the Complainants in the lawsuit brought by the Indiana Office of the Attorney General (OAG).  Mr. Pike finished last among the six candidates, garnering 10% of the total votes cast.  No other Complainants or sympathizers ran.

The results of last year’s 2017 election were similar as far as the prospects for the OAG Complainants. (LINK)  In that election, four Complainants ran and none were successful.  Harbours elections continue to demonstrate the complete rejection of Complainants and their agendas by the membership.  It should perhaps be considered progress that only one chose to run in the most recent election.

 

Proxy Voting and the Special Meeting of 2013

Elections have long been a contentious issue with the Harbours HOA.  And it’s probably an issue with many HOAs, perpetuated by a minority faction who feel they can’t get the right people elected or their agendas pursued.  So they raise questions about how elections are conducted, who conducts them, and the results they yield.  The Harbours has developed a detailed system to manage elections that produce results which haven’t much changed over the years: candidates and initiatives not supported by the majority continue to get voted down, as they should be.

One Harbours issue has been proxy voting in elections.  The Complainants and others who usually lose in elections claim that proxy voting procedures lead to entrenched management.  Paul Ranney mentioned that in one of his emails. (LINK)  And the Complainants convinced Indiana politicians to draft legislation that changed laws governing proxy voting.  No longer in Indiana can a person grant a proxy to his/her representative for an indefinite period of time, like a durable power-of-attorney.  The Harbours established those as “general proxies”, and they’re no longer allowed per Indiana law nor can you set up a power-of-attorney for that purpose.  The law now only allows a proxy for a specific time period (IC 32-25.5-3-10, LINK).

2013 Special Meeting to Remove Board Members

After the Indiana Office of the Attorney General (OAG) filed suit, the Complainants gathered enough signatures to call a Special Meeting to remove Defendant Kevin Zipperle and another director–herein referred to as “Candidate A”–from the Board of Directors.  A petition to remove a third Board member, “Candidate B”, was also submitted to the HOA.  Candidate B was a person who was supported by the Complainants at that time.  A meeting was called on April 25, 2013 to recall those three Board members, and as in all previous Harbours elections, both types of proxies were allowed.

The resulting vote to remove each person is shown in the chart to the left.  50% of those casting votes in person or by proxy is necessary to remove a director.  And by a slim margin (0.68%), Candidate A was removed.  Also by a small margin (0.92%), Zipperle retained his seat on the Board and served the remainder of his term through December 2014.

The accountants presiding over the meeting provided a breakdown on how votes were cast.  More than half (red pie slice) were submitted by the person completing the ballot and attending the meeting.  28% (blue) proxied to another person attending the meeting for this one election.  And the remainder (yellow) were represented by a general proxy, a person who handled that owner’s affairs on all HOA matters including this election.  Proxy voting in total was a significant percentage of the votes, and turnout was high by historical standards with more than 80% of all units voting.

The most interesting element of the voting was how proxy votes were cast.  By large margins, voters who cast their own ballots voted to retain Zipperle and Candidate A; and by a smaller margin, they also wanted to retain Candidate B (red bars below).  Proxy votes, however, were greatly skewed away from Zipperle and Candidate A although proxy voters still wanted to retain Candidate B (blue-yellow striped bars).

What do these results indicate?  Again, the Complainants were known to support Candidate B and to be against Zipperle and Candidate A, which is exactly the skew in the proxy results.  The only logical conclusion is that the Complainants and those sympathetic to the Complainants controlled a majority of the proxies for votes cast at the 2013 Special Meeting.

Proxies don’t represent a disenfranchised group of owners who normally don’t vote.  Their viewpoints aren’t significantly different from owners overall.  They’re simply owners who are unable to attend a meeting in person.  And if the results of proxy voting ever show something unusual, there is an underlying cause.  What was fact in this election is that votes cast by proxy were significantly different from votes cast by Harbours owners themselves.  This should have caused the accountants and the Board to question how representative the proxy votes were of the underlying homeowners esp. since a Board member was removed.  Could owners have misunderstood the procedures?  Could tampering with the procedure, proxies, and/or ballots have occurred?  These are questions that weren’t asked but should have been to address election improprieties.

What is known is that proxy voting does not explain why Complainant agendas and candidates don’t prevail.  Indeed, just the opposite appears to have been true in the Special Meeting of 2013.  Assertions like Paul Ranney in his email of June 13, 2012 are totally unsupported in evidence like this.

Paul Ranney Emails to the OAG

Paul Ranney, Sr. and his family moved to The Harbours in late 2006 and reside in one of a handful of townhouse units in the building.  (These properties are at ground level with external entrances and are somewhat unique in terms of their characteristics.)  Mr. Ranney has tried many times unsuccessfully to get elected to the Harbours Board of Directors or to get appointed.  He has also served intermittently on the Building & Grounds Committee.  In June 2017, Ranney again submitted his name for a Board position, and he was finally appointed to fill a vacancy.  His current term runs through December 2019.

Ranney was a regular correspondent with the Indiana Office of the Attorney General (OAG), and his earliest emails were nearly two years before the OAG filed suit.  Those emails were part of the OAG’s response to discovery, and they have been organized and uploaded. (LINK)  His comments were always in support of legislation which helped their agency intervene in the affairs of homeowner associations, legislation discussed earlier as HB1058. (LINK)  He repeatedly expressed that the OAG had grounds to investigate and take action against The Harbours.  Some examples from his emails…

Paul Ranney would often blind copy the OAG on his emails as did other Complainants, occasionally when they were corresponding with each other.  Although his OAG contacts are no longer employed or in their current capacities, it’s unknown whether this practice continues with his Board communications today.

Mr. Ranney’s emails make clear his intentions to serve on the Board of Directors as evidenced by his numerous attempts.  It’s interesting that he speculated (Email 007) that the reason for his failed attempts was the widespread use of proxies during Harbours’ elections.  My next posting will cover one such voting outcome that ran 180 degrees counter to Ranney’s claim, and that election possibly removed a director via fraudulently obtained proxies.

Speaking of which, the thread in Email 012 is another example of OAG misrepresentation.  They drafted a document that included information about voting by proxy and the authority to vote 51% of the eligible votes held by directors in power.  No Harbours Board has ever held anything close to 51% voting power.  When challenged, the OAG retracted it and called it a hypothetical statement.

Paul Ranney’s Recent Comments about the Lawsuit

An earlier post contained the OAG complaints submitted by Paul Ranney on March 16, 2010 and prior to the lawsuit in 2012 against the Defendants. (LINK)  Paul was one of 17 residents who each filed six identical complaints against Board members in conjunction with a Board decision.  Mr. Ranney’s six complaints were recorded by the OAG as 10-CP-54001, and the cover letter reads “in the matter of Paul Ranney vs. Harbours Condominium Association.” (LINK)  His complaints were referenced as 10-CP-X for all 17 Complainants in the aforementioned post.

In a recent email among Board members, Paul remarked

“More B.S…  I was not a part of the complaint made to the AG that caused them to sue [Zipperle]. Leave me out of it…”  – Paul Ranney, 10-11-2017

Ranney is speculating and has no knowledge about the complaints on which the lawsuit was based.  His remark also begs several questions…  Why the attempt at deception?  Why try to differentiate between complaints he filed against Board members that led to the lawsuit?

And while Paul Ranney was so outspoken about HB1058, why try to distance himself now from the OAG’s legal action and the events leading up to it?  That makes no sense unless he has other motives presently.

ICRC Complaint Filed by OAG Complainants Betty and Don Cantrell

Approximately ten years ago, The Harbours Condominiums was contacted by the Indiana Civil Rights Commission (ICRC).  Elizabeth “Betty” and Donald Cantrell filed a complaint against the HOA claiming that their civil rights had been violated when they were refused a handicapped parking space.  Parking was at issue in the lawsuit filed by the Indiana Office of the Attorney General (OAG), and it continues to be debated by Betty Cantrell despite the outcomes of both the OAG suit and her ICRC complaint which is the subject here.

The Cantrells’ complaint was filed on January 30, 2008, and The Harbours received notification shortly thereafter. (LINK)  Their complaint alleged that they were denied the use of one of two handicapped parking spaces in a location they preferred.  One (#18) of the two spaces was still under the control of the HOA and assigned to homeowners as needed on a short term basis, e.g., illness, injury and/or recovery.  The second space they wanted, referred to as “#17”, had been transferred to another owner in a private transaction prior to Developer turnover and had never been under HOA control.  The Harbours response to the Cantrell complaint followed on February 19, 2008. (LINK)

Betty Cantrell has long contested the transfer of parking spaces by the Developer even prior to turnover.  She references a parking diagram shown as Exhibit C to the 2nd Amendment recorded by the Developer in 2001. (LINK)  This was the last parking plan recorded for The Harbours and shows the current location of parking spaces including handicapped spaces reserved at that time marked “HC”.  Subsequent to the 2nd Amendment, the Developer sold parking spaces 17, 101, and 102 to homeowners along with the condo purchased by each buyer.

At that point, the Developer recognized that he would sell out of handicapped spaces long before his inventory of condos were sold.  So, a plan was put in place where an owner with special needs could do a “reciprocal exchange” of a parking space sold with his/her condo for one of the spaces held by the HOA.  This plan is still in use today, and it was presented by the HOA in their response to the ICRC complaint as Attachment 1.  One or more of the owners who bought spaces 17, 101, and 102 would have qualified for reciprocal exchanges, but those spaces had already been deeded to those owners and were no longer under Developer control.

Betty Cantrell could have obtained one of the available parking spaces that the Harbours had for reciprocal exchange: #18, 103, 104, 531, or 601A.  (See Attachment 2 to the Harbours response.)  But she turned down those choices and wanted either #17 or 18 indefinitely, and The Harbours had no choice but to refuse her request.  Several months of mediation and back-and-forth resulted in the “Finding” by the ICRC on June 13, 2008 that “[no] unlawful discriminatory practice has occurred” by The Harbours. (LINK)  The Cantrells appealed the ICRC decision (LINK), and the complaint was finally dismissed after nearly a year of investigation and procedural steps on October 28, 2008. (LINK)

Outside counsel was pursued in anticipation of the Cantrells escalating their parking issues, and the HOA lawyer agreed with the Board’s positions. (LINK)

Other Allegations

The Cantrell complaint of January 30, 2008 alleges that Ms. Cantrell received “numerous disparaging emails from [OAG Defendant] Kevin Zipperle” as well as a “threatening letter” from another Board member.  A file was maintained in the property manager’s office where these correspondences were stored in hard-copy form; most were ten years old.  The emails have been compiled and uploaded in logical threads. (LINK)  They are presented in reverse chronological order as normal on this site and with email generally.  Messages sent from Mr. Zipperle to Ms. Cantrell are presented as emails 006-008 in the linked file.  She describes these emails as “disparaging”.

The Board contacted Betty Cantrell along with a handful of owners about spaces in the”surface parking” area on page 7 of the file linked earlier for the 2nd Amendment.  Ms. Cantrell responded to that letter, and she objected to the way the Board was handling the matter. (LINK)  One of the Board members made a follow-up contact with her, explaining why Cantrell was contacted, and counseling her not to park again in a space that she didn’t have permission to park in.  Betty Cantrell called the personal letter she received “threatening”.

HOA Parking Issues

At the root her parking problems is that Betty Cantrell has never accepted the validity of parking spaces that the Developer transferred to the HOA when he handed over control in 2004.  Not coincidentally, parking spaces were a central focus of the OAG in their investigation.  She believes that spaces were designated for handicapped parking with the recording of the 2nd Amendment in 2001 and never legitimately changed by the Developer or HOA.

What Ms. Cantrell will not believe is that the Developer owned and controlled all assets including parking spaces until he formally sold or transferred those assets to someone else.  She’s even used the expression that “he goofed” meaning that the Developer lost control/ownership of parking spaces that he didn’t intend to–as if a professional property developer who records his own governing documents didn’t account for these routine events procedurally.  It had nothing to do with recording documents and operational control.  When the HOA was established, the Developer owned all assets until he formally relinquished them.  And there’s nothing in Harbours governing documents that says otherwise.  The Developer wasn’t even obligated by law to leave behind handicapped or HOA common parking spaces.  If Betty Cantrell believed otherwise, she should have gotten that in writing when she bought property at The Harbours.  It is not nor was it ever the Association’s job to, in her mind, make her whole.

Transition Committee

The Harbours Condominiums was established in 2000 as a community of single-family residences in a large, multicultural, urban locale.  Situated in Jeffersonville, Indiana, it is minutes away from downtown Louisville, Kentucky and centrally located in a US metro area of more than one million people.

As described in an earlier posting, the Property had been operated as an apartment building but was converted by the Developer into condominiums that were separately sold to individual owners.  (LINK)  The Developer originally owned all property and held a 100% voting interest until turnover of operational control in 2004.  At that point, a Board of Directors elected from and by owners assumed control.

To prepare for handover of control, the Developer asked a group of owners in 2003 to serve on a “transition committee”, a committee that was a precursor to an elected board.  Participation was voluntary, and it was without formal authority and accountability.  The Developer still held all voting power and was responsible for managing the Property.  There is no reference in Indiana law or the Harbours Declarations & Bylaws to the formation of such a committee.  Inasmuch as  Transition Committee members had little experience serving on a condo board, however, it provided valuable insight into how The Harbours operated.  The Committee was also ad hoc and served no purpose beyond the point at which the HOA became governed by an elected Board of Directors.

Transition Committee members were not randomly chosen.  In fact, there was a deliberate attempt to pick people across different backgrounds and dimensions in 2003.  By the start of that year, two-thirds of condo properties had been sold to individual owners.  So, the Developer had a reasonable gauge of people comprising the first community of residents.  In alphabetical order, the people chosen for the Committee were:

Bobby Branham (deceased)
Sharon Chandler
Culpepper Cooper
Marcia Hall-Craig
Harry Leiding (dec.)
William Mapother (dec.)
Mary Lou Trautwein-Lamkin
Sandy Wilson (HOA President, appointed)
Kevin Zipperle

There’s occasional misunderstanding about the Transition Committee and the roles of these individuals, some of it propagated by people who are looking to assign blame or promote their agenda.  In the context of history and how we got where we are, it’s appropriate to understand exactly what the Transition Committee was and was not.

What the Transition Committee Was

Nine people served on the Transition Committee comprised of five men and four women.  Exact ages are not known, but they ranged at the time from the mid-40s to 70s.  The Harbours does not have a large population of African-American residents, but one Committee member was AA.  Six of them were full time residents; two were investors exclusively (Leiding and Wilson), one of whom was an employee of the Developer and the appointed President of the HOA (Wilson).  And a third investor was also a full time resident (Zipperle).  Among the condo properties owned by members of the Transition Committee, every floor in the building was represented except for the 8th.

The Developer still had full control of operations, so there was no need for the Committee to have any of kind of organizational or hierarchical structure.  It served mostly as a panel of owners to be educated by the Developer and on-site management re. issues that were being addressed on a routine basis.  Members were solicited for opinions only.  However, these were people who had an interest in how the HOA was managed, and it was not just a discussion forum or think tank.  All of the Transition Committee members were selected with the expectation that they would be willing to serve as Board members, and most of them did.

What the Transition Committee Was Not

No one except for Sandy Wilson came to the Transition Committee with prior knowledge of the inner workings of The Harbours, nor were they responsible for knowing.  Learning was a primary purpose for members of the Committee.  As mentioned, it had no formal authority, accountability, or legal standing.

It’s important to understand the Transition Committee’s role with respect to the Developer.  And to do that, you have to understand what the Developer’s responsibilities were to homeowners at that time.  In addition to what was prescribed in Indiana law, the only responsibilities he had to the HOA were spelled out in governing documents–articles of incorporation, declaration and bylaws–and in side agreements he made with condo buyers in their purchase contracts.

There were no other obligations that the Developer had to the HOA.  Consequently, the Transition Committee had no leverage over the Developer for unstated obligations they thought he needed to meet, if any.  Nor were Committee members liable for such obligations.  Anyone who maintains that the Developer shirked responsibilities that weren’t spelled out in governing documents or purchase contracts is trying to rewrite history and create legal or contractual commitments where there weren’t any.

Financials at Turnover and Afterward

In 2003, Harbours finances were insufficient to maintain the Property as a going concern.  However, those financials put the HOA well on its way to the solvency it had when the Indiana Office of the Attorney General (OAG) filed its lawsuit.  The HOA had about $50,000 in equity at the point of turnover and over $200,000 in cash in the bank.  (LINK)

The Transition Committee and elected Boards that would follow built those financials considerably.  By 2012 when the OAG filed suit, total HOA assets had amassed to almost a million dollars, and owners equity was in excess of $930,000.  (LINK)  Three of the Defendants in the OAG lawsuit were members of the Transition Committee and Board of Directors during this entire time period, 2003-2012.  And they put in place the systems and oversight to make The Harbours sound financially.

OAG Investigation

The OAG was very interested in the Harbours Transition Committee.  It was the subject of extensive questioning during the depositions conducted on Defendants Zipperle (LINK) and Trautwein-Lamkin (LINK).  Some evidence appended to the Complaint pertained to the Transition Committee, although there were no allegations related to it.  And as pointed out on other topics, there were no findings by the OAG of any kind including the formation and operation of the Committee.

First Elected Board of Directors

All of the Transition Committee members except for Marcia Hall-Craig agreed to run for seats on the first Board of Directors, and all were elected to staggered terms of from one to three years.  The Board needed nine members, and the other homeowner elected in 2004 was Marty Haley.

Mr. Haley chaired the Building & Grounds Committee once it was formed.  This Committee was central to issues alleged about the Property at the time of turnover by the Developer.  Haley was later a Complainant even though he was in a key position of oversight at the time of turnover.  Indeed, his comments presented in an earlier post painted a starkly different picture of  how he viewed The Harbours and how the Property was managed in the early-to-mid 2000s compared to what he said as a complainant.  (LINK)

The Transition Committee ended with the formation of the Board of Directors.  In its brief existence, it served an important purpose to smooth that transition.  And it enabled the Developer to focus on the sale of his remaining condos and parking spaces at The Harbours and move onto other property development projects.

Kathy Bupp Emails to the OAG

This blog entry contains another set of emails forwarded by the Indiana Office of the Attorney General (OAG) in response to Defendants’ request for discovery.  These emails were individually sent by Kathy Bupp to the OAG staff–primarily Deputy AG Jennie Beller and/or Investigator Sally Miller.  They do not include memoranda forwarded separately by the Indiana Office of the Attorney General (OAG) between Ms. Bupp and other parties.

Her emails to the OAG were dated between May 2012 and February 2014.  They’re organized into 39 logical threads in which she corresponded under the names “Kathy Bupp” and “Kathy Kennedy” (maiden name).  Her email file is formatted in a similar fashion to those linked previously.

Kathy Bupp’s email

The attachments referenced in these emails are linked below.

Ms. Bupp had a keen interest in a handful of subjects, and a majority of her emails covered these subjects or had specific objectives:

• Personalize her relationship with OAG staff
• Repeated inquiries into the OAG investigation and offers to assist
• Harbours elections and voting eligibility
• Performance of then-current Board and President (2012-2014)
• Real estate: condo 1104, parking spaces, cell tower lease

And there were isolated subjects in her emails like defending the rights of Harbours renters.  At least that was a subject in which Kathy Bupp had a legitimate stake as a longtime renter herself.

This information will be referenced in future posts on these subjects.  One of which will be Ms. Bupp’s efforts to get close to (“personalize”) the OAG staff who worked for her longtime friend, AG Greg Zoeller.  Among the Complainants, Bupp was not alone in trying to recruit and befriend the OAG staff, but her efforts were as consistent as anyone’s.  Examples of  her behavior have already been presented, and more will follow.

ATTACHMENTS

Email 003 attachment

Email 005 attachment (1st)

Email 005 attachment (2nd)

Email 005 attachment (3rd)

Email 038 attachment (1st)

Email 038 attachment (2nd)

Email 038 attachment (3rd)

Email 038 attachment (4th)