History of Condo Sales by the Developer

A previous post introduced the topic of Developer control (LINK).  Section 8 of the Declarations contains provisions that bound the Developer/Declarant during the build and sellout phase of the project (LINK). Section 22 provides clarity on the Developer’s rights until all of his units were sold.  Per Section 22…

“For the purpose of maintaining the residential character of the Regime, and for the protection of Co-Owners, Declarant specifically reserves the mode and method of the original sale of each Unit until the last Unit in the Regime is sold…

…The right of Declarant to so designate and use such Units and/or Office shall continue so long as Declarant owns any Units within the Property, and no action of the Association or any Owner shall impair such right.“

This blog post presents the condominium sales statistics corresponding to the “event” dates in Section 8.  Most of this information is available through a public records search on the following website: http://counties.xsoftin.com/clark/parcelsearch.aspx

According to public records, the first Harbours condo sold in June 2000.  That sale defined the event date or milestone of July 1, 2005 as the five-year anniversary of the sale by the Developer of his first unit.  The 95% milestone (percentage of units sold) also applied per Section 8, and turnover of control to homeowners was required by the earlier of the two dates.

Historical information for condo sales is shown graphically below, and the complete list of sale dates is available at this LINK.  The 95% milestone was reached one year after the five-year anniversary based on the sale of condo 710 on March 1, 2006.  That transaction brought the total sq ft sold to 95.1%, and the turnover milestone worked out to July 1, 2006 which was four months later.

This graph also shows the date that the Developer turned over operational control to homeowners: April 27, 2004.  This was date of the election of the first homeowner Board of Directors.  By that date, the Developer had sold 87.9% of his condos, and there were 17 units remaining to sell.  Per Section 22 of the Declarations (see citations above), the Declarant kept all of his privileges of development and ownership “until his last unit was sold.”

A misrepresentation by Complainants is that the Developer forfeited these privileges on April 27, 2004.  That argument fails at various levels even if you can’t agree on what the Declarations say.  First, the Developer was also the Declarant: he composed the Declarations.  It would have made no sense to record Declarations that stripped himself of privileges to his financial detriment.  Secondly, as the sales data show, turnover of control was earlier than required by more than 14 months.  Had the Developer been financially impaired with turnover, he would have waited until the last moment to do so and liquidated beforehand any real estate holdings that would have been surrendered.

Another misrepresentation is that Indiana law superseded the Harbours Declarations with requirements that ran contrary to the Declarations.  The law and our Declarations were not in conflict.  Indiana legal code is available online and can be read and searched as desired (LINK).  In addition to the nonprofit code, some laws specific to condominiums and HOAs have been updated in recent years and are linked specifically below.  These laws make no reference to real property owned individually by a developer, including parking spaces except to define them as “common” property (IC 32-25-2-4).

A final test is what the Office of the Indiana Attorney General (OAG) did and did not conclude in their investigation.  The OAG had access to a vast amount of information–incl. from private sources–and a laser focus on how condos and parking spaces were transacted in the changeover from Developer control.  Their conclusion of “no wrongdoing” is testament to how the Developer and Board of Directors carried out their fiduciary responsibilities.

IC 32-25: Condominiums

IC 32-25.5: Homeowners Associations

Kathy Bupp’s Facebook Remarks

Despite the outcome of the Harbours lawsuit, intervention by the Indiana Office of the Attorney General (OAG) continues to be a favorite discussion topic of unhappy residents.  Their reactions were highlighted in a prior blog post when the suit was settled with no finding of liability or wrongdoing (LINK).   Yet, they still try to couch it as a victory, they rationalize why the results didn’t go further, and they think the OAG will come to their assistance again in the face of the highly visible and failed first attempt.  Their remarks are usually devoid of substance and based more in opinion and hope than fact.  And these same people continue to file OAG complaints against The Harbours.

Kathy Bupp commented extensively a couple weeks ago on lawsuit particulars, and her remarks are presented and analyzed below.  She is a close friend of former AG Greg Zoeller and contributed significantly to his campaigns to hold office during the Harbours investigation (LINK).  Ms. Bupp also worked closely with the OAG to enable passage of HB 1058 granting the OAG broad powers to intervene in the legitimate affairs of homeowner associations (LINK).

Her recent comments were made on Facebook and the original text as posted is linked here.

Original Text

She posted these comments on or around August 15, 2017.  They are highlighted below along with background and analysis of the accuracy of each statement.

Gary Davis was a former Director appointed to fill a Board vacancy, and he was elected by membership to a three-year term starting in 2009.  However, he resigned in June of that year due to repeated legal threats by a few homeowners including Kathy Bupp.  Before serving on the Board, Mr. Davis was party to the sale of condo 312 and the purchase of condo 1110 in a three-way transaction that also involved Kevin and Debbie Zipperle as the buyers of 312 (LINK).

Bulletin I that Bupp mentions was attached to the original lawsuit as Exhibit W and described additional parking spaces in the transaction (LINK).  The spaces represented “added value” to bridge the difference between buyer and seller in price negotiations.  The same term was used in the Zipperles’ response to the OAG subpoena for information on the 312 purchase (LINK).   OAG staff member Jennie Beller both in the lawsuit (LINK, item 45) and in deposition (LINK, p. 0060) used the term “sweeten” the deal which is nowhere else referenced.  It’s presumably a term the OAG believed meant that something illicit was going on and parroted by Kathy Bupp in her remarks for that same purpose.

Of more significance is her contention that Gary Davis said the extra parking spaces in the 312 transaction did not belong to the Developer.  This is hearsay on her part, but the OAG said much the same thing during Zipperle’s deposition (LINK, p. 0112).  Jennie Beller was reminded that many homeowners and even Board members are unaware of what’s actually in the Declarations.  In this example, the Developer originally owned all real estate assets–condos and parking spaces–until they were sold to individual owners.  This was recently discussed in the blog post on developer control (LINK).  There’s no reference in Harbours governing documents for any surrender of his assets when he handed over operational control in April 2004.  Indeed, control was turned over to the HOA early and prior to the attainment of the five year/95% sellout benchmarks (LINK, Declarations Section 8); there would have been no incentive for an early turnover by the Developer if assets of value were going to be lost.

That the Developer continued to own standalone parking spaces after turnover of control remains a sticking point with some Complainants and even though there is nothing documented that supports their claims otherwise.  Perhaps not all Board members were aware of that either.  And Kathy Bupp who has never been an owner had no claim on any Harbours assets.

With these comments, Kathy Bupp is concocting a story behind the facts.  The Defendants in the lawsuit were subpoenaed by the OAG for detailed information about parking space transactions.  This information was included in interrogatories provided by two of the Defendants (LINK) as well as Exhibits K-Q in the Complaint for a third Defendant (LINK).  All parking spaces were acquired for cash or in conjunction with condo purchases.  There were no “Mexican jumping beans” or anything resembling that with respect to these transactions.  And the OAG had almost a year to review and investigate all transactions before settling the lawsuit without finding.  As a renter, again, Ms. Bupp never had claims on Harbours real estate, and she’s simply unhappy that her relationship with AG Greg Zoeller didn’t bear fruit.

This is actually a reference to this website (WordPress) and an absurd suggestion of “guilt” feelings in the aftermath of a long, expensive investigation that did nothing but exonerate the Defendants.

It’s true that the OAG requested that courts deny the Defendants any use of HOA funds in their defense (LINK, p. 42).  It’s also true that was a REQUEST and that the OAG had no authority to present this as a demand.  It’s further true that no judge’s order was forthcoming in response and that the OAG would eventually settle the suit with no finding of wrongdoing on the part of any Defendant.  An assertion like Kathy Bupp is making here has less relevance now than it ever has.

In fact, there are Indiana laws that cover this situation, a nonprofit Director sued unsuccessfully in his fiduciary capacity (LINK).  Statutes as well as case law prescribe reimbursement for that Director.  Ms. Bupp is simply anticipating that outcome and expressing her displeasure.  As a longtime renter, she made no contribution to and has no claim on the HOA fees that she is purportedly trying to protect.

Kathy Bupp either has a case of amnesia, or she doesn’t understand what “skin in the game” means.  Between 2008 and 2014, she contributed directly or through her then-husband or his company a total of $10,000 to AG Greg Zoeller.  She lived at The Harbours in most or all of those years.  And she was interested in buying property at The Harbours, having submitted offers to purchase multiple condominiums.  During the same time frame, Bupp was actively assisting the OAG to get legislation passed broadening their powers over condo associations.  And she sought their intervention in The Harbours, with particular respect to condo 1104 that she wanted to purchase.  It’s hard to envision how Kathy Bupp could have had MORE skin in the game–or in the present, maybe she just means she lost it!

There’s no proof, but it’s hard to accept that Ms. Bupp would have invested time and money from which she only wanted the truth as she claims.  The reason she worked “tirelessly” to get others like the OAG to investigate The Harbours is because she wanted to profit from their efforts (LINK, pp. 89-90).

The OAG formally visited The Harbours in August 2010 and filed suit in 2012 after investigating the HOA for several years prior.  The suit was ultimately settled in August 2015, three years after it was filed.  Over that entire time frame, the OAG subpoenaed records on many occasions and conducted depositions.  Most of the information linked to this website was available to the OAG as well as information yet to be uploaded.  They were also provided financial information to conduct forensic audits over multiple years.

To allege that the OAG was in any way deficient or limited in the evidence it was able to obtain is preposterous and simply an excuse for the outcome.  With its subpoena power, the OAG had the authority to get any records it wanted, and they used that authority.  Kathy Bupp is just spinning a no-finding result that’s not to her liking.

As mentioned, the Bupps entered into various purchase contracts on Harbours condominiums since taking up residence here.  There has been nothing preventing her from purchasing except outright greed.  She wants a property for well below market price and less than owners are willing to sell for.  Her offer to purchase condo 1104 was rejected by Fannie Mae because it was 30% lower than the offer submitted by Defendant Trautwein-Lamkin, $150,000 (LINK) vs. $220,000 (LINK).  And she incorrectly thought that the OAG could help her buy condo 1104 with a low-ball offer.

Unfortunately for Kathy Bupp, she has frittered away a golden opportunity.  As far as the real estate market was concerned, her timing was right in moving to The Harbours when she did.  Like most real estate nationally, The Harbours went through its own recession and recovery.  When she first rented here, the property market was characterized by distressed sales and good long-term value for a buyer.  Bupp can blame others for not owning at The Harbours, but greed is what kept her from getting the condo she wanted at an attractive price.

…Rhetoric and rationalization for what happened.  Kathy Bupp nurtured a relationship with the OAG who in her way of looking at things couldn’t get guilty people convicted.  And she can’t bring herself to admit that the OAG came up short or the more fundamental fact that nothing illicit or illegal went on.  Like her few Harbours friends, she blames others for her outcomes.

Subject Index Added to Menu Bar

LOOK UP…  The number of posts to the website has led to the creation of a new index to navigate posts and subjects.  Regular visitors simply want to know what new content has been added.  But like the previous post and an analysis of the most popular posts, a subject index could be especially useful to new users.  Having subjects organized by how popular they are or letting someone choose his/her subject of interest allows the occasional reader to use his time more productively and customize the experience.

The old “index to site” link name has been replaced with “chronological index.”  As users know, this is actually a reverse chronological list with the newest posts at the top along with a small amount of content info.  This index is otherwise unchanged as is the organization of the homepage.  When new posts are uploaded, each title will be referenced on both indexes.

Hopefully, this feature improves the user experience.  My greatest shortcoming in hosting this site has been focusing too much on the content and not enough on making the visit pleasurable.  I will make a conscientious effort to balance those priorities going forward.

Website Statistics (ATTENTION: New Visitors…)

WordPress has built–in tools to provide webmasters useful information about their websites.  With a couple years of operating experience, it’s time to share some of the info with the users of this site.  This could be especially beneficial for a new user with limited time and a “where do I begin” or “how do I start” question.  The most popular blog posts will be listed and linked below.  (Note that all of the following info was summarized through August 5, 2017.)

Some preliminaries…  Through what page do people enter this website?  In the beginning, there was simply a homepage where all of the blog posts are shown in reverse chronological order.  An “index to site” page was later provided to streamline the list, allowing frequent users to see the recent posts at the top and quickly know whether any new content had been added.  With that index, a reader can simply click on the post title and access a page for each post.  (Most of you have discovered that the homepage also has the embedded link for each post in the post title.)  As use of the index has increased, the yellow bar on the chart indicates that readers now click on the post titles to view that content instead of accessing it through the homepage.

MOST READ

The critical question is which info is of greatest interest?  Which of the posts comprising the yellow bar are people clicking to read the most?  In terms of sheer numbers, the following chart shows that the two posts on OAG complaints, Parts I and II of Kevin Zipperle’s deposition, and Debbie Pullen’s emails to the OAG have been clicked on the most.

Simple count, however, can give a false impression of people’s interest.  For example, the link to Debbie Pullen’s emails was posted on September 15, 2016.  Info on the OAG complaints was presented in two separate posts in January 2016.  Visitors to the website have had twice as long to view OAG complaint info as they have had to view Ms. Pullen’s emails.  A good way to adjust for that is looking at frequency of page views, a statistic such as page views per month.

On an equal time period basis, Debbie Pullen’s emails are clearly being read at a faster rate than any other posts, twice the frequency of the next-highest.  And the info on Kathy Bupp’s contributions to AG Greg Zoeller, posted in late March 2017, moves well up the list.  Along with the Zipperle deposition and OAG complaint posts, these are clearly the topics of most interest to readers.  For new visitors to this site, here are the direct links again to those blog entries:

MOST POPULAR POSTS:

Debbie Pullen Emails to the OAG (Part I and Part II)

Deposition of Kevin Zipperle (Part I and Part II)

Kathy Bupp’s Financial Contributions to AG Greg Zoeller

Harbours Consumer Complaints (HOA Summary and Individual)

LEAST READ

Similarly, we can look at posts and subjects that have garnered the least interest.  This chart shows the posts currently ranked lowest in frequency of page views.

It’s important to not just accept this type of data on face value, and the previous two charts show why.  Parking space 601 subjects appear on both the most and least read lists: SIXTH MOST read as well as THIRD LEAST read.  (There have been 47 published posts.)  Apparently, the most interesting aspect of space 601 to readers is WHO is raising issues—Complainant Sheila Rudder—and not the facts, history, and potential remedies.

Reader comments would be another gauge of interest if there were more comments to analyze.  This site is not designed primarily for discussion although there is an opportunity for readers to comment on any post, by name or anonymously.  If comments ever increase in number, this sort of analysis may be useful.

OTHER INTERESTING STATS

WordPress logs data for “referrers” to and “clicks” from the website.  Referrers are other websites that link and direct users to the WordPress site.  For this site, almost 80% of referring sites are search engines, primarily Google.  WordPress also records the most common search terms, but there are no consistent terms used to search for this website.

The number of referrers and the number of visitors to the website are approximately the same.  This probably indicates that almost all visitors are finding this site by web searches, even repeat users.  Evidently, few users type in the web address or have it set up as a favorite on their web browsers.

Clicks are on the links embedded in this website to other websites and “proprietary” media.  Proprietary media are files and information that have been prepared and uploaded exclusively for this website’s users.  As the chart shows, most of the media viewed on this site is proprietary, specific to the lawsuit, and archived through WordPress.  However, the relative sizes of the yellow and blue bars may simply be a reflection of the proportion of those two types of embedded links.

The distribution of proprietary media clicks in the yellow bar is shown in the final chart below.  These are uploaded files that are embedded in the respective blog posts, and those that are viewed most frequently.  The media files in this last chart only represent about one-fourth of the overall number of proprietary media clicks.  It’s reasonable to conclude that there isn’t much of a subject preference indicated in this data although the high ranking of OAG complaints, Zipperle’s deposition, and Debbie Pullen’s emails carry over from prior charts.

One Thousand Visitors!

The 1,000th visitor to this website was recently recorded–on June 30th–which is certainly reason to celebrate.  As far back as this information dates and as dry and tedious as some of it is, that’s a lot of interest.  There have also been more than 5,500 page views by those visiting, meaning it’s not just the accidental or “drive-by” experience.  People are coming here to be educated on the facts behind this unfortunate chapter in some of our lives.

Consider that 1,000 visitors is more than five times the number of condominiums at The Harbours.  And it’s doubtful that even half of the Harbours residents have visited here, less than that number are probably even aware of the website.  What happens when awareness increases, and after much of this information is no longer in the minds of people who have been around long enough to recall or know about it?  This will be the only comprehensive source for those wanting accurate info about the failed OAG lawsuit.

Indeed, this website is far less a casual read and more of a reference.  Rare is the post like this, written without a link to new information.  And the site will remain that way.  There’s still a lot of information remaining to upload although a sizable amount is now in the public domain and free for anyone to consult.

And that’s because the former Defendants in this lawsuit have always been about transparency.  There has been nothing to hide, and the information available here consistently repudiates claims once made by the OAG and the Complainants they tried unsuccessfully to appease.  After years and hundreds of thousands of wasted dollars, the former group tried to save face and eventually turned to other pursuits; the latter remains as unhappy and vindictive as they have ever been at The Harbours, miserable in their own existence, and unable to respect anyone’s authority but their own.

Thanks to those who continue to visit this site, and there will always be a concerned effort to make your visits worthwhile.  Keep coming back!

Independent Appraisal of Condominium 312

Successful prosecution of civil claims by the Indiana Office of the Attorney General (OAG) would have required proof of tangible gain by the Defendants.  For claims involving condo 312, that would have involved an immediate profit by the Zipperles on the value of real estate compared to what was paid.  Alternatively, it could have been a gain realized by another party to the transaction—the Developer or the buyer of condo 1110—along with some sort of reciprocity and collusion among the parties involved.

In November 2009, about three years after the purchase of condo 312, an appraisal was obtained to refinance the property.  A copy of the appraisal is linked here; and based on comparable sales, it shows a value of $360,000 for the condo and NINE (9) parking spaces assigned to it at that time.  As shown in yesterday’s blog post, the price paid for those assets was $355,000 in 2006, yielding a gain of $5,000 or 1.4% over the ensuing three years.  The chart to the left presents that comparison graphically.

The OAG was originally unaware of this appraisal, so they did not request it at the time of the subpoena linked yesterday nor did they reference it in their lawsuit.  However, the appraisal very likely would have been submitted as evidence by the Defendants at trial.  There was brief mention of it during Part I of Zipperle’s deposition, pp. 70-74 (numbered in left margin).

The appraisal provided further proof that no Defendant gained financially from the purchase of condo 312.  Any extra parking spaces included were fairly priced and paid for.  In fact, the OAG ended up reasoning that the buyer of condo 1110 possibly benefited from the parking spaces more than any Defendant in the suit which further undermined their claims.  (See Part I of Zipperle’s deposition, pp. 190-193.)

Transaction Involving Condominium 312

One of the subjects of interest to the Indiana Office of the Attorney General (OAG) was the purchase of condo 312 by the Zipperles in 2006.  Exhibits C through J from the Complaint and previously linked focused primarily on this transaction.  Exhibit W to the Complaint was also about condo 312, and it was questioned extensively in Part I of Kevin Zipperle’s deposition, pp. 50-106 (numbered in left margin).

Prior to the Complaint, the OAG had requested other documents pertaining to condo 312.  Their request came in the form of a subpoena linked here.  The response by the Zipperles to this subpoena is presented in its entirety in the following links.

Zipperle Response

Enclosure I

Enclosure II

Enclosure III

Enclosure IV

Enclosure V

Enclosure VI

Enclosure VII

Enclosure VIII

Enclosure IX

Enclosure X

The essence of the transaction was two real estate transfers plus extra parking spaces between three different people.  The Developer was marketing one of his final properties, condo 1110, to a buyer who was himself trying to sell his residence, condo 312.  The sale of 1110 had to be conditional on the sale of 312, so the Developer was motivated to help in the 312 sale as well.  Toward that end, Kevin Zipperle was contacted on behalf of the Harbours about buying 312 for the HOA to use as a community space.  And extra parking spaces owned by the Developer were added to make the purchase of 312 more attractive.  If The Harbours purchased 312, the HOA would have had the option of keeping the parking spaces or selling them to defray costs.

The transaction completed but would have never taken place had the Zipperles not agreed to be a “buyer of last resort” for condo 312.  In this case, that meant the condo could be bought by The Harbours at the terms negotiated by Zipperle; but if the HOA chose not to, the Zipperles would have to buy it under the same terms.  And because of that agreement, the OAG went to great lengths—unsuccessfully—to try to prove that something nefarious was involved.

A major issue was over the extra parking spaces, numbering eight and varying widely by location and quality.  The OAG tried to prove that (1) these were assets owned or eventually owned by the HOA after the Developer’s exit, (2) they represented value to the Zipperles and/or the buyer of 1110 over and above the underlying condos as priced in the transaction, and (3) there was never a legitimate attempt to present condo 312 and the extra parking spaces to the HOA for purchase.  The OAG failed on all of those issues.

The last blog post discussed in more detail why and how (1) is flawed.  The Developer controlled all of his real estate assets until they sold or transferred out of his ownership.  He was free to use the eight parking spaces involved in this transaction as an inducement to sell a condo or in a standalone sale or sales.  The links above marked as “Enclosures I through VI” show that the parking spaces were valued in the transaction at $40,000 total or around $5,000 each.  Any of the three parties involved in this transaction could have walked away with ownership of the spaces and that much money less in their pockets, thereby debunking (2).  And there were fifty or more people who could serve as witness to the fallacy of (3), homeowners who attended a meeting in September 2006 to hear a presentation of the terms to purchase condo 312.

The many details on the transaction and how the OAG tried to spin the facts to fulfill their agenda are left to explore as much as you want.  There was never an obligation for any of the parking spaces involved to be made the property of The Harbours.  If a mistake was made in hindsight, it was not offering the role of the Zipperles to another homeowner as buyer of last resort.  With respect to that, however, no homeowner ever stepped up and made that request or assertion; indeed, a different buyer could have been arranged even after the fact.  No, the only complaints were from the chosen few who still think they were entitled to receive something for nothing.

Understanding Developer Control

The Harbours was built in the early 1990s and operated initially as an apartment community.  The Property was reportedly purchased by the Developer at a foreclosure auction from a Scandinavian-based firm in the late 90s.  And it continued to be managed as apartments while units were rehabbed and sold to individual owners.  The Harbours Condominiums was incorporated in the State of Indiana on June 13, 2000 as a nonprofit, and the Articles of Incorporation are linked HERE.

The Harbours went through what is commonly known as a “condo conversion project”.  (Example LINK.)  That process starts with an income producing property like an apartment building that is titled under one entity, often referred to as the “Developer.”  As individual units are split off and sold, they become separately titled.  When that conversion process is completed, the remaining property is considered “common” to all individual owners and shared among them.  An asset like a swimming pool is common property with all owners able to use it and responsible for its maintenance.

While an apartment, The Harbours also managed the allocation of parking spaces on the Property among its tenants.  It’s important to note that when the Developer entered the picture, apartments were not recorded as separate units nor were parking spaces legally assigned.  (Each tenant did have a specific space or spaces designated for his use.)  At the time of sale, a condo and its parking space(s) came from separate inventories and were matched up by the Developer’s sales staff.  There’s evidence, e.g.,  numbered parking diagrams, that the Developer had pre-assigned spaces to condos.  But they were never recorded as intact, individual properties, and the Developer had no legal obligation to maintain those assignments through any number of negotiated transactions.

The Developer was also the Declarant, or the entity that composed and recorded the Harbours Declarations and governing documents.  The Declarations & Bylaws were appended as Exhibit A to the Complaint and are presented in their entirety in this POST from August 6, 2015.  References to the Declarant in these documents are intact in their original form.
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Privileges of the Developer as Declarant

The Developer had several important powers or privileges that are typical of a multifamily residential project during development.  The last of these three will be discussed in detail as there is still confusion to this day about it.

• Control of decision-making and Board functions.  For a period of up to five years from incorporation or until 95% of the Units had been sold, the Developer could make all of the decisions relating to Harbours financials and property management.  This is spelled out in the Declarations Section 8
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• Marketing presence.  While selling condos, the Developer could maintain a sales presence, agents in the management office, model units, etc.  These privileges are defined in Declarations Sections 11.A(a) and 22.
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• Ownership of real estate (incl. parking spaces).
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Developer Real Estate Assets

The Developer relinquished management control of The Harbours in April 2004, or more than a year earlier than required.  (Nor had he sold 95% of his Units at that time.)  An appointed Transition Committee was replaced by a homeowner-elected Board of Directors.  The Developer still owned a number of condominiums along with his inventory of unsold or unassigned parking spaces.  Surrender of management control in 2004 had no bearing on his standing as a real estate owner.

However, the Developer-turned-owner retained one privilege as the Declarant which is often misunderstood by people researching old real estate records.  And that pertains to parking spaces.  A commonly used adage at The Harbours is “you can’t own a parking space without owning a condo.”  That’s true presently and will be forever unless the Declarations are amended to allow it.  BUT it wasn’t true of the Declarant.  The pertinent language for the Declarant is in the Harbours Declarations, Section 5(c), for “Limited Areas – Parking Spaces”:

“…Once a parking space has been assigned or sold by the Declarant, such parking space, being a Limited Area, shall be perpetually appurtenant to the Unit to which it is assigned, except as provided herein for transfers among Owners…”

The second part of that sentence is the widely communicated and understood restriction.  But the first part is where the confusion usually exists.  ”Once a parking space has been assigned or sold by the Declarant” means that the remainder of that sentence—the restriction—didn’t apply to him or his parking spaces.  The precondition has to occur before what follows is relevant.  For sure, it didn’t apply until the Developer sold his original inventory of spaces.  And it can be debated whether that privilege extends to him in perpetuity, for example, if he was to attempt to purchase a parking space and resell it.  (Fortunately, that’s not likely to happen!)

As evidence of that misunderstanding in the OAG lawsuit, there was an exchange between OAG staff member Jennie Beller and Defendant Kevin Zipperle during the first day of his deposition (see file pp. 34-35).  Ms. Beller remarked that “other homeowners read the Declarations differently.”  While undoubtedly true, this isn’t a matter of viewpoint; it’s an example of understanding what the Declarations say unambiguously.

Therefore, it was possible—and it may have indeed happened—that the Developer sold his last condo while retaining ownership of parking spaces.  At the very end of his Harbours engagement, he transferred a block of parking spaces to the homeowners association that are used today for HOA business purposes.  He was under no obligation to leave any unsold spaces behind despite how some people interpret documents that the Developer recorded.  Had he chosen to, the Developer could still retain ownership and control of parking spaces today.

Defendant Interrogatories

Continuing with the discovery phase of litigation in September 2014, the Indiana Office of the Attorney General (OAG) formally requested answers to a set of questions–“interrogatories”–from Defendants Mary Lou Trautwein-Lamkin and Kevin Zipperle.  Included in the requests was the production of additional documents.  The completed sets of interrogatories are linked below:

Mary Lou Trautwein-Lamkin Interrogatories & Production (Signature Page)

Kevin Zipperle Interrogatories & Production (Signature Page)

Among the answers and information that the OAG requested:

• Complete histories of real estate and parking spaces owned
• History of service to the HOA by committee or Board position
• The individuals who drafted and approved Bulletins 1 & 2 (Exhibits W and X)
• Offers to purchase condos 1103 and 1104 (related LINK)
• Information related to the purchase of condo 312

Defendant Kevin Zipperle had previously supplied information on the purchase of condo 312 in response to a subpoena dated September 13, 2011.  The full contents of that response will be linked in an upcoming blog entry.

The OAG received timely responses from the Defendants in October 2014.  The Consent Judgment between parties was agreed and entered in August 2015, an interval of approximately ten months during which the OAG had all available information to investigate the legitimacy of these records and transactions.  Per the Consent Judgment, nothing was found suggesting fraud or malfeasance.  As also shown previously (LINK), the value of property related items in the lawsuit was in excess of $800,000.

Debbie Pullen Emails to the OAG (Part II)

A large volume of 253 emails was forwarded by the Indiana Office of the Attorney General (OAG) in response to the Defendants’ discovery request for former homeowner Debbie Pullen.  These emails were organized into 176 topical threads and presented as Part I of this subject.  Ms. Pullen moved to The Harbours in May 2011 as an owner, and she sold her condo and moved out in 2016.  Her move-in was about 15 months before the OAG filed their lawsuit, but it was several years after they had started their investigation.  As will be discussed, she did her best to make up for lost time and influence the outcome of the suit.

Her emails have now been analyzed for their content and accuracy, which was no small undertaking.  We will be discussing subjects of greatest interest to her, those which shed light on her ambitions and motives.  We will also highlight those communications that reflect on her character and that of her OAG contacts.  It’s impossible to do every subject justice and keep people interested in reading about them—which is why they’ve been uploaded in their entirety and organized for review.  You’re encouraged to read all of them and pose questions about any that you don’t understand.

Statistics

Many people hate numbers, but a few statistics warrant examination to understand Ms. Pullen’s approach to communicating with the OAG.  A large number—about 15%—of her emails were naturally about the Defendants, mostly about Kevin Zipperle.  And Pullen was firmly behind prosecution of the Defendants.  But that begs the question why did so many of her emails—more than 80%—not directly involve the Defendants and the OAG’s lawsuit?  What was her focus in about two hundred unrelated emails that the OAG acknowledged receiving?

Most of Debbie Pullen’s contacts with the OAG had little to do with the evidence in their lawsuit or the Defendants.

Pullen’s greatest interest by email count was politics at The Harbours and her personal aspirations.  Around 18% of her emails expressed her interest in a Board position (emails 5, 6, 64, 104, 114, 116, 137); other Board members, positions, and/or officers (3, 29, 38, 40, 65, 115); and committees and her community efforts (15, 19, 27, 62, 75, 90, 117, 127).  She tried to engage the OAG on subjects as trivial as a Board member selling her condo (41) or how funds were used from a “bike sale” on which Pullen was involved (117).  Another 5% of her emails were on the related subject of Harbours elections, even though most were sent after the OAG filed their lawsuit containing no allegations about how elections were conducted (31, 68, 70, 71, 72, 126, 136, 150).

Indeed, raising new issues was a primary objective of Debbie Pullen in her emails, not putting old issues to bed.  6% of her emails were about Harbours property managers who had no connection to the lawsuit (35, 89, 143, 144, 146, 157-162).  Another 10% were about HOA issues since the lawsuit was filed (4, 78-87, 91, 92, 98, 103, 107, 109).  5% of her emails were on the single topic of the Harbours online message board (17, 74, 93-95, 97, 99, 106, 125).

Personal Relationship: Email 155

A common approach to the way Harbours Complainants and sympathizers tried to interact with the OAG was to personalize that relationship.  Debbie Pullen was no exception as her emails showed.  According to OAG Investigator Sally Miller during her deposition (see pp. 118-119), that is not uncommon for complainants generally.  However, Ms. Miller also assured that…

“We (OAG staff) don’t reciprocate in kind with information about our families or… anything like that…”

Thread 155 in Ms. Pullen’s email file contains an exchange between her and Sally Miller’s supervisor, Jennie Beller, on July 9, 2012.  This was about one month into the 21-month time frame of the emails forwarded by the OAG for Debbie Pullen—which would have been early in their relationship.  Here is the dialogue in email thread 155…

Pullen:  If you are going to call, I will be leaving the office for a meeting at 2:30 pm…

Beller:  Will you be available around 1:00 pm?

Pullen:  Sure . . . My office # is 812-889-8180.

Beller:  Debbie, I won’t be able to speak with you today. I just got a call from the day care where my husband goes. Their air conditioning is out and they are sending clients home. FYI – if you didn’t know, my husband had a massive stroke 17 months ago. He is paralyzed on the right side and lost his ability to speech (sic). Fortunately, he is the same sweet guy I married, and we manage to communicate some.  We’ll catch up tomorrow.

Pullen:  Sounds like you are an angel on earth!

Beller:  I am no angel! Chuck has the hard part. He has all his memories, intelligence and opinions he has always had. He just can’t express himself.  The good news is we both have a great sense of humor…  I also have help. Chuck willingly goes to daycare four days a week. The fifth day, we have a nurse’s aide in to watch him at home. I am grateful I can go to work every day.

Pullen:  Jennie, Thank you for sharing a bit of yourself with me. In this life, we all have issues to deal with and that is what makes us who we are…What I keep telling myself is that this life is just temporary and we are merely preparing ourselves for our always life with GOD.  You are fortunate to have found an enduring love, even though it must be so difficult for both of you…dealing with it on a daily basis. GOD blesses each of us in different ways and also gives each of us our own set of challenges and never gives us more than we can handle. I myself remember walking around a park that I used to walk in and looking up and telling GOD, enough…I’m not sure just how broad you think my shoulders are …but GOD does help give us the courage. I hope to be fortunate enough to meet you one of these days…  Thank you for all you are doing to make a difference in this crazy world of ours. I will keep you and Chuck in my prayers and hope that if you ever have any extra prayers you will include me.  Take care.

Note that it is Jennie Beller who first personalizes this exchange by volunteering information about her husband’s medical condition.  If this doesn’t qualify as “reciprocation” in the eyes of Sally Miller, it’s hard to envision what does.  And it obviously resonated with Debbie Pullen—who needed little encouragement.

This isn’t, by the way, the only email evidence of a personal relationship that was cultivated between the OAG and the Complainants.  There aren’t many examples, but others will be presented and discussed that didn’t involve Debbie Pullen.  What the OAG was not entirely successful doing is expunging these emails from their response to discovery, and it was simply an issue of the large number of emails they were handling.  We know from Sally Miller’s defensive tone in her deposition and in her emails to homeowner Kathy Quiggins that the OAG was sensitive to an accusation of favoritism—to the point of being less than truthful about it under questioning.  While the OAG forwarded nearly a thousand emails from Harbours owners and residents, we are now aware of examples like those involving Ms. Quiggins that were held back from the Defendants.  No one but the OAG knows how many emails were actually sent by and exchanged with the Complainants and what they contained.

Character

In a few of her emails, Debbie Pullen speaks on religious matters (21, 67, 69, 77).  In a number of others, she paints herself as the victim of a criminal act while professing her honesty in how she deals with others (135, 138, 139, 151, 153, 156, 163-174).  The “crime” inflicted on her was later discovered to be infestation that damaged her car and several other vehicles on the Property.

Ms. Pullen had a proclivity to blind-copy the OAG on many of her emails to other people, and she didn’t much discriminate.  She regularly blind-copied the OAG while corresponding with Board members and management and Harbours residents whom she didn’t completely trust.  But she also did so on emails to other Complainants.  She even blind-copied the OAG on an email to her insurance agent.  In total, there were 56 instances where the only way the OAG could have received Pullen’s email was to have been blind-copied.  In just a couple of cases did she tell the target recipient that the OAG was also receiving the email.  Between 2012 and 2014, there was a high probability that talking to Debbie Pullen meant the OAG was eavesdropping.

She also made a startling remark in email thread 152, and OAG staff member Jennie Beller made an equally curious response…

Pullen:  I meant to mention something to you when we spoke…  Since I figure that [former property manager] and Kevin are working together on whatever but that Kevin has probably reaped the most benefit and is the most dangerous, what about going to [former property manager] and (lying if you have to) tell her that you guys are very close to bringing charges on both of them.  After telling her that let her know that if she will come clean about everything, help put Kevin where he belongs and make restitution to the Harbours, you will make her a deal and she won’t serve jail time… Does this sound totally off-the-wall???? Perhaps I have been watching too many cop shows.

Beller:  Oh, Debbie – too much TV. I wish we had criminal authority, but alas-our statutory authority is limited to civil action.

Ms. Pullen was OK with a government agency lying to get information for its own investigation, even to the point of recommending the agency resort to that.  And Jennie Beller didn’t exactly take umbrage at the suggestion on behalf of the OAG, only that it was a little far-fetched!

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While not a Harbours Complainant formally, Debbie Pullen was a pretty good example of one.  Whatever means to the ends she wanted to accomplish were OK, and better that State government and Indiana citizens paid for the effort.  Her contributions of substance to the OAG’s investigation were negligible and limited mostly to trying to unearth new issues and smoking guns.  She didn’t reside long enough at The Harbours prior to the lawsuit to know much information firsthand.  But she worked tirelessly for almost two years to personally engage and encourage OAG staff members to follow through with their suit.  Ms. Pullen communicated very little with any of the Defendants to understand opposing sides to a debate or question, rather, taking up with a small group of disgruntled homeowners and working to recruit new ones.  When she moved to The Harbours in 2011, she openly admitted that she moved there to meet people.

Debbie Pullen also carried self-serving agendas with her.  She successfully fostered a personal relationship with the OAG and tried to use it to gain their help in much the same manner that Kathy Bupp did to buy Harbours real estate.  Where that similarity may have ended is that Ms. Pullen was a not a large financial contributor to AG Greg Zoeller.  His staff at the OAG apparently did little more than return Debbie Pullen’s friendly advances.

Spurned by repeated attempts to get on the Board of Directors and infiltrate circles of people that she sought out, she chose to sell her condo and move.  In the end, that was probably her greatest contribution to the community.