Litchfield Plantation: Struggle continues for control of POA
By Charles Swenson
Efforts by the developer of Litchfield Plantation to take back control of the property owners association are on hold pending an appeal of a Circuit Court ruling. But the judge who issued that ruling now has to decide whether to allow it to take effect while the case waits to be heard by the S.C. Court of Appeals. Proposed orders are due from attorneys Friday.
The developer, Litchfield Plantation Co., says the appeal of Judge Larry Hyman’s ruling is a delaying tactic.
The Litchfield Plantation Association, controlled by a five-member board of homeowners, says it wants to make sure assessments collected from property owners are spent as intended for the maintenance of common property. “What we’re seeking to do is maintain the status quo,” said Tim Bouch, an attorney for the association, at a hearing last week.
The association went to court last year seeking ratification of a vote that ousted the former president of Litchfield Plantation Co. and the company’s attorney from the homeowners board. The new members asked the court to declare that a clause in the restrictive covenants for the development that gives the company one more vote than all the other members in selecting the association board was void because the company failed to make its annual payment to the association.
Hyman ruled that the so-called Class B voting right was only suspended until the payment was made and ordered an accounting.
The payment, $149,981, was made in August, and the current president of Litchfield Plantation Co., John Miller, announced plans to elect a new board and begin work on a new phase of development.
But the current association board refused to count the company’s votes, Mark Neill, attorney for the company, told the court. The association board, whose members are plaintiffs in the case, said the appeal of Hyman’s ruling stays the restoration of the company’s voting rights.
The company elected a new board anyway, but the management company “will not acknowledge us,” Neill said.
Attorneys for the association have said they are concerned that if the development company regains control of the board it will end the effort to recover association funds the current board says were used to fund the company’s operations.
In a memo to property owners following Hyman’s ruling on the developer’s voting rights, the board said property owners “will have no input about how the plantation is developed or what types and sizes of homes are built.”
Neill told the court last week that control of the association is essential to selling property.
Aside from making annual payments to the association, the development company must also sell at least 100 lots in a five-year period in order to maintain its Class B voting rights. The current period runs to 2015.
“Five individuals decided they were going to take control of the Litchfield Plantation Association,” Neill said. After Hyman restored the company’s voting rights, “they had to invoke Plan B.”
Neill told the court the association’s strategy is, “if we can string this thing out, we can effectively terminate the Class B rights.”
However, court rules include exceptions to a stay of a ruling on appeal in cases involving personal property or real estate.
“It’s clear that we fall under the personal property exemption,” Neill said.
“He has no piece of personal property,” Bouch said. “The idea is rather innovative.”
He argued that the voting right is “a right arising out of documents in this case,” and doesn’t qualify for the exemption.
“If we can’t meet the 100-lot requirement by 2015, they’re going to get what they want anyway,” Neill said.
But Bouch said there is nothing to stop Litchfield Plantation Co. from selling its property. “There is a lot of distrust,” he said.
In a separate suit, the association is seeking payment of over $734,000 in promissory notes due from the development company.
Bouch said the association is concerned about giving the company access to its checkbook. He told the court the association offered to agree the assessments would only be spent on association matters, but the company turned it down.
Neill said the company doesn’t have a problem with that, but added, “We want our rights back.”
“We will be happy to submit to an accounting,” Bouch said. “We have no incentive to loot the homeowners association.”
If the association tries to block any real estate sales, “they know the way to the courthouse just like we do,” Bouch said.
Hyman told each attorney to prepare a proposed order and have it on his desk by Friday.
The case was scheduled for trial earlier in, but that was postponed. Attorneys said their is mediation scheduled in October.