Thursday, December 1 2022

Can condominium board members interpret access to records laws as they wish if they decide that the unit owners making the requests are acting against them?

That’s one of the questions a Palm Beach County circuit judge will answer in an ongoing contentious lawsuit between longtime Boca View Condominium Association officers and unit owners Eleanor and Edward Lepselter over a request for inspection of how money is spent at the four-story, 72-unit complex, located a few blocks west of Boca Raton Beach.

It’s the same association that won a $395,554 judgment last spring against fellow unit owner Eileen Breitkreutz, a single mother she sued over her 2016 record claim.

The lawsuit, which began Thursday in a West Palm Beach courtroom, stems from a Feb. 6, 2019, request by Eleanor Lepselter, also signed by Edward, naming the law firm of attorney Jonathan Yellin, Backer Aboud Poliakoff & Foelster as their authorized representative to conduct a registration application on their behalf.

That same day, Yellin, one of the firm’s attorneys, sent his own letter informing him that he was representing Eleanor Lepselter and planned to conduct a “forensic audit” of the association’s financial records. His letter said the couple planned to file a petition for arbitration with the state Department of Business and Professional Regulation if the board did not make the records available.

The state condominium law requires condominium boards to provide access to records “to a member of the corporation (unit owner) or the authorized representative of that member.”

On February 22, 2019, the association’s property manager, Eric Estabanez, emailed Eleanor Lepselter, setting the following Monday as the date the records would be made available. The email stated that only Eleanor, not Yellin, would be allowed to inspect the records.

When Eleanor Lepselter showed up at the property manager’s office with Yellin at the appointed time, Estabanez said that only she would be allowed into the room where the files were assembled.

Yellin protested, telling Treasurer Giuseppe Marcigliano, who also attended, that state law required access by unit members or their authorized representatives.

Eleanor Lepselter and Yellin testified at trial that Marcigliano told them, “It’s your law. Not my law. I don’t care about your law.

Asked about the statement in court, Marcigliano told the Lepselters’ attorney, Christopher Salavar, “You are a liar.”

But then Marcigilano said, “I said that to end the conversation. I didn’t want to talk to [Yellin] more. He is hateful.

Circuit Judge John Kastrenakes singled out the dispute over the meaning of “or” in state law condo record access language as one of the key issues that will determine his decision in the case.

The association’s legal position, the judge said, is that it’s the association’s choice — not a unit owner’s — whether to provide records to a unit owner or representative. authorized. “You can watch them and he can’t,” he said. “That’s the dispute.”

Kastrenakes’ decision could set a legal precedent that could affect how associations handle similar registration requests from their members.

The lawsuit, which has generated more than 300 lawsuits, is the latest skirmish in an exhaustive series of legal disputes involving the association, including civil lawsuits and arbitration cases before the Division of Condominiums, Timeshares and of mobile homes from the Department of Business and Occupational Regulation. .

In those actions, Boca View President Diana Kuka and board members accused the Lepselters, Breitkreutz and another couple, David and Dganit Shefets, of working together to try to oust the board members from ‘administration.

Since its conversion of an apartment complex in 2004, the association has had 27 complaints to DBPR, Kuka said on Friday.

The association has made similar allegations in documents filed in the ongoing lawsuit. Speaking to Lepselters attorneys Andrew Schwartz and Christopher Salavar, board treasurer Giuseppe Marcigilano said on the witness stand, “You represent all the troublemakers in the building.”

The dispute dates back nearly a decade, when the Shefets transferred ownership of their two condo units to a limited liability company they formed, Cool Spaze LLC, for the purpose of renting out the units. The Shefets took legal action in 2015 after the association refused to process lease applications, saying the Shefets had not sought council approval for the transfers. This case is still pending.

Around the same time, a once cordial relationship between the Lepselters, who work as real estate agents, and Kuka soured.

The animosity led to a pair of lawsuits in 2013 filed by Edward Lepselter. The former claimed that Kuka spat on him and called him “white trash” during a board meeting. This complaint was later dropped. The second lawsuit, filed in small claims court, sought $1,364 for damage to the couple’s unit that Lepselter said was caused by a broken water main the council failed to maintain.

The association prevailed and argued so heavily that it initially sought $120,000 in legal fees from the couple. The judge in that case reduced the debt to $32,900 and accused the association’s law firm, Becker, then called Becker & Poliakoff, of compiling time slips that were “duplicate, unreasonable, unnecessary and excessive”.

The Shefets filed their request for inspection of the board’s financial records in 2016, but the association rejected it, saying the couple were no longer members of the association because they had transferred ownership to their company.

Yellin’s partner, Ryan Poliakoff, later acknowledged in a deposition that after the Shefets’ request was denied, the law firm sought out “other relevant owners” to request access to the company’s records. association. And Breitkreutz acknowledged in a deposition that the Shefets had agreed to pay the legal fees incurred in his 2016 filing. Yellin represented Breitkreutz, who lost the case when a judge ruled that the association stood complied with the law despite the short notice of inspection.

On the stand Friday, Eleanor Lepselter said the Shefets loaned the couple $15,000 to help pay the $32,900 legal bill ordered in the small claims case. But she said all that money had been repaid since 2014 or 2015, and the couple did not owe the Shefets any money when they filed for the record in 2019.

After Yellin was denied access to the records, Eleanor Lepselter filed a claim for non-binding arbitration by the DBPR.

The arbitrator agreed with Lepselter, saying that the wording of the law requiring access to records be provided to association members or the member’s authorized representative was “directly contrary” to how the association interpreted it.

“The Association does not have the right to choose who will be the authorized representative of the member,” determined the decision of the arbitrator. Further, he said the use of the word “or” is inclusive because “it is expected that the Member and his attorney will ‘review the records together’.”

The arbitrator’s decision required the association to make all records available and to pay $500 in damages.

Instead, the association sued Eleanor Lepselter, in what is essentially an appeal of the referee’s decision.

On Friday, Kuka acknowledged that one of the reasons the association denied Yellin access to the records is that officers feared Yellin would give copies to the Shefets.

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She recounted numerous disputes with the Lepselters, including calls to the police department, election recall efforts, disputes over planned reparations, and complaints to the city of Boca Raton about alleged code violations.

Repeatedly throughout the two days of hearings, Kastrenakis cautioned Boca View’s witnesses and their attorneys — Adam Cervera and JoAnn Burnette — not to stray from matters not cited in the complaint or other evidence. not filed in the case.

Among many arguments, the association’s lawsuit alleges that the Lepselters’ request violated a provision of a separate state law governing nonprofit organizations’ access to finances. The law says nonprofits — and homeowners associations fall into this group — must allow access to members if requests are made in “good faith and for a legitimate purpose.”

In its complaint, the association said, “There is no doubt that the Lepselters’ request for documents was made in ‘bad faith’ because it was made on behalf of Shefets and/or Cool Spaze.”

Kastrenakis said on Thursday that the association had waived its right to use the argument of bad faith to refuse the release of the records – because it had previously agreed to provide them to Eleanor Lepselter.

The judge set Tuesday morning the final pleadings of the case, likely to be followed by his judgment, which the association would be entitled to appeal.

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at [email protected].

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