News

Good morning, and welcome to another day with a beautiful sunrise in paradise.

Because I have had questions about a recent lawsuit against the HOA, I want to address this issue today. First, I need to give you some background by explaining how the Covenants Committee (CC) functions.

The CC conducts administrative hearings where residents have an opportunity to respond to any citation that they received for rule violations. Examples of rule violations are: stop sign and speeding violations, home design violations, and inappropriate conduct. Residents who are cited for a violation may request a hearing before the CC rather than pay a fine. The CC then has jurisdiction to uphold the fine, dismiss the fine, or impose some other option.

The CC procedures for due process are not like the standards of Superior or Civil Court. What is required by law is that we follow the Civil Code, CC&Rs, By-laws, and our own Rules. Sections that apply are:

1. Civil Code §4935(a) “The board may adjourn to…executive session to consider litigation… member discipline…”.
2. By-Law Section 8.06 (c). “The Board…shall be entitled to adjourn at any time for purposes of reconvening in executive session to discuss… member discipline…”.
3. HOA Rule 1.3.2 “…The CC meets monthly in executive session…”.

This means that, in a CC hearing, there is no right to an open hearing, no right to confront the accuser, and no right to cross-examine witnesses. Rules of Evidence do not follow Civil and Criminal Court procedures, and the CC is only required to give a summary of the incident without names of accusers. The HOA Board takes the position that we want to maintain a friendly environment in our neighborhoods and so don’t want residents confronting each other over such complaints. As a result, there is disclosure of complainant names, we do not allow open hearings, and there is no cross-examination. Now that we understand the administrative hearing process, I can explain the lawsuit. A resident, according to a contractor doing work, was interfering with work being done. When the resident did not comply with requests to stop interfering, a citation was issued to the resident for a rule violation. The resident was fined $200 after attending a CC hearing.

The resident felt his due process rights were violated, and so he sued the HOA in Small Claims Court for $10,000 — $200 for return of the fine and $9,800 for punitive damages. The resident claimed he was denied an open hearing, denied ability to cross-examine witnesses, denied the opportunity to confront the accuser, and the HOA failed to follow rules applicable to civil and/or criminal trials.

The judge found in favor of the HOA. The judge stated there were no violations of the Civil Code on the part of the HOA. The HOA followed the law, so no damages were awarded to the resident. The benefit of this lawsuit is that the judge made clear that the process the HOA is following is correct and legal.

The effort here is to explain the rules of our hearings, so that residents understand the process and are not led to believe that their rights are being denied. We would like to avoid what some might consider frivolous lawsuits that simply cost the HOA money.

Even after such hearings, I look at another beautiful sunset and thank everyone for making each day a special day where we can all say: “It doesn’t get any better than this.”

Kim Fuller
President

Per the instructions of Judge Hop, Ceasar Larrach delivered a Cashier’s Check made payable to Sun City Shadow Hills HOA on Monday 6/11/18 in the amount of $125,000. This has been deposited into the HOA account.

Thank you,
Kim Fuller
President

Since I have had questions about a recent lawsuit against the HOA, I want to address this issue today. First, I need to give you some background by explaining how the Covenants Committee (CC) functions.

The CC is a Committee which conducts Administrative Hearings where residents have an opportunity to respond to any citation that was imposed on them for rule violations. Examples of rule violations are: stop sign and speeding violations, home design violations, and inappropriate conduct. Residents who are cited for a violation may have a hearing before the CC to be heard rather than paying a fine. The CC then has jurisdiction to uphold the fine, dismiss the fine, or impose some other option.

The CC procedures for due process are not like the standards of Superior or Civil court. What is required by law is that we follow the Civil Code, CC&R’s, By-laws, & our own Rules. Sections that apply are:

1. Civil Code §4935(a) “The board may adjourn to, …, executive session to consider litigation, ……, member discipline, ……”.
2. By-Law Section 8.06 (c). “The Board . . . shall be entitled to adjourn at any time for purposes of reconvening in executive session to discuss . . . Member discipline….”
3. HOA Rule 1.3.2 “…. The CC meets monthly in executive session….”

This means that in a CC hearing there is no right to an Open hearing, no right to confront the accuser, and no right to cross-examine witnesses. Rules of Evidence do not follow Civil and Criminal Court Procedures, and the CC is only required to give a summary of the incident, without names of accusers. The HOA Board takes the position that we want to maintain a friendly environment in our neighborhoods and so don’t want residents confronting each other over such complaints. As a result, disclosure of complainant names is not done, we do not allow open hearings, and there is no cross-examination.

Now that we understand the Administrative hearing process, I can explain the lawsuit. A Resident, according to a contractor doing work, was interfering with work being done. When the resident did not comply with requests to stop interfering, a citation was issued to the resident for a rule violation. The resident was fined $200 after attending a CC hearing.

The Resident felt his due process rights were violated and so he sued the HOA in Small Claims court for $10,000, $200 for return of the fine and $9,800 for punitive damages. The resident claimed he was denied an open hearing, denied ability to cross examine witness, denied being able to confront the accuser, and the HOA failed to follow rules applicable to civil and/or criminal trials.

The Judge found in favor of the HOA. The Judge stated there were no violations of the Civil Code on the part of the HOA. The HOA followed the law so no damages were awarded the resident. The benefit of this lawsuit is that a Judge made clear that the process the HOA is following is correct and legal.

The effort here is to explain the rules of our hearings, so that residents understand the process and are not led to believe that their rights are being denied. We would like to avoid what some might consider frivolous lawsuits that simply cost the HOA money.

Thank you,

Kim Fuller
President

1. The Montecito Clubhouse Fitness equipment has been replaced and the Fitness Center is now open for business. Stop by the fitness desk to sign-up for an orientation to learn how the new equipment works.
2. There is an open Board meeting this Thursday, 5/31/18 at 9:00 AM, in the Front half of Ballroom, to discuss:
   1. Rule changes for Covenants Committee.
   2. Rule changes for FAC committee regarding number of members of the committee.
   3. Covenants Committee Charter approval.
   4. Presentation of the new website.
3. Ceasar Larrach update: Larrach was ordered to pay restitution of $125,000 to our HOA by June 7.  Click on "Residents Only" above for more information.
4. The Tennis Courts at the Montecito Clubhouses have completed repainting of all poles and fences and the installation of new windscreens.
5. The Santa Rosa Fitness Center new carpet replacement bids going to Board next month for approval.

Bob Israel once again attended the settlement hearing for Ceasar Larrach on 5/25/18. Here is his updated report of that conference.

Thank you, Bob, for attending the second hearing.

Kim Fuller
President

From Bob Israel:

Per the Request of Kim Fuller, I appeared at the Riverside County Superior Court, Indio Justice Center at 8:30am on May 25. I had discussions with both Steve Morgan the assigned DA and Joseph T. Rhea, Ceasar’s criminal attorney. Ceasar’s attorney was indicating promised restitution would be sent either to the Court System or the Insurer who had paid the claim. I advised that there had to date been no payment towards the Association’s loss of money by any insurer and indicated if possible the funds should be transmitted directly to the SCSHA as the victim to avoid further delays, and to avoid what I learned was a10% administrative fee ($12,500) normally charged by the County of Riverside for collecting and transmitting restitution funds. With these clarifications, and agreements, Mr. Rhea then transmitted to me a request for wire information to the HOA accounts which I forwarded to Kim Fuller and Tyler Ingle for immediate response. Following that, the two attorneys went into the Judge’s chambers to apprise the Judge of the agreed terms of the Plea arrangement before the matter was undertaken in open court. After a substantial period of time, during which all necessary forms and agreements were reduced to writing, at approximately 11:40 AM, Ceasar appeared before the Honorable Judge John J. Ryan one of the most senior and most respected Judges on the bench locally at which time the terms were outlined which included:

1. Ceasar withdrew his previous plea of not guilty to the charges against him and entered a plea of guilty to all three felony counts.
2. Ceasar acknowledged his waiver of his right to a jury trial.
3. The Judge suspended imposition of sentence upon the felony counts subject to Ceasar’s agreement that he was accepting an initial term of 120 days in jail (119 days with one day credit for time previously served) subject to probation as to be determined by the sheriff’s department which could include work release, ankle bracelet (with Ceasar to pay the cost thereof), or any other diversionary program approved by probation authorities. DA Morgan, later advised that the determination of the Judge to suspend imposition of sentence upon the felony counts was the better outcome than the judge rendering an immediate sentence beyond the 120 days, as should Ceasar not comply with any of the terms of his probation, including e.g. restitution, not fully complying with the terms imposed for his probation, having or controlling firearms, etc. he would then be subject to the Court conducting a full sentencing hearing and imposing State Prison time of up to 5 years and 4 months for the felonies Ceasar plead guilty to. The judge asked Ceasar if he understood this and then stated: "that in the case of violation of probation he would be sent to prison for a long, long time".
4. Ceasar agreed to restitution of $125,000 to the HOA and he and his attorney represented that the funds were available and would be transmitted by wire to the HOA pending receipt of instructions, with evidence of such payment sent to the Court on or before June 7, 2018 and the matter was re-calendared for that date. The judge advised Ceasar that failure to make the agreed restitution would be considered a violation of probation.

It should be noted that the amount of restitution is capable of being re-opened upon further proof of additional fraud, but it is my understanding that at least according to the investigation thus far, this sum is very close to what the HOA and its investigators believe could be proved as actual out of pocket losses.

As soon as the funds have been received, the HOA will email an acknowledgement to Ceasar’s attorney Mr. Rhea and to DA Steve Morgan, acknowledging that fact so that information can be provided to the Judge by June 7. Should for any reason, the funds not be received, by close of business June 6, DA Morgan should be emailed immediately.

DA Steve Morgan stressed that the outcome of these criminal proceedings had no effect whatsoever upon any additional claims (beyond the funds covered by restitution) which the HOA may wish to civilly assert against Ceasar or his employer for damages/losses beyond the amounts the Plea of Guilty by Ceasar now admits were stolen.

On behalf of the HOA I thanked DA Morgan for his efforts and anticipated result on our behalf.

Bob Israel
Member at Large

Once again as the first light breaks across the horizon, and a neighbor greets me with a “good morning,” I smile and reflect on the gift of this paradise. It is a pleasure meeting, talking, and working with so many great people. Feel free to contact me anytime with your questions or concerns.

Today I would like to take a moment to thank some of the many people who are doing so much for our community. It is easy to forget all the people that work to make this place a paradise. So many people on so many committees work hard for our benefit. Too often people think it is the Board that does all the work. But it is the members of each committee that are doing much of the work, to provide the Board with the information before voting. It is all these members that make the difference between success and failure in creating a beautiful place to live. Please take a moment and thank them for all their efforts and for making the work of the Board so much easier.

If you know a committee member, stand up and thank them. We can’t say it loud enough or often enough given their dedication. Let me take this moment to thank all the Chairs of each committee for their service and unselfish dedication:

• Communications Advisory Committee Chair: Tom Hutson
• Design Review Committee Chair: Vicki L Berg
• Facilities & Services Advisory Committee Chair: John Petersen
• Finance Advisory Committee Chair: Bill Wethe
• Food & Beverage Advisory Committee Chair: Jurgen Gross
• Golf Advisory Committee Chair: Dave Bakshy
• Information Advisory Committee Chair: Erin Smith
• Landscape Advisory Committee Chair: Chris Stevens
• Safety Advisory Committee Chair: Ed Chavez
• Emergency Preparedness Committee Chair: Jeff Kirkpatrick

And the new Covenants Committee should be starting in the next two months.

We have a new website ready to launch soon. The Board will be reviewing the site and, if all goes well, it will be launched sometime in June. Our goal is to be able to communicate with residents with information as fast as possible. To make this happen, we need each resident to sign up for e-blast communications, which are the notices we send out by e-mail. If you haven’t already signed up for e-blast, you will need to fill out a form to receive these e-mails as we are not allowed to send them without your permission. There is also a form to fill out if you want your e-mail information to remain private. This, too, can be accommodated. The more residents we sign up for this e-mail communication, the faster we can send out notices of information to you and keep you up to date about everything that is happening here at Shadow Hills.

So, when the sun sets on this day, I will reflect on the beautiful sunrise, a good morning greeting, plus all the kind people who have gathered in this community and say to myself, “It doesn’t get any better than this.”

Kim Fuller
President

Bob Israel attended the hearing for Ceasar Larrach on his settlement conference. Here is his report of that conference.

Thank you, Bob, for attending.

Kim Fuller
President

From Bob Israel:

I attended the Ceasar Larrach court appearance in Indio May 16. This was a continuance of the settlement conference. Prior to addressing the Court, I heard a discussion between Ceasar’s attorney and Steve Morgan the DA in which Ceasar’s attorney indicated Ceasar was ready to accept the Plea agreement deal offered previously by the DA at the time of the last conference.

He indicated that Ceasar was willing to make “ full restitution” of $105K by wire to the DA’s office , and plead guilty to a felony with a sentence ( to be determined by the court of from two to four years) which sentence would be suspended with probation for a period of time set by the court, during which time if Ceasar were to commit or  be found guilty of any other serious legal charges his probation could be revoked and he be required to serve time in prison.

Ceasar would be initially sentenced to 120 days in jail, subject to whatever referral programs to be recommended by the probations officers, (i.e. work release ,house arrest, ankle bracelet etc.).

When the DA indicated that the restitution amount was on the basis of his record to be $123,000 and not the mentioned $105K which was the amount in the initial charging papers, but which had been amended upwards, there were additional discussions, which resulted in the attorney for Ceasar asking for a one week delay until 8:30AM on May 25, at which time he represented he was fairly certain there would be a settlement and plea agreement to be entered.

After the hearing, I confirmed the above information in a short conversation with the DA Steve Morgan. Should Ceasar not comply as indicated, then subject to whatever arm twisting on the County and on Ceasar and his attorney which the judge might engage in, there would either be a settlement and plea or a date for a preliminary hearing would be set. On the basis of everything I heard I would anticipate that there will be a plea and restitution agreement arrived at by next Friday as lacking that the matter would move to preliminary hearing and result in Ceasar being bound over for trial.

Bob Israel
Member at Large

Good Morning Residents.

There have been many questions about the change in policy regarding insurance requirements for entertainers and performers. Although the concern has been described for just the entertainers, the changes were directed at all contractors that access the facility. Perhaps the best way to start is to explain what was required, what is required now, and why the change.

About one year ago the Finance Advisory Committee (FAC) was directed by the Board to examine and recommend changes in our contracts, agreements, insurance coverages, and how each would affect the HOA. FAC consulted with legal counsel for the HOA and made written recommendations to the Board. There were examples of contractors not supplying required certificates of insurance and related endorsements to be furnished to the HOA making it more difficult to collect on a potential claim for damages.

It is true that guests of residents do not have to show any proof of insurance when accessing our community and its common area and amenities. Please remember all residents take responsibility for their guests and any damage that may be caused while visiting our community. In the case of a guest of a resident, if the guest causes damages in the common area, the HOA will collect from the resident if the guest refuses to pay the claim. This is different for all contractors in that if there is damage by a contractor, we would have to take legal action, like small claims court, if the contractor refused to pay a claim. This is a more time consuming and costly process for the HOA. On the other hand, if the HOA has entered into a written agreement which requires a certificate of insurance from the Contractor or Entertainer, together with the Additional Insured endorsement from the insurance company, the HOA can submit the claim and be paid by the other insurance company, which protects our HOA from a claim and possible increase in future rates.

In the review by FAC and legal counsel for the HOA, it was determined that some contractors were not providing a certificate of insurance for Automobile Liability which is separate from Commercial General Liability insurance. The HOA was already asking for a certificate of insurance for Commercial General Liability together with an ‘Additional Insured’ endorsement on the insurance policy, from all contractors and Entertainers. What was not being checked was ‘did the contractor or Entertainer have Automobile Liability insurance coverage’.

Since this coverage was not being checked, the FAC recommended that all agreements with Contractors and Entertainers have a provision requiring a certificate of Auto Liability insurance coverage in addition to a certificate of Commercial General Liability coverage. The FAC, legal counsel for the HOA and the insurance broker of record for the HOA also recommended the minimum limits of coverage for Automobile Liability be the same as the minimum limit for Commercial General Liability which was One Million dollars ($1M). The Board decided a minimum limit of $1M for Automobile Liability insurance was burdensome for the entertainers that were being hired by the Clubs and Groups, so they voted that part of the recommendation down. It was discussed and decided since California law requires proof of insurance, and people are supposed to carry such a card in the vehicle, we would just ask for a copy of that card for Club Entertainers. That way no Entertainer would have to obtain different coverage or pay for an increase in coverage limits. The Entertainer would simply show proof of Automobile Liability insurance with at least the minimum California car insurance coverage for Bodily Injury Liability and Property Damage Liability, and the HOA would be satisfied. This was the compromise at the time regarding Automobile Liability coverage for Entertainers.

The Board thought requesting a copy of an insurance card would not be a burden since everyone already had one by state law requirements. So, this policy was implemented at the beginning of this year in the hope of increasing the protection of the HOA, and it would cause little effort to obtain. It now appears some feel that asking for such a document for the Club Entertainers is a burden, so the Board will need to discuss this situation once more. It was not the intention of the Board when implementing this policy that any Club or Group would be overly burdened with the request because the proof of insurance for Automobile Liability is a state requirement. It was also thought by the Board that checking to be sure Contractors and Entertainers have auto insurance when they drive on site was a responsible policy.

I understand no system is perfect and we try to implement that which can work for the great majority of situations. Many of the situations don’t come up at the time of implementation but become known after the implementation process. For example, what happens if there is a substitute performer last minute because of illness, emergency, etc. The insurance would not be confirmed. This is true. What happens for the guests of the performers that drive in a separate car, there would be no proof of insurance. This also is true. What happens if a Contractor or Entertainer cancels their insurance, we would not know it was cancelled, and that too is true. All these exceptions can occur and make for more detailed work for the Clubs and Groups. It was never the intention of the Board to make for more work just to make for more work. It is the intention of the Board to protect all residents of the HOA the best we can within reasonable limits, a point of balance you might say.

Given this information the question now before the Board is what policy should be implemented? I totally understand and agree that more work for little reason seems onerous and burdensome. Somewhere we need to find that balance to protect the 6,000 residents and not to overly work Clubs and Groups that supply such terrific service and programs. Finding the balance will be the challenge. We could simply remove any requirement for proof of auto given that many think it is a low risk situation. We could make exceptions for just some Clubs and Groups, but that might seem unfair to other Clubs and Groups. And then there are some residents that believe asking for the card is not a burden and needs to be done. I do believe that if residents don’t want the Clubs and Groups to have to do such work, and the residents want our insurance to cover the claims because it is a low risk, I think that is their right. But we need to all recognize, with open eyes, it might lead to higher premiums, can’t say how much, can’t say it would happen, I can only say it is possible.

At our next Board meeting we will need to discuss and try to a find a solution. There is no perfect answer but there should be a reasonable solution that benefits the greatest good. So, everyone should respond to the Board with their thoughts, ideas, and solutions. Your opinion matters because in the end, whatever risk we take on, we do it together and it will affect us all. At the same time, if policies are too burdensome, and we lose volunteer programs that we all enjoy, that too affects us all.

So please write to us with your thoughts on how we should proceed.

Thank you for your help.

Kim Fuller
President