Condo Can’t Keep Records from ‘Troublemakers’

Judges Gavel

Judge: Condo owners don’t have to tell their boards why they want financial records, and they get to decide if their authorized representative can examine them.

FORT LAUDERDALE, Fla. – Condominium owners don’t have to tell governing boards why they want to examine their associations’ financial records. And owners, not boards, are allowed to decide whether the examinations can be conducted by themselves or their authorized representatives.

Those two rights were affirmed by a Palm Beach County circuit judge in a ruling against the Boca View Condominium Association’s three-year effort to deny access to its records to the attorney of a unit owner it called a “troublemaker.”

Circuit Judge John Kastrenakis concluded a three-day bench trial in West Palm Beach by shooting down nearly all of the numerous legal arguments raised by Boca View attorneys from the powerful Becker law firm to justify denying records access to Eleanor Lepselter and her attorney, Jonathan Yellin.

“I’m just happy it’s over, to get this monkey off our back,” a tearful Lepselter said after Kastrenakis announced his decision. “This is something you can’t imagine having to live through.”

Andrew Schwartz, Lepselter’s co-counsel, called the ruling “a substantial victory, not just for Mrs. Lepselter but for all members of associations seeking their rights to inspect records.”

The trial was the latest courtroom skirmish in a decadelong conflict between the governing board of the Boca Raton complex, including its president Diana Kuka and treasurer Giuseppe Marcigilano, and a group of unit owners critical of the board’s management. During the trial, Marcigliano labeled the unit owners “troublemakers” while Kuka said after the ruling that they were “bleeding the association dry.”

Boca View attorney Adam Cervera accused Lepselter and her husband, Edward, of being involved “in some way, shape or form” with 27 arbitration requests, numerous lawsuits, and a 2020 federal civil rights complaint.

The bulk of the trial focused on a provision of Florida’s Condominium Act that requires associations to allow inspections of its records by a unit owner “or” the owner’s authorized representative. Boca View argued that the provision gave it the right to determine which of the two gets to see the records. Lepselter argued that the unit owner gets to choose.

Lepselter filed her inspection request via certified letter on Feb. 6, 2019. The letter stated that she had appointed Yellin to inspect the records on her behalf. On the same day, Yellin sent his own letter stating that he planned to inspect the records personally.

On Feb. 22, 2019, Boca View’s property manager told Lepselter by email that the board had decided that she, and not Yellin, could inspect the records the following Monday. When Lepselter and Yellin showed up to the property manager’s office, the property manager and later Boca View’s treasurer informed the pair that only Lepselter could inspect the records.

Lepselter next sought non-binding arbitration from the Department of Business and Professional Regulation (DBPR), as required by state law. In October 2019, DBPR’s arbitrator sided with Lepselter, finding that she had the right under state law to appoint Yellin to represent her in the review.

After the arbitrator’s order, Boca View’s association appealed the ruling by suing Eileen Lepselter and adding her husband to the suit as an “indispensable party.”

Kastrenakis concurred with the arbitrator in his ruling on Tuesday.

“It’s the right of the [unit owner] to make that choice, not the right of the association,” he stated. “It’s ludicrous to believe otherwise.” Rules governing record access, the judge noted, “always apply to the rights of the member” – not associations’ governing boards.

In his ruling, Kastrenakis affirmed other findings by the arbitrator, including one disallowing Boca View’s contention, based on a section of state law pertaining to nonprofit organizations, that it could deny access to records if it determined the requests were not made “in good faith” and for a “proper purpose.”

Boca View argued that Lepselter was set up as a “straw person” for another couple, David and Dganit Shefets, whose own record inspection request was denied after the couple transferred ownership of two units to a limited liability corporation they had formed. The Shefets had agreed to pay attorneys’ fees associated with a later record inspection request by another unit owner, Eileen Breitkreutz, and Boca View’s board argued that Lepselter and Yellin wanted access to the records so they could share them with the Shefets.

But a 2010 revision to the nonprofit law barred the “good faith” and “proper purpose” requirements from being applied to condo, homeowner, and mobile homeowner association members, Lepselter’s attorneys argued.

And Kastrenakis noted that the board did not cite any such requirements when it originally decided to give Lepselter access to the records. He noted that numerous arbitration rulings found that unit owners weren’t required to provide any reason for seeking records.

He also rejected the board’s “straw man” argument, finding that neither the Shefets nor anyone else were coercing Lepselter to request records or paying Lepselter to retain Yellin as her attorney.

“She wanted to see the records herself with no persuasion from anyone else,” the judge said.

The ruling represents a rare defeat for the Becker firm, which has been criticized in recent years for helping condo associations defeat challenges by their unit owners by subjecting them to voluminous and costly litigation. Critics say the prospect of being sued by litigious associations dissuades unit owners from exercising their legal rights under Florida’s Condominium Act to hold their associations accountable.

Boca View’s 2016 suit over Breitkreutz’s record inspection request spawned six years of litigation and a $395,544 legal fee judgment against the single mom. In that case, Circuit Judge Donald Hafele agreed that the association fulfilled its obligation to provide access to its records.

This time the giant attorney fee bill will be delivered to Boca View and its 72 unit owners – unless the board decides to appeal Kastranekis’ ruling and wins.

Kastrenakis told Lepselter’s attorneys that he expected their bills to rival the one delivered to Breitkreutz. Arguments over the fee amount, he predicted, would last into 2024.

He prefaced his ruling by suggesting that the dispute was overly litigated.

“I would have thought, with the excellent lawyering, that I was in a wrongful-death trial worth millions,” he said. “It’s sad that we’ve gotten into this level of litigation over a basic records review.”

Lepselter’s lead attorney, Christopher Salavar, said, “It’s unfortunate that it took years of litigation over records that Mrs. Lepselter should have been allowed to view.”

Breitkreutz, who expects to file bankruptcy to avoid paying the judgment, responded to news about Kastrenakis’ ruling by saying, “It’s about time.”

“Maybe something can be done about mine retroactively,” she said. “I’m so glad there is a justice system in South Florida. I hope it shows other associations they must comply.”

© 2022 South Florida Sun-Sentinel. Distributed by Tribune Content Agency, LLC.

By Ron Hurtibise | Read the Original Article Here: Condo Can’t Keep Records from ‘Troublemakers’