SGCC Purchase Agreement – What Next?

Somersett United
Somersett United

Following lifting of the Temporary Restraining Order (see previous post) the SOA Board was permitted to continue counting the SGCC Purchase Agreement ballots, under which a majority approval (i.e., ratification) was obtained as reported in the SOA’s “Somersett Happenings” newsletter as well as on the SOA website.

What remains to be accomplished?

  • Due Diligence – Per Section 6.1 of the Purchase Agreement, the SOA has 90 days after “Opening of Escrow” to complete their due diligence activities. Since “Opening of Escrow” occurred on October 8 the due diligence period will end on or about January 6. Note that the SOA may terminate the agreement any tine for any reason during this period.
  •  Loan Procurement – No knowledge if this has actually been accomplished and under what terms.
  • Inspection and Tests – Per Section 6.2 of the Purchase Agreement, up to the close of escrow, the SOA may enter the SGCC property to conduct whatever tests or inspections they deem necessary. No available information as to what the BOD may be planning in this regard.
  • Close of Escrow – Per Section 5.3 of the Purchase Agreement, escrow shall close 15 days following the later of: a) expiration of due diligence period, or b) within 90 days after ratification (which occurred on or about December 22); provided close of escrow shall not occur later than December 31, 2014, i.e., the “Outside Date”. Agreement conditions further state that if ratification does not occur within 60 days of the “Opening of Escrow” date, or close of escrow has not occurred by the December 31 “Outside Date”, then the agreement will immediately terminate.

The SOA BOD has not published any status on if and when the due diligence actives will be completed. Also, it appears obvious that the close of escrow “Outside Date” of December 31 will not be realized. To circumvent the immediate termination provision of the Purchase Agreement, these conditional dates will have to be modified, which would require approval of both parties and presumably before December 31.

To date the BOD has been publically silent on the preceding activities. Perhaps a BOD member reading this blog could provide a status report, if not here, perhaps via email newsletter or on the SOA website.

CC&R Amendment and SGCC Purchase Agreement Dec. 18th Hearing Update

Somersett United
Somersett United

A hearing was held on Dec. 18th in the 2nd Judicial District Court of Nevada regarding the Lawsuit filed by a group of Somersett residents alleging unlawful actions on the part of the SOA Board in conducting the CC&R Amendment Vote and SGCC Purchase Agreement Vote. The purpose of the hearing was to determine Plaintiffs request for a preliminary injunction which would extend the provisions of the Temporary Restraining Order until disposition of the case on its merits at trial.

Note: See previous CC&R Amendment and SGCC Purchase Agreement Restraining Order Somersett United Blog post dated December 12.

The Judge denied the motion for preliminary injunction on the basis the Plaintiffs did not demonstrate sufficient irreparable harm if the preliminary injunction was not issued. . The Order states:

the Court has difficulty in recognizing irreparable harm as a result of defendant’s actions” and that “the Court is convinced that a monetary award can adequately compensate the plaintiffs should they prevail on their claims”.

However, in issuing the Order, the Court also made the following findings with respect to Nevada law, stating in his Order:

 “There is reasonable probability that the Plaintiffs will prevail on most of their claims for relief since it is apparent that the Board did not follow the requirements of NRS116.31035 nor NRS116. 311(9) as they pertained to the vote on the CC&R Amendment, and the Board was less than straightforward in regards to the Statute’s requirements with regards to the opposing views to the purchase. The response of the Board to the plaintiffs’ repeated requests for equal time to present their positions, in the Court’s opinion, was disingenuous, apparently done with the goal of obviating opposition to the amendments”.

To read the Order in its entirety, one may click on the following link


CC&R Amendment and SGCC Purchase Agreement Restraining Order

Somersett United
Somersett United

The lawsuit filed against the BOD alleging the CC&R Amendment Voting process was unlawfully conducted, has resulted in a Temporary Restraining Order (TRO).  A court hearing has been set for December 18, which is open to the public. The issued TRO prohibits the BOD from engaging in the following activities:

  • Officially recording the amended CC&R’s
  • Moving forward on any activity associated with the proposed SGCC Purchase Agreement.  Such as, ballot solicitations, counting of ballots, or BOD mailings supporting its approval.

The Judge hearing the case has, however, permitted the BOD to vote on extending the deadline for ballot submittals and to negotiate with the SGCC on extension of the December 31st “Outside Closing Date”, which if not met would immediately terminate the agreement.

As a result of the TRO, the BOD issued the following directive:

“ Because there is a temporary restraining order in place, the Association and its agents are not allowed to undertake activities to encourage voting.  We have to take a conservative reading of the temporary restraining order to be safe. Our attorneys advised us that the acts of a committee member or other volunteer may arguably be imputed to the Association, which means no committee members or Association volunteers should take any action to encourage voting in order to ensure that such activities do not potentially violate the temporary restraining order.”

This raises the question about the recent mailing homeowners received from Rob Ducca and Diana Hicks that contain information on the proposed Country Club Purchase Agreement, in which they argue for an Approval vote. The Ducca/Hicks mailings also included the SOA’s “Proposed SGCC Agreement Ballot” and an envelope for mailing it in. Given that Mr. Ducca is Chairman of the BOD’s Communication Committee and in frequent contact with BOD members, it is fair to assume that the BOD was aware of and approved inclusion of the SOA Ballots within the Ducca/Hicks mailing. If this is the case, and since the included SOA Ballot document contains a BOD recommendation to approve the Agreement, this could bring the NRS “Opposition Equal Space” requirement (NRS 116.31035) into play.

In a response to a homeowner email questioning any BOD involvement with the Ducca/Hicks mailing, the SOA’s attorney provided the following quote:

  1. “The board did not participate in or pay for the mailing. No board member reviewed the mailing or what was going to be said or contained in the mailing.
  2. The board did not approve the inclusion of the ballot in the mailing.
  3. The board believes the specific owners named on the outside of the envelope or others who do not represent the association compiled and sent the materials, including a copy of the ballot.
  4. The mailing, with the inclusion of the ballot does not trigger any rights under NRS 116.31035 because the association did not prepare, authorize, sanction, pay for or send the mailing.”

Logically speaking, only the SOA should disseminate ballots and conduct voting under a strictly controlled process. Although apparently not illegal, for others to do so should not be condoned by the BOD.  For others to pass out ballots indiscriminately raises the concern about the potential for duplicate counting, conflicting results or improper handling. In response to this concern, the SOA attorney also provided the following:

  1. “The association has not sanctioned or authorized the handing out of any ballots by anyone. In fact there is a TRO in place prohibiting the association from doing so.
  2. The association has a mechanism in place to ensure each owner’s vote is counted only once. Additionally, such mechanism is set up so that only the first ballot that comes in from an owner will be counted. If a second ballot comes in from an owner who has already voted, such ballot will not be counted.
  3. There is a place on each ballot for an owner to sign. Therefore if an owner uses the original ballot provided to him by the association or if he uses a copy of the ballot, it will still have the owner’s signature, and as explained above if duplicates arrive only the first is counted. If any fraud is alleged, the owner can always testify as to how he voted.”

As a Committee Chairman subject to the above quoted BOD directive, hopefully Mr. Ducca conducted his mailings prior to BOD receipt of the TRO.


December 10th BOD Meeting Recap

Somersett United
Somersett United

The SOA Board of Directors (BOD) held their bi-monthly meeting at The Club at Town Center (TCTC) on December 10th, the agenda for which may be accessed by clicking on the following: Dec 10 BOD Meeting Agenda.

A recap on some of the more significant agenda items follow:

Election of Officers: 

  • President – Tony Fakonas,
  • Treasurer -Joe Fadrowsky
  • Secretary – Susan Novell
  • Vice Presidents – Danielle Kirby and Chris Huff

Litigation Items:

  • Whisper Rock Owners Property Access Issue – No new status – Still an open issue
  • CC&R Amendment Lawsuit – See subsequent posting regarding details on this issue

SGCC Purchase Agreement – Ballot submittal deadline extended to February 9, 2015.

Sierra Canyon Common Area Maintenance Amendment – Needs resolution with Developer (Pulte) who still owns property.

Town Square Lot – Purchase of the lot adjacent to the Town Square retail buildings has been accomplished, purchase price was $260K using available TCTC funds. No current plans on use of the property, which is being bought for future amenity expansion. Although TCTC funds were used for the purchase, future usage involving shared amenities with Sierra Canyon is still possible.

December 10 BOD Meeting

Somersett UnitedThe Somersett Owners Association Board of Directors (BOD) will be holding their open Board meeting on Wednesday, December 10th at 5:30 PM in the Canyon View Room at The Club at Town Center.  For those interested in attending, the meeting agenda may be accessed via the following link:

Dec 10 BOD Meeting Agenda

This will be the first meeting of the newly installed BOD.  Items of particular interest include the following:

  • Election of BOD officers
  • Review of Current SOA Litigation
  • Sierra Canyon Common Area Maintenance Amendment
  • Review and Approval of SGCC Vote Agreement Extension

Homeowners are encouraged to attend and provide any comments you may have on agenda topics or other issues of concern.

Somersett and Golf – a 10 Year Story

The following article posted by Geoffrey Brooks  –  Somersett Homwowner

A decade ago, Blake Smith creator of Somersett, had 220 acres of land carved out of the PUD and had Tom Kite build a Championship Golf Course, the Somersett Country Club (SGC).

There was no club house, but equity memberships were sold with the understanding that the membership fees, which reached a high of $42K, would be used to build a fancy club house. Once 360 memberships had been sold, all real property and club facilities would be turned over to the members.  Members were happy to pay $425/month for exclusivity and championship golf experience par excellence!

In 2008 the evil, greedy bankers and hedge fund managers found a way to “take” all of our money, which caused the Great Recession of 2008-09. To pay for their excesses, ordinary people had their homes confiscated, property values in Somersett plunged to 40% of 2007 levels…nearly 2000 properties were affected, lives destroyed, savings lost…the future went down the toilet. ………

Read Mr. Brooks entire article by clicking on:   Somersett and Golf