Association board hired forclosure company owned by association attorney's former wife

February 22, 2001

By Fancis P. Garland (View author info)
Copyright ©2001 The Recordnet.com

An Ebbetts Pass homeowners group that had begun foreclosing on the home of a chronically ill resident behind in his dues halted the proceedings Wednesday.

John Gasser, president of the Snowshoe Springs Owners Association Board of Directors, said the association's foreclosure action against Dave Donnell were terminated because they were flawed.

"A mistake has been made," Gasser said Wednesday. "It may be a technicality, but it's there."

The association's decision to start foreclosing on Donnell, who owed some $3,100 including interest and collection costs, attracted widespread attention among association members and others in the area.

Several people offered to help pay the back dues for Donnell, 46, who has been hospitalized four times since December and has received more than 30 pints of blood to counteract internal hemorrhaging.

Donnell, who has epilepsy and pancreatitis, has been unable to hold a steady job for some time and survives on government aid andsmall jobs.

Donnell's parents built his cabin in 1968, and he has been living there full time since 1989. He paid his dues for several years, but when his health began to fail, he fell behind on the payments.

The payments are about $250 per year. The association board, weary of the mounting bills owed by Donnell and another property owner, decided to pursue foreclosure last summer. However, the paperwork was flawed, Gasser said, and that prompted him Wednesday to ask association attorney Curtis Sproul to halt the proceedings.

Michael Johnson, an attorney representing Donnell, said the association board adopted a policy that governs collections, liens and foreclosures without first putting it to a vote of the full association.

Johnson also said the lien filed against Donnell's property did not permit foreclosure because the association did not name a trustee.

Johnson, in a letter to Sproul last Thursday, said he would seek an injunction to scrap the foreclosure proceedings if the association didn't voluntarily do so by March 2.

Johnson said he was working with an Oakland-based nonprofit group that specializes in fair-housing law to determine if Donnell's rights were violated and whether or not he had grounds to file a civil lawsuit.

Donnell, who does not have a telephone, could not be reached for comment Wednesday.

Johnson also suggested Sproul had a "very clear conflict of interest" in that the association board hired KGS Community Services -- a company owned by Sproul's former wife -- to assist in the foreclosure proceedings.

Sproul said he has been divorced from KGS's owner for two years and added that he has been "absolutely upfront" about his relationship with KGS's owner. Gasser said he had no reservations about hiring KGS "as long as they do a good job."

However, Gasser also said he was unaware of the relationship between Sproul and KGS's owner until he saw Johnson's letter to Sproul.

Gasser said he's not sure what the association will do with regard to Donnell's case. He did not rule out reinstituting foreclosure proceedings but said the association would need "to make sure every dot and period is exactly right.

"We need to discuss all our options as a board. But you can't have one person not paying (their dues) when everyone else is paying.That doesn't work in this world."