Bay Creek Lawsuit Settlement Terms Questioned
By DORIE SOUTHERN
Cape Charles Wave
January 7, 2014
Bay Creek property owners were sent a letter (click to read) last month from the Bay Creek Community Association informing them that a mediated settlement agreement has been reached to the lawsuit brought against the Community Association management and Bay Creek companies by Paul and Robert Galloway and their companies.
No property or homeowner should accept this settlement based on blind faith . . . . JOHN C. BOYTOS (Click to read full statement)
The terms of the settlement agreement were only partially revealed in the letter. The Class “A” Unit owners were told that they could object to the settlement and dismissal of the derivative counts by contacting the attorney for the Association.
The lawsuit raises derivative counts concerning the management of the Bay Creek Community Association including the constitution of its Board, its organization, breaches of the declaration and by-laws, breaches of fiduciary duties and loyalty, breach of Declarant Assessments, failure to complete and to maintain common areas, failure to exercise good judgment, violation of Fair Debt Collection Practice Act, and Violation of the Interstate Land Sales Full Disclosure Act.
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The derivative action was brought on behalf of the Community Association against the directors and management of the Community Association for failure to exercise their authority for the benefit of the Association.
Plaintiff Paul Galloway told the Wave that he is not at liberty to comment on the agreement at this time.
The Association’s letter says that the Galloway Complaint “asserts several counts derivatively on behalf of the members of the Association . . . The parties to the case have settled all matters raised in the dispute and recommend approval of the settlement, including the dismissal with prejudice.”
The letter advises that unless 50 percent of Bay Creek “A” Unit owners object, the settlement will be deemed accepted by the owners and the Galloways’ Complaint will be dismissed with prejudice. “Dismissal with Prejudice” means that no further lawsuits may be brought on the matters related to those settled. Telephone calls from the Wave to the Association’s Attorney, asking if the derivative counts would be settled for all Bay Creek property owners, were not returned as of press time.
The letter ended by noting, “Any objections will be provided to the Court prior to entry of the final order dismissing the Complaint.”
Bay Creek property owner and local contractor John C. Boytos told the Wave that he intends to object to the settlement agreement. He said he cannot agree to the settlement if he does not know the terms and what it would mean for his rights as a property owner in Bay Creek. He is also concerned that not all property owners may have received the letter or understand the lawsuit. Click here to read the full Boytos statement.
Asked if the settlement would be sealed upon conclusion of the agreement, Galloway said he thought not. Sealing makes settlement terms confidential and, therefore, not in the public record. When a settlement is finalized by a judge, it is usually not sealed. If it were sealed, Bay Creek property owners would never know the full terms of the agreement.
Click here to read the Galloways’ 27-page lawsuit.