The Assets of the Diamondhead Country Club and Property Owners Association (POA) are in jeopardy!
The POA Board of Directors has had two past presidents who have assaulted owner-members, while performing their official duties as president. Both were found guilty of assault in a Court of Law, and were fined. Both continued to serve on the Board with no disciplinary action taken by the other board members. One past president is still actively serving as exofficio. This gives the appearance that violent behavior committed by a board member is common practice and is assumed to be Board approved activity since nothing has been done to remove the offender.
As a Business Management graduate from Cal Poly, San Luis Obispo, retired Naval officer, and 22+ years as Director of Risk Management for a publicly traded Real Estate Investment Trust owning malls and shopping centers, commercial buildings and apartment complexes covering five states. My experience with risk management gave me the knowledge to do a little homework on what could become a major problem for Diamondhead property owners.
All Liability Policies, including policies covering Boards of Directors, contain clauses that address actions that are not covered by the policy. Deliberate assault, especially if the perpetrator is found guilty and fined in a Court of Law, is one of the activities not covered under liability policies. Knowing this, I pulled in some favors and found the insurance company that carries Diamondhead’s Officers and Director’s liability policy. I called them. The executive representative with whom I spoke, could not tell me what
action on coverage they would or could take, if another act of violence committed by a board member occurs in the future. He did say, however, that it appears the Diamondhead POA Board has serious moral and ethical problems that require immediate remedial action!
The representative did say the carrier would investigate any future claim and would make a decision on coverage at that time. The insurance carrier is now informed as to the violent actions and serious infractions made by two past presidents of Diamondhead’s Board of Directors. My personal experience tells me no insurance company, knowing this history, would honor coverage should future violent acts be committed by a Board member. The individual property owner-member could be assessed by the POA Board to fund any damages found by a Court of Law. The only recourse property owner-members would have to recover their loss is to sue the POA Board, individually, for their failure to honor their sworn fiduciary responsibility to the people of Diamondhead.
If the POA Board chooses not to act immediately by ridding itself of law-breaking bullies, they fail to uphold their fiduciary responsibility to this community. It is time they do what they were elected to do. The offending past-president must GO!
Gary E. Longanecker