Condo association lawyers and lobbyists have successfully shot down efforts by lawmakers to ban “excessive” fees on owners.

When Rhonda Campbell-Sutton was trying to get rid of a pile of junk from the hallway of Dowsett Point, where she owns a unit and serves on the condo association’s board, she talked to the building manager, the construction company believed to have left the junk behind and, eventually, an inspector from the fire department.

It was all for naught. Instead of getting help removing the junk, Campbell-Sutton got something unexpected: a cease-and-desist letter from the condo association’s lawyers alleging she had violated the association’s bylaws by, among other things, contacting the contractor without approval of the association board.

“These actions will no longer be tolerated and DEMAND IS HEREBY MADE that you IMMEDIATELY cease and desist from any further unauthorized communications with the Association’s contractors,” said the letter, which was signed by R. Laree McGuire and Christopher Han from the law firm Porter McGuire Kiakona.

More surprising than the letter was what came after it: a bill on her condo association account for $4,902.32 to cover Porter McGuire Kiakona’s legal fees.

Rhonda Campbell-Sutton, a board member on the Association of Apartment Owners of Dowsett Point, stands before construction screens surrounding a courtyard on the property. Campbell-Sutton got slapped with a cease-and-desist letter and charged almost $5,000 in legal fees for allegedly violating condo rules. (Stewart Yerton/Civil Beat/2023)

Spiraling Costs

Campbell-Sutton isn’t alone. Terrance Revere, a lawyer representing other Dowsett Point condo owners, said Porter McGuire Kiakona lawyers have sent out nine such letters to residents, including board members, who say the letters are retaliation for speaking out about management of the complex.

The complaints point mainly at the site manager, Ohana 4; property manager, Hawaiian Properties Ltd. and Antonio “Tony” Ramirez, president of the board, which is formally called the Association of Apartment Owners of Dowsett Point. The number of letters sent to condo owners suggests the problem isn’t with the owners, but the board members authorizing the letters, Revere said.

“You might have a problem condo board if you have nine different letters that you send out to owners telling them to shut up or else,” he said.

Ramirez referred questions to McGuire, who did not return a call seeking comment. In an interview, Ramirez said board members speaking to the media should be considered a violation of Dowsett Point’s code of conduct. He also sent a notice to residents through a condo messaging system, saying if they were contacted by a Civil Beat reporter, “You are under no obligation to answer his questions.”

The Dowsett Point controversy underscores something most condo owners don’t know until they get legal bills from their associations. If the board takes action against the owners, the owners often have to pay the fees of the lawyers coming after them.

Residents say the courtyard of Dowsett Point has been in disarray for months. (Stewart Yerton/Civil Beat/2023)

State law allows the associations to charge residents the fees of lawyers enforcing house rules and association bylaws, for instance. If an owner gets behind on paying the lawyers’ fees on top of their association dues, the owner can also be forced to cover legal fees of an association placing a lien on the owner’s condo, and eventually foreclosing on the lien. That would essentially force the owner to sell their condo to pay snowballing legal fees, and to pay for the transaction of selling the condo.

Failed Legislation

Some lawmakers have tried in vain to change this system, describing the fees as excessive. House and Senate companion bills sponsored in 2022, for instance, would have required associations to pay legal fees from reserve funds saved up from association dues rather than charging condo owners individually. Lawyers’ communications with condo owners would have been limited. And the lawyers wouldn’t have been able to bill or demand payment from the condo owners.

The measures died, despite being sponsored by House Speaker Scott Saiki and Sen. Stanley Chang, chairman of the Senate Housing Committee.

Management company lobbyists and law firms like Porter McGuire Kiakona called the bills unnecessary. In written testimony McGuire said it’s uncommon for condo association lawyers to send cease-and-desist letters with no warning, although that’s precisely what the Dowsett Point owners say McGuire is doing.

McGuire incorporated testimony of a condo association lobbyist who said “few if any condominium associations resort to immediate legal action when an owner violates the rules.”

“Instead,” the testimony said, “the common practice is to give at least two or three Warnings to the owner about the violation or the nonpayment before the matter is referred to an attorney.”

Margaret Knight, an association board member who received cease-and-desist letters from McGuire in January and March, said McGuire’s actions belie her testimony. Knight said she received no warning from the board before getting the cease-and-desist letters from McGuire.

Lawyer: Cease-And-Desist Letters Are Retaliation

The letters accuse Knight of “constant micromanaging, harassment, and hostile behavior” toward site managers. One incident occurred after a neighbor’s dog Knight was walking got covered with epoxy that workers were applying to the floor of the condo parking garage.

“Mrs. Knight appears to have taken issue with the lack of notices for the work that day,” the letter says. The letter says Knight should have known about the work going on because of its “obvious nature,” the smell of epoxy and notices and cones that had previously been placed in the area, but not on the day of the incident.

Regardless, Knight confronted the site manager, Michelle Taan, about the lack of notices and the consequences of that for the epoxy-coated dog. The six-page letter demands Knight not communicate directly with Taan and goes on for pages citing condo bylaws, house rules and Hawaii statutes. The price tag for the January letter: more than $1,300, according to an itemized bill from Porter McGuire Kiakona.

Taan declined to comment. Knight’s lawyer Amanda Dutcher, who works with Revere, has fired back with a letter to Porter McGuire Kiakona alleging harassment of Knight. While the letter is replete with allegations of harassment, the overarching theme is that Porter McGuire Kiakona is being used to retaliate against critics of some board members.

“Apparently, Mrs. Knight is only one of many owners who have received cease and desist letters,” Dutcher writes. “Many, if not all of these letters, like the two sent to Mrs. Knight, threaten legal action against owners simply because these owners have voiced opposition to how the AOAO is operating.”

The letter also asks Kiakona to substantiate that the cease-and-desist letters sent to Knight were approved by the board, on which Knight serves. Knight said they were not. Asked if the board as a whole, or he alone, had instructed McGuire to send cease and desist letters to particular board members, Ramirez said, “I’m not going to answer that question.”

The letter demands Ramirez be removed from the board for his role in sending out the cease-and-desist letters and that he pay the legal fees Knight has incurred responding to the letters.

The exterior of the Dowsett Point condominium complex, shown here from its Kamamalu Avenue entrance, hides common areas in disrepair. (David Croxford/Civil Beat/2023)

Campbell-Sutton said she can’t afford a lawyer so she’s fighting back on her own. She has filed a complaint with the Hawaii Office of Disciplinary Counsel, which regulates lawyers.

For its part, Porter McGuire Kiakona is no stranger to penalties for taking improper actions against owners. Last year, the firm got slapped with a $475,000 jury award, including $400,000 in punitive damages, for violating state and federal law related to work done for the Plumeria Hale condo association in a dispute with an owner over the owner’s dog. The firm and condo owner later settled for an undisclosed amount.

Ken Lawson, who teaches legal ethics at the University of Hawaii William S. Richardson School of Law, said Campbell-Sutton’s complaint against McGuire seems to have merit.

He pointed to the charge of nearly $5,000 for legal work that appears to consist mainly of a fairly simple letter to Campbell-Sutton, with pages of boilerplate text cut-and-pasted from other cease-and-desist letters. That might violate the state’s rule of professional conduct concerning fees, Lawson said after reviewing Campbell’s complaint.

While Campbell-Sutton waits to see what the Office of Disciplinary Counsel does, she said she’s doing what she can to make Dowsett Point more livable. On a recent tour of the property, she showed off small problems – a deteriorating fence and swimming pool shower – and big ones, including a courtyard that looked like a war zone, with a concrete floor, pond-sized puddles and weather-stained plywood walls. The space has been in disarray for months, she said.

“This place is like the Titanic,” she said. “Every time it rains you worry that there’s going to be water damage.”

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