Part 3: GWLUA/ GW Inc Legal Issues.

Part 3: GWLUA/ GW Inc Legal Issues Gillian Fryer posted 7 months ago

So we're now in the early 2000s. GW is a subdivision and Mike is back to building again.

He files new Articles of Association, By-Laws and Land User's Code on March 25th, 2002. There are some important changes to these documents. In addition to reflecting the road requirements for the subdivision, Mike addresses the issue of a board:

By-Laws Article V, Section 1: "The affairs of the Association shall be managed by a single Director/Initiator, Michael Reynolds, the designer and founder of the concept, until the project is at least 90% developed and all debit and business relative to the founding of the community are completed."

I guess that lays to rest whether a board was going to be created within the parameters of the original documents from 1994, doesn't it?

Do you suppose the community got to determine the rules changes as required by NMSA 53-10, which Mike still references as the controlling law, under which the GWLUA was established?

At a board meeting in 2018, Sally Margolin stated that she was unaware that these new documents had been filed. David Henry, who was instrumental in the initial creation of the GWLUA and the development of the documents, was sitting next to her and was incredulous that she would say such a thing! I knew immediately what had happened: New Mexico is a NO NOTICE state. That means that a document can be filed against your property and neither the filer nor the state is required to tell you about it. You would only know about it if you had a mortgage (in which case the bank would have been informed of potential claims against its interests), or if you physically checked with the county. Sally, who owned her home outright, was never notified. Since you can't agree to something that you don't even know about, she also was never consulted about the development of the new documents and she did not grant her permission for their adoption. It sure looks like NMSA 53-10 was violated.

In his response to the current lawsuit, Mike has repeatedly stated that his filing of these new documents reinstated the statutory time limit for the GWLUA, so that it now runs until March of 2022. (2023 with the doucments filed in 2003.) Up until 2015, when the lawsuit was filed, Mike also claimed that we were not an HOA, but an LUA: a Land User's Association. Mike now claims that Taos County REQUIRED that we have an HOA, in order to ensure that the road expenses were paid. I find it interesting that the county could claim jurisdiction over the GWLUA, since we were not a party to that lawsuit. Of course, Mike has not presented any documents showing this requirement. I've seen several GW closing documents which have the NO HOA checkbox ticked, so apparently the county was unaware that the GWLUA was an HOA as recently as 2013.

The Articles of Association state that the undersigned, solely Michael Reynolds, formed a non-profit unincorporated association under NMSA 53-10 as of 3/12/2002. However, by 2002 there were numerous property owners. To be properly formed, ALL members at that time, should have signed the formation documents, showing their agreement to be bound. It appears that Mike filed new documents, retaining his sole authority, without consultation nor agreement of the membership, as required by NMSA 53-10. It also looks like Mike potentially extended the duration of the GWLUA, without the required written agreement of 75% of the membership, as set forth in the original 1994 documents. These problems alone, bring into question whether these filings are legally enforceable.

Mike again filed Articles of Association, By-Laws, and Land User's Code dated 2003 and an addendum dated 2005. These documents don't show the county's filing marks, so we do not know the official dates of effectiveness. Again, only Mike's and a notary's (now Amy Duke) signatures appear on the documents.

I want to point out one very important issue of conflict between docuements: road maintenance. The articles of Association have always held that the community will pay for road maintenance after the initial installation by the developer. In contrast, the Land User's Code, which I claim has superiority, states that the roads will be maintained by the community AFTER TOTAL BUILD OUT.

The conflict is clear, so I have never understood why Mike did this. As I've said this is a contract. By requiring the community pay for the roads before total build out, Mike has breached his side of the contract he himself created, potentially invalidating it entirely.

Here is a link to the 2001 documents: https://www.greaterworldcommunity.org/file/document/2850934796/NpQWT2fM8PqJtUIl.pdf

and the 2003-2005 documents: https://www.greaterworldcommunity.org/file/document/2850934796/oqeMal2VmqteUHtl.pdf

Mike used the community to foot his bills and feed his wallet all the while claiming to be some savior for sustainability. Each building he built was nothing more than a vehicle to get him through to the next set of bills. Each illegality stretching the limits and slowly augmenting the community until it has become obvious that there was never any intent to actually build a COMMUNITY.

From the first earthship to the last, once its completed it is sold AS IS and not one more thing is done to improve or even simply upkeep it. The roads are horrible, there is no greenery, nothing appears to be sustainable at all. There are simply a bunch of individual lots showing the progression of the buildings themselves, as well as where they became stagnant leading to alternatives and improvements. There is no attempt to preserve the legacy of the builds or even document the improvements. Of course there is no sharing with those who invested their money into these buildings. There is no thought put forward regarding pride, or increasing the overall value of the land here.

The simple truth is, with Mike's own people using chain link fencing and building wood frame home additions camouflaged to pretend they are within the "rules", there is no true business going on in this community aside from padding the pocket of the developer. Truly an opportunity lost.

LaNaeh commented 7 months ago

I just want to point out two things.
1- the 'common' land was never in the name of the GWLUA by deed transfer as far as I know, so, then, no one would be notified about documents filed at the County Clerk's Office. Even if it had been, perhaps those with a mortgage still would not have been notified. Can a LUA exist if it has no land in its' name?
2- I have never found an allowance in the law used to allegedly create the GWLUA (53-10) for any kind of extention or 'reinstatement.'

2006 New Mexico Statutes - Section 53-10-7 — Maximum term of existence; dissolution; distribution of proceeds of property.
53-10-7. [Maximum term of existence; dissolution; distribution of proceeds of property.]

Any association or club formed under the provisions of this act [ 53-10-1 to 53-10-8 NMSA 1978] may exist for such period of time not exceeding twenty years as may be fixed in the statement required to be filed by Section 1 [ 53-10-1 NMSA 1978] of this act; and upon the dissolution or winding up of any such club or association prior to the termination of its existence or otherwise, the property real and personal then possessed by said club, or any real estate the title to which is then standing in its name shall in law be deemed to be held by the said club or association for the use and benefit of the members at the time of such dissolution, and upon a sale or disposition, the proceeds shall be distributed among the members of such club or association at the time of such dissolution.

"not exceeding 20 years"

Thanks, Gillian. I hope you all are doing well. Best wishes to all.
J

Jody Rhines commented 7 months ago

Hi Jody!

I think the Land User's refers to individual property owners, without regard to the common lands. Maybe you know something different, since you've done so much research. (Mike probably also realized that the laws regarding HOAs were already convoluted and he probably didn't want any part of that. The name is irrelevant if it looks and acts like an HOA, so Mike was always just playing a semantic game that I'm sure the courts saw through.) BTW, the common lands were transferred to the new Greater World, Inc. as of February of this year! The reason why incorporation was even an issue, was to protect the property owners from liability for use of the lands and roads, if those were in our name. 'They' incorporated in a rush in October of 2019... a year and a half ago! Why the rush?

With respect to notice in general, every time any document is field against your property, you could conceivably get a notice. In this state, only the mortgage holder would get any notice. So every time Mike filed new GWLUA documents, which are potentially legally binding, you would not likely even know about it! This is a strange way to act if you want compliance with your new documents. Ultimately Mike filed what he wanted and didn't think he had to consult with the community. I found a quote from Amy to that effect in our minutes, when we were trying to rewrite the LUC back in August of 2018.

Mike's position with respect to the lawsuit is that every filing 'restarted' the GWLUA time limitation. He has claimed at two community meetings, that Judge McElroy actually ruled in his favor on this. However at McElroy's finial hearing before he retired, August 28 2019, the judge again refused to rule on that issue. Its in the records... So Mike lied to us! That is irrefutable. Amy was there, so she knows too!

Maybe Natelson thinks he will get a ruling that will change the almost 100 year old law! Except that, the community, as members of the 53-10 organization, would still have to agree to such an extension, and I think I have established that community members were never consulted.

Whomever chose 53-10 to establish the GWLUA, should have read the law and known of the time limitation, and yet, they created the Articles of Association which call for a 25 year limitation. Why write your initial documents with such an obvious conflict? Even back in the '90s, law offices were computerized, so there was no excuse for such errors... that's if a lawyer was even consulted. (There are glaring omissions in our documents... issues that would be expected, such as the terms of amendment, which leads me to believe that Mike did not consult a lawyer when crafting these documents.)

The reason MIke chose an unincorporated association as the business structure was because he didn't want personal liability, but he also didn't want a board right away. 53-10 looked like the only way to accomplish that task.

Gillian Fryer commented 7 months ago

Can a LUA exist if it has no land in its' name?

If you think about this, its logical. How can the LUA bind us when the one and only person who has ever legally signed the LUA is the actual single land owner.

For me, I am feeling that Mike is in an agreement with only himself, and now those few people who were wrangled into signing up with GW Inc. Without your signature you are not legally bound.

Leaving us once again as an unconventional Taos County subdivision utilizing the agreements made directly with the county as our only rules. Leaving Mike in the position of being the developer and also being constrained by those same rules and the contract he made with the community to fulfill his obligation to this Taos County subdivision

LaNaeh commented 7 months ago

Except that Mike isn't constrained to abide by the contract he issued.

That's the point of the current lawsuit: Mike has not performed his obligations.

Normally, one would expect the County to hold the developer to the subdivision agreements, but it has been so long in development (now 27 years) , that the county isn't interested. It's my understanding that they told Jody that she would have to sue to enforce the County's subdivision rules!

Mike has ultimately controlled the board, so they have gone along with what ever he has wanted. I doubt even to this day, that any board member has read all the community documents and the lawsuit to figure out what has been going on. I include myself in this assessment: I did not read and understand everything fully at the beginning. Once I did, Mike, et al did everything they could to get rid of me. Ultimately that makes the board members all culpable too. (I'll have something to say about that in a little while too.)

MIke is big on ideas in the moment, but short on execution. I think he had the best of intentions initially, and he claims that he made some commitments that he was pressured into (such as the community center.) Big surprise: those are the things he hasn't done in 27 years.

The lawsuit was filed in 2015, and it has probably cost a total in excess of $200K. Mike won't give in, and I don't think Jody will either. I doubt Mike has ever faced such tenacious opposition, so in that regard, he totally underestimated Jody. And of course, his lawyer is all too happy to play this out for as long as it takes. In all of this time, Mike could have cut a deal. He could have performed some of the things he had committed to, to make the suit moot. He didn't. He won't, unless not doing so costs him even more.

Gillian Fryer commented 7 months ago