Oak Tree developer wins voting rights lawsuit

Journal Record, The (Oklahoma City), Dec 16, 1998 by Susan M. Grossman Special to The Edmond Sun

The developers of Oak Tree claimed victory Tuesday following a district court ruling that allows them to continue to control voting rights of the homeowners association.

Oklahoma County District Court Judge John Amick decided that homeowners will continue to be minority members of the association until at least half of the lots in the north Edmond development have been sold.

About 405 lots have been sold at Oak Tree since 1976 by Signature Properties and its predecessor, Landmark Land Co. Those homeowners each have one vote in the association, giving them Class A status. Developer Signature holds three votes for each unsold lot, which is Class B status. Signature had claimed there were 1,295 lots, platted and unplatted, that earned them three votes apiece, while homeowners contended that only lots ready for development should count toward Signature's voting rights. There are 50 such lots. Amick, however, said the term "lot" was not defined in the Articles of Incorporation for Oak Tree's homeowners association. "I suppose Mr. Smith (Robert Smith, attorney for Signature Properties) will regard himself as the victor in this regard," the judge concluded. Amick took less than 10 minutes Tuesday morning to deliver his verdict. He said the decision was a struggle because both sides were well represented. Edmond attorneys Randel Shadid and Steve Friot, who represent the more than 200 property owners involved in the dispute, said it will be January before they decide whether to appeal the verdict. "We're disappointed," Shadid said. "No one likes a ruling against them. Our interpretation is that Class B voting rights are terminated according to the Articles of Incorporation. That is not the judge's view." Smith, who represents Signature's Canadian owners, brothers Chris and Peter Ansley, said the verdict "means Signature will continue to operate the property as it has under the declarations. Hopefully, this will allow us to have harmony at Oak Tree and work together to make it what we hope it can be. "Right now, we need to wait to see if the plaintiffs will move for a new trial or appeal," Smith said. "I think they have 10 days to ask for a new trial and 30 days to appeal. Their appeal rights are stayed if they seek a new trial. In the meantime, Signature Properties will continue to operate in the same status as we were pending trial." Smith did not know when Signature would call a homeowners meeting or when the company would distribute a financial report regarding the association's finances. Since a possible appeal could take a couple of years, he speculated that the developer would conduct an association meeting soon. The plaintiffs maintained that the 1976 Articles of Incorporation are the final authority in determining voting status and have never been amended according to state law. Amick said he agreed with the plaintiffs that the Articles of Incorporation cannot be amended by the association's Declaration of Covenants, Conditions and Restrictions. However, he said the word "lot" was not defined in the articles, thus the Declarations were intended when filed in 1977 by Landmark to express "the true intent of the founders." In regard to recovering legal fees incurred by the homeowners' lawsuit against Signature, Smith said, "I believe we will seek recovery of our legal fees, but we need to evaluate the applicability of the statute to the case. Once I reach a decision as to applicability, then it's up to Signature whether they will proceed in such manner. "Under the statute, when one party seeks to declare a section of the declarations governing an association invalid, and another party seeks to uphold, the prevailing party has the right ... to seek recovery of fees against the individual plaintiffs," Smith explained. "They would not be allowed to do so against the HOA (which was not a plaintiff). There would be a legal argument whether the statute is applicable in this case."