 This is Think Tech Hawaii, Community Matters here. Aloha and welcome to our weekly show, Condo Insider. As I've said many times before, about 38% of our population lives in some form of an association, and Condo Insider is all about association living, trying to help board members and owners alike understand how that all works. Some of you may have missed me, I've been on vacation and I had a little medical procedure, nothing to worry about along the way, that's the hat. And I want to thank Jane Sugimura for her weeks of covering for me, while I was recovering and or traveling and enjoying life. Today we have a really fascinating guest on a story that hit the papers and a new story that has significant implications for associations and there's many lessons to be learned. To give you a little footnote, the headline in the Star Advertisers said, jury sides with couple in 1.9 million disability discrimination lawsuit. This was against a Maui Condominium Association. The actual numbers are that the association got a judgment against it for 1,765,300 dollars plus fees and costs of another approximately 487,000 or a total judgment of 2,252,000. So I've invited Eric Ferrier here, the plaintiff's attorney who started down this road to help defend these poor homeowners and welcome to the show Eric. Thank you, it's a pleasure to be here. Tell me a little bit about you and how long you've been in Hawaii and what you do. Okay, well I am an attorney, I've been an attorney for 36 years and I originally came from New York, you might hear it in my voice from time to time and moved out to Southern California, attended UCLA Law School and after I went to law school I decided I would go back to New York. It was the hottest summer that I can ever remember, I said I'm getting out of here and went back to Los Angeles and joined Johnny Cochran's firm and worked with Johnny for 21 years until he passed and in 1997 I moved to Hawaii, I've been visiting Hawaii for 10 years and I said I should stop visiting and live here. I moved to Maui and I've been living in Aiku Maui ever since. So you moved to Hawaii in 1997? Yeah. So you've been here how many years? 21 years. 21 years, do you love it? Oh my gosh, I wouldn't live anywhere else. You know, I understand that. Well, you know, this case, you know, I'm in the industry here so I just find it bizarre and I've got a chance to talk with you earlier about this case. The road it took. But why don't you just tell us in simple terms, kind of an overview generally what the case was about? Well, I represented Gregory and Michelle White. Gregory has been blind in his left eye of his entire life, had a condition that affected also his right eye, but he could see pretty well out of that eye. But as he got older, he continued to have problems, particularly in the dark. He stopped driving at night and that was a particular problem in his condominium unit because when it got dark and he only had artificial light, he couldn't see very well and he started tripping over the carpet on his second floor unit in the condominium complex and the condo had a house rule that said you couldn't have anything but carpeting on the second floor unit. So they started investigating, you know, what would help him with this situation. They found that a hardwood floor would work well for him and even though there was this rule, they knew that there was any number of people in the condominium complex that had wood floors, including two board members. Let me stop there. So here you have a condo and they have a rule, probably been there forever, no hardwood floors on the second floor, probably because of noise. Yes. And meanwhile, over the life of this condo, they allowed other people to have hardwood floors and two board members had hardwood floors and so he put in a hardwood floor. So what's the problem? Well, it's interesting. It took about two and a half months at $16,000 to put this floor in. The whole board knew about it. No one complained except one person, the person downstairs and not to the whites, to the board. He was complaining to the board for weeks, if not months, but they still never came to the whites and said, well, what are you doing here? So the floor goes in and now the downstairs neighbor gets annoyed and she writes to the board and says, I'm going to sue everybody. I'm going to sue the guy, the board member with the wood floor, the president, the whole board, the whites. And three weeks after that, the board finally writes a letter to the whites and says, oh, took you two and a half months to put it in? Rip it out in two weeks. But typically from my, and I know nothing, just so you know, but typically from my experience when we've had other people have installed hardwood floors, did this floor have like a criss-ting between the wood? It did. And they specifically made sure that they did that. And then the next question is, typically when we have that problem, we send someone, even sometimes you get some acoustical equipment to see, because you know, living in a condo, I had a case with a retirement home up in Mililani where the owner was complaining about the noise transmitting of the door cabinets closing and the toilet flushing. Did they do anything to check the validity of this person's complaint? Well, they did as a matter of fact. They sent the board member with the wood floor. By the way, he never told the board that he had a wood floor while all this was going on. They sent him over to see if there really was noise and he goes over there twice, listens and all he hears is water, you know, on the sink and a door closing and he hears no noise from the wood floor. He runs back to the condo and he says, I don't hear any noise. So there was no evidence and in fact at the trial, there was no evidence there actually was noise coming from this floor. Now, when the owner put the wood floor, did he talk to the board or was finding any letters or what did he, I mean, he obviously strikes me that he would have said something to somebody about the wood. I want to put a wood floor. Oh, absolutely. First, he asked the board member that put the wood floor in. Did you have to get permission to put the board, the floor? And he said, no. Then they call up the president and they ask the president, you know, can we get an exception to this rule? And he says, well, we don't really enforce that rule. We only, you know, do something if in fact there's a complaint. So they thought they could put the floor in. They have board members or the residents that have wood floors on the second floor, they thought they could do it. Do any of the other units that have wood floors, any residents living under them ever complained about the wood floor? I think that some of them did. I think there were some legitimate complaints. But that's the interesting thing. There was never really a legitimate complaint with respect to my clients at condominium unit. Well, your issue is a little bit unique in the sense that, and you know, the civil rights laws, discrimination laws are very strict about what you can say and what you can't say, you know, as far as what a board can ask or not ask. So you have your client who's saying, well, I need to have a wooden floor because of my poor eyesight. And by the way, I never mentioned this to you. I have poor eyesight. I'm blind to my right eye. Oh, okay. I'm blind from birth. So it's not something that can be corrected. I just have to learn how to maneuver in dark lights and those types of things. So I have empathy for his problem. It was probably worse than mine, to be honest with you. But did he ever tell them that I'm disabled or I have a medical condition that requires this? And eventually he did. But one of the problems that they had right from the outset is after this two-week period passes and they don't have enough time to remove the floors or do anything for that matter, the board, in violation of their bylaw, starts fining the whites $200 a day. And so all of a sudden they're hitting with these fines. They know that all these other people have wood floors and they hire an attorney to see if he can work something out and just be really treated like everybody else in the condominium unit. And that went nowhere. Tell me a little more what the bylaw said. The bylaw has this provision and it's really kind of a due process provision. They call it procedural safeguards. And it essentially says that before you can levy a fine against any homeowner, you have to basically have a hearing with three people, competent people, and you get a chance to put on evidence, you get a chance to cross-examine witness, you get a chance to call your own witnesses. And that has to happen before any fine is issued. And this case, there were 850 fines issued and these folks were never afforded a hearing. I know I have bad hearing because I'm old. Did you say 850 fines issued? Yes, it's worth repeating that. 850 fines and they weren't $10 fines. They were $200 fines. And just to keep this in perspective, these folks' maintenance fees were about $573. So after three days, their maintenance fees are used up. That gets into another issue that's really kind of a bad situation that this association did with respect to these people. Yeah, what that is is, and just to remind our viewing audiences, there used to be until July 1 of this year what they call priority of payment, where in fact, if you had a balanced due like to a fine, when you made a payment as a homeowner, the board could, in this discretion, apply it to the way they wanted. So in the old days, they would apply it to the fine leaving unpaid maintenance fees and then they would theoretically foreclose it. Don't tell me they tried to foreclose on these poor people. That's exactly what they did. They basically misappropriated these people's maintenance fees to pay illegal fines and attorney fees and then they claimed that these folks were in arrears. And they actually told everybody about that. That was publicized to the 140 units there that they were actually in arrears. And they never wore it. They paid their maintenance fees every month. That seems to be a violation of the basic Fair Debt Collection Practices Act to disclose credit information. That's right. That's right. And we would tell our clients never to do that because it's risky. Yeah. So anyway, you're telling me they find an 850 dot fine for about $170,000 plus dollars. That's correct. They took the maintenance fees they paid and applied it to the fines. And of course you could never, ever have enough money to pay off these fines at $200 a day. And then you're telling me they actually went through and tried to do a foreclosure. That's right. And even before the foreclosure, my clients notified them in writing that Gregory had a disability. They said we'd like a reasonable accommodation in the form of an exception to this second floor rule. They took the president of the association 23 minutes to make a decision. And the decision was made on the basis of the fact that my client walks his dog around the property and lives on the second story. And there was no analysis. There was no reach out to my client. They refused to sit down. And in fact they had their attorney write my client saying we won't even talk to you about this reasonable accommodation until you pay $30,000. That was what they claimed was due at that point. So they had to pay $30,000 just to sit down with the board and talk about this. And of course they didn't have the money so they couldn't sit down. And then their attorney continued to threaten them and say we're going to foreclose. And ultimately after they got me involved I started sending letters to these folks saying what are you doing here? You're violating the law. And they just wouldn't listen. I want to say something probably impolite. Are they undrugged? But instead we're going to take a one minute break and we wait back with Kondo and Cider in a minute. Okay. This is Think Tech Hawaii, raising public awareness. I'm getting older. Do I need to worry about falling? Yes you do. Each year one in four people 65 and older will experience a fall and many will be serious. The majority of falls happen at home so remove things that could make you trip and install handrails to keep you steady. To learn more about the steps you can take to help prevent a fall, please talk to your doctor. You can also visit aarpfoundation.org or Medicaremadeclear.com slash falls. This message was brought to you by UnitedHealthcare and AARP Foundation. Hello everyone. I'm DeSoto Brown, the co-host of Human Humane Architecture which is seen on Think Tech Hawaii every other Tuesday at 4 p.m. And with the show's host Martin Desbang we discuss architecture here in the Hawaiian Islands and how it not only affects the way we live but other aspects of our life not only here in Hawaii but internationally as well. So join us for Human Humane Architecture every other Tuesday at 4 p.m. on Think Tech Hawaii. We're back with Eric Ferrier talking about the big judgment of over $2 million against the Maui Condo Association for Discrimination. And before we took the break I kind of made an offhand comment that here they find this owner for wood floors allegedly in violation of their documents didn't comply with the bylaws to give them a hearing and they find them a little bit more than once like 850 times or a total of $170,000 and then say, well, we're going to take your maintenance fees and apply that to the fines and so you're delinquent in your maintenance fees and we're going to foreclose and if you want to hear it you've got to pay me $30,000 first. That's a good summary. So what happened next? Well, after I wrote a letter to the attorney for the board and I said, look, you know you're violating the law he wouldn't do anything so we followed the Hawaii Civil Rights Complaint figured that might get their attention. They still didn't do anything. In December of 2014 I wrote another letter and said, look, stop the fines, postpone the foreclosure let's sit down, let's talk about this because if you don't do so there's going to come a day when I'm going to be before a jury and I'm going to tell them what you did to these folks they still didn't do anything. So January 6th at noontime 2015 was the date for the sale. We had no choice. We had to file the complaint and we followed the day before and I showed up on the courtroom steps and see if they were crazy enough to go forward with this foreclosure. They postponed the foreclosure but they still were kind of crazy because what they did after that they issued another 573 fines and the only reason they stopped is I took the deposition of the president and I put the bylaws in front of him and I said did you do any of these things these procedural safeguards that you're supposed to do before you find these folks and he said no and I asked him well why didn't you do that and he said I have no information about that. Nine days later they stopped the fine but they didn't forgive the fines at that point well you know I've been around the block a long time I've been in this industry 25 years I hate to use the word outrageous but this conduct is outrageous in the sense it doesn't seem that the board have much respect for the rights of the individual owner and certainly when it comes to a disabled owner they have a lot of rights under the federal law rights of what we call accommodation you know and where do you feel the disconnect that happened I mean they seem to be going down this road regardless of the outcome I feel like almost I'm a student of military history I'm thinking July 2nd, 1863 when General Lee didn't listen to all his generals and sent William Pickett across the wheat field in Gettysburg where in two hours 12,000 soldiers were killed or wounded it's like what were they thinking? You know that's a question I've been asking for four years before the trial of this case did you know focus groups informally with everybody that I know and I would tell them as fairly as possible the fact scenario that you just heard which still there's some more facts that you haven't heard yet and they would say these folks are crazy to go to trial they're not going to win this case so I was asking that question but I want to tell you about one other thing I want to hear it so after I took the deposition of the president and they stopped to find I guess they had to figure out how they were going to characterize the fines and what they were going to do about this because they were illegal about eight months later they came up with the solution they thought and they created this document they called a resolution and you start reading through it and you think oh this is good they're going to forgive the fines and they're going to not foreclose and everything's going to be alright until you get to the last paragraph last paragraph of that document said everything above is conditioned on one of two things this case with prejudice now that means you give up your rights so what they were doing was they were leveraging their illegal fines to make these folks give up a civil right that's unlawful that's just wrong or you go to trial you keep on spending all these thousands of dollars on your attorneys and we're not going to decide whether or not you should get this reasonable accommodation we're going to let the jury decide that so what they were doing was saying we're not going to do our job we're going to make the jury do our job for us and we're going to make you pay all the attorney fees necessary for you to get there and I want you to know that at that time my client was recovering from heart surgery and they had spent all their money on this case they were broke their life savings was gone so they didn't say in that quote settlement offer for lack of a better word they didn't say we're going to grant you a reasonable accommodation they just basically said we'll waive the fines and stop the foreclosure they didn't admit that he was entitled to a reasonable accommodation and then they were saying even though he violated theoretically your civil rights ignore that we're going to make you give up all your rights to have your civil rights enforced because if you accept this you have to drop all these rights that's supposed to be a hardship on your client so I have the ultimate respect for them you know anybody that goes through this and they spend all their money and they're at their wits end it's unimaginable it's like I told the jury it's like 850 cuts and then beyond because they kept on oppressing these people making them think that they were going to lose their home and so it got to the point where they couldn't pay their attorney fees anymore and the question for us and them was whether we were going to let this go and let this rogue homeowners association get away with this or we were going to continue the fight and so we agreed to continue the fight on a contingency fee basis and ultimately we got justice for them we don't I would have to tell you I've been in an industry as I said a long time I don't think this case is representative of the industry on a normal course of event I think most boards are much more diligent the things that come to mind when I hear this story is you know board members are volunteers they probably rely on professionals so I would assume they would have been relying on their management company and or their counsel on this matter which leads me to believe that you better make sure you have a good management company and good counsel because you could be led down the wrong road if you just kind of gloss this over and think because you're a board that you have some indefinite power that you can do to do these kinds of things I think that's absolutely true having competent counsel and a management company is essential and the thing to keep in mind for all homeowners association is the fact that you have an attorney who knows everything about the condo laws is not good enough in this situation because this case was not governed by condo law it was governed by discrimination law the FHA and HRS 515 and the requirements under those sections is different from anything else and if you don't have an attorney that knows that they can run afoul of those laws and a large judgment like this they can be subject to and rightfully so I've had many guests on the show here we say look we need to respect the rights of the disabled and we need to find ways to help them enjoy their life and accommodate them so they can enjoy their home and sometimes that may require some sacrifices I think we talked earlier about putting a ramp in for common elements including allowances to allow wood floors and other types of things it's just part of the law A but it's just part of aloha in common sense and dignity to be able to preserve the rights of disabled but quickly going along you got the judgment you got the money yet not yet so the defendant has filed what I would characterize as a fibrous notice of appeal I looked at the issues I've been involved in this case I know the rulings that the judge made they all were appropriate so they filed a notice of appeal presumably to preserve their rights but it's not going anywhere and one of the things that I hope they don't do is compound a number of mistakes that they've made over four years with one more significant one interest is accruing on this judgment every single day I think it's something like over $600 a day if they lose this appeal they're going to be responsible for that they're going to be responsible attorney fees and courts and so there comes a time when you just have to man up if you will or woman up if you will and say we were wrong about this let's try to make this right and I hope that they're in that frame of mind we have a mediation coming up and we'll see what happens are there insurance companies involved in this they have plain insurance there's issues about that but they have plain insurance I think you were telling me in the break that heaven forbid that they noticed one of their insurance carriers but the other insurance carrier they never told about the claim in the first place it may very well be that I don't know all the facts I'll find out more in mediation all I do know is that they send out sheets that show all the coverage that they have and I can tell you that that coverage if it's properly used is more than enough to pay this judgment so we'll see what happens I guess my message to our audience is that if you have a claim whether right or wrong make sure you talk to your insurance agent and submit it to all the carriers that may provide some form of coverage if you don't you potentially didn't get the notice of the claim in jeopardy the insurance coverage I'm not an expert on insurance because there's all this right to defend issues and all these other things but the common industry practice if you have a claim tell all your insurance companies so you're radically protected in case something goes south which this went deep south what are the takeaways you have from the case went over four years right four years so I think it's really common sense it really is it's not rocket science but the first takeaway is that boards need to read understand and follow their bylaws if that happened in this case you can almost foresee what would happen they would have had a hearing way back at the end of 2013 or the beginning of 2014 given an opportunity for everybody all the stakeholders to talk about what was going on here and they could have resolved this right then and there and the same thing with their non-discrimination policy you need to read, understand and follow your non-discrimination policy it required an investigation an investigation doesn't occur when you have 23 minutes you make a decision in 23 minutes and never talk to the disabled individual and talk to my client so you got to at least do those two things but in addition to that the evidence in this case showed that they had medical records that demonstrated that my client was disabled so it wasn't just their word it wasn't just my word it was their doctor's word they acted like they never got it and we proved that they had it early on in this matter and finally you need to have competent counsel and by that I mean you need to have somebody who has legal issues in this particular case not generally in condo cases but if you got a disability case a discrimination claim they need to know the law with respect to that and even if the board just wasn't that in tune to all of this if they had used the current statute that provides for a value of mediation before a retired judge cost them $175 a party they would have had a chance to at least try the initial mediation with a retired judge where the judge can actually express himself on the issues and potentially resolve it before this got to be a $400,000 plus fees and costs in addition to the damages the $1.7 million that's right communication is key and you can't just use your lawyer as something to separate you from your owners you need to have that relationship with the owners and so you need to talk and communication whether it be by way of mediation or directly and if directly it doesn't work out get the mediation you know it's almost free you know when you think about what mediation costs to stay so it's absolutely no reason to not avail of someone yourself on that Well let me congratulate you on what I call taking care of some poor unfortunate owners the verdict itself and your story tells you what happened here and let me tell our board members out there and owners remind you we have a value of mediation when there are disputes like this when it comes to the rights of the disabled it goes beyond the condo law and even what your documents may say they have rights of reasonable accommodation and you need to approach that intelligently and fairly to try to help people truly deserve help because if they're disabled they're trying to make the best of their life so I wish all of you a happy holiday Jane's going to be here next year next week and thank you for watching condo insider and again Eric thank you for being on the show Thank you