MARTIN D. CLARKE
855 Ocean Parkway,
Berlin, Maryland 21801
Plaintiff,
v.
BOARD OF DIRECTORS OF OCEAN PINES ASSOCIATION, INC.
239 Ocean Parkway
Ocean Pines, Maryland 21811,
Defendant.
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PETITION FOR WRIT OF MANDAMUS AND INJUNCTIVE RELIEF
Plaintiff, Martin D. Clarke by and through his counsel, David N. Honick and Honick & White, P.A. hereby brings this civil action seeking Writs of Mandamus pursuant to Maryland Rule 15-701 and a Preliminary Injunction, and states as follows:
The Parties
1. Plaintiff Martin D. Clarke (hereinafter referred to as “Plaintiff’) is a voting member in good standing of Ocean Pines Association, Inc; a member of the organization STOP – Stop Taxing Ocean Pines; and a resident of Worcester County, Maryland.
2. Ocean Pines Association, Inc. (hereinafter referred to as “Association”) is a Maryland corporation the operation of which is governed by its bylaws and the laws of the State of Maryland.
3. Defendant Board of Directors (hereinafter referred to as “Defendant”) of the Association consists of seven directors.
Jurisdiction and Venue
4. This Court has subject matter jurisdiction pursuant to Maryland Code, Courts and Judicial Proceedings § 1-501.
5. This Court has personal jurisdiction over the Defendant pursuant to Maryland Code, Courts and Judicial Proceedings § 6-102.
6. Venue is proper pursuant to Maryland Code, Courts and Judicial Proceedings § 6-201.
Facts
7. Pursuant to the Association’s Bylaws, Defendant possesses certain powers, including the power to “include in any annual charge amounts necessary to fund capital expenditures.” Section 5.14 (d) of Association’s Bylaws is incorporated herein and attached hereto as Exhibit A.
8. However, Defendant’s power to authorize expenditures and increase Association’s fees is not unlimited: “in the event any single capital expenditure exceeds twenty percent (20%) of the current income derived from annual charges, it shall require approval of the membership by a majority of the votes cast in a referendum vote of all voting members.” Section 5.14(d), Exhibit A.
9. In 1995, Defendant voted for a new community center to be built for five million three hundred thousand ($5,300,000.00) dollars. Said amount exceeded 20% of the Association’s revenues, and pursuant to Section 5.14(d) of the Association’s Bylaws, Defendant called a referendum. The Defendant’s proposal for a new center was defeated by a 71% majority of votes.
10. In 2001, Defendant again voted for a new community center. At that time, it called another referendum for “approximately 28,000 square feet built on the Sports Core property at a cost not to exceed $5 million.” Special Community Center Referendum Issue is incorporated herein and attached hereto as Exhibit B. That proposal was again defeated by 59% of Association’s members.
11. In 2005, Defendant again recommended to the Association’s members building a new community center (hereinafter referred to as “Center” and the “Project”).
12. Defendant “anticipated” that the Center would cost three million nine hundred ($3,900,000.00) dollars, which amount exceeded 20% of the five million twenty-six thousand nine hundred fifty-eight ($5,026,958.00) dollar budget derived from annual charges in the 2005. Ocean Pines Referendum Prospectus is incorporated herein and attached hereto as Exhibit C.
13. In accordance with Section 5.14(d) of the Association’s Bylaws, Defendant initiated a referendum to obtain Association’s members’ approval of the expenditure in August of 2005.
14. Defendant informed Plaintiff and other members of the Association that the Project would be “funded by the sale of 19 OPA-owned buildable lots within the community and the sale of the OPA-owned 2.8 acre commercial property”, and that the three million nine hundred ($3,900,000.00) dollar budget covered “all site preparation, the requisite permits and legal expenses, all construction materials, access from Cathell Road (only), a brick exterior, landscaping, furniture, equipment, 14% for contingencies, and, of course, labor.” Exhibit C.
15. When held, the referendum question read as follows: “Do you authorize the OPA Board of Directors to build this facility as described above, funded as stated?” Exhibit C.
16. On August 13, 2005, by only 214 member votes, which constituted 3% of all votes, the Association’s members approved the three million nine hundred ($3,900,000.00) dollar Project to be funded by the sale of the Association’s lots.
17. However, after the Association’s members voted on the Project and authorized Defendant to spend three million nine hundred ($3,900,000.00) dollars, within a year, the budget of the Project increased to five million three hundred seventy-two thousand seven hundred ninety-four ($5,372,794.00) dollars. Ocean Pines Community Center Budget Summary is incorporated herein and attached hereto as Exhibit D.
18. As of the date of filing of this Petition, Defendant has not sold any of the Association’s nineteen (19) buildable lots or the 2.8 acre commercial lot, the proceeds from the sale of which were to fund the Project.
19. The one million four hundred seventy-two thousand seven hundred ninety-four ($1,472,794.00) dollar increase in the Center’s budget is greater than 20% of the 2006 budget.
20. As such, pursuant to Section 5.14(d) of the Association’s Bylaws, it requires a referendum vote of all voting members of the Association.
21. Defendant initiated no such referendum, but instead, continued to proceed with the Project in violation of the Association’s Bylaws.
22. In addition to Section 5.14(d) of the Association’s Bylaws that requires Defendant to hold a referendum to receive the Association’s members’ authorization for expenditures exceeding 20% of the annual budget, another section of the Association’s Bylaws – Section 4.09 requires Defendant to hold a hearing on referendum issues proposed by Association’s members in “a petition signed by voting members in good standing representing at least ten percent (10%) of the total voting units.” Exhibit A.
23. On or about January 3, 2007, in accordance with Section 4.09, nine hundred fifteen (915) of the Association’s members, comprising more than 10% of Association’s members, presented the Defendant with a petition for referendum on the increase of the Center’s budget. Exhibit E.
24. Defendant refused to call a hearing on the proposed referendum alleging that the petition lacked valid signatures. Letter of January 15, 2007 is incorporated herein and attached hereto as Exhibit F.
Writ of Mandamus – Referendum in Accordance with Section 5.14(d)
25. Plaintiff realleges, as if fully set forth, each and every allegation in paragraphs 1 through 24.
26. The Association’s Bylaws require Defendant to hold a referendum vote on all capital expenditures exceeding 20% of income derived from annual charges.
27. Defendant failed to hold a referendum vote and increased the Center’s budget by one million four hundred seventy-two thousand seven hundred ninety-four ($1,472,794.00) dollars without the required approval of the Association’s members.
WHEREFORE, the Plaintiff requests that a Writ of Mandamus be issued by this Court ordering the Defendant to comply with Section 5.14(d) of the Association’s Bylaws and hold a referendum vote on the increase of the budget of the Community Center.
Writ of Mandamus – Hearing in Accordance with Section 4.09
28. Plaintiff realleges, as if fully set forth, each and every allegation in paragraphs 1 through 24.
29. The Association’s Bylaws require Defendant to hold a hearing on a referendum issue proposed by more than 10% of voting members in good standing.
30. Defendant failed to hold a hearing on the referendum issue proposed by more than 10% of voting members in good standing.
WHEREFORE, the Plaintiff requests that a Writ of Mandamus be issued by this Court ordering the Defendant to comply with Section 4.09 of the Association’s Bylaws and hold a hearing on the referendum vote on the increase of the budget of the Community Center.
Preliminary Injunction
31. Plaintiff realleges, as if fully set forth, each and every allegation in paragraphs 1 through 24.
32. The Association’s Bylaws require Defendant to hold a referendum vote on all capital expenditures exceeding 20% of income derived from annual charges.
33. Defendant failed to hold a referendum vote and increased the Center’s budget by one million four hundred seventy-two thousand seven hundred ninety-four ($1,472,794.00) dollars without the required approval of the Association’s members.
34. Defendant has commenced and continues to enter into binding contractual agreements for construction of the Center.
35. Defendant’s disbursement of Association’s funds without the required approval of the Association’s members is damaging Association’s budget.
36. Plaintiff will suffer immediate, substantial and irreparable injury, loss and damage before a full hearing can be held if Defendant does not stop construction of the project.
37. Injunctive relief from this Court is required to preserve the status quo until such time as the Court can determine the issues raised on their merits, and a referendum vote is held.
38. Plaintiff is likely to be successful on the merits of its claim.
39. Further, Plaintiff would suffer a greater degree harm and injury from the denial of the injunction than would be suffered by Defendant if the injunction is granted and the status quo is preserved.
WHEREFORE, the Plaintiff requests that this Court issue preliminary injunctive relief ordering the Defendant to immediately stop all further construction of the Community Center project until this matter is resolved; award attorneys fees to the Plaintiff; and for such other and further relief as the Court deems appropriate.
David N. Honick
Law Offices of David N. Honick, P.A.
107 Baptist St.
Salisbury, MD 21801
(410) 334-6397
Attorney for Plaintiff
MARTIN D. CLARKE Plaintiff,
v. BOARD OF DIRECTORS OF OCEAN PINES ASSOCIATION, INC.
Defendant.
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WRIT OF MANDAMUS
Upon consideration of Plaintiff Martin D. Clarke’s Petition for Writ of Mandamus and any responses thereto, it is, on this day of , 2007, by the Circuit Court for Worcester County in the State of Maryland;
ORDERED, that Defendant Board of Directors for Ocean Pines Association, Inc. comply with Section 5.14(d) of Ocean Pines Association’s Bylaws and hold a referendum vote on the increase of the budget of the Community Center within thirty (30) days of the issuance of this writ.
____________________________
____________________________
Judge of the Circuit Court
for Worcester County
MARTIN D. CLARKE
Plaintiff, v. BOARD OF DIRECTORS OF OCEAN PINES ASSOCIATION, INC.Defendant.
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ORDER FOR PRELIMINARY INJUNCTION
Upon consideration of Plaintiff Martin D. Clarke’s request for preliminary injunction included in the Complaint in the above captioned matter and any responses thereto, it is, on this
day of , 2007, by the Circuit Court for Worcester County in the State of Maryland;
ORDERED, that Defendant Board of Directors for Ocean Pines Association, Inc. is enjoined from proceeding with all further construction of the Community Center until trial of this matter is concluded or the matter is otherwise resolved by the parties.
____________________________
Judge of the Circuit Court
for Worcester County
Uploaded: 2/14/2007
