On Monday 6/15, the receiver will appear in court and present the next receiver's report. We do not know what the report will contain or what will be discussed. We are hoping that there will be some answers to the following questions.
Judge Garcia had indicated a strong preference to have the election completed in the month of May. Due to extreme difficulties in sorting through the HOC's records, the audit has taken considerably longer than expected. We will remain in receivership (which is very costly) until the audit and election are complete.
We can only hope that the receiver's report and court hearing on 6/15 will provide some definitive answers.
(See also blog entry from 5/15)
On 4/22, the receiver presented his last report to the court. This report included the (now infamous) Sher/Shaw 'Invoice' for $17.6K plus ongoing payments of $5.9K per month. The invoice also referred to a contract that allegedly spelled out the terms of payment.
You can view that report by clicking HERE.
To view the just the invoice, click HERE.
To view the contract, click HERE.
After reviewing the invoice and hearing arguments from the Shaw sisters, Judge Garcia scheduled a special hearing on 5/5/15, specifically to address the Sher/Shaw invoice. At this hearing, the contract was presented as evidence, and Jack Shaw took the stand to make his argument about why he & Robert should be paid.
To view the transcript of the 5/5 hearing (including Jack Shaw's testimony), click HERE.
Jack Shaw tried to explain what he did for Cedar Run and how he is entitled to payment for all the money he has 'saved' for the association and for the homeowners. To add insult to injury, he also claimed that he was giving us a discounted rate from what he would normally charge a business or association to consult for them and 'revive' them from financial ruin.
Despite the contract and Jack Shaw's long speech about everything from goose droppings to financial audits, the judge was not convinced, and Sher's/Shaw's payment request was denied.
Also notable was the discussion between Judge Garcia and Anne Shaw about certain invoices that she sent to the receiver, requesting payment. To Anne's own admission, she had double-billed for $1860. But from there, it gets even more interesting.....
Judge Garcia had actually gone line-by-line through another Shaw Legal Services invoice (totaling about $12,000) and spotted charges that he felt were redundant and unnecessary. An example of this would be when two attorneys from Anne's firm had both billed time for what appeared to be the same task. Another would be when an outside attorney was brought into the case, and Shaw Legal Services billed Cedar Run for the time it took to brief this attorney on the case.
After all was said and done, Judge Garcia rejected $7,560 in charges from Shaw Legal Services.
The former HOC board had filed a claim with Chubb Insurance to cover their legal costs in the bank litigation. When this happens, normally the attorney would submit their bills directly to the insurance company for payment. However, Anne Shaw has opted to do it a bit differently.
She has been submitting her bills directly to the association (Cedar Run HOC), collecting payment for those bills, and then leaving it up to the board to request reimbursement from Chubb. Why is this a concern? Because, as Anne Shaw admitted herself, legal bills submitted to Chubb are "strictly scrutinized", and Chubb will deny portions if they don't agree with them.
Why is this a big deal?
Because Shaw Legal Services is being paid UP-FRONT with Cedar Run homeowner funds before the bills are submitted to and "strictly scrutinized" by Chubb. If certain portions are denied, it makes no difference to Anne Shaw.......She's already been paid in full!! The Cedar Run homeowners are on the hook for any portion that Chubb denies....unless Anne Shaw credits this money back to the HOC. Has she ever done this?? Doubtful, but we will have to wait for the audit to find out.
We have reason to believe that there may be a considerable amount that Chubb would deny. Much of Anne's efforts in the bank litigation have been outside the realm of defending the HOC board and much more in the realm of offensively attacking the banks and phase associations. Chubb will only cover legal costs that they believes are necessary to defend the board.
There may not be anything illegal about this billing practice. It is just irregular, unorthodox, unethical, and very unfair to the Cedar Run homeowners.
- When will the audit be complete?
- When and how will the audit results be disseminated to the homeowners?
- What is the time-frame of the upcoming election?
Judge Garcia had indicated a strong preference to have the election completed in the month of May. Due to extreme difficulties in sorting through the HOC's records, the audit has taken considerably longer than expected. We will remain in receivership (which is very costly) until the audit and election are complete.
We can only hope that the receiver's report and court hearing on 6/15 will provide some definitive answers.
Recap of previous court hearings
(See also blog entry from 5/15)
On 4/22, the receiver presented his last report to the court. This report included the (now infamous) Sher/Shaw 'Invoice' for $17.6K plus ongoing payments of $5.9K per month. The invoice also referred to a contract that allegedly spelled out the terms of payment.
You can view that report by clicking HERE.
To view the just the invoice, click HERE.
To view the contract, click HERE.
After reviewing the invoice and hearing arguments from the Shaw sisters, Judge Garcia scheduled a special hearing on 5/5/15, specifically to address the Sher/Shaw invoice. At this hearing, the contract was presented as evidence, and Jack Shaw took the stand to make his argument about why he & Robert should be paid.
To view the transcript of the 5/5 hearing (including Jack Shaw's testimony), click HERE.
Jack Shaw tried to explain what he did for Cedar Run and how he is entitled to payment for all the money he has 'saved' for the association and for the homeowners. To add insult to injury, he also claimed that he was giving us a discounted rate from what he would normally charge a business or association to consult for them and 'revive' them from financial ruin.
Despite the contract and Jack Shaw's long speech about everything from goose droppings to financial audits, the judge was not convinced, and Sher's/Shaw's payment request was denied.
Shaw Legal Services Billing Discrepancies
Also notable was the discussion between Judge Garcia and Anne Shaw about certain invoices that she sent to the receiver, requesting payment. To Anne's own admission, she had double-billed for $1860. But from there, it gets even more interesting.....
Judge Garcia had actually gone line-by-line through another Shaw Legal Services invoice (totaling about $12,000) and spotted charges that he felt were redundant and unnecessary. An example of this would be when two attorneys from Anne's firm had both billed time for what appeared to be the same task. Another would be when an outside attorney was brought into the case, and Shaw Legal Services billed Cedar Run for the time it took to brief this attorney on the case.
After all was said and done, Judge Garcia rejected $7,560 in charges from Shaw Legal Services.
Another Raw Deal for Cedar Run Homeowners
What was also uncovered in the review and questioning of Anne Shaw's invoices was the issue of how her fees were being paid for the bank litigation.
The former HOC board had filed a claim with Chubb Insurance to cover their legal costs in the bank litigation. When this happens, normally the attorney would submit their bills directly to the insurance company for payment. However, Anne Shaw has opted to do it a bit differently.
She has been submitting her bills directly to the association (Cedar Run HOC), collecting payment for those bills, and then leaving it up to the board to request reimbursement from Chubb. Why is this a concern? Because, as Anne Shaw admitted herself, legal bills submitted to Chubb are "strictly scrutinized", and Chubb will deny portions if they don't agree with them.
Why is this a big deal?
Because Shaw Legal Services is being paid UP-FRONT with Cedar Run homeowner funds before the bills are submitted to and "strictly scrutinized" by Chubb. If certain portions are denied, it makes no difference to Anne Shaw.......She's already been paid in full!! The Cedar Run homeowners are on the hook for any portion that Chubb denies....unless Anne Shaw credits this money back to the HOC. Has she ever done this?? Doubtful, but we will have to wait for the audit to find out.
******UPDATE******
We have learned that to date, NONE of Shaw Legal Services' bills have been submitted to Chubb. This is on a lawsuit that has been going on since December of 2012!! We don't know if any of it will be reimbursed. We will have to wait for the audit results to determine how much we have paid to Anne Shaw's firm for this litigation.
******UPDATE******
We have reason to believe that there may be a considerable amount that Chubb would deny. Much of Anne's efforts in the bank litigation have been outside the realm of defending the HOC board and much more in the realm of offensively attacking the banks and phase associations. Chubb will only cover legal costs that they believes are necessary to defend the board.
There may not be anything illegal about this billing practice. It is just irregular, unorthodox, unethical, and very unfair to the Cedar Run homeowners.
We'd love to hear from you!
(224) 544-9058
