Valley National Bank sues to determine control of Greenacres HOA
Daily Business Review
10 February 2016
Two rival boards battling for control of a Greenacres community's
finances prompted Valley National Bank to file an interpleader
complaint to determine who should administer a nearly $500,000 account
amid claims of fraud and misappropriation.
The bank sued the Seminole Palms Home Owners Association Inc. and board
members Allen Borza, Sterling Jean, Theodore Matz and Lisa Kallai
Hargrove, who have split into two factions, to clarify things. A
receiver was named in January to take charge of association finances.
Borza, Jean and Matz claim they were re-elected to lead the Palm Beach
County association in March despite an attempt by Hargrove to
improperly remove them through a vote designed to bar nominations and
make her the board's sole member. They alleged Hargrove then installed
an onsite manager, Deerfield Beach-based Regal Cam Inc., led by
president Marsha Fink, to siphon off association funds.
In a month, Hargrove paid $15,000 to Regal Cam, including $5,000 for
unexplained legal fees and more than $9,000 for that month's management
services, according to court documents. Jean and Matz's rival board
said its candidate for community association manager would charge about
$2,300 monthly for work in the largely working-class community of homes
valued at around $100,000.
"We believe that this coup was part of a grander conspiracy," Jean's
and Matz's attorney, Richard Lubliner of Greenstein & Associates in
West Palm Beach, told the Daily Business Review. "They're pathological
in their criminality. We essentially took their job, and their job was
to rob this community."
Fink did not respond to requests for comment by deadline, but she filed
an urgent letter with the court Feb. 2 describing "major malfeasance
that may rise to extensive and outrageous criminal activity" by the
board majority, its attorneys, homeowners and a court-appointed
"The trust account that these men are so desperately trying to get
appears to be far in excess of what the books appear to show, meaning
that for 'some reason' there is more money in the trust account than
should be," she wrote in the letter to Palm Beach Circuit Chief Judge
Jeffrey Colbath and presiding Judge Catherine Brunson.
The majority held one election, and Hargrove held another, with each
group claiming victory and the right to control the Seminole
The larger group then told the bank Hargrove had been ousted and asked
it to remove her from the association's accounts. Hargrove claimed the
opposite, telling the bank the other members were now off the board and
should have no access to community funds.
Valley said it became aware of the competing claims after Borza, Jean
and Matz visited a bank branch last April 2 to make withdrawals with
cashier's checks of $250,514, $203,650 and $27,460 made out to Seminole
Palms HOA. The withdrawals closed two of the association's accounts and
left a third with a $100 balance.
The next morning, Hargrove wrote the bank alleging the men did not
represent the HOA and fraudulently withdrew the funds, reportedly
prompting her to seek a criminal investigation.
Attorneys for both sides then contacted the bank with contradictory
instructions, so it stopped payment on the three checks and turned to
Palm Beach Circuit Court to decide the issue.
"Valley cannot determine who is entitled to possession, custody and
control of the account funds and is faced with conflicting claims that
may result in double or multiple liability," it wrote in a complaint
filed April 13.
Brunson responded in January by appointing Fort Lauderdale attorney
Eric Glazer as receiver to supervise the board's annual election and
administer its finances.
Numerous motions and cross motions have been filed in the last 10
months as the competing boards accused the other of fraud and
Hargrove's camp claimed bias by Glazer and asked for Brunson's recusal.
A pro se motion filed Jan. 23 to recuse the judge and vacate the
receiver's appointment suggested Hargrove believes Brunson, Glazer and
rival HOA colluded against her.
"This judge is obviously extremely biased or incompetent or worse," she
wrote, listing allegations arising from a Jan. 7 hearing. Among the
claims, Hargrove alleged the judge allowed the receiver to select a
"ringer mediator" to handle the case.
The motion also accused Glazer of bias and claimed he orchestrated an
"underhanded unethical trick" during a mediation session to give the
rival board a litigation advantage.
Brunson denied the request to recuse herself and vacate all rulings
Feb. 1, calling the motion legally insufficient.
Hargrove's attorney, Thomas Walters of Boca Raton, filed a motion to
withdraw citing irreconcilable differences, which Brunson granted
Monday over his client's objections.