Valley National Bank sues to determine control of Greenacres HOA
Daily Business Review
Samantha Joseph
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 receiver.

"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 association.

Competing Claims
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.

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