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Judge dismisses all but one count in TDL case
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Judge dismisses all but one count in TDL case

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Judge dismisses all but one count in TDL case

Following a court judgement Tuesday, only one count remains of a five-count petition filed on behalf of former-Terre Du Lac Association Board Member Michael Tilley against Board Members Gary Keithley and Cary Combs last year.

A judge has dismissed all but one count stated in a petition filed on behalf of former-Terre Du Lac Association Board Member Michael Tilley against Board Members Gary Keithley and Cary Combs last year.

Litigation in this matter has been ongoing since April 2019 when a Temporary Restraining Order (TRO) was granted prohibiting Keithley and Combs from serving on the association board pending a final judgment in the case.

The original TRO has since expired and an amended petition was filed on behalf of Tilley on Oct. 21, requesting that the court enter judgment on five counts.

On Tuesday, Associate Circuit Judge Timothy Inman dismissed two of the three remaining counts of the amended petition.

In count one, the judge dismissed Tilley’s request to remove Keithley and Combs as directors of the association by injunctive relief.

The court did not enter a ruling as to the remainder of the relief requested in count one, which included requests to bar Keithley and Combs from the Terre Du Lac Association business office.

Judge Inman also dismissed count two of Tilley’s petition which requested judgment to remove Keithley and Combs as directors of the association pursuant to Section 355.221 of the Revised Statutes of Missouri (RSMo).

Attorneys for Keithley and Combs argued that Section 355.356, RSMo is the exclusive means of removing a director of a not-for-profit corporation, not Section 355.221, RSMo. The court’s judgment cites case law that supports the argument, and grants the motion made to dismiss the count.

The court’s decision Tuesday leaves only count four of the petition in effect. Count four seeks a declaratory judgment regarding dual board membership.

The count alleges a conflict of interest exists as a result of Combs owning the development and real estate companies, Terre Du Lac Inc. and Town and Country Home Sales Inc.

The count claims that in August 2018, while serving as a director of both Terre Du Lac Inc. and the association, Combs demanded and secured a vote exempting himself from paying costly permit application fees for new construction. The count states that Combs then obtained construction permits for Town and Country Homes without paying permit fees.

Tilley’s request in count four is that the court declares that a breach of fiduciary duty and a conflict of interest arose when Combs sought or obtained from the association any financial or other benefits for himself, Terre Du Lac Inc., or any private venture with which he or his companies are affiliated.

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Further requested is that the court enters a ruling that would void any vote of the association’s directors that resulted in any financial or other benefits to Combs or his companies.

A trial-setting is scheduled for Sept. 21, according to court records.

Other counts laid out in Tilley's petition were dismissed last year.

Judge Inman dismissed counts three and five of the amended petition on Oct. 28.

In the amended petition, count three requested that the court enter a ruling that Combs, association developer of Terre Du Lac Inc., no longer have veto power over amendments to the bylaws and articles of incorporation of the association on the grounds that the developer no longer owns 75% of the lots in the development.

The court ruled that Tilley was asking the court to speculate on a hypothetical situation as there are no pending amendments to the bylaws nor articles of incorporation of the association that would trigger the questionable “veto power.”

The court further found that the amended petition failed to present a “real, substantial, presently existing controversy admitting of specific relief as distinguished from an advisory or hypothetical situation,” which is required by existing case law precedent for the judgment asked for in Tilley’s petition.

The ruling stated the court has no obligation to render an advisory opinion based on a hypothetical situation and therefore the count was dismissed.

In count five of the amended petition, it was requested that the court set aside a judgment entered on Dec. 4, 1989, between the association and the developer.

As part of the 1989 consent judgment, the association agreed to include lots acquired by the developer after Dec. 4, 1989, in determining whether the developer was subject to the association's 75% Rule. The association further agreed to give the developer a permanent seat on the Association Board of Directors as well as end a prior attempt to enforce a proposed amendment to the bylaws.

Tilley alleged in count five of his petition that none of these settlement terms were previously contained in the association’s By-Laws or the Articles of Incorporation and by entering into this agreement to a consent judgment, the association’s directors amended the By-Laws and Articles of Incorporation without a vote of the general membership.

In their motion to dismiss, Keithley and Combs alleged that such claims failed to state a cause of action to set aside a 30-year-old judgment.

Stated in Judge Inman's dismissal judgment is that under Missouri statute, the action requested by Tilley cannot be granted as almost 30 years had passed since the original judgment.

Additionally, the judgment states that count five of the amended petition pleaded no facts constituting fraud in the procurement of the 1989 judgment nor fraud upon the court in obtaining the judgment.

Bobby Radford is a reporter for the Daily Journal. He can be reached at bradford@dailyjournalonline.com

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