A judge has dismissed two of the five counts stated in an amended petition filed on behalf of Terre Du Lac Association Board Member Michael Tilley against fellow Board Members Gary Keithly and Cary Combs.
Litigation in this matter has been ongoing since April when a Temporary Restraining Order (TRO) was granted prohibiting Keithly 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.
Associate Circuit Judge Timothy 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 alleges 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.
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In their motion to dismiss, Keithly and Combs alleged that such claims failed to state a cause of action to set aside an almost 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 have 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.
A ruling has not yet been made by the court on the remaining three counts of Tilley’s amended petition.
Count one of Tilley’s petition is a request for a permanent injunction barring Keithly and Combs from serving as directors or officers of the association. Alleged in the count is that failure to bar Keithly and Combs from the association board will result in immediate and irreparable injury, loss, and damage as the result of Keithly and Combs’ continued willful and contrary conduct.
Count two of Tilley’s petition is a request for removal as an alternative to a permanent injunction if the court would find that the injunctive relief sought in count one cannot be awarded.
It’s requested in count two that the court enter an order directing the Association Board of Directors to immediately carry out such acts as are necessary to effect the prompt removal of Keithly and Combs as officers and members of the association board, and thereafter ordering that the respondents not be eligible to serve as officers, directors, agents, representatives, or employees of the association board for a period of 10 years from the date of removal.
Count four of the petition 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 of 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. He 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. Further requested is that the court enter 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 Dec. 16 in this case.