Special Duty Agreement - Valid?
Earlier this year the HOA attempted to enter into a revised Special Duty Agreement with the Richland County Sheriff's Department.
The effective date was February 1st, and the Agreement was signed by Sheriff Lott and electronically by Vernell Butler, Treasurer. Normally, contracts should be signed by the President and the Secretary.
The Board of Directors never authorized anyone on the board to re-negotiate the Agreement or to execute it, according to Minutes.
In my opinion, the HOA's $2,000,000 in cash is at risk, so I sent the following email to the legal officer at RCSD.
"Earlier this year I obtained a copy of the Special Duty Agreement (SDA) between RCSD and the Summit HOA*. This was effective February 1, 2023 and is signed by Sheriff Lott and electronically by Vernell Butler, Treasurer of the HOA. The signatures of the HOA President and HOA Secretary were not on the document.
"Contrary to the Authority and Acknowledgement of Reliance in the SDA, I believe the Board of Directors never authorized any of the officers to negotiate or enter into the SDA. The Minutes of board meetings are silent about any such authority. Therefore, the Treasurer lacked "... full legal capacity and authority to bind and act for (the HOA)..."
"In the absence of such "legal capacity and authority" of a signor, does the SDA have any legal effect? If RCSD makes a claim for a deputy's injury or death or indemnification under the Liability clause in the Agreement, will such a claim be denied?
"Under the By-Laws of the HOA, Directors are to be elected annually by Voting Members. However, there are likely no legitimate Voting Members to do so because many, if not all, of the 28 Neighborhoods in the HOA have disregarded the By-Laws and have failed to elect Neighborhood Representatives (Voting Members) annually for many years. Without legitimate Voting Members, there is no one to elect Directors. Without legitimate Directors, there are no officers to enter into contracts, such as the SDA.
"I have urged the Board to seek a legal opinion from its attorney and also to submit the SDA to its insurance carrier, in view of the additional risk taken on, but I have seen no indication that it has done so.
" * There is no legal entity of the "Summit HOA". The legal name is The Summit Community Association, Inc.
"If the SDA is invalid, would it be wise for RCSD not to assign any deputies to work under it, until these questions are resolved?"
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