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[ATG] State files lawsuit against three board members of The Harbours
Start Date: 8/31/2012Start Time: 12:00 AM
End Date: 8/31/2012End Time: 11:59 PM
Entry Description

JEFFERSONVILLE, Ind. – Three board members of The Harbours Condominiums Association are named in a state lawsuit for allegedly breaching their fiduciary duty and committing fraud.

The Indiana Attorney General’s Office filed the complaint in Clark County against board members Kevin Zipperle, Mary Lou Trautwein-Lamkin and Sharon Chandler. Frank Prell is also named in the lawsuit as  a former owner of multiple condominium units at The Harbours which is located at One River Point Plaza.

“Today’s lawsuit is the first of its kind under a new state law allowing the Attorney General’s Office to regulate homeowner associations,” said Gabrielle Owens, director of the Homeowner Protection Unit and Licensing Enforcement Unit of the Indiana Attorney General’s Office. “Board members have a fiduciary duty to serve in the interest of those they represent. Our office is committed to protecting homeowners and will continue to bring actions against violators who misuse their positions for personal gain.”

A state law passed in 2011 allows the Attorney General’s Office to regulate homeowners associations similar to other nonprofit organizations. The office has the authority to bring actions against a homeowner association’s board of directors and in some cases, against association board members.

Today’s lawsuit seeks restitution on behalf of The Harbours Condominium Association, Inc. and the removal of Zipperle, Trautwein-Lamkin and Chandler from their positions as board members.

The management of The Harbours was transferred from the developer to the HOA in 2004, and Zipperle, Trautwein-Lamkin, and Chandler were members of the initial transition committee and have been board members since. According to the lawsuit, Zipperle serving in multiple positions over a number of years, “used his position on the Board on an ongoing basis to deceive the HOA and its members for his own personal benefit and to benefit his friends and/or business associates which was detrimental to those to whom he had a fiduciary duty.”

Zipperle, Trautwein-Lamkin and Chandler, the board treasurer at the time, are accused of paying former community director and manager of the HOA, Cindy Richards, without documenting or verifying time spent on the job. According to the lawsuit, Richards had only accrued four weeks of vacation time but was paid her regular salary for 10 weeks without working full-time.

Prell allegedly bought two separate condominiums in April of 2005 and combined the units into one larger unit without a building permit, HOA approval or permission from the holder of both his mortgages. According to the complaint, Prell illegally attempted to sell the units as one property, but was later foreclosed upon.

Zipperle purchased one of the units through a short sale and later, Prell and/or Zipperle allegedly constructed a substandard wall to separate the units once again. The new wall ran through the middle of the shared kitchen sink and was erected without building permits or HOA approval. Trautwein-Lamkin and Zipperle later purchased the second unit, but falsely claimed they were going to use the property as their primary residence in order to obtain preferential treatment in the bidding process. 

Zipperle is also accused of instructing office staff to neglect or ignore requests made from HOA members he considered “malcontents.” In October 2011, Zipperle’s campaign letter for the HOA board said, “The activities of a handful of hard-core malcontents in our community continue to occupy our time and cost us valuable resources.”

A judge will determine what amount of restitution is due to the HOA from any actions that resulted in loss of dues and income to the HOA. According to the state’s lawsuit the defendants should be barred from using the association’s funds for their legal defenses. 

-30-

Contact Information:
Name: Erin Reece
Phone: 317.232.0168
Email: Erin.Reece@atg.in.gov
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Entry Type:
Press Release
Entry Category:
  • Announcements
  • IN.gov Category:
  • Goverment
  • Agency Name
    Attorney General

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