Seawall Settlement: Promises made--promises kept?

As noted in two recent posts (here and here), there are a number of issues involved in the seawall settlement known only by the Board and the 12 Owners who have sued the Club. A video exists of Keith Wandell making an unequivocal promise to submit any settlement relating to the seawall to the Owners for a vote. Fortunately, the By-Laws empower the Board President to call a special meeting of the Owners--with or without the concurrence of the Board.

Here are some things to ponder:

-    No details on the settlement have been made available to the Owners.

-    The Owners are already on the hook for the 1/3 of the J-Lot seawall owned by the Club. The settlement will deal with how much of the remaining 2/3 of the costs are paid by the Club.

-     There are three types of costs involved: (1) past maintenance and repair costs; (2) the reserve for future maintenance and repair costs that should be established; and (3) future maintenance and repair costs.

    -    How will past costs (i.e., costs already incurred) be shared?

    -   Will a reserve be established? If so, who pays what?

    -   Who pays for future maintenance and repair costs in excess of the amount in the reserve?

    -   Who pays for legal costs incurred to date?

-    Why the delay in disclosing the settlement to the Owners? There must be a term sheet that outlines the principles of settlement. Why does it take 30-45 days to disclose the deal to the Owners--particularly in light of the Board President's commitment to put the settlement to a vote of the Owners? Any "final" settlement documentation would be contingent upon the approval of the Owners, or Wandell's promise to send it to the Owners for a vote would be meaningless. Just send the term sheet to the Owners--they can figure out whether the deal is a good one for them.

-    Unless South Carolina law is different from most jurisdictions, courts do not rule on the substance of a settlement (other than class action settlements--and the seawall litigation is not a class action)--the Court just wants to ensure that all parties have agreed to settle and stipulate to the dismissal of the lawsuit-- then the judge happily orders the case "closed."

-    Nor are settlements "recorded." However, changes to the covenants must be recorded and the Board has the power to amend the seawall covenants with the consent of the seawall lot owners. The settlement may provide that the covenants will be amended in some manner. These changes are probably noted in the term sheet, but remain unknown to the Owners who were promised a vote. The vote should precede any amendment of the seawall covenants.

During the June 2022 Town Hall Meeting, the Board President made a videoed promise that the Owners would get to vote on the settlement. The Club carries the burden of persuading the Owners that a settlement is in the Club's best interest. I'm certainly not averse to settling this lawsuit. But I am quite averse to buying a "pig in a poke." Publish the term sheet and schedule a vote.

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