STATEMENT-OF-FACTS
Based on over 3,000 pages of records obtained via subpoena.
In an effort to justify its expenditures and decisions, members of the board (particularly Kurt Meister) and its legal counsel made statements and/or assertions about the dispute over a $250 septic maintenance bill and about the Krahns that were not accurate. Some of those were:
(1) Krahns kept the $250,
(2) Krahns did not pay Premier,
(3) HOA did not take $250 from the Krahns’ account,
(4) HOA attorney met with and had substantial conversations with the Krahns before the Krahns filed,
(5) there’s no evidence the Krahns reached out to the attorney/HOA/Ogden before filing,
(6) Krahns chose to sue rather than picking up the phone,
(7) HOA dropped its counterclaims,
(8) Krahns are to blame for all the associations legal costs,
(9) Krahns met many times with HOA atty Francom,
(10) Krahns engaged in illegal conduct,
(11) Krahns threatened Premier with a lawsuit in order to recover their $250,
(12) Premier did not double-bill,
(13) Krahns wrote profanity-laden emails to Ogden,
(14) the Krahns’ strategy was delay delay delay and then drop the suit,
(15) the Krahns enriched themselves at the HOA’s expense,
(16) the Krahns pocketed the $250,
(17) Krahns repeatedly contacted Premier over the past several years to demand information about issues that have nothing to do with Premier’s septic maintenance services.
These 17 statements were false, and the board has not attempted to substantiate them with evidence. The following comprehensive, evidence-based narrative, clarifies the inaccuracies in their assertions.
In October 2021, Premier performed septic maintenance on the Krahns’ septic system. Premier’s billing process issued invoice #21 to the homeowner and also sent a duplicate invoice #21 to Ogden. The Krahns submitted their $250 invoice #21 to the Treasurer in accordance with long-standing association practice dating back to 2014. This practice was consistent with voluminous association records since TFE’s inception (e.g., audits, budgets, budget comparisons, budget narratives, all 3 prior reserve studies, a 2019 septic lawsuit, community votes, board meeting recordings, and 11 prior payments). This CCR-interpretation was later re-affirmed by the Court: Burns v. TFE.
The Treasurer and Ogden (both Community Manager, Rebecca Parmeley, and Accounts Payable) all approved invoice #21 for payment to Premier. However, Ogden inadvertently issued the payment to the Krahns. Krahns then paid Premier $250 using Premier’s hotlink in the email and a credit card. Ogden erroneously recorded the $250 septic payment as “printing and postage” in the TFE ledger.
Just days after the Meister board took over, and without yet knowing of the invoice #21 issue, Kurt Meister emailed Jeanne Ackerley, claiming he had done “research into [John Krahn’s] behavior” and shared a video about destroying the reputation of a person whom Kurt equated with John Krahn. Jeanne indicated she enjoyed the video and then shared it with board member Jeremy Sikes. This evidence shows that Kurt and Jeanne, from early on, were driven by personal animosity, with a malicious intent to harm John Krahn’s reputation in TFE, rather than act in the best interests of the HOA.
About a month later, Rebecca presented the already-paid, duplicate invoice #21 to Kurt Meister and Treasurer Jeanne Ackerley. Rebecca’s email fails to disclose that invoice #21 had already been approved and paid — under Rebecca’s oversight — in accordance with the policy and authority of the prior board and the CC&Rs. Although Rebecca expressed her personal opinion that it should be back-assessed, she acknowledged that she had not yet “read through the CC&R’s.” She did not explain to Ackerley or Meister why she and Accounts Payable had previously approved and paid invoice #21. Furthermore, Rebecca did not provide Treasurer Ackerley with the prior approval email from former Treasurer Burns, nor did Rebecca, Ackerley, or Meister contact the prior Treasurer to understand the rationale behind the earlier approval. As further demonstration of their personal animosity toward the Krahns, Kurt Meister bet Jeanne Ackerley that the Krahns were using both fake checks and fake checking accounts.
The Meister board subsequently and secretly/illegally (see Burns v TFE) altered the long-standing and CC&R-defined septic policy, and applied their change retroactively and selectively to only the Krahns and Ms. Burns. The Meister board and Ogden then errantly paid the same invoice #21 a second time and, at the direction of the Meister board, Ogden took $250 from the Krahns’ account to fund their “mistaken paid invoice.”
Around the same date, the Meister board issued a Cease & Desist (C&D) letter to John Krahn, requesting that he communicate solely through US Mail and solely with HOA attorney Francom. This gave the board an excuse for not responding to John’s inquiries about the $250 taken from the Krahn’s account.
Upon discovering the $250 had been taken from their account, the Krahns reached out 21 times over the next five weeks seeking an explanation. Despite Krahns’ repeated efforts (which included two demand letters) and despite HOA Attorney Francom advising “the Board (or Rich) can respond accordingly [to the Krahns],” neither the board nor Ogden manager, Rich Orcutt, ever responded.
During this period, Kurt Meister instructed Ogden to ignore calls and emails from John Krahn, insisting that communication be conducted through physical letters only. Despite this directive, the board did not respond to John’s physical letters and also disregarded communications from Janet Krahn, who was not subject to the C&D letter.
Further demonstrating their malice as part of a broader pattern of behavior, then-board-member Jeremy Sikes sent an unsolicited, profane text threatening that both he and the HOA’s attorney were preparing to inflict significant and imminent financial harm on the Krahns and two other residents.
Ogden advised Kurt Meister and the HOA’s legal counsel to request proof of payment from the Krahns to determine if a double payment had occurred — neither sought proof. Krahns’ Portal requests were returned as “denied,” and Ogden repeatedly and confusingly asked the Krahns to deliver a check to Ogden for a negative $113. On two occasions, Ogden accounting/billing representatives informed the Krahns that the $250 charge “appeared suspicious” and promised that someone would call them back to explain — no one ever called. Lori Percival, President of Ogden, emailed Community Manager Rich Orcutt, stating that she was “not sure of this whole situation and who is responsible for these costs.” The board failed to pursue any of eight alternative routes (most cost-free and some advised by their attorney) to avoid litigation. The lack of constructive communication and the board’s failure to honor deadlines compelled the Krahns to file a Small Claims court action seeking the return of the $250 taken from them.
Although Kurt Meister correctly noted that “Ogden was sloppy,” he erroneously concluded that the $250 (mis-catalogued as “Printing and Postage”) was not for Invoice #21 but was instead an “erroneous check” that the Krahns had embezzled by “pocketing the $250.” Supplied with Kurt’s misconceptions about the $250, the board hyper-litigated the matter: escalated the case to Justice Court and filed a counterclaim, denying that the Krahns “had paid any portion of the $250” and accusing the Krahns of retaining funds “without providing payment himself,” resulting in “personal gain at the association’s expense.” The counterclaim alleged “specific damages in the amount of $500,” not $250, based on the incorrect assertion that the Krahns had embezzled $250.
Upon receiving the Justice Court counterclaim alleging they had embezzled $250, the Krahns were shocked and puzzled. Armed with their receipt and credit card statements, Krahns knew they had paid Premier and had not enriched themselves at the association’s expense. The Krahns contacted Premier, who immediately realized and acknowledged Premier’s mis-statement to Ogden about the Krahns not having paid, acknowledged the double-payment, apologized, and freely offered to reimburse the Krahns. Premier put that on letterhead and overnighted it to the Krahns. The Krahns promptly disclosed this new information to HOA attorney Francom and met with him once in March. During that March meeting, Francom admitted heretofore being unaware of the prior association septic actions dating back to 2014, the extensive septic-related records from TFE’s inception, and the 2021 community vote regarding septic policy, and conceded that the HOA would have no case to collect either of the $250 amounts.
During an ethics investigation, Francom, in his letter to Senior Bar Counsel and the Arizona State Bar, confirmed that he then “discussed new information and, based on new information, advised my client of the pros and cons of the counterclaims and the likelihood of their success.” Furthermore, Francom insisted that he kept the entire board, not just Kurt Meister, fully aware of the case, writing “At all steps throughout the litigation, I communicated with and advised and received guidance from my client, the Association” and asserted “I was in regular communication via both email and telephone with the client. Communication was presented to the client in order for the client to make informed decisions.”
With neither party having cause to continue litigation, the Krahns requested that the board agree to a mutual dismissal, with each party absorbing their own costs. Kurt Meister and the board refused. Having achieved their sought relief and no further need to litigate, the Krahns moved to dismiss their case, including the Premier letter as an exhibit, while leaving the HOA’s case open. Acknowledging their counterclaims were meritless, partly based on the Premier letter, the board “did not oppose Mr. Krahn’s motion as it related to any counterclaims.”
The Judge granted the Krahns’ motion on May 19, 2022, but, on his own accord, the Judge also dismissed the board’s meritless countersuit. The 14-day appeal deadline expired on June 2, 2022, thereby officially ending litigation. Francom confirmed: “In an email dated June 10, 2022, the Board of Directors indicated the Association did not want to move forward.” Thus, as of June 10, 2022, there was neither litigation nor contemplated litigation, thereby removing any alleged protection of privilege for defamatory statements made as of June 10, 2022.
Following litigation conclusion, the board, particularly Kurt Meister, made numerous false statements about the prior case and the Krahns (see list, above). During multiple open – and at times hostile – board meetings, numerous knowledgeable homeowners attempted to correct the board’s misrepresentations, some even providing physical evidence, such as Premier’s letter. Kurt Meister acknowledged the Premier letter while dismissing the homeowners, asserting, “I’m the guy that’s watching it every day.” Board members Steve Gauer, Ken Riley, Jeanne Ackerley, and Kerry Chou remained complicit, mostly sitting silently while repeated demonstrably false statements were made. As further demonstration of their willingness to misrepresent, the board and Kurt Meister now claim to “have no recollection of ever seeing [the Premier] letter until it was exchanged during discovery in this case,” despite all evidence to the contrary.
Months after litigation ended, Kurt Meister expressed renewed desire to litigate further against the Krahns. Board member Ken Riley cautioned that further legal action “appeared retaliatory,” a sentiment Kurt Meister agreed with, yet Meister still pushed to reinstitute litigation, further demonstrating malice. On August 30, 2022, the Meister board filed additional litigation against the Krahns. Francom blames the HOA for the knowingly late filing: “The delay in the motion was not due to my actions, but a change in the direction the client wanted to take with the case.” Francom blames the entire board: “I was in regular communication with my client and took action based on directives that I received from the President of the Board of Directors whom I believed and understood was acting on behalf of the entire Board.”
With the 14-day appeal deadline having passed about 3 months prior, the judge decisively denied their late request.
During an open meeting, Kurt Meister accurately and repeatedly described Francom’s filing as “botched” and “screwed up.” When questioned about board approval for the poorly executed and baseless filing, Kurt deflected blame onto Francom, stating it “was filed without our approval.” However, Francom’s testimony to the State Bar contradicts Kurt Meister’s allegation: “There is no indication that any action was taken either in the lawsuit or in any other aspect of the firm’s representation of the Association that was not authorized by the [board].” HOA legal counsel later acknowledged the countersuit was an “error and wrote off all of the legal fees originally charged to the Association for bringing the counterclaim.” Ultimately, Francom’s firm terminated representation of TFE.
Prior to more litigation, the Krahns appealed to the board at two open meetings to address the false statements made by Kurt Meister – the board failed to respond either time. Krahns then submitted a written proposal to resolve the matter wherein the Krahns’ request was to develop and publish a “mutually-agreed-upon retraction and statement of the facts.” Note, the Krahns neither requested nor required an apology or admission of wrongdoing – merely a retraction. Importantly, a statement-of-facts and retraction did not require either HOA attorney or HOA insurance involvement.
In response, the board requested significant time extensions. Because of the short statute of limitations on defamation claims and with no other option to protect their rights, the Krahns filed a defamation lawsuit but also reiterated their desire to settle amicably. The board again failed to engage.
The board decided — outside of an open board meeting — to use the HOA’s insurance instead of paying out of pocket. Premiums then rose by 84%, the deductible increased 25-fold, and a few days later, the insurance company terminated all coverage for TFE.
All parties initially agreed to meet on February 20, 2024, to collaboratively craft a Statement-of-Facts and bring an end to the litigation. However, the meeting was canceled at the last minute when HOA legal counsel disclosed that no board members would be attending.
Subsequently, a new meeting was scheduled for March 19, 2024, with the same objective. The Krahns were prepared to use the board’s draft as a starting point. Both Steve Gauer and the Krahns traveled for the meeting, but the HOA attorney abruptly canceled it just minutes before it was to begin. Later, Steve Gauer and John Krahn compared the pre-meeting correspondences from their attorneys, confirming that HOA legal counsel had misrepresented the situation to justify cancellation.
In April 2024, John Krahn and Steve Gauer once again agreed to work together on drafting the Statement-of-Facts to resolve the litigation. However, HOA legal counsel intervened, claiming that Steve was too “unsophisticated” to participate in the process.
In June 2024 and consistent with the Statement of Facts above, the Gauer/Riley/Jolivette board and Kurt Meister finally acknowledged they “should have been more proactive in trying to resolve the parties’ dispute,” they “should have employed less drastic means to resolve their dispute,” “they made mistakes that have led to unfavorable outcomes for everyone involved“ and, consequently, their actions “do not serve the interests of the Association.”
During an August 2024 Court Hearing, Judge Herrod, while citing a former and well-respected Chief Judge, admonished legal counsel for “absorbing the emotions their clients have fed them,” wastefully spending money, and bringing the HOA into risk of special assessments to pay for damages, stating “this case needs to settle” because what the board and Kurt Meister were doing “does not solve the community problem.” Despite this, HOA counsel insisted on proceeding with up to eight hours of depositions—depositions that would offer no real benefit—before engaging in mediation to draft an evidence-based Statement-of-Fact.
Heeding the Judge’s remarks, the Krahns issued a no-cost proposal to the board, requesting they stop wasting time and money on further discovery and instead collaborate in mediation to produce an evidence-based Statement-of-Fact using the existing exhibits. Any unresolved issues would be left to the discretion of the mediator, a distinguished retired judge and trial lawyer, thereby ensuring an end to the lawsuit. The board refused on September 10, 2024.
Disclaimer:
The information contained in this Statement-of-Fact is based on evidence obtained and reviewed during ongoing litigation. It reflects facts and findings as of the date of publication. Any subsequent evidence or developments that may arise are not reflected in this document. This Statement-of-Fact is provided solely for informational purposes related to the ongoing legal dispute and should not be construed as final or exhaustive. Once the litigation is officially concluded, this Statement-of-Fact will remain as a historical record of the facts as they were understood at the time of publication. The authors reserve the right to update or amend the content if new evidence becomes available.
Kurt Meister, Elder, Boulder Mountain Community Church, Mesa, Arizona