David Bagwell was the developer of three homeowners’ associations (HOAs). David and his wife Susan (the Bagwells), acted as directors of each of the HOAs. Sister Initiative, LLC (the LLC) loaned money to the HOAs and was owned by Bagwells’ daughters. Susan Bagwell was the manager of the LLC. The Bagwells also owned several other businesses that interacted with the HOAs. In 2010 the LLC loaned the HOAs $120,000, allegedly because of the downturn in the economy. In 2011 the Bagwells were ousted as directors, and the LLC sued to recover on the loans. The use of the funds is the heart of the case, as the HOAs argued that the funds were funneled to improper uses.
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