City issues citations to MTCA in records access dispute

6-Jan-09 – A nearly year-long dispute over access to condo association records has ended with the City of Chicago issuing citations against Marina Towers Condominium Association and its management company, Draper and Kramer, Inc.

The citations, issued on December 2 by the city’s Department of Consumer Services, allege MTCA and Draper & Kramer “failed to allow unit owners…to inspect the records within three days of the written request.”

According to the violation notices, each day on which the respondents fail to allow inspection of the records constitutes a separate and distinct offense.

On December 18, 2007, a unit owner at Marina City, Mindy Verson, filed a consumer fraud complaint with the Department of Consumer Services over claims MTCA had not provided financial documents she requested the previous month. A Chicago ordinance requires a condominium association to allow unit owners to inspect its financial books and records within three days after a written request is made.

Just prior to a hearing on the complaint scheduled for January 30, 2008, attorneys for MTCA and Verson agreed to a schedule for allowing Verson to see some financial records. Under the watchful eye of an MTCA attorney, Verson was later allowed to examine copies of documents and summaries of financial records from 2006 and 2007. She was not, however, allowed to make copies of the documents or see detailed records of attorney fees paid by the association in 2007.

Through its attorney, former state legislator Ellis Levin, MTCA denied the request, saying Verson had not given a “proper purpose” for the request. Levin says legal bills are subject to attorney-client privilege and not available to unit owners, and that copies of his invoices to MTCA are not included in the definition of “financial books and records” of the association.

According to an audit by an outside CPA firm, legal expenses incurred in 2007 by MTCA were 149 percent over budget. General legal fees were budgeted at $15,000 but $37,322 was actually spent. Legal fees related to collections were $38,405, or 54 percent over budget, and offset by legal fee income of just $19,624.

Verson (pictured at left) says she was suspicious of amounts paid to Levin because she had heard Levin claim, on three separate occasions, he was paid three different amounts for work on a lawsuit Verson and six other residents filed against MTCA in 2006. The lawsuit was dismissed without prejudice in October 2006.

In March 2008, Verson’s attorney, Leo G. Aubel, accused MTCA of reneging on the settlement reached in late January. In a letter to Levin, Aubel wrote, “Exclusion of records from Ms. Verson’s examination of financial books and records for calendar year 2007 was never part of our settlement agreement.”

After a second hearing on June 25, 2008, a decision from the city was expected within two weeks. But Verson was told by department director Barbara Gressel that her case file was lost, possibly twice.

According to Aubel, if the disputed records are not produced by January 13, 2009, the city is likely to schedule an enforcement hearing.

Copies of citations:

• Marina Towers Condominium Association
• Draper and Kramer

Related stories:

• Second hearing held in MTCA records dispute
• Lawyers square off in MTCA records dispute