Letter to Harbor Pointe Homeowners

May 18, 2015

Dear Harbor Pointe Homeowner,

Your home market value is significantly at risk if you vote yes for amending the CC&Rs to exclude palm trees from the height limitations in Sections 9.01 and 9.02.

Please read the following and visit:

www.Harborpointecdm.com

The CC&Rs were originally drafted by Fieldstone to protect our views, because views significantly enhance the market values of our properties. If the CC&Rs are amended to exclude Palm Trees from the height limitations, your property value will be significantly at risk because the current board of directors believes that palm trees should be able to be grown higher than the rooflines even if they block views! Connie Morris testified to this in her deposition. See her complete deposition on-line and judge for yourself if she is qualified to make policy decisions for our HOA.

To determine the value of my view, I retained an appraiser. Below is his opinion about the value of the view, when unobstructed by trees:

Why the lawsuit?

The owners of 8 HP Dr received multiple notices from the board to trim their bushes and trees prior to 2013, to no avail.

In the first half of 2013 the board sent correction notices to homeowners at 1 HP Dr, 2 HP Dr and 8 HP Dr asking them to trim their trees and bushes. The board issued hearing notices to owners of 1 HP Dr, 2 HP Dr and 8 HP Dr to appear before the board on June 4, 2013.

The following are some of the pictures taken a few hours prior to the board hearing and were displayed at the hearing:

The board majority decided "additional trimming" had to be done but never followed through.

In the summer of 2013, after having tried for several years to get my ocean view unobstructed by owners of 1 HP Dr, 3 HP Dr, 7 HP Dr and 8 HP Dr and some of the community trees, I had no choice but to seek legal help. Through my lawyer, I asked the HOA and the above homeowners to participate in mediation.

The HOA and all the above homeowners except 3 HP Dr rejected the request for mediation. A second request for mediation was sent and the response was the same. I reluctantly filed a lawsuit in early Nov 2013.

The board majority misrepresented the facts to the homeowners and purportedly obtained 15 votes to amend the CC&Rs in Jan 2014 to exempt palm trees from the height of the roof ridge line. Michael Crossley is one of the homeowners who has palm trees which violate Section 9.01 of the CC&Rs. When he refused to agree to mediation, or do additional trimming to improve my view, he was named in the lawsuit. Mr. Crossley submitted his defense to The HOA's insurance policy, since he was the president of the HOA, and he was successful getting the associations insurance company to defend him. Connie Morris, another board member, was named because she was not on title when elected to the board in 2013 and therefore not qualified to be a board member per the Bylaws.

On May 11, 2015 the court agreed that Connie Morris had been an invalid Director for not being a homeowner on the record and denied the motion filed by the defense lawyers for summary judgment.

What is the purpose of the lawsuit?

There are approximately over 250 trees of different species at Harbor Pointe overall. Approximately 23 queen palms and 4 Mexican fan palms are currently obstructing my view of the ocean. The lawsuit is seeking the removal of 27 palms. These can be replaced by palm trees of a different variety which do not grow higher than the roof lines, to keep the tropical ambience in our community. The tall palm trees in front of the community are not the subject of this lawsuit, nor are any other approximately 220 trees in the community. The board has repeatedly misrepresented the facts. I am not seeking the removal of all the trees in the community! The 27 palms act as a green wall blocking my approximately 140-degree ocean view.

Please see below the location of the trees currently blocking my view:

Here are some pictures showing how my view is obstructed by trees from:

Michael Crossley (1 HP Dr): Newport harbor view is blocked

Michael Crossley (1 HP Dr), Houshang Khademi (8 HP Dr) & Community trees:

Houshang Khademi (8 HP Dr):

Houshang Khademi (8 HP Dr):

Georgia Hickingbothams trees on the left and Houshang Khademis trees on the right:

Georgia Hickingbothams trees (7 HP Dr):

Michael Crossleys trees ( 1 HP Dr):

Community trees, Houshang Khademis trees, Georgia Hickingbothams trees:

A small fraction of the legal expenses spent so far could have paid for replacing the offending trees with palms that grow no taller than about 20 to maintain the ambience as a palm tree community.

Below is an example of a limited height palm tree at the entrance of Harbor Pointe. Palms such as this one can be planted in the lower part of the community to maintain the ambience and also not obstruct the ocean view.

See the link below for more examples:

http://www.turbosquid.com/3d-models/3d-dypsis-lutescens-model/737765

The CC&Rs amendment, as it was written in 2013 , will create future conflicts over the trees.

See below the opinion of a longstanding member of our community:

The expenses of the current lawsuit, including the costs of defending Michael Crossley and Connie Morris are all being paid by the former insurer of HPNOA who refused to renew the policy because of the expenses incurred in defending the lawsuit. My lawsuit is simply an attempt to enforce the governing document of our Association which are recorded against our properties. The reason why Michael Crossley wants the CC&Rs amended is that he will be found liable for violating them if the Owners do not vote to amend them to exempt his palm trees from Section 9.01. Our insurance premiums have skyrocketed because of the boards failure to enforce the view protections in our CC&Rs. If the board had simply enforced the view protections, there would not have been the need for any lawsuit.

The height limit for trees in Sections 9.01 and 9.02 of the CC&Rs worked well since 1986 when the homes were built at HP. The builder had the vision and the wisdom to know that the trees will eventually grow taller than the ridge line of the roof and therefore block views. That is the reason why Sections 9.01 and 9.02 of the CC&Rs were put into the CC&Rs, to protect our views. A pillar of any HOA is to preserve the property values. Why change the well written CC&Rs when we can replace a few old trees with new trees and leave 90% of all other trees as is.

The cost of replacing a few trees is negligible in compare to the loss of value of homes due to losing the ocean view. Here is a simple math: The average home value at the upper HP Dr. is approximately

$2.3 million so the total value of all 11 homes at the upper HP Dr. is about $25 million. Value of the ocean view for the 11 homes is approximately 20% to 25% of the overall value of the home. Using the 22% average figure, the estimated loss of value for the entire community will be over $5.5 million. The devaluation of homes in the upper HP Dr. also devaluates the homes on the lower section of the HP Dr.

This is not just about my property value. This impacts all the home values at HP. Your board obviously does not care about the property values.

Why is the board trying to amend the CC&Rs, for a second time?

Here are the reasons:

All three board members are from the lower section of Harbor Pointe DR, either with no view or dont care about other homeowners ocean view.

Please see the boards sworn statements online at www.harborpointecdm.com/

Connie Morris testified that she doesnt care about the ocean view of other homes.

The house at 2 HP Dr has no ocean view. Bushes and trees at 2 HP Dr blocked the ocean view for 29 HP Dr for years. The board cited the owner in 2013 and required him to unblock the ocean view for 29 HP Dr. He subsequently was elected to the board. As a board member, he ratified what Michael Crossley and Connie Morris had voted to amend the CC&Rs to exempt the palms from the height limit. Below are the pictures of trees and bushes at 2 HP Dr in 2013 and now, blocking the ocean view of 29 HP Dr. while the property has been for sale and the view obstruction does not help the sale.

One example of bushes and trees at 2 HP Dr in spring of 2013 seen from the backyard of 29 HP Dr:

Michael Crossleys trees and/or other trees blocking the ocean view of 29 HP Dr:

Bushes and trees at 2 HP Dr seen from the backyard of 29 HP Dr. during an open house for sale a few weeks ago:

FACTS ABOUT HARBOR POINTE CC&R AMENDMENT TO EXCLUDE PALM TREES FROM HEIGHT RESTRICTION IN ORIGINAL CC&RS

When the Board solicited votes to Amend Sections 9.0 I and 9.02 of the CC&Rs, in December, 2013, several misrepresentations were made that Owners should be aware of.

Misrepresentation

"The purpose of this amendment is to assert the original builder's intentions as stated in the section I 0.08 of the CC&Rs; "By accepting a deed to a Lot, hereby acknowledges that any construction or installation by Declarant may impair the view of such Owner and hereby consents to such impairment."

The deposition of Michael Crossley who is the President of Harbor Pointe-Newport Owners Association, was taken on August 29, 2014. In his deposition, Mr. Crossley admitted that the developer (The Fieldstone Company) did not plant any trees on his property, and therefore section 10.08 would not apply to his Lot. Mr. Crossley also admitted in his deposition that he is not aware of any evidence which shows that the developer planted any trees on the Hickingbotham property. Photos taken at the time of the development confirm this.

If the purpose of the amendment was to assert the original builder's intentions, Sections 9.01 and 9.02 of the CC&Rs should not be modified. The height restrictions in those sections were obviously intended to protect all homeowners' views in Harbor Pointe-Newport.

Misrepresentation

"The Architectural Review Committee has previously ruled that the palms do not unreasonably obstruct views."

This is untrue. In the first six months of 2013 the ARC required several Owners to trim their palm trees so that they did not unreasonably obstruct views. Palm trees grow new fronds and grow higher every year. They can grow to 40-45 feet high. Palm trees can unreasonably obstruct views when they grow higher than the roofline, or even when they are not higher than the roofline. Therefore, palm trees should not be excluded from the height restriction in Sections 9.01 and 9.02 of the CC&Rs, if they block views.

Misrepresentation

"Clarifying the language in the CC&Rs will protect the Association from excessive costs of litigation, possible removal of the palms on individual lots and common areas, and preserve the beauty of our community, as the original builder intended."

The amendments dont clarify the language in the CC&Rs, they completely change the language by exempting all palm trees from any height limitation. Palm trees block views the same way other types of trees block views.

Boards Duties

Duty of Loyalty - Highest standard of conduct

Objectivity (Non-discriminatory)

Quarterly Financial Review

Basic Familiarity with Governing Documents

Protect Privileges

Main Purposes of Board Preservation of Property Value

To Act As "Corporate Brain"

To Make Informed Decisions

To Develop Policies of Governance

Not a Popularity Contest

Would you, as Jury in a trial, vote to change the law to protect the offender knowing that the offense is against the financial interests of the community, yours included?

Is the current board working in the best interests of the community?

Value your vote! Vote right! If you are pressured to vote, you have the right to abstain!

If you have a view worth protecting, if you vote in favor of amending the CC&Rs, your rights will be at the whim of the current three board members, all who live in the lower half of our community and whose views are not affected by palm trees which exceed the height of the houses. If you live in the upper part of our community, by voting to amend the CC&Rs, you will eliminate the important view protection put into the CC&Rs by Fieldstone which was intended to protect your view.

Sincerely,

Mahmood Rezai

Mahmood Rezai

21 Harbor Pointe Dr.

714 883 2912

[email protected]