Ulf Buchholz / File photo
Monday, March 21, 2011 | 5:09 p.m.
New allegations of wrongdoing are flying pitting Las Vegas-area collection agencies for homeowner associations against homeowners and investors in foreclosed properties.
Nevada Association Services Inc. and other collection agencies say that when it comes to the glut of foreclosed homes in Southern Nevada, they're helping HOAs keep their budgets balanced by making sure investors buying the properties pay for accumulated HOA assessments, fees and fines.
But the investors -- and homeowners in some cases -- say the collection agencies have gone overboard in seeking to collect assessments and collection fees in excess of what's allowed by law.
A flurry of lawsuits arose from the dispute in 2010 and this year.
So far the litigation has resulted in a ruling by the Nevada Financial Institutions Division limiting the amount collected -- including collection costs -- to nine months of assessments.
Collection agencies gained a court order in December blocking implementation of that ruling and that order is now on appeal to the Nevada Supreme Court.
One of the most recent lawsuits over the issue was filed Friday by Nevada Association Services (NAS), RMI Management LLC and Angius & Terry Collections LLC.
Defendants in the suit filed in Clark County District Court include Puoy Premsrirut, a Las Vegas attorney who regularly litigates against collection agencies. She and her brother Rutt Premsrirut also were sued in their capacities as investors in foreclosed homes.
Friday's lawsuit claims Puoy Premsrirut has participated in the filing of frivolous regulatory complaints and lawsuits against collection agencies -- including one pending in federal court alleging violations of the Fair Debt Collection Practices Act (FDCPA).
"Defendants caused the FDCPA lawsuit to be filed to further their strategy of achieving economic gain through intimidation and abuse of the legal system," the collection agencies charged in Friday's lawsuit.
The lawsuit also claims Rutt Premsrirut has been sending letters to HOA board members threatening to sue anyone who attempts to collect fees and regularly sends emails to the collection agencies "in which he uses the threat of ongoing and future litigation to try and extract a settlement."
The lawsuit alleges abuse of process, intentional interference with contractual relations between the collection agencies and their HOA clients, intentional interference with prospective economic advantage and civil conspiracy.
Puoy Premsrirut sees things differently. She couldn't immediately be reached for comment on Friday's lawsuit, but in a March 7 declaration in the FDCPA lawsuit, she said: "Our office receives referrals every day concerning aggrieved homeowners-consumers who contend that they have been taken advantage of by debt collectors including defendant David Stone (head of NAS) and NAS."
"In the instant case, consumer debtors are being victimized and threatened with foreclosure, when the law and defendants' express intentions prohibit the course of conduct," she wrote.
Her co-counsel, attorney James Adams, said in his own declaration: "Defendants have been engaged in a scheme to defraud not only these investors, but to defraud banking institutions and government-sponsored corporations such as Fannie Mae and Freddie Mac, all of whom are transferees of single-family residences via foreclosure auctions."
"By allegedly employing this very scheme thousands of times over the last several years, investors, banks and Fannie Mae and Freddie Mac have paid to defendants tens of millions of dollars which they did not owe, and to which defendants or their principals had no legal entitlement," Adams wrote.
Homeowner associations and collection agencies also are being sued in federal court by a Bank of America subsidiary. That Jan. 31 lawsuit complains HOAs and their trustees are wrongly demanding the bank pay fees and collection costs it's not obligated to pay.
In yet another lawsuit over the Fair Debt Collection Practices Act against Nevada Association Services filed in federal court on Jan. 12, Jacob Seeley said he received a collection validation letter from NAS dated Nov. 8.
"Seeley owed $96 because his HOA changed property managers and didn't bill him $16 per month HOA dues during the next five months' transition. To make it more difficult, there was no HOA office to drop off payments," the lawsuit says.
The suit claims NAS required payment of $380 within 10 days from the date of the letter to avoid a lien on his home as well as $325 in additional charges.
"These threats of a lien on his home and additional charges at the beginning of this collection letter overshadowed the end of the letter, which stated that the plaintiff had 30 days to dispute the debt," said the lawsuit, filed by the law firm Marquis Aurbach Coffing.
The suit complained NAS violated the FDCPA by attempting to collect fees that are not expressly authorized by the covenants, conditions and restrictions for his community.
Seeley was damaged by anger, anxiety, emotional distress, fear and frustration as well as "suffering from unjustified and abusive invasions of his personal privacy," the lawsuit charged.
Attorneys for NAS with the law firm Holland & Hart LLP are disputing those allegations, writing in a response: "Seeley undisputedly failed to pay assessments owed to his HOA, yet now feels as though he has no obligation to pay the collection costs he caused to accrue by failing to pay his debt. NAS is fully authorized by both Nevada law and the relevant HOA to pursue collection costs in collecting the debt that was undisputedly owed by Seeley."
The NAS attorneys said that in collecting past-due assessments and charges from delinquent homeowners, "this is a task of particular importance in the current foreclosure crisis."
"Without collection agencies and the ability to pursue collection costs from delinquent homeowners, HOAs would have little or no ability to pursue the endless list of delinquent assessments, thereby increasing costs to law-abiding homeowners who actually pay their bills," the NAS filing said.
Nevada Association Services has also disputed the allegations in the Bank of America subsidiary lawsuit and the FDCPA lawsuit filed by Adams and Premsrirut.