STR lawsuit status update letter to members

February 14, 2023

Lake Arrowhead is private and remains private. The Association’s property is private
property and not open to the public.  Neither the lake itself, nor the trails nor the Beach Clubs
are open to the public.  The Association is not involved in any litigation pertaining to the privacy of Lake Arrowhead. Rather, the litigation ALA has been named in relates to access of the Association property by short term renters.
 
All Arrowhead Lake Association Directors have stated that they want Lake Arrowhead to remain and be maintained as a private lake.
 
Prior to 2020, short term renters that were clients of Arrowhead Woods property
owners had access to Association property.  At one time, more than 90 short term renters from one member were given access to our lake and property.  Short term renters increased the Association’s liability and costs and impacted members’ enjoyment.  The Association has no purview over the rental of homes in the neighborhoods of Lake Arrowhead, nor issues that may arise from noise, trash, parking, etc. Those issues all fall under the jurisdiction of San Bernardino County.

 In 2020, the ALA surveyed its members, all of whom were Arrowhead Woods Property Owners, asking if the Members wanted short term rental clients to be able to access the Lake and other ALA property.  Many members believed it was a poorly written survey that offered just a binary everything or nothing choice.  The survey did not inform the members of material legal agreements and settlements pertaining to Association property or to lake rights that would impact members, it did not explain the potential costs and liabilities associated with new rules and litigation, and it did not provide any legal and financial analysis.
 
The Arrowhead Lake Association then adopted a bylaw revision restricting short-term
renters from accessing trails, docks, Beach Clubs, Association property and the lake and began enforcing that bylaw including the imposition of fines for violations.  
 
In 2021, the Arrowhead Lake Association, along with ALA Board members, were sued by
a small number of members after the Arrowhead Lake Association adopted the bylaw change,
citing, among other causes of action, a breach of the 1964 Agreement and the rights it granted to Arrowhead Woods Property Owners. In addition to filing a lawsuit, the plaintiffs sought a preliminary injunction against ALA, seeking to prohibit the enforcement of the bylaw revision.
 
The Arrowhead Lake Association initially retained Gregory Garrison from Gregory M.
Garrison, APC and Michael Scafiddi from the Law Offices of Michael A. Scafiddi regarding the
lawsuit and preliminary injunction. The individual board members are represented by D.
Wayne Leech of the Law Office of D. Wayne Leech. Mr. Garrison, Mr. Scafiddi, and Mr. Leech
handled the initial phases of the lawsuit, as well as the preliminary injunction. After answering the complaint, a ruling by the Court was made on the plaintiffs’ preliminary injunction, ALA retained the law firm Best Best & Krieger LLP to represent the Arrowhead Lake Association. 
 
Best Best &  Krieger (BBK) previously represented Lake Arrowhead Community Services District in the early 2000’s on the issue of the Association’s recreational water rights and limiting water extraction from Lake Arrowhead.  This litigation concluded with a community compromise.  BBK is familiar with the legal history of the Association.
 
In early 2022, San Bernardino County Judge Gilbert G. Ochoa granted the plaintiffs a
preliminary injunction preventing the Association from enforcing the new bylaw and several of the other rules the Association promulgated, but allowing the Association various enforcement capabilities.  The Association has appealed the preliminary injunction, which is still pending.  The Appellate Court has not ruled on the Association’s motion, and will not do so until both parties have completed filing their briefs, which has not yet occurred. Meanwhile, pursuant to trial court’s order on the preliminary injunction, short term renters are NOT ALLOWED to operate any watercraft on the lake, including kayaks and SUPs. In short, pursuant to the preliminary injunction, STRS are not allowed to use any facility that is not covered by the 1964 Agreement.
 
As this matter is presently in litigation, one of two paths may occur in the future. The parties
can either present their respective cases to the Court in a trial, or the parties can reach a
resolution by way of a settlement. Most courts either encourage or mandate that parties at
least participate in a settlement meeting.
 
The Association members who filed the law suit strongly believe in property rights, are long-
term members of the Association and believe in our community. 
 
Several ALA members have stated that they want No Negotiations with the plaintiffs.  Other
members acknowledge that either a judge will render a decision or that the parties will reach
an agreement. One way or the other a decision will be made.  Many members believe the
Association should meet with the plaintiffs and to see where there is agreement that could limit or negate misunderstandings and differences, and mitigate the impact of the ultimate
resolution.
 
At this time, and since January 2021 the preliminary injunction remains in place and the ALA is not allowed to enforced certain rules.  We expect the Appeals Court to render a decision in late 2023.

In the meantime, the Board of Directors suggests that you become acquainted with issues and
the arguments set forth by the plaintiffs and the Association. To that end, and in the spirit of
transparency, the legal documents, including the injunction itself, are available for member
review at https://www.ala-ca.org/legal_information.php. At the bottom of the list are the two
most recent filings, the briefs of both parties regarding the Association’s appeal.

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Arrowhead Lake Association Dock Owners Insurance Program:

Arrowhead Lake Association is pleased to announce that an exclusive dock insurance program is now available for Arrowhead Lake Association dock owners.  The dock insurance program will be administered and run by Arrowhead Lake Association’s insurance agency, Shaw, Moses, Mendenhall & Associates.

The program provides property and general liability insurance coverage for single, double, triple, quad, and multi-slip docks.  Insurance is written through A.M. Best A rated insurance companies that specialize in writing coverage for docks, piers, and wharves.

Coverage program:

• Property insurance covering the following perils:  Fire, lightning, explosion, windstorm, hail, flood, wave action, frost, theft, weight of ice and/or snow, collision with another ship, vessel, or floating object, and contact with aircraft or object dropped therefrom.
• General liability insurance to cover third party bodily injury (slips and falls or injuries on the docks) and third party property damage.

Please note ALA homeowners obtain dock insurance at their own election and discretion, for the individual docks they own.  While Arrowhead Lake Association worked with its insurance broker, Shaw, Moses, Mendenhall & Associates to establish a voluntary and optional dock insurance program for homeowners interested in obtaining dock insurance, Arrowhead Lake Association is not in charge of administering or running the dock insurance program.  ALA homeowners choose to obtain, or choose not to obtain, dock insurance at their own discretion, and Arrowhead Lake Association is neither responsible nor liable in any manner, for any homeowner’s decision to obtain their own dock insurance, whether through this program or any other dock insurance program.

For more information on the program and/or to quote your dock, please click on the link below:

click here to go to the website