Legal Update XVIII:
Two 🆕 Lawsuits Filed Against the Club –
One Appealed

May 8, 2021

It has been a couple months since our last update. We were hoping for some clarity in the various legal actions in which the Club is entangled and, while clarity does not seem to be emerging, new cases have come against the Club. The Club is now engaged in four active lawsuits at the same time! Details regarding the existing and new cases, including an appeal filed by the Club after they lost, are starting to pile up. In this email, we will update you on:

  1. The Club’s ever-expanding lawsuit against former Treasurer Carl Kennedy.
  2. Steven Borer wins Refundable Membership Fee judgment against the Club.
  3. The Sunwood lawsuit against the Club, seeking repayment of a $100,000 loan.
  4. Former Secretary Paul Sanchez sues Club, seeking repayment of $50,000+ in loans.

Pompano Senior Squadron Flying Club vs Carl L. Kennedy II

This case is marching along with no end in sight. In review, the Club’s April 7, 2020 Complaint requested that the court compel former Treasurer Kennedy to return to the Club “all corporate records in his possession or control,” even though the Club already possessed many of them or it was not the Treasurer’s responsibility to retain them. By all accounts we can see, Kennedy has more than satisfied the records and accounting request reflected in the Club’s April 7, 2020 Complaint.  Therefore, the lawsuit’s only stated objective to obtain records and information was met long ago.

As we have noted in previous correspondence, Judge Haimes told the Club during a hearing five months ago to “roll up their sleeves” and identify any records they wanted that Kennedy had not yet provided. Judge Haimes also made it clear that if the Club felt there was evidence that something improper or illegal was going on, the Club should turn the matter over to “the authorities.” The Judge summed things up by noting the issue is either just poor record-keeping of legitimate expenses or there is “something funny going on” and, if the latter, the Club should “call the local authorities” to pursue a criminal case. It is unfortunate the Club, well aware of Judge Haimes’ guidance, continues to make filings that expand their Complaint beyond simple discovery, and even make allegations beyond the scope of civil venue. Since Judge Haimes has been clear about what he will not entertain and since the Club’s Complaint was basically a “discovery” lawsuit seeking records and information, this new Club behavior has the optics of a personal agenda directed at Kennedy.

As to the level of activity in this now one-year-old case, there have been numerous Club filings over the last two months alone, suggesting there is no end in sight. One could say that the Club’s recent flurry of activity suggests they are just getting the legal billing clock warmed up. For example:

It should be noted that, among those the Club seeks to depose, former Club Secretary Paul Sanchez recently filed a lawsuit against the Club to recover over $50,000 in loans he made to the Club (more on that below). By seeking to depose Sanchez, especially so late in this Kennedy case and just a few weeks after Sanchez filed his lawsuit against the Club, one could argue that this has the optics of improper motives by the Club.

The only thing that seems certain is the Club’s already huge legal expenses will continue to rise rapidly and with no end in sight. Given the sheer volume of new material on file, it seems virtually certain there will be a “Special Set” hearing scheduled, but we are currently unaware of pending hearings.

Steven Borer vs Pompano Senior Squadron Flying Club

This trial was held on January 11, 2021 and had been “ripe” for a decision for three months. Finally, on April 14, 2021, the Court published their decision, a complete victory for the Borers. The Judge ordered the Club to refund the Borer’s $1,700 Membership Fee plus court costs and interest, totaling nearly $2,000. We reached out to the Borers to see if the Club has paid the judgment and if the matter is closed, but they informed us the Club has not paid. We since discovered that, on May 4, 2021, the Club filed a Notice of Appeal to the Florida Fourth District Court of Appeal.

We believe the membership has reason to question the Club’s decision of compounding their mounting legal fees to prolong this saga, in part because the Club’s appeal seems almost certain to draw new scrutiny about misrepresentations by the Club’s President and attorney during the trial. We have provided a link to the certified transcript of the trial.

  1. The Club repeatedly made false claims they had subpoenaed bank records. But when the Judge asked when the subpoena was issued, the Club’s attorney said he could not remember, in spite of the Judge’s statement such records would be important. (See Tr. p. 38, ln 4-18). The Club’s attorney was later forced to admit he never subpoenaed any bank records.
  2. The Club President, Greg Gilhooly, responding to the Club attorney’s question as to why some members received monies and some members did not testified, “there’s no rhyme or reason why certain members received their payment and certain members did not receive their payment.” (See Tr. p. 39, ln 15-22).
  3. The Judge then directly asked Gilhooly about this. Gilhooly testified that some other members after Borer left had received a refund. (See Tr. p. 40, ln 18-20).
  4. The Judge probed Gilhooly further, asking what the rationale was for refund decisions. Gilhooly suddenly backtracked, saying that the question was “beyond my scope,” and claimed that he actually didn’t have any knowledge of who the Club did or did not pay. (See Tr. p. 43, ln 1-6).
  5. The Judge then asked Gilhooly if the Operational Rules had been modified since 2018. Gilhooly responded that they had been amended, but claimed he was “not completely aware of what [the amendments] exactly were.” (See Tr. p. 45, 8-16).  In truth, however, Gilhooly had to have been acutely aware of all amendments since 2018 because he was Club President at all times the Operational Rules were amended since 2018.
  6. But then, immediately after testifying that he was “unaware” of all amendments, Gilhooly claimed that none of the changes were relevant to the issue before the Court. (See Tr. p. 45, ln 8-19). Despite Gilhooly claiming a lack of awareness, his personal involvement in Club policy changes is irrefutable. Gilhooly himself advanced the first key change in the first Operational Rules revision during his presidency that had the practical effect of eliminating the refundable $1,700 Membership Fee, which was the very issue before this Court.
  7. Gilhooly’s direct involvement in the revision to the Operational Rules in May 2020 is well-documented. During the appeal, the Borer’s will almost certainly solicit evidence and testimony to impeach Gilhooly’s truthfulness in sworn testimony to the Judge during trial when he claimed he wasn’t aware of changes to the Operational Rules and that none of the changes were relevant to the issue before the Court:
    • On April 22, 2020, Gilhooly himself sent a mass email to the membership noticing a Special Club Meeting to occur on May 4, 2020. Gilhooly’s stated agenda for this Special Club Meeting and associated Board discussion/votes at the meeting were the first steps in eliminating the refundable $1,700 Membership Fee.
    • On May 4, 2020, at that Special Club Meeting, Gilhooly verbalized his advocacy for the motion to “eliminate” the refundable $1,700 Membership Fee and have a $500 application fee. Gilhooly himself moved to make $499 of that new application fee non-refundable, and Gilhooly subsequently voted in favor of the motion.
    • During the Club Board meeting on May 13, 2020, Gilhooly voted in favor of amending the Operational Rules to eliminate the refundable $1,700 Membership Fee, a decision that was announced during the immediately subsequent regular Club meeting the same day.
    • The Operational Rules had not been previously amended since 2015 – long before Gilhooly was even a member of the Club.
    • This May 2020 amendment to the Operational Rules was the first, most sweeping, and radical revision to the Operational Rules during Gilhooly’s presidency.
    • Still, Gilhooly testified under oath that he was “unaware” of Operational Rules amendments and that none were relevant to this case despite being well aware that the Club’s default on the refundable $1,700 Membership Fee was the very basis of the Borer’s lawsuit.

Remember that, after-the-fact, the Club tried to excuse their repeated misstatements that they had issued a “subpoena,” saying their misrepresentations were “inadvertent,” but they only corrected the record after the Borers exposed the Club attorney’s irrefutably baseless claim he had issued a subpoena to a bank. The Club’s behavior at trial will certainly give the Borers basis to challenge the Club’s credibility during appeal. It would not be unreasonable for them to demand strict proof of each and every alleged statement of fact, regardless of how insignificant those details may seem.

The Club should do the honorable thing, drop the appeal, and just pay the judgment. They should then seek agreements for a refund schedule with all members who joined the Club under the refundable Membership Fee policy in place on or prior to May 2020. None of this should have ever happened, and the sad irony here is that the Club may face more fiscal hardship if they continue down their litigious road rather than just doing what was morally and ethically correct all along.

🆕 Sunwood, Inc. vs. Pompano Senior Squadron Flying Club, Inc.

Sunwood, Inc. filed a lawsuit against the Club on February 16, 2021 in which they seek repayment of a $100,000 loan they claim to have given the Club or about September 24, 2018. Unlike the Kennedy and Borer cases, Sunwood is represented by an attorney and, on March 26, 2021, Sunwood requested the Club to produce certain documents including (1) the bank records reflecting the deposit and handling of Sunwood’s $100,000 loan, (2) Club Board meeting minutes from June 2018 to December 2020, (3) records of the purchase of N2921S, (4) any documents supporting the Club’s affirmative defense(s), and (5) any other documents the Club intended to rely upon in defending the lawsuit. On April 26, 2021, the Club filed a notice to the Court that they provided all documents responsive to items 2-4, but objected to item 1 because they claimed it was confidential (indicating that the Club apparently did have the bank records requested by the Judge in the Borer case and, as we now know, did not have to subpoena any bank to obtain them), and said item 5 would be produced pursuant to any trial order. Sunwood actually did serve a subpoena upon third-party Bank of America seeking records of the Club bank account into which their loan was deposited, so Sunwood may already have what the Club refused to provide.

We are unaware of any pending hearings in this case.

🆕 Paul Sanchez vs. Pompano Senior Squadron Flying Club, Inc.

Former Club Secretary and current Club member, Paul Sanchez, filed a lawsuit against the Club on March 31, 2021 seeking to recover money he loaned the Club a few years ago and has been patiently waiting for repayment. It seems like the word is getting out: If the Club owes you money, they have no intention of repaying. You better take action now if you ever want to collect.

Sadly, the Sanchez lawsuit has been delayed for a month due to the actions of Club President, Gregory Gilhooly. It would appear that Gilhooly either intentionally evaded service of the summons (notice of the lawsuit) issued on April 1, 2021, or he failed to maintain the Club’s Registered Agent address with the Florida Secretary of State. In a filing on April 28, 2021, a private Process Server filed a notice in the case saying he began trying to serve the summons to the Club’s Registered Agent, Gregory Gilhooly, at the address the Club provided and is on file with the Florida Secretary of State. The Process Server’s notice describes repeated attempts to deliver the summons to Gilhooly. The Process Server said that, on April 14, 2021, when he tried to serve Gilhooly at the address on file with the Florida Secretary of State, a tenant claimed he rented the condominium from Gilhooly, but (apparently) would not accept service of the summons. This necessitated an alternate method of service.  On April 28, 2021, the summons was served at the home of then Club Vice President, Tor Holm. It seems more than appropriate to observe the irony of Club officials claiming all manner of misdeeds by others while simultaneously demonstrating inability to maintain minimum administrative records required by law in Florida.

Conclusion

As has been previously stated, it is increasingly evident that the Club has embarked on a strategy to simply ignore all debts that do not meet their personal opinion as to how a financial obligation is created. Sadly, the Club will likely never again be able to operate with informality and verbal agreements, as it had successfully enjoyed for decades. This new breed of leaders arrived on the scene and immediately condemned such casual business practices as if their condemnation was proof of a criminal conspiracy. To the best of our knowledge, until April of last year – for over 50 years – the Club never sued any current or former members, and no current or former members had ever sued the Club. However, in the last 12 months, the Club has been dealing with five lawsuits, four involving current or former members, and is now alleged to have squandered some $50,000 from the Club’s treasury in doing so.

It is beyond us why the current Club membership is sanctioning such behavior from Club officials. Make no mistake, the Club membership has the final say in how the Club is run, and so ultimately YOU are responsible. As long as this conduct occurs and the membership takes no action, it is fair to say the membership is complicit.

Hot News

Just as we were preparing to send this, we learned that Club Treasurer Andrew Bilukha has resigned and that the Board voted in a new Board member, and then “rearranged the deck chairs” of the Officers. This behavior is remarkably similar to what happened last year in March 2020, and then again in May 2020. The Officers actively campaigned for positions with terms of a year, and the membership elected them in good faith based on their pledges that they were willing and able to serve. But then, just a couple months after being elected, somebody resigned and the vacancy was immediately filled by Board vote. Just like in 2020, it was again announced that a vacancy had been both created and filled, again with no prior notice to the membership or solicitation of candidates. There are too many aspects of these events to unpack and discuss in this newsletter, but certainly enough for an informed membership to arrive at reasonable conclusions.