BAYVIEW VILLAGE ASSOCIATION BOARD OF DIRECTORS MEETING

February 16, 2006

This meeting was conducted at the home of Nancy Kragh on February 16, 2006 beginning shortly after 9:00 AM.  This closed meeting was convened pursuant to the decision of the Board taken at the regularly scheduled meeting of February 13, 2006 and was solely for the purpose of conferring by telephone with the Association's legal counsel, Mr. William Broughton, with reference to currently proceeding litigation concerning the Association's "unification" or "reformation" project.  The teleconference lasted approximately twelve minutes.  Present at the meeting were: Nancy Kragh, President of the Board; Robert Azen, Vice President; Sherry Robinson, Treasurer; and, Bob Retke, Secretary.

            Mr. Broughton responded to a telephone call to his office.  He initiated the conversation with the observation that the discussion would constitute a privileged communication between the Board and himself.  Nancy gave each of the Board members the opportunity to pose questions to Mr. Broughton.  In response to questions asked of him he made the following points:

            1.  The Association is not entitled to a default judgment against the two defendant parties.  Their attorney, Mr. Shattuck, filed an appearance within the twenty day period following service upon the defendants.  This was a timely filing.   Simultaneous with that filing or shortly thereafter, Mr. Shattuck indicated that the defendants were prepared to enter into a stipulated judgment in favor of the Association.

            2. The language in the judgment will mirror the language in the declaration and will therefore afford the Association the same relief that a signature of the declaration would have provided.  Indeed, the stipulated judgment will constitute a judicial identification of the problem with the two master sets, recognize the original intent that there be only one, and declare their reformation into one.  This judicial determination should be advantageous to both the Association and South Bay.

            3.  There is no advantage to the Association in rejecting the offer of a stipulated judgment since the only alternative would be to go to trial.  But the judgment that would result from a favorable outcome of a trial would give the association no more than it will receive from the stipulated judgment.  A trial, however, would incur additional litigation expenses.

            4.  Under Washington law all parties to a law suit are ordinarily made to bear their own costs of litigation unless a statute makes specific provision to the contrary.  In this particular type of action there is a statute which, if the Association were to refuse a stipulated judgment and go to trial, would permit the collection of limited fees and costs, probably in a total amount of three to four hundred dollars.  On the other hand, if the Association accepts a stipulated judgment, under the statute we will not have a basis for the collection of fees or costs from the defendants.  Of course, it would cost the Association more to go to trial than it could collect in statutorily allowed cost and fees.  Going to trial would cost both the Association and the defendants more money. There is, therefore, no financial advantage to the Association in choosing to reject the stipulated judgment.

            5.  The matter should be fully resolved, including the judge's signature on the stipulated judgment within one week.

            Upon the termination of the telephone conversation with Mr. Broughton no further discussion of Association business was conducted and the meeting was adjourned.

Respectfully submitted:

__________________________________                        ______________________________

Bob Retke, Secretary                                                        Nancy Kragh, President