Huh? Ousted Malletts Bay homeowners sue themselves.

Two dozen former Colchester residents have collectively lost about $4 million in mortgages and other investments in homes they were forced to leave last month, their lawyer says.

A lawsuit currently pending in Vermont Superior Court — filed last year by Malletts Bay residents against their own homeowners’ association — hopes to recover some of that money through an insurance claim.

The lawsuit charges the association with “negligence, breach of fiduciary duty and breach of contract” in dealings with its landlord.

EARLIER: Financial wreckage remains after Malletts Bay evictions

Evicted on April 30 for violating terms of a ground lease, the former residents “are in a very, very difficult spot,” said Pietro Lynn, their Burlington-based lawyer during a court hearing Wednesday.

Superior Court Judge Robert A. Mello agreed.

So did Tom Higgins, the lawyer representing the Malletts Bay Homeowners’ Association on behalf of Hanover Insurance.

Only one former homeowner, Peter Dupuis, attended the hearing. Dupuis has said he still owes $95,000 on a home he was ordered to abandon.

The predicament is “untenable” said Higgins, who asked the judge to appoint a legal guardian, or receiver, to act on the association’s behalf.

That receiver’s legal fees, he added, should be paid for by association members — those very residents who filed the lawsuit — at rates of up to $250 per hour.

Lynn, representing the individual residents, countered that the association’s insurance carrier should foot the bill.

The courtroom stalemate persisted for about 30 minutes.

“It is the plaintiffs that have in essence sued themselves, for their own actions and their own decisions,” Higgins said.

Last month in a court filing Higgins described the former residents’ lawsuit as a “procedural and ethical log jam.”

The court action also repeats many complaints that had been filed against the association by its landlord, Mongeon Bay Properties — and led to the lease termination and evictions.

In that case, begun in 2011 and resolved last summer in Mongeon’s favor, the Vermont Supreme Court ruled Malletts Bay Homeowners’ Association failed to protect shoreline property from erosion damage.

The homeowners’ lawsuit against their associationalso echoes Mongeon’s earlier portrayals of residents’ as being unable or unwilling to work in concert.

The association had an unwritten practice that “delegated responsibility for maintenance and repair of the leased lakeshore land to individual owners” and generally “relied on homeowners to self-regulate,” according to the former residents’ lawsuit.

Judge Mello has no deadline under which to rule on the first, tentative steps towards a resolution.

Contact Joel Banner Baird at 802-660-1843 or joelbaird@freepressmedia.com. Follow him on Twitter@VTgoingUp.