Category: Opinion

Posts by GKS

CAI continues to ignore the Constitution for the HOA constitution

CAI continues its stand against HOAs being held to the US and state constitutions.  This is a second case, the first being CBTR v. Twin Rivers, 929 A.2d 1060 (2007). Sort of an argument for secession to an independent principality status where all residents would be regarded as “expats” (expatriates).

In the Twin Rivers case, the CAI amicus brief to the NJ appellate court warned about “the unwise extension of constitutional rights to the use of private property by members [in HOAs].”

Here’s what CAI had to say in this more recent NJ case, 4 years later. Note that it’s a “putative” brief. Aside for being paid by a party, not indicated here, a putative amicus brief can bring up arguments not raised by the parties for the “edification” of the court. This appears to be CAI – NJ’s position.

Excerpts from the “Putative Amicus Curiae Brief” by CAI – NJ to NJ Supreme Court, July 27, 2011

Whatever rights common interest association members have to express themselves regarding association issues arise not from the State Constitution but rather from statute, from contractual provisions of the association’s governing documents, from the fiduciary duty owed by the association trustees, and from concepts of fundamental fairness.

The ability of members to communicate with each other thus may be said to be an implied covenant in the By-Laws, a fiduciary obligation of the organization, and/or due to fundamental fairness to enable members to participate in community affairs and governance.

A governing board’s regulations are enforceable only if they satisfy the business judgment rule, that is, they are authorized by statute or the governing documents and the board’s action is not fraudulent, self-dealing or unconscionable. [citing Twin Rivers].

Because the unit owners have other statutory, contractual and legal remedies to protect them from overreaching by the Association, there is no need to apply the constitutional free speech clause. For that reason as well, the appellate majority opinion should be reversed.

Mazdabrook Commons v. Kahn, No. 67,094, (NJ 2011) (Not yet decided).

In other words, who needs the Constitution? We have our top-down, business profiteer’s CC&Rs private contract, and laws that mimic and are almost identical to the CC&Rs. Who needs the NJ Constitution, too.

See Twin Rivers and NJ HOA free speech rights, redux.

Trayvon — Zimmerman reported to be acting for HOA

This Philly.com AP report by Mike Schneider has the evidence. Why is national TV still avoiding the HOA’s role in this slaying?

The homeowners association’s February newsletter said that Sanford police had beefed up patrols in the neighborhood and that officers on bicycles were making random checks of front yards and backyards. It was not clear how big the neighborhood watch was, but Zimmerman was the dominant force.

“If you’ve been the victim of a crime within the community, after calling the police, please contact our captain, George Zimmerman … so we can be aware and help address the issue with other residents,” the newsletter said. It added that the neighborhood watch group was looking for more participants at its monthly meetings.

A vice president of the homeowners association didn’t return a call Wednesday.

See Phily.com for the complete article.

What is an HOA’s duty of care liability to its members and to all others?

State laws, in general, hold that the duty HOA board of directors is one of good faith, and as a fiduciary or prudent person with respect to the members, where “members” does not mean an individual member.  This is based on the nonprofit, membership corporation and HOA/condo Acts that can be found in almost every state.

But, what about tortious or wrongful acts under tort law negligence, or agency law, or real estate law on an owner liability for injuries to others on his property?  And there is also the charitable volunteer laws shielding all but grossly negligent acts by volunteers.   These laws apply although you can’t find them in your CC&Rs or in the HOA/condo statutory Acts, and the average board member probably has very little, if any, awareness of their applicability to HOAs.

I write as a lay person, because no one else is writing and the national lobbying organization is not likely to tell it like it is — nothing bad about HOAs.  Not even any of your state consumer protection agencies.  With respect to the Trayvon murder incident, I wrote about some of these HOA liability issues in, “What is the HOA liability for wrongful acts by its security officers?”   Information has come forth in the media that the Retreat at Twin Lakes, the HOA, either “hired” Zimmerman or at least had knowledge, or should have had knowledge, of Zimmerman’s history.

My initial research into the question of HOA duty of care under tort law of negligent acts revealed a few court cases that shed some light on this question.  The most recent case (The Landings v. Williams, No. A10A1956, GA App. 2011) is the mauling by an alligator of an 83 year old woman on the common property of the HOA in Georgia.  The woman was visiting her family and is an “invitee” (legal term pertaining to a third-party on property held out to the public), and the appellate court denied a motion for reconsideration and upheld the HOA to have a duty of care and was negligent in this instance.

In California, several related cases have been reported by attorney Jeffrey A. Barnett in “Aberrant Behavior in Associations.”  He references the California Supreme Court holding that,

the owner’s duty to provide protection from foreseeable third party crime has always been determined in part by balancing the foresee ability of the harm against the burden of the duty to be imposed . . . . The board can be liable for failure to take reasonable steps to prevent injuries from foreseeable criminal activity.  (Isaac’s v. Huntington Memorial Hospital,38 Cal 30 112 (1985)).

The Court further held (Frances T. v. Village Green Owners Assn., 42 Cal 3d. 490 (1986), “that a homeowners association has a duty to exercise due care for the safety of residents in those areas under the association’s control.”  And that,

the property owner’s duty includes exercising reasonable care to discover whether criminal acts are being, or are likely to be, committed upon the owner’s land. If an investigation would in all probability lead to the discovery of prior similar incidents to the occurrence giving rise to an injury, constructive knowledge of such incidents is imparted to the property owner, and the owner may be liable for the damage resulting from the criminal activity.  (Phillips v. Perils of Pauline Food Production, Inc., 35 Cal.App. 4th 1510 (1995).

The HOA board cannot be allowed to justify negligence of this magnitude in the Trayvon slaying by claiming that they are just poor unpaid volunteers working for the community.  No!  HOA boards must be held accountable like all other government officials and entities.  Our public officials and entities are not given absolute immunity, and neither should that be given to HOA boards.

What is the HOA liability for wrongful acts by its security officers?

 

As a private government, HOAs are not subject to government immunity as other government entities.  Its officers are not covered by limited immunity for discretionary decisions as government officials are.    Can the HOA board escape liability because they are volunteers?  Does their D & O insurance cover such negligence as appears to have occurred in the tragic incident described below?  Or escape liability under the pro-HOA attorney’s business judgment rule defense (my emphasis)?

 

The business judgment rule thus provides significant protection to directors (and officers) from personal liability for their good faith, informed, business decisions. The presumption may be rebutted where it is shown that a director . . . did not inform himself of all information that was reasonably available, failed to exercise the requisite level of care . . . .

 

In other words, doesn’t the HOA board of directors have a duty of care as a prudent person acting in good faith, and under fiduciary duties to the HOA to properly supervise and oversee the acts of their agents?    Under agency law and tort respondeat superior liability, the answer is YES.   And how much can that liability amount to?   Millions of $$$?  I think in the following incident it could well be.

I call your attention to the killing of a 17 year-old in a gated Florida HOA by an armed HOA security guard who is not even a police officer.  Read this report and judge for yourself:  Shooter of Trayvon Martin a habitual caller to cops.  By what authority do HOA governments usurp legitimate public government police powers to stop and detain others?  A recent Illinois court says that stopping and detaining, no less shooting others, was a violation of government authority. See How far will independent HOA principalities go in usurping police powers.

HOAs must be held subject to the Constitution and the laws of the land.  They must not be permitted to hide behind exaggerated claims of “private contract” exclusions and escape application of the 14th Amendment that applies to all legitimate public government entities. They must not be permitted to escape application of their state’s constitution and its Declaration of Rights.

Good night and very good luck – the unspoken media HOA alliance

I hope that the paraphrased quote of, “Good Night and Good Luck,” the signoff by the renowned Edward R. Murrow, who was the only journalist to openly oppose the commie scare by Sen. McCarthy in the 50s, is recognized by the news media. The media of today, especially the local news media, the young and laughing personalities of the 5:00 PM news seem to be totally oblivious to important HOA bills before state legislatures. Bills that would affect some 20% of the people in across the country.

Why? It seems that they prefer to see no evil, hear no evil, speak no evil about HOAs. Or is it really corporate media making the call?

Murrow, upon leaving the CBS network in 1953 had this to say about the TV news media.

Our history will be what we make it. And if there are any historians about fifty or a hundred years from now . . . they will there find . . . evidence of decadence, escapism and insulation from the realities of the world in which we live. I invite your attention to the television schedules of all networks between the hours of 8 and 11 p.m., Eastern Time.

We are currently wealthy, fat, comfortable and complacent. We have currently a built-in allergy to unpleasant or disturbing information. Our mass media reflect this.

Are the big corporations who pay the freight for radio and television programs wise to use that time exclusively for the sale of goods and services? Is it in their own interest and that of the stockholders so to do?

Since this statement was made, the news has become highly editorialized and selective, geared to entertain. It appears that providing important matters of civic concern affecting their private property and community to their viewers is a secondary concern, and only such information as the media moguls deem to be appropriate. (For a brief history of Arizona’s HOA news coverage, see Arizona HOA News History).

There have been no in-depth analyses or debates of the HOA legal concept even at the national level, as the spread of HOA-Land is nationwide. The Sunday news talk shows, or by 20-20 and Dateline, are silent. There have been no discussions on whether HOAs, as de facto governments, should by made a government entity. Or whether state legislatures should continue to allow equitable servitude law to supersede contract and constitutional law. Or the lack of debate on the absence of “truth in HOAs” disclosures, similar to truth in lending and truth in advertising.

Or what is the legitimate government interest to allow private governments to deny the equal application of the laws. Or to allow constructive notice – just take your deed — to bind unsuspecting home buyers to the CC&Rs sight unseen. Apparently there is no need to inform buyers at closing of the great leap that they are taking into the unknown.

Doesn’t the news media understand, haven’t they been taught in journalism 101, that silence carries an acceptance of conditions and events. With no opposing views, what do they think their viewers will accept and believe. Obviously, “No news is good news.” And this silence has helped generate the national groupthink that “HOAs are the next best thing to Mom’s apple pie.” This silence helps generate an inbreeding, a closed group without outside reality testing for verification. (See the seminal work by Irving Janis, Victims of Groupthink, 1972).

Here’s what the activist group, Psychologists for Social Responsibility (PsySR), has to say about groupthink (my emphasis).

A group is especially vulnerable to groupthink when its members are similar in background, when the group is insulated from outside opinions, and when there are no clear rules for decision making. Groupthink occurs when groups are highly cohesive and when they are under considerable pressure . . . . When pressures for unanimity seem overwhelming, members are less motivated to realistically appraise the alternative courses of action available to them. These group pressures lead to carelessness and irrational thinking since groups experiencing groupthink fail to consider all alternatives and seek to maintain unanimity. Decisions shaped by groupthink have low probability of achieving successful outcomes.

And PsySR finds fault with the media for failing to inform its viewers about the alternative views of others.

Knowledge is power and we as citizens and as a nation are becoming less powerful. The American press, especially the television news media, has let down the American people and the American people have allowed this to happen. US television news is geared more toward providing entertainment than information.

We can now answer why this silence, why this unspoken alliance of no negatives about HOAs. The history of the media’s role with respect to substantive issues on HOA constitutionality, and other legalities, has gone through four stages: 1) repeat what the special interests have to say, 2) allow advocates to speak out in opposition, 3) report only favorable stories, and 4) withdrawal from the controversy. (See Arizona HOA News History).

The reason for this withdrawal by the media can be found in their realization that the HOA legal concept cannot be defended without renouncing the US Constitution and our system of democratic government. In short, any such attempt would be Defending the Indefensible. So, silence is the only option if one truly believes, in spite of the overwhelming evidence, that HOAs are better than Mom’s apple pie.

With that I say, “Good night and good luck.”   Those of you living in HOAs surely need lots of it.