Category: Opinion

Posts by GKS

Arizona Attorney General will not prosecute for HOA justice

In response to a homeowners complaint, the AG’s office, Consumer Protection and Advocacy Section, replied,

Unfortunately, the problem you complained about is not within our jurisdiction.  Our office enforces the Consumer Fraud Act, however, the Act does not allow our office to pursue private disputes. Our office represents the state of Arizona and cannot act as a private attorney for individual citizens.

 

Understand that under the legalities here, the AG’s authority to deal with fraud is limited to “consumer fraud”.  Carefully reading the AG’s authority on its website[i], I found that fraud is defined solely in terms of the “selling or advertising“, which precludes its involvement in many of the HOA offenses and abuse.  Fraud, itself, is basically defined in terms of misrepresentation and false statements.[ii]  Consequently, homeowners must look elsewhere within the Attorney General’s Office for possible assistance. 

The Criminal Division[iii] has authority to  “protect the citizens of Arizona by successfully investigating and aggressively and fairly prosecuting criminal cases within the State of Arizona.”  Its Criminal Prosecutions Section contains the Fraud and Public Corruption unit, which “prosecutes white collar crime and fraud by individuals . . ..”  (Nothing further is mentioned of white-collar crime on the AG’s website). Note the distinction between “white collar crime” and “fraud”.  White-collar crime, as stated by the Gillespie Law firm, is a broad label, 

White-collar crimes typically refer to a type of financial, corporate, or economic crime often committed by employees or professionals using deception, as opposed to violent crimes that involve force. Most people who think of white-collar crime think of stock market and business fraud cases. However, white-collar crime involves a wide variety of criminal offenses.[iv]

 

Gillespie then lists the following as white-collar crimes:

1.      Bribery A.R.S. §§ 13-2601, et. seq. 

2.      Embezzlement, Theft, and Larceny A.R.S. § 13-1802 

3.      Extortion A.R.S. § 13-1804.  “Extortion” is a type of theft involving taking property or services through the use of a threat.  A person commits extortion when they knowingly 1) obtain or try to obtain something by threatening to: Cause damage to property, 2) Expose a secret that will subject anyone to hatred, contempt, or ridicule, or to impair their credit or business, or 3) Cause anyone to part with any property.

4.      Fraud Schemes A.R.S. § 13-2310[v].  A person commits a “fraudulent scheme” if, through the use of a scheme, they knowingly obtain any benefit by using false pretenses, representations, promises, or materials omissions.

In order to get the Attorney General to take your case, you need to file a complaint according to the above, with  evidence that can be taken to court.[vi]  Will he take your case?  In spite of the fact that he’s running for Governor, based on his prior unwillingness to defend homeowners against HOA abuse, and his failure to defend the OAH adjudication of HOA disputes, not very likely.  The AG has the discretion to declare, and will most likely do so, declare your complaint a private matter, a tort — a civil, not criminal wrong.[vii]  And asked if his office is to do justice, unlike the Dept. of Justice, he will probably say, no, it is to defend the state government. 

The AG will once again say  (paraphrasing), “Go ye unto the legislature, the sovereign of the state, and seek redress of your grievances.”   We must reply, “Will you come forward and support our cause against HOA abuse and injustice?”  And we must remind him that, “In every stage of these oppressions we have petitioned for redress in the most humble terms: our repeated petitions have been answered only by repeated injury.” [viii]

 Notes

[i] http://www.azag.gov/consumer

[ii] “A knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his detriment“, Black’s Law Dictionary.

[iii] http://www.azag.gov/criminal

[iv] ARIZONA THEFT / WHITE COLLAR CRIME, The Gillespie Law firm; the law firm is a criminal defense firm  (http://www.craiggillespie.com /theft.html).

[v] “Any person who, pursuant to a scheme or artifice to defraud, knowingly obtains any benefit by means of false or fraudulent pretenses, representations, promises or material omissions is guilty of a class 2 felony.”

[vi] “Fraud must be proved by showing that the defendant’s actions involved five separate elements: (1) a false statement of a material fact,(2) knowledge on the part of the defendant that the statement is untrue, (3) intent on the part of the defendant to deceive the alleged victim, (4) justifiable reliance by the alleged victim on the statement, and (5) injury to the alleged victim as a result.” The Free Legal Dictionary,  (http://legal-dictionary.thefreedictionary.com/fraud). 

[vii] Viewing HOA injustice as a civil matter sets public policy against the homeowner in that the state is not interested in violations of the law with respect to HOAs. In general, a crime is an offense against society, whereas a tort is a civil wrong against a person. See Tort Law for Legal Assistants, Edwards & Edwards, eds. p. 6 (Thomson 2004).

[viii] Declaration of Independence.

How good are the CAI member HOA attorneys?

Ever wonder if the CAI member HOA attorneys are worth their fees? How good are they? What’s their Win – Loss stats? This data is very difficult to come by from the trial courts, and even from the appellate courts where records are kept. Of course, we wouldn’t want to get these stats from CAI unless their source data is provided for independent inspection, which is a problem based on the recent CAI “satisfaction surveys” lacking in such material disclosures.

Fortunately, detailed records are available from the Arizona Office of Administrative Hearings (OAH) where proceedings are recorded and decisions posted on the internet. For the short period of 28 months (from September 2006 to February 2009), this state agency was permitted to adjudicate HOA disputes, and decided 52 out of 66 petitions.  Although this is a limited sampling not related to civil court cases — where the Rules of Civil Procedure come into play against the Pro Per — these OAH hearings present a leveling of the litigation playing field. An analysis of these cases will provide a good clue to the litigation value of an HOA attorney, and to whether or not engaging a CAI member attorney resulted in improved success.

A colleague gathered the data, which showed the following prevailing party percentages:

HOA                    53.8%
Homeowner   40.4%
Split                      5.8%

This is quite surprising given that in almost all the cases the homeowner was a Pro Per and the HOA was represented by an attorney; and given the fact that the state laws are clearly pro-HOA, and the governing documents amount to an adhesion contract in favor of the HOA. What the percentages seem to be saying is that “black letter” provisions of the statutes or governing documents — it’s right there, in black and white — were violated by the HOA. That an unambiguous provision had been violated and yet the HOA and its attorney failed to “own up” and voluntarily correct these obvious violations. That it took a hearing by the victimized homeowner in order to obtain justice.

The question before us to be answered is: did using a CAI member attorney improve the stats? Roughly 38% of the petitions, 20 out of 52, involved one of four CAI member attorney firms, with

CAI prevailed                            55.0%
Homeowner prevailed           45.0%

Intuitively, and supported by statistical analysis, engaging CAI member attorneys had no impact on the outcome of the hearings. We then ask: What role, if any, do these attorneys play in HOA disputes? And the answer, partly addressed in the highlighted sentence in the earlier paragraph, and from the prolific advisories from one CAI member firm, Carpenter Hazlewood, is: to seek and promote loopholes and technicalities in the law and governing documents that would lead to adversarial litigation.

Arizona's new "Take That George!" law: officials don't have to defend HOA statutes

This law was introduced, I firmly believe, as a result of my repeated chastising of our elected officials, over the past year, for their failure of to defend the constitutionality of the statutes that permitted the Office of Administrative Hearings (OAH) to adjudicate homeowner association disputes.  I take it as a feeling of guilt that this bill was introduced.

The adjudication of HOA complaints by OAH had leveled the playing field somewhat, providing attainable —”affordable”, to use a term used to defend the state’s protection of HOAs — justice, where the homeowner could go before an independent tribunal, without a lawyer and without the need to know the 100 odd rules of civil procedure contained in some 200 pages of “legalize.”  The constitutionality of the statute was not defended by the Attorney General, or by the legislative leadership, resulting in a superior court disgraceful default decision. A homeowner has no place to go, not even to the OAH where he could once hope to have found justice.  In the short history of OAH, pro per homeowners won 42% of their petitions against their HOA and its attorney.

This total disregard of my letter follows a flat denial, without explanation, of my February 11, 2009 Motion to Intervene, which was an abuse of discretion by Judge McMurdie.  Perhaps it was because I had included the Attorney General’s defense of the constitutionality of the statute in a prior case which would have caused a trial and an embarrassment to the AG), LC2007-00598 (Waugaman), given that the AG and Legislature now failed to defend the statute in this case. (See The State of Arizona will not protect buyers of HOA homes!, Feb. 29, 2009).

Ariz. Sess. L., Ch 105 (2010).
HB 2774 addition:

ARS 12-1841

D. THIS SECTION SHALL NOT BE CONSTRUED TO COMPEL THE ATTORNEY GENERAL, THE SPEAKER OF THE HOUSE OF REPRESENTATIVES OR THE PRESIDENT OF THE SENATE TO INTERVENE AS A PARTY IN ANY PROCEEDING OR TO PERMIT THEM TO BE NAMED AS DEFENDANTS IN A PROCEEDING. THE ATTORNEY GENERAL, THE SPEAKER OF THE HOUSE OF REPRESENTATIVES OR THE PRESIDENT OF THE SENATE, IN THE PARTY’S DISCRETION, MAY INTERVENE AS A PARTY, MAY FILE BRIEFS IN THE MATTER OR MAY CHOOSE NOT TO PARTICIPATE IN A PROCEEDING THAT IS SUBJECT TO THE NOTICE REQUIREMENTS OF THIS SECTION. 

 

 

CAI continues the civil vs. private HOA government "turf wars"

Arizona CAI is at it again, fighting every little “turf war” to control the powers and authority over the members of the community, regardless of what the common law, real estate law, or constitutional law may hold.

HB2345

We go from controlling parking issues on public streets to restricting access to one’s home. Under the law, every owner has the right to ingress and egress to his home, and the right of visitors and family members to have access to his home.   Under the right to advertise the sale of a home, Scott Carpenter has spied a loop-hole in the new HB 2345 bill signed into law, where is advises his faithful followers that, you know, you can prevent open houses in gated communities. He is cautious to state, “But nothing in HB 2345 requires an association to provide access to potential buyers when the access protocol in place would not permit their entry.”   And he stops there without qualifying things like, signing in, like placing a sticker on the dash, etc., but leaves readers to the false conclusion that they can stop open houses in some way. 

This is an outright failure to recognize the intent of the legislature, and to “stir up the pot”, knowing full well that any such harassment of potential buyers and visitors would be seen as an outright “restraint on alienation” under property law —  a clause that seeks to prohibit the recipient from selling or otherwise transferring his interest in the property.

HB 2768

Here, Carpenter attempts to muddle the waters with respect to transfer fees.  He says to the HOA boards, go forth and amend your CC&Rs (and we will be glad to show you how), at our usual fee) to make the fees for reserve purposes a “legitimate” covenant. “By virtue of the exception, HB2768 will not prohibit the enforcement of “transfer fee covenants” in governing documents if the fee or charge is to be used “exclusively for the purpose authorized in the document”   And Carpenter also points, hey guys, collect these fees for recreational purposes, which the law still allows.  Once again, ignoring the intent of the legislature on behalf of their separatist, secessionist private principalities.
 

These “turf wars” will continue  until the legislature finally takes a strong hand to properly restrain these lawyers and HOA boards, and assert the supremacy of civil government over contractual, private governments that reject the Constitution.

Source:  http://blog.carpenterhazlewood.com/scott/ HB 2345 and HB 2768.

The Lament of the CAI against a pro-homeowner bill

Hear the lament of the California CAI LAC about a pro-homeowner bill.

  • AB 2502 would give financial incentives for owners to unfairly manipulate their legal obligation to pay HOA assessments by refusing to pay for approximately one and a half years or up to $3,600 until the association can take appropriate legal action for that owner to pay. This will cause financial havoc for HOA’s. Owners should never be given a right to intentionally stall the payment of debt.
  • Owners should not be given the right to unilaterally change the payment plan that was lawfully entered into by and between the owner and HOA. There would be no reason to enter into a plan if an owner could change it at will.
  • HOA’s must be able to retain counsel or other professionals to assist them in payment plans. The bill permits HOA’s to retain experts IF the owner grants permission to do so. HOA’s, just like owner’s must always be given an ability to retain professional assistance.
  • Creditors, like HOA’s, need to use collection agents periodically. Those agents, like other businesses, require payment. This bill makes it extremely difficult to pay those agents and as a consequence, HOA’s will rarely use them.

 

This is a desperate attempt to turn homeowners against their  own best interests, and to support the oppressive,  authoritarian HOA de facto government!   Hey CAI guys, what about adhesion contracts; “no need to see” constructive notice to bind one to a contract and to surrender one’s rights, freedoms, privileges and immunities; kangaroo court due process procedures; the right to subsequently alter the contract at purchase time without the buyer’s consent; unfair election procedures; and no enforcement against violation by the HOA government?  What about these gross injustices? 

To claim that homebuyers openly and fervently embraced this  treatment by the HOA is an insult to the good people of California.  It is grossly disrespectful and demeaning. 

 

This Grassroots Alert email alert ends with the true objective of CAI:  

Thank you for helping us preserve association solvency!!!  [and our income stream]