Tag: court trial

AZ court holds HOA in a representative role on behalf of the members

If your HOA was involved in a legal action and won  a substantial award, who would get the money? Who should get the money? The HOA is a legal person; its members do not have title or stock; they just have a beneficial interest. (With Condos members own a specified interest and ownership in the condominium assets, as stated in their deed,  in addition to their own unit).

Foothills Reserve[1], an HOA,  is a “first impression” for me as judges would say, having not come across the issues presented in the case before. There are two aspects in this case that warrant discussion that have not been presented in the media. It involves an eminent domain taking of property that the HOA claimed diminished the value of the HOA properties, and the court’s reasoning as to who gets to keep the award money.

Eminent Domain and property values

The State of Arizona acquired Foothills property for a major highway interchange and Foothills received $6.5 million compensation as required under the law. But the HOA

“claimed damages [of] alleged diminished value of their homes as a result of factors such as noise, pollution, loss of view, and unsightliness as a result of the South Mountain Freeway., i.e., proximity damages.”

The Court added to the eminent domain’s paid  compensation an additional $12 million depending upon the outcome of the State’s appeal with respect to the “proximity damages” claim. (The brief was filed but at this time I have not been able to obtain a copy). The claim is based on ARS 12-1134(A)

“If the existing rights to use, divide, sell or possess private real property are reduced by the enactment or applicability of any land use law . . . and such action reduces the fair market value of the property the owner is entitled to just compensation from this state or the political subdivision of this state that enacted the land use law.”

Court awarded damages

With respect to the treatment and handling of the award monies, the Court gave very specific orders to the HOA and to the HOA’s attorney who was to be the escrow company for the distribution of the $6.5, and if successful the additional $12.5. It held that “the HOA represented [the owners] solely in a representative capacity,” and was ordered to send the award money to its attorney’s “State Bar Trust Account.”  Furthermore,

“Because many of the homes within the Foothills Reserve subdivision have been sold and may be sold pending appeal, this Judgment does not prevent the Court from taking action to” (i) approve a plan for reasonable notice to the 589 Owners (as some of their whereabouts may not be known). Plaintiff [Arizona] will not participate in these actions”

In short, the Court said that the HOA, “pursuant to the provisions of the Covenants, Conditions, Restrictions and Easements governing the Foothills Reserve subdivision,” was required to act in accordance with the CC&Rs — and as I interpret the statement — in the best interest of the members who have beneficial interests in the HOA corporation.

The Court reaffirms, in my view,  that the HOA exists for the benefit of its members and not for the board of directors to do as they please.

Note [1]. Arizona v. Foothills Reserve, CV-2017-010359, Maricopa Superior Court (March 4, 2022).

Donie Vanitzian’s murderer  still waiting trial after 4 years

Three days after Xmas on Dec. 28, 2017, L A. columnist and strident homeowner rights activist Donie Vanitzian died at the hands of her husband of 35 years, Tom Foster. She was 67. It was a murder-suicide incident according to the police. Foster was charged with murder and plead “Not Guilty By Reason of Insanity.” The case is still pending with a series of pretrial conferences scheduled for a number of years now, which I believe must be related to his insanity plea.

Please note that criminal court records are accessible by the public either at the courtroom or remotely by means of computers at the courthouse.  This April 22 another pretrial conference is scheduled and I am hoping someone can drop by the courthouse and access the minute/orders and bring us up to date.

The January 2018 British Daily Mail article, describing Foster as “a former British nightclub tycoon,” depicts their relationship.

Many long-time advocates will remember Donie Vanitzian (1950 – 2017) and her strident, outspoken activism displayed in her emails, in her L. A. Times column, Associations, and in her texts: Villa Appalling!: Destroying the Myth of Affordable Community Living, Vanitzian and Glassman (Villa Appalling Publishing 2002); California Common Interest Development — Homeowner’s Guide,  D. Vanitzian (Thomson-West Legal Publishers, Series: The Expert Series (2006).

* * * *

I worked with Donie from 2006 – 2016 on CLRC ‘s rewrite of the Davis-Stirling Act and in defending her, when she called from time to time at wits end,  against attacks by the Evil Empire attempting to remove were LA Times column and to discredit her in general. We fought like hell, along with Elizabeth McMahon (AHRC), to get a member’s bill of rights included in the rewrite but failed. I admired her and had respect for her knowledge and energizer bunny activism.  We chatted in private. She had a JD but kept on failing the Bar exam and I understood why. She did not accept the establishment’s version of justice and the judicial process.  She had those to-the-point views and criticisms of the Evil Empire and its loyal followers.

In 2006 with her help pretending to be doing research as an adjunct professor,  I was able to get a copy of the 400+ page, 8 ½ x 11 The Homes Association Handbook, TB #50 at a cost of $180.  We split the cost. You will not find this document anywhere, not even on Amazon.

You can read the Jan. 7, 2018 L.A. Times tribute to Donie by Andrew Khouri.  “Champion of Homeowners’ Rights”

In memory of Donie’s dedication to justice, fair play, and to protecting homeowner rights, I would like to list a number of events that I had recorded as a Commentary over the years, and  revealing a number of incidents that I had occasion to record.

·         Realtors: Are they protecting buyers or the HOA? (May 2006)

·         Common Interest Developments – Homeowner’s Guide (Thomson-West) (Oct. 2006)

·         Homes in HOAs are Lifetime Collateral for HOA Survival (Oct. 2006)

·         AB 1921: The CLRC recommended HOA special interest bill (Jan 2009)

·         Why is CAI member firm of Adams Kessler allowing criticism of LA Times HOA column? (Oct. 2011)

·         Is there a CAI game plan to rewrite HOA CC&Rs to restrict member voting powers?  (Feb. 2012)

·         LA Times column: protecting your HOA property (Nov. 2016)