Tag: due process

Business Judgment Rule: an outstanding con job!

In short, the business judgment rule (BJR) is an unconstitutional delegation of legislative powers to a private entity.  The rule essentially allows the judge to defer to the HOA board as best to decide the matter,  denying the due process of law for citizens to be heard in court.  It is an unequal protection of the laws! However, the lawsuit was before the court to obtain an independent and supposedly unbiased application of the law. Think about it! The court is rubberstamping the BOD’s decision. Say what!

It’s nothing more than an understandingly successful con job fostered upon HOA members.  The BJR is a poster child for the need for advocates to be fully educated about the laws, government, and the courts.  STOP THE CON!

First, be aware that you will not find “business judgment rule” anywhere in state statutes and codes, that’s why it’s referred to as a “rule.”  What the reader will find are references to the duties and obligations of directors and officers to be fair, without conflicts, and acting in the best interest of the HOA. This is the basis for the misguided presumption.

Let me explain as best as I could and keep this complex issue as simple as possible. The courts’ adoption and continuing support for  the BJR avoids and ignores several constitutional issues at play: 1) delegation of legislative powers, 2) the HOA as a state actor, functioning in the place of municipal government, and 3) the judicial scrutiny doctrine testing the constitutionality of a laws. 

Read the full paper here: the con job

The Collected Writings TOC 1

Announcing “HOA Constitutional Government: the continuing battle,” is now available on Amazon as a Kindle eBook. See https://www.amazon.com/dp/B0CSC5LCY8. Paperback to follow.

I have included a table of contents of 56-issues reflecting perspectives, views, opinions, and documentation that point the way to HOA substantive reforms.  Readers may not agree, accept, or like what is stated in these issues that have been essentially avoided over the years; they are of immense educational value  and necessary for a realistic picture of HOA-Land. Part 2 of the TOC to follow.

See: HOA Constitutional Government: collected posts.

I.  On Reform Legislation . . .

d.  Decl. of Indep. from HOA government — 2000 . . .

e.  A united, national front to HOA reform legislation (2023)      . . .

f.   Two distinct levels for HOA legislation (2019)   . . .

g.  Analysis of The Homes Association Handbook (2006) . . .

h.  America’s homeland: HOA law vs. Home rule law (2022)        . . .

i.   Preface to HOA Common Sense (2021)    . . .

j.   HOA Common Sense, No. 1: The New America of HOA-Land (2013) . . .

k.  the NJ Supreme Court opinion in the Twin Rivers HOA case (2008) . . .

l.   CAI firmly supports the New America of HOA-Land (2011)     . . .

m. Authoritarianism in America; authoritarianism in HOA-Land (2022) . . .

l.   AZ bill, SB 1148, seeks to restore OAH adjudication of HOA disputes (2011) . . .

m. Arizona’s new “Take That George!” law: defend HOA statutes (2010)           . . .

n.  AZ Rep. explains failure of HOA reform legislation (2013)      . . .

o.  The Florida (HB 1397): police powers and the loss of fundamental rights (2009)  

p.  Landmark FL HOA law imposes criminal conduct (2023)       . . .

q.  Colorado senator’s guide to effective HOA legislation (2013)  . . .

r.  NC reform bills need your support (2023)          . . .

s.  North Carolina: second battleground for people’s rights in HOAs (2013) .  .

t.  CA bill AB 1410 –  a step backwards for HOA homeowner rights (2022)       .  .

u.  Substantive SC HOA reform bill – end foreclosure (2019)       . . .

v.  Effective HOA reform legislation (2023) . . .

w. HOA member Declaration of US and State citizenship (2015) . . .

Activist judge interpreting the law

I have presented my case many times, saying that many judges have become activist and in doing so have violated long-standing legal doctrine on the interpretation of contracts and laws.

“The Constitution should be construed so as to ascertain and give effect to the intent and purpose of the framers and the people who adopted it. We give effect to the purpose indicated, by a fair interpretation of the language used, and unless the context suggests otherwise words are to be given their natural, obvious and ordinary meaning.”

. . . .

An example of this misconstruing of the law — of the 14th Amendment, Section 3 —  

can be seen in the controversial Trump court battles.

“No person shall . . . hold any office, civil or military, under the United States [who]  shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof. But Congress may by a vote of two-thirds of each House, remove such disability.”

This CNN opinion by Dean Obeidallah quotes Colorado District Court Judge Sarah Wallace:

“[Wallace] ruled last week that former President Donald Trump ‘engaged in an insurrection’ on January 6, 2021, as defined by Section 3 of the US Constitution’s 14th Amendment. She didn’t disqualify Trump from the state’s ballot, however, finding that the ‘insurrectionist ban’ in the 14th Amendment does not apply to US presidents.”

Wallace added,

“At the time the 14th Amendment was ratified, an insurrection was ‘understood to refer to any public use of force or threat of force by a group of people to hinder or prevent the execution of law.’  The ‘events on and around January 6, 2021, easily satisfy this definition of ‘insurrection.’” [However,] ‘for whatever reason the drafters of Section Three [of the 14th Amendment to the US Constitution] did not intend to include a person who had only taken the presidential oath.’”

. . . .

To clarify, her decision is unreasonable and lacking in legal support. She interjects her opinion, my view, that she didn’t think the drafters intended to include the President although the wording of this 14th Amendment, Section 3 speaks to “no person.” That’s plain and simple.  If, as many courts have held when attempting to assert a missing clause into the law, “if the legislature wanted the clause it would have added the clause,” rejecting the lame defense that it was simply an oversight.

Do we need a private, parallel government? Why?

The answer to the title question is a resounding, NO!  Here are the reasons why not. In essence, all those state HOA/Condo Acts and statutes establish and permit a parallel system of local government— that regulates and controls the residents within its borders —  to function outside the Constitution.

First, it’s time for state legislatures and the judicial system to acknowledge their   willful blindness[1] that the HOA legal scheme, with its insistence and reliance on  equitable servitudes, that “the HOA CC&Rs have crossed over the line between purely property restrictions to establishing unregulated and authoritarian private governments.”  

Professor Evan McKenzie said it quite clearly some 29 years ago in his 1994 book, Privatopia, “”CIDS [HOAs] currently engage in many activities that would be prohibited  if they were viewed  by the courts as the equivalent of local governments.”[2] It remains true today!

Second, Why are there private HOA governments when there is home rule, charter governments?[3] All the states have a version of home rule that varies in the degree of independence granted to a local governments and under what terms. Under the Home Rule doctrine local communities are permitted a large degree of independence even to the extent that state legislative action is not necessary. What is Home Rule? In simple terms, it is a grant of authority and power — of independence — from the legislature to local communities.

There are no legitimate reasons why HOA governed communities cannot exercise effective and productive self-government while  being subject to constitutional law under home rule statutes.

Third, Just what are the valid reasons for sporting and encouraging private government by the state?  Answer: there’s no legitimate and valid reason for private, local government to exist outside the constitutional framework.  Home rule doctrine existed long before the advent of the HOA legal structure in 1964. That is not to say that it would have solved all problems and be a perfect government, but it would be a government under the Constitution, part of the Union,  like all other forms of local government.  

The constitutionality of statutes is subject to the doctrine of judicial review and scrutiny.[4] I have yet to see any valid government justification in support of the HOA legal scheme that deprives citizens of their constitutional and fundamental rights, which requires meeting the strict scrutiny test. Under strict scrutiny, “the government must prove that the challenged law is both narrowly tailored and the least-restrictive means available to further a compelling governmental interest.”

To argue, as have the states and pro-HOA supporters, that state and local government have an interest in reduced expenditures and the establishment of desirable community living does not carry weight. There are valid arguments that the HOA legal scheme denies fundamental and constitutional rights under the 14th Amendment,[5] which requires the application of strict scrutiny.  It has not been tested!

It is no wonder that state legislatures, CAI, and pro-HOA supporters avoid the issues of HOAs as de facto governments, and questions of judicial review.

The 64-dollar question is: Why do HOAs continue to exist and grow? Could it be, like drugs, there is widespread demand? Or is it because of the collaboration — as a group functioning as a monopoly[6] —   of CAI, the builders/developers, real estate agents, etc. to restrict housing solely subject to private governments? Is housing in HOA-Land equal to public, free-market housing?

Adopting the US Supreme Court’s decision in Brown,[7] “’separate but equal’ has no place. Separate educational facilities are inherently unequal.” Separate HOA/condo housing under private governments is inherently unequal and a violation of the 14th Amendment’s Equal Protection Clause.

The answer will be more discussed in more detail in a subsequent commentary.

NOTES

[1] Willful blindness is a legal concept that describes the state of deliberately ignoring or avoiding facts that would make them liable for a wrongful act. 

[2] Evan McKenzie. Privatopia: Homeowners Associations and the Rise of Private Residential Government, Yale Univ. Press, 1994.

[3] See America’s homeland: HOA law vs. Home rule law.

[4] See Judicial Scrutiny standards judge claims of constitutionality

[5] In general, see Desert Mountain opinion (AZ) constitutionality – part 2,  and Law review on CC&Rs constitutionality – part 1.

[6] A monopoly can be “a company or group having exclusive control over a commodity or service: ‘areas where cable companies operate as monopolies.’”

[7] Brown v. Bd of Education,  347 U.S. 483 (1954).

Advocate files AZ supreme court amicus brief fighting unjust laws

We must make the injustice visible.

We must provoke until they respond and change the laws.

(Mahatma Gandhi)

An AZ supreme court amicus brief was filed by Jonathan Dessaules on behalf of the Arizona Homeowners Coalition in CAO v. Dorsey (CA-CV 21-0275) (Waiting for the Court’s decision).  Dessaules argues that the statute in question, ARS 33-1228, conflicts with the Arizona Constitution, Article 2, Section 17, and “a statute cannot circumvent or modify constitutional requirements”.

The intricate legality and constitutionality of private entities—the HOA — taking of another party’s property rights – a homeowners — is discussed in detail.  I frequently quote the brief to ensure accuracy in my review.

ARS 33-1228 “allows condominium associations to force the sale of a nonconsenting owner’s property for someone else’s private use” and is the justification for investors to shut down the HOA. However, “When a state statute conflicts with Arizona’s Constitution, the constitution must prevail.” Furthermore, it is argued that “The legislature may not enact a statute which is in conflict with a provision of the Arizona Constitution.” Consequently, the Legislature lacked the authority to enact 33-1228.

(Stay with it!) The brief goes on to say that ARS 12-1131 provides that “eminent domain may be exercised only if the use of eminent domain is authorized by this state, whether by statute or otherwise, and for a public use as defined in this article.” Public use does not allow for “forcing the sale of a holdout owner’s property to be used by the investor who owners a majority of the other units within the condominium.”

The HOA, Dorsey, counterclaimed that it wasn’t a sovereign and § 1231 doesn’t apply to private organizations, ignoring § 12-1111 that permits individuals the right of eminent domain takings. Consequently, again, it is argued that 12-1228 is invalid.

An additional powerful argument is raised that the Declaration is an adhesion contract. “A declaration is generally a ‘standardized form offered to consumers on essentially a take it or leave it basis.’” And to my long awaited legality, the brief states that “Without the contract even being presented to the purchaser for their signature,” the contract is imposed on the buyer.

Again, we see the  doctrine of “reasonable expectations” as applied to adhesion contracts. “Contracts of adhesion will not be enforced unless they are conscionable and within the reasonable expectations of the parties.” Dessaules maintains that including unconstitutional  statutes in the Condo Act is “substantively unconscionable.” Furthermore, as I have argued many times, “a waiver of a constitutional right is not within reasonable expectations of the parties.”

This is a solid amicus brief by an advocate fighting for HOA reforms to protect members’ rights and privileges.  It does not pretend to accept unjust laws.

* * * *

I would like to thank Dennis Legere, Arizona Homeowners Coalition,  for hiring attorney Jonathan Dessaules to file this important, to the point, excellent amicus brief.