Tag: due process

Arizona court protection of CAI member attorneys

The Arizona case, DC Lot v. Maxwell & Morgan, against a CAI HOA attorney regarding some $650,000 in missing HOA funds is closed or sealed.  A court order is needed to unseal it. Even the court ordered closing and the reasons for its action are sealed. The public is being kept in the dark.  Why?  Now I can understand that maybe there are investigations or discoveries going on that certain parties shouldn’t know about, but this is a civil case, not criminal.

Remember, this is a case brought by the court appointed Receiver and not by just anybody else. The CAI attorney law firm of Maxwell & Morgan is being sued for aiding & abetting and disgorgement, among other things. Maxwell & Morgan are still practicing law. Maxwell has had a few sanctions against him. Why the secrecy?

The Arizona Capitol Times covered the underlying story in 2009, so there’s no secret anymore. The secret is the fact that a CAI member attorney is being sued for some serious wrongs. And if by some chance it is felt that open court records would diminish DC property values and that’s the justification for complete secrecy, something is rotten in Denmark and in Arizona.

Rule 123 of the Arizona Rules of the Supreme Court addresses the closing, “sealing,” of case records. R 123 allows the judge to seal it on his own, in the interest of the public, or upon motion of a party. What is the public interest being served here? Generally, the closing of a case, excluding the usual personal info like social security number, proprietary business data, etc., relates to juvenile and criminal proceedings.

R 123(c)(1) Open Records Policy. . . [T]he records in all courts . . . are presumed to be open to any member of the public . . . . However, in view of the countervailing interests of confidentiality, privacy or the best interests of the state public access to some court records may be restricted . . . . (My emphasis).

(d) Access to Case records. Upon closing any record the court shall state the reason for the action, including a reference to the statute, case, rule or administrative order relied upon.

It appears Rule 123(d) has been violated as there is no public record of the seal order. R 123(d) can’t mean that the reasons for closing records are to be kept secret, too, can it? Now, that would require extreme level of public protection, maybe national security level, to “erase” all the records, don’t you think? The case just “disappeared like smoke in the wind,” to quote colleague, and only because I had obtained the case number way back when has this fact come to light! What could justify a complete blackout?

It has similarities to another CAI member (Carpenter Hazlewood) case in which the Maricopa County superior court judged failed to give reasons for denying my motion to intervene (required so I could appeal the denial) in the OAH statute constitutionality case (Phoenix Townhouse v. AZ DFBLS), which was decided by default. And then all my submissions to the court were ordered stricken and the clerk was ordered not to accept any further materials from me. That material contained evidence that the “real person in interest” no longer existed as he no longer owned a lot in the HOA in question. Yet the decision was allowed to stand.

I am seeking assistance from concerned parties to help unseal these records, which smells of HOA attorney protection, and denying the people their right to public disclosure.

References

What happened to the AZ lawsuit against HOA attorney for aiding & abetting missing $650,000?

AZ Supreme Court accepts advocate’s amicus brief in challenge to HOA statute

Amicus

Dare oppose the Will of the HOA, you will pay for it!

Local Phoenix Ch. 3, azfamily.com, (HOA forecloses on Mesa homeowner) did an excellent job in bringing out what goes on in HOA-Land where HOAs are protected by public policy.   In this incident, a homeowner builds a wall for security, as she stated, and gets fined by the HOA.  In a default judgment for an injunction, the CAI HOA attorney obtained some $16,000 in fees for less than 9 months’ work.  This incident expanded to the HOA foreclosure for nonpayment of assessments.

In the foreclosure, a simple filing asking the judge to grant the sale — unlike other disputes over nonpayment of a debt, there are no justifiable excuses not to pay HOA dues — the HOA attorneys tacked on another $12,000 in fees, for a total of some $28,000 in fees.  The HOA got a total just $3,300, of which $1,700 were for unpaid assessments.

If this was in the public arena, and a fine was permitted, there would be no attorney fees paid.  If the state foreclosed for nonpayment of taxes, the equivalent of HOA-Land assessments, there would be no attorney fees.  But, the HOA attorneys are allowed to walk away with fees far in excess of the fines and unpaid “taxes.”  I call it legalized extortion.  

The extortion consists in knowing the homeowner does not have the funds or power to oppose the HOA, and the HOA is not punished under law for any wrong doing.  So the HOA sues, knowing that it has an  80% of getting a default decision, or the homeowner pays the money demanded.   Any different from banana republic justice?    The problem becomes out of control when the homeowner falsely, but innocently, believes  the HOA can’t do anything to him. He lets it go until sued for the typical amounts as involved in this incident.

The common pro-HOA, but  misleading, argument on the acceptance to be bound to the CC&Rs has no merit.  It  ignores the questions of fraud and misrepresentation when buying an HOA controlled home.    For example, is the buyer told that the “sacred” CC&Rs at his closing can be modified without his consent, making them a meaningless piece of paper?  That this ability means that his neighbors control what he still thinks is his private property?    Is the  buyer told that his house is collateral to the HOA, and he must pay no matter, even if  the HOA fails to perform or violates the CC&Rs; or that the CC&Rs are a binding contract whether or not he has signed or read them?  And what about the agent who makes the buyer sign the purchase contract and initial all the contract pages, but requires nothing equivalent from the buyer regarding that second, briefly mentioned in passing, CC&Rs contract?   Look up the definition of fraud and misrepresentation.

In the above AZFamily.com story, when  the homeowner appealed   the attorney fees, the judge approved them writing that, “The Court notes in passing that the short answer to defendant’s objection to the amount of attorneys’ fees is that they were caused by defendant’s intransigence.”  (Minute entry of 3/5/2012, CV 20120-12322).

“Intransigence” is a loaded word!   It denotes firmness and sticking to your guns, even stubborness.  What the judge has done here is to punish the homeowner for standing up for her rights and her home against the banana republic justice illustrated above.  Dare oppose the Will of the HOA and you will pay for it!   Big time!  And he rewards the attorney, without any discussion of the role the attorney played in the delays.  What about the 3 minute entries over 2 years that basically said, “nothing is happening for the past 150 days with the suit”, about which the attorney could have prevented by seeking a decision.  But that would cut his fees, wouldn’t it?  The unreasonable prolonging of law suits violates  R11(a) of civil procedure.

Is this the public policy of the State of Arizona?   Support the HOA and its attorney against the people of Arizona who have been misled about HOA-Land?  Four bills that would have held the HOA and its board accountable under penalty, and which would have provided for “clean HOA elections,” failed to become law this past session.

What happened to the AZ lawsuit against HOA attorney for aiding & abetting missing $650,000?

In 2009, homeowners in DC Lot Owners Association obtained a court appointed Receiver to find out what happened to some $650,000 in missing HOA funds. CAI members, and CCAL members, Maxwell & Morgan were the HOA attorneys.  (See Arizona Capitol Times Oct. 7, 2009 article, Casa Grande HOA stripped of powers over accusations of theft and fraud).

In 2010, the Receiver then filed suit against Maxwell & Morgan and Charles Maxwell, personally — DC Lot Owners Assn v. Maxwell & Morgan, CV 2010-004684 — charging aiding & abetting, disgorgement, and breach of ethical duties among other charges.  As of this date, some 18 months after filing the complaint, the Pinal County, Arizona Superior Court shows no record of the case number, or of a complaint being filed naming DC Lot or Maxwell & Morgan as parties.  There is no record of a minute entry order to seal the court records, leaving the public totally ignorant of this important case involving HOA attorneys.

After some persistence, it was determined from a call to the Pinal County Clerk’s Office that the case was indeed sealed, no date given.  Why is the public being shut out?  Who ordered the sealing of the records?  The Judge?  Or was it pressure from the national HOA lobbying organization to squelch bad publicity about one of its self-declared, honored CCAL attorneys?  There is no legitimate reason for sealing the records of this case.  What happened to the $650,000?  Who is responsible for the loss?  The public has a right to know!

I am pursuing the matter seeking the help of media organizations to unseal the records.

NV agency opinion: stop making homeowners pay HOA attorney fees

The purpose of the homeowner in an HOA is to pay and pay and pay.     Donie Vanitzian, a homeowner rights advocate and author, said it back in her 2002 book, Villaappalling! Destroying the Myth of Affordable Community Living,

When homeowners move into [an HOA] they have only: Obligations to pay out money. . . They also pay out when and if the board tells them, ‘You have to pay’  . . . . Should you disagree with the board’s order (agenda or whim) to pay, you still have to pay to prove that you don’t have to pay.  (P. 296).

This message was recently taken to heart by the Nevada Real Estate Dept. (RED) in response to a request for an advisory opinion by homeowner rights advocate, Jonathan Friedrich.  This issue is a common, and one example of the broader issue of, “the homeowner pays and pays everything.”  Friedrich asked: “Does NRS 116.3115(6) give an association the right to charge a unit’s owner an attorney fee when the association’s attorney attends a hearing against a unit’s owner?”

The RED concluded,

Exercising the due process right to a hearing on an alleged violation under NRS 116.31031 is not in and of itself “misconduct,” “willful misconduct,” or “gross negligence.” Associations should not be using NRS 116.3115(6) to pass on any attorney fees resulting from a hearing, especially where the association imposes a fine to the maximum extent possible under NRS 116.31031. NRS 116 specifically provides for attorney’s fees to be provided to prevailing parties under NRS 116.4117 in civil actions to enforce the governing documents or NRS u6. The court is not required to award attorney’s fees even if an association is the prevailing party. Association board members who chose to have an attorney present at alleged violation hearings do so at the expense of all the unit owners. Such expense cannot be passed on to a particular unit owner.

Let’s look into some of these money making practices, not for the HOA, but for the HOA attorney, which serve to intimidate the homeowner by means of legalized extortion – demanding payments under the threat of harm or injury.

Understand that the modus operandi here – the reason for doing – is fostered by the legal HOA scheme that allows the HOA attorney to control and strongly influence board decisions in its favor.  (Relying on expert advice will relieve the director of any personal liability).  And that is to go to court under the justification, “You can’t let the masses get away with anything as it undermines your authority to rule.”  My words, but to the point.  So, why not adopt a hostile, no holds barred approach which generates income for the attorney. And, making this approach more appealable to the board by pointing the HOA legal scheme, the attorney tells the board, “Don’t worry, you can charge all this back to the homeowner.”

Another  prevalent tactic occurs in an attempt to work out issues with the board on matters of alleged fines or late assessment payments.  The homeowner is often told to talk to the attorney and not anyone else, where the attorney tacks on his usual fee of $150 – $300 per  transaction.   Shades of  banana republic justice!  This amounts to legalized extortion —  pay to resolve our charges even before a hearing on the merits takes place.  But, we all know the hearing is just window dressing  — we’ll give you a fair hearing before saying, “Guilty.” Makes you wonder why the HOA attorneys do not fight for a fair and just due process procedure like that offered by the Office of Administrative Hearings in Arizona, doesn’t it?

I congratulate the Nevada RED for its just and fair opinion, and Jonathan Friedrich for seeking the opinion.  We need justice for homeowners from our state protective agencies to put a stop to these obvious HOA banana republic tactics.

We need to seriously look into the roles of the HOA attorneys and their overbearing advice to go to court no matter what.   And many times these court actions are frivolous and violate rules of civil procedure relating to  a meaningful action  based on an examination of the facts and the law by the attorney.

Are HOAs part of this country, this community, or are they secessionist?

“While Terry believes HOAs wield far too much power, Marta Gore has a different opinion. “We all want our property values to increase. In order for them to increase, we all have to hold to a certain standard,” said Gore.”

And that requires, as history has well demonstrated, strict enforcement of the rules to coerce obedience to the objectives of the state[1], which flows not from the US Constitution, but from the HOA organic law based on The Homes Association Handbook and UCIOA[2]. Wait, wait . . . do you hear the refrains of Deutschland uber alles, the adopted hymn of HOA-Land?

HOAland, HOAland über alles,

Über alles in der Welt,

Wenn es stets zu Schutz und Trutze

Brüderlich zusammenhält.

. . . .

HOAland, HOAland über alles,

Über alles in der Welt!

HOAland, HOAland above everything,

Above everything in the world,

When, for protection and defence, it always.

takes a brotherly stand together.
. . . .

HOAland, HOAland above everything,!

Above everything in the world!
“Gore is with Texas Community Association Advocates; an organization that represents hundreds of HOAs in Texas. The McKinney resident says a few abusive HOAs give the rest of the industry a bad and undeserved reputation.”

Why are they continually opposing reforms to hold the rogue and intentionally wrongful HOAs accountable to the state, and to demand good corporate citizenship.  Are they saying that it’s not the job of our HOA, that it’s not in the CC&Rs?

 See Powerful HOAs Leave Many Texans Feeling Homeless

References

1. HOA Gestapo tactics — the slippery slope steepens

2. Legislative protection of HOAs: replacing US organic law with HOA organic law