Tag: due process

HOAs vs. local government — which “laws” control?

In the  Aug. 6, 2010 Carpenter Hazlewood (CAI attorneys, AZ) e-newsletter post, “Deed Restrictions versus City and County Ordinances: Which One Controls,”   attorney Nkita Patel wrote,

“In sum, if there is a conflict between the association’s CC&Rs and a city or county ordinance, the more restrictive provision will govern.”  

The underlying rationale is that the homeowner, upon taking possession of his deed, has agreed to every surrender of his rights.  And people can agree to the surrender of their rights.  But, under what circimstances and conditions?  Under servitude law of covenants, the homeowner need not read nor sign his explict consent to the surrender of his rights. But, this justification, by itself, is a violation of not only contract law, but of constitutional law and the owner’s due process rights.  Even The Restatement of Servitudes, §3.1, holds that an unconstitutional covenant is invalid.  What say you, Ms. Patel?  

Furthermore, what say you if the covenant simply says, ineffect, “No parking on the streets or driveway?”   Here, regarding public streets, the ordinance says, “No parking 8:00PM to 6:00AM.”  Which is more restrictive?  Which “political law” controls?   

And, finally, the “usual advice” statements are offered, where only partial answers are provided —  those favoring the HOA and NOT explaining how the law would apply as to circumstances favorable to the homeowner.  Carpenter Hazlewood has never addresed the issue of guest parking and the wrongful holding a member in violation of the CC&Rs in an egregious violation of the law, good faith treatment of members, and a just and fair governance. 

What say you, Ms. Patel, about the HOA’s actions in these circumstances?  Please see Wigwam Creek North HOA v. Fuchs, CC: 2010- 49644, Estrella Justice Court, where such an event and wrongful HOA act took place, apparently with HOA attorney approval.

 

Read more . . .

HOA attorney collusion and regulation of public streets

Ethical obligations of attorneys to HOA members

 

Texas & Arizona: the different meanings of ‘standing to sue’ an HOA

The question on appeal was a question of a legal standing to bring this suit against the defendants.  In general, the Texas appellate court in Webb clarified the legal status of “standing” (emphasis added),

 Standing deals with whether a litigant is the proper person to bring a lawsuit. . . . To establish standing, one must show a justiciable interest by alleging an actual or imminent threat of injury peculiar to one’s circumstances and not suffered by the public generally. . . . As stated by the United States Supreme Court, the question of standing is whether the party invoking jurisdiction has “a personal stake” in the outcome of the controversy.

 

Traditionally, courts have held that this “personal stake” must exist at the commencement of the litigation and continue throughout the lawsuit’s existence.

 

With respect to the Webb decision, the Court noted (emphasis added),  “Accordingly, unless Webb is an owner of a lot within Glenbrook Estates, she does not have standing to seek a declaration whether the Association waived enforcement of certain Covenants.”  Webb was not the recorded owner of the lot, only her husband’s name appeared on the deed, and Webb could not establish any fiduciary relationship or other representation for her husband.  Webb’s  case was dismissed due to a lack of standing to sue.

 See  Webb v. Voga, No. 05-09-00074-CV, Tex. App. Dist. 5, July 15, 2010.  (Glenbrook Owners Assn was a defendant).

NOW, TURNING OUR ATTENTION TO ARIZONA’S MOCKERY OF JUSTICE,  where the Office of Administrative Hearings adjudication of HOA disputes was declared unconstitutional  by the Maricopa County Superior Court (Meritt v. Phoenix Townhouse HOA, LC2008-000740, January 29, 2009), we find an unaddressed issue of standing to sue.  In short, after the decision and after a denial of this writer’s right to file a Motion to Intervene by Judge Murdock, an attempt was  made to bring the issue of a lack of standing to the attention of the court. The fact that the homeowner, who initiated the case, was no longer a member of the Phoenix Townhosue Assn.  On Feburary 23, 2009 I wrote Judge McMurdie, providing the evidence and saying,

 

Petitioner and real party in interest, Ron Merrit (sic), had quitclaimed his deed to his co-owned property in the Phoenix Townhouse subdivision on October 10, 2008, prior to the superior court special appeal of October 23. (Exhibit 1).  I believe this issue became moot at that point.

 I reminded the judge,

 If I had been permitted to intervene, these facts, discovered subsequent to filing the Motion to Intervene, would have been presented appropriately. Rule 60(c)(6) “does not limit the power of a court to entertain an independent action to relieve a party from judgment, order . . . or to set aside a judgment for fraud upon the court.” 

 On March 2, 2009 Judge McMurdie responded with the following Minute Entry (emphasis added),

 The Court has received Intervener’s, George Staropoli, miscellaneous filings.

IT IS ORDERED striking these filings.

IT IS FURTHER ORDERED that the Clerk of Court shall not accept any filings from George Staropoli in this case.

  Apparently, the Arizona courts have a different take on this doctrine of standing to sue when it comes to HOAs.  The decision and harsh attitude of the Judge, and the absence of any government agency or official to defend the statute, allows a paraphrasing of Carl von Clausewitz’s, “War is the continuation of policy by other means” (On War):

  “The judicial system is the continuation of policy by another means!”

  Read the complete story of OAH constitutionality at

The State of Arizona will not protect buyers of HOA homes!

HOA attorney collusion and regulation of public streets

During the past Arizona legislative session, HB 2153, dealing with a re-assertion that public streets are regulated not by HOAs but by civil government, was defeated by HOA/CAI opposition and a group of HOA special interests, Sun City HOA.   Part of the argument for the bill were the realistic incidents where the HOA fined a homeowner for a car parked in front of his home, on a public street — without any attempt to verify whether the car was owned by a member of the household.  In other words, in a display of gross injustice and a  stark display of HOA power and intimidation, the HOA simply fined the homeowner. (It is well understood that some 90% of the homeowners pay up rather than go to court to fight for their rights).

 What is further unconscionable and irresponsible, and a violation of an attorney’s code of conduct, HOA attorneys would simply “pick up the paper,” file the charges against the homeowner, and of course tack on its fees, and proceed in a flagrant violation of  Rule of civil procedure, 11(A), which states, in part (emphasis added),

The signature of an attorney or party constitutes a certificate by the signer that the signer has read the pleading, motion, or other paper; that to the best of the signer’s knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.

and the Arizona Rules of Professional Conduct, R42, Ethical Rule 3.1 (mimics the above Rule), and ER 3.3, Candor to Toward Tribunal, in part,

(a) A lawyer shall not knowingly:  (1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer . . .  (3) offer evidence that the lawyer knows to be false.

Is this legalized extortion by the HOA attorney and HOA board, acting together?[i]

While the bill was before the legislature, an on going court case[ii] was taking place, just brought to my attention.  A homeowner was being fined for just such an occurrence.  Both the management firm and HOA attorney are Community Association Institute (CAI) members, a trade group that lobbied against the bill.  CAI advertises as being the leading educator for the HOA industry and HOA law experts.  The Arizona law firm is Maxwell & Morgan where both principles are members of the CAI Community Association College of Lawyers.

Upon being notified of parking violations, the homeowner properly informs the management firm, Rossmar & Graham, that the cited cars are not his, and provides the license plates of his 2 cars (Mar. 28, 2009 email).  Subsequently, the board denies his request to remove the fines.  According to the homeowner, the attorneys continue and file suit, and then remove their claim for the fines.  Undoubtedly, the attorney realized she was in trouble for blindly doing the HOA’s bidding. 

Most egregiously and unethically, the M & M attorney still sought attorney fees from the homeowner.  This is unconscionable and unethical.  The attorney did the board’s bidding, ran up  fees, and then found that she was involved in an unsupportable charge, but still sought her fees from the homeowner.  The homeowner has to pay for the wrongful acts of the board, and the blind acceptance of the suit by the attorney? 

And now we have a former CAI legislative action committee chair, Scott Carpenter (another CAI college of lawyers member), whose firm advises HOAs on possible loopholes in the right of HOAs to regulate parking[iii].   In an inexcusable misstatement of the public parking issue, attorney Patel fails to mention the main issue regarding regulation of public streets by public government, citing only a Missouri case, Maryland Estates v. Puckett, that affirms HOA regulation of its members, but not the public.  His reference to checking vehicle ownership is only made in regard  to the possibility of illegal towing.

The battle for HB 2153 was precisely to prevent such abuse as occurred in the Wigwam Creek lawsuit.  But, Carpenter, in his Arizona Legislative Session blog entry of January 13, 2010, “Authority Over Roadways,” only saw, “If the bill is really about parking, then enforcement of a parking prohibition in a planned community’s governing documents is the enforcement of a contractual provision and does not, in its enforcement, exert any ‘authority’ over the roadway itself.”   Clearly this is a biased advocacy statement regarding pending legislation, and hiding behind the imprimatur of an attorney, not addressing or cautioning his readers about the implications regarding the public who are not members of the HOA.

In my Commentary of April 5, 2010[iv] I stated that the purpose of the prolific advisories/advertisements were “to seek and promote loopholes and technicalities in the law and governing documents that would lead to adversarial litigation.”

Something is rotten in Denmark!  Shame on CAI, Maxwell & Morgan and Carpenter, Hazlewood.   And shame on the Arizona Legislature for seeing no evil in regard to public control of public streets, and for accepting the voice of the CAI attorneys as gospel.

Notes

[i] See, Ethical obligations of attorneys to HOA members.

[ii] Wigwam Creek North HOA v. Fuchs, CC: 2010- 49644,  Estrella Mountain Justice Court, Maricopa County, AZ.

[iii] “Enforceability of Parking Restrictions”, Nikita V. Patel, Esq., July 9, 2010 enewsletter, Carpenter, Hazlewood, Delgado & Wood, PLC.

[iv] “How good are the CAI member HOA attorneys?“,  HOA Private Government, http://pvtgov.wprdpress.com.

Does CAI act in good faith for the benefit of the people in HOAs?

Arizona’s Augustus Shaw IV, only recently joining CAI’s College of Community Association Lawyers, was enjoined from running for state representative by a Maricopa superior court decision.  Shaw was found to live in District 20, but wanted to run in District 17, and having given a number of justifications for living in District 17 as opposed to District 20.   Now, it should be quite simple, even if you are not a lawyer, to know where one really lives, unless you are looking “to pull a fast one.”  See the Minute Entry, http://www.courtminutes.maricopa.gov/docs/Civil/062010/m4270712.pdf. 

Is this the caliber of membership in CAI’s self-proclaimed lawyer’s “honor” association?    What will CAI do, since it has a code of ethics, supposedly both for  members and a CCAL members?  I have not seen any evidence or documentation in my 10 years of watching CAI that any action was brought against a member or a CCAL member for violations of the respective codes of ethics

And what about those state legislatures and town councils that employ CAI as the official educator of HOA boards and property managers?  What will they do?  They should be watching for a strong indication that CAI  removes members not of good character and standing, and who display unethical conduct, especially if they are a lawyer.  Why?  Because state legislators have operated under a mistaken presumption that HOA boards will conduct themselves in good faith and obey the laws  —  even without any threat of punishment. 

But, the record repeatedly shows otherwise.  Abusive HOA boards ignore the laws knowing that homeowners will not go to court against the experienced HOA/CAI attorneys.  CAI, that powerful national lobbying trade group, has claimed over the years, before the legislators, that they speak for the homeowners, and what CAI argues is also what the homeowners want.  But, we know better.  Do you really think a homeowner wants his home as collateral for the survival of the HOA?  Or really agrees to being foreclosed on for a mere $200?  Or willing surrenders his right to due process in favor of HOA kangaroo courts?  Get real, legislators!  Get real! 

CAI proposes and supports HOA laws for its own self interest and does not deal in good faith.  The CAI attorneys act as hardnosed defense councils against the homeowner, and do not recognize a fiduciary obligation to the owners of the HOA, the homeowners.  They see it purely as a management vs. employee relationship, and they are on the management side.  CAI does not see, nor does it want ever to admit to any de facto government status, that the HOA is an authoritarian form of political government and an anathema to our democratic system of government. 

If CAI is really acting in good faith for the benefit of the people living in  HOA territories, it will seek the dismissal of Augustus Shaw from its CCAL.

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.