Tag: justice

States Rights: the transfer of power from Washington to private government HOAs

I am pleased to hear the whispers of substantive issues regarding the institution of HOAs that undermine our democratic principles of government as found in this Washington Post article. Among the Christmas cards to one homeowner, a warning, “Several state courts have ruled that by agreeing to abide by homeowners association rules, home buyers relinquish some constitutional rights,” and who points out there are some limits on HOAs. But, I would like to clarify that these few rights had to be fought for in each state legislature on a piecemeal basis – restoring those rights taken away by the HOA declaration “agreement.”

 

The media must follow in this reporter’s footsteps and stop being an active participant in the Unspoken Alliance of “No Negatives About HOAs!” The media must understand that “States Rights” is nothing more than the transfer of political power from Washington to the state legislatures. State legislatures who, in turn, openly and eagerly support the transfer of political power to local private governments — homeowners associations — unanswerable to the US Constitution as required of all public forms of civil government.

 

These unrecognized, de facto governments hold power by the mere filing of a subdivision declaration of covenants, conditions and restrictions (CC&Rs), which is necessary and sufficient to bind unsuspecting home buyers. Declarations that bind without the need for the buyer to have read or to have explicitly signed-off on these relinquishments of constitutional rights, privileges and immunities, absent of any equal protection of the laws, and absent of any due process protections loss of life, liberty and property.

 

Perhaps we shall see a second effort by a number of states to amend and rewrite the Fourteenth Amendment to the Constitution, one that attempts to justify and defend this disgraceful state of affairs by a country once held in high esteem as the ideal democracy. This second amendment would sanction “chartered” private governments with their imposed, unconscionable adhesion agreements that provide for the carte blanche surrender of constitutional rights, and with their powers that include the loss of private property rights by the votes of others without the need for the consent of the affected homeowners. This amendment would legitimize these declarations of CC&Rs that do not recognize any “inalienable rights” at the time of purchase, and that permit ex post facto amendments to render the so-called sacrosanct declaration a meaningless pieces of paper. A travesty of our American democracy.

 

Who will stand up and fight for Lady Justice? Qui Pro Domina Justitia Sequitur (“who prosecutes on behalf of Lady Justice?“, DOJ seal). Who will defend and preserve our principles of democratic government?

The continuing saga to quash HOA due process protections by the State of Arizona

 

On Feb. 11, 2009 my attempt to intervene in the Arizona Meritt superior court appeal of an DBFLS petition was denied. The Meritt complaint was based solely on the superior court decision in Waugaman, as no argument occurred in the Meritt default decision. I was required to file an Answer in defense of the statute to the HOA complaint that sought a declaration of unconstitutional adjudication of HOA disputes by DFBLS.

 

This denial was a surprising event given that Meritt was a default decision on a question of the constitutionality of a statute, and I had introduced the Attorney General’s brief in support of constitutionality from Waugaman in my Answer. In Waugaman, the AG’s brief was given a single line in the decision, a decision that quoted the HOA’s argument: “the Attorney General’s office fails to identify a single way in which the [Department] actually exerts regulatory authority over planned communities.” The focus was solely on whether or not the AG’s brief satisfactorily addressed the one issue of concern to the court, and to the HOA: the extent of regulatory authority. (For a clarification of the roles played by these cases, see my earlier comments on the Gelb petition at Will AZ Supreme Court do justice for 1 million HOA members? )

 

Filing as a Pro Per, this knowledgeable layman argued, among other things,

 

Here [HOA adjudication] there is a direct statutory adjudication authority and there is no need to divine legislative intent and tie it to an agency’s regulatory mission. The decision regarding constitutionality must therefore fall to the Bennett or four-fold test used in both Hancock and Cactus Wren. There is nothing in the Bennett test that considers proper regulatory authority per se. The requirement for adjudication as ancillary to proper regulatory authority is not a requirement of the Bennett four-fold test . . . . (¶ 10, p. 5).

 

In view of the facts in Hancock contained in paragraph 10, this fixation on regulatory authority is misplaced in view of the direct statutory authority to adjudicate contractual disputes in both the Act and planned communities. (¶ 11, p. 7).

 

This essential argument finding error with the Waugaman decision’s focus on the extent of regulatory authority (used as sole authority in Meritt, and essentially repeated in the Gelb appeal) is more elegantly presented in part 3 of the Nov. 30, 2010 Gelb Petition, “III. A.R.S. § 41-2198 is a Constitutional Delegation of Authority to An Administrative Agency and Does Not Violate the Separation of Powers Doctrine.” (p. 11). Gelb argued,

 

The Court of Appeals incorrectly determined § 41-2198(3) violated Article 3 of the Arizona Constitution because there was “no nexus between the regulatory authority or purpose of the DFBLS and the authority to regulate planned communities.” . . . Significantly, the word “nexus” does not appear in either decision. Nor does either case require “a nexus between the primary regulatory purpose of the [agency] and the adjudicatory authority granted in the Administrative Process” as stated in the Court of Appeals opinion.

 

Furthermore, in undertaking this analysis of the constitutional delegation of powers to an agency, the Gelb appellate court stated, “In applying these factors, we are mindful that duly enacted laws are entitled to a strong presumption of constitutionality and any doubts should be resolved in favor of upholding a statute against constitutional challenges.” Additional Petition arguments cited authority in support of a blending of functions, and agency adjudication as assisting the judiciary rather than usurping its powers as held in the Gelb opinion. These arguments attacked the court’s conclusion that the HOA had overcome “this strong presumption of constitutionality” of a statute.

 

Let us hope that the Arizona Supreme Court will hear this Petition and do justice on behalf of the people, an estimated 1 million plus Arizonans living in HOAs and condos.

Will AZ Supreme Court do justice for 1 million HOA members?

The two issues for review sought in the Gelb OAH constitutionality Petition to the Arizona Supreme Court are, in my layman’s view: 1) a legal procedural issue centering on the appellate rules of court, ARCAP 13(b)(3), and 2) the real issue at hand of the constitutionality of OAH adjudication of HOA disputes (technically, the authority of DFBLS to receive complaints that are forwarded to an ALJ at OAH). In both the Gelb appellate opinion and the earlier Meritt superior court ruling the basis for the decisions was the identical analysis of the same two Arizona cases, Hancock and Cactus Wren.

 

My commentary will focus on the first issue: ARCAP 13(b)(3) that relates to the procedure for filing a cross-appeal. It involves some contradictory or vague wording as to when a party must file a cross-appeal. A cross-appeal is just an appeal brought by the other party, the appellee, raising its own issues for review. Gelb maintains that the HOA had to file a cross-appeal and it didn’t. The rule in question, ARCAP 13(b), reads:

 

3. The brief of the appellee may, without need for a cross-appeal, include in the statement of issues presented for review and in the argument any issue properly presented in the superior court. The appellate court may affirm the judgment based on any such grounds. The appellate court may direct that the judgment be modified to enlarge the rights of the appellee or to lessen the rights of the appellant only if the appellee has cross-appealed seeking such relief.

 

The Petitioner/Appellant believes that the appellate court enhanced the HOA’s rights above than was specified in the superior court decision, and the HOA had violated the rule. Therefore, the decision was invalid, without force. The Petition points out that the HOA raised the constitutionality issue not in its appeal of any issue in the OAH decision, but in its motion to dismiss. The HOA’s authority was simply to cite that a lower court, a trial court that does not set precedent for other cases, had decided the unconstitutionality of DFBLS. (Presumably, the Meritt superior court case, which was a default decision based on an even earlier superior court case, Waugaman, all brought by Carpenter et al. The appellate court accepted this argument.) Furthermore, in the Petition, Gelb pointed out that the issue of constitutionality was never subject to a presentation or discussion of legal arguments (much like the Meritt case) and was an abuse of discretion by the court.

 

It is interesting to note the time frame during which the Carpenter Hazlewood law firm attempted to get an opinion of unconstitutionality – all for the good of its clients, three different HOAs. (See The State of Arizona will not protect buyers of HOA homes! for links to documentation supporting the following). It is interesting to note that in Gelb, the HOA had won the DFBLS case, so why would it want to vacate that decision by filing a constitutionality challenge?

 

On Aug. 4, 2008 Meritt filed a complaint with DFBLS. On Aug. 8, 2008, Gelb filed an appeal of its OAH/DFBLS ruling. However, since nobody, but nobody, including Meritt, the AG, or the legislature responded to defend DFBLS it was decided rather quickly. In Meritt, on Oct. 10th, after the OAH decision on Oct. 3, 2008, Meritt had quit claimed his deed to Big Henge, but that didn’t stop Carpenter Hazlewood from filing an appeal to the superior court on Oct. 23rd. Meritt no longer had standing to sue, and the case was moot. Although Carpenter Hazlewood added John Hernandez as a co-plaintiff in the appeal, Hernandez did not file a complaint with DFBLS — he was not a DFBLS petitioner — only Meritt did, and so Hernandez also had no standing to sue.

 

This raises strong questions of violations of professional conduct rule 42, Candor to the Tribunal, E. R. 3.3. David Dodge, former Chair of the Disciplinary Commission for the Arizona Supreme Court, wrote about “Perjury Pitfalls” in the January 2006 issue of the Arizona attorney: “There are lines that lawyers cannot cross in their endeavor to increase ‘the bottom line,’ and their duty of candor toward the court cannot be sacrificed to please a client.”

 

Other events at DFBLS/OAH provide insights into the attempt by Carpenter Hazlewood to stop OAH adjudication of HOA disputes, where 42% of the complaints were won by the homeowner. On the same day of the ALJ decision, Oct 3rd, Carpenter sought an expansive order — the one he obtained in Meritt that applied the ruling to all HOAs — which was denied on Oct. 10th, the same day Meritt quit claimed his deed.

 

On Jan. 28, 2009, in the superior court appeal, Judge McMurdie ruled DFBLS unconstitutional, and upon request by Carpenter Hazlewood, reaffirmed on Feb. 24, 2009 that his decision applied to all HOAs. Ten days later, on Mar. 6, 2009, Carpenter Hazlewood filed its Motion to Dismiss in Gelb citing the trial court Meritt decision. (It was too late to file an amended complaint). Carpenter could not raise the constitutionality argument at the time the appeal was filed, back on Aug. 8, 2008. The Gelb appeal was necessary in order to obtain the elusive opinion that could serve as precedent in future cases.

 

 _____________

The supreme court has yet to accept the Petition for a decision. If it does and finds in favor of Gelb on the above issue, it will probably not entertain the real issue of the constiutionality of OAH adjudication. Its opinion would vacate the appeallate court holding and DFBLS/OAH would then be required, under law, to hear HOA disputes once again.

HOA disputes: judicial activism with a political agenda

Our judicial system rebounds with mottos, slogans, quotes end even chiselings on building facades attesting to the goal of “justice for all” or “equal justice under the law.” But we must ask whether justice was served in the Arizona ruling in Gelb v. DFBLS[1] that struck down an independent tribunal’s adjudication of HOA disputes?  We must ask:  Was the ruling judicial activism in support of a political agenda?

In the underlying Hancock case, the court held,

 The separation of powers doctrine does not forbid all blending of powers, but only is intended to keep one branch of government from exercising the whole power on another branch . . . Courts today also recognize that absolute independence of the branches of government and complete separation of powers is impracticable. . . .We also believe public policy favors such a blending of powers here.

With the above understanding, we must ask how the Gelb court arrived at its opinion that,  “In accordance with well-established legal authority, the HOA has overcome the presumption of constitutionality . . . “

 Read the full Commentary at HOA judicial activism.

 

HOA due process protections: Arizona OAH vs. NV Ombudsman

 

The HOA statistics provided by the Nevada Ombudsman Report for 2010 stands in sharp contrast to the success of the terminated Arizona OAH adjudication of HOA disputes.  It shows 55% of the HOA complaints were resolved, while the Intervention Affidavit (complaint) Report reveals that a mere 4.5% had gone on to an ALJ for adjudication. The Ombudsman Report also shows that of the indicated 1,260 complaints, only 25% made it to a conference hearing, of which 55% were resolved. In total, about 14% of the complaints were resolved. (It should be noted that the number of complaints indicated on the two reports reveal a marked discrepancy of 1,260 on one and 493, or 512, on the other).

 

Some people would point to these numbers and say, “See, we told you so. HOAs are 95% good, but we do have these malcontents and disgruntled people.” Others would say that the Ombudsman office operates like State Bars where very few complaints make it to a judicial hearing, and only after being screened by their brethren.

 

Other states with an ombudsman office haven’t fared any better. In California, the Ombudsman can be vaguely discerned through the bureaucratic mist, while in Florida the outspoken homeowner rights advocate group, CyberCitzens for Justice, repeatedly criticizes the handling, or lack of handling, by Florida’s DBPR “ombudsman” agency. Both have been in existence for over four years.

 

In Arizona, after a brief 2 plus years, its agency that handled HOA disputes by means of the independent Office of Administrative Hearings (OAH) was declared unconstitutional[1]. In contrast to the reported Nevada 4.5% heard by an ALJ, just about 80% of the complaints were heard by an ALJ at Arizona’s OAH. In contrast to these other large states, an ALJ at OAH heard some 66 cases of which 42% were won, for the vast majority, by the Pro Per homeowner against the HOA and its attorney.

 

No wonder the CAI member law firm made repeated attempts to silence OAH[2], and after 3 shots at the apple it won in Gelb v. DFBLS, CA-CV 09-0744 (Ariz. App. Div. 1, Oct. 28, 2010). The well documented OAH adjudication had revealed the stark reality of HOA abuse, and the denial of the equal protection of the law under the corrupt HOA hearing process where the accusers judged the accused. (To say, as some have, that the homeowner openly and with full knowledge accepted this condition is incredulous!) In the two years prior to the passing of the bill granting DFBLS/OAH power to adjudicate HOA disputes, the Arizona Legislature had failed to pass bills that would ease the burden on homeowners going before the Justice of the Peace courts. It rationale was that it would create an uncertain burden on the JP courts because of a potential tidal wave outcry for justice.

 

The adjudication of HOA disputes by the Office of Administrative Hearings in Arizona was a landmark advance in due process protections for homeowners and should be adopted in all other states. It’s powers were limited and the parties had rights to appeal to the civil courts. It did not usurp the role of the judiciary nor violate the separation of powers doctrine, but assisted the civil courts by providing justice within reasonable costs for the individual homeowner. Case law contains many rulings that such benefits and purposes do not violate the separation of powers doctrine, and many such instances exist today. (It should be noted that all OAH petitions were brought by the homeowner).

 

The Arizona Legislature cannot pick and choose what portions of the Constitution it wishes to enforce and which it wishes to ignore. In order for it to acquire obedience in conscience from the people, its legitimacy rests on valid and just laws. Due process protections for HOA residents must be restored by means of an “acceptable to the courts” revision of the applicable statutes.

Notes

1. 
Independent tribunal adjudication of HOA disputes in AZ held unconstitutional.

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