Tag: law

AZ class action against HOA management firms for unauthorized practice of law

A class action suit was filed in Maricopa County, AZ against numerous HOA management firms for the unauthorized practice of law resulting from their attempts to collect HOA debts.  The two plaintiffs allege against some 30 management firms, among other things,

Upon information and belief, the Defendants represented to the public and to members of the Class that they were acting with the full measure of authority reserved for licensed legal counsel for Defendants by negotiating debt on behalf of a third party, drafting, filing and/or preparing legal papers, including liens, debt collection letters, complaints, default judgment, judgments, and other debt collections activities which require the appearance of a licensed and authorized attorney; and charging fees for the foregoing activities. . . . Defendants actions directed at these Class Members constitute the unauthorized practice of law and are clear violations of the Fair Debt Collections Practices Act and Arizona law.

 

Crame v. 360 Management (Maricopa County Superior Court, CV 2012-095288, Sept. 10, 2012). The case has been moved to Federal Court.

A class action is undertaken when the number of victims is so numerous and who have basically the same allegations of wrongdoing. The two plaintiffs represent the class of homeowners who meet the following criteria,

 

All persons or entities who, at any time from August 1, 2006 to the present (the “Class Period”), were members of a Homeowners’ Association or like entity and who were pursued for an alleged debt owed to that Homeowners’ Association or like entity by any of the Defendants or other Community Management Companies who purported to pursue collections against said persons or entities without proper legal representation and/or on behalf of their third party HOA/Condo customers and/or who improperly held themselves out to be an attorney.

  

Related information

Class Action Filed Against AZ HOA Management Companies (Attorney Roger Wood blog)

UPL 12-01 – Scope of Legal Services to HOA’s (March 2012) (State Bar Advisory Opinion)

Final Order: HOA management firm engaged in unauthorized practice of law (AAM, LLC  was the defendant.  Still not made public info on the Supreme Court or State Bar web pages.)

 

PLEASE pass this on to others who may have claims against the HOA management firms.

CAI attorney stalwart defends HOA Land private constitutions and so-called bill of rights

The CAI stalwarts once again responding to my challenge to defend the constitutionality and legal status of the HOA legal scheme, including the highly questionable assertion of a “consent to agree” under the constructive notice doctrine.  This time, dedicated CAI stalwart Beth Grimm enters the arena with her August 2012 e-newsletter, What’s new in HOA Land . . .  The topic is, “Homeowners Bill of Rights.”

From the very start she informs her readers, in a round-about way, that there are no federal or state constitutions applicable to HOA private agreements.  I’ve been saying that for years!  And she points out that, “Without A Constitution What Is a Bill of Rights Worth?”  Grimm continues in what must be taken as a joke, in full agreement with the comment by Bill Davis, with a quote from Thomas Jefferson about the need for a bill of rights after admitting there is no HOA constitution.  

It appears that the reader is entering the realm of the attorney “word-game,”  where long established concepts and meanings are distorted to suit the attorney’s private agenda.  It’s an indoctrination and propaganda tactic. Welcome to Newspeak.

In strict legal terms, the assertion by Grimm that the governing documents are the HOA’s constitution is not correct.   But the courts have upheld the CC&RS as if they were just like a political constitution and interpreted them as a de facto constitution.  And as I have tried to explain, state laws like the California Davis-Stirling Act, the UCIOA acts, and other state HOA “Acts” serve as a parallel code of public laws applicable at the local government level to the class of nonprofit private governments called HOAs. 

The courts have also applied public government attributes, conditions and rights to these private contracts that are not contained in the explicit CC&RS covenants, and have applied overly broad interpretations as to what the members have agreed to without their signature – just by simply taking their deed in hand.  In other words, the activist courts are imputing a “consent to agree” that does not exist in the CC&RS. And nobody warns the unsuspecting homeowner of the consequences of reaching out for that deed. Nobody!

A host of reputed rights are then examined by Grimm, but they read more like the documents of the Rights and Responsibilities of members (a document first used to explain what a democracy is all about and how citizens are to act;[i] and a publication of CAI Central). It is in stark contrast to the preamble to the US Bill of Rights, emphasis added,

THE Conventions of a number of the States, having at the time of their adopting the Constitution, expressed a desire, in order to prevent misconstruction or abuse of its powers, that further declaratory and restrictive clauses should be added: And as extending the ground of public confidence in the Government, will best ensure the beneficent ends of its institution.

This long time CAI stalwart attorney does not address the constitutional concerns raised in my The Truth in HOAs Disclosure Agreement, nor does she call for CAI to conduct such a poll. There is no support for my Declaration of US and State Citizenship. Grimm’s presentation misses this important point.

Nor does she mention that back in the 2008 – 2009 the California Law Review Commission’s attempt to rewrite the Davis-Stirling Act contained a proposed Chapter 2, Member Bill of Rights.  It was quickly removed and has not been adopted in the new law to become effective in 2014.  Nor does she present the homeowner advocates proposed homeowners bill of Rights published in the now defunct AHRC website and the AARP version written by David Kahne in 2006, among others.

It should be noted that in 2008 the Uniform State Laws Commission adopted a bill of right for UCIOA (UCIOBORA), but did not incorporate it was a part of UCIOA.  Rather, they created a separate version so that states can choose to adopt its so-called bill of rights or leave them out.  To date, no state has adopted this bill of rights.  It reads like your CC&Rs and pro-HOA state laws.  Nothing at all like the US Bill of Rights or the state Declarations of rights.

If HOA Land is to join the union and lose its independent principality status, thereby providing constitutional protections to the homeowners,  then Beth Grimm and all other CAI legal-academic aristocrats should be demanding the amendments to the Declaration  and state laws as proposed in my Declaration above,

The association hereby waivers and surrenders any rights or claims it may have under law and herewith unconditionally and irrevocably agrees 1) to be bound by the US and State Constitutions, and laws of the State within which it is located, as if it were a subdivision of the state and a local public government entity, and 2) that constitutional law shall prevail as the supreme law of the land including over conflicting laws and legal doctrines of equitable servitudes.

Why aren’t they?  The above state law and mandatory Declaration amendments will put an end to the jokes and word games that attempt to hide the fact that HOAs are de facto but unrecognized governments operating outside the Constitution. And there will be a bona fide Bill of rights!

 

[i] The Rights of Man, Thomas Paine, 1791; The Declaration of the Rights of Man and of the Citizen, 1793, French revolution origins)

If the watchdogs of the judiciary fail, it follows that the government also fails

On May 30, 2012 I file a complaint against Judge Olson, No. 12-148, for illegally closing the files on the complaint against CAI attorney Maxwell by a court appointed Receiver[1].   (See Judicial misconduct complaint filed for sealing records in AZ case against HOA attorney).  The AZ Commission writes that it has no problem with Judge Olson’s sealing of the records.

 

ORDER

 

The complainant alleged that a superior court judge improperly sealed a case. The responsibility of the Commission on Judicial Conduct is to impartially determine if the judge engaged in conduct that violated the provisions of Article 6.1 of the Arizona Constitution or the Code of Judicial Conduct and, if so, to take appropriate disciplinary action. The purpose and authority of the commission is limited to this mission.

 After reviewing the information provided by the complainant, the commission found no evidence of ethical misconduct and concluded that the judge did not violate the Code in this case. The commission does not have jurisdiction to review the legal sufficiency of the judge’s ruling. Accordingly, the complaint is dismissed in its entirety pursuant to Rules 16(a) and 23.

 Dated: August 15, 2012.

FOR THE COMMISSION

 

Its first reaction to my complaint was to attack the messenger, asking how did I know about the case. (See AZ judicial conduct comm. on hidden HOA attorney case: who let the cat out of the bag?).

I am still trying to fathom the logic or rational that the judge did not violate Rule 123(d) of the Rules of the Supreme Court.  Rule 81 is the Code of Judicial Conduct that I referenced in my complaint.  Under Rule 81 there is at the very start, Rule 1.1, Compliance with the Law.   The act of sealing all the court record information by Judge Olson is prima facie evidence of a violation of Rule 123(d) (see Judicial misconduct complaint link above). 

How can the Commission say, with a straight face, “The commission does not have jurisdiction to review the legal sufficiency of the judge’s ruling.”  Who then watches the judges?    Their brethren?  Given the black and white issue here, the Code becomes a joke!

The entire beginnings of Rule 81 under Preamble and Scope speak to maintaining the integrity of the court, the confidence of the public, and avoiding the appearance of impropriety.  Words, simply words that have no meaning at all!

What is most offensive to the legitimacy of the court, and to the legitimacy of the government, is that the Commission, the watchdog of the judiciary, took a hands-off “not me” position and did nothing.  If the judicial watchdogs fail, what then of the judiciary itself that watches the government?  It, too, most fail, and so too the government.

[1] DC Lot Owners v. Maxwell & Morgan, CV 2010-004684, Pinal County Superior Court, AZ.

Court decisions: HOA Enlightenment Movement vs. the Dark Ages

In this “groundbreaking decision”, as described by Evan McKenzie in  his Privatopia Blog, the Illinois appellate court made a ruling consistent with the HOA Enlightenment Movement.  Neglect by a condo asociation to make repairs affecting a unit is a defense against continued payment of assessment.  This is a major step toward homeowner justice that removes the “pay no matter what, or lose your home” doctrine of the authoritarian HOA governments.

The case, Spanish Court Two Condominium Association v. Lisa Carlson (2012 IL App (2d) 110473), involved a demand for assessments owed plus a possession — forcible entry — of the unit that was alleged to have suffered damages due to the condo association’s neglect.  (Understand that the condo sued under the Forcible Entry Act to repossess the unit). The court held the condo in the same position as a landlord under the landlord-tenant laws, which allow a tenant to withhold rent as a defense against forcible entry.

 We hold, by analogy to the case law on actions brought under the Forcible Entry Act by landlords for possession of leased property due to unpaid rent, that the unit owner may claim neglect as a defense to the board’s suit under the Act.

 And of very important significance for case law precedent is the holding on the mutual obligations of the CC&Rs contract, my emphasis, (p. 13,14),

 “Plaintiff suggests that a board’s right to collect assessments is absolute and that a claim for nonpayment of assessments is not subject to any affirmative defense.”

[The court replied,] “nowhere does the . . .  Condominium Act suggest that the right is absolute.”  The Condominium Act appears to set the rights of unit owners on par with the rights of the board of managers. Moreover, the rights arise from mutually exchanged promises—on the one hand to pay assessments, on the other hand to maintain the common elements—and so the Declaration and the Bylaws are best seen as contracts.

[T]he condominium instrument indicates (as presumably most do) that the unit owner’s promise to pay assessments is in exchange for the board of managers’ promise to use those assessments for the repair and maintenance of the condominium property, the unit owner may claim, as a justification for nonpayment of assessments, that the board of managers breached its duty of repair and maintenance.

 Contrast this decision with the recent California Supreme Court opinion, reflecting a culture still in the Dark Ages sorely in the  need of enlightenment, Pinnacle Museum Tower  v. Pinnacle Market Development( No. S186149, Aug. 16, 2012 ).   Here the court validated the binding arbitration clause with (my emphasis),

 [T]the Davis-Stirling Act ensures that the covenants, conditions, and restrictions of a recorded declaration — which manifest the intent and expectations of the developer and those who take title to property in a community interest development — will be honored and enforced unless proven unreasonable.

 Under its Discussion, B. Contractual Nature of Terms in a Recorded Declaration, the court gives an instructive presentation on the preferential treatment of the declarant/developer, consent to obey, waiver of rights, “for the common good,” and the open-ended amendment process.  Section C explains what constitute an unconscionable contract clause, rejected in this instance.  Very informative of the Dark Ages culture.

 

The HOA Enlightenment Movement is rolling on, and will gather momentum as the truth, justice, and the American way shall once again prevail.

The role of the HOA apathy affliction in circumventing public policy

In my prior Commentary, See The HOA apathy affliction: a political dynamic, I wrote about the HOA attorney driven recourse to complete rewrites of the CC&Rs that works because of the apathy affliction that is thriving in HOA-Land.  I would like to now add that this approach, in general, is an intentional violation of your state’s public policy.

Public policy is expressed in many ways by the actions or inactions, and statements or non-statements by government officials in the executive, judiciary and legislative branches. What bills are made law or not passed, and the intention of the legislature, when and if explicitly stated, makes public policy. 

In Arizona, for instance, HB 2441 (2011 session) was submitted and aggressively supported by the CAI chapter. It contained, among other things, a provision for the minority control of the CC&Rs amendment process by allowing as low as 33% of the all members to approve an amendment. While the Apache Wells rewrite contains a very vague and loose requirement for amending the CC&RS in contrast to the detail by-laws amendment process, it lacks homeowner protections.  There are no requirements for notice, meeting at which the voting is to take place, no approval requirement, etc.  (The prior 1987 CC&Rs required a majority approval of all the members).  The 50% vote is misleading as to homeowner protections without all of the above in place, as has occurred in the Fourth Amendment rewrite with respect to the minority approval of special assessments (See below and the prior Commentary link)..

10.4. Amendments. At any time this Declaration may be amended by an instrument in writing, executed by the then Lot Owners of more than fifty percent (50%) of the Lots in the Project.  Any amendment approved pursuant to this Section 10.4 of this Declaration shall be signed by the President of the Association and shall become effective upon recordation of the same with the County Recorder of Maricopa County, Arizona. Any such amendment shall certify that the amendment has been approved as required by this Section 10.4.

 

But, when it comes to approving special assessments (Section 7.5 of the CC&Rs), which could be almost any amount like the assessments to pay off an $8.5 million loan for a suspect administrative building in 2007, the rewrite allows for a 25% approval of any special assessment. (The prior 1987 CC&Rs required a majority ratification of the special assessment by all the members).  The point that I wish to make is that the special assessment rewrite is only one example of how minority control fails to protect the homeowner.

Another example is the attorney self-interest covenant, 10.2, Administrative Law Proceedings, which states in part,

In the event the Association is required to incur any expense, including attorneys’ fees and costs, as a result of the direct or indirect actions of any Owner, the Association shall be entitled to recover all such expenses incurred, including all attorneys’ fees and costs, against the applicable Owner, regardless of whether formal proceedings are actually filed, pursued or awarded . . . .

 The public policy of the State of Arizona was made clear in 2006 when ALJs were permitted to hear HOA disputes, and no attorney fees were allowed to be awarded in these hearings. The CAI attorneys managed to have the law declared unconstitutional, which resulted in a reaffirmation of the legislative intent in 2011 to provide for ALJ adjudication without attorney fee.  The intent of the legislature was explicitly stated in the new bill.

 The inclusion of section 10.2 in the Apache Wells CC&Rs rewrite can only be viewed as another intentional slap at Arizona public policy, and one in the best interests of the HOA hired-hand attorney.  The covenant for minority approval of special assessments, given the history of special assessments at Apache Wells, is another act of bad faith and disregard for public policy. 

 The recourse to CC&R amendment rewrites with the reality of the apathy affliction so prevalent in HOA-Land is a devise to circumvent public policy in order to achieve goals and objectives not in the best interests of the homeowner.  The Restatement of Property: Servitudes, Section 3.1, Validity of Servitudes,    “A servitude [covenant running with the land] . . . is valid unless it is illegal or unconstitutional or violates public policy.”  It is only the acts and actions of the people within HOAs that can return them to the American way of life.

 Read the related Commentary, Why do people harm others in HOAs?