Tag: linkedin

Wrongful death suit filed against California HOA

A wrongful death suit was filed against California HOA by homeowner’s family. As I wrote in, If Trayvon HOA is sued, who should share the blame?, there’s a lot of blame to go around for creating an atmosphere that the HOA has a “free ride” and is immune from accountability.

According to the lawsuit, the defendants knew by September 2009 that Olga Martinez had a restraining order against her husband, Napoleon E. Castro, and that he posed a potential danger to her.

It was expected that defendants would provide a level of care in whom they admitted to the secured housing area in the gated community and restrict unauthorized visitors,” the suit states. “Defendants breached their duty of care by permitting …Castro to enter the building.”

 

(My emphasis).

Daughter of slain Pacoima woman files wrongful death suit against condo complex’s HOA

Looking for justice in an HOA? Look here first!

In the recent California case, Sui v. Price, the plaintiff owned a van for 12 years, and parked it in their reserved parking space. For the past 4 years, the van was inoperable due to a damaged engine, but remained locked in the parking space.

In 2006 Price, the HOA president, caused an amendment to the Rules prohibiting inoperable cars to be approved, and had the van towed. Where have we heard this before? A $1,700 fine was levied on Sui, which affected his credit rating and ability to refinance his home. The homeowner sued for breach of contract and several tort claims, based on an intent to harm the plaintiff, and sought $58,000 in punitive damages. Another case of the effects of ex post facto amendments, when the doctrine of estoppel by laches would be very applicable in favor of the homeowner.

There is no statement of ”an unsightly intrusion” caused by the van with a damaged engine — no fact of a beat-up body, or no tires, etc. California law allows the removal of a vehicle in violation, presumably after 96 hours of notice. The complaint was dismissed. The court dismissed the fact that Sui was just one individual with an inoperable vehicle, and that the CC&Rs prohibit rules that discriminate against member.  Forget about the holding that the CC&Rs supesede the Rules.

The court only looked to the the reasonableness of a covenant, relying on,

Simply put, there is nothing unreasonable about prohibiting the open, long-term parking of disabled vehicles. The association was perfectly reasonable in prohibiting this unsightly intrusion upon the aesthetics of their common interest development. (emphasis added).

 

And that is the danger of the “general interest or general purpose” doctrine – almost anything can be rationalized and justified when isolated and only considered by itself. So the court chose – it was a validly passed amendment, and those other, unaffected members, could undo the amendment. Is this communalism or socialism?

We see no reason to apply a different test for reasonableness of an association’s operating rules, especially since a rule adopted by the association’s board may be reversed by majority vote of the homeowners at a meeting called on petition of only 5 percent of the separate interests in the association. (emphasis added).

Here again the court diminishes individual rights for a perceived common good of the community in what many would call socialism.  It’s disturbing that the homeowner in these cases is not compensated for a loss in benefits by being a member of the community, while others are held to benefit. Another overlooked requirement for upholding valid amendments.

In the public arena, the homeowner would have received compensation for this “taking.”

If Trayvon HOA is sued, who should share the blame?

As indicated in the media and earlier (What is an HOA’s duty of care liability to its members and to all others?), the HOA could be sued under a number of legalities as determined by the facts.  It is important to ask what factors led to the use of Zimmerman by the HOA.   Under the legal doctrine could  the homeowner members and even the public policies of the state that amount to a “hands-off” accountability toward HOAs — they can do no wrong — be held liable?

The latest media report (Homeowner association could be sued in Martin case) reminds everyone that the homeowners would most likely have to reach into their pockets.

“So, if you’re going to send out a newsletter saying, ‘Hey, he is the captain. Whatever he says goes,’ you have now basically rented a free police officer for your neighborhood,” Clark said. “He certainly took on that role with the homeowners association, and it seems to me that they recognized that.”

Who would pay in the event of such a lawsuit would probably be determined by the type of insurance coverage the association has, Clark said. Some policies may be wide enough to cover Zimmerman’s actions. If there is no policy or the policy in place is very narrow in its coverage, homeowners likely would have to pay out of their own pockets through higher monthly assessment fees because most associations don’t have very deep reserves, he said. He noted that policies typically cover about $1 million.

Many will cry out that it would be unfair and just to make the homeowners pay for the neglect, if true, by the board.  But would it?   It is obvious that the board of directors, the legal body responsible for managing the HOA would be first and foremost.  But what about the homeowners themselves, who have oversight control through the election and recall of board members?

 Under a “ re ipsa loguitor” (a form of circumstantial evidence that permits a reasonable person to surmise that the most probable cause of an accident was the defendant’s negligence) theory, do the homeowners have a share of the blame in actions by the HOA’s agents?   Would the fact that HOA members are well known to apathetic with respect to the acts and actions of their elected boards absolve them of any failure to act?

In turn, the homeowners could argue that the homeowners’ hands are tied, for the most part, by the adhesion contract CC&Rs that permit an imbalance of powers to the HOA over the rights and liberties of the members, and by statute. That the ineffective  pro-HOA state laws reflect a public policy in support of the survival of the HOA at the expense of the homeowner.  (See The public policy of the states with respect to HOAs).

Laws that have no enforcement penalties against HOA board wrong-doing may explain some of the members’ apathy  — “What’s the use?”  You can’t fight city hall.”  Laws that Alexander Hamilton called, “recommendations.”   “If there is no penalty [for] disobedience, the resolutions or commands which pretend to be laws will, in fact, amount to nothing more than advice or recommendation.” (Federalist #15).

It is difficult to understand the rationality for this hands-off policy that flies in the face of our system of governance, with its checks and balances and separation of powers doctrines felt necessary to restrain the power of government.   “If angels were to govern men, neither external nor internal controls on government would be necessary.” ( James Madison, The Federalist papers, # 51).

In answer to the question posed here as to who should share the blame, the answer must be “all the above.”  And state legislatures are in the power seat to make the needed changes to fulfill the special interest propaganda of healthy and harmonious communities. All that the state legislatures have to do is to do justice and  SAY NO to the special interests!

why shouldn’t HOA directors be held for criminal activities if the shoe fits?

The latest AZ-CAI chapter’s Call to Action, Apr. 5, 2012, objects to the AZ bill, HB 2160, that would make violations of the HOA elections procedure a Class 1 Misdemeanor. No reason s offered as to why not. The bill clearly states that only if the violation is an intentional violation, which is only fair considering the importance of fair and just elections in a democratic society. And aren’t we told by CAI that HOAs are the model of democracy?

Again, CAI resorts to scare tactics by focusing on the penalties under a class 1 misdemeanor. And that the fines, that can be as high as $20,000 for the HOA corporation, would be passed on to the homeowners. What an excellent approach to get member involvement, don’t you think, CAI? BTW, the Call does point out that the bill is to stop “electioneering,” you know, to stop the political machine interference so the people can “throw the bums out.”

The “we are poor volunteers” doing community good argument appears, but the presumption is that they are indeed doing good by opposing elections reforms. It ignores the fact that the bill addresses intentional acts by the political machine running the HOA for its own personal agenda. And the “death of the HOA” argument if we hold directors accountable for their acts is there, too. Well, should we support corrupt and incompetent entities used by a few for their personal agendas, entities that can ruin a member through fines and cruel foreclosure?

Finally, in an admission that not all actions by directors are covered by insurance — surprise, surprise – the fear of no insurance coverage is used. You know, it is not the acts of the directors themselves that is the precipitating cause of such refusals by insurers. No, not the directors, us poor volunteers.

I can hear those directors saying, “Damn! And we had it so good not being held accountable. Gee, I don’t think HOA life is such a good idea now that the “free ride” is over.”

I am well aware of the frequently used techniques that amount to legalized extortion by the HOA or its agent, the management firm. The 2 common instances are forcing the member to talk to the HOA attorney, and to sue on unsubstantiated and frivolous allegations. In the first instance, the member who is given notice of unpaid assessments but does not receive a detailed accounting of the alleged debt. So he rightfully asks the HOA for a statement of his account, not provided by the attorney, but is told to talk to the attorney. Why?

If the manager of president is not sure, he should contact the attorney on his dime and not the member’s dime – attorneys costs are charged back to the member. This is a legitimate request for corporate records and not attorney-privilege concern. And the HOA attorney knows this.

The second instance is the notice of a violation by the  attorney on HOA statements that would fail “reasonable cause” tests.  These allegations are acted upon without any attempt to “check out” the HOA charges, as it must necessarily be concluded, violating R. Civ. P. 11(a), “that to the best of the [attorney’s] knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law.”

The attorneys know that in the vast majority of these cases the homeowner will not go to court and either pay, if he can, or take the default judgment by the court. One JP Court judge told a homeowner in such a case that, “Normally, these type of HOA cases are default decisions . . . “ I would say that that amounts to legalized extortion with the attorney cooperating and looking the other way. See Code of Professional Conduct below).

(Sadly, Arizona bills with meaningful penalties against the HOA failed: SB 1240 would have awarded triple damages against HOA for selective enforcement actions; HB 2455, would have held the directors directly personably liable for member attorney fees; and HB 2731, would have held directors personally liable for lawsuits not made in good faith. They will be back next year, and the year after until put into law.)

HB 2160, elections reforms with meaningful penalties, gives the member a solid footing to take away control of the HOA by political machines and rogue boards. It awaits final votes.

Rules of the Arizona Supreme Court, Part V, Regulation of the Practice of Law, D, Lawyer Obligations, Rule 42.

1.2 (d) A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent

1.13 (b) If a lawyer for an organization knows that an officer, employee or other person associated with the organization is engaged in action, intends to act or refuses to act . . . that is a violation of a legal obligation to the organization, or a violation of law . . . .

NEW HOA DOCUMENTARY FILM, THE HOAX

On behalf of Rodney,

Hi there, I’m Rodney Gray. I am a former U.S. Marine, an actor and a filmmaker, who is currently directing and producing a feature documentary on the homeowners’ association (HOA) industry for submission to film festivals and future distribution, but also as my MFA production thesis at the University of North Texas.

My new film, The HOAX, follows an investigative reporter, homeowners, and HOA reform activists as they reveal shocking evidence of financial and psychological hardships experienced by people throughout Texas and Nevada. A few of these people, including the filmmaker, have been the subject of adverse actions from the very HOAs created to help them.

Please feel free to visit our websites to find out more information, get updates and watch the teaser trailer.

  The HOAX Movie Website:  http://thehoaxfilm.com/

The HOAX Trailer Tease and Campaign Website: www.indiegogo.com/thehoaxfilm

 

Spread the word and please share these links. Help us bring injustices into the light.

 

Best to you all,

Rodney