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SB 1454: Machiavelli at work in the AZ legislature – Part 2

Part 2 – UPL violations and “HOAS” in the title.

(See Part 1).

E.         Sanctions against HOA managers violating UPL

In spite of several emails sent to Rep. Ugenti, the Senate GE members, and the public in general there was no mention in the public hearings about the actions taken by the Arizona Supreme Court document preparer board in 2012 regarding the unauthorized practice of law, Supreme Court Rule 31). (See Arizona’s HB 2371 empowers unlicensed HOA property managers to avoid UPL).  I refer to the State Bar UPL Advisory Opinion, 12-01 and the decision holding AAM, a AACM and CAI member, to have repeatedly violated UPL.  (Supreme Court Board of Legal Document Preparers v. AAM, LDP-NFC-09-L094 and LDP-NFC-10-L026). Rather than seek remedial legislation SB1454 and HB 2371 sought to exempt HOA managers from UPL.

The illusion and appearance that all is well and that no stakeholder or legislator was aware of these actions was successful. 

 

F.         Arizona Capitol Times showing “HOAS” in SB 1454 short title

Finally, the weekly Arizona Capitol Times (ACT) covers goings on at the capitol and produces an online LOLA Report listing the short and long titles of all the bills. Its LOLA shows “HOAS” in the short tile of SB 1454. It states that the info is taken “from Arizona Capitol Reports reporters and records and from state and other databases. Bill-tracking information is updated continuously during legislative sessions.”   But, the official ALIS public access to legislative bill information does not show a short title with “HOAS.”   Who, when, and how was “HOAS” removed from the short title?  And why was it removed?  Surely ACT had no motive to change ALIS to add “HOAS”, and would not dare to do so.

Curiously, the AACM website under Legislative Update shows the same short title as from LOLA, as AACM states that’s where it got the info.  Why wasn’t this called to Ugenti’s attention, or did nobody notice?  Yet, there’s an addendum tacked on to the title, in all caps, “AS SIGNED BY GOVERNOR,” which could only come on June 20th or later with still no correction to reflect the official ALIS version.  Why not?

It has come to my attention that Jeff Sandquist, AACM lobbyist, explained that the state’s position for settling the constitutionality lawsuit was because it wanted to save portions of the bill that it thought was more important.  He seems to be aware that if the court declared the entire bill unconstitutional the initial SB 1454 provisions dealing with Elections would also be invalidated. However, by leaving off “HOAS” in the title the State could argue, if indeed the “plot” was discovered, as it was, that only the second part of Section 13 of the Constitution applied. This would only invalidate the HOA provisions. And so it happened. 

Was this the plan for removing “HOAS”?  Was this the plan for getting Senator Yee’s approval for attaching HB 2371 to her bill, SB 1454?  That her original bill would survive? Recall that Rep. Olson apparently didn’t approve of the Griffin attempt to add HB 2371 to his bill, HB 2518, and it died.

So I argue SB1454 was rushed through in the final hours of the night on the last day of the session, in the midst of attention focused on the budget and Medicare issues. The session ended just before 1:00 AM on the 14th.

“The founders understood that the principal mission of government was to secure people in their natural rights — to protect them against the lawless private thugs as well as of ill-intentioned legislators.” (“Machiavelli and America,” Hadley Arkes, p. 145, The Prince (Yale University Press, 1999)).

The arguments and events presented here make a case for a frustrated Rep. Ugenti who, in an act of desperation, intentionally violated the Arizona Constitution and House Rule 16(D).  The Legislature cannot sit idly by and allow a flagrant violation of the Arizona Constitution to go unpunished. It must send a message that such ardent belief in a bill does not allow for the law to be broken and that the end does not justify the means. 

I have urged the Arizona Speaker of the House and House Ethics Committee to bring disciplinary charges against Rep. Ugenti and to seek her expulsion under House Rule 1. Many questions remain unanswered.

AZ Rep. explains failure of HOA reform legislation

I feel that my Footnote 1 from an upcoming commentary on SB 1454 should stand by itself. Here’s the paragraph and the Footnote.

Rep. Ugenti stated that each year there was “a plethora of personal HOA legislation” and tried “to spare the [committee] members the constant agony of many personal pieces of HOA legislation,” as contrasted to the industry legislation.

 Footnote 1.  I digress. My emphasis reflects, to good extent, homeowners failing to see the broader picture beyond their HOA problem, such as raising substantive issues of constitutionality. Ugenti is saying that homeowners don’t really understand the problems with HOAs, which only the HOA industry special interests can solve. It is evident that this is the view held by all state legislatures across the country. Homeowners have failed to deal with this reality.

A good part of this failure must be laid on the leaders of the homeowner rights advocacy movement. The leaders who appear, while paying lip service to constitutionality issues, to have failed to provide the necessary and adequate guidance and direction to accomplish HOA reform legislation.  Instead, take for example the recent SB 1454 post and comments on the Privatopia Papers where portions of just one news article are quoted. The quotes indicate that the plaintiffs had “done wrong to homeowners” by winning their constitutionality challenge. The challenge was against certain actions taken by a rogue legislator with respect to an HOA bill. The balancing and explanatory parts of the article were not quoted.

Fred Pilot, a long term participant in HOA reform issues commented about “So does this mean local governments can continue to utilize CID mandates?”, which is totally irrelevant and non-applicable to the victorious lawsuit.  Or to his biased quote from the article.  “What has “CID mandates” got to do with the article?  And attempts to clarify the matter as to the implied, “the plaintiffs have harmed the homeowners when they won”, resulted in their non-publication by the owner, Evan McKenzie.

Yet, McKenzie wrote that it was a fair question deserving an answer, but apparently not as a comment on Privatopia Papers. He wrote “my understanding is that SB 1454 . . . prohibited municipalities and planning and zoning commissions from requiring developers to create HOAs.”  McKenzie lacks the understanding that these provisions were twice killed in this legislative session; and that Ugenti had to underhandedly get the bill passed in the wee hours of the morning on the last day of the session.  But, I guess that has no bearing in this matter. It was only us evil plaintiffs who done homeowners in, under the principle that the end justifies the means.

 Not a word about how this lawsuit sent a message to pro-HOA legislators and lobbyists that they can’t get away with such flagrant abuse of the laws. Not a word. But the charges stand, unanswered on the Privatopia Papers.

 Unless the leaders get their act together, the arguments and implications of Ugenti’s quote above will continue to dominate attempts at HOA reforms.

Disciplinary action sought against AZ legislator in SB 1454 HOA amendments

This past Wednesday I asked the Arizona Speaker of the House and House Ethics Committee to commence disciplinary proceedings against Rep. Ugenti for her role in causing SB 1454 to be declared unconstitutional.   I also asked that a vote be called under House Rule 1 to expel Rep. Ugenti for the manner in which she added her failed HB 2371 HOA amendments to SB 1454 in the waning hours of the legislative session.

In addition to the legislative records, my argument was supported by the Statement of Facts in the complaint, Staropoli and Brown v. State of Arizona, and the statements made by our attorney in his July 23rd appearance on Horizon PBS.  There are five documents found on the legislative public info website, ALIS, that warn legislators against placing more than one subject in a bill.

I further pointed out the need to look into why there are two different versions of the Bill Summary for SB 1454, one with “HOAS” in the title and one without.  The logical conclusion is an intentional removal of the word from the title.

I concluded my email to the Speaker with,

The Legislature cannot sit idly by and allow a flagrant violation of the Arizona Constitution to go unpunished. . . .  It must send a message that such ardent belief in a bill does not allow for the law to be broken and that the end does not justify the means.

AZ Attorney General admits SB 1454 HOA to be invalid and without effect

Pursuant to a consent agreement with the State of Arizona,[1] the Attorney General’s office admitted that SB 1454 violated the AZ Constitution and sections of SB 1454 relating to certain HOA statutes to be invalid and without effect on September 13th.  SB 1454 violated Article 4, Part 2, Section 13 of the Arizona Constitution.  On July 19, 2013 plaintiffs George K. Staropoli and William M. Brown had filed suit against the State of Arizona, CV 2013-009991,[2] seeking a declaratory judgment that SB 1454 violated the Constitution.

“The founders understood that the principal mission of government was to secure people in their natural rights — to protect them against the lawless private thugs as well as of ill-intentioned legislators.” Machiavelli and America, Hadley Arkes, p. 145, The Prince (Yale University Press, 1999).

The invalidated Sections are:  2, 3, and 15 – 17, 19 – 21 of SB 1454 (Ariz. Sess. L. Ch. 254). These sections affected the following Arizona Revised Statutes:  9-461.15, 11-810, 22-512, 33-1250, 33-1260.01, 33-1261, 33-1806.01, 33-1812, and 41-2198.01.  We believed that Section 18, adding ARS 33-1261(E) to the Condominium Act, is about political signs and relates to public elections. We agreed it is covered in the title subject of “elections” and is a valid statute.

Particularly disturbing was the amendments that granted special powers to HOA managers to represent HOAs in small claims court and in OAH hearings, powers that state Certified Legal Document Preparers do not possess. The litigation rights of homeowners were put at a disadvantage because they could not also have an untrained and unlicensed third-party represent them.

Many may believe that SB 1454 had HOA amendments that would benefit homeowner rights and this lawsuit removed these benefits.  The loss of these perceived benefits lies not in this victory, but in the acts of Rep. Ugenti who is responsible for attaching, at the last legislative session, her defeated HB 2371 to SB 1454.  SB 1454 now became a bill with two subjects in violation of the constitution.[3]

The consent agreement will become binding pending acceptance and signing of the order by the Superior Court judge, expected before the 13th.

I would like to thank Executive Director Tim Hogan, Staff Attorney Joy Herr-Cardillo, and the Arizona Center for Law in the Public Interest for their outstanding support of the people.

 

References

AZ HOA bill SB 1454 and lack of transparency

As you should recall, the SB 1454 complaint was filed as a result of unethical conduct by Rep. Ugenti when she surreptitiously attached an HOA reform bill to a bill with another subject in violation of the Arizona Constitution.

Discussions with the AG’s office continue on 2 important issues. I believe, however, that we are being taken to the brink where we will need to go to court and get an injunction to stop SB 1454 from becoming effective until the court decides the issue, as had happened with SB 1070.  How much will that cost the State?

At the same time that we heard from the AG’s office on August 21st, it came known to us that an Administrative Director at the AZ Supreme Court filed a petition (R13-0041), two days after we filed the complaint, to change Rule 31 of the Supreme Court rules. This rule change would allow HOA managers to represent HOAs in small claims court, which would not be an unauthorized practice of law (UPL). State Certified Legal Document Preparers (paralegals) do not have this right. 

This request for an emergency decision was based on SB 1454 becoming law in September to avoid the legislature encroaching upon the judiciary branch that sets rules and regulations for the courts.  As it stands, if SB 1454 becomes law then we would have a second constitutional issue of a violation of the separation of powers doctrine.

There was no mention of our constitutionality challenge in the petition to change the rules. Upon being informed of the lawsuit the SC asked for a copy of the complaint, apparently not aware of it at all. I guess the petitioner misplaced it.  A decision to hear the petition is expected within 2 days.

Today, another incident of misrepresentation of the facts in regard to SB 1454, a third instance, was discovered in an HOA article by a landlord-tenant attorney writing in the Arizona School of Real Estate and Business Journal.  The school is an ADRE approved education and training facility for real estate agents and property managers.  It provides mandated courses in real estate law, agency law, contract law, and the Commissioner’s Rules (administrative law).  There are no requirements to know anything about HOAs where 23% of the population lives.

The author did not mention the constitutionality challenge either, but admitted to the co-plaintiff that she was aware of the complaint.  While she refers to SB 1454 as “a hotly contested bill,” she failed to mention that it is still being contested in the courts.  Apparently she felt no need to caution her readers that these “laws” may change or even be delayed, like SB 1070, so don’t go making firm plans right away.  The 90 day wait period between bill signing and its effective date was intentionally put into place to allow for such challenges as ours to the newly passed laws.

Are there any men and women of honor in Arizona?    Or, have those who should know better adopted the ethics of Machiavelli who believed: an ethical act is one that advances your goals or your power.

 

References

1.  See SB 1454:  crossing the line for HOAs

2.  See Rule change petition