Tag: supreme court

HOA foreclosure ratio of 36 times violates the 14th Amendment against cruel and unusual punishment

Matt Tomsic wrote an important article in the Charleston Region Business Review on HOA foreclosures with some revealing statistics.  SPECIAL REPORT: YOUR HOME, THEIR RULES.  For example, 68% of the foreclosures were for $5,000 or less in Charleston County, SC.

I wrote the author for some additional statistics. What he had available was just median values for debt owed the HOA and home value, which were $4,500 and $160,000, respectively.

 

That amounts to a punishment of 36 times the debt owed. The US Supreme Court in State Farm v. Campbell, 538 U.S. 408 (2003) set criteria of punitive damages exceeding 10 times actual damages constitutes a violation of the 14th Amendment against cruel and unusual punishment. In the jargon of today, HOA foreclosure is the iconic instance of cruel and unusual punishment. And the HOA did not advance any hard cash like a bank to justify foreclosure rights.

 

BUT, your elected representatives see no evil and continue to support the real estate industry’s business interests, with the people being the pawns and “marks” in the con game.

AZ judicial conduct comm. on hidden HOA attorney case: who let the cat out of the bag?

In my June 10th post, Judicial misconduct complaint filed for sealing records in AZ case against HOA attorney, I brought to your attention the fact that the records on a case involving a CAI member attorney sued for aiding and abetting and disgorgement could not be found on the court’s public access website.   Not even a notice that the case was sealed.  The complaint alleged that the “disappearance” of the records from public view was a violation of the Code of Judicial Conduct, Rule 123(d).

A response was received from the Commission on Judicial Conduct Staff Attorney who was more concerned with “shooting the messenger” rather than with taking a few minutes, like I did, and verify from the court records themselves the truth of my allegations.  Not even mentioned in her response.

My reply to the Staff Attorney, in part, reads,

The tone of the letter gives the impression of another angry person filing wild and unsupported accusations against a judge. It is condescending, insulting and attacks the messenger without any reference to conducting a duty bound investigation into the easily verifiable facts — the court records themselves.

The information that I provided is more than sufficient for a bona fide investigation of the facts by the Staff Attorney.  Just 10- 20  minutes on the Internet Pinal County case public information web page, followed by a call to the Pinal County Superior Court Clerk, as I undertook, would quickly and  independently verify the complaint (Exhibit B) that the court records were sealed in violation of Rule 123(d) – public access has been denied and denied without notice. 

The entire reply can be read here . . .

 

What makes a good HOA lawyer?

A good lawyer is highly skilled in creating doubt and confusion through the use of semantic deconstruction.  By “deconstruction” I mean analyzing, dissecting and fragmenting the sentence grammatically to isolate individual words or phrases and to explore alternative definitions.  The poster child example was demonstrated by Pres. Clinton: “It depends on what the meaning of is, is.”

Other specific, well known examples are from the judiciary itself, where in the Kelo decision the court redefined “public use,” as found in the 5th Amendment, to mean “public purpose”; and in the Citizens United decision equating a corporation to a real person with rights to contribute to election campaigns.

A good way to understand this tactic is the forest and trees analogy.  The HOA attorneys ignore the description of the forest (the common meaning of the sentence statement) and attempt to redefine the individual trees that make up the forest (the words and phrases used in the sentence).  By redefining the descriptions of the trees, the attorneys create doubt and an alternative interpretation in their favor. And by doing so, they have redefined the forest to mean something else other than what was obviously intended. The statement, as commonly accepted, now has several alternative meanings.

My favorite example is CAI’s insistence that HOAs are not governments but businesses.  CAI makes use of the archaic Marsh v. Alabama public functions test that reduces the long held legal doctrine of a government (the sentence) to a test of a few factors (the trees). Does the HOA possess the functions of a government?  Well, the question can be reversed to ask: Does a government possess the functions of a business?  This approach gets us nowhere.  The “trees” have become the focus, the substitute legal meaning, of deciding the definition of what a government is, and the traditional legal doctrine is summarily dismissed as irrelevant.  It is a defect in our system of jurisprudence.

If you attempt to find the meaning of a vague concept in the dictionary by pursuing the words used to define it, say the word “government,” you quickly find yourself in a circular rut.  Justice Potter encountered this difficulty in Jacobellis v. Ohio (1964) when he wrote that the Supreme Court “was faced with the task of trying to define what may be indefinable,” referring to the difficulty of defining the broad concept of what is pornography.  He admits to not being able to intelligently define pornography, “But I know it when I see it.” 

This sums up the reality of attempting to define concepts that are well understood in our society, but escape a unique and distinguishing definition. Only by specifying examples that distinguish between what is and what is not can a society clearly arrive at an acceptable definition.

These “word games,” as I call them, this one shot redefinition of long held concepts (the court seeks some means to decide an issue and picks one, almost arbitrarily), is very dangerous and undermines a stable society.  It, along with “political correctness,” is Newspeak (from Orwell’s 1984) where a person can no longer make meaningful distinctions about reality, and where black can mean white.

Good lawyer play these word games very skillfully, and the judges follow along with redefinitions to suit the particular issue before them, rather than re-examining the whole concept that is in question.  Opposing lawyers for homeowner rights advocates must not lose sight of the broader picture, the forest.

HOA foreclosure: an unconstitutional punishment

Writing on the Hindman-Sanchez blog (Colorado) in 2011, attorney Sanchez asks, “Is Foreclosure the Right Option?”  She offers 3 options: 1) just lien the property and wait, 2) get a money judgment on the debt owed and garnish money source, and 3) foreclose. Sanchez answers that option 1 is not quick; option 2 will not work if there is no cash available; so that leaves option 3, foreclose on the house.

However, working on behalf of the HOA and its supposed survival concerns, Sanchez fails to address the practical matter of 1) not enough equity in the home to for the HOA to collect its debt after the mortgage is paid off, or assumed, and 2) the moral and ethical question of a discriminatory, unethical, and inequitable option that amounts to a cruel and unusual punishment. It affects only those who have paid their mortgage and assessments obligations over many years. 

And remember, the HOA has not advanced any hard cash as a bank or lender to warrant a special foreclosure law, but is functioning as a state entity collecting on the failure to pay taxes.  Nor has it performed any services to warrant special treatment under a mechanics lien analogy.  Its services have been performed on behalf of the fictional but legal and separate person, the HOA.

From a broader aspect on the nature of the “contract” between the homeowner and the HOA, the homeowner was not told that buying into the HOA corporation is like buying into a closely held business that has limited marketability (ease of selling out, which amounts to selling his home), and whose source of additional funds is very, very limited – increased assessments, special assessments, and obtaining a bank loan if possible.  That’s the bargain the homeowner made when he bought his home.  That is the hidden downside of HOA corporations kept hidden by the HOA, the developer, the real estate agent and the consumer protection agency, if any. 

The use of foreclosure focuses the members’ attention to the other guy and not on the nature of the contract.  It is an irrational attempt by an HOA attorney to “get blood from a turnip,” which after all, is just what one would expect when dealing with “deadbeats.”  It serves to intimidate and punish homeowners by taking away the homeowner’s home, leaving him nothing. 

Sanchez ignores the reality of the present economic situation, which she admits to. She speaks, however, of foreclosure as a “necessary tool” to punish and to intimidate.

While associations have other options available, foreclosure is a powerful and necessary tool in the association’s collection efforts arsenal. People take notice when there [sic] property is being foreclosed. Foreclosure may motivate those who have not been making assessments to bring their account current. More often than not once a delinquent homeowner gets notice of a pending foreclosure on their property, they make some type of payment arrangement or refinance.

If HOA covenants and statutes that allow the HOA to take a member’s home or money based on an HOA fine was held to be an unconstitutional punishment or penalty[i], so must foreclosure statutes be held as an unconstitutional preemption of government power.  The argument that foreclosure is just a legal collection method and not a punishment falsely states reality.

(Loura Sanchez and Hindman are Colorado attorney members of CAI  and members of its College of Community Associations Lawyers (CCAL)). 

[i]In  Unit Owners Association v. Gilman, 292 S.E.2d 378 (1982), the Virginia Supreme Court heldthat a fine was  “A pecuniary punishment imposed by lawful tribunal upon person convicted of crime or misdemeanor. A pecuniary penalty. It may include a forfeiture . . .” and that “The imposition of a fine is a governmental power. The sovereign cannot be preempted of this power, and the power cannot be delegated or exercised other than in accordance with the provisions of the Constitutions of the United States and of Virginia. Neither can a fine be imposed disguised as an assessment.”  

Complaint filed with NJ Supreme Court for CAI lack of “candor to the tribunal”

A complaint was filed with the NJ Supreme Court against CAI for a lack of “candor to the tribunal” with respect to statements made in CAI-NJ’s amicus curiae brief in Mazdabrook v. Khan.  Excerpts from the complaint letter follow.

________________________________________________________

Two attorneys for the Community Associations Institute (CAI) NJ Chapter, Karpoff and Macysyn, sought and received permission to file an amicus brief and to make oral arguments. They signed certifications as to the truth of the statements made and content of their brief. 

I submit that the arguments to file a brief and to make oral arguments contained misrepresentations and false and misleading statements as to the true nature and purpose of CAI.  These misrepresentations lead the Court, and amicus readers, to believe that CAI is not in a conflict of interest position as its true interests, which oppose the interests of the homeowners associations and the of HOA member homeowners. 

The Macysin certification says the brief is brought on behalf of CAI itself, as a friend of the court to help it in its decision. Yet, throughout the certification one is confused as for whom CAI is representing: CAI itself, the HOAs, or the homeowners.  These are conflicting representations.

 In the 24 paragraph certification, Macysin fails to inform the Court of the legal tax exempt status of CAI as a 501(c)6 tax-exempt organization  as of 1992. CAI chose the vendors and became a trade group so it could avoid the limitations of an educational organization and become actively involved in lobbying in all the states. (The usual course of action is for the consumer group, which is seeking assistance, to set up its own nonprofit educational organization. It then would invite the vendors as affiliate or associate, second-class, members).

 It should be clearly understood that the production of harmonious and vibrant communities is juxtaposed to the true interests of the CAI members.  Rather, the best interest of its true members is to keep the HOA heavily dependent upon the services of its attorney and management members, to foster adversarial relations, hostility and divisiveness, and to deny democratic reforms under the state and US Constitutions.  The CAI record before state legislators and in the courts, including here in New Jersey, speaks for itself. 

The CAI-NJ prepared HOA board resolution (Appendix B, page 6), gives the impression that the HOA board’s decision to join CAI is a valid act.  What this resolution accomplishes is to allow the HOA board to address homeowner concerns about a conflict of interest.  It provides the board with a reasonable justification for joining CAI — education for the benefit of the HOA.

However, the basis for a board to sign-off is that CAI is the “Great Educator” and that CAI has no conflict of interest as a business trade group whose tax-exempt grant is to help its members, not consumer HOAs. The resolution does not state that CAI is a 501(c)6 trade group or that since it was created in 1973 to solve problems with HOAs it has failed to do so for the past 39 years, or that it has repeatedly opposed constitutional protections for homeowners. 

Sanctions were sought against these CAI attorneys.