Tag: supreme court

Constitutional free speech in HOA upheld in this surprising case

“Court documents indicate [homeowner] Immelt got upset after being told she had violated a homeowner’s association rule. Immelt borrowed a friend’s car, pulled up in front of the home of the neighbor who reported her and honked the horn repeatedly for up to 10 minutes. Several neighbors were awakened.

“Immelt was convicted of violating a local noise ordinance that prohibits sounding a horn for anything other than public safety or a publicly sanctioned event. Immelt appealed, saying her constitutional free speech rights were violated and that the ordinance was too broad. Her conviction was upheld in appellate court.

“While the court didn’t decide if what Immelt did constituted protected speech, it concluded that the noise ordinance Immelt was arrested under could ban’”protected forms of expressive conduct involving horn honking. It therefore fails constitutional scrutiny’.”

Who says the Constitution means nothing?

State of Washington v. Immelt, No. 83343-5, 2011 Wash. LEXIS 825,* (Wash. Oct 27, 2011). Very long case.

Gross injustice: HOA declarations not a contract, but held binding as a contract

In Epernay CA v. Shaar the Texas appellate court again avoided declaring that a declaration of CC&Rs is a contract, but use the carefully worded, CC&RS “are subject to the general rules of contract construction,” followed by, “In construing contracts. . .” Other courts have declared CC&Rs to be a contract without providing evidence, making the declaration a dicta (ipse dixit made by a judge). Others have referred to cases that, themselves, are also dicta utterances.

 

The reason for this is that HOA governments under CC&Rs are held to be subject to the laws of equitable servitudes, which simply requires the filing of the CC&Rs with the county in order to be binding on the unsuspecting homeowner. He doesn’t even have to read the CC&Rs or even explicitly consent to agree in general, or to agree with the surrender or waiver of all his rights stated or implied in the CC&Rs. If indeed CC&RS were to be considered a bona fide contract under contract law 101, they would be thrown out the window.

 

See the responses to the Truth in HOAs poll where 92% said they would not agree to the conditions in HOAs as disclosed in the Disclosure Agreement.

 

Additionally, if the requirement for the genuine consent with full knowledge, and the absence of misrepresentation, were applied under contract law, the CC&Rs would be thrown out the window.

 

Why have the courts followed servitude laws over constitutional law with its requirements for the equal application of the law – contract law – and due process protections against special laws for special private organizations? Why have the courts or state legislatures failed to declare HOA governments to be an unconstitutional delegation of legislative powers to private organizations? Or to be state actors under the criteria set forth by the US Supreme Court (and not the ancient and misplaced holding of the “public functions” test)?

 

If people can get together a draw a contract, call it CC&RS, and operate as private governments not subject to the 14th Amendment, why do we need constitutional government? That’s secession, isn’t it?

Montana Supreme Court rules CC&Rs may be adhesion contracts

This very important Montana Supreme Court opinion concerns the explicit issue of CC&Rs as adhesion contracts. Sadly, once again, the gentlemen in black fail in their understanding of the true nature and practicality of the effectiveness of those “grandiose” covenants within the CC&Rs. This judicial blindness to reality and the acceptance of the written word as gospel — “so let it be written and so it is done” — is a mockery of justice as one would expect from banana republic courts.

While the Court ruled the CC&Rs in this case were not adhesive, others may argue that CC&Rs are adhesion contracts.  Plaintiff had failed to address all the requirements of an adhesion contract.

I’ve excerpted relevant parts of the opinion below. Read the discussion on “reasonable expectations.” Be sure to read Justice Nelson’s disagreement at the end of the opinion (emphasis added).

¶ 9 The CCRs here are not a contract of adhesion. First, the CCRs are not a standard form contract without negotiable terms. Further, Graziano has the ability to change the terms of the CCRs. Graziano may not have had the ability to negotiate the terms of the original CCRs, but it is within his power to change and amend the CCRs in accordance with the amendment provisions in Section XVII of the CCRs. . . . ;

“[W]e do not foreclose the possibility that a future plaintiff could demonstrate that land use covenants, conditions, and restrictions are adhesive. We simply find that given the facts of this case, the CCRs in question are not adhesive.

<¶ 20 Even if the CCRs did constitute a contract of adhesion, that alone does not make the arbitration clause unenforceable. Assuming a contract of adhesion exists, Graziano must still show the arbitration clause either (1) was not within his reasonable expectations, or (2) was within his reasonable expectations, but when considered in context, is unduly oppressive, unconscionable, or against public policy. Id. Graziano has only argued the first prong; therefore, we limit our analysis to whether or not the arbitration clause was within Graziano’s reasonable expectations.

¶ 22 We conclude, given all the surrounding circumstances, the arbitration clause was within Graziano’s reasonable expectations. First, and significantly, Graziano had notice of the CCRs. While he claims the CCRs were not mentioned in the letter accompanying the original packet of materials sent by Stock Farm, that alone is not dispositive. Both the buysell agreement and the title report indicate the Lot was encumbered by CCRs and easements of record. The buy-sell agreement also states that “Seller has delivered or made available to “Buyer [Graziano] copies of the covenants, conditions, restrictions . . . .” Graziano had actual notice, before finalizing his purchase, that the Lot was encumbered by CCRs. Even if this did not constitute actual notice, Graziano is still charged with ;”>constructive notice< because the CCRs were recorded.

¶ 24 . . . In an affidavit submitted to the District Court, Graziano states that no one explained the CCRs to him, that he did not know the CCRs contained language that would affect his rights, and that he was not represented by counsel. Graziano does not say he did not know of or read the CCRs, only that they were not explained by Stock Farm or the Association. We find Graziano’s affidavit self-serving in light of his extensive business experience and that it constitutes “weak evidence” regarding his understanding of his purchase of the Lot.

¶ 25 After reviewing all the surrounding circumstances, we conclude the CCRs are not a contract of adhesion, and the arbitration provision contained within the CCRs was within Graziano’s reasonable expectations. Therefore, we agree with the District Court’s funding that the arbitration provision is valid and enforceable.

Justice James C. Nelson, specially concurs.

¶ 37 I agree with the result of the Court’s Opinion. I do not necessarily agree that the CCRs here were not adhesive, nor do I agree that, as a general proposition, land use covenants, restrictions and conditions imposed unilaterally by the developer or owner upon a subdivision cannot be adhesive. In my view, upon appropriate proof of the criteria set forth in Woodruff v. Bretz, Inc., 2009 MT 329, ¶ 8, 353 Mont. 6, 218 P.3d 486, a plaintiff could prevail on a claim that land use covenants, restrictions and conditions are adhesive. Imposing and enforcing pre-dispute arbitration requirements in such circumstances is nothing more than a means of depriving landowners of their constitutional rights of access to the courts and to a jury trial under Article II, Sections 16 and 26, respectively, of the Montana Constitution.

¶ 38 That said, in this case I agree that, even assuming that the CCRs were adhesive, the arbitration provisions were within Graziano’s reasonable expectations . . . .

¶ 39 Land use covenants, restrictions and conditions might arguably benefit the land, and the landowner may be granted some illusory—albeit impossible, as a practical matter— method of amending the covenants, restrictions and conditions. Nonetheless, the landowner should not be bound by a pre-dispute arbitration clause imposed by the developer without negotiation on what amounts to be a “take it or leave it”—or, rather, “buy it and you’re stuck with them”—basis. A landowner should retain the right to have disputes over the interpretation and enforcement of land use covenants, restrictions and conditions resolved in court with a jury; forcing mandatory pre-dispute arbitration on landowners should not be a prerequisite to property ownership.

GRAZIANO v. STOCK FARM HOMEOWNERS ASSOCIATION, INC., 2011 MT 194,No. DA 10-0580 (Mont. 2011).

Twin Rivers and NJ HOA free speech rights, redux

Here we go again! Once again revisiting the question of free speech rights to display signs in a New Jersey HOA. In Mazdabrook v. Khan the appellate court revisited Twin Rivers and the underlying “test case’, State v. Schmidt, but with a different outcome in favor of free speech. I find it very interesting how our judicial system analyzes and bisects broad legal principles into 1001 “and, if or buts” micro-segments. How is the average person to know what is legal and what is not? Must he go to an attorney, who may or may not know but will take you to court to find out?

In Mazdabrook the homeowner placed campaign signs for his election as major of the town, not a for sale sign, but the HOA had governing documents permitting only for sale signs and no others. The court said No, No, No, that’s content-based restriction on commercial advertising and a constitutional violation of free speech rights and a total ban on other signs. In contrast to Twin Rivers, the HOA sign restriction to allow a sign in every window and one outside sign no more than three feet from the house was held not to be an unreasonable burden on the owner’s free speech rights. It cited the Restatement of Property “suggestion” that a covenant is not valid if it “not mentioning the obvious that a covenant is also invalid if it were unconstitutional.”

See, as to another question of reasonableness, the NJ Esposito case, In NJ, HOA boards do not have to be reasonable, and go figure how our judicial system works. See also the link to the Paula Franzese and Steven Siegel critique of the Twin Rivers decision in Rutgers Journal articles on HOAs and Twin Rivers case.

OF SPECIAL INTEREST and importance is the dissenting opinion of a judge who addressed such questions as: the waiver of one’s rights when simply taking possession of his deed, the implied consent to be governed, and a surprising reference to the waiver of ex post facto rights. Where did he get that from??? I wonder?

I’ve been told that the appellate decision has been appealed to the very same NJ Supreme Court, but oral arguments have not yet been heard. Also, the Rutgers Constitutional Law Clinic under Frank Askin, the party that represented the homeowners in Twin Rivers, has filed an amicus curiae brief for ACLU, and will be allowed to make an oral argument.

Cases

Mazdabrook v. Khan (N.J. Super. A.D., 2010, unpublished).

CBTR v. Twin Rivers, 929 A.2d 1060 (2007).

State v. Schmidt, 423 A.2d 615 (1980).

In NJ, HOA boards do not have to be reasonable

Nor in any other state that stands by the Business Judgment Rule (BJR) doctrine.

 

Re: Esposito v. Riviera at Freehold HOA, No. A-6001-09T1, (NJ Supr.Ct App. Div. April 2011).

 

This appellate court decision reflects what’s wrong with our judicial system with its doctrine of binding precedents, stare decisis, that is used to uphold earlier decisions even if they may be obviously unjust by anyone’s standard. It perpetuates injustice and judicial bias, as we see with HOA decisions. In Esposito, the court cited the protections for homeowners based on the Twin Rivers NJ Supreme Court opinion,

 

The protections for common interest residents were described by the Court in [Twin Rivers]. The Court noted that (emphasis added):

 

First, the business judgment rule protects common interest community residents from arbitrary decision-making. . . . Pursuant to the business judgment rule, a homeowners’ association’s rules and regulations will be invalidated (1) if they are not authorized by statute or by the bylaws or master deed, or (2) if the association’s actions are “fraudulent, self-dealing or unconscionable.” Our Appellate Division has uniformly invoked the business judgment rule in cases involving homeowners’ associations.

 

[It should be noted that this ipse dixit (a dictum in the courts) that homeowners were protected by the business judgment rule was an “offering” to mollify homeowners who just had their constitutional protections to free speech rejected by the NJ Supreme Court.]

 

Note the BJR absence of reasonableness in board decision making as found in the Restatement (Third) of Property: Servitudes, § 3.1(2) – (4), and elsewhere. However, the homeowners were well aware of reasonableness as a criteria for valid decisions and argued the “material adverse effect” standard that includes reasonableness as a criteria instead of the BJR. Unfortunately, the Court quickly perceived that this standard only applied to condominiums as indicated in the court decision (Billig v. Buckingham Condominium Association I, Inc., 287 N.J.Super. 551 (App. Div. 1996)).

 

The Court decided that, emphasis added,

 

The trial judge held that since the Association was not a condominium association, the Condominium Act did not apply, and he refused to extend the “reasonableness” and “material adverse effect” standard in Billig to this matter. After a careful review of the record and weighing of the evidence, we see no reason to disturb the judgment requiring replacement of the door. We reach this decision based on the finding of facts by the trial court, which are adequately supported by the evidence, and essentially for the legal conclusions expressed in [the trial judge’s] comprehensive and thoughtful opinion.

What about justice? Why is reasonableness required for justice to be served in condos but not in HOAs? HOAs are sui generis, a combination of nonprofit and governmental functions. They are not just another run-of-the-mill nonprofit with ease of entry and access, and without liens or foreclosure penalties. Don’t they deserve a heightened degree of homeowner protection as provided under the “material adverse effect” and Restatement doctrines? Are we a nation of laws to serve justice or a nation of men to decide as they please?

 

[As to the nature of this complaint, the homeowner replaced his “colonial” style door with a “gothic” style door, which I am told are quite different. Esposito claimed that the property manger gave him a verbal OK, which he relied on, but submittted a change approval after the fact. The ACC, as we all could anticipate, denied the after-the-fact request. And so the suit progressed. Why, it can be reasonbly asked without fears of lost income, didn’t the board or ACC simply say it was quite unreasonable to replace a colonial with a gothic? You don’t need a King Solomon to nake this rational, reasonable, decision. Well, maybe so if you accept McKenzie’s view that incompetent people are conscripted to run HOAs and who affect the individual homeowner’s finances. Was it undue lawyer influence based on the fear of lost fees?]

 

Returnng to the argument at hand, judicial bias against HOAs, as I wrote previously in Judicial precedent and HOA bias,

The researchers found that the doctrine of stare decisis, itself, falls victim to the preferences of the judges. “Stare decisis is the rule of law that imports the aura of legitimacy on the judicial process by holding future decisions to be bound by prior decisions that serve as “precedent.” The doctrine of stare decisis ‘permits society to presume that bedrock principles are founded in the law rather than in the proclivities of individuals, and thereby contributes to the integrity of our constitutional system of government. Vasquez v. Hillery, 474 US 254 (1986).’

 

In HOAs in America, I quoted William B. Allen’scomments on Machiavelli’s The Prince, which helps illuminate my argument. In his commentary Allen wrote that “the role of morals in politics is mainly to cultivate illusions,” and that “politics is merely appearance and morality is merely pretense.” And speaking of justice, the necessary ingredient for the claim to the legitimacy of government and to be obeyed in conscience, Allen offers Machiavelli’s advice, “Because the [right] to rule is rather the appearance of justice rather than justice itself, the appearance of injustice defeats every [right] to rule.”