Tag: UPL

SB 1454: Machiavelli at work in the AZ legislature – Part 1

Part 1. Rep. Ugenti, Senator Griffin and lobbyist Sandquist 

(See Part 2).

Back in July I commented about SB1454 and wondered whether the Constitution or Machiavelli was alive and well in the Arizona Legislature.  In the subsequent two months I’ve come into possession of additional information on the events surrounding SB 1454 and its predecessor, HB 2371, and the underhanded manner in which it became an unconstitutional law. 

This post elaborates on the above commentary, which should be read first as it provides background information. This post also provides insight on how a legislature really functions, and undoubtedly how your legislature functions with respect to HOA legislation.

Furthermore, for a better understanding of the events the reader should view my video of the HB 2371 hearing before Senator Griffin’s GE committee.  It includes some interesting statements between Rep. Ugenti, who sponsored HB 2371, and Griffin; and between the HOA manager association lobbyist and Griffin. (The lobbyist’s statements begin at 9:13 into the 11 minute video). 

Please pay attention not only to their words, but to their body language as well. Listen to their arguments, but closely examine what is being said “between the lines.”

 

A.        Representative Ugenti

The March video of Senator Griffin’s hearing shows a perky Ugenti exuding confidence. She makes use of the special interest mantra, “stakeholder,” and states how all the stakeholders met and agreed upon the bill. She basically tells the committee that they are vendors (“stakeholders” refers not to homeowners, but to all those vendors who are making money off the HOA and off the homeowners).  The problem is, is that these vendors are daring to set legislation affecting the rights of homeowners that serve their own agenda.  Yet no committee member asks, “Where are the homeowners?”

Ugenti stated that each year there was “a plethora of personal HOA legislation”[1] and tried “to spare the [committee] members the constant agony of many personal pieces of HOA legislation,” as contrasted to the industry legislation. Ugenti also said that she “felt very responsible to the stakeholders.”

 

B.        Senator Griffin

Senator Griffin is also the Senate President Pro Tempore, second in line in the leadership hierarchy. The AZ Legislative Manual states that, “the chief duties of these officers are to preside over Senate and House proceedings and to otherwise assume the duties of the President and the Speaker when they are absent from the Legislature.”  

Griffin played a role in two separate incidents.   The first, see (C) below, is her withdrawal of an amendment to HB 2371, thereby allowing HB2371 to go on the Consent Calendar. This calendar leads to a direct vote by the Floor without further debate by all the representatives. However, it was objected to being on the Consent Calendar, which forced the bill to be debated by the Committee of the Whole (COW).  The bill was never debated and never came to a vote; it died in the Senate.

Second, having faced defeat in her bill Ugenti once again obtained the co-operation of President Pro Tem Griffin. Griffin added the failed HB 2371 HOA amendments to HB 2518 (Rep. Olson was the Sponsor), now before the Senate.  The bill passed the Senate and was sent to the House where a Conference Committee was recommended – the House did not accept the Griffin/Ugenti amendment.  This time, the House failed to hear the amended HB 2518 and it, too, died along with Ugenti’s HB 2371 HOA amendments.[2]

  “The role of morals in politics is mainly to cultivate illusions . . . politics is merely appearance and morality is merely pretense.” (“Machiavelli and America,” Hadley Arkes, p. 104, The Prince (Yale University Press, 1999)).

 

 C.       Jeff Sandquist, AACM lobbyist

At the end of the above mentioned video (see Part 1), Jeff Sandquist, lobbyist for the Arizona Association of Community Managers (AACM) addressed the committee.  AACM stood to gain much from HB 2371, which would allow its members to represent HOAs in small claims court and before administrative law judges at OAH (Office of Administrative Hearings).  State certified legal document preparers (paralegals) are not allowed this right. There were no provisions in the bill for licensing, training, or educating property managers to adequately represent HOAs. Nor equal representation for homeowners.

Note the very friendly dialogue between Sandquist and the Chair, Griffin, which is out of order for a committee hearing.  “Tell your Mom hello for me.” Griffin mentions that making an amendment got her to see her “buddy” Sandquist.  He thanks her for not offering her amendment.

Sandquist also vaguely spoke about how the courts would like to see a provision moved to another section, implying an acceptance by the courts. It also implies a recognition of a separation of powers issue on granting HOA managers representation rights.

Two days after filing the complaint, about a month after the Governor signed SB 1454, a Supreme Court Rule 31 change was requested seeking an exception for HOA managers to be able to represent HOAs in small claims court (still pending).

[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.

[2] In my 13 years I have seen isolated cases in various legislatures in different states where the right and ethical action was taken and legislation was defeated or passed as appropriate, as we see here with these 2 bills.  But, on the whole, far too few.

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 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

 

AZ HB 2371 allows unlicensed managers to represent HOAs in disputes

This video covers the Arizona Senate GE committee hearing on a bill that would allow unlicensed HOA managers to represent HOAs.  It shows the AZ legislature abdicating and supporting HOA-Land rule over democratic rule, and over the Constitution. It shows a banana republic, “I see no problems,” mentality.

See Arizona’s HB 2371 empowers unlicensed HOA property managers to avoid UPL.


Here are my comments at several points in the video.

My opening statement

Hi, I’m George Staropoli, also known on the internet as HOAGOV.   I am once again, reluctantly, before the camera with another HOA legislative documentary. My material comes from events at the Arizona Legislature, and from the legislators themselves.

Viewers will be alerted to the following comments at appropriate points in the video. They are provided to assist you in understanding of what’s really going on.  With this in mind, I strongly recommend that you take time to read my HB 2371 Commentary (on this date) on my website before continuing — the link is now being shown.

This video will also be posted to my HOA Constitutional Government website along with my detailed comments — the link is on the screen.

Let’s view the hearing . . .

Opening comments by Ugenti:

You just witnessed the sponsor’s “opening statement.”  Note her motive for the bill: Let me quote her, “Every year there is a plethora (many, many) of personal HOA legislation . . . as well as industry HOA legislation.”  She stated that she combined all those bills “working through a stakeholder process and allowing the stakeholder process to filter the proposed legislation   . . . representing a consensus from the AZ realtors, and AACM (AZ Association of Community Managers, the beneficiary of this bill).”  She further added “to spare the members from the agony of voting up or down on personal pieces of legislation.”

Now, what was she saying?  First the “personal” bills come from homeowners while the other legislation is “HOA industry legislation.”  She put the bills through a stakeholder process and used the process to filter the bills. She failed to say, however, that no homeowner advocates participated in this stakeholder filtering process, which was brought to light in her House GOV testimony, and not denied.

Ugenti said nothing  about fixing HOA problems and making HOAs better for everyone, especially the real stakeholders — the homeowners.  Not even entertaining an amendment to address issues of substance relating to constitutionality, fair and just laws, and of other homeowner concerns as emailed to her.

Now let me explain that in her earlier statement to the House GOV committee, she also said that she wanted to avoid any controversial bills.  But, think about it.  If there is serious opposition, based on authoritative sources, wouldn’t that that create a controversy?  So, her choice was to deny any opposing views, and only pick the special interest agenda – the stakeholder agenda.  Isn’t Ugenti failing to understand that these problems are not singular or personal to just one homeowner?  I mean, after hearing more of the same from others and the media, you would think she could take a hint!  Apparently not!

Homeowners appear to have been given short rift, and have been placed “at the bottom of the food chain,” defenseless and being gobbled up by everyone else.  And here I thought our representatives are supposed to represent the people, not the moneyed special interests.

Art. II, Sect. 2, of the AZ Constitution states, “Governments . . . are established to protect and maintain individual rights.”  Did I miss something?

Furthermore, in an outright act of favoritism toward the special interests, as shown in the video, Ugenti asked for questions that she or the stakeholders can answer.

Let’s return to the video . . . .

Homeowner email:

Please understand what has happened in this staged scenario with this constituent email, which the legislators viewed as having a “personal issue” with her association  —  homeowner owners only bring personal problems while the special interests deal with non-personal agendas.

With the several email dealing with issues and problems of substance, why was the single email chosen for airing before the committee?  Why? Because it serves to reinforce the sponsor’s false argument that homeowners only deal in personal issues, which justifies her leaving out the homeowners from serious, authoritative HOA industry specialists! There was no mention of the non-personal, substantive constitutional issues brought to the attention of the legislators in my emails and commentary, or in two other homeowner advocate emails that I have personal knowledge.  Nothing! Silence!  Not a word!

The legislators “hear no evil, see no evil, and speak no evil.”

Let’s return to the video . . .

 

Conclusion

You have now witnessed another episode of “the unspoken alliance of no negatives about HOAs.”  Did you hear any of the objections that were emailed to the committee? NO!   You did not hear that the bill would allow unlicensed HOA property managers to represent HOAs in small claims court, or before an administrative law judge at the Office of Administrative Hearings?   Did you know that even licensed paralegals are not allowed to represent others?  Did you know that the current law applies to all hearings from all agencies before OAH?

Don’t tell me that the legislators, AACM, CAI, or the sponsor of  HB 2371 don’t know about the 2012 AZ Supreme Court opinion on HOA managers  engaged in the unauthorized practice of law, and the decision against for numerous UPL violations against one CAI/AACM member?  C’mon!  The legislators were sent copies of these decisions.  The viewers of the hearing video would not think any such events against unlicensed mangers had occurred.  In court, hiding exculpatory evidence (evidence in favor of the defendant) is a crime!  But, apparently it’s OK in the legislature.

And rather than do what is just, fair and reasonable, and that is to require proper licensing for managers if they are being allowed to represent HOAs, HB2371 is silent on education!

What we have here is a special law for special private entities, without even a whisper of any legitimate justification.  The bill is an unconstitutional special law violating the AZ Constitution, ART II, section 13, which states, “No law shall be enacted granting to any citizen, class of citizens, or corporation other than municipal, privileges or immunities which, upon the same terms, shall not equally belong to all citizens or corporations.”  In other words, no special laws for special people are permitted.

Section 32 states, “The provisions of this Constitution are mandatory, unless by express words they are declared to be otherwise.”   Where are the “express words” in this bill to override the Constitution?

What you have witnessed is the homeowner, the real stakeholder, has been cut out from the legislative process. What we have here is legislative support, cooperation, entwinement, and a symbiotic relationship between the state and the HOA, thereby making good cause for HOAs to be declared arms of the state, or state actors, subject to the 14TH Amendment protections.

It must still pass the Rules committee and the final vote of the entire Senate before becoming law.  Passing this bill into law would be unconscionable!  

WELCOME TO THE NEW ARIZONA OF HOA-LAND

 

Arizona’s HB 2371 empowers unlicensed HOA property managers to avoid UPL

In short, HB 2371 would allow untrained and unlicensed HOA property managers to represent HOAs in small claims court, but does not allow the homeowner to be represented.  Yet, real estate agents, who are required to take continuing education courses in agency, real estate, and contracts law, are not allowed to represent others in court.  And even licensed paralegals cannot represent others! Why allow untrained and unlicensed HOA managers to represent a special class of nonprofit entities?  What legitimate reason is there for this provision except to provide income for the special interests?

The only justification for this bill, which was by offered by the Sponsor, was that it was not controversial and it was agreed to at a meeting of all the stakeholders. However, the stakeholders did not include any homeowner advocacy group, and this bill is very much not only controversial but un-American as well.  This is the second such bill brought by a state representative in the past 3 years, the other being HB 2441, the “minority control” bill in 2011, that was rightfully defeated in the Senate.

In January of last year HOA managers were put on notice by the AZ Supreme Court opinion (UPL Advisory Opinion, 12-01) on the Unauthorized Practice of Law, and one firm in particular, a member of two HOA special interest trade organizations, was found to have engaged in the unauthorized practice of law (in RE: Board of Legal Document Preparers v. AAM, LDP-NFC-09-L094 and LDP-NFC-10-L026). 

So, it appears, the problem of managers engaging in UPL activities is to be resolved by introducing a bill to “make it all good without any requirement for training and licensing!  This is a disgraceful bill! A bill that treats the good people of Arizona, who are subject to unregulated HOA private governments, as second-class citizens.  It insults the good people of Arizona!

Furthermore, HB 2371 goes on to allow “contractors” (that can not only be managers, but landscapers, pool maintenance people, etc.) of HOAs to represent HOAs before the Office of Administrative Hearings. It allows attorney fees to be awarded only for the Petitioner if he wins. Under the law, OAH is not permitted to award attorney fees, so this bill is needed to make it happen.

 But, it is only for HOA adjudication hearings and not for any other agency hearing!  With HB 2371, the unlicensed and untrained manager will get fees paid by the Pro Se homeowner who turns to OAH because of no attorney fees.   Records show that some 90% of the homeowners were Pro Se not using an attorney, while the HOAs were almost 90% represented by an unnecessary attorney. (Based on detailed OAH records for the first 66 cases in 2006-7).

 The purpose of OAH adjudication was to provide an increased level of judicial protections for homeowners in HOAs without the need for an attorney in an informal setting, and without the need to understand the rules of court.  The HOA attorneys have been trying for years to turn OAH into civil court proceedings under 100 rules found in some 200 pages of legalese. But, the bill does not require that the HOA manager learn and understand the civil rules or the law.  

Once more the citizen, the whole reason for the existence of a democratic system of government, is smashed down to the bottom of the food chain by an unconscionable bill.  A disgraceful and insulting bill!  The Senate committee cannot allow this bill to pass in good conscience.  It must be soundly thrashed.

HB 2371 will be heard in the Arizona Senate Government & Environment Committee on a Monday to be determined.