August 2023 – VCL – HOA Reearch

AG power to investigate HOA abuse

An example of bill wordings in 2 states to be applied in every state.

It may come to a surprise to many who find no ills living in an HOA, but it’s well known that state Attorney General’s offices have shied away from investigating and bringing legal actions against HOA board violations of state laws and their contractual obligations.

See NC group North Carolina attempts AG protection of HOA members – HB 311 https://pvtgov.info/…/new-hampshire-attempts-ag…/ See below 2011 Indiana bill (repealed 2015),

Indiana Code

Title 32, Property, Article 25.5, Homeowners Associations, Chapter 3, Homeowners Associations

IC 32-25.5-3-8 Attorney general’s action against association or board member; misappropriation or fraud; remedies Sec. 8. (a) The attorney general may bring an action against a board or an individual member of a board of a homeowners association if the attorney general finds that: (1) the association’s funds have been knowingly or intentionally misappropriated or diverted by a board member; or (2) a board member has knowingly or intentionally used the board member’s position on the board to commit fraud or a criminal act against the association or the association’s members. (b) A court in which an action is brought under this section may do the following: (1) Issue an injunction. (2) Order the board member to make restitution to the homeowners association or to a member. (3) Order a board member to be removed from the board. (4) Order a board member to reimburse the state for the reasonable costs of the attorney general’s investigation and prosecution of the violation.

Never, ever say this to the court

Plaintiff further asserted that “his claims should not be dismissed because of “meaningless” rules.”

Read the full post here: Never, ever say this to the court

Are you a vexatious litigant?

I would like to call attention to those frustrated homeowners with a legitimate complaint against their HOA who file every little grievance in their lawsuit. It weakens the focus of a valid complaint because the judge will quickly see that it is a general unhappiness with the board’s decisions but not violations of law or the governing documents.

Be careful! Continued court filings by the homeowner who is not getting the results that he is seeking can lead to being declared a vexatious litigant and his complaint dismissed. The following is a good example of what can happen and why. It was an Arizona complaint against a reputable HOA attorney. Please note that I have omitted the reputable HOA attorney’s named in this litigation as the party was deemed a vexatious litigant.

The litigation [marriage dissolution] has sparked over forty additional lawsuits in Arizona courts, many of which are against the attorneys. It alleged the attorney agreed to represent him in a legal malpractice lawsuit and accepted money for the representation, then never performed the work and withdrew without telling him. I’ve seen these accusations galore.

[The attorney] moved under A.R.S. § 12-3201 to declare the plaintiff a vexatious litigant. He had filed multiple responses – some 40 — opposing the motion. The trial court held that the responses,

“are unsupported by facts as alleged, argue legal positions which are not founded in the law or reasonable interpretations of the law, re-argue the same positions again and again with no regard for rulings of the Court, and promote abuse of process.”

(Now, this position by the court stated above can be found in very similar warnings against attorneys. See Rules of Civil Procedure in your state, usually R 11(a) or (b). But under a “professional courtesy” defense one attorney will not charge another attorney for fear of reciprocal complaints. You would need the court or legislator to file such a complaint with the State Bar.)

The trial court, therefore, concluded “there must be some restraint regarding new filings in Civil Court to ensure cases to be filed have a concisely plead basis in fact and law,” found Danko to be a vexatious litigant.

The plaintiff’s error was not to follow the Rules of Civil Procedure (Rule 13(a)(4)) requiring a brief that “requires an opening brief to contain a ‘statement of the case’ that must concisely state the nature of the case, and a “statement of facts’ that are relevant to the issues presented for review.”

And most importantly,

“the brief must include an “argument” section with the “contentions concerning each issue presented for review, with supporting reasons for each contention, and with citations of legal authority and appropriate references to the portions of the record” relied on.”

(Very important! In general, the requirement for filing a brief as specified above is also required when filing a lawsuit. Most are thrown out for this failure to comply. In other words, as I have argued, you need solid facts and hard evidence in order to win.)

The appellate court found the plaintiff lacking in substance and declared him a vexatious litigant.

Law review article talks HOA constitutionality

While the title of the Ken Stahl Pepperdine Law Review article addresses the “validity of private deed restrictions” (CC&Rs) and “an unconstitutional taking” (eminent domain) with respect to affordable housing, Stahl’s investigation covers many of the HOA constitutionality concerns that I’ve raised over the years. He warns about legislative “overrides” – statutes that impinge on CC&Rs – and the balance of governmental powers between the state/county and private, contractual governments.

View the full response at HOA Constitutional Government.

Research memorandum examples

I chose 2 document examples, a court analysis and an issue or legislative proposal memo. The case study dates back to 2006 and the AZ Office of Administrative Hearings (OAH) adjudication of HOA disputes. It strictly follows my suggestion on understanding a legal decision. View OAH.

The second document is a presentation of arguments regarding a proposed legislative reform bill, based on a recent court holding. I chose an important but complex Florida case (Woodside Village Condominium Assn v. Jahren, 754 So.2d 831, Fla. 2 Dist. App. 2000) to address ex post facto amendments and eminent domain takings by HOAs. It required a separate examination of 4 constitutional issues. I wrote: “This Florida Supreme Court case, supporting such amendments as valid, touches on important constitutional questions of due process and the equal protection of the laws.” View proposal arguments.

Please feel free to discuss with others and to ask questions for clarifications. A dialogue will go a long way.