HOA Private Government

Some sense is finally being displayed by Cal. courts in support of the Constitution against the second local,  de facto  governments — HOAs.   Homeowners require protection to speak out, since HOA issues can be public issues.  Many states have an anti-SLAPP statutes.  

A SLAPP suit (strategic lawsuit against public participation) is a lawsuit brought primarily to chill a party’s constitutional right of petition or free speech. The anti-SLAPP statute was enacted to prevent and deter lawsuits that chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances and provides “an efficient procedural mechanism to obtain an early and inexpensive dismissal of nonmeritorious claims” arising from the exercise of those constitutional rights. (Martinez v. Metabolife Intern., Inc. (2003) 113 Cal.App.4th 181, 186.)

Section 425.16, subdivision (b)(1), states: “A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.”

The Signs Are Speech Protected by the First Amendment

The Signs Are Not Defamatory

The Signs are in a Public Forum and Concern a Matter of Public Interest

No Probability of Success on the Merits Nuisance

Slander of Title.  The Beach Club asserts that it has stated a cause of action for slander of title because the signs disparage and impair the marketability of its property.

 
HOLDING:  Beach Club action was SLAPP.

SANTA BARBARA BEACH CLUB, LLC, v. FREEMAN, No. B212972 (Cal. App. 2 Div. May 3, 2010).  

http://www.leagle.com/unsecure/page.htm?shortname=incaco20100503008

Dear Committee members:

I am providing a copy of an email from a NC homeowner that exhibits her frustration and inability to deal in a fair and equitable manner with her HOA board.  If you believe that homeowners openly and freely agreed to be subjected to this type of treatment by de facto private governments, then I have a bridge in Brooklyn that I’d like to sell you.  Homeowners need to be protected like any other segment of the people from abuse by any group or organization. To say that a homeowner can go to court for a redress of grievances, would be like saying that there was nothing wrong with the 1950s Poll Tax abomination, used as an effective, legal at the time, devise to stop voter registrations.

 Please see my earlier post to concerned parties pertaining to recent NC Supreme Court decisions regarding HOAs.

Please restore constitutional protections for homeowners, along with the respect and dignity that they deserve, and provide penalties against abusive boards for violating NC laws.

 Respectfully,

George K. Staropoli

Pres.

Citizens for Constitutional Local Government

In response to a homeowners complaint, the AG’s office, Consumer Protection and Advocacy Section, replied,

Unfortunately, the problem you complained about is not within our jurisdiction.  Our office enforces the Consumer Fraud Act, however, the Act does not allow our office to pursue private disputes. Our office represents the state of Arizona and cannot act as a private attorney for individual citizens.

Understand that under the legalities here, the AG’s authority to deal with fraud is limited to “consumer fraud”.  Carefully reading the AG’s authority on its website[i], I found that fraud is defined solely in terms of the “selling or advertising“, which precludes its involvement in many of the HOA offenses and abuse.  Fraud, itself, is basically defined in terms of misrepresentation and false statements.[ii]  Consequently, homeowners must look elsewhere within the Attorney General’s Office for possible assistance. 

The Criminal Division[iii] has authority to  “protect the citizens of Arizona by successfully investigating and aggressively and fairly prosecuting criminal cases within the State of Arizona.”  Its Criminal Prosecutions Section contains the Fraud and Public Corruption unit, which “prosecutes white collar crime and fraud by individuals . . ..”  (Nothing further is mentioned of white-collar crime on the AG’s website). Note the distinction between “white collar crime” and “fraud”.  White-collar crime, as stated by the Gillespie Law firm, is a broad label, 

White-collar crimes typically refer to a type of financial, corporate, or economic crime often committed by employees or professionals using deception, as opposed to violent crimes that involve force. Most people who think of white-collar crime think of stock market and business fraud cases. However, white-collar crime involves a wide variety of criminal offenses.[iv]

Gillespie then lists the following as white-collar crimes:

1.      Bribery A.R.S. §§ 13-2601, et. seq. 

2.      Embezzlement, Theft, and Larceny A.R.S. § 13-1802 

3.      Extortion A.R.S. § 13-1804.  “Extortion” is a type of theft involving taking property or services through the use of a threat.  A person commits extortion when they knowingly 1) obtain or try to obtain something by threatening to: Cause damage to property, 2) Expose a secret that will subject anyone to hatred, contempt, or ridicule, or to impair their credit or business, or 3) Cause anyone to part with any property.

4.      Fraud Schemes A.R.S. § 13-2310[v].  A person commits a “fraudulent scheme” if, through the use of a scheme, they knowingly obtain any benefit by using false pretenses, representations, promises, or materials omissions.

In order to get the Attorney General to take your case, you need to file a complaint according to the above, with  evidence that can be taken to court.[vi]  Will he take your case?  In spite of the fact that he’s running for Governor, based on his prior unwillingness to defend homeowners against HOA abuse, and his failure to defend the OAH adjudication of HOA disputes, not very likely.  The AG has the discretion to declare, and will most likely do so, declare your complaint a private matter, a tort — a civil, not criminal wrong.[vii]  And asked if his office is to do justice, unlike the Dept. of Justice, he will probably say, no, it is to defend the state government. 

The AG will once again say  (paraphrasing), “Go ye unto the legislature, the sovereign of the state, and seek redress of your grievances.”   We must reply, “Will you come forward and support our cause against HOA abuse and injustice?”  And we must remind him that, “In every stage of these oppressions we have petitioned for redress in the most humble terms: our repeated petitions have been answered only by repeated injury.” [viii]

 Notes

[ii] “A knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his detriment“, Black’s Law Dictionary.

[iii] http://www.azag.gov/criminal

[iv] ARIZONA THEFT / WHITE COLLAR CRIME, The Gillespie Law firm; the law firm is a criminal defense firm  (http://www.craiggillespie.com /theft.html).

[v] “Any person who, pursuant to a scheme or artifice to defraud, knowingly obtains any benefit by means of false or fraudulent pretenses, representations, promises or material omissions is guilty of a class 2 felony.”

[vi] “Fraud must be proved by showing that the defendant’s actions involved five separate elements: (1) a false statement of a material fact,(2) knowledge on the part of the defendant that the statement is untrue, (3) intent on the part of the defendant to deceive the alleged victim, (4) justifiable reliance by the alleged victim on the statement, and (5) injury to the alleged victim as a result.” The Free Legal Dictionary,  (http://legal-dictionary.thefreedictionary.com/fraud). 

[vii] Viewing HOA injustice as a civil matter sets public policy against the homeowner in that the state is not interested in violations of the law with respect to HOAs. In general, a crime is an offense against society, whereas a tort is a civil wrong against a person. See Tort Law for Legal Assistants, Edwards & Edwards, eds. p. 6 (Thomson 2004).

[viii] Declaration of Independence.

This law was introduced, I firmly believe, as a result of my repeated chastising of our elected officials, over the past year, for their failure of to defend the constitutionality of the statutes that permitted the Office of Administrative Hearings (OAH) to adjudicate homeowner association disputes.  I take it as a feeling of guilt that this bill was introduced.

The adjudication of HOA complaints by OAH had leveled the playing field somewhat, providing attainable —”affordable”, to use a term used to defend the state’s protection of HOAs — justice, where the homeowner could go before an independent tribunal, without a lawyer and without the need to know the 100 odd rules of civil procedure contained in some 200 pages of “legalize.”  The constitutionality of the statute was not defended by the Attorney General, or by the legislative leadership, resulting in a superior court disgraceful default decision. A homeowner has no place to go, not even to the OAH where he could once hope to have found justice.  In the short history of OAH, pro per homeowners won 42% of their petitions against their HOA and its attorney.

This total disregard of my letter follows a flat denial, without explanation, of my February 11, 2009 Motion to Intervene, which was an abuse of discretion by Judge McMurdie.  Perhaps it was because I had included the Attorney General’s defense of the constitutionality of the statute in a prior case which would have caused a trial and an embarrassment to the AG), LC2007-00598 (Waugaman), given that the AG and Legislature now failed to defend the statute in this case. (See The State of Arizona will not protect buyers of HOA homes!, Feb. 29, 2009).

Ariz. Sess. L., Ch 105 (2010).
HB 2774 addition:

ARS 12-1841

D. THIS SECTION SHALL NOT BE CONSTRUED TO COMPEL THE ATTORNEY GENERAL, THE SPEAKER OF THE HOUSE OF REPRESENTATIVES OR THE PRESIDENT OF THE SENATE TO INTERVENE AS A PARTY IN ANY PROCEEDING OR TO PERMIT THEM TO BE NAMED AS DEFENDANTS IN A PROCEEDING. THE ATTORNEY GENERAL, THE SPEAKER OF THE HOUSE OF REPRESENTATIVES OR THE PRESIDENT OF THE SENATE, IN THE PARTY’S DISCRETION, MAY INTERVENE AS A PARTY, MAY FILE BRIEFS IN THE MATTER OR MAY CHOOSE NOT TO PARTICIPATE IN A PROCEEDING THAT IS SUBJECT TO THE NOTICE REQUIREMENTS OF THIS SECTION. 

Hear the lament of the California CAI LAC about a pro-homeowner bill.

• AB 2502 would give financial incentives for owners to unfairly manipulate their legal obligation to pay HOA assessments by refusing to pay for approximately one and a half years or up to $3,600 until the association can take appropriate legal action for that owner to pay. This will cause financial havoc for HOA’s. Owners should never be given a right to intentionally stall the payment of debt.
• Owners should not be given the right to unilaterally change the payment plan that was lawfully entered into by and between the owner and HOA. There would be no reason to enter into a plan if an owner could change it at will.
• HOA’s must be able to retain counsel or other professionals to assist them in payment plans. The bill permits HOA’s to retain experts IF the owner grants permission to do so. HOA’s, just like owner’s must always be given an ability to retain professional assistance.
• Creditors, like HOA’s, need to use collection agents periodically. Those agents, like other businesses, require payment. This bill makes it extremely difficult to pay those agents and as a consequence, HOA’s will rarely use them.

This is a desperate attempt to turn homeowners against their  own best interests, and to support the oppressive,  authoritarian HOA de facto government!   Hey CAI guys, what about adhesion contracts; “no need to see” constructive notice to bind one to a contract and to surrender one’s rights, freedoms, privileges and immunities; kangaroo court due process procedures; the right to subsequently alter the contract at purchase time without the buyer’s consent; unfair election procedures; and no enforcement against violation by the HOA government?  What about these gross injustices? 

To claim that homebuyers openly and fervently embraced this  treatment by the HOA is an insult to the good people of California.  It is grossly disrespectful and demeaning. 

Thank you for helping us preserve association solvency!!!  [and our income stream]

The Arizona Senate Government Institutions Committee failed to pass, for the second consecutive year, a bill reaffirming the civil government’s power and authority over public roadways.  Bowing to pressures from an unincorporated town, Sun City, the legislators accepted the right of a group of private people, who are governed by CC&Rs, to infringe, usurp, and trespass upon local government ordinances.

Why is the Senate committee deferring to private agreements, which ignore constitutional law and its protections of our rights and freedoms?  Why is the legislature agreeing to HOA political government supremacy over public laws, while not recognizing the HOA as a de facto government and holding it accountable as such?  This deference gives the HOA pretty much of a free ride. 

We need to ask on what basis does the Restatement of Servitudes, which offers recommendations to the judicial system by pro-HOA “legal-academic aristocrats”, proclaim: “Although zoning regulations and servitudes are usually compatible in the sense that the more restrictive prevails . . . .”[i]   What does “usually compatible in the sense that the more restrictive prevails” mean?  And, we also need to ask is the current legal doctrine of CC&R supremacy legitimate and constitutionally valid? 

The Arizona Attorney General, in a 2006 Opinion[ii] on this issue, with respect to county fire code authority, cites case law and provides the following conflicting opinions:

1. In general, when a contract is incompatible with a statute, the statute will control. . . . The exercise of police power to protect the public welfare, such as the enactment of fire codes, may supersede provisions in private contracts like CC&Rs if the government’s actions are reasonable and appropriate to the public purpose.
2. restrictive covenants cannot avoid obligations imposed by parking ordinance;
3. municipal ordinance imposing fence requirements supersedes restrictive covenant;
4. The provisions of these and other fire codes supersede conflicting provisions in CC&Rs.

1.  State or county fire codes supersede CC&Rs when fire code provisions directly conflict with CC&R provisions.
2. When a fire code provision and a CC&R provision are not in direct conflict, but rather, are both restrictive, the provision that contains the more stringent restriction will control and will establish the permitted use.

The first 4 items from the AG’s Opinion are consistent and reflect an unequivocal doctrine that statutes and ordinances supersede CC&Rs.  While item (4) above introduces the issue of “conflict”, it still holds that the ordinance controls even when there is conflict.  Items (5) and (6) above, which are found in the summary section of this short 5-page opinion, are contradictory, and conflict with the first four items taken from the “Analysis” section of this Opinion.. 

We are now faced with the question: what is meant by “direct conflict” as opposed to just “conflict”?   The AG offers no clarification of these terms. This hair-splitting distinction reverses the cited case law and serves to support CC&Rs as controlling over ordinances when the covenant is “more  restrictive.”  

Perhaps, to better understand these words, we can ask: What meaning can be attached to “indirect conflict”? If, for example, a parking ordinance restricts parking from 10:00PM to 6:00AM, is  a covenant restricting parking at any time “more restrictive” or in “direct conflict”?  The pro-HOA quick answer is: obviously it’s more restrictive.  The criterion of  “more restrictive” to grant HOA agreements as controlling is without any rational legal basis to serve as criteria for the denial of legitimate government authority as set forth in the statutes and ordinances.   The only rational basis for a government interest for the surrender of civil authority to a private entity is that “that’s what this private group wants.”  

But the denial of our rights and privileges rises to a constitutional issue, which must requires a more stringent test of “a compelling and necessary government interest”. Those raising the “safe parking” issue in opposition to the have over remedies in law to effectively address their concerns without a wholesale grant of authority to the HOA. . “More restrictive” denies rights belonging to the people by a private organization —  the right, in our example, that the people enjoyed from freedom to park at all other unrestrictive times.  “More restrictive” directly conflicts with the rights belonging to the people.

It should be understood that any such enforcement by the courts could be challenged under the state constitution’s “privileges and immunities” clause, or under the color of law doctrine of 42 U.S.C 1983.

Every person who, under color of any statute, ordinance, regulation . . . subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress . . .

Covenants that are unconstitutional, contrary to public policy, unreasonable, or arbitrary and capricious are invalid and unenforceable.  Pro-HOA devotees offer the desperate and misleading argument that “members agreed to be bound by the CC&Rs, raising the issue of “contract interference.” Which leads to a multitude of questions concerning the validity of the consent to have agreed under the requirements for a bona fide contract.  Which leads to the argument that servitudes law with its constructive notice doctrine — homeowners are bound, sight unseen to the CC&Rs — controlling issues of constitutional law.[iii]  Which “turns the Constitution on its head” and leads to questions of a constitutionally valid surrender of one’s rights, freedoms, privileges and immunities. Which, coming full circle, leads to covenants that are unconstitutional, contrary to public opinion, unreasonable, or arbitrary and capricious are invalid and unenforceable.

Notes

[ii] ATTORNEY GENERAL OPINION, Terry Goddard, No. I06-005, (R06-009), November 15, 2006.

[iii] Supra, n. 1, § 3.1, cmt. h. (“The question whether a servitude unreasonably burdens a fundamental constitutional right is determined as a matter of property law, and not constitutional law“).

The following email letter from Mr. Brown to the Arizona legislative leaders reflects his concern about democracy in America.  (For more information on this HOA bill, please see public streets: the battleground for private or public government control).   

hoa constitution

My dear President Burns, Chairman Tibshraeny, Vice-Chairman Harper, Members of the Senate Government Institutions Committee, Senator Bunch, Representative Barto, Co-Sponsors of HB2153 and Representative Barnes:

“From time to time we read in the newspapers, or hear on the radio, about policies and procedures and practices in the Arizona legislature. Most often that which we read or head is critical of how the legislature goes about its business. Words such as “fair” and “open” and “level playing field” are used, as if to imply that the legislature should operate in a significantly different manner that it does.” Senator Randall Gnant, “From Idea…..To Bill…..To Law, The Legislative Process in Arizona,” February 2000

The Guest Opinion, “Who controls public streets,” Arizona Capitol Times, April 1, 2010, is on-point re the proposed HB2153 legislation as well as the global issues respecting associations’ control of property not owned by an association, associations’ control of the conduct and actions of Arizona citizens clearly not subject to the association’s governing documents and associations’ coveted power and dominion over homeowners subject to the association’s governing documents, the sacrosanct “private contract.”

Association stakeholders opposed to HB2153 regularly blur the lines between their long-held belief in “private contracts” not to be interfered with by federal, state, county and/or municipal governments and certainly not the legislature unless and until it suits the stakeholders and their client associations’ interests as evidenced by associations’ growing reliance on “what can government do for” stakeholders and associations today. (See Community Resource, Issue 1 / 2010, “What Your Local Government Can Do For You,” Community Associations Institute / Central Arizona Chapter, attached)

“Getting a hearing on a bill is a crucial first step for individual citizens, lobbyists, special interest groups and state agencies..in the Senate, bills that receive a hearing have a high likelihood of passing the full Senate. So, while failure to secure a hearing is a virtual disaster for a bill, getting a hearing takes a bill on the longest step towards becoming law.” (Gnant)

Please include HB2153 on the Committee On Government Institutions’ agenda, Consideration of Bills, permitting the peoples’ representatives in the Senate to vote on the bill’s passage as your brethren in the House, the people’s other representatives, did so on February 17, 2010 (43/14/03).

Respectfully,

William M. Brown