Will AZ Supreme Court address broad HOA issues of constitutionality?

As we approach an October 5th decision to decide to hear the Tarter v. Bendt defamation case[i] that raises free speech and limited- purpose public figure issues, I am hoping that the Court will address the real-world widespread misinformation regarding conditions and the legal status of homeowner associations statutes. This investigation by the Court is essential for a just and fair decision in the defamation lawsuit by an HOA president and attorney. Questions of failing to act in good faith and an abuse of the law by the plaintiff attorney with respect to filing a strategic lawsuit against public participation (SLAPP) was raised in my amicus brief.

This is not an ordinary defamation lawsuit but one involving the actions and conduct by the plaintiff in his capacity as the HOA president  and in the context of matters of HOA governance. In the recent Nevada Supreme Court opinion in Kosor,[ii] the Court held that “HOAs as public forums and the president as a limited-purpose public figure” and further held that an HOA “is a quasi-government entity ‘paralleling in almost every case the powers, duties, and responsibilities of a municipal government.’”

The decision by the Arizona Court will have widespread repercussions and consequences not only for Arizona, but for HOAs  nationwide affecting  statutes in every state. The legitimacy of a democratic country rests on just and fair laws for the people, as Professor Randy Barnett wrote,

A constitution that lacks adequate procedures to ensure the justice of valid laws is illegitimate even if it was consented to by a majority …. A law may be ‘valid’ because it was produced in accordance with all the procedures required by a particular lawmaking system, [the HOA amendment procedure, for example] but be ‘illegitimate’ because these procedures were inadequate to provide assurances that a law is just.[iii]

Since the context of the lawsuit relates to the legal status  and constitutionality of the HOA model of government, and to the statutes and CC&Rs “constitution” creating private contractual governments, did Bendt receive justice with a $500,000 award for the HOA president’s “pain and suffering? As applied to HOA statutes and Acts, will this Court heed US Supreme Court Justice Sotomayor’s dissent on the failure to uphold the Constitution?[iv]

“Presented with an application to enjoin a flagrantly unconstitutional law engineered to prohibit women from exercising their constitutional rights and evade judicial scrutiny . . . . Because the Court’s failure to act rewards tactics designed to avoid judicial review . . . . 

“To circumvent it [the Constitution], the [Texas] Legislature took the extraordinary step of enlisting private citizens to do what the State could not . . . .  It cannot be the case that a State can evade federal judicial scrutiny by outsourcing the enforcement of unconstitutional laws to its citizenry . . . .”

This case must be remanded to the trial court for consideration of the impact of HOA bias on the decision against Bendt.

Notes


[i] See HOA limited-purpose public directors and officers; The continuing saga of Bendt and public speech in HOAs; Pro Se Bendt amicus brief accepted by AZ Supreme Court.

[ii]  Kosor v. Olympia Companies, NV No, 75669 (Dec. 31, 2020).

[iii]  Randy Barnett, Restoring the Lost Constitution, Princeton Univ. Press, (2004).

[iv]  Whole Woman’s v. Austion Reeve Jackson, 594 U. S. ____ (2021) Sotomayor R, J., dissenting, Supreme Court of the United States, No. 21A24 [September 1, 2021]. (Abortion case).

Attorney abuse sanctioned: why not HOA attorneys?

This US district court opinion[1] sanctioned lawyers who

“abused the well-established rules applicable to the litigation process by proffering claims not backed by law; proffering claims not backed by evidence (but instead, speculation, conjecture, and unwarranted suspicion); proffering factual allegations and claims without engaging in the required prefiling inquiry.”

This opinion imposed   

“monetary sanctions on nine Trump attorneys was that it was so long in coming  . . . made outlandish claims of election fraud in Michigan and other key battleground states, all of which were roundly rejected by every court that considered them.”

 What has this case to do with HOA attorney conduct? Plenty!  Just read the judge’s opinion (pages 1 – 5) and see why. The highly relevant opinion that can be applied to the conduct of many HOA attorneys:

“Specifically, attorneys have an obligation to the judiciary, their profession, and the public (i) to conduct some degree of due diligence before presenting allegations as truth; (ii) to advance only tenable claims; and (iii) to proceed with a lawsuit in good faith and based on a proper purpose. Attorneys also have an obligation to dismiss a lawsuit when it becomes clear that the requested relief is unavailable. . . This matter comes before the Court upon allegations that Plaintiffs’ counsel did none of these things.”

Be sure to read the footnotes that further explain the justifications!

Furthermore, in response to intervenor, the City of Detroit’s  charges of violations of Rule 11, civil court procedures, that requires the attorney to certify that the lawsuit was not for “an improper purpose”, was not “well-grounded in law, because the factual allegations could not support Plaintiffs’ claims.”   You may recall my arguments on violations of Rule 11[2] as well as Rules of Professional Conduct, “candor to the tribunal (telling the truth)[3].

This country needs  more cities and towns, like Detroit,  to stand up to attorney abuse of their obligations to the judicial system. We need state bar associations to pursue claims of abuse! We need to stop the attorney claims of “professional courtesy” who fail to raise these issues on behalf of their homeowner clients!

Notes


[1] Timothy King et al. v. Gretchen Whitmer et al.,  No. 2:20-cv-13134  Aug. 25, 2021).

[2] See HOA members fail to invoke their strongest weapon — Rule 11, representations to the court.  

[3] See in general, Is CAI’s ‘lack of candor to the tribunal’ intentional? and Misrepresentation: CAI comes with unclean hands.

 

Questionable CAI/FCAR 2020 facts

My analysis of the data presented in the 2020-2021 Statistical Review and CAI Factbook for 2020 by the CAI affiliate, Foundation for Community Association Research, brings me to suspect the data.  I painstakingly extracted the raw data as presented and subjected it to my own analysis using an EXCEL spreadsheet.  Almost immediately a very disturbing result appeared that should have been obvious to a statistician as highly unlikely.  Of the 27 top states by number of  HOA organizations, my analysis revealed a fixed 3.3% of Volunteers to HOA residents for the state. Restated, each state showed 3.3% of all HOA residents as CAI volunteers.research

From a point of view of statistics, events and activities generally follow the normal probability curve, more or less, but when there is no variation then the conclusion is that some other factors are at play that produced the result.  The normal distribution is the most important probability distribution in statistics because many continuous data in nature and psychology displays this bell-shaped curve when compiled and graphed.  For example, if we randomly sampled 100 individuals we would expect to see a normal distribution frequency curve for many continuous variables, such as IQ, height, weight and blood pressure.

Consequently, this result should have been caught if it were some error, or if not an error then an explanation as to what caused this highly unusual result.  There was no explanation. Therefore the validity and integrity of the Statistical Review is suspect. The data used to generate the results cannot be accepted as a factual free choice representation of the underlying reality.  To repeat, the “error” is too obvious not to  have stood out and been corrected. As such, the entire factsheet is suspect, and probably earlier factsheets as well.

Looking for some rational explanation, I then looked into the possibility that the Top 27 states were somehow different from all the states so I examined a random 5 states, one from each corner and one from central US.  They, too, showed this suspect 3.3% ratio.

My research also revealed  the percent of HOA residents to the total US population as 21.1% and 22.4% (a variation ascribed to intermediate rounding of numbers and not significant). CAI has touted the number as 25% – 27%,  also in 2019, but in 2016 the number was in line with the 22% figure.  I cannot explain how this CAI number was obtained.

Hopefully, CAI and FCAR have an explanation.

For the mathematically inclined, the EXCEL spreadsheet (PDF) can be viewed. http://pvtgov.org/pvtgov/downloads/2020 data analysis.pdf

In case you were wondering about my background in statistics, I have taken courses in statistical analysis in psychological research, product marketing  (MS Management), participated in a queuing theory analysis of computer messaging throughput for international wall street firm, set up the methodology for the calculation of business sales for business brokerage industry, and analyzed the TV show, Deal or No Deal, probabilities of winning the million dollar prize (see starman.com website).

“Private Metropolis” revisited

It is my strong belief that  the HOA legal model of local government played a part  in the demise of democracy in America[i] has been greatly assisted by the recent publication Private Metropolis.[ii]  In my prior post on Private Metropolis,[iii] I was very pleased by the opening Introductory paragraph,

The opening introductory segment encompasses a wide description of special  governmental units. It is loaded with constitutional issues and controversies that says it all quite plainly: “quasi-governments,” “shadow local states,” “the municipality is no longer the privileged seat of governance,” and “special purpose local governments” (including homeowner associations with some 27% of the population — according to CAI — as residents), that “became, in effect, shadow governments.” 

Unfortunately, these highly descriptive political concepts  used in this very broad study of local government failed to appropriately address the form of local government known as HOAs.  Scant attention is given to these associations by the authors. In the 312 pages “homeowner association” is mentioned just once and “CID” twice. But “shadow government” and “quasi-government” and “special districts” are tossed around quite frequently. Readers, having read the very enticing title, will be greatly disappointed by its failure to deal with the most direct affront to the eclipse of local democratic government: the HOA legal model of governance that has been supported by all state legislatures across this country.

HOAs, my generic term for community and homeowners associations, satisfy the fundamental definition of a political government.  Black’s Law Dictionary (7th Ed.) definition separates the men from the boys: “Modern states are territorial; their governments exercise control over persons and things within their frontiers.”  And that is the unique feature of political government that  distinguishes an HOA from  a business, a non-profit charity, a club, a union, etc. I believe that the decision to form HOA governance outside the domain of public government was intentional to avoid constitutional restrictions.[iv]

They are a de facto yet unrecognized form of local government — other forms being mayor-council, council-manager — born and created as private entities, and as such,  have escaped, for the most part, under the common defense prohibiting  any ”law impairing the obligation of contracts.” Although the other forms of public local government are subject and held to the Constitution and the laws of the land. HOAs meet every criteria set forth by the authors as indicated above and epitomize the eclipse of local democratic government. 

The authors appear to admit the failure of the  ivory tower “philosopher kings” (my terms) to actively participate in preventing the fall of local democracy: “Instead, even scholars who study local governments [only recently realized] the degree to which quasi-public institutions are insulated from the democratic process.”  That applies strongly to authoritarian HOA governments. 

Notes


[i] See in general, Whither goest local government? Restrictive HOAs or responsible public government (2009); CAI’s early awareness of HOA constitutionality, public mini-government (2021); HOAs are another form of local government (2021).

[ii] Private Metropolis: the Eclipse of Local Democratic Government,  Dennis R. Judd, Evan McKenzie, Alba Alexander, Global and Community Series, Vol. 32, Univ. of Minneapolis Press (June 22, 2021).

[iii]  Private Metropolis: explaining the demise of local public government.

[iv] CC&Rs are a devise for de facto HOA governments to escape constitutional government.

Business judgment rule not right for sui generis HOAs

This examination of the business judgment rule is a supplement to my amicus curiae brief to the AZ Supreme Court (Taylor v. Bendt, CV-21-0049, awaiting decision to hear case) in which I provided guidance in regard to 1) HOAs are sui generis created by rejecting Constitutional protections and instituting and supporting  separate laws for special organizations, 2) HOA-Land has been under the heavy influence and domination of the national lobbying entity, Community Associations Institute (CAI), and 3) as a result of the above a pro-HOA mindset has crept into our judicial system resulting in bad laws setting  bad precedent.

You can read the complete 30 page treatise (15 pages of argument plus apprendices) here .