How CAI lawyers “work” the legislators on HOA reforms

CAI’s Legislative Action Committees are committees found in all CAI state chapters. The AZ Central Chapter is co-chaired by two homeowner asociation attorneys who have, in the past several years, represented CAI’s interests before the legislature. They are Curtis Ekmark and Scott Carpenter. The May 14, 2008 Call to Action by the CAI AZ Chapter argues against SB1162, stating,

This is definitely a “Pro-Litigation” bill. Currently, Boards and individual members can seek to amend documents to avoid lengthy and expensive litigation. The proponents of SB1162 want to take away an association’s ability to have the membership weigh in on a matter being litigated. That undermines democracy in associations and feeds the litigation machine. It is always ironic when a bill that appears to favor owners actually favors attorneys, but that is exactly what SB1162 does.

Actually, the bill says no such thing at all, but allows the judge to award attorney fees only in the event of unjust conduct by any party, including the attorneys. It specifically applies existing law, ARS 12-340 et seq., to HOAs and provides constitutional due process protections as applied to all contractual litigation. In furtherance of just and fair treatment of homeowners, it restricts the award of attorney fees, which will reduce, not increase litigation! Work it out! Mediate the issue!

Evidence from HOA records and statements at board meetings reveal the HOA attorney actually informing the board to proceed because the insurance will cover the bulk of the costs, and that they are allowed to bill the homeowner-violator per the CC&Rs. The HOA is using “other people’s money”, the assessments from members, in pursuit of many frivolous and trivial legal suits sometimes reaching $10,000 – $20,000 and more.

If a community adopts an amendment that “does not apply to a court action filed before the amendment is adopted”, there is the potential that the amendment would apply to all owners not involved in the litigation, but not the owner who happened to be in litigation at the time the amendment is adopted. When the Legislature changes the law, it does not exempt existing citizens and make the new law only apply to new citizens.

It appears that these astute attorneys who have “advised” legislators in the past are a bit confused with the questionable logic used in the above quote. First, once again these astute lawyers misdirect the issue by attempting to compare private, contractual agreements of governance with our free and open non-contractual civil governments. The above false argument is more CAI propaganda, because the issue is not of “new citizens” but of changing a contractual agreement without the consent of the homeowner, rendering the agreement meaningless.

Furthermore, what the bill does, reflecting the true reason for prohibiting “ex post facto” amendments, is to forbid amendments making what was “legal” now “illegal” — a cornerstone of American principles and values of justice and fair play. It puts the HOA in step with our Constitution. Too many times amendments are used by newly constituted HOA boards is to declare “illegal” what was once legal, imposing financial hardships on homeowners who acted in good faith and in accordance with the then existing CC&Rs. And many times with written or verbal approval of the HOA.

No, this is CAI attempting to protect its “turf” and opposing any legitimate and just constraint on HOA conduct and activities. Witness these two LAC attorneys, Ekmark and Carpenter, arguing that the HOA board is permitted to interpret the CC&Rs exclusively and in finality, and arguing to the courts and administrative law judges that the courts are intruding on the free and completely unrestrained right of people to contract as they wish. (See OAH petition 08F- 08F-H088015-BFS, and Maricopa County Superior Court appeal LC2007-000598).

In other words, as I’ve written many times, the HOA is held by CAI as an independent city-state, a principality, free from US and state constitutional restrictions. No, it’s the HOA attorneys who are promoting and encouraging questionable litigation under the claim that they are defending their client, the HOA, regardless of how it promotes a better community. Ask yourself, why is it necessary to have such provisions in the CC&RS that grant the board absolute authority over important contractual agreements in a one-sided violation of contract law. Do you call that democratic?

I ask, in judging the Call to Action by these attorneys, would they make the following claim before the courts? “When the Legislature changes the law, it does not exempt existing citizens and make the new law only apply to new citizens.” This is an example a frivolous claim to increase costs and to harass homeowners to not file legitimate complaints against abusive boards.

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Published in: on May 17, 2008 at 11:08 am  Leave a Comment  

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