HOA court decisions, dicta, and activist judges

What I have discovered from my reading of hundreds of court decisions and cases on homeowner associations, from the ALJ, the trial and appellate courts, and the state and US supreme courts, is that all is not what you read in your textbooks.  In numerous instances, citations are made and taken out of context to evoke alternate interpretations; the misuse of dicta, that is simply an opinion of the judge and not material to the decision in the issue at hand, and presented as though it was, itself, the issue that was before and decided by the court; and the numerous decisions that place constitutional law secondary to equitable servitude law by, what essential are, activist judges.  These discoveries are particularly disturbing when related to homeowner association issues where 1) the body of law is not very deep, yet biased to protect the HOA, and 2) HOAs are a sui generis, a unique legal entity, not at all similar to the typical nonprofit with its ease of entry and exit.
 
With the above understanding, many HOA attorneys cite dicta as arguments for their position, which are unlike the case in most other circumstances where dicta are the result of long established doctrines and are usually correct.  That is, when a judge says so-and-so is his position or opinion as part of his reasons for his decision, and without citing case law, he is basing his opinion on long established doctrine that has been upheld over many years, after at least one court bona fide decision was handed own on the issue, or dicta.  You can say, alternatively, that his opinion is a statement of “well established doctrine and principles of law.”  But, that is not always the case with homeowners associations. 
 
For example, several court decisions have upheld the doctrine that the CC&Rs and governing documents are equivalent to contracts and will be treated as such.  So we have court after court citing, or attorneys citing, cases were this opinion was given by the judge in a decision on some other issue before the court, but never really addressed and a decision made by a court.  Of course, the basis or rational for such treatment can be challenged in court to obtain a court rendered opinion. In  Arizona Biltmore Estates, Divisio ,and Sunburst Farms (each citing the next earlier case) the court simply stated: “The deed restrictions in this case constitute a covenant running with the land [equitable servitudes law] and form a contract between the subdivision’s property owners as a whole and the individual lot owners.”  This opinion served as the basis for interpreting the CC&Rs in order for the court to decide the varying issues actually before the court. The question of a bona fide contract was not the issue before these courts, and was not decided by the court.
 
Pursuing this misuse of dicta in the courts, I asked Arizona attorney Scott Carpenter, a CAI member, a simply question on his new blog:  “Would you please provide the case law on voluntary purchases? Thank You.”  This was in response to his statement under “2010 Legislative Review” that, “The Arizona Revised Statutes, as well as case law, support the proposition that purchasing a home in a restricted community is a voluntary act and that the purchase binds the owners to the contract – the CC&Rs or restrictive covenants.”  Arizona law says no such thing in regard to voluntary acts.  If indeed it were so, then was there a need for a statutory lien to enforce HOA foreclosure rights , a supposedly a consensual lien?  A search of the eight cases provided in reply by Mr. Carpenter revealed that three did not involve HOAs (one going back to 1931), and four of the remaining five said no such thing about voluntary acts under a search for the words  “voluntary”, “agreement”, or “consent.  (The fifth HOA case, Heritage, was not searched).  
 
And, the miss-understanding of dicta is not confined to attorneys alone.  The Texas Supreme Court in Inwood v. Harris (1987) held that covenants running with the land — servitudes law — are superior to the Texas Constitution.  At the other end of the spectrum, an Arizona superior court judge, in an appeal of an administrative law judge’s decision, elevated a dictum to the level of decided law and material to the issue in her case. The superior court judge, a trial court judge, held that the cited  case’s dictum that an agency had been given regulatory functions was a material requirement for her ruling that a statute was an unconstitutional delegation for the adjudication of HOA disputes by an agency. (See Troon Village v. DFBLS (2008), aka “Waugaman“; the Carpenter law firm brought the appeal).   Yet, the test criteria used in the cited case did not require “delegated proper regulatory powers” as one of its criteria for the validity of the statute.  The judge simply included and miss-applied the opinion in the cited case, as if it were decided law material to the issue at hand.
 
This important legal doctrine of voluntary purchase has not been tested in the courts, and neither has the question of HOAs as bona fide governments regardless of the fact that they are chartered under corporation law rather than under municipality law.
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Published in: on January 14, 2010 at 4:34 pm  Comments (4)  

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4 CommentsLeave a comment

  1. Our homeowner association allows a resident use of the tennis courts for his personal financial gain. Some of the Board members know him. Any problems here?

  2. Can a HOA place a lien against a members property for a claim of money owed ( not dues ) when the hpmeowner,member,can prove they do not owe any money to the HOA because they did not cause the damaged claiamed by the HOA?

    How can such a lien be challenged in court ?

    This is a texas incident.

    • THey can do almost anything they want becasue their are no punishments for violating the law. Consequently, they take the attitude of, “Go ahead, sue us!”, knowing most homeowners will not sue. In many cases, like yours, you must sue. Write your legislator –write to Sen. Wentworth who supposedly wants to hear these horror stories.

  3. After reading this post about HOA court decisions, dicta, and activist judges « HOA Private Government, I am not sure I understand what you are trying to relate. Please expand on your thoughts a little more. Thanks


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