NV supreme court upholds HOAs as public forums

Last week the Nevada Supreme Court, in Kosor,[i] citing California Davis-Stirling law and Damon[ii] and Kite Hill[iii] opinions, affirmed HOAs as public forums. Issues relating to HOA governance are matters of public interest protected by free political speech.

SPOTIFY Audio PODCAST of post

In short, legitimate and valid criticisms of your HOA and its president and board are protected from HOA lawsuits of defamation and libel. At heart: Are the statements made in good faith and truthful?

Kosor filed an anti-slapp motion in defense that argues that the statements at issue were protected under free public speech —  statements that were of general interest to the public.  In summary, here’s what the Court upheld, following California’s rulings and law.

Accordingly, we conclude that Kosor met his prima facie burden to demonstrate that the statements in question were all made in public forums on a matter of public interest.

“Nextdoor.com post qualifies as a public forum for the purposes of anti-SLAPP protections. . . .these steps [Kosor’s statements] do not seem to differ significantly from that which might be required to view posts on Facebook; that is, a post on Nextdoor.com is as compatible with expressive activity as one on the other platform, which we have already held can support a public forum.

“The HOA here is no less of ‘a quasi-government entity’ than that in Damon, ‘paralleling in almost every case the powers, duties, and responsibilities of a municipal government.’”

“it appears that Kosor’s post, like his HOA meeting commentary, campaign flyer, and printed letter, sought to open conversation among Southern Highlands community members and enlist their participation in the community’s decision-making process.

Does your state protect your right to dissent in an HOA?  Why not?

References


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

[ii] Damon v. Ocean Hills Journalism Club, 102 Cal. Rptr. 2d 205 (Ct. App. 2000).

[iii] Cohen v. Kite Hill Cmty. Ass’n, 191 Cal. Rptr. 209 (Ct. App. 1983).

Calif. holds HOA elections as protected free speech public elections

Speaking of HOA members and public voting rights, “Why Are HOA Members Allowed A Public Vote?”[1], let’s look at the reverse side and ask, Why aren’t HOA elections equivalent to public elections?  This is another example of how successful constitutional challenges can lead to and bring about broad HOA reform legislation.

Many of us are aware of the treatment of dissenting and opposing voices with respect to BOD actions and elections. There are the threats by rogue BODs of harm, and of  slanderous and libelous statements aimed to discredit and injure the dissenter’s reputation. And then, in true attack the attackers,  there are the lawsuits by the BOD claiming that the dissenter’s speech was harmful and injured the reputation of the HOA and/or BOD members.

Anti-SLAPP

These lawsuits are referred to as Strategic Lawsuits Against Public Participation – SLAPP —  whose purpose is to silence the dissenting homeowner(s) by arguing that the HOA/BOD was defamed.[2]  In the name of justice, or the appearance of justice, many states have adopted anti-SLAPP statutes to protect the dissenters; in our case here, the homeowners. The common criteria to file an anti-slapp suit includes (my emphasis):

A moving party may file a special motion to dismiss [the HOA suit] under [the state’s] antiSLAPP statutes “if an [HOA] action is filed in retaliation to the exercise of free speech [homeowner dissent].” In considering a special motion to dismiss, a district court must undertake a two-prong analysis. First, the court must determine whether the moving party [homeowner] has, by a preponderance of the evidence, established that the action [anti-slapp motion] is based upon a good faith communication in furtherance of the right to free speech in direct connection with an issue of public concern.

Furthermore, 1)  the statement must be made without knowledge of falsehood or truth with respect to a public concern, 2) the statement must be made in a place open to the public or in a public forum, and 3) “aimed at procuring any governmental or electoral action, result or outcome.” WOW! No chance in hell to bring an anti-Slapp suit against an HOA.

HOA elections are public

However, as expected, the anti-slapp statutes vary from state to state with Arizona adopting the very strict government election requirement while California has held, over several court cases, that (my emphasis):

California courts have repeatedly held in the context of anti-SLAPP litigation that board meetings of a homeowners association “serve[] a function similar to that of a governmental body. As [the California] Supreme Court has recognized, owners of planned development units “‘comprise a little democratic subsociety.”‘ … A homeowners’ association board is in effect ‘a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government.”[3]

The use of mail or internet – social media or websites open to the public —  have been held by the California courts to be “ a public forum.”   Nextdoor was held to be a public forum in spite of the fact it functions as a closed group, but its intent is clearly to be open to anyone.[4]

This is another important tool for homeowners and advocates to use in CA, and to lobby for the same return to justice anti-slapp laws in other states.

Notes

[1] George K. Staropoli, “Why are HOA members allowed a public vote?” HOA Constitutional Government (July 20, 2019).

[2] See in general, Colorado’s anti-Slapp statute, Colorado becomes 31st State.

[3] Quoted Appellant’s Opening Brief,  Kosor v. Olympia Companies, LLC, (Nev. SC NO.75669, Feb. 8, 2019). At this writing Kosor has not yet been accepted to be heard by the Nevada Supreme Court.

[4] Id, Part C, vii, printed page 33.  See Kronemyer v. Internet Movie Data Base, Inc., 59 Cal. Rptr. 3d 48 (2007).

Beware of unsupported legal arguments and opinions when in court

All too often judges make decisions on HOA cases, making new law and new contract meanings, with unsupported statements not related to the case on hand. For example, in a question of signage, a court may state that the HOA is not a mini-government and offer no legal authority for that statement. It is referred to as a dictum (dicta) and is non-binding. However, it is used as if it were indeed a court proven and decided fact.

In the Nevada Supreme Court decision in Sanzaro v. Adiente HOA, Nev. No. 61288 (Oct. 16, 2015) we have a good example that deals with the question of proper notice. (“Proper notice” is a 14th Amendment due process requirement.) Here, arbitrators ruled that Sanzaro had “constructive notice” — here we go again, no need to read the notice — that no dogs were allowed and charged the homeowners with $17,000 in legal fees (and I thought arbitration was the best solution to HOA decisions). The district court upheld that decision, finding that the homeowners had “not shown by competent evidence any deficiency that would warrant the relief being sought.”

As it happened, the homeowners, at purchase time, were told to see the HOA webpage for a copy of the rules, but the web page rules were not the latest with the dog restriction. The HOA insisted that sending a welcome letter about the web page with its rules amounted to constructive notice. In other words, like with the CC&Rs, the homeowners were told that there was another document affecting them. Go get it and read it.

The Court found that arbitration awards are reviewed to determine whether the arbitrator’s decision represents a ‘manifest disregard for the law’ . . . the error of accepting respondents’ [HOA’s] contention that appellants [homeowners] received proper “constructive notice” of the amended rule . . . or that such notice was even properly achieved in light of appellants’ arguments and evidence to the contrary, demonstrates a manifest disregard for the law.”

In regard to CC&Rs, most state laws and CC&Rs require a mailing or personal delivery of the changed rules, or other governing documents. Nevada is one of them. In other words, constructive notice does not trump statutory notice. Some allow constructive notice of amendments by simply filing with the county clerk — BEWARE!!!!

Of course, in regard to the CC&Rs, there are no provisions in the CC&Rs requiring the delivery of the documents to a new buyer. While some states require delivery of the governing documents before closing, this requirement is waived or the documents are not read to the detriment of the buyer.

The important point is that arguments used against homeowners by HOA lawyers must be based on evidence and legal authority and not on a vague statement, like 95% of the people in HOAs like HOAs. The HOA lawyers claim to be the experts; get them to prove it and demand the legal basis for their statements.

Can the HOA legal scheme survive constitutional due process?

Bob Frank, a Commissioner on the Nevada Commission for Common Interest Communities and Condominium Hotels, asked in the LinkedIn group, Condo Association (and HOA) Network, Should States Pass “Due Process Regulations” Along The lines of The Following Draft?

My comment follows:

Bob, an excellent in depth presentation of HOA due process procedures. Allow me to provide the authority for your proposal. Judge Henry Friendly in his well-regarded article, “Some Kind of Hearing,”[1] generated a list that remains highly influential, as to both content and relative priority (my emphasis):

  • An unbiased tribunal;
  • Notice and grounds for the proposed action;
  • An opportunity to show why the proposed action should not be taken;
  • The right to call witnesses;
  • The right to know opposing evidence;
  • The right to have the decision based only on the evidence presented;
  • The opportunity to be represented by counsel;
  • A record of the proceeding;
  • A statement of reasons;
  • Public attendance; and
  • Availability of judicial review.

 

As you will note, the first listed item above requires “an unbiased tribunal.” What would you add to your proposal to further protect the integrity of your HOA due process procedures? Obviously some sort of code of conduct for those sitting on the “hearing tribunal” is in order. Following are the four Canons taken from the American Bar Association’s Model Code of Judicial Conduct[2].

CANON 1

A judge shall uphold and promote the, independence, integrity, and impartiality of the judiciary, and shall avoid impropriety and the appearance of impropriety.

CANON 2

A judge shall perform the duties of judicial office impartially, competently, and diligently.

CANON 3

A judge shall conduct the judge’s personal and extrajudicial activities to minimize the risk of conflict with the obligations of judicial office.

CANON 4

A judge or candidate for judicial office shall not engage in political or campaign activity that is inconsistent with the integrity, or impartiality of the judiciary.

I would think that third-parties with some legal background would be the way to go, but this would run into the dogmatic “the HOA members shall judge their ‘peers.’” But, then again, is that possible?

You have touched upon one of my 5 HOA substantive reforms arguments, “Fair and Just Hearings,[3] the absence of which is a clear indication of the oppressive and authoritarian nature of the HOA legal scheme.  If it is possible to obtain fair and just hearings, would this move toward democratic reforms cause the HOA legal scheme as it exists today to collapse, or can the real estate package governed by an HOA government survive governed by a true democracy?[4]

References

[1] Judge Henry Friendly, “Friendly, Some Kind of Hearing,” 123 U. PA. L. Rev. 1267, 1279-1295 (1975).

[2] American Bar Association’s Model Code of Judicial Conduct (http://www.americanbar.org/groups/ professional_responsibility/publications/model_code_of_judicial_conduct.html).

[3] See “HOA Common Sense, No. 6, Fair and Just Hearings”.

[4] See “Would the HOA legal scheme collapse under a democratic form of government?

 

What HOA issues are appropriate for federal intervention?

In my comment (see PVTGOV comment) to Evan McKenzie’s post in his Privatopia Papers blog, Las Vegas HOA corruption probe continues,  (February 26, 2013) I supported McKenzie’s opinion that congressional hearings on HOAs was in order.  In North Carolina and Nevada several homeowner rights advocates felt the same and Norm McCullough contacted Nevada Congressman Joe Heck, who responded on April 22 with,

 I can certainly understand and appreciate your frustrations. Since HOAs are governed by local or state law rather than federal, it would be best to contact your state assemblyman or state senator and local county officials with your comments.

Please be assured that I will keep your comments in mind should this issue be brought to the attention of the House of Representatives for legislative action.

A careful reading of the first paragraph above leads to the obvious: “Not my problem. See your legislators” (my words).  However, he extends hope for homeowners in the second paragraph above, “If HOA issues get here, I’ll remember what you wrote” (my words).  Congratulations to Norm.

Well, just what are federal issues aside from constitutional issues that abound with HOAs?  Let’s take a look at some other recognizable federal laws or “acts”.  There’s the Americans With Disabilities Act, Fair Debt Collections Practices Act, Truth in Lending, Truth in Advertising, Right to Work, etc. all of which deal with practices within an industry that cross state lines.  These are the nationwide practices that need the broad reach of the federal government.  And all the above resulted from abuse against the consumer by the respective industry.  With HOAs, we have very strong legitimate arguments pertaining to constitutional violations that amount to state actions in all states.

If advocates wish to be effective at the national level, they must rise above HOA operational concerns and address issues of national import.  They must be able to understand and deal with these fundamental issues of democratic governance. 

And they must accept the fact that since 1973 CAI has been the aggressive protagonist for the HOA legal scheme or structure that is offensive to our principles of democratic government.