Bad faith by HOA for not promptly processing insurance claim
Source of Law:
CC&Rs
Discussion:
By stipulation of the parties reached during the hearing, Respondent agreed to pay the $1000.00 deductible and the depreciation cost for Petitioner.
Holding:
The stipulation of the parties regarding costs associated with repair of Petitioner’s interior wall resolves Petitioner’s claim. There is no violation of the C,C & R with respect to Respondent’s obligation to repair Petitioner’s interior wall damage.
Respondent did not violate either its general obligation to landscape and maintain the common areas, under C,C & R, Article VIII, Section 6; or its specific obligation to maintain the natural vegetation in the sloped Common areas at least quarterly, as required by the Architecture and Landscaping Regulations and Guidelines (Exhibit P13).
Respondent did not act unreasonably or in violation of the C,C & R in failing to take more intrusive and costly measures to bring the Easterbrook property into compliance.
Following a discussion on the record prior to commencement of the hearing, this allegation, #1 relating to painting the garage door, was dismissed pursuant to an agreement of the parties.
As to issue #5, the issue was no longer in dispute.
Office of Administrative Hearings does not have legal authority to award attorney fees and costs to a party in this proceeding.
Comments:
In this case, the homeowner won the real issue of getting paid her $1,000 deductible by the association, but lost the remaining complaints.
Essential complaint was that delays and initial failures to respond to her roof/wall problem resulted in financial costs and other hardships, and that such failure was a failure to act in good faith.
Issue #5: Issues with neighbor regarding roof repairs is a separate issue. Insurance claim for interior damages, relating to roof and common wall as a result of a tree falling on the roof. HOA refused to file claim. Yet, as of the hearing date, Farmers Ins. has provided a claim check for interior damages as a result of recent storm only. Petitioner incurred additional costs to force the claim, and she wants to be paid. Original neighbor did not fix repairs, and house was sold twice. Roof is not being repaired. New neighbor plans to fix the roof, so petitioner will be “made whole”.
Petitioner wants $1,000 deductible to be split by HOA and homeowner, as provided in CC&Rs. Is the common “touching” 2 houses a common wall, thereby invoking the split of the deductible costs?
ALJ can only issue a penalty against the HOA, and not damages for HOA bad faith. Any penalty is paid to the General Fund and not to the Petitioner. Petitioner wanted her costs for attorney fees, etc will not be awarded by ALJ – outside OAH jurisdiction. OAH does not award attorney fees or other costs – just a return of filing fee.
Only the issue of reimbursement of deductible to Petitioner was heard. No “bad faith” issues would be heard. Petitioner wanted judgment for possible mold when interior is repaired. ALJ cannot hear “what if” possibilities (need to file suit if mold is actually found to exist).
Issue #4: While HOA agreed to allow the antennae, petitioner still is being held in violation of the Rules (which means loss of certain privileges and voting). Settled and not heard.
Issue #3: Failure of HOA to trim trees. Quarterly maintenance is not the same as quarterly tree trimming. Allowed for hearing.
Issue #2: Damage caused mold. HOA was required to intercede according to CC&Rs. Allowed for the hearing.
Issue #1: Paint colors. Special consideration for board member. ACC guidelines permit discretion, which was not abused. ALJ will not entertain issues with other homeowners, unless petitioner represents these other homeowners. Not heard.
Note: The first 48 minutes was more like a pre-conference hearing where the ALJ clarified the issues and which were suitable for ALJ adjudication. Only 3 of the 6 counts (issues) were heard.
Carolyn Goldschmidt is the HOA attorney. She repeatedly brought up “legal issue”, which was beyond the jurisdiction of OAH. For example, “Is the board responsible for interceding in neighbor disputes?”
This was a 4 ½ hour Hearing.
