OAH-023 stipulation: HOA attorney lack of good faith

Carolyn Goldschmidt, CAI member attorney for the Association, Winterhaven at Country Club Estates in Sierra Vista, initiated a settlement stipulation with Petitioner, Donald Hard, relating to the conformity of lot walls with three neighbors.  The stipulation was signed and the OAH case was vacated – didn’t exist and can be refilled. 

Although the Petitioner had submitted municipality compliance documents to the court and HOA,

Upon completion, the raised wall was inspected and approved by the City of Sierra Vista. A copy of the City of Sierra Vista Building Permit with approvals was entered into evidence as Exhibit P-72 by the Administrative Law Judge at the hearing conducted by the Office of Administrative Hearings on April 11, 2007.

the stipulation called for,  “(5) The Association shall ensure that requirements of the ARC and the City of Sierra Vista shall be strictly adhered to in the wall revisions it undertakes.” [emphasis added]. 

In an act of good faith by the petitioner, he allowed HOA contractor to measure walls for the agreed upon adjustments, where upon he receives a letter from Goldschmidt now declaring that,

According to Bob Camps, Building Inspector for the City of Sierra Vista, the City measures wall height from the highest side, which is your side of the wall in both cases. The raised portion of the respective common walls exceeds six feet and according to Messrs. Camps and Ruiz of the City of Sierra Vista, therefore, violates the building code and would fail a building inspection.

This was not an actual inspection by the City of Sierra Vista, but “friendly” comments to the attorney by a city official, and is being used to refute the stipulation since nothing as of yet was undertaken by the HOA. No mention is made in the letter of the prior approval by the city. 

The Petitioner is being subjected to a “revisionist” interpretation of the simple stipulation by the attorney who does not admit to any  knowledge of the prior city approval.  This is an act of bad faith by the HOA with attorney Goldschmidt’s acquiescence. 

Goldschmidt warns the petitioner, not her client and without advising that he consult with an attorney, that

If this impasse cannot be resolved, I will file a motion to Judge Carroll to set aside the Stipulation, reinstate the hearing and issue his ruling. If this is the course you choose, there undoubtedly will be further litigation in Cochise County Superior Court.

 

Perhaps this is what the Petitioner should do, and file a Bar complaint against the HOA attorney, Goldschmidt.

Case No.: 07F-H067023-BFS

Complaint:                    Board failed to place member petition on annual ballot.

Source of Law:             statutes (ARS 33-1803, 33-1805); governing documents

Discussion:                   ALJ says his authority is bound by ARS 41-2198.02; that is, to force compliance with the laws and documents, and the right to charge HOA with a penalty.  ALJ advises petitioner that an adverse decision — petitioner failed to comply with CC&Rs — may result in a removal of the wall at the discretion of the HOA.

ALJ suggested the parties come to some settlement as proposed by HOA to modify walls as mutually agreed that included half-payment by the HOA.  ALJ will vacate the case subject to a signed settlement agreement, pursuant to a “stipulation of the parties.”  He would not require fees to be paid by HOA or to levy any penalty, subject to receiving a settlement agreement.

Holding:                        This matter proceeded to a hearing on April 11, 2007.  Petitioner and Respondent negotiated a settlement at the hearing, which was to be summarized in writing for signature of the parties.   A written stipulation having been filed in this Office, on April 30, 2007, which resolves the issues between the parties,

IT IS HEREBY ORDERED vacating the hearing in this matter.

           

Comments:

 

The issue relates to an agreement between homeowners over a “shared wall”, and the HOA nullification of the agreement.  This is a “neighbor” dispute over common walls with the HOA adding additional conditions and restrictions that turned into a “can of worms”.

HOA motion to dismiss was denied.

ALJ summarized the issues as follows: Did petitioners obtain approval prior to starting construction?  Was approval of all affected neighbors (3) obtained as per ACC guidelines?  HOA letter appears to have approved construction, after the fact, but asserted additional conditions.  Conditions imposed required petitioner to meet city code, yet the imposed conditions violated city code.

Petitioner complained that there were no written agreements to rely on between the neighbors or HOA “meetings”, just conversations. So they filed this complaint to clarify the issues.   Also, prior approval was given and then the HOA changed its mind.  Petitioner relied on developer’s guidelines as the HOA standard, but after transition to non-declarant control, HOA maintained that HOA rules took affect. However, HOA guidelines were “thrown out” because they violated city code, and so, petitioner maintained, the developer’s was the only guidelines in effect.

Petitioner objected to the procedural manner of the ARC “interference” when it held one-on-one meetings without all involved neighbors in attendance.  Furthermore, ARC has no enforcement authority, only the board.  ARC did not provide records for petitioner review.  Petitioners were denied attendance at any ARC meetings.Carolyn Goldschmidt for HOA.  A 5-hour hearing.

Case No.: 07F-H067024-BFS

Complaint:                    Board violations of CC&Rs and bylaws

Source of Law:             CC&Rs & bylaws

Discussion:                   HOA attempted to settle, but homeowner said board refused to discuss settlement.  ALJ advises petitioner as to the scope of his jurisdiction, and that the counts in the complaint are outside his jurisdiction:  Replace board, reset CC&Rs and bylaws, no absentee ballots.  Settles with prejudice – can’t raise them again.

 

Holding:                        Under the terms of that agreement, which was memorialized on the record, Respondent acknowledged that some technical violations of the documents governing the Association had been alleged in the Petition, and that Respondent had already instituted procedural changes which would prevent a recurrence.  Respondent further agreed to pay Petitioner’s filing fee in this matter. 

 

                        Petitioner acknowledged that, as a result of the agreement reached by the parties, he would not proceed further against Respondent regarding any of the allegations in the Petition.

  Comments:                  

The ALJ informed the petitioner that HOA cases are final decisions that cannot be appealed.  He is correct in that they  cannot be appealed to the Agency, but fails to say that it can be appealed to the Superior Court. ARS 12-904 Judicial Review of Administrative DecisionsA. An action to review a final administrative decision shall be commenced by filing a complaint within thirty-five days from the date when a copy of the decision sought to be reviewed is served upon the party affected.  

Mulcahy does not correct the ALJ (in other cases we’ve seen the HOA attorney advising the ALJ as to how he is to make his decision). Petitioner than decides to enter into a settlement agreement.

Expensive case that lasted only 10 minutes (Consider the 3 other cases that were vacated).

Beth Mulcahy for the HOA.