OAH refuses to correct misleading public information on non-HOA petitioners

My investigation into the false and misleading reporting that a non-HOA entity is an OAH Petitioner, in violation of ARS § 41-2198.01(B), indicates an administrative error on the part of OAH. An error which is easily correctable and which would not mislead the public. Yet, the Director/Chief Administrative Judge refuses to correct the false statement.  (12F-H1212010-BFS, Pecos Ranch Community Association, Associated Asset Management, LLC vs. Randy and Sharon Hoyum).

In response to my notification, OAH took the position that only the assigned ALJ could make the change upon motion by a party.  But, OAH has no procedure for filing a motion to intervene by a person affected by the Petition, a person with rightful standing.  And why should a third party or even a party to the case be required to correct an obvious clerical error, most likely not the doing of an ALJ.  Where is the logic?   Something is wrong here!  This concern for impartiality to the extent of not correcting a clerical error is very disturbing.

The Petition was filed by the Brown/Olcott attorney for the HOA and AAM is not a co-petitioner, and there is no DFBLS Multiple Petitioners form submitted.  The petition form asks for both the name of the management firm and the attorney.  Obviously, some newbie got it wrong, and if not, then we really have a serious question of the integrity of OAH with respect to HOA adjudication. 

The important issue is the position by OAH to allow an obvious false statement to continue to be displayed for public consumption.  A position of bureaucratic rules over justice.

OAH history was made this month: first HOA petition filed

OAH history was made this month with the first of 101 Petitions filed, since Sept. 2006, by an HOA.:   12F-H1212010-BFS, Pecos Ranch Community Association, Associated Asset Management, LLC vs. Randy and Sharon Hoyum.

Please note, however, the co-plaintiff is an HOA management firm and is barred from filing HOA petitions by statute. It is the same management firm hit with the UPL ruling that it engaged in the unauthorized practice of law. See
Final Order: HOA management firm engaged in unauthorized practice of law

 

Petitions must be filed against the HOA, not directors

In OAH Petition 11F-20112005-BFS, the homeowner filed against and named the four individual board members rather than the HOA. AZ law states that a Petition may be filed only between the HOA and individuals. After a hearing where the Petitioner said he was actually filing against the HOA, only one response was filed by a board member. As that director signed in her name only, and not on behalf of the board, the Petition was vacated and remanded to the agency, DFBLS, to “provide an opportunity for the Association to submit a response.”  In such event, DFBLS may request an ALJ hearing again.

OAH is becoming more formalized – that’s good for homeowners

Please read BEFORE FILING a petition with OAH.

As I wrote earlier, OAH is spending more time with pre-conference hearings and responding to HOA summary judgment motions. In the Esquire Village Petition, 11F-H1112004-BFS, the ALJ once again clarifies the role of OAH and the rules for subpoenas of documents.  This move toward a more formalized process is necessary and benefits the homeowners who have filed 100% of the Petitions.

Much too often homeowners act as if they are at Starbucks having coffee or having a beer at a barbeque, and complaining about their HOA.  This is not the judicial process, of which OAH is a more “relaxed” process. But OAH still must follow a basic set of procedural rules. And homeowners, to their benefit, must understand and follow these rules if they expect to get a favorable decision at OAH.

By statute OAH can only hear complaints relating to the statutes in Title 33, Chapters 9 and 16, and the HOA‘s governing documents. It cannot hear complaints involving Title 10, Corporations, nor common law violations as stated in the Restatement (Third) of Property: Servitudes.  Sadly, that means, among others, that many of the more common abuses by HOAs cannot be heard by OAH  — good faith and “prudent man” obligations of directors, ARS 10-3830, and invalid covenants due to violations of public policy or are arbitrary and capricious or are unreasonable. The Restatement of Servitudes, Sec. 3.1 is not within the jurisdiction of OAH.

In the Esquire Village Petition the homeowner sought the production of documents relating to issues not relevant to the nature of the complaint.  As the ALJ wrote,

The parties are advised that this matter involves whether Respondent has appropriately acted in accordance with the laws and community document provisions cited in the Petition that was filed with the Department of Fire Building and Life Safety, namely, by issuing notice of violations for Petitioners’ displaying the Gadsden flag . . . .

However, in the request, the subpoena, the

Petitioner stated the reason for the subpoena request was to show: (i) selective treatment of homeowners; (ii) how Respondent fines homeowners; and (iii) how Respondent finds violations. . . . The issues of selective enforcement, how Respondent has determined violations by homeowners, and how fines have been generally assessed are not issues that fall within the scope of the hearing.

What the ALJ seems to be saying is that the subpoena is related to an arbitrary and capricious, or an unreasonable, decision by the HOA not to allow the Gadsden flag to be flown, and not on the right to fine the homeowner.  OAH cannot hear such complaints.

( I am at a loss to understand why, if not, the Petition did not state a plain and straight-forward violation of ARS 33-1808(A)(5), which permits flying this flag as of July 2011. While there are 4 versions of this law which is very confusing as to just what the law is, flying the flag is contained in all of them.  Only version 4 is effective as of 1/1/12.)

Restricting OAH to the Title 33  statutes placed a severe restriction on justice for homeowners, as the HOA attorneys who opposed the statutes and its constitutionality well know.  We must demand that the Legislature amend the statutes to include Title 10, nonprofit corporations, and the Restatement of Servitudes with its very important Section 3.1, Validity of Covenants and Chapter 6, HOAs.  These sections amount to some 33% of the Restatement.

Demand in the upcoming session, in January, that your legislators amend the OAH statutes accordingly.

OAH Case: 11F-H1112002-BFS

OAH Case No.         11F-H1112002-BFS               Date decided:      open               

Complaint:              HOA removed entry way fountain in violation of the CC&Rs.

Source of Law:      Sec. 10.2, Hunters Pointe, Mesa, AZ  CC&Rs.

Discussion:             Motion to Dismiss filed by HOA attorney firm, Maxwell & Morgan, in place of the usual Response/Answer to the Petition.  For a motion to dismiss to be upheld, there must not be any areas of contention as to the facts. A difference in interpreting seemingly conflicting provisions of the CC&Rs arose and, on the face of it, would appear that a disagreement as to the interpretation of the CC&Rs is a bona fide question of material facts.

The HOA insists it has authority for the “alteration”, “augmentation,” and “disposal” of the Property.  As a result of diminished assessments leading to needed repairs and the Mesa requirement to add a fence around the fountain, the board decided to demolish the fountain.  The board voted to replace the fountain with a garden.

The HOA attorney makes the misleading claim that the CC&Rs state that the board’s interpretation of the CC&Rs is binding (which is contrary to Arizona case law that state that it is the court who interprets contracts), and it interpreted the CC&Rs in its favor.

The Petitioner responded to the motion to dismiss pointing out to the ALJ wordings in the same provisions that were partially quoted by the HOA attorney, and that supported his claim for the restoration of the fountain and not its destruction and replacement.  Petitioner alleges that the HOA knew that the fountain had to be repaired, and that he, and other homeowners, was not aware of any decision to remove the fountain until work began.  Allegations of bad faith conduct by the board were offered regarding the board’s failure to discuss the issue.

Holding:                 Denied by ALJ, Oct. 13, 2011.

HOA attorney:     Maxwell & Morgan

Comments:              In my view, the ALJ properly decided to dismiss the motion.  It is quite obvious that there were controversies as to the facts in this situation, and a motion to dismiss was not warranted.  I presume that there will be an Answer filed by the HOA attorney – another step and more documents.

The Petitioner responded to the motion as required by the rules, with facts and evidence.