President’s Report – July 2018

Good morning, and welcome to another day with a beautiful sunrise in paradise.

Because I have had questions about a recent lawsuit against the HOA, I want to address this issue today. First, I need to give you some background by explaining how the Covenants Committee (CC) functions.

The CC conducts administrative hearings where residents have an opportunity to respond to any citation that they received for rule violations. Examples of rule violations are: stop sign and speeding violations, home design violations, and inappropriate conduct. Residents who are cited for a violation may request a hearing before the CC rather than pay a fine. The CC then has jurisdiction to uphold the fine, dismiss the fine, or impose some other option.

The CC procedures for due process are not like the standards of Superior or Civil Court. What is required by law is that we follow the Civil Code, CC&Rs, By-laws, and our own Rules. Sections that apply are:

  1. Civil Code §4935(a) “The board may adjourn to…executive session to consider litigation… member discipline…”.
  2. By-Law Section 8.06 (c). “The Board…shall be entitled to adjourn at any time for purposes of reconvening in executive session to discuss… member discipline…”.
  3. HOA Rule 1.3.2 “…The CC meets monthly in executive session…”.

This means that, in a CC hearing, there is no right to an open hearing, no right to confront the accuser, and no right to cross-examine witnesses. Rules of Evidence do not follow Civil and Criminal Court procedures, and the CC is only required to give a summary of the incident without names of accusers. The HOA Board takes the position that we want to maintain a friendly environment in our neighborhoods and so don’t want residents confronting each other over such complaints. As a result, there is disclosure of complainant names, we do not allow open hearings, and there is no cross-examination. Now that we understand the administrative hearing process, I can explain the lawsuit. A resident, according to a contractor doing work, was interfering with work being done. When the resident did not comply with requests to stop interfering, a citation was issued to the resident for a rule violation. The resident was fined $200 after attending a CC hearing.

The resident felt his due process rights were violated, and so he sued the HOA in Small Claims Court for $10,000 — $200 for return of the fine and $9,800 for punitive damages. The resident claimed he was denied an open hearing, denied ability to cross-examine witnesses, denied the opportunity to confront the accuser, and the HOA failed to follow rules applicable to civil and/or criminal trials.

The judge found in favor of the HOA. The judge stated there were no violations of the Civil Code on the part of the HOA. The HOA followed the law, so no damages were awarded to the resident. The benefit of this lawsuit is that the judge made clear that the process the HOA is following is correct and legal.

The effort here is to explain the rules of our hearings, so that residents understand the process and are not led to believe that their rights are being denied. We would like to avoid what some might consider frivolous lawsuits that simply cost the HOA money.

Even after such hearings, I look at another beautiful sunset and thank everyone for making each day a special day where we can all say: “It doesn’t get any better than this.”

Kim Fuller