Current Law suit

In 2017 our HOA voted on an amendment of our Declaration concering animals with the goal to make the neighborhood equine only. Prior to the the submission of the vote by the board there was a formal assessment by the HOA attorney that the amendment would require unanimous consent. The board then ended up hiring another attorney who advised 67% vote was adequate. Short story, the 67% was obtained, and a group of us ended up filing suit against the HOA for an invalid amendment as it did not require the unanimous consent that is explicit in our Declaration, supported by statute, recent case law, and a formal written opinion of a previous HOA counsel. The board sees this amendment as valid and they are enforcing as such, despite the fact that the validity of this amendment is being called out in District Court. The case has been sitting for over a year in court with nothing happening... so it is just a waiting game.

What would your take be with your experience with the hoa, or maybe having been a board member on the active enforcement, and fining of an amendment or even a rule that is currently under litigation? We are actually being pursued now with violations for having poultry which we have had since before the amendment was voted on... and I am a plaintiff. I would think it sticking their necks out to actively pursue violations and fine us for something that must now be decided by the courts, and I am operating under the guise of the covenants when I moved here, and disputing legally that the change is invalid.

Hope that makes sense and looking for input. I will be involving my attorney, however I wanted input elsewhere.

I don't know how to capture the sections like you did and answer them!

No, there is no discovery yet... the case has not even been reviewed by the judge yet. Apparently a huge backlog of cases.

We motioned for summary judgement over a year ago, no news yet

By pursuing, I mean the board and their wives (they are all super close friends) stalk my home regularly. My neighbors take no issue, and I have that in writing, but these are passers by who have elicited the complaints though they live acres and acres away. So we are violation #2 threatening fines if the animals aren't removed, and I can't even have a hearing because they aren't impartial as is required by CO state law.

Also, CCIOA, which is the section 4.5 you quoted is extremely pertinent and is well discussed in our brief supporting unanimous consent. There have been a couple other cases, here in CO and in WA that have upheld the unanimous consent clauses.

I really like your idea of the injunction. Things like that won't cause the judge to be super favorable towards the HOA when they keep screwing around and being malicious. In fact, I have recently caught them not following a couple of policies, especially the fine policy. These are other things noted in the lawsuit... I think a motion for injunction is perfect.

YES our declaration has "unanimous consent" as a requirement for changes on use restrictions as well as a few other things. The great thing is our Declaration then explicitly lists the use restrictions, which are in a different list than for instance building restrictions. So yes, this is hard fact and even the HOA openly agreed and we had an owner's meeting with the HOA attorney reviewing the unanimous consent. Then the board took a drastic and sudden turn when they found an attorney who supported 67%, despite any case law.

Anyhow I agree completely about the lurking and harassing unless there is trespassing. The problem is this issue is in the hands of the legal system so I can't see how on earth they would have the audacity to touch the issue with a 10 foot pole until it is settled with the courts. I'm actually shocked and personally feel they are putting themselves in a situation of liability as board members, thus outside of their fiduciary duty, to try to push and fine me for what our rights were before this amendment was inappropriately adopted. However, I think it continues to substantiate how our HOA is continuously over reaching.

Thanks for the suggestions and I like your letter as well!

None of the actions the HOA has taken are shocking, this happens in almost every HOA now and then.

The HOA cannot contact you except through your attorney. And vice versa. You state that they might try to fine but have they? Let them fine you through the proper notices and hearings and a properly recorded vote to engage the fines. You state in Colorado the hearings are impartial but they still have to follow the notice requirements. Once they fine you, That’s when it gets real. Then you can file an injunction to keep your rights intact ands put a halt on the fines. Same thing happened in the famous Farran VA case where the deck refusal and fines were illegal and $400k later the Farran’s won. Someone can check the facts if i’m wrong. Filing an injunction now will cost money and will only be temporary until the case is heard. Save the money and seek advice from your attorney who will advise what is actionable or not. When you do get the case heard you can show the actions of violations and fines the HOA took despite warnings from your attorney.

The letter from the attorney sounds like a good place to start.

What do Colorado statutes say about the fines process?

Is there a mandated committee, made up of independent members of the HOA, that approve or deny the fines levied by the Board?

Time to up the ante in the litigation.

Sue the lawyer who said that 67% approval is OK.

And do a "derivative demand" on the board, demanding that the HOA go after that lawyer and board members who are directing the enforcement of the rule. If you do a "derivative demand" and the HOA doesn't do as you wish, then you can sue the lawyer and board members on behalf of the HOA. The HOA collects any winnings, but it puts more pressure on the bad actors.

I've done one against a HOA. I'm a lawyer but not a HOA lawyer and so when I had a battle with my HOA, I had some methods, from non-HOA situations, that I used.

It is guaranteed this lawyer had some sort of defensible legal reasoning. Plus you are proposing that Jennifer sue this attorney for malpractice on behalf of the corporation, in a derivative suit. I think the only thing this will accomplish is to cause the judge to be angry with Jennifer's attorney.

The courts are backed up enough. She needs to keep this simple. So far it appears she has a solid claim.

This board appears to be completely dug in. They will be happy to pay the HOA attorney more and more money to defend their position. Plus they have at least 67% of the membership who agree with them. You think they mind paying the HOA attorney? I doubt it.

If Jennifer really thinks this attorney did something "wrong," the better path would be to speak with the Colorado Office of Attorney Regulation Counsel,
https://coloradosupremecourt.com/Complaints/File_ComplaintAgainstAtty.asp . But since Jennifer is not the attorney's client, her chances are even worse.

Starting a new claim, that is derivative, is only going to cost Jennifer more time and money. Plus it will not help her with the judge.

What I quoted is you telling Jennifer what to do.

How does a board "harm the corporation" when it uses its judgment (as supported by the latest HOA attorney) to interpret whether a certain covenant is a "use restriction"? It's not black and white at all that a derivative claim is viable.

I think Jennifer's attorney will decline to take the paths you propose.

AugustinD, you would indeed think that any attorney would undoubtedly provide sound legal reasoning in their opinion letter and subsequent advice to their client. In our case I question that there was any. In fact the first attorney I hired privately (prior to forming a group and selecting a different ligitator) noted in his analysis that the HOA attorney "provided a written opinion and provided no caselaw, statutes, or analysis, but rather just provided a legal conclusion without any authority for the opinion provided." This attorney I hired performed a full analysis and agreed with the original HOA attorney that our amendment required unanimous consent. This legal letter was sent to the board, and the board pursued the vote for the amendment and completely disregarded the three page detailed legal analysis from my attorney.

By the time the vote officially rolled around, the HOA attorney had changed her tune stating that a change in a use restriction does indeed require unanimous consent, however we weren't changing the use restriction, but merely updating the restrictions. Say what? There is a case in CO where the courts defined "change in use restriction" that appears in statute. It is any change in the enumerated restrictions currently in a document, in addition to the addition or removal of a restriction.

Everyone keeps saying well, what exactly is a use restriction? That is debatable of course, but if your Declaration list them therein lies your use restrictions! Just for your information, our Declaration states the following:

USE RESTRICTIONS: Subject to the Special Declaraant Rights reserved under Article VI, the following use restrictions appoly to all Units and to the Common Elements:

The use restrictions are then listed a-r with a detailed description for each.

I don't think most declarations are so clear, but luckily ours is. There was a case in WA state regarding short term rentals where it was argued that the amendment wasn't a change in use restriction. The courts didn't define use restriction there either, but rather ruled in favor of the plaintiff exclusively because the Declaration listed the use restrictions just as ours does. Therefore the definition of use restriction is not important if the Declaration simply identifies the use restrictions. Anyhow I digress. The point is the HOA attorney did not adequately perform an analysis and did not have sound reasoning in her conclusions and the board was happy to oblige because everyone on the board was seeking the amendment for personal reasons.

I'll join with Augustin on this.

In a derivative suit, you need to prove 2 sets of claims -- your claim against the HOA BOD and your claim against the lawyer. Either one can trip you up. You have to win on both.

The communications between the HOA BOD and the HOA lawyer are privileged. Because of this, the process of discovery can become a long, drawn out affair of costly filings and meetings -- back and forth, back and forth ... on and on.

Many judges I know hate dealing with HOA disputes. Many hate derivative suits. Put them both together, and what have you got ...

It's not working because the judge has not ruled according to your and Jennifer's desired timeframe, in a court system backed up with lawsuits and prosecutions? So you think adding additional claims will speed things up, or get this board, possibly backed by 2/3rds plus of its HOA members, to cave?

Paul, I appreciate the robust discussion. Maybe it will help not only Jennifer but also others.

You say Jennifer is not getting results. But as long as the lawsuit is in place, is she being harmed? I do not see any harm at present. First, right now she is able to keep the chickens and ignore the violation notices. As needed, she can ask her attorney to ask the HOA (and as needed, the judge) to tell the HOA to stop issuing violations and wasting time with HOA hearings while the matter is in litigation. Second, is the harassment Jennifer described going to stop if she wins the lawsuit? I doubt it. She's on the board's radar now. They have the power and money to pay an attorney to make her life miserable, and do it in a way where she has little legal recourse.

By contrast, you seem to be saying, "Just threaten a derivative suit. My New York HOA caved when I made this threat. Or, Jennifer, you can Spend another $5,000 to $10,000 and either have your attorney amend the court complaint, or withdraw the current court complaint and file a new one (a derivative claim)."

According to you, the threat of a derivative suit, or actually filing same in court, has a good chance of getting the HOA Board (and its 67%+) to cave.

I guess if Jennifer is either in a hurry; or wants to try to bully the board; or thinks the harassment will stop, she can try your approach. I think counseling patience with the court system, with a very solid claim and no substantive harm occurring at present, is the better approach.

Of course I would like to hear what her attorney says is causing the seeming delay.

I have responded to these points already. You and I do not agree about the present harm and future harm of staying the course.

What is your exact advice (non-legal, of course, as you cannot create an attorney-client relationship) for her next step? Do you advise that Jennifer ask her attorney to consider and then write a demand letter threatening a derivative suit?

Here is the thing. Jennifer's lawsuit isn't about the "money". She is not suing them for money. She is suing them because she wants to raise chickens on her land. (Which I would assume means having crowing roosters lest we forget...). The HOA doesn't want chickens raised but making it a "horse stable" of sorts.

The HOA voted for the restriction of horses only by a majority 67%. Which may or may not be the required amount to make changes to the CC&R's on such restrictions. I believe Jennifer (maybe others?) think it was to be 100% approval to change the restriction.

So Jennifer is suing her HOA because the restriction doesn't think is "legal" or "enforceable" to prevent chicken raising. Which honestly believe chicken raising can scope from a small chicken coup to a full blown chicken raising operation. Which could be restricted locally as well in some areas.

The people making "money" in her case would be her lawyer and the HOA's for defending them. Which by the way, the HOA is using Jennifer's money in her dues to pay for the defense/lawyer....

It may be easier for Jennifer to organize neighbors in taking another vote to meet the requirement or changes than go through the court system. May still lose because not many people like living near chickens coups.

Note: My step-brother is a chicken breeder and owns many chicken coups. He isn't a commercial one. He has a few hundred chickens of various size/breeds. It has included Emu's and Ostrich. So I do know a bit about the chickens... It also understandable why some people may be against them. I also don't like horses... If I lived in a HOA with such restrictions I would not like it. However, pursuing the issue in court wouldn't be the way I would have gone.

Not questioning your skills in navigating litigation for yourself.

My statements were about the perception of some of your BOD members. Even if you used a lawyer, some will think that it's cheaper for you - maybe because they think you do some of the work yourself - maybe because they think the lawyer you hire doesn't have to spend as much time with you - maybe because they think you get a discount as a professional courtesy. Maybe because they think you know the judge. Maybe none of this is true - but negotiated settlements often succeed based on impressions like these.

Also, I don't think that the majority of ordinary people respond as you think to some declaration about standing your ground. No such thing as last and final offer. No such thing as never giving an inch. If they think you're just being a jerk, they might dig in their heels even deeper.

I do agree that it's a war of attrition. Last man standing is almost always the one with the most money to burn and the least urgency.

Might help her cause.

From http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/238823/view/topic/Default.aspx and other sources, the original, 1990s covenant stated:

Use Restrictions.
Subject to the Special Declarant Rights reserved under Article VI, the following use restrictions apply to all Units and to the Common Elements:
...
j) Pets; Animals.
Pets and/or animals may not be kept for any commercial purposes, and no wildlife species, especially young or injured animals, may be kept as pets. Farm livestock (not raised for resale or a commercial purpose), horses, dogs, cats and other household pets shall be controlled by their owner at all times, and shall not be allowed off the owner's Unit except when properly leashed or controlled and accompanied by the animal's owner or such owner's representative. ...

[Definitions]
"Unit. A Unit is a physical portion of the Common Interest Community
designated for separate ownership or occupancy, the boundaries of which are defined on
the Plat and described in Section [xyz] of this Declaration."

"[xyz] Boundaries. Vertical boundaries of each Unit created by the Declaration are
shown on the Plat and each Unit is identified with its identifying number. The Units are not
defined by horizontal boundaries."

The 2017 amendment paperwork on file with the county states, among other things:
"B. The Original Declaration provides 'for and allows for this [] Amendment to the Common Interest Community Declaration of [redacted], A Planned Community (the "Amendment") [sic] in Article [], Section [], which provides in pertinent part as follows:
. . except as limited by Section 11.4 . . . of this Declaration, this Declaration, including the Plat, may be amended only by vote or agreement of Unit Owners of Units to which at least sixty seven percent of the votes in the Association are allocated

Section 11.4 provides, in pertinent part, as follows:

... an amendment may not... change... the uses to which a Unit is restricted, except by unanimous consent of the Unit Owners.

C. The purpose of this Amendment is to update the restrictions concerning animals that may be kept in the community.

D. This Amendment does not seek to change the uses to which Units in the community are restricted and therefore may be amended with approval of 67% of the
votes in the Association."
---

The 2017 amendment's pertinent wording deletes the Declaration's original wording regarding farm animals and then substitutes:

"Pets and/or animals may not be kept for any commercial purposes, and no wildlife species, especially young or injured animals may be kept as pets. The Association shall be
considered an "equine only" community where no farm animals will be allowed, except horses, donkeys, and mules. Equine animals, dogs, cats, and other household pets shall be
controlled by their owners at all times and shall not be allowed off the Owners' Units except when properly leashed or controlled and accompanied by the animal's owner or such
owner's representative."

The HOA has a few hundred members. Its "units" (a.k.a. lots) appear to be several acres each.

What the second HOA attorney argued follows.

The second HOA attorney argued that, "a change to what animals are permitted on the lots does not impact the rights of owners to use their homes for residential and/or leasing purposes. Therefore, a declaration amendment removing owners' rights to keep farm animals on their lots does not change the actual use to which such land is restricted and does not require approval from 100% of the owners."

The wording of the amendment appears to be consistent with the above:
-------
[quoting from the original Declaration] ... an amendment may not... change... the uses to which a Unit is restricted, except by unanimous consent of the Unit Owners.

The purpose of this Amendment is to update the restrictions concerning animals that may be kept in the community.

D. This Amendment does not seek to change the uses to which Units in the community are restricted and therefore may be amended with approval of 67% of the votes in the Association."
--------------

The attorney appears to be arguing that a "use restriction" and "the uses to which a unit is restricted" are two different things. She seems to be alleging that "the uses to which a unit is restricted" are about residential, leasing, commercial and other municipal land use code principles. By contrast, I do not think case law involving covenants has ever said that "use restrictions" and "the uses to which a unit is restricted" (or similar leger-de-main of the wording) are different things.

Is what this second attorney did a violation of the Rules of Professional Conduct? No. She read the words in the original declaration about when unanimous consent is required. The phrases "the uses to which a unit is restricted" and "Use Restrictions" are just different enough that she decided to plant a stake and declare open season on this verbal turf.

As far as I am concerned, it's not clever. It's an argument in the vein of "it depends on what the meaning of the word 'is' is." This attorney is doing what law schools train attorneys to do: Argue as effectively as possible all sides. Everything then becomes ripe for an expensive existential argument in lower level courts about the meaning of... whatever.

But whatever (sic). I cannot call the maneuver non-sensical. I can call it the stuff of a judge getting angry that this dispute is not in mediation. I suppose like the recent Eldorado chicken case, the parties will not agree to mediation, and the chances are high that the losing side (whichever it may be) will appeal.

What a two-bit, money-grubbing attorney, wasting the courts' and taxpayers' time and money. I hope she gets a reputation in Colorado for being frivolous.

Ultimately I expect the chickens will win, as they should. I am sorry you have to suffer through this, Jennifer.

Correct.

This HOA's governing documents are publicly posted on the net.

Considering the long time frame, the OP’s rights would be grandfathered in , anyway. Only if the property were sold would any new rule, restriction or CCR apply.