Conflict Between Declaration and State HOA Statute?

Jones is correct. Even if an agreement says that someone must do something, a court can decide to enforce that obligation or not.

I believe this is about the law on assignment of attorney fees. The American Rule provides that each party is responsible for paying its own attorney's fees, unless specific authority granted by statute or contract allows the assessment of those fees against the other party. The Declaration is a contract. The state HOA statute also happens to speak to attorney fees. So the American Rule pretty much does not apply (except maybe to influence the judge in a general way?).

ChrisE8, your bottom line is the bottom line at which I arrived, but by different reasoning. I sure appreciate the input.

I welcome further input, as a test of whether my reasoning here (or just my bottom line) is pretty bulletproof.

I lean toward agreeing with Chris and Sheila, but I don't like it.

The CC&Rs say that Jones pays the HOA's costs, period. State law does not contradict this, it only says the court may choose to order Jones to pay but does not have to. This is not a conflict. If I were designing an expert system to produce the correct result, it would say that Jones pays.

However, if the state law actually says that the court has discretion in deciding who pays the HOA's fees, that's a different thing. In fact, the hierarchy of laws doesn't matter in this case - the court is the final arbiter. In which case, my expert system would pause at the previous step and look for input from the court before producing its answer.

And this final paragraph is why I said I don't like it. It allows the court to override contract and other laws as they see fit. Your opinion of this depends in part on whether you believe courts should upload the laws as written, or if they should achieve "justice" (or at least their notion of justice).

Interesting. I think ideally, the statute would have that popular qualifying phrase and read something like, "Unless the Declaration provides otherwise, when an Owner files suit against the HOA and loses to the HOA, a Court may order the Owner to pay the HOA's costs of defending itself." But the statute does not say this.

In short, I think your argument has merit, and maybe a lot of merit, so that my argument above is far from bullet-proof. I am pondering it.

I am also wondering whether this is a bona fide ambiguity in this statute section when this statute section comes up against a Declaration with a provision like the one I named in my first post.

I am betting there is case law on the use of "may" here, buried deep in the online repository of case law and which I do not look forward to attempting to extract.

For this issue and I think most HOA issues, I am in the camp that the courts should follow the laws (including laws on contract) as written. Granted ambiguities arise now and then.

I am not sure there is an ambiguity in the statute here, but on account of your post, I am a lot closer to thinking there is.

Thank you.

I am still pondering, of course.

I should have said in my prior post that you do indeed have me thinking there may be *no* conflict between the statute section and the Declaration section. Jones will likely argue there is a conflict, but I may likely argue for him to cool his jets. (I have told Jones I am helping him only to the extent I think he is in the right. I am not on some law firm's payroll, prostituting myself because I just lo-ove the adversarial system and its Quixot-ian existential explorations. Jones knows he can go hire an attorney. I remind him thusly often.)

It says the Court *may* order the Owner to pay the HOA's costs of defending itself.

Assuming there really is no conflict between statute and the gov docs, I agree with you. If there is no conflict, then courts should not override the HOA's governing docs (a contract).

Ya but trial courts often disagree on the same principle of law. It's practical reality that one trial court judge is not bound by the decision of another trial court judge.

On the other hand, if your point is that both the trial courts above ought to abide by the same rule, then sure. On the third hand, this is why appeals courts exist. (I know you know this. Call me a wise guy.)

I know the background of the judge involved here. I believe he is absolutely going to rule based on what state law (including case law) and the governing documents say. This includes what state law and the governing documents say about identifying conflicts and, if there is a conflict, following the law on resolving the conflict. This judge is not going to "make up" justice as he goes, because of his own politics or philosophy. The judge's approach happens to be my preference, even if it means Owner Jones has to pay attorney fees. (To be more exact, the HOA attorney fees, that I think Jones may very well have to pay, would be on a failed counterclaim by Jones. Anyone boo-hissing on my failure to elaborate: You will have to trust me it would not make a difference. I know the responses here are only as good as the assumptions I provide.)

In other words, Jones has to pay the HOA's court costs, as prescribed by the CC&Rs, *unless the court intervenes" and assigns those costs to the HOA.

Jones pays (unless the judge says otherwise). The laws do not contradict each other.

(I love it when we debate "shall" vs. "may". Wait 'til we start arguing punctuation...) :-)

Well, first, I'd like to know when this statute went into effect. In my state our HOA statute (such as it is) went into effect after July 2009 and applied to HOAs created or or after that date. Older HOAs (like mine) could choose to be covered by the statute - I think the homeowners would have to vote on that and documents would probably need to be changed.

For me, the hierarchy you listed is how this normally works, but I always tell people to note the effective date of these statutes. Sometimes there are rules for condos vs. detached single-family communities, so that also plays a role - what if Jones lives in a townhouse and for some strange reason, their rules fall under the condo statute?

Usually people request that attorneys' fees and legal expenses be reimbursed by the plaintiff if they win, regardless of what the lawsuit is about.
In this case, if Jones' community was established before the HOA statute took effect, he or she may be out of luck. On the other hand, the judge might order the parties to split the costs, depending on what the issue was. If either side felt it shouldn't have to pay, this question would be part of the appeal, if not the whole thing, and this would go on and on.

Another issue is discretion - Jones filed the lawsuit against the HOA and lost, and if the judge may order the losing side to pay up, I'd expect Jones to provide a compelling reason why he or she SHOULDN'T pay the HOA's expenses. That's how it is with lawsuits - they're easy to file, but if you're going that route, you should have a better than 50% chance you'll win, and a 90% chance of the other side satisfying the judgement. None of this stuff is guaranteed of course, and that's why I'm an advocate of alternative dispute resolution. Ideally, the mediator can get both sides to meet in the middle and save everyone time and money.

That's the other thing about disputes - some (many?) are little more than pissing contests with people becoming more interested in being right than resolving the problem. It may be the HOA attorney is in it for the money (ultimately they always win) or the board is wanting to prove once more that they are the board and therefore they are.

But don't forget the homeowner - they aren't always the put upon putz people think they are. Some people think rules only apply to everyone but them and they want what they want, not listening to reason and then scream "I'm gonna sue!" After all someone's responsible dammit, and they want satisfaction, no matter how much scorched earth ensues.

Interesting as a hypothetical question.

But in the real world, I don't think you will get the answer you seek.

As a matter of common sense, a judge who decides against Jones will base her decision on the fact that she has discretion, not based on what the HOA docs say. A decision based on the statute cannot be overruled on appeal. A decision based on the docs can be overruled. No judge likes to be overruled, and the real world judge on this case will craft her opinion to avoid it. She will rely on "may" even if she is thinking "must." You will never know.

If the judge decides for Jones, please realize that the judge always has discretion to decide both the facts and the law. Rest assured that the judge will describe the facts of the case so as to fit to the legal decision she make. Makes no difference what your factual description is.

At the end of the day, the judge will be looking at whether the lawsuit is frivolous or has some underlying merit. Once again, you may never learn the true reason for the judge's decision.

My point is that the published reasoning will of course be written in such a way that the judge is not likely to be overturned. Yet, there may be some aspects of the judge's reasoning that will never be revealed in the written opinion.

I don't call that bias. I call it practical reality. As you said, there's no telling which way a judge will go. Sometimes it's a crapshoot.

Be sure to let us know how the judge rules.

Thanks.

Wow.

All of the new posters who are so hot to trot about suing their associations should read this thread and take the lessons on board. All that time, all that money, distracted board members who may have neglected other important items while this was going on, possibly a chilling effect on other homeowners who were considering running for the board themselves...

As you said: lawyers 1, everybody else 0.

I have trouble imaging a judge saying, "State law gives me the authority to decide who shall pay, but my hands are tied by the HOA's documents." Moreover, there's a good chance that the specifics of the two cases are different, and in the differences lies the reasoning why Jones didn't have to pay (no case law, could have gone either way) but Smith did (a frivolous lawsuit of clearly settled law).

I wasn't speaking to the specifics of your case; I was simply presenting two contrasting possibilities that could explain why it would be appropriate for the first person not to have to pay the HOA legal fees, but for the second to have to.

In your specific case, does the judge have discretion, or doesn't he?

In both cases, the HOA was the plaintiff and claimed it was enforcing the covenants. Per the covenants (a contract), and if the HOA had prevailed in both cases, then the judge would have had no discretion. (The case law is clear in my state and I think nationwide: Contractual terms on attorney fees override what is known as "The American Rule.") Meaning the judge would have had to order the owner to pay the HOA's attorney fees.

The HOA prevailed in only the first lawsuit. The judge ordered the owner to pay the HOA's attorney fees in the first lawsuit. This outcome was still in play (meaning not yet enforced) when the second lawsuit was still percolating along with motion hearings and such.

The second lawsuit never went to trial. Instead, and before the HOA sought to enforce the first lawsuit's order for attorney fees, the HOA and the owner settled both disputes outside of court. (This was to the delight of the judge, who said as much at one point, as judges are at times wont to do*.) After the settlement, both parties quickly and jointly motioned for dismissal, with prejudice, of both lawsuits.

It was grueling for Owner Jones, whose first language is not English.

I get the feeling it ultimately became grueling for the HOA directors as well, but in a different way of course. The directors of course had enough on their plate before this started.

Insurers are not involved. I estimate each member of this HOA is forking over at least $300 to pay for the litigation.

"As the World Turns." Soap Opera, draining lives and people's bank accounts.

* As I believe most of the HOATalk veterans know well, and from my observation over 15 or so years: It's not that judges hate either HOAs, HOA members, or both. It's that judges' dockets are so full that they want all lawsuits settled, mediated, arbitrated, whatever it takes to keep things moving along and preferably not on court time. This of course is to save the taxpayers' money, encourage people not to lawyer up and so save themselves from themselves, and so on. In my state from some gossip, I am just about ready to swear to god the state bar goes around soliciting volunteers from the ranks of experienced attorneys to sit on the state district court benches, and even the appellate court and supreme court benches. I theorize the Bar offers these names to the governor to fill vacancies. The pay is not awful but the work is grueling. I think many an attorney gets lassoed into this, grumbling all the way but persuaded that he or she has a civic duty to spend some time on the bench. Of course, any resentment these judges feel for having to preside over, say, civil cases is taken out on both parties. Notably in the last few years in my state over half of new civil cases are brought by pro se parties. Which I believe has led to many a roll of the eyes by judges. The judges want to help with Access to Justice but the judges also know full well the general ineptness of these non-lawyer pro se folks is costing the taxpayer a fortune.