In which a homeowners’ association tries to blaze new trails in corporate law

Plaintiff was an elected member of  the Board of the Sun Lakes HOA. She received an email accusing HOA employees of malfeasance. The Board, in executive session,  discussed the email with its lawyer, who advised it to do nothing and to shut up about the email. (Apparently he thought the information too serious to reveal but not serious enough to investigate.) The Board also passed a strange resolution disavowing any responsibility for “maligning” the employees. Plaintiff then tried to read the email in open session but the chairman shut down the meeting. On the further advice of its attorney the Board “banned” Plaintiff from attending the Board’s executive sessions. She sued, seeking among other things an injunction to attend them. She sought a preliminary injunction; the trial court denied it. She appealed.

The Court of Appeals reverses. Nothing in the law or the HOA bylaws allows such action. Plaintiff had both a right and a duty to attend meetings, A.R.S. 10-3825. Apparently the Board’s only legal argument was that by excluding Plaintiff it was simply creating a committee. It hadn’t actually thought to try that at the time, inventing the excuse after the fact (presumably after insurance defense counsel was retained), but in any event the Board “could not have done so for the sole purpose” of excluding Plaintiff. Otherwise a Board could nullify 3825 “by creating a special executive session committee.”

The Board argued that it had no other way to keep executive-session information confidential. Whether Plaintiff had refused to do so was apparently in dispute; in any event, the Court points out that there are things called “injunctions.” It doesn’t explicitly say that an injunction would lie here but suggests that a court may exclude a Director from executive sessions that address, for example, misconduct, conflict of interest, or potential litigation involving the Director. There is also a statutory process for removing Directors for cause.

The Court remands with instructions to grant the preliminary injunction. It awards Plaintiff her fees on appeal but because other issues are pending below it denies her earlier fees, deferring to the trial court’s eventual determination of who is the prevailing party.

(Opinion: McNally v. Sun Lakes)

We blog this case about an adoption because it says some things about judicial immunity.

Plaintiffs agreed to adopt an unborn child. The statutes say that prospective parents must first file a report about themselves, prepared by a third party, on the basis of which the court  can certify them as “acceptable.” For that Plaintiffs hired Defendant, one of several private outfits that provide such reports. But it seems – the details aren’t given – that Defendant had doubts about Plaintiffs’ acceptability; in any event, there were “disagreements” between them. So Plaintiffs fired Defendant and hired another company. The baby was born; Plaintiffs obtained temporary custody; the new outfit filed a report pronouncing them acceptable. But then the court, without explanation, denied certification. At a later status conference the judge revoked the temporary custody and had the child picked up by CPS.

It turned out that when Plaintiffs fired Defendant it had sent a letter to the judge “expressing concerns” about Mr. Plaintiff. The judge mentioned this at the status conference; its not clear whether this was the first Plaintiffs had heard of it but they hadn’t seen it. The judge ordered Defendant to produce it for them. He also set, as Plaintiffs had requested, an evidentiary hearing. After that hearing, at which the judge heard testimony from Plaintiffs and both reporting outfits, he certified the Plaintiffs. But by then – months after CPS took the baby – CPS had placed it with another family. Plaintiffs sued Defendant for various torts, including negligence, alleging “untruths and misstatements” in the letter. Defendant moved for summary judgment, arguing judicial immunity. The trial court granted the motion; Plaintiffs appealed.

The Court of Appeals reverses. Courts have extended immunity to “court officer, employees, or agents who perform functions intimately related to or . . . an integral part of the judicial process” – e.g, probation officers, doctors, and various social workers. There are limits, though; probation officers are immune regarding presentence reports, for example, but not for supervising probationers. The court assumes, without deciding, that immunity exists for those who submit certification reports as called for in the statute. But “in submitting its ex parte letter, [Defendant] was not acting pursuant to delegated judicial authority or any mandate from the legislative or executive branch.” The letter wasn’t in the form of, and didn’t contain some information the statutes require of, a certification report. (One might ask why, if the letter was nothing official, the judge considered it. Or why, if Defendant was merely a witness, it can be sued in negligence for inaccuracies in its evidence. And what about the form of the report? If somebody forgets to put into it an element that the statute requires does that destroy immunity?)

“In evaluating whether conduct is protected by judicial immunity, some courts consider whether due process protections exist for individuals potentially aggrieved by the underlying conduct – a consideration we also deem relevant.” What the court means is that the statutory report must be copied to the prospective parents whereas they didn’t get a copy of the letter. Defendant’s argument that it should have immunity because it was acting in the best interest of the child “sweeps too broadly” because “if [Defendant] had qualms about [Plaintiffs’] suitability as adoptive parents, it could have communicated those concerns in a court filing that afforded [Plaintiffs] notice and an opportunity to be heard . . . .” (Does that mean that if, instead of sending a letter to the judge, Defendant had filed the same letter with the clerk and sent a copy to Plaintiffs then it would have immunity?)

Speaking of judicial immunity, shouldn’t that judge should be happy he has it? As far as we can tell from the opinion, he got a letter. He didn’t tell the parties about it. He based a ruling on it (denying certification while having nothing else before him contesting it). When confronted with the fact that Plaintiffs never saw it he issued an order for Defendant to produce it rather than give them a copy himself right away. At the same time, he revoked custody and ordered an evidentiary hearing two months in the future. After that hearing he sat on his ruling for at least another month before issuing it. And by then the baby was gone.   

An alternative is that he assumed that the letter was a report, even though it didn’t meet the requirements of one and even though he also had another one that contradicted it. (Most likely this is what he did; should the Court of Appeals have paid some attention to that, or at least explained why it didn’t mean anything?) In either event, how could the instinctive reaction of a judge not be to alert the parties and set a hearing sua sponte to sort things out? He is the only player in this tragedy who will suffer no consequence of his failures.

Eight footnotes in this, nothing unusual by Division One standards. But it has something we hadn’t noticed before: a footnoted section heading. The heading “Conclusion” is footnoted to a note that addresses an argument the court decided not to address. Wrong on so many levels.

(Opinion: Griggs v. Oasis)

This is published for its holding that 12-821 (one-year limitation for suit against public entity) doesn’t violate equal protection. There is nothing novel about the analysis except that it apparently hasn’t been done yet for the present version of the statute. Preliminarily, the court addresses old arguments made by people who made old mistakes.

Plaintiff was injured in a fall at the town cemetery. He submitted, at the town’s request, a written notice of claim, though the town never responded to it; the town’s claims people did open a file and collect his medical bills. He filed suit just short of two years after the accident, which was a year too late. The trial court dismissed. He appealed. The Court of Appeals had to kick the case back to let the parties get Rule 54(b) language into the judgment. Now it affirms.

Plaintiff first argued equitable estoppel – that by dealing with the claim the town led him to expect that he wouldn’t need to file a timely suit. The court cites a few of the several cases on point in summarizing: a plaintiff bears the burden of presenting evidence of the defendant’s specific, affirmative acts that reasonably led the plaintiff not to file. In this case the town hadn’t done anything – hadn’t admitted liability, hadn’t negotiated, hadn’t mentioned the statute of limitations. And because there is a statute on point, by not responding to the notice of claim the town had denied it as a matter of law – which the plaintiff knew, also as a matter of law.

Plaintiff argued that he should be entitled to wait to bring suit until he finished treating (which was longer than one year) and knew the full extent of his damages. The court gets mixed up on whether this is an issue of tolling or accrual. The argument is wrong either way but the court analyzes it as accrual before concluding that “the statute is not tolled simply because he did not know the full extent of his damages.”

Plaintiff argued that the one-year statute is unconstitutional, first because it violates anti-abrogation. Like all of the above, this was settled long ago. Statutes of limitations are – surprise! — constitutional; they regulate, not abrogate.

Finally, Plaintiff relied on equal protection. He argued for strict scrutiny but the court applies rational basis, that being the test that applies to statutes that merely regulate the right to sue. The state has a legitimate interest in “protecting public entities from stale claims and in being able to investigate claims and plan budgets in light of a proposed suit.” For the most part this incorporates similar analyses that earlier cases had used to uphold the notice-of-claim statute (12-821.01). 

(Opinion: Viniegra v. Town of Parker)