WARNING! -- Are You Currently A Board Member in Arizona!??

If you are an officer or board member in an association you might want to have a talk with your legal counsel to see what possible liability you and your association might have immediately! You could ultimately be held PERSONALLY RESPONSIBLE.

Arizona HOA Management Companies Involved In Class Action Lawsuit

PLAINTIFFS:

Christopher Crame

Robert Leatham

DEFENDANTS:

360 Management LLC,

AAM LLC ,

Vision Community Management LLC,

Brown Community Management Incorporated,

Cadden Community Management Incorporated,

Capital Consultants Management Corporation,

City Property Management Company,

Colby Management Incorporated,

Cornerstone Properties Incorporated,

EPMI Incorporated,

Golden Valley Property Management LLC,

Golden Valley Collections LLC,

Community Asset Management LLC,

K Management Services Incorporated,

Metro Property Services Incorporated,

Morrison Group Incorporated,

Cimros Incorporated,

Ogden & Company Incorporated West,

Dan Peterson Property Management Company LLC,

Planned Development Services Incorporated,

Preferred Communities LLC,

Premier Community Management Incorporated,

Renaissance Community Partners LLC,

Sentry Management Incorporated,

Stratford Management LLC,

Northcott Bellow & Associates Incorporated,

Management Trust Incorporated

Total Property Management Incorporated

CASE NUMBER: CV2012-095288

COURT: Superior Court of Arizona in and for the County of Maricopa

FILED: September 10, 2012

CASE NUMBER: 2012CV01969

COURT: Federal Ninth Circuit - Arizona District Court

OFFICE: Phoenix Division Office

COUNTY: Maricopa

PRESIDING JUDGE: Susan R. Bolton

FILED: September 14, 2012

COMPLAINT: Class Action, Fair Debt Collections Practices Violations, Wrongful Lien

Since there are so many companies involved and so many homeowners affected, it appears this is the reason the attorneys for the plaintiff are working to make this a class action lawsuit.  

A review of the complaint outlines what the Plaintiff’s are seeking compensation for.  The management companies are accused of violating of the Federal Fair Debt Collections Act by doing things that only a licensed attorney should do. 

Some of the most serious purported violations appear to be:

• Recording debt collection documents;
• Recording of liens;
• Appearing in small claims or justice courts
• Charging legal fees for legal work when a licensed attorney was not used

The defendant management companies are accused of practicing law without a license.  That would constitute the unauthorized practice of law (UPL) in Arizona. 

A ruling in March of 2012 from the State Bar of Arizona, (UPL Advisory Opinion No.12-02) specifically addressed the concerns raised as a result of community association management companies providing legal services on behalf of client associations by non-lawyers.

Here is a link to that ruling: http://www.azbar.org/media/445177/upl12-01.pdf   

Obviously, the goal of the plaintiff’s attorneys is to get as much money from the insurance policies to receive compensation for the purported violations.  Could the associations have liability too?  Who knows?  They might. What happens if the management companies insurance doesn’t cover the amount if a judgment is secured – or worse yet, if they don’t have insurance to cover the loss?  Anyone can file a lawsuit and can name an association as a defendant.  If you are an officer or board member in an association you might want to have a talk with your legal counsel to see what possible liability you and your association might have.