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MD
(California)

Posts:27

06/15/2008 7:11 PM
APPELLATE COURT RULES IN FAVOR OF LEISURE WORLD SENIORS! > > Leisure World/Seal Beach seniors bagged yet another > victory on last week, when the California Court of Appeal > Fourth Appellate District in Santa Ana ruled in their > favor and against the Golden Rain Foundation (GRF). > > In an 18-page decision, the Appeals Court reaffirmed a > lower court ruling that Leisure World is indeed a common > interest development and, therefore, subject to the state > laws governing associations. > > The battle began in January 2004 when seven seniors filed > 16 suits in small claims court, because the Golden Rain > Foundation, which operates Leisure World, refused to turn > over financial records. Civil Code 1365.02 lets homeowners > sue in small claims court if an association refuses to > grant access to records. Since 2004, both Orange County > small claims and superior courts have repeatedly ruled in > favor of Carol Franz, Edmund Loritz, David Lyon, Jacklyn > Shaw, and several other residents. > > The Foundation then tried another legal tack: countersuing > the seniors and arguing that Leisure World wasn’t a common > interest development to begin with and that the Foundation > “wasn’t a homeowner association.” It concluded, therefore, > that neither entity was subject to the state statutes > governing California’s 45,000 common interest communities. > Golden Rain has been battling the seniors in Orange > County courts for four-and-a-half years -- and losing > every round. > > On June 9th, the Fourth Appellate Court reaffirmed the > lower court ruling: Golden Rain Foundation is indeed an > association and Leisure World, by every measure, is a > common interest development and both are, therefore, > subject to state laws governing associations. > > “I’m overjoyed and relieved,” said Franz, one of the > Leisure World seniors who brought the small claims suit > more than four years ago. “We are delighted that it’s > over – and that the opinion is a published opinion with > application to associations like our own.” > > Added David Lyon, one of the original plaintiffs, “The > Golden Rain Foundation fought the law – and the law won. > You can’t just pick and choose which laws you want to > follow. Golden Rain argued for four years that it was > exempt from association law – and it isn’t.” > > But whether Monday’s ruling will end the fight is unclear. > > The Center for Homeowner Association Law phoned Leisure > World Administrator Daniel Schaeffer to ask him if Golden > Rain plans to appeal the case to the California Supreme > Court. Schaeffer's spokeswoman said she was instructed to > tell the Center that "Mr. Schaeffer is in a meeting right > now with the GRF president, two board members and the GRF > attorneys to decide what to do next, because we're not > sure what the decision means; it's quite ambiguous. The > ramifications of the ruling aren't clear." > > According to Steven P. Rice, one of the attorneys for the > seniors, the published opinion is extraordinarily clear: > it will apply to other Leisure World communities, like > Rossmoor in Walnut Creek (Contra Costa County), also > founded by developer Ross Cortese. “It will also apply to > other associations to the extent that they are structured > like Leisure World,” he said. He also praised the three > Appellate Court judges for the clarity of the opinion and > for the definitions it offered. > > Rossmoor, operated by a Golden Rain Foundation, filed an > amicus brief with the Appellate Court in support of the > Seal Beach GRF. Rossmoor seniors have also been > campaigning to get the Foundation to open up its records. > They too want to know how GRF is spending their money. > > With the help of Orange County Legal Aid, the Leisure > World seniors filed the original small claims suits under > AB 104, legislation carried by then-Assembly Member Alan > Lowenthal (D-Long Beach) in 2003. > > He carried the bill because of complaints by senior > constituents in his own district that they were unable to > access the financial records of their association to find > out how boards and property managers were spending the > thousands of dollars collected from homeowners. > > The seniors in his district were also worried about > escalating assessments. [State law lets California > associations raise assessments 20% a year -- without > homeowner consent. HOAs now control about $8.8 billion > dollars -- in cash -- collected from the 9 million > homeowners living in associations.] > > A coalition of senior groups in Sacramento, chaired by > Marjorie Murray, now president of the Center for Homeowner > Association Law, proposed an amendment to AB 104 allowing > homeowners to sue in small claims court if the association > refused to open up the financial records. The senior > coalition lobbied hard to get the bill through the > Legislature and launched a separate campaign to get the > bill signed into law. The Leisure World seniors used the > small claims court tool immediately, when AB 104 became > effective in 2004. > > Legislation later carried by Assembly Member Dave Jones > [D-Sacramento] further strengthened and clarified > homeowner rights under state law to access association > records. The sponsor of the bill, the California Alliance > for Retired Americans, again under the leadership of > Murray, got the legislation amended so that it stated > clearly that community service organizations like Leisure > World are subject to the Civil Code laws on accessing > records. By 2005, when the bill was introduced, Golden > Rain was arguing that it was a community service > organization (CSO), not subject to association laws. > > Orange County courts have sided with the seniors in > multiple rulings. Monday’s Appeals Court ruling was on > the countersuit filed by Golden Rain in retaliation > against the seven seniors who filed the original small > claims actions. > > How much money Golden Rain has spent on legal fees > fighting the seniors is not known. Estimates range from > $500,000 to $1 million dollars. The Appellate court ruled > on Monday that Golden Rain will also have to pay the legal > fees of the attorneys, who represented the seniors. > > More than 9,000 seniors live in Leisure World. It’s not > clear whether the Golden Rain Foundation will have to levy > a special assessment on the Leisure World seniors in order > to pay all the legal bills, including those of the > attorneys representing Franz and the other original > plaintiffs. If Golden Rain tries to appeal Monday’s > ruling in the California Supreme Court, it will have to > spend even more homeowner money. > > In a nice touch of irony, Carol Franz learned of the > Appellate ruling Monday afternoon during the Golden Rain > annual meeting, where she was delivering a speech on board > accountability. “The 300 homeowners at the meeting all > cheered,” she said. > ###

JosephW
(Michigan)

Posts:735

06/16/2008 6:22 AM
Do you have a link for this story - its not showing up on the usual feeds. Joe

Joseph West Official HOATalk.com Sponsor Community Associations Network, LLC www.CommunityAssociations.net *See legal notice below (end of page) or go to www.hoatalk.com/legal

MD
(California)

Posts:27

06/16/2008 8:04 AM
Good morning, Joe: I Googled the topic and found the actual appellate decision. I attached it as a PDF file. Hope that helps-Emma
Attachment: 161643516871.pdf

JosephW
(Michigan)

Posts:735

06/16/2008 8:52 AM
The attachment helps greatly, but the story you printed looks like it comes from a news source, not the courts. Googling hasn't brought it up so I was wondering if you had a link to the news story. I want to reference it in my e-newsletter as well as a link to the decision. Joe

Joseph West Official HOATalk.com Sponsor Community Associations Network, LLC www.CommunityAssociations.net *See legal notice below (end of page) or go to www.hoatalk.com/legal

MD
(California)

Posts:27

06/16/2008 11:25 AM
Joe: I got the text in the original post in an email from a friend. I think the news release comes from the senior citizens group of which many of the original litigants belong. My friend lives in Leisure World. I'll email and ask her the source. I think the senior's group is CARA (California Association something). Sorry I am not more help-

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