Harassing Females & Vendors
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  California's Leader in Community Association Law June 29, 2020
HARASSING FEMALES
AND VENDORS


QUESTION: We have a homeowner who has been harassing board members and contract landscapers for several years. He picks his victims carefully — single females or landscapers who are afraid to respond. He has recently taken to calling a female board member obscene names to anyone who will listen. The board and management are aware of his behavior. What should we do? -Suzanne S.

RESPONSE: The board needs to take action. California defines "harassment" as unlawful violence, a credible threat of violence, or a knowing and willful course of conduct directed at a specific person that seriously alarms, annoys, or harasses the person, and that serves no legitimate purpose. (Code Civ. Proc. §527.6(b)(3).)

Reluctant Boards. As a rule, boards generally avoid confrontation and are unsure how to deal with a resident who bullies and harasses others. They are reluctant to escalate matters and incur legal fees. Some are fearful the bully will shift his attention and start attacking them. They hope the bad behavior will subside on its own.

Strong Action. The problem with bullies is that they enjoy harassing other people. Passive or conciliatory responses only encourage more bad behavior. More often than not, intervention by the board can escalate matters as the bully tests the board's resolve. Stopping a bully requires strong action that signals significant legal and financial consequences if the bad behavior continues. That means getting the association's attorney involved.

Failure to Act. Failure to act can prove costly. The victims of discrimination and harassment can sue the association for failure to intervene. A case involving an association found its way into Federal court in 1997. In Reeves v. Carollsburg, a male resident harassed a female owner (Reeves), yelling racist and sexist epithets and threatening to rape and kill her. Reeves repeatedly complained to the association. The board failed to act even though it was fully aware of the problem. 

Lawsuit Filed. Reeves sued the association, claiming she suffered emotional injury and sought punitive damages. The association tried to get out of the case. The lower court refused to dismiss the case and the association appealed. The United States District Court noted that once the association knew about the incidents, it
had a duty to intervene. Therefore, the case could proceed. In addition, the question of punitive damages could also proceed. The association could be punished if the association acted with "reckless disregard" of Ms. Reeve's federal rights. (Reeves v. Carollsburg)

HUD Regulations.
Effective October 14, 2016, the U.S. Department of Housing and Urban Development (HUD) established regulations requiring all housing providers take steps to end harassment of protected classes. The regulation includes homeowner associations as a housing provider. (Code of Fed. Reg. §100.7(a)(1)(iii).)

Failure to Investigate. If a board fails to investigate complaints and take appropriate action, the target of harassment can either sue the association or file a complaint with HUD. Once a complaint is lodged, it is referred to California's Department of Fair Employment and Housing for investigation and possible legal action against the association. In other words, the State of California could sue the association on behalf of the plaintiff.

RECOMMENDATION: The board should get the association's attorney involved. If it has not already done so, it should adopt an anti-harassment policy describing (i) the association's policy against harassment, (ii) limitations on the association's authority, (iii) procedures for reporting harassment, (iv) how investigations will be conducted, and (v) potential actions related to findings.

Simultaneously, the board should have counsel send the person a cease and desist letter. If the behavior persists, it should hold a hearing and levy fines. If that doesn't work, a prelitigation offer of alternative dispute resolution (ADR) should be made. If the person is devoid of any sense of self-preservation and continues to behave badly, the board should sue him. (Contact us for more information.)

BREACH OF
FIDUCIARY DUTIES

In a prior newsletter, I mentioned a case involving breach of fiduciary duties by directors. It involved conflicts of interest.

In an unpublished case filed on June 11, a developer owned a majority of units in an association. This allowed him to elect a majority of directors to the board. A homeowner filed a lawsuit alleging the directors ran the association to benefit the developer at the expense of the membership.

Lower Court. The trial court found the developer's directors breached their fiduciary duties by improperly sharing the association's privileged communications with counsel with the developer, and approving assessments that benefited the developer and harmed members.

Court of Appeal. The decision was promptly appealed. The court of appeal came to the same conclusion and added that the developer directors were personally liable for their actions. The court pointed out that directors who act with a material conflict of interest are NOT protected from personal liability by the business judgment rule. (Coley v. Eskaton)

CONCLUSION: A conflict of interest exists when directors have a financial interest that is personal and distinct from that enjoyed by association members generally. Whenever that occurs, directors must recuse themselves from all discussions and votes on the issue.

 

NorCal Counties. Guidance for pool facilities has been added for El Dorado County, Placer County, San Mateo County, Sonoma County. Contra Costa is considering delay of July 1 openings.

Marin County is delaying some reopenings set for June 29. The businesses and activities allowed to move forward with reopening on June 29 includes indoor dining, and hair salons and barbershops, campgrounds and RV parks, picnic and barbecue areas, outdoor vehicle-based gatherings. Reopenings that have been paused include hotels, motels and short-term rentals; gyms and fitness studios; and other personal services (body art professionals, tattoo parlors, piercing shops, electrology services, estheticians, skin care and cosmetology services, non-medical massage services, and nail salons).

San Francisco is delaying their reopening set for June 29. This includes hair salons and barbershops, nail salons, tattoo studios, museums, zoos, outdoor bars and outdoor swimming.

SoCal Counties. The governor ordered closure of bars in the following counties: Fresno, Imperial, Kern, Kings, Los Angeles, San Joaquin, and Tulare. The governor also recommended the following counties close bars: Contra Costa, Riverside, Sacramento, San Bernardino, Santa Barbara, Stanislaus, and Ventura. Riverside County is not allowing recreational and youth sports at this time.


Updated Chart. For a list of county restrictions and links to health department orders, see County Chart 6-26-20. The chart is also posted on our website. Thank you to readers for sending us information about their counties. If we missed anything, please contact us.
 

Hi Adrian, It is still early and you are already making me laugh so hard with your response about the proxy! I can’t stop laughing! -Lorna

I have been unable to get past the first sentence of your response to the “proxies” question because I am laughing so hard I am afraid that I might wet myself. -Bob F.

Your response to the proxy question makes no sense whatever. If someone is dead, how can I get their signature? -Philip F.

LOL re the question re a proxy... and I suspect that your wry sense of humor was on display. RIP: “Rite-In-Proxy” -Kit

Sounds like you are suggesting getting the signature of a dead woman for her proxy!!!! -Ann V.

Adrian, thanks for always keeping your fingers on the “pulse” of how to handle deceased proxies!!! -Sue S.

Thanks for the laugh! And thanks for your informative newsletters. The information is most helpful, not to mention entertaining, when delivered in such a witty manner. -Kathy L.

I almost choked on my bagel this morning at the response to “Proxies.” The first paragraph had me laughing so hard! Thanks, it was a great way to wake up! Another excellent newsletter! -Barbara S.

Hilarious on the first one! -Pamela B.

How does one get a signature off a dead person? -John E.

"The proposed proxyholder should immediately go to the funeral home and get her signature before she is buried." You can't be serious!!! -George H.

Hahaha, tell Adrian that last newsletter cracked me up, OMG I was laughing. Get the dead person's signature for the proxy before she’s buried! -Shelly R.


Superb answer on the dead member! Adrian, you are not only an exceptional lawyer but also an exceptional literary artist! -Georgeta B.

Executor's Authority. An executor's authority depends on the stage of the estate; e.g., has the court approved the appointment of the executor, have assets been distributed? The more interesting issue — is the right to vote an asset? I would argue "No." The home is an asset, sure, but not likely the right to vote on an HOA issue. If you argue the right to vote is an asset, then that “asset” belongs to the beneficiaries of the estate, not the executor. -Jeffrey Greathouse, an Estates and Trusts attorney in Long Beach and Rancho Mirage, CA

 
Boards can contact us for friendly,
professional advice.


Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS|STIRLING PLC
DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to actually hire us. It's okay, we're friendly. You can call us. Keep in mind we are corporate counsel to associations only.

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