Limitations on Arizona HOA's Ability to Collect Legal Fees

Arizona homeowners associations regularly charge homeowners for legal fees incurred collecting amounts allegedly owed by homeowners, even when no court has awarded those attorneys’ fees to the HOA. The imposition of these charges is typically based on language in the Covenants, Conditions, and Restrictions (“CC&Rs”) governing the Association that allows for the recovery of legal fees by the Association in the event of any legal dispute with a homeowner. Arizona also has a statute (A.R.S. § 12-341.01), which allows for the recovery of legal fees by a prevailing party in litigation involving a contract. That statute applies to most HOA disputes because the CC&Rs constitute a contract between and among the Association and all of the homeowners.

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Wrongful Discharge Claims Arising From Employees Misclassified As Independent Contractors

Some employers attempt to avoid incurring some of the costs of employing employees by classifying employees as independent contractors. Sometimes this even happens after the employee has worked for some time as a regular employee but are then told they will be considered an independent contractor going forward. This can be a real problem because independent contractors, unlike employees, are not eligible for overtime pay, unemployment insurance, worker’s compensation and many other benefits that come with employee status. Employers may also argue that independent contractors are precluded from bringing wrongful termination claims because they were never actually employed by the company.

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A.R.S. § 23-108.02 - Appointment Of Administrative Law Judges Of The Arizona Industrial Commission

Arizona Revised Statute Section 23-108.02 governs the appointment of administrative law judges for the Arizona Industrial Commission. This section states:

A. The commission shall appoint administrative law judges of the commission who shall be members of the Arizona state bar. 
B. The annual compensation of the chief administrative law judge and of the administrative law judges shall be as determined pursuant to section 38-611.

This section of the Arizona statutes, first enacted in 1968 and subsequently amended on at least three occasions, specifies that one of the duties of the Industrial Commission is to appoint lawyers, who must be members of the Arizona State Bar, to act as Administrative Law Judges to hear legal matters pending before the Commission. These matters generally fall within the scope of the General Powers granted to the Industrial Commission in A.R.S. § 23-107.

The Administrative Law Judges of the Industrial Commission act within the ALJ Division of the Commission, and work within the stated mission "to resolve disputed matters in workers’ compensation, youth employment and wages efficiently, impartially and equitably as the administrative tribunal of the ICA in matters that arise under the jurisdiction of the ICA."

The Industrial Commission employees several Administrative Law Judges in Phoenix and Tucson, who hear matters from throughout the State. Although the statute only specifies that the ALJs must be members of the Arizona State Bar, the Industrial Commission has established additional standards requiring that they must also have at least five years of experience in workers' compensation, employment, or a related field. 

A.R.S. § 23-109 - Use Of Gifts And Grants By The Arizona Industrial Commission

Arizona Revised Statute Section 23-109 addresses the uses of gifts and grants by the Arizona Industrial Commission as follows:

The industrial commission may accept and expend public and private gifts and grants for the conduct of programs which are consistent with the overall purposes and objectives of the commission.

This Arizona statute pertains to the funding sources that the Industrial Commission is authorized to receive funds from, and the use of those funds. Based on the language of the statute, which does not appear to have been the subject of much litigation since it was enacted in 1974, there are few limitations on the sources of funding for the Industrial Commission. The Commission is only able to use those funds, however, in ways that are "consistent with the overall purposes and objectives of the commission."

Although the "purposes and objectives" of the Industrial Commission are not expressly defined in this section of the statutes, nor elsewhere as far as I can tell, they may be generally derived from the balance of the governing statutes as set forth in A.R.S. §§ 23-101 - 23-110, and in Title 20, Section 5, of the Arizona Administrative Code, which is the section of the official rules of the State of Arizona governing state agencies, boards, and commissions that apply to the Industrial Commission.

Arizona Supreme Court Holds That A.R.S. § 33-814(G) Only Applies When A Dwelling Has Been Completed

In a ruling filed on January 23, 2015, the Arizona Supreme Court reversed a judgment of the Superior Court and overruled the Arizona Court of Appeals' decision in M & I Marshall & Ilsley Bank v. Mueller, 228 Ariz. 478, 268 P.3d 1135 (Ct. App. 2011), which had applied the anti-deficiency protections of Arizona Revised Statute Section 33-814(G) where a borrower intended to eventually occupy a partially constructed home on the property.

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Understanding the Remedy of Specific Performance

In Arizona, one of the remedies available to a party who has been the victim of a contract  breach is specific performance. Specific performance, as opposed to the alternative remedy of monetary damages, refers to the situation where a court orders the breaching party to honor his or her obligations under a contract - in other words, to perform as agreed.

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The Protecting Tenants at Foreclosure Act of 2009

The Protecting Tenants at Foreclosure Act of 2009, part of the Helping Families Save Their Homes Act of 2009, was signed into law by President Obama on May 20, 2009. The Act contains several provisions designed to help tenants who are lawfully occupying a property that is foreclosed on due to the landlord's failure to pay the mortgage. The Act applies in foreclosure proceedings involving any federally-related mortgage loan on a residential property, which includes most residential properties in Arizona.

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A.R.S. § 33-814 - Arizona's Law Governing Legal Actions to Recover A Deficiency Judgment After The Sale Or Foreclosure Of Property Under A Deed Of Trust

In some cases a lender or their successor may maintain a legal action to recover a balance left owing after the sale or foreclosure of real estate pursuant to a trust deed, which is addressed in A.R.S. § 33-807. Section 33-814 addresses the ninety-day time limitation for bringing such actions, the procedure for establishing the fair market value to determine the amount of a deficiency judgment, and the obligations of guarantors.

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There Are Two Parts To Every Case

Over the years in meeting with thousands of clients and prospective clients I have learned that many people fail to understand the two distinct yet equally important parts of almost every lawsuit. From the moment a lawsuit is filed, your lawyer will begin preparing the case for trial, which involves gathering information to prove liability and damages.

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When Is Settling Better Than Going To Trial?

The simple fact is that most cases settle. There are a number reasons that this is true, but at least one study suggests that settling is often the smart move. On August 7, 2008, the New York Times published an article entitled Study Finds Settling Is Better Than Going to Trial.  The findings are consistent with the observations of many litigators who advise their clients that eliminating the risks and costs of trial can frequently be a smart move.

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Arizona Wrongful Termination Law - Retaliation For The Exercise Of Lawful Rights To Workers' Compensation Benefits

The Arizona Employment Protection Act includes various employment protections that the legislature has deemed are consistent with the "public policy of this state." The Act also severely limits contract-based claims, effectively eliminating such claims if there is no written contract. One of the protections provided applies to retaliatory actions based on the exercise of workers' compensation rights.

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A.R.S. § 23-201 - Liability For Obtaining Labor By False Pretenses

Although it is not a frequent occurrence, sometimes an employee is surprised when his or her employer fails to pay them wages earned. There are a variety of statutes and laws pertaining to the payment of wages, most of which are set forth at A.R.S. §§ 23-350 - 23-392, that require payment of wages within a specific period of time and also allow for certain penalties when wages are not paid in a timely manner.

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