Tuesday, March 24, 2009

Pet, or Service Animal? (Again...)

A new Florida Federal District Court case has some good reasoning and guidance dealing with the pet vs. service animal distinction, and how an association should respond to requests for a service animal accommodation.

The case, Hawn v. Shoreline Towers Phase 1 Condominium Association, involved the Davis C. Hawn's assertion that his Labrador retriever, Booster, was a service animal who was "dually trained to help [Mr. Hawn] both physically and psychologically.

Booster was originally introduced to the association's board as a "pet", and Mr. Hawn sought a six month trial period "to give folks a chance to prove that they love their pets as onel would love any other family member." There's no evidence that the association did anything in response to this letter, but about a year later, Mr. Hawn sought permission to keep Booster as his "service animal". His letter asserted physical and psychological disabilities, supported by a letter from a psychologist and a chiropractor.

The association thereafter attempted on two different occasions to get more information regarding Mr. Hawn's alleged handicap; no further information was provided. As a result, the association sent a letter stating "at this time, we must deny your request..."; Mr. Hawn responded by filing a complaint with the Florida Commission on Human Relations (FCHR). The FHCR ultimately found in favor of Mr. Hawn; following that, he filed his claim in the Florida Federal District Court, alleging violation of the Federal Fair Housing Act and the intentional or reckless infliction of emotional distress.

The defendants moved for summary judgment, contending that Haws had failed to meet his burdens. The court, while assuming that Hawns was handicapped, found for the association based upon the fact that the association had no knowledge or reason to know that he was, in fact handicapped. The court noted that the association had never denied the accommodation, but rather had twice requested -- unsuccessfully -- to obtain additional evidence of the handicap and/or the need for the accommodation.

The court, in its opinion, reviewed and relied extensively upon a Hawaii case of several years ago, Prindable v. Association of Apartment Owners of 2987 Kalakaua, 304 F.Supp.2d 1245 (D. Hawaii 2003), affirmed, Dubois v. Association of Apartment Owners of 2987 Kalakaua, 453 F.3d 1175 (9th Cir. 2006). The Prindable/Dubois case, like this case, involved a patient association which sought, unsuccessfully, to receive medical evidence to support the need for an alleged service animal.

Haws provides strong support for associations' rights to request competent evidence for the need for a requested service animal. In those instances where the need for a service animal is not obvious, associations can and should insist upon adequate and appropriate medical evidence, so that legitimate requests for accommodation are granted, and unwarranted requests are denied.

Tuesday, March 10, 2009

Live Blogging -- The Fair Debt Collection Practices Act

Several of my colleagues in the office are gathered in the conference room, listening excitedly to a seminar on the Fair Debt Collection Practices Act (the "Act"). Since I know that so many of you are interested in the subject, I'm going to live blog it.

The presenter, J. Scott Watson, is regaling the audience by letting us know that he knew (and worked for) Mr. Lieberman (presumably not Joe), who was the defendant in the leading case which established that lawyers are "debt collectors", under the Act.

A creditor, collecting its debts in the name of another, will be responsible for its conduct in connection with the collection of debts. In other words, an association whose representative uses a name other than the association, may be imposing the association and himself or herself to liability.

All debt collectors, including attorneys, are precluded from contacting debtors who are known to be represented by counsel. This is a non-issue to lawyers, as the Rules of Professional Conduct otherwise preclude such conduct.

The speaker suggests "reading the act in its entirety..."

A case called Foti established that a message on a voice mail, without the purpose of the call, violated the Act. On the other hand, identification of the reason for the call would be a violation, assuming a third party answered the call. The suggestion.

The speaker offers no suggestions; my suggestion -- don't leave messages on voice mail machines.

Never discuss a debt with anyone other than the debtor. If you are seeking someone's location from a third party (which is allowed under a specific exemption), don't disclose the reason for your inquiry. If someone contacts you purporting to be counsel for a debtor, request confirmation in writing, before proceeding.

Calling a deadbeat (er, I mean debtor) at work can be a real problem.

If a debtor requests that the debt collector cease collection activities, the debt collector must stop; the only exception will be the pursuit of judicial proceedings.

Perhaps the most troublesome aspect of the Act is the "least sophisticated debtor"; that requires that communications cannot be confusing to the least sophisticated debtor. That is, needless to say, a pretty low standard.

A new trend in litigation, according to the speaker, is suits arising from efforts to collect an amount that the debtor is not entitled to. For this reason, associations and managers must use extreme caution in referring collections to make certain that the information conveyed is accurate.

The recent Hicks case, from Florida, involved Section 1692; the debtor alleged that the voice mail messages were improper, in that they did not disclose the debtor's identity, and the purpose of the call. The message said, "this is in regard to a personal matter...." The court certified a class action, based upon the assumption that the auto-dialer had most likely called a large number of individuals.

Campuzano involved a letter being sent, with the necessary warnings; it made an "offer" of a discount, for a quick call. The plaintiff suggested that it was deceptive in that the officer who had purportedly signed the letters had not actually been involved; the court noted that the officers of the company did not need to have personal knowledge of the letters in order to avoid liability. The court noted that the executives were not lawyers, suggesting a different standard for lawyers.

In McKinney v. Cadleway Properties, Inc., the court addressed the status of a successor who had acquired a debt; the successor will be treated as a debt collector.

Romano case involved an attempted call to Ruben Romano; he was speaking to Ruben, Sr., rather than Ruben, Jr. The discussion with the father disclosed the debt to the son. Either the speaker didn't say, or I didn't catch, what the court did under those facts. I'll track it down, and supplement.

Fogel involved the collection of student loans from a law school graduate (oops!); the lawsuit was filed in the district of the primary Rutgers campus, which was in a different county than the law school, and the residence of the graduate. Again, I'll follow up with the result.

Interesting question for the end of the seminar: If you have two debtors, should you send a letter to both? The speaker advises yes. That, of course, leads to another question; if you do so, can you bill for both?

Friday, March 06, 2009

What's a Short Sale?

I'm live blogging today from the UCCAI Manager's Munch; the topic of the day is -- you guessed it -- the economy. More specifically, "The Effects of Short Sales and Foreclosures on Homeowners' Associations".

The speaker is Paul Newton, Backman Title Services.

Paul's beginning with an explanation of "race notice" -- the concept that the first to record their property interest will have priority.

Utah's Condominium Act provides priority to mortgage holders over association liens in condominiums; in the HOA setting, there was no law prior to 2004. Nonetheless, most declarations (in HOAs and condominiums) provide similar protections to lenders.

Backman's office was opening 150 foreclosure files a month in 2007; now it's a thousand per month.

Paul appropriately points out that the language of a declaration is critical respecting the association's rights; some declarations give priority to first mortgages; others give priority to all mortgages. Needless to say, at least for a while, that's a significant issue.

Another good point arises with respect to the "due date" of assessments in non-condominium associations. Most declarations have assessments on an annual basis. If assessments become due on the first of the year, but are billed monthly thereafter, the association may have priority relating back to January 1. Careful lenders avoid this predicament by receiving a payoff, and assuring that assessments are current at the time of transfer.

Paul says that their company appreciates the filing of a new lien, even post-foreclosure, so that the title companies know whom to contact. John Morris questions whether the filing of a lien against lenders may create a "selective enforcment" issue. That's a good point; a solution to that may be an amendment to the association's debt collection policy; a policy distinction which is reasonable should eliminate that argument.

John Richards inquired about how to pursue lenders who don't take care of their property; Paul recommends contacting the lender at the address on the deed, and the trustee who conducted the sale. (There are a lot of very busy foreclosure lawyers who will really enjoy that additional mail.)

A short sale, as defined by Paul, involves a proposal for a sale where not all lienholders will be made whole; the first lienholder will dictate who gets what, and the title company must close within those parameters. Obviously, the frequency of these short sales is increasing.

What's a Short Sale?

Mortgage Cram-Down Update

Last night, the U.S. House of Representatives passed H.R. 1106, allowing for bankruptcy court intervention in renegotiating the terms of certain mortgages. The bill does not directly refer to association's, but CAI's Public Affairs team was (and is) encouraging community association leaders to follow the legislation, and share your concerns about the potential of interference with community association assessments. Here's a snippet of the info sent from CAI this morning:
On Thursday, March 5, the House of Representatives passed HR 1106 with some technical amendments by a vote of 234 to 191. Although the concerns raised by CAI and others have not yet been fully resolved, your efforts in expressing concern have helped us get Congress’s attention, and members of the Judiciary Committee have committed to work with us to clarify and address these issues.

CAI continues to have concerns that the legislation will have a negative impact on associations in states with priority assessment liens, and that the grant of authority to bankruptcy courts, absent clearer direction and limitations, may be used to modify a homeowner’s assessment obligations to his/her community association. Again, thanks to your efforts, Congress is now aware of these issues and we will continue to work with legislators as the bill moves into the Senate.

Your efforts will help us ensure that this legislation will not have negative unintended consequences for common interest communities across the country and the residents who are current in their assessments. A well-crafted plan, that helps those in distress while protecting those who are current, will benefit us all.

I'll post updates here on this blog, and on the www.utahcondolaw.com parent page, and on our new collection site, www.caalrs.com