Utopian Village v. Jack Sparrow A Mock Mediation

1. Utopian Village v. Jack Sparrow A Mock Mediation Daniel Zimberoff, Esq., CCAL – Zimberoff Deutsch, APC Laurie S. Poole, Esq., CCAL – Adams | Stirling, PLC Bradley Schuber, Esq. – Kriger Law Firm Gloria Kirkwood, PCAM, CCAM – General Manager Palm Valley HOA Rachel Garrett, PCAM, CCAM – Walters Management

2. COMMON CONFLICTS • Nuisance (noise, smoking, etc.) • Maintenance • Architectural • Violations of the Governing Documents (parking, pets, etc.)

3. UNRESOLVED CONFLICTS LEAD TO . . . • Time and Stress • Loss of Community Cohesiveness • Legal Fees • Diminished Property Values • Distraction from Important Association Business

4. ENFORCEMENT • Enforcement Policy – is there one? • Courtesy Notice • Violation Notice • Hearing • Impose Fines • Due Process

5. COMMON DEFENSES • Everyone Else is Violating • Selective Enforcement • It’s Been Too Long • Didn’t Follow Procedures • Variance

6. INTERNAL DISPUTE RESOLUTION(IDR) • Dispute between HOA and member involving rights under DS Act, Corp Code or gov docs (broad) • Meet in good faith to resolve dispute • More informal than Alternative Dispute Resolution • Mandatory participation by Association if initiated by Owner • No Charge to Owner • Meet promptly at a mutually convenient time/location • May be assisted by attorney or other party • Agreement is judicially enforceable if: • In writing • Signed by all parties • Not in conflict with law or governing documents

7. ALTERNATIVE DISPUTE RESOLUTION MEDIATION ARBITRATION Can be binding or non-binding More formal – mini trial Individual arbitrator or panel Evidence is introduced Arbitrator(s) decide If binding, decision is final • More informal than arbitration • Focused on reaching resolution between the parties • Parties control the outcome • Caucus sessions • Written agreement is enforceable

8. ALTERNATIVE DISPUTE RESOLUTION(ADR) • “Enforcement Action” – civil action or proceeding to enforce DS Act, Corp Code and gov docs (broad) • Required before certain types of litigation • Injunctive, declaratory or writ relief (not preliminary injunction or TRO) • Can be in conjunction with monetary damages under small claims court limits ($5,000 for entities; $10,000 for individuals) • Not required for: • Cross-Complaints • Small Claims Court actions • Assessment Disputes BUT must offer prior to lien and initiating foreclosure • Parties bear the costs (50/50?) • Prevailing Party can be awarded attorneys’ fees and costs for ADR

9. UTOPIAN VILLAGE v.JACK SPARROW Unauthorized Hard Floor Installation

10. THE SCENARIO Jack Sparrow submitted ARC application for installation of hard-surface flooring throughout unit Application approved Three months later, downstairs neighbor complained of excessive noise HOA investigated, claimed Sparrow failed to use proper materials, and is assessing fines IDR failed, both parties agreed to mediation

11. CC&Rs Provision Flooring: Any acoustical impact on neighbors should be minimized. Owners should submit to the ARC details on how they intend to minimize sound transmission in any projects that include new or replacement flooring. Details of product specifications and installation methods should be included with the submission.

12. Timeline • 8/1/17: Sparrow submits ARC application to replace all flooring in unit with hard surface product with IIC rating of 70 • 8/30/17: ARC approves application • 11/1/17: Sparrow submits Completion of ARC Work Completed to HOA • 2/15/18: Board receives complaint from downstairs neighbor of excessive noise and allegations of improper materials utilized • 3/30/18: In Executive Session, Board votes to proceed with enforcement action against Sparrow

13. Timeline • 4/10/18: HOA sends Notice of Violation including monetary fine and demand to replace flooring • 4/17/18: Sparrow requests hearing to rebut Notice of Violation • 6/1/18: Hearing held; Sparrow submits evidence from contractor • 6/10/18: HOA sends Sparrow letter upholding fines and demand to replace flooring • 6/19/18: Sparrow requests IDR • 7/15/18: Parties meet for IDR; no progress made

14. Timeline • 7/30/18: Sparrow’s attorney sends letter to HOA requesting ADR (mediation) • 8/22/18: HOA’s counsel provides response, includes prospective mediators • 8/30/18: Parties agree on mediator and mediation set for 10/19/18

15. PREPARING FOR MEDIATION ASSOCIATION HOMEOWNER Review process Set reasonable expectations—clear objectives Attempt to de-escalate tension Frank discussion on fees Submit brief early • Who participates? • Settlement parameters • Settlement authority • Have options • Submit brief (confidential?)

16. WHAT TO EXPECT AT MEDIATION • Confidentiality • Neutral Mediator • Caucus Sessions • Down time when mediator is with other party

17. MEDIATIONDO’S AND DON’TS DO DON’T Lose your temper Be uncompromising Disparage the other party Lose perspective Forget this is your chance to control the outcome • Set realistic goals • Listen/speak with respect • Be open-minded • Focus on the instant issue (not past grievances) • Remember you all have to live in the same community afterwards

18. EFFECTIVE AGREEMENT • Specificity • What will occur • When will it occur • Where will it occur • Who is doing what • Address attorneys’ fees for enforcement if breached • Everyone signs

19. WHAT IF NOT RESOLVED? • Superior Court Lawsuit • No Further Action

20. Q&A Thank You!