Request for Judicial Notice: Laws & Regulations Exhibit 3 Limits on HOA agents’ & managers’ authority to act

NRS 116.310313     Collection of past due obligation; charge of reasonable fee to collect.

2.  The provisions of this section apply to any costs of collecting a past due obligation charged to a unit’s owner, regardless of whether the past due obligation is collected by the association itself or by any person acting on behalf of the association, including, without limitation, an officer or employee of the association, a community manager or a collection agency.

NRS 116.310313 (2)

NRS 116.310315     Accounting for fines imposed by association.

NRS 116.31083       Meetings of executive board; frequency of meetings; notice of meetings; periodic review of certain financial and legal matters at meetings; requirements concerning minutes of meetings; right of units’ owners to make audio recordings of certain meetings.

NRS 116.31084       Voting by member of executive board; disclosures; abstention from voting on certain matters.

NRS 116.31085       Right of units’ owners to speak at certain meetings; limitations on right; limitations on power of executive board to meet in executive session; procedure governing hearings on alleged violations; requirements concerning minutes of certain meetings.

NRS 116.31087       Right of units’ owners to have certain complaints placed on agenda of meeting of executive board.

HOA managing agents are fiduciaries

 NRS 116A.620  Management agreement: Contents; requirements; community manager to provide executive board with evidence of insurance; community manager to provide executive board with copy; changes; termination or assignment

3/31/14 management agrement FirstService Residential and Sun City Anthem

4/27/12 debt collection agreement FirstService Residential dba Red Rock Financial Services and Sun City Anthem includes an unenforced indemnification clause that unjustly enriches Red Rock’s undisclosed principals

NRS 116A.630  Standards of practice for community managers. 

In addition to any additional standards of practice for community managers adopted by the Commission by regulation pursuant to NRS 116A.400, a community manager shall:

      1.  Except as otherwise provided by specific statute, at all times:

      (a) Act as a fiduciary in any client relationship; and

      (b) Exercise ordinary and reasonable care in the performance of duties.

NRS 116A.630(1)(a)

Agents owe duties to the HOA & have no independent rights to profits

NRS 205.405  Falsifying accounts

NRS 207.230           Acting without lawful authority.

NRS 116.3116-NRS 116.31168 (2013)

NRS 116.31164(3)(2013) Ministerial duties after an HOA sale

Red Rock did not comply with NRS 116.31164 (3) (b) or (c)

NRS 116A.640        Community manager prohibited from engaging in certain acts; exceptions.

In addition to the standards of practice for community managers set forth in NRS 116A.630 and any additional standards of practice adopted by the Commission by regulation pursuant to NRS 116A.400, a community manager shall not:

 8.  Intentionally apply a payment of an assessment from a unit’s owner towards any fine, fee or other charge that is due.

      9.  Refuse to accept from a unit’s owner payment of any assessment, fine, fee or other charge that is due because there is an outstanding payment due.

      10.  Collect any fees or other charges from a client not specified in the management agreement.

NRS 116A.640 (8), (9), (10)

9.  Taking property from another under circumstances not amounting to robbery;      

29.  Perjury or subornation of perjury;

30.  Offering false evidence;

NRS 207.360 (9) (29) (30)

HOA Governing Documents

SCA third amended & restated CC&Rs 2008

SCA Third Amended and Restated Bylaws, 2008

Sun City Anthem CC&Rs 7.4 Compliance & Enforcement

Sun City Anthem bylaws 3.15 Open HOA Board meetings

Sun City Anthem bylaws 3.15A Executive session HOA Board meeting

Sun City Anthem bylaws 3.17        Powers of the HOA Board

Sun City Anthem bylaws 3.18. Duties of the HOA Board

Sun City Anthem bylaws 3.20. Management; Defines what HOA Board duties SHALL not be delegated

 Sun City Anthem bylaws 3.25. Board standards. Directors are fiduciaries

Sun City Anthem bylaws 3.21 (f)(v) Delinquency reports must be published quarterly

Sun City Anthem bylaws 3.21      Accounts and reports: delinquency report

(f)(v) a delinquency report listing all Owners who are delinquent in paying any assessments at the time of the report and describing the status of any action to collect such assessments which remain delinquent ( any assessment or installment thereof shall be considered to be delinquent on the 15th day following the due date unless otherwise specified by Board resolution).

SCa bylaws 3.21 (f)(v)

Sun City Anthem bylaws 3.26. Enforcement procedures

Harassment or bullying an HOA homeowner is a crime

It’s against the law for anyone to bully or to create a hostile environment for anyone in a Nevada HOA.

 NRS 116.31184  Threats, harassment and other conduct prohibited; penalty.

      1.  A community manager, an agent or employee of the community manager, a member of the executive board, an officer, employee or agent of an association, a unit’s owner or a guest or tenant of a unit’s owner shall not willfully and without legal authority threaten, harass or otherwise engage in a course of conduct against any other person who is the community manager of his or her common-interest community or an agent or employee of that community manager, a member of the executive board of his or her association, an officer, employee or agent of his or her association, another unit’s owner in his or her common-interest community or a guest or tenant of a unit’s owner in his or her common-interest community which:

(a) Causes harm or serious emotional distress, or the reasonable apprehension thereof, to that person; or

(b) Creates a hostile environment for that person.

2.  A person who violates the provisions of subsection 1 is guilty of a misdemeanor.

NRS 116.31184

Wait!

Why are Seddon and Clarkson exempted from this law in Sun City Anthem’s newly published policy?
Clarkson wrote the Sun City Anthem policy a bit too narrowly:  
The law says community manager, employees, and HOA agents are covered:     

     A community manager, an agent or employee of the community manager, a member of the executive board, an officer, employee or agent of an association, a unit’s owner or a guest or tenant of a unit’s owner shall not willfully and without legal authority threaten, harass or otherwise engage in a course of conduct against any other person

Did Clarkson misquote the law TWICE?

Opps! It looks like Clarkson accidentally forgot TWICE to make the law apply to himself or Seddon if they are accused of bullying .

Clarkson’s anti-bullying policy only applies to acts against them.

“Such a violation may subject the violator to a fine commensurate with the severity of the violation and any other appropriate remedies available to the Association”

Clarkson’s anti-harassment policy for Sun City Anthem owners

So, what?

Could it be because foreclosure could be an “appropriate remedy”?

I guess all Clarkson would have to do is deem my complaints against him and Seddon were health, safety and welfare violations that subjected me to a fine commensurate to the severity of  my horrific conduct.

Then, HOA attorney and debt collector Clarkson could impose other “appropriate remedies available to the Asociation” and foreclose on this house too when I refused to pay. 

The law says an HOA can’t foreclose on a fine unless the violation poses a threat:

The association may not foreclose a lien by sale based on a fine or penalty for a violation of the governing documents of the association unless:      (a) The violation poses an imminent threat of causing a substantial adverse effect on the health, safety or welfare of the units’ owners or residents of the common-interest community;

NRS 116.31162 (6)

Is it ethical for Clarkson to claim the anti-bullying law doesn’t apply to him or Sandy Seddon?

Short answer. No.

He should be fired immediately.

Clarkson knowingly revised the law to exclude himself and Sandy Seddon.
This is one more example of unethical self dealing.

Please consider this Nevada HOA retaliation case where attorneys claim to be exempted from being considered agents of the HOA under the retaliation statute NRS 116.31183.

“We conclude that an attorney is not an “agent” under NRS 116.31183 for claims of retaliatory action where the attorney is providing legal services for a common-interest community homeowners’ association. ” Dezzani v. Kern & Assocs., Ltd., 412 P.3d 56 (Nev. 2018). Link to Dezzani PDF.

The word “agent” is not defined in NRS 116.31183 or otherwise in NRS Chapter 116. SeeNRS 116.31183 ; NRS 116.003 –.095 (definitions). Kern points to NRS 116.31164, which governs foreclosure of liens, and argues that because NRS 116.31164 uses the words “agent” and “attorney” distinctly, it demonstrates that the Legislature purposefully distinguished an attorney from an agent under NRS Chapter 116. Therefore, Kern contends that the Legislature specifically omitted attorneys from NRS 116.31183, and the term “agent” does not include attorneys.

Dezzani v. Kern & Assocs., Ltd., 412 P.3d 56, 59 (Nev. 2018)

Given an attorney’s ethical obligations to be candid with a client and zealously represent his or her client, and the general presumption that an attorney providing legal services to a client is generally not subject to third-party liability for that representation, we agree with Kern and the amicus curiae State Bar of Nevada that the two relationships should not be treated the same in NRS 116.31183. Doing so, and imposing liability on an attorney for representing his or her HOA client, would impermissibly intrude on the attorney-client relationship and interfere with an HOA’s ability to retain an attorney and the attorney’s ability to ethically represent the HOA. Therefore, we conclude that the term “agent” in NRS 116.31183 does not include an attorney who is providing legal services to, and acting on behalf of, a common-interest community homeowners’ association.

Although the Dezzanis argue that the attorney-client relationship is different when an attorney and an HOA are involved because the HOA members’ fees are used to pay the HOA’s attorneys, we disagree. Kern represented the HOA, not its individual members. Thus, similar to counsel for a corporation, Kern owed fiduciary duties only to the HOA, not to the individual members of the HOA. See Skarbrevik v. Cohen, England & Whitfield, 231 Cal.App.3d 692282 Cal.Rptr. 627, 635 (1991) (“[C]orporate counsel’s direct duty is to the client corporation, not to the shareholders individually, even though the legal advice rendered to the corporation may affect the shareholders.”).

Dezzani v. Kern & Assocs., Ltd., 412 P.3d 56, 62 (Nev. 2018)

To whom does Clarkson owe a fiduciary duty?

Clarkson’s fiduciary duty is to the Association, not to me as an individual member of the association or to me, previously as a single elected member of the board.

Clarkson’s representation of Sandy Seddon’s interest vs. those of the HOA is a breach of his fiduciary duty to the HOA. Acting on his own initiative, or getting assignments or taking direction from Sandy Seddon, is usurping the authority of the Board.

Clarkson breached his fiduciary duty to the HOA, and that’s why I want the HOA to sue Clarkson for damages under the NRCP 23.1 shareholder derivative provision.

The Board doesn’t understand how he has breached his duty to the HOA and is not willing or able to protect the association from him. I can represent the HOA as a single member, but I just think it will be harder to prevail because Clarkson is so willing to defame me, turn me into a pariah and bury the HOA in fees to try to protect it from me. 

Respondeat superior is Clarkson’s escape hatch when he is usurping the authority of the HOA Board.

Here’s what Clarkson said in his 8/24/17 letter removing me from my elected Board seat

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 Clarkson had no legal authority to remove me from the Board. The discussion in the Board executive session in the morning was to get the Board to respond to my notice of intent against Clarkson and my Form 514a complaint against Seddon and her sidekick Lori Martin.

8/24/17 Clarkson’s imaginary statement of the law that conveniently ignores the black letter of the law in NRS 116.31034, NRS 116.31036, NRS 116.31084(1)(a)(b), and NRS 116.4117,

8/16/17 Notice of Intent to file a professional ethics complaint against Clarkson

I served notice on 8/16/17 of my intent to file a professional ethics complaint against him to the State Bar of Nevada image.png

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8/11/17 notice of intent to file an ethics complaint against Sandy Seddon

8/11/17 notice of intent to file Form 514a
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Looks a lot like bullying & retaliation to me