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CCOC Decision Summary

#66-09, Simons v. Fair Hill Farm HOA (May 6, 2010) (Panel: Fleischer, Gannon, Greenspan)

Simons, a member of the Fair Hill Farm HOA, appealed a decision of the board of directors fining him $1,000 for allegedly �topping� trees on the common areas next to his home, denying that he caused any damage.  He also complained that the HOA failed to enforce a no-parking rule in what he claimed was a fire lane near his house.

The evidence at the hearing showed that Simons had complained about trees owned by the HOA which were touching his house and which blocked his view of his car.  He alleged that the car was vandalized and that the trees created a condition that encouraged vandalizing.  Simons admitted he pruned the trees so that they did not touch his home, but he denied topping the trees.  The trees had been topped, or cut down, about 10 feet from the ground.  The HOA claimed Simons topped the trees and chased away a landscaping crew that was attempting to remove and replace the damaged trees.  The HOA held a hearing of its board of directors to determine if Simons had damaged the trees and to penalize him if he had; but Simons did not attend that meeting.  The HOA did not provide any information about that meeting to the CCOC hearing panel nor did it provide any evidence to the panel showing that Simons had topped the trees.  At the end of the CCOC hearing the HOA asked for permission to submit at a later date an affidavit from a witness who would testify that she saw Simons top the trees.

The panel denied the request to submit an affidavit.  The panel noted that although it was not bound by the strict rules of evidence used in court, such as the hearsay rules, it would not accept an affidavit after the hearing from a person it never met because it had no way to judge that person's credibility.

The panel then took up the issue of what standard it would use to review the case.  The panel held that it could not act as a trial court, making its own decisions on the evidence, but rather its role was to review the decision of the board of directors to determine if it was proper.

The panel then determined if it should apply the "business judgment rule" or the "reasonableness rule" to this dispute. The panel held that in a dispute in which a board decision affects the other party's financial or property ownership rights, the "reasonableness rule" applies and the board must show that it has a good reason for its decision to take action against the other party   

The panel  distinguished the recent CCOC decision in Prue v. Manor Spring, #39-09, which applied the business judgment rule to a dispute over a fence.  In that case, the complaining member's own rights were not at issue. Instead, she wanted the board to order her neighbor to remove a fence the neighbor had installed on his own property. The board had decided to allow the fence. The panel ruled that the business judgment rule applied in that dispute and it must uphold the board's decision unless the complainant showed the board acted in bad faith or arbitrarily. The complainant was not able to produce such proof, and the panel upheld the board's decision.

On the "no-parking" dispute, the panel found that no law or HOA rule declared the area involved to be a no-parking area; therefore, HOA was not required to post it as such or to remove vehicles parked there.  However the panel encouraged (but did not order) the HOA to consider a rule to that effect because that area included the common mailboxes and two fire hydrants, and parking could cause problems if there were an emergency.

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