News Intelligence Analysis
Confronting Humpty Dumpty's Reasoning
in a Homeowner's AssociationJanuary 25, 2012
By Katherine Yurica
"When we use a word," the majority of the 2011
Board said in unison and in rather a scornful tone,
"it means just what we choose it to mean—neither more nor less."
"The question is," said Alice, "whether you
can make words mean so many different things."
The question is," said the old Board,
"which is to be master—that's all."With apologies to Lewis Carroll
Lewis Carroll's real name was Charles Lutwidge Dodgson and he was an Oxford Don who was the Mathematical Lecturer of Christ Church for about a full half-century. Though his writings, including Alice's Adventures in Wonderland and Through the Looking Glass were meant for children, they expose fundamental reasoning fallacies. And as such, as we are about to see, they represent an invaluable aide for folks who are confronted with arguments in disputes that literally make no sense!
So because we all sometimes find ourselves in a quandary similar to Alice's, I offer my readers the following analysis.
Usually, the most valuable resolution to an argument is found in dictionaries, history books or in law books. But of all the more comfortable ways to examine what I shall call the "Humpty Dumpty Syndrome," most of us find reading the law the least palatable. For one thing, law books are usually, but not always, incomprehensible to us!
However, the Washington State Law governing homeowner's associations is a masterpiece of legal structure that houses not only a unique and powerful legal engine but reveals the stability and depth that ultimately glues the structure that holds up every type of homeowners' association in this state. Breathing brilliance upon the surface of descriptive thought, and inserting clarity into its definitions, the code succeeds in bringing universal commonality to the many sizes and shapes of association entities.
Having said that, we need to focus on two pillars of the law in order to discover whether the governing documents of an association are equal to, less than, or superior to the edicts of the Washington State law. And most importantly, we need to know whether the directors, who sit on an association board, can legally overrule and effectively nullify their own governing documents under the guise of following statutory law. For as Humpty Dumpty put it: "The question is, which is to be master—that's all!"
The Facts During the meeting, the Chairman suddenly announced:
"Rule Forty-two. All persons more than a mile high must leave."
Everybody looked at Alice.
"I'm not a mile high," said Alice.
"You are," said the Chairman.
"Nearly two miles high," added the Secretary.
"Well, I sha'nt go, at any rate," said Alice;
"besides, that's not a regular rule: you invented it just now."
"It's the oldest rule in the book," said the Chairman.
"Then it ought to be Number One," said Alice.With apologies to Lewis Carroll
If one is going to try to find out whether or not a law has been broken, or is being misinterpreted, or simply is not applicable, one must read and study that law! So in order to determine the overall position of the Washington State legislation, one has to read the entire Chapter 64.38 RCW on homeowners' associations. There's no getting around it!
There are in fact, repeated references throughout the code section chapter making it clear that each association's governing documents remain the primary legal authority. In other words, the RCW repeatedly asserts that the governing documents of an association do in fact supersede and take precedence over the Washington State RCW itself.
Therefore, because the Washington State law in Chapter 64.38 of the RCW repeatedly refuses to nullify or preempt the governing documents of a homeowner's association, (with the exception in which the legislative intent was to outlaw racial and other forms of discrimination) one must conclude that the homeowners' associations law on its face establishes the association documents as the major operative legal authority. For example, Section 64.38.020 literally reads like this:
"Unless otherwise provided in the governing documents, an association may:
"(1) Adopt and amend bylaws, rules, and regulations;"
"Unless otherwise provided in the governing documents, an association may:
"(2) Adopt and amend budgets for revenues, expenditures, and reserves, and impose and collect assessments for common expenses from owners…"
Then RCW section 64.38.020 continues with a list of other powers an association may execute, including this statement reiterating the authority of the bylaws:
"Unless otherwise provided in the governing documents, an association may:
"(12) "Exercise any other powers conferred by the bylaws." (Emphasis added)
Notice that this latter code section necessarily reinforces the authority of the SVCA board to establish the dues and assessments (as stated in the bylaws at Article III, Section 19), subject to "the approval by a vote of not less than sixty (60%) percent of the members present in person or by proxy at any annual or special meeting."
Significantly this bylaw has not been amended or changed in any way by the association members through the voting procedure. It was, however, essentially nullified by fiat by a majority of a board of directors who believed they had the right to unilaterally ignore or effectively amend the Sudden Valley Community Association's bylaws without a vote of the membership.
In addition, Section 64.38.025 of the RCW adds two more important caveats:
"(1) Except as provided in the association's governing documents or this chapter, [i.e. Chapter 64.38, which contains the entire code for homeowner's associations in the RCW], the board of directors shall act in all instances on behalf of the association…"
"(2) The board of directors shall not act on behalf of the association to amend the articles of incorporation, to take any action that requires the vote or approval of the owners, to terminate the association, to elect members of the board of directors…" (Emphasis added.)
Thus a board of directors is prohibited by law "to take any action that requires the vote or approval of the owners," which most certainly includes a defacto amendment to the bylaws and the imposition of a dues increase without the approval of the membership as required by Article III, Section 19 of the Sudden Valley bylaws.
Additionally and significantly, Section 64.38.040 "Quorum for meeting," also reiterates the law's position:
"Unless the governing documents specify a different percentage, a quorum is present throughout any meeting of the association if the owners to which thirty-four percent of the votes of the association are allocated are present in person or by proxy at the beginning of the meeting."
In fact, Sudden Valley's bylaws require the presence in person or by proxy of only fifty (50) eligible members (Article II, Section 5)—and not the estimated 544 members apparently required by the state law! (Roughly 34% of the estimated 1,600 members.) It is perhaps extremely revealing that the 2011 board members showed their disingenuousness by placing a portion of the State Law above the association documents, but chose to follow the association bylaws on an issue when it suited their purposes. They cannot have it both ways!
There is also an issue involving equity here. When RCW Section 64.38.028 was passed, it struck down every kind of discrimination in homeowner's associations: racial, sexual, national origin, families with children, etc. It therefore would be surprising, to say the least, if the legislative intent was to allow a board of directors to impose monetary hardship against the elderly, against families with children and against the working classes of its citizens without due process of law. Sudden Valley's membership consists of not only the wealthy and the upper middle classes but also the poor.
There are well-to-do families with large and spacious homes overlooking Lake Whatcom and or the Sudden Valley golf course, which is predominantly used by the same affluent "eastsiders." However, the majority of the homes in the association are owned by working families and retirees who live on the west side of the Valley in small, family sized houses. Nonetheless, Sudden Valley's dues and assessments are based on an equal rate of payment for every lot. Thus a millionaire pays the same amount of dues to the association as a retiree on a fixed income, or as a working family with small children, or as the family living on social security. But the less affluent retirees and working families form the largest financial base for the association. Because the community was designed to attract both the wealthy as well as the working classes, the covenants and governing documents were wisely designed to create protections for the less affluent families with bylaws that gave the membership the power to turn down unjustifiably high dues and assessments proposed frequently by boards consisting of the affluent. That protection must not be allowed to be swept away by a mistaken understanding of what the RCW Chapter 64.38 really says!
"An Axiom, you know, is a thing that you accept without
contradiction. For instance, if I were to say 'Here we are!', that
would be accepted without any contradiction, and it's a nice sort
of remark to begin a conversation with. So it would be an Axiom.
Or again, supposing I were to say 'Here we are not!' that would be—"
"—a fib!" cried Bruno.
"Oh, Bruno!" said Sylvie in a warning whisper. "Of course it
would be an Axiom, if the Professor said it!"
…"It might be an Axledum," Bruno said: " but it wouldn't be true!"
