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COMPANY, an Arizona Corporation; COLBY MANAGEMENT, INC., an Arizona
Corporation; CORNERSTONE
PROPERTIES, INC., an Arizona Corporation; EPMI, Inc., an Arizona corporation doing business as EAGLE PROPERTY
MANAGEMENT; GOLDEN VALLEY PROPERTY MANAGEMENT, LLC, an Arizona limited liability company; GOLDEN VALLEY COLLECTIONS, LLC, an Arizona limited liability company; COMMUNITY ASSET MANAGEMENT, LLC, Arizona limited liability company doing business as HOAMCO (HOMEOWNERS
ASSOCIATION MANAGEMENT
COMPANY, KACHINA MANAGEMENT, INC., an Arizona corporation; K
MANAGEMENT SERVICES, INC. an Arizona corporation doing business as KINNEY MANAGEMENT SERVICES and SENTINEL SERVICES; METRO
PROPERTY SERVICES, INC., an Arizona corporation; MORRISON GROUP, INC., an Arizona corporation; CIMROS, INC., is an Arizona corporation doing business under the trade name MUTUAL MANAGEMENT SERVICES; OGDEN & COMPANY, INC. WEST, a Wisconsin corporation authorized to do business in Arizona; DAN PETERSON PROPERTY MANAGEMENT COMPANY, LLC an Arizona limited liability company; PLANNED DEVELOPMENT SERVICES, INC., an Arizona Corporation; PREFERRED COMMUNITIES, LLC, an Arizona limited liability company; PREMIER COMMUNITY MANAGEMENT, INC., an Arizona
corporation; RENAISSANCE COMMUNITY PARTNERS, LLC, an Arizona limited liability company; SENTRY MANAGEMENT, INC., a Florida Corporation authorized to do
business in Arizona; STRATFORD
MANAGEMENT, LLC, an Arizona limited liability company; NORTHCOTT BELLOW & ASSOCIATES, INC., an Arizona
corporation doing business under the registered trade name STRATFORD
) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )
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MANAGEMENT; THE MANAGEMENT TRUST, INC., a California corporation authorized to do business in Arizona; and TOTAL PROPERTY MANAGEMENT, INC., is a California corporation doing business in Arizona. Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) )
COME NOW, Plaintiffs, on behalf of themselves and all others similarly situated, by and through undersigned counsel, and for their Complaint against these Defendants, allege as
follows:
GENERAL ALLEGATIONS FOR THE CLASS ACTION
1. Plaintiffs bring this action to secure redress for unlawful credit and collections practices engaged in by Defendants. Plaintiffs allege that Defendants, and other similarly situated Community Association Management Companies (“CAMs”), violated the Fair Debt Collection Practices Act, 15 U.S.C. §1692 et seq. (“FDCPA”), the Arizona Constitution, and Arizona’s Wrongful Lien Statutes.
2. The FDCPA broadly prohibits unfair or unconscionable collection methods; conduct which harasses, oppresses or abuses any debtor; and any false, deceptive or misleading statements, or violation of a law, in connection with the collection of a debt; it also requires debt collectors to provide consumer debtors with certain information. 15 U.S.C. §§1692d, 1692e, 1692f and 1692g.
3. The Defendants are CAMs who have acted without legal authority and in violation of State law prohibiting the unauthorized practice of law in pursuing Arizona’s homeowners for alleged debts to their Homeowners Associations and thereby subjecting the
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CAMs to penalties for each violation of the Fair Debt Collections Practices Act and other State of Arizona laws.
JURISDICTION AND VENUE
4. This Court has jurisdiction under 15 U.S.C. §1692k (FDCPA) and 28 U.S.C. §§1331, 1337 and 1367. 4. Venue and personal jurisdiction in this County are proper because: a) Defendants’ collection communications were received and/or initiated by Plaintiffs and/or Defendants within this County and within this State; b) Defendants transact business within this State; and c) this action concerns a debt collection practices affecting real estate located within this County or otherwise within this State.
THE PARTIES
5. Plaintiff Christopher Crame is a resident of Maricopa County Arizona and he holds title to real property located in this County and subject to a recorded set of deed restrictions. He is also a member of his Condominium Association.
6. Plaintiff Robert Leatham is a resident of Pinal County Arizona and holds title to real property located in Pinal County that is subject to a recorded set of deed restrictions. As such, he is a member of his Homeowners Association.
7. The Defendants, each and all of them, are Community Association Management companies who have contracted business within Arizona and have contractual relationships with Arizona Homeowners Association and Condominium Association entities.
8. The Defendants, each and all of them, are not themselves Arizona Homeowners Association or Condominium Association entities, but merely third party managing agents of their Arizona Homeowners Association and Condominium clients.
9. The Defendants, each and all of them, are not in privity of contract with any of the named or class member Plaintiffs.
10. During the Class Period, the Defendants were in the business, trade, or commerce of managing the operations of their HOA and Condominium clients and in addition, providing
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debt collection activities and/or recording debt collection related documents, including the issuing of debt collection correspondence, the filing of court documents and the recording of liens against and in furtherance of collecting debts, appearing in small claims or justice court proceedings on behalf of the Homeowners Association entity clients, appointing a CAM representative as a special officer of the Board in an attempt to legitimize the activities of the CAMs, negotiating alleged debts and legal rights on behalf of a third-party and charging or incurring fees for any and all of these activities for the Class Member’s Homeowners’ Association against the Class Members.
11. The Defendant 360 MANAGEMENT, LLC, an Arizona Limited Liability Company doing business under the registered Arizona Trade Name of 360 PROPERTY MANAGEMENT with its headquarters located at 4630 E. Indian School Road, Phoenix, Arizona authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Fieldcrest Homeowners Association and Summerfield Place III Homeowners Association;
12. The Defendant AAM, LLC, is an Arizona Limited Liability Company doing business under the registered Arizona Trade Name of AAM with its headquarters located at 1600 West Broadway, #200, Tempe, Arizona authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Tramanto Master Community Association, Legend Trail Community Association and Pecan Creek South Community Association.
13. The Defendant VISION COMMUNITY MANAGEMENT, LLC, is an Arizona Limited Liability Company doing business under the registered Arizona Trade Name of ARIZONA’S VISION with its headquarters located at 9633 South 48th Street, Suite 150, Phoenix, Arizona authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Superstition Views Community Association and Pecan Manor Homeowners Association.
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14. The Defendant BROWN COMMUNITY MANAGEMENT, INC., is an Arizona
Corporation doing business as the Registered Arizona Trade Name of BROWN COMMUNITY MANAGEMENT with its headquarters located at 7225 E. Hampton Avenue, #101, Mesa, Arizona authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Desert Valley and Villas at Red Mountain Homeowners Association;
15. The Defendant CADDEN COMMUNITY MANAGEMENT, INC. is an Arizona
Corporation with its headquarters located at 1870 W. Prince Road, #43-48, Tucson, Arizona, authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Rita Ranch Crossing Homeowners Association;
16. The Defendant CAPITAL CONSULTANTS MANAGEMENT CORPORATION
is a Nevada Corporation with its headquarters located at 311 S. Division Street, Carson City, Nevada authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Power Ranch Community Association and Johnson Ranch Community Association
17. The Defendant CITY PROPERTY MANAGEMENT COMPANY is an Arizona
Corporation with its headquarters located at 4645 E. Cotton Gin Loop, Phoenix, Arizona authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Montelena Master Community Association and San Tan Community Association.
18. The Defendant COLBY MANAGEMENT, INC. is an Arizona Corporation with its headquarters located at 17220 N. Boswell Blvd., #140, Sun City, Arizona authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: West Green Townhouses and Spanish Gardens Homeowners Association, Inc.
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19. The Defendant CORNERSTONE PROPERTIES, INC., an Arizona Corporation with its headquarters located at 4523 E. Broadway Road, Phoenix, Arizona authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Corte Sierra Community Association and Moon Valley Canyon Homeowners Association.
20. The Defendant EPMI, Inc. is an Arizona company doing business as EAGLE PROPERTY MANAGEMENT with its headquarters located at 3875 N. 44TH St. Suite 102, Phoenix, authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Paradise Gardens Villas Homeowners Association and Talavera Community Association.
21. The Defendant GOLDEN VALLEY PROPERTY MANAGEMENT, LLC is an Arizona limited liability company with its headquarters located at ADDRESS authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Los Paseos Condominium Owners Association and Shadow Bend Condominium Association of Scottsdale.
22. The Defendant GOLDEN VALLEY COLLECTIONS, LLC is an alter ego and admittedly a “sister company” of GOLDEN VALLEY PROPERTY MANAGEMENT, LLC sharing common ownership, common office locations and common employees.
23. The Defendant COMMUNITY ASSET MANAGEMENT, LLC is an Arizona limited liability company doing business as HOAMCO and HOMEOWNERS ASSOCIATION MANAGEMENT COMPANY is an Arizona company with its headquarters located at 3205 Lakeside Village Drive, Prescott as well as other locations in Arizona, Colorado and New Mexico, authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Torreon Community Association and Long Meadow Ranch Community Association.
24. The Defendant K. MANAGEMENT SERVICES, INC. is an Arizona company with its headquarters located in Tempe, Arizona authorized and conducting business in the state
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of Arizona as KINNEY MANAGEMENT SERVICES and SENTINEL SERVICES; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Corte Sierra Community Association and Festival Homeowners Association.
25. The Defendant METRO PROPERTY SERVICES, INC., is an Arizona company with its headquarters Chandler authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Kingstree Village Association and Overlook I at Scottsdale Mountain Association.
26. The Defendant THE MORRISON GROUP, INC. is an Arizona corporation with its headquarters located at 5229 North 7th Avenue in Phoenix and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Sonoran Sanctuary Homeowners Association and the Preserve at Shadow Mountain Homeowners Association.
27. The Defendant CIMROS, INC., is an Arizona corporation registered and doing business under the trade name MUTUAL MANAGEMENT SERVICES, its headquarters located at 5333 NORTH 7TH ST B-114PHOENIX, Arizona 85014 authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Maryland Manor Homeowners Association and Sundial Unit III Association.
28. The Defendant OGDEN & COMPANY, INC. WEST is a Wisconsin corporation registered and doing business as foreign corporation in Arizona with its local at 1901 East University Drive, #440; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Papago Buttes Homeowners Association and Tesoro at Grayhawk.
29. The Defendant DAN PETERSON PROPERTY MANAGEMENT COMPANY,
LLC is an Arizona limited liability company with its headquarters located at 9590 E. Ironwood Square Drive, Suite 215-A, Scottsdale, Arizona authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the
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following entities: Wilshire Place Condominiums and Granite Mountain Ranch Homeowners Association, Inc.;
30. The Defendant PLANNED DEVELOPMENT SERVICES, INC. is an Arizona corporation with its headquarters located at 8765 W. Kelton Ln. in Peoria, authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Estrella Park Homeowners Association and Waterford Square Homeowners Association;
31. The Defendant PREFERRED COMMUNITIES, LLC is an Arizona limited liability company with its headquarters located at 1050 East University Drive, Suite 1, Mesa, authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Sierra Heights Homeowners Association and Signal Butte Casitas;
32. The Defendant PREMIER COMMUNITY MANAGEMENT, INC. is an Arizona
company with its headquarters located in Chandler, Arizona authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Las Maderas Association and Springer Ranch Homeowners Association.
33. The Defendant RENAISSANCE COMMUNITY PARTNERS, LLC is an Arizona
limited company with its headquarters in Gilbert, Arizona authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Parkwood Ranch Community Master Association and Coronado Ranch Community Association;
34. The Defendant SENTRY MANAGEMENT, INC. is a Florida corporation authorized to do business in Arizona with its headquarters locally in Tempe, Arizona, authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Warner Ranch Phase 3 Association and Windhaven Unit III Association;
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35. The Defendant STRATFORD MANAGEMENT, LLC doing business as
STRATFORD MANAGEMENT, together with the entity, NORTHCOTT BELLOW & ASSOCIATES, INC., also doing business as STRATFORD MANAGEMENT, is an Arizona company with its headquarters located in Tucson, Arizona authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Sabino Creek Homeowners Association.
36. The Defendant THE MANAGEMENT TRUST is a California corporation
Company with its Arizona offices in Scottsdale, Arizona authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Cactus Flats Condominium Association and Vineyards of Chandler Homeowners Association.
37. The Defendant TOTAL PROPERTY MANAGEMENT is a California
corporation doing business in Arizona with a local Arizona address in Phoenix, Arizona, authorized and conducting business in the state of Arizona; said Defendant is purporting to act on behalf of and for the benefit of at least the following entities: Villas Scottsdale II Homeowners Association and Village at Litchfield Park Homeowners Association.
FACTUAL ALLEGATIONS SPECIFIC
TO REPRESENTATIVE PLAINTIFF CHRISTOPHER CRAME
38. Representative Plaintiff, Christopher Crame (“Crame”), is an unmarried man and the record owner of a condominium unit at Los Paseos Condominium Association located in Maricopa County, Arizona.
39. Los Paseos Condominium Association is managed by Defendant Golden Valley Property Management, LLC.
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40. Golden Valley is owned by Mickey D. Latz.
41. Los Paseos Condominium Association also has a contractual relationship with Golden Valley Collections, LLC.
42. Golden Valley Collections is also owned by Mickey D. Latz.
43. Upon information and belief, Golden Valley Property Management and Golden Valley Collections operate with common employees, common ownership and common relationships with their Community Association and Condominium Association clients.
44. Upon information and belief, the legal differentiation between the management arm and the collections arm of Golden Valley is in name only.
45. An Association’s contractual relationship with Golden Valley Property Management also requires a contractual relationship Golden Valley Collections.
46. Crame allegedly has been delinquent in his assessments for quite some time.
47. He filed a bankruptcy several years ago for protection from various creditors, including the debt owed his Condominium Association, Los Paseos.
48. On 2009, Defendant Cornerstone Properties, Inc., recorded a Notice of Automatic Lien for Non-Payment of Common Expenses against Crame’s Los Paseos condominium.
49. The 2009 Notice was recorded at Maricopa County Recording Number, 20091027697.
50. The 2009 Notice was signed by Mike Roberson, one of the principals of Defendant Cornerstone Properties, Inc.
51. Roberson’s signature was notarized by his father, Larry Roberson, the other principal of Cornerstone.
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52. According to the Crame account ledger information, Cornerstone entered a $140 charge and a $25.34 charge on October 30, 2009 for its lien preparation, signing and recording services.
53. Crame’s most recent account ledger prepared by Golden Valley Property Management/Golden Valley Collections indicates that there have been as many as two lawyers assigned to collect his allegedly delinquent assessment account and as many as two different CAMs involved in actions to collect the allegedly delinquent account.
54. After several years and thousands of dollars in legal fees, Golden Valley Property Management and Golden Valley Collections took over the file in early 2012.
55. On or about January 17, 2012, Golden Valley sent Crame a demand letter threatening litigation.
56. The January 17, 2012 demand was signed electronically by Melissa Ferrelez.
57. The January 17, 2012 demand listed a post office box for Golden Valley and a telephone number listed for both the management and collections entities.
58. The Crame account ledger indicates that Golden Valley charged Crame the following expenses on or about February 8, 2012:
GVC Collections – 30 day letter $50.00
GVC Collections – Asset Search $100.00
GVC Collections – Certified Mail $5.59
GVC Collections – Complaint $350.00
59. On March 7, 2012, Los Paseos filed a complaint in the Desert Ridge Justice Court, Maricopa County.
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60. The Los Paseos Complaint was filed “c/o Golden Valley Collections”.
61. Upon information and belief, the Complaint was signed by a Los Paseos board member, but prepared by Golden Valley.
62. The Complaint is also stamped by Joyce Brendel, Arizona Licensed Document Preparer #81249.
63. After the lawsuit was filed, Crame attempted to negotiate with Golden Valley. 64. Crame’s negotiation was not with any Los Paseos board member or employee, but instead with its CAM, Golden Valley and the related collection agency entity.
65. Much of that communication was with a Golden Valley employee, Melissa Ferralez. 66. A cursory Internet search of social networking websites shows that Ferralez listed her duties at Golden Valley as follows:
Manage daily functions of Golden Valley Collections department. Skip Tracing/Asset searches, attorney/court correspondence, preparing court documents for entry, debtor negotiations, monitor payment plans, bankruptcy research, garnishments, writ of execution.
67. After undersigned attorney, Wood, became involved in the matter on behalf of Crame, Golden Valley negotiations on behalf of Los Paseos continued.
68. In a recent email communication, Golden Valley employee Joyce Brendel wrote “We will be filing the Application for Entry of Default due to no response.”
69. Joyce Brendel’s email signature states that she is the “Association Accountant” and the signature lists both Golden Valley entities. Emphasis added.
70. The Association’s default paperwork was signed by Raven Esquivel, a Golden Valley employee, not a Los Paseos director or officer.
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71. While Crame’s Justice Court matter has yet to be reduced to a Judgment, a simple Maricopa County Recorder on-line document shows that Golden Valley records its small claims and justice court judgments with the Maricopa County Recorder’s office.
72. Those representative Golden Valley judgment records show that Golden Valley did nothing to file and obtain a transcript of judgment in the appropriate county superior court.
FACTUAL ALLEGATIONS SPECIFIC
TO REPRESENTATIVE PLAINTIFF ROBERT LEATHAM
73. Representative Plaintiff, Robert Leatham (“Leatham”) is a married man dealing with his sole and separate property located in Pinal County, Arizona.
74. On February 6, 2012, Defendant AAM, LLC, recorded a “Notice of Lien on a Planned Community” with the with the Pinal County Recorder’s Office, Recording Number 2012-009363.
75. AAM, LLC recorded said Notice on behalf of its Association client, Pecan Creek South Homeowners Association, an Arizona non-profit corporation.
76. The Notice caption stated that the lien notice should be returned from recording to AAM “in care of” Pecan Creek South.
77. The Notice of Lien was drafted by an AAM employee, Christine Gant, an Arizona licensed document preparer.
78. The Notice of Lien was signed by Kevin Debolske on behalf of Pecan Creek South.
79. The Arizona Corporation Commission Records do not show that Kevin Debolske is an officer or director at Pecan Creek South.
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80. Kevin Debolske is an employee of AAM, LLC.
81. The amount of the lien stated it was to secure an alleged debt of $447.
82. The amount on the Pecan Creek South’s account ledger indicates that AAM charged Defendant Leatham $150 on January 27, 2012 for a “lien/lien release” fee.
83. The amount on the Association’s lien reflects charges and amounts not authorized by Arizona law.
84. Further review of the Leatham account ledger prepared by AAM, LLC shows that charges a $40 “demand fee”.
85. In this matter, AAM, LLC did not pursue Leatham in a small claims or justice court action, but instead turned the file over to an attorney.
86. Once turned over to the attorney, the attorney threatened to record a Notice of Lien, even though AAM had already recorded that notice. The lawyer also charged a fee to the homeowner for that demand and threat of legal action already completed by AAM only two months before.
87. According to Arizona Supreme Court Rule 31, “Nothing in these rules shall prohibit the preparation of documents incidental to a regular course of business when the documents are for the use of the business and not made available to third parties.”
88. In a recent opinion, the Arizona State Bar’s Unauthorized Practice of Law Committee, the Committee opined that CAMs, such as AAM, LLC could not avail themselves of the protections of Arizona Supreme Court Rule 31(d)(20)’s exemptions as CAMs were making these legal “available to third parties”.
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Association bylaws and appropriate corporate resolution, CAM personnel may not sign a document on behalf of the corporate entity.”
90. As to the Notice of Claim of Lien filed and recorded as to Mr. Lehman’s property and to the thousands of recorded Notices similarly signed and recorded by AAM, LLC, such violations of Arizona’s Rules of Court also violate federal debt collection laws and Arizona wrongful lien statutes.
91. A cursory review of the public record in Maricopa County alone shows that AAM, LLC represents the interest of hundreds of its HOA clients in thousands of small claims and justice court matters and has wrongfully recorded more than 2,000 small claims judgments with the Maricopa County Recorder’s office.
92. None of those more than 2,000 small claims judgments went through the statutory transcript of judgment process and were recorded such a superior court transcript of judgment number.
COMMON PRACTICE AS TO ALL CLASS MEMBERS
93. Upon information and belief, the Defendants represented to the public and to members of the Class that they were acting with the full measure of authority reserved for licensed legal counsel for Defendants by negotiating debt on behalf of a third party, drafting, filing and/or preparing legal papers, including liens, debt collection letters, complaints, default judgment, judgments, and other debt collections activities which require the appearance of a licensed and authorized attorney; and charging fees for the foregoing activities. Further, numerous Defendants have recorded small claims and/or justice court judgments with the various county recorder’s offices without following the procedures outlined in Arizona statute and in violation of Arizona’s Article VI Constitutional provisions regarding the authority and efficacy of courts of record. Defendants actions directed at these Class Members constitute the
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unauthorized practice of law and are clear violations of the Fair Debt Collections Practices Act and Arizona law. Further, such unlawfully recorded liens and judgment liens violate Arizona law and Arizona’s wrongful lien statute. There is also evidence that many, if not all of these CAMS charge duplicate fees, sue homeowners for collection fees alone, and are regularly unmonitored by their Homeowners Association clients in these processes. The CAMs do not consult the Homeowners Association clients when debtors offer settlements and the CAMs generally make decisions about continued collections efforts that are driven by their own collection fees and expenses rather than the underlying principle debt. Further, these CAMs often ignore Arizona statutes that mandate how a Homeowner’s payments must be applied to delinquent assessments in order to artificially continue the debtor’s delinquency. This allows the CAMs to charge the debtor homeowners even more unlawful collections fees.
CLASS ACTION ALLEGATIONS
94. Plaintiffs bring this action as a class action on behalf of themselves and the following class:
All persons or entities who, at any time from August 1, 2006 to the present (the “Class Period”), were members of a Homeowners’ Association or like entity and who were pursued for an alleged debt owed to that Homeowners’ Association or like entity by any of the Defendants or other Community Management Companies who purported to pursue collections against said persons or entities without proper legal representation and/or on behalf of their third party HOA/Condo customers and/or who improperly held themselves out to be an attorney.
95. The following persons shall be excluded from the Class of Plaintiffs: (a) Defendants and their owners, subsidiaries, officers, directors, members and affiliates; (b) all persons who make a timely election to be excluded from the proposed Class; (c) governmental entities; and (d) the judge(s) to whom this case is assigned and any immediate family members thereof.
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96. Plaintiffs reserve the right to modify or amend the Class definition(s) before the Court determines the appropriate certification(s).
97. Certification of the Class is appropriate because: (a) the Class is so numerous that joinder is impracticable; (b) the Defendant CAMS’ own publicly available records indicate that they have adjudicated hundreds, if not thousands, of cases in which an employee or agent of Defendants, who is not a licensed attorney, purports to be a representative of a Homeowner’s Association, Condominium or like entity performing acts to collect a debt which require the presence of a licensed attorney; (c) there are questions of law or fact common to each Class member which predominate over any questions affecting only individual members; (c) the representative party will fairly and adequately protect the interests of the Class; and (d) the class action is an appropriate method for the fair and efficient adjudication of this controversy.
98. Plaintiffs are informed and believe that the proposed Class contains thousands, of similarly situated persons and entities who were pursued for an alleged debt to their Homeowner’s Association or a like entity by Defendant CAMs who were committing the unauthorized practice of law by recording and filing legal documents on behalf of third parties and charging fees for such services. The true number of Class Members is known by the Defendants. Under any circumstances, the Class is so numerous and so diverse that joinder of all members would be impracticable.
99. Common questions of law or fact exist as to all members of the Class and predominate over any questions affecting only individual Class Members. These common legal and factual questions arise from the Defendants’ uniform practice of using non-attorneys to represent Homeowners’ Associations and like entities in the pursuit of alleged debts; said non-attorneys issued debt collections letters, filed and recorded liens against homeowners’ real property, filed Complaints in Arizona courts; signed legal pleadings; issued Judgments; recorded Judgments; and acted in a manner specifically reserved by law for attorneys or those individuals or parties choosing to represent themselves.
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100. The common question of law is whether these Defendant CAMs in using non-attorneys to represent the Homeowners’ Associations and like entities in their debt collections practices committed the unauthorized practice of law; thereby violating the Fair Debt Collections Practices Act, 15 USC §1692 et seq.. Common questions of law and fact include, but are not limited to, the following:
(a) Whether the Defendants engaged in the common practice described above; (b) Whether the Defendants committed the unauthorized practice of law in
dealing with the Class;
(c) Whether the Defendants charged fees to Class members that were unauthorized due to the unauthorized practice of law;
(d) Whether Defendants violated the Fair Debt Collection Practices Act, 15 USC §1692, et seq. entitling the Class members to the appropriate penalty for each violation;
(e) Whether Defendants violated Arizona’s wrongful lien statutes (ARS §33-420) when causing the recording of various documents purporting to assert an interest in the Class members’ real properties;
(f) Whether Defendants were negligent in failing to identify the need for legal representation in their actions to pursue a debt on behalf of another;
(g) Whether Class members sustained damages as a result of the Defendants’ conduct and the measure of those damages; and
(h) Whether Plaintiffs and the Class are entitled to relief and the amount and nature of that relief, including, but not limited to penalties available by statute, and the recovery of their attorney’s fees and costs.
101. Plaintiffs will fairly and adequately represent the interests of the members of the Class. The Plaintiffs’ claims arise from the same practices and course of conduct that gave rise to the Class Members’ claims and are based upon the same legal theories. Plaintiffs have retained counsel experienced in complex class action litigation, and Plaintiffs intend to prosecute this action vigorously. The Plaintiffs have no adverse or antagonistic interests to those of the Class.
102. A class action is superior to all other available means for the fair and efficient adjudication of this controversy. The damages or other financial detriment suffered by
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individual members of the Class are relatively small compared to the burden and expense occasioned by individual litigation of the Class’ claims. It would thus be virtually impossible for the members of the Class, on an individual basis, to obtain effective redress for the wrongs done to them. Furthermore, even if members of the Class could afford individualized litigation, the judicial system could not. Individualized claims brought by members of the Class would create the danger of inconsistent or contradictory judgments arising from the same set of facts. Individualized litigation would also increase the delay, expense and burdens to all parties and the court system from the issues raised by this action. By contrast, the class action device provides the benefits of adjudication of these issues in a single proceeding, economies of scale, and comprehensive supervision by a single court, and presents no unusual management difficulties under the circumstances here.
COUNT I
(Violation of the Fair Debt Collection Practices Act, 15 U.S.C.§1692, et seq.)
103. Plaintiffs reallege the above allegations as if fully set forth herein.
104. Defendants are “debt collectors” as defined by 15 U.S.C. §1692 a(6), and in doing the acts alleged, were attempting to collect alleged consumer debts.
105. Rule 31, Arizona Rules of the Supreme Court regulate the practice of law. Defendants were regularly and routinely committing the unauthorized practice of law in pursuit of alleged debts for a third party. The “practice of law” means providing legal advice or services to or for another by: (1) preparing any document in any medium intended to affect or secure legal rights for a specific person or entity; (2) preparing or expressing legal opinions; (3) representing another in a judicial, quasi-judicial, or administrative proceeding, or other formal dispute resolution process such as arbitration or mediation; (4) preparing any document through any medium for filing in any court, administrative agency or tribunal for a specific person or entity; or (5) negotiating legal rights or responsibilities for a specific person or entity.
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engaging in the practice of law by persons or entities not authorized to practice pursuant to paragraphs (b) or (c) or specially admitted to practice pursuant to Rule 38 (a), Arizona Rules of the Supreme Court.
107. Defendants are not qualified legal assistants/paralegals because their activities in preparing legal documents were not performed under the supervision of an active member of the State Bar of Arizona and for whom an active member of the state bar is responsible. Rule 31 (C), Ariz.R.Sup. Ct.
108. Defendants may or may not be qualified legal document preparers. Under Arizona Code of Judicial Administration §7-208: Legal Document Preparer, a legal document preparer may:
a. Prepare or provide legal documents, without the supervision of an attorney, for an entity or a member of the public in any legal matter when that entity or person is not represented by an attorney:
b. Provide general legal information, but may not provide any kind of specific advice, opinion or recommendation to a consumer about possible legal rights, remedies, defenses, options or strategies;
c. Provide general factual information pertaining to legal rights, procedures, or options available to a person in a legal matter when that person is not represented by an attorney;
d. Make legal forms and documents available to a person who is not represented by an attorney; and,
e. File and arrange for the service of legal forms and documents for a person in a legal matter when that person is not represented by an attorney.
109. Further, the Document Preparer Code of Conduct, Section J(5)(B) of the Document Preparer Rules states as follows:
J. Code of Conduct: (5)(b): A legal document preparer shall not represent they are authorized to practice law in this state, nor shall the legal document preparer provide legal advice or services to another by expressing opinions, either verbal or written, or by representing another in a judicial, quasi-judicial, or
administrative proceeding, or other formal dispute resolution process, except as authorized in Rule 31(d), Rules of the Supreme Court. A legal document preparer shall not attend court with a consumer for the purpose of assisting the consumer in the court proceeding, unless otherwise ordered by the court.
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110. If Defendants do hold an Arizona document preparer’s license, the Class members assert that those licenses do not allow said license holders to take the actions described herein as such practices constitute the unauthorized practice of law.
111. It is a violation of Arizona law for any person to “practice law in this state or represent in any way that he or she may practice law in this state unless the person is an active member of the state bar.” Rule 31, Ariz.R.Sup. Ct.
112. Defendants violated, at a minimum, 15 U.S.C. §1692(e) and (f), by making false or misleading representations in their unfair attempts to collect debts from Plaintiffs and the Class, by among other things: representing that Defendants had the legal authority to represent the Homeowners’ Association in debt collection practices, including but not limited to the submission of debt collection letters, filing and signing of Complaints in court, signing legal pleadings, issuing and recording liens, appearing at tribunals on behalf of third parties; issuing and pursuing legal judgments, recording those judgments to effect judgment lien status without proper authority of the law, in some cases to misrepresent the true nature and character of the alleged debts; in some cases misrepresenting the identity of the CAMs to the Homeowner debtor; and negotiating the legal rights and interests of third parties with the Class members.
113. As a direct and proximate result of the violations of the FDCPA, Plaintiffs and the Class were harmed, and are entitled to injunctive relief and to recover actual and statutory damages and attorney’s fees and costs pursuant to 15 U.S.C.§1692k.
COUNT II
(Violation of A.R.S.§33-420, et seq.)
114. Plaintiffs reallege each and every foregoing allegation as if fully set forth herein. 115. Defendants regularly charged fees for the drafting, signing and recording of liens against Plaintiffs and the other Class member’s real property asserting a lien for a debt owed to a
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third-party. As Defendants were not attorneys, the drafting, signing and recording of said liens for the benefit of third parties constitutes the unauthorized practice of law and invalidates the lien.
116. Arizona Revised Statutes, §33-420 prohibits Defendants actions and subjects them to statutory penalties:
A.R.S. §33-420. False documents; liability; special action; damages; violation; classification
A. A person purporting to claim an interest in, or a lien or encumbrance against, real property, who causes a document asserting such claim to be recorded in the office of the county recorder, knowing or having reason to know that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid is liable to the owner or beneficial title holder of the real property for the sum of not less than five thousand dollars, or for treble the actual damages caused by the recording, whichever is greater, and reasonable attorney fees and costs of the action.
B. The owner or beneficial title holder of the real property may bring an action pursuant to this section in the superior court in the county in which the real property is located for such relief as is required to immediately clear title to the real property as provided for in the rules of procedure for special actions. This special action may be brought based on the ground that the lien is forged, groundless, contains a material misstatement or false claim or is otherwise invalid. The owner or beneficial title holder may bring a separate special action to clear title to the real property or join such action with an action for damages as described in this section. In either case, the owner or beneficial titleholder may recover reasonable attorney fees and costs of the action if he prevails.
C. A person who is named in a document which purports to create an interest in, or a lien or encumbrance against, real property and who knows that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid shall be liable to the owner or title holder for the sum of not less than one thousand dollars, or for treble actual damages, whichever is greater, and reasonable attorney fees and costs as provided in this section, if he willfully refuses to release or correct such document of record within twenty days from the date of a written request from the owner or beneficial title holder of the real property.
D. A document purporting to create an interest in, or a lien or encumbrance against, real property not authorized by statute, judgment or other specific legal authority is presumed to be groundless and invalid.
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E. A person purporting to claim an interest in, or a lien or encumbrance against, real property, who causes a document asserting such claim to be recorded in the office of the county recorder, knowing or having reason to know that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid is guilty of a class 1 misdemeanor.
117. Further, numerous Defendants, after acting on behalf of their Association clients in small claims and justice court matters, have been awarded judgments.
118. Defendants have taken those judgments and recorded them with various county recorders’ offices in Arizona.
119. The Arizona Constitution and related state statutes do not recognize Arizona small claims courts and justice courts as courts of record and as such those judgments cannot be recorded as a lien on the judgment debtor’s real property.
120. Arizona Constitution and Statute state as follows:
The Supreme Court, the court of appeals and the superior court shall be courts of record. Other courts of record may be established by law, but justice courts shall not be courts of record. Article 6, Section 30(A), Arizona Constitution.
No real property or any interest therein shall be levied upon or sold by virtue of any judgment given by a justice of the peace unless a certified transcript of the judgment is first filed in the office of the clerk of the superior court of the county where the judgment was given and entered by the clerk on the appropriate book kept by him. Execution on the judgment shall be issued by the clerk of the superior court. ARS §22-546
121. As a result, those Defendant CAMs known to record judgments from courts not of record are in direct violation of Arizona law, and specifically, Arizona Revised Statutes §33-420 and Class members have suffered and continue to suffer statutory and actual damages.
CLASSWIDE RELIEF
WHEREFORE, Plaintiffs, on behalf of themselves and all others similarly situated, pray for judgment, as follows:
A. An order certifying this case as a class action and appointing Plaintiffs and their counsel to represent the Class;
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B. An order awarding Plaintiffs and the Class actual, consequential, and statutory damages to be determined at trial;
C. An order awarding restitution and/or disgorgement and other equitable relief as the Court deems proper;
D. An injunction prohibiting Defendants from continuing to engage in these unfair and unlawful business practices, including prohibiting Defendants from pursuing debt collections for third-parties such that they are participating in the unauthorized practice of law.
E. Pre and post judgment interest;
F. An award of attorneys’ fees and costs; and,
G. For an award to Plaintiffs and the Class of punitive damages; and
H. For an award to Plaintiffs and the Class of such other further relief as this Court deems just and proper.
DATED this ____ day of September 2012
WATTERS & WATTERS, P.L.L.C.
Andrea E. Watters Attorney for Plaintiffs
LAW OFFICES OF J. ROGER WOOD, PLLC
J. Roger Wood
