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In 2007, the Arizona Court of Appeals published an Opinion commonly known as Tierra Ranchos v. Kitchukov (216 Ariz. 195 (Ariz. Ct. App. 2007)), where Arizona officially adopted a reasonableness standard for courts to utilize when evaluating HOA decisions and actions. In doing so, the Court rejected the "business judgment rule" that traditional corporation board of directors find safe harbor protections. However, HOA attorneys have relied on this Opinion to argue that neither HOAs nor their boards of directors owe fiduciary duties to their members. Owner attorneys, including McKeddie Cooley, strongly disagree. We believe Tierra Ranchos made it easier for owners to pursue those claims, as the presumption of good faith provided by the business judgment rule does not apply. Trial court judges have ruled both ways. Accordingly, Melanie McKeddie wrote a law review article describing the history of the law in this area, the nature of the ongoing dispute regarding the meaning and implications of the Tierra Ranchos Opinion, the rationale supporting breach of fiduciary duty claims against HOAs and their directors and the need for further clarification from Arizona's appellate courts. See, 4 Phoenix L. Rev. 715 (2010).
Justin Cooley served as an Editor for the Phoenix School of Law's law review while in law school. He was one of the few students who's article was selected for publication. In his article, Mr. Cooley discusses Arizona's Planned Community Act. As indicated by the article's title, Mr. Cooley recognizes that the Planned Community Act is minimalistic and in need of much more from the Arizona legislature. As it currently stands, there are only a handful of statutes specifically addressing the rights of owners living in community associations, and the obligations such associations have with respect to both their members and the community as a whole. Mr. Cooley persuasively argues that Arizona is in need of a detailed statutory scheme to ensure all parties involved are able to know and understand their respective rights, obligations and duties.
4 Phoenix L. Rev. 853 (2010)
Melanie McKeddie successfully defeated a Florence HOA's effort to evict a woman dying of cancer from her community. The community was subject to deed restrictions that required all residents to be at least 55 years old. Ms. McKeddie's client, age 53 at the time, moved into the community where her mother lived so that her mother could be her caregiver and so that she could be near her mother during her final years. After proving that the HOA permitted other underage people to reside in the community, as well as the fact that the HOA's board members and attorneys had acted maliciously, McKeddie Cooley prevailed in obtaining justice for our client. CBS Arizona covered the case in its evening newscast.
Source: www.kpho.com
Ms. McKeddie represented a group of over 50 owners challenging a majority ownership group's conduct that occurred while they controlled the community's HOA. Ultimately, Ms. McKeddie succeeded in removing the majority owners from control, when the Court appointed a Receiver to operate the HOA. Multiple media outlets have covered the case. Below are links to the articles where Ms. McKeddie was interviewed about this case, as well as a radio interview she participated in.