Judge rebukes lawyer in HOA foreclosure

Attorney denies asking woman to halt Bar complaint


Article Courtesy of The Arizona Republic

By Michael Kiefer

Published May 24, 2006


An attorney who specializes in homeowners-association law was chastised by a Maricopa County Superior Court judge for trying to foreclose on the home of a woman who owed back dues of less than $400 and an additional $1,000 in accumulated late fees and legal costs.

As the woman fought the foreclosure in court, her HOA bill rose to nearly $7,000 in penalties and attorney's fees.

In a minute entry dated May 12, Judge Peter Swann called the case "an example of the risk to the public of abusive litigation practices run amok. The court is simply a forum for the resolution of disputes, not a weapon to be used to generate leveraged fee awards."

Swann also took attorney Augustus H. Shaw IV to task for trying to offer a settlement to the woman that was contingent on her dropping a complaint against him to the State Bar of Arizona, which polices attorneys. In his minute entry, Swann did not comment on the merits of Stacy Mobbs' complaint but said that asking her to drop it was inappropriate.

Shaw denied he tried to make Mobbs drop the Bar complaint.

In addition to his law practice, Shaw has a radio show about HOAs and until last week had an HOA advice column in the community editions of The Arizona Republic.

Mobbs fell behind on her annual payments to the homeowners association.

She owed $343.02, but she had ignored notices from the HOA until last September, when Shaw, who represents the North Canyon Ranch Home Owners Association, filed a lien in Superior Court, citing a balance due of $1,479.68 or the association would initiate foreclosure on the property, according to court records.

Mobbs, 39, an auditor with the state Department of Health Services, was not sure how the back dues had more than quadrupled.

But on Nov. 17, she brought a cashier's check for $1,479.68 to the HOA office, where an employee gave her receipts showing the amount paid in full.

Within days, Shaw had the check returned to her, saying that management had no right to collect it and that she owed even more, according to court records.

Mobbs asked to bring the issue directly to the HOA board at its next meeting, but she said Shaw would not allow it and sent her e-mails saying she could speak only to him.

Mobbs filed a complaint against him with the State Bar.

In March, she received a bill from the HOA for $6,825, including her next year's dues of $240. The rest was listed as "balance forward."

Shaw sent a letter and e-mails to Mobbs offering to settle the matter for $2,000 if she would drop all counterclaims against Shaw and an HOA member.

Shaw denies he asked Mobbs to drop the Bar complaint, though Swann's minute entry referred specifically to his "demand" that Mobbs drop the complaint.

"I did not make that statement," Shaw said. "I did not make it in writing. I did not make it orally, and I would defy the court or Ms. Mobbs to prove affirmatively in a court of law or any other procedure that I made that comment."

T.J. Montoya, president of North Canyon Ranch Home Owners Association, said that dropping the Bar complaint was indeed a condition of the proposed settlement.

"I had made that request to him that if we were to settle this out and she drops all of her complaints and that he rescind his attorney's fees to that amount, she pays the amount and we are done with it," Montoya said.

Mobbs refused.

But on May 12, Swann ruled that Mobbs had to pay the back dues, plus interest - $370 - and that Shaw would collect no attorney's fees. Swann looked over the e-mail correspondence between Mobbs and Shaw and pronounced it "abusive and inconsistent with the fundamental principles of professionalism."

Swann also forwarded his minute entry describing Shaw's conduct to the State Bar.

Shaw downplayed the criticism.

"If the judge felt I was abusing process, or if the judge felt I was using the court system erroneously or without honor, the judge's options are clear," he said. "He could hold me in contempt of court or he can issue . . . sanctions against me."

Community Associations Institute Attorney Chastised By Judge!