AZ Statute or Law regarding breach of fiduciary duty for criminal act
Does anyone know of a law or statute that refers to board of directors fiduciary duties, and if they commit a criminal act, such as physical assault of a homeowner, that they can be removed from office?
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Aaron
Board members can be removed from office by only two ways. They can resign or they can be recalled by a vote of the members. There is no current state law that if found in violation the individual board member would be removed from office. If a board member physically assaulted, you then call the police and file criminal assault charges against the board member. If the board member verbally assaulted, you and has done so on multiple occasions then file for an injunction against harassment in Municiple court. If you provoked the board member into those verbal assaults, then you have no-one to blame other than yourself. I will be introducing legislation this coming session that will define the duties of the board members to the homeowners and to the association. If a board member is found in breach of duty, he can be held personally liable for any cost and legal fees that the association incurs defending that civil action. The burden of proof for anyone challenging the actions of a board member will lie with the challenger and will have to overcome the assumption that all board actions comply with the duties as defined.
Dennis
Thank you for the response. I am working on criminal charges. Judge denied the harassment injunction but will hold a hearing to hear both sides. I will reach out as I am committed to helping homeowners address HOA issues. We are experiencing so many at our community and I am grateful to have found you.
Aaron,
While I mentioned that i will be introducing legislation to codify into Arizona statutes the real duties and standards for Association Boards , they are already part of Arizona case law from 2007 in Tierra Ranchos HOA v Kitchukov. That case invoked the standards defined in the Restatement of law third Property; Servitudes from the American Law institute in 2000. My proposed legislation will codify those same requirements into Arizona Statutory Law. While that standard does not extent that association boards have a fiduciary duty to the association homeowners, that standard would be too strict to apply to a voluntary board, it does apply the next step lower of a prudent person acting in a similar situation and similar conditions relative to their care for the common property and their use and protection of the financial assets of the community.
Dennis