Connect Magazine: Issue 1—2016 by CAI-GRIE

CAI-GRIE’s mission is: To make a positive contribution to the Common Interest Development Community through education and networking.

connect A PUBLICATION OF THE GREATER INLAND EMPIRE CHAPTER OF CAI

ISSUE ONE 2016

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connect A PUBLICATION OF THE GREATER INLAND EMPIRE CHAPTER OF CAI

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OFFICERS Dana Mathey, AMS, PCAM........................................................ President FirstService Residential Jeremy Wilson, MBA, CCAM, CMCA, AMS, PCAM ..........President-Elect Associa-PCM/Sun Lakes Country Club Linda Cooley........................................................................ Vice-President Rosetta Canyon Community Association Chet Oshiro................................................................................ Secretary EmpireWorks Phil Hakopian, CIRMS..................................................................Treasurer Cornerstone Commercial & Personal Insurance Services, Inc. Nancy I. Sidoruk, Esq............................................................Past President Epsten Grinnell & Howell, APC

Table of Contents Features 4 Active Adult Communities are Active Indeed

2 5 2015 Review, Look Ahead to 2016 – Federal Priorities

By Tad Creasey, CCAM

Printed with permission from CAI National

8 Sacramento is Waiting – and We’re Coming Back, Again! By Robert Riddick, CMCA

BOARD DIRECTORS Greg Borzilleri............................................PCW Contracting Services, Inc. Jackie Fromdahl.....................................................Painting Unlimited, Inc. George Gallanes, CMCA...................................... Sunnymead Ranch PCA Cyndi Koester, CMCA, AMS, PCAM....................................Sunwest Bank Kimberly Lilley, CMCA, CIRMS....................... Berg Insurance Agency, Inc. Shelly Risbrudt..............................................Pilot Painting & Construction Robert Serdoz................................................ Elite Pest Management, Inc. Christy Towner-Quesada, CMCA........................... FirstService Residential CHAPTER EXECUTIVE DIRECTOR DJ Conlon, CMCA ADMINISTRATIVE ASSISTANT Ginny Aronson-Hoke EDITOR IN CHIEF

By Pat King

Linda Cooley...............................Rosetta Canyon Community Association Robert Riddick, CMCA......................................... Sunnymead Ranch PCA DESIGN & PRODUCTION

6 President’s Message By Dana Mathey, AMS, PCAM

13 Editor’s Link 14 Declarant Board Members & California’s Anti-SLAPP Statute By Brittany A. Ketchum, Esq. By Jane Blasingham, Esq.

19 The Seven Biggest Mistakes Currently Contained in Employee Handbooks By Michael Drenan, Esq.

Brittany Ketchum, Esq..........................................Beaumont Gitlin Tashjian PUBLICATIONS COMMITTEE

Departments

12 Spotlight on Solera Oak Valley Greens

16 New Board Member Spotlight Featuring Phil Hakopian, CIRMS

27 Stagecoach at Stix Billiards Tournament Photos

23 Classification of Workers as Independent Contractors or Employees By Mandy D. Hexom, Esq.

Kristine Gaitan....................Rey Advertising & Design/The Creative Dept.

All articles and paid advertising represent the opinions of authors and advertisers and not necessarily the opinion of either Connect or the Community Associations Institute – Greater Inland Empire Chapter. Information contained within should not be construed as a recommendation for any course of action regarding financial, legal, accounting or other professional services and should not be relied upon without the consultation of your accountant or attorney. Connect is an official quarterly publication of Greater Inland Empire Chapter of the Community Associations Institute (CAI–GRIE). The CAI–GRIE Chapter encourages submission of news and articles subject to space limitation and editing. Signed letters to the editor are welcome. All articles submitted for publication become the property of the CAI–GRIE Chapter. Reproduction of articles or columns published permitted with the following acknowledgment: “Reprinted with permission from Connect Magazine, a publication of the Community Associations Institute of Greater Inland Empire Chapter.”

Advertisers Alliance Association Bank..........................17

Epsten Grinnell & Howell, APC...................6

AMS Paving, Inc..............Inside Front Cover

Fiore Racobs & Powers APLC...................22

Association Reserves.................................15

Keystone Pacific Property

Beaumont Gitlin Tashjian...........................18

Management, Inc......................................21

Berg Insurance Agency, Inc.......................13

NPG – Nelson Paving.... Outside Back Cover

Diversified Asphalt Products......................11

Steven G. Segal Insurance Agency, Inc.....17

Elias Bros. Contractors, Inc..........................7

Union Bank HOA Services...................... 20

Copyright © 1998–2016 CAI-Greater Inland Empire Chapter. Advertising, articles or correspondence should be sent to: CAI-GRIE Chapter 5029 La Mart, Suite A • Riverside, CA 92507-5978 (951) 784-8613 / fax (951) 848-9268 info@cai-grie.org

The Greater Inland Empire Chapter of CAI hosts educational, business and social events that provide the Chapter’s Business Partners various opportunities to promote their companies’ products and services to Community Association owners and managers serving the Community Association Industry. It is expected that all participants in Chapter events — whether they be educational, business or social — will conduct themselves in a professional manner representative of their business or service organization so as not to detract from the experience of others seeking to benefit from their membership in the Chapter. CONNECT WITH GRIE • ISSUE ONE 2016

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BY TAD CREASEY, CCAM

Active Adult Communities are Active Indeed W

orking with four active adult communities in Riverside County has provided a wonderful insight to the commitment and passion the residents have for making their communities a fantastic place to call home. The dominant criteria for residency in these adult communities is to be over 55 years of age. And that’s where the activity starts. Active adult master planned communities are built on quality and created around the owners’ unique lifestyles and preferences. Featured “Lodges” or “Community Centers” serve as an exquisite central location for the numerous clubs and hobbyists; and provide meeting areas for both educational and HOA interests. Many active adult communities feature professionally designed gyms, ballrooms, billiard rooms, a library, and activity rooms for games, cards, and arts and crafts. Spacious ballrooms serve as meeting centers, gracious areas for celebrations, and fun places to stage dancing, plays, and live entertainment. Bistros may enhance a community by offering a good bill of faire conveniently located and offering its clients a chance to see and meet with friends. Outside, resort styled pools and spas, sports courts, such as tennis, pickle ball, paddle ball, horseshoes, Bocce ball, and basketball courts, as well as spacious and luxuriously appointed grounds beckon the recreation minded residents. Sport oriented clubs invite residents to join the fun. 4 |

ISSUE ONE 2016 • CONNECT WITH GRIE

Participation An impressive feature of active adult communities is the amount of talented people who are excited about participating in their HOA’s management, committees and clubs. Boards of directors and committees should welcome members who have successfully worked in various occupations and have held leadership positions to provide their wisdom and expertise to the community each day. As with all HOAs, the board members are tasked with the responsibility of making decisions of prudently steering the HOA’s business. The board’s decisions are amplified by the active adult residents’ high expectations that the board will safeguard their ownership investment by providing a homogeneous quality of life. The boards often schedule several substantial projects each year to enhance the HOA’s amenities. Boards tend to respond quickly to enforce the HOA’s governing documents, including the rules, which ensure consistency of enjoyment of the residents’ homes and use of HOA common areas. Board members are expected to perform these responsibilities, which may be divisive, while maintaining friendships with their neighbors and residents on a daily basis or socializing with them at the numerous events and meetings

staged at throughout the year at the HOA’s community center or at offsite attractions. Many residents choose to concentrate their knowledge by serving on committees: Architectural committees review homeowner’s improvements; Landscaping and facilities committees monitor and advise the board on projects and ongoing activities to maintain the community’s grandeur; Finance committees monitor HOA expenses and financial interests; Social committees and sunshine committees are involved with providing fun and welcoming efforts to the residents; and Access control and emergency preparedness committees evaluate the HOA’s ability to control access, privacy and responsiveness to activities. These volunteers enjoy being involved by contributing their expertise to the community. Prudent committee members continually seek ways to be informed about changing laws and HOA guidelines for implementation and how to best adopt these changes to their committee’s purview for improving the facilities and providing input to better manage the HOA’s business as it pertains to each committee’s interests. Unlike many HOAs, active adult HOA committees often have more volunteers than space allows.

Clubs – How Many, When and Where

The clubs within the HOA provide a great opportunity for residents to meet other residents with similar interests. The expansive range of clubs includes many forms of card games, board games, dancing, acting, instrumental and singing, and classes to learn languages or arts and crafts. Sport oriented clubs generate enthusiastic members and take advantage of the sport courts, pool and billiard areas. Popular clubs will often meet several times during the week, which accommodate the members’ busy schedules. While most clubs’ activities occur in clubhouses on the community center’s grounds, recreational vehicle (RV), motorcycle, wine and epicurean enthusiasts, and travel clubs take to the highways to enjoy their passions. Continued on page 6 CONNECT WITH GRIE • ISSUE ONE 2016

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Active Adult Communities are Active Indeed Continued from page 5

Impact on Management Teams

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ISSUE ONE 2016 • CONNECT WITH GRIE

Managing an active adult community is an inclusive and embracing commitment. Management teams and staff usually find the active adult residents’ activity and interest levels to be energetic, enthusiastic, as well as critical and challenging. While the residents have high expectations, they willingly provide the means for management to deliver on their expectation. The active adults also have available time for activities and are generous with their comments and suggestions for improvement based on ongoing concerns and/or daily interactions at events or clubs, or with friends or staff. Management teams and staff learn to apply attention, interest and patience to accommodate the residents’ needs and requests. Going the extra step by doing a little thing makes a big difference to the active adult. By working with and through the HOA’s board, as well as its committees and vendors, managers can achieve communities that mirror resort standards. Management’s teamwork approach to new projects, ongoing maintenance, enforcement issues, and supervision of events, without overlooking the importance of responding to individual resident requests contributes to a successful active adult community.

A Smart Choice

Managing an active adult community is fast paced and challenging, but it can be generously rewarding. Choosing to live in one is usually the best decision the resident makes for this period of life. Be ready for action, fun and memorable experiences; they’re all here. Tad Creasey, CCAM, is Regional Manager for FirstService Residential. Mr. Creasey oversees four large active adult communities in Riverside County.

PRESIDENT’S MESSAGE Your board of directors had the opportunity to engage with Jean Block, who has more than 45 years in the nonprofit sector as a board member and staff leader, to discuss adopting the invisible yellow line. As Jean Block puts it, it’s invisible, it moves, it can be hotly contested, and neither team Dana Mathey AMS, PCAM can actually see it. In other words, A Regional Director for we can be on different teams but FirstService Residential and we still have the same mission. 2016 CAI-GRIE Chapter We must respect each other’s roles President. and responsibilities by taking a team approach, engage or don’t complain, and get off the bench and participate. Your CAI Team, “Team We Can,” is engaged and passionate about CAI’s mission to advance the community association industry through positive image, professionalism, advocacy, education, and networking. We look to the members for open, honest communication and feedback. This is the only way to improve your membership experience. What a great start for 2016! Lee Silber, an awardwinning speaker and the owner of a successful corporate training company, was the keynote speaker for our January

mini trade show luncheon. The topic “Beyond Busy” was enjoyed by all, and focused on the importance of using our time wisely despite being extremely busy. Our Billiards Tournament, Stagecoach at Stix, co-chaired by AJ Schwartz and Fernando Becerra, exceeded expectations. Thank you all for participating. Your CAI Team has put together an awesome calendar of events for 2016. The committee chairs had a successful “check in” meeting, bouncing off ideas to enhance and retain your membership experience. As I write this message our next mini trade show in February features Skim Daum, CAICLAC advocate, and Kelly Richardson, Esq., CCAL, 2015 CAI National President. This issue of Connect magazine focuses on active adult communities, new board member spotlight, employee handbook mistakes, tips and best practices on classification of independent contractors and employees, and more. These articles offer great insight and education about our industry. As the year progresses, your “Team We Can” will listen to your honest and open communication to improve your membership experience. Look for us at future events; we are participators. We look to the membership for future volunteers and participation in the many opportunities that CAI offers. In closing, “Good teams incorporate teamwork into their culture, creating building blocks for success.” – Ted Sundquist

CONNECT WITH GRIE • ISSUE ONE 2016

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Sacramento is Waiting – And, We’re Coming Back, Again! BY ROBERT RIDDICK, CMCA

s members of the GRIE chapter you’ve all hopefully heard about “it” taking place every year for the past 22 years now. And, we’ve been broadcasting information about “it” at every GRIE event for the past few months. With just a few weeks left before “it” happens again, we thought we’d remind you one more time. The “it” is, of course, none other than this year’s 23rd Annual CAI-California Legislative Action Committee’s Legislative Day at the Capitol, which takes place this coming April 17th and 18th at the Hyatt Regency in Sacramento. For those of you who might not be familiar with that particular Hyatt property, it is located in very convenient proximity to the State Capitol building (directly 8 |

ISSUE ONE 2016 • CONNECT WITH GRIE

across from it) at 1209 “L” Street in downtown Sacramento. Leg Day, for short, is an event that includes providing CAI-CLAC members from across the State the opportunity to attend education sessions that are geared towards better informing CAI members of the legislative issues of importance to all common interest communities and their community association volunteer leaders, those CAI members involved in managing the literally thousands of California common interest communities, as well as those business partners who are directly involved in providing services and products to the HOA industry here in California. It’s also an opportunity for those attending, to be a part of the “Meet the Delegates” portion of the event,

where all the CAI stakeholders get a chance to interact with our CLAC delegates and liaisons, who themselves collectively work year-round with our lobbyist and the eight representative CAI California chapter Legislative Support Committees (LSC). And, of course, the primary reason for Leg Day is to meet in-person with and educate State legislators on legislation that is important to those who live in and work with community associations throughout the state of California. If you’re a member of any one of the three membership groups that make up CAI, then you are one of those individuals who need to be among those attending this year’s Leg Day. Whether you’re a CAVL (Community Association Volunteer Leader), an association Manager, or one of our valued Business Partners, there are a myriad of reasons for you to participate in this annual event. Several that stand out include the opportunity to attend educational sessions specifically geared towards providing, especially for first-time attendees, informative insight into how the “system” works when it comes to, for instance, how legislative bills are originated and moved forward towards either being eventually adopted into law or not being adopted into law at all. There is also the opportunity to learn how to meet and interact with our individual elected state representatives, both Assembly Members as well as Senators. And, there is the opportunity during those meetings to actually effect how those representatives might eventually vote on issues we bring to their attention. Having participated in several annual Leg Days, I can tell you that when our legislators see us walking into their individual offices, representing CAI-CLAC, and being informed as well as prepared to discuss those pending bills that will have either a positive or negative impact on the quality-of-life for those of us

who advocate on behalf of the almost thirteen million residents in over 50,000 common interest communities statewide, it sends an undeniablypowerful message to those legislators that we are involved, committed, and willing to communicate as one wellinformed voice. And, an overwhelming indication that no matter who the legislator may be, their constituents are likely composed of a considerable number of residents CAI-CLAC represents through our advocacy efforts.

For those who have not had the opportunity in the past to be a part of this annual event, this year could be the time to join other CAI members and participate in Leg Day 2016. As part of the Leg Day educational efforts each year, we are privileged to have only the most qualified presenters delivering the programs. This year is no exception. During the Sunday morning session, we will be treated to “How A Bill Becomes Law,” which will be jointly presented by Robert M. DiNichilo, Esq. (Nordberg/ DiNichilo, LLP) and Amy K. Tinnetti, Esq. (Hughs Gill Cochrane). These distinguished speakers carry extensive and impressive credentials as both litigants specializing in HOA industry related matters, as well as recognized and awarded members of multiple

CAI California chapters. Closing in on well over thirty years of combined experience within the industry, these two will be outstanding presenters at this year’s event, and based on my own personal experience in attending the seminar in the past, you won’t be disappointed. In total, there will be three educational programs offered this year. “How a Bill Becomes Law” will be followed by lunch, then two other programs. By four o’clock that afternoon our lobbyist, Mr. Skip Daum (Capitol Communications Group), will provide a briefing on the bills that will have an impact on the common interest communities in California. This is the session where we are all presented with detailed information on the bills that CAI-CLAC either supports or opposes, along with the reasons for our positions taken on them. This information is critical to the conversations that we will have the next day (Monday) when we all descend on the Capitol to speak in-person with our legislators about those same bills identified as important to us. When that session wraps then it’s time for relaxing a bit by joining with the CLAC delegates, liaisons, our lobbyist, and all the support staff that enable CLAC to be the effective advocacy organization is has evolved into over the years. Called “Meet the Delegates,” it is an opportunity to network with the CLAC members directly over dinner and cocktails in a relaxed environment where questions, comments, discussions and just plain ol’ camaraderie flows freely among those in attendance, and serves as an excellent segue to being even more prepared for the next day’s visit to the Capitol and subsequent meetings with our legislators. For those who have not had the opportunity in the past to be a part of this annual event, this year could be Continued on page 10 CONNECT WITH GRIE • ISSUE ONE 2016

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Sacramento is Waiting... Continued from page 9

the time to join other CAI members and participate in Leg Day 2016. For those who have “been theredone that” in the past, then you already know first-hand what a great opportunity it presents to actually influence our legislators in moving in a direction that CLAC advocates, relating to bills pending before those elected officials who will be considering them. And finally, many of you have heard the term “grass roots” when it comes to legislative efforts conducted by the so-called “common-folks” of the land or community. Leg Day is a classic example of a true “grass roots” effort, mounted by those of us who are intimately involved in the HOA industry at some level or another. The hundreds of CAI members statewide who continue to participate in each year’s Leg Day is nothing less than an opportunity to “make a difference” in the overall quality-of-life for all of us who call common interest communities home as well as for those who support our communities, by participating in the “grass roots” efforts that this event offers all of us. Why not join us this year as we continue the tradition? All the information you need can be found on the CLAC website, www.caiclac.com/ Page/16678~513069/2016-LegislativeDay-at-the-Capitol

Robert is the current President of the Sunnymead Ranch PCA, and past GRIE-Chapter President. He is also a past member and Chair of the CAI National CAVC committee, and is a past CAI National Board of Trustees member. He completed his sixth year as a GRIE-Chapter Board member at the end of 2014, and currently serves as the CAI-GRIE chapter CLAC Liaison.

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ISSUE ONE 2016 • CONNECT WITH GRIE

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AGE QUALIFIED COMMUNITIES

Spotlight On Solera Oak Valley Greens By Pat King

hat do people expect when they move into an age qualified (55+) community? Once they move in, what draws them to events or gives them the courage to take that first step into a new club, a new group or a special presentation at the clubhouse? These are questions that every 55+ community struggles with and our community is no different. Solera Oak Valley Greens is a 55+ Del Webb Community located in Beaumont, California. It is conveniently located about an hour from the beach and thirty minutes from the mountains or the desert! The beautiful snowcapped San Jacinto Mountains serve as a backdrop 12 |

ISSUE ONE 2016 â&#x20AC;˘ CONNECT WITH GRIE

for the community and with just a quick five-minute drive you are wandering through the apple orchards and drinking apple cider at nearby Oak Glenn. There is a beautiful greenbelt with walking paths, a clubhouse with the best fitness center in the pass, a pool with a spa, two tennis courts and four Bocce Ball courts. However, getting residents involved is a challenge and solving this problem requires a great deal of planning and awareness of the demographics of our community. One thing about living in a 55+ community is that residents have many common interests and at the same time have similar problems with health and

physical disabilities or limitations. Also Solera has many residents still employed that have minimum time for community involvement. It is difficult to find the right activities to meet everyoneâ&#x20AC;&#x2122;s busy schedules. We are fortunate to have a recreation director that develops many activities for our community. She knows that although we have over 2,000 residents, less than half of them actively use the amenities that are available. An advisory committee appointed by the board of directors assists her in planning several events during the year. Together they recognize the need for an effective plan to raise awareness of all that is available in the community. Demographics of the community, varied interests, different levels of involvement with varying commitment along with agerelated concerns or disabilities are considerations that are evaluated with each activity. This design has evolved over the past twelve years. Early in the development of Solera, the builders were eager to build a sense of community and were willing to put money into the activities to attract buyers. Activities were planned with little cost to the residents and many early relationships were developed. Those relationships eventually lead to residents developing clubs and groups according to their common interests. As the community grew the demands for activities grew and more structure was needed.

Currently there are a variety of activities available at Solera. There are several activities planned throughout the year that do not involve a great deal of commitment. They have a beginning, middle, and end and usually involve a fee. Residents buy a ticket, attend the show and go home. These include magic shows, comedy nights, concerts on our greenbelt and many seasonal dinner dances. Residents of all ages come and enjoy a night out by themselves or with a group of friends. We also have two community garage sales, a holiday craft fair, a holiday house decorating contest and a Fourth of July Golf Cart Parade. Other activities involve a weekly or monthly commitment and usually meet in the clubhouse. Clubs and groups have been formed to meet the varied interests of residents. A Club & Group Expo is held annually for clubs and groups to show off their clubs and recruit new members. We have approximately 40 clubs and groups. These include everything from early morning water aerobics to dance! Residents meet to share ideas and practice their skills in genealogy, model railroads, tole painting, line dancing, paper crafters, yoga and the list goes on and on! Many long-term relationships are formed in these groups. We are a long way from getting 100% of our residents involved in association activities, but we know that the majority of our homeowners are happy with their lifestyle and at some point they may be ready to take that step and join a club or attend a special event. Until then, we will just keep searching out interests and planning activities that meet the needs and interests of our residents.

EDITOR’S LINK With age comes wisdom, with youth comes opportunity. This issue of Connect magazine explores a spectrum of community association populations and offers advice for community leaders facing common concerns. In this issue, we explore the challenges and achievements experienced by age qualified communities, as well as new developments, and evaluate ways a community association can protect itself from liability in Brittany A. Ketchum, Esq., connection with hiring employees and engaging an associate attorney with Beaumont Gitlin Tashjian, independent contractors. has devoted her career to Our Chapter’s motto for this year is “Team We representing common interest developments. Can.” Teamwork requires effective and efficient She can be reached at action by a group of people. We hope that the bketchum@bgtlawyers.com. knowledge, experience and skills demonstrated by the authors of the articles in this issue will help us learn from one another. Through teamwork, we can learn from each other’s success and avoid making the same mistakes. It is my sincere pleasure to serve as your 2016 Editor of Connect magazine. As part of our team, we invite you to participate by sharing ideas for magazine content or contributing articles on the issues that matter most. Our goal is to dig deep into those matters that you want to read about. Together, we can make a difference in our individual communities and together we can make a difference in our industry.

Pat King is President of the Board of Directors of Solera Oak Valley Greens in Beaumont, California.

CONNECT WITH GRIE • ISSUE ONE 2016

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Declarant A Board Members & California’s Anti-SLAPP Statute By Jane Blasingham, Esq.

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re a declarant board member’s actions protected against legal claims under California’s anti-SLAPP statute (the “Statute”)?1 The answer is not an easy “yes,” as several developers have recently discovered after unsuccessfully seeking to have courts dismiss complaints under the Statute.2 California’s anti-SLAPP Statute protects a person from being sued for the valid exercise of their right of petition or right of freedom of speech under the U.S. Constitution concerning a public issue.3 The legislature passed this law finding the judicial process was being abused to chill a person’s constitutional right to freedom of speech about matters of public importance.4 Under the Statute, the individual sued may make a motion to the court to dismiss the claim, which is called an anti-SLAPP motion.5 The court applies a two-step process.6 For step one, the court determines whether the individual making the motion has shown the lawsuit was brought against them because of their conduct in furtherance of their right of petition or right of free speech about a public issue.7 If the court finds affirmatively for step one, it proceeds to step two and decides whether the individual who sued has a probability of prevailing on their claim.8 Under the first step, the Statute specifies conduct in furtherance of an individual’s right of petition or free speech about a public issue as a written or oral statement or writing 1) “made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law,” 2) connected to a matter “under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law,” or 3) “made in a place open to the public or a public forum in connection with an issue of public interest.”9 Also protected is any other conduct that furthers the right of petition or the right of free speech related to a public issue or a matter of public interest.10 In Talega Maintenance Corporation v. Standard Pacific Corporation, an HOA claimed three former developer employees engaged in fraud, negligence and breach of fiduciary duties while serving as declarant board members.11 The HOA alleged the employees spent HOA money to repair HOA property when they knew the repairs were to be paid for by the developer.12 The developer filed an anti-SLAPP motion, which was denied.13 The court held that HOA board meetings are not official proceedings.14 The protection the Statute

provides for statements made before an official proceeding authorized by law does not apply to HOA board meetings.15 However, HOA board meetings are public forums and statements made at them may be protected if made in connection with an issue of public interest.16 An issue of public interest is not confined to governmental issues.17 It may be an ongoing controversy, dispute or discussion about an organization’s activities affecting a community.18 In Talega¸ an ongoing controversy, dispute or discussion did not exist because the homeowner board members believed the declarant board members’ alleged representations.19 The statements were not made in connection with an issue of public interest and not protected.20 The court also held the declarant board members’ alleged actions of withholding information and improperly directing were not written or oral statements.21 Voting may be protected, however, if the voting is incidental to the conduct, then it’s not protected.22 In Trilogy at Glen Ivy Maintenance Association v. Shea Homes, Inc., an association alleged a developer breached its fiduciary duty regarding a contract it entered into while it controlled the association’s board.23 In its amended complaint, the association claimed the developer refused to automatically transfer the contract to it per the association’s CC&Rs.24 The developer brought an anti-SLAPP motion arguing the association’s refusal claim was based on the developer’s own court filings.25 Therefore, the statement was made before a judicial proceeding for an issue under review by a judicial body and protected by the anti-SLAPP statute.26 The Court denied the motion holding the developer’s fiduciary duties existed while it controlled the board and the alleged breach could only have occurred at that time.27 Whether a declarant board member may have an immunity defense under

the anti-SLAPP statute is not an open and shut case. As evidenced by the holdings in Talega and Trilogy at Glen Ivy, the court is hesitant to extend the Statute’s protections to all conduct. Code of Civ. Proc. Proc, § 425.16. Trilogy at Glen Ivy Maintenance Association (2015) 235 Cal.App.4th 361; Talega Maintenance Corporation v. Standard Pacific Corporation (2014) 225 Cal.App.4th 722. 3 Code of Civ. Proc., § 425.16, subd. (b)(1). 4 Code of Civ. Proc., § 425.16, subd. (a). 5 Code of Civ. Proc., § 425.16, subd. (b)(1). 6 Ibid. 7 Ibid. 8 Ibid. 9 Code of Civ. Proc., § 425.16, subd. (e). 10 Ibid. 11 Talega Maintenance Corporation v. Standard Pacific Corporation, supra, 225 Cal.App.4th at 725. 12 Id. at p. 726. 13 Ibid. 14 Talega Maintenance Corporation v. Standard Pacific Corporation, supra, 225 Cal.App.4th at 732. 15 Ibid. 16 Code of Civ. Proc., § 425.16, subd. (e); Talega Maintenance Corporation v. Standard Pacific Corporation, supra, 225 Cal.App.4th at p. 734. 17 Talega Maintenance Corporation v. Standard 1 2

Pacific Corporation, supra, 225 Cal.App.4th at 734. 18 Ibid. 19 Ibid. 20 Ibid. 21 Id. at p. 728-29. 22 Id. at p. 729-30. 23 Trilogy at Glen Ivy Maintenance Association v. Shea Homes, Inc. (2015) 235 Cal.App.4th 361, 365-66. 24 Ibid. 25 Id. at p. 366. 26 Ibid. 27 Id. at p. 369. Jane Blasingham is Corporate Counsel at Adams Stirling. Jane’s experience includes planning, entitlement, management, budgeting, permitting, and construction of new residential communities for large, national home builders in California. She managed the formation of new communities and oversaw the creation of CC&Rs, bylaws, rules and regulations, and maintenance manuals. Jane earned her Juris Doctorate from Western State College of Law where she graduated magna cum laude and valedictorian of her class.

CONNECT WITH GRIE • ISSUE ONE 2016

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New Board Member Spotlight Phil Hakopian, Business Partner

n 2015, the annual election resulted in four new board members being elected to the Chapter board of directors. Over the next four issues, you’ll have a chance to

meet each of them. I recently had the pleasure of interviewing one of our chapter’s most amenable (and also newest) board members, Mr. Phil Hakopian. Our interview consisted of my asking Phil a series of questions, with the purpose of giving our readers and members a little more insight as to who Phil is, as a new board member of the Greater Inland Empire chapter, as well as one of our very supportive business partners. As expected, Phil was more than gracious in giving me both the time as well as the responses that follow:

Robert - Phil, thanks so much for the opportunity to ask you a few questions. First of all, why did you decide, after all this time, to run for our chapter Board? Phil – Thanks for asking, Robert. Okay, so I’ve already served the past five years on other boards and CAI committees, and with my business (Cornerstone Commercial and Personal Insurance Services, Inc.) performing in a pretty manageable way, along with being influenced and persuaded by more than a few people I both respect and admire, I thought it was just the right time to look at how I could add value, as a board member, to our chapter. Robert – Okay. Well, with your election to the board, what would you like to see accomplished on your “watch”, as a whole, and for our chapter?

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Phil - That’s easy to answer. I’d really like to see more participation by managers and management companies in becoming members of our chapter. I know there are many, many of them in our chapter region that are still not aware of who we are, and I’d like to see our “identity message” spread to them in the hope of encouraging their involvement with us. I’d also like to see our chapter getting more involved in outreach efforts with some of the many organizations in our area that could use all the help they can get, especially from organizations like ours, as a way of sustaining a “better community” concept. I’d include examples like the Boys and Girls Clubs of America, but certainly not limit it to just those organizations. Robert – Great! So, in that regard, what do you bring to the board and how will that not only

benefit the chapter, but overall, help you accomplish your goals you mentioned earlier? Phil – First, I bring over 25 years of board-experience with me, having served on the boards of organizations like Steven’s Hope for Children, Inc, A.R.I., and CAI just to name a few. My positions working with each of them enabled me to continually grow in the knowledge of how nonprofits especially, function at their peak. I also learned along the way, how to deal with the adversity that non-profits also often have to deal with when it comes to accomplishing organizational goals. More than anything, I’d like to think that I bring both my business-sense as well as people-skills to the table, in efforts to continually help CAI-GRIE succeed in its mission. Continued on page 18

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New Board Member... Continued from page 16

Robert – Okay. And, what do you see as the biggest challenge for the new board? Phil – My initial observations include dealing with how we can stimulate getting more participation by members of the chapter on and with committees. There are a host of things I see us wanting to accomplish, moving forward, and the committee concept is, in my humble opinion, the core of how that will be successfully done. Without committee participation, our success is limited to only what our chapter leadership can do on their own, and that’s definitely not a recipe for success, no matter what organization we’re talking about. The other big challenge is also tied to committees, and that is the idea of participating with an understood level of commitment. In other words, if you join a committee, you should also realize that doing so makes a

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statement about your commitment to your fellow committee-members. A statement that inherently says that even as a volunteer, that you will still “be there” when it’s time for the committee to do its work. Otherwise, what’s the point of volunteering to be on a committee? Robert – Well said, sir! And finally, having now had a chance to better understand a little better who you are in taking on this new role, I’m curious, as I’m sure other members who don’t really know you yet, Phil, what do you do to relax and take your mind off of the business as well as volunteer work? Phil – That’s another easy answer, Robert. I’m an outdoors type of guy. I enjoy mountain-biking, riding motor cycles, walking, playing sports that I still can play (lol), and especially spending time with my family. As far as the business goes, I have a saying that I strongly believe in, and that is

“It’s all about working to the business, instead of working on the business.” Robert – Thanks, Phil, for the very enlightening interview. I think our members are definitely going to enjoy reading this, and discovering that our Chapter is certainly in good hands with you as a part of the board. Thanks again. Phil – My pleasure. Phil is the owner of Cornerstone Commercial and Personal Insurance Services, Inc., and is based out of Rancho Cucamonga, CA. Phil’s company covers all of southern California, and he is also a member of multiple California CAI chapters. Robert is the current President of the Sunnymead Ranch PCA, and past GRIE-Chapter President as well. He is also serving his fifth year on the CAI National CAVC committee, and is a past CAI National Board of Trustees member. He ended his sixth year as a GRIE-Chapter Board member at the end of 2014, and currently serves as the CAI-GRIE CLAC Liaison.

The Seven Biggest Mistakes Currently Contained in Employee Handbooks BY MICHAEL DRENAN, ESQ.

any associations are often faced with the same tasks governments and large corporations are confronted with. One such task is the hiring, management, and firing of employees. Employee handbooks are an important tool for employers to set forth the basic policies regarding employment at their companies. A properly designed employee handbook functions as a protective shield against potential legal actions that employees may bring against the employer. The following are the seven biggest mistakes contained in those employee handbooks. The biggest mistake is not to have an employee handbook in place. An improperly designed employee handbook can be just as dangerous as having no employee handbook at all.

Incorrect Family Medical Leave Act & California Family Rights Act References The rule is simple. If you employ less than 50 employees, there should be no references to either the Family Medical Leave Act or the California

Family Rights Act in your handbook. These laws provide reinstatement rights to employees following specific leaves of absence. If you employ less than 50 people, you do not want to provide such reinstatement rights where there is no entitlement.

Incorrect Wage & Hour References

The Eight-Hour-Day Restoration of Workplace Flexibility Act determined that California non-exempt employees who work over eight hours a day are entitled to overtime, and in addition, any employee who works over 40 hours a week is entitled to overtime compensation. As such, many handbooks have incorrect references because previous law only provided for overtime for over 40 hours in a workweek. California law requires that all non-exempt employees are entitled to at least one-half hour of unpaid meal breaks for every work period of five hours. Significantly, in Brinker Restaurant Corporation v. Superior Court, (April 2012), the California Supreme Court held that employers

must only “provide” meal periods and rest periods to their employees, but do not necessarily ensure that the employees take the meal and rest periods. This makes the handbook policies “providing” the meal periods and rest periods to the employees very important.

Illegal Vacation Policies

Many of the California vacation policies I review contain illegal “use it or lose it” policies. These policies inform employees that they lose any accrued vacation not used in a calendar year. However, California courts have determined that accrual cap vacation policies are legal. These policies set a cap on the amount of unused vacation that an employee may accrue. This is important because if an employee’s employment is terminated, the employer must pay any accrued vacation time along with a final paycheck to the employee immediately, if the employer terminated the employment, and within seventy-two hours if the employee voluntarily resigns. These accrual cap policies save employers Continued on page 20

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The Seven Biggest Mistakes Continued from page 19

money because employees are only entitled up to the cap amount as set forth in the vacation policy. There is no requirement for employers to provide their employees with vacation time. However, once an employer sets forth a vacation policy, it must follow Labor Code Section 227.3.

Inflexible Complaint Policy

A complaint procedure that does not provide employees with the flexibility to complain to more than one person in a position of authority could invalidate the entire discrimination/harassment complaint procedure. This is because if the employee’s only avenue of complaint is to the alleged discriminator/or harasser, the complaint procedure could be futile for the employee. One of the most important ways for employers to protect themselves with respect to such claims by employees is to have a flexible complaint

procedure which allows the employee to complain about the alleged discrimination/harassment to persons higher in authority than the alleged discriminator/harasser. It is extremely important that the discrimination policy require the employee to complain in writing to their immediate supervisor, the president of the company or the human resources department. If an employee unreasonably fails to use an available complaint procedure, this can be an effective defense for the employer in claiming that it was not only unaware of the alleged conduct, but that the employer was not given the opportunity to take proper remedial action to protect the employee.

Probationary Periods & Progressive Discipline Policies Probationary/Introductory periods and progressive discipline policies are frequently contained in employee handbooks. However, there is a great danger in eroding a company’s at-will

employment policy already contained in the employee handbook if you use these policies. If probationary period policies are improperly worded, they can be interpreted to mean that if the employee completes a probationary period they have a permanent position from which they can only be terminated for good cause instead of being an at-will employee. Be sure to and state that the completion of the period does nothing to erode the at-will relationship between the employer and the employee. Progressive discipline policies set forth increasingly severe discipline for misconduct by the employee. However, these kinds of policies have been interpreted by the courts that an employee cannot be terminated at the will of the employer, but can only be terminated through the progressive discipline policy. As set forth above, any progressive discipline policy must also state that the employee is still an at-will employee.

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Arbitration Agreements

One of the biggest mistakes that employers have made over the years is placing mandatory arbitration agreements in the employee handbook and not having a separate agreement signed by the employee outside of the handbook. The reason for this is because arbitration is a creature of contract; the last thing the employer wants is for the employee handbook to be found to be a contract of employment. Indeed, in July 2012, a California court of Appeal held that such an agreement was invalid because it was contained in the handbook. Sparks v. Vista del Mar Child & Family Services. In other words, the arbitration agreement should be a separate agreement, signed by the employee outside of the handbook.

handbook is a vital protective device for employers. However, an improperly designed handbook can cause an employer as many headaches as not having a handbook at all.

Michael D. Drenan is a Principal and the Litigation Manager of the San Diego office of Jackson Lewis P.C. For over 25 years, he has counseled and represented employers in such matters as wrongful discharge, tort claims related to employment, employment discrimination, sexual harassment, unfair

competition cases, and wage and hour matters. Mr. Drenan advises, represents, and defends employers in various areas of employment law and employment litigation before federal and state courts and administrative agencies. He also has extensive experience representing employers with Employment Practices Liability Insurance (EPLI) in all phases of employment litigation by virtue of his selection as panel counsel for national insurance carriers. Mr. Drenan’s representative clients include entities in the property management and healthcare industries, financial institutions, professional services companies, transportation companies, manufacturing companies and homeowners associations.

Inadequate Receipt & Acknowledgment

The acknowledgment should only be included with the handbook, without a page number, as a separate document. Moreover, it is important that a copy of the signed acknowledgment be placed in each employee’s personnel file. In a properly drafted acknowledgment, the employee agrees that the employee handbook is not a contract of employment and reaffirms that the employee’s employment with the company is at-will. Thus, pursuant to California Labor Code Section 2922, the employee or the employer can terminate the employment relationship with or without notice and with or without cause. Additionally, the acknowledgment should state that the at-will relationship can only be modified by the president of the company or the board of directors to ensure that the at-will employment relationship is not eroded. Unfortunately, many of the acknowledgments which I have reviewed contain no such language and merely have the employees acknowledge receipt of the handbook itself. A properly designed employee

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Indep Cont endent racto r

TIPS AND BEST PRACTICES

Classification of Workers as Independent Contractors or Employees BY MANDY D. HEXOM, ESQ.

mployers, including community associations and management companies, who improperly classify their workers as independent contractors subject themselves to potential civil liability, including penalties. This article gives a brief overview of the law and provides some tips and best practices to mitigate the chances of liability for misclassification. Correctly classifying an individual as an employee or independent contractor is critical. Misclassification of an individual as an independent contractor “voluntarily and knowingly” is unlawful and could subject an employer to a civil penalty of at least a minimum of $5,000

and up to $15,000 for each violation, in addition to potential back wages and tax penalties, among other damages. California Labor Code Section 3353 defines an “independent contractor” as “any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished.” In other words, to properly classify an individual as an independent contractor, the principal or hiring party must not control how the individual performs the work. In making a classification of independent contractor status, various

tests and factors are used by courts and governmental agencies, which are dependent on the particular facts of each case. The most important factor in determining proper classification of workers is the right to control the manner and means of accomplishing the desired result. Control asserted presumes the worker is an employee. The best practice is to consider the following factors before classifying an individual as an independent contractor:

• Whether the individual has control over the manner and means of the work. CONNECT WITH GRIE • ISSUE ONE 2016

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Tips and Best Practices Continued from page 23

• Whether the individual has the ability to work for others. • Whether the individual is engaged in a distinct occupation or business of his or her own. • Whether the particular work is usually done under the direction of a principal or by specialist without supervision. • Any special skills required for the particular occupation. • Whether the individual supplied tools and the place of work. • Length of time that services are to be performed. • Method of payment. • Whether the work is performed for time or by job. • Whether the work is part of the employer/principal’s regular business. • Whether the parties believe they are creating employer-employee relationship. • Whether the individual can claim a profit or suffer a loss as a result of work, aside from money earned on the job. • Investment by the individual in equipment or materials used to perform the work.

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For example, if the principal establishes general working hours for the individual as well as specific tasks, and the individual worker is paid based on the hours worked, that individual will likely be properly classified as an employee, not an independent contractor. Each factor mentioned above has differing degrees of weight depending on the circumstances. The best course of action is to tread lightly when classifying workers. Associations and other businesses should exercise sound judgment and seek advice when classifying workers as independent contractors. To try to prevent against improper classification claims, in addition to consideration of the factors above, associations and other businesses can implement the following procedures when hiring independent contractors: • Have a written independent contractor agreement. • Make sure the worker has liability insurance. • If the worker has a license, make sure it is current and valid. • Ask for a copy of the worker’s business license with the city/ county where the work is to be performed.

• Do not set the worker’s hours and ask for invoices prior to payment for the work. • Have the individual provide his/her own tools, equipment, materials and/or supplies to perform the work. • Do not provide any benefits that are provided to employees, such as paid vacation time or other similar benefits. • Do not assert control or supervise the independent contractor’s employees or assistants. • Do not control the manner and means of the work.

If there is any question whether an individual is properly classified, the best practice is to classify the worker as an employee to avoid potential liability for misclassification. Mandy D. Hexom is a Senior Attorney at Epsten Grinnell & Howell, APC.

2015 Review, Look Ahead to 2016 Federal Priorities REPRINTED WITH PERMISSION FROM CAI NATIONAL

key development and highlight for CAI Government Affairs in 2015 was the increasing number of CAI members advocating on federal government issues. CAI members responded in record numbers to federal legislative alerts, contacting members of Congress at critical times. CAI member phone calls, e-mails, and letters had a significant impact, amplifying CAI lobbying activities in the Congress. In one instance, CAI members flooded key Senate offices with more than 1,400 messages over the course of two critical days. Importantly, 2015 saw growth in CAI’s Federal Issues Summit. In October, more than 45 CAI members traveled to Washington, DC to discuss CAI’s federal policy issues and spend a day lobbying on Capitol Hill. In just one day, CAI member advocates met with the offices of almost 80 U.S. Representatives and U.S. Senators. CAI federal advocacy faced critical challenges in 2015, which will continue in 2016. Looking ahead, CAI Government Affairs will be actively lobbying in the following areas— • Qualifying all community associations for federal disaster assistance • Preserving association governance over HAM radio towers and antennas • Federal Housing Administration (FHA) approval rules for condominiums • Preserving state association lien priority statutes

Disaster Assistance for Associations

A highlight for CAI member

advocacy in 2015 was the introduction of legislation ensuring all community associations qualify for federal disaster assistance. U.S. Rep. Steve Israel (D-NY) has emerged as the leader in Congress in the fight for equity in disaster assistance for community associations. Due to Rep. Israel’s tireless efforts, the U.S. House Committee on Transportation approved disaster assistance reform legislation that included a provision requiring that FEMA work to qualify community associations for disaster assistance. Rep. Israel also successfully included a similar requirement in legislation funding FEMA operations in 2016. Most important was Rep. Israel’s introduction of H.R. 3863, the Disaster Assistance Equity Act of 2015. H.R. 3863 qualifies community associations for federal debris removal

assistance following a disaster and allows condominiums and cooperatives access to federal disaster funds to repair critical common infrastructure. In 2016, CAI members will press Congress to approve H.R. 3863. By speaking with one voice, CAI members can ensure all community associations have access to federal disaster recovery resources.

HAM Radio in Community Associations

U.S. Representatives Adam Kinzinger (R-IL) and Greg Walden (R-OR) have introduced legislation, H.R. 1301, that voids community association rules applying to HAM radio towers and antennas. Reps. Kinzinger and Walden have been joined in this effort by U.S. Senator Roger Wicker (R-MS), who is Continued on page 26 CONNECT WITH GRIE • ISSUE ONE 2016

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2015 Review, Look Ahead to 2016... Continued from page 25

championing identical legislation, S. 1685, in the U.S. Senate. CAI opposes federal legislation that needlessly interferes with the community association governance process. H.R. 1301 and S. 1685 replace association rules governing HAM radio towers and antennas with a federal standard that currently applies to county and municipal governments. Under this federal standard, it would be difficult for a community association to establish uniform height, placement, and size restrictions on HAM radio towers and antennas that could withstand a legal challenge. Over CAI’s objections, on November 18th, the U.S. Senate Commerce Committee approved S. 1685. As a direct result of CAI member advocacy, U.S. Senator Bill Nelson (D-FL) and U.S. Senator Brian Schatz (D-HI) opposed S. 1685. Senator Nelson and Senator Schatz are senior members of the Commerce Committee and serve in leadership positions. With Senator Nelson and Senator Schatz actively opposed to S. 1685, it is unlikely the legislation will be approved in its current form by the full U.S. Senate. CAI will continue to pursue a compromise that respects the right of community associations to set standards concerning HAM radio towers and antennas, but also ensures amateur radio licensees can pursue their hobby. According to CAI member research, a super majority of community associations permit HAM radio broadcasting, but require prior approval of external towers and antennas. Preserving these rules and procedures is a key federal priority for CAI in 2016.

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condominiums. This new approach has resulted in a substantial decline in the number of condominiums approved to participate in FHA’s mortgage insurance program. With FHA’s participation in the condominium market now at historic lows, qualified condominium unit owners are being denied access to FHA-insured mortgages. U.S. Rep. Blaine Leutekeymer (R-MO) has introduced legislation, H.R. 3700, to reverse FHA condominium policies such as the agency’s prohibition on transfer

CAI members can support a healthy and vibrant condominium market by contacting their federal representatives to urge support for critical legislation. fees, limits on commercial space in condominiums, and owner occupancy requirements. H.R. 3700 also requires FHA to extend the current 2-year project certification and streamline the recertification process. These reforms will allow more condominiums to receive FHA approval. CAI strongly supports H.R. 3700. CAI members can support a healthy and vibrant condominium market by contacting their federal representatives to urge support for this critical legislation.

Preserving Association Lien Priority Statutes

The Federal Housing Finance Agency (FHFA), a powerful independent federal agency, is working to overturn association lien priority statutes. To illustrate the

agency’s scorched-earth approach, FHFA has sued community associations in Nevada that lawfully foreclosed association liens. The agency also threatened Nevada lawmakers, stating FHFA believed that lenders may reasonably refuse to issue mortgages in the state unless legislators repeal Nevada’s priority lien statute. CAI’s Amicus Committee has filed numerous briefs countering FHFA’s arguments against lien priority in courts across the country. In Washington DC, CAI members have met with senior FHFA officials, including the Director of FHFA, the Honorable Mel Watt. Director Watt has stated FHFA will continue to oppose association lien priority and will actively seek federal preemption of lien priority statutes. In 2016, CAI anticipates FHFA will support a campaign by mortgage bankers to repeal or substantially revise association lien priority laws in the various state legislatures. While CAI will continue to urge FHFA to drop its misguided campaign against community associations, CAI members in priority lien states should prepare for a coordinated campaign to eliminate lien priority statutes.

Team CMS takes first place!

Team Andre Landscape takes second place!

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5029 La Mart, Suite A Riverside, CA 92507-5978