BHOA Claims and Ratings for the Settlement Agreement with the Town of Carefree

The Claims:

If the jury awards more than the town’s offer of $25,500, the town will be required to reimburse our trial expenses, in the range of $10,000 – $15,000. (Carefree Truthiness)

Interest is already accruing on any jury award. And, if the jury awards us more than the town appraisal amount ($25,500), the town will be required to reimburse our trial expenses, including the cost of our expert witnesses. (Four BHOA Board members)

Rating: Mostly false

Interest does indeed accrue from the date of summons, in this case from 4/23/2021, so this part of the statement is true.

However, we believe an award of greater than the Town’s appraisal of $25,500 is unlikely to lead to expense reimbursement, which is not mandated under law.  Carefree Unity has received an opinion from a leading Arizona condemnation attorney who has tried hundreds of cases and is generally familiar with this case:

Attorney Response:

First “trial expenses” is a meaningless term.    The court has the discretion to allow costs.   “Costs” are defined by statute, and do not include every category of expenses.  Generally, filing fees, court reporter fees, witness fees, costs of deposition, jury fees and the like are included in costs. The court is given wide latitude as to how much to award.  For instance, the court need not award any or all of a witness’ fee regardless of how much the witness was actually paid.

Second, the court has the discretion to allow costs “or not,” in a condemnation case.  Further, if costs are awarded the court may apportion them between the parties in its discretion.  The statement that the “town will be required to reimburse our [costs]” is contrary to law. 

Third, it is rare in condemnation cases for either party to be awarded costs because in most cases neither side gets 100% of what they want.  In other words, for example, a $100,000 verdict is much closer to Carefree’s appraisal than to the HOA’s so it would be highly unlikely that a court would award them costs for pursuing a $500,000 claim.  I agree that there would be zero probability the court would award costs to the HOA if it did not get a verdict in excess of the town’s appraisal.   However, the implication that any award in excess of $25,500 means that the HOA will automatically be awarded their costs, and 100% of their costs at that, is nonsense.

The Claims:

We must be concerned about future attempts by the Town to seize more of it by eminent domain. Our frontage along Tom Darlington Drive is some of the most valuable land in the area. Our land along Stagecoach is also at risk. By refusing to settle for a fraction of a reasonable appraisal and taking our case to a jury, we demonstrate to the Town that we will not sit back and let our property be taken. (four BHOA Board members)

The greatest danger of a quick giveaway settlement is to our remaining common land.  There is a theory swirling that believe the town is going to take more of our common land along Tom Darlington because we are selling it so cheaply.  Maybe the idea is not outlandish at all.  The town has already declared that it is looking for a new site for town hall outside the commercial center. (Letter to Residents, Rocky and Maureen Benedetto)

Rating: Misleading

These statements appear to be part of a long-running narrative that the Town has plans to condemn our common land to enhance the tax base for the town, a narrative that we believe to be completely false.  It has been disputed in the strongest terms by the mayor, the Town Administrator and the Town attorney (in an official letter to the BHOA attorney), and we believe it would not be legal under Arizona law.

In this matter also, Carefree Unity has consulted with several attorneys, including two with extensive experience in condemnation law.  They generally agree that Article 2, Section 17 of the Arizona Constitution prohibits condemnation for commercial development (in fact, for almost any private use), but this prohibition was explicitly codified in Arizona statutes by the passage in 2006 of Prop 207, the “Private Property Protection Act.” The text of this proposition includes the following passage:

The Town may be able to condemn land for public buildings under certain circumstances.  In the second quote the town hall is specified.  However, multiple Town officials have repeatedly insisted that this is not planned and is not plausible in the foreseeable future.

The Advice:

We believe that any future settlement offer, foregoing our advantages at trial, should include a binding commitment by the Town not to take any more of our land for any purpose. (four BHOA Board members)

Some homeowners have proposed that any settlement should include a binding commitment from the town to not ever take any more of our common land for any purpose.  This is a great idea! (Letter to Residents, Rocky and Maureen Benedetto)

Rating: Irrelevant (and likely unnecessary)

Attorneys have told Carefree Unity that a “binding commitment … not to take land” would have very little legal effect because a current Town government cannot legally bind future governments to commitments not to take legislative actions…like voting to condemn property for a public good.  A contract agreement to prohibit the Town of Carefree from future condemnations would therefore be in effect for (at most) a single legislative body, so in general for two years or less.

However, the Town has recently restated its position that it has no intention of condemning additional BHOA land and would in fact be prevented from doing so by Arizona law.

The Claim:

Our litigation counsel estimates a 50% likelihood that we will obtain a result at trial between $300,000 and $400,000. (four BHOA Board members)

Rating: Clarification Required 

The litigation counsel did make this estimate, but his justification letter seems to include a substantial and consequential mathematical error.

Dale Zeitlin did send a letter to the Board including the referenced estimate, and portions of the letter have been made public by the Board, but in our opinion the text of the letter contains consequential errors.  For example, he says that (the Town’s appraiser) “does state that public utility easements generally are only 10-25% of fee value.”  Actually, the Town’s appraiser states that “municipalities typically pay 10-25% of fee value for public utility easement” (emphasis added).  A reader might believe this to be just imprecise language except for the following sentence: “So, using what I consider the higher end of feasible discounts at say 25% applied to $400,000 a likely jury verdict would be in the range of about $300,000+/-.”

But the text is internally inconsistent and, in our opinion, does not support the value calculation Mr. Zeitlin makes.  We believe the most likely valuation a jury would obtain by trying to follow this procedure is $100,000 (25% of $400,000), though $40,000 is also possible (“the higher end of feasible discounts” yields a result of $40,000).  The difference between ‘$40,000 to $100,000’ and ‘$300,000+/-‘ seems clearly both substantial and consequential.

Mr. Zeitlin does not reveal how heavily this scenario weighed into his estimate, but we can be reasonably certain a mathematical correction would move his estimates downward.  Although Carefree Unity has talked to Board members who confirm being aware of the error, a corrected estimate has not been made.  We can therefore only say that a revised estimate would have to start somewhere in the range $40,000 to $300,000.

The Claim:

We believe that a jury will sympathize with a community that has preserved its open desert common land for more than 40 years. (four BHOA Board members)

Rating: Misleading

We do not dispute the authors’ beliefs, but at trial we fear a jury may conclude the party making the argument that our common area must be preserved as open space is the Town, not the HOA.  The proceedings will focus on valuation only, and the BHOA argument on valuation is that neither the binding easements nor the deed dedication of this land as open space impacts the value of the land and a purchaser would pay a price that reflects the value as a homesite.  In contrast, the Town’s appraisal reflects the easements and the deed restrictions that value the land at its highest and best use as open space.

False or Misleading Statements by Candidates and Board Members

Carefree Campaign Misinformation

1. (John Crane SUED OUR TOWN)…To make matters worse, the Town of Carefree ended up  paying HIS legal fees.  This has cost our town thousands of dollars.

Rating: False

Who has made this claim?

Mayoral candidate Peter Sample (7/13/22), local blog Carefree’s Future Matters (7/17/22)

Why this assertion is false: 

Because John Crane refused payment of legal fees even though the court awarded them.  Instead, he filed a Notice of Satisfaction of Judgement to make clear to the court that he considered the matter resolved without any payment from the Town.  This notice is reproduced below.

Why has this been repeated?

Honestly, we don’t know. Campaigns can make mistakes or tell lies, and it is impossible to say which is at play here. It was repeated, however, despite the author’s knowledge that it had been fact-checked as false by local publication Carefree Truth. Perhaps it was just an attempt to get more campaign mileage from the false claim.

No. CV2018-006012

Chris DeRose, Clerk of Court *** Electronically Filed *** K. Vega, Deputy 7/9/2018 6:00 PM Filing ID 9500011

Timothy A La Sota, SBN # 020539

TIMOTHY A. LA SOTA, PLC

2198 EAST CAMELBACK ROAD, SUITE 305 PHOENIX, ARIZONA 85016

TELEPHONE: (602) 515-2649 tim@timlasota.com

 Attorney for Plaintiff

SUPERIOR COURT OF ARIZONA MARICOPA COUNTY

JOHN CRANE, individually, Plaintiff,

vs.

LES PETERSON, in his official capacity as Mayor of the Town of Carefree; JOHN CRANE, in his official capacity as member of the Town Council of Carefree; MIKE FARRAR, in his official capacity as member of the Town Council of Carefree; STEPHEN HATCHER, in his official capacity as member of the Town Council of Carefree; MICHAEL KRAHE, in his official capacity as member of the Town Council of Carefree; CHERYL KROYER, in her official capacity as member of the Town Council of Carefree; GENE ORRICO, in his official capacity as member of the Town Council of Carefree; KANDACE FRENCH, in her official capacity as Carefree Town Clerk; TOWN OF CAREFREE, a public entity; ADRIAN FONTES, in his official capacity as Maricopa County Recorder; DENNY BARNEY, in his official capacity as Maricopa County Supervisor, CLINT HICKMAN, in his official capacity as Maricopa County Supervisor, BILL GATES, in his official capacity as Maricopa County Supervisor, STEVE CHUCRI, in his official capacity as Maricopa County Supervisor, STEVE GALLARDO, in his official capacity as Maricopa County Supervisor;

Defendants.

Plaintiff John Crane, by and through undersigned counsel, hereby gives notice that the Defendant Town of Carefree, and the Defendant members of the Town Council have satisfied the judgment entered against them on July 5, 2018 in this matter, although no payments have been made. Plaintiff does not intend to take any further action with respect to enforcing the judgment and considers this cause of action resolved fully. RESPECTFULLY SUBMITTED this 9th day of July, 2018.

TIMOTHY A. LA SOTA, PLC

By: /s/ Timothy A. La Sota

Timothy A. La Sota, SBN 020539 2198 East Camelback Road, Suite 305 Phoenix, Arizona 85016
Telephone: (602) 515-2649
Email: tim@timlasota.com
Attorney for Plaintiff

I hereby certify that on July 9, 2018 I caused the foregoing document to be electronically transmitted to the Clerk’s Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants:

The Honorable Hugh Hegyi Maricopa County Superior Court East Court Building-714
101 West Jefferson Street Phoenix, Arizona 85003

I hereby certify that on July 9, 2018 I emailed copies of the foregoing documents to the following:

Michael Wright

Sherman & Howard

7033 East Greenway Parkway, Suite 250,
Scottsdale, Arizona 85254
mwright@shermanhoward.com
Attorneys for Defendants Carefree Town Council Members, Town of Carefree, and Carefree Clerk

Colleen Connor
Talia J. Offord
Deputy County Attorney
Maricopa County Attorney’s Office
222 North Central Avenue, Suite 1100
Phoenix, AZ 85004
connorc@mcao.maricopa.gov
Attorneys for Defendants Maricopa County Board of Supervisors and County Recorder

/s/ Timothy A. La Sota

Michael Farrar
c/o Michael Wright
Sherman & Howard
7033 East Greenway Parkway, Suite 250, Scottsdale, Arizona 85254 mwright@shermanhoward.com
Pro per

Posted on Legal Proceedings

https://carefreeunity.files.wordpress.com/2022/07/notice-of-satisfaction-of-judgment-time-stamped.pdfht

Boulders HOA Misinformation

1. The main purpose of the Water tank in BHOA common land is to support a resort at the corner of Tom Darlington and Carefree Highway.

Rating: False

Who has said or strongly implied this to be true: One Board candidate (March 9, 2022), Board President Pistillo (February 18, 2022), 2021 Board (multiple occasions; most recently 1/31/22)

Why this assertion is false:

a. First, it has to be false because of physics. The elevation of the tank will be approximately 2325 ft above sea level and the level of the property that might become a resort ranges from roughly 2255-2270 feet.  The top of the tank will be about 2328 feet and faucets and shower heads at buildable portions of the potential resort would range from roughly 2259 to 2288 feet.  Everyone acknowledges that the tank will supply gravity fed water and it takes a 2.31 foot fall to generate 1 psi of water pressure.  Desirable water pressure is normally set at 50-60 psi, with a code maximum of 80 psi and anything under 40 psi considered low pressure.  Doing the math for these elevations yields water pressures that are always below 30 psi and below 20 psi at some locations.  This is not opinion; it’s just math.  The water will run past the proposed resort but will not be usable as a water supply until the elevation drops by an additional fifty feet or so.

b. Second, the Town has never said anything to encourage belief in this theory.  All Town statements have consistently said that the water tank is being built to supply water exclusively to the west side of Carefree in the area designated by the Water Company as ‘Neighborhood A.’

Why does this theory continue to be repeated?

We can only guess, but we know for sure that it is not because the Town has not explained it.  In fact, the Town sent a letter to BHOA attorney Beth Mulcahy and the Board asserting this to be false and warning them to stop making the claim.  The two most recent instances (by President Pistillo and Candidate Benedetto) came after this legal warning.

Our best guess is that it keeps getting repeated because people find it believable and those spreading it count on people not to do their own research.  Note, however, that if this is the reason, those repeating it are simply being deceptive or dishonest.

Another possibility is that people might believe it because the developer believed it at one time.  The Board has referred to an email from a potential developer to the property owner that speculates that the water tank could reduce development costs of the property.  The fact that someone involved with the property believed this at one time is evidence, but it does not override physics and is not evidence that the Town ever said so.  In fact, the Town and the Water Company corrected the owner’s impression when he approached them.  Further, the Town provided their legal fact check to that and another dozen or so Board statements on February 3, 2022, before the most recent publications.

2. The Town’s plans to take our common land were hidden from us for more than a year.

Rating: False

Who has said or strongly implied this to be true: One Board candidate (3/9/22), Board member Schwarzkopf (1/20/21 and 2/16/21)

Why this assertion is false:

a. The record is very clear: In the most recent claim, Mr. Benedetto actually provided the June 26, 2019 agreement between the BHOA and the Town that allowed the Town to test our common property in the area of the water company easement for suitability of locating a water tank there.  The Town had been evaluating sites for at least six months by that point, but clearly no final decision could be made without a determination that the geology of our site would be suitable.  Mr. Schwarzkopf’s letter states that the geotechnical drilling was done two months later.  On November 8, 2019 the Town held a meeting with our residents to explain their reasons for building a tank and for choosing our common area as a site.  Multiple notices were sent to residents about this meeting, starting on October 14.  We don’t know exactly how long it took the Town and Water Company to complete the geological testing, but its clear the time from the Town’s firm decision to build on our common land to the meeting to explain the decision to all residents was less than three months, and most likely less than two.  In addition, the Board was giving frequent status updates throughout the year in monthly Board meetings throughout the summer.

b. The record therefore shows the Town revealed their plans as soon as residents returned in sufficient number for a well-attended meeting, and the Board updated residents throughout the year including through the summer, and it now seems obvious the Board would have been unaware of any final decision until later.  In contrast, in 2021 our current Board suspended meetings throughout the summer despite the existence of ongoing legal actions of community interest.

Why does this narrative continue to be repeated?

Again, we can only guess, but this false narrative has always been provably wrong, has been fact-checked several times, and there has never been a reasonable basis for believing it.  The earliest version was misleading because it apparently just ignored contradictory evidence, but it did avoid making flatly incorrect assertions. However, the second version by the same author exaggerated those claims into the narrative that is currently in use.  It is possible to believe that those now repeating this are simply believing and repeating falsehoods spread by others, but Board members and candidates for the Board should be held to a higher standard than that, in our view.

3. The ill-conceived “golden toilet” at the west gate unnecessarily disturbed area in our common land that will cost more than $100,000 for landscape.

Rating: False

Who has asserted or strongly implied this to be true: One Board candidate (3/9/22), Board President Pistillo (2/18/22), Board member Schwarzkopf (6/25/21)

Why this assertion is false:

Where to start?  This assertion may not have been formally fact-checked before because it seems so ridiculous.  Let’s start with the premise:

The previous septic system had to be replaced if the Community Manager’s office was to have a functioning toilet.  The renovation of the toilet in the manager’s office would require replacing the unusable toilet in the office and the existing septic system in the drain field nearby.  The alternative, which at least one Board member continues to promote, would be to have the manager use the restroom at the West Pool, a location that violates even the 0.25 mile OSHA accessibility requirement for farm workers.  We therefore rate as false the first part of the sentence, which in effect implies it is unnecessary to provide workers with an OSHA-compliant workplace.

It is the second part, however, that seems impossible to even take seriously.  The assertion seems to be that the desert should have been left alone so that the current Board would not have to spend $100,000 for landscaping.  Before the installation of the septic system the area around it was a sparser version of the desert that still exists behind it.  The area has never been carefully maintained or landscaped, so restoring the 6,000 square foot area could be as simple as planting several hundred dollars’ worth of foliage, installing a simple and temporary irrigation method, and waiting several years.  All plant types that had been there before would grow if replanted in the new leach field (because it was already a leach field), so no exotics are required.  In contrast, the assertion is that we will now be required to spend at least ten times that much.  We are not saying it’s impossible to spend $100,000, but whatever results from that kind of expenditure will be nothing like a restoration.  We therefore rate the second part of the statement as obviously false.

Why does this narrative continue to be repeated?

Frankly, it’s a mystery to us.  It seems neither accurate nor believable.  We believe any resident who has ever paid for a landscape project in the Boulders will recognize $100,000 as not remotely appropriate for a restoration of 6,000 square feet of natural desert.

4. For more than two years, we were told that the Boulders site was the only possible engineering solution. However, the water bond offering document for potential investors discloses that there are other solutions, and if the tank is not built it will not impede the delivery of water to our neighbors to the west.

Rating: False & Misleading

Who has asserted or strongly implied this to be true: One Board candidate (3/9/22), the 2021 Board (multiple occasions, most recently 1/31/22)

Why this assertion is false and misleading:

The first portion is false because the Town has never said the Boulders site was the only possible engineering solution, only that it was the best.

The second portion is misleading because it implies that other solutions will be equally effective, an implication that is false.  In fact, the Town has consistently said that other solutions are possible, but that all have been evaluated and a tank on the Boulders property is the best solution in terms of cost and reliability.

Why does this narrative keep being repeated?

A prerequisite to believing construction of a water tank should be stopped is a belief that it is not necessary.  It is therefore essential that opponents develop narratives that seek to demonstrate that.  Alternatives that are equally suitable would be especially persuasive, if true.  We believe this is repeated frequently because it is persuasive.  Of course, it is also apparently and obviously wrong.