Agenda Item 1
January 21, 2016
Public Hearing
MEMORANDUM
January 15,2016
TO:
County Council
FROM:
Josh Hamlin, Legislative
Attom~
\
Public Hearing:
Bill 50-15, Common Ownership Communities - Commission on
SUBJECT:
Common Ownership Communities - Composition - Dispute Resolution
Bill 50-15, Common Ownership Communities - Commission on Common Ownership
Communities Composition - Dispute Resolution, sponsored by Lead Sponsor Council President
on behalf of the County Executive, was introduced on December 8, 2015. A joint Planning
Housing and Economic Development and Public Safety Committee worksession is tentatively
scheduled for January 28,2016 at 2:00 p.m.
Bill 50-15 would:
(l)
make mediation of certain disputes regarding common ownership
communities mandatory;
(2) alter the composition of the three member hearing panel;
(3) alter the composition of the Commission on Common Ownership
Communities to include members of the public;
(4) transfer duties assigned to the Office of Consumer Protection to the
Department of Housing and Community Affairs;
(5) provide for certain transition provisions; and
(6) generally amend County law concerning common ownership communities.
By memorandum dated November 23, 2015, the Executive requested the Council's
consideration of Bill 50-15. The memorandum details the proposed changes to the law, and the
justification for the changes (See ©12-13).
Background
Bill 50-IS would make three distinct changes to the existing law.
(I)
It
would move all of the Commission on Common Ownership Communities
(CCOC) from the Office of Consumer Protection (OCP) into the Department of
Housing and Community Affairs (DHCA). This proposed move was prompted by
the Office of Legislative Oversight (OLO) report on the CCOC from March of last
year,
1
which was mentioned by the Executive in his transmittal memo.
In
that
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8CommissiononCommonOwnershipCommunities.pdf
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report, OLO stated its belief "that relocating the Commission to DHCA could
provide administrative and infonnation technology resources and support that the
Office of Consumer Protection simply cannot provide."
(2)
It
would make mediation of all complaints mandatory where it is currently optional.
The justification for this change, offered by the Executive, is that it "will facilitate
the prompt resolution of complaints without the formalities and costs associated
with a quasi-judicial administrative hearing," and that mediation is a better means
of resolving what generally are "conflicts between neighbors" than an adversarial
proceeding.
It
would change the composition of both the Commission as a whole and of the
hearing panels convened to adjudicate disputes not resolved through mediation.
Bill 50-15 would alter the composition of the Commission, which now consists of
8 owner/resident members and 7 professional/manager members, to be made up of
5 owners/residents,S professionals/managers, and 5 members from the public at­
large.
It
would also change the makeup of the hearing panels, which now consist
of one member from each of the existing member-groups and a volunteer panel
chair that is an attorney practicing Common Ownership Community law, to be
comprised of 1 member from each of the proposed new member-groups.
(3)
The proposed elimination of the volunteer attorney-panel chairs is in response to a
conflict of interest identified by the Ethics Commission in the dual role these
attorneys may have in serving on a CCOC hearing panel in one instance while
representing a client before a hearing panel in another case. In its report, OLO
provided an excellent summary of the Ethics Commission advice and
detenninations regarding the CCOC (©14-16). Most pertinent to Bill 50-IS's
proposed change is correspondence between the Ethics Commission and the CCOC
beginning in February 2014 (©17-31), and culminating with a letter of guidance
dated April 10,2014 (©32-35). In that letter, the Ethics Commission concluded
that volunteer panel members
(i.e.,
the attorney panel chairs) are prohibited from
compensated representation of businesses with a matter before a CCOC panel.
Since the OLO report was published, the Ethics Commission denied a CCOC
request to waive certain conflict of interest provisions in the County's Code of
Ethics for attorneys serving as hearing panel chairs (©36-41). As it currently
stands, the Ethics Commission's April 2014 conclusion that volunteer panel
members are prohibited from representing, for compensation, businesses before a
CCOC panel, still applies.
This packet contains:
Bill 50-15
Legislative Request Report
Memo from County Executive
OLO Summary of Ethics Commission Advice
Ethics Commission CCOC Correspondence, Feb. Apr. 2014
Ethics Commission Letter of Guidance, Apr. 10, 2014
Ethics Commission Advisory Opinion 15-08-011
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10
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Bill No.
50-15
Concerning: Common
OWnership
Communities - Commission on
Common Ownership Communities ­
Composition - Dispute Resolution
Revised:
Draft No.
Introduced:
December 8,2015
Expires:
June 8, 2017
Enacted: ____________________
Executive: _____________
Effective: ____________
Sunset Date: --'-='No=n=eo...-_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: COlIDCil President at the Request ofthe County Executive
AN
ACT to:
(1)
(2)
(3)
(4)
(5)
(6)
make mediation of certain disputes regarding common ownership
communities mandatory;
alter the composition of the three member hearing panel;
alter the composition of the Commission on Common Ownership
Communities to include members ofthe public;
transfer duties assigned to the Office of Consumer Protection to the
Department of Housing and Community Affairs;
provide for certain transition provisions; and
generally amend County law concerning common ownership communities.
By amending
Montgomery County Code
Chapter lOB, Common Ownership Communities
Sections IOB-2, lOB-3, lOB-4, IOB-5, lOB-7A, lOB-9A, lOB-II, lOB-I2, lOB-l3, lOB-I4,
and lOB-I9.
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law
by
original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL
No.
50-15
1
Sec
1.
Sections 10B-2, 10B-3, 10B-4, 10B-5, 10B-7A, 10B-9A, 10B-11, 10B-12, 10B­
13, 10B-14, and 10B-19 are amended as follows:
Article 1. Commission on Common Ownership Communities.
2
3
4
5
6
7
*
10B-2. Definitions.
*
*
In
this Chapter, the following words have the following meanings:
[(a)]
Commission
means
the
Commission
on
Common
Ownership
8
9
10
11
12
13
Communities.
[(b)]
Common ownership community
includes:
(1) a development subject to a declaration enforced by a homeowners'
association, as those terms are used in state law;
(2) a residential condominium, as that term is used in state law; and
(3)
a cooperative housing project, as that term is used in state law.
14
15
*
*
*
[(c)] [Office means the Office of Consumer Protection.]
Department
means
the Department of Housing and Community Affairs.
Director
means the Director of the Department of Housing and
16
17
18
19
Community Affairs or the Director's designee.
lOB-3. Commission on Common Ownership Communities.
20
21
(a)
The County Executive must appoint, subject to confirmation by the
Council, a Commission on Common Ownership Communities. The
Commission consists of 15 voting members.
(1)
[Eight] Five members should be selected from unit or lot owners
or residents of self-managed and professionally managed
condominiums,
cooperative
self-managed
and
professionally
and
managed
and
22
23
24
25
26
housing corporations,
self-managed
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Bill
No.
50-15
27
professionally managed homeowners' associations, and may
include members or former members of governing boards.
(2)
[Seven] Five members should be selected from persons who are
members of professions associated with common ownership
communities (such as persons involved in housing development
and real estate sales and attorneys who represent community
associations, developers, housing management or tenants),
including at least one person who is a professional community
association manager.
28
29
30
31
32
33
34
35
36
37
ill
Five members should be selected from the public at large who
would not meet the criteria for selection under subsection (a)(1) or
(aX2).
38
39
(b)
Designees of the County Council (if the Council selects a designee),
Planning Board, Department ofEnvironmental Protection, Department of
Permitting Services, Department of Transportation, [Office of Consumer
Protection,] and Department of Housing and Community Affairs are ex­
officio nonvoting members of the Commission.
40
41
42
43
44
45
*
(i)
*
*
The [Office] Department must provide the Commission with staff, offices
46
47
and supplies as are appropriated for it.
U)
The Commission must submit an annual report by September 1 to the
County Executive and the County Council summarizing its activities,
needs, and recommendations, and the extent to which the goals of this
Chapter are being met.
48
49
50
51
lOB-4. Administrative support.
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BILL
No. 50-15
52
53
54
55
In
selecting staff
to
carry out the [Office's] Department's responsibilities under
this Chapter, the Director must consider the recommendations of the
Commission.
IOB-5. Duties of the [Office] Department of [Consumer Protection] Housing and
Community Affairs.
The [Office] Department, in consultation with the Commission, must:
56
57
58
59
60
*
IOB-7A. Notification requirements.
*
*
The governing body of a community association must, at least annually,
distribute information in a form reasonably calculated to notify all owners about
the availability of dispute resolution, education, and other services to owners
and residents of common ownership communities through the [Office]
Department and the Commission. The governing body may satisfy this
requirement by including with any annual notice or other mailing to all members
of the community association any written materials developed by the [Office]
Department to describe the Commission's services.
Article 2. Dispute Resolution.
61
62
63
64
65
66
67
68
69
70
71
72
*
lOB-9A. Request for relief from stay.
*
*
*
*
*
(b)
The special panel must consist of 3 voting members of the Commission
designated by the chair, and must include [at least] one representative of
each membership category.
73
74
75
*
(a)
*
*
76
77
lOB-II. Mediation; dismissal before hearing.
The [Office] Director may investigate facts and assemble documents
relevant to a dispute filed with the Commission, and may summarize the
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BILL
No. 50-15
79
80
81
82
issues in the dispute. The [Office] Director may notify a party if, in [its]
the Director's opinion, a dispute was not properly filed with the
Commission, and may inform each party of the possible sanctions under
Section 1OB-13(d).
(b)
Ifthe [Office] Director, after reviewing a dispute, finds that, assuming all
facts alleged by the party [which] that filed the dispute are true, there are
no reasonable grounds to conclude that a violation of applicable law or
any association document has occurred, [it] the Director may so inform
the Commission. The Commission[, in its discretion, may] must dismiss
a dispute if it fmds that there are no reasonable grounds to conclude that
a violation of applicable law or any association document has occurred,
or it may order the [Office] Director to investigate further. The
Commission may reconsider the dismissal of a dispute under this
subsection if any party, in a motion to reconsider filed within 30 days
after the dispute is dismissed, shows that:
(1)
the Commission erroneously interpreted or applied applicable law
or an association document; or
(2)
material issues offact [which] that are necessary to a fair resolution
ofthe dispute remain unresolved.
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
(c)
(Any party may request mediation.] If the Director, after reviewing
~
99
100
101
102
103
dispute and any investigation, finds reasonable grounds to conclude that
~
violation of applicable law or an association document has occurred,
the Director must attempt to resolve the matter through mediation. Each
~
named in the dispute or its representative must attend any mediation
conference scheduled
Qy
the Director under this Section unless excused
104
105
Qy
the Director. If the
~
that files the dispute refuses or fails to
participate in the mediation, the Director must dismiss the dispute. If the
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BILL
No. 50-15
106
107
108
109
110
111
112
113
114
115
J2ill1Y
that is the subject of the dispute refuses or fails to participate in the
mediation, the Director must refer the dispute to the Commission for
resolution. The
ImtlY
that is the subject ofthe dispute may not appear at
the hearing, and the hearing panel may award relief to any
ImtlY
that the
facts on the record warrant.
(d)
[If a party requests mediation, the Commission must notifY all parties of
the filing and of the mediation session.] Unless otherwise agreed to
Qy
the parties in writing, a mediation conference is informal and nothing said
or done during
~
mediation conference is admissible
in
any subsequent
hearing under this article.
(e)
[The Commission must provide a qualified mediator to meet with the
parties within 30 days after a party requests mediation to attempt to settle
the dispute.] The Commission must promptly schedule
~
hearing under
Section
IOB-I3
if either:
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
ill
mediation has not occurred within 90 days
~
after the Director found reasonable grounds to believe
violation
occurred; or
ill
the Director decides at any time that mediation would be
fruitless. The Director may extend the mediation deadline
Qy
mutual
consent ofthe parties.
[(
t)
Ifany party refuses to attend a mediation session, or
if
mediation does not
successfully resolve the dispute within 10 days after the first mediation
session is held, the Commission must promptly schedule a hearing under
Section
IOB-13
unless a hearing has already been held under Section
IOB-I3.]
lOB-12.
Hearing Panel.
(a)
If a hearing is scheduled, the chair ofthe Commission must convene a 3­
member panel to hear the dispute.
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BtLL No. 50-15
132
133
134
135
(b)
The chair must choose
[2]
J
members of the panel from the voting
[The 2 Commission
members ofthe Commission. The persons selected must represent the
[2]
J
different membership groups of the Commission.
members must designate the third member from a list of volunteer
arbitrators trained or experienced in common ownership community
issues maintained by the Commission. The third member must chair the
panel. Ifa suitable arbitrator is not available, the chair ofthe Commission
must designate the third panelist from among the voting members of the
Commission, and must designate the chair of the panel.] The chair must
designate one panel member to serve as panel chair.
136
137
138
139
140
141
142
143
144
145
146
*
lOB-13. Administrative hearing.
*
(d)
*
*
*
*
The hearing panel may award costs, including reasonable attorney's fees,
to any party ifthe other party:
147
148
149
150
151
152
(1)
filed or maintained a frivolous dispute, or filed or maintained a
dispute in bad faith;
(2)
[unreasonably] refused to participate in mediation of a disputer, or
unreasonably withdrew from ongoing mediation]; or
(3)
substantially delayed or hindered the dispute resolution process
without good cause.
The hearing panel may also require the losing party in a dispute to pay all
or part ofthe filing fee.
(e)
153
154
155
156
157
[the]
The hearing panel must apply state and County laws and all relevant
caselaw to the facts ofthe dispute, and may order the payment ofdamages
and any other relief that the law and the facts warrant. The decision of the
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BILL
No. 50-15
158
159
160
161
162
163
hearing panel is binding on the parties, subject to judicial review under
Section 2A-II.
*
(i)
*
*
The Commission, acting through the [Office] Department and the County
Attorney, may enforce a decision of the hearing panel by taking any
appropriate legal action.
164
165
166
167
168
169
170
171
172
173
174
175
176
*
*
*
*
*
lOB-14. Settlement of disputes; assistance to parties.
*
(b)
The [Office] Director may inform any party who has settled a dispute by
mediation, or any party who prevails in a hearing held under Section IOB­
13, about how the agreement or decision can be enforced.
lOB-19. Enforcement.
(a)
(b)
The [Commission] Department may enforce this Article by legal action.
In
addition to any action by the [Commission] Department and any other
action authorized by law, including the filing of a dispute under Article
2, any person may file an action:
(1)
for injunctive relief to enforce this Article or correct any violation
of it, and
(2)
to recover damages for a loss sustained as a result of a violation of
this Article.
Sec. 2. Effective Date.
Sections 1OB-II (c), (d), and (e), which mandate mediation of disputes, applies
to all disputes filed with the Commission after this Act takes effect as provided in
Charter Section 112.
Sec. 3. Transition.
177
178
179
180
181
182
183
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Bill No. 50-15
184
185
186
187
188
The first three vacancies of members selected under Section lOB-3(a)(1) and
the first two vacancies ofmembers selected under Section lOB-3(aX2) must be filled
by members selected under Section lOB-3(a)(3).
Approved:
189
Nancy F1oreen, President, County Council
Date
190
Approved:
191
Isiah Leggett, County Executive
Date
192
This is a correct copy ofCouncil action.
"
193
Linda M. Lauer, Clerk of the Council
194
Date
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LEGISLATIVE REQUEST REPORT
Bill 50-15
Common Ownership Communities
-
Commission on Common Ownership Communities ­
Composition
-
Dispute Resolution
DESCRIPTION:
This legislation would: 1) make mediation a mandatory component of
dispute resolution when complaints are filed with the Commission on
Common Ownership Communities (CCOC); 2) change the
composition of the Commission by requiring that one third of the
Commissioners be selected from members of the general public; 3)
replace the volunteer arbitrators that currently chair hearing panels
with voting members of the Commission; and 4) transfer staff support
duties from the Office of Consumer Protection to the Department of
Housing and Community Affairs.
This legislation addresses three concerns that have arisen about the
operation of the current CCOC law. 1) Adjudication of disputes has
required parties to engage in hearings that require the parties to comply
with complex rules of procedure. 2) The CCOC does not have
adequate access to staff support and other resources to carry out its
mission as effectively as initially envisioned. 3) CCOC hearing panels
are currently chaired by outside volunteers that are not voting members
of the Commission and have been found, in some instances, by the
Ethics Commission to have a conflict of interest.
To improve the efficiency and effectiveness of the CCOC by
encouraging informal resolution of disputes between homeowners,
residents and governing bodies of common ownership communities;
to ensure that hearing panels are composed of individuals who
represent a balance of the interests involved in adjudication of
disputes; and to provide the CCOC with better access to administrative
support and technology resources.
Department of Housing and Community Affairs
To be requested.
To
be
requested.
To be requested.
N/A
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
Eric Friedman, Office ofthe Consumer Protection, 240-777-3636
Clarence Snuggs, Department of Housing and Community Affairs, 240­
777-3600.
@
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APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
Only applicable
in
the City of Rockville.
NI
A
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I
OFFICE OF THE COUNTY EXECUTivE
ROCKVIlLE, MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
November 23
t
2015
TO:
George Leventhal, President
Montgomery County Council
FROM:
SUBJECT:
Isiah
Leggett. County Executi_
.>t~,...---
.
:
.
j
Commission on Coll1IIlon Ownership Communities - Amendments to
Chapter lOB
I am forwarding with this memorandum proposed legislation to amend
Chapter lOB, Common Ownership Communities. I believe that this legislation,will
enhance the ability ofthe.CommissiOD9n
~oinmon,Owpership Cornmqt1iti~s
{ceo
C) to
better fulfill the purposes for which iiWas' estabiished 25 years ago.
As
you kllow, I
was
a
member ofthe County Council when the CCOC was established, and I remember well the
intent and the need for creating this first-of-its kind commission. After 25 years, however,
revisions are needed.
Several factors contribute to the timeliness of these proposed legislative
changes. Over one-third of Montgomery County's residents now live in
COtnIIlOfl'·
ownership communities, and the CCOC has gathered considerable experience regarding a
multitude of issues. The Office of Legislative Oversight recently submitted a report
evaluating the CCOC and offered several recommendations, including having the
staff
support for CCOC
be
provided by the Department of Housing and Community Affairs.
Furthermore, Montgomery County's Ethics Commission has identified a conflict of
interest regarding the manner in which CCOC hearing panels are convened. Finally, a
review of the nature of the complaints filed, as compared to the mechanisms used to
process those complaints, indicates that the CCOC dispute resolution program has strayed
from its original intent to function as an alternative to court litigation.
the
ecoc
:will
continue to contribute to the quality of life in Montgomery County, the
legislation I am forwarding to the Council for its consideration would: (1) make mediation
a mandatory component of dispute resolution when complaints are filed with the CCOC;
(2) change the composition of the Commission by requiring that one-third of the
CommissiQners be selected from members of the general public; (3) replace the volunteer
arbitrators who currently chair hearing panels with voting members
oftheCoJ~lIl1ission;
In
order to systematically address all of the above issues, and to ensure that
. . . . . . . . . ._ ....1311.240-m-....T1Y
@
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....
. .">j
..
.' I
,
.
~
..... I
George Leventhal, President
November 23,2015
Page 2
and (4) transfer staff support duties from the Office of Conswner Protection to the
Department of Housing and Community Affairs.
Executive staff stand ready to work with the Council on this important
legislation.
IL:tjs
@
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An Evaluation ofthe Commission on Common Ownership Communities
4.
COMCOR Code of Montgomery County Regulations
COMCOR also outlines regulations for common ownership communities in three subject areas: dispute
resolution, establishment of a dispute filing fee, and the establishment of an annual registration fee. The
remaining regulations relating to the dispute resolution process are included in Chapter Four. These
executive regulations also outline the payment of fees associated with common ownership communities:
• The cost to file a case with the CCOC is $50 for each dispute and assists to fund the dispute
resolution process and provision oftechnical assistance.
24
• Regulations require an annual $3.00 per unit registration fee. If an association fails to pay the fee
and register, it is a Class A violation and renders the community ineligible to file a complaint
under Chapter 1OB.
25
~
c.
Ethics Commission Advisory Opinions
The Montgomery County Ethics Commission may issue either an advisory opinion or waiver on an issue
relating to Section 19A-7 of the County Ethics Law. Advisory opinions may be requested by any person
subject to the Ethics law, the Code ofEthics for the County Appeals Board, or County Procurement law.
The Ethics Commission may grant a waiver of the prohibitions of the Ethics law and Procurement law, if
in the Commission's opinion, certain statutory provisions are met. The Commission can also issue a
Letter of Guidance in regards to the law and specific questions.
The Commission on Common Ownership Communities is considered a County administrative agency and
Commission members are considered public employees. Due to this designation, Section 19A-12 of the
County Ethics law states that a public employee must not be employed by any business that:
• Is regulated by the County agency with which the public employee is affiliated; or
• Negotiates or contracts with the agency with which the public employee is affiliated; or
• Hold any employment relationship that would impair the impartiality and independence of
judgment ofthe public employee.2
6
The Commission may grant a waiver of the prohibited acts if it finds that a waiver is needed to ensure
timely and available services; failure to grant a waiver may reduce the County's ability to hire or retain
qualified employees; or the proposed employment is not likely to create an actual conflict of interest.
27
Summarized below, the Ethics Commission has issued three advisory opinions, one waiver, and one letter
of guidance regarding the Commission on Common Ownership Communities since the early 1990s. Each
action by the Ethics Commission relates to the applicability ofthe Sections 19A-8(b) and 19A-12(b) to
Chapter 10, which regulates the Commission's activities.
Advisory Opinions. The County Ethics Commission issued three advisory opinions relating to an
individual's ability to either represent or participate in Commission on Common Ownership
Communities' activities. Brief descriptions for each decision are provided below.
COMCOR 108.07.01.01
25
COMCOR 10B.07.02.0l
26
§ 19A-12.
27
§ 19A-8(b).
24
OLO Report 2015-8
13
March 10, 2015
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An Evaluation ofthe Commission on Common Ownership Communities
• Advisory Opinion 1994-7. The question before the Ethics Commission was whether a member of
the Commission, who was also a private attorney, could represent an HOA client in a matter
before the Commission. In this case, the Ethics Commission ruled that a waiver was not
necessary since the situation in question only occurred once in the prior four years, thus not
meeting the need of timely delivery of services. Further, the Ethics Commission found that an
actual conflict may occur as a result of the representation ofthe HOA client in front of the
Commission. The Ethics Commission reasoned that ifthe case were on appeal, the attorney
would be taking a position that was adverse to the Commission and the County, creating an actual
conflict of interest. However, this decision "does not preclude [the attorney] from advising [his]
client and assisting with a settlement of the dispute."28
• Advisory Opinion 1998-12. There were two questions before the Commission in this case. The
first was whether an attorney's former partner or other attorneys at a firm could represent clients
in matters before the Commission and other County Boards and the Commission ruled that the
attorney's former firm may represent clients before the Commission and other boards. The
second question dealt with whether the attorney could continue to represent and advise clients on
matters unrelated to Montgomery County Government even though his former firm is
representing the client before other Montgomery County agencies. The Ethics Commission ruled
that the attorney must recuse himself on all matters relating to County boards and commissions in
which the firm is representing clients.
• Advisory Opinion 2000-5. This is a case in which a Commission board member was an officer of
his homeowner association and another Commission member had a financial interest in the
property management company that manages the same association. The first board member is
also the chair ofthe committee on which the second member served. The Ethics Commission
looked at two questions: (1) can the first board member vote on jurisdiction over cases or serve
on a hearing panel involving the management company and (2) does the fact he votes on the
association's contract with the management company raise any concerns about voting on
Commission issues. The Ethics Commission ruled in regards
to
both questions that the law does
not prohibit him from participating in Commission matters, as long has he stays impartial.
Waiver.
The only Ethics Commission waiver was issued in 1992 and concerns whether the Council
representative to the Commission could also serve as the president ofher homeowner's association. The
Ethics Commission waived the conflict of interest because the Council knew she was a member of the
homeowner's association upon appointment and she was a non-voting Commission member limited to
participating in discussions only. Further, the Ethics Commission required her to disclose to the
Commission that she held an elected position in her homeowner's association to ensure that the
association did not receive an unfair advantage.
Letter of Guidance.
The Ethics Commission examined the applicability of Section 19A to the volunteer
arbitrators who serve as Hearing Panel Chairs. The Ethics Commission found that the list of volunteers is
almost exclusively comprised oflawyers who practice in Montgomery County and often represent
homeowner associations and condominium associations. The Ethics Commission concluded that
arbitrators are public employees because they exercise responsibility in adjudicating matters before the
Commission, thus Section 19A applies.
In
addition to excluding volunteer panel members from participating because their work is regulated by
the County, the Ethics Commission took a broad approach to defining the conflict of interest. The Ethics
Commission wrote that volunteer arbitrators may be able to influence the decision at hand in a way that
28
Montgomery County Ethics Commission, Advisory Opinion 1994-7.
OLO Report 2015-8
14
March 10,2015
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An Evaluation o/the Commission on Common Ownership Communities
favors their clients or may be influenced by the prospect of gaining clients due to their representation.
While no claim has been filed by individuals to the Ethics Commission on this matter, the Commission is
aware of four separate instances where individuals felt that there was bias between the volunteer panel
chair and the associations.
The application of State and County law govern the formation and operation of common ownership
communities and afford protections to both the association governing bodies and residents living in one of
these communities.
aLa
Report
2015-8
15
March
10,2015
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MONTGOMERY COUNTY ETHICS COMMISSION
Kenita V. Barrow
Chair
February 4. 2014
Mark
l.
Greenblatt
Vice Chair
Elizabeth Molloy
Chair
Commission on Common Ownership Communities
c/o The Montgomery County Office of Consumer Protection
100 Maryland Ave, Suite 300
Rockville, MD 20850
Dear Ms. Malloy:
This letter provides notice to the Commission on Common Ownership Communities ("CCOC")
of the Montgomery County Ethics Commission's intent to issue an interpretation of Chapter 19A
of
the
Montgomery County Code as
to
certain practices at the CCOC.
In
recent months, the
Ethics Commission
has
been notified, informally and in writing, by unrelated parties of potential
conflict of interest concerns related to hearings convened by the Chair of the CCOC.
It
is our
understanding that panel chairs can represent clients before CCOC panels to which they have not
been assigned. After consideration of the applicable laws, the Ethics Commission
is
concerned
that representation of clients by CCOC panel chairs before the CCOC may be inconsistent with
the Montgomery County Public Ethics Law, Chapter 19A. Accordingly, the Ethics Commission
is providing you with its preliminary views so that you might provide any additional information
that you believe would be relevant to the Ethics Commission's review of the matter.
"
In
accordance with Chapter lOB of the Montgomery County Code, the CCOC has established a
list of volunteer panelists made up of persons who are "trained or experienced in common
ownership community issues." The list of volunteer panelists
is
almost exclusively comprised of
lawyers who practice in Montgomery County. Many of these lawyers represent clients in
matters involving communities of common ownership.
In
fact, many of the lawyers on the list of
panel members advertise that they represent homeowners associations and residential
condominium associations.
The Ethics Commission's concern stems from the representation by panel members of clients
before CCOC hearing panels that they are not currently sitting on. Section 19A-12 provides
specific liInitations on the activities of "public employees":
Montgomery County Ethics Commission
100 Maryland
Avenue, Room
204,
Rockville,
MD 20850
OFFICE 240-777-6670, FAX 240-777-6672
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Commission on Common Ownership Communities
Page 2,
214/2014
(b)
Specific restrictions.
Unless the Commission grants- a waiver under subsection 19A-8(b). a
public employee must not:
, (1) be employed by, or own more than one percent of, any business that:
(A) is regulated by the County agency with which the public employee is affiliated; or
(B)
negotiates or contracts with the County agency with which the public employee is affiliated;
or
(2) hold any employment relationship that could reasonably be expected to impair the
impartiality and independence ofjudgment of the public employee.
A threshold question is whether volunteer panel members who serve as arbitrators on panels are
"public employees." The Ethics Commission believes that panel members are "public
employees" as they exercise responsibility
in
adjudicating matters brought to the CCOc. Panel
members have long been considered "public employees" by County Executive regulation, as
they are designated as "public employees" required to
file
confidential
financial
disclosure
reports pursuant to
Arti~le
IV of the Public Ethics Law.
Because volunteer panel members are "public employees," representation by volunteer panel
members of businesses regulated by the CCOC is likely prohibited by Section 19A-12(b)(1) of
the Public Ethics Law. The Commission thinks that a business with a matter before a CCOC
panel is "regulated by the County agency with which the public employee is affiliated."
Therefore, the Commission believes volunteer panel members are prohibited from representing
businesses with a matter before a CCOC panel.
Section 19A-12(b)(1)'s prohibition only extends to outside employment by businesses. Section
19A-12(b)(2)'s reach is broader as «any employment relationship that could reasonably be
expected to impair the impartiality and independence of judgment of the public employee" is
prohibited.
The
Commission believes representation by panel members of clients before CCOC
hearing panels that they are not currently sitting on is prohibited by 19A-12(b)(2). Panelists who
represent clients before other panels may be able to influence the resolution of matters before
other panels by resolving matters that come before them in a way that favors their clients:
adjudicative bodies are frequently influenced by how similar matters were decided even without
,formal reliance on precedence.
1
Also, panelists who represent clients before other panels could,
in theory, be influenced by the prospect of gaining clients, such as a housing association with
many matters coming before the CCOC,
in
adjudicating matters when serving as a panelist.
Lastly, CCOC panels are collaborative bodies where give and take between panel members can
be expected. Panel members appearing as attorneys before persons with whom
this
give and take
has occurred cannot be looked at
in
a vacuum without regard for other potential official
of the hearing panels are not binding on other hearing panels in different cases
(they
are,
however, binding on the
parties
to the case resolved by the mIings), the panels' explanations of
the laws and the legal principles
are
a valuable source of information for those who seek guidance on the
problems facing them as members or directors of the County's community associations." The CCOC
Staff's GUIDE TO THE PROCEDURES AND DECISIONS of the MONTGOMERY COUNTY
COMMISSION ON COMMON OWNERSHIP COMMUNITIES, November
2012.
Montgomery County Ethics Commission
100 Maryland Avenue, Room 204, Rockville, MD 20850
OFECE24()..777-6670,
FAX
240-777-6672
1
"Although the rulings
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Commission on Common Ownership Communities
Page 3,
2/412014
interactions. Under these circumstances, the representation of clients by CCOC panelists could
be reasonably expected to impair the impartiality and independence ofjudgment of these public
employees.
2
, The Ethics Commission realizes that it may well have been the expectation, when the CCOC
authorizing legislation was enacted, that the volunteer panel chairs would include lawyers
practicing before other CCOC panels. However, neither the ecoe authorizing legislation nor
the Public Ethics Law included a provision that provide an exception for the ceoc panels from
the requirements of the Public Ethics Law.
The Ethics Commission is very aware that the ceoC's practices as regards volunteer panelists
are not new. And the Commission has, based on the information that has been brought to its
attention, no interest or intent to conduct any investigation into past practices. But the
Commission believes the ccoes practices should be aligned with the County's Public Ethics
Law. This could occur by either altering CCOC practices or the CCOC's authorizing legislation
or the Public Ethics Law. The Ethics Commission solicits your views as to what steps should be
taken to address the apparent inconsistency between the Public Ethics Law and Commission
practices. The Commission would welcome receiving any additional information regarding the
issues presented above. Mter sixty days from the date of this letter, the Ethics Commission will
consider any additional information it has received; then it may issue an interpretation of the
provisions of the Ethics Law with respect to the issues identified in this letter.
In
the meantime, .
the opinions expressed here are to be considered to be preliminary and for the purpose only of
soliciting your views to an issue pending before the Commission.
Should you have any questions, please refer them to Robert Cobb, Counsel to the Ethics
Commission at 240-777-6674.
Sincerely,
~~
Kenita Barrow
Chair
Montgomery County Ethics Commission
cc: Timothy Firestine, Chief Administrative Officer
Marc Hansen, County Attorney
Eric Friedman, Director of Consumer Protection
Steve Farber, Council Administrator
The Commission's Advisory Opinion 1994-7 addressed the question of whether a CCOC member could
represent a client before the CCOC hearing panel. The Commission determined that it would not issue a .
waiver of the prohibition of Section 19A-12(b) to a member of the CCOC because the statutory waiver
standard could not be met.
2
Montgomery County Ethics Commission
Maryland Avenue, Room
MD 20850
OFrlCE 240-777-6670, FAX 240-777-6672
/9
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'
.
COMMISSION ON COMMON OWNERSIDP COMMUNITIES
Isiah
Leggett
County Executive
April 4, 2014
Kenita V. Barrow
Montgomery County Ethics Commission
100
Maryland Avenue, Room
204
Rockvill~h{D
20850
Dear Ms. Barrow:
As requested, the Co:m.n1ission on Common-Owned Communities
(~COC)
is providing
its
views
in response to your letter ofFebruary
4,2014
providing your preliminary views that
representation ofclients by the CCOC voluntary panel chairs before the CCOC may
be
inconsistent with the Montgomery County Public Ethics Law, Chapter 19A. We understand
that
.the opinions expressed in your February 4 letter are·preliminary and
that
after April 5, the Ethics
Commission will consider any additional information it
has
received
and
may issue an
interpretation of
the
provisions of
the
Ethics Law with respect to the issues identified in this
letter.
Background
The CCOC is made up of fifteen members appointed by the County Executive. Eight members
are residents of common ownership communities and seven are professionals associated with
common ownership communities (attorneys, property managers, realtors. developers, etc.).
The
CCOC is responsible to
act
as an· advisor to
the
County Council, the County Executive, and
offices of County government on matters·including: providing education to members of ..
common ownership communities; ensuring proper establishment
and
operation of common
ownership comniunities; reducing the number and tlivisiveness of disputes by offering informal
resolution ofdisputes or formal hearings; assisting
the
development ofpolicy supporting these
communities; and preventing potential public financial liability for repair or replacement of'
common ownership community facilities.
.
The CCOC
has
jurisdiction to handle disputes between two or more parties involving: (1) the
authority of a governing body, under any law or asSociation docUment, to (a) require any person
to take any action, or not to take any action, involving a unit;
(b)
require any person to pay a fee,
fine or assessment; (c) spend association
funds;
or (d) alter or
add
to a common area or element;
or (2) the failure of a governing body. when r:equired by law or an association document, to (a)
properly conduct an election;
(b)
give
adeqUate
notice of a meeting or other aCtion; (c) properly
O~CEOFCON~PROTECTION
./
)
100 Maryland Avenue, Room 330 • Rockville, Ma:tyland 20850 •
2401n7-3766,
fax;
24on77-3768
www.montgomerycountymd.gov/cooc
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.'
.<
Letter
to
the Montgomery County Ethics Commission
April 4, 2014
, -)
conduct a
m~ting;
(d) properly adopt a
b~
or role; (e) maintain ?r audit books and records;
.
. or
(f)
allow mspection ofbooks and records.
Section 10B-12(a) ofthe Montgomery County Code requires the eeoc to convene a tbree­
member panel to hear a dispute and Section 10B-12(b) directs the eeoc to choose a resident
and professional eeoc member to fill two of
the
positions on the panel and
to
designate the
third member from a
list
of volunteer arbitrators trained or experieil.ced in common ownership
issues.
a
The eeoc's Panel Chair Guidelines, adopted on September 2, 1998"caIl for the eeoc's
hearing panels to have attorneys experienced in common ownership issues as the panel chairs.
(See Exhibit 1.) One reason for this is· that most commissioners are not lawyers,
and
most ofthe
"lawyers who have served on the eeoc do not practice commllIiity association law. The eeoc
maintains a
list
ofvolunteer panel chairs on its website. The panel chairs are appointed by the
eeoc for two-year terms and can be reappointed for
subseq~ent
two-year terms. To be
considered by the eeoc for appointment a prospective panel chair submits a letter describing
his or her relevant experience and a resume. The eeoc considers a panel chair's past
performance.in determinlng whether or not to reappoint
him
or her. Of our 16 current volunteer
panel chairs, 8 practice before the eeoc and ofthose 8 almost all have represented both
. associations and individuals before
the
eeoc.
:
)
When a complaint is filed, eeoc
staff
works with the parties
to
set
up
mediation sessions
to
discuss informal settlements ofthe disputes. Most disputes are settled.
If
mediation is
unsuccessful or declined, eeoc staff submits the cqmplaint
to
the eeoc to determine whether
the dispute is within the eeoc's jurisdiction. lfthe eeoc accepts the dispute for
consideration, the chair assigns a hearing panel and
init;ial
hearing date.
In
some situations, the
matter
can be set for hearing before the Office of Zoning and Administrative Hearings (OZAH)
and the OZAH hearing officer, after holding the hearing, makes a recommendation for
consideration by the eeoc hearing panel assigned. The hearing panel then reviews the record
and issues the
final
decision.
Our panel chairs understand that they cannot accept assignments
if
they. or the law firms to
which they belong, have represented one ofthe parties in
the
past or currently represent one of
the parties in another matter.
When a matter is set for hearing, a summons is sent to each party which identifies the names of
the panel members and notes that a party may object to any selected panel member by notifYing
the eeoc within ten days and specifying the basis for the objection. (See Exhibit 2.) 'This
advice is reiterated in th€ booklet we send with each summons,
Haw
to
Prepare for Your
Hearing.
(Exhibit 3). The ceoe Chair will rule on any objections filed.
In
the approximately
)
)
not include a disagreement 1hat involves: (1) title
to
any unit or any
co~on
ar~
or element; (2) the percentage interest or vote allocable to a unit;
(3)
the interpretation or
enforcement of any warranty; (4) the conection ofan assessment validly levied
against
a party; or
(4)
the
judgment or discretion of a governing body in taking or deciding not
to
take any legally authorized action.
1
A dispute does
-2­
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0'
....
Letter
to
the Montgomery County Ethics Commission
April 4, 2014
50 disputes set for hearing over the past three years, only one person has filed a request for the
removal of a panel chair, and the attorneys involved both voluntarily withdrew.
To date, almost all
ceoc
decisions have been unanimous, and
all
the members of
a
panel
participate in the
making
of their panel's decision. After the hearing is completed and the panel
has
made its decision, the panel chair
drafts
and circulates a decision reflecting
the
consensus of
the panel for comment by the other panel members
and
the County Attorney. Once reviewed
and edited as appropriate, the panel issues its
:final
Decision and Order. Oecisions issued by the .
CCOC's hearing panels
that
are appealed to
the
Circuit Court are rarely overturned.
In
your letter you note that Section 19A-12(b) states:
Unless the Commission
grants
a waiver under subsection 19A-8(b), a public employee
must not
(1)
be employed by, or own more
than
one percent of, any business
that:
(A) is regulated by the County agency with which the public employee is
affiliated; or
(B) negotiates or contracts with the County agency with which the public
employee is affiliated; or
(2) hold any employment relationship that could reasonably be expected to impair .
th~
impartiality and independence ofjudgment ofthe public employee.
Status ofPanel Chairs as Public Employees
You identifY in your letter that a threshold question of whether volunteer panel members who
serve as arbitrators on panels are "public employees." You state that the Ethics Commission
believes that panel members are «public employees" as they exercise responsibility in
adjudicating matters brought to the CCOC. You note that panel members have long been
Considered "public employees" by County Executiye,regulation, as they are designated as
"public employees" required to file confidential finanCial 'disclosure reports pursuant ioArtic1e
IV of the Public Ethics Law. We agree. .' .
Section 19A-12(b)(1) No representation ofclient directly before panel
You then state that because volUnteer panel members are "public employees," representation by
volunteer panel members ofbusinesses regulated by the CCOC is likely prohibited by Section
19A-12(b)(1) of
the
Public Ethics Law. The Ethics Commission asserts
that
a business with a
matter before a
ceoc
panel is "regulated by the County agency
with
which the public employre
is affiliated." Therefore, the Ethics Commission believes volunteer panel members are
prohibited from representing businesses
with
a matter before a CCOC panel. We do not appoint
as panel chair an attorney who represents one of the parties appearing before the panel. .
As for being employed by a business regulated by
the
County agency, the
ceoc
has
always
viewed the attorneys that chair hearing panels as being employed by the law
finns
that
-3­
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..
Letter to the Montgomery County Ethics Commission
Apri14~
2014
compensate them for representing parties before hearing panels rather by the parties themselves.
Those law firms are not businesses regulated by the CCOC. They are strictly regulated by the
Maryland Court ofAppeals. In thf? rare instance whereby a panel chair attorney is compensated
directly by a community association as its employee,
we
believe that the exception under Section
19A-12(c)(3) would apply because panel chairs are required to file financial
di~closure
statements revealing their sources ofincome and the financial disclosure statements are placed
on file with the Ethics Commission.
Section 19A-12(b)(2) impartiality and independence of.judgment
,
,
You state
that
Section 19A-12(b)(2)'s reach is broader as "any employment relationship that
could reasonably be expected to impair the impartiality and independence ofjudgment ofthe
public employee" is prohibited. The Ethics Commission believes representation by' panel
memberS of clients before CCOC hearing panels that they are not currently sitting on is '
proJrlbited by 19A-12(b)(2). You identify
three
ways in which you believe
p~el
chairs may
be
affected. We address each concem in
tum
You opine that panelists who represent clients before other panels may be able
to
influence the
. resolution of matters
befo~
other panels by resolving matters that come before them in a way
that favors their clients. In support ofthis, you state
that
adjudicative bodies are frequently
influenced by how similar matters were decided even without formal reliance on precedence.
:
')
We do not believe fIlat volunteer panel chairs use their positions to influence the resolution of
matters before other panels, nor have
we
ever been presented with evidence
to
the contrary. The
fact that one hearing panel may be influenced by how a dispute involving similar set of facts that
was resolved by a different hearing panel
in
an earlier case occurs independently of whether the
earlier hearing panel was chaired by an attorney that represents clients before other CCOC
hearing panels. Section IOB-13(e) requires each hearing panel to apply the statutes and case law
that are relevant
to
the facts ofthe case. Therefore, even though a decision by one panel does not
create binding precedent for other panels,
ifthe
statutes and cases (fited in an earlier case are
useful
in
resolving a similar dispute in,another case,
it
is inevitable that
the same cases and
statutes
will
likely be relied upon
In
a Jater case.
In
addition, we note that beyond the panel
chair, each panel is composed oftwo other persons representing different interests
in
order
to
achieve balance.
.
You also express concern that panelists who represent clients before other panels could,
in
theory,
be
influenced by
the
prospect of gaining clients, such as a housing association with many
matters coming before the
ecoc,
in adjudicating matters when serving as a panelist. Again, we
note that Section lOB-13(e) requires eachheanng panel
to
apply the statutes and case law that
are relevant
to
the facts ofthe case.
In
addition, the County's Administrative Procedures Act
requires the
hearing
panels
to
issue detailed Findings of Fact and Conclusions of Law. The
Findings of Fact must
be
supported by credible evidence
in
the 'official record or they can be
reversed by the Circuit Court. The vague possibility ofbias must
be
balanced against
~
need
to
support the decision with evidence on record and
to
follow the relevant statutes and judicial'
precedents.
)
)
-4­
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" Letter
to
the Montgomery County Ethics Commission
April 4, 2014
..
Last, noting
that
CCOC panels are collaborative bodies where give and take between panel
members can be expected, you state
that
panel members appearing as attomeys before persons
with whom
this
give
and
take
has
occurred cannot be looked
at
in a vacuum. without regard for
other potential official interactions. You state that under these circumstances, the representation
ofclients by
ecoc
panelists could be reasonably expected to impair the impartiality and
independence ofjudgment ofthese public employees.
We do not believe
this
to
be a concern. CCOC members who serve on panels have experience
With their own associations, either as residents or representatives
and
have experience discussing
issues facing associations and their residents with the:full Commission.
Of
the 17-20 hearings
we hold each year, a CCOC commissioner might serve on 2 or 3 panels.
We have reviewed the most recent 34 decisions. OZAH conducted hearings for 3 ofthe cases
a:o-d a volunteer-panel-chair-Ied panel conducted hearings for the remaining 3l cases. All 3 .
recommendations
issued
by the OZAH hearing officers were in favor ofthe associations
involved in those proceedings. The CCOC hearing panels adopted all ofthose
recommendations.
Ofthe remaining 31 cases, 13
cases
involved panel chairs acting as advocates for one or the
other ofthe parties.
In.
12 ofthese cases, the attomey represented the association; in 1 the
homeoWner. Ofthese 13 cases, the parties represented by the panel chair/advocates prevailed in
4 cases, lost in 4 cases, and received split decisions in 5 cases. Ofthe 14 cases heard by our
panels, where an association was represented by an attorney who is not a volunteer panel chair,
the association prevailed in 8 cases,lost 4, and received split decisions in 2.
In
other words, our.
records do not support the supposition that panel chairs acting as professional advocates exercise
undue influence compared to
the
disputes in which other attorneys appear before the CCOC, or
compared
to
the results ofthe disputes that go to OZAH. We
again
note
that
beYGnd the panel
chair,
each panel is composed oftwo other persons representing different interests in order
to
achieve balance.
The
Commission has several mechanisms
in
place to ensure the impartiality and independence of
its.panel chairs.
The
attached Panel Chair Guidelines) which have been in effect for 16 years
require any person interested in serving as a panel chair to provide a description ofhis or her
relevant experience in addition
to
submitting a resume. This provides an opportunity for the
prospective panel chair
to
disclose any employment held prior
to
appointment as a panel chair.
Additionally, any party with a case before the CCOC may object to any person selected to serve
on a hearing panel, including a panel chair.
In.
response to that objection, the CCOC Chair may
replace that panel chair to avoid even the perception ofa conflict of interest. Beyond the CCOC,
attorneys are subject to
the
Maryland Rules ofProfessional Conduct, which provide very strict
guidelines requiring them to avoid conflicts of interest. .
As
explained above, we
do
not believe
that
our current practice is in conflict with the ethics law.
However
ifthe
Commission believes that:further clarification is needed, we would propose the
following amendment
to
Section 10B-12(c) of
the
cOunty Code as a way
to
clarifY the issue:
)
)
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Letter
to
the Montgomery County Ethics Commission
·'
April 4, 2014
(c)
Each panelist must not have any interest in the dispute
to
be heard._
Notwithstanding Section 19A-12, the
list
ofvolunteer arbitrators that chair panels under
subsection
.@
may include attorneys
that
represent parties before other hearing panels
convened 1.Ulder subsection.@1 However, an arbitrator must not chair
~
panel in which
~
:oot!Y
~
represented
Qy
an attorney employed
Qy
~
law:firm
that also employs the
arbitrator.
We hope this infor.mirtion is useful in helping you address this issue. Until resolved we are not
new assigning cases to the affected panel chairs. Even with referring some cases to the OZAH, .
we are concerned that the timeliness of our processing of cases
will
be affected by the loss of one
half ofour available volunteer panel chairs.
Please feel free to contact Peter Drymalsld,·at Peter.Drymalsld@montgomerycountymd.gov or
240-777-3716, if you have additioll.aI questions.
Sincerely,
E~{r/.'.~
1(;IJ'r
"
)
.
EIdbeth Molloy
Chair
Montgomeiy County
~mmission
on Common-Ownership Communities
cc:
Timothy Firestine, Chief Administrative Officer
Marc Hansen, County Attorney
Eric Friedman, Director of Consumer
AffairS
Steve Farber, Council Administrator
)
)
-6­
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..
PANEL CHAIR GUIDELINES
Adopted by the Montgomery County Commission on Common Ownership
Communities
Af> amended, December 2012
The Legislative Committee of the Commission recommends, and the
Commission hereby adopts, the following gujdelil}es and procePures:
PROCEDURES FOR PANEL CHAIRS
The Committee recommends that the Commission establish internal
procedures regarding the selection, terms and practices of the Panel Chairs as
follows:
.
A.
Term: Panel Chairs should be appointed by the Commission for two-year
terms. There shall be no liinitations on the number of terms a
Panel Chair may serve.
Appointment: Each person interested in serving as a Panel Chair must
submit a letter of interest describing his or her relevant experience,
together with a resume. The Commission will then consider these
materials at a regular monthly Commission meeting. The Commission
will
seek to cbmplete appointments in September of each year, but may
make appointments at any time should an interested person submit a
letter and resume, and·the Commiss·ion tJelieves there is a need for
additional Panel
Chairs: . ' .
.
'"
B.
'.
.
C.
ReappOintment: Each Panel Chair seeking reappointment
will
notify the
staff. However, any discussion of a Panel Chair's past performance will
be discussed at a close
meeting
in order to maintain all confidences.
Such closed meetings will be held in accordance with all open meetings
requirements as advised by the Commission's counsel. The Commission
staff will contact each panel chair at least one month before
th~
expiration
of the
Panel
Chair's term, to inquire whether that Panel Chair is interested
in reappointment and to remind the Panel Chair of the reappointment
procedures.
Qualifications: Each person applying as a Panel Chair for the first
time should be an attorney.
}
)
D.
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E.
Decision Timetables: According to the County Code, Section 108-13 and
Section
2A-10,
all panel decisions must be issued within 45 days of the
hearing
unless an extension is provided. The Commission is concerned
that decisions are issued in a timely manner, and
if
possible within the
45-day time limit. Toward this end, the Commission expects that Panel
Chairs and Comf.Tlissioriers will adhere to the following timefable when
issuing decisions:
(i)
(ii)
'~ii)
Up to
21
days for the Panel Chair to draft decision and send to
other Panel Members and Staff for review (no later than day
21).
Up to 5 days for Panel Members to send comments back to Panel
Chair and
~taff
(no later than day 26).
Up to 5 days for Panel Chair to consider comments, confer witli '
Panel MemberS and revise draft, decision (no later than day 45) .
Up to 14 days for Commission's attorney and Panel Members to
review and revise draft and issue in final (no later than day 45).
. (iv)
:
)
These procedures are intended for internal guidance only and are not
meant to be published as formal rules.
Amended December 5,
2012;
Septe~ber
1, 1999; adopted September 2, 1998.
)
),
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"
BY REGULAR AND CERTIFIED U,S. MAIL
SUMMONS, STATEMENT
OF
CHARGES, AND
NOTICE OF HEARING
MONTGOMERY COUNTY
COMMISSION ON COMMON OWNERSHIP COMMUNITIES
In
the Matter of Case No.
TO:'
,
.J
)
At its meeting on Wednesday, ,2014. 'the Montgomery County Commission on
Common Ownership Communities accepted jurisdiction of the above-referenced dispute.
The hearing has been scheduled for Wednesday. 2014,
at
6:30 p.m., in Room 225,
Council
Office Building, 100
Miuyland Avenue, Rockville, Maryland. The Complainant,
(name) alleges that the Respondent, (name), is/are in violation of the rules of the
community by
This letter is official notice of the jurisdictional decision of ,the Commission
pursuant to Montgomery County Regulation 10B.06.0L02.
If
you 'wish
to
submit
a
Request for Production of Documents or for Interrogatories pursuant to Montgomery
County Regulation 10B.06.01.04(b) and (c), you must serve them upon the other party
, within fifteen (15) days
of
the
date
of
this
notice, and send a copy
to
the Commission.
You must also submit
the
proposed Interrogatories to the Panel
Chair
for review and
approval.
Do
not contact the 1;'anel directly:
all
correspond~ce
,to the Panel should, be
addressed
to
the
Commission's sf;aff.'
.
..
You are hereby notified to bring
all
relevant documents* concerning this dispute
.
to
the
hearing.
If
you would like to have individuals subpoenaed
to
testify at the hearing, submit
your request to the Commission in
writing
within
:fifteen (15) days of the date of this
correspond~ce.
The Panel Chair
will
rule upon those requests.
Associations (condominium and homeowner associations and cOoperatives)
MUST be represented EITHER by legal counselOR by a duly-appointed member of their
board of directors; homeowners and unit owners may represent themselves or be
represented by legal counsel.
J)
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~.
")
2
In
reference
10
the public
hearing
process, please be advised that Section 2A-6 of
the Montgomery County Code,
-1994,
as amended, states in part that .
- The parties have the opportunity
to
present witnesses; cross-examine witnesses
and present supporting documentation;
- There are pre-hearing procedure requirements as set forth in Section 2A-7 of the
Administrative Procedures Act;
- The parties may request a continuance of the hearing by written request
if
made
not less
than
five (5) days prior
to
the date of hearing;
- A verbatim record and transcript of the hearing
will
be
made
where said record
and transcript is required by
laW;
or:
in
the alternative, that any party may request
that
such record of
the
transcription be made at his or her expense; and .
- There
is
a right, subject
to
the provision ofthe state public information law,
10
inspect and copy
at
the requesting PartYs own expense documents of any party,
administrative authority or investigating governinental agency involved where'
such inspection is not otherwise prohibited by law.
/
)
- Hearings are open
10
the public.
- The Commission may summons any witness
it
deems necessary, and the failure
'to
comply with any Summons, including this one, constitutes a vioiation of
Chapter lOB of the Montgomery County
Cod~
(1994,
as amended). The
Commission may extend the time for any hearing and for the issuance of any
findings, decisions and orders.
-You 'must send a copy of
any
motion or request
that
you make
to
the
Commis~ion
,to
the other party. Your motion or request must state
that
you sent
the copy
and
il?-e date you sent the
co~y
to
~e
other
p~
-Any communication you make with the
staff
concerniD.g the substance of
this
dispute
will
be shared with the other party.
. Although it
is
not required, each party is strongly encouraged to limit the presenta­
tion of its case or defense
to
one hour or shorter.
. Enclosed is a copy of the original complaint
form,
and at or before the public
hearing, the staff will send you a computer
link
to the digital copy of the case file
containing
the
proposed documents to' be entered
into
the
record.
(This
will
be called
Commission Exhibit
1.)
If
you intend to enter
into
evidence any documents not already
included
in
Commission Exhibit 1, please bring a
total
of six (6) copies of each such
document so
that
the
other party
and
three
panel members can each receive a copy.
)
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---_._._-­
3
The hearing panelists are (names), Conimissioners, and (name)
will
be the
Panel Chair. .ff-yoI,l9bjecttO__
~y)elec:ted
panel member,
YQU
~ust
notify
this office,
in
writing, withm'ten
(Hi)
"day; from
the
date ofthis
letter~
You must address your objection
to
Elizabeth Molloy, Chairperson, Commission on Common Ownership
. CommUnities,
100 Maryland
Avenue,
Room-
330,
Rockville,
MarYland
20850,
and
must specifY the basis for the objection and send a copy of your objection to the parties to
the dispute. The
Commi~ion
Chairperson
will
rule upon any such objections.
Sincerely.
'*
Peter Drymalski
Commission Staff
Encl: sent by
certified
mail only,
ex1ra
copies available on request:
complaint
Preparmgfor Your Commission on Common Ownership Communities l1earing
Chapter lOB, Montgomery County Code
and
Executive Regulation 10B.06.01
Certificate ofService
I certifY that on (date), 2014, I mailed a copy oftbis Summons andNotice ofHearing to
Complainanl/Respondent at the address above by regular First-Class
u.S.
Mail and by
certified
First-Class U.S. Mail.
Peter
Drymalsld,
Investigator
Office of Consumer Protection
100 Maryland Avenue, Room 330
Rockville, Maryland 20850
*
What
docum~ts
are relevant will
~epend:
on the specmb complaint
and
the
defe~es
to
it
Sonie exru;nple,S- are: 1. in a dispute' over' whether
the
homeowner is
'in
violation of an
architectural rule, thf1U relevant documents include- notices of violation, rulings of the
board and architectural committee, photographs, and copies of the rules allegedly
violated. 2.
in
a dispute over official actions
taken
by a board of directors, relevant
documents include copies of the by-laws and covenants, meeting agendas, minutes of the
meetings, correspondence and notices.
)
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-~
"
.'
'~/'''''1I
1..
T1t"£
SUMMONS
\
o
2.
C OMMISSIONEXHIBIT:t.
The hearing process begins
when the
eeoc
votes to accept a
dispute and refer it to a hearing pan­
el. The
eeoc
staff
then issues a
Summons
and
Statement ofCharg­
es.
The
summons
is an order from
the CCOC to both parties to come to a hearing and to bring.
relevant documents with them.
The summons contains important information,
including:
• The date
an~
place of the hearing;
• . the issues to be resolved at the hearing;
,*.
the names of the 3 members of the hear.ing panel;
'¥r
~
'f,-·
In
order to make
it
easier for both parties to prepare for the
hearing, and
to
simplify the record, the CCOC prepares an official
record of the case called Commission Exlu'bit One C1CE1). The staff
prepares
eEl
as
soon
as
it issues the summons, and
this
file
contains the history of the dispute up
to
the date of the summons in
chronological order, beginning with the
filing of the complaint. It includes the
complaint, the answer, relevant· doc­
uments filed by the parties, the govern­
ing documents of the association, official
documents drafted by the
staff
during
the case, and other information which
the staffbelieves is relevant to the dis­
pute. When CEl is ready the
staff
posts it
ooline for the use ofthe parties and the
password,
hearing panel. (Access to the file is protected by a
which the staff provides only to the parties and the panel.)
At the
b~aring,
the panel
chair
will
introduce CEl into
evidence. The parties
can
then object for good cause to any doc-'
ument contained in CEl. Likewise, the parties
can
introduce into
evidence, as p8.rt of their own case presentations, any
docu­
ments which are not already
part
of CEl. A party who wishes to in­
troduce new documents, not already part of CE1, must bring 5 cop­
ies of ea,ch
such
documents to the hearing for the official record and
for the use of the hearing panel and the other party.
Both parties
can
use
GEl
as part of their own cases simply by
referring to the proper page number of CE1.
This
way, the parties
do not have to bring numerous documents to the hearing.
The staff sends the
link
to the online copy of CEl several
weeks before the hearing. Take the time to review it carefully and
3
the right to obj ect to a panel member for good cause;
• the right to conduct discovery (see below);
• the right to request subpoenas;
• Other rights under the County's Ad:ministrative
Procedures
Act.
Read the summons carefully,
and use it to begill
planning for your hearing..
The summons comes with a copy of the original com­
plaint form and copies of Couhty Code Chapter
loB
and Code
of Montgomery County Regulation (COMCOR) Section.
loB.o6;Ol
Read these also. The Regulation
gives
you
de­
tailed information about what happens during the hearing
process.
~
2
"
f&X
lot
115
I
i
.3
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MONTGOMERY COUNTY ETHICS COMMISSION
Kenita V. Barrow
Chair
Mark
L.
Greenblatt
Vice Chair
April 10, 2014
Elizabeth Molloy
Chair
Commission on Common Ownership Communities
c/o The Montgomery County Office of Consumer Protection
100 Maryland Ave, Suite 300
Rockville, MD 20850
Dear Ms. Malloy:
Thank you for your letter of April 4, 2014, responding to the Ethics Commission's (MCEC)
letter of February 4,2014. The MCEC considered your letter at its Public Meeting held on April
8. The MCEC appreciates the thoughtful consideration of the Commission on Common
Ownership Communities ("CCOC") to the issues raised by the MCEC and, furthermore, the
interim steps taken by the CCOC to address the concerns raised by the MCEC.
In
particular, the
MCEC recognizes the step taken to stop assigning new cases to panel chairs who represent
parties before other CCOC panels pending resolution of the issues raised by the MCEC.
After considering your letter, the MCEC issues this guidance which interprets Chapter 19A of
the Montgomery County Code.
The MCEC has been notified, informally and in writing, by unrelated parties of potential conflict
of interest concerns related to hearings convened by the Chair of the CCOc. Panel chairs
appointed by the Chair of the CCOC can represent clients before CCOC panels to which they
have not been assigned. After consideration of the applicable laws, the MCEC concludes that
representation of clients by CCOC panel chairs before the CCOC is inconsistent with the
Montgomery County Public Ethics Law, Chapter 19A.
In
accordance with Chapter
lOB
of the Montgomery County Code, the CCOC has established a
list of volunteer panelists made up of persons who are "trained or experienced in common
ownership community issues."The list of volunteer panelists is almost exclusively comprised of
lawyers who practice in Montgomery County. Many of these lawyers represent clients in
matters involving communities of common ownership and advertise that they represent
homeowners associations and residential condominium associations. Your letter indicates that in
12 of 13 recent cases involving panel chairs acting as attorneys for a party before a CCOC panel,
Montgomery County Ethics Commission
--------".--:----~.-----------.~-.-.---~-------
100 Maryland Avenue, Room 204, Rockville, MD 20850
OFFICE 240-777-6670, FAX 240-777-6672
32
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Commission on Common Ownership Communities
Page 2, 4/10/2014
the panel chair/attorney represented the homeowners association.
In
just one of the cases, the
panel chair/attorney represented the homeowner.
Section 19A-12 provides specific limitations on the activities of "public employees":
(b)
Specific restrictions.
Unless the Commission grants a waiver under subsection
19A-8(b), a public employee must not:
(1)
be employed by, or own more than one percent of, any business that:
(A) is regulated by the County agency with which the public employee is
affiliated; or
(B) negotiates or contracts with the County agency with which the public
employee is affiliated; or
(2) hold any employment relationship that could reasonably be expected to impair
the impartiality and independence of judgment of the public employee.
A threshold question is whether volunteer panel members who serve as arbitrators on panels are
"public employees." The MCEC concludes that panel members are "public employees" as they
exercise responsibility in adjudicating matters brought to the CCOC. Your letter indicates that
you agree with this conclusion.
Because volunteer panel members are "public employees," volunteer panel members may not be
employed by businesses regulated by the CCOC pursuant to Section 19A-12(b)(1) of the Public
Ethics Law. Your letter suggests that attorneys representing clients before the CCOC are not
"employed by" their clients, but are employed by, in the typical case, a law firm; you believe the
19A-12(b)(1) restriction does not apply because the CCOC does not regulate law firms.
I
The
MCEC concludes that the panel chairs are "employed by" the clients they represent before the
CCOC for purposes of this guidance. 19A-4(f) defines "employer" as meaning "any person who
pays or agrees to pay compensation for services rendered." A client who pays for legal services
is an employer, and for purposes of 19A-12(b)(1), the lawyer who provides the legal services for
that client is deemed to be "employed by" that client.
In
addition, the MCEC concludes that a
Your letter states "the CCOC has always viewed the attorneys that chair hearing panels as being
employed by the law firms that compensate them ... rather than by the parties themselves." This position
is belied by the 1994 MCEC opinion addressing an application for a waiver of section 19A-12(b) for a
CCOC Commissioner seeking to engage in representation of an ROA before a CCOC panel. The ROA
client (and not simply the attorney's law practice) was considered to be the "employer" as 19A-12(b) was
deemed to apply.
I
Notably, the MCEC's Advisory Opinion 1994-7 stated that the MCEC would not issue a waiver of the
prohibition of Section 19A-12(b) to the member of the CCOC because the statutory waiver standard could
not be met. The opinion observes the "actual conflict that would occur in the event that the decision of
the COCOC were appealed to the Circuit Court. Upon appeal, if you were to continue your
representation, you would be taking a position adverse to the COCOC and the County, which creates an
actual conflict of interest"
Montgomery County Ethics Commission
100 Maryland Avenue, Room 204, Rockville, MD 20850
OFFICE 240-777-6670, FAX 240-777-6672
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Commission on Common Ownership Communities
Page 3,
4/1012014
business with a matter before a CCOC panel is "regulated by the County agency with which the
public employee is affiliated." Therefore, the MCEC concludes that volunteer panel members
are prohibited from compensated representation of businesses with a matter before a CCOC
panel.
Section 19A-12(b)(I)'s prohibition only extends to outside employment by businesses. Section
19A-12(b)(2)'s reach is broader as "any employment relationship that could reasonably be
expected to impair the impartiality and independence of judgment of the public employee" is
prohibited. The MCEC concludes representation by panel members of clients before CCOC
hearing panels that they are not currently sitting on is prohibited by 19A-12(b)(2). Panelists who
represent clients before other panels may be able to influence the resolution of matters before
other panels by resolving matters that come before them in a way that favors their clients:
adjudicative bodies are frequently influenced by how similar matters were decided even without
fonnal reliance on precedence? Also, panelists who represent clients before other panels could,
in theory, be influenced by the prospect of gaining clients, such as a housing association with
many matters coming before the CCOC, in adjudicating matters when serving as a panelist.
Lastly, CCOC panels are collaborative bodies where give and take between panel members can
be expected. Panel members appearing as attorneys before persons with whom this give and take
has occurred cannot be looked at in a vacuum without regard for other potential official
interactions. Under these circumstances, the representation of clients by CCOC panelists could
be reasonably expected to impair the impartiality and independence of judgment of these public
employees. The MCEC is cognizant of the facts and arguments iterated in your letter supporting
your opinion that conflicts of interest are addressed and do not present an issue in connection
with CCOC panels' operations. Nonetheless, the MCEC has received four separate sets of
allegations that the process employed by the CCOC seems unfair.
In
light of the construct of the
County's Public Ethics Law, the MCEC agrees that the relationships involved could be
reasonably expected to impair the impartiality and independence of judgment of these public
employees. The MCEC wishes to make clear that it is not aware of any impaired judgment of
any individual in connection with a particular CCOC panel decision - a finding that there is a
reasonable expectation of an impairment of judgment due to an institutional and systemic
approach is different from making a finding that an impairment has occurred in an individual
case. Moreover, the MCEC recognizes that the volunteer panelists affected by this opinion have
offered their services
to
the County pursuant to a regimen established by others.
The MCEC realizes that it may well have been the expectation, when the CCOC authorizing
legislation was enacted, that the volunteer panel chairs would include lawyers practicing before
other CCOC panels. However, neither the CCOC authorizing legislation nor the Public Ethics
"Although the rulings of the hearing panels are not binding on other hearing panels in different cases
(they are, however, binding on the parties to the case resolved by the rulings), the panels' explanations of
the laws and the legal principles are a valuable source of infonnation for those who seek guidance on the
problems facing them as members or directors of the County's community associations." The CCOC
Staffs GUIDE TO THE PROCEDURES AND DECISIONS of the MONTGOMERY COUNTY
COMMISSION ON COMMON OWNERSHIP COMMUNITIES, November 2012.
2
Montgomery County Ethics Commission
100 Maryland Avenue, Room 204, Rockville, MD 20850
OFFICE 240-777-6670, FAX 240-777-6672
I'
J
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Commission on Common Ownership Communities
Page 4,
4/10/2014
Law included a provision that provide an exception for the CCOC panels from the requirements
of the Public Ethics Law.
At its April 8, 2014, meeting the MCEC considered the amendment to Section lOB-12(c)
suggested in your letter. The MCEC agrees that the amendment would resolve the inconsistency
between the CCOC's practices as regards panel chairs representing clients before other panel
chairs and current County law; but, the MCEC does not support this proposal as, in the MCEC's
view, representation by panel chairs of clients before other CCOC panels inherently raises an
appearance of a conflict of interest, whether it has been made legal or otherwise.
Should you have any questions, please refer them to Robert Cobb, Counsel to the MCEC at 240­
777-6674.
Sincerely,
#V~
Kenita Barrow
Chair
Montgomery County Ethics Commission
cc: Craig Rice, Council President
Isiah Leggett, County Executive
Timothy Firestine, Chief Administrative Officer
Marc Hansen, County Attorney
Eric Friedman, Director of Consumer Protection
Steve Farber, Council Administrator
Montgomery County Ethics Commission
-~,-~~-~-~,,------~----~,~-------
100 Maryland Avenue, Room 204, Rockville, MD 20850
OFFICE 240-777-6670, FAX 240-777-6672
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MONTGOMERY COUNTY ETHICS COMMISSION
Kenita V. Barrow
Chair
Mark
L.
Greenblatt
Vice Chair
August 21, 2015
Advisory Opinion 15-08-011
Rand Fishbein, Ph.D.
Chair, Commission on Common Ownership Communities
This is in response to your letter of July 9, 2015, requesting, on behalf of the Commission
on Common Ownership Communities (CCOC), among other things, a waiver of
restrictions on outside employment as those restrictions apply to volunteer Panel Chairs
of the CCOC in quasi-judicial hearings of the CCOC.
In
particular, the CCOC has
requested that the Ethics Commission:
1. Approve new CCOC Ethical Standards for Hearing Officers on CCOC Panels.
2. Approve a new CCOC Conflict of Interest Disclosure form for attorneys who
practice before the CCOC Hearing Panels.
3. Approve a Litigant Consent Form permitting parties, by mutual consent, to permit
an attorney who practices before the Commission to serve as a Panel Chair in
their case.
4. Grant a class waiver under Section 19A-8 ofthe County Code for attorneys who
practice before the CCOC so they may also act as Panel Chairs without being in
violation of 19A-12(b).
The request of the CCOC is made in the context of the Ethics Commission's issuance of
"Guidance on Representation of Clients before the Commission on Common
Ownership Communities by CCOC Panel Chairs" on April 10, 2014. That guidance
found that representation by volunteer panel members of clients before CCOC hearing
panels that they are not currently sitting on is prohibited by 19A-12(b)(2) of the
Montgomery County Public Ethics Law.
The Ethics Commission has closely reviewed the requests in your July 9 letter with
particular focus on the request for a waiver; the Commission has considered the
presentations you and other representatives of the CCOC made at the Ethics
Commission's public meetings on June 17 and July 21 of this year; and the Commission
is appreciative of the extensive thought and effort that the CCOC has given to ensuring
MONTGOMERY COUNTY ETHICS COMMISSION
100 MARYLAND AVENUE, ROOM 204, ROCKVILLE, MARYLAND 20850
OFFICE: 240.777.6670 FAX:
240.n7.6672
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CCOC, August 21, 2015
Page 2 of6
that CCOC hearing panels operate in a manner that is balanced and fair. After
considerable thought and deliberation, however, the Commission denies the request for a
waiver from the application of 19A-12(b)(2) to volunteer Panel Chairs with regard to
their private representation of parties to CCOC hearing panels. The Commission believes
the practice the CCOC would like waived is inherently inconsistent with the County's
ethics law; if the practice is to be authorized, it must be authorized by County legislation.
As the Commission is not issuing a waiver, the request for approval of a consent is moot.
As for the requested approvals for new Standards and Disclosure Form, the Commission
is not statutorily authorized to "approve" supplemental standards of conduct for other
agencies in County government. Presumably, as there is no statutory authority for the
issuance of such standards, the standards would not have the force and effect of law. The
Commission is authorized to issue regulations under the procedure associated with
method (2) under County law, but only to implement the Public Ethics Law; there is no
suggestion of implementing the proposed Standards as regulations under method (2).
This said, the Ethics Commission is not opposed to the issuance of internal guidance by a
County agency, as long as the standards are not inconsistent with the County's ethics
laws or other law. The Commission notes that in the draft Standards you presented there
is no reference to or summary of applicable County law on the subjects of conflict of
interest as regards personal financial interests, outside employment activities, and post­
employment activities, or with respect to disclosure of confidential information, ex parte
communications, soliciting and acceptance of gifts, political activities and financial
disclosure. These are the requirements covered by County law the violation of which can
be addressed through civil and criminal sanction. The Commission believes there would
be substantial opportunity for confusion among volunteer panel chairs who might
conclude that the Standards you have proposed are the primary rules addressing their
conduct to the exclusion of applicable law.
Waiver Request
The waiver standard applicable to the CCOC's request for a waiver of 19A-12(b) is found
in 19A-8(b).
19A-8(b) provides:
(b) After receiving a written request, the Commission may waive the
prohibitions of subsection 19A-12(b) if it finds that:
(1)
the waiver is needed to ensure that competent services to the County are
timely and available;
(2) failing to grant the waiver may reduce the ability of the County to hire or
retain highly qualified public employees; or
(3) the proposed employment is not likely to create an actual conflict of
interest.
The Ethics Commission's decision whether to grant a waiver pursuant to 19A-8(b) is
inherently discretionary.
MONTGOMERY COUNTY ETHICS COMMISSION
100 MARYLAND AVENUE, ROOM 204, ROCKVILLE, MARYLAND 20850
OFFICE: 240.777.6670 FAX:
240.m.6672
37
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CCOC, August 21,2015
Page 3 of6
The CCOC has provided information supporting the notion that a waiver is needed to
bring on competent persons to perform the position of panel chairs. Representations have
been made by the CCOC that recruiting competent professionals (without the 19A­
12(b)(2) conflict) to perform the requested services has been very difficult; the CCOC
has also indicated that obtaining retired members of the judiciary (one alternative that has
been considered) is very difficult. The CCOC has vigorously expressed that the waiver is
needed to ensure competent services to the CCOC. To the same extent, the CCOC has
indicated that its ability to operate the CCOC hearing panels has been severely impaired
by the Ethics Commission April 2014 guidance.
In the view of the CCOC, its panel chairs do not have an actual conflict of interest in
representing parties before other panels. The CCOC contends that the high bar of
professional ethics for Maryland lawyers and the idea that said lawyers are not going to
compromise either their ethics or their careers to advance personal interests ahead of the
duties and roles they have as Panel Chairs protects the integrity of the CCOC process and
ensures the integrity of those serving as panel chairs.
I
Furthermore, the CCOC has
expressed that the additional steps taken (including the new CCOC Ethical Standards for
Hearing Officers on CCOC Panels, the new CCOC Conflict of Interest Disclosure form
for attorneys who practice before the CCOC Hearing Panels, and the new Litigant
Consent Form) would all serve to further protect the CCOC hearing panel process from
actual conflicts of interest.
Notwithstanding the positions taken by the CCOC, the Ethics Commission is not inclined
to exercise its discretion to issue a waiver ofthe requirements of 19A-12(b)(2).
The Ethics Commission April 2014 guidance made clear the Commission believed
"representation of clients by CCOC panel chairs before the CCOC is inconsistent with
the Montgomery County Public Ethics Law, Chapter 19A." The Commission described
the activities of Panel Chairs as lawyers for parties before CCOC panels in terms of the
relati ve balance of representation of homeowners versus residential associations:
The list of volunteer panelists is almost exclusively comprised of lawyers who
practice in Montgomery County. Many of these lawyers represent clients in
matters involving communities of common ownership and advertise that they
represent homeowners associations and residential condominium associations.
Your letter [letter from Elizabeth Malloy to Kenita Barrow dated April 4, 2014]
indicates that in 12 of 13 recent cases involving panel chairs acting as attorneys
for a party before a CCOC panel, the panel chair/attorney represented the
homeowners association. In just one of the cases, the panel chair/attorney
represented the homeowner.
The
eeoc
provided no support for this assertion. Such support may have included the volunteer attorney
panel chairs seeking an opinion of the Maryland State Bar Association on the propriety of representing
clients before the quasi-judicial agency for which the same attorneys serve as panel chairs.
1
MONTGOMERY COUNTY ETHICS COMMISSION
100 MARYLAND AVENUE, ROOM
204,
ROCKVILLE, MARYLAND 20850
OFFICE:
240.m.6670
FAX:
24D.7n.SS72
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CCOC, August 21,2015
Page 4 of6
This imbalance of representation evidenced concerns that institutional biases (rather than
any intentional act) would influence the adjudicative process. These concerns were
identified in the Ethics Commission guidance as follows:
1. Panelists who represent clients before other panels may be able to influence the
resolution of matters before other panels by resolving matters that come before
them in a way that favors their clients: adjudicative bodies are frequently
influenced by how similar matters were decided even without formal reliance on
precedence.
2. Panelists who represent clients before other panels could, in theory, be influenced
by the prospect of gaining clients, such as a housing association with many
matters coming before the CCOC, in adjudicating matters when serving as a
panelist.
3. CCOC panels are collaborative bodies where give and take between panel
members can be expected. Panel members appearing as attorneys before persons
with whom this give and take has occurred cannot be looked at in a vacuum
without regard for other potential official interactions. Under these circumstances,
the representation of clients by CCOC panelists could be reasonably expected to
impair the impartiality and independence of judgment of these public employees.
In
consideration of whether a waiver should issue, the Commission addresses each of
these concerns with reference to the Council "findings" in the CCOC's enabling
legislation:
The Council finds that there is often unequal bargaining power between
governing bodies, owners, and residents of homeowners' associations, residential
condominiums, and cooperative housing projects. . . . Owners and residents in
common ownership communities require the protection of democratic
governance.
In
furtherance of this goal, the Council finds a need to regulate ...
resolution of disputes with adequate due process protections ....
1. Potential for Resolving Matters
In
Ways That Will Benefit Clients
The proposed solutions do not materially address the concern that Panel Chairs will be
institutionally biased to decide matters in a way that creates precedence in a manner that
may favor the persons they represent contemporaneously and in the future. There is
some legitimacy to questioning the level of this risk: the CCOC hearing decisions are not
required to be precedential, so a hearing panel that considers a subsequent "Case B" that
is similar to "Case A" that was previously adjudicated by an attorneylPanel Chair
representing a party in Case B will not be bound by the Case A decision.
In
addition, one
might question whether facts in two cases would be sufficiently similar to even consider
whether the Case B decision could influence the decision in Case
A.
Accordingly, the
attorney who was the Panel Chair in Case A would be unlikely to be tempted to rule in
Case A in a way that would favor a client in a future Case B. On the other hand, the
MONTGOMERY COUNTY ETHICS COMMISSION
100 MARYLAND AVENUE, ROOM 204, ROCKVILLE, MARYLAND 20850
OFFICE:
240.7n.6670
FAX:
240.n7.6672
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CCOC, August 21,2015
Page 5 of6
institutional bias created in a person's representing and arguing on behalf of clients who
are predominantly on one side of a set of issues could reasonably be expected to
influence that person's perspective in cases where that person intends to be a neutral
adjudicator of issues. Would a defendant in a criminal matter want to have his case
judged by a current prosecutor? Would a prosecutor want a prosecution decided by a
judge who currently handles only criminal defense work?
2. Spector of Gaining Clients, Particularly Housing Associations
The County's ethics law prohibits public employees from using the prestige of office for
private gain
(19A-14)
and more specifically being hired by persons with business before
the public employee's agency.
In theory, attorneys volunteering to be Panel Chairs who represent parties back to the
CCOC Panels could be motivated by the prospect of handling themselves in a manner
that is conducive to gaining clients. It is noteworthy that housing associations are likely
to have a much greater need for legal services than an individual homeowner and would
be more attractive for this reason to have as clients. Noting also, the reported prevalence
of panel chairs representing housing associations (as they did in 12 of 13 cases as
mentioned above), it seems that panel chairs would have an economic incentive to act in
such a way as to not offend the panel chair's professional interests in representing
housing associations. This creates an institutional bias toward favoring housing
associations.
2
We note each chair would be required by the CCOC's Standards to avoid circumstances
creating "a perceived or actual conflict of interest." The Commission also observes that
various mechanisms, such as requirements in terms of completing matters a certain time
before being appointed a panel chair or beginning a new representation before a CCOC
panel might tend towards addressing the theoretical issue of panel chairs trying to
advance their professional interests through being a panel chair, but the Ethics
Commission believes the ethics law, for good reason, does not allow public employees to
try to advance their private interests through the conduct of their official positions.
3. Panel Members
a"l
Insiders Whose Relationships with other Insiders May Suggest
a Process Imbalance
There is no way to avoid the appearance of incremental advantage that accrues from
being a "person inside the tent". This appearance exists when a CCOC panel volunteer
represents a party before a CCOC paneL Creating temporal separation that separates a
volunteer Panel Chair from their role as practicing attorney for clients before CCOC
panels could assist with the appearance issues but not eliminate them. To the
2
The statistics reported in Ms. Malloy's Jetter of April 4, 2014, regarding case outcomes suggest that no
bias has actually occurred; however, the sample of cases is small and the variables associated with the cases
could explain the results. The framework desired by the
eeoc
promotes institutional bias whereas the
eeoe
mandate is towards a leveling of bargaining power for residents.
MONTGOMERY COUNTY ETHICS COMMISSION
100 MARYLAND AVENUE, ROOM 204, ROCKVILLE, MARYLAND 20850
OFFICE: 240.777.6670 FAX:
240.n7.6672
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CCOC, August 21,2015
Page 6 of6
Commission, representing parties before colleagues will always create an appearance of
gaining an advantage in an adjudicative process.
The Ethics Commission believes the representation of clients by public employees to the
very body the public employees serve by deciding similar cases is inherently conflicting,
and not appropriate for a waiver.
Lack of Suitability of a Class Waiver
At the public Ethics Commission meeting on June 17, representatives of the CCOC told
the Ethics Commission that volunteer Panel Chairs who would be representing parties
before CCOC hearing panels frequently represent both residents and homeowners
associations.
3
The Ethics Commission believes that while analyzing the make-up of
represented clients is helpful in assessing the overall degree of institutional imbalance
evidenced by the panel chairs representing clients before CCOC panels, it is not
dispositive as to individual panel chairs, which is important in the consideration of the
issuance of a class waiver.
If
some panel chairs represented only homeowner
associations as opposed to both homeowner associations and homeowners, any rationale
that there was balance to representative activity by panel chairs in general would fail as to
those panel members.
Notwithstanding the great effort to establish systems to protect litigants through
additional ethics rigor, policies, and consents, the waiver the CCOC requests would allow
panel chairs whose business is representing homeowners associations to sit in judgment
of disputes between homeowners and homeowners associations. This strikes the
Commission as a fundamentally flawed construct for a class waiver.4
For the reasons stated, the Ethics Commission declines to issue the requested waiver.
The Commission is hopeful that the effort the CCOC has put into managing its processes
to ensure the equality and fairness in CCOC proceedings have been of benefit
notwithstanding the Commission's unwillingness to grant the requested waiver. The
Commission also appreciates the considerations that the CCOC has shown to the
Commission in the addressing of this difficult issue.
For the Commission:
J/wl~'.~~
Kenita V. Barrow, Chair
This representation is difficult to reconcile with the statistics reported in the Malloy letter (12 of 13 recent
instances involved the representation of homeowners associations by attorneys who were volunteer panel
chairs).
4
The lack of suitability for a class waiver does not stand as encouragement for the application for the
issuance of individual waivers. The three enumerated concerns above would also be present in the
consideration of an individual waiver, even where an individual could demonstrate that the individual
represented both residents and homeowner associations.
3
MONTGOMERY COUNTY ETHICS COMMISSION
100 MARYLAND AVENUE, ROOM 204, ROCKVILLE, MARYLAND 20850
OFFICE: 240.777.6670 FAX: 240.777.6672