Artificial Intelligence, or AI, has seemingly become an everyday term these days. People are using AI to write resumes, create rough drafts of stories based on variables that the end-user inputs, and also perform all types of tasks for personal and professional use … and … it’s evolving (quickly!). But, as I learned from an awesome acronym from my computer programming (go Basic, Fortran and Pascal!) classes way back in the stone age … GIGO. Wait, GIGO? What does this mean? Quite simply: “garbage in, garbage out“.
In the context of AI utilized in the provision of legal services, it means that the information and data that AI is gathering and aggregating from the internet for attorneysto use in real-world (i.e., not “AI-world”) court filings is oftentimes replete with utter and absolute garbage – including but not limited to absolutely incorrect legal analyses and [caselaw] summaries and citations, and other big “no-nos” for attorneys – which, as you may have already guessed, is a massive problem not just for attorneys and their law firms, but also for the clients of these lawyers and law firms.
About a week ago, on August 19, 2024, the Honorable Karoline Mehalchick, a United States District Judge for the Middle District of Pennsylvania, issued a Civil Practice Order entitled “Use of Generative Artificial Intelligence”, which provides as follows:
Increased use of Artificial Intelligence (“AI”), particularly Generative AI(including, but not limited to, OpenAI’s ChatGPT or Google’s Bard), in the practice of law raises a number of practical concerns for the Court, including the risk that the generative AI tool might generate legally or factually incorrect information, or that it might create unsupported or nonexistent legal citations. As such, any party, whether appearing pro se or through counsel, who utilizes any generative AI tool in the preparation of any document to be filed in any matter pending before Judge Mehalchick, must include with the document a Certificate of Use of Generative AI in which the party must disclose and certify:
The specific AI tool that was used;
The portions of the filing prepared by the AI program; and
That a person has checked the accuracy of any portion of the document generated by AI, including all citations and legal authority.
What exactly does this mean? It means that if your Association’s attorneys/law firms are representing your Association in a matter in front of Judge Mehalchick, they must certify that AI was used (and which type(s)), identify which portions of the filling are prepared by AI, and that someone (a real live person – go figure!) checked the accuracy of any portion of the filing prepared by AI, including all citations and legal authority. A failure to do so may result in sanctions.
While this Civil Practice Order only applies to matters in front of Judge Mehalchick in the [federal] District Court for the Middle District of Pennsylvania, Community Association attorneys, and their clients, throughout all of Pennsylvania, as well as virtually (no pun intended) in every other jurisdiction in this country, should understand that all of this is coming to a courthouse near you … and soon. Judges do not want to deal with GIGO filings in their courtrooms, so attorneys and law firms should take heed of the risks associated with the use of AI in legal practice – NOW.
If you’ve been paying attention, Hoffman Law LLC previously advised of updates to the Pennsylvania Breach of Personal Information Notification Act” (“BPINA”) in 2022/2023 in a prior Blog post found here. This Blog post is an update to same.
NEW:
Pennsylvania Senate Bill 824 (SB 824) changed the BPINA in numerous ways, and the changes become effective on September 26, 2024. We will summarize the recent changes provided by SB 824 below, not in its entirety, but as it may apply to/impact Community Associations.
1.NOTIFICATION OF BREACH. BPINA used to require notification to credit reporting agencies when 1,000 or more PA residents were impacted in the event of a breach. SB 824 brings that number of impacted residents down to 500 or more PA residents.
2. CREDIT REPORTING/MONITORING. SB 824 requires that qualifying entities provide impacted PA residents with access to a credit report and credit monitoring services, free of charge, if the following apply:
a. there was a breach of the “security of the systems” as defined by PA law; and
b. the data accessed as a result of the breach included the individual’s name (first and last name, or first initial and last name) in combination with their SS #, bank acct. # or driver’s license/state identification card #.
If the two aforementioned requirements have both been triggered, the Ass’n must provide the impacted PA individual with access to an independent credit report from a consumer reporting agency if the individual is otherwise not able to obtain an independent credit report free of charge. The Ass’n must also provide the impacted PA individual with an offer of twelve (12) months of credit monitoring services, and advise that same is available free of cost.
3. PA Attorney General. SB 824 requires that an Ass’n notify the Pennsylvania Attorney General’s Office (PA AG) whenever it provides notice of a breach under PA law to more than 500 residents of the Commonwealth (used to be 1000!). The notification to the PA AG must be provided at the same time of the notice provided to impacted individuals, and must include the following information (if known at that time):
Ass’n name/location;
Date of breach;
Summary of incident that led to breach;
Estimated total # of impacted individuals; and
Estimated total # of impacted residents of PA.
Finally, we still recommend that community associations review BPINA as amended, as Act No. 33 of 2024 (June 28, 2024), which can be found here, and discuss with their counsel, managing agents, and/or any service providers that handle personal information (especially association software providers), and confirm proper insurance coverage with association insurance professionals. As it relates to insurance, community associations should obtain adequate cyber-liability insurance to offset risk and cover a breach incident (it is noted that the cost of proper notification is tremendous, especially if the breach (now) involves notification to over 500 persons at one time (because all consumer credit reporting agencies must also be notified, as well as the Pennsylvania Attorney General’s Office).
There’s a chance that we might fall apart before too long
(We Can Work It Out, The Beatles)
In my career as a community association attorney, I can’t begin to count the number of times I have heard from clients that life in a community association is akin to life in paradise … no muss, no fuss, no bother. Now that I have your attention, let’s talk turkey. Life in a community association is just like life in the rest of the world … while it can be wonderful and rewarding, it can also be challenging to say the least. The distinction is that challenges and disputes that arise in a community association have as their genesis not only ordinary societal issues (including differing attitudes, disagreements and a divided country), in a community association, disputes often arise as a result of non-compliance with the community’s governing documents, covenants and restrictions.
A couple of years ago, I authored a piece entitled “Peace of the Puzzle” which discussed best practices in avoidingconflict in community associations (Common Ground, May/June 2021 issue). But what happens when conflict cannot be avoided and it results in a dispute that needs to be resolved? We will discuss dispute resolution as it applies to community associations in this article.
Communication
Communication by and between the disputing parties is critical to resolving the dispute. Time and time again, I have witnessed parties engaged in a dispute actually stop communicating with one another. A practical question arises as it pertains to this strategy: how in the world will ceasing communication between the parties actually help resolve the conflict? The simple answer is: it won’t. In fact, it will generally make things worse. For clarification, I am not suggesting that parties who are engaged in a dispute where one party is abusing, intimidating or harassing the other (or a situation of such mutual behavior) should attempt to talk it out. I am suggesting (and recommending) that when parties can discuss their dispute professionally and in a civil nature, they should. This may actually lead to resolving the dispute, or may assist in getting to a resolution faster than if the parties were not communicating.
From the perspective of a community association being a party to a dispute with a unit owner (unrelated to the collection of delinquent assessments), I generally recommend that the association (through its Board and/or with a Community Manager) seek to meet with the adverse unit owner either formally or informally to discuss the dispute and try and resolve the matter.
Similarly, a unit owner battling with his or her community association or with another unit owner should strongly consider meeting with representatives of the association or with the other unit owner, as may be applicable, to attempt to resolve their dispute. Communication by and between any of the adverse parties can be worth its weight in gold.
Exhaustion of Internal Remedies
In virtually every community association in every jurisdiction, the governing documents and/or the controlling common interest community statutes will provide that when the association is enforcing its governing documents against a unit owner for a violation, the association must provide notice of the violation to the unit owner, and an opportunity to be heard (due process) on the violation to the unit owner prior to issuing the violation against and/or assessing a fine to the unit owner. (Statutes vary by jurisdiction, but the gist is the same; check with your community association attorney to ensure the required steps are being handled correctly). Following this process correctly would serve to exhaust all of the required internal remedies as it relates to the violation, and, if need be, would permit the association to move forward with further action(s) if the unit owner disputes the violation and relief from the court or some other remedy, such as a form of Alternative Dispute Resolution (ADR), such as mediation or arbitration, is sought to resolve the dispute.
As part of the internal remedy procedure, some states (like New Jersey, where I am licensed to practice) statutorily require that community associations affirmatively offer ADR to unit owners prior to going to court on all, or some, issues. Other states, such as Pennsylvania (where I am also licensed, and primarily practice) statutorily provide for voluntary ADR as part of the internal remedy procedure. The Pennsylvania statutes provide that: (1) All parties must agree to ADR; (2) ADR is not mandatory; any party may seek a private cause of action or other relief; and (3) Costs for ADR (excluding attorneys’ fees) are to be assessed equally against all parties to the dispute.
The common interest community statutes and/or association governing documents in many jurisdictions also permit a unit owner to file a complaint against the association for violations (generally for allegedly failing to enforce the covenants and restrictions) and/or for other disputed issues. In many jurisdictions, the statutes and/or the governing documents also require a unit owner to exhaust internal remedies as may be required prior to filing an agency complaint or taking the association to court on all or some issues. For example, Pennsylvania’s statutes permit a unit owner in good standing to file a complaint with the Pennsylvania Office of Attorney General’s Bureau of Consumer Protection for a limited number of issues (meetings, quorums, proxies, voting and association records). However, before a unit owner can file a complaint with the Pennsylvania Attorney General, all existing internal remedies must first run their course, and, if the association’s governing documents provide for internal ADR to first occur, a unit owner can’t file with the Pennsylvania Attorney General until ADR is exhausted and no resolution results, or one-hundred days have passed with no resolution. A unit owner can immediately file a complaint with the Pennsylvania Attorney General if the governing documents do not contain ADR provisions or if the governing documents provide for ADR but the association refuses to agree to engage in ADR with the unit owner.
It is therefore strongly recommended that parties determine if their governing documents and/or respective jurisdiction’s statutes require ADR or some other dispute resolution mechanism to occur prior to engaging in other dispute resolution efforts or litigation. A final note: the required internal remedies that we have discussed invariably may lead to – you guessed it – some form of communication occurring between the parties that are engaged in the dispute … which, as we know, is better than no communication.
Actively Working to Resolve the Dispute Outside of Court
If communication and the exhaustion of internal remedies do not resolve the dispute, it’s time to seek other options. I generally recommend exploring if a formal or informal meeting with/between the party/parties to try and resolve the dispute is possible (even if attempted in the initial communication phase) – after all, it can’t hurt to try. The best case scenario is that the dispute gets resolved.
If a formal or informal meeting doesn’t work, or simply doesn’t happen, then the parties should explore formal Alternative Dispute Resolution (ADR) using a third party for a non-binding or binding mediation and/or arbitration based on the agreement of the parties (of course this need not be utilized if the parties were required to engage in ADR in exhausting the administrative remedies and it was not successful. The parties can attempt a second ADR session if they so choose at this point, which may or may not be successful). ADR is a popular and often much less expensive choice for associations who seek to resolve disputes without the need for full-blown litigation in court.
The two most popular types of ADR utilized by associations are mediation and arbitration. Mediation is generally heard by a sole mediator and is more of a “summary” proceeding where the parties and the attorneys submit information (usually mediation memoranda) to the Mediator (ahead of time and/or at the mediation) and discuss their cases with the mediator and/or with the mediator and one another without the need for evidence/actual testimony to be introduced/taken at the mediation). The mediator issues a recommendation for resolution at the conclusion of a non-binding mediation that the parties may choose to accept or turn down, or in the situation of a binding mediation, the mediator issues a mediation order which the parties agreed to abide by (sometimes the mediation order gets filed with the court and a judge enters an order, unless the mediation proceeding and/or the result is to remain confidential).
Arbitration is generally a more formal and technical proceeding that can be performed by a sole arbitrator or a panel of arbitrators. Arbitration memoranda are typically submitted by the attorneys prior to the proceeding, testimony is taken and evidence is introduced at the proceeding. The arbitrator or arbitration panel issues a recommendation for resolution at the conclusion of a non-binding arbitration that the parties may choose to accept or turn down, or in a binding arbitration, the arbitrator or arbitration panel issues a binding arbitration order which the parties agreed to abide by (sometimes the arbitration order gets filed with the court and a judge enters an order, unless the mediation proceeding and/or the result is to remain confidential).
I am typically a bigger fan of a non-binding mediation session over a binding ADR session, whether it is a binding mediation or arbitration, except in rare situations where a binding, final outcome is the best available option for the particular dispute. Being a non-binding session allows the parties to attempt to formally resolve the dispute with the assistance of a mediator who is a third party with no vested interest in the outcome (aside from his/or her fee). I have been involved in complex, multi-party litigation where multiple mediation sessions were required to resolve a dispute with finality, but even three, four or five mediation sessions is vastly cheaper and more efficient than participating in a four to six week trial which would be subject to appeal.
The Last Straw: Going to Court
Sometimes, despite our best intentions and attempts at resolving a dispute outside of court – we end up in court – because we have to. While cases often settle on the courthouse steps and/or during the trial itself, cases need to be prepared to go the distance, which is time-consuming and expensive for the litigants. A few thoughts about going to court are as follows:
When to go to court. This seems obvious, but sometimes it isn’t. Court is not just the “last resort” option when all else fails. Parties can actually spin their wheels for a long time attempting to resolve a dispute, where one party is purposefully leading the other party down the primrose path. In this situation, going to court sooner, rather than later, may be more beneficial and actually end up being more cost effective.
Focusing on What’s Important and Picking our Battles. I often tell clients, don’t sweat the small stuff, sweat the big stuff. In other words, focus on what’s important and pick your battles when identifying your litigation strategy – look at what the desired end result, and work to achieve that instead of getting lost in the weeds battling over minutiae.
Cost-Benefit Analysis. Every party in litigation should engage in a cost-benefit analysis as it relates to the desired outcome and the cost to get there. If the cost exceeds the desired outcome, then settlement of the dispute in lieu of trial is likely the best option.
Risk-Benefit Analysis. If the risk of losing at trial is greater than the potential benefit of going to trial, then settlement of the dispute in lieu of trial is likely the best option.
Impact on the Association, Board and Members/Owners. Litigation is expensive, time-consuming and can be emotionally exhausting. The association will need to pay its counsel to go to court and the Board and any impacted members/owners will need to deal with the case from inception through trial – many times this causes Board members to resign and members/owners sometimes move out of communities after being involved in protracted litigation.
After the suit – now what? To the victor go the spoils, or so they say. But is this really true in an association setting where it is association vs. unit owner? While there is a formal “winner” at the end of the litigation, the parties (Board members on behalf of the association and the unit owner) must still live next to one another as neighbors and attempt to coexist amicably. This is tough following a drawn-out court case, but the parties should do their best to put the past behind them and forge a new path moving forward. This is obviously much easier said than done, as human nature and behavior often get in the way. Sometimes the greatest goal following litigation for some parties is that they won’t end up in court again.
Parting Thoughts on Conflict Resolution
I am not trying to sound like a self-help guru, but my advice to association residents would be to keep an open mind, act in good faith and be neighborly – this may go a long way when a dispute arises and a resolution is required. As the Beatles taught us: we can work it out.
– Edward Hoffman, Jr., Esq., CCAL
* Content in this Blog post is also contained in an abbreviated/edited article by Edward Hoffman, Jr., Esq., CCAL, published in the November/December 2023 issue of CAI’s Common Ground magazine, entitled “We Can Work It Out”.
While this is not a Bill which seeks to amend the three Common Interest Community Statutes in Pennsylvania (PA Condominium Act, PA Uniform Planned Community Act or the PA Real Estate Cooperative Act), this Bill, if it becomes law, could have an impact on new construction community associations in some manner related to residential real property improvements owned by the association, or, at minimum, upon unit owners in the community associations in new construction communities. PA HB 377, found here, provides:
If a builder becomes aware of a construction defect in an improvement to real property constructed or facilitated by the builder, the builder shall notify the owner of the real property. The builder shall also notify the owner of any real property for which the builder constructed or facilitated construction of an improvement if the builder has reasonable cause to suspect the existence of a substantially similar construction defect. The following shall apply:
(1) The notification shall include all of the following: (i) A description of the construction defect or suspected construction defect. (ii) The reason that the builder knows or suspects that the construction defect exists. (iii) Contact information for the builder. (2) The notification shall be made within 30 days after the builder knows or has reasonable cause to suspect that the construction defect exists. (3) The builder shall provide the notification by certified mail to the address of record for the owner of the real property. (4) The notification is not required if at least 15 years have elapsed since completion of construction of the defective improvement. (5) The notification shall not constitute evidence of the builder’s liability for the construction defect, nor shall the notification relieve the builder from any liability which may exist as the result of the construction defect. (b) Failure to comply.–A builder who willfully or negligently fails to notify an owner of real property as required by this section shall be liable for the amount of actual damages suffered by the owner as a result of the builder’s failure to notify the owner. This subsection shall not be construed to restrict or expand the authority of a court to impose punitive damages or apply other remedies applicable under another provision of law. (c) Statute of limitations.–An action for damages as the result of a violation of this section must be commenced within two years of the time that the owner of the real property becomes aware of the builder’s failure to comply with this section.
The definition of “construction defect” provides as follows: “A material defect that results from a deficiency in the design, planning, supervision or observation of construction or construction of an improvement to real property. The term includes a material defect that results from the use of defective building materials or from the improper installation of building materials.“
Interestingly, HB 377 provides that notification of the defect is not required after 15 years since the constriction of the defective improvement has occurred; this is greater than the 12 year statute of repose in Pennsylvania for claims related to construction.
Finally, a builder who fails to notify an owner, would be liable for the amount of actual damages suffered by the owner and the ability to impose punitive damages under some other law would not be limtied by this Bill if it becomes law.
Q: Our association wants to post “swim at your own risk” signs instead of providing lifeguards at our pool. What do we need to do to make sure we’re not liable for any accidents? –Pennsylvania
A: While an association with a private swimming pool is permitted to adopt a “swim at your own risk” policy at its pool and eliminate lifeguards, there are certain procedures and safeguards the association should be sure to enact and follow prior to this occurring.
To begin, the association should create, publish and circulate a policy called “Rules and Regulations for Unattended Pool Use” (or the like) to all of the unit owners. The document should include language similar to the below, in bold letters on the first page:
THIS IS AN UNATTENDED “SWIM-AT-YOUR-OWN-RISK” POOL FACILITY – THERE IS NO LIFEGUARD ON DUTY. USE OF THE FACILITY IS AT THE SOLE RISK OF THE INDIVIDUAL USING THE FACILITY.
PARENTS/GUARDIANS ARE RESPONSIBLE FOR THE SAFETY AND CARE OF THEIR MINOR CHILDREN AND ASSUME ALL RISK(S) IN THIS REGARD.
IN THE EVENT OF A SERIOUS INJURY OR LIFE-THREATENING EMERGENCY, CALL 911 AND THEN CALL THE MANAGEMENT COMPANY AT _________.
ALL OWNERS/TENANTS/RESIDENTS ARE REQUIRED TO COMPLETE A RELEASE OF LIABILITY FORM ON AN ANNUAL BASIS AND RETURN THE FORM TO THE MANAGEMENT COMPANY.
The policy should discuss unattended pool use, that key fobs are required for access to the pool area as the area will have an auto-locking access gate to limit access, issues related to guests and children, food and beverage consumption, and rules for conduct.
In addition to the policy, a liability release should be created and signed by all owners/residents on an annual basis (the association attorney should draft the release and the policy to ensure the association is best protected).
The association should also confer with its General Liability insurance carrier and/or its agent to ensure that the proposed shift to a “swim at your own risk” pool is acceptable from the perspective of underwriting so as to ensure that coverage will be present should a liability incident occur. While an association can never protect against all liability and risk for accidents or other incidents, it can assure that proper insurance is present to attempt to offset the risk.
As it relates to the physical pool area, there should be appropriate “unattended pool area” and/or “swim at your own risk” signage placed in the pool area as recommended by the association attorney and/or the insurer and the association should also verify if the local municipality also has any requirements. The pool area must be locked out from access for safety purposes – typically a self-locking gate system is installed with key fob access in an unattended pool area.
Finally, going from a pool with a lifeguard to a “swim at your own risk” pool can become a potentially contentious issue within any community – given the subject matter, we recommend that the Board and management openly communicate the issue and the proposed switch to all owners before it decides to move forward with it as transparency will serve the best interests of all involved.
The original version was published in the May/June 2019 issue of CAI’s Common Ground Magazine: https://lscpagepro.mydigitalpublication.com/publication/?i=580131&ver=html5&p=67
