sys.fn_hadr_backup_is_preferred_replica returns 0 on both nodes of cluster

I have setup a Windows 2012, SQL 20102, 2-node, non-shared storage Availability Group cluster. I am trying to backup the transaction logs and databases but the sys.fn_hadr_backup_is_preferred_replica function returns 0 on both nodes. I have changed backup preference settings multiple ways, rebuilt the availability group from scratch, rebooted both nodes and there is no change. If I remove the database from the availability group, it will backup no problem(using Ola Hallengren's scripts). We have a case sensitive collation(Latin1_General_BIN). Not sure If that may be an issue.