Case Summary
| Case ID | 08F-H078001-BFS |
|---|---|
| Agency | DFBLS |
| Tribunal | OAH |
| Decision Date | 2007-11-06 |
| Administrative Law Judge | Lewis D. Kowal |
| Outcome | no |
| Filing Fees Refunded | $0.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Marilyn A. Stevens | Counsel | — |
|---|---|---|---|
| Respondent | Cliffs Condominium Association | Counsel | — |
Alleged Violations
CC&R Section 4.08; By-Laws Article II, Section 1
By-Laws Article III, Section 3; Article VII, Section 1
Outcome Summary
The Administrative Law Judge dismissed the petition, finding that the Petitioner failed to prove violations regarding the meeting date (due to waiver) and the election terms (valid amendment found).
Why this result: Petitioner failed to prove by a preponderance of the evidence that the Association violated CC&Rs or By-Laws; specific objections were waived or based on incorrect legal premises regarding recordation.
Key Issues & Findings
Improper Annual Meeting Date
Petitioner alleged the Association held the annual meeting on an improper date (Jan 10) rather than in March or May.
Orders: Dismissed
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_lose
Election of Directors to 3-Year Terms
Petitioner alleged that the By-Laws were not properly amended or recorded to allow for 3-year director terms.
Orders: Dismissed
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_lose
Decision Documents
08F-H078001-BFS Decision – 179590.pdf
Administrative Law Judge Decision: Stevens v. Cliffs Condominium Association
Executive Summary
This briefing document summarizes the administrative adjudication of a dispute between Marilyn A. Stevens (“Petitioner”) and the Cliffs Condominium Association (“Respondent”). The case, heard before the Arizona Office of Administrative Hearings (No. 08F-H078001-BFS), centered on allegations that the Association violated its Declaration of Covenants, Conditions and Restrictions (CC&Rs) and By-Laws.
The Petitioner raised two primary challenges: the improper scheduling of the January 10, 2004, annual meeting and the election of Association directors to three-year terms rather than one-year terms. Following hearings in late 2007, the Administrative Law Judge (ALJ) dismissed the petition. The decision was based on the Petitioner’s failure to provide specific evidence of timely objections regarding meeting irregularities and the determination that the Association had legally amended its By-Laws to permit three-year director terms in 2001.
Case Overview and Procedural History
The matter was presided over by Administrative Law Judge Michael K. Carroll and later reassigned to Lewis D. Kowal. The case involved the following foundational elements:
• Parties: Marilyn A. Stevens, a member of the Cliffs Condominium Association, acting on her own behalf; and the Cliffs Condominium Association, represented by John Caldamone.
• Regulatory Context: The petition was filed with the Arizona Department of Fire, Building and Life Safety.
• Procedural Ruling: Despite an objection from the Association regarding the verification of documents, the ALJ ruled that the CC&Rs and By-Laws attached to the Petition were the governing documents for the matter, as both parties relied upon them during the proceedings.
Analysis of Primary Issues
Issue 1: Improper Scheduling of the January 10, 2004, Annual Meeting
The Petitioner contended that the annual meeting held on January 10, 2004, was improperly scheduled based on historical precedent (March meetings) and specific governing provisions.
Governing Provisions and Evidence:
• CC&R Section 4.08 and By-Laws Article II, Section 1: These specify that the annual meeting date should be the anniversary of the initial meeting held within 120 days of the first unit conveyance.
• Petitioner’s Argument: Witnesses testified to a lack of notice and proxy vote information. The Petitioner cited a deposition from the Association president, John Caldamone, where he admitted the meeting date violated the By-Laws.
The “Waiver” Determination: The ALJ’s decision rested on Article II, Section 9 of the By-Laws, which states:
The ALJ found that while the Petitioner claimed protests occurred, the testimony provided by witnesses (such as Connie Luckenbach) was “vague and general.” There was no reliable evidence that a specific objection regarding the meeting date was made at the January 10, 2004, meeting. Consequently, any right to object to the timing was legally waived.
Issue 2: Election of Directors to Three-Year Terms
The Petitioner challenged the validity of electing directors to three-year terms at the 2004 meeting, asserting that the By-Laws required one-year terms and that no valid amendment existed or was recorded.
Key Findings on Term Length:
• The 2001 Amendment: The Association presented evidence that a special meeting was held on April 26 or 27, 2001, where the By-Laws were amended to change director terms from one year to three years.
• Amendment Requirements: Under CC&R Section 4.07 and By-Laws Article VII, Section 1, the By-Laws may be amended by a majority of a quorum (at least 25% of total votes). The ALJ determined the weight of the evidence established that this vote occurred in April 2001.
• Recordation Dispute: The Petitioner argued the amendment was invalid because it was not “registered” or recorded with the Maricopa County Recorder’s Office. The ALJ concluded that since the CC&Rs and By-Laws did not contain an explicit requirement for amendments to be recorded to be effective, this was not a valid basis for a violation.
Legal Conclusions
The ALJ dismissed the Petition based on the following legal standards and conclusions:
Conclusion Category
Determination
Burden of Proof
The Petitioner bore the burden of proving violations by a preponderance of the evidence but failed to meet this standard for either issue.
Scope of Authority
The Petitioner requested the court to provide specific directions and monitoring of the Association. The ALJ ruled that this relief was outside the tribunal’s authority; the tribunal’s function is not to monitor and enforce compliance.
Meeting Validity
Violations regarding the 2004 meeting date were waived per Article II, Section 9 of the By-Laws.
Director Terms
The Association successfully demonstrated that the By-Laws were amended in 2001 to allow for three-year terms.
Final Order
Based on the findings of fact and conclusions of law, the Administrative Law Judge ordered that no action was required of the Association and the Petition was dismissed in its entirety on November 6, 2007.
Study Guide: Stevens v. Cliffs Condominium Association
This study guide provides a comprehensive review of the administrative law case Marilyn A. Stevens vs. Cliffs Condominium Association (Case No. 08F-H078001-BFS). It examines the legal disputes regarding association governance, the interpretation of community bylaws, and the procedural requirements of administrative hearings.
Part I: Short-Answer Quiz
Instructions: Answer the following questions in two to three sentences based on the provided source context.
1. Who were the primary parties involved in this case and what was the core of their dispute?
2. What procedural objection did the Cliffs Condominium Association raise regarding the documents attached to the Petition?
3. According to the By-Laws and CC&Rs, how is the date for the annual meeting of unit owners determined?
4. What specific evidence did the Petitioner provide to support the claim that the January 10, 2004 meeting date was improper?
5. Explain the significance of Article II, Section 9 of the Association’s By-Laws in the context of the January 10 meeting.
6. Why did the Administrative Law Judge (ALJ) find the testimony of Connie Luckenbach insufficient to prove an objection was made?
7. What were the Petitioner’s four main arguments regarding the illegitimacy of the three-year term for directors?
8. According to Section 4.07 of the CC&Rs, what are the requirements for a valid amendment to the By-Laws?
9. Why did the ALJ refuse to rule on whether the By-Law amendments needed to be recorded with the Maricopa County Recorder’s Office?
10. What was the ALJ’s reasoning for denying the specific relief requested by the Petitioner in her closing argument?
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Part II: Answer Key
1. Parties and Dispute: The Petitioner, Marilyn A. Stevens, filed a case against the Respondent, Cliffs Condominium Association. The dispute centered on allegations that the Association violated its CC&Rs and By-Laws by holding an annual meeting on an improper date and incorrectly electing directors to three-year terms.
2. Procedural Objection: The Association objected to the inclusion of Association documents attached to the Petition, asserting there was no verification they were the versions existing as of January 10, 2004. However, the ALJ overruled this, finding that the parties relied on these provisions during the hearing and the Association was not prejudiced by their consideration.
3. Annual Meeting Timing: Section 4.08 of the CC&Rs and Article II, Section 1 of the By-Laws state that the annual meeting date is the anniversary of the initial meeting. That initial meeting was required to be held within 120 days from the date the first conveyance of a unit from the Association to an owner was recorded.
4. Evidence of Improper Date: The Petitioner relied on a deposition from Association President John Caldamone, where he admitted that holding the meeting on January 10, 2004, violated the By-Laws. Additionally, witnesses testified that meetings were historically held in March or should have been held on the third Thursday in May.
5. Article II, Section 9 (Waiver): This provision states that any informalities or irregularities in meeting notices or calls are deemed waived if no objection is made at the meeting. The ALJ concluded that because the Petitioner could not prove a specific objection was raised during the January 10 meeting, any right to challenge the meeting date was legally waived.
6. Luckenbach Testimony: While Connie Luckenbach testified that objections were raised, the ALJ found her statements to be vague and general. When asked for specifics, she described issues regarding the timing of the annual meeting relative to a special meeting rather than a direct objection to the validity of the annual meeting date itself.
7. Arguments Against Director Terms: The Petitioner argued that members did not receive copies of the amendment or meeting minutes, she received outdated By-Laws when purchasing a second unit, and the amendment was not recorded. She contended that without recording the amendment with the County Recorder, the change from one-year to three-year terms was ineffective.
8. Amendment Requirements: Section 4.07 and Article VII, Section 1 dictate that By-Laws may be amended by a majority of a quorum of voting owners (at least 25% of total votes present). Furthermore, written notice of the intention to amend the By-Laws must be provided in the official notice of the meeting.
9. Recording of Amendments: The ALJ concluded that the issue of recordation was outside his jurisdiction because the Petitioner failed to cite any specific provision in the CC&Rs or By-Laws that required amendments to be recorded to be valid. Therefore, it was not a “proper issue” for the administrative tribunal to address.
10. Denial of Relief: The Petitioner requested that the ALJ provide specific directions on how the Association should act and how it should be monitored. The ALJ ruled that such oversight was outside his authority, noting that the tribunal’s role is not to monitor and enforce ongoing compliance.
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Part III: Essay Questions
Instructions: Use the source context to develop comprehensive responses to the following prompts.
1. The Role of Procedural Waivers: Discuss how Article II, Section 9 of the By-Laws functioned as a “statute of limitations” for internal Association grievances. How did this provision impact the ALJ’s ability to rule on the merits of the meeting date, despite the President’s admission of a violation?
2. The Burden of Proof in Administrative Hearings: Explain the concept of “preponderance of the evidence” as applied in this case. Analyze how the Petitioner’s reliance on verbal testimony and lack of specific documentation led to the dismissal of her claims.
3. Corporate Governance and Recordkeeping: Evaluate the Association’s defense regarding the 2001 amendment of director terms. How did the conflicting testimonies between John Caldamone and the unit owners illustrate the importance of maintaining clear, accessible, and “registered” corporate records?
4. Jurisdictional Limits of the ALJ: Explore the boundaries of the Administrative Law Judge’s authority as defined in this decision. Specifically, contrast what the Petitioner requested in terms of relief versus what the ALJ was legally empowered to provide.
5. Interpretation of Governing Documents: Analyze the interplay between the CC&Rs and the By-Laws in determining Association operations. How does the ALJ prioritize the written text of these documents over historical practices or verbal admissions?
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Part IV: Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
A presiding official who conducts hearings and issues decisions for state or federal agencies, in this case, the Office of Administrative Hearings.
By-Laws
The internal rules and regulations that govern the daily operations and management of an organization or association.
Covenants, Conditions, and Restrictions; the legal governing documents that dictate the rules for a real estate development or condominium association.
Conveyance
The legal process of transferring the title or ownership of real property from one party to another.
Deposition
Formal, out-of-court oral testimony of a witness that is reduced to writing for later use in court or for discovery purposes.
Petitioner
The party who initiates a lawsuit or petition; in this matter, Marilyn A. Stevens.
Preponderance of the Evidence
The standard of proof in most civil and administrative cases, meaning the evidence shows that a fact is more likely true than not true.
A written authorization allowing one person to act or vote on behalf of another person, typically used in association meetings.
Quorum
The minimum number of members of an assembly or organization that must be present at any of its meetings to make the proceedings of that meeting valid.
Respondent
The party against whom a petition is filed or an appeal is taken; in this matter, the Cliffs Condominium Association.
Waiver
The voluntary or automatic relinquishment of a known right or claim, often resulting from a failure to object in a timely manner.
The HOA Trap: 5 Hard Truths About Homeowner Rights (and How to Protect Yours)
1. Introduction: The High Stakes of the “Boring” Annual Meeting
Imagine you are standing in a hearing room, facing the Board of Directors of your Homeowners Association. You have a “smoking gun”: a deposition where the Board President openly admits that the Association held its annual meeting on a date that violated the By-Laws. You assume the case is over. In any logical world, an admission of a violation leads to a victory for the petitioner.
However, as the case of Marilyn A. Stevens v. Cliffs Condominium Association (No. 08F-H078001-BFS) at the Arizona Office of Administrative Hearings proves, logic and administrative law are often at odds. Despite the President’s admission, the homeowner still lost. This case serves as a masterclass in how procedural traps can strip homeowners of their rights, even when they are factually correct. To survive a conflict with your HOA, you must understand that the “rules of engagement” are often more important than the rules themselves.
2. The “Silence Trap”: Your Presence Is Your Consent
The most dangerous provision in many HOA By-Laws is the waiver clause. In the Cliffs Condominium case, the Board relied on Article II, Section 9, which contains what I call the “Silence Trap.” The text is devastatingly broad:
The Failure of Informal Protests Petitioner Marilyn Stevens argued that “protests” were made regarding the meeting. However, the Administrative Law Judge (ALJ) dismissed these because they lacked formality. From a legal governance perspective, “complaining” is not “objecting.” Informal protests—such as grumbling to neighbors or airing grievances during a community forum—are legally insufficient because they do not provide the Association with a formal opportunity to “cure” the irregularity on the spot. If you attend a meeting and fail to enter a specific, formal objection into the record, the law deems that you have consented to every procedural error the Board committed.
3. Why an “Admission of Guilt” Isn’t a “Get Out of Jail Free” Card
The most shocking turn in the Stevens case involved Exhibit 8: a deposition from a separate Superior Court action where Association President John Caldamone admitted that holding the meeting on January 10, 2004, violated the By-Laws.
In administrative law, however, procedural waivers can render substantive truths irrelevant. Because the Petitioner failed to make a formal objection at the meeting, the ALJ determined in Finding of Fact #6 that it was “not necessary… to address” whether the meeting date was actually valid. The “Silence Trap” ended the inquiry before the President’s admission could even be considered. This is a brutal reality of HOA governance: a Board can admit to breaking the law, but if you missed the procedural window to object, that admission becomes legally moot.
4. The Recording Myth: Internal Rules vs. Public Records
Homeowners often fall into the trap of seeking legal advice from the wrong sources. In this case, witness Donna Nutter testified that a clerk at the Maricopa County Recorder’s Office told her that By-Law amendments must be “registered” to be valid. Relying on this, the Petitioner challenged a 2001 amendment that changed Director terms from one year to three years.
The ALJ rejected this “myth of recordation.” The “Hard Truth” is that administrative courts only care about the specific text of your governing documents, not the informal advice of a government clerk. The ALJ noted that recordation was “not a proper issue” because the Petitioner failed to cite any provision in the existing CC&Rs that required amendments to be recorded.
Under Section 4.07 of the CC&Rs and Article VII, Section 1 of the By-Laws, the only things that truly mattered were:
1. A quorum of 25% was met.
2. A “written notice of intention to amend By-Laws” was provided in the meeting notice.
3. A majority vote was obtained. If these internal hurdles are cleared, the amendment is law—whether the County Recorder has a copy or not.
5. Vague Testimony is the Enemy of Justice
Under A.A.C. R2-19-119, the burden of proof rests entirely on the homeowner. To win, you must provide “reliable evidence,” a standard the Petitioner failed to meet due to poor witness preparation.
Witness Connie Luckenbach testified that objections were raised at the meeting, but the ALJ dismissed her account as “vague and general in nature.” When pressed for specifics, Luckenbach focused on the fact that the annual meeting was held 90 minutes before a special meeting—a logistical grievance—rather than the specific legal violation regarding the meeting date.
Analyst’s Advisory: To defeat an HOA, you cannot rely on “general feelings” of unfairness. You must create a paper trail. If you believe a meeting is illegal, you must hand a written objection to the Board Secretary during the meeting and demand it be included in the minutes. This bypasses the “vague testimony” trap and creates a record that a judge cannot ignore.
6. The “Judge as a Manager” Delusion
Perhaps the most frustrating realization for homeowners is the limited scope of judicial power. Marilyn Stevens concluded her case by requesting that the Judge monitor the Association and provide specific directions on how they should operate in the future.
The ALJ flatly denied this, noting that such relief was “outside the scope” of the Tribunal’s authority. As stated in the decision’s footnote:
Homeowners often view the court as a “super-manager” that will fix a broken neighborhood. In reality, the court can only rule on whether a specific violation occurred. It will not act as a long-term watchdog. If you win, the Board is simply ordered to comply; the burden of ensuring they actually do so remains with the homeowners.
7. Conclusion: The Power of the Paper Trail
The Stevens v. Cliffs Condominium Association case is a stark reminder that in the world of community governance, the written word and the timely objection are the only real currencies of power. A Board President’s admission of guilt is worthless if you have already waived your right to complain through silence.
To protect your home and your rights, you must move beyond informal protests. You must read your governing documents with a critical eye, specifically looking for waiver clauses that trade your silence for consent.
Case Participants
Petitioner Side
- Marilyn A. Stevens (petitioner)
Cliffs Condominium Association (Member)
Appeared on her own behalf - Connie Luckenbach (witness)
Cliffs Condominium Association (Unit Owner)
Testified regarding objections at the January 10, 2004 meeting - Donna Nutter (witness)
Testified regarding information received from Maricopa County Recorder's Office
Respondent Side
- John Caldamone (respondent representative)
Cliffs Condominium Association (President)
Appeared on behalf of the Association
Neutral Parties
- Michael K. Carroll (ALJ)
Office of Administrative Hearings
Presided over September 4, 2007 hearing; left OAH before decision - Lewis D. Kowal (ALJ)
Office of Administrative Hearings
Presided over October 22, 2007 hearing; authored decision - Robert Barger (Director)
Department of Fire, Building and Life Safety
Listed on mailing distribution - Joyce Kesterman (staff)
Department of Fire, Building and Life Safety
Listed on mailing distribution
