Case Summary
| Case ID | 08F-H088007-BFS |
|---|---|
| Agency | DFBLS |
| Tribunal | OAH |
| Decision Date | 2008-05-13 |
| Administrative Law Judge | Michael G. Wales |
| Outcome | no |
| Filing Fees Refunded | $550.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Stanton S. Sanders | Counsel | — |
|---|---|---|---|
| Respondent | Florence Gardens Mobile Home Association | Counsel | Mark A. Holmgren |
Alleged Violations
Declaration Para 24; Policies 1-96, 3-98; CC&Rs § 4A; Rules 9(b), 16(c); A.R.S. § 33-1802
Outcome Summary
The ALJ dismissed the complaint, finding the Association acted within its authority under the Articles of Incorporation and Bylaws to rescind the prior assessment waiver policy. The Petitioner's reliance on A.R.S. § 33-1802 and various governing document clauses was rejected as inapplicable or unsupported by evidence.
Why this result: The ALJ determined the Association lawfully exercised its authority to rescind the waiver policy and levy assessments. A.R.S. § 33-1802 is definitional only; 'combined lot' provisions in the Declaration and CC&Rs did not restrict assessment powers found in the Articles/Bylaws.
Key Issues & Findings
Imposition of assessments on vacant adjacent lots
Petitioner challenged the Association's 2008 re-imposition of assessments on his vacant lot (combined with his improved lot), arguing it violated past policies, the Declaration, CC&Rs, and state statute.
Orders: Petitioner's Complaint is dismissed. Respondent's request for attorney's fees is denied.
Filing fee: $550.00, Fee refunded: No
Disposition: respondent_win
Decision Documents
08F-H088007-BFS Decision – 190931.pdf
Administrative Law Judge Decision: Sanders v. Florence Gardens Mobile Home Association
Executive Summary
This briefing document summarizes the administrative law decision in Case No. 08F-H088007-BFS, involving a dispute between Stanton S. Sanders (Petitioner) and the Florence Gardens Mobile Home Association (Respondent). The central conflict arose from the Association’s decision to terminate a long-standing practice of waiving assessments for vacant lots adjacent to improved lots when held by the same owner.
The Administrative Law Judge (ALJ) ruled in favor of the Association, dismissing the Petitioner’s complaint. The core findings established that the Association’s Articles of Incorporation and Bylaws grant it the explicit power to levy assessments on each lot, regardless of ownership status or proximity to other lots. The Petitioner failed to prove that the Association’s rescission of its previous waiver policy violated any governing documents or state statutes. Furthermore, while the Association prevailed, its request for attorney’s fees was denied based on legal precedent regarding administrative proceedings.
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Case Background and Procedural History
Parties Involved
• Petitioner: Stanton S. Sanders, owner of adjacent lots 1164 and 1165 in Florence Gardens.
• Respondent: Florence Gardens Mobile Home Association, Inc., represented by Mark Holmgren, Esq.
Nature of the Dispute
On April 12, 2007, the Association’s Board of Directors notified members that starting in 2008, it would no longer waive assessments for vacant lots adjacent to improved lots. The Petitioner, who benefited from the previous waiver policy, filed a petition with the Arizona Department of Fire, Building and Life Safety on January 28, 2007 (later amended on February 15, 2007), alleging the Association violated multiple governing documents and state statutes.
Legal Context
The hearing took place on April 29, 2008, before ALJ Michael G. Wales. The Petitioner carried the burden of proof, requiring a “preponderance of evidence” to show that the Association’s actions were more likely than not a violation of established rules or law.
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Analysis of Governing Documents and Authority
The decision hinged on the hierarchy and specific language of the documents governing the Florence Gardens community. The following table summarizes the key documents analyzed during the hearing:
Document Type
Relevant Section
Association Authority / Court Finding
Articles of Incorporation
Article V, Section F
Grants the Association power to levy assessments against the owners of each lot.
Association Bylaws
Article II, Sec. 11; Article XIII, Sec. 2
Defines “Lot” as any separate parcel on the plat and reiterates the power to levy assessments.
Deed Restrictions
Paragraph 24
Specifies that parts of adjoining lots are deemed a single lot only for the purpose of the Declaration of Restrictions, not for assessments.
Section 4A
States combined lots are one lot for landscaping requirements only; does not apply to assessments.
Recorded Plat
Book 18, Page 37
Establishes lots 1164 and 1165 as separate and distinct parcels of real property.
Rules & Regulations
Rules 9(b) and 16(c)
Petitioner admitted during testimony that these rules had not been violated.
The Power to Assess
The ALJ found that the authority to levy assessments does not derive from the Declaration of Restrictions or the CC&Rs, but from the Articles of Incorporation and the Association Bylaws. Because the recorded Plat defines the Petitioner’s holdings as two separate and distinct lots, the Association maintains the legal right to assess each lot individually.
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Examination of Rescinded Policies and State Statutes
Rescission of Policies 1-96 and 3-98
The Association previously maintained Policies 1-96 and 3-98, which permitted the waiver of assessments for vacant adjoining lots. The evidence established:
• The Board of Directors rescinded these policies on June 6, 2006, during a public meeting.
• The re-imposition of assessments did not begin until 2008.
• Consequently, the Association did not act in contravention of its written policies, as the policies providing for the waiver were no longer in effect when the assessments were levied.
Statutory Allegations (A.R.S. § 33-1802)
The Petitioner alleged a violation of A.R.S. § 33-1802. The ALJ concluded this claim was legally unfounded because:
• A.R.S. § 33-1802 provides statutory definitions only.
• The statute does not impose specific duties, rights, or obligations on persons or legal entities.
• It is legally impossible to “violate” a set of definitions in the manner described by the Petitioner.
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Final Conclusions and Order
Burden of Proof
The Petitioner failed to sustain his burden of proof across all counts. The ALJ determined that the Association legally exercised its authority to change its assessment policy and that the Petitioner’s interpretation of “combined lots” was restricted to landscaping and specific deed restrictions, not financial assessments.
Ruling on Costs and Fees
1. Filing Fees: As the non-prevailing party, the Petitioner was not entitled to a refund of his $550.00 filing fee.
2. Attorney’s Fees: The Association requested an award for its attorney’s fees. However, the tribunal declined this request, citing Semple v. Tri-City Drywall, Inc. (1992). The Court of Appeals in Semple held that:
◦ An administrative agency is not a “court.”
◦ An administrative proceeding is not an “action” for the purposes of A.R.S. § 12-341.01.
◦ There is no legislative intent to apply attorney’s fees statutes to administrative proceedings.
Final Order
The Administrative Law Judge ordered the dismissal of the Petitioner’s complaint and denied the Respondent’s request for attorney’s fees. Per A.R.S. § 41-2198.04(A), this decision is the final administrative action and is not subject to rehearing.
Study Guide: Sanders v. Florence Gardens Mobile Home Association (No. 08F-H088007-BFS)
This study guide provides a comprehensive overview of the administrative legal dispute between Stanton S. Sanders and the Florence Gardens Mobile Home Association. It explores the legal frameworks governing planned communities, the interpretation of association governing documents, and the standards of proof required in administrative hearings.
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Review Quiz
1. Who are the primary parties involved in this case and what is the core issue being contested? The Petitioner is Stanton S. Sanders, an owner of two lots in the Florence Gardens Mobile Home Community, and the Respondent is the Florence Gardens Mobile Home Association. The dispute centers on the Association’s decision to end its long-standing practice of waiving assessments for vacant lots adjacent to improved lots owned by the same member.
2. What is the “preponderance of evidence” standard as applied in this administrative hearing? Under A.A.C. R2-19-119(A), this standard requires the Petitioner to provide evidence that is sufficient to persuade the judge that a claim is more likely true than not. It is defined as evidence of greater weight or more convincing force than the evidence offered in opposition.
3. How does the Association’s Articles of Incorporation establish its authority regarding assessments? Article V, Section F of the Articles of Incorporation, filed in 1971, explicitly grants the Association the power to levy assessments against the owners of each lot. This document serves as a foundational source of authority that exists independently of specific deed restrictions.
4. Why did the Administrative Law Judge (ALJ) determine that Paragraph 24 of the Declaration of Restrictions did not protect the Petitioner from multiple assessments? While Paragraph 24 states that adjoining lots under single ownership are “deemed to constitute a single lot,” the ALJ found this language is strictly limited to the deed restrictions within that specific Declaration. It does not prohibit assessments because the power to tax lots originates from the Articles of Incorporation and the Association Bylaws rather than the Declaration.
5. What role did the Association’s 2006 board meeting play in the legality of the new assessment policy? On June 6, 2006, the Board of Directors held a public meeting where they rescinded Policies 1-96 and 3-98, which had previously allowed for the assessment waivers. Because these policies were legally rescinded before the 2008 assessments were imposed, the Association was not acting in contravention of its own written rules.
6. How did the CC&Rs Section 4A specifically address “combined lots,” and how did the ALJ interpret this? Section 4A of the CC&Rs states that combined lots are considered one lot specifically regarding landscaping requirements. The ALJ concluded that this language is narrow and only applies to landscaping, thereby offering no legal restriction against the Association levying separate assessments for each lot.
7. Why was the Petitioner’s citation of A.R.S. § 33-1802 ruled ineffective by the tribunal? The ALJ found that A.R.S. § 33-1802 merely provides statutory definitions for terms related to planned communities. Because the statute does not impose specific duties, rights, or obligations on any entity, the Association could not be found in violation of it.
8. What evidence from the Pinal County Recorder’s Office was used to justify the Association’s assessment of two separate fees? The Plat of record for Florence Gardens, Unit D, shows lots 1164 and 1165 as separate and distinct parcels of real property. Since no evidence was presented to show the Plat had been amended to combine the lots, they remained legally separate for the purposes of the Association’s assessment powers.
9. What was the outcome regarding the Petitioner’s request for a refund of his filing fee? Because the Respondent was determined to be the prevailing party in the matter, the Petitioner was not entitled to an award or reimbursement of his $550.00 filing fee. Under A.R.S. § 41-2198.02, such awards are generally reserved for the prevailing party.
10. On what legal grounds did the ALJ deny the Respondent’s request for attorney’s fees? The request was denied based on the precedent set in Semple v. Tri-City Drywall, Inc., which holds that an administrative agency is not a “court.” Consequently, administrative proceedings do not constitute an “action” under the statutes that normally allow for the recovery of attorney’s fees in contract or community association disputes.
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Answer Key
1. Parties and Issue: Stanton S. Sanders vs. Florence Gardens Mobile Home Association; the dispute is over the Association rescinding a waiver for assessments on adjacent vacant lots.
2. Preponderance of Evidence: The burden of proof where the fact-finder must be persuaded that the claim is more probable than not.
3. Articles of Incorporation: Article V, Section F grants the Association the specific power to levy assessments on lot owners.
4. Paragraph 24 Interpretation: The “single lot” designation in Paragraph 24 applies only to deed restrictions, not to the assessment powers granted by other governing documents.
5. 2006 Board Meeting: This meeting legally rescinded the old waiver policies, making the 2008 assessments valid under the current Association rules.
6. CC&Rs Section 4A: This section only applies to landscaping requirements for combined lots and does not impact financial assessments.
7. A.R.S. § 33-1802: This statute only contains definitions and does not create enforceable obligations or duties.
8. The Plat: The official county map lists the lots as separate and distinct; without an amendment to the Plat, they are legally two individual units.
9. Filing Fee: The Petitioner lost the case and therefore was not eligible for the recovery of the $550.00 fee.
10. Attorney’s Fees: Administrative hearings are not considered “court actions,” and statutes allowing for attorney fee awards in court do not apply to these proceedings.
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Essay Questions
1. Hierarchy of Governing Documents: Analyze how the ALJ prioritized the Articles of Incorporation and Bylaws over the Declaration of Restrictions in determining assessment authority. Why is the specific scope of language in a document (e.g., “for the purpose of this Declaration”) critical in legal interpretations?
2. The Burden of Proof in Administrative Law: Discuss the implications of A.A.C. R2-19-119 on the Petitioner. How does the requirement to prove a case by a “preponderance of evidence” affect an individual lot owner’s ability to challenge an Association’s policy changes?
3. Administrative vs. Judicial Proceedings: Using the denial of attorney’s fees and the Semple v. Tri-City Drywall, Inc. case as a reference, compare the legal status of an administrative hearing with that of a court of law. What are the potential advantages and disadvantages for parties involved in administrative hearings?
4. Evolution of Association Policy: The Association maintained a “long standing practice” of waiving assessments before changing its policy. Examine the legal requirements for an Association to change its internal policies and the importance of public board meetings in this process.
5. Definition and Status of Real Property: Evaluate how the recorded Plat and the definition of a “Lot” in the Bylaws served as the foundation for the Association’s victory. How might a property owner successfully argue that two parcels have become one for all legal purposes?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
A presiding officer who conducts hearings and issues decisions for administrative agencies.
Articles of Incorporation
The primary document filed with the State (Arizona Corporation Commission) that establishes the existence and basic powers of a corporation or association.
Assessment
A fee or levy imposed by a homeowners’ association on its members to fund community expenses.
Bylaws
The internal rules that govern the administration and management of an association, including definitions of membership and voting rights.
Covenants, Conditions, and Restrictions; recorded limitations on how a property can be used and the obligations of the owner.
Declaration of Restrictions
A legal document recorded against property titles that outlines specific rules and limitations for all lots within a community.
Petitioner
The party who initiates a legal action or petition, in this case, the lot owner Stanton S. Sanders.
An official map, drawn to scale, showing the divisions of a piece of land into lots, usually recorded in county records.
Preponderance of Evidence
The standard of proof in most civil cases, meaning the evidence shows the claim is “more likely than not” to be true.
Respondent
The party against whom a petition is filed, in this case, the Florence Gardens Mobile Home Association.
Statute
A written law passed by a legislative body (e.g., Arizona Revised Statutes, or A.R.S.).
Why Your HOA Might Be Able to Double-Charge You for a Single Property: Lessons from the Florence Gardens Case
1. Introduction: The “Ghost Lot” Surprise
Imagine the security of owning two adjacent lots in a planned community, where for years your Homeowners Association (HOA) has treated them as a single property. You pay one assessment, maintain one yard, and live with the peace of mind that your vacant “side yard” is an extension of your home. Then, through an administrative sleight of hand, that peace of mind evaporates. You receive a letter stating that a “long-standing practice” has been rescinded. Suddenly, that vacant lot is no longer a yard; it is a “ghost lot” with its own separate bill, and you owe double.
This was the harsh reality for Stanton S. Sanders in the case of Stanton S. Sanders vs. Florence Gardens Mobile Home Association. Sanders found himself caught in a legal gears-grinding that proves how “combined lots” can vanish overnight. His case serves as a cautionary tale: what you perceive as a single property is often, in the eyes of the law, a collection of distinct taxable units waiting for a Board to change its mind.
2. Takeaway 1: “One Lot” Doesn’t Always Mean “One Bill”
Homeowners often fall into a linguistic trap when reading their governing documents. In the Florence Gardens case, Sanders pointed to Paragraph 24 of the Declaration of Restrictions, which stated that ownership of parts of two adjoining lots “shall… be deemed to constitute a single lot.” To any reasonable person, “single lot” implies a single financial obligation.
However, the Administrative Law Judge (ALJ) delivered a cold reality check. The hierarchy of HOA documents matters. While the Declaration might define a lot for the purpose of “deed restrictions” (such as where you can build a garage), it does not necessarily govern the Association’s pocketbook. The power to levy money is “constitutional” in nature, usually residing in the Articles of Incorporation and the Bylaws, which trump the functional rules of a Declaration.
3. Takeaway 2: Past Waivers Aren’t Permanent Promises
For years, Florence Gardens operated under Board Policies 1-96 and 3-98, which waived assessments for vacant lots adjacent to improved lots. Sanders relied on this historical behavior as a shield. But a Board policy is a fragile promise, not a permanent right.
Unlike a recorded Plat Map or a formal amendment to the Bylaws—which require rigorous, often member-driven processes to change—a “policy” can be overturned by a simple Board vote. On June 6, 2006, the Board did exactly that in an open meeting. Because the underlying Articles of Incorporation granted the power to charge “each lot,” the Board was legally empowered to stop giving out “discounts” that weren’t mandated by the community’s founding documents. For the homeowner, this means that a decade of “handshake” agreements can be erased in a single afternoon.
4. Takeaway 3: Landscaping Rules Are Not Financial Rules
In a desperate attempt to pivot his defense, Sanders pointed to Section 4A of the CC&Rs, which explicitly stated, “Combined lots will be considered as one lot.” On the surface, this looked like a smoking gun.
The tribunal, however, looked at the sentence’s full context. The provision actually read: “Combined lots will be considered as one lot and will have the same landscaping requirements as a single lot.” The Judge ruled that this language was strictly limited to the height of the weeds and the placement of trees. It did not redefine the lot for financial purposes. This is a critical distinction for every property owner: your land can be “one” for the purpose of your lawnmower, but it remains “two” for the purpose of your checkbook.
5. Takeaway 4: Definitions Don’t Always Equal Rights
Sanders also attempted to find refuge in state law, citing Arizona Revised Statute § 33-1802. Many homeowners believe that state definitions of “lots” or “planned communities” provide a baseline protection that overrides their HOA documents.
This is a dangerous misconception. In his ruling, the ALJ noted that technical definitions in law are descriptive, not prescriptive. The statute “simply sets forth statutory definitions and does not impose any duties, rights or obligations.” In the world of private governance, the contract—your HOA documents—usually supersedes generic state definitions unless the law explicitly states “notwithstanding any provision in the community documents.” Citing a dictionary definition of a “lot” is a legal dead-end if your Articles of Incorporation say the Board can charge you for every parcel on the map.
6. Takeaway 5: The “Prevailing Party” Fee Gap
Perhaps the most stinging lesson from the Florence Gardens case is the “fee gap.” Even though the HOA successfully defended its right to double-bill Sanders, it was denied the recovery of its attorney’s fees.
This highlights a major risk for homeowners and Associations alike: an “Administrative Hearing” is not “Superior Court.” Under Arizona law (specifically the Semple v. Tri-City Drywall, Inc. precedent), an administrative agency is not considered a court. Therefore, the standard laws that allow a winning party to force the loser to pay their legal fees in a contract dispute do not apply.
For the homeowner, this is a double-edged sword. You might not have to pay the HOA’s lawyers if you lose, but you also won’t get your own costs covered if you win. In this forum, everyone pays to play, regardless of the outcome.
7. Conclusion: The Plat Map is King
The ultimate “ground truth” in property rights is not the fence you built or the “combined” landscaping you maintain—it is the recorded Plat Map. In the Sanders case, the Plat recorded in Book 18 of Maps, Page 37, clearly showed lots 1164 and 1165 as “separate and distinct.” Because that map was never formally amended through the county, the lots remained separate entities in the eyes of the law.
If you own the lot next door, don’t wait for a surprise bill to investigate your status. Go to your County Recorder’s office, pull the Plat Map, and see if there are two lines or one. If the map says you own two lots, and your Articles of Incorporation allow the Board to assess “each lot,” you are living on borrowed time. Are you relying on a handshake and a historical waiver, or have you actually merged your property in the only place it counts?
Case Participants
Petitioner Side
- Stanton S. Sanders (Petitioner)
Owner of lots 1164 and 1165; appeared personally
Respondent Side
- Mark A. Holmgren (Respondent Attorney)
Carpenter, Hazlewood, Delgado & Wood PLC
Spelled 'Holmgen' in appearances section
Neutral Parties
- Michael G. Wales (ALJ)
Office of Administrative Hearings - Robert Barger (Director)
Department of Fire, Building and Life Safety
Listed on distribution - Debra Blake (Agency Staff)
Department of Fire, Building and Life Safety
Listed on distribution
