Case Summary
| Case ID | 19F-H1919060-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2019-09-13 |
| Administrative Law Judge | Jenna Clark |
| Outcome | loss |
| Filing Fees Refunded | $0.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | John H. Kelly | Counsel | — |
|---|---|---|---|
| Respondent | Cortez Canyon Unit Owners Association | Counsel | Jonathan A. Dessaules |
Alleged Violations
ARIZ. REV. STAT. § 33-1243
Outcome Summary
The ALJ concluded that the Petitioner failed to meet the required threshold of 21 valid signatures from eligible voters needed to compel the Association to call a special meeting under ARIZ. REV. STAT. § 33-1243. The petition was consequently denied.
Why this result: Petitioner failed to provide the minimum required 21 valid signatures from eligible unit owners (only 13 were valid) as required by the Association's Bylaws and state statute.
Key Issues & Findings
Alleged violation of failure to call a special meeting to remove a board member.
Petitioner filed a petition alleging the Association failed to call a special meeting to remove a board member after collecting what Petitioner believed were sufficient signatures (36 collected, 21 required). The Association countered that only 13 of those signatures were valid (excluding non-owners, duplicates, and delinquent members ineligible to vote).
Orders: Petitioner’s petition is denied.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
- ARIZ. REV. STAT. § 33-1243
- ARIZ. REV. STAT. § 32-2102
- ARIZ. REV. STAT. § 32-2199 et seq.
- ARIZ. REV. STAT. § 32-2199.05
- ARIZ. REV. STAT. § 32-2199(2)
- ARIZ. REV. STAT. § 32-2199.01(A)
- ARIZ. REV. STAT. § 32-2199.01(D)
- ARIZ. REV. STAT. § 32-2199.02
- ARIZ. REV. STAT. § 41-1092 et seq.
- ARIZ. REV. STAT. § 33-1243(H)(4)
- ARIZ. REV. STAT. § 33-1243(H)(4)(c)
- ARIZ. ADMIN. CODE R2-19-119
- Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Analytics Highlights
- ARIZ. REV. STAT. § 33-1243
- ARIZ. REV. STAT. § 32-2102
- ARIZ. REV. STAT. § 32-2199 et seq.
- ARIZ. REV. STAT. § 32-2199.05
- ARIZ. REV. STAT. § 32-2199(2)
- ARIZ. REV. STAT. § 32-2199.01(A)
- ARIZ. REV. STAT. § 32-2199.01(D)
- ARIZ. REV. STAT. § 32-2199.02
- ARIZ. REV. STAT. § 41-1092 et seq.
- ARIZ. REV. STAT. § 33-1243(H)(4)
- ARIZ. REV. STAT. § 33-1243(H)(4)(c)
- ARIZ. ADMIN. CODE R2-19-119
- Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Video Overview
Audio Overview
Decision Documents
19F-H1919060-REL Decision – 737890.pdf
Administrative Hearing Briefing: Kelly vs. Cortez Canyon Unit Owners Association
Executive Summary
This document summarizes the Administrative Law Judge Decision in case number 19F-H1919060-REL, a dispute between Petitioner John H. Kelly and the Respondent, Cortez Canyon Unit Owners Association (“the Association”). The core issue was whether the Association violated Arizona state law by refusing to call a special meeting to remove a board member, as demanded by a petition initiated by Mr. Kelly.
The Association’s bylaws require a petition signed by at least 25% of eligible voting members—in this case, 21 of the 84 unit owners—to compel such a meeting. Mr. Kelly submitted a petition with 36 signatures. However, upon review, the Association invalidated 23 signatures for specific reasons: 11 were from non-owner renters, 6 were duplicate signatures from units that had already signed, and 6 were from owners whose voting rights were suspended due to being over 15 days delinquent on payments.
This left only 13 valid signatures, well short of the 21 required. The Administrative Law Judge, Jenna Clark, concluded that the Petitioner failed to meet the burden of proof. The evidence clearly demonstrated that the number of valid signatures was insufficient to legally compel the Association to call a special meeting. Consequently, the judge ruled that the Association did not violate Arizona statute § 33-1243 and denied Mr. Kelly’s petition.
Case Overview
Parties Involved
Name / Entity
Details
Petitioner
John H. Kelly
A condominium owner and member of the Cortez Canyon Unit Owners Association. Appeared on his own behalf.
Respondent
Cortez Canyon Unit Owners Association
The homeowners’ association for the Cortez Canyon condominium development in Phoenix, AZ. Represented by Jonathan A. Dessaules, Esq.
Witness
Saundra Garcia
President of the Association’s Board of Directors.
Adjudicator
Jenna Clark
Administrative Law Judge, Arizona Office of Administrative Hearings.
Core Dispute
The central issue adjudicated was whether the Cortez Canyon Unit Owners Association violated Arizona Revised Statute § 33-1243 by failing to call a special meeting for the purpose of removing a board member after receiving a petition from unit owners. The Petitioner alleged that the required number of signatures had been collected, while the Respondent denied this claim, asserting that the petition lacked the requisite number of valid signatures from eligible voters.
Legal and Governance Framework
The dispute was governed by Arizona state law and the Association’s own internal documents.
• Arizona Revised Statute § 33-1243(H)(4): This statute mandates that an association with 1,000 or fewer members must call a special meeting to remove a board member upon receipt of a petition signed by at least 25% of the eligible voters in the association.
• Association Bylaws, Article II, Section 2: Mirrors the state statute, stipulating that a special meeting may be called by unit owners holding at least 25% of the votes in the Association.
• Association Bylaws, Article II, Section 7: Critically, this section states that a unit owner’s right to vote is automatically suspended if they are in arrears on payments (assessments, penalties, etc.) for a period of 15 days. This suspension remains until all payments are brought current.
Petitioner’s Position and Evidence (John H. Kelly)
Mr. Kelly initiated the petition to recall an Association board member. His position and the evidence he presented are summarized as follows:
• Petition Submission: Mr. Kelly, with assistance from others, collected 36 signatures and submitted them to the Association’s then-property management group, Golden Valley.
• Initial Confirmation: He testified that Golden Valley initially informed him that he had secured enough signatures to compel the special meeting.
• Reversal by New Management: A short time later, after the Association’s contract with Golden Valley expired on June 1, 2019, a new property management company informed him that the petition did not meet the signature threshold.
• Key Admission: Mr. Kelly testified that neither he nor his assistants verified whether the signatories were unit owners eligible to vote prior to submitting the petition.
• Argument at Hearing: Mr. Kelly argued that he had submitted a minimum of 23 valid signatures. This included the signature of Jeffery Law, an owner of six units, which Mr. Kelly contended should be counted six times. However, it was established that Mr. Law’s signature was secured after the initial submission and was never provided to the management company.
• Formal Allegation: In his April 29, 2019, filing with the Department, Mr. Kelly stated: “Cortez Canyon has 84 units and 25% is 21 units. Homeowners have collected more than the required 21 home-owner’s signatures. The Cortez Canyon HOA board has stated that they will not schedule the required special meeting.”
Respondent’s Position and Evidence (Cortez Canyon Association)
The Association, represented by its Board President Saundra Garcia, presented a detailed rebuttal based on a thorough review of the submitted petition.
• Receipt of Petition: The Association received the petition with 36 purported unit owner signatures on or about April 19, 2019.
• Signature Verification Process: Upon review, the Association determined that a significant number of signatures were invalid based on the community’s governing documents.
• Disqualification of Signatures: The Association provided a specific breakdown of the 23 signatures it disqualified:
◦ 11 signatures were removed because they were from non-owner renters or occupants.
◦ 6 signatures were removed because they were from units for which another owner’s signature had already been collected (only one vote is permitted per unit).
◦ 6 signatures were removed because the unit owner was ineligible to vote, being more than 15 days delinquent on fines, fees, or dues owed to the Association, as stipulated in the Bylaws.
• Final Tally: After removing the 23 invalid signatures from the 36 submitted, the Association concluded that the petition contained only 13 valid signatures.
• Conclusion: Since 13 signatures is below the required threshold of 21, the Association determined it was not obligated by law or its bylaws to call the special meeting. The signature from the multi-unit owner, Jeffrey Law, was not part of the petition received by the Association and was therefore not considered in its count.
Administrative Law Judge’s Findings and Ruling
The Administrative Law Judge, Jenna Clark, reviewed the evidence and testimony from both parties and issued a decision decisively in favor of the Respondent.
Conclusions of Law
• Burden of Proof: The Judge established that the Petitioner, John H. Kelly, bore the burden of proving by a “preponderance of the evidence” that the Association had violated the statute. A preponderance of evidence is defined as proof that convinces the trier of fact that a contention is more probably true than not.
• Undisputed Facts: The material facts of the case were not at issue. Both parties agreed that 21 valid signatures were required to compel the special meeting.
• Evidence of Record: The Judge found that the evidence presented demonstrated the Petitioner’s failure to meet the required threshold. The decision states, “While Petitioner is correct that he submitted more than twenty-one signatures to the Association, he is incorrect that all of signatures provided were valid.”
• Final Determination on Signatures: The ruling affirmed the Association’s count, concluding, “What the evidence of record reflects is that Petitioner only provided thirteen valid signatures along with his petition to the Association, which was not enough to compel the Association to call a special meeting.”
Final Order
Based on the failure of the Petitioner to sustain his burden of proof, the Administrative Law Judge issued the following order on September 13, 2019:
IT IS ORDERED that Petitioner’s petition be denied.
Study Guide: Kelly v. Cortez Canyon Unit Owners Association (Case No. 19F-H1919060-REL)
This study guide provides a comprehensive review of the Administrative Law Judge Decision in the matter between Petitioner John H. Kelly and Respondent Cortez Canyon Unit Owners Association. It is designed to test and reinforce understanding of the case’s facts, legal arguments, governing documents, and final outcome.
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Part I: Short-Answer Quiz
Instructions: Answer the following ten questions in two to three complete sentences, based solely on the information provided in the case document.
1. Who were the primary parties involved in this hearing, and what were their respective roles?
2. What was the specific violation of Arizona law alleged by the Petitioner in his initial petition to the Department of Real Estate?
3. How many condominium units are in the Cortez Canyon development, and what number of valid signatures was consequently required to compel a special meeting?
4. According to the Association’s Bylaws, what circumstances would cause a Unit Owner to have their voting rights suspended?
5. List the three categories of invalid signatures that the Association identified in its review of the Petitioner’s submission.
6. Who was Jeffery Law, and why was his signature ultimately not counted by the Association?
7. What was the initial assessment given to the Petitioner by the property management group, Golden Valley, and how did it differ from the Association’s final determination?
8. In this type of legal proceeding, who bears the “burden of proof,” and what standard of proof must be met?
9. What was the Administrative Law Judge’s final conclusion regarding the Petitioner’s claim?
10. What was the final ORDER issued by the Administrative Law Judge in this case?
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Part II: Answer Key
1. The primary parties were John H. Kelly, the “Petitioner,” who appeared on his own behalf, and the Cortez Canyon Unit Owners Association, the “Respondent,” which was represented by Jonathan A. Dessaules, Esq. Administrative Law Judge Jenna Clark presided over the hearing. Saundra Garcia, the Association’s Board President, appeared as a witness for the Respondent.
2. The Petitioner alleged that the Association violated ARIZ. REV. STAT. § 33-1243 by failing to call a special meeting for the purpose of removing a board member. He claimed to have collected the required number of signatures from homeowners to compel such a meeting.
3. The Cortez Canyon development has 84 units. Based on the requirement for signatures from 25% of the votes in the Association, a total of 21 valid Unit Owner signatures were required to compel a special meeting.
4. According to Bylaws Article II, Section 7, a Unit Owner’s right to vote is automatically suspended if the owner is in arrears in the payment of any Assessment, monetary penalties, or other fees for a period of fifteen days. This suspension remains in effect until all payments are brought current.
5. The Association determined that of the 36 submitted signatures, 23 were invalid. The categories for invalidation were: eleven signatures from non-owner renters or occupants, six signatures from units where another signature had already been collected, and six signatures from Unit Owners who were ineligible to vote due to being delinquent on payments.
6. Jeffery Law was an Association member and owner of six condominium units. His signature was not counted because the Petitioner secured it after submitting the petition to the management company and never provided it to the Association as part of the formal submission.
7. The former property management group, Golden Valley, initially informed the Petitioner that he had secured enough valid signatures to compel a special meeting. However, after the Association directly reviewed the petition, it determined that only 13 of the signatures were valid, far short of the required 21.
8. In this proceeding, the Petitioner, John H. Kelly, bore the burden of proof. The standard of proof required was a “preponderance of the evidence,” which means providing evidence that is more convincing and has superior weight than the evidence presented by the opposing side.
9. The Administrative Law Judge concluded that the Petitioner failed to sustain his burden of proof. The credible evidence demonstrated that the Petitioner submitted only thirteen valid signatures, which was insufficient to compel the Association to call a special meeting under its Bylaws and state law.
10. The final ORDER, based on the Findings of Fact and Conclusions of Law, was that the Petitioner’s petition be denied.
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Part III: Essay Questions
Instructions: The following questions are designed for longer, essay-style responses. They require a deeper analysis of the case’s themes, legal principles, and procedural elements. Do not provide answers.
1. Analyze the concept of “burden of proof” as it applies to this case. Explain what “preponderance of the evidence” means in this context, who held the burden, and how the failure to meet this standard was the central reason for the judge’s final decision.
2. Discuss the critical importance of an association’s governing documents (CC&Rs and Bylaws) in resolving internal disputes. Use specific articles and sections from the Cortez Canyon Bylaws to illustrate how they definitively established the rules for calling a special meeting and determining voter eligibility, leaving little room for interpretation.
3. Evaluate the Petitioner’s strategy and execution in collecting signatures for his petition. Identify the critical errors he and his assistants made in the process, and outline the specific steps he could have taken to verify signatures and ensure his petition was valid before its submission.
4. Explain the legal and practical distinctions between a Unit Owner, an occupant/renter, and an “eligible voter” within the context of the Cortez Canyon Unit Owners Association. How did the Petitioner’s failure to understand these distinctions become the central point of failure for his petition?
5. Imagine you are advising the Cortez Canyon Board of Directors following this hearing. Based on the evidence and outcome of the case, what recommendations would you make regarding their procedures for validating petitions and their communication with Unit Owners about voting rights, petition requirements, and the consequences of financial delinquency?
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Part IV: Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
The official (Jenna Clark) who presides over hearings at the Office of Administrative Hearings, reviews evidence, and makes legal findings and conclusions.
Answer
The formal written response filed by the Respondent (the Association) on May 28, 2019, denying the Petitioner’s allegations.
ARIZ. REV. STAT.
Abbreviation for Arizona Revised Statutes, which are the codified laws of the state of Arizona. The specific statute at issue was § 33-1243.
Association
The Cortez Canyon Unit Owners Association, the governing body for the condominium development, comprised of all unit owners.
Board of Directors (the Board)
The group of individuals that oversees the Association, as empowered by the CC&Rs. The petition sought to remove a member of this board.
Burden of Proof
The legal obligation on one party in a dispute (in this case, the Petitioner) to provide sufficient evidence to prove their claim.
Bylaws
The set of rules adopted by the Association on June 14, 2000, that govern its internal operations, including meetings and voting rights.
Covenants, Conditions, and Restrictions (CC&Rs)
The primary governing documents for the development, recorded on May 9, 2000, which form an enforceable contract between the Association and each property owner.
Department
The Arizona Department of Real Estate, the state agency authorized to receive and decide petitions from members of homeowners’ associations.
Eligible Votes
A term defined in the Bylaws as the total number of votes that can be lawfully cast, excluding those from members whose voting rights are suspended.
Findings of Fact
The section of the legal decision that outlines the established, undisputed facts of the case based on the hearing evidence.
OAH (Office of Administrative Hearings)
An independent state agency where evidentiary hearings are conducted by Administrative Law Judges.
The final, legally binding command issued by the judge at the conclusion of the decision. In this case, the Order was to deny the petition.
Petitioner
The party who initiates a legal action by filing a petition. In this case, John H. Kelly.
Petition
The formal document filed by the Petitioner on April 29, 2019, with the Department to initiate the hearing process against the Association.
Preponderance of the Evidence
The standard of proof required in this case, meaning that the evidence must be sufficient to convince the judge that the contention is more probably true than not.
Respondent
The party against whom a petition is filed and who must respond to the allegations. In this case, the Cortez Canyon Unit Owners Association.
Special Meeting
A meeting of Association members called for a specific purpose outside of the regularly scheduled meetings. The petition sought to compel a special meeting to remove a board member.
Unit Owner
An individual who holds legal title to a condominium within the Cortez Canyon development and is a member of the Association.
He Gathered 36 Signatures to Oust His HOA Board. Here’s Why Only 13 Counted.
Introduction: The Power and Pitfalls of Community Action
Many homeowners have felt the frustration of trying to enact change within their community, especially when it involves challenging the decisions of a Homeowners Association (HOA) board. It can feel like an uphill battle, but the right to petition and call for special meetings is a cornerstone of community governance.
However, a real-world case involving homeowner John H. Kelly and the Cortez Canyon Unit Owners Association serves as a critical cautionary tale. Mr. Kelly gathered what he believed were more than enough signatures to force a special meeting to remove a board member. Despite his significant effort, his petition failed spectacularly. This article breaks down the key legal and procedural reasons why, offering essential lessons for every homeowner.
1. Not All Signatures Are Created Equal: The Validity Gauntlet
The core of the issue began with a simple numbers game. The Cortez Canyon HOA has 84 units, meaning a petition required signatures from 25%, or 21, of the unit owners to compel a special meeting. Mr. Kelly successfully collected 36 signatures—a number that seemed to guarantee his success.
In a moment of false victory, the association’s property management company at the time, Golden Valley, informed Mr. Kelly that he had indeed secured enough signatures. But this assurance was short-lived. A new management company took over, and after a formal review, the association delivered devastating news: only 13 of the 36 signatures were valid. The petition was dead on arrival.
The association disqualified 23 signatures for specific, documented reasons:
• Non-Owners: Eleven signatures were from renters or other residential occupants who were not the legal owners of the unit.
• Duplicate Units: Six signatures were removed because another signature had already been collected from the same unit, upholding the “one vote per unit” principle.
• Ineligible Owners: Six signatures were from homeowners who were technically owners but were found to be ineligible to vote at the time they signed.
This reveals the petitioner’s first critical, and ultimately fatal, assumption: that the HOA would do the work of verifying his supporters. In reality, the burden of proof was his alone. The legal findings state it plainly: “Neither Petitioner nor his assistants verified if the signatures that were collected belonged to Unit Owners eligible to vote.” From a governance perspective, this initial culling of signatures is where most grassroots community efforts fail.
2. The Fine Print That Disenfranchises: “Good Standing” and Your Right to Vote
Here, we find the kind of boilerplate legal language that is often ignored by homeowners but wielded with immense power by boards. The ineligibility of six homeowners stemmed from a specific clause in the association’s bylaws related to financial standing.
The bylaw states:
“In the event any Unit Owner is in arrears in the payment of any Assessment, monetary penalties or other fees and charges due under the terms of the Condominium Documents for a period of fifteen (15) days, the Unit Owner’s right to vote as a member of the Association shall be automatically suspended…”
This single provision had a profound impact. Six of the signatures Mr. Kelly collected were from homeowners who were more than 15 days late on their dues or fines. Their voting rights were suspended, and their signatures were rendered invalid. This highlights a crucial preparatory step for any petitioner: confidentially requesting a list of members in good standing from the association before collecting signatures, if the governing documents allow, or at minimum, reminding potential signatories to ensure their accounts are current.
3. Process is Paramount: The Signature That Never Was
Facing a losing battle at the administrative hearing, the petitioner made a final argument to salvage his petition. He contended that he had also secured the signature of a member named Jeffrey Law, who owned six separate units. Mr. Kelly argued this single signature should count as six votes, which would have put him over the required threshold.
However, this argument failed due to a simple but fatal procedural error. According to the court’s findings, the signature from Mr. Law was never actually submitted with the petition to the association.
The Administrative Law Judge’s finding was unambiguous: “The signature Petitioner collected from the multiple unit owner, Jeffrey Law, was not a part of the petition received by the Association and therefore was not counted.” This procedural error, while seemingly minor, is an absolute bar to success in administrative law. Unlike a casual disagreement, there is no room for “I meant to” or “I thought I had.”
Conclusion: Knowledge is Power in an HOA
Because the petitioner could only provide 13 valid signatures instead of the required 21, the Administrative Law Judge denied his petition. The HOA was not required to call the special meeting, and the board member remained in place. Mr. Kelly’s story is a powerful reminder that enthusiasm and effort are not enough to navigate the complexities of community governance. The case provides three clear takeaways for any homeowner:
1. Quality Over Quantity: A short, verified list of eligible voters is infinitely more powerful than a long list of unverified names.
2. Bylaws are Your Battlefield: The governing documents contain the rules of engagement. Ignoring them—especially clauses on voter eligibility—is a unilateral surrender.
3. Documentation is Everything: If it wasn’t formally submitted to the correct party, it legally never happened. Your ability to prove submission is as important as the submission itself.
This case is a powerful reminder that enthusiasm and effort aren’t enough. The real question every homeowner should ask is: Do you truly know the rules that govern your rights in your own community?
Case Participants
Petitioner Side
- John H. Kelly (petitioner)
Respondent Side
- Jonathan A. Dessaules (attorney)
Dessaules Law Group
Appeared on behalf of Respondent - Saundra Garcia (board member)
Cortez Canyon Unit Owners Association
Called as a witness and testified as Board President - Jacob A. Kubert (attorney)
Dessaules Law Group
Counsel receiving notice of decision
Neutral Parties
- Jenna Clark (ALJ)
Office of Administrative Hearings - Judy Lowe (commissioner)
Arizona Department of Real Estate
Decision transmitted to Commissioner
Other Participants
- Jeffery Law (owner)
Cortez Canyon Unit Owners Association
Unit owner whose signature Petitioner secured but was not submitted to the Association
