Case Summary
| Case ID | 21F-H2120014-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2020-12-01 |
| Administrative Law Judge | Adam D. Stone |
| Outcome | loss |
| Filing Fees Refunded | $500.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Lori & James Jordan | Counsel | — |
|---|---|---|---|
| Respondent | The Pines at Show Low Condominium Owners' Association, Inc. | Counsel | — |
Alleged Violations
CC&Rs Sections 3.04, 3.07 & 3.09; 2012 Rules and Regulations Section 19
Outcome Summary
The Administrative Law Judge denied the petition, concluding that the Petitioner failed to prove the Association violated the CC&Rs regarding sewer maintenance or deductible apportionment, finding that the Association properly applied its 2012 Rules and Regulations.
Why this result: Petitioner failed to meet her burden of proof that the Respondent violated the CC&Rs in apportioning a proportionate share of the insurance deductible.
Key Issues & Findings
Dispute over apportionment of insurance deductible following sewer backup damage in a common area.
Petitioner challenged the Association's decision to apportion 43.84% ($10,958.96) of the insurance deductible to her unit following damage caused by a main sewer line blockage in a common area.
Orders: Petitioner’s petition is denied.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
- ARIZ. REV. STAT. § 32-2102
- ARIZ. REV. STAT. § 32-2199 et seq.
- ARIZ. REV. STAT. § 32-2199(2)
- ARIZ. REV. STAT. § 32-2199.01(D)
- ARIZ. REV. STAT. § 32-2199.02
- ARIZ. REV. STAT. § 32-2199.05
- ARIZ. REV. STAT. § 41-1092
- ARIZ. REV. STAT. § 41-1092.09
- Title 33, Chapter 9 of the Arizona Revised Statutes
- CC&Rs Sections 3.04, 3.07, 3.09
- 2012 Rules and Regulations Section 19
Analytics Highlights
- ARIZ. REV. STAT. § 32-2102
- ARIZ. REV. STAT. § 32-2199 et seq.
- ARIZ. REV. STAT. § 32-2199(2)
- ARIZ. REV. STAT. § 32-2199.01(D)
- ARIZ. REV. STAT. § 32-2199.02
- ARIZ. REV. STAT. § 32-2199.05
- ARIZ. REV. STAT. § 41-1092
- ARIZ. REV. STAT. § 41-1092.09
- Title 33, Chapter 9 of the Arizona Revised Statutes
Video Overview
Audio Overview
Decision Documents
21F-H2120014-REL Decision – 840033.pdf
Questions
Question
Can the HOA require a homeowner to pay a portion of the association's insurance deductible for damage caused by a common element failure?
Short Answer
Yes, if the community Rules and Regulations authorize the Board to apportion the deductible based on repair costs.
Detailed Answer
The ALJ found that the Association's Board had the authority to adopt rules regarding insurance deductibles. Specifically, the rules allowed the Board to apportion the deductible among unit owners and the association based on the proportion of repair costs when damage affects multiple units and common areas, even if the damage originated from a common element like a sewer line.
Alj Quote
Sections 19(b) and (c) appears to have anticipated the present scenario. There was damaged caused to two units and the common area, and Petitioner was apportioned 43.84% of the deductible. From the evidence presented, the Association also properly applied the applicable Rules and Regulations.
Legal Basis
Rules and Regulations Section 19
Topic Tags
- insurance
- deductible
- assessments
- common elements
Question
Who is responsible for ensuring insurance coverage for the 'gap' created by an HOA's insurance deductible?
Short Answer
The homeowner is responsible for obtaining personal insurance to cover the gap.
Detailed Answer
The decision highlights that governing documents or rules may explicitly state that owners must be aware of the deductible amount and secure their own coverage to handle that cost if assessed.
Alj Quote
Each Owner needs to be aware of the amount of the Association’s insurance deductible so that the Owner can determine that their personal insurance coverage will cover any gap.
Legal Basis
Rules and Regulations Section 19(e)
Topic Tags
- insurance
- homeowner responsibilities
Question
If the HOA fixes a maintenance issue after it occurs (like a sewer backup), can I still claim they violated their maintenance duty to avoid paying the deductible?
Short Answer
Likely no, as long as the HOA coordinated and accomplished the repairs.
Detailed Answer
The ALJ ruled that because the Association coordinated and completed the repairs once the issue occurred, the homeowner failed to prove that the Association neglected its maintenance duties under the CC&Rs. Therefore, the assessment of the deductible was not invalidated by a failure to maintain.
Alj Quote
Once the sewer backed up, the Association coordinated the repairs and accomplished the same. Petitioner failed to demonstrate that the Association failed to properly attend to the maintenance and/or repair of the sewer lines.
Legal Basis
CC&Rs Section 3.09
Topic Tags
- maintenance
- repairs
- negligence
Question
What is the burden of proof for a homeowner challenging an HOA decision in an administrative hearing?
Short Answer
The homeowner must prove their case by a 'preponderance of the evidence'.
Detailed Answer
The homeowner (Petitioner) has the burden to prove that the HOA violated the governing documents or statutes. The standard is 'preponderance of the evidence,' meaning the claim must be shown to be more probably true than not.
Alj Quote
In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated the CC&Rs… 'A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.'
Legal Basis
Standard of Evidence
Topic Tags
- legal procedure
- evidence
- burden of proof
Question
Can the HOA Board create rules that change how financial liabilities (like deductibles) are handled without amending the CC&Rs?
Short Answer
Yes, if the CC&Rs grant the Board the authority to adopt rules for the regulation of the property.
Detailed Answer
The decision upheld the enforcement of a rule regarding insurance deductibles found in the 'Rules and Regulations,' noting that the CC&Rs granted the authority to adopt such rules.
Alj Quote
Section 4.10 of the CC&Rs granted authority to adopt rules 'for the regulation and operation of the Property…'
Legal Basis
CC&Rs Section 4.10
Topic Tags
- rulemaking
- board authority
- governing documents
Case
- Docket No
- 21F-H2120014-REL
- Case Title
- Lori & James Jordan vs. The Pines at Show Low Condominium Owners' Association, Inc.
- Decision Date
- 2020-12-01
- Alj Name
- Adam D. Stone
- Tribunal
- OAH
- Agency
- ADRE
Questions
Question
Can the HOA require a homeowner to pay a portion of the association's insurance deductible for damage caused by a common element failure?
Short Answer
Yes, if the community Rules and Regulations authorize the Board to apportion the deductible based on repair costs.
Detailed Answer
The ALJ found that the Association's Board had the authority to adopt rules regarding insurance deductibles. Specifically, the rules allowed the Board to apportion the deductible among unit owners and the association based on the proportion of repair costs when damage affects multiple units and common areas, even if the damage originated from a common element like a sewer line.
Alj Quote
Sections 19(b) and (c) appears to have anticipated the present scenario. There was damaged caused to two units and the common area, and Petitioner was apportioned 43.84% of the deductible. From the evidence presented, the Association also properly applied the applicable Rules and Regulations.
Legal Basis
Rules and Regulations Section 19
Topic Tags
- insurance
- deductible
- assessments
- common elements
Question
Who is responsible for ensuring insurance coverage for the 'gap' created by an HOA's insurance deductible?
Short Answer
The homeowner is responsible for obtaining personal insurance to cover the gap.
Detailed Answer
The decision highlights that governing documents or rules may explicitly state that owners must be aware of the deductible amount and secure their own coverage to handle that cost if assessed.
Alj Quote
Each Owner needs to be aware of the amount of the Association’s insurance deductible so that the Owner can determine that their personal insurance coverage will cover any gap.
Legal Basis
Rules and Regulations Section 19(e)
Topic Tags
- insurance
- homeowner responsibilities
Question
If the HOA fixes a maintenance issue after it occurs (like a sewer backup), can I still claim they violated their maintenance duty to avoid paying the deductible?
Short Answer
Likely no, as long as the HOA coordinated and accomplished the repairs.
Detailed Answer
The ALJ ruled that because the Association coordinated and completed the repairs once the issue occurred, the homeowner failed to prove that the Association neglected its maintenance duties under the CC&Rs. Therefore, the assessment of the deductible was not invalidated by a failure to maintain.
Alj Quote
Once the sewer backed up, the Association coordinated the repairs and accomplished the same. Petitioner failed to demonstrate that the Association failed to properly attend to the maintenance and/or repair of the sewer lines.
Legal Basis
CC&Rs Section 3.09
Topic Tags
- maintenance
- repairs
- negligence
Question
What is the burden of proof for a homeowner challenging an HOA decision in an administrative hearing?
Short Answer
The homeowner must prove their case by a 'preponderance of the evidence'.
Detailed Answer
The homeowner (Petitioner) has the burden to prove that the HOA violated the governing documents or statutes. The standard is 'preponderance of the evidence,' meaning the claim must be shown to be more probably true than not.
Alj Quote
In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated the CC&Rs… 'A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.'
Legal Basis
Standard of Evidence
Topic Tags
- legal procedure
- evidence
- burden of proof
Question
Can the HOA Board create rules that change how financial liabilities (like deductibles) are handled without amending the CC&Rs?
Short Answer
Yes, if the CC&Rs grant the Board the authority to adopt rules for the regulation of the property.
Detailed Answer
The decision upheld the enforcement of a rule regarding insurance deductibles found in the 'Rules and Regulations,' noting that the CC&Rs granted the authority to adopt such rules.
Alj Quote
Section 4.10 of the CC&Rs granted authority to adopt rules 'for the regulation and operation of the Property…'
Legal Basis
CC&Rs Section 4.10
Topic Tags
- rulemaking
- board authority
- governing documents
Case
- Docket No
- 21F-H2120014-REL
- Case Title
- Lori & James Jordan vs. The Pines at Show Low Condominium Owners' Association, Inc.
- Decision Date
- 2020-12-01
- Alj Name
- Adam D. Stone
- Tribunal
- OAH
- Agency
- ADRE
Case Participants
Petitioner Side
- Lori Jordan (petitioner)
Appeared and testified at the hearing - James Jordan (petitioner)
- Chuck Stewart (witness)
The Pines at Show Low Condominium Owners' Association, Inc. Board
Testified for Petitioner; later joined Board and voted against apportionment
Respondent Side
- Sean Lissarrague (board member)
The Pines at Show Low Condominium Owners' Association, Inc.
Vice President of the Board; appeared and testified for Respondent
Neutral Parties
- Adam D. Stone (ALJ)
Office of Administrative Hearings
Administrative Law Judge - Judy Lowe (Commissioner)
Arizona Department of Real Estate
Received electronic transmission of the decision
Other Participants
- c. serrano (administrative staff)
Transmitted the electronic decision
