Case Summary
| Case ID | 21F-H2121037-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2021-06-11 |
| Administrative Law Judge | Adam D. Stone |
| Outcome | partial |
| Filing Fees Refunded | $1,500.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Gregory L. Smith | Counsel | — |
|---|---|---|---|
| Respondent | Mountain Bridge Community Association | Counsel | Nicole Payne, Esq. |
Alleged Violations
A.R.S. § 33-1811
CC&R Article 11.3.2
Outcome Summary
The Petitioner prevailed on the claim of violating CC&R Article 11.3.2 (failure to negotiate in good faith) but was denied relief on the claim of violating A.R.S. § 33-1811 (conflict of interest). Petitioner was ordered reimbursed $500.00 for the filing fee.
Why this result: Petitioner failed to prove the A.R.S. § 33-1811 violation because the statute was interpreted by the Tribunal to require the action to involve compensation.
Key Issues & Findings
Conflict of Interest Disclosure
Petitioner alleged the Respondent violated A.R.S. § 33-1811 because the HOA President failed to disclose a conflict of interest during the approval of his own flagpole. The Tribunal found the statute requires the decision to involve compensation, and Petitioner failed to meet the burden of proof.
Orders: Petition denied as to a violation of A.R.S. 33-1811. Tribunal declined to award a civil penalty.
Filing fee: $1,000.00, Fee refunded: No
Disposition: petitioner_loss
- A.R.S. § 33-1811
Failure to Negotiate Claim Resolution in Good Faith
Petitioner claimed Mountain Bridge failed to negotiate a resolution in good faith after he filed a claim notice. Mountain Bridge failed to communicate until approximately 35 days after the claim was noticed. The Tribunal found Respondent failed to negotiate in good faith.
Orders: Petitioner is deemed the prevailing party as to his claim of an Article 11 violation. Respondent must reimburse the $500.00 filing fee within 30 days. Tribunal declined to award a civil penalty.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
- CC&R Article 11.3.2
Analytics Highlights
- A.R.S. § 33-1811
- A.R.S. § 32-2199(B)
- A.R.S. § 41-1092.07(G)(2)
- A.A.C. R2-19-119(A)
- A.A.C. R2-19-119(B)(1)
- A.A.C. R2-19-119(B)(2)
- A.R.S. § 32-2199.02(B)
- A.R.S. § 32-2199.04
- A.R.S. § 41-1092.09
Video Overview
Audio Overview
Decision Documents
21F-H2121037-REL Decision – 887461.pdf
Questions
Question
Does a board member violate conflict of interest laws by voting on their own architectural request if no money is exchanged?
Short Answer
Likely not. The ALJ ruled that the conflict of interest statute (A.R.S. § 33-1811) applies specifically to decisions involving compensation.
Detailed Answer
The ALJ interpreted A.R.S. § 33-1811 narrowly. While acknowledging that abstaining from voting on one's own request is 'best practice,' the Judge determined that the phrase 'contract, decision or other action for compensation' implies that the decision must involve compensation to trigger the statutory violation. Since the architectural approval was not for compensation, the statute was not violated.
Alj Quote
However, the word “other” would indicate that the contract or decision would involve compensation. … Therefore, the Tribunal finds that Mr. Smith has not sustained his burden in demonstrating that Mountain Bridge violated A.R.S. § 33-1811.
Legal Basis
A.R.S. § 33-1811
Topic Tags
- Conflict of Interest
- Board Conduct
- Architectural Review
Question
If the CC&Rs require the HOA to negotiate a dispute within a certain time, can they simply ignore it?
Short Answer
No. Ignoring a request for negotiation beyond the mandated timeframe can be considered a violation of the duty to negotiate in good faith.
Detailed Answer
In this case, the CC&Rs required the parties to make a reasonable effort to meet and confer. The HOA failed to communicate with the homeowner until 35 days after the claim was noticed (past the 30-day negotiation period). The ALJ found this lack of communication to be a violation of the specific CC&R article requiring good faith negotiation.
Alj Quote
The credible evidence presented demonstrated that Mountain Bridge, or its attorneys, did not communicate with Mr. Smith until October 13, 2020, approximately 35 days after the claim was noticed. … Therefore, the Tribunal finds that Mountain Bridge failed to negotiate in good faith and violated Article 11.3.2 of the CC&R’s.
Legal Basis
CC&R Article 11.3.2
Topic Tags
- Dispute Resolution
- Good Faith
- HOA Obligations
Question
Can the HOA use the COVID-19 pandemic as a valid excuse for failing to communicate with me?
Short Answer
Not if they fail to send any updates. The HOA must at least inform the homeowner of potential delays.
Detailed Answer
The ALJ rejected the HOA's implicit defense that the pandemic justified the delay in communication. The ruling stated that even if the pandemic caused issues, the HOA had an obligation to at least inform the homeowner that delays were occurring. Total silence was not justified.
Alj Quote
While this dispute occurred during the COVID-19 pandemic, certainly communications could have been sent to Mr. Smith informing him there may be some delays in communication. However, there were none, and thus no valid justification for the Board not entering into negotiations with the Smiths.
Legal Basis
Administrative Discretion / Good Faith
Topic Tags
- Communication
- Delays
- Good Faith
Question
Who is responsible for proving that the HOA violated the rules during a hearing?
Short Answer
The homeowner (Petitioner) bears the burden of proof.
Detailed Answer
The homeowner must prove their case by a 'preponderance of the evidence,' meaning they must show it is more likely than not that the violation occurred. The HOA does not have to disprove the claim initially; the burden starts with the homeowner.
Alj Quote
Petitioner bears the burden of proof to establish that Respondent violated CC&R § 3.1 by a preponderance of the evidence.
Legal Basis
A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A)
Topic Tags
- Legal Procedure
- Burden of Proof
- Evidence
Question
Can I claim the HOA violated a definition in the CC&Rs, such as 'Visible from Neighboring Property'?
Short Answer
No. You cannot violate a definition; you can only violate the rules that use the definition.
Detailed Answer
The homeowner argued the HOA violated the definition of 'Visible from Neighboring Property.' The ALJ ruled that a definition is descriptive and cannot be violated in and of itself. Violations must be tied to specific covenants or restrictions.
Alj Quote
Further, because “Visible from Neighboring Property” as mentioned in Article 1 is a definition, it is impossible for Mountain Bridge to violate the same.
Legal Basis
Contract Interpretation
Topic Tags
- CC&R Interpretation
- Definitions
- Legal Standards
Question
If I win my hearing against the HOA, will I get my filing fee back?
Short Answer
Yes, if you prevail on a claim, the ALJ can order the HOA to reimburse your filing fee.
Detailed Answer
The ALJ deemed the homeowner the prevailing party regarding the 'failure to negotiate' claim (even though other claims were denied) and ordered the HOA to reimburse the $500.00 filing fee within 30 days.
Alj Quote
Thus, Petitioner is entitled to his filing fee of $500.00 and Respondent must reimburse the same with 30 days.
Legal Basis
Administrative Remedy
Topic Tags
- Remedies
- Fees
- Reimbursement
Case
- Docket No
- 21F-H2121037-REL
- Case Title
- Gregory L. Smith vs. Mountain Bridge Community Association
- Decision Date
- 2021-06-11
- Alj Name
- Adam D. Stone
- Tribunal
- OAH
- Agency
- ADRE
Questions
Question
Does a board member violate conflict of interest laws by voting on their own architectural request if no money is exchanged?
Short Answer
Likely not. The ALJ ruled that the conflict of interest statute (A.R.S. § 33-1811) applies specifically to decisions involving compensation.
Detailed Answer
The ALJ interpreted A.R.S. § 33-1811 narrowly. While acknowledging that abstaining from voting on one's own request is 'best practice,' the Judge determined that the phrase 'contract, decision or other action for compensation' implies that the decision must involve compensation to trigger the statutory violation. Since the architectural approval was not for compensation, the statute was not violated.
Alj Quote
However, the word “other” would indicate that the contract or decision would involve compensation. … Therefore, the Tribunal finds that Mr. Smith has not sustained his burden in demonstrating that Mountain Bridge violated A.R.S. § 33-1811.
Legal Basis
A.R.S. § 33-1811
Topic Tags
- Conflict of Interest
- Board Conduct
- Architectural Review
Question
If the CC&Rs require the HOA to negotiate a dispute within a certain time, can they simply ignore it?
Short Answer
No. Ignoring a request for negotiation beyond the mandated timeframe can be considered a violation of the duty to negotiate in good faith.
Detailed Answer
In this case, the CC&Rs required the parties to make a reasonable effort to meet and confer. The HOA failed to communicate with the homeowner until 35 days after the claim was noticed (past the 30-day negotiation period). The ALJ found this lack of communication to be a violation of the specific CC&R article requiring good faith negotiation.
Alj Quote
The credible evidence presented demonstrated that Mountain Bridge, or its attorneys, did not communicate with Mr. Smith until October 13, 2020, approximately 35 days after the claim was noticed. … Therefore, the Tribunal finds that Mountain Bridge failed to negotiate in good faith and violated Article 11.3.2 of the CC&R’s.
Legal Basis
CC&R Article 11.3.2
Topic Tags
- Dispute Resolution
- Good Faith
- HOA Obligations
Question
Can the HOA use the COVID-19 pandemic as a valid excuse for failing to communicate with me?
Short Answer
Not if they fail to send any updates. The HOA must at least inform the homeowner of potential delays.
Detailed Answer
The ALJ rejected the HOA's implicit defense that the pandemic justified the delay in communication. The ruling stated that even if the pandemic caused issues, the HOA had an obligation to at least inform the homeowner that delays were occurring. Total silence was not justified.
Alj Quote
While this dispute occurred during the COVID-19 pandemic, certainly communications could have been sent to Mr. Smith informing him there may be some delays in communication. However, there were none, and thus no valid justification for the Board not entering into negotiations with the Smiths.
Legal Basis
Administrative Discretion / Good Faith
Topic Tags
- Communication
- Delays
- Good Faith
Question
Who is responsible for proving that the HOA violated the rules during a hearing?
Short Answer
The homeowner (Petitioner) bears the burden of proof.
Detailed Answer
The homeowner must prove their case by a 'preponderance of the evidence,' meaning they must show it is more likely than not that the violation occurred. The HOA does not have to disprove the claim initially; the burden starts with the homeowner.
Alj Quote
Petitioner bears the burden of proof to establish that Respondent violated CC&R § 3.1 by a preponderance of the evidence.
Legal Basis
A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A)
Topic Tags
- Legal Procedure
- Burden of Proof
- Evidence
Question
Can I claim the HOA violated a definition in the CC&Rs, such as 'Visible from Neighboring Property'?
Short Answer
No. You cannot violate a definition; you can only violate the rules that use the definition.
Detailed Answer
The homeowner argued the HOA violated the definition of 'Visible from Neighboring Property.' The ALJ ruled that a definition is descriptive and cannot be violated in and of itself. Violations must be tied to specific covenants or restrictions.
Alj Quote
Further, because “Visible from Neighboring Property” as mentioned in Article 1 is a definition, it is impossible for Mountain Bridge to violate the same.
Legal Basis
Contract Interpretation
Topic Tags
- CC&R Interpretation
- Definitions
- Legal Standards
Question
If I win my hearing against the HOA, will I get my filing fee back?
Short Answer
Yes, if you prevail on a claim, the ALJ can order the HOA to reimburse your filing fee.
Detailed Answer
The ALJ deemed the homeowner the prevailing party regarding the 'failure to negotiate' claim (even though other claims were denied) and ordered the HOA to reimburse the $500.00 filing fee within 30 days.
Alj Quote
Thus, Petitioner is entitled to his filing fee of $500.00 and Respondent must reimburse the same with 30 days.
Legal Basis
Administrative Remedy
Topic Tags
- Remedies
- Fees
- Reimbursement
Case
- Docket No
- 21F-H2121037-REL
- Case Title
- Gregory L. Smith vs. Mountain Bridge Community Association
- Decision Date
- 2021-06-11
- Alj Name
- Adam D. Stone
- Tribunal
- OAH
- Agency
- ADRE
Case Participants
Petitioner Side
- Gregory L. Smith (petitioner)
Appeared on his own behalf - Christa Smith (witness)
Called by Petitioner
Respondent Side
- Nicole Payne (HOA attorney)
Carpenter Hazlewood
Appeared on behalf of Respondent - Amber Martin (community manager)
Mountain Bridge Community Association
Also testified as a witness - Jim Rayment (ARC Chair)
Mountain Bridge Community Association
Approved the flagpole; also testified as a witness - Mr. Riggs (HOA President)
Mountain Bridge Community Association
Petitioner's backyard neighbor
Neutral Parties
- Adam D. Stone (ALJ)
OAH
Administrative Law Judge - Judy Lowe (Commissioner)
Arizona Department of Real Estate
Recipient of decision transmission
