Case Summary
| Case ID | 21F-H2121051-REL-RHG |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2022-01-03 |
| Administrative Law Judge | Thomas Shedden |
| Outcome | none |
| Filing Fees Refunded | $500.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Clifford (Norm) Burnes | Counsel | — |
|---|---|---|---|
| Respondent | Saguaro Crest Homeowners Association, Inc. | Counsel | John Crotty |
Alleged Violations
ARIZ. REV STAT. 33-1804
Outcome Summary
The ALJ dismissed the Petitioner's complaint, finding that the Respondent HOA did not violate the open meeting law (A.R.S. § 33-1804) because the action was taken without a meeting via unanimous written consent as authorized by A.R.S. § 10-3821.
Why this result: The Petitioner did not meet the burden of proof to show that the alleged violation occurred, as the board acted without holding a formal meeting.
Key Issues & Findings
Violation of open meeting law by taking action via unanimous written consent
Petitioner alleged that the Board of Directors violated the open meeting law (A.R.S. § 33-1804) on May 3, 2020, by taking two actions using unanimous written consent of the Board members, which the Respondent claimed was permissible under A.R.S. § 10-3821 as action without a meeting.
Orders: Petitioner's petition is dismissed.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
- ARIZ. REV STAT. 33-1804
- ARIZ. REV STAT. 10-3821
Analytics Highlights
- ARIZ. REV STAT. 33-1804
- ARIZ. REV STAT. 10-3821
- ARIZ. REV. STAT. 32-2199
- ARIZ. REV. STAT. 32-2199.02(A)
- ARIZ. REV. STAT. 41-1092.08
- ARIZ. ADMIN. CODE R2-19-119
- ARIZ. REV. STAT. 10-3701(F)
- ARIZ. REV. STAT. 10-3071
Video Overview
Audio Overview
Decision Documents
21F-H2121051-REL Decision – 899423.pdf
21F-H2121051-REL Decision – 930803.pdf
21F-H2121051-REL Decision – 935756.pdf
Briefing Document: Burnes v. Saguaro Crest Homeowners Association
Executive Summary
This briefing document synthesizes the legal proceedings and final decision in the case of Clifford (Norm) Burnes versus the Saguaro Crest Homeowners Association, Inc. (Case No. 21F-H2121051-REL). The core of the dispute was Petitioner Burnes’s allegation that the HOA Board of Directors violated Arizona’s open meeting law for planned communities by taking two official actions on May 3, 2020, without holding a public meeting. The HOA defended its actions, stating that it utilized a provision in the Arizona statutes for non-profit corporations (ARIZ. REV. STAT. § 10-3821) that allows a board to take action “without a meeting” through the unanimous written consent of all directors.
The Administrative Law Judge (ALJ), Thomas Shedden, ultimately ruled in favor of the HOA. The key finding was that no “meeting” as defined by the open meeting law actually occurred on May 3, 2020. Instead, the Board President individually visited other board members to obtain signatures on consent forms. The ALJ concluded that the two relevant statutes—the open meeting law (§ 33-1803/1804) and the action-by-consent statute (§ 10-3821)—are not in conflict. An HOA board can legally use the action-by-consent procedure, but if it chooses to hold a meeting, it must comply with the open meeting law.
Mr. Burnes’s request for a rehearing, which raised several legal and jurisdictional arguments, was granted but ultimately denied on its merits. The ALJ systematically rejected each of Burnes’s arguments, reaffirming the original decision. The final order dismissed Mr. Burnes’s petition, making the HOA the prevailing party.
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Case Overview
• Petitioner: Clifford (Norm) Burnes
• Respondent: Saguaro Crest Homeowners Association, Inc.
• Case Number: 21F-H2121051-REL (and 21F-H2121051-REL-RHG for rehearing)
• Adjudicating Body: Arizona Office of Administrative Hearings
• Administrative Law Judge: Thomas Shedden
• Core Allegation: The Petitioner alleged that on May 3, 2020, the Respondent’s Board of Directors violated Arizona’s open meeting law (cited as ARIZ. REV STAT. § 33-1803 in the initial decision and § 33-1804 in the rehearing decision) by taking two formal actions via unanimous written consent without allowing members to attend and speak.
• Respondent’s Defense: The Respondent acknowledged taking action by unanimous consent but asserted this was permissible under ARIZ. REV. STAT. § 10-3821, which allows for action without a meeting. Therefore, the open meeting law did not apply.
Factual Background and Timeline
1. April 2020: Mr. Burnes and his wife raised two issues with the HOA Board concerning “lot 7,” which is adjacent to their property. The issues were related to a construction bond waiver and the placement of a house on the lot.
2. April 2020 (Post-Complaint): Following the complaint, research was conducted by Jamie Argueta, and emails were exchanged between Mr. Burnes, the Board members, and Mr. Argueta.
3. April 19 & 21, 2020: The Board members met with Mr. and Ms. Burnes to discuss the issues. Minutes were kept for these meetings.
4. Undated Discussions: Board President Esmerelda Sarina Martinez and Board member Mr. Madill had informal discussions with other HOA members, which Ms. Martinez characterized as “neighbors talking and not a meeting.”
5. May 3, 2020: Ms. Martinez, acting alone, drafted two unanimous consent forms. She personally brought the forms and related documents to the homes of the other Board members, who each read the information and signed. The two actions taken by consent were:
◦ Honoring a waiver of the construction deposit for lot 7.
◦ A decision regarding the placement of the home on lot 7.
6. August 29, 2020: The first regularly scheduled Board meeting after the May 3rd actions was held. The meeting minutes did not include an entry showing that the written consent documents had been filed with the corporate records, a requirement of § 10-3281(A).
Procedural History
• May 7, 2021: Mr. Burnes filed his petition with the Arizona Department of Real Estate, initially asserting seven violations but being required to select only one for adjudication due to paying a single fee. He selected the violation of members not being permitted to attend and speak before the Board took formal action on May 3, 2020.
• July 16, 2021: An initial hearing was held before ALJ Thomas Shedden.
• July 28, 2021: The ALJ issued a decision dismissing Mr. Burnes’s petition, finding he had not proven a violation because no meeting occurred on May 3, 2020.
• September 2, 2021 (approx.): Mr. Burnes filed a Rehearing Request.
• September 22, 2021: The Department of Real Estate granted the request for a rehearing.
• December 9, 2021: The ALJ issued an order concluding the rehearing matter, noting that since only legal issues were raised, the decision would be based on the existing record and supplemental briefs (though neither party filed one).
• January 3, 2022: The ALJ issued the final decision on the rehearing, once again dismissing the petition and upholding the original ruling. This order was final and binding, subject to judicial review in the Superior Court.
Analysis of Legal Arguments from Rehearing
In his request for a rehearing, Mr. Burnes raised six primary legal arguments against the initial decision. The ALJ addressed and rejected each one.
Petitioner’s Argument
ALJ’s Analysis and Conclusion
1. Limited Jurisdiction: The ALJ’s jurisdiction is limited to Title 33, Chapter 16 and does not include ARIZ. REV. STAT. § 10-3821.
Rejected. Jurisdiction was proper because Mr. Burnes alleged a violation of § 33-1804 (which is in Title 33, Ch. 16). Nothing prohibits a Respondent from raising defenses from outside Title 33, or the ALJ from considering them.
2. Inapplicability of § 10-3821: The statute for action-by-consent only applies to actions found in Title 10, Chapters 24-40. The actions the HOA took are not found there.
Rejected. The ALJ noted that Mr. Burnes himself acknowledged that “voting” is an action found within those chapters of Title 10, and voting is precisely the action that was taken by unanimous consent.
3. Conflict of Law (§ 10-3701(F)): Statute § 10-3701(F) states that in cases of inconsistency, Title 33 (planned communities) controls over Title 10.
Rejected. This analysis is flawed because § 10-3701(F) applies specifically to membership meetings (Title 10, Ch. 30). The statute for action by consent, § 10-3821, deals with directors’ meetings and is in a different chapter (Title 10, Ch. 31), which has no similar provision. The legislature’s choice to include this provision for membership meetings but not for board meetings indicates an intent to allow boards more latitude to act by consent.
4. Specific vs. General Statute: § 33-1804 is specific to planned communities and should control over § 10-3821, which applies to all non-profits. The policy of the state favors open meetings.
Rejected. This principle of statutory construction only applies when statutes are in conflict and cannot both be given effect. Here, they are not in conflict. Both can be given full effect: an HOA may take action without a meeting per § 10-3821, but if a meeting is held, it must follow the open meeting requirements of § 33-1804.
5. Bylaws Are Irrelevant: The ALJ wrongly cited the HOA’s bylaws allowing action-by-consent, because § 33-1804 applies “notwithstanding any provision in the… bylaws.”
Rejected. Mr. Burnes was correct that bylaws do not trump the open meeting law. However, he overlooked that § 10-3821 itself contains an exception: it does not apply if the corporation’s bylaws prohibit action by consent. The finding regarding the bylaws was necessary only to show that this exception did not apply to the HOA, thus making § 10-3821 available to them.
6. A Meeting Did Occur: Mr. Burnes asserted a meeting did take place on May 3, 2020.
Rejected. The ALJ found this position had several flaws: Mr. Burnes cited no evidence from the record to prove discussion occurred on May 3rd; he conflated prior meetings with the events of May 3rd; and he provided no legal authority to show that drawing on past discussions to draft a consent form constitutes a “meeting.” The ALJ also dismissed his reliance on new dictionary definitions not presented at the original hearing.
Key Statutes and Legal Principles
• ARIZ. REV. STAT. § 33-1803 / § 33-1804 (Open Meetings Law):
◦ Mandates that “all meetings of the members’ association and the board of directors… are open to all members of the association.”
◦ Members “shall be permitted to attend and speak at an appropriate time during the deliberations and proceedings.”
◦ A “quorum of the board of directors that meets informally to discuss association business… shall comply with the open meeting and notice provisions.”
◦ Reflects a state policy that provisions should be construed “in favor of open meetings.”
• ARIZ. REV. STAT. § 10-3821 (Action Without Meeting):
◦ “Unless the articles of incorporation or bylaws provide otherwise, action… to be taken at a directors’ meeting may be taken without a meeting if the action is taken by all of the directors.”
◦ The action must be evidenced by one or more written consents, signed by each director, and included in the minutes filed with corporate records.
◦ A consent signed under this section has “the effect of a meeting vote.”
• Saguaro Crest HOA Bylaws (Section 3.5):
◦ The association’s bylaws explicitly provide directors with “the right to take any action in the absence of a meeting, which they could take at a meeting by obtaining the written consent of all the directors.”
Conclusion and Final Order
The Administrative Law Judge concluded that Mr. Burnes failed to meet his burden of proof to show that the Saguaro Crest HOA violated the open meeting law. The central finding was that the HOA’s actions on May 3, 2020, did not constitute a “meeting” but were a legally permissible “action without a meeting” under ARIZ. REV. STAT. § 10-3821. The subsequent rehearing confirmed this legal interpretation.
The final order, issued January 3, 2022, was:
“IT IS ORDERED that Petitioner Clifford (Norm) Burnes’s petition is dismissed.”
The order was final and binding, with any further appeal requiring judicial review by the Superior Court within 35 days.
Study Guide: Burnes v. Saguaro Crest Homeowners Association, Inc.
This study guide provides a review of the administrative law case involving Petitioner Clifford (Norm) Burnes and Respondent Saguaro Crest Homeowners Association, Inc. It includes a short-answer quiz, an answer key, essay questions, and a glossary of key terms based on the provided legal decisions.
Short-Answer Quiz
Answer each question in 2-3 sentences, based on the information in the case documents.
1. What was the single, specific violation that Clifford (Norm) Burnes alleged against the Saguaro Crest Homeowners Association’s Board of Directors?
2. What was the Respondent’s primary legal justification for the actions its Board of Directors took on May 3, 2020?
3. What two specific decisions did the Board make using the unanimous consent forms on May 3, 2020?
4. According to the Administrative Law Judge (ALJ), how can both the open meeting law (§ 33-1804) and the statute allowing action without a meeting (§ 10-3821) be given effect without being in conflict?
5. What was the purpose of the rehearing granted to Mr. Burnes, and what was the outcome?
6. How did the HOA’s bylaws, specifically section 3.5, support the Respondent’s case?
7. What argument did Mr. Burnes make regarding the ALJ’s jurisdiction to consider ARIZ. REV. STAT. section 10-3821?
8. What is the standard of proof required in this matter, and who bears the burden of meeting it?
9. Mr. Burnes asserted that a meeting did occur on May 3, 2020. What flaws did the ALJ identify in this assertion?
10. What specific requests did Mr. Burnes make in his petition as a remedy for the alleged violation?
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Quiz Answer Key
1. Mr. Burnes’s single alleged violation was that at the “meeting” on May 3, 2020, HOA members were not permitted to attend and speak after discussion but before the Board took formal action. This, he claimed, was a violation of Arizona’s open meeting law, cited as ARIZ. REV STAT. § 33-1803 and later § 33-1804.
2. The Respondent acknowledged taking two actions by consent but argued that no meeting actually occurred. Their defense was that they acted under the authority of ARIZ. REV. STAT. § 10-3821, which explicitly allows a board of directors to take action without a meeting if it is done via unanimous written consent of all directors.
3. The two decisions made via unanimous consent related to issues Mr. Burnes had raised about lot 7, which abuts his property. The first action was to honor a waiver of the construction deposit for lot 7, and the second action was regarding the placement of the home on lot 7.
4. The ALJ reasoned that the statutes are not in conflict because they apply to different situations. Respondent may take action without a meeting as allowed by § 10-3821, but if a meeting is held, Respondent must follow all the requirements of the open meeting law, § 33-1804.
5. Mr. Burnes requested a rehearing, alleging that the initial ALJ decision’s findings of fact were not supported by evidence or were contrary to law. The rehearing was granted to review these legal issues, but the outcome was the same: the ALJ once again concluded that no violation had occurred and dismissed Mr. Burnes’s petition.
6. Section 3.5 of the Association’s bylaws, titled “Action Without a Meeting,” explicitly provides the directors with “the right to take any action in the absence of a meeting, which they could take at a meeting by obtaining the written consent of all the directors.” This directly supported the Respondent’s claim that its actions were permissible under its own governing documents as well as state law.
7. Mr. Burnes argued that the ALJ’s jurisdiction is limited to Title 33, Chapter 16, and therefore the ALJ had no jurisdiction to consider section 10-3821 as a defense because it is not found in that title. The ALJ rejected this, stating that jurisdiction was proper because the complaint was about a violation of Title 33, and nothing prohibits a respondent from raising defenses from outside that title.
8. The standard of proof is a “preponderance of the evidence.” The Petitioner, Mr. Burnes, bore the burden of proof to show that the alleged violation occurred.
9. The ALJ found several flaws in this assertion: Mr. Burnes did not cite evidence from the record proving a discussion occurred on May 3rd, he conflated prior meetings with the events of May 3rd, and he provided no legal authority showing that prior discussions are pertinent to whether a meeting occurred on that specific day.
10. Mr. Burnes requested that the Respondent be ordered to rescind the consent actions, comply with the open meeting law, pay his filing fee, and be assessed a civil penalty.
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Essay Questions
1. Analyze the central conflict between ARIZ. REV. STAT. § 33-1804 (“Open meetings”) and ARIZ. REV. STAT. § 10-3821 (“Action without meeting”) as presented in this case. Explain the ALJ’s reasoning for concluding that the statutes do not conflict and can both be given effect.
2. Describe the timeline of events leading up to the May 3, 2020 unanimous written consent. How did the meetings and communications in April 2020 between Mr. Burnes and the Board influence the context of the dispute, even though they were not the subject of the final legal violation claim?
3. Evaluate the six specific legal arguments Mr. Burnes raised in his request for rehearing. For each, summarize his point and the ALJ’s counter-argument or legal conclusion.
4. Discuss the concept of “preponderance of the evidence” as defined in the case documents. Explain why the ALJ concluded that Mr. Burnes failed to meet this standard of proof in both the initial hearing and the rehearing.
5. Examine the relationship between state statutes and an association’s governing documents (like bylaws) in this case. How did the ALJ address Mr. Burnes’s argument that § 33-1804 should apply “notwithstanding any provision in the…bylaws”?
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Glossary of Key Terms
Term / Statute
Definition
Action without meeting
A procedure allowed by ARIZ. REV. STAT. § 10-3821 and the Association’s Bylaws (Section 3.5) where a board of directors may take action if it is evidenced by one or more written consents signed by all directors. The consent has the effect of a meeting vote.
Administrative Law Judge (ALJ)
The official, in this case Thomas Shedden, assigned to adjudicate complaints and ensure compliance with relevant statutes for the Office of Administrative Hearings.
ARIZ. REV. STAT. § 10-3821
The state statute titled “Action without meeting” that permits a board of directors to take action without a meeting if all directors provide written consent, unless the articles of incorporation or bylaws provide otherwise.
ARIZ. REV. STAT. § 33-1803 / § 33-1804
The state’s “Open meetings” law for planned communities. It requires that all meetings of an HOA board be open to all members, who shall be permitted to attend and speak at an appropriate time.
Burden of Proof
The obligation of a party in a trial to produce the evidence that will prove the claims they have made against the other party. In this case, the Petitioner (Mr. Burnes) bore the burden of proof.
Clifford (Norm) Burnes
The Petitioner in the case, a member of the Saguaro Crest Homeowners Association.
Petitioner
The party who files a petition or brings an action; in this case, Clifford (Norm) Burnes.
Preponderance of the evidence
The standard of proof in this case, defined as “The greater weight of the evidence…sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”
Respondent
The party against whom a petition is filed; in this case, Saguaro Crest Homeowners Association, Inc.
Saguaro Crest Homeowners Association, Inc.
The Respondent in the case; a planned community governed by a Board of Directors.
Unanimous Written Consent
The method used by the Respondent’s Board of Directors on May 3, 2020, to take action. It involved each board member signing written consent forms, as permitted by ARIZ. REV. STAT. § 10-3821.
Your HOA Board Can Legally Make Decisions in Secret—Here’s How One Homeowner’s Lawsuit Proved It
1.0 Introduction: The Expectation vs. The Reality
For most homeowners living in a planned community, the principle of transparency is paramount. The common expectation is that all significant decisions made by the Homeowners Association (HOA) board of directors will happen in open meetings. These are forums where members can attend, listen to the deliberations, and, at the appropriate time, make their voices heard before the board takes a formal vote. This commitment to openness is often seen as a cornerstone of fair governance.
But what if a board could make a decision without ever holding a meeting at all? This question was at the heart of a legal dispute in Arizona, where a homeowner named Clifford (Norm) Burnes took his HOA, Saguaro Crest, to court. Mr. Burnes alleged that his board violated the state’s open meeting law when it took action on two separate issues without convening a meeting. The case worked its way through an administrative law court, and the final decision sided with the HOA, establishing a critical legal precedent that boards can, under specific circumstances, bypass open meetings entirely.
2.0 Takeaway 1: Boards Can Legally Act “Without a Meeting”
The central facts of the case were not in dispute. On May 3, 2020, the Saguaro Crest HOA board made two formal decisions concerning a neighboring lot, specifically regarding a construction bond waiver and home placement—issues that Mr. Burnes himself had previously raised. Instead of calling a meeting, the board used a procedure known as “unanimous written consent.” The Board President, Ms. Martinez, drafted two consent forms, personally brought them to the homes of the other board members, and had each director sign them.
This action, while sidestepping an open meeting, was found to be perfectly legal. The board was operating under the authority of a specific Arizona state law, ARIZ. REV. STAT. section 10-3821, titled “Action without meeting.” This statute explicitly allows the board of a non-profit corporation to take action without a meeting, provided the action is taken by all directors and is documented by written consent.
Furthermore, this power was not just granted by state law; it was also written directly into the HOA’s own governing documents. Section 3.5 of the Saguaro Crest HOA’s bylaws, titled “Action Without a Meeting,” explicitly grants its directors “the right to take any action in the absence of a meeting, which they could take at a meeting by obtaining the written consent of all the directors.”
3.0 Takeaway 2: A Legal Puzzle—When Two State Laws Seem to Conflict
Mr. Burnes’s case created a compelling legal puzzle by highlighting two state laws that appeared to be in direct opposition. On one side was Arizona’s Planned Community law (ARIZ. REV. STAT. section 33-1804), which strongly mandates open meetings for HOA boards and includes a policy statement that any interpretation of the law should be construed “in favor of open meetings.”
On the other side was the state’s Nonprofit Corporation law (ARIZ. REV. STAT. section 10-3821), which, as noted, expressly permits a board to act without a meeting. Mr. Burnes argued that the open meeting law should take precedence.
The Administrative Law Judge, however, made a crucial distinction. Applying a standard legal principle that courts must try to give effect to both laws if possible, the judge determined the two statutes do not actually conflict. The judge’s reasoning clarifies how both can exist and be applied legally.
In this case, both sections 10-3821 and 33-1804 can be given effect in that Respondent may take action without a meeting as allowed by section 10-3821, but if a meeting is held, Respondent must follow the requirements of section 33-1804.
This interpretation is the core of the decision. The open meeting law, with all its requirements for notice and member participation, only applies if a meeting is held. By using the “action without meeting” statute, the Saguaro Crest board legally sidestepped the requirement to hold a meeting in the first place, thereby rendering the open meeting law inapplicable to their actions on that day.
4.0 Takeaway 3: Legislative Intent Can Be Read in a Law’s Silence
Mr. Burnes also advanced a more sophisticated legal argument: that in any conflict, the specific laws written for HOAs (found in Title 33 of the state code) should overrule the more general laws for non-profit corporations (found in Title 10).
The judge’s response to this provided a fascinating lesson in how courts interpret legislative intent, not just from what a law says, but from what it doesn’t say. The judge noted that the section of law governing general membership meetings does contain a specific clause stating that in the case of an inconsistency, the HOA laws control.
Crucially, the section of law governing board meetings, where the “action without meeting” statute is found, has no such clause. The judge interpreted this difference not as an oversight, but as a deliberate choice by lawmakers. This “silence” in the statute was read as a “legislative intent to allow boards latitude to act by consent.” In other words, if the legislature had intended for the open meeting law to always override the board’s ability to act by written consent, it would have explicitly said so, just as it did for membership meetings.
5.0 Conclusion: Efficiency vs. Transparency
While homeowners understandably value and expect open meetings as a tool for transparency and participation, the law also recognizes the need for boards to operate efficiently. The unanimous written consent procedure provides a legal mechanism for boards to make decisions, particularly on straightforward matters, without the time and expense of convening a formal meeting.
This case is more than a legal curiosity; it’s a practical lesson for every homeowner. The power wielded by the Saguaro Crest board is not unique to Arizona. If you want to understand the true scope of your own board’s authority, take these two steps:
1. Review your HOA’s bylaws. Look for a clause titled “Action Without a Meeting” or similar language that grants the board the right to act via written consent. This is the internal authorization.
2. Check your state’s Nonprofit Corporation Act. Search for a statute similar to Arizona’s § 10-3821. This is the ultimate source of the board’s power, and it likely exists in some form in your state, defining the boundary between efficiency and transparency for your community.
Case Participants
Petitioner Side
- Clifford (Norm) Burnes (petitioner)
Appeared on his own behalf at the original hearing
Respondent Side
- John Crotty (HOA attorney)
Law Offices of Farley, Choate & Wood
Attorney for Saguaro Crest Homeowners Association, Inc. - Esmerelda Sarina Martinez (board president, witness)
Saguaro Crest Homeowners Association, Inc.
Testified as a witness for Respondent - Madill (board member)
Saguaro Crest Homeowners Association, Inc.
Referred to as Mr. Madill
Neutral Parties
- Thomas Shedden (ALJ)
- Judy Lowe (Commissioner)
ADRE
Commissioner during original decision transmittal - Louis Dettorre (Commissioner)
ADRE
Commissioner during rehearing transmittal - Miranda Alvarez (staff)
Transmittal staff (also noted as Miranda A.) - c. serrano (staff)
Transmittal staff
Other Participants
- Jamie Argueta (staff)
Conducted research; position and function apparently not in the record
