**Case Title:** 25F-H009-REL (Consolidated under 24F-H033-REL)

**Parties:**
* **Petitioners:** John Krahn, et al.
* **Respondent:** Tonto Forest Estates Homeowners Association (TFE)

**Main Issue:**
The primary legal issue was whether the Respondent violated Arizona Revised Statutes (A.R.S.) § 33-1804(A) by deciding to file a claim with its Directors and Officers (D&O) liability insurance company during a closed executive session rather than in an open meeting.

**Key Facts and Arguments:**
* **Background:** The dispute arose after Petitioner John Krahn filed a defamation lawsuit against the TFE Board. In response to this lawsuit, the Board met in a closed session and decided to invoke its liability insurance policy to secure legal defense counsel.
* **Petitioners' Position:** The Petitioners argued that while the Board was permitted to *discuss* the litigation in a closed session, the actual discretionary financial *decision* to file an insurance claim should have been made during an open meeting. Furthermore, the Petitioners alleged that this decision caused the HOA's insurance policy to be canceled, forcing the Association to secure new coverage at a significantly higher cost. The Petitioners sought a $500 civil penalty.
* **Respondent's Position:** The Respondent contended that the Board had the right to invoke its insurance coverage in a closed session because the action constituted a legal decision regarding pending litigation initiated by a homeowner. The Respondent also clarified that the insurance policy was not canceled because of the claim, but rather because the insurance provider ceased offering that specific type of policy.

**Legal Analysis:**
The Administrative Law Judge (ALJ) analyzed the matter under A.R.S. § 33-1804(A), which generally mandates open meetings for HOA boards but provides specific exceptions. Under the statute, a board may close a portion of a meeting to consider legal advice from an attorney or matters concerning pending or contemplated litigation.

The ALJ determined that because there was active, pending litigation against the Board by a homeowner, the Board was entirely within its statutory rights to both discuss and decide upon invoking its insurance policy during a closed session. The tribunal found no statutory requirement dictating that only the discussion may remain private while the subsequent decision or action must be executed in an open meeting, particularly when the litigation involves a member of the Association.

**Final Decision (Outcome):**
The ALJ concluded that the Petitioners failed to meet their burden of proving a statutory violation. Consequently, the petition for case 25F-H009-REL was **denied**. Additionally, the ALJ ruled that the Respondent was not required to reimburse the Petitioners' filing fee, and no civil penalty was awarded.