Case Summary
| Case ID | 25F-H036-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2025-06-08 |
| Administrative Law Judge | Kay Abramsohn |
| Outcome | partial |
| Filing Fees Refunded | $500.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | John R. Krahn Living Trust/Janet Krahn Living Trust | Counsel | — |
|---|---|---|---|
| Respondent | Tonto Forest Estates Homeowners Association | Counsel | — |
Alleged Violations
CC&R 5.3
Outcome Summary
The Administrative Law Judge granted the Petitioner’s single-issue petition because the HOA Board had not appointed a third member to the Architectural Committee (ARC) to comply with CC&R 5.3 until March 17, 2025. The HOA was ordered to reimburse the Petitioner’s $500.00 filing fee, but no civil penalty was awarded.
Key Issues & Findings
Architectural Committee Composition Requirement
Petitioner alleged violation of CC&R Article 5.3, which mandates the Architectural Committee (ARC) shall consist of three regular members, because the HOA only had two members on the ARC as of the petition date (February 5, 2025). The Tribunal found the HOA failed to appoint a third member to the ARC until March 17, 2025, granting the petition.
Orders: Petition granted; Respondent ordered to reimburse Petitioner's $500.00 filing fee. No civil penalty was awarded.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
- CC&R 5.3
- ARIZ. REV. STAT. § 32-2199.01
- ARIZ. REV. STAT. § 33-1817(B)(1)
Analytics Highlights
- ARIZ. REV. STAT. § 32-2102
- ARIZ. REV. STAT. § 32-2199
- ARIZ. REV. STAT. § 32-2199.05
- ARIZ. REV. STAT. § 32-2199(2)
- ARIZ. REV. STAT. § 32-2199.01(D)
- ARIZ. REV. STAT. § 32-2199.02
- ARIZ. REV. STAT. § 32-2199.04
- ARIZ. REV. STAT. § 41-1092
- ARIZ. REV. STAT. § 41-1092.09
- ARIZ. REV. STAT. § 33-1817(B)(1)
- ARIZ. ADMIN. CODE R2-19-119
- CC&R 5.3
Audio Overview
Decision Documents
25F-H036-REL Decision – 1294268.pdf
25F-H036-REL Decision – 1295556.pdf
25F-H036-REL Decision – 1314961.pdf
25F-H036-REL Decision – 1323845.pdf
25F-H036-REL Decision – 1323922.pdf
Briefing Document: Krahn Living Trust v. Tonto Forest Estates Homeowners Association (Case No. 25F-H036-REL)
Executive Summary
This document synthesizes the proceedings and outcome of the administrative case John R Krahn Living Trust/Janet Krahn Living Trust v. Tonto Forest Estates Homeowners Association, Case No. 25F-H036-REL, held before the Arizona Office of Administrative Hearings. The central dispute involved an allegation by the Petitioner that the Tonto Forest Estates Homeowners Association (HOA) violated Article 5.3 of its Covenants, Codes, and Restrictions (CC&Rs), which mandates that its Architectural Committee (ARC) “shall consist of three (3) regular members.”
The Petitioner, John R. Krahn, filed a single-issue petition on February 5, 2025, asserting that the ARC was operating with only two members, thereby violating the governing documents. The Petitioner argued that this violation had persisted for an extended period and that the HOA Board had ignored his own application to fill the vacancy, constituting punitive behavior that warranted civil penalties.
The Respondent, represented by Board President Dwight Jolivette, contended that the governing documents allow for flexibility and that no violation occurred while the Board was actively recruiting a third member. The HOA argued that its interpretation was practical, in the best interest of the homeowners, and consistent with the practices of previous boards.
The Administrative Law Judge (ALJ), Kay A. Abramsohn, ruled in favor of the Petitioner. The decision, issued on June 8, 2025, found that the HOA was in violation of CC&R 5.3 at the time the petition was filed. The ruling was narrowly focused on the number of ARC members and explicitly declined to address secondary arguments about the validity of member appointments, as those were outside the scope of the single-issue petition. Consequently, the HOA was ordered to reimburse the Petitioner’s $500 filing fee. The Petitioner’s request for a civil penalty was denied.
——————————————————————————–
Case Overview
Case Number
25F-H036-REL
Petitioner
John R Krahn Living Trust / Janet Krahn Living Trust (Represented by John R. Krahn)
Respondent
Tonto Forest Estates Homeowners Association (Represented by Dwight Jolivette, Board President)
Arizona Office of Administrative Hearings (OAH)
Presiding Judge
Administrative Law Judge Kay A. Abramsohn
Hearing Date
May 14, 2025
Decision Date
June 8, 2025
Central Dispute: Violation of CC&R Article 5.3
The core of the dispute was the interpretation and application of CC&R Article 5.3 concerning the composition of the Architectural Committee (ARC).
Relevant Text of CC&R 5.3:
“After such time as the rights of Declarant to appoint the members of the Architectural Committee expire or are relinquished by the Declarant, the Architectural Committee shall consist of three (3) regular members, each of whom shall be appointed by the Board. In the event the Board does not appoint an Architectural Committee for any reason, the Board shall exercise the authority granted to the Architectural Committee under this Declaration…”
The Petitioner filed a single-issue petition on February 5, 2025, alleging the HOA was in violation of this article by operating the ARC with only two members.
Petitioner’s Position and Key Arguments
The Petitioner, John R. Krahn, who previously served as ARC Chairman (2019-2021) and Board Secretary (2019-2021), presented the following arguments:
• Mandatory Requirement: The term “shall” in CC&R 5.3 creates a mandatory, non-discretionary obligation for the ARC to have exactly three members.
• Prolonged Non-Compliance: The ARC operated with only two members for approximately 17 months, from at least October 2023 until March 17, 2025. Krahn further argued the period of non-compliance was potentially 42 months, claiming ARC member Mike Ackerly was never lawfully appointed by a formal Board vote in an open meeting.
• Failure to Correct: The HOA Board acknowledged the vacancy at a November 19, 2024 meeting and called for volunteers. Krahn submitted his resume the next day but his application was never discussed or voted upon. He contended this was a missed opportunity to bring the ARC into compliance.
• Punitive Behavior: The Board’s failure to consider his candidacy was described as “personal retaliation” and “punitive governance,” for which a civil penalty was warranted.
• Corrective Action as Admission: The Board’s appointment of a third member on March 17, 2025—after the complaint was filed—was presented as proof of the underlying violation.
Key Testimony (Krahn): “This is not a matter of opinion or interpretation. It’s a binary question of fact and by respondent’s own admission are operating for many months with other than three members.”
Respondent’s Position and Key Arguments
The HOA, represented by Board President Dwight Jolivette, countered with the following arguments:
• Reasonable Interpretation: No board has ever interpreted CC&R 5.3 to mean the ARC is non-viable or must be dissolved if it temporarily falls below three members.
• Active Recruitment: The Board was actively recruiting for the vacant position, as evidenced by the public call for volunteers. During this recruitment period, the two-member committee’s continued function was reasonable and in the community’s best interest.
• Board Authority: The Board has the authority under CC&R 12.5 to interpret the governing documents. Its interpretation that the committee could function with two members during a vacancy was a valid exercise of that authority.
• Appointment Process: The governing documents require members to be “appointed by the Board” but do not explicitly mandate a formal vote.
• Past Precedent: Jolivette argued that the ARC had operated with fewer than three members under prior boards, including one on which Krahn himself served.
Key Testimony (Jolivette): “Our position is that two members is not not necessarily a violation of 5.3 if and when you’re actively recruiting for another member… Nothing in the governing document states that an appointment is equivalent to a vote.”
Hearing and Procedural Timeline
Nov 19, 2024
The HOA Board acknowledges an ARC vacancy and calls for volunteers.
Nov 20, 2024
Petitioner John Krahn submits his resume for the ARC position.
Jan 22, 2025
The HOA’s Community Manager confirms in an email that the ARC has two members: Steve Gauer and Mike Ackerly.
Feb 5, 2025
The Petitioner files a single-issue petition with the Arizona Department of Real Estate.
Mar 17, 2025
The HOA Board formally appoints Alan Damon to the ARC via motion and vote, bringing its membership to three.
May 14, 2025
An evidentiary administrative hearing is held virtually before ALJ Kay Abramsohn.
June 8, 2025
The Administrative Law Judge Decision is issued.
June 29, 2025
An Order Nunc Pro Tunc is issued to correct the number of admitted petitioner exhibits in the original decision.
Administrative Law Judge’s Decision and Order
The ALJ’s decision, issued on June 8, 2025, resolved the dispute by granting the petition but denying the request for a civil penalty.
• Violation Confirmed: The ALJ concluded that the Petitioner met the burden of proof to demonstrate that as of the petition’s filing date (February 5, 2025), the HOA Board had not appointed a third member to the ARC. This constituted a violation of CC&R 5.3.
• Corrective Action Timing: The decision noted that a third member was not appointed until March 17, 2025, more than a month after the petition was filed.
• Limitation of Scope: The ALJ explicitly stated that the Petitioner’s arguments regarding the validity of Mike Ackerly’s appointment process were not addressed. The ruling was confined to the single issue presented in the original petition: whether the ARC had the required number of members. The decision stated, “Petitioner’s arguments regarding the appointment process are not addressed.”
The ALJ issued a three-part order:
1. Petition Granted: The Petitioner’s petition in case 25F-H036-REL was granted on the grounds that the HOA had not appointed a third member to the ARC to comply with CC&R 5.3 until March 17, 2025.
2. Filing Fee Reimbursed: The Respondent (HOA) was ordered to reimburse the Petitioner’s $500.00 filing fee.
3. Civil Penalty Denied: No civil penalty was awarded.
An Order Nunc Pro Tunc was later issued on June 29, 2025, to correct a clerical error in the original decision, changing the record of admitted evidence from “Petitioner’s Exhibits 1 through 22” to “Petitioner’s Exhibits 1 through 26.” This correction was retroactive to the date of the original decision.
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STAT. § 33-1817(B)(1)”, “topic_tags”: [ “Architectural Committee”, “Board of Directors”, “Statutory Requirements” ] }, { “question”: “Will I automatically be awarded civil penalties (fines against the HOA) if I prove a violation?”, “short_answer”: “No. Proving a violation does not guarantee that the judge will impose a civil penalty.”, “detailed_answer”: “Although the homeowner successfully proved the HOA violated the CC&Rs regarding committee membership, the ALJ explicitly declined to award any civil penalties.”, “alj_quote”: “IT IS FURTHER ORDERED that no civil penalty is awarded.”, “legal_basis”: “Administrative Discretion”, “topic_tags”: [ “Penalties”, “Remedies”, “Civil Penalty” ] }, { “question”: “What is the standard of proof for a homeowner in an HOA administrative hearing?”, “short_answer”: “Preponderance of the evidence.”, “detailed_answer”: “The homeowner must prove that their claim is ‘more probably true than not.’ It is based on the convincing force and superior weight of the evidence, not just the number of witnesses.”, “alj_quote”: “In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated CC&R 5.3… ‘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”: “ARIZ. ADMIN. CODE R2-19-119”, “topic_tags”: [ “Burden of Proof”, “Legal Standards”, “Evidence” ] }, { “question”: “How long do I have to request a rehearing if I am unhappy with the decision?”, “short_answer”: “30 days.”, “detailed_answer”: “Any party wishing to request a rehearing must file the request with the Commissioner of the Department of Real Estate within 30 days of the service of the order.”, “alj_quote”: “Pursuant to ARIZ. REV. STAT. § 41-1092.09, a request for rehearing in this matter must be filed with the Commissioner of the Department of Real Estate within 30 days of the service of this Order upon the parties.”, “legal_basis”: “ARIZ. REV. STAT. § 41-1092.09”, “topic_tags”: [ “Appeals”, “Rehearing”, “Procedure” ] } ] }
{ “case”: { “docket_no”: “25F-H036-REL”, “case_title”: “John R. Krahn Living Trust/Janet Krahn Living Trust v. Tonto Forest Estates Homeowners Association”, “decision_date”: “2025-06-08”, “alj_name”: “Kay A. Abramsohn”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “If the CC&Rs state a committee ‘shall’ have a specific number of members, is the HOA in violation if they operate with fewer?”, “short_answer”: “Yes. If the governing documents mandate a specific number of members (e.g., three), failing to appoint that number is a violation.”, “detailed_answer”: “The ALJ ruled that the HOA violated the CC&Rs because the documents required the Architectural Committee to consist of three members, but the Board had failed to appoint a third member for a period of time. The use of ‘shall consist’ in the CC&Rs created a mandatory requirement.”, “alj_quote”: “IT IS ORDERED that Petitioner’s petition in 25F-H036-REL be granted because the newly elected HOA Board had yet appointed a third member to the ARC in order to comply with CC&R 5.3 until March 17, 2025.”, “legal_basis”: “CC&R 5.3”, “topic_tags”: [ “CC&Rs”, “Committee Requirements”, “Governance” ] }, { “question”: “If the HOA fixes the violation after I file my complaint, do I still win the hearing?”, “short_answer”: “Yes. Correcting the issue after the petition is filed does not erase the fact that the violation existed at the time of filing.”, “detailed_answer”: “The homeowner filed the petition in February. The HOA appointed the missing committee member in March (before the May hearing). The ALJ still granted the petition because the HOA was not in compliance at the time the dispute arose and the petition was filed.”, “alj_quote”: “The Tribunal concludes that that Petitioner has met his burden to demonstrate that, as of February 5, 2025, the newly elected HOA Board had not yet appointed a third member to the ARC… IT IS ORDERED that Petitioner’s petition… be granted because the newly elected HOA Board had yet appointed a third member to the ARC… until March 17, 2025.”, “legal_basis”: “Administrative Law Standards”, “topic_tags”: [ “Procedural”, “Compliance”, “Dispute Resolution” ] }, { “question”: “Will the HOA have to pay me back for the filing fee if I win?”, “short_answer”: “Yes. The ALJ typically orders the HOA to reimburse the filing fee if the homeowner prevails.”, “detailed_answer”: “Upon granting the petition and finding the HOA in violation, the judge ordered the HOA to reimburse the homeowner’s $500 filing fee as required by Arizona statute.”, “alj_quote”: “IT IS FURTHER ORDERED that Respondent shall reimburse Petitioner’s $500.00 filing fee as required by ARIZ. REV. STAT. § 32-2199.01.”, “legal_basis”: “ARIZ. REV. STAT. § 32-2199.01”, “topic_tags”: [ “Filing Fees”, “Remedies”, “Costs” ] }, { “question”: “Does the law require a Board member to serve on the Architectural Committee?”, “short_answer”: “Yes. Arizona statute mandates that at least one board member serve as the chairperson of the design review or architectural committee.”, “detailed_answer”: “Regardless of what the specific community documents say, Arizona state law (A.R.S. § 33-1817) overrides them to require that a board member serve as the chairperson of the architectural committee.”, “alj_quote”: “Membership on a design review committee, an architectural committee or a committee that performs similar functions, however denominated, for the planned community shall include at least one member of the board of directors who shall serve as chairperson of the committee.”, “legal_basis”: “ARIZ. REV. STAT. § 33-1817(B)(1)”, “topic_tags”: [ “Architectural Committee”, “Board of Directors”, “Statutory Requirements” ] }, { “question”: “Will I automatically be awarded civil penalties (fines against the HOA) if I prove a violation?”, “short_answer”: “No. Proving a violation does not guarantee that the judge will impose a civil penalty.”, “detailed_answer”: “Although the homeowner successfully proved the HOA violated the CC&Rs regarding committee membership, the ALJ explicitly declined to award any civil penalties.”, “alj_quote”: “IT IS FURTHER ORDERED that no civil penalty is awarded.”, “legal_basis”: “Administrative Discretion”, “topic_tags”: [ “Penalties”, “Remedies”, “Civil Penalty” ] }, { “question”: “What is the standard of proof for a homeowner in an HOA administrative hearing?”, “short_answer”: “Preponderance of the evidence.”, “detailed_answer”: “The homeowner must prove that their claim is ‘more probably true than not.’ It is based on the convincing force and superior weight of the evidence, not just the number of witnesses.”, “alj_quote”: “In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated CC&R 5.3… ‘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”: “ARIZ. ADMIN. CODE R2-19-119”, “topic_tags”: [ “Burden of Proof”, “Legal Standards”, “Evidence” ] }, { “question”: “How long do I have to request a rehearing if I am unhappy with the decision?”, “short_answer”: “30 days.”, “detailed_answer”: “Any party wishing to request a rehearing must file the request with the Commissioner of the Department of Real Estate within 30 days of the service of the order.”, “alj_quote”: “Pursuant to ARIZ. REV. STAT. § 41-1092.09, a request for rehearing in this matter must be filed with the Commissioner of the Department of Real Estate within 30 days of the service of this Order upon the parties.”, “legal_basis”: “ARIZ. REV. STAT. § 41-1092.09”, “topic_tags”: [ “Appeals”, “Rehearing”, “Procedure” ] } ] }
Case Participants
Petitioner Side
- John R. Krahn (petitioner/representative)
John R Krahn Living Trust
Appeared on Petitioners’ behalf; former ARC Chairman and Board Secretary. - Janet Krahn (petitioner)
Janet Krahn Living Trust
Named party in the case title.
Respondent Side
- Dwight Jolivette (board president/HOA representative)
Tonto Forest Estates Homeowners Association
Appeared on Respondent's behalf. - Barbara Bonilla (property manager)
Ogden & Company
Community Manager for the HOA. - Steve Gauer (board treasurer/ARC member)
Tonto Forest Estates Homeowners Association
Became Board Treasurer in November 2024; served on ARC. - Mike Ackerly (ARC member)
Tonto Forest Estates Homeowners Association
Joined the ARC in February 2022. - Alan Damon (ARC member)
Tonto Forest Estates Homeowners Association
Appointed to the ARC on March 17, 2025. - Kenneth Riley (ARC member (former))
Tonto Forest Estates Homeowners Association
Indicated as an ARC member between July and November 2024.
Neutral Parties
- Kay A. Abramsohn (ALJ)
Office of Administrative Hearings (OAH) - Susan Nicolson (commissioner)
Arizona Department of Real Estate (ADRE)
Other Participants
- Joe Burns (attendee)
Attended the hearing virtually; did not give testimony. - John Fris (ARC member (former))
Mentioned as a former ARC member appointed in February 2021. - Brett (ARC member (former))
Mentioned as a former ARC member whom John (Fris) replaced.
