03/15/2024 — CV2023053589 KLATT, JIMMIE 03/15/2024 HONORABLE MICHAEL D. GORDON View Minute Entry ↑ top
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- Minute Source
Clerk of the Superior Court
*** Electronically Filed ***
03/20/2024 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
CV 2023-053589
03/15/2024
Docket Code 005
Form V000A
Page 1
CLERK OF THE COURT
HONORABLE MICHAEL D. GORDON
C. Curley
Deputy
JIMMIE KLATT
JACOB A KUBERT
v.
SUNBIRD GOLF RESORT HOMEOWNERS
ASSOCIATION INC
STEVEN D CROCCHI
JUDGE GORDON
ORAL ARGUMENT
Courtroom 111 – Northeast Regional Court
10:08 a.m. This is the time set for an Oral Argument regarding Defendant’s Motion to
Dismiss Plaintiff’s Complaint filed on October 5, 2023, the Plaintiff’s Response to Motion to
Dismiss and Cross-Motion for Judgment on the Pleadings filed on November 7, 2023, the
Defendant’s Reply in Support of Defendant’s Motion to Dismiss Plaintiff’s Complaint and
Defendant’s Response to Plaintiff’s Cross-Motion for Judgment on the Pleadings filed on
November 20, 202, the Plaintiff’s Reply in Support of Cross-Motion for Judgment on the Pleadings
filed on December 4, 2023, the Defendant’s Motion to Strike Plaintiff’s Cross Motion for
Judgment on the Pleadings and Reply in Support filed on December 14, 2023 and the Plaintiff’s
Response to Motion to Strike filed on December 14, 2023. Plaintiff, Jimmie Klatt, is represented
by counsel, Jacob Kubert. Defendant, Sunbird Golf Resort Homeowners Association, Inc, is
represented by counsel, Steven Crocchi.
A record of the proceedings is made digitally in lieu of a court reporter.
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Argument is held regarding Defendant’s Motion to Dismiss Plaintiff’s Complaint filed on
October 5, 2023.
IT IS ORDERED taking the matters under advisement.
10:55 a.m. Matter concludes.
LATER:
UNDER ADVISEMENT RULING
Pending before the Court is:
Defendant Sunbird Golf Resort Homeowners Association, Inc.’s (Sunbird HOA) Motion
to Dismiss Plaintiff’s Complaint (filed 10/5/23).
Plaintiff Jimmie Klatt’s (Klatt) Cross-Motion for Judgment on the Pleadings (filed
11/17/23).
Sunbird HOA’s Motion to Strike Plaintiff’s Cross Motion for Judgment on the Pleadings
and Reply in Support (filed 12/14/23).
The Court has reviewed the motions, the responses, replies, the file and the applicable case
law. The Court has also considered the parties’ arguments advanced at oral argument held on
March 15, 2024. The matter is ready for ruling.
A. Background
With this lawsuit Klatt challenges 2021 amendments to Sunbird HOA’s Covenants,
Conditions and Restrictions (CC&R’s) and asserts that Sunbird HOA violated A.R.S. §33-
1806(D). Those amendments permit the use of common assessments for a golf course that runs
through the properties but are not owned by Sunbird HOA. He contends that 2021 amendments
were not foreseeable and they violate the principles set forth in Kalway v. Calabria Ranch HOA,
LLC, 252 Ariz. 532 (2022).
More specifically, Klatt alleges that he owns a home managed by Sunbird HOA located in
Chandler, Arizona which sits near the Sunbird Golf Resort (Resort). Developed between 1990-
1994, the Resort was originally surrounded by 17 individual homeowner associations through
which the Sunbird Golf Course (Golf Course) ran. Complaint, ¶¶ 6-7. In 1999, the homeowners,
through a transition agreement (Transition Agreement) consolidated the associations and formed
Sunbird HOA. Id. at ¶8.
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Klatt further alleges that the Golf Course remains separately owned and was never made
part of the HOA and that the 1999 CC&Rs expressly provided that “The Golf Course Owner shall
be responsible for maintaining the Golf Course Land…”. Id. at ¶ 17. He alleges that “Over the
years, the Association amended the CC&Rs on several occasions but did not change anything
insofar as it related to the Association’s relationship with the Golf Course.” Id. at 20. Klatt avers
that, as evidenced by the 2015 version of the CC&Rs, one of the primary purposes of the Sunbird
HOA was to “apply all funds” for maintenance of common areas, and the Golf Course is not part
of the common area. Id. at ¶¶ 22-26.
Klatt further alleges that in March 2020, the Sunbird HOA Board, and the Golf Course
owner “met in a secret meeting where they discussed how to amend the 2015 CC&Rs so the
Association could use its funds to support the Golf Course.” Id. at ¶ 29. Ultimately, in 2021, “the
Sunbird HOA adopted three amendments and apparently persuaded enough owners to pass them
(2021 Amendment).” Id. at ¶ 30. The 2021 Amendment gave the Board the authority to use
common expenses for the Golf Course and assessed all new owners a $300.00 transfer fee
(Transfer Fee) to be used for common areas including the Golf Course. Id. ¶¶31-33.
Klatt has filed a one-count Complaint. He asserts: 1, (Count 1) Declaratory
Judgment/Injunction that the 2021 Amendment is invalid under Kalway v. Calabria Ranch HOA,
LLC, 252 Ariz. 532 (2022), the Transfer Fee is invalid under A.R.S. § 33-1806(D), and a fine for
violation of that statute.
On October 5, 2023, the Sunbird HOA filed the extant Motion to Dismiss, which triggered
Klatt’s Response and a Cross-Motion for Judgment on the Pleadings, filed on November 7, 2023.
The Sunbird HOA, in turn, filed a Moton to Strike the Cross Motion for Judgment on the Pleadings
because Rule 12(c) requires the pleadings be closed before a judgment on the pleadings is
appropriate.
A. Motion to Dismiss & the Parties’ Arguments1
In ruling on a Rule 12(b)(6) motion to dismiss, the Court will “assume the truth of the well-
pled factual allegations and indulge all reasonable inferences therefrom.” Cullen v. Auto-Owners
Ins. Co., 218 Ariz. 417, 419 (2008). The Court will grant the motion only if the plaintiff is not
entitled to relief “under any facts susceptible of proof in the statement of the claim.” ELM Ret.
Ctr., LP v. Callaway, 226 Ariz. 287, 289 (App. 2010), quoting Mohave Disposal, Inc. v. City of
Kingman, 186 Ariz. 343, 346 (1996). The Court, however, will not “speculate about hypothetical
facts that might entitle the plaintiff to relief.” Cullen, 28 at 420. Nor will the Court “accept as true
allegations consisting of conclusions of law, inferences or deductions that are not necessarily
1 To the extent the Court omits a party’s argument, that argument is rejected.
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implied by well-pleaded facts, unreasonable inferences or unsupported conclusions from such
facts, or legal conclusions alleged as facts.” Jeter v. Mayo Clinic Ariz., 211 Ariz. 386, 389 (App.
2005).
Before the trial court grants a Rule 12(b)(6) motion to dismiss, the non-moving party
should be given an opportunity to amend the complaint if such an amendment cures its defects.”
Wigglesworth v. Mauldin, 195 Ariz. 432, 439 (App. 1999); see also Dube v. Likins, 216 Ariz. 406,
415 (App. 2007). But a request for leave to amend should be made in a proper motion. Blumenthal
v. Teets, 155 Ariz. 123, 131 (App. 1987).
Turning to the motion to dismiss, Sunbird HOA alleges that there is no justiciable issue
because Klatt has paid no assessment under the amendments, which only apply to new home
purchasers, and he is at “no risk” of ever paying those assessments. The Sunbird HOA further
argues that Klatt has not and cannot allege that Sunbird HOA has used any money collected from
existing homeowners, including his monies, for the Golf Course.
Sunbird HOA further challenges Klatt’s allegation that the 2021 Amendment affects “the
marketability” because it is no more than a “conclusory statement.” It argues that Klatt has not
alleged that he intends to sell the home.
Sunbird also claims that Klatt has failed to allege a justiciable issue under Kalway. It asserts
that a homeowner’s association (HOA) may amend CC&R’s by a majority vote if such voting
rights are in the original declaration. Sunbird HOA acknowledges that Kalway requires the
amendment fall within reasonable expectations based on the declaration in effect at the time of
purchase. Because Klatt is not being asked to pay the assessment, the 2021 Amendment does not
run afoul of Kalway.
Finally, the Sunbird HOA alleges that Klatt’s claims under A.R.S. 33-1806(D) fails as a
matter of law because the declaratory judgment/Injunction claim does not encompass monetary
damage. Section 33-1806(D) prohibits a HOA (and subjects it to a fine) from collecting a fee
“relating to services for resale disclosure, lien estoppel and any other services related to the transfer
or use of a property except as specifically authorized by that statute.” The Sunbird HOA contends
that the transfer fee provides additional funds “for common expenses.”
Klatt responds and emphasizes that the Transition Agreement expressly provided that the
golf course was not conveyed or leased to the Association as common area and expressly
“acknowledge[d] and agree[d] that the Sunbird Golf Course … [is] owned by SBG.” Klatt stresses
that Recital A of the 1999 CC&Rs states, “Golf Course Owner owns and operates the Sunbird Golf
Course … [and it] does not constitute ‘common area’ under the various declarations of covenants,
conditions, and restrictions applicable to Sunbird Golf Resort.”
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Klatt further highlights the 2015 CC&Rs in place at the time he purchased his home define
“common expenses” which provide for the expenses for the acquisition, construction, alteration,
maintenance of common areas “except for the golf course.” He further points out that the HOA
provides that “[n]either the Association or its members shall be responsible for the costs and
expenses incurred in the operation and maintenance of the golf course, driving range and related
golf operation (except for the payment of membership fees, green fees, user fees and other related
golf fees).”
Klatt argues that the amendment violates Kalway because the amendment was
unforeseeable and therefore required a unanimous vote. He further argues that he is clearly entitled
to the sanctions imposed by section 33-1806(D) that, however packaged, the fee is being charged
in connection with the transfer of the property--- and the statute permits only reimbursement for
the costs of supplying new owners of the HOA’s government documents. A.R.S. § 33-1806(C)
(2024). The statue provides a cap of to $400.00. Id.
In its Reply, Sunbird HOA re-asserts the claim that there is no justiciable controversy
because there is no way Klatt can be harmed. The Declaratory Judgment Act, it contends, is not
absolute right for homeowners but, also requires equitable considerations. It also again argues that
Klatt has not established a violation of Kalway.
Having considered the arguments, the Court denies the motion to dismiss. A justiciable
controversy under the Declaratory Judgments Act exists if there is “an assertion of a right, status,
or legal relation in which the plaintiff has a definite interest and a denial of it by the opposing
party.’” See Keggi v. Northbrook Prop. & Cas. Ins. Co., 199 Ariz. 43, 45, Ct. App. 2000).
The Court finds that Klatt’s claim that the marketability may be effected is not wholly
conclusory. The 2021 Amendment’s Transfer Fee, while seemingly nominal, is not all that is at
issue. The 2021 Amendment arguably transformed the community from one which is independent
of its neighboring golf course to one that is not. That dynamic also impacts marketability.
The Court turns to Kalway. In Kalway, the Supreme Court held that a general-amendment-
power provision in a homeowner association’s CC&Rs “may be used to amend only those
restrictions for which the HOA’s original declaration has provided sufficient notice.” Kalway, 252
Ariz. at 535. A.R.S. § 33-1817(A) permits amendment of CC&Rs by a majority vote, so long as a
voting scheme is included in the original declaration, but common law further requires that the
“original declaration must give sufficient notice of the possibility of a future amendment; that is,
amendments must be reasonable and foreseeable.” Id. at 537-39 (citing Dreamland Villa Cmty.
Club, Inc. v. Rainey, 224 Ariz. 42, 51 (App. 2010), Shamrock v. Wagon Wheel Park Homeowners
Ass’n, 206 Ariz. 42, 45-46 (App. 2003), and Wilson v. Playa de Serrano, 211 Ariz. 511, 513 (App.
2005)). This is because “[a]llowing substantial, unforeseen, and unlimited amendments would alter
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the nature of the covenants to which the homeowners originally agreed.” Id. at 536 citing
Dreamland, 224 Ariz. at 51).
On the record before the Court, the Court finds that Sunbird HOA has not proven the
absence of foreseeability as a matter of law. Indeed, the opposite appears to be the more viable
argument and may well carry the day. Moreover, the fact that Klatt is not directly impacted by the
2021 Amendment does not foreclose an award of nominal damages. Edwards v. Anaconda, 115
Ariz. 313 (App. 1997)
Finally, the Court denies the motion to dismiss with respect to the statutory claim. Indeed,
the Court finds that the 2021 Amendment, absent further authority demonstrating otherwise,
violates section 33-1806. That stated, the case is not procedurally postured in a way that would
permit the Court to grant Klatt relief on the issue See section B, infra.
B. Motion to Strike Judgment on the Pleadings and Motion for Judgment on the
Pleadings.
Sunbird HOA moves to strike Klatt’s Cross Motion for Judgment on the Pleadings. It
correctly argues that Rule 12(c) of the Arizona Rules of Civil Procedure requires that the pleadings
be closed. The Court rejects Klatt’s contention that because the dueling motions purportedly
resolve the case, he may ignore Rule 12(c).
The Court will strike the motion. It is unequivocally premature under Rule 12(c).
C. Conclusion
For the foregoing reasons,
IT IS ORDERED denying Sunbird HOA’s Motion to Dismiss Plaintiff’s Complaint (filed
10/5/23).
IT IS FURTHER ORDERED granting Sunbird HOA’s Motion to Strike Plaintiff’s
Motion for Judgment (filed on 12/14/23).
IT IS FURTHER ORDERED striking Klatt’s Cross Motion for Judgment on the
Pleadings (filed 11/17/23).
05/02/2025 — CV2023053589 KLATT, JIMMIE 05/02/2025 HONORABLE MICHAEL D. GORDON View Minute Entry ↑ top
- Source
- Minute Source
Clerk of the Superior Court
*** Electronically Filed ***
05/05/2025 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
CV 2023-053589
05/02/2025
Docket Code 926
Form V000A
Page 1
CLERK OF THE COURT
HONORABLE MICHAEL D. GORDON
T. Williams
Deputy
JIMMIE KLATT
JACOB A KUBERT
v.
SUNBIRD GOLF RESORT HOMEOWNERS
ASSOCIATION INC
LORI N BROWN
JUDGE GORDON
MINUTE ENTRY
Introduction
In this lawsuit, Jimmie Klatt (Klatt) has sued his Sunbird Golf Resort Homeowner’s
Association (Association). Klatt challenges amendments to the Sunbird Golf Resort
Homeowners Association ’s CCR’s that were recorded in 2021. He alleges that these
amendments were unforeseeable and violated contractual principles as set forth in Kalway v.
Calabria Ranch HOA, LLC, 252 Ariz. 532 (2022). He claims that the Association violated
Arizona law which limits the right of homeowner’s associations (HOA) to charge transactional
fees upon resale of property within a HOA. See A.R.S. § 33-1806 (HOA Transfer Statute).
On September 27, 2024, after oral argument, the Court denied Plaintiff Jimmie Klatt’s
(Klatt) Motion for Summary Judgment (filed May 6, 2024). The Court found that factual
questions regarding foreseeability precluded the entry of summary judgment.
The Court’s denial triggered Klatt’s Motion for Reconsideration (filed September 27,
2024) wherein he argued that the issue of whether an amendment to the covenants, conditions,
and restrictions (CCRs) is foreseeable is a question of law--- to which the Court ordered a
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Response be filed. In its Response, Defendant Sunbird Golf Homeowner’s Association
(Association) agreed that it was a question of law.
On December 4, 2024, the Court granted Klatt’s Motion for Reconsideration. The Court
agreed to reconsider its ruling on Klatt’s Motion for Summary Judgment (filed May 6, 2024) de
novo. The Court further granted the Association leave to file a cross motion for summary
judgment.
Thus, now pending is Klatt’s Motion for Summary Judgment (filed May 6, 2024) and the
Association’s Cross Motion for Summary Judgment (filed January 6, 2025).The Court has
reviewed the motions, the responses, replies, the file and the applicable case law. The Court has
also considered the parties’ arguments advanced at oral argument held on March 15, 2024.
The matter is ready for ruling. The Court will grant Klatt’s Motion in part with respect to
the Kalway issue and will grant the Association’s Motion in part with respect to the HOA
Transfer Fee.
Background
The summary judgment record establishes that Klatt owns a home he purchased in 2018
which is managed by the Association. Developed by Sunbird Golf (SBG) between 1990-1994,
the homes sit and around a resort which was originally surrounded by 17 individual homeowner
associations through which a golf course (Golf Course) runs.
In 1999, the various homeowners, through a transition agreement (Transition
Agreement), consolidated the associations and formed the Association. In addition to the
Transition Agreement, other documents were executed including the full set of CCRs applicable
to all homes (1999 CCRs) and a 1999 Common Areas Lease (Common Areas Lease).
Under the 1999 CCRs, the Golf Course remained separately owned by SBG and was
never made part of the Association. Moreover, the Common Areas Lease did not and still does
not include any part of the Golf Course.
In 2015, the 1999 CCRs were amended and recorded (2015 CCRs). The 2015 CCRs were
those in effect when Klatt purchased his home.
Like the 1999 CCRs, the 2015 CCRs left out the Golf Course. In a separate section
captioned “Golf Course” sub-captioned “Operation,” these CCRs stated that “[n]either the
Association nor its members shall be responsible for costs and expenses incurred in the operation
and maintenance of the golf course” See 2015 CCRs, § 9.2.
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The 1995 CCR’s also limited the expenditure of Assessments. In a separate section
captioned “Purpose of Assessments,” the 1995 CCRs limited the expenditure of funds to those
they called a “common expense” (Common Expense). See 2015 CCRs, § 6.3(A). The provision
expressly stated that any costs associated with the Golf Course were not a Common Expense. Id.
The 2015 CCRs also authorized the Association to create a Capital Improvement
Contribution Fund (CCIF). See 2015 CCRs, § 6.7(B). The CCIF was to be imposed only n new
members upon the acquisition of lots within the Association. Id. The CCIF funds must be
deposited in a separate account and be used for the “maintenance, repair, replacement or capital
improvements of the Common Areas or other areas that benefit the Association but shall not be
used for any work on any portion of any Lot.” Id.
In 2020, the Golf Course owner reported financial troubles to the Association. It
approached the Association seeking financial assistance. The Golf Course needed maintenance
that could not be sustained by its owners.1 Some of the maintenance the Golf Course needed in
late 2020 appeared to be due in part to precipitation runoff from the residential lots and common
areas controlled by the Association.
The 2015 CCRs contain general amendment power. See 1995 CCRs, § 13.2.
Amendments require a majority vote of the lot owners. Id.
In 2021, the Association amended the 2015 CCRs with the approval of the majority
Association members. (2021 Amendments). They were approved by a majority of the
homeowners.
First, the 2021 Amendments altered section 6.3(A) by removing the Golf Course
exclusion from a list of Common Expenses. The 2021 Amendments added the Golf Course but
directed that such funds be collected as a CCIF.
Second, the 2021 Amendments also changed Section 9.2. Section 9.2, as amended,
permitted funds to be used for the Golf Course.
Third, the 2021 Amendments authorized the Association to charge a $300 transfer fee
called a “Capital Improvement Assessment” (CIA) for the Golf Course. Consistent with CCIF
requirements, the CIA had to be imposed to new home buyers and the funds had to be deposited
in a separate account.
1 Klatt did not deny this fact but instead stated that this fact was irrelevant. Instead, he stated that he is “not in a
position to admit or dispute these factual allegations.” Having not disputed it, the Court deems it to be uncontested.
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Klatt has filed a one-count Complaint. He asserts: 1, (Count 1) Declaratory
Judgment/Injunction that the 2021 Amendment is invalid under Kalway v. Calabria Ranch HOA,
LLC, 252 Ariz. 532 (2022), the HOA Transfer Fee, i.e., the CIA, is invalid under A.R.S. § 33-
1806(D) and a fine for violation of that statute.
Legal Standards for Summary Judgment
The case law directs that “[s]ummary judgment is appropriate when the record shows that
there is no real dispute as to any material facts and the moving party is entitled to judgment as a
matter of law.” United Bank of Ariz. v. Allyn, 167 Ariz. 191, 194-95 (App. 1990) (citing Rule 56,
Arizona Rules of Civil Procedure; Nicoletti v. Westcor, Inc., 131 Ariz. 140, 142 (1982); State ex
rel. Corbin v. Sabel, 138 Ariz. 253, 255 (App.1983)). If a genuine issue of material fact exists
upon which reasonable people might reach different conclusions, summary judgment is not
appropriate. Orme Sch. v. Reeves, 166 Ariz. 301, 309-10 (1990); see also Celotex Corp. v.
Catrett, 477 U.S. 317 (1986). “Even if no factual dispute exists, summary judgment is
inappropriate when reasonable jurors could draw conflicting inferences from the circumstances.”
Bishop v. State Dep’t of Corrections, 172 Ariz. 472, 475 (App. 1992) (citing N. Contracting Co.
v. Allis-Chalmers Corp., 117 Ariz. 374, 376 (1977)).
The party moving for summary judgment must produce evidence that they believe
demonstrates the absence of a genuine issue of material fact and must explain why summary
judgment is warranted. Nat’l Bank of Ariz. v. Thruston, 218 Ariz. 112, 115 (App. 2008); If the
nonmoving party has the burden of proof of the claim or defense at trial, the moving party need
not disprove the nonmoving party’s claim or defense but need only point out the lack of evidence
on an essential element of the claim or defense. Thruston, 218 Ariz. at 117; see also Vig v. Nix
Project II P’ship, 221 Ariz. 393, 396 (App. 2009).
Ruling
A. The Enforceability of the 2021 Amendment under Kalway.
The Court begins with the proposition that covenants, conditions, and restrictions
constitute a contract between the property owners and the Association. Ahwatukee Custom
Estates Mgt. Ass’n., Inc. v. Turner, 196 Ariz. 631, 634, ¶ 5 (App. 2000). They contain vested
rights, and the owners are entitled to rely on these covenants and their stability. Scholten v.
Blackhawk Partners, 184 Ariz. 326, 330 (App. 1995).
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Nonetheless, “Arizona law permits the amendment of CCRs by a majority vote if such
voting is specified in the original declaration.” Kalway, at 537-538. ¶10 (citing A.R.S. §33-
1817(A) (2022)). The amendments must be foreseeable. Kalway.
The Kalway Opinion and §33-1817(A) do not overrule the common law requirement
which prohibits some amendments even if passed by majority vote. Kalway, at 537-538, ¶10.
The CCRs can only amend the original covenants when such amendments would be “reasonable
and foreseeable.” Id.; see also Dreamland Villa Community Club, Inc. v. Ramsey, 224 Ariz. 42,
51, ¶38 (App. 2010); see also Shamrock v. Wagon Wheel Park Homeowners Ass’n, 206 Ariz. 42,
45-46 (App. 2003); Wilson v. Playa de Serrano, 211 Ariz. 511, 513 (App. 2005)). This is
because “[a]llowing substantial, unforeseen, and unlimited amendments would alter the nature of
the covenants to which the homeowners originally agreed.” Id. at 536 (citing Dreamland, 224
Ariz. at 51).
The Kalway issue is whether the 2015 CCRs gives sufficient notice that common
expenses could be used to support the Golf Course. More specifically, the question is whether
the 2021 Amendments that now authorize the charging of a $300 CIA were reasonably
foreseeable from the 2015 CCRs perspective. As the parties have agreed, this is a legal issue to
be decided by the Court. See Vista del Corazon HOA v. Smith, 2024 WL 1007275 (App. 2024);
Preston v. Las Sendas Community Association, Inc., 2023 WL 7139326 (App. 2023).2
At the outset, the Court rejects the Association’s argument that because Klatt is not
subject to the CIA he has a diminished right to challenge the 2021 Amendments. That such fees
are collected from only new homeowners is of no moment given that such fees become the
property of all homeowners through the Association. It is the amendment of expenditure
Association’s funds at ---- not the funds’ source--- that directly impact Klatt’s rights. As a
member he of the Association, he can challenge its expenditures.
Similarly, the Court rejects the Association’s claim that the CIA did does not have a
sufficient impact on Klatt’s use of the land. The 2021 Amendments effectively marry the
homeowners to the Golf Course inextricably linking both financially. As noted by Klatt, the
Association has used substantial funds on such matters as rebuilding the Golf Course’s
maintenance grid ($20,000), for a new maintenance gate ($20,000), a new ball catcher ($5,000)
and a new lawnmower ($4,000).
The Court now evaluates foreseeability and must interpret the 2015 CCR’s to assess the
drafters’ intent. Kalway, at 59, ¶¶ 16, 17. The Court must look objectively at the 2015 CCRs to
2 The Court finds these authorities to be persuasive and cites them pursuant to Arizona Supreme Court Rule 111(c).
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determine whether there was notice that the amended covenants could be altered. Id. The Court
is to resolve all ambiguities against the drafters. Id.
On the critical point of measuring foreseeability, the Kalway Court observed:
The restriction itself does not have to necessarily give notice of the
particular details of a future amendment; that would rarely happen.
Instead, it must give notice that a restrictive or affirmative
covenant exists and that the covenant can be amended to refine it,
correct an error, fill in a gap, or change it in a particular way. [].
But future amendments cannot be “entirely new and different in
character,” untethered to an original covenant. []. Otherwise, such
an amendment would infringe on property owners’ expectations of
the scope of the covenants.
Id., at 59, ¶17 (emphasis added).
Thus, Kalway provides a two-part test. First, the Court evaluates whether the 2015 CCR’s
give notice of the restrictive covenant, that is whether using funds for the Golf Course is
prohibited. And if so, whether the covenants give notice that they can be amended to refine,
correct an error, fill in a gap, or change it.
As for step one, the Court finds that the 2015 CCRs give notice that no funds were to be
used for the Golf Course. Sections 6.3(a) and 9.1 make that clear.
Turning to step two, the Court appraises whether 1995 CCRs give notice that they “can
be amended to refine it, correct an error, fill in a gap, or change it” in a manner that permits the
expenditure of Association funds on the Golf Course. The answer to that question is no.
The Court begins with section 6.3(A) which provides in relevant part:
6.3(A) Purpose of Assessments. The Association shall apply all
funds and property received by it, including the Annual and
Special Assessments, fees, loan proceeds, surplus funds and all
funds and property received by it from any other source for the
common good and benefit by devoting the funds and the property
to the expenses of the administration and operation of the Common
Areas and to any other expenses incurred in conformance with this
Declaration, the Articles, Bylaws, or Association Rules (which
expenses are sometimes referred to herein as “Common
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Expenses.”). Common expenses include, without limitation
expenses for the acquisition, construction, maintenance, provision
and operation, by any manner or method whatsoever of any and all
land, properties, improvements, recreational facilities (except for
the golf course).
Section 6.3(A) is self-captioned as “Purpose of Assessments” and the Court construes this
provision in that context. That said, the Court is mindful that the 2015 CCRs set forth
interpretive rules which state that “[t]he marginal or topical headings of the Sections contained in
this Declaration are for convenience only and do not define, limit or construe the Sections of this
Declaration.” 2015 CCRs, § 15.2. The captions, therefore, provide a roadmap but not substance
to the Court’s decision today.
Section 6.3(A)’s “purpose” signals that it contains “something set as an object or end to
be attained.” Meriam Webster Dictionary, merriam-webster.com/dictionary/purpose.
Contextually, section 6.3(A)’s object is to limit the expenditure of assessments on matters for the
“common good and benefit.”
The Court does limit 6.3(A) as simply setting forth the purpose. Substantively, section
6.3(Ak) also requires that be made for the common expenses that provide the common good and
benefit. While whatever constitutes common good and benefit is not exhaustively defined,
section 6.3(A) expressly excludes maintenance of the Golf Course as falling within its
parameters.
Section 6.3(A) also makes clear that what constitute expenditures captures resources well
beyond the members’ assessments. They constitute “all funds and property received [by the
Association], including the Annual and Special Assessments, fees, loan proceeds, surplus funds
and all funds and property received by it from any other source.”
Having thoroughly reviewed section 6.3(A), the Court sees nothing that signals the
provision is subject to modification and/or there are gaps to be filled. That the Association and a
majority of its members later believed that an ill-maintained Golf Course running through and
around the community undermined the common good and benefit, does not change that fact---
even it seems like good policy.
The Association posits that section 6.7(B) adds to this foreseeability. It authorizes the
Association to create the CCIF for the “maintenance, repair, replacement or capital
improvements of the Common Areas or other areas that benefit the Association but shall not be
used for any work on any portion of any Lot.” Id. (Emphasis Added). Consistent with Kalway,
SUPERIOR COURT OF ARIZONA
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Form V000A
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the Association argues, section 6.7(B) leaves open “other areas” and thereby gives notice that it
can be amended to fill in that gap--- and the 2021 Amendments fill in that gap.
Section 6.7(B) does indeed leave open a gap and gives notice that the CCIF could be used
for the common areas or other areas that benefit the Association. The question is whether “other
areas that benefit the Association” can include the Golf Course--- when the Declaration already
stated that the Golf Course is exempt from the common good and benefit
The short answer to the question no. This is especially true given the all-encompassing
sweep of section 6.2(A)’s broad definition of common expenses—from which the Golf Course is
excluded.
On this point, the Court again reviewed what constitutes common expenses:
Common expenses include, without limitation expenses for the
acquisition, construction, maintenance, provision and operation, by
any manner or method whatsoever of any and all land, properties,
improvements, recreational facilities (except for the golf course).
There is no daylight between use of Association funds for common expenses that which
exclude the Golf Course, and use of CCIF funds for “other areas that benefit the Association.”
While CCIF does leave open its use for areas not expressly listed in section 6.7, they do not
include the Golf Course.
Finally, section 9.2, captioned “Operation” falls under the broad section captioned “Golf
Couse.” Like section 6.3(A), there is nothing in section 9.2 that offers any notice that it can be
amended. This provision states unequivocally that neither the Association nor its members shall
be responsible for costs incurred or the maintenance of the Golf Course—hard stop.
In the end, the Court finds that a proper interpretation of the 2015 CCR’s does not allow
the 2021 Amendments. While the 2015 CCRs also provided for creation of a CCIF, there is
insufficient notice that it could be used for the Golf Course.
The Court therefore finds that the 2021 Amendments violate Kalway and Klatt’s motion
for summary judgment will be granted on the Kalway issue.
B. Title 33-1806
Klatt also asserts that the 2021 Amendments violate Arizona law because they are a
prohibited fee under the Transfer Fee Statute. The HOA Transfer Fee Statute requires HOA’s to
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
CV 2023-053589
05/02/2025
Docket Code 926
Form V000A
Page 9
deliver to purchasers of property a copy of its bylaws, rules, declaration and a statement of
disclosure addressing assessments and other matters impact the HOA. Ariz. Rev. Stat. Ann. § 33-
1806(A)(1-3) (2025).
The HOA Transfer Statute permits the charging of a fee for costs incurred in the
preparation and delivery of mandatory disclosures required under the Transfer Fee Statute. Ariz.
Rev. Stat. Ann. § 33-1806(C) (2025). The HOA Transfer Statute expressly prohibits the charging
of other fees relating to services for resale disclosure, lien estoppel and other services. Id. An
association that charges or collects a fee in violation of this section is subject to a civil penalty of
not more than one thousand two hundred dollars.” Id.
Klatt alleges that the CIA violates the HOA Transfer Statute and, therefore, the
Association should pay the civil penalty. That the Court found the CIA violates Kalway does not
mean that it also violates the HOA Transfer Statute. It was the lack of notice that renders it
ineffective, and for no other reason.
As such, the Court finds that the CIA does not violate the HOA Transfer Fee Statute.
The Association is therefore entitled to summary judgment on this issue.
Conclusion
For the foregoing reasons,
IT IS ORDERED granting Klatt’s Motion for Summary Judgment (filed May 6, 2024)
in part on the Kalway issue only and denying it on the HOA Transfer Statute.
IT IS FURTHER ORDERED granting the Association’s Cross Motion for Summary
Judgment (filed January 6, 2025) on the HOA Transfer Statute only and denying it on the
Kalway issue.
IT IS FURTHER ORDERED that the parties shall file any Application for attorney’s
fees and taxable costs, and each shall lodge a form of judgment within 20 days from the filing
date of this minute entry.
05/16/2024 — CV2023053589 KLATT, JIMMIE 05/16/2024 HONORABLE MICHAEL D. GORDON View Minute Entry ↑ top
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Clerk of the Superior Court
*** Electronically Filed ***
05/31/2024 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
CV 2023-053589
05/16/2024
Docket Code 023
Form V000A
Page 1
CLERK OF THE COURT
HONORABLE MICHAEL D. GORDON
C. Curley
Deputy
JIMMIE KLATT
JACOB A KUBERT
v.
SUNBIRD GOLF RESORT HOMEOWNERS
ASSOCIATION INC
LORI N BROWN
JUDGE GORDON
MINUTE ENTRY
The Court has reviewed Defendant Sunbird Golf Resort Homeowners Association, Inc.’s
(Sunbird HOA) Motion for Clarification (filed 4/16/24). No response was filed.
Sunbird HOA seeks clarification of the Court’s Under advisement Ruling (Ruling) (filed
3/20/24).
A. Issue No 1: Foreseeability.
The Court’s comments about foreseeability were in response to the issues raised under
Kalway v. Calabria Ranch HOA, LLC, 252 Ariz. 532 (2022). The Court however incorrectly
stated that “Sunbird HOA has not proven the absence of foreseeability.” Instead, the Court
intended to state that “Sunbird HOA has not proven foreseeability . . . “
B. Issued No, 2: Law of the Case.
The “law-of-the-case” doctrine is ‘the judicial policy of refusing to reopen questions
previously decided in the same case by the same court or a higher appellate court.’” Hall v. Smith,
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
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Page 2
214 Ariz. 309, 317 (App. 2007) (citing Jimenez v. Wal–Mart Stores, Inc., 206 Ariz. 424, ¶ 12, 79
P.3d 673, 677 (App. 2003)). While the rule is one of procedure, not substance, the rule is grounded
in the policy that a “trial court’s power to reconsider an earlier ruling should not be employed
lightly.” Id. Further, a court should not reconsider the non-final ruling of another judge of the same
court in the same action unless the first decision was manifestly erroneous or unjust, or there has
been a substantial change of essential facts, issues, evidence, or law. Cypress on Sunland
Homeowners Ass’n v. Orlandini, 227 Ariz. 288, 296 (App.2011) (emphasis added).
The Ruling addressing A.R.S. § 33-1806 was made on the record before it. Having stated
the law, the parties are free to argue whether the Court’s ruling is law of the case under that
standard.
C. Conclusion.
For the foregoing reasons,
IT IS ORDERED granting Defendant’s Motion for Clarification (filed 4/16/24).
IT IS FURTHER ORDERED clarifying the Ruling as set forth supra.
08/16/2024 — CV2023053589 KLATT, JIMMIE 08/16/2024 HONORABLE MICHAEL D. GORDON View Minute Entry ↑ top
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Clerk of the Superior Court
*** Electronically Filed ***
08/19/2024 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
CV 2023-053589
08/16/2024
Docket Code 094
Form V000A
Page 1
CLERK OF THE COURT
HONORABLE MICHAEL D. GORDON
M. Dern
Deputy
JIMMIE KLATT
JACOB A KUBERT
v.
SUNBIRD GOLF RESORT HOMEOWNERS
ASSOCIATION INC
LORI N BROWN
JUDGE GORDON
ORAL ARGUMENT SET
Before the Court is Plaintiff’s Motion for Summary Judgment filed May 6, 2024,
Defendant’s Opposition and Plaintiff’s Reply. On the Court’s own Motion,
IT IS ORDERED setting an in-person Oral Argument on Plaintiff’s Motion for
Summary Judgment on September 27, 2024 at 9:00 a.m. (time allotted: 30 minutes) in this
Division.
Oral argument shall be limited to thirty (30) minutes with the time divided equally
between the sides.
NOTE: All Court proceedings are recorded digitally and not by a court reporter. Pursuant
to Local Rule 2.22, if a party desires a court reporter for any proceeding in which a court reporter
is not mandated by Arizona Supreme Court Rule 30, the party must submit a written request to
the assigned judicial officer at least ten (10) judicial days in advance of the hearing and must pay
the authorized fee to the Clerk of the Court at least two (2) judicial days before the proceeding.
The fee is $140 for a half-day and $280 for a full day.
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
CV 2023-053589
08/16/2024
Docket Code 094
Form V000A
Page 2
Counsel and the parties, if representing themselves, are to appear in person before:
The Honorable Michael D. Gordon
Northeast Regional Court Center
Courtroom 111
18380 North 40th Street
Phoenix, Arizona 85032
Phone: 602-372-0762
NOTICE: As of October 14, 2024, the Honorable Michael Gordon’s division will be
relocating to the Central Court Building, Courtroom 402, 201 W. Jefferson St., Phoenix,
AZ 85003. In-person hearings held on or after October 14, 2024, will be held at this location.
09/19/2025 — CV2023053589 KLATT, JIMMIE 09/19/2025 HONORABLE BRIAN D. KAISER View Minute Entry ↑ top
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- Minute Source
Clerk of the Superior Court
*** Electronically Filed ***
09/22/2025 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
CV 2023-053589
09/19/2025
Docket Code 056
Form V000A
Page 1
CLERK OF THE COURT
HONORABLE BRIAN D. KAISER
R. Beals
Deputy
JIMMIE KLATT
JACOB A KUBERT
v.
SUNBIRD GOLF RESORT HOMEOWNERS
ASSOCIATION INC
LORI N BROWN
COMM. KAISER
MINUTE ENTRY
The Court having received and reviewed Defendant’s Request for Hearing on Writ of
Garnishment to First Citizens Bank filed September 11, 2025, and good cause appearing,
IT IS ORDERED setting virtual Hearing regarding Defendant’s Request for Hearing on
Writ of Garnishment to First Citizens Bank filed September 11, 2025 and Defendant’s Motion to
Set Supersedeas Bond and Stay Execution of the Judgment filed September 11, 2025 on
September 22, 2025 at 9:15 a.m. (time allotted: 30 minutes), in this Division, East Court
Building, Courtroom 514, 101 W. Jefferson St., Phoenix, AZ 85003.
Commissioner Brian Kaiser
Courtroom Assistant: Amaris Lopez
Division Email: [email protected]
Courtroom Assistant Phone: 602-372-3938
Hearings will be held via videoconference through Court Connect and Microsoft TEAMS. An
invite to the TEAMS conference will be sent out to the email on file for each party or counsel of
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
CV 2023-053589
09/19/2025
Docket Code 056
Form V000A
Page 2
record. It is the party’s responsibility to ensure receipt of the invitation prior to the hearing date.
The information is included below as well:
Please join my meeting from your computer, tablet or smartphone.
TEAMS LINK
tinyurl.com/jbazmc-sec02
Please note: Do not enter ‘www’ in front of the URL. Can copy and paste as is into a web
browser.
You can also dial in using your phone.
Teams Phone Number: +1 917-781-4590 Access Code: 184259566
More information regarding Court Connect can be found at:
https://superiorcourt.maricopa.gov/court-connect/
NOTE: All court proceedings are recorded by audio and video method and not by a court
reporter. Pursuant to Local Rule 2.22, if a party desires a court reporter for any proceeding in
which a court reporter is not mandated by Arizona Supreme Court Rule 30, the party must
submit a written request to the assigned judicial officer at least ten (10) judicial days in advance
of the hearing, and must pay the authorized fee to the Clerk of the Court at least two (2) judicial
days before the proceeding. The fee is $140 for a half-day and $280 for a full day.
09/22/2025 — CV2023053589 KLATT, JIMMIE 09/22/2025 HONORABLE BRIAN D. KAISER View Minute Entry ↑ top
- Source
- Minute Source
Clerk of the Superior Court
*** Electronically Filed ***
09/25/2025 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
CV 2023-053589
09/22/2025
Docket Code 002
Form V000A
Page 1
CLERK OF THE COURT
HONORABLE BRIAN D. KAISER
R. Beals
Deputy
JIMMIE KLATT
JACOB A KUBERT
v.
SUNBIRD GOLF RESORT HOMEOWNERS
ASSOCIATION INC
LORI N BROWN
COMM. KAISER
MINUTE ENTRY
Courtroom 514A-VC-CV – East Court Building
9:16 a.m. This is the time set for Hearing regarding Defendant’s Request for Hearing on
Writ of Garnishment to First Citizens Bank filed September 11, 2025 and Defendant’s Motion to
Set Supersedeas Bond and Stay of Execution of the Judgment filed September 11, 2025.
Judgment Creditor/Plaintiff, Jimme Klatt, is represented by counsel, Jacob A. Kubert. Judgment
Debtor/Defendant, Sunbird Golf Resort Homeowners Association Inc., is represented by counsel,
Chrstine B. Stutz, appearing for counsel of record, Lori N. Brown. No one else appears. All
participants appear virtually.
A record of the proceedings is made digitally in lieu of a court reporter.
Counsel informs the Court that an agreement has been reached and a Stipulation for
Order to Set Supersedeas Bond and Related Relief has been filed with the Court.
At the request of both Judgment Creditor/Plaintiff’s counsel and Judgment
Debtor/Defendant’s counsel, and on their avowal that they have reached a settlement,
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
CV 2023-053589
09/22/2025
Docket Code 002
Form V000A
Page 2
IT IS ORDERED vacating the Hearing set this date regarding Defendant’s Request for
Hearing on Writ of Garnishment to First Citizens Bank filed September 11, 2025 and
Defendant’s Motion to Set Supersedeas Bond and Stay of Execution of the Judgment filed
September 11, 2025.
9:19 a.m. Matter concludes.
