Case Summary
| Case ID | 17F-H1716002-REL-RHG |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2017-06-12 |
| Administrative Law Judge | Suzanne Marwil |
| Outcome | partial |
| Filing Fees Refunded | $500.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Paul Gounder | Counsel | — |
|---|---|---|---|
| Respondent | Royal Riviera Condominium Association | Counsel | Mark Kristopher Sahl |
Alleged Violations
A.R.S. § 33-1250(C)(2)
Outcome Summary
The Administrative Law Judge found Respondent violated A.R.S. § 33-1250(C)(2) by using two substantively different ballots during the 2016 board election,. Respondent was ordered to reimburse the Petitioner’s $500.00 filing fee,. The Administrative Law Judge concluded Respondent did not violate A.R.S. § 33-1250(C)(4),.
Why this result: Petitioner failed to prove violation of A.R.S. § 33-1250(C)(4), which specifies timing requirements for ballots; the ALJ noted that a meeting ballot did not need to contain a received-by date or be mailed seven days in advance if it had been substantively the same as the compliant absentee ballot,,,.
Key Issues & Findings
Ballot must provide an opportunity to vote for or against each proposed action.
The use of two substantively different ballots in the March 2016 election violated A.R.S. § 33-1250(C)(2) because members who did not attend the meeting were unaware of an additional candidate (Eric Thompson) listed on the meeting ballot, thereby denying those members the opportunity to vote for or against each proposed action contained in the meeting ballot,. This finding does not require ballots to be identical, but substantive changes must be presented to all members,,.
Orders: Petitioner's Petition was granted, and Respondent was ordered to reimburse Petitioner's filing fee of $500.00,. No other relief was available.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
- A.R.S. § 33-1250(C)(2)
- A.R.S. § 32-2199.02
- A.R.S. § 41-1092.08
Analytics Highlights
- A.R.S. § 33-1250(C)(2)
- A.R.S. § 33-1250(C)(4)
- A.R.S. § 33-1250(C)
- A.R.S. § 41-2198.01
- Article VII CC&Rs
Video Overview
https://youtu.be/0-3GaFWuqA8
Audio Overview
Decision Documents
17F-H1716002-REL Decision – 523915.pdf
17F-H1716002-REL Decision – 564851.pdf
17F-H1716002-REL Decision – 567887.pdf
17F-H1716002-REL Decision – 575055.pdf
Briefing Document: Gounder v. Royal Riviera Condominium Association
Executive Summary
This briefing document synthesizes the key events, arguments, and legal conclusions from the administrative case of Paul Gounder versus the Royal Riviera Condominium Association (Case No. 17F-H1716002-REL-RHG). The central issue revolved around the Association’s use of two substantively different ballots for its March 14, 2016, board member election.
The Petitioner, Paul Gounder, alleged that the use of a separate mail-in ballot and an in-person meeting ballot, which contained different candidate lists, violated Arizona statute A.R.S. § 33-1250(C)(2). Specifically, the ballot distributed at the meeting included the name of a seventh candidate, Eric Thompson, who was not listed on the mail-in ballot, thereby denying absentee voters the opportunity to vote for all candidates.
After an initial hearing resulted in a recommended dismissal, a rehearing was granted. Administrative Law Judge (ALJ) Suzanne Marwil ultimately concluded that the Association’s actions constituted a statutory violation. The Judge found that because members voting by mail were not informed of Mr. Thompson’s candidacy, they were denied their right to vote “for or against each proposed action.” The Respondent’s argument that the matter was moot due to a subsequent election was rejected.
The Department of Real Estate adopted the ALJ’s decision, issuing a Final Order on June 12, 2017. The Order granted the petition and required the Royal Riviera Condominium Association to reimburse Mr. Gounder’s $500.00 filing fee. The ruling establishes that while election ballots are not required to be identical, any substantive changes must be presented to all members to ensure an equal opportunity to vote.
——————————————————————————–
I. Case Overview and Background
This matter was brought before the Arizona Department of Real Estate and the Office of Administrative Hearings.
• Petitioner: Paul Gounder, a condominium owner and member of the Association.
• Respondent: Royal Riviera Condominium Association, a homeowners’ association for a development of approximately 32 condominiums.
• Initial Petition: Filed on or about June 23, 2016.
• Core Allegation: The Association violated A.R.S. § 33-1250(C)(2) and its own CC&Rs by using two substantively different ballots to elect Board members at its March 14, 2016, annual meeting.
II. Procedural History
1. Initial Hearing (October 17, 2016): A hearing was held before Administrative Law Judge Diane Mihalsky.
2. Recommended Dismissal (October 18, 2016): Judge Mihalsky recommended the petition be dismissed, concluding:
3. Rehearing Granted (February 17, 2017): The Petitioner requested a rehearing, which the Department of Real Estate granted. The Department’s order specifically requested a review of A.R.S. § 33-1250, with a focus on subsection (C)(4).
4. Rehearing (May 17, 2017): A rehearing was held before Administrative Law Judge Suzanne Marwil. At this hearing, the Respondent raised a procedural question regarding the correct statutory subsection for review, leading to a temporary order holding the record open until May 24, 2017, for clarification.
5. ALJ Decision (June 2, 2017): Judge Marwil issued a decision finding that the Respondent had committed a statutory violation.
6. Final Order (June 12, 2017): The Commissioner of the Department of Real Estate, Judy Lowe, accepted the ALJ’s decision and issued a Final Order making the decision binding.
III. The Core Dispute: The Two-Ballot System
The parties stipulated that two different ballots were used for the March 14, 2016, board election, which had seven open positions. The key differences are outlined below.
Feature
Mail Ballot (Absentee)
Meeting Ballot (In-Person)
“Mail Ballot”
“Ballot”
Candidates Listed
Six names
Seven names (added Eric Thompson)
Write-in Option
Included a blank line for a write-in candidate
No space provided for write-in candidates
Distribution
Distributed at least seven days before the meeting
Handed out to members attending the meeting
Return Deadline
Specified the date by which it had to be returned
Did not specify when it needed to be returned
IV. Arguments of the Parties
A. Petitioner’s Position (Paul Gounder)
• Violation of A.R.S. § 33-1250(C)(2): The addition of Eric Thompson’s name to the meeting ballot deprived members who voted by mail of their right “to vote for or against each proposed action,” as they had no opportunity to vote for Mr. Thompson.
• Violation of A.R.S. § 33-1250(C)(4): The meeting ballot violated this subsection because it was not mailed to all members at least seven days in advance of the meeting and did not provide a date by which it had to be received to be counted.
B. Respondent’s Position (Royal Riviera Condominium Association)
• No Violation: The statutes do not explicitly require the use of identical ballots for an election.
• Common Practice: It is a common practice for homeowners’ associations to use a different absentee ballot and meeting ballot.
• Mootness: The issue is moot because the Association had already held another election in 2017 and seated a new board, which included the Petitioner’s wife as a member.
V. Administrative Law Judge’s Findings and Conclusions
In her June 2, 2017 decision, ALJ Suzanne Marwil made the following key legal conclusions:
The ALJ found that the Association’s use of two substantively different ballots did violate this statute.
• Reasoning: Members who did not attend the meeting in person were not notified of Mr. Thompson’s willingness to run for the board. As a result, “these members did not have the opportunity to vote for him and hence were denied their right to vote for or against each proposed action contained in the meeting ballot.”
• Clarification: The ruling explicitly states that this finding does not impose a requirement that all ballots must be identical; however, it establishes that “substantive changes to ballots must be presented to all members.”
The ALJ concluded that no violation of this subsection occurred.
• Reasoning: The Petitioner conceded that the absentee ballot itself complied with the statutory requirements (e.g., being mailed seven days in advance with a return-by date). The judge reasoned that a meeting ballot handed out in person would not need to contain this information if it were “substantively the same as the absentee ballot.” The legal problem arose not from a failure to mail the second ballot, but from the substantive difference between the two.
The ALJ determined that the matter was not rendered moot by the 2017 election and the seating of a new board. The Judge affirmed that the tribunal “can and does find that Respondent committed a statutory violation in the course of holding its 2016 election.”
VI. Final Order and Outcome
• ALJ Recommended Order (June 2, 2017):
◦ The Petitioner’s petition should be granted.
◦ The Respondent must reimburse the Petitioner’s filing fee.
◦ No other relief was available to the Petitioner.
• Department of Real Estate Final Order (June 12, 2017):
◦ The Commissioner of the Department of Real Estate accepted and adopted the ALJ’s decision.
◦ The Order is a final administrative action, effective immediately.
◦ The Royal Riviera Condominium Association was ordered to reimburse the Petitioner’s filing fee of $500.00 within thirty (30) days.
◦ The parties were notified that the Order could be appealed via a complaint for judicial review.
Study Guide: Gounder v. Royal Riviera Condominium Association
This study guide provides a comprehensive review of the administrative case Paul Gounder v. Royal Riviera Condominium Association, Case No. 17F-H1716002-REL-RHG. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms based on the provided legal documents.
——————————————————————————–
Short-Answer Quiz
Instructions: Answer the following ten questions in 2-3 sentences each, based on the information in the case documents.
1. What was the central allegation made by the Petitioner, Paul Gounder, in his initial petition?
2. Describe the two different ballots used by the Royal Riviera Condominium Association for its March 14, 2016, board election.
3. What were the two primary legal arguments made by the Respondent, Royal Riviera Condominium Association, to defend its actions?
4. What was the initial outcome of the hearing held on October 17, 2016, before Administrative Law Judge Diane Mihalsky?
5. What was Administrative Law Judge Suzanne Marwil’s final conclusion regarding the alleged violation of A.R.S. § 33-1250(C)(2)?
6. How did Judge Marwil explain her finding that A.R.S. § 33-1250(C)(4), which deals with ballot delivery timelines, was not violated?
7. How did the Respondent argue that the case was moot, and why did Judge Marwil reject this argument?
8. According to the Final Order issued by the Commissioner of the Department of Real Estate, what specific relief was granted to the Petitioner?
9. What is the standard of proof in this matter, and which party has the burden of proof?
10. What specific action did the Department of Real Estate request be reviewed when it granted the request for a rehearing?
——————————————————————————–
Answer Key
1. The Petitioner, Paul Gounder, alleged that the Respondent violated A.R.S. § 33-1250(C)(2) and its own CC&Rs. The violation occurred by using two substantively different ballots for the election of Board members at the annual meeting on March 14, 2016.
2. The first ballot was an absentee “Mail Ballot” with six candidate names and a blank line for a write-in. The second ballot, handed out at the meeting, was titled “Ballot” and included the names of seven candidates (adding Eric Thompson) but had no space for a write-in candidate.
3. The Respondent argued that it committed no violation because the statutes do not explicitly require the use of identical ballots and that using different absentee and meeting ballots is common practice. It also maintained that the matter was moot because a new election had already occurred in 2017.
4. Following the initial hearing, Judge Diane Mihalsky recommended the dismissal of the Petition on October 18, 2016. She concluded that no statute or bylaw prevented the Respondent from adding the names of willing members to the ballot used at the annual election.
5. Judge Suzanne Marwil found that the use of two substantively different ballots did violate A.R.S. § 33-1250(C)(2). Because members voting by mail were not informed of Eric Thompson’s candidacy, they were denied their right to vote for or against each proposed action.
6. Judge Marwil concluded A.R.S. § 33-1250(C)(4) was not violated because the absentee ballot itself complied with the statute’s requirements for delivery timelines. She reasoned that a meeting ballot would not need to meet these requirements if it were substantively the same as the compliant absentee ballot; the problem arose only because the ballots were different.
7. The Respondent argued the case was moot because a new board had been seated in a 2017 election. Judge Marwil rejected this, stating that the fact a new board is seated does not prevent an Administrative Law Judge from finding that a statutory violation occurred in a past election.
8. The Final Order, issued by Commissioner Judy Lowe on June 12, 2017, granted the Petitioner’s petition. It ordered the Respondent to reimburse the Petitioner’s filing fee of $500.00 within thirty (30) days.
9. The standard of proof is a “preponderance of the evidence,” as stated in A.A.C. R2-19-119(A). Pursuant to A.A.C. R2-19-119(B), the Petitioner has the burden of proof in the matter.
10. In its February 17, 2017, Order Granting Request for Rehearing, the Department of Real Estate specifically requested a review of A.R.S. § 33-1250, and in particular, A.R.S. § 33-1250(C)(4).
——————————————————————————–
Suggested Essay Questions
Instructions: The following questions are designed for longer, essay-style responses to test a deeper understanding of the case. Answers are not provided.
1. Analyze the legal distinction Judge Marwil makes between ballots being “identical” versus “substantively different.” How did this distinction become the central point upon which her decision on A.R.S. § 33-1250(C)(2) turned?
2. Trace the procedural history of this case, from the filing of the initial petition to the issuance of the Final Order. Discuss the role and decisions of each key actor, including Petitioner Gounder, Respondent Royal Riviera, ALJ Mihalsky, ALJ Marwil, and Commissioner Lowe.
3. Evaluate the legal arguments presented by the Respondent. Why was the argument about “common practice” for homeowners’ associations ultimately unpersuasive, and why did the “mootness” doctrine not apply?
4. Discuss the significance of the specific provisions within A.R.S. § 33-1250(C). How do subsections (C)(2) and (C)(4) work together to ensure fair voting rights for all members of a condominium association, including those who vote by absentee ballot?
5. Examine the relationship between the Arizona Department of Real Estate and the Office of Administrative Hearings as demonstrated in this case. How do they interact to adjudicate disputes between homeowners and their associations?
——————————————————————————–
Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, hears evidence, and makes legal findings and recommendations. In this case, Diane Mihalsky and Suzanne Marwil served as ALJs.
A.R.S. (Arizona Revised Statutes)
The codified collection of laws for the state of Arizona. This case centered on the interpretation of A.R.S. § 33-1250.
Arizona Department of Real Estate (the Department)
The state agency authorized by statute to receive and decide Petitions for Hearings from members of homeowners’ associations in Arizona. It granted the rehearing and accepted the final ALJ decision.
CC&Rs (Covenants, Conditions, and Restrictions)
The governing legal documents that set up the rules for a planned community or condominium. The Petitioner alleged the Respondent violated Article VII of its CC&Rs.
Final Order
The concluding and binding decision in an administrative case. In this matter, the Final Order was issued by the Commissioner of the Department of Real Estate on June 12, 2017, accepting the ALJ’s decision.
A legal term for a matter that is no longer in controversy or has become irrelevant. The Respondent unsuccessfully argued the case was moot because a subsequent election had been held.
Office of Administrative Hearings (OAH)
An independent state agency that conducts administrative hearings for other state agencies. The Department of Real Estate referred this case to the OAH for a hearing.
Petitioner
The party who files a petition initiating a legal or administrative action. In this case, the Petitioner was Paul Gounder.
Preponderance of the Evidence
The standard of proof required in this administrative hearing. It means the party with the burden of proof must convince the judge that there is a greater than 50% chance that their claim is true.
Rehearing
A second hearing of a case to review the decision made in the first hearing. The Petitioner requested and was granted a rehearing after the initial recommendation to dismiss his petition.
Respondent
The party against whom a petition is filed. In this case, the Respondent was the Royal Riviera Condominium Association.
Your HOA’s Election Rules Might Be Unfair. This Court Case Explains Why.
Introduction: The Devil in the Details
Living in a community governed by a Homeowners’ Association (HOA) often means navigating a complex web of rules, regulations, and procedures. While most are designed to maintain property values and community standards, the enforcement of these rules can sometimes feel arbitrary. But what happens when the very process for electing the board that enforces those rules is flawed?
A fascinating legal challenge demonstrates that even a single, seemingly minor discrepancy in an HOA election can have significant consequences. But the victory was anything but certain. In the case of Paul Gounder versus the Royal Riviera Condominium Association, the homeowner’s initial petition was actually recommended for dismissal by the first judge. It was only through persistence—requesting a rehearing—that the homeowner ultimately prevailed. This case serves as a powerful real-world example of why procedural fairness in community governance is not just important—it’s legally required—and reveals several surprising lessons for any homeowner who values a fair and transparent election process.
Takeaway 1: “Common Practice” Isn’t a Legal Defense
When challenged on its election procedures, the Royal Riviera Condominium Association’s defense was simple: it was merely following “common practice.” The board argued that many HOAs use a different absentee and in-person ballot, so they had done nothing wrong. However, the Administrative Law Judge disregarded this argument entirely, focusing instead on the explicit requirements of Arizona statute A.R.S. § 33-1250(C)(2). This decision provides a crucial lesson for all homeowners: an association’s internal habits or traditions do not override clear legal statutes. If a state law or the community’s own governing documents dictate a specific procedure, the HOA must follow it, regardless of what other associations might be doing. This empowers homeowners by showing that the law, not just internal tradition, is the ultimate authority governing their association’s actions.
Takeaway 2: A “Small” Change Can Invalidate an Election
The dispute in the March 14, 2016 election centered on two different ballots used for the same board election. The mail-in ballot, sent to members voting absentee, listed six names and included a blank line for a write-in candidate. The in-person ballot, distributed to members at the meeting, listed seven names—adding candidate Eric Thompson—and provided no space for write-ins. This difference was not seen as a minor error but as a “substantive” change that fundamentally altered the election. The judge reasoned that members who voted by mail “did not have the opportunity to vote for him and hence were denied their right to vote for or against each proposed action contained in the meeting ballot.”
The judge made a critical distinction about what constitutes a fair process, clarifying that the issue wasn’t about perfection, but equality of opportunity.
Finding this violation does not impose a requirement that ballots be identical; it simply states that substantive changes to ballots must be presented to all members.
This point is not about minor cosmetic differences like fonts or paper color. It’s about ensuring every single voting member has the exact same set of choices. Adding or removing a candidate on one version of a ballot creates two different elections, disenfranchising one group of voters. This ruling affirms that a fair election requires that all members have an equal opportunity to vote on all candidates and measures.
Takeaway 3: Accountability Matters, Even After the Fact
The association attempted to have the case dismissed by arguing that the issue was “moot.” Because a new election had already been held in 2017 and a new board was in place, the HOA claimed the flawed 2016 election no longer mattered. The Administrative Law Judge explicitly rejected this argument. The decision stated that “the fact that a new board is currently seated does not render the matter moot as the Administrative Law Judge can and does find that Respondent committed a statutory violation in the course of holding its 2016 election.” The final order granted the homeowner’s petition and required the Royal Riviera Condominium Association to reimburse his $500.00 filing fee. This is an impactful takeaway for any homeowner who feels it’s too late to act. It demonstrates that an HOA can be held legally accountable for past procedural violations, establishing an important precedent for the community and putting the board on notice for future conduct.
Conclusion: Knowledge is Power
The case of Gounder v. Royal Riviera Condominium Association is a powerful reminder that procedural fairness, strict adherence to legal statutes, and the vigilance of individual homeowners are essential checks on the power of an HOA board. The core lesson is clear: seemingly small details in an election process can have major legal consequences. Homeowners who take the time to understand the specific laws and bylaws governing their community can successfully challenge their associations. But this case also teaches a deeper lesson about perseverance. Faced with an initial recommendation for dismissal, the homeowner could have given up. Instead, he challenged the ruling and won on rehearing, proving that knowledge combined with conviction is a powerful force for ensuring the principles of fairness and equality are upheld.
Does your own community’s voting process ensure every member has an equal voice, and would it stand up to this kind of scrutiny?
Case Participants
Petitioner Side
- Paul Gounder (petitioner)
- Frederick C. Zehm (witness)
Royal Riviera Condominium Association member
Testified for Petitioner - Marlys Kleck (witness)
Royal Riviera Condominium Association member
Testified for Petitioner
Respondent Side
- Mark Kristopher Sahl (HOA attorney)
Carpenter Hazlewood Delgado & Bolen PLC - Dan Peterson (property manager)
Owner of Respondent's management company
Neutral Parties
- Diane Mihalsky (ALJ)
Presided over initial hearing - Suzanne Marwil (ALJ)
Presided over rehearing - Judy Lowe (ADRE Commissioner)
Arizona Department of Real Estate - Abby Hansen (ADRE staff/HOA Coordinator)
Arizona Department of Real Estate
Also listed as AHansen - LDettorre (ADRE staff)
Arizona Department of Real Estate - djones (ADRE staff)
Arizona Department of Real Estate - jmarshall (ADRE staff)
Arizona Department of Real Estate - ncano (ADRE staff)
Arizona Department of Real Estate - M. Aguirre (staff)
Transmitted order
Other Participants
- Eric Thompson (member/candidate)
Candidate added to meeting ballot - Al DeFalco (member/candidate)
Nominated from the floor
