Aaron Ricks (Somerstone Properties, LLC), v. Montelena Master

Posted on February 16, 2021 by [email protected]

Case Summary

Case ID	21F-H2120024-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2021-02-16
Administrative Law Judge	Tammy L. Eigenheer
Outcome	The Administrative Law Judge dismissed the Petition because the Petitioner failed to meet the burden of proof to establish that the Montelena Master Community Association violated A.R.S. § 33-442 or its CC&Rs regarding the imposition of a transfer fee. The ALJ found that the use of the fee to fund operating expenses and/or reserves was an acceptable purpose under the relevant statute.
Filing Fees Refunded	$500.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Aaron Ricks (Somerstone Properties, LLC)	Counsel	—
Respondent	Montelena Master Community Association	Counsel	Troy Stratman

Alleged Violations

A.R.S. § 33-442, A.R.S. § 33-1806

Outcome Summary

The Administrative Law Judge dismissed the Petition because the Petitioner failed to meet the burden of proof to establish that the Montelena Master Community Association violated A.R.S. § 33-442 or its CC&Rs regarding the imposition of a transfer fee. The ALJ found that the use of the fee to fund operating expenses and/or reserves was an acceptable purpose under the relevant statute.

Why this result: Petitioner failed to establish Respondent acted in violation of the community documents and A.R.S. § 33-442.

Key Issues & Findings

Challenge to unauthorized/unlawful transfer fees charged by HOA

Petitioner alleged that the $2500.00 transfer fee charged to the purchaser was an unlawful transfer fee in violation of A.R.S. § 33-442 and specific CC&R provisions, arguing that the authorized use of the fee (Master Association’s operating expenses and/or reserves) was not specific enough to meet the statutory exception under A.R.S. § 33-442(C).

Orders: Petitioner’s petition is dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

A.R.S. § 33-1806
A.R.S. § 33-442
A.R.S. § 32-2199
A.R.S. § 41-1092.07(G)(2)
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)
Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)

Analytics Highlights

Topics: HOA transfer fee, A.R.S. 33-442, CC&R violation, Operating expenses, Reserves

Additional Citations:

A.R.S. § 33-1806
A.R.S. § 33-442
A.R.S. § 32-2199
A.R.S. § 32-2199.02(B)
A.R.S. § 32-2199.04
A.R.S. § 41-1092.09
A.R.S. § 41-1092.07(G)(2)
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)

Video Overview

Audio Overview

Decision Documents

21F-H2120024-REL Decision – 855401.pdf

Uploaded 2026-04-24T11:31:43 (95.8 KB)

This is a concise summary of the Administrative Law Judge Decision in the matter of *Aaron Ricks (Somerstone Properties, LLC) v. Montelena Master Community Association*.

Concise Summary of Administrative Hearing

Key Facts and Parties

The hearing took place on January 27, 2021, before Administrative Law Judge Tammy L. Eigenheer. Petitioner, Aaron Ricks, filed a Homeowners Association (HOA) Dispute Process Petition on or about October 27, 2020, alleging violations of community documents and statute. The dispute centered on alleged "unlawful fees ($5,000 in total)" that Petitioner claimed he was forced to pay to sell his home. The specific fee at issue was a $2500.00 transfer fee charged to the purchaser each time a parcel was sold.

Main Issues and Legal Basis

The core issue for the hearing was whether the Respondent, Montelena Master Community Association, violated A.R.S. § 33-1806, A.R.S. § 33-442, and the Association’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs) Article 6.9.2/6.9.2.9, specifically regarding the imposition of the transfer fee.

The legal focus was A.R.S. § 33-442, which generally prohibits transfer fees but provides exceptions. The key exception cited was A.R.S. § 33-442(C)(3), which allows fees if they are used exclusively for a purpose authorized in the document, touch and concern the land, and are not passed through to a specific third party or declarant (unless authorized to manage property or part of an approved development plan).

Key Arguments

Respondent’s Position (Motion for Summary Judgment): Respondent filed a Motion for Summary Judgment arguing the Petition should be dismissed because the CC&Rs (Sections 7.15 and 6.6) authorized the fee, which touched and concerned the land. A 2010 Board Resolution specified the Transfer Fee was "to be used exclusively to fund the Master Association’s operating expenses and/or the Master Association’s reserves". Counsel argued this usage was sufficient to meet A.R.S. § 33-442(C) requirements. Respondent also asserted that the CC&R sections cited by the Petitioner (6.9.2 and 6.9.2.9) addressed a "Contribution to Reserves," not the specific Transfer Fee being contested.
Petitioner’s Position: Petitioner acknowledged the statutory exception but argued that the transfer fee must be used for a very specific limited purpose (e.g., a swimming pool or landscaping project), rather than a general purpose like operating expenses or reserves, for the fee to be compliant with A.R.S. § 33-442. Petitioner also asserted that specific CC&R sections precluded the fee. (Petitioner offered no argument regarding A.R.S. § 33-1806).

Legal Points and Outcome

The Administrative Law Judge (ALJ) noted that the Petitioner bore the burden of proof to establish violations by a preponderance of the evidence.

The ALJ determined that Petitioner failed to establish a violation of the community documents and A.R.S. § 33-442. Crucially, Petitioner offered no legal authority to support his interpretation that A.R.S. § 33-442 required the transfer fee to be designated for a more specific purpose than the association’s operating expenses and/or reserves identified in the governing documents.

The final decision was that Petitioner’s petition is dismissed. This decision was done on February 16, 2021.

Questions

Question

Who is responsible for proving that an HOA violated the law or community documents during a hearing?

Short Answer

The homeowner (Petitioner) bears the burden of proof.

Detailed Answer

In an administrative hearing, the homeowner filing the petition must prove that the HOA committed the alleged violations. This must be established by a 'preponderance of the evidence,' meaning the homeowner's claims are more likely true than not.

Alj Quote

Petitioner bears the burden of proof to establish that Respondent committed the alleged violations by a preponderance of the evidence.

Legal Basis

A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1)

Topic Tags

burden of proof
legal procedure
evidence

Question

Can an HOA charge a transfer fee that is used for general operating expenses rather than a specific project?

Short Answer

Yes, funding operating expenses or reserves is considered a valid purpose.

Detailed Answer

Under Arizona law (A.R.S. § 33-442), transfer fees are generally prohibited unless they fall under specific exceptions. One exception is if the fee is used for a purpose authorized in the document. The ALJ ruled that using fees for 'operating expenses and/or… reserves' satisfies this requirement; it does not need to be for a specific limited purpose like a swimming pool.

Alj Quote

Petitioner offered no authority to support his interpretation that A.R.S. § 33-442 required that the transfer fee had to be for a more specific purpose than those identified in the governing documents.

Legal Basis

A.R.S. § 33-442(C)

Topic Tags

transfer fees
operating expenses
financial management

Question

Can the HOA Board set the amount of a transfer fee without a vote if the CC&Rs allow it?

Short Answer

Yes, if the CC&Rs grant the Board the authority to set the amount.

Detailed Answer

If the community's Declaration of Covenants, Conditions, and Restrictions (CC&Rs) specifically states that the transfer fee amount is 'to be set by the Board' or established 'from time to time by the Board,' the Board has the authority to determine the fee amount.

Alj Quote

The Master Association may require the new Owner of a Lot or Parcel to pay to the Master Association, or its designated representative, a transfer fee in an amount to be set by the Board . . . .

Legal Basis

CC&Rs Section 6.6; CC&Rs Section 7.15

Topic Tags

board authority
CC&Rs
fees

Question

Can an HOA charge both a Transfer Fee and a Reserve Contribution fee on the same sale?

Short Answer

Yes, an HOA can charge multiple distinct fees if authorized by the governing documents.

Detailed Answer

The ALJ found that a Transfer Fee can be charged in addition to other fees, such as a Reserve Contribution, provided the governing documents (like a Board Resolution or CC&Rs) explicitly state that the fee is in addition to other assessments.

Alj Quote

This Transfer Fee shall be in addition to any other fees and assessments due and payable in relation to the transfer of the property, including, but not limited to, a Reserve Contribution pursuant to Article 6, Section 6.9 of the Declaration.

Legal Basis

Board Resolution (Recorded July 23, 2010)

Topic Tags

reserve contribution
transfer fees
closing costs

Question

What does 'preponderance of the evidence' mean in an HOA dispute?

Short Answer

It means the evidence shows a claim is more probably true than not.

Detailed Answer

This legal standard requires the party with the burden of proof to provide evidence that has 'superior evidentiary weight.' It does not mean removing all doubt, but rather sufficient evidence to incline a fair mind to one side over the other.

Alj Quote

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

Arizona Law of Evidence § 5

Topic Tags

legal definitions
evidence
standard of proof

Question

Is a transfer fee valid if I purchased the property out of bankruptcy?

Short Answer

Yes, if the CC&Rs require payment immediately upon becoming the owner.

Detailed Answer

The manner of purchase (e.g., out of bankruptcy) does not automatically exempt an owner from transfer fees if the CC&Rs mandate that 'Each person or entity who purchases a Lot… shall pay… immediately upon becoming the Owner.'

Alj Quote

Therefore, Respondent was able to charge Petitioner the transfer fee pursuant to his purchase of the property out of bankruptcy.

Legal Basis

CC&Rs Section 7.15

Topic Tags

bankruptcy
property transfer
exemptions

Case

Docket No: 21F-H2120024-REL
Case Title: Aaron Ricks (Somerstone Properties, LLC) v. Montelena Master Community Association
Decision Date: 2021-02-16
Alj Name: Tammy L. Eigenheer
Tribunal: OAH
Agency: ADRE

Questions

Question

Who is responsible for proving that an HOA violated the law or community documents during a hearing?

Short Answer

The homeowner (Petitioner) bears the burden of proof.

Detailed Answer

Alj Quote

Petitioner bears the burden of proof to establish that Respondent committed the alleged violations by a preponderance of the evidence.

Legal Basis

A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1)

Topic Tags

burden of proof
legal procedure
evidence

Question

Can an HOA charge a transfer fee that is used for general operating expenses rather than a specific project?

Short Answer

Yes, funding operating expenses or reserves is considered a valid purpose.

Detailed Answer

Alj Quote

Legal Basis

A.R.S. § 33-442(C)

Topic Tags

transfer fees
operating expenses
financial management

Question

Can the HOA Board set the amount of a transfer fee without a vote if the CC&Rs allow it?

Short Answer

Yes, if the CC&Rs grant the Board the authority to set the amount.

Detailed Answer

Alj Quote

The Master Association may require the new Owner of a Lot or Parcel to pay to the Master Association, or its designated representative, a transfer fee in an amount to be set by the Board . . . .

Legal Basis

CC&Rs Section 6.6; CC&Rs Section 7.15

Topic Tags

board authority
CC&Rs
fees

Question

Can an HOA charge both a Transfer Fee and a Reserve Contribution fee on the same sale?

Short Answer

Yes, an HOA can charge multiple distinct fees if authorized by the governing documents.

Detailed Answer

Alj Quote

Legal Basis

Board Resolution (Recorded July 23, 2010)

Topic Tags

reserve contribution
transfer fees
closing costs

Question

What does 'preponderance of the evidence' mean in an HOA dispute?

Short Answer

It means the evidence shows a claim is more probably true than not.

Detailed Answer

Alj Quote

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

Arizona Law of Evidence § 5

Topic Tags

legal definitions
evidence
standard of proof

Question

Is a transfer fee valid if I purchased the property out of bankruptcy?

Short Answer

Yes, if the CC&Rs require payment immediately upon becoming the owner.

Detailed Answer

Alj Quote

Therefore, Respondent was able to charge Petitioner the transfer fee pursuant to his purchase of the property out of bankruptcy.

Legal Basis

CC&Rs Section 7.15

Topic Tags

bankruptcy
property transfer
exemptions

Case

Docket No: 21F-H2120024-REL
Case Title: Aaron Ricks (Somerstone Properties, LLC) v. Montelena Master Community Association
Decision Date: 2021-02-16
Alj Name: Tammy L. Eigenheer
Tribunal: OAH
Agency: ADRE

Case Participants

Petitioner Side

Aaron Ricks (petitioner)
Somerstone Properties, LLC

Respondent Side

Troy Stratman (HOA attorney)
Stratman Law Firm, PLC

Neutral Parties

Tammy L. Eigenheer (ALJ)
Judy Lowe (Commissioner)
Arizona Department of Real Estate

The Sun Groves Homeowners Association v. David L & Makenzie Lockhart

Posted on February 10, 2021 by [email protected]

Case Summary

Case ID	21F-H2120019-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2021-02-10
Administrative Law Judge	Adam D. Stone
Outcome	The Petitioner (HOA) prevailed as the Respondents stipulated they violated the CC&R Article 10.11.1 concerning parking, and were ordered to pay the Petitioner's $500.00 filing fees.
Filing Fees Refunded	$500.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Sun Groves Homeowners Association	Counsel	Robert H. Willis, Esq.
Respondent	David L. and Stephanie J. Lockhart	Counsel	Andrew Ellis, Esq.

Alleged Violations

Article 10.11.1 of the SGHA CC&R’s

Outcome Summary

The Petitioner (HOA) prevailed as the Respondents stipulated they violated the CC&R Article 10.11.1 concerning parking, and were ordered to pay the Petitioner's $500.00 filing fees.

Why this result: Respondents stipulated that they were in violation of Article 10.11.1 of the SGHA CC&R’s.

Key Issues & Findings

Violation of parking restrictions

Respondents stipulated that they were in violation of the SGHA CC&R’s regarding parking restrictions.

Orders: Petition granted; Respondents assessed the cost of Petitioner’s filing fees in the amount of $500.00.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

A.R.S. § 32-2199(B)

Analytics Highlights

Topics: Stipulation, CC&R Violation, Parking

Additional Citations:

A.R.S. § 32-2199(B)
Title 33, Chapter 16

Video Overview

Audio Overview

Decision Documents

21F-H2120019-REL Decision – 854057.pdf

Uploaded 2026-04-24T11:30:59 (84.7 KB)

The administrative legal case hearing, *The Sun Groves Homeowners Association (SGHA) v. David L. and Stephanie J. Lockhart*, was held on February 9, 2021, before the Office of Administrative Hearings (OAH). The proceeding was overseen by Administrative Law Judge Adam D. Stone.

Key Facts and Jurisdiction

The Petitioner, Sun Groves Homeowners Association, is a planned community organization. Respondents, David L. and Stephanie J. Lockhart, are homeowners and members of SGHA. The case was filed with the Arizona Department of Real Estate (ADRE), which, along with the OAH, is authorized by A.R.S. § 32-2199(B) to hear petitions regarding violations of planned community documents.

Main Issue and Legal Points

SGHA filed a complaint alleging that the Lockharts were in violation of Article 10.11.1 of the SGHA CC&R’s. This specific article restricts the parking of private passenger automobiles or pickup trucks, requiring them to be parked within a garage, in a private driveway, or in Board-designated areas. The most critical legal point of the hearing was that the Respondents stipulated (agreed) that they were in violation of Article 10.11.1 of the CC&R’s. The Respondents also stipulated that SGHA was the prevailing party in the matter.

Final Decision and Outcome

Pursuant to the stipulation of the parties, the tribunal issued a Conclusion of Law finding that the Respondents had violated Article 10.11.1 of the SGHA CC&R’s. The Administrative Law Judge granted the Petitioners’ petition. As the prevailing party, SGHA was awarded costs, and the Lockharts were ordered to pay Petitioner’s filing fees in the amount of $500.00. The Order became binding unless a request for rehearing was filed with the Commissioner of the Department of Real Estate within 30 days.

Questions

Question

Can my HOA restrict parking on the street or in front of my house?

Short Answer

Yes, if the CC&Rs specifically restrict parking to garages or driveways.

Detailed Answer

The ALJ upheld a CC&R provision that prohibited parking private passenger automobiles or pickup trucks anywhere on the property or adjacent roadways, except within a garage or private driveway.

Alj Quote

No private passenger automobiles or pickup trucks shall be parked upon the Property or any roadway adjacent thereto except within a garage, in a private driveway appurtenant to a Dwelling Unit, or within areas designated for such purpose by the Board.

Legal Basis

CC&R Article 10.11.1

Topic Tags

Parking
CC&Rs
Restrictions

Question

If I admit to a violation during a hearing, what happens?

Short Answer

The judge will accept the admission and issue a finding that the violation occurred.

Detailed Answer

When a homeowner stipulates (agrees) that they were in violation of a specific rule, the tribunal accepts this admission as fact and rules accordingly without needing further evidence.

Alj Quote

Pursuant to the stipulation of the parties, the tribunal finds that Respondents violated Article 10.11.1 of the SGHA CC&R’s.

Legal Basis

Stipulation of Parties

Topic Tags

Hearing Procedure
Stipulation
Evidence

Question

Can the HOA force me to pay their filing fees if they win?

Short Answer

Yes, the judge can order the homeowner to pay the HOA's filing fees.

Detailed Answer

In this case, the homeowners agreed to pay the HOA's $500.00 filing fee as part of the stipulation that the HOA was the prevailing party, and the judge ordered this assessment.

Alj Quote

IT IS FURTHER ORDERED assessing the cost of Petitioner’s filing fees in the amount of $500.00.

Legal Basis

Administrative Order

Topic Tags

Fines
Fees
Costs

Question

Does the Department of Real Estate have authority to hear HOA violation cases?

Short Answer

Yes, state law allows owners or HOAs to file petitions regarding violations of community documents.

Detailed Answer

Arizona statute permits planned community organizations (HOAs) or owners to file petitions with the Department regarding violations, which are then heard by the Office of Administrative Hearings.

Alj Quote

A.R.S. § 32-2199(B) permits an owner or a planned community organization to file a petition with the Department for a hearing concerning violations of planned community documents under the authority Title 33, Chapter 16.

Legal Basis

A.R.S. § 32-2199(B)

Topic Tags

Jurisdiction
ADRE
Process

Question

Is the Administrative Law Judge's decision final?

Short Answer

Yes, the order is binding unless a rehearing is granted.

Detailed Answer

The decision issued by the ALJ is legally binding on both the homeowner and the HOA unless a request for a rehearing is successfully granted.

Alj Quote

Pursuant to A.R.S. §32-2199.02(B), this Order is binding on the parties unless a rehearing is granted pursuant to A.R.S. § 32-2199.04.

Legal Basis

A.R.S. § 32-2199.02(B)

Topic Tags

Legal Status
Appeals
Binding Order

Question

How much time do I have to appeal or request a rehearing?

Short Answer

You must file a request for rehearing within 30 days of the service of the order.

Detailed Answer

If a party wishes to challenge the decision, they must file a request for a rehearing with the Commissioner of the Department of Real Estate within 30 days.

Alj Quote

Pursuant to A.R.S. § 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

A.R.S. § 41-1092.09

Topic Tags

Appeals
Deadlines
Procedure

Case

Docket No: 21F-H2120019-REL
Case Title: The Sun Groves Homeowners Association vs. David L & Makenzie Lockhart
Decision Date: 2021-02-10
Alj Name: Adam D. Stone
Tribunal: OAH
Agency: ADRE

Questions

Question

Can my HOA restrict parking on the street or in front of my house?

Short Answer

Yes, if the CC&Rs specifically restrict parking to garages or driveways.

Detailed Answer

The ALJ upheld a CC&R provision that prohibited parking private passenger automobiles or pickup trucks anywhere on the property or adjacent roadways, except within a garage or private driveway.

Alj Quote

Legal Basis

CC&R Article 10.11.1

Topic Tags

Parking
CC&Rs
Restrictions

Question

If I admit to a violation during a hearing, what happens?

Short Answer

The judge will accept the admission and issue a finding that the violation occurred.

Detailed Answer

When a homeowner stipulates (agrees) that they were in violation of a specific rule, the tribunal accepts this admission as fact and rules accordingly without needing further evidence.

Alj Quote

Pursuant to the stipulation of the parties, the tribunal finds that Respondents violated Article 10.11.1 of the SGHA CC&R’s.

Legal Basis

Stipulation of Parties

Topic Tags

Hearing Procedure
Stipulation
Evidence

Question

Can the HOA force me to pay their filing fees if they win?

Short Answer

Yes, the judge can order the homeowner to pay the HOA's filing fees.

Detailed Answer

In this case, the homeowners agreed to pay the HOA's $500.00 filing fee as part of the stipulation that the HOA was the prevailing party, and the judge ordered this assessment.

Alj Quote

IT IS FURTHER ORDERED assessing the cost of Petitioner’s filing fees in the amount of $500.00.

Legal Basis

Administrative Order

Topic Tags

Fines
Fees
Costs

Question

Does the Department of Real Estate have authority to hear HOA violation cases?

Short Answer

Yes, state law allows owners or HOAs to file petitions regarding violations of community documents.

Detailed Answer

Arizona statute permits planned community organizations (HOAs) or owners to file petitions with the Department regarding violations, which are then heard by the Office of Administrative Hearings.

Alj Quote

Legal Basis

A.R.S. § 32-2199(B)

Topic Tags

Jurisdiction
ADRE
Process

Question

Is the Administrative Law Judge's decision final?

Short Answer

Yes, the order is binding unless a rehearing is granted.

Detailed Answer

The decision issued by the ALJ is legally binding on both the homeowner and the HOA unless a request for a rehearing is successfully granted.

Alj Quote

Pursuant to A.R.S. §32-2199.02(B), this Order is binding on the parties unless a rehearing is granted pursuant to A.R.S. § 32-2199.04.

Legal Basis

A.R.S. § 32-2199.02(B)

Topic Tags

Legal Status
Appeals
Binding Order

Question

How much time do I have to appeal or request a rehearing?

Short Answer

You must file a request for rehearing within 30 days of the service of the order.

Detailed Answer

If a party wishes to challenge the decision, they must file a request for a rehearing with the Commissioner of the Department of Real Estate within 30 days.

Alj Quote

Legal Basis

A.R.S. § 41-1092.09

Topic Tags

Appeals
Deadlines
Procedure

Case

Docket No: 21F-H2120019-REL
Case Title: The Sun Groves Homeowners Association vs. David L & Makenzie Lockhart
Decision Date: 2021-02-10
Alj Name: Adam D. Stone
Tribunal: OAH
Agency: ADRE

Case Participants

Petitioner Side

Robert H. Willis (attorney)
Burdman Willis, PLLC

Respondent Side

David L. Lockhart (respondent)
Stephanie J. Lockhart (respondent)
Proper co-Respondent in this matter
Makenzie Lockhart (listed respondent)
Respondent’s daughter
Andrew Ellis (attorney)

Neutral Parties

Adam D. Stone (ALJ)
Judy Lowe (Commissioner)
Arizona Department of Real Estate

Erik R. Pierce v. Sierra Morado Community Association

Posted on February 9, 2021 by [email protected]

Case Summary

Case ID	20F-H2020053-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2021-02-10
Administrative Law Judge	Adam D. Stone
Outcome	The Administrative Law Judge denied the petition, concluding that the Respondent HOA did not violate CC&R Section 11.1 because that section grants the Board discretion, rather than a mandatory obligation, in the timing of enforcement actions.
Filing Fees Refunded	$0.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Erik R. Pierce	Counsel	James C. Frisch
Respondent	Sierra Morado Community Association	Counsel	Nicholas C.S. Nogami and Heather M. Hampstead

Alleged Violations

Article 11, Section 11.1

Outcome Summary

The Administrative Law Judge denied the petition, concluding that the Respondent HOA did not violate CC&R Section 11.1 because that section grants the Board discretion, rather than a mandatory obligation, in the timing of enforcement actions.

Why this result: The Petitioner failed to meet the burden of proof to establish that the Respondent violated CC&R Section 11.1, as the ALJ found the Board's decision to temporarily delay enforcement pending litigation and settlement discussions fell within the discretion granted by the CC&R.

Key Issues & Findings

Failure of HOA to Enforce Architectural Approval Conditions (Hot Tub Screening)

Petitioner alleged that the HOA failed to enforce the mandatory installation of a pergola and screening around a neighbor's hot tub, a condition imposed by the Architectural Review Committee when retroactively approving the installation.

Orders: Petitioner's petition is denied.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

A.R.S. § 32-2199(B)
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)
CC&R Article 11, Section 11.1
CC&R Article 4, Section 4.27

Analytics Highlights

Topics: HOA Enforcement, CC&R Dispute, Architectural Control, Discretionary Enforcement

Additional Citations:

A.R.S. § 32-2199(B)
A.R.S. § 32-2199.02(B)
A.R.S. § 32-2199.04
A.R.S. § 41-1092.07(G)(2)
A.R.S. § 41-1092.09
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)
A.A.C. R2-19-119(B)(2)
CC&R Article 4, Section 4.27
CC&R Article 11, Section 11.1
Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)
MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999)

Video Overview

Audio Overview

Decision Documents

20F-H2020053-REL Decision – 850237.pdf

Uploaded 2026-04-26T09:52:48 (43.0 KB)

20F-H2020053-REL Decision – 850239.pdf

Uploaded 2026-04-26T09:52:51 (7.1 KB)

20F-H2020053-REL Decision – 853778.pdf

Uploaded 2026-04-26T09:52:54 (119.9 KB)

Administrative Hearing Briefing: Pierce v. Sierra Morado Community Association

Executive Summary

This briefing synthesizes the key findings and judicial decision in the administrative case of Erik R. Pierce versus the Sierra Morado Community Association (SMCA), Case No. 20F-H2020053-REL. The petition, filed by homeowner Erik R. Pierce, was ultimately denied by the Administrative Law Judge on February 10, 2021.

The core of the dispute was Pierce’s allegation that the SMCA failed to enforce its Covenants, Conditions, and Restrictions (CC&Rs) against his neighbors, the Kinstles, who installed a hot tub visible from Pierce’s property, creating a privacy violation. While the SMCA Board retroactively approved the hot tub, it did so with the explicit condition that a pergola and screening be installed to mitigate the visibility issue. The Kinstles subsequently failed to install the required screening.

The judge concluded that the SMCA’s conditional approval resolved the initial violation claim under CC&R Section 4.27. The central issue then became whether the SMCA’s subsequent failure to compel the installation of the screening constituted a violation of its enforcement duty under CC&R Section 11.1. The judge ruled that it did not, finding that the CC&Rs grant the Association a discretionary right to enforce its rules, not an absolute obligation. The judge found persuasive the SMCA’s testimony that it delayed enforcement actions due to the ongoing litigation and in an attempt to foster a settlement between the neighbors. This exercise of discretion was deemed permissible under the Association’s governing documents.

1. Case Overview

Parties and Legal Representation

Entity

Legal Counsel

Petitioner

Erik R. Pierce

James C. Frisch, Esq. & Michael Resare, Esq. (King & Frisch, P.C.)

Respondent

Sierra Morado Community Association (SMCA)

Heather M. Hampstead, Esq. & Nicholas C.S. Nogami, Esq. (Carpenter, Hazlewood, Delgado & Bolen, LLP)

Key Case Details

• Case Number: 20F-H2020053-REL

• Presiding Judge: Adam D. Stone, Administrative Law Judge

• Hearing Date: January 25, 2021 (conducted via Google Meet)

• Decision Date: February 10, 2021

• Jurisdiction: The Arizona Department of Real Estate (ADRE) is statutorily authorized to hear petitions from homeowners’ association members. This case was referred by the ADRE to the Office of Administrative Hearings for an evidentiary hearing.

2. Core Dispute and Allegations

Petitioner’s Complaint

On March 23, 2020, Erik R. Pierce filed a complaint with the ADRE alleging that the SMCA was in violation of its own CC&Rs, specifically Sections 4.27 (Swimming Pools and Spas) and 11.1 (Enforcement).

The dispute originated with the installation of a hot tub by Pierce’s neighbors, the Kinstles. Pierce testified that the hot tub and its occupants were visible from inside his house, and that occupants of the hot tub could look directly into his home, violating his right to privacy.

Timeline of Key Events

• September 4, 2019: Pierce submits his initial complaint to the SMCA, noting the hot tub’s visibility and asserting that the Kinstles had failed to obtain prior approval from the Architectural Review Committee (ARC).

• Post-September 2019: The SMCA informs the Kinstles that they installed the hot tub without approval and directs them to submit plans for the proper approval process.

• February 10, 2020: After several rejections, the SMCA Board approves the Kinstles’ hot tub installation on the condition that a pergola and screening are installed.

• March 3, 2020: Pierce receives a letter from the property management company, AAM, LLC, stating that the installation was approved with the screening requirement and that the complaint was closed.

• January 25, 2021: At the time of the hearing, the Kinstles had still not installed the required pergola and screening.

3. Analysis of Key Testimonies

The decision was informed by testimony from four witnesses presented by the Petitioner.

• Erik R. Pierce (Petitioner): Outlined the timeline of the dispute, the visibility of the neighbors’ hot tub, the resulting privacy violation, and the SMCA Board’s failure to enforce its own conditional approval requiring a pergola and screening.

• Bill Oliver (Former SMCA President, Fall 2019 – April 2020): Confirmed that the Board approved the hot tub retroactively with the stipulation for a pergola and screening. He stated the Board had a “rigorous process of enforcement” but could not recall if a specific violation letter was sent to the Kinstles after the conditional approval was granted.

• Jodie Cervantes (Former Community Manager, 2019 – June 2020): Testified that she believed the CC&Rs were enforced and the matter was closed. She suggested the Kinstles had a six-month period to comply with the screening requirement, which she believed was in the Design Guidelines, but could not point to the specific language.

• Martin Douglas (Current SMCA President, from April 2020): Stated he had been to the Pierce residence for another matter and the hot tub was not visible to him. He attributed the lack of enforcement action to the “ongoing litigation and multiple settlement offers which were being exchanged.” He testified that upon resolution of the case, the Board “will follow through with enforcement actions should the Kinstle’s fail to comply.”

4. Judicial Reasoning and Decision

The Administrative Law Judge’s decision centered on the interpretation of the SMCA’s CC&Rs and the discretionary power of its Board.

Governing CC&R Provisions

The ruling rested on the specific language of two sections of the SMCA CC&Rs:

• Section 4.27 (Swimming Pools and Spas): This section permits the installation of a hot tub only if it is “properly screened… if neither it nor its occupants are Visible from Neighboring Property, and with the prior written approval of the Architectural Review Committee.”

• Section 11.1 (Enforcement): This section states that “The Association or any Owner shall have the right to enforce the Project Documents… The failure of the Association or an Owner to take enforcement action with respect to a violation of the Project Documents shall not constitute or be deemed a waiver of the right of the Association or any Owner to enforce the Project Documents in the future.”

Administrative Law Judge’s Conclusions

1. Resolution of the Section 4.27 Claim: The judge determined that the initial issue regarding the unapproved hot tub “was essentially resolved by the Board instructing the Kinstle’s erect a pergola and install screening.” By making its approval conditional on a privacy solution, the Board addressed the core requirement of the section.

2. The “Heart of the Matter” – Section 11.1 Enforcement: The judge identified the central question as whether the SMCA violated Section 11.1 by failing to enforce the screening requirement against the Kinstles.

3. Discretionary vs. Mandatory Enforcement: The judge concluded that the language of Section 11.1 grants the Board a “right to enforce, not an absolute obligation.”

4. Rationale for Delayed Enforcement: The judge found the testimony of the current SMCA President, Martin Douglas, to be “more persuasive.” Douglas’s explanation—that the Board delayed enforcement to “foster an agreement with the neighbors” amid ongoing litigation—was accepted as a valid exercise of the Board’s discretion.

5. Final Ruling: The judge stated, “Section 11.1 expressly granted the Board this discretion, and it should not be disturbed.” Consequently, the judge ruled that the Petitioner failed to prove by a preponderance of the evidence that the Respondent had violated CC&R Section 11.1.

Final Order

IT IS ORDERED that Petitioners’ petition is denied.

The order was issued on February 10, 2021, and is binding unless a rehearing is granted.

Study Guide: Pierce v. Sierra Morado Community Association (Case No. 20F-H2020053-REL)

This study guide provides a review of the administrative hearing concerning the dispute between Erik R. Pierce and the Sierra Morado Community Association. It includes a short-answer quiz, an answer key, suggested essay questions, and a comprehensive glossary of terms and entities involved in the case.

Short-Answer Quiz

Answer each of the following questions in two to three complete sentences, based on the provided source documents.

1. Who were the primary parties in this case, and what were their respective roles?

2. What was the initial reason for Mr. Pierce’s complaint against his neighbors, the Kinstles?

3. Which two sections of the Sierra Morado Community Association (SMCA) CC&Rs did Mr. Pierce allege were violated?

4. What action did the SMCA Board take after being informed that the Kinstles had installed a hot tub without prior approval?

5. What specific conditions did the SMCA Board require for the retroactive approval of the Kinstles’ hot tub installation?

6. According to former Board President Bill Oliver’s testimony, what was the Board’s common practice regarding architectural requests made after an installation?

7. What reason did Community Manager Jodie Cervantes give for her belief that no further enforcement action could be taken against the Kinstles?

8. According to current SMCA Board President Martin Douglas, why had the Board delayed enforcement actions against the Kinstles?

9. What was the Administrative Law Judge’s final decision regarding the alleged violation of CC&R Section 11.1?

10. How did the judge interpret the Board’s enforcement power as described in Section 11.1 of the CC&Rs?

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Answer Key

1. The primary parties were Erik R. Pierce, who was the Petitioner filing the complaint, and the Sierra Morado Community Association (SMCA), which was the Respondent. Mr. Pierce is a homeowner and member of the SMCA.

2. Mr. Pierce’s complaint originated because his neighbors, the Kinstles, installed a hot tub that was visible from his backyard. He testified that occupants in the hot tub were visible from inside his house, violating his privacy.

3. The Petitioner, Mr. Pierce, alleged that the Respondent, SMCA, was in violation of sections 4.27 and 11.1 of the SMCA CC&Rs. Section 4.27 pertains to the installation of spas, and Section 11.1 addresses the enforcement of project documents.

4. After Mr. Pierce filed his complaint, the SMCA informed the Kinstles that they had installed the hot tub without approval. The Board then directed the Kinstles to submit their plans and go through the proper architectural approval process.

5. The Kinstles’ hot tub was approved retroactively on February 10, 2020, on the condition that they install a pergola and screening. This was intended to address the visibility of the hot tub from Mr. Pierce’s property.

6. Bill Oliver, the SMCA President from fall 2019 to April 2020, testified that the Board would approve architectural requests retroactively. He confirmed that this is what occurred in the case of the Kinstles’ hot tub.

7. Jodie Cervantes, the Community Manager, testified that she believed the matter was closed because the Kinstles had six months to comply with the pergola and screening requirements. She believed this six-month deadline was outlined in the Design Guidelines, though she could not locate the specific language.

8. Martin Douglas, who became Board President in April 2020, testified that the Board delayed enforcement actions due to the ongoing litigation. He stated that multiple settlement offers were being exchanged in an effort to foster an agreement between the neighbors.

9. The Administrative Law Judge ordered that the Petitioner’s petition be denied. The judge concluded that Mr. Pierce did not establish by a preponderance of the evidence that the SMCA had violated CC&R Section 11.1.

10. The judge determined that Section 11.1 grants the Board a right to enforce the rules, not an absolute obligation to do so. This interpretation means the Board has the discretion to delay enforcement, which it did in this case to facilitate a potential settlement.

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Essay Questions

The following questions are designed for longer, essay-style responses. Use evidence and testimony from the case documents to construct a thorough analysis. No answers are provided.

1. Explain the legal standard of “preponderance of the evidence” as defined in the Administrative Law Judge’s decision. Analyze why the Petitioner, Erik R. Pierce, failed to meet this burden of proof concerning the violation of CC&R Section 11.1.

2. Trace the timeline of events from Mr. Pierce’s initial complaint on September 4, 2019, to the final decision on February 10, 2021. Discuss the key actions, delays, and decisions made by the SMCA Board during this period.

3. Compare and contrast the testimonies of Bill Oliver, Jodie Cervantes, and Martin Douglas. How do their different roles and timeframes with the SMCA shape their perspectives on the association’s enforcement process and the specific handling of the Kinstle case?

4. Analyze the Administrative Law Judge’s interpretation of CC&R Section 11.1. Discuss the distinction made between a “right to enforce” and an “absolute obligation,” and explain how this interpretation was central to the final ruling.

5. Based on the judge’s findings and the testimony of Martin Douglas, what are the likely next steps for the SMCA regarding the Kinstles’ non-compliance with the pergola and screening requirement? Evaluate the potential for future conflict or resolution between the parties involved.

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Glossary of Key Terms

Term / Entity

Definition

AAM, LLC

The property management company that employed Community Manager Jodie Cervantes and managed the Sierra Morado Community Association during the period of the dispute.

Administrative Law Judge (ALJ)

The official who presides over administrative hearings. In this case, the ALJ was Adam D. Stone of the Office of Administrative Hearings.

Architectural Committee (ARC)

The committee within the SMCA responsible for approving construction, installations, and alterations to properties, as referenced in CC&R Section 4.27.

Arizona Department of Real Estate (ADRE)

The state agency authorized by statute to receive and decide Petitions for Hearing from members of homeowners’ associations. Mr. Pierce filed his initial complaint with this department.

Burden of Proof

The obligation on a party in a legal case to prove its allegations. In this case, the Petitioner had the burden to establish his claim by a “preponderance of the evidence.”

Covenants, Conditions, and Restrictions. These are the governing documents or rules of a planned community. The dispute centered on alleged violations of Sections 4.27 (Swimming Pools and Spas) and 11.1 (Enforcement).

Hearing

The formal proceeding held on January 25, 2021, where the parties presented exhibits and witness testimony to the Administrative Law Judge.

Office of Administrative Hearings

An independent state agency that conducts evidentiary hearings for other state agencies, such as the Department of Real Estate.

Petitioner

The party who files a petition or complaint to initiate a legal proceeding. In this case, the Petitioner was Erik R. Pierce.

Preponderance of the Evidence

The evidentiary standard required for the Petitioner to win the case. It is defined as proof that convinces the trier of fact that a contention is “more probably true than not.”

Respondent

The party against whom a petition or complaint is filed. In this case, the Respondent was the Sierra Morado Community Association (SMCA).

Retroactive Approval

The act of approving an architectural installation (such as a hot tub) after it has already been completed, which the SMCA Board did in this case.

Sierra Morado Community Association (SMCA)

The homeowners’ association in Tucson, Arizona, of which Erik R. Pierce and the Kinstles are members.

Stipulation

An agreement between the parties in a legal proceeding. In this case, the parties stipulated to enter all submitted exhibits into the record.

Your HOA Can Ignore Its Own Rules? A Surprising Legal Case Every Homeowner Needs to Understand

Introduction: The Homeowner’s Dilemma

Most homeowners in a planned community operate under a simple assumption: if a neighbor violates a clear rule, you can file a complaint, and the Homeowners Association (HOA) is required to take action. It’s the fundamental promise of an HOA—consistent enforcement to protect property values and quality of life.

But what happens when the HOA agrees a violation has occurred, demands a fix, and then… does nothing to enforce it?

A real-world legal case, Erik R. Pierce versus the Sierra Morado Community Association, provides a surprising and cautionary answer. The final court decision reveals a critical loophole that may exist in your own HOA agreement. This article will break down the three most counter-intuitive takeaways from that case that every homeowner should understand.

Takeaway 1: “A Right to Enforce” Isn’t an “Obligation to Enforce”

The core of the dispute was straightforward. Homeowner Erik Pierce filed a complaint because his neighbors, the Kinstles, installed a hot tub that was visible from his property, a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs)—the legally binding rules that govern the community. The HOA’s Architectural Committee retroactively approved the hot tub, but only on the condition that the neighbors install a pergola and screening to shield it from view.

The neighbors never installed the required screening, yet the HOA took no further enforcement action. This inaction led Mr. Pierce to sue the HOA.

The judge’s decision hinged on a crucial interpretation of the HOA’s governing documents. The judge ruled in favor of the HOA because the documents gave the Board the right to enforce the rules, not an absolute obligation to do so. This distinction granted the HOA discretion to choose its strategy. The judge found the board’s reasoning for the delay persuasive: it was deliberately choosing negotiation over immediate punitive action to resolve the conflict. The board’s discretion wasn’t just a right to do nothing; it was a right to choose a different path to compliance.

The key phrase here is “shall have the right to enforce.” Had the documents stated the board “shall enforce,” the outcome would likely have been entirely different. This single phrase transforms enforcement from a mandate into a strategic option for the board.

The Administrative Law Judge’s decision highlights this critical point:

“…Section 11.1 only gives the Board a right to enforce, not an absolute obligation. While Petitioner is understandably upset that there has yet to be any follow through on enforcement of the screening requirements, this tribunal finds the testimony of Mr. Douglas more persuasive, namely that the Board has delayed in enforcing because it was trying to foster an agreement with the neighbors. Section 11.1 expressly granted the Board this discretion, and it should not be disturbed.”

This finding is shocking for most homeowners, who reasonably assume that the rules laid out in their CC&Rs are mandates for the board, not a menu of discretionary options.

Takeaway 2: Suing Your HOA Can Ironically Pause Enforcement

The board’s discretionary power was put on full display when Mr. Pierce filed his lawsuit, creating a legal Catch-22. The current SMCA Board President, Martin Douglas, testified that the board deliberately paused formal enforcement actions against the neighbors who had violated the architectural requirement.

The judge ultimately found that the board’s rationale for this pause was a valid exercise of its discretion. The decision to delay was framed not as inaction, but as a strategic choice “to foster an agreement with the neighbors” amidst the complexities of litigation.

This reveals a deep irony: by filing a petition to force the HOA’s hand, the homeowner inadvertently provided the context for the HOA to justify a delay. The judge accepted that the board’s attempt to find a negotiated solution instead of escalating fines and penalties during an active lawsuit was a reasonable use of its discretionary authority. This case demonstrates how legal action, intended to accelerate a resolution, can sometimes be used by an HOA board to justify a different, slower approach.

Takeaway 3: A Clear Rule Violation Doesn’t Guarantee a Win in Court

One of the most surprising aspects of this case is that the facts of the violation were not in dispute. The judge explicitly acknowledged that the neighbors were in violation of the Architectural Review Committee’s requirement. The official decision states:

“Based upon the evidence provided, the Kinstle’s are in violation of the requirement the ARC Committee imposed on them.”

Despite this clear violation by the neighbor, the homeowner, Mr. Pierce, still lost his case against the HOA.

The case was lost on a critical legal distinction: the lawsuit was not about the neighbor’s violation, but about the HOA’s alleged failure to act. Since the judge determined the HOA had the discretionary right—not the mandatory obligation—to enforce the rule, its choice to pursue negotiation rather than immediate punitive action was not considered a violation of its duties.

The lesson here is profound: proving a neighbor is breaking the rules is only the first step. To win a case against your HOA for non-enforcement, you must also prove that its response (or lack thereof) constitutes a breach of its specific duties as outlined in your community’s governing documents.

Conclusion: Know Your Documents, Temper Your Expectations

The case of Pierce v. Sierra Morado Community Association serves as a stark reminder that HOA governance is often more complex than it appears. The precise wording of your community’s CC&Rs is critically important, as a single phrase can be the difference between a mandatory duty and a discretionary power. This case illustrates that the gap between a rule existing on paper and the board’s power to enforce it can be vast.

As a homeowner, your first step should be to obtain a copy of your community’s most recent CC&Rs and search for the enforcement clause—does it say your board “shall” enforce the rules, or does it say they have the “right” to?

This case forces every homeowner to ask: If your governing documents give your board the ‘right’ to act, what leverage do you truly have to ensure they actually will?

Case Participants

Petitioner Side

Erik R. Pierce (petitioner)
James C. Frisch (petitioner attorney)
King & Frisch, P.C.
Michael Resare (petitioner attorney)

Respondent Side

Nicholas C.S. Nogami (respondent attorney)
Carpenter, Hazlewood, Delgado & Bolen, LLP
Heather M. Hampstead (respondent attorney)
Carpenter, Hazlewood, Delgado & Bolen, LLP
Jodie Cervantes (property manager/witness)
AAM, LLC
Community Manager for Respondent SMCA
Bill Oliver (board member/witness)
Former SMCA President (Fall 2019 to April 2020)
Martin Douglas (board member/witness)
Current SMCA Board President (since April 2020)

Neutral Parties

Adam D. Stone (ALJ)
Judy Lowe (Commissioner)
Arizona Department of Real Estate
LDettorre (unknown)
Arizona Department of Real Estate
Transmission recipient
AHansen (unknown)
Arizona Department of Real Estate
Transmission recipient
djones (unknown)
Arizona Department of Real Estate
Transmission recipient
DGardner (unknown)
Arizona Department of Real Estate
Transmission recipient
ncano (unknown)
Arizona Department of Real Estate
Transmission recipient
c. serrano (clerk)
Signed document transmission

Thomas W Sweeney v. Warner Ranch Landing Association

Posted on February 4, 2021 by [email protected]

Case Summary

Case ID	21F-H2120027-REL
Agency	Arizona Department of Real Estate
Tribunal	—
Decision Date	2021-02-04
Administrative Law Judge	—
Outcome	Petition dismissed.
Filing Fees Refunded	—
Civil Penalties	—

Parties & Counsel

Petitioner	Thomas W. Sweeney	Counsel	Pro Se
Respondent	Warner Ranch Landing Association	Counsel	Austin Baillio, Esq.

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

21F-H2120027-REL Decision – 852845.pdf

Uploaded 2026-04-24T11:31:56 (102.5 KB)

Briefing Document: Sweeney vs. Warner Ranch Landing Association (Case No. 21F-H2120027-REL)

Executive Summary

On February 4, 2021, Administrative Law Judge Sondra J. Vanella issued a decision in the matter of Thomas W. Sweeney vs. Warner Ranch Landing Association. The dispute centered on whether the Warner Ranch Landing Association (the Respondent) violated community CC&Rs (Covenants, Conditions, and Restrictions) by increasing annual assessments in 2021. The Petitioner, Thomas W. Sweeney, contended that a 10% assessment increase exceeded the allowable limit defined in the community documents.

The Administrative Law Judge (ALJ) ruled in favor of the Association, dismissing the petition. The ruling established that the Board of Directors acted within its authority under Article 8, Section 8.1.5 of the CC&Rs and complied with Arizona statutory limits (A.R.S. § 33-1803(A)). The decision clarifies the distinction between the "Maximum Annual Assessment"—a calculated ceiling that grows annually—and the actual assessment levied by the Board.

Detailed Analysis of Key Themes

1. Interpretation of Section 8.1.5 (Maximum Annual Assessment)

The core of the dispute was the interpretation of how the "Maximum Annual Assessment" (MAA) is calculated and applied. Under Section 8.1.5, the MAA for 1987 was set at $840.00. For every subsequent year, the MAA increases by the greater of:

The percentage increase in the Consumer Price Index (CPI); or
Five percent (5%).

The Board is not required to levy the full amount of the MAA each year. However, the document specifies that choosing not to levy the full amount does not prevent the Board from raising assessments to the full MAA in future years. The Respondent demonstrated that if the MAA had increased by 5% annually since 1988, the allowable maximum in 2021 would have been $4,412.81—far exceeding the actual 2021 assessment.

2. Statutory vs. Contractual Limits

The case highlighted the interplay between community-specific CC&Rs and Arizona state law.

CC&R Section 8.1.5: Allows for an annual increase in the Maximum assessment ceiling by at least 5%.
A.R.S. § 33-1803(A): A state statutory safeguard that prevents Homeowners Associations (HOAs) from imposing a regular assessment more than 20% greater than the previous fiscal year’s assessment.

The Association's 10% increase in 2021 was found to be legally permissible because it was both below the calculated MAA ceiling and well within the 20% statutory limit.

3. Board Discretion and Financial Obligations

The Association provided testimony that the 10% increase was necessary to address inadequately funded reserves for community projects, specifically road improvements. The ALJ noted that Section 8.1.5 explicitly allows the Board to meet increases in utility and insurance obligations without member approval, provided they stay within the statutory 20% limit.

4. Burden of Proof in Administrative Hearings

A significant factor in the dismissal was the Petitioner’s failure to meet the "preponderance of the evidence" standard. The Petitioner offered personal interpretations of the CC&Rs but provided no external evidence or data to support the claim that the Association had exceeded its authority.

Important Quotes with Context

On the Calculation of Assessments

"The Maximum Annual Assessment for any fiscal year shall be equal to the Maximum Annual Assessment for the immediately preceding fiscal year increased at a rate equal to the greater of: (a) the percentage increase… in the Consumer Price Index… or (b) five percent (5%)."

— Context: This excerpt from Section 8.1.5 of the CC&Rs defines the formula used to determine the legal "ceiling" for assessments.

On Board Authority

"Nothing herein shall obligate the Board to levy, in any fiscal year, Annual Assessments in the full amount of the Maximum Annual Assessment… and the election by the Board not to levy… shall not prevent the Board from levying Annual Assessments in subsequent fiscal years in the full amount of the Maximum Annual Assessment."

— Context: This provision protects the Board’s right to increase dues significantly in a single year (up to the MAA) even if they have kept dues low in prior years.

On the Burden of Proof

"Petitioner bears the burden of proof to establish by a preponderance of the evidence that Respondent violated Article 8.1.5 of its CC&Rs… 'A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.'"

— Context: The ALJ explains that the Petitioner must prove the violation is more likely than not; simply disagreeing with the Board's math or interpretation is insufficient.

Actionable Insights

Stakeholder	Insight/Action
HOA Boards	Maintain Historical MAA Records: Boards should keep a continuous record of the "Maximum Annual Assessment" calculations dating back to the community's inception to justify current increases.
HOA Boards	Reserve Funding Transparency: Communicating that increases are tied to specific projects (e.g., road improvements) provides a clear rationale for exercising the right to increase assessments.
Homeowners	Distinguish MAA from Actual Levies: Homeowners should understand that the "Maximum Annual Assessment" in many CC&Rs is a theoretical ceiling that grows every year, regardless of whether the actual dues collected grow at the same rate.
Homeowners	Evidentiary Requirements: When filing a petition with the Department of Real Estate, petitioners must provide concrete evidence (financial records, professional audits, or data) rather than relying solely on personal interpretations of community documents.
Legal Counsel	Statutory Overlays: Always evaluate assessment increases against the 20% statutory cap (A.R.S. § 33-1803(A)), as this often serves as the practical limit even if the CC&Rs allow for a higher "Maximum" ceiling.

Study Guide: Sweeney vs. Warner Ranch Landing Association

This study guide provides a comprehensive overview of the administrative hearing between Thomas W. Sweeney and the Warner Ranch Landing Association (No. 21F-H2120027-REL). It covers the legal frameworks, key arguments, and the interpretation of community documents that shaped the Administrative Law Judge's decision.

I. Core Case Overview

The case centers on a dispute regarding the legality of a 10% increase in annual homeowner association (HOA) assessments for the year 2021. The Petitioner, Thomas W. Sweeney, alleged that the Respondent, Warner Ranch Landing Association, violated Article 8, Section 8.1.5 of the Covenants, Conditions, and Restrictions (CC&Rs) by implementing this increase.

Key Legal Frameworks

Article 8, Section 8.1.5 of the CC&Rs: Governs the calculation of the "Maximum Annual Assessment." It establishes a base rate ($840.00 in 1987) and allows for annual increases based on the greater of the Consumer Price Index (CPI) or 5%.
A.R.S. § 33-1803(A): An Arizona statute that prohibits an HOA from imposing a regular assessment that is more than 20% greater than the immediately preceding fiscal year's assessment.
A.R.S. § 32-2199: Grants the Arizona Department of Real Estate the authority to hear petitions concerning violations of planned community documents.

II. Summary of Arguments

The Petitioner’s Position

Thomas W. Sweeney argued that the Respondent exceeded the allowable assessment increase. His primary points included:

Interpretation of 8.1.5: He asserted that the 5% increase mentioned in the CC&Rs only applies if the Consumer Price Index no longer exists.
Assessment History: He noted that assessments remained flat at $820.00 semi-annually from 2011 to 2017, increased by 5% in 2018, and reached $925.40 semi-annually in 2020. He contended the 2021 increase should have been limited to a lower amount ($962.70 semi-annually).
Motive: He suggested the 10% increase was a response to the membership rejecting a special assessment.

The Respondent’s Position

The Warner Ranch Landing Association argued that the increase was well within both contractual and statutory limits:

The "Greater Of" Clause: The Association interpreted Section 8.1.5 as allowing an automatic increase in the "Maximum Annual Assessment" by the greater of the CPI or 5% each year, regardless of whether the Board actually levied that full amount.
Cumulative Maximum: Testimony indicated that if the 5% increase had been applied annually since 1988, the 2021 Maximum Annual Assessment would have been $4,412.81.
Actual vs. Maximum: The 2021 assessment was set at a level significantly lower than the calculated maximum allowable assessment ($2,324.00 less than the maximum).
Statutory Compliance: The 10% increase from the 2020 assessment was lower than the 20% cap mandated by A.R.S. § 33-1803(A).

III. Short-Answer Practice Questions

What was the original Maximum Annual Assessment for each lot in 1987?

Answer: Eight Hundred Forty Dollars ($840.00).

According to Section 8.1.5, what two metrics are compared to determine the annual increase of the Maximum Annual Assessment?

Answer: The percentage increase in the Consumer Price Index (CPI) and five percent (5%). The Board uses whichever is greater.

Under what specific circumstances can the Board increase the Maximum Annual Assessment without member approval, even if it exceeds the standard rate?

Answer: To meet increases in premiums for required insurance coverage or charges for utility services necessary for the Association's performance.

What is the statutory limit for annual assessment increases according to A.R.S. § 33-1803(A)?

Answer: The increase cannot be more than 20% greater than the immediately preceding fiscal year's assessment.

Who bears the burden of proof in this administrative hearing, and what is the required evidentiary standard?

Answer: The Petitioner bears the burden of proof by a "preponderance of the evidence."

Why did the Association Board decide to raise the 2021 assessment by 10%?

Answer: Because the Association's reserves were not adequately funded for planned projects, such as road improvements.

IV. Essay Prompts for Deeper Exploration

The Difference Between "Levied Assessments" and "Maximum Annual Assessments": Analyze the Board's authority to levy assessments at a rate lower than the maximum allowable limit. How does the election not to levy the full maximum in one year affect the Board's ability to levy the full maximum in subsequent years according to Section 8.1.5?
Statutory vs. Contractual Limits: Discuss the interplay between A.R.S. § 33-1803(A) and the community's CC&Rs. If a community's CC&Rs allow for a certain increase, but state law sets a different cap, which takes precedence in the context of this case?
The Role of Judicial Interpretation in CC&R Disputes: The Administrative Law Judge relied on a "plain reading" of Section 8.1.5. Evaluate the Petitioner's interpretation that the 5% increase was a contingency for the disappearance of the CPI versus the Judge's interpretation of the word "or." How do specific grammatical structures influence the outcome of HOA disputes?

V. Glossary of Important Terms

Term	Definition
A.R.S.	Arizona Revised Statutes; the codified laws of the state of Arizona.
Administrative Law Judge (ALJ)	A judge who serves as the trier of fact in hearings conducted by government agencies.
Annual Assessment	Regular fees collected from homeowners to fund the operations and maintenance of a planned community.
CC&Rs	Covenants, Conditions, and Restrictions; the governing documents that dictate the rules and operations of a common-interest community.
Consumer Price Index (CPI)	A measure published by the Bureau of Labor Statistics that examines the weighted average of prices of a basket of consumer goods and services.
Maximum Annual Assessment	The theoretical ceiling for regular assessments as calculated by the formula provided in the CC&Rs.
Petition	A formal written request to a government authority (in this case, the Department of Real Estate) for a hearing on a specific dispute.
Preponderance of the Evidence	The standard of proof in most civil cases, meaning the evidence shows that the claim is "more probably true than not."
Respondent	The party against whom a petition is filed (in this case, the Warner Ranch Landing Association).
Special Assessment	A one-time fee levied by an HOA for a specific project or emergency, often requiring a membership vote.

Understanding HOA Assessment Limits: Lessons from Sweeney v. Warner Ranch Landing Association

1. Introduction: The Shock of the Assessment Increase

For many homeowners, the arrival of the annual HOA budget is met with a sense of trepidation. When that notice arrives with a significant hike—perhaps 10% or more—the immediate reaction is often one of disbelief. Residents frequently ask: "Can they really do this without a vote?"

The case of Thomas W. Sweeney vs. Warner Ranch Landing Association (No. 21F-H2120027-REL), adjudicated in the Arizona Office of Administrative Hearings, serves as a masterclass in the mechanics of community association finance. In my experience reviewing HOA litigation, these disputes rarely stem from malice, but rather from a fundamental misunderstanding of "Maximum Annual Assessments." This post explores the legal boundaries of board authority and how a decades-old formula can create a surprising "ceiling" for modern dues.

2. The Case Profile: A Dispute Over the Numbers

The conflict began when homeowner Thomas W. Sweeney filed a petition with the Arizona Department of Real Estate. He alleged that his association had overstepped its bounds by imposing a 10% increase for the 2021 fiscal year.

Petitioner: Thomas W. Sweeney
Respondent: Warner Ranch Landing Association
The Document in Question: Article 8, Section 8.1.5 of the community’s Covenants, Conditions, and Restrictions (CC&Rs).
The Allegation: The Petitioner asserted that the Association increased annual assessments in violation of the specific mathematical limits established in the CC&Rs.

3. The 1987 Legacy: How a Decades-Old Formula Dictates Today's Dues

To understand why the homeowner lost this case, one must look at the "latent power" hidden in the community’s governing documents. Section 8.1.5 of the Warner Ranch CC&Rs establishes a "Maximum Annual Assessment" (MAA) that began at $840.00 in 1987.

The Compounding Formula Unless two-thirds of the membership votes for a higher amount, the MAA for any given year is the previous year’s maximum increased by the greater of:

(a) The percentage increase in the Consumer Price Index (CPI); or
(b) Five percent (5%).

The "Math Gap" and Latent Power What many homeowners miss—and what I always emphasize to boards—is that this 5% increase is compounded annually. Because the Association did not levy the full 5% increase every year since 1987, they effectively built a "bank" of authorized but unlevied assessment power.

A critical distinction exists between the Maximum Allowable Assessment (the legal ceiling) and the Actual Assessment (what you pay). The Board is never obligated to levy the full maximum. However, their restraint in past years does not forfeit their right to "catch up" toward that cumulative ceiling in the future.

4. Homeowner’s Misconception vs. The Legal Reality

The Petitioner’s case rested on a restrictive reading of the CC&Rs, whereas the Board relied on the compounding math of the last 30 years.

Homeowner’s Misconception	The Board's Legal Reality
Argued the 5% increase only applied if the Consumer Price Index (CPI) ceased to exist.	The "plain reading" of the word "or" allows the Board to choose whichever rate is higher (CPI or 5%).
Believed a 10% increase was an illegal overreach because members had previously rejected a special assessment.	Provided expert testimony showing that since the CPI rarely exceeded 5% since 1987, the 5% compounding rule was the valid benchmark.
Claimed the 2021 semi-annual assessment should have been capped at $962.70.	Demonstrated that the 2021 "ceiling" could have legally reached $4,412.81. The actual 2021 assessment was just $1,898.50—a massive $2,324.00 "cushion" below the maximum.

5. The Statutory Safety Net: Arizona's 20% Rule

While the CC&R formula establishes the internal "ceiling," state law provides an overriding "safety net" that prevents boards from utilizing their latent power too aggressively in a single year.

Under A.R.S. § 33-1803(A), an Arizona HOA is prohibited from imposing a regular assessment that is more than 20% greater than the assessment from the immediately preceding fiscal year. In the Sweeney case, the Community Manager testified that while the CC&R cumulative ceiling was over $4,000, the Board was still bound by this 20% year-over-year statutory cap. Since the Board only implemented a 10% increase to address underfunded reserves for road improvements, they remained well within both the community's internal limits and the state's statutory protections.

6. The Verdict: Why the Judge Dismissed the Petition

Administrative Law Judge Sondra J. Vanella dismissed the petition, ruling that the Association had acted entirely within its authority. The ruling highlighted three key points:

The "Plain Reading" Principle: The judge found the language in Section 8.1.5 unambiguous. The word "or" creates a choice, and the Board was entitled to use the 5% compounding method to determine the maximum ceiling.
The Insurance/Utility Exception: The judge noted that the Board can even exceed the standard formula (though still remaining subject to the 20% statutory cap) to meet rising costs for insurance premiums and utilities without a member vote.
The Burden of Proof: Most importantly, the judge noted the Petitioner offered no evidence or expert data to support his claims, relying solely on his personal interpretation of the text.

7. Key Takeaways for Homeowners and HOA Boards

The Sweeney decision offers several actionable insights for navigating community finances:

Calculate the Cumulative Ceiling: Understand that your "Maximum Assessment" likely grows every year regardless of what you are currently paying. This "latent power" allows boards to implement increases without a vote as long as they stay under that compounded total.
Respect the Statutory Cap: Remember that A.R.S. § 33-1803(A) is your primary protection. Even if a 30-year-old CC&R formula suggests a massive increase is "legal," the 20% annual cap serves as the ultimate check on the Board's year-over-year power.
Establish the Burden of Proof: For homeowners considering a legal challenge, personal disagreement is not evidence. To win an administrative hearing, you must provide data or expert testimony that proves the Board exceeded both the cumulative CC&R ceiling and the statutory cap.
Communicate Reserve Funding Needs: Boards should be transparent about the "why" behind an increase. In this case, the Board justified the hike by citing underfunded reserves for road improvements—a prudent move that usually withstands judicial scrutiny.

8. Final Summary

The tension between maintaining a community’s infrastructure and keeping assessments low is a constant challenge for HOA boards. As Sweeney v. Warner Ranch Landing Association demonstrates, boards often have significantly more "latent" authority to raise dues than homeowners realize. To avoid the expense and stress of administrative hearings, boards should prioritize clear communication about how their "maximum" is calculated, while homeowners should recognize that a 10% increase—while painful—is often a legally sound exercise of the board’s duty to protect the association’s long-term financial health.

Case Participants

Petitioner Side

Thomas W. Sweeney (Petitioner)
Appeared on his own behalf

Respondent Side

Austin Baillio (Counsel)
Warner Ranch Landing Association
Esq., represented Respondent
Christopher Reynolds (Community Manager / Witness)
Warner Ranch Landing Association
Provided testimony on behalf of Respondent
Michael Goldberg (Vice-president of the Board / Witness)
Warner Ranch Landing Association
Provided testimony on behalf of Respondent

Neutral Parties

Sondra J. Vanella (Administrative Law Judge)
Office of Administrative Hearings
Judy Lowe (Commissioner)
Arizona Department of Real Estate

Haining Xia v. Dorsey Place Condominium Association

Posted on January 22, 2021 by [email protected]

Case Summary

Case ID	21F-H2120016-REL-RHG
Agency	ADRE
Tribunal	OAH
Decision Date	2021-07-14
Administrative Law Judge	Sondra J. Vanella
Outcome	none
Filing Fees Refunded	$0.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Haining Xia	Counsel	—
Respondent	Dorsey Place Condominium Association	Counsel	Nick Nogami, Esq.

Alleged Violations

Bylaws Articles 3.3, 4.1, and 4.4

Outcome Summary

The Administrative Law Judge concluded that Petitioner failed to meet the burden of proof to establish that Respondent violated its Bylaws Articles 3.3, 4.1, and 4.4. The Respondent was found to be the prevailing party, and Petitioner’s appeal was dismissed.

Why this result: Petitioner failed to sustain the burden of proof to establish a violation by a preponderance of the evidence, specifically failing to establish that an election was required during the years alleged.

Key Issues & Findings

Failure to elect the Board at Annual Members Meetings in 2018 and 2019

Petitioner alleged Respondent failed to elect the board during the 2018 and 2019 Annual Members Meetings. The ALJ found that Petitioner failed to sustain the burden of proof to establish a violation, specifically failing to establish that an election was required during those years.

Orders: Respondent is the prevailing party, and Petitioner's appeal is dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

A.R.S. § 41-2198.01
A.R.S. § 33-1202(10)

Video Overview

Audio Overview

Decision Documents

21F-H2120016-REL Decision – 895555.pdf

Uploaded 2026-04-24T11:30:48 (107.4 KB)

21F-H2120016-REL Decision – 849881.pdf

Uploaded 2026-04-24T11:30:52 (109.6 KB)

Briefing Document: Xia v. Dorsey Place Condominium Association

Executive Summary

This document synthesizes the key findings, arguments, and legal proceedings from two Administrative Law Judge Decisions concerning a dispute between petitioner Haining Xia and the Dorsey Place Condominium Association (the Respondent). The core of the dispute revolves around Mr. Xia’s allegation that the Association violated its own bylaws by failing to conduct board elections during its 2018 and 2019 annual meetings.

The Respondent’s primary defense was a jurisdictional challenge, arguing that the Office of Administrative Hearings (OAH) could not hear the case because the Association’s condominium status was legally terminated in April 2019, prior to the filing of the petition. This termination was previously upheld by the Maricopa County Superior Court.

In the initial hearing on January 7, 2021, the Administrative Law Judge (ALJ) found that the petitioner failed to meet his burden of proof, relying solely on assertions without presenting any documentary evidence. Consequently, the petition was denied. A rehearing was granted and held on July 2, 2021, where the petitioner submitted documents but failed to provide testimony explaining their relevance or to establish that board elections were required in the years in question. The ALJ again concluded that the petitioner did not sustain his burden of proof. The final order dismissed the petitioner’s appeal and declared the Respondent the prevailing party.

Case Overview

• Case Number: 21F-H2120016-REL / 21F-H2120016-REL-RHG

• Tribunal: Arizona Office of Administrative Hearings (OAH)

• Petitioner: Haining Xia

• Respondent: Dorsey Place Condominium Association

• Presiding Administrative Law Judge: Sondra J. Vanella

• Core Allegation: The petitioner alleged that the Respondent violated its Bylaws Articles 3.3, 4.1, and 4.4 by failing to include board elections on the agendas for the 2018 and 2019 Annual Members Meetings and by never electing a board at said meetings.

Chronology of Proceedings

September 21, 2020

Haining Xia files a Homeowners Association (HOA) Dispute Resolution Petition with the Arizona Department of Real Estate.

November 20, 2020

The Department issues a Notice of Hearing.

January 7, 2021

The initial administrative hearing is held.

January 22, 2021

The ALJ issues a Decision denying the Petitioner’s Petition.

February 18, 2021

The Petitioner files a request for rehearing, citing errors of law and evidence.

March 23, 2021

The Commissioner of the Arizona Department of Real Estate issues an Order Granting Rehearing.

July 2, 2021

The rehearing is conducted.

July 14, 2021

The ALJ issues the final Decision, declaring the Respondent the prevailing party and dismissing the Petitioner’s appeal.

Petitioner’s Position and Arguments

Haining Xia’s case rested on several key arguments presented across both hearings.

• Primary Claim: The central assertion was that the Respondent was in “direct violation of HOA Bylaws Article 3.3, Article 4.1 and Article 4.4” because board elections were not held or even placed on the agenda for the 2018 and 2019 annual meetings.

• Challenge to Condominium Termination: Mr. Xia actively disputed the validity of the Association’s termination as a condominium.

◦ He argued the “Condominium Termination Agreement” was invalid because it “does not contain valid signatures” and represented a “usurpation of corporate power.”

◦ He maintained that because he still holds the title to his unit and the sale has not been finalized, the condominium status could not be legally changed.

◦ He stated his intention to appeal a separate Maricopa County Superior Court ruling which had already upheld the termination agreement.

• Specific Meeting Grievances:

◦ 2018 Meeting: The annual meeting, scheduled for March, was delayed until August 2018. Its stated purpose was to vote on a special assessment, but Mr. Xia asserted there was “not a valid board for that meeting.”

◦ 2019 Meeting: This meeting was held to discuss the termination agreement, but Mr. Xia claimed there was “no election of board members or appointment of officers.”

• Stated Objective: The petitioner requested “a definitive answer as to whether there were valid corporate officers” and, in the rehearing, stated he “wants a finding that there was no legitimate board and no officers appointed.”

• Personal Motivation: During the rehearing, Mr. Xia asserted that he is the only homeowner “who stood up to fight,” that he is fighting “evil,” and is “looking for justice.”

Respondent’s Position and Arguments

The Dorsey Place Condominium Association’s defense was primarily procedural and jurisdictional.

• Jurisdictional Challenge: The Respondent filed a Motion to Dismiss, arguing that the OAH lacked jurisdiction over the dispute.

◦ The basis for this argument was that the Association’s status as a “Condominium” was terminated via a “Condominium Termination Agreement” recorded on April 9, 2019.

◦ As the entity no longer met the legal definition of a condominium under A.R.S. §33-1202(10), the OAH had no authority to hear a dispute between it and a unit owner.

• Superior Court Precedent: The Respondent emphasized that the validity of the termination agreement had already been adjudicated and upheld by the Maricopa County Superior Court. The ALJ noted that the OAH “does not have the authority to overturn or modify that ruling.”

• Mootness: The Respondent argued that since the termination, the property is “currently being utilized as an apartment complex,” making the petitioner’s claims moot.

Administrative Law Judge’s Findings and Conclusions

The decisions issued by ALJ Sondra J. Vanella focused squarely on the legal standard of proof required of the petitioner.

The ALJ repeatedly established that the petitioner “bears the burden of proof to establish that Respondent committed the alleged violations by a preponderance of the evidence.” This standard is defined as “proof as convinces the trier of fact that the contention is more probably true than not.”

• Failure to Present Evidence: The ALJ found that Mr. Xia “failed to present any evidence at hearing, documentary or otherwise, but rather relied solely on his own assertions.”

• Conclusion: The petitioner did not meet his burden of proof to establish a violation of the specified bylaws.

• Order: The Petition was denied.

• Basis for Rehearing: The rehearing was granted based on the petitioner’s claim of “error in the admission or rejection of evidence or other errors of law occurring during the proceeding.”

• Evidence at Rehearing: Mr. Xia submitted several documents, including meeting notices for 2018 and 2019, an “Action by Written Consent,” and a “Board Resolution Filling Director and Officer Vacancies.” However, he “did not provide an explanation of the documents at hearing or testimony concerning the documents.”

• Final Conclusion: After reviewing all evidence from both hearings, the ALJ concluded that the petitioner “failed to sustain his burden to establish a violation.” Critically, the ALJ noted that Mr. Xia “failed to establish that an election was required during either of those years [2018 and 2019].”

• Final Order: The Respondent was declared the prevailing party, and the petitioner’s appeal was dismissed. This order is binding unless appealed to the superior court within 35 days.

Relevant Bylaw Articles

The petition was based on alleged violations of the following articles from the Dorsey Place Condominium Association Bylaws:

Article

Key Provision

Annual Members Meeting

States that at each annual meeting, “the Members shall elect the Board and transact such other business as may properly be brought before the meeting.”

Election

Stipulates that the Association’s affairs are managed by the Board and that “each director shall be elected at the annual meeting of Members concurrent with the expiration of the term of the director he or she is to succeed.”

Annual Board Meetings

Requires that “within thirty (30) days after each annual meeting of Members, the newly elected directors shall meet forthwith for the purpose of organization, the election of officers, and the transaction of other business.”

Study Guide: Haining Xia v. Dorsey Place Condominium Association

This guide reviews the administrative case between Haining Xia (Petitioner) and the Dorsey Place Condominium Association (Respondent) before the Arizona Office of Administrative Hearings. It covers the core allegations, legal arguments, procedural history, and final rulings.

Short-Answer Quiz

Instructions: Answer the following questions in 2-3 sentences based on the information provided in the case documents.

1. Who are the primary parties in this case and what are their roles?

2. What specific violations of the association’s Bylaws did the Petitioner allege?

3. What was the Respondent’s primary legal argument for why the Office of Administrative Hearings lacked jurisdiction?

4. According to the case documents, what is the legal standard known as “preponderance of the evidence”?

5. What was the initial ruling by the Administrative Law Judge on January 22, 2021, and what was the key reason for this decision?

6. On what grounds did the Petitioner request and receive a rehearing of the case?

7. What evidence did the Petitioner submit during the rehearing on July 2, 2021?

8. Why did the Administrative Law Judge state that the Office of Administrative Hearings could not invalidate the “Condominium Termination Agreement”?

9. What specific requirements for annual meetings are outlined in Article 3.3 of the Respondent’s Bylaws?

10. What was the final outcome of the case after the rehearing, as detailed in the order dated July 14, 2021?

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Answer Key

1. The primary parties are Haining Xia, the Petitioner, and Dorsey Place Condominium Association, the Respondent. The Petitioner is the unit owner who filed a dispute petition, while the Respondent is the homeowners’ association accused of violating its own Bylaws.

2. The Petitioner alleged that the Respondent violated Bylaws Articles 3.3, 4.1, and 4.4. He claimed the Respondent never elected a board at its Annual Members Meetings for 2018 and 2019 and that board elections were not included on the agendas for those meetings.

3. The Respondent argued that the Office of Administrative Hearings lacked jurisdiction because the association’s condominium status was terminated in April 2019 via a “Condominium Termination Agreement.” As it was no longer legally a condominium, the Respondent claimed it did not meet the statutory requirements for OAH jurisdiction over such disputes.

4. The legal standard is defined as “such proof as convinces the trier of fact that the contention is more probably true than not.” It is also described 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.”

5. The initial ruling on January 22, 2021, denied the Petitioner’s Petition. The judge concluded that the Petitioner failed to meet his burden of proof because he presented no documentary evidence and relied solely on his own assertions to support his claims.

6. The Petitioner requested a rehearing on the grounds that there was an “error in the admission or rejection of evidence or other errors of law occurring during the proceeding.” The Commissioner of the Arizona Department of Real Estate granted this request.

7. During the rehearing, the Petitioner submitted Annual Membership Meeting Notices for 2018 and 2019, a document titled “Action by Written Consent of a Majority of the Unit Owners,” and a November 16, 2018, Board Resolution. However, he did not provide testimony or an explanation concerning these documents.

8. The Administrative Law Judge advised the Petitioner that the validity of the termination agreement had already been adjudicated and upheld by the Maricopa County Superior Court. The Office of Administrative Hearings does not have the legal authority to overturn or modify a ruling from the Superior Court.

9. Article 3.3 states that the annual meeting of Members shall be held in March each year, though it can be delayed until May 31. The purpose of this meeting is for the Members to elect the Board and transact other business that may properly be brought before the meeting.

10. After the rehearing, the Administrative Law Judge again ruled against the Petitioner, ordering that his appeal be dismissed and naming the Respondent as the prevailing party. The judge concluded that the Petitioner once again failed to sustain his burden to establish a violation of the Bylaws.

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Essay Questions

Instructions: The following questions are designed for a more in-depth, essay-style response. Answers are not provided.

1. Analyze the jurisdictional challenge raised by the Respondent. How did the “Condominium Termination Agreement” of April 2019 fundamentally alter the legal status of the property and impact the proceedings before the Office of Administrative Hearings?

2. Discuss the legal standard of “preponderance of the evidence” as it is defined and applied in this case. Explain in detail why the Administrative Law Judge concluded that the Petitioner failed to meet this burden of proof in both the initial hearing and the subsequent rehearing.

3. Trace the complete procedural history of this case, beginning with the filing of the petition on September 21, 2020, and ending with the final order on July 14, 2021. Identify the key events, decisions, and legal reasonings at each stage.

4. Evaluate the different arguments made by the Petitioner, including his claims about invalid board elections, the legitimacy of the termination agreement, and his status as a titled owner. Explain why the Office of Administrative Hearings was limited in its authority to rule on certain aspects of his claims.

5. Based on Bylaws Articles 3.3, 4.1, and 4.4, describe the prescribed process for electing the Board of Directors and conducting annual meetings. How did the Petitioner’s specific allegations in his petition directly challenge whether the Respondent had followed these procedures?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions. In this case, the ALJ was Sondra J. Vanella.

Affirmative Defense

A set of facts other than those alleged by the petitioner which, if proven by the respondent, defeats or mitigates the legal consequences of the respondent’s otherwise unlawful conduct. The respondent bears the burden of proof for affirmative defenses.

A.R.S.

Abbreviation for Arizona Revised Statutes, the collection of laws for the state of Arizona.

Bylaws

The set of rules governing the internal management and affairs of an organization, such as a homeowners’ association. The Petitioner alleged violations of Articles 3.3, 4.1, and 4.4 of the Respondent’s Bylaws.

Condominium Termination Agreement

A legal document recorded on April 9, 2019, that officially terminated the condominium status of Dorsey Place. The Respondent argued this action removed it from the jurisdiction of the Office of Administrative Hearings for condominium disputes.

Department

Refers to the Arizona Department of Real Estate, the state agency authorized to receive and decide petitions for hearings involving homeowners’ associations.

Homeowners Association (HOA)

An organization in a subdivision, planned community, or condominium that makes and enforces rules for the properties and residents. The Dorsey Place Condominium Association is the HOA in this case.

Jurisdiction

The official power to make legal decisions and judgments. The Respondent challenged the OAH’s jurisdiction on the basis that it was no longer legally a condominium.

Motion to Dismiss

A formal request made by a party to a court or other tribunal to dismiss a case. The Respondent filed a Motion to Dismiss for lack of jurisdiction.

Office of Administrative Hearings (OAH)

A state agency that conducts hearings for other state agencies. In this case, the OAH conducted the hearing for the Arizona Department of Real Estate.

Petition

The formal written request filed by the Petitioner to initiate the dispute resolution process with the Arizona Department of Real Estate.

Petitioner

The party who files a petition or brings an action in a legal proceeding. In this case, the Petitioner is Haining Xia.

Preponderance of the Evidence

The burden of proof in this civil case. It is defined as “such proof as convinces the trier of fact that the contention is more probably true than not,” and as evidence that has “the most convincing force.”

Respondent

The party against whom a petition is filed or an action is brought. In this case, the Respondent is the Dorsey Place Condominium Association.

Superior Court

A state trial court of general jurisdiction. The Maricopa County Superior Court had previously issued a ruling upholding the validity of the Condominium Termination Agreement.

He Fought His HOA and Lost—Twice. 3 Costly Mistakes Every Homeowner Should Avoid.

The Frustration and the Fight

For many homeowners, dealing with a Homeowners Association (HOA) can be a source of immense frustration. Rules can feel arbitrary, and board decisions can seem opaque. It’s a common feeling to believe the HOA is in the wrong and to want to stand up for your rights. But what happens when that conviction meets the cold, hard reality of the legal system?

The case of Haining Xia versus the Dorsey Place Condominium Association serves as a powerful cautionary tale for any homeowner considering a legal challenge. Mr. Xia’s core complaint was straightforward and, on its face, seemed reasonable: he alleged that his HOA violated its own bylaws by failing to hold board elections during its 2018 and 2019 annual meetings.

Despite his strong convictions, he lost his case. He was then granted a rehearing—a rare second chance—and lost again. This article explores the surprising and crucial lessons from his defeat, revealing why simply being right in principle is often not enough to win in practice.

1. Conviction Is Not Evidence

The single biggest reason for Mr. Xia’s failure was his inability to provide proof for his claims. In the initial hearing, the Administrative Law Judge’s decision was stark: the petitioner “failed to present any evidence at hearing, documentary or otherwise, but rather relied solely on his own assertions.”

Herein lies the central mistake for any potential litigant: in a legal proceeding, the outcome isn’t determined by who feels most wronged, but by who can meet the required standard of proof. In this case, that standard was the “preponderance of the evidence.” The legal definition clarifies this standard:

“The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Think of it as the scales of justice. Your evidence doesn’t need to slam one side to the ground, but it must be strong enough to tip the scale, even slightly, in your favor. Mr. Xia arrived with only his convictions, which carry no weight on the scale.

During the rehearing, his testimony was filled with passionate statements, asserting that he was the only homeowner “who stood up to fight,” that he was fighting “evil,” and was simply “looking for justice.” These heartfelt convictions, however, were met with the judge’s blunt conclusion that he failed to meet his evidentiary burden. This reveals a critical lesson: in a legal setting, the passion of one’s convictions is irrelevant without factual, documentary proof to back them up.

2. Fight the Right Battle in the Right Courtroom

A significant portion of Mr. Xia’s case was derailed by a fundamental strategic error. The HOA’s attorney argued that the Office of Administrative Hearings (OAH)—the body hearing the dispute—had no power over the case because the property had ceased to be a condominium in 2019 pursuant to a “Condominium Termination Agreement.”

In response, Mr. Xia tried to argue that this termination agreement was invalid, claiming it “does not contain valid signatures” and was a “usurpation of corporate power.” This was the wrong argument to make in the wrong place.

The Administrative Law Judge explicitly advised him that the validity of the termination agreement had already been decided by a higher court, the Maricopa County Superior Court. The judge stated plainly that the OAH “does not have the authority to overturn or modify that ruling.”

This wasn’t just a procedural mistake; it was a credibility-damaging tactical blunder. By focusing on an issue the court had no power to address, he appeared unprepared and distracted from the one claim he was actually there to prove. This strategic error likely damaged his credibility with the judge from the outset, underscoring the importance of understanding a court’s specific jurisdiction before you ever step foot inside.

3. A Second Chance Requires a New Strategy, Not Just New Documents

Being granted a rehearing is a significant opportunity in any legal dispute. Mr. Xia was granted this second chance after citing a specific “error in the admission or rejection of evidence or other errors of law occurring during the proceeding.” This wasn’t a general appeal to fairness; it was a procedural opening that offered a rare chance to correct the flaws of his first attempt.

Unfortunately, he failed to capitalize on it. While he did submit documents in the second hearing, the judge noted a fatal flaw in his presentation: he “did not provide an explanation of the documents at hearing or testimony concerning the documents.”

Submitting a stack of papers is not the same as building a case. Evidence doesn’t speak for itself. Each document needed a narrative. Mr. Xia should have walked the judge through each paper, explaining: “This is the notice for the 2018 meeting. As you can see, an election is not on the agenda, which violates Bylaw 3.3. This document proves my specific claim.” Without that narrative, he just presented a puzzle with no solution.

The final, unambiguous conclusion from the second hearing was that the “Petitioner failed to establish that an election was required during either of those years.” The key takeaway is clear: a procedural victory like a rehearing is meaningless if the fundamental flaws in your case—in this instance, a lack of compelling, well-explained evidence—are not corrected.

From Principle to Proof

Mr. Xia’s journey shows a fatal progression: he began with a case built on feeling instead of fact, tried to fight it in the wrong court over a settled issue, and when given a rare chance to fix these fundamental errors, he failed to change his approach. It’s a story of how a lack of preparation can doom a case from start to finish.

This case is a stark reminder that in the eyes of the law, a right that cannot be proven does not exist. Before you begin your fight, ask yourself: are you prepared to prove your case, not just believe in it?

Case Participants

Petitioner Side

Haining Xia (petitioner)
Appeared and testified on his own behalf

Respondent Side

Nick Nogami (attorney)
Dorsey Place Condominium Association
Represented Respondent
Edith Rudder (attorney)
Carpenter, Hazlewood, Delgado & Bolen, PLC
Listed on service list

Neutral Parties

Sondra J. Vanella (ALJ)
OAH
Administrative Law Judge for initial hearing and rehearing
Judy Lowe (commissioner)
Arizona Department of Real Estate
Commissioner who issued Order Granting Rehearing
Daniel Martin (judge)
Referenced regarding a prior Minute Entry

John D Klemmer v. Caribbean Gardens Association

Posted on December 17, 2020 by [email protected]

Case Summary

Case ID	21F-H2120009-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2020-12-17
Administrative Law Judge	Kay A. Abramsohn
Outcome	loss
Filing Fees Refunded	$500.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	John D Klemmer	Counsel	—
Respondent	Caribbean Gardens Association	Counsel	Nicole D. Payne, Esq., Lydia A. Pierce Linsmeier, Esq.

Alleged Violations

CC&Rs Article 1, Sections 1.5 and 1.8; Article 3, Section 3.4; Article 4, Section 4.1; Article 8, Section 8.1; and, Article 12, Section 12.4

Outcome Summary

The Petition was dismissed because the Petitioner failed to prove, by a preponderance of the evidence, that the Respondent Association violated the cited CC&R provisions by refusing to manage the disputed area, which the ALJ determined was a limited common element.

Why this result: The Petitioner lost because the area in dispute was determined to be a 'limited common element' (a balcony serving Unit 207) under Arizona statute (A.R.S. § 33-1212(A)), not a 'common area' the Association was required to manage under the referenced CC&Rs.

Key Issues & Findings

Refusal to manage, operate, maintain and administer common area

Petitioner alleged the HOA violated multiple CC&Rs by refusing to maintain an area between Unit 206 and Unit 207, which he claimed was a common area. The HOA argued the area was a limited common element. The ALJ concluded, relying on A.R.S. § 33-1212(A), that the disputed area was a limited common element (a balcony) allocated exclusively to Unit 207, thus Petitioner failed to establish a CC&R violation.

Orders: Petitioner's Petition is dismissed. Petitioner bears his $500.00 filing fee.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

A.R.S. § 33-1212(A)
CC&Rs Article 1, Section 1.5
CC&Rs Article 1, Section 1.6
CC&Rs Article 3, Section 3.4
CC&Rs Article 4, Section 4.1
CC&Rs Article 8, Section 8.1
CC&Rs Article 12, Section 12.4

Analytics Highlights

Topics: condominium, common elements, limited common elements, balcony dispute, CC&R violation, A.R.S. 33-1212

Additional Citations:

A.R.S. § 33-1212
A.R.S. § 33-1218
A.R.S. Title 33, Chapter 16
A.A.C. R2-19-119
CC&Rs Article 1, Sections 1.5, 1.8
CC&Rs Article 3, Section 3.4
CC&Rs Article 4, Section 4.1
CC&Rs Article 8, Section 8.1
CC&Rs Article 12, Section 12.4

Video Overview

Audio Overview

Decision Documents

21F-H2120009-REL Decision – 876384.pdf

Uploaded 2026-04-24T11:29:57 (124.8 KB)

21F-H2120009-REL Decision – 843358.pdf

Uploaded 2026-04-24T11:30:03 (129.8 KB)

21F-H2120009-REL Decision – 843358.pdf

Uploaded 2026-01-23T17:35:00 (129.8 KB)

Briefing Document: Klemmer v. Caribbean Gardens Association

Executive Summary

This document synthesizes the findings and decision in the administrative case of John D. Klemmer v. Caribbean Gardens Association (No. 21F-H2120009-REL). The core of the dispute was the legal classification of an outdoor space located between two condominium units. The Petitioner, a unit owner, argued the space was a “common area” that the Association was legally obligated to manage under its governing documents (CC&Rs). The Respondent Association countered that the space was a “balcony” or “limited common element” for the exclusive use of the adjacent unit owner.

The Administrative Law Judge (ALJ) ultimately dismissed the petition. While the Association’s 1973 CC&Rs and the official Plat document were ambiguous regarding the space, the decision hinged on the application of a later state statute, Arizona Revised Statutes (A.R.S.) § 33-1212. This statute defines balconies designed to serve a single unit as “limited common elements” allocated exclusively to that unit. Because the disputed area was only accessible from a single unit (Unit 207), the ALJ concluded it met this statutory definition. Consequently, the Petitioner failed to prove by a preponderance of the evidence that the Association had violated its CC&Rs by not treating the space as a general common area.

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Case Overview

Case Name

John D Klemmer v. Caribbean Gardens Association

Case Number

21F-H2120009-REL

Jurisdiction

Arizona Office of Administrative Hearings

Presiding Judge

Administrative Law Judge Kay A. Abramsohn

Hearing Date

November 6, 2020

Decision Date

December 17, 2020

Petitioner

John D. Klemmer (Unit 101 Owner), representing himself

Respondent

Caribbean Gardens Association, represented by Nicole D. Payne, Esq.

Fundamental Dispute: The case centered on whether the Caribbean Gardens Association violated its Declaration of Covenants, Conditions, and Restrictions (CC&Rs) by refusing to manage, operate, and maintain an outdoor area located on the second level between Units 206 and 207, which the Petitioner claimed was a common area belonging to all 40 unit owners.

Petitioner’s Position (John D. Klemmer)

The Petitioner’s case rested on the argument that the disputed area was a “common area” or “common element” as defined by the Association’s governing documents.

• Core Allegation: On April 15, 2020, the Caribbean Board violated multiple sections of its CC&Rs by refusing to administer a common area.

• Basis of Claim: The Petitioner argued that all space not explicitly delineated on the official Plat document as an “Apartment,” “patio,” or “balcony” must be considered a common area. The area in question is blank on the Plat.

• Ownership Argument: Each of the 40 unit owners possesses an “undivided ownership interest in the common areas and [common] elements.” He contended that if the Board did not acknowledge ownership, this common area would be lost to its rightful owners.

• Evidence of Misuse: The Petitioner presented photographic evidence showing that the owners of Unit 207 were exclusively occupying the space as if it were another room, adding furniture, walls, and making improvements to the exterior walls of Unit 206.

• Cited CC&R Violations: The petition alleged violations of the following articles:

◦ Article 1, Sections 1.5 and 1.8: Definitions of “Apartment” and “Plat.”

◦ Article 3, Section 3.4: Requirement for the Association to manage Common Elements.

◦ Article 4, Section 4.1: Vests title of Common Elements in the owners.

◦ Article 8, Section 8.1: Pertains to encroachments.

◦ Article 12, Section 12.4: Binds all owners to the Declaration.

Respondent’s Position (Caribbean Gardens Association)

The Association denied the allegations, arguing that the space was not a common area under its purview.

• Core Defense: The disputed area is not a common area but is instead a “balcony” attached to Unit 207, or alternatively, a “limited common element” for the exclusive use of the Unit 207 owners.

• Testimony: Board Member Alex Gomez testified that the Board’s position is that the area is a balcony. He further stated that the Association has never maintained any balconies within the community, including the one in question.

• Procedural Motions: The Association initially filed a Motion to Dismiss and a Motion for Summary Judgment, arguing that the tribunal lacked jurisdiction, the Petitioner was seeking relief that couldn’t be granted (declaratory and injunctive), and that other procedural and constitutional issues existed. These motions were denied by the tribunal.

Findings of Fact and Evidence

The ALJ established the following key facts based on the hearing record:

• Description of Disputed Area: The space is a concrete slab on the second level, located between the exterior walls of Unit 206 and Unit 207. It includes outside iron railings that fence it off.

• Exclusive Access: The area is not a staircase landing and can only be accessed through a door from a room within Unit 207. This access is an original feature of the building’s construction.

• Status on the Plat: The official Plat document, which defines the boundaries of apartments and their associated balconies and patios, is blank in the location of the disputed area. It is not specifically delineated in any way.

• Current Use: Photographic evidence confirmed the space contains furniture and other decorative items, indicating exclusive use by the occupants of Unit 207.

Legal Analysis and Conclusion of the Administrative Law Judge

The ALJ’s decision was based on an interpretation of both the community’s CC&Rs and overriding state law.

• Burden of Proof: The Petitioner, Mr. Klemmer, bore the burden of proving by a preponderance of the evidence that the Association had violated the specified CC&R provisions.

• Ambiguity in Governing Documents: The judge acknowledged a conflict in the 1973 CC&Rs.

◦ Article 1.5 defines an “Apartment” by its depiction on the Plat, which does not include the disputed area.

◦ Article 1.6 defines “Common Elements” as “all other portions of the Property except the Apartments.” This definition would logically include the undelineated disputed area.

• Application of State Statute: The decisive factor was the application of A.R.S. § 33-1212, a statute enacted in 1985, after the CC&Rs were recorded. The judge focused on subsection 4:

• Final Conclusion: The ALJ concluded that the disputed area fits the statutory description of a balcony “designed to serve a single unit,” as it is only accessible from Unit 207. Therefore, under Arizona law, it is classified as a “limited common element” allocated exclusively to that unit. Because it is not a general common area, the Association had no obligation to manage it as such. The Petitioner thus failed to establish a violation of the CC&Rs.

Final Order

Based on the analysis, the Administrative Law Judge issued the following orders on December 17, 2020:

1. IT IS ORDERED that Petitioner’s Petition is dismissed.

2. IT IS FURTHER ORDERED that Petitioner bears his $500.00 filing fee.

Study Guide: Klemmer v. Caribbean Gardens Association

This guide provides a detailed review of the Administrative Law Judge Decision in the case of John D. Klemmer v. Caribbean Gardens Association, No. 21F-H2120009-REL. It includes a quiz with an answer key to test comprehension, a set of essay questions for deeper analysis, and a comprehensive glossary of key legal and case-specific terms.

Quiz: Short-Answer Questions

Answer each of the following questions in 2-3 sentences based on the information provided in the case document.

1. Who are the primary parties involved in this administrative hearing, and what are their respective roles?

2. What was the central allegation made by the Petitioner, John D. Klemmer, in his petition filed on August 21, 2020?

3. Describe the specific physical location and characteristics of the disputed area at the heart of this case.

4. On what grounds did the Petitioner argue that the disputed area should be considered a “common area”?

5. What was the initial position of the Caribbean Gardens Association Board regarding the status of the disputed area, as testified by Board Member Alex Gomez?

6. Before the hearing, what arguments did the Respondent make in its Motion for Summary Judgment?

7. How do the CC&Rs define an “Apartment” versus “Common Elements”?

8. Which specific Arizona Revised Statute (A.R.S.) did the Administrative Law Judge ultimately rely upon to classify the disputed area?

9. What was the final conclusion of the Administrative Law Judge regarding the nature of the disputed area?

10. What was the final recommended order issued by the Administrative Law Judge in this case?

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Answer Key

1. The primary parties are John D. Klemmer, the Petitioner who brought the complaint, and the Caribbean Gardens Association, the Respondent and condominium community association. Mr. Klemmer represented himself, while the Association was represented by counsel, Nicole D. Payne, Esq.

2. The Petitioner alleged that on April 15, 2020, the Caribbean Board violated its CC&Rs by refusing to manage, operate, maintain, and administer a specific “common area.” He claimed this refusal would lead to the loss of the area to its rightful owners, the 40 unit owners of Caribbean Gardens.

3. The disputed area is located on the second level of the building, between the exterior walls of Unit 206 and Unit 207. It consists of a concrete slab with attached iron railings and can only be accessed through a door from Unit 207.

4. The Petitioner argued the area was a “common area” because it was not specifically delineated on the Plat document as part of an apartment, patio, or balcony. He contended that any space not explicitly designated as part of a unit on the Plat must therefore be a common element belonging to all 40 unit owners.

5. Board Member Alex Gomez testified that the Board’s position was that the disputed area is not a common area but is a “balcony” attached to Unit 207. He stated that the Association has never maintained any balconies, including the one in question.

6. In its Motion for Summary Judgment, the Respondent argued that the Petitioner was seeking relief that the Tribunal could not grant, that he should have filed a derivative action, and that he had not paid sufficient filing fees for multiple issues. The Respondent also challenged the constitutionality of the Enabling Statutes and the jurisdiction of the Department and the Tribunal.

7. Article 1, Section 1.5 of the CC&Rs defines an “Apartment” as the space enclosed by the planes shown on the Plat, including any patio or balcony areas identified on said Plat. In contrast, Article 1, Section 1.6 defines “Common Elements” as all other portions of the Property except the Apartments, including specific items like pools and landscaping.

8. The Judge relied on A.R.S. § 33-1212, which states that balconies and other fixtures designed to serve a single unit but located outside its boundaries are “limited common elements allocated exclusively to that unit.”

9. The Administrative Law Judge concluded that the disputed area must be a balcony “designed to serve a single unit, but located outside the unit’s boundaries.” Therefore, it is considered a limited common element, and the Petitioner did not establish that the Caribbean Gardens Association had violated any CC&R provisions.

10. The recommended order was that the Petitioner’s Petition be dismissed. It was further ordered that the Petitioner bear his own $500.00 filing fee.

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Essay Questions

The following questions are designed for longer, more analytical responses. No answers are provided.

1. Analyze the conflicting interpretations of the disputed area presented by the Petitioner and the Respondent. How did their respective readings of the CC&Rs and the Plat document lead to their opposing conclusions?

2. Discuss the critical role of the Plat document in this dispute. Explain how the blank space on the Plat between Units 206 and 207 created an ambiguity that was central to the arguments of both parties.

3. Trace the legal reasoning employed by Administrative Law Judge Kay A. Abramsohn. Detail her process of weighing the definitions in the 1973 CC&Rs against the provisions of the 1985 Arizona Revised Statutes to reach a final decision.

4. Evaluate the arguments raised by the Caribbean Gardens Association in its Motion for Summary Judgment. Although the motion was not granted, what significant legal and jurisdictional challenges did it present against the Petitioner’s case and the hearing body’s authority?

5. This case highlights a tension between a condominium’s original governing documents (the 1973 Declaration) and subsequent state law (the 1985 Condominium statutes). Discuss how this dynamic influenced the outcome and what it reveals about the hierarchy of legal authority in condominium governance.

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official who presides over an administrative hearing and issues a written decision. In this case, the ALJ was Kay A. Abramsohn.

Apartment

As defined by Article 1, Section 1.5 of the CC&Rs, it is a part of the Property intended for independent use as a dwelling unit, consisting of the space enclosed by the planes shown on the Plat, including any patio and balcony areas identified on that Plat.

An abbreviation for the Declaration of Covenants, Conditions and Restrictions, the governing legal documents for the Caribbean Gardens community. These were originally recorded in 1973.

Common Elements

As defined by Article 1, Section 1.6 of the CC&Rs, this term includes “general common elements” as defined in the former A.R.S. § 33-551, along with specific areas like parking, yards, the swimming pool, and “all other portions of the Property except the Apartments.”

Horizontal Property Regime

The legal framework governing the property, established under A.R.S. § 33-551 through § 33-561 at the time of the 1973 Declaration. These statutes were later repealed and replaced by the current Condominium laws.

Limited Common Elements

A legal classification defined in A.R.S. § 33-1212. It refers to fixtures like porches, balconies, patios, and entryways that are designed to serve a single unit but are located outside that unit’s boundaries, and are therefore allocated exclusively to that unit.

Petition

The formal, single-issue legal document filed by John D. Klemmer with the Department to initiate the dispute, alleging that the Caribbean Board violated its CC&Rs.

Petitioner

The party initiating a legal action by filing a petition. In this case, John D. Klemmer, a resident of Unit 101.

The official two-page survey map of the Property and all Apartments, attached to the Declaration as Exhibit “B.” It delineates the boundaries of individual units and other areas within the community.

Preponderance of the Evidence

The standard of proof the Petitioner was required to meet. It means the evidence presented must be more convincing than the opposing evidence, showing the fact in question is more probable than not.

Respondent

The party against whom a petition is filed and who must respond to the allegations. In this case, the Caribbean Gardens Association.

Tribunal

A term used in the decision to refer to the Arizona Office of Administrative Hearings (OAH), the state agency authorized to hear and decide the contested matter.

Questions

Question

If a balcony or patio serves only my unit but isn't explicitly drawn on the community Plat map, is it considered general common area?

Short Answer

Likely not. Under Arizona law, fixtures designed to serve a single unit located outside its boundaries are considered 'limited common elements' allocated exclusively to that unit, even if the Plat is ambiguous.

Detailed Answer

In this decision, the ALJ determined that an area not drawn on the Plat was a limited common element because it was physically accessible only from one unit. The judge cited A.R.S. § 33-1212(4), which defines features like balconies and patios designed to serve a single unit as limited common elements.

Alj Quote

Accordingly, the Administrative Law Judge concludes that the disputed area must be a balcony 'designed to serve a single unit, but located outside the unit’s boundaries.'

Legal Basis

A.R.S. § 33-1212(4)

Topic Tags

Common Elements
Plat Maps
Property Boundaries

Question

What is the burden of proof for a homeowner filing a petition against their HOA?

Short Answer

The homeowner (Petitioner) must prove their case by a 'preponderance of the evidence'.

Detailed Answer

The homeowner must demonstrate that their claims are more probable than not. It is not the HOA's job to disprove the allegations; the homeowner must provide evidence of greater weight.

Alj Quote

Petitioner bears the burden of proving by a preponderance of the evidence that, as alleged, Caribbean has violated CC&Rs…

Legal Basis

A.A.C. R2-19-119

Topic Tags

Procedure
Burden of Proof
Evidence

Question

Does the Department of Real Estate have jurisdiction to hear disputes about CC&R violations and maintenance issues?

Short Answer

Yes, the Department has jurisdiction to receive petitions and hear disputes regarding property owners and condominium associations.

Detailed Answer

The decision affirms that the Tribunal has the authority to hear contested matters between owners and associations regarding alleged violations of the CC&Rs and statutes.

Alj Quote

The Department has jurisdiction to receive petitions, hear disputes between a property owner and a condominium community association, and take other actions pursuant to Arizona Revised Statutes (A.R.S.), Title 33, Chapter 16.

Legal Basis

A.R.S. Title 33, Chapter 16

Topic Tags

Jurisdiction
ADRE Authority
Dispute Resolution

Question

Who is responsible for paying the filing fee if the homeowner loses the hearing?

Short Answer

The homeowner (Petitioner) typically bears the cost of the filing fee if the petition is dismissed.

Detailed Answer

In this case, after dismissing the homeowner's petition, the judge ordered the homeowner to bear the cost of the $500 filing fee.

Alj Quote

IT IS FURTHER ORDERED that Petitioner bears his $500.00 filing fee.

Legal Basis

Administrative Order

Topic Tags

Fees
Penalties
Hearing Costs

Question

What specifically counts as a 'limited common element' under Arizona law?

Short Answer

Fixtures like shutters, awnings, balconies, and patios that are outside a unit's boundaries but designed to serve that single unit.

Detailed Answer

State statute specifically lists items such as doorsteps, stoops, porches, balconies, and exterior doors as limited common elements if they are designed for the exclusive use of one unit.

Alj Quote

Any shutters, awnings, window boxes, doorsteps, stoops, porches, balconies, entryways or patios, and all exterior doors and windows or other fixtures designed to serve a single unit, but located outside the unit's boundaries, are limited common elements allocated exclusively to that unit.

Legal Basis

A.R.S. § 33-1212

Topic Tags

Definitions
Limited Common Elements
Statutes

Question

Can the HOA Board make rules regarding the use of common elements without a vote of the owners?

Short Answer

Yes, if the CC&Rs grant the Board the exclusive right to manage and regulate common elements.

Detailed Answer

The CC&Rs in this case provided the Board with the exclusive power to establish rules governing the use and maintenance of common elements.

Alj Quote

The Board shall have the exclusive right and power to establish and impose rules and regulations governing the use, maintenance and development of all and any part of the Common Elements…

Legal Basis

CC&Rs Article 3, Section 3.4

Topic Tags

Board Authority
Rules and Regulations
Common Elements

Case

Docket No: 21F-H2120009-REL
Case Title: John D Klemmer v. Caribbean Gardens Association
Decision Date: 2020-12-17
Alj Name: Kay A. Abramsohn
Tribunal: OAH
Agency: ADRE

Case Participants

Petitioner Side

John D. Klemmer (petitioner)
represented himself

Respondent Side

Nicole D. Payne (HOA attorney)
Carpenter, Hazlewood, Delgado & Bolen, LLP
Alex Gomez (board member)
Caribbean Board
testified at hearing
Lydia A. Pierce Linsmeier (HOA attorney)
Carpenter, Hazlewood, Delgado & Bolen, LLP

Neutral Parties

Kay A. Abramsohn (ALJ)
Judy Lowe (Commissioner)
Arizona Department of Real Estate

Anthony & Karen Negrete v. Sundance Ranch Homeowners Association

Posted on December 14, 2020 by [email protected]

Case Summary

Case ID	21F-H2120012-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2020-12-13
Administrative Law Judge	Kay A. Abramsohn
Outcome	The Respondent's Motion to Dismiss was granted because the statute cited by Petitioners (A.R.S. § 33-1817(B)(2)(b)) regarding mandatory design approval meetings applies only to the construction or rebuild of the 'main residential structure,' not to a shed.
Filing Fees Refunded	$500.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Anthony & Karen Negrete	Counsel	—
Respondent	Sundance Ranch Homeowners Association	Counsel	Quinten Cupps, Esq.

Alleged Violations

A.R.S. §§ 33-1803 and 33-1817(B)(2)(b)

Outcome Summary

The Respondent's Motion to Dismiss was granted because the statute cited by Petitioners (A.R.S. § 33-1817(B)(2)(b)) regarding mandatory design approval meetings applies only to the construction or rebuild of the 'main residential structure,' not to a shed.

Why this result: The key statute relied upon by Petitioners was deemed inapplicable to the construction of a shed.

Key Issues & Findings

Failure to provide opportunity to participate in design approval meeting for replacement shed

Petitioners alleged they were not given the opportunity to participate in a final design approval meeting for building a replacement shed on their property, pursuant to A.R.S. § 33-1817(B)(2)(b).

Orders: Respondent’s Motion to Dismiss is granted and Petitioners’ Petition is dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

A.R.S. § 33-1803
A.R.S. § 33-1817(B)(2)(b)

Analytics Highlights

Topics: Design Review, Shed, Architectural Approval, Motion to Dismiss, Statutory Interpretation

Additional Citations:

A.R.S. § 33-1803
A.R.S. § 33-1817(B)(2)(b)
A.R.S. Title 33, Chapter 16
A.A.C. R2-19-119

Video Overview

Audio Overview

Decision Documents

21F-H2120012-REL Decision – 842597.pdf

Uploaded 2026-04-24T11:30:33 (131.7 KB)

This administrative hearing, held on November 2, 2020, before Administrative Law Judge Kay A. Abramsohn, addressed a dispute between homeowners Anthony & Karen Negrete (Petitioners) and Sundance Ranch Homeowners Association (Sundance or Respondent).

Key Facts and Procedural Background:

Petitioners, long-time residents of Sundance, removed an existing shed (approved in 2005) due to deterioration from rodents and bees, and constructed a replacement shed in a new location on their property, intending to build a pool where the old shed stood. Petitioners did not initially seek approval for the replacement or the new location, believing it was unnecessary since a shed had been previously approved.

Sundance issued violation notices in March and April 2020, asserting the new shed was built without approval from the Architectural Committee. After applying for retroactive approval in June 2020, Sundance denied the application in July 2020, stating the new shed violated Design Guidelines regarding height, materials, and placement against a shared wall, and arguing the original approved shed could not be moved.

Main Issues and Arguments:

Petitioners filed a petition alleging Sundance violated Arizona Revised Statutes (A.R.S.) §§ 33-1803 and 33-1817(B)(2)(b). The specific issue Petitioners raised at the hearing was that they were not given the opportunity to participate in a design approval meeting pursuant to A.R.S. § 33-1817(B)(2)(b). Sundance denied the allegations and moved to dismiss the Petition.

The Design Guidelines require prior written approval from the Design Review Committee for any improvement, alteration, or change in the exterior appearance of structures. A.R.S. § 33-1803 governs the HOA's authority regarding enforcement and fines.

Legal Points and Outcome:

Petitioners had the burden of proving a violation by a preponderance of the evidence. The crucial legal point centered on the applicability of A.R.S. § 33-1817(B)(2)(b), which mandates that the association must hold a final design approval meeting allowing the member to attend.

The Administrative Law Judge (ALJ) concluded that A.R.S. § 33-1817(B)(2)(b) applies only to the "new construction of the main residential structure on a lot or for rebuilds of the main residential structure on a lot". Since the dispute involved a replacement shed—not the main residential structure—this statutory mandate for a meeting did not apply.

The ALJ concluded that Petitioners failed to establish a violation by Sundance of either A.R.S. § 33-1803 or A.R.S. § 33-1817(B)(2)(b). Consequently, the Respondent’s Motion to Dismiss was granted, and Petitioners’ Petition was dismissed. Petitioners were ordered to bear their $500.00 filing fee.

Questions

Question

Do I need HOA approval to replace an old structure (like a shed) that was approved years ago?

Short Answer

Yes. Prior approval of an original structure does not automatically apply to a replacement, especially if the location or condition changes.

Detailed Answer

Even if a structure was approved in the past, building a replacement is considered a new improvement or alteration. The ALJ found that despite having a shed approved in 2005, the homeowners were required to seek approval for the new shed, particularly because the governing documents stated that no improvements or alterations could be made without prior written approval.

Alj Quote

All subsequent additions to or changes or alterations in any building, fence, wall or other structure … shall be subject to the prior written approval of the Design Review Committee.

Legal Basis

CC&Rs Article 4, Section 4.1(a)

Topic Tags

Architectural Review
Improvements
Grandfathering

Question

Is the HOA required to hold a 'final design approval meeting' for backyard projects like sheds?

Short Answer

No. The legal requirement for a design approval meeting applies only to the main residential structure.

Detailed Answer

The ALJ clarified that A.R.S. § 33-1817(B)(2)(b), which mandates a design approval meeting, is specific to the new construction or rebuild of the 'main residential structure.' It does not apply to ancillary structures like sheds.

Alj Quote

The Administrative Law Judge concludes that A.R.S. § 33-1817(B)(2)(b) contains a mandate for a “design approval” meeting in the circumstance of construction of a “main residential structure.” That was not the circumstance in this case.

Legal Basis

A.R.S. § 33-1817(B)(2)(b)

Topic Tags

Meetings
Statutory Interpretation
Homeowner Rights

Question

Can I move an approved structure to a different location on my lot without new approval?

Short Answer

No. Moving a structure is considered a change that must adhere to current guidelines and receive approval.

Detailed Answer

The HOA successfully argued that an approval from 2005 was for a specific location and condition. Moving the structure constitutes a change that requires adherence to current guidelines.

Alj Quote

Again, the shed that was approved in 2005 cannot move or change- it is not denied, it simply cannot be moved or change. Any changes must adhere to the guidelines and be approved.

Legal Basis

CC&Rs / Design Guidelines

Topic Tags

modifications
Architectural Review
Compliance

Question

Who bears the burden of proof when a homeowner challenges an HOA in a hearing?

Short Answer

The homeowner (Petitioner) bears the burden of proving the HOA violated the law.

Detailed Answer

In an administrative hearing, it is up to the homeowner to provide evidence that carries more weight than the evidence offered by the HOA to prove a violation occurred.

Alj Quote

In this proceeding, pursuant to Arizona Administrative Code (A.A.C.) R2-19-119, Petitioners bear the burden of proving by a preponderance of the evidence that Respondent violated A.R.S. §§ 33-1803 and 33-1817(B)(2)(b).

Legal Basis

A.A.C. R2-19-119

Topic Tags

Legal Procedure
Burden of Proof
Hearings

Question

Can the HOA restrict the height and placement of backyard sheds?

Short Answer

Yes. The HOA can enforce specific design guidelines regarding dimensions and location relative to neighbors and the street.

Detailed Answer

The ALJ upheld the validity of Design Guidelines that mandated maximum heights and specific lot placements to ensure conformity with city codes and minimize visibility.

Alj Quote

Sundance Design Guidelines regarding “sheds” mandates: (a) a maximum height, including the roof pitch, of no more than eight (8) feet, … [and] (c) lot placement has to conform to City codes and have approval from the Design Committee “based on neighboring properties and visibility from the street,”

Legal Basis

Design Guidelines

Topic Tags

Architectural Guidelines
Restrictions
Property Use

Question

What happens if I start construction without approval?

Short Answer

The HOA may issue violation notices, impose fines, and require the structure be returned to its original state.

Detailed Answer

The ALJ noted that the HOA acted within its rights to issue violation notices and fines when it discovered unapproved construction. They also warned the homeowner to return the property to its original state.

Alj Quote

If the work has been started or completed, you will have 30 days from the date of this letter to have the submitted items returned to the original state. Or fines will be imposed.

Legal Basis

A.R.S. § 33-1803

Topic Tags

Violations
Fines
Enforcement

Case

Docket No: 21F-H2120012-REL
Case Title: Anthony & Karen Negrete v. Sundance Ranch Homeowners Association
Decision Date: 2020-12-13
Alj Name: Kay A. Abramsohn
Tribunal: OAH
Agency: ADRE

Questions

Question

Do I need HOA approval to replace an old structure (like a shed) that was approved years ago?

Short Answer

Yes. Prior approval of an original structure does not automatically apply to a replacement, especially if the location or condition changes.

Detailed Answer

Alj Quote

All subsequent additions to or changes or alterations in any building, fence, wall or other structure … shall be subject to the prior written approval of the Design Review Committee.

Legal Basis

CC&Rs Article 4, Section 4.1(a)

Topic Tags

Architectural Review
Improvements
Grandfathering

Question

Is the HOA required to hold a 'final design approval meeting' for backyard projects like sheds?

Short Answer

No. The legal requirement for a design approval meeting applies only to the main residential structure.

Detailed Answer

Alj Quote

Legal Basis

A.R.S. § 33-1817(B)(2)(b)

Topic Tags

Meetings
Statutory Interpretation
Homeowner Rights

Question

Can I move an approved structure to a different location on my lot without new approval?

Short Answer

No. Moving a structure is considered a change that must adhere to current guidelines and receive approval.

Detailed Answer

The HOA successfully argued that an approval from 2005 was for a specific location and condition. Moving the structure constitutes a change that requires adherence to current guidelines.

Alj Quote

Again, the shed that was approved in 2005 cannot move or change- it is not denied, it simply cannot be moved or change. Any changes must adhere to the guidelines and be approved.

Legal Basis

CC&Rs / Design Guidelines

Topic Tags

modifications
Architectural Review
Compliance

Question

Who bears the burden of proof when a homeowner challenges an HOA in a hearing?

Short Answer

The homeowner (Petitioner) bears the burden of proving the HOA violated the law.

Detailed Answer

In an administrative hearing, it is up to the homeowner to provide evidence that carries more weight than the evidence offered by the HOA to prove a violation occurred.

Alj Quote

Legal Basis

A.A.C. R2-19-119

Topic Tags

Legal Procedure
Burden of Proof
Hearings

Question

Can the HOA restrict the height and placement of backyard sheds?

Short Answer

Yes. The HOA can enforce specific design guidelines regarding dimensions and location relative to neighbors and the street.

Detailed Answer

The ALJ upheld the validity of Design Guidelines that mandated maximum heights and specific lot placements to ensure conformity with city codes and minimize visibility.

Alj Quote

Legal Basis

Design Guidelines

Topic Tags

Architectural Guidelines
Restrictions
Property Use

Question

What happens if I start construction without approval?

Short Answer

The HOA may issue violation notices, impose fines, and require the structure be returned to its original state.

Detailed Answer

Alj Quote

If the work has been started or completed, you will have 30 days from the date of this letter to have the submitted items returned to the original state. Or fines will be imposed.

Legal Basis

A.R.S. § 33-1803

Topic Tags

Violations
Fines
Enforcement

Case

Docket No: 21F-H2120012-REL
Case Title: Anthony & Karen Negrete v. Sundance Ranch Homeowners Association
Decision Date: 2020-12-13
Alj Name: Kay A. Abramsohn
Tribunal: OAH
Agency: ADRE

Case Participants

Petitioner Side

Anthony Negrete (petitioner)
Karen Negrete (petitioner)

Respondent Side

Quinten Cupps (HOA attorney)
Sundance Ranch Homeowners Association

Neutral Parties

Kay A. Abramsohn (ALJ)
OAH
Judy Lowe (Commissioner)
Arizona Department of Real Estate

Marc Archer v. PMPE Community Association, Inc.

Posted on December 4, 2020 by [email protected]

Case Summary

Case ID	20F-H2020063-REL-RHG
Agency	ADRE
Tribunal	OAH
Decision Date	2021-03-16
Administrative Law Judge	Tammy L. Eigenheer
Outcome	none
Filing Fees Refunded	$0.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Marc Archer	Counsel	—
Respondent	PMPE Community Association, Inc.	Counsel	Nicholas Nogami, Esq.

Alleged Violations

A.R.S. § 32-2199.02(B)

Outcome Summary

The Administrative Law Judge issued an Order Vacating Hearing after the Petitioner voluntarily withdrew his request for rehearing.

Key Issues & Findings

Request for Rehearing Withdrawal

Petitioner requested a rehearing based on actions taken by the Respondent after the initial decision. When informed that a rehearing could only address matters occurring prior to the initial petition filing, Petitioner chose to withdraw the request for rehearing and stated intent to file a new petition challenging Respondent’s denial of his submission to build an addition to his house.

Orders: The hearing in this matter is vacated from the calendar of the Office of Administrative Hearings.

Filing fee: $0.00, Fee refunded: No

Disposition: dismissed

Cited:

A.R.S. § 32-2199.02(B)
A.R.S. § 41-1092.08(H)
A.R.S. § 12-904(A)

Analytics Highlights

Topics: Rehearing, Withdrawal, Vacated Hearing, Procedural

Additional Citations:

A.R.S. § 32-2199.02(B)
A.R.S. § 41-1092.08(H)
A.R.S. § 12-904(A)

Video Overview

Audio Overview

Decision Documents

20F-H2020063-REL Decision – 864308.pdf

Uploaded 2026-04-24T11:28:03 (52.9 KB)

20F-H2020063-REL Decision – 864361.pdf

Uploaded 2026-04-24T11:28:15 (8.2 KB)

20F-H2020063-REL Decision – 840677.pdf

Uploaded 2026-04-24T11:28:22 (125.3 KB)

Administrative Hearing Briefing: Archer v. PMPE Community Association, Inc.

Executive Summary

This briefing document outlines the key details and resolution of case number 20F-H2020063-REL-RHG, involving Petitioner Marc Archer and Respondent PMPE Community Association, Inc. On March 16, 2021, Administrative Law Judge Tammy L. Eigenheer issued an order vacating a scheduled rehearing. The core issue was procedural: the Petitioner’s request for rehearing was based on actions the Respondent took after the initial hearing’s decision, which falls outside the permissible scope of a rehearing. Upon being informed of this limitation, the Petitioner withdrew his request. He indicated his intent to file a new, separate petition to address the Respondent’s denial of his submission to build a house addition. The judge’s order is binding, with any appeal required to be filed in superior court within 35 days.

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Case Overview

I. Case Identification

Detail

Information

Case Name

Marc Archer, Petitioner, vs PMPE Community Association, Inc., Respondent

Case Number

20F-H2020063-REL-RHG

Adjudicating Body

Office of Administrative Hearings (Arizona)

Presiding Judge

Tammy L. Eigenheer, Administrative Law Judge

Date of Order

March 16, 2021

II. Parties Involved

Name & Affiliation

Contact Information

Petitioner

Marc D. Archer

[email protected]

Respondent

PMPE Community Association, Inc.

Not provided

Respondent’s Counsel

Nicholas Nogami, Esq., Carpenter Hazlewood Delgado & Bolen, LLP

[email protected]
[email protected]

Analysis of Proceedings

A. Basis for the Rehearing and Procedural Issue

The scheduled hearing was a rehearing requested by the Petitioner, Marc Archer. The basis for his request centered on events that transpired after the conclusion of the initial hearing.

• Petitioner’s Grounds for Rehearing: The request was explicitly based on “actions taken by Respondent after the decision in the initial hearing had been issued.”

• Jurisdictional Limitation: The Petitioner was informed at the hearing that the scope of a rehearing is limited to matters that occurred before the original petition was filed. The document states: “When Petitioner was informed that the only issues that could be addressed in a rehearing on his petition were those matters that occurred prior to his petition being filed…”

• Subject of New Dispute: The specific post-decision action Archer sought to challenge was the “Respondent’s denial of his submission to build an addition to his house.”

B. Resolution and Outcome

Faced with the procedural limitations of a rehearing, the Petitioner altered his legal strategy, leading to the cancellation of the proceeding.

• Withdrawal of Request: The Petitioner “concluded that he wished to withdraw his request for a rehearing at that time.”

• Stated Intention: Archer “indicated that he would file a new petition to challenge Respondent’s denial of his submission to build an addition to his house.”

• Final Order: The judge issued a formal order vacating the hearing.

Legal Standing and Appeal Process

The order issued on March 16, 2021, carries legal weight and outlines specific requirements for any subsequent appeal.

• Binding Nature of the Order: The order is binding on the parties involved, as stipulated by Arizona Revised Statutes (A.R.S.) § 32-2199.02(B).

• Appeal Requirements: A party wishing to appeal the order must seek judicial review.

◦ Venue: The appeal must be filed with the superior court.

◦ Deadline: The filing must occur within thirty-five (35) days from the date the order was served upon the parties.

• Governing Statutes: The appeal process is prescribed by the following state statutes:

◦ A.R.S. § 41-1092.08(H)

◦ A.R.S. § 12-904(A)

◦ Title 12, Chapter 7, Article 6 of the Arizona Revised Statutes

Document Distribution

Copies of the “Order Vacating Hearing” were officially distributed via mail, email, or fax on March 16, 2021, to the following parties:

• Arizona Department of Real Estate:

◦ Judy Lowe, Commissioner

◦ Additional recipients at the department ([email protected], [email protected], [email protected], [email protected], [email protected], [email protected])

• Petitioner:

◦ Marc D. Archer

• Respondent’s Counsel:

◦ Nicholas Nogami, Esq. (Carpenter Hazlewood Delgado & Bolen, LLP)

Study Guide: Case No. 20F-H2020063-REL-RHG

Short-Answer Quiz

Answer the following questions in two to three sentences each, based on the provided legal document.

1. Identify the primary parties involved in case No. 20F-H2020063-REL-RHG and state their respective roles.

2. What was the specific legal action taken by the Office of Administrative Hearings on March 16, 2021, and who was the presiding judge?

3. What was the original reason Marc Archer requested a rehearing?

4. Why was the Petitioner informed that his reason for a rehearing was invalid for the current proceedings?

5. What was the Petitioner’s final decision regarding his request for a rehearing, and what was the outcome for the scheduled hearing?

6. What future action did Marc Archer state he intended to take after withdrawing his request?

7. According to the document’s notice, what is the legal standing of the “Order Vacating Hearing” on the parties involved?

8. Describe the process and timeline an involved party must follow to appeal this order.

9. Who legally represented the Respondent, PMPE Community Association, Inc., in this matter?

10. To what primary state agency and specific official was a copy of this order distributed?

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Answer Key

1. The primary parties were Marc Archer, who served as the Petitioner, and the PMPE Community Association, Inc., which was the Respondent. The Petitioner is the party who filed the petition, and the Respondent is the party against whom the petition was filed.

2. On March 16, 2021, an “Order Vacating Hearing” was issued, removing the matter from the calendar of the Office of Administrative Hearings. The presiding judge who signed the order was Administrative Law Judge Tammy L. Eigenheer.

3. Marc Archer’s basis for requesting a rehearing was to address actions that the Respondent, PMPE Community Association, Inc., had taken after the decision in the initial hearing had already been issued.

4. The Petitioner was informed that his basis was invalid because a rehearing can only address matters that occurred prior to the filing of his original petition. The new actions he wished to contest would require a new, separate petition.

5. After being informed about the limitations of a rehearing, the Petitioner concluded that he wished to withdraw his request. As a result, the judge ordered that the hearing be vacated from the Office of Administrative Hearings’ calendar.

6. After withdrawing his request, Marc Archer indicated that he would file a new petition. This new petition would specifically challenge the Respondent’s denial of his submission to build an addition to his house.

7. The order is legally binding on the parties, as stated in the notice section referencing Arizona Revised Statute (A.R.S.) § 32-2199.02(B). This means both the Petitioner and the Respondent must legally comply with the order.

8. To appeal the order, a party must seek judicial review in the superior court. This appeal must be filed within thirty-five days from the date the order was served upon the parties, as prescribed by A.R.S. § 41-1092.08(H), title 12, chapter 7, article 6, and A.R.S. § 12-904(A).

9. The Respondent was represented by Nicholas Nogami, Esq. of the law firm Carpenter Hazlewood Delgado & Bolen, LLP.

10. A copy of the order was mailed or e-mailed to Judy Lowe, the Commissioner of the Arizona Department of Real Estate. Copies were also sent to several other email addresses associated with that department.

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Essay Questions

Develop a detailed essay answer for each of the following prompts, using only information found within the source document to support your analysis.

1. Analyze the procedural error made by the Petitioner that led to the hearing being vacated. Explain the critical distinction between the scope of a “rehearing” and a “new petition” as implied by the events in the order.

2. Based on the provided document, reconstruct the timeline of events. Begin with the implied initial hearing, describe the basis for the requested rehearing, detail the procedural clarification provided to the Petitioner, and outline the subsequent actions taken by both the Petitioner and the Administrative Law Judge.

3. Discuss the legal framework governing appeals for this type of administrative order. Cite the specific Arizona Revised Statutes (A.R.S.) mentioned in the document and explain the jurisdiction, requirements, and timeline for seeking judicial review.

4. Evaluate the communication process documented in the order. Identify all named recipients of the order, their titles or affiliations, and hypothesize why each party or entity would need to be formally notified of this decision.

5. Examine the role and authority of the Administrative Law Judge and the Office of Administrative Hearings in this specific dispute. How does the order demonstrate the limits of their jurisdiction and the procedural rules they enforce?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official, in this case Tammy L. Eigenheer, who presides over hearings at the Office of Administrative Hearings and has the authority to issue legally binding orders.

Appeal

The process by which a party requests that a higher court (in this case, the superior court) review the decision of a lower body (the Office of Administrative Hearings).

A.R.S. (Arizona Revised Statutes)

The collection of laws enacted by the Arizona state legislature. The document references A.R.S. § 32-2199.02(B), § 41-1092.08(H), and § 12-904(A) to establish the legal basis for the order’s finality and the appeal process.

Judicial Review

A type of court proceeding in which a judge reviews the lawfulness of a decision or action made by a public body, such as the Office of Administrative Hearings.

Office of Administrative Hearings (OAH)

A state agency that conducts hearings for other state agencies, providing a neutral forum for disputes. In this case, it presided over the matter between Marc Archer and the PMPE Community Association, Inc.

Order Vacating Hearing

A formal directive from a judge that cancels a previously scheduled hearing and removes it from the court’s or agency’s calendar.

Petition

A formal written request submitted to a court or administrative body, initiating a legal case or making a specific application.

Petitioner

The party who files a petition with a court or administrative body. In this case, Marc Archer.

Rehearing

A second hearing of a case to consider issues that were part of the original petition. As clarified in the order, it cannot be used to address new matters that arose after the initial decision.

Respondent

The party against whom a petition is filed and who is required to respond to it. In this case, PMPE Community Association, Inc.

Superior Court

A state-level trial court of general jurisdiction. The document specifies that any appeal of the administrative order must be filed with the superior court.

Select all sources

864308.pdf

864361.pdf

No emoji found

20F-H2020063-REL

2 sources

The provided sources are two copies of an Order Vacating Hearing issued by the Office of Administrative Hearings in the matter of Marc Archer vs PMPE Community Association, Inc. The order, signed by Administrative Law Judge Tammy L. Eigenheer on March 16, 2021, indicates that Petitioner Marc Archer requested a rehearing based on actions taken by the Respondent after the initial decision was issued. Because the rehearing was limited to matters that occurred before the original petition was filed, Mr. Archer chose to withdraw his request for a rehearing and announced his intention to file a new petition to challenge the community association’s denial of his proposal to build a house addition. Consequently, the hearing was vacated from the administrative calendar, and the order includes a notice regarding the process for judicial review if a party wished to appeal.

Why did Marc Archer withdraw his request for a rehearing on case 20F-H2020063-REL?

What were the specific procedural limitations governing the scope of the administrative rehearing?

How does this order relate to the Petitioner’s future challenge regarding his house addition?

Audio Overview

Video Overview

Mind Map Mind Map

Reports Reports

Flashcards

Quiz

00:00 / 00:00

Case Participants

Petitioner Side

Marc Archer (petitioner)
Appeared on his own behalf; Homeowner and member of PMPE

Respondent Side

Nicholas Nogami (HOA attorney)
Carpenter, Hazelwood, Delgado & Bolen
Represented Respondent PMPE Community Association, Inc.
Keith Kauffman (board member)
PMPE Community Association, Inc.
President, Treasurer, and AC member; testified at hearing

Neutral Parties

Tammy L. Eigenheer (ALJ)
Office of Administrative Hearings
Presided over the main hearing and issued the order vacating rehearing
Velva Moses-Thompson (ALJ)
Office of Administrative Hearings
Ruled in a prior related evidentiary hearing
Judy Lowe (Commissioner)
Arizona Department of Real Estate
Addressee for transmission of orders
DGardner (ADRE Staff)
Arizona Department of Real Estate
Recipient of order via email
f. del sol (Staff)
Signed transmittal of ALJ decision
c. serrano (Staff)
Signed transmittal of Order Vacating Hearing
LDettorre (ADRE Staff)
Arizona Department of Real Estate
Recipient of order via email
AHansen (ADRE Staff)
Arizona Department of Real Estate
Recipient of order via email
djones (ADRE Staff)
Arizona Department of Real Estate
Recipient of order via email
ncano (ADRE Staff)
Arizona Department of Real Estate
Recipient of order via email

Other Participants

Carlotta L Turman (unknown)
Carpenter, Hazelwood, Delgado & Bolen
Listed in transmission details associated with PMPE counsel

Lori & James Jordan v. The Pines at Show Low Condominium Owners’

Posted on December 1, 2020 by [email protected]

Case Summary

Case ID	21F-H2120014-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2020-12-01
Administrative Law Judge	Adam D. Stone
Outcome	The Administrative Law Judge denied the petition, concluding that the Petitioner failed to prove the Association violated the CC&Rs regarding sewer maintenance or deductible apportionment, finding that the Association properly applied its 2012 Rules and Regulations.
Filing Fees Refunded	$500.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Lori & James Jordan	Counsel	—
Respondent	The Pines at Show Low Condominium Owners' Association, Inc.	Counsel	—

Alleged Violations

CC&Rs Sections 3.04, 3.07 & 3.09; 2012 Rules and Regulations Section 19

Outcome Summary

The Administrative Law Judge denied the petition, concluding that the Petitioner failed to prove the Association violated the CC&Rs regarding sewer maintenance or deductible apportionment, finding that the Association properly applied its 2012 Rules and Regulations.

Why this result: Petitioner failed to meet her burden of proof that the Respondent violated the CC&Rs in apportioning a proportionate share of the insurance deductible.

Key Issues & Findings

Dispute over apportionment of insurance deductible following sewer backup damage in a common area.

Petitioner challenged the Association's decision to apportion 43.84% ($10,958.96) of the insurance deductible to her unit following damage caused by a main sewer line blockage in a common area.

Orders: Petitioner’s petition is denied.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

ARIZ. REV. STAT. § 32-2102
ARIZ. REV. STAT. § 32-2199 et seq.
ARIZ. REV. STAT. § 32-2199(2)
ARIZ. REV. STAT. § 32-2199.01(D)
ARIZ. REV. STAT. § 32-2199.02
ARIZ. REV. STAT. § 32-2199.05
ARIZ. REV. STAT. § 41-1092
ARIZ. REV. STAT. § 41-1092.09
Title 33, Chapter 9 of the Arizona Revised Statutes
CC&Rs Sections 3.04, 3.07, 3.09
2012 Rules and Regulations Section 19

Analytics Highlights

Topics: Deductible Apportionment, Sewer Maintenance, Common Area, Condominium Documents, Rules and Regulations

Additional Citations:

ARIZ. REV. STAT. § 32-2102
ARIZ. REV. STAT. § 32-2199 et seq.
ARIZ. REV. STAT. § 32-2199(2)
ARIZ. REV. STAT. § 32-2199.01(D)
ARIZ. REV. STAT. § 32-2199.02
ARIZ. REV. STAT. § 32-2199.05
ARIZ. REV. STAT. § 41-1092
ARIZ. REV. STAT. § 41-1092.09
Title 33, Chapter 9 of the Arizona Revised Statutes

Video Overview

Audio Overview

Decision Documents

21F-H2120014-REL Decision – 840033.pdf

Uploaded 2026-01-23T17:35:25 (138.3 KB)

This summary details the Administrative Law Judge Decision in the case of Lori & James Jordan vs. The Pines at Show Low Condominium Owners' Association, Inc.. The hearing was held on November 23, 2020, before Administrative Law Judge Adam D. Stone.

Key Facts and Main Issue

The Petitioner, Lori Jordan, is a property owner and member of The Pines at Show Low Condominium Owners' Association (“Association”). The dispute centered on damage caused to her unit (Unit 1006) around October 2018 due to a sewer backup in the main sewer line, which was allegedly caused by tree root growth in a common area.

The core issue was whether the Association violated its Community Documents—specifically CC&Rs Sections 3.04, 3.07, and 3.09—by apportioning a share of the insurance deductible to the Petitioner. Petitioner's unit was apportioned 43.84% of the deductible, totaling $10,958.96.

Key Arguments and Proceedings

Petitioner's Argument: Petitioner Lori Jordan and witness Chuck Stewart argued that the sewer line blockage occurred in the common area, and because the CC&Rs (Section 3.09) made the Association responsible for the maintenance and repair of the "sewer collection system within the Property," the Association should bear the full insurance deductible.
Respondent's Argument: Sean Lissarrague, Vice President of the Board, testified that the Board fulfilled its obligations under the CC&Rs by paying for the line repairs. He argued that the apportionment of the deductible was proper based on Section 19 of the 2012 Rules and Regulations. Section 19(b) and (c) grant the Board the authority to apportion the deductible when damage occurs to more than one unit and the common areas. The Association also stated that unit owners are responsible for maintaining proper gap insurance coverage.

Legal Points and Outcome

The Administrative Law Judge (ALJ) concluded that the matter was within the Department of Real Estate’s jurisdiction. The Petitioner bore the burden of proving by a preponderance of the evidence that the Respondent violated the CC&Rs.

The ALJ made the following crucial findings:

No CC&R Violation: Although CC&R Section 3.09 mandates the Association to maintain and repair the sewer collection system, the Association did coordinate and accomplish these repairs. The Petitioner failed to demonstrate that the Association neglected its duty regarding maintenance or repair.
Deductible Allocation Upheld: The ALJ recognized that the Petitioner was primarily challenging Section 19 of the 2012 Rules and Regulations. The scenario involved damage to two units and the common area, and the Association properly applied Section 19(b) and (c) of the Rules in apportioning the deductible.

Final Decision: Based on the evidence, the Petitioner failed to meet the burden of proof that the Association violated the CC&Rs by apportioning a share of the insurance deductible. The Petitioner’s petition was therefore denied. This decision is binding unless a rehearing is granted.

Questions

Question

Can the HOA require a homeowner to pay a portion of the association's insurance deductible for damage caused by a common element failure?

Short Answer

Yes, if the community Rules and Regulations authorize the Board to apportion the deductible based on repair costs.

Detailed Answer

The ALJ found that the Association's Board had the authority to adopt rules regarding insurance deductibles. Specifically, the rules allowed the Board to apportion the deductible among unit owners and the association based on the proportion of repair costs when damage affects multiple units and common areas, even if the damage originated from a common element like a sewer line.

Alj Quote

Sections 19(b) and (c) appears to have anticipated the present scenario. There was damaged caused to two units and the common area, and Petitioner was apportioned 43.84% of the deductible. From the evidence presented, the Association also properly applied the applicable Rules and Regulations.

Legal Basis

Rules and Regulations Section 19

Topic Tags

insurance
deductible
assessments
common elements

Question

Who is responsible for ensuring insurance coverage for the 'gap' created by an HOA's insurance deductible?

Short Answer

The homeowner is responsible for obtaining personal insurance to cover the gap.

Detailed Answer

The decision highlights that governing documents or rules may explicitly state that owners must be aware of the deductible amount and secure their own coverage to handle that cost if assessed.

Alj Quote

Each Owner needs to be aware of the amount of the Association’s insurance deductible so that the Owner can determine that their personal insurance coverage will cover any gap.

Legal Basis

Rules and Regulations Section 19(e)

Topic Tags

insurance
homeowner responsibilities

Question

If the HOA fixes a maintenance issue after it occurs (like a sewer backup), can I still claim they violated their maintenance duty to avoid paying the deductible?

Short Answer

Likely no, as long as the HOA coordinated and accomplished the repairs.

Detailed Answer

The ALJ ruled that because the Association coordinated and completed the repairs once the issue occurred, the homeowner failed to prove that the Association neglected its maintenance duties under the CC&Rs. Therefore, the assessment of the deductible was not invalidated by a failure to maintain.

Alj Quote

Once the sewer backed up, the Association coordinated the repairs and accomplished the same. Petitioner failed to demonstrate that the Association failed to properly attend to the maintenance and/or repair of the sewer lines.

Legal Basis

CC&Rs Section 3.09

Topic Tags

maintenance
repairs
negligence

Question

What is the burden of proof for a homeowner challenging an HOA decision in an administrative hearing?

Short Answer

The homeowner must prove their case by a 'preponderance of the evidence'.

Detailed Answer

The homeowner (Petitioner) has the burden to prove that the HOA violated the governing documents or statutes. The standard is 'preponderance of the evidence,' meaning the claim must be shown to be more probably true than not.

Alj Quote

In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated the CC&Rs… '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

Standard of Evidence

Topic Tags

legal procedure
evidence
burden of proof

Question

Can the HOA Board create rules that change how financial liabilities (like deductibles) are handled without amending the CC&Rs?

Short Answer

Yes, if the CC&Rs grant the Board the authority to adopt rules for the regulation of the property.

Detailed Answer

The decision upheld the enforcement of a rule regarding insurance deductibles found in the 'Rules and Regulations,' noting that the CC&Rs granted the authority to adopt such rules.

Alj Quote

Section 4.10 of the CC&Rs granted authority to adopt rules 'for the regulation and operation of the Property…'

Legal Basis

CC&Rs Section 4.10

Topic Tags

rulemaking
board authority
governing documents

Case

Docket No: 21F-H2120014-REL
Case Title: Lori & James Jordan vs. The Pines at Show Low Condominium Owners' Association, Inc.
Decision Date: 2020-12-01
Alj Name: Adam D. Stone
Tribunal: OAH
Agency: ADRE

Questions

Question

Can the HOA require a homeowner to pay a portion of the association's insurance deductible for damage caused by a common element failure?

Short Answer

Yes, if the community Rules and Regulations authorize the Board to apportion the deductible based on repair costs.

Detailed Answer

Alj Quote

Legal Basis

Rules and Regulations Section 19

Topic Tags

insurance
deductible
assessments
common elements

Question

Who is responsible for ensuring insurance coverage for the 'gap' created by an HOA's insurance deductible?

Short Answer

The homeowner is responsible for obtaining personal insurance to cover the gap.

Detailed Answer

The decision highlights that governing documents or rules may explicitly state that owners must be aware of the deductible amount and secure their own coverage to handle that cost if assessed.

Alj Quote

Each Owner needs to be aware of the amount of the Association’s insurance deductible so that the Owner can determine that their personal insurance coverage will cover any gap.

Legal Basis

Rules and Regulations Section 19(e)

Topic Tags

insurance
homeowner responsibilities

Question

If the HOA fixes a maintenance issue after it occurs (like a sewer backup), can I still claim they violated their maintenance duty to avoid paying the deductible?

Short Answer

Likely no, as long as the HOA coordinated and accomplished the repairs.

Detailed Answer

Alj Quote

Legal Basis

CC&Rs Section 3.09

Topic Tags

maintenance
repairs
negligence

Question

What is the burden of proof for a homeowner challenging an HOA decision in an administrative hearing?

Short Answer

The homeowner must prove their case by a 'preponderance of the evidence'.

Detailed Answer

Alj Quote

Legal Basis

Standard of Evidence

Topic Tags

legal procedure
evidence
burden of proof

Question

Can the HOA Board create rules that change how financial liabilities (like deductibles) are handled without amending the CC&Rs?

Short Answer

Yes, if the CC&Rs grant the Board the authority to adopt rules for the regulation of the property.

Detailed Answer

The decision upheld the enforcement of a rule regarding insurance deductibles found in the 'Rules and Regulations,' noting that the CC&Rs granted the authority to adopt such rules.

Alj Quote

Section 4.10 of the CC&Rs granted authority to adopt rules 'for the regulation and operation of the Property…'

Legal Basis

CC&Rs Section 4.10

Topic Tags

rulemaking
board authority
governing documents

Case

Docket No: 21F-H2120014-REL
Case Title: Lori & James Jordan vs. The Pines at Show Low Condominium Owners' Association, Inc.
Decision Date: 2020-12-01
Alj Name: Adam D. Stone
Tribunal: OAH
Agency: ADRE

Case Participants

Petitioner Side

Lori Jordan (petitioner)
Appeared and testified at the hearing
James Jordan (petitioner)
Chuck Stewart (witness)
The Pines at Show Low Condominium Owners' Association, Inc. Board
Testified for Petitioner; later joined Board and voted against apportionment

Respondent Side

Sean Lissarrague (board member)
The Pines at Show Low Condominium Owners' Association, Inc.
Vice President of the Board; appeared and testified for Respondent

Neutral Parties

Adam D. Stone (ALJ)
Office of Administrative Hearings
Administrative Law Judge
Judy Lowe (Commissioner)
Arizona Department of Real Estate
Received electronic transmission of the decision

Other Participants

c. serrano (administrative staff)
Transmitted the electronic decision

Foothills Club West Homeowners Association v. Subrahmanyam & Sheila

Posted on November 27, 2020 by [email protected]

Case Summary

Case ID	21F-H2120004-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2020-11-27
Administrative Law Judge	Kay Abramsohn
Outcome	The ALJ concluded that Foothills demonstrated Respondents' violation of the community governing documents by commencing and continuing construction of a second-story Addition without obtaining the required Architectural Committee approval. Foothills was deemed the prevailing party, and Respondents' appeal was dismissed.
Filing Fees Refunded	$0.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Foothills Club West Homeowners Association	Counsel	John Halk, Esq.
Respondent	Subrahmanyam & Sudhakar Living Trust	Counsel	Mary T. Hone, Esq.

Alleged Violations

CC&Rs Article 7, Section 7.3, and Article 9, Sections 9.3, 9.4, and 9.5

Outcome Summary

The ALJ concluded that Foothills demonstrated Respondents' violation of the community governing documents by commencing and continuing construction of a second-story Addition without obtaining the required Architectural Committee approval. Foothills was deemed the prevailing party, and Respondents' appeal was dismissed.

Key Issues & Findings

Unauthorized 2nd story addition

Respondents constructed a second-story Addition to their property without first obtaining approval from the Foothills Architectural Committee, violating the community governing documents.

Orders: Respondents’ appeal is dismissed, and Foothills is deemed the prevailing party with regard to its Petition.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_win

Cited:

CC&Rs Article 7, Section 7.3
CC&R Article 9, Section 9.3
CC&R Article 9, Section 9.4
CC&R Article 9, Section 9.5

Analytics Highlights

Topics: architectural review, cc&r violation, unapproved construction, second story addition, prevailing party

Additional Citations:

A.R.S. §§ 32-2102
A.R.S. §§ 32-2199 et al.
A.R.S. §§ 32-2199(2)
A.R.S. §§ 32-2199.01(D)
A.R.S. §§ 32-2199.02
A.R.S. § 32-2199.05
A.R.S. § 41-1092
A.R.S. §32-2199.02(B)
A.R.S. § 32-2199.04
A.R.S. § 41-1092.09
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
ARIZ. ADMIN. CODE R2-19-119
MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
BLACK’S LAW DICTIONARY 1220 (8th ed. 1999)

Video Overview

Audio Overview

Decision Documents

21F-H2120004-REL Decision – 839537.pdf

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Briefing Document: Foothills Club West HOA v. Subrahmanyam & Sudhakar Living Trust

Executive Summary

This document synthesizes the findings and decision in the case of Foothills Club West Homeowners Association v. Subrahmanyam & Sudhakar Living Trust (No. 21F-H2120004-REL), adjudicated by the Arizona Office of Administrative Hearings. The core dispute involved the construction of a second-story addition by homeowners (Respondents) without the prior approval of the Homeowners Association (Petitioner), a direct violation of the community’s governing documents.

The Administrative Law Judge (ALJ) found conclusively in favor of the Foothills Club West HOA. The evidence demonstrated that the Respondents not only began construction without seeking approval but continued the project even after receiving a formal denial from the HOA’s Architectural Committee. A subsequent agreement between the parties, wherein the Respondents would demolish the addition in exchange for a waiver of fines, was not honored by the Respondents. The ALJ dismissed the Respondents’ appeal and declared the HOA the prevailing party, validating its authority to enforce the community’s architectural standards as outlined in its Covenants, Conditions, and Restrictions (CC&Rs).

I. Case Overview

• Case Name: Foothills Club West Homeowners Association, Petitioner, v. Subrahmanyam & Sudhakar Living Trust, Respondent.

• Case Number: 21F-H2120004-REL

• Jurisdiction: Arizona Office of Administrative Hearings

• Administrative Law Judge: Kay Abramsohn

• Hearing Date: October 5, 2020

• Decision Date: November 27, 2020

• Central Issue: The petition filed by Foothills HOA on July 24, 2020, alleged that the Respondents constructed an unauthorized and unapproved second-story addition to their property. This action was alleged to be in violation of CC&Rs Article 7, Section 7.3, and Article 9, Sections 9.3, 9.4, and 9.5.

II. Chronology of Key Events

The hearing record established the following undisputed sequence of events:

Oct. 2018

Respondents begin construction of the second-story addition.

Nov. 7, 2018

The City of Phoenix issues a stop-work order, noting a permit is required.

Nov. 7, 2018

Foothills HOA issues a violation notice to the Respondents.

Dec. 17, 2018

Respondents obtain a permit from the City of Phoenix.

Jan. 18, 2019 (approx.)

Respondents submit a request for approval to the Foothills Architectural Committee.

Jan. 18, 2019

Foothills HOA issues a penalty notice to the Respondents, with further notices issued monthly.

Feb. 22, 2019

Foothills HOA issues a formal denial of the application.

Mar. 15, 2019

The City of Phoenix gives final approval to the construction and issues a Certificate of Occupancy.

Post Feb. 2019

The parties reach an agreement for Respondents to demolish the addition in exchange for a waiver of fines.

July 24, 2020

Foothills HOA files its petition, noting Respondents have not complied with the demolition agreement.

Oct. 5, 2020

The administrative hearing is held.

Nov. 27, 2020

The Administrative Law Judge issues the final decision.

III. Arguments of the Parties

A. Petitioner: Foothills Club West HOA

• Violation of CC&Rs: The HOA argued that the Respondents violated CC&R Article 9, Section 9.3 by commencing construction without first obtaining approval from the Architectural Committee.

• Disregard for Denial: The HOA asserted that the Respondents completed the addition after receiving a formal denial of their application.

• Breach of Agreement: The HOA noted that the parties had reached a settlement agreement for demolition, which the Respondents failed to honor. The HOA requested that the Tribunal enforce this agreement.

• Jurisdictional Distinction: The HOA maintained that approval from the City of Phoenix was a separate matter and did not negate the requirement to obtain approval from the HOA as mandated by the governing documents.

B. Respondents: Subrahmanyam & Sudhakar Living Trust

• Initial Ignorance: Respondents claimed they were initially unaware of the HOA approval requirements.

• Attempted Compliance: They argued that once notified, they followed the association’s guidance, met with the Board, and sought approval.

• Vague Denial: Respondents stated they did not understand the meaning of the denial reason, “Fails aesthetics of surrounding community,” or how the addition specifically violated community rules.

• Lack of Due Process: They argued they did not receive a letter indicating an appeal process was available and therefore felt they had not received a final “denial.”

• Demolition Delay: While not disputing the existence of the demolition agreement, Respondents cited COVID-19 issues and safety concerns for their at-risk family as reasons for requesting more time.

• Final Appeal: At the hearing, Respondents reversed their position on the agreement and requested to be allowed to keep the addition.

IV. Analysis of Governing Documents

The decision centered on specific provisions within the Foothills Club West governing documents, which constitute the contract between the HOA and the homeowners.

• CC&R Article 9, Section 9.3 (Architectural Approval): This section was central to the case. It states in pertinent part:

• CC&R Article 9, Section 9.4 (Obligation to Obtain Approval): This provision explicitly sets forth a homeowner’s obligation to secure approval from the Architectural Committee.

• CC&R Article 9, Section 9.5 (Exterior Appearance): This section clarifies that while the HOA cannot limit interior remodeling, it retains jurisdiction over any changes that are “visible from outside such [home] … or affects the exterior appearance of such [home].”

• Amended Architectural Guidelines (2013): These guidelines reinforce the CC&Rs, specifying that a homeowner’s plans must be submitted for approval through the Architectural Committee on a case-by-case basis.

V. Administrative Law Judge’s Decision and Rationale

The ALJ’s conclusions of law provided a clear framework for the final order.

A. Burden of Proof

The ALJ established that in this proceeding, the petitioner (Foothills HOA) bore the burden of proving by a “preponderance of the evidence” that the Respondents had violated the governing documents. A preponderance of the evidence is defined as “proof as convinces the trier of fact that the contention is more probably true than not.”

B. Core Conclusion on Violations

The ALJ found that the HOA had successfully met its burden of proof. The central conclusion of law states:

“The Administrative Law Judge concludes that Foothills has demonstrated Respondents’ violation of the community governing documents, as stated in CC&R Article 9, Sections 9.3, 9.4, and 9.5, because Respondents began to construct a modification, the Addition, to their existing home prior to obtaining approval from Foothills Architectural Committee and, further, Respondents continued to construct the Addition despite receiving a denial of approval from Foothills Architectural Committee.”

This finding affirmed that the Respondents committed two distinct violations: starting work without approval and continuing work after being explicitly denied approval.

VI. Final Order and Implications

Based on the findings of fact and conclusions of law, the ALJ issued a decisive order.

• Order:

• Binding Nature: The decision notes that the order is binding on both parties unless a rehearing is requested. Pursuant to A.R.S. § 41-1092.09, a request for rehearing must be filed with the Commissioner of the Arizona Department of Real Estate within 30 days of the service of the order.

Study Guide: Foothills Club West HOA v. Subrahmanyam & Sudhakar Living Trust

This guide provides a detailed review of the Administrative Law Judge Decision in case No. 21F-H2120004-REL. It includes a short-answer quiz to test factual recall, essay questions for deeper analysis, and a comprehensive glossary of key terms found within the document.

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Short-Answer Quiz

Instructions: Answer the following ten questions in 2-3 sentences each, based on the information provided in the source document.

1. Who are the Petitioner and Respondent in this case, and what is their relationship?

2. What was the single issue raised in the petition filed by Foothills Club West Homeowners Association?

3. According to the Petition, which specific articles and sections of the governing documents did the Respondents allegedly violate?

4. What action did the City of Phoenix take on November 7, 2018, regarding the Respondents’ construction project?

5. What reasons did the Foothills Architectural Committee provide for denying the Respondents’ application on February 22, 2019?

6. Prior to the hearing, what agreement did the parties reach in an attempt to resolve the dispute?

7. What was the Respondents’ primary argument for their actions and for their failure to comply with the association’s denial?

8. What is the legal standard of proof required in this case, and which party bore the burden of meeting it?

9. Explain the difference between the City of Phoenix’s approval and the Foothills Architectural Committee’s approval, as argued by the Petitioner.

10. What was the final order issued by the Administrative Law Judge in this matter?

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Answer Key

1. The Petitioner is the Foothills Club West Homeowners Association (“Foothills”). The Respondent is the Subrahmanyam & Sheila Sudhakar Living Trust. Their relationship is that of a homeowners’ association and a member homeowner residing within the planned community for 22 years.

2. The single issue raised was that the Respondents constructed an unauthorized and unapproved second-story addition to their property. The construction was completed even after the Foothills Architectural Committee had issued a denial of the project.

3. Foothills alleged that the Respondents violated the CC&Rs Article 7, Section 7.3, and Article 9, Sections 9.3, 9.4, and 9.5. These articles pertain to the rights and obligations of the association and the architectural standards requiring prior approval for modifications.

4. On November 7, 2018, the City of Phoenix issued a stop-work order for the Respondents’ construction project. The order noted that the work being performed required a permit, which had not yet been obtained.

5. The Foothills Architectural Committee denied the application because it needed copies of the City permit, the plans were incomplete, and there was no documentation on the roof line or roofing materials. Furthermore, the denial stated that the project “Fails aesthetics of surrounding community.”

6. The parties came to an agreement wherein the Respondents would complete the demolition of the second-story addition. In exchange, Foothills agreed to waive the penalties that had been imposed on the Respondents for the violation.

7. The Respondents argued that they initially did not know what was required and that they cooperated with the association’s Board once notified. They claimed they did not understand what “Fails aesthetics” meant, did not receive a letter about an appeal process, and therefore did not feel they had received a final “denial.”

8. The legal standard of proof is a “preponderance of the evidence,” which is defined as proof that convinces the trier of fact that a contention is more probably true than not. The Petitioner, Foothills, bore the burden of proving the Respondents’ violation by this standard.

9. Foothills argued that approval from the City of Phoenix and approval from the association’s Architectural Committee were two different and separate matters. Even though the Respondents eventually received a City permit and a Certificate of Occupancy, this did not override the CC&R requirement to first obtain approval from Foothills.

10. The Administrative Law Judge ordered that the Respondents’ appeal be dismissed. The Judge deemed Foothills the prevailing party with regard to its petition, finding that Foothills had demonstrated the Respondents’ violation of the community’s governing documents.

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Essay Questions

Instructions: The following questions are designed for longer, more analytical responses. Formulate an essay-style answer for each, drawing evidence and support directly from the provided legal decision.

1. Analyze the arguments presented by both the Petitioner (Foothills) and the Respondents at the hearing. Discuss the key evidence and claims each party used to support their position and explain why the Administrative Law Judge ultimately found the Petitioner’s case more persuasive.

2. Explain the distinct roles and jurisdictions of the Homeowners Association’s Architectural Committee and the City of Phoenix regarding the Respondents’ construction project. Why was obtaining a City permit and a Certificate of Occupancy insufficient for the Respondents to proceed without violating the community’s governing documents?

3. Trace the procedural history of case No. 21F-H2120004-REL, from the filing of the initial petition to the final order. Discuss key filings, motions, and deadlines mentioned in the document, including the Respondents’ attempt to consolidate another case.

4. Discuss the significance of the “contract” between the parties, as defined in footnote 15. How do the CC&Rs and the amended Architectural Guidelines function as this contract, and which specific sections were central to the judge’s conclusion that a violation occurred?

5. Evaluate the Respondents’ attempt to justify their failure to demolish the addition as per their agreement with Foothills, citing COVID-19 issues. How did their request at the hearing to keep the addition conflict with their prior agreement, and what does this reveal about their position in the dispute?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official, in this case Kay Abramsohn, who presides over administrative hearings at the Office of Administrative Hearings and issues decisions.

Architectural Committee

A committee appointed by the Foothills HOA, as established by CC&R Article 9, with the authority to review, approve, or disapprove plans for construction, modifications, and additions to properties within the community.

An abbreviation for the Declaration of Covenants, Conditions and Restrictions. These are the governing documents that form a binding contract between the homeowners association and the property owners, outlining their rights and obligations.

Disclosure

The formal process by which parties in a legal case provide evidence, exhibits, and information to each other before a hearing. The deadline for disclosure in this case was September 29, 2020.

Governing Documents

The set of rules for the planned community, including the CC&Rs and the amended Architectural Guidelines, which have the same force and effect as association rules.

Petitioner

The party who initiates a legal proceeding by filing a petition. In this case, the Foothills Club West Homeowners Association.

Petition

The formal document filed with the Arizona Department of Real Estate to initiate a hearing concerning violations of community governing documents. In this case, it was a “single-issue petition.”

Preponderance of the Evidence

The standard of proof required in this administrative hearing. It is defined as “proof as convinces the trier of fact that the contention is more probably true than not.”

Respondent

The party against whom a petition is filed and who is required to respond to the allegations. In this case, the Subrahmanyam & Sheila Sudhakar Living Trust.

Tribunal

The Arizona Office of Administrative Hearings, the state agency authorized by statute to hear and decide contested matters referred to it, such as this dispute.

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21F-H2120004-REL

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This text is an Administrative Law Judge Decision from the Arizona Office of Administrative Hearings concerning a dispute between the Foothills Club West Homeowners Association and the Subrahmanyam & Sudhakar Living Trust. The Petitioner, the Foothills Club West Homeowners Association, filed a petition alleging that the Respondents constructed an unauthorized second-story addition to their property in violation of the association’s governing documents, specifically the CC&Rs Article 9, Sections 9.3, 9.4, and 9.5. The Administrative Law Judge determined that the Respondents violated these community documents by beginning construction prior to obtaining approval from the Foothills Architectural Committee and continuing the work despite receiving a denial. The judge ultimately concluded that Foothills was the prevailing party and dismissed the Respondents’ appeal, effectively upholding the violation finding.

What are the specific governing document violations alleged and proven against the homeowners?

How did the legal and administrative process address the unauthorized construction dispute?

What was the final resolution ordered regarding the unapproved second-story home addition?

Case Participants

Petitioner Side

John Halk (HOA attorney)
BROWN/OLCOTT, PLLC
Represented Petitioner Foothills Club West Homeowners Association
Nathan Tennyson (HOA attorney)
BROWN/OLCOTT, PLLC
Counsel for Petitioner

Respondent Side

Mary T. Hone (Respondent attorney)
Mary T. Hone, PLLC
Counsel for Respondent Trustees Subrahmanyam & Sheila Sudhakar
Subrahmanyam Sudhakar (respondent)
Subrahmanyam & Sheila Sudhakar Living Trust
Trustee of the Respondent Living Trust
Sheila Sudhakar (respondent)
Subrahmanyam & Sheila Sudhakar Living Trust
Trustee of the Respondent Living Trust

Neutral Parties

Kay Abramsohn (ALJ)
Office of Administrative Hearings
Administrative Law Judge
Judy Lowe (Commissioner)
Arizona Department of Real Estate
LDettorre (Agency Staff)
Arizona Department of Real Estate
Recipient of electronic transmission of Order
AHansen (Agency Staff)
Arizona Department of Real Estate
Recipient of electronic transmission of Order
djones (Agency Staff)
Arizona Department of Real Estate
Recipient of electronic transmission of Order
DGardner (Agency Staff)
Arizona Department of Real Estate
Recipient of electronic transmission of Order
ncano (Agency Staff)
Arizona Department of Real Estate
Recipient of electronic transmission of Order