Category Archives: HOA Cases

Charles P Mandela vs. Blue Ridge Estates Homeowners Association of

Posted on by

Case Summary

Case ID 19F-H1918006-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2019-02-28
Administrative Law Judge Velva Moses-Thompson
Outcome none
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Charles P. Mandela Counsel —
Respondent Blue Ridge Estates of Coconino County Homeowners' Association Counsel Paul K. Frame, Esq.

Alleged Violations

CC&Rs § 3.1(a)

Outcome Summary

The Administrative Law Judge denied the homeowner's petition in its entirety, finding the homeowner failed to meet the burden of proof to show the HOA violated CC&R § 3.1(a) when denying the construction of a cedar patio structure.

Why this result: Petitioner failed to establish that the HOA violated CC&R 3.1(a). The proposed structure was found to be a second detached structure and/or a temporary structure barred by the community documents, and the Petitioner had previously failed to submit sufficient information for an attached structure proposal.

Key Issues & Findings

Alleged violation of CC&Rs § 3.1(a) by denying request for patio structure while allowing another member to erect a Tuff Shed.

Petitioner alleged the HOA improperly denied his request for a detached cedar patio structure (150 sq ft) based on CC&R § 3.1(A) which limits properties to one detached structure (Petitioner already had a tool shed). The ALJ found Petitioner failed to establish the violation, concluding the proposed structure was a second barred detached structure or a temporary structure (as concrete pavers were not equivalent to a required cement/block foundation). Petitioner also failed to provide sufficient architectural details for an attached structure request.

Orders: Petitioner's petition is denied.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • CC&R § 3.1(a)
  • Architectural Committee Aligned Standard 3(D)

Analytics Highlights

Topics: HOA rules enforcement, architectural review, detached structures, temporary structures, rehearing
Additional Citations:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • CC&R § 3.1(a)
  • Architectural Committee Aligned Standard 3(D)

Video Overview

Audio Overview

Decision Documents

19F-H1918006-REL Decision – 692294.pdf

Uploaded 2026-04-24T11:15:26 (119.5 KB)

19F-H1918006-REL Decision – 669528.pdf

Uploaded 2026-04-24T11:15:30 (91.9 KB)

Briefing Document: Mandela v. Blue Ridge Estates HOA

Executive Summary

This document synthesizes the findings and conclusions from two administrative law hearings concerning a dispute between homeowner Charles P. Mandela and the Blue Ridge Estates Homeowners Association of Coconino County (“Blue Ridge”). The core of the dispute was Blue Ridge’s repeated denial of Mr. Mandela’s requests to construct a 150-square-foot cedar patio structure on his property.

The Administrative Law Judge (ALJ) ultimately denied Mr. Mandela’s petition in both an initial hearing and a subsequent rehearing, finding that the homeowner failed to meet the burden of proof to establish any violation of the association’s governing documents. The ALJ’s decisions affirmed that Blue Ridge acted within its authority and correctly applied its Covenants, Conditions, and Restrictions (CC&Rs) and architectural regulations.

Key takeaways from the rulings include:

• Violation of Detached Structure Limit: Mr. Mandela’s request for a detached patio was denied because he already had a tool shed, and the HOA rules explicitly permit only one detached structure per property.

• Improper “Play Structure” Request: An initial request framing the patio as a “play structure” was correctly denied as its proposed 150 sq. ft. size exceeded the 80 sq. ft. limit for certain play structures.

• Insufficient Plans for Attached Structure: A separate request to attach the structure to his home was denied due to Mr. Mandela’s failure to provide the required detailed architectural plans and construction drawings, which the HOA deemed necessary for approval.

• Arguments Found Lacking: Mr. Mandela’s arguments—including claims of selective enforcement, discrimination against homeowners without children, and misinterpretation of the term “temporary structure”—were found to be unsubstantiated by evidence. The ALJ concluded the structure would be a prohibited temporary structure as the proposed concrete pavers do not constitute a permanent foundation under the HOA’s definition.

Case Overview

Parties Involved

Description

Petitioner

Charles P. Mandela

A homeowner and member of the Blue Ridge Estates HOA.

Respondent

Blue Ridge Estates Homeowners Association of Coconino County

The governing homeowners’ association for the Blue Ridge Estates development.

Adjudicator

Velva Moses-Thompson

Administrative Law Judge, Office of Administrative Hearings.

Timeline of Key Events

c. Feb 1, 2018

Mr. Mandela submits his first request for a 150 sq. ft. patio, using a “Play Structure Approval Request” form. Blue Ridge denies it for exceeding the size limit.

c. Mar 2, 2018

Mr. Mandela submits a second request, this time to attach a cedar patio shade to his home. Blue Ridge requests detailed plans and materials.

c. Mar 8, 2018

Blue Ridge denies the request for an attached structure due to “incomplete information,” instructing Mr. Mandela to provide formal drawings as per CC&R guidelines.

c. Mar 23, 2018

Mr. Mandela files an internal appeal with Blue Ridge, which is subsequently denied for the same reason of incomplete construction information.

Post-Mar 23, 2018

Mr. Mandela submits a third request for a detached 150 sq. ft. cedar patio structure. Blue Ridge denies it because he already has a detached tool shed.

c. Jul 31, 2018

Mr. Mandela files a petition with the Arizona Department of Real Estate, alleging Blue Ridge violated CC&R § 3.1(a) by denying his request while allowing another member a Tuff Shed.

Oct 17, 2018

An evidentiary hearing is held before the Office of Administrative Hearings.

Nov 6, 2018

The ALJ issues the initial decision, denying Mr. Mandela’s petition.

Dec 12, 2018

The Arizona Department of Real Estate orders a rehearing of the matter.

Feb 8, 2019

The rehearing is held before the same ALJ.

Feb 28, 2019

The ALJ issues the final decision, again finding in favor of Blue Ridge and denying Mr. Mandela’s petition.

Analysis of Construction Requests and Denials

Mr. Mandela made three distinct applications to the Blue Ridge Architectural Committee for his proposed 150 sq. ft. cedar patio structure, each of which was denied for different reasons based on the HOA’s governing documents.

Request 1: Detached “Play Structure”

Mr. Mandela’s initial application on February 1, 2018, was submitted using a “Play Structure Approval Request” form.

• HOA Rule: The form, based on modified Rules and Regulations from April 6, 2016, states: “Cannot exceed 80 SF if it’s a Tree House, Tree Viewing Stand, Play House/Fort.”

• Denial Rationale: Blue Ridge denied the request because the proposed 150 sq. ft. size of the structure exceeded the 80 sq. ft. limit specified for this type of structure.

Request 2: Attached Cedar Patio Shade

On March 2, 2018, Mr. Mandela submitted a new request to attach the structure to his home.

• HOA Action: The committee chairman, John Hart, requested documents showing the structure would not be free-standing, such as plans and material specifications.

• Mandela’s Response: In a March 3 email, Mr. Mandela stated: “I am building this myself. I am not an Architect, I have not software to show (6) 2 by 4”s to attach from the single family roof lie to the roof lien of the same roof.” He asserted that photos of other attached structures were sufficient.

• Denial Rationale: The request was denied on March 8 due to “incomplete information.” The denial letter explicitly instructed Mr. Mandela to submit all required documents, including drawings that “match exactly what you are going to build,” per CC&R Section 10.3. His subsequent appeal was also denied, with Blue Ridge noting that a manufacturer’s representative stated they would not warranty the product if the design was altered and reiterating the need for detailed elevation drawings.

Request 3: Detached Cedar Patio Structure

Following the denial of his appeal, Mr. Mandela submitted a third request for a detached version of the patio.

• HOA Rule: According to CC&R § 3.1(A) and Architectural Committee Aligned Standard 3(D), “One detached structure may… be constructed on a property.”

• Denial Rationale: Blue Ridge denied this request because Mr. Mandela already had one detached structure—a tool shed—on his property. The rules permit only one such structure.

Key Arguments and Rulings from Administrative Hearings

At the initial hearing and subsequent rehearing, both parties presented arguments regarding the application of the HOA’s rules. The ALJ systematically addressed and ruled on each point, ultimately concluding that the petitioner failed to prove his case.

Petitioner’s Core Arguments (Charles P. Mandela)

• Definition of “Detached Structure”: He argued that his proposed patio was not a “detached structure” under the CC&Rs because, based on his misinterpretation of a prior administrative ruling, a detached structure is one that can be easily converted into a second residence.

• Selective Enforcement: He alleged that Blue Ridge approved a “Tuff Shed” for another member and was not enforcing the 80 sq. ft. play structure size limit against other homeowners, thus discriminating against him.

• Discriminatory Rules: He contended that the rule allowing a second detached structure if it is a “play structure” violates CC&R 3.1 because it discriminates against people without children. He stated he wanted the patio for his mother.

• Definition of “Temporary Structure”: He asserted the structure was not a prohibited temporary structure because he planned to use concrete pavers, which he claimed constituted a “cement foundation” under the rules, and the materials had a 5-year warranty.

Respondent’s Core Arguments (Blue Ridge Estates HOA)

• One Detached Structure Rule: The rules unambiguously limit homeowners to one detached structure, and Mr. Mandela already had one.

• Incomplete Submissions: The request for an attached structure lacked the necessary architectural details to ensure it was properly and safely constructed, as required by the CC&Rs. Joseph Hancock, Vice President of Blue Ridge and a former contractor, testified that Mr. Mandela failed to consider critical factors like height and width differentials.

• Temporary Structure Violation: Mr. Hancock testified that a concrete paver is not the equivalent of a “cement or slab foundation.” Therefore, the proposed structure would be a prohibited temporary structure under the CC&Rs.

• No Selective Enforcement: Mr. Hancock refuted Mr. Mandela’s claims of selective enforcement, testifying that the lots Mr. Mandela cited either had structures built before 2003 (predating certain rules) or had no detached structures at all.

Administrative Law Judge’s Final Conclusions

The ALJ found that Mr. Mandela failed to establish his claims by a preponderance of the evidence. The final order denied his petition based on the following conclusions of law:

• Burden of Proof: The petitioner did not meet his burden to prove that Blue Ridge violated CC&R Article III, Section 3.1(a).

• Second Detached Structure: It was undisputed that Mr. Mandela had a shed on his property. The proposed 150 sq. ft. patio therefore constituted a barred second detached structure.

• Prior Rulings Not Precedent: The ALJ noted that Mr. Mandela misinterpreted the prior administrative decision he cited and, furthermore, that “prior administrative law judge decisions are not precedent or binding on future administrative law decisions.”

• Temporary Structure: The preponderance of the evidence showed the proposed structure is a temporary structure under the CC&Rs because “concrete pavers are not the equivalent of cement or block foundation.”

• Denial of Attached Structure: The denial of the request to attach the structure was proper, as the “Petitioner failed to provide sufficient details to illustrate how he would attach the cedar patio structure to his home.”

• No Evidence of Discrimination: The petitioner failed to establish that Blue Ridge approved other oversized play structures or that the denial of his requests was discriminatory. The ALJ also noted the tribunal lacked jurisdiction over potential constitutional claims under the Fourteenth Amendment.

Relevant HOA Governing Documents

Document/Section

Key Provision / Definition

CC&R § 3.1

Permitted Uses and Restrictions – Single Family: “No building or structure shall be erected or maintained separate from the Single Family Residence located on any Lot, other than a garage…”

Architectural Committee Aligned Standard 3(D)

Detached Structures: “One detached structure may, with Architectural Committee approval, be constructed on a property.”

CC&R § 3.6 & Aligned Standard

Temporary Structures: Prohibits temporary structures. A temporary structure is defined as one “without a cement or block foundation to which the structure or building is permanently attached.”

Modified Rules and Regulations (April 6, 2016)

Play Structures: Allows up to two play structures but specifies they “Cannot exceed 80 SF if it’s a Tree House, Tree Viewing Stand, Play House/Fort.”

CC&R § 3.24

Architectural Approval: “No building, fence, wall, screen, residence or other structure shall be commenced, erected, maintained, improved or altered… without the prior written approval of the… Architectural Committee.”

CC&R § 10.3

Architectural Submission Guidelines: Specifies the format and information required for submittals to the architectural committee.

CC&R § 12.2

Declaration Amendments: Requires an affirmative vote or written consent of members owning at least 75% of all lots to amend the Declaration.

Study Guide: Mandela v. Blue Ridge Estates HOA

This study guide provides a comprehensive review of the administrative legal dispute between petitioner Charles P. Mandela and respondent Blue Ridge Estates Homeowners Association of Coconino County. The case revolves around Mr. Mandela’s multiple attempts to gain approval for a patio structure on his property and the subsequent legal proceedings. The material is drawn from two Administrative Law Judge Decisions, dated November 6, 2018, and February 28, 2019.

——————————————————————————–

Instructions: Answer the following questions in 2-3 complete sentences, drawing your information directly from the provided case documents.

1. What were the three distinct requests Mr. Mandela submitted to the Blue Ridge Estates HOA, and what was the outcome of each?

2. Explain the HOA’s rule regarding detached structures and why Mr. Mandela’s third request for a detached patio was denied under this rule.

3. On what grounds did the HOA deny Mr. Mandela’s second request to attach a cedar patio shade to his home?

4. What was Mr. Mandela’s primary allegation in his initial petition filed with the Department of Real Estate on July 31, 2018?

5. How do the Blue Ridge rules define a “temporary structure,” and why did the Administrative Law Judge conclude Mr. Mandela’s proposed patio fell into this category?

6. Describe Mr. Mandela’s discrimination argument regarding the HOA’s policy on play structures.

7. What is the legal standard of proof the petitioner was required to meet in this case, and what does this standard mean?

8. Mr. Mandela cited a prior administrative law judge decision to support his case. What was his interpretation of that decision, and how did the presiding judge respond to this line of argument?

9. Who is Joseph Hancock, and what key pieces of testimony did he provide on behalf of the HOA during the rehearing?

10. According to the CC&Rs, what is the procedural difference between amending the Declaration (the CC&Rs themselves) versus adopting new “Rules and Regulations”?

——————————————————————————–

Answer Key

1. Mr. Mandela first submitted a “Play Structure Approval Request” for a 150-square-foot patio, which was denied for exceeding the 80-square-foot size limit for such structures. His second request was to attach a cedar patio shade to his home, which was denied due to incomplete information and a lack of adequate plans. His third request was for a detached 150-square-foot patio structure, which was denied because he already had another detached structure on his property.

2. According to CC&Rs § 3.1(A) and Architectural Committee regulation 3(D), a property is permitted to have only one detached structure. Mr. Mandela’s third request was denied because it was undisputed that he already had a tool shed on his property. The proposed detached patio would have constituted a prohibited second detached structure.

3. The HOA denied the request to attach the patio shade because Mr. Mandela submitted incomplete information and failed to provide sufficient plans. The HOA requested detailed elevation drawings showing construction methods, dimensions, foundation details, and attachment methods, which Mr. Mandela did not provide.

4. In his petition of July 31, 2018, Mr. Mandela alleged that the Blue Ridge HOA had violated CC&Rs § 3.1(a). His specific claim was that the HOA discriminated against him by denying his request to place a patio structure in his backyard while allowing another member to erect a Tuff Shed.

5. The Architectural Committee rules define a temporary structure as one “without a cement or block foundation to which the structure or building is permanently attached.” The judge concluded the proposed patio was a temporary structure because Mr. Mandela planned to use concrete pavers, which, according to the credible testimony of Joseph Hancock, are not the equivalent of a permanent cement or block foundation.

6. Mr. Mandela argued that the modified rule allowing a second detached play structure (up to 80 sq ft) violates CC&R 3.1 because it discriminates against people who do not have children. He asserted the policy was unfair because he wanted to build the structure for his mother to rest outside, not for children’s play.

7. The petitioner, Mr. Mandela, had the burden of proof to establish his claim by a “preponderance of the evidence.” This standard is defined as evidence that has the most convincing force and is sufficient to incline a fair and impartial mind to one side of an issue rather than the other, meaning the contention is more probably true than not.

8. Mr. Mandela argued that a prior administrative law judge decision had found that a “detached structure” under Blue Ridge CC&Rs is a structure that can be easily converted into a second residence, which his patio could not. The presiding judge dismissed this by stating that Mr. Mandela misinterpreted the prior ruling and, more importantly, that prior administrative law judge decisions are not binding precedent for future decisions.

9. Joseph Hancock is the Vice President of the Blue Ridge HOA and a former general, electrical, and HVAC contractor. He testified that concrete pavers are not equivalent to a cement or block foundation, that Mr. Mandela’s plans for attaching the structure were insufficient, and that he had investigated lots Mr. Mandela cited for alleged violations and found none.

10. According to the CC&Rs, adopting, amending, or repealing “Rules and Regulations” can be done by a majority vote of the Board (§ 4.2). In contrast, amending the Declaration of CC&Rs themselves is a much more stringent process, requiring the affirmative vote or written consent of members owning at least seventy-five percent (75%) of all lots (§ 12.2).

——————————————————————————–

Essay Questions

Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate your answers in a standard essay format, using specific evidence from the source documents to support your arguments.

1. Analyze the progression of Mr. Mandela’s three distinct requests to the HOA. How did the denial of his first request (as a “Play Structure”) appear to influence his subsequent applications and legal arguments?

2. Discuss the concept of “burden of proof” as it applies in this case. Explain why Mr. Mandela ultimately failed to convince the Administrative Law Judge that the HOA violated its own rules, citing specific examples of his failed arguments (e.g., the temporary structure definition, claims of selective enforcement, and the adequacy of his submitted plans).

3. Examine the distinction made in the Blue Ridge Estates governing documents between the core CC&Rs and the “Rules and Regulations” adopted by the Board. How did this distinction allow the HOA to have a rule permitting a second “play structure” while the main CC&Rs seem to limit properties to a single residence and one other detached structure (a garage)?

4. The HOA denied Mr. Mandela’s request for an attached structure due to “incomplete information.” Based on the evidence presented in the decisions, evaluate the reasonableness of the HOA’s request for detailed plans versus Mr. Mandela’s assertion that he had provided sufficient information for approval.

5. Trace Mr. Mandela’s various claims of unfair treatment, including selective enforcement (the Tuff Shed), discrimination (the play structure rule), and his interpretation of key terms like “detached structure.” For each claim, explain the HOA’s counter-position or the Administrative Law Judge’s final conclusion.

——————————————————————————–

Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An independent judge who presides over administrative hearings for state agencies, such as the one between Mr. Mandela and the HOA. In this case, the ALJ was Velva Moses-Thompson.

Architectural Committee

A committee within the HOA granted authority by CC&R § 10.2 to approve or deny proposed construction and promulgate regulations aligned with the CC&Rs. It denied all of Mr. Mandela’s requests.

Burden of Proof

The legal obligation of a party in a dispute to provide sufficient evidence to prove their claim. In this case, the petitioner (Mr. Mandela) bore the burden of proof.

Covenants, Conditions, and Restrictions. These are the primary governing documents for the Blue Ridge Estates community, outlining land use, permitted structures, and rules members must follow.

Detached Structure

A building or structure on a property that is separate from the main single-family residence. According to Architectural Committee regulation 3(D), only one such structure is permitted per lot.

Petitioner

The party who files a petition initiating a legal action. In this case, Charles P. Mandela is the petitioner.

Play Structure

A structure defined by the HOA’s modified rules to include items like Swing Sets, Jungle Gyms, Tree Houses, and Ground Placed Play Houses/Forts. Play Houses/Forts and Tree Houses are limited to 80 square feet.

Preponderance of the Evidence

The standard of proof required in this case. It is defined as “proof as convinces the trier of fact that the contention is more probably true than not,” representing the greater weight of the evidence.

Respondent

The party against whom a petition is filed. In this case, the Blue Ridge Estates Homeowners Association is the respondent.

Rules and Regulations

Rules that can be adopted, amended, or repealed by a majority vote of the HOA Board, as distinct from the CC&Rs which require a 75% vote of all lot owners to amend. The “Play Structure” rules are an example.

Temporary Structure

As defined by the Architectural Committee regulations, a structure “without a cement or block foundation to which the structure or building is permanently attached.” Such structures are prohibited by CC&R § 3.6.

Select all sources
669528.pdf
692294.pdf

No emoji found

Loading

19F-H1918006-REL-RHG

2 sources

These sources document two decisions from the Office of Administrative Hearings concerning a dispute between Charles P. Mandela and the Blue Ridge Estates Homeowners Association (HOA). The first document presents the initial Administrative Law Judge (ALJ) Decision which denied Mr. Mandela’s petition, finding he failed to prove the HOA violated its governing documents by denying his request to build a patio structure. The second document is the ALJ Decision following a rehearing, which reaffirms the initial denial, concluding that Mr. Mandela’s proposed structure was either a prohibited second detached structure or a temporary structure lacking a proper foundation, and that he failed to provide sufficient plans for an attached structure. Both sources establish that Mr. Mandela did not meet his burden of proof to show the HOA discriminated against him or otherwise violated the Covenants, Conditions, and Restrictions (CC&Rs).

2 sources

What were the specific reasons the HOA denied Charles Mandela’s requests?
How did the HOA Covenants, Conditions, and Restrictions govern detached structures?
What was the ultimate outcome of Charles Mandela’s petition and subsequent rehearing?

Based on 2 sources

00:00
00:00

NotebookLM can be inaccurate; please double check its responses.

Case Participants

Petitioner Side

  • Charles P. Mandela (petitioner)

Respondent Side

  • Paul Frame (HOA attorney)
    FRAME LAW PLLC
  • John Hart (HOA Chairman)
    Blue Ridge Estates Homeowners Association
    Reviewed petitioner's requests
  • Joseph Hancock (HOA Vice President, witness)
    Blue Ridge Estates Homeowners Association
    Presented testimony

Neutral Parties

  • Velva Moses-Thompson (ALJ)
    OAH
  • Judy Lowe (ADRE Commissioner)
    Arizona Department of Real Estate
    Recipient of transmitted decision

Other Participants

  • Felicia Del Sol (administrative staff)
    Transmitted decision electronically

Warren R. Brown vs. Mogollon Airpark, Inc

Posted on by

Case Summary

Case ID 18F-H1818029-REL-RHG, 18F-H1818045-REL, 18F-H1818054-REL
Agency ADRE
Tribunal OAH
Decision Date 2018-10-18
Administrative Law Judge Thomas Shedden
Outcome The ALJ dismissed the petitions regarding the assessment increase (Dockets 029 and 054), ruling that A.R.S. § 33-1803(A)'s 20% cap applies only to 'regular assessments' and not special assessments. However, the ALJ ruled in favor of Petitioner Brown regarding late fees (Docket 045), finding that the statutory limit on late charges applies to all assessments, ordering the HOA to rescind the $25 fee and refund the filing fee.
Filing Fees Refunded $1,500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Warren R. Brown Counsel —
Respondent Mogollon Airpark, Inc. Counsel Gregory A. Stein; Mark K. Sahl

Alleged Violations

A.R.S. § 33-1803(A)
A.R.S. § 33-1803(A)
A.R.S. § 33-1803(A)

Outcome Summary

The ALJ dismissed the petitions regarding the assessment increase (Dockets 029 and 054), ruling that A.R.S. § 33-1803(A)'s 20% cap applies only to 'regular assessments' and not special assessments. However, the ALJ ruled in favor of Petitioner Brown regarding late fees (Docket 045), finding that the statutory limit on late charges applies to all assessments, ordering the HOA to rescind the $25 fee and refund the filing fee.

Why this result: For the assessment issues, the ALJ rejected the petitioners' interpretation that 'regular' refers to the approval process rather than the assessment type, finding that applying the cap to special assessments would violate principles of statutory construction.

Key Issues & Findings

Assessment Increase (Docket 029 – Brown)

Petitioner alleged the HOA violated the statute by increasing assessments by $325 (39.4%), exceeding the 20% limit.

Orders: Petition dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Late Fees (Docket 045 – Brown)

Petitioner alleged the HOA charged a $25 late fee, which exceeds the statutory limit of the greater of $15 or 10%.

Orders: Respondent ordered to rescind the $25 late fee and refund the $500 filing fee.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Assessment Increase (Docket 054 – Stevens)

Petitioner alleged the $325 assessment increase violated the statutory 20% cap and that the HOA used deceptive accounting.

Orders: Petition dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Video Overview

Audio Overview

Decision Documents

18F-H1818045-REL Decision – 666285.pdf

Uploaded 2026-04-24T11:12:44 (151.9 KB)

18F-H1818045-REL Decision – 672623.pdf

Uploaded 2026-04-24T11:12:49 (144.6 KB)

Administrative Law Judge Decision: Brown and Stevens vs. Mogollon Airpark, Inc.

This briefing document provides a comprehensive analysis of the consolidated administrative hearing between Petitioners Warren R. Brown and Brad W. Stevens and Respondent Mogollon Airpark, Inc. (the HOA). The proceedings focused on the legality of assessment increases, late fees, and interest charges under Arizona Revised Statutes (A.R.S.).

Executive Summary

The matter originated from three separate petitions consolidated for a hearing held on September 28, 2018. The primary disputes involved a 39.4% total increase in annual assessments and the imposition of late fees and interest rates that allegedly exceeded statutory limits.

The Administrative Law Judge (ALJ) reached a split decision. Regarding the assessment increase, the ALJ ruled in favor of Mogollon Airpark, Inc., determining that the statutory 20% cap applies only to "regular assessments" and not to "special assessments." Consequently, petitions 18F-H1818029-REL-RHG and 18F-H1818054-REL were dismissed. However, in petition 18F-H1818045-REL, the ALJ ruled in favor of Warren R. Brown, finding that the HOA’s $25 late fee violated A.R.S. § 33-1803(A), which limits such charges. The HOA was ordered to rescind the fee and reimburse the petitioner's $500 filing fee.

Case Overview and Financial Context

The following table outlines the financial changes implemented by Mogollon Airpark, Inc. in 2018 that led to the legal challenge:

Item Previous Year (2017) New Rate (2018) Percentage Increase
Total Assessment $825.00 $1,150.00 39.4%
Regular Portion $825.00 $941.00 ($116 increase) 14.1%
Special Portion $0.00 $209.00 N/A
Late Fee Not Specified $25.00 N/A
Interest Rate Not Specified 18% N/A

Analysis of Key Themes

1. Statutory Interpretation of "Regular Assessment"

The central legal conflict involved A.R.S. § 33-1803(A), which states that an HOA shall not "impose a regular assessment that is more than [20%] greater than the immediately preceding fiscal year's assessment" without member approval.

  • Petitioners' Argument: Brown and Stevens argued that "regular" refers to the process by which an assessment is passed (motion, second, and vote) rather than the type of assessment. They contended that since the total amount rose by 39.4%, it violated the statute.
  • Respondent's Argument: Mogollon argued that "regular assessment" is a specific category of assessment. They claimed the "special assessment" of $209 was a separate category not subject to the 20% cap.
  • Judicial Conclusion: The ALJ agreed with the Respondent, noting that if "regular" only referred to the process, the word would be rendered "trivial or void" in the statute. The ALJ found that the 14.1% increase in the "regular" portion was within the legal 20% limit.
2. Authority to Impose Special Assessments

A recurring theme was whether the HOA had the authority to issue a special assessment at all.

  • The "Trial Run" Concern: Mr. Stevens testified that the $209 assessment was perceived as a "trial run" to see if the HOA could successfully bypass statutory limits to fund projects not authorized by governing documents.
  • Contractual Basis: The Petitioners argued the Bylaws and CC&Rs only allow dues for operating expenses and approved reserve funds.
  • Judicial Conclusion: The ALJ noted that while the Petitioners questioned the HOA's authority to impose special assessments, the "single-issue" nature of the petitions limited the hearing's scope to whether the HOA violated A.R.S. § 33-1803(A).
3. Allegations of Accounting Impropriety

Both petitioners alleged that Mogollon’s treasurer engaged in deceptive accounting to justify the assessment increase.

  • Claims of Fabricated Shortfall: Mr. Brown alleged that accounting procedures were altered to show a loss of funds, despite the 2016 board leaving the treasury $200,000 better off. Mr. Stevens alleged the use of "two sets of books" to create a false need for higher dues, stating his belief that the HOA actually possessed in excess of $1 million.
  • Judicial Conclusion: The ALJ acknowledged these allegations but did not rule on the substance of the accounting practices, suggesting that civil courts might be better suited for such claims.
4. Late Fee and Interest Limits

A.R.S. § 33-1803(A) limits late payment charges to the greater of $15 or 10% of the unpaid assessment.

  • The Conflict: The HOA charged a $25 late fee. They argued that because the limit appeared in a section discussing "regular assessments," it did not apply to late fees on "special assessments."
  • Judicial Conclusion: The ALJ rejected this argument. The statute’s limit on late charges applies to "assessments" generally, not just "regular assessments." Therefore, the $25 fee was found to be a violation of the law.

Important Quotes and Context

"Courts will not place an absurd and unreasonable construction on statutes."

  • Context: Used in Conclusion of Law #4 to explain that the ALJ must interpret the term "regular assessment" in a way that makes logical sense and provides a fair result.

"Under Mogollon’s interpretation, it is necessary to add the word 'regular' where the legislature chose not to use it. This violates principles of statutory construction."

  • Context: The ALJ's reasoning in Conclusion of Law #10 regarding why the HOA could not charge a $25 late fee. The legislature omitted the word "regular" in the late fee clause, meaning it applies to all assessments.

"It is believed that the accounting was deliberately misleading and was intended to present an inaccurate picture of the HOA finances."

  • Context: A statement from Mr. Brown's original petition (Finding of Fact #18) regarding the alleged motive behind the 2018 assessment increase.

Decision Summary by Docket

Docket Number Petitioner Ruling Order
18F-H1818029-REL-RHG Warren R. Brown Dismissed Petition dismissed; Mogollon is the prevailing party.
18F-H1818054-REL Brad W. Stevens Dismissed Petition dismissed; Mogollon is the prevailing party.
18F-H1818045-REL Warren R. Brown Sustained Brown is the prevailing party. HOA must rescind the $25 late fee and pay Brown’s $500 filing fee.

Actionable Insights

  • Statutory Precision: Organizations must distinguish between "regular" and "special" assessments in their financial planning. While regular assessments are capped by a 20% annual increase under A.R.S. § 33-1803(A), special assessments may fall outside this specific cap (provided the HOA has the underlying authority to levy them).
  • Uniform Late Fee Limits: Regardless of the type of assessment (regular or special), late fees must strictly adhere to the statutory limit of $15 or 10% of the unpaid amount. Associations cannot bypass this cap by reclassifying the assessment type.
  • Burden of Proof: In administrative hearings, the petitioner bears the burden of proof by a "preponderance of the evidence." Technical arguments regarding statutory definitions require strong support from principles of statutory construction to succeed.
  • Jurisdictional Limits: The Office of Administrative Hearings may be limited to specific statutory violations. Allegations of complex financial fraud or "deceptive accounting" may require resolution in civil court rather than an administrative tribunal.

Legal Study Guide: Brown and Stevens v. Mogollon Airpark, Inc.

This study guide provides a comprehensive analysis of the consolidated administrative hearing involving Warren R. Brown, Brad W. Stevens, and Mogollon Airpark, Inc. It examines the legal interpretations of Arizona statutes regarding Homeowners Association (HOA) assessments and late fees.

I. Case Overview and Context

Administrative Context
  • Venue: Office of Administrative Hearings, Phoenix, Arizona.
  • Administrative Law Judge: Thomas Shedden.
  • Hearing Date: September 28, 2018.
  • Consolidated Matters: Three petitions (Docket Nos. 18F-H1818029-REL-RHG, 18F-H1818045-REL, and 18F-H1818054-REL) were consolidated into a single hearing because they shared common allegations regarding deceptive accounting practices and statutory violations.
Key Parties
Party Role Legal Representation
Warren R. Brown Petitioner (029 and 045 matters) Self (Pro Se)
Brad W. Stevens Petitioner (054 matter) Self (Pro Se)
Mogollon Airpark, Inc. Respondent (HOA) Gregory A. Stein, Esq. and Mark K. Sahl, Esq.

II. Central Legal Issues and Facts

Financial Assessments in Dispute

In 2018, Mogollon Airpark, Inc. implemented significant changes to its assessment structure. The previous year’s assessment was $825.

2018 Assessment Breakdown:

  • Regular Assessment Increase: $116 (a 14.1% increase).
  • Special Assessment: $209.
  • Total Increase: $325 (a 39.4% total increase).
  • New Fees: A $25 late payment fee and 18% interest on past-due accounts.
Statutory Focus: ARIZ. REV. STAT. § 33-1803(A)

The primary legal conflict centered on the interpretation of A.R.S. § 33-1803(A), which dictates:

  1. Assessment Caps: An association cannot impose a "regular assessment" more than 20% greater than the preceding fiscal year's assessment without majority member approval (unless community documents require a lower limit).
  2. Late Fee Limits: Charges for late payments are limited to the greater of $15.00 or 10% of the unpaid assessment.

III. Arguments and Interpretations

Interpretation of "Regular Assessment"
  • Petitioners' Position: Brown and Stevens argued that "regular assessment" refers to the process by which an assessment is created (regularly scheduled votes via motion and second). Therefore, the total $325 increase (39.4%) violated the 20% statutory cap.
  • Respondent's Position: Mogollon argued that "regular assessment" is a specific type of assessment distinct from a "special assessment." They maintained that since the regular portion only increased by 14.1%, they were in compliance with the law.
  • ALJ Ruling: The judge sided with Mogollon. Under principles of statutory construction, if "regular" referred only to the process, the word would be rendered "trivial or void." The judge determined the 20% cap applies specifically to the category of "regular assessments."
Interpretation of Late Fee Limits
  • Respondent's Position: Mogollon argued the $25 late fee was lawful because A.R.S. § 33-1803(A) should only apply to regular assessments.
  • ALJ Ruling: The judge sided with Petitioner Brown (045 matter). The statute limits late charges for "assessments" generally, not just "regular assessments." By using the broad term "assessments," the legislature intended the cap ($15 or 10%) to apply to all late fees. Mogollon's $25 fee was found to be in violation.
Allegations of Accounting Impropriety

Petitioners alleged that Mogollon's treasurer used "deceptive and nonstandard accounting methods," including "keeping two sets of books," to fabricate a financial shortfall. They argued this was a "plan" to justify the 39.4% increase despite the HOA allegedly having over $1 million in funds. The ALJ noted that civil courts might be better suited for such fraud allegations and did not address the substance of the accounting practices in the final decision.

IV. Short-Answer Practice Questions

  1. What was the previous year's assessment amount for Mogollon Airpark?
  • Answer: $825.
  1. According to A.R.S. § 33-1803(A), what is the maximum percentage a regular assessment can increase without a majority vote?
  • Answer: 20%.
  1. Why did the ALJ dismiss the 029 and 054 matters regarding the $325 increase?
  • Answer: Because the petitioners failed to prove that the increase in the regular assessment (which was only 14.1%) exceeded the 20% limit, and the judge ruled the cap does not apply to special assessments.
  1. In the 045 matter, why was the $25 late fee ruled unlawful?
  • Answer: A.R.S. § 33-1803(A) limits late fees for all "assessments" to the greater of $15 or 10%; Mogollon’s $25 fee exceeded these statutory limits.
  1. What is the "standard of proof" required for petitioners in this administrative hearing?
  • Answer: A preponderance of the evidence.
  1. What was the ALJ’s order regarding Mogollon’s obligation to Warren R. Brown in the 045 matter?
  • Answer: Mogollon was ordered to rescind the $25 late fee and reimburse Mr. Brown his $500 filing fee.

V. Essay Prompts for Deeper Exploration

  1. The Nuances of Statutory Construction: Analyze the ALJ's reasoning in applying different interpretations to the word "regular" versus the word "assessment" within the same statute (A.R.S. § 33-1803(A)). Why did the presence of the word "regular" in the first half of the statute exclude special assessments from the 20% cap, while the absence of that word in the second half meant late fee limits applied to all assessments?
  2. The Burden of Proof and Evidence: Discuss the role of the "preponderance of the evidence" standard in this case. Evaluate why Brad Stevens's 600+ pages of exhibits and testimony regarding the HOA's $1 million surplus were insufficient to win the 054 matter, given the ALJ's focus on matters of law over accounting disputes.
  3. Jurisdictional Limits of Administrative Hearings: The ALJ noted that civil courts might be better suited for allegations of accounting improprieties and deceptive practices. Explore the limitations of an administrative tribunal versus a civil court in resolving complex financial disputes within an HOA.

VI. Glossary of Important Terms

  • A.R.S. § 33-1803(A): The Arizona Revised Statute governing HOA assessments and late fees.
  • CC&Rs (Covenants, Conditions, and Restrictions): The governing documents that serve as a contract between the HOA and its members.
  • Community Documents: The collective term for an association’s Bylaws, CC&Rs, and other governing rules.
  • Preponderance of the Evidence: The legal standard of proof where the evidence is of "greater weight" or has the "most convincing force," inclining a fair mind to one side of the issue.
  • Prevailing Party: The party in a legal proceeding that successfully proves its case or defends against an allegation; in this case, Mogollon prevailed in 029/054, while Brown prevailed in 045.
  • Regular Assessment: An assessment levied on a recurring basis to cover the association's standard operating expenses.
  • Single-Issue Petition: A simplified petition filed with the Department of Real Estate focusing on a single alleged violation of statute or community documents.
  • Special Assessment: A specific, often one-time assessment charged to members for expenses not covered by regular assessments (e.g., paving).
  • Statutory Construction: The process by which courts interpret and apply legislation, ensuring every word is given meaning and results are sensible rather than "absurd."

HOA vs. Homeowners: Decoding the Mogollon Airpark Legal Ruling on Dues and Fees

In the high-altitude enclave of Mogollon Airpark, a legal dogfight over three hundred dollars has redefined the boundaries of HOA power in Arizona. Homeowners Warren R. Brown and Brad W. Stevens took their Association to court, challenging a sudden 39.4% spike in annual costs and aggressive late penalties.

The resulting administrative law ruling serves as a vital case study in Arizona’s planned community statutes. By examining ARIZ. REV. STAT. § 33-1803, the court clarified exactly where a Board’s authority ends and where homeowner protections—specifically the "20% cap"—begin.

The $325 Question: When is an Increase Too High?

The conflict began in 2018 when Mogollon Airpark, Inc. (the HOA) implemented a $325 increase per household. For the petitioners, this felt like a clear-cut violation of state law, which generally requires a majority vote for significant cost hikes.

To evaluate the legality of the Board’s move, the court looked at the breakdown of the $325 increase relative to the previous year’s $825 total:

  • 2017 Total Assessment: $825
  • 2018 "Regular" Portion Increase: $116 (a 14.1% increase)
  • 2018 "Special" Portion (Paving): $209
  • Total 2018 Increase: $325
  • Total Percentage Increase: 39.4%

Brown and Stevens argued that any increase exceeding 20% in a single year is a violation of § 33-1803(A). They contended that "regular" in the statute refers to the process—meaning any assessment passed through a standard board vote should be subject to the cap. Under their interpretation, the label "special" was merely a semantic trick to bypass homeowner voting rights.

The Legal Definition of "Regular": Why the HOA Won the Assessment Battle

Despite the jarring 39.4% jump, Administrative Law Judge (ALJ) Thomas Shedden dismissed the petitions regarding the dues increase. The decision hinged on the principle of "Statutory Construction"—how courts interpret the precise wording of legislation.

The ALJ determined that the term "regular" in § 33-1803(A) defines a specific type of assessment rather than the voting process used to enact it. If "regular" merely meant an assessment passed by a motion and a vote, the judge reasoned, the word would be "trivial" or "redundant" because almost all assessments are passed that way.

The court's interpretation established two critical precedents:

  1. The Cap is Narrow: The 20% limit only protects homeowners from increases in standard annual operating dues.
  2. Special Assessments are Separate: Because the legislature included "regular" in the assessment cap portion of the law but omitted it elsewhere, the court concluded that "special" assessments—such as the $209 paving fee—do not count toward the 20% threshold.

Since the $116 "regular" increase was only 14.1% of the previous year's total, the HOA stayed within the legal boundary.

The Late Fee "Gotcha": Why the Homeowners Won the Penalty Battle

While the homeowners lost the fight over dues, Petitioner Warren R. Brown secured a strategic victory regarding penalties in Docket No. 18F-H1818045-REL. The HOA had been charging a $25 late fee and 18% interest on past-due accounts, even for the contested paving assessment.

Here, the ALJ applied a symmetrical logic that worked against the HOA. The ALJ noted that while the statute specifies "regular assessments" when discussing the 20% cap, the section governing late charges refers broadly to all "assessments."

The statute limits late charges to the greater of:

  1. $15.00
  2. 10% of the unpaid assessment

The HOA argued the $25 fee was valid because it applied to a special assessment. The ALJ rejected this, refusing to "read in" the word regular where the legislature had purposely left it out. Consequently, the HOA was ordered to rescind Mr. Brown's $25 fee and—most significantly—reimburse his $500 filing fee.

Transparency and Accounting: The Allegations Beneath the Surface

The legal battle revealed deep-seated distrust within the community. Petitioner Brad W. Stevens provided 45 pages of testimony and 600 pages of exhibits, painting a picture of a Board manufacturing a financial crisis.

The allegations included:

  • The "Two Sets of Books": Claims that the treasurer used deceptive accounting to hide the fact that the 2016 board actually left the treasury $200,000 better off than when they started.
  • Hidden Reserves: Allegations that the HOA held over $1 million in reserves, making the paving assessment unnecessary.
  • The "Trial Run": Mr. Stevens testified that the paving assessment was a "trial run" to see if the Board could successfully bypass the membership to fund future unauthorized projects.

While the ALJ acknowledged these concerns, he noted that complex accounting disputes and claims of "fabricated shortfalls" are better suited for a civil court rather than an administrative tribunal.

Conclusion & Key Takeaways for Homeowners

The consolidated ruling for Mogollon Airpark highlights the technical nature of HOA law and the high bar for homeowners seeking to overturn Board decisions.

Final Case Outcomes
Case Number Petitioner Primary Issue Outcome
18F-H1818029-REL-RHG Warren R. Brown $325 Assessment Increase Dismissed (HOA Won)
18F-H1818045-REL Warren R. Brown $25 Late Fee / 18% Interest Prevailing Party (Brown Won)
18F-H1818054-REL Brad W. Stevens $325 Assessment Increase Dismissed (HOA Won)
Lessons Learned
  • For Boards: Your late fee structures must strictly adhere to the $15 or 10% limit across all assessment types. There is no statutory loophole for "special" assessment penalties.
  • For Homeowners: The 20% cap is not a total shield. If your Board classifies a portion of a hike as a "special assessment" for a specific project like paving, the statutory cap likely won't protect you.
  • For Both: Procedural accuracy is paramount. A previous version of the 029 petition was dismissed simply because the homeowner failed to cite a specific Bylaw, CC&R, or statute. In the administrative arena, specific citations are the only way to get your day in court.

Homeowners are encouraged to audit their own association's fee and penalty structures against ARIZ. REV. STAT. § 33-1803. If your late fees exceed $15 or 10%, your HOA may be operating outside the law.

Case Participants

Petitioner Side

  • Warren R. Brown (petitioner)
    Petitioner in docket Nos. 18F-H1818029-REL-RHG and 18F-H1818045-REL; appeared on his own behalf
  • Brad W. Stevens (petitioner)
    Petitioner in docket No. 18F-H1818054-REL; appeared on his own behalf

Respondent Side

  • Gregory A. Stein (respondent attorney)
    Carpenter, Hazlewood, Delgado & Bolen LLP
    Attorney for Respondent Mogollon Airpark, Inc.
  • Mark K. Sahl (respondent attorney)
    Carpenter, Hazlewood, Delgado & Bolen LLP
    Attorney for Respondent Mogollon Airpark, Inc.

Neutral Parties

  • Thomas Shedden (ALJ)
    Office of Administrative Hearings
    Administrative Law Judge presiding over the consolidated hearing
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
    Recipient of the transmitted decision
  • Felicia Del Sol (clerk)
    Office of Administrative Hearings
    Transmitted the decision

Warren R. Brown vs. Mogollon Airpark, Inc(ROOT)

Posted on by
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.

Case Summary

Case ID 18F-H1818029-REL-RHG; 18F-H1818045-REL; 18F-H1818054-REL
Agency ADRE
Tribunal OAH
Decision Date 2018-10-18
Administrative Law Judge Thomas Shedden
Outcome The ALJ found Mogollon did not violate ARS § 33-1803(A) concerning the 39.4% assessment increase (Matters 029 and 054), rejecting the Petitioners' interpretation of 'regular assessment.' However, Petitioner Brown prevailed in Matter 045, proving Mogollon violated the late charge limit of ARS § 33-1803(A) by charging a $25 late fee, resulting in a refund of his $500 filing fee and rescission of the fee.
Filing Fees Refunded $1,500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Warren R. Brown Counsel —
Respondent Mogollon Airpark, Inc. Counsel Gregory A. Stein, Esq.; Mark K. Sahl, Esq.

Alleged Violations

ARIZ. REV. STAT. section 33-1803(A)
ARIZ. REV. STAT. section 33-1803(A)
ARIZ. REV. STAT. section 33-1803(A)

Outcome Summary

The ALJ found Mogollon did not violate ARS § 33-1803(A) concerning the 39.4% assessment increase (Matters 029 and 054), rejecting the Petitioners' interpretation of 'regular assessment.' However, Petitioner Brown prevailed in Matter 045, proving Mogollon violated the late charge limit of ARS § 33-1803(A) by charging a $25 late fee, resulting in a refund of his $500 filing fee and rescission of the fee.

Why this result: The assessment increase claims (029 and 054) were lost because the ALJ determined that interpreting 'regular assessment' as referring to the procedural method (motion, second, vote) would render the word 'regular' trivial or void in the statute.

Key Issues & Findings

Late payment charges limitation (045 Matter)

Petitioner Brown (045 matter) alleged the HOA violated ARS § 33-1803(A) by charging a $25 late fee. The ALJ found that the statutory limitation on late charges applies to all 'assessments,' not just 'regular assessments,' and found the $25 late charge was in violation.

Orders: Mogollon Airpark Inc. must rescind the $25 late fee assessed against Mr. Brown; Mogollon must pay Mr. Brown his filing fee of $500.00 within thirty days.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • ARIZ. REV. STAT. section 33-1803(A)

Assessment increase greater than 20% limit (029 Matter)

Petitioner Brown (029-RHG matter) argued the 39.4% increase violated the 20% cap because 'regular assessment' refers to the procedure for instituting any assessment. The ALJ rejected this interpretation, finding it rendered the word 'regular' void in the statute.

Orders: Petition dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. section 33-1803(A)

Assessment increase greater than 20% limit (054 Matter)

Petitioner Stevens (054 matter) alleged the HOA's $325 assessment increase was unlawful under the 20% cap. The ALJ dismissed the petition, applying the same statutory interpretation as in the 029 matter, holding that Mogollon's classification of the majority of the increase as a special assessment was valid under the statute.

Orders: Petition dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. section 33-1803(A)

Video Overview

Audio Overview

Decision Documents

18F-H1818029-REL-RHG Decision – 666285.pdf

Uploaded 2026-04-24T11:10:42 (151.9 KB)

18F-H1818029-REL-RHG Decision – 672623.pdf

Uploaded 2026-04-24T11:10:45 (144.6 KB)

Briefing Document: Brown and Stevens v. Mogollon Airpark, Inc.

Executive Summary

This document synthesizes the findings and conclusions of an Administrative Law Judge (ALJ) decision concerning three consolidated petitions filed by residents Warren R. Brown and Brad W. Stevens against their homeowners’ association, Mogollon Airpark, Inc. The core of the dispute revolves around a significant 2018 assessment increase and the legality of associated late fees under Arizona statute.

The central legal question was the interpretation of ARIZ. REV. STAT. section 33-1803(A), which limits an HOA’s ability to “impose a regular assessment that is more than twenty percent greater than the immediately preceding fiscal year’s assessment.” The petitioners argued that the HOA’s total 39.4% increase violated this cap. The HOA contended the increase was comprised of a compliant “regular assessment” and a separate “special assessment” not subject to the cap.

The ALJ’s decision resulted in a split outcome:

• On the Assessment Increase: The judge ruled in favor of Mogollon Airpark, Inc. The petitions challenging the assessment increase were dismissed. The ALJ’s rationale was that statutory construction requires distinguishing between “regular” and “special” assessments, and the 20% cap applies only to the former.

• On the Late Fees: The judge ruled in favor of Petitioner Warren R. Brown. The HOA’s $25 late fee was found to be in violation of the statutory limit, which applies to “assessments” in general, not just “regular assessments.” The HOA was ordered to rescind the fee and reimburse the petitioner’s filing costs.

Underlying these specific legal challenges were broader allegations by the petitioners of deceptive accounting practices and financial mismanagement by the HOA’s treasurer, which they claimed were intended to create a false justification for the assessment increase. These allegations were noted but not adjudicated in this hearing.

I. Case Overview

The matter concerns a consolidated hearing held on September 28, 2018, at the Office of Administrative Hearings in Phoenix, Arizona. Administrative Law Judge Thomas Shedden presided over the case, which combined three separate petitions against the respondent, Mogollon Airpark, Inc.

• Petitioners: Warren R. Brown and Brad W. Stevens.

• Respondent: Mogollon Airpark, Inc.

• Docket Numbers:

◦ 18F-H1818029-REL-RHG (“029 matter”): Warren R. Brown, Petitioner

◦ 18F-H1818045-REL (“045 matter”): Warren R. Brown, Petitioner

◦ 18F-H1818054-REL (“054 matter”): Brad W. Stevens, Petitioner

II. Central Disputes and Allegations

A. The 2018 Assessment Increase (Matters 029 & 054)

The primary dispute centered on Mogollon Airpark’s 2018 assessment changes.

• Previous Assessment (2017): $825

• 2018 Increase: $325, representing a 39.4% total increase.

• HOA’s Breakdown of Increase:

◦ Regular Assessment Increase: $116 (a 14.1% increase over $825)

◦ Special Assessment: $209

• Legal Challenge: The petitioners alleged the total $325 increase violated ARIZ. REV. STAT. section 33-1803(A), which prohibits an HOA from imposing a “regular assessment that is more than [20%] greater than the immediately preceding fiscal year’s assessment” without member approval.

B. Late Fees and Interest Charges (Matter 045)

The second dispute, raised by Mr. Brown, concerned new penalties for late payments.

• New Charges: A $25 late fee and 18% interest on past-due accounts.

• Legal Challenge: Mr. Brown alleged these charges violated the same statute, which limits late fees to “the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.” He presented an invoice showing he was charged a $25 late fee and $1.57 in interest.

C. Underlying Allegations of Financial Impropriety

Although the hearing’s scope was limited, the petitions were rooted in serious allegations of financial misconduct by the HOA. These claims formed the petitioners’ motive for challenging the assessments but were not the direct subject of the ALJ’s ruling.

• Core Claim: The petitioners asserted that Mogollon’s treasurer and others used “deceptive and nonstandard accounting methods,” including keeping two sets of books, to create the appearance of a financial shortfall.

• Alleged Purpose: This “fabricated shortfall” was allegedly used to convince the Board of Directors that a 39.4% dues increase was necessary.

• Petitioners’ Financial View: Mr. Stevens testified that he believed the HOA possessed funds in excess of $1 million and therefore did not require the increased assessment.

• ALJ’s Acknowledgment: The decision noted, “Considering the nature of Messrs. Brown and Stevens’s allegations, the civil courts may be better suited than an administrative tribunal to address the issues they raise. Regardless, the substance of their allegations was not addressed in this hearing.”

III. Arguments of the Parties

The central legal conflict hinged on the interpretation of the term “regular assessment” within the statute.

Petitioners’ Position (Brown & Stevens)

Respondent’s Position (Mogollon Airpark, Inc.)

Assessment Increase

The term “regular assessment” in § 33-1803(A) describes the process by which an assessment is instituted (i.e., by motion, second, and vote). Therefore, the entire $325 increase is a single assessment subject to and in violation of the 20% statutory cap. They further argued the HOA’s governing documents provide no authority to impose “special assessments.”

“Regular assessment” and “special assessment” are distinct types of assessments and industry terms of art. The 20% cap applies only to the regular portion. The $116 regular increase (14.1%) was compliant. The existence of the term “special assessment” in another statute (§ 33-1806) proves the legislature intended this distinction.

Late Fees

The 25latefeeisaclearviolationofthestatutorylimitof”15.00 or 10%.” The statutory text for late fees applies to “assessments” generally, not just “regular assessments.”

The statutory limit on late fees applies only to regular assessments. Since the late fee was charged on a special assessment, it did not violate the statute.

IV. Administrative Law Judge’s Decision and Rationale

The ALJ applied principles of statutory construction to arrive at a split decision, finding for the respondent on the main issue of the assessment increase but for the petitioner on the secondary issue of late fees.

A. Ruling on the Assessment Increase (Matters 029 & 054)

• Conclusion: The petitions filed by Mr. Brown and Mr. Stevens were dismissed. Mogollon Airpark, Inc. was deemed the prevailing party.

• Rationale: The judge concluded that the petitioners had not shown by a preponderance of the evidence that the statute was violated. Their definition of “regular assessment” as a procedural term was found to be inconsistent with principles of statutory construction. The judge reasoned that if “regular” simply meant the standard process of passing an assessment, the word would be redundant (“trivial or void”) because all assessments must follow that process. This interpretation supports the view that the legislature intended to differentiate between types of assessments, and that the 20% cap applies only to the “regular” type.

B. Ruling on Late Fees (Matter 045)

• Conclusion: Petitioner Warren R. Brown was deemed the prevailing party.

• Rationale: The judge rejected Mogollon’s argument that late fee limits apply only to regular assessments. The statutory text states, “Charges for the late payment of assessments are limited to…” without the “regular” qualifier. The ALJ determined that adding the word “regular” where the legislature chose to omit it would violate statutory construction principles. Therefore, the $25 late fee, being greater than the allowed $15 or 10%, was illegal.

V. Final Orders

The ALJ issued the following binding orders on October 18, 2018:

• ORDER FOR DOCKET NO. 18F-H1818029-REL-RHG (Brown vs. Mogollon):

◦ The petition is dismissed.

• ORDER FOR DOCKET NO. 18F-H1818045-REL (Brown vs. Mogollon):

◦ Petitioner Warren R. Brown is deemed the prevailing party.

◦ Mogollon Airpark Inc. must rescind the $25 late fee it assessed against Mr. Brown.

◦ Mogollon Airpark Inc. must pay Mr. Brown his filing fee of $500.00 within thirty days.

• ORDER FOR DOCKET NO. 18F-H1818054-REL (Stevens vs. Mogollon):

◦ The petition is dismissed.

Study Guide: Brown and Stevens v. Mogollon Airpark, Inc.

This study guide provides a review of the consolidated administrative hearing involving petitioners Warren R. Brown and Brad W. Stevens against the respondent, Mogollon Airpark, Inc. The case centers on disputes over Homeowners Association (HOA) assessments and fees under Arizona law.

——————————————————————————–

Short-Answer Quiz

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

1. Who were the primary parties involved in this consolidated matter and what were their respective roles?

2. What specific actions did Mogollon Airpark, Inc. take in 2018 that led to the legal petitions?

3. What was the total percentage increase of the 2018 assessment, and how did Mogollon Airpark, Inc. break down this increase?

4. Explain the petitioners’ main legal argument regarding the assessment increase and which statute they claimed was violated.

5. How did Mogollon Airpark, Inc. legally defend its decision to increase the assessment by more than 20%?

6. What was the central issue in the “045 matter” filed by Warren R. Brown?

7. Upon what legal principle did the Administrative Law Judge primarily rely to reach his conclusions on both the assessment increase and the late fee?

8. Why did the judge rule in favor of Mogollon Airpark on the assessment increase but in favor of Warren R. Brown on the late fee?

9. What were the underlying allegations made by the petitioners concerning Mogollon Airpark’s financial management that were not addressed in the hearing?

10. What was the final outcome and order for each of the three consolidated petitions (029, 045, and 054)?

——————————————————————————–

Answer Key

1. The petitioners were Warren R. Brown (dockets 029 and 045) and Brad W. Stevens (docket 054), who were members of the HOA. The respondent was Mogollon Airpark, Inc., the HOA being challenged. The matter was decided by Administrative Law Judge Thomas Shedden.

2. Mogollon Airpark, Inc. raised its 2018 assessment by a total of $325. It also instituted a new $25 fee for late payments and began charging 18% interest on past-due accounts.

3. The total increase of $325 over the previous year’s assessment of $825 constituted a 39.4% increase. Mogollon classified this increase as two separate parts: a $116 (14.1%) increase to the “regular assessment” and a $209 “special assessment.”

4. The petitioners argued that the total $325 increase violated ARIZ. REV. STAT. section 33-1803(A), which prohibits an HOA from imposing a “regular assessment” that is more than 20% greater than the previous year’s assessment. They contended that the term “regular assessment” refers to the standard process of levying an assessment (motion, second, vote), not a specific type of assessment.

5. Mogollon Airpark, Inc. argued that the 20% limit in section 33-1803(A) applies only to “regular assessments” and not to “special assessments,” which it claimed is a separate term of art in the industry. Since the increase to the regular assessment was only $116 (14.1%), it was below the 20% statutory threshold and therefore legal.

6. The central issue in the “045 matter” was Warren R. Brown’s allegation that Mogollon’s $25 late fee and 18% interest charge violated section 33-1803(A). The statute limits late charges to the greater of fifteen dollars or ten percent of the unpaid assessment.

7. The judge primarily relied on principles of statutory construction. This involved giving meaning to every word in the statute and not reading words into a provision where the legislature omitted them, which led to different interpretations of the statute’s clauses on assessments versus late fees.

8. The judge ruled against the petitioners on the assessment because their interpretation would make the word “regular” in the statute redundant. However, he ruled for Brown on the late fee because the statutory text limits charges on “assessments” in general, not just “regular assessments,” and to rule otherwise would require adding a word the legislature did not include.

9. The petitioners alleged that Mogollon’s treasurer engaged in deceptive and nonstandard accounting practices, including keeping two sets of books, to create a “fabricated shortfall.” They claimed this was done to falsely justify the need for the assessment increase, as the HOA actually had over $1 million in funds.

10. The petitions in the 029 matter (Brown) and 054 matter (Stevens) concerning the assessment increase were both dismissed. The petition in the 045 matter (Brown) concerning the late fee was successful; Mogollon was ordered to rescind the $25 fee and reimburse Brown’s $500 filing fee.

——————————————————————————–

Essay Questions

Instructions: Consider the following questions for a more in-depth analysis of the case. Formulate a comprehensive response based solely on the information in the provided legal decision.

1. Analyze the role of statutory construction in the Administrative Law Judge’s decision. How did the interpretation of the specific word “regular” and the general term “assessments” shape the final, divergent outcomes for the consolidated petitions?

2. Discuss the petitioners’ underlying allegations of deceptive accounting practices. Although not the central issue of the hearing, how did these claims frame the dispute, and why did the judge note that civil courts might be better suited to address them?

3. Compare and contrast the legal arguments presented by the petitioners and the respondent regarding the interpretation of ARIZ. REV. STAT. section 33-1803(A). Evaluate the strengths and weaknesses of each side’s position as described in the decision.

4. Trace the procedural history of the “029 matter,” from its initial filing and dismissal to the rehearing. What does this progression reveal about the procedural requirements for filing a successful petition with the Office of Administrative Hearings?

5. Evaluate the outcome of the consolidated hearing. Why was one petitioner successful on one claim while both were unsuccessful on another, despite the claims originating from the same set of actions by the HOA?

——————————————————————————–

Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official, in this case Thomas Shedden, who presides over hearings at the Office of Administrative Hearings and issues decisions and orders.

ARIZ. REV. STAT. section 33-1803(A)

The specific Arizona statute at the center of the dispute. It limits HOA “regular assessment” increases to 20% over the prior year and caps late payment charges at the greater of $15 or 10% of the unpaid assessment.

Assessment

A fee imposed by an HOA on its members. The case distinguishes between a “regular assessment” (a recurring charge) and a “special assessment” (a one-time charge for a specific purpose).

Burden of Proof

The obligation of the petitioners, Messrs. Brown and Stevens, to prove their allegations against the respondent.

Consolidated Matter

The joining of multiple, separate legal petitions (in this case, 029, 045, and 054) into a single hearing because they involved the same parties and related issues.

Petitioner

A party who files a petition initiating a legal action. In this matter, Warren R. Brown and Brad W. Stevens were the petitioners.

Preponderance of the Evidence

The standard of proof required in this administrative hearing. It is defined as evidence with the most convincing force that inclines an impartial mind to one side of an issue over the other.

Respondent

The party against whom a petition is filed. In this matter, Mogollon Airpark, Inc. was the respondent.

Single-Issue Petition

A petition filed with the Department of Real Estate that is limited to a single allegation, which in the case of Mr. Stevens’s 054 matter required a $500 filing fee.

Statutory Construction

The legal process of interpreting and applying legislation. The judge used principles of statutory construction to determine the meaning of “regular assessment” and “assessments” in the relevant statute.

How One Word Created an HOA Loophole for a 40% Fee Hike—And How Another Word Gave a Homeowner a Key Victory

1.0 Introduction: The Dreaded HOA Letter

It’s the letter every homeowner dreads opening. A crisp envelope from the Homeowners Association lands in your mailbox, and inside is a notice that your mandatory fees are about to skyrocket. For a group of homeowners in Arizona’s Mogollon Airpark, this scenario became a reality when their HOA announced a staggering 39.4% increase in their annual assessments.

What followed was a legal battle that provides a fascinating and cautionary tale for every homeowner living under an HOA. The dispute, which pitted homeowners Warren Brown and Brad Stevens against Mogollon Airpark, Inc., didn’t hinge on fairness or financial need, but on the legal interpretation of a single word. This article distills the surprising and counter-intuitive lessons learned from their fight, revealing loopholes and legal technicalities that can make all the difference.

2.0 A 40% Fee Hike Can Be Legal Thanks to the “Special Assessment” Loophole

The core of the dispute was the massive fee hike. Mogollon Airpark, Inc. raised its 2018 assessment by $325 from the previous year’s $825—a 39.4% increase. This seemed to be a clear violation of Arizona law (ARIZ. REV. STAT. section 33-1803(A)), which explicitly prohibits an HOA from increasing a “regular assessment” by more than 20% in one year without a majority vote from members.

The HOA, however, employed a clever strategy. It split the $325 increase into two distinct parts:

• A $116 “regular assessment” increase, which amounted to a legal 14.1% hike.

• A separate $209 “special assessment.”

The HOA argued that the 20% statutory cap only applied to the “regular” portion of the increase, making their move perfectly legal.

The homeowners countered that this was a deceptive maneuver. They argued that the term “regular assessment” in the law refers to the process of creating an assessment (a motion, a second, and a vote), not a specific type of assessment. From their perspective, the entire 39.4% increase was a single action and was therefore illegal.

In a surprising ruling, the Administrative Law Judge sided with the HOA. The judge reasoned that if the homeowners’ interpretation was correct and all assessments followed the same “regular” process, then the word “regular” in the statute would be rendered “trivial or void.” By giving meaning to that single word, the judge affirmed that “regular assessments” and “special assessments” are different categories, and the 20% cap only applies to the former. This interpretation effectively creates a significant loophole for HOAs to bypass statutory limits and implement large fee increases.

3.0 The Devil Is in the Details: “Regular Assessment” vs. “Assessments”

While the HOA won the main argument over the 39.4% increase, they lost on a smaller but crucial point: late fees. Along with the assessment hike, the HOA instituted a new $25 late fee for overdue payments.

Homeowner Warren Brown challenged this fee, pointing to the same state law. He argued that the statute limits late fees to “the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.” Since the new $25 fee exceeded this limit, it was a direct violation.

Emboldened by their victory on the assessment increase, the HOA extended its logic, arguing that since the late fee was applied to a special assessment, the statutory limit—which they claimed was intended for regular assessments—did not apply.

This time, the judge decisively ruled in favor of the homeowner. The judge highlighted a critical distinction in the law’s wording. The part of the statute limiting assessment increases uses the specific term “regular assessment.” However, the part of the law limiting late charges uses the broader, more general term “assessments.” The omission of the word “regular” was the key.

The judge’s reasoning was a masterclass in statutory construction:

This argument fails because the statute’s limit on late charges applies to “assessments,” not “regular assessments.” Under Mogollon’s interpretation, it is necessary to add the word “regular” where the legislature chose not to use it. This violates principles of statutory construction.

This outcome underscores the immense importance of precise legal language. The legislature’s choice to omit a single word in one clause of a law gave the homeowner a clear victory and held the HOA accountable.

4.0 Serious Allegations Don’t Guarantee a Day in Court

Underlying the homeowners’ legal challenge were serious allegations of financial misconduct. Mr. Brown and Mr. Stevens claimed the HOA treasurer used “deceptive and nonstandard accounting methods,” kept “two sets of books,” and created a “fabricated shortfall” to justify the assessment increase and “convince the Board that a 39.4% increase in dues was required.”

Surprisingly, none of these explosive allegations were addressed during the hearing. The reason for this is a crucial lesson in legal strategy. The homeowners had filed “single-issue petitions,” which legally limited the scope of the administrative hearing to one narrow question: did the HOA violate the specific statute governing assessment increases (ARIZ. REV. STAT. section 33-1803(A))? All other matters, including the allegations of accounting improprieties, were outside the hearing’s jurisdiction.

The judge explicitly noted this limitation in a footnote to the decision:

Considering the nature of Messrs. Brown and Stevens’s allegations, the civil courts may be better suited than an administrative tribunal to address the issues they raise. Regardless, the substance of their allegations was not addressed in this hearing.

This case is a powerful reminder that in law, the structure of your argument can be more important than the weight of your accusations. By filing a narrow petition, the homeowners guaranteed a hearing on that one issue but forfeited the chance to have their broader, more serious claims heard in that venue.

5.0 A Partial Victory Is Still a Victory

The final outcome of the consolidated case was decidedly mixed. The homeowners lost their primary challenge, and the court upheld the HOA’s $325 assessment increase.

However, Mr. Brown was officially deemed the “prevailing party” in his case regarding the illegal late fees. This was not just a moral victory; it came with a direct order from the judge. Mogollon Airpark Inc. was ordered to:

• Rescind the $25 late fee it assessed against Mr. Brown.

• Pay Mr. Brown back his $500 filing fee for the case.

While it wasn’t the total win they had hoped for, this outcome demonstrates that a single, well-prepared homeowner can successfully hold their HOA accountable for breaking the law, even on smaller matters. It proves that knowing the rules and persevering can lead to tangible results, forcing an association to correct its illegal actions and compensating the homeowner for the cost of the fight.

6.0 Conclusion: Know the Law, Word by Word

The case of Brown and Stevens vs. Mogollon Airpark is a potent lesson in how legal battles are won and lost in the margins. A single word—”regular”—opened a loophole for the HOA to impose a nearly 40% fee hike, while the deliberate absence of that same word in a later clause empowered a homeowner to strike back and win.

This case serves as a powerful reminder that when it comes to the laws governing your community, every word matters. It poses a vital question for all homeowners: are the protections you count on in state law as ironclad as you think, or could they evaporate based on the interpretation of a single adjective?

Case Participants

Petitioner Side

  • Warren R. Brown (petitioner)
    Appeared on his own behalf
  • Brad W. Stevens (petitioner)
    Appeared on his own behalf; presented testimony

Respondent Side

  • Gregory A. Stein (attorney)
    CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
    Counsel for Respondent Mogollon Airpark, Inc.
  • Mark K. Sahl (attorney)
    CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
    Counsel for Respondent Mogollon Airpark, Inc.

Neutral Parties

  • Thomas Shedden (ALJ)
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
  • Felicia Del Sol (clerk)
    Transmitted the decision

Brent J Mathews v. American Ranch Community Association

Posted on by

Case Summary

Case ID 18F-H1818050-REL
Agency ADRE
Tribunal OAH
Decision Date 2018-10-11
Administrative Law Judge Tammy L. Eigenheer
Outcome The Administrative Law Judge dismissed the Petition because the Petitioner failed to prove the Respondent Board violated the Bylaws. The Board was found to have the necessary authority under Bylaws Section 3.11 to enter into the Well Agreement 2 as a variance, and this action did not constitute an improper amendment of the CC&Rs.
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Brent J. Mathews Counsel —
Respondent American Ranch Community Association Counsel Lynn Krupnik and Timothy Krupnik

Alleged Violations

American Ranch Bylaws, Article 3.11

Outcome Summary

The Administrative Law Judge dismissed the Petition because the Petitioner failed to prove the Respondent Board violated the Bylaws. The Board was found to have the necessary authority under Bylaws Section 3.11 to enter into the Well Agreement 2 as a variance, and this action did not constitute an improper amendment of the CC&Rs.

Why this result: The Board was authorized to grant a variance to the CC&Rs regarding the well on Lot 2, a power delegated to the Association, meaning the Board did not exceed its authority under the Bylaws.

Key Issues & Findings

Alleged violation of the American Ranch Bylaws, Article 3.11, when the Board entered into the 'Well Agreement' (Well Agreement 2).

Petitioner asserted that the Board violated the Bylaws by entering into Well Agreement 2, claiming the Board lacked the authority to grant exceptions or variances to the CC&Rs regarding the use of a private water well on Lot 2. The Board agreed the well existed in violation of CC&Rs Section 3.26, but argued Well Agreement 2 constituted a variance, not an amendment.

Orders: The Petition was dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 41-2198.01
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09

Analytics Highlights

Topics: HOA authority, Bylaws 3.11, CC&Rs, Variance, Amendment, Well Agreement, Burden of Proof, Dismissal
Additional Citations:

  • A.R.S. § 41-2198.01
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09

Video Overview

Audio Overview

Decision Documents

18F-H1818050-REL Decision – 664186.pdf

Uploaded 2026-04-24T11:13:46 (112.4 KB)

Briefing Document: Mathews v. American Ranch Community Association

Executive Summary

This briefing document outlines the findings and decision in case number 18F-H1818050-REL, a dispute between Petitioner Brent J. Mathews and the American Ranch Community Association (HOA). The Administrative Law Judge dismissed the petition, concluding that Mr. Mathews failed to prove his allegations by a preponderance of the evidence.

The central issue was whether the HOA’s Board of Directors violated Article 3.11 of its Bylaws by entering into a “Well Agreement” with the owners of Lot 2 on August 9, 2016. The Petitioner argued that this agreement constituted an unauthorized amendment to the community’s Covenants, Conditions, and Restrictions (CC&Rs) because the Board does not have the power to grant exceptions.

The judge found this argument “faulty,” determining that the agreement was not an amendment but a variance. The CC&Rs explicitly grant the authority to issue variances to the Architectural Review Committee. Per the Bylaws, the Board is empowered to exercise any authority delegated to the Association that is not specifically reserved for the general membership. Therefore, the judge concluded that the Board acted within its authority when it executed the agreement. The decision was based on the Board’s need to resolve a problematic prior agreement under time-sensitive circumstances related to a property sale.

1. Case Overview

Case Number

18F-H1818050-REL

Petitioner

Brent J. Mathews

Respondent

American Ranch Community Association

Hearing Date

September 21, 2018

Decision Date

October 11, 2018

Presiding Judge

Administrative Law Judge Tammy L. Eigenheer

The dispute originated from a petition filed by Brent J. Mathews on May 16, 2018, with the Arizona Department of Real Estate. The core of the complaint was an alleged Open Meeting Violation concerning an “Action Outside of Meeting” that resulted in a “Well Agreement” between the Association and homeowners Mark and Diane Kaplan.

2. Petitioner’s Core Allegation

After being directed to clarify his petition to a single issue, Mr. Mathews submitted the following statement on August 23, 2018:

“When the Board entered into the ‘Well Agreement’ they may have assumed they had the power to grant exceptions to the CC&R’s. The American Ranch Community Association Bylaws do not empower the Board to grant exceptions to the CC&R’s. Therefore the single complaint is an alleged violation of the American Ranch Bylaws, Article 3.11.”

The Petitioner’s legal argument was that the Board’s action in creating the “Well Agreement 2” was effectively an amendment of the CC&Rs. According to Section 9.3.1 of the CC&Rs, amendments require the written approval or affirmative vote of 75 percent of the total owners. Since this did not occur, the Petitioner concluded the Board lacked the authority to enter into the agreement.

3. Factual Background and Chronology of Events

The case revolves around a water well on Lot 2 of the American Ranch community, which was installed in violation of the governing documents.

A water well is installed on Lot 2. This installation violates Section 3.26 of the CC&Rs, which prohibits wells on all lots except Equestrian Lots and, even then, only with prior approval from the Architectural Review Committee (ARC) for specific purposes.

June 2011

The owners of Lot 2 and the HOA Board enter into the first “Well and Easement Agreement” (Well Agreement 1). This agreement permitted the continued use of the well for irrigation but required the owners to install a water meter and pay the HOA for water usage at the same rate as the local water district.

November 23, 2013

Lot 2 is sold to Steven and Frances Galliano.

July 30, 2016

Mark and Diane Kaplan, who are in escrow to purchase Lot 2, email the Community Manager, Tiffany Taylor. They express concern over Well Agreement 1 and state they cannot proceed with the purchase without clarity on the HOA’s position. They also note that the Gallianos told them they had never been charged for water from the well.

August 2016

Facing a time-sensitive situation due to the pending property sale, the HOA Board decides to enter into a new agreement to invalidate Well Agreement 1. The Board’s decision was based in part on the belief that it lacked the authority to enter into the original agreement, specifically because it had no power to bill residents for water usage—a function of the water district.

August 9, 2016

The HOA Board and the Kaplans execute a new “Well Agreement” (Well Agreement 2). This agreement permits the continued use of the well for irrigation purposes but explicitly states the owners will not be billed for the water used.

4. Administrative Law Judge’s Findings and Legal Reasoning

The Judge’s decision rested on a critical distinction between a CC&R amendment and a variance, and a detailed analysis of the powers granted to the Board by the governing documents.

A. Burden of Proof

The Petitioner, Brent J. Mathews, bore the burden of proof to establish that the HOA committed the alleged violation by a “preponderance of the evidence.” This standard requires proof that a contention is more probably true than not.

B. Variance vs. Amendment

The central point of the Judge’s legal conclusion was the rejection of the Petitioner’s argument.

• Petitioner’s Argument: Well Agreement 2 was an amendment to the CC&Rs.

• Judge’s Finding: The argument is “faulty.” The decision states, “A variance granted to an individual owner from a restriction under the CC&Rs does not constitute an amendment of the CC&Rs.”

The Judge found that the CC&Rs themselves, in Section 3.31, provide a specific mechanism for granting variances. The ARC is authorized to grant variances in “extenuating circumstances” if a restriction creates an “unreasonable hardship or burden” and the variance does not have a “substantial adverse effect” on the community.

C. The Board’s Delegated Authority

The Judge established a clear chain of authority that empowered the Board to act as it did:

1. CC&R Section 3.31: Delegates the power to grant variances to the Architectural Review Committee.

2. Bylaw Section 3.11.8: States the Board shall have the power to “Exercise for the Association all powers, duties and authority vested in or delegated to the Association and not reserved to the membership by other provisions of the Project Documents.”

3. Conclusion: Because the power to grant variances was delegated to the ARC (and thus to the Association) and not reserved for the membership, the Board had the authority to grant the variance embodied in Well Agreement 2.

5. Final Order

Based on the foregoing analysis, the Administrative Law Judge issued the following order:

• Decision: The Petition filed by Brent J. Mathews is dismissed.

• Reasoning: “Petitioner failed to establish by a preponderance of the evidence that the Board of Directors lacked the authority to enter into Well Agreement 2. Thus, Petitioner failed to sustain his burden to establish a violation of Section 3.11 of the Bylaws.”

The order was finalized and transmitted to the parties on October 11, 2018.

Study Guide: Mathews v. American Ranch Community Association (Case No. 18F-H1818050-REL)

This guide provides a comprehensive review of the Administrative Law Judge Decision in the case between Petitioner Brent J. Mathews and Respondent American Ranch Community Association. It is designed to test and deepen understanding of the facts, legal arguments, and final ruling presented in the source document.

——————————————————————————–

Short-Answer Quiz

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

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

2. What was the initial, overarching subject of Brent J. Mathews’s complaint filed on May 16, 2018?

3. After being asked to clarify, what single issue did the Petitioner choose to proceed with for the hearing?

4. According to the CC&Rs, what are the specific rules regarding the use of water wells on lots within American Ranch?

5. What were the key terms of “Well Agreement 1,” established in June 2011 with the original owners of Lot 2?

6. Why did the American Ranch Board of Directors believe they lacked the authority to enforce “Well Agreement 1”?

7. What were the terms of “Well Agreement 2,” which was executed on August 9, 2016, with the new owners of Lot 2, the Kaplans?

8. What was Petitioner Mathews’s primary legal argument against the Board’s authority to enter into “Well Agreement 2”?

9. How did the Administrative Law Judge distinguish between a “variance” and an “amendment” to the CC&Rs in the final decision?

10. What was the final order issued by the Administrative Law Judge on October 11, 2018?

——————————————————————————–

Answer Key

1. The primary parties were Petitioner Brent J. Mathews, who filed the complaint, and Respondent American Ranch Community Association (HOA), which was the subject of the complaint. Mathews represented himself, while the Association was represented by Lynn Krupnik and Timothy Krupnik.

2. The initial complaint’s subject was an “Open Meeting Violation regarding an ‘Action Outside of Meeting’” that took place on August 6, 2016. This action concerned the Association entering into a “Well Agreement” with Mark and Diane Kaplan.

3. The Petitioner clarified his single issue was an alleged violation of the American Ranch Bylaws, Article 3.11. He argued that the Board entered into the “Well Agreement” assuming they had the power to grant exceptions to the CC&Rs, a power he claimed the Bylaws did not grant them.

4. Section 3.26 of the CC&Rs prohibits water wells on all lots except Equestrian Lots. On Equestrian Lots, wells are permitted only with prior written approval from the Architectural Review Committee and must be used solely to irrigate pasture land and provide drinking water for horses.

5. “Well Agreement 1” acknowledged that the owners of Lot 2 were using their well for irrigation in violation of the CC&Rs. The agreement allowed them to continue this use, provided they installed a water meter and paid the Association the same per-gallon charge as other owners paid to the water district.

6. The Board of Directors believed they did not have the authority to enter into “Well Agreement 1” because they had no ability or authority to bill the lot owners for water used from a private well. They reasoned that billing for water was the responsibility of the water district, not the HOA.

7. “Well Agreement 2” stated that the private water well on Lot 2 would continue to be used for irrigation purposes. Crucially, it specified that the owners (the Kaplans) would not be billed for the water used from this well.

8. Petitioner Mathews argued that “Well Agreement 2” constituted an amendment of the CC&Rs. He contended that under Section 9.3.1 of the CC&Rs, an amendment requires the written approval or affirmative vote of 75 percent of the total owners, and therefore the Board acted outside its authority.

9. The Judge ruled that “Well Agreement 2” was a variance granted to an individual owner, not an amendment to the CC&Rs. The CC&Rs specifically provide a method for granting variances via the Architectural Review Committee, and this power is delegated to the Association and thus exercisable by the Board.

10. The final order, issued on October 11, 2018, was that the Petition be dismissed. The Judge concluded that the Petitioner failed to establish by a preponderance of the evidence that the Board of Directors lacked the authority to enter into “Well Agreement 2.”

——————————————————————————–

Essay Questions

Instructions: The following questions are designed for a more in-depth, essay-style response. Use the case document to construct a thorough and well-supported argument for each prompt. Answers are not provided.

1. Analyze the evolution of the dispute, from the initial installation of the well on Lot 2 to the final Administrative Law Judge Decision. Discuss the key events and agreements (Well Agreement 1 and Well Agreement 2) and explain how each contributed to the legal conflict.

2. Explain the legal reasoning used by the Administrative Law Judge to dismiss the Petitioner’s claim. Detail the specific sections of the Bylaws and CC&Rs cited (3.11, 3.26, 3.31, 9.3.1) and explain the distinction the Judge made between a “variance” and an “amendment.”

3. Discuss the concept of “burden of proof” as it applies to this case. Who held the burden of proof, what was the required standard (“preponderance of the evidence”), and why did the Petitioner ultimately fail to meet this standard?

4. Evaluate the actions of the American Ranch Community Association Board of Directors regarding Lot 2’s well. Discuss their reasoning for invalidating Well Agreement 1 and creating Well Agreement 2, and analyze whether their actions were consistent with the powers granted to them by the community’s governing documents.

5. Based on the procedural history outlined in the “Findings of Fact,” describe the process of an HOA dispute in this jurisdiction, from the initial filing of a petition to the final order from the Office of Administrative Hearings.

——————————————————————————–

Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official (Tammy L. Eigenheer) who presides over administrative hearings and issues a decision on the matter.

A.R.S. (Arizona Revised Statutes)

The statutory laws of the state of Arizona, sections of which regulate planned communities and the administrative hearing process.

Architectural Review Committee

A body within the Association delegated the authority by the CC&Rs (Section 3.31) to grant variances from certain restrictions in extenuating circumstances.

Board of Directors

The governing body of the American Ranch Community Association, which has the powers and duties necessary for administering the Association’s affairs.

Burden of Proof

The obligation of a party in a legal case to prove their claims. In this case, the Petitioner had the burden to establish the alleged violations.

Bylaws

The rules governing the internal administration of the Association. Petitioner alleged a violation of Bylaw 3.11, which outlines the powers and duties of the Board.

Covenants, Conditions, and Restrictions. These are the governing documents that set rules for properties within the community, such as the prohibition of certain water wells (Section 3.26).

Department

Refers to the Arizona Department of Real Estate, the agency with which the initial Homeowners Association Dispute Process Petition was filed.

Office of Administrative Hearings

An independent state agency to which the Department refers HOA dispute cases for a formal hearing.

Petition

The formal document filed by Brent J. Mathews to initiate the HOA dispute process with the Arizona Department of Real Estate.

Petitioner

The party who brings the legal action or complaint. In this case, Brent J. Mathews.

Preponderance of the Evidence

The standard of proof required in this hearing. 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 the petition is filed. In this case, the American Ranch Community Association.

Variance

An officially granted exception from a restriction in the CC&Rs for an individual owner. The Judge determined Well Agreement 2 was a variance, not an amendment.

Well Agreement 1

A June 2011 agreement that allowed the owners of Lot 2 to use a non-compliant well for irrigation, provided they paid the Association for the water.

Well Agreement 2

An August 2016 agreement that invalidated Well Agreement 1 and allowed the new owners of Lot 2 (the Kaplans) to continue using the well for irrigation without being billed for the water.

Your HOA Board Might Be More Powerful Than You Think: 3 Lessons from a Legal Showdown

1.0 Introduction: The Predictable Fight with an Unpredictable Outcome

It’s a scenario familiar to many homeowners: you suspect your Homeowners Association (HOA) board is playing favorites, bending the rules for one resident while holding everyone else to the letter of the law. This feeling of frustration often leads to heated disputes, but what happens when a homeowner decides to take that fight to court? You might expect a simple verdict based on the community’s clear, written rules.

That’s exactly what homeowner Brent J. Mathews thought. He discovered his HOA board had made a special agreement with a neighbor, allowing a water well that clearly violated the community’s governing documents. He filed a formal complaint, arguing the board had illegally overstepped its authority.

The case that followed, however, didn’t turn on one obvious rule. Instead, the judge’s decision hinged on how different governing documents—the CC&Rs and the Bylaws—interact. The outcome reveals some surprising and counter-intuitive truths about where power really lies within an HOA, offering critical lessons for every homeowner.

2.0 Takeaway 1: A Special Exception Isn’t the Same as Changing the Rules for Everyone

Mr. Mathews’ central argument was straightforward and, on its face, perfectly logical. He contended that the board’s “Well Agreement 2” with his neighbor was effectively an amendment to the community’s Covenants, Conditions, and Restrictions (CC&Rs).

According to the community’s CC&Rs (Section 9.3.1), amending the rules is a serious undertaking that requires the written approval of 75 percent of all homeowners. The board clearly did not have this approval, so it seemed to be a clear-cut case of an illegal action. Many homeowners would have made the same reasonable assumption: the board can’t just change the rules on its own.

However, the judge found a critical distinction. The board’s action was not an “amendment”—a permanent change to the rules for the entire community. Instead, it was legally considered a “variance”—a one-time exception granted to a single homeowner. Because the CC&Rs contained a separate, specific process for granting variances (Section 3.31), the board was not illegally rewriting the rulebook; it was simply using a different, pre-existing tool in the governing documents.

3.0 Takeaway 2: The Board Can Wield Powers Given to Its Own Committees

This distinction raised another logical objection. The CC&Rs (Section 3.31) explicitly state that the power to grant variances belongs to the “Architectural Review Committee” (ARC), not the Board of Directors. It appeared Mr. Mathews had found his checkmate: even if the action was a variance, the wrong body had granted it.

This is where the case took its most surprising turn. The judge looked beyond the CC&Rs and consulted a different governing document: the Bylaws. This document contained a foundational clause about the board’s authority that proved decisive.

According to Bylaw 3.11.8, the Board of Directors is empowered to exercise any authority of the Association that is not specifically and exclusively reserved for the members themselves. Since the power to grant variances was delegated to a committee (the ARC) and not reserved for a vote by the general membership, the Board had the authority to step in and exercise that power itself. The judge’s decision made this clear.

“As the power to grant variances was delegated to the Architectural Review Committee and was not reserved to the membership, the Board had the authority to grant such a variance.”

This finding reveals a crucial principle of HOA governance: powers delegated to a committee are not the same as powers reserved for the entire membership. Unless a power is explicitly reserved for a member vote, the Bylaws can grant the Board ultimate authority over it.

4.0 Takeaway 3: A Messy History Can Justify an Unusual Solution

While the legal arguments are complex, the context behind the board’s decision is equally important. The board wasn’t making a special deal out of the blue; it was trying to solve a messy problem it had inherited.

The well on Lot 2 was originally installed around 2007 in violation of Section 3.26 of the CC&Rs. The board’s first attempt to fix this, “Well Agreement 1” in or about June 2011, allowed the well’s use but required the owner to pay the association for the water consumed. This arrangement, however, was deeply flawed.

When new buyers (the Kaplans) were in escrow to purchase the property in 2016, the situation came to a head. The Kaplans discovered the unusual agreement and informed the board they would be “unable to proceed with the purchase” unless its status was clarified. With the real estate deal on the line, the board recognized that “time was of the essence.”

The board’s decision to execute “Well Agreement 2” was driven by two realities. First, they believed the original agreement was legally invalid, as the board had no authority to bill a resident for water. Second, the agreement was a failure in practice; the Kaplans had been told by the prior owners that “they had never been charged for the water used from the well.” Facing an unenforceable and un-enforced agreement that was now threatening a home sale, the board acted pragmatically to resolve the decade-old violation once and for all.

5.0 Conclusion: Know the Rules—And Who Has the Power to Bend Them

The core lesson from this case is that HOA governance is a complex web of interlocking documents. The rules you read in the CC&Rs might not tell the whole story. Power and authority can be defined, and even transferred, by provisions buried in the Bylaws or other governing texts. What may seem like an obvious violation can be justified by a clause a homeowner might easily overlook.

This case is a powerful reminder for every homeowner. It’s not enough to know the rules of your community. You also need to understand the system of governance that enforces, interprets, and sometimes, grants exceptions to them. It prompts a critical question: Do you know not just the rules in your community, but who really has the authority to grant exceptions?

Case Participants

Petitioner Side

  • Brent J. Mathews (petitioner)
    Appeared on his own behalf

Respondent Side

  • Lynn Krupnik (attorney)
    Krupnik & Speas, PLLC
    Represented Respondent
  • Timothy Krupnik (attorney)
    Krupnik & Speas, PLLC
    Represented Respondent
  • Tiffany Taylor (community manager)
    American Ranch Community Association
    Testified for Respondent
  • Brad Baker (board member)
    American Ranch Community Association
    Respondent Vice President; testified at hearing

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
    OAH
  • Judy Lowe (commissioner)
    Arizona Department of Real Estate
  • Felicia Del Sol (administrative staff)
    Signed transmission page
  • LDettorre (ADRE staff)
    Arizona Department of Real Estate
    Decision recipient
  • AHansen (ADRE staff)
    Arizona Department of Real Estate
    Decision recipient
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Decision recipient
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
    Decision recipient
  • ncano (ADRE staff)
    Arizona Department of Real Estate
    Decision recipient

Other Participants

  • Mark Kaplan (owner)
    Lot 2
    Executed Well Agreement 2
  • Diane Kaplan (owner)
    Lot 2
    Executed Well Agreement 2
  • Steven Galliano (former owner)
    Lot 2
  • Frances Galliano (former owner)
    Lot 2

Michelle Ruffo vs. Reflections in the Catalinas Condo Association

Posted on by

Case Summary

Case ID 18F-H1818044-REL
Agency ADRE
Tribunal OAH
Decision Date 2018-10-03
Administrative Law Judge Diane Mihalsky
Outcome The Administrative Law Judge denied the petition, concluding that the Petitioner failed to prove the HOA violated the governing documents or relevant statutes in assessing fines for unauthorized parking.
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Michelle Ruffo Counsel —
Respondent Reflections in the Catalinas Condo Association Counsel Nathan Tennyson

Alleged Violations

A.R.S. §§ 33-1242, 33-1248, 33-1803(A), 33-1803(B), 33-1805; CC&Rs §§ 1.36, 1.38, 4.7, 2.8.3

Outcome Summary

The Administrative Law Judge denied the petition, concluding that the Petitioner failed to prove the HOA violated the governing documents or relevant statutes in assessing fines for unauthorized parking.

Why this result: Petitioner continually violated CC&R § 4.7 and failed to prove Respondent violated any CC&R or statute, particularly as A.R.S. § 33-1242 did not apply to disputes concerning the use of limited common elements.

Key Issues & Findings

HOA violation of CC&Rs and Statutes by imposing parking fines

Petitioner challenged the HOA's decision to assess continuous fines against her account totaling $2,544.00 for repeatedly parking in spaces that were not assigned to her unit 52, arguing the fines and enforcement lacked proper statutory process and violated CC&Rs. The ALJ found that Petitioner failed to meet her burden of proof and that the statute cited (A.R.S. § 33-1242) concerning property condition notices did not apply to this dispute regarding limited common elements (parking spaces).

Orders: Petitioner Michelle Ruffo’s petition against Respondent Reflections in the Catalinas Condo Association is denied.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 33-1242
  • A.R.S. § 33-1803
  • CC&R § 4.7
  • CC&R § 2.8.3

Analytics Highlights

Topics: parking violation, fines, HOA enforcement, limited common elements, due process, Arizona Department of Real Estate
Additional Citations:

  • A.R.S. § 32-2199
  • A.R.S. § 33-1242
  • A.R.S. § 33-1248
  • A.R.S. § 33-1803
  • A.R.S. § 33-1805
  • A.R.S. § 12-349
  • CC&R § 4.7
  • CC&R § 2.8.3

Video Overview

Audio Overview

Decision Documents

18F-H1818044-REL Decision – 663567.pdf

Uploaded 2026-04-24T11:12:35 (270.9 KB)

Briefing Document: Ruffo v. Reflections in the Catalinas Condo Association

Executive Summary

This document provides a comprehensive analysis of the Administrative Law Judge (ALJ) Decision in case number 18F-H1818044-REL, involving Petitioner Michelle Ruffo and Respondent Reflections in the Catalinas Condo Association. The core of the dispute centers on a series of fines levied by the Association against Ms. Ruffo for repeatedly parking in condominium parking spaces not assigned to her unit.

The Petitioner argued that she had informal written permission from other residents to use their spaces, that the Association’s notices of violation were procedurally flawed, that she was the victim of retaliatory harassment, and that her own assigned space was frequently occupied by others. The Respondent maintained that its actions were in strict accordance with the community’s Covenants, Conditions, and Restrictions (CC&Rs), which unambiguously require owners to use only their assigned parking spaces and outline a formal process for reallocating them, a process the Petitioner did not follow.

The ALJ ultimately denied the petition, finding that Ms. Ruffo failed to meet her burden of proof. The decision concluded that the Association acted within its rights, that its enforcement actions were consistent with its governing documents, and that the Petitioner’s reliance on informal agreements represented the very “evils that the CC&Rs were designed to prevent.” As of the hearing date, the outstanding balance of fines, interest, and fees on the Petitioner’s account totaled $2,544.00.

Case Background

Parties Involved

Name / Entity

Representation / Key Details

Petitioner

Michelle Ruffo

Owner of unit 52, assigned parking space #131. Appeared on her own behalf.

Respondent

Reflections in the Catalinas Condo Assoc.

The condominium unit owners’ association. Represented by Nathan Tennyson, Esq. of Brown Olcott, PLLC.

Adjudicator

Diane Mihalsky

Administrative Law Judge, Office of Administrative Hearings.

Witnesses

Carol Lundberg

Testified for the Petitioner.

Vanessa Chapman Lubinsky & Gabino Trejo

Former and current property managers, respectively, who testified for the Respondent.

Core Dispute

The central issue is the Association’s imposition of fines against Ms. Ruffo for violating the community’s parking regulations. On or about April 17, 2018, Ms. Ruffo filed a petition alleging the Association violated its CC&Rs and several Arizona statutes by fining her for parking in spaces #38 and #40, which were not assigned to her unit #52. The Association denied any violation, asserting it was enforcing valid community rules.

Chronology of the Dispute

The conflict escalated over a period of approximately two years, marked by a series of notices, fines, and failed attempts at resolution.

• August 2, 2016: The Association sends a “Friendly Reminder” to Ms. Ruffo to cease parking in space #40 and use her assigned space, #131.

• August 5, 2016: A “Notice of Violation” is sent for the same issue, serving as a second warning.

• March 14, 2017: A “Final Non-Compliance Notice” is issued, noting violations in both space #40 and #38. The notice informs Ms. Ruffo of her right to a hearing with the Board of Directors if requested within 14 days.

• March 30, 2017: The first fine of $50.00 is assessed after Ms. Ruffo’s vehicle is again observed in space #38.

• April 17, 2017: Ms. Ruffo responds in writing, claiming she has permission to use the spaces and requests the fine be waived.

• April 27, 2017: The Association’s Board reviews and denies the waiver request. Ms. Ruffo was invited to address the Board but did not attend.

• June 6, 2017: A $200.00 fine is assessed for two observed violations in space #40.

• June 26, 2017: Another $200.00 fine is assessed for violations in spaces #40 and #38.

• July 11, 2017: The Association warns that access to community amenities (pool, fitness room) will be denied if fines remain unpaid. This action is later taken.

• August 31, 2017: A Board meeting is scheduled for Ms. Ruffo and her attorney, Mark F. Williman, to attend. Neither party attends, and they fail to provide advance notice. The Association incurs a $200 legal fee for its attorney’s attendance.

• September 25, 2017: Fines totaling $1,400.00 are assessed for multiple observed violations.

• September 27, 2017: The Association attempts to tow Ms. Ruffo’s vehicle. The attempt is aborted after she refuses to exit the vehicle and calls the Pima County Sheriff’s Office.

• October 4, 2017: The Association’s attorney informs Ms. Ruffo that another hearing will not be scheduled until she reimburses the Association for the $200 legal fee from the missed August 31 meeting.

• October 2017 – January 2018: A series of additional fines are assessed for ongoing violations, and Ms. Ruffo sends multiple letters requesting a hearing and protesting the fines and the $200 reimbursement requirement.

• April 17, 2018: Ms. Ruffo files the formal petition with the Arizona Department of Real Estate.

• September 18, 2018: The evidentiary hearing is held before the Office of Administrative Hearings.

Analysis of Arguments and Evidence

Petitioner’s Position (Michelle Ruffo)

Ms. Ruffo’s defense was multi-faceted, based on claims of permission, procedural errors by the Association, and alleged harassment.

• Claim of Permission: Ms. Ruffo testified that since 2005, she had been parking in spaces #38 and #40 with written permission. She claimed a 2006 agreement with the Morleys, then owners of unit #56, for space #40. She also submitted a 2018 email from Julie Ruiz, a tenant in unit #53, granting permission to use space #38.

• Allegations of Improper Notices: She argued the Association’s notices violated A.R.S. § 33-1242(C) because they did not always identify the person who observed the violation or provide photographic evidence.

• Allegations of Harassment and Retaliation: Through an attorney, Ms. Ruffo alleged she was being “unlawfully discriminated against and harassed in retaliation for her role related to allegations that HOA President Mitch Treese misappropriated HOA funds.” The ALJ noted that no evidence was submitted at the hearing to support this claim.

• Counter-Evidence: Ms. Ruffo submitted photographs dated from October 2016 to July 2017 showing other vehicles, including those of Associa maintenance and a landscaping contractor, parked in her assigned space #131.

• Dispute over Hearing Preconditions: She argued that the Association’s demand for a $200 reimbursement for its attorney’s fees as a condition for a new hearing was unlawful and not permitted under the CC&Rs.

Respondent’s Position (The Association)

The Association’s case rested on the explicit language of its governing documents and its adherence to established enforcement procedures.

• Primacy of the CC&Rs: The Association argued that its governing documents are unambiguous. Section 4.7 explicitly forbids owners from parking in any space other than the one assigned to their unit as a Limited Common Element.

• Formal Reallocation Process: Per Section 2.8.3, reallocating a Limited Common Element like a parking space requires a formal, written amendment executed by the unit owners involved and submitted to the Board for approval. Ms. Ruffo never followed this procedure.

• Rejection of Informal Agreements: The property manager testified that such private agreements are not legally binding or enforceable by the Association and create confusion, as evidenced by complaints from subsequent owners and tenants who were unable to use their assigned spaces.

• Adherence to Enforcement Policy: The Association followed its documented Violation Enforcement Policy, starting with a friendly reminder and escalating to formal notices and fines for continued non-compliance.

• Opportunity to Be Heard: Ms. Ruffo was provided opportunities to address the Board on April 27, 2017, and August 31, 2017. She failed to attend either meeting, and her failure to provide notice for the latter caused the Association to incur unnecessary legal fees.

• Witness Testimony: The former property manager, Ms. Chapman, testified that she had personally witnessed all the charged violations.

Governing Documents and Statutes

The case hinged on the interpretation of the Association’s CC&Rs and relevant Arizona state law.

Key CC&R Provisions

Section

Provision

Relevance

Motor Vehicles: “no Owner, Lessee or Occupant may park any . . . motor vehicle . . . in any Parking Spaces other than the Parking Space assigned to the Unit as a Limited Common Element.”

The central rule that the Petitioner was found to have repeatedly violated.

§ 2.8.3

Reallocation of Limited Common Elements: A reallocation requires a formal, recorded amendment executed by the owners and submitted to the Board.

The official procedure for changing parking space assignments, which the Petitioner did not follow for her informal agreements.

§ 13.1

Enforcement: Grants the Association the right to impose monetary penalties, suspend an owner’s right to use facilities, and tow vehicles in violation of the rules, after notice and an opportunity to be heard.

Provides the legal authority within the governing documents for the Association’s actions (fines, suspension of amenity access, attempted tow).

§ 1.36

“Parking Space” Definition: Defines a parking space as a portion of the Limited Common Elements.

Legally classifies the disputed parking spaces, making them subject to the rules governing Limited Common Elements.

Arizona Revised Statutes (A.R.S.)

The Petitioner cited A.R.S. § 33-1242(C), which requires an association, upon written request from an owner, to provide details of an alleged violation, including the observer’s name and the date. The ALJ determined this statute was inapplicable to the dispute. The judge’s reasoning was that the statute applies specifically to notices regarding the “condition of the property owned by the unit owner” (i.e., her physical condo unit #52), not her use of Limited Common Elements like parking spaces, which she does not own.

Administrative Law Judge’s Decision and Rationale

The ALJ’s decision was a conclusive denial of the petition, siding entirely with the Association.

Final Order: “IT IS ORDERED that Petitioner Michelle Ruffo’s petition against Respondent Reflections in the Catalinas Condo Association is denied because Petitioner has not established that Respondent violated the CC&Rs or any statute in assessing fines against her for her repeated violations of CC&R § 4.7 by parking in spaces that were not assigned to her unit #52.”

Key Legal Conclusions

• Burden of Proof: The Petitioner bore the burden of proving her claims by a preponderance of the evidence and failed to do so.

• Unambiguous Covenants: The CC&Rs regarding parking are unambiguous and must be enforced to give effect to the intent of the parties. CC&R § 4.7 clearly requires owners to park in their assigned spaces.

• Invalidity of Informal Agreements: The ALJ found that the Petitioner’s reliance on informal agreements illustrated “the evils that the CC&Rs were designed to prevent.” These undocumented side deals create instability and conflict when properties are sold or new tenants arrive, undermining the security and order of the community’s parking plan.

• Respondent’s Proper Conduct: The Association was found to have followed its own enforcement policy and provided the Petitioner with opportunities to be heard.

• Attorney’s Fee Condition: While the CC&Rs do not explicitly authorize charging an owner for attorney’s fees as a precondition for a hearing, the ALJ noted that A.R.S. § 33-1242(A)(18) allows an association to “exercise any . . . powers necessary and proper for the governance and operation.” Furthermore, civil statutes often require a party to pay for fees they cause an opponent to incur unnecessarily.

• Futility of a Board Hearing: The ALJ concluded that, in light of the Petitioner’s arguments and her “continued violation of Respondent’s parking policy over nearly two years,” a hearing before the Association’s Board would not have changed her behavior or the outcome of the matter.

Financial Implications

The conflict resulted in significant financial penalties for the Petitioner. The fines were assessed on an escalating basis for continued violations.

• March 30, 2017: $50.00

• June 6, 2017: $200.00

• June 26, 2017: $200.00

• August 9, 2017: $200.00

• September 25, 2017: $1,400.00

• October 17, 2017: $100.00

• November 6, 2017: $100.00

As of the hearing on September 18, 2018, the total outstanding balance on Ms. Ruffo’s account, including interest and certified letter fees, was $2,544.00.

Study Guide: Ruffo v. Reflections in the Catalinas Condo Association

This guide is designed to review and assess understanding of the Administrative Law Judge Decision in case number 18F-H1818044-REL, Michelle Ruffo v. Reflections in the Catalinas Condo Association.

——————————————————————————–

Short-Answer Quiz

Instructions: Answer the following questions in 2-3 complete sentences, drawing all information directly from the provided legal decision.

1. Who are the primary parties in this case, and what is the central dispute between them?

2. What was the Petitioner’s main justification for parking in spaces that were not assigned to her unit?

3. According to the Association’s CC&Rs, what is the formal procedure required to reallocate a Limited Common Element, such as a parking space?

4. Describe the key enforcement actions the Condo Association took against the Petitioner in response to the ongoing parking violations.

5. Why did the Administrative Law Judge determine that Arizona Revised Statute § 33-1242(B) and (C) did not apply in this case?

6. Summarize the incident involving the tow truck on September 27, 2017.

7. What reason did the Association’s attorney provide for requiring the Petitioner to pay a $200 fee before another hearing would be scheduled?

8. What evidence did the Petitioner submit to demonstrate that her own assigned parking space, #131, was frequently occupied by others?

9. Identify the two property managers who provided telephonic testimony on behalf of the Respondent.

10. What was the final ruling in this case, and what was the judge’s primary reason for this decision?

——————————————————————————–

Answer Key

1. The primary parties are Michelle Ruffo, the Petitioner and owner of unit 52, and Reflections in the Catalinas Condo Association, the Respondent. The central dispute is over fines imposed by the Association against Ms. Ruffo for her repeated violations of parking rules by parking in spaces not assigned to her unit.

2. The Petitioner justified her actions by claiming she had long-standing written permission from other unit owners or tenants to use their spaces. Specifically, she cited a 2006 agreement with the owners of unit #56 to use space #40 and more recent permission from a tenant in unit #53 to use space #38.

3. According to Section 2.8.3 of the CC&Rs, reallocating a Limited Common Element requires an amendment to the Declaration. This amendment must be executed by the owners involved, state how the element is being reallocated, and be submitted to the Board of Directors for approval before it can be recorded.

4. The Association’s enforcement actions escalated over time, beginning with a “Friendly Reminder” and moving to a “Notice of Violation” and a “Final Non-Compliance Notice.” Subsequently, the Association assessed escalating monetary fines, suspended the Petitioner’s access to amenities like the pool and fitness room, and attempted to have her vehicle towed.

5. The judge ruled the statute did not apply because it specifically pertains to written notices about the condition of the property owned by the unit owner. The dispute in this case was not about the condition of Ms. Ruffo’s unit (#52) but about her use of Limited Common Elements (parking spaces) that were not assigned to her.

6. On September 27, 2017, the Association attempted to tow the Petitioner’s vehicle from a space not assigned to her. The Petitioner was inside her vehicle and refused to leave, calling the Pima County Sheriff’s Office. The responding officer instructed the tow truck driver to remove the equipment and try again at another time.

7. The Association required the $200 fee to reimburse it for the attorney’s fees it incurred for a Board meeting scheduled on August 31, 2017. The Petitioner and her attorney at the time, Mr. Williman, failed to attend this meeting and did not provide notice of their absence until a few minutes before it was scheduled to begin.

8. The Petitioner submitted a series of dated photographs showing various other vehicles parked in her assigned space, #131. These vehicles included maintenance trucks bearing the Associa logo, a landscaping contractor’s truck and trailer, and several other private cars.

9. The two property managers who testified for the Respondent were Gabino Trejo, the current manager, and Vanessa Chapman Lubinsky (referred to as Ms. Chapman), the former manager.

10. The final ruling was a denial of Michelle Ruffo’s petition. The judge found that the Petitioner had not established that the Respondent violated any CC&Rs or statutes, concluding that the Association was justified in assessing fines for her repeated and clear violations of CC&R § 4.7, which requires owners to park in their assigned spaces.

——————————————————————————–

Essay Questions

Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive response to each, structuring your answer in a standard essay format.

1. Analyze the arguments and evidence presented by both the Petitioner and the Respondent. Discuss the specific CC&R sections, witness testimonies, and exhibits each side used to support their claims, and explain why the Administrative Law Judge ultimately found the Respondent’s position more convincing.

2. The concept of “Limited Common Elements” is central to this case. Using the definitions provided in the CC&Rs (Sections 1.31, 1.36, and 2.8.1(e)), explain the legal significance of this designation in the dispute over parking spaces. How did the specific rules for reallocating these elements (CC&R § 2.8.3) undermine the Petitioner’s primary defense?

3. Trace the timeline of communication and escalating enforcement actions taken by the Reflections in the Catalinas Condo Association against Michelle Ruffo, beginning with the “Friendly Reminder” in August 2016. Evaluate whether the Association followed its own Violation Enforcement Policy and the powers granted to it in the CC&Rs throughout this process.

4. Discuss the role of legal representation and the various attorneys involved in this case (Nathan Tennyson, Mark F. Williman, Eric J. Thomae, Jonathan Olcott). How did their actions, communications, and, in one instance, inaction, impact the proceedings and the relationship between the Petitioner and the Respondent?

5. The Petitioner argued that her right to due process was violated because the violation notices she received did not contain photographs or identify the person who observed the violation. Explain the Administrative Law Judge’s legal reasoning for rejecting this argument, specifically referencing the interpretation of A.R.S. § 33-1242 and the distinction made between a violation concerning the “condition of the property owned” versus the use of common elements.

——————————————————————————–

Glossary of Key Terms and Entities

Term / Entity

Definition

Administrative Law Judge (ALJ)

An independent judge who presides over administrative hearings. In this case, Diane Mihalsky presided over the hearing at the Office of Administrative Hearings.

A.R.S. (Arizona Revised Statutes)

The codified laws of the state of Arizona. Several statutes, including those under Title 33 (Property) and Title 32 (Professions and Occupations), were cited in the case.

Associa Property Management Services

The property management company employed by the Respondent to manage the condominium complex. Both Ms. Chapman and Mr. Trejo were employees of Associa.

CC&Rs (Covenants, Conditions, and Restrictions)

The governing legal documents that set out the guidelines for a planned community or condominium. The CC&Rs define the rights and obligations of the homeowners’ association and its members.

Gabino Trejo

The current property manager for the Respondent at the time of the hearing.

Limited Common Elements

As defined in CC&R § 1.31, a portion of the Common Elements allocated for the exclusive use of one or more, but fewer than all, of the Units. Parking spaces are explicitly defined as Limited Common Elements.

Mark F. Williman, Esq.

An attorney and friend of the Petitioner who agreed to help her resolve issues with the Board. He failed to attend a scheduled Board meeting on her behalf on August 31, 2017.

Michelle Ruffo

The Petitioner in the case, owner of condominium unit 52, and member of the Respondent association.

Parking Space

As defined in CC&R § 1.36, a portion of the Limited Common Elements intended for parking a single motor vehicle and allocated to a specific Unit Owner for their exclusive use.

Petitioner

The party who files a petition or brings an action in a legal proceeding. In this case, Michelle Ruffo.

Preponderance of the Evidence

The standard of proof in this case, defined as evidence that is more convincing and has superior weight, inclining an impartial mind to one side of the issue rather than the other.

Reflections in the Catalinas Condo Association

The Respondent in the case; the condominium unit owners’ association for the development where the Petitioner resides.

Respondent

The party against whom a petition is filed or an action is brought. In this case, the Reflections in the Catalinas Condo Association.

Vanessa Chapman Lubinsky (Ms. Chapman)

The former property manager for the Respondent (from 2012 to early 2018) who handled most of the interactions and sent most of the violation notices to the Petitioner.

Violation Enforcement Policy

The Respondent’s official policy that outlines the procedure for addressing violations, including sending a “Friendly Reminder” and a “Notice of Violation,” and provides for a hearing if requested within 14 days.

How a Parking Spot Deal Led to a Tow Truck Standoff and a $2,544 HOA Bill: 4 Lessons

Introduction: The Handshake Deal That Cost a Fortune

It’s a common scenario in community living: you make a friendly, informal agreement with a neighbor. Maybe you agree to switch parking spots for convenience or let them use your guest pass. These simple handshake deals seem harmless, but what happens when they collide with the ironclad rules of a homeowners’ association (HOA)?

The real-life case of Michelle Ruffo and her condo association serves as a stark cautionary tale. A long-standing, informal parking arrangement escalated into a bitter dispute that culminated in a tow truck standoff, loss of amenities, and a final bill for $2,544 in fines and fees. This case reveals several surprising and critical lessons for anyone living in a community governed by an association.

1. Your Neighbor’s Permission Can Be Legally Worthless

The core of the dispute was Ms. Ruffo’s belief that she had the right to park in spaces other than her own. Since 2006, she had an agreement with another owner to use space #40. Later, she began parking in space #38, believing she had permission from that unit’s tenant. From her perspective, she had done her due diligence. This is the core conflict in community living: the perceived authority of a neighbor’s handshake versus the legal authority of the governing documents.

The association, however, operated under its official Covenants, Conditions, and Restrictions (CC&Rs). Those documents told a different story.

• Section 4.7 explicitly required owners to park only in their assigned spaces.

• Section 2.8.3 detailed the only valid procedure for changing parking allocations. Because parking spaces are “Limited Common Elements,” any reallocation required a formal, written amendment executed by the unit owners involved, submitted to the Board for approval, and then officially recorded.

Crucially, the property manager testified that the owner of the unit assigned to space #38 had explicitly denied giving Ms. Ruffo permission and reported that his tenants were complaining. Because Ms. Ruffo never followed the formal procedure, her informal agreements were not recognized or enforceable. The Administrative Law Judge’s decision highlighted the critical importance of these rules:

Because Petitioner never submitted any written agreement with another owner regarding reallocation of parking spaces to Respondent’s Board for its tacit approval, as CC&R § 2.8.3 requires, subsequent tenants and owners have no notice of Petitioner’s alleged agreements with their predecessors regarding parking spaces. If everyone adopted Petitioner’s sense of entitlement as to parking spaces at the Reflections, no one would be able to park their car with any security or plan.

2. Ignoring Official Notices Leads to More Than Just Fines

This conflict didn’t begin with a massive fine. The property management company, Associa, followed a documented escalation process that provided Ms. Ruffo with multiple opportunities to comply. For any homeowner, this documented paper trail should have been a five-alarm fire, signaling a problem that required immediate and formal resolution.

The warnings began on August 2, 2016, with a “Friendly Reminder,” followed by a “Notice of Violation” and a “Final Non-Compliance Notice.” The first fine of just $50 wasn’t assessed until March 30, 2017. But as the violations continued, so did the consequences. After a July 11, 2017 letter, the association shut off Ms. Ruffo’s “electric-key access to the pool and fitness center for the community,” a tangible loss of amenities.

The financial penalties then began to skyrocket. Fines of $200 were assessed in June and August. Then, on September 25, 2017, the association dropped the hammer: a single letter assessing $1,400 for 14 separate observed violations. Just two days later, on September 27, the dispute reached its climax. The association attempted to tow Ms. Ruffo’s vehicle. She was inside the car and refused to leave, prompting her to call the Sheriff’s Office to intervene. The situation had moved from letters and fines to a physical standoff in the parking lot.

3. Skipping a Hearing Can Get You a Bill for the HOA’s Lawyer

After retaining an attorney, Ms. Ruffo was scheduled to have her case heard by the Board on August 31, 2017. The association, anticipating a formal legal discussion, also had its own attorney present. In any formal dispute, failing to appear at your own requested hearing is a critical error. In this case, it not only cost Ruffo credibility but also came with an immediate invoice.

Minutes before the meeting, while the Board and its lawyer were waiting, Ruffo’s attorney sent a message that neither he nor his client would be attending. This last-minute cancellation had a direct financial consequence. The association’s attorney charged it $200 for the time spent on the aborted meeting. The Board then refused to schedule another hearing until Ms. Ruffo reimbursed the association for that $200 fee. This failure to engage was immediately followed by the association’s most severe actions: the $1,400 fine and the attempt to tow her vehicle.

4. “But They Do It Too!” Is Not a Winning Legal Defense

A common response to a violation notice is to point out that others are breaking the rules as well. Ms. Ruffo attempted this strategy, presenting photographic evidence that her own assigned space, #131, was frequently occupied by other vehicles, including maintenance vans bearing the property management company’s logo.

While the property manager testified that she had addressed the issue with the maintenance crew, the Judge ultimately found this argument unpersuasive. The ruling contained a crucial insight: The lesson isn’t just that this defense failed, but why it failed. The Judge noted that Ms. Ruffo “did not present any evidence… that she made any effort to report others parking in her assigned space when there was something that the property manager or Respondent could have done about it.” By failing to formally and properly report her own issue, she undermined her claim that the association was negligent, making it impossible to excuse her own persistent violations.

Conclusion: Read the Fine Print Before You Shake On It

This case serves as a powerful reminder of a fundamental truth of community living: in an HOA, the official, written governing documents are the ultimate authority. Informal “handshake deals,” no matter how reasonable they seem, can lead to serious consequences when they conflict with the rules. This dispute didn’t just involve letters; it led to escalating fines, the loss of amenities, a physical standoff with a tow truck, and ultimately a legal judgment.

This entire conflict, which cost thousands of dollars and countless hours, started with a parking spot—when was the last time you read your community’s rules?

Case Participants

Petitioner Side

  • Michelle Ruffo (petitioner)
    Appeared on her own behalf.
  • Carol Lundberg (witness)
    Resides in Unit 45; presented testimony by Petitioner.
  • Julie Ruiz (witness)
    Unit 53 Tenant
    Provided email confirming she gave Petitioner permission to park in Unit 53's space.
  • Mark F. Williman (attorney)
    Retained by Petitioner; failed to attend the August 31, 2017 Board meeting.
  • Eric J. Thomae (attorney)
    Retained by Petitioner sometime after October 24, 2017.

Respondent Side

  • Nathan Tennyson (HOA attorney)
    Brown Olcott, PLLC
  • Vanessa Chapman Lubinsky (property manager)
    Associa Property Management Services
    Former manager; referred to as Ms. Chapman in the decision.
  • Gabino Trejo (property manager)
    Associa Property Management Services
    Current manager.
  • John Pohlig (unit owner)
    Owner of unit assigned space #38; communicated he had not given Petitioner permission to park there.
  • Jonathan Olcott (HOA attorney)
  • Mitch Treese (HOA president)
    Alleged by Petitioner's attorney to have misappropriated HOA funds.

Neutral Parties

  • Diane Mihalsky (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
  • Felicia Del Sol (administrative staff)
    Transmitted decision electronically.

Thomas P. Satterlee vs. Green Valley Country Club Vistas II Property

Posted on by
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.

Case Summary

Case ID 18F-H1817022-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2018-09-25
Administrative Law Judge Tammy L. Eigenheer
Outcome The petition was dismissed with prejudice upon rehearing because the Administrative Law Judge confirmed that the Respondent HOA did not meet the statutory definition of a 'planned community,' thereby depriving the OAH and ADRE of subject matter jurisdiction.
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Thomas P. Satterlee Counsel —
Respondent Green Valley Country Club Vistas II Property Owner's Association Counsel James A. Robles

Alleged Violations

A.R.S. § 33-1802(4)

Outcome Summary

The petition was dismissed with prejudice upon rehearing because the Administrative Law Judge confirmed that the Respondent HOA did not meet the statutory definition of a 'planned community,' thereby depriving the OAH and ADRE of subject matter jurisdiction.

Why this result: The ALJ narrowly interpreted the statutory term 'roadway' to mean the part of the road intended for vehicles, excluding the landscaping maintenance performed by the HOA.

Key Issues & Findings

Subject Matter Jurisdiction: Planned Community Status

This issue was heard on rehearing. Petitioner argued that the maintenance of entrance landscaping constituted maintaining 'roadways' by interpreting the statutory term broadly, citing the 'Complete Streets' approach and Pima County right-of-way documents. The ALJ affirmed the original decision, holding that the plain meaning of 'roadway' is the part of the road intended for vehicles, not the entire right-of-way, and thus jurisdiction was lacking.

Orders: Petitioner’s petition is dismissed with prejudice because the Office of Administrative Hearings and the Arizona Department of Real Estate lack subject matter jurisdiction over the dispute.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1802
  • Ariz. Bd. of Regents for & on Behalf of Univ. of Ariz. v. State ex rel. State of Ariz. Pub. Safety Ret. Fund Manager Adm’r, 160 Ariz. 150, 156 (App. 1989)
  • Swichtenberg v. Jack Brimer, 171 Ariz. 77, 828 P.2d 1218 (App. 1991)
  • Villa De Jardines Ass’n v. Flagstar Bank, FSB, 227 Ariz. 91, 95 (App. 2011)
  • Callender v. Transpacific Hotel Corp., 179 Ariz. 557, 561 (App. 1993)
  • Sunrise Desert Vistas v. Salas, 1 CA-CV 14-052 (Ct. App. 2016)

Analytics Highlights

Topics: Jurisdiction, Planned Community, A.R.S. 33-1802, Roadway Definition, Rehearing, HOA Dispute, Statutory Interpretation
Additional Citations:

  • A.R.S. § 33-1802
  • Ariz. Bd. of Regents for & on Behalf of Univ. of Ariz. v. State ex rel. State of Ariz. Pub. Safety Ret. Fund Manager Adm’r, 160 Ariz. 150, 156 (App. 1989)
  • Swichtenberg v. Jack Brimer, 171 Ariz. 77, 828 P.2d 1218 (App. 1991)
  • Villa De Jardines Ass’n v. Flagstar Bank, FSB, 227 Ariz. 91, 95 (App. 2011)
  • Callender v. Transpacific Hotel Corp., 179 Ariz. 557, 561 (App. 1993)
  • Sunrise Desert Vistas v. Salas, 1 CA-CV 14-052 (Ct. App. 2016)

Video Overview

Audio Overview

Decision Documents

18F-H1817022-REL-RHG Decision – 661827.pdf

Uploaded 2026-01-23T17:23:02 (130.3 KB)

Jurisdictional Analysis in Satterlee v. Green Valley Country Club Vistas II POA

Executive Summary

This document outlines the legal analysis and final decision in case number 18F-H1817022-REL, wherein the Office of Administrative Hearings (OAH) dismissed a petition filed by Thomas P. Satterlee against the Green Valley Country Club Vistas II Property Owner’s Association. The dismissal was based on a lack of subject matter jurisdiction.

The central issue was whether the Respondent association qualified as a “planned community” under Arizona statute A.R.S. § 33-1802(4). This determination hinged entirely on the interpretation of the phrase “covenant to maintain roadways.” The Petitioner argued that the association’s maintenance of landscaping at the community’s entrance constituted roadway maintenance, asserting a broad definition of “roadway” that encompassed the entire right-of-way, supported by the modern civil engineering concept of “Complete Streets.”

The Administrative Law Judge (ALJ) rejected this argument, concluding that the plain meaning of “roadway” refers specifically to the portion of a road used by vehicles. The ALJ noted that the state legislature used the specific term “roadway” in a 2014 statutory amendment, even though the broader “Complete Streets” concept was already well-established, indicating a deliberate choice of the narrower term. Ultimately, because the association’s activities did not include maintaining roadways, it was not deemed a “planned community,” and therefore, the OAH and the Arizona Department of Real Estate lacked jurisdiction to hear the case. The petition was dismissed with prejudice.

——————————————————————————–

Case Overview and Procedural History

The matter of Thomas P. Satterlee v. Green Valley Country Club Vistas II Property Owner’s Association (Case No. 18F-H1817022-REL) was adjudicated by the Arizona Office of Administrative Hearings. The core of the dispute was a dispositive motion concerning the OAH’s subject matter jurisdiction over the Respondent association.

• January 26, 2018: The Respondent filed a Motion to Dismiss, arguing the OAH lacked jurisdiction because the association was not a “planned community” as defined by A.R.S. § 33-1802(4).

• March 15, 2018: Following oral arguments, the ALJ issued an initial decision finding that the OAH lacked jurisdiction and dismissed the petition.

• April 10, 2018: The Petitioner filed a Homeowner’s Association (HOA) Dispute Rehearing Request with the Arizona Department of Real Estate.

• May 3, 2018: The Commissioner granted the Petitioner’s request for a rehearing.

• September 5, 2018: A new round of oral arguments was held, focusing again on the dispositive jurisdictional issue.

• September 25, 2018: The ALJ issued a final decision, once again dismissing the petition with prejudice for lack of subject matter jurisdiction.

The Central Jurisdictional Question

The jurisdiction of the Office of Administrative Hearings and the Arizona Department of Real Estate in this matter was entirely dependent on whether the Respondent association met the statutory definition of a “planned community.” A lack of subject matter jurisdiction is a non-waivable issue that voids any administrative decisions made without it.

The pivotal question was whether the association’s maintenance of landscaping around the walls and sign at the community entrance constituted a “covenant to maintain roadways,” which is a key criterion in the statute.

Statutory Framework: A.R.S. § 33-1802(4)

The relevant statute, A.R.S. § 33-1802(4), defines a “planned community” as:

“…a real estate development that includes real estate owned and operated by or real estate on which an easement to maintain roadways or a covenant to maintain roadways is held by a nonprofit corporation or unincorporated association of owners…”

A 2014 amendment to this statute added the language regarding an “easement to maintain roadways or a covenant to maintain roadways.” Before this amendment, an association had to own real property to be considered a planned community.

Arguments of the Parties

The dispute centered on the interpretation of the single word “roadways” within the statute.

Petitioner’s Position (Thomas P. Satterlee)

The Petitioner argued for a broad and expansive interpretation of “roadway,” asserting that it should include the entire right-of-way.

• Core Argument: The developer built walls and an entrance sign, and the Respondent’s subsequent maintenance of the surrounding landscaping constitutes a “covenant to maintain roadways.”

• “Complete Streets” Concept: The Petitioner presented extensive documentation to argue that the modern civil engineering approach of “Complete Streets” supports his interpretation. This concept treats the entire transportation corridor—including sidewalks, bicycle lanes, transit stops, and landscaping—as an integrated system for all users.

• Equivalency of Terms: The Petitioner claimed that “roadway” is the “new word for ‘street'” and that the “roadway” encompasses the entire width of the “right-of-way.”

• Evidence Presented: The Petitioner submitted numerous documents to support his claim, including:

◦ A letter from the Pima County Director of Transportation confirming the association’s maintenance of landscaping.

◦ Excerpts from the Pima County Roadway Design Manual (RDM).

◦ Pima County Board of Supervisors policies on landscaping in the right-of-way.

◦ Website printouts from the U.S. Department of Transportation, Federal Highway Administration, and other entities defining “Complete Streets.”

◦ Pima County Code of Ordinances related to roadway projects.

Respondent’s Position (Green Valley Country Club Vistas II POA)

The Respondent advocated for a strict, plain-meaning interpretation of the statute.

• Core Argument: The maintenance of landscaping does not constitute the maintenance of a “roadway.”

• Legislative Intent: The Respondent argued that the Arizona legislature deliberately chose the specific term “roadway” when it amended the statute in 2014. By that time, the “Complete Streets” concept was well-known. Had the legislature intended a broader scope, it could have used terms like “right-of-way” or “Complete Streets,” but it did not.

• Conclusion: Because the association does not have a covenant to maintain roadways, it does not meet the statutory definition of a “planned community,” and therefore the state agencies lack jurisdiction.

Administrative Law Judge’s Analysis and Decision

The ALJ’s decision was grounded in principles of statutory construction, focusing on the plain meaning of the legislative language.

The ALJ began with the legal principle that when construing statutes, a court must first look to the language of the statute and give the words their plain meaning, presuming the legislature expressed its meaning as clearly as possible.

To determine the plain meaning, the ALJ consulted numerous dictionary definitions of “roadway” and “street.”

Source

Definition of “Roadway”

English Oxford Living Dict.

“The part of a road intended for vehicles, in contrast to the pavement or verge.”

Merriam-Webster

“the part of a street reserved for vehicles.”

Dictionary.com

“The part of a road over which vehicles travel; road.”

Cambridge Dictionary

“the part of the road on which vehicles drive.”

American Heritage Dictionary

“A road, especially the part over which vehicles travel.”

Oxford Learner’s Dictionaries

“a road or the part of a road used by vehicles.”

The ALJ concluded that the consistent, plain meaning of “roadway” is the portion of a road upon which vehicles travel, distinct from adjacent areas like sidewalks or landscaping.

The ALJ found the Petitioner’s evidence regarding the “Complete Streets” concept to be irrelevant to the statutory interpretation. The decision noted that because the legislature amended the statute after this concept was widely adopted but chose to use the narrower term “roadway,” it signaled a clear intent not to encompass the entire right-of-way. The ALJ stated:

“Had the legislature intended to include associations such as Respondent in the definition of ‘planned community’ in A.R.S. § 33-1802(4), it could have used the term ‘right-of-way’ or ‘Complete Streets’.”

The ALJ highlighted that several documents submitted by the Petitioner actually undermined his argument by explicitly distinguishing between “roadway” and “right-of-way.”

• Pima County Code 10.56.020: This ordinance defines minor projects to include “[c]hanges or improvements to the right-of-way area outside the shoulder of an existing roadway.”

• Pima County RDM: The design manual specified different drawing scales for “Roadway Plans” (1” = 40’) and “Landscape Plans” (1” = 20’).

• Pima County RDM Statement: Another document stated that the “[i]nstallation of landscaping shall begin not later than six months after the formal completion date of the roadway project.”

These examples demonstrated that, even within the Petitioner’s own evidence, “roadway” and “landscaping” within the “right-of-way” are treated as distinct elements.

Final Order and Implications

Based on the analysis, the ALJ reached a definitive conclusion on the jurisdictional question.

• Finding: The association’s maintenance of the area around the entrance walls and sign does not render it a “planned community” because this activity is not maintenance of “roadways” as understood by the statute’s plain meaning.

• Order: The petition was dismissed with prejudice on September 25, 2018.

• Legal Consequence: The Office of Administrative Hearings and the Arizona Department of Real Estate lack subject matter jurisdiction over the petition.

• Further Recourse: The decision explicitly states that the Petitioner remains free to file an action in a court of competent jurisdiction as specified by the Respondent’s community documents.

Study Guide: Satterlee v. Green Valley Country Club Vistas II Property Owner’s Association

This guide reviews the administrative law case Thomas P. Satterlee v. Green Valley Country Club Vistas II Property Owner’s Association (No. 18F-H1817022-REL-RHG). The central issue is whether the Respondent association qualifies as a “planned community” under Arizona law, which would grant jurisdiction to the Arizona Department of Real Estate and the Office of Administrative Hearings. The case hinges on the statutory definition of “roadway” and whether the association’s maintenance of landscaping falls under a “covenant to maintain roadways.”

——————————————————————————–

Short-Answer Quiz

Answer the following questions in 2-3 complete sentences based on the provided source document.

1. What was the Respondent’s primary argument for filing a Motion to Dismiss?

2. How did the Petitioner, Thomas P. Satterlee, initially argue that the Respondent qualified as a “planned community”?

3. What was the key piece of evidence presented by the Petitioner from the Pima County Director of Transportation during the rehearing?

4. What is the “Complete Streets” concept, and how did the Petitioner attempt to use it in his argument?

5. According to the Respondent, how did the Arizona legislature’s choice of words in the 2014 statutory amendment undermine the Petitioner’s argument?

6. How did the Administrative Law Judge use dictionary definitions to analyze the term “roadway”?

7. What piece of Pima County code did the judge cite to show that “roadway” and “right-of-way” are distinct terms?

8. Why did the Administrative Law Judge ultimately find the “Complete Streets” argument to be irrelevant to the case?

9. What is the legal principle regarding subject matter jurisdiction as stated in the Conclusions of Law?

10. What was the final order in this case, and what option did it leave available to the Petitioner?

——————————————————————————–

Answer Key

1. The Respondent argued that the Office of Administrative Hearings lacked subject matter jurisdiction over the petition. This was because the Respondent was not a “planned community” as defined by A.R.S. § 33-1802(4), since it did not own real estate or have a covenant to maintain roadways.

2. The Petitioner initially argued that the Respondent had a “covenant to maintain roadways” because the developer built walls and a sign at the community entrance, and the Respondent had maintained the landscaping around the sign. He contended that the term “roadway” in the statute included “roadway systems,” which would encompass the landscaped entrance land.

3. During the rehearing, the Petitioner presented a letter from Ana M. Olivares, PE, Director of Pima County Transportation. The letter stated that the Respondent had been maintaining the landscaping at the corners of La Canada Drive and La Canoa since its installation and would continue to do so until the county found funds to take over maintenance.

4. The “Complete Streets” concept is an approach to designing roadways and rights-of-way to be safe and accessible for all users, including pedestrians, bicyclists, and motorists. The Petitioner argued that this modern engineering approach effectively equates the term “roadway” with the entire “right-of-way,” which would include the landscaped areas maintained by the Respondent.

5. The Respondent argued that the “Complete Streets” concept was well-known by 2014 when the statute was amended. However, the Arizona legislature specifically chose to use the term “roadway,” not “right-of-way” or “Complete Streets,” implying a narrower, more specific meaning was intended.

6. The Administrative Law Judge consulted multiple dictionaries (English Oxford, Merriam-Webster, Dictionary.com, etc.) to establish the plain meaning of “roadway.” These definitions consistently described a “roadway” as the part of a road intended for vehicle travel, distinct from adjacent areas like sidewalks or landscaping.

7. The judge cited Pima County Code of Ordinances 10.56.020, which defined minor projects to include “[c]hanges or improvements to the right-of-way area outside the shoulder of an existing roadway.” This language explicitly treats the “right-of-way” and “roadway” as separate and distinct areas, contradicting the Petitioner’s claim.

8. The judge found the “Complete Streets” argument irrelevant because the statute in question was amended after the widespread adoption of the concept, yet the legislature chose to use the term “roadway.” The judge reasoned that if the legislature had intended to include the broader scope of a “right-of-way,” it would have used that specific term or referenced “Complete Streets.”

9. The Conclusions of Law state that a lack of subject matter jurisdiction cannot be waived by the parties and must be addressed. Administrative decisions that go beyond an agency’s statutory power are considered void, as jurisdiction is defined by statutes, not by the parties involved.

10. The final order was that the Petitioner’s petition be dismissed with prejudice because the Office of Administrative Hearings lacked subject matter jurisdiction. The Petitioner remained free to file an action in a court of competent jurisdiction as specified by the Respondent’s community documents.

——————————————————————————–

Essay Questions

Answer the following questions in a detailed essay format. No answers are provided.

1. Analyze the Petitioner’s legal strategy, focusing on the evolution of his arguments from the initial hearing to the rehearing. Discuss the strengths and weaknesses of using the “Complete Streets” concept as the central pillar of his case for establishing jurisdiction.

2. Examine the Administrative Law Judge’s method of statutory interpretation in this case. How did the judge apply the principles of “plain meaning” and legislative intent when analyzing the definition of “planned community” in A.R.S. § 33-1802(4)?

3. Discuss the legal and practical distinction between “roadway” and “right-of-way” as presented in the case documents. Explain how this distinction was pivotal to the judge’s final decision on subject matter jurisdiction.

4. Evaluate the significance of the 2014 amendment to A.R.S. § 33-1802(4). How did this change in statutory language, which added “easement to maintain roadways or a covenant to maintain roadways,” create the central point of contention in this dispute?

5. Based on the judge’s Conclusions of Law, explain the legal concept of subject matter jurisdiction and why it cannot be waived or conferred by the parties involved. How does this principle protect the integrity of the administrative and judicial process?

——————————————————————————–

Glossary of Key Terms

Definition from Source Context

Administrative Law Judge (ALJ)

An official who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions and orders, such as the dismissal of a petition.

A.R.S. § 33-1802(4)

The Arizona Revised Statute that defines a “planned community.” The statute specifies that a planned community includes real estate development where a nonprofit association owns/operates real estate or holds an easement or covenant to maintain roadways for the purpose of managing, maintaining, or improving the property.

Complete Streets

An approach to planning, designing, and operating roadways and rights-of-way with all users in mind (pedestrians, bicyclists, motorists, etc.) to make the transportation network safer and more efficient. The concept includes elements like sidewalks, bike lanes, and transit stops.

Covenant

A formal agreement or promise. In this case, a “covenant to maintain roadways” is a condition that, if met by a homeowner’s association, could classify it as a “planned community” under Arizona law.

Jurisdiction

The official power to make legal decisions and judgments. In this case, the central issue was whether the Office of Administrative Hearings had jurisdiction over the dispute.

Petitioner

The party who brings a petition or action before a court or administrative body. In this case, the Petitioner is Thomas P. Satterlee.

Planned Community

As defined by A.R.S. § 33-1802(4), a real estate development with real estate owned/operated by, or having an easement/covenant to maintain roadways held by, an association of owners who are mandatory members and pay assessments.

Respondent

The party against whom a petition is filed or an appeal is brought. In this case, the Respondent is Green Valley Country Club Vistas II Property Owner’s Association.

Right-of-Way

The strip of land over which a public road is built. As shown in Pima County policy diagrams, this can include travel lanes, medians, shoulders, bike lanes, sidewalks, and landscaping areas. The court found this to be a broader term than “roadway.”

Roadway

Based on multiple dictionary definitions cited by the judge, the part of a road intended for vehicles, in contrast to the pavement, verge, or sidewalk. The judge concluded its “plain meaning” is the portion of a road upon which vehicles travel.

Subject Matter Jurisdiction

The authority of a court or administrative body to hear cases of a particular type or cases relating to a specific subject matter. The decision states this type of jurisdiction cannot be waived and is determined by statute, not the parties.

  • don't play in the street

Case Participants

Petitioner Side

  • Thomas P. Satterlee (petitioner)

Respondent Side

  • James A. Robles (attorney)
    Perry, Childers, Hanlon & Hudson, PLC

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
  • Felicia Del sol (staff)
    Clerk/Distribution staff

Other Participants

  • Ana M. Olivares (Director)
    Pima County Transportation
    Provided documentation/letter regarding landscaping maintenance

Travis Prall v. Villas at Tierra Buena HOA

Posted on by

Case Summary

Case ID 18F-H1818053-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2019-01-31
Administrative Law Judge Tammy L. Eigenheer
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Travis Prall Counsel —
Respondent Villas at Tierra Buena Homeowners Association Counsel Lydia Pierce Linsmeier

Alleged Violations

Section 7.1.4 of the CC&Rs

Outcome Summary

The Administrative Law Judge dismissed the Petition following a rehearing, concluding that the Petitioner failed to meet the burden of proof to show the HOA violated Section 7.1.4 of the CC&Rs because there was no credible evidence that the disputed landscaping (tree) had been originally installed by the developer.

Why this result: Petitioner failed to establish by a preponderance of the evidence that the landscaping was originally installed by the Declarant, which was a prerequisite for HOA maintenance responsibility under the relevant CC&R section.

Key Issues & Findings

Neglecting yard maintenance in visible public yards

Petitioner alleged the HOA violated CC&R Section 7.1.4 by failing to maintain a tree in his back yard, arguing the back yard qualified as a 'Public Yard' and the tree was originally installed by the Declarant.

Orders: The Petition was dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 41-2198.01
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 41-1092.08(H)
  • A.R.S. § 12-904(A)

Analytics Highlights

Topics: HOA maintenance, CC&R interpretation, burden of proof, landscaping
Additional Citations:

  • A.R.S. § 41-2198.01
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 41-1092.09
  • A.R.S. § 41-1092.08(H)
  • A.R.S. § 12-904(A)

Video Overview

Audio Overview

Decision Documents

18F-H1818053-REL Decision – 686236.pdf

Uploaded 2026-04-26T09:46:58 (116.2 KB)

18F-H1818053-REL Decision – 661820.pdf

Uploaded 2026-04-26T09:47:00 (107.3 KB)

18F-H1818053-REL Decision – 686236.pdf

Uploaded 2026-04-24T11:14:18 (116.2 KB)

18F-H1818053-REL Decision – 661820.pdf

Uploaded 2026-04-24T11:14:22 (107.3 KB)

Briefing: Prall v. Villas at Tierra Buena HOA Dispute

Executive Summary

This briefing synthesizes the findings and legal rationale from a homeowners’ association dispute between Petitioner Travis Prall and Respondent Villas at Tierra Buena HOA. The case centered on whether the HOA was responsible for maintaining a tree in the Petitioner’s backyard. The Petitioner alleged the HOA violated Section 7.1.4 of the community’s Covenants, Conditions, and Restrictions (CC&Rs) by neglecting maintenance in what he defined as a “Public Yard.”

The dispute was adjudicated by the Arizona Office of Administrative Hearings, resulting in two decisions, an initial ruling and a subsequent ruling on rehearing, both of which dismissed the Petitioner’s case. The critical takeaway is that the case was decided not on the ambiguous definition of “Public” versus “Private” yards, but on a crucial qualifying clause in the CC&Rs. Section 7.1.4 obligates the HOA to maintain landscaping only “as originally installed by Declarant.”

The Petitioner failed to provide sufficient evidence that the tree in question was part of the original developer’s landscaping. Conversely, the HOA presented credible testimony from an early homeowner and board member stating that all backyards in the community were sold as “just dirt,” with no developer-installed landscaping or irrigation. The Administrative Law Judge ruled that the Petitioner’s arguments were based on “suppositions and inferences” and did not meet the “preponderance of the evidence” standard required to prove his claim.

Case Overview

This dispute was initiated by a petition filed with the Arizona Department of Real Estate and adjudicated by the Office of Administrative Hearings. The core issue was the interpretation of HOA maintenance responsibilities as defined in the community’s governing documents.

Case Detail

Information

Case Number

18F-H1818053-REL

Petitioner

Travis Prall

Respondent

Villas at Tierra Buena HOA

Adjudicator

Administrative Law Judge Tammy L. Eigenheer

Initial Hearing

September 4, 2018

Initial Decision

September 24, 2018 (Petition Dismissed)

Rehearing

January 11, 2019

Final Decision

January 31, 2019 (Petition Dismissed)

Timeline of Key Events

• 2010: Petitioner Travis Prall purchases his home, an “interior” unit, and believes the HOA is responsible for both front and backyard maintenance.

• July 26, 2014: A storm knocks over a large tree in the Petitioner’s backyard. He pays for its removal while asserting it was the HOA’s responsibility.

• Post-2014: The tree regrows from its remaining trunk.

• 2018: The HOA observes that the regrown tree’s roots are causing a “pony wall” to buckle and hires Sun King Fencing & Gates to perform repairs. The repair company recommends removing the tree to prevent recurrence.

• May 3, 2018: The HOA issues a “Courtesy Letter” to the Petitioner, requesting he “trim or remove the tree in the back yard causing damage to the pony wall.”

• June 4, 2018: In response, the Petitioner files a Dispute Process Petition with the Arizona Department of Real Estate, initiating the legal proceedings.

Central Allegation and Dispute

The Petitioner alleged that the Villas at Tierra Buena HOA violated Section 7.1.4 of its CC&Rs by “neglecting yard maintenance in visible public yards.” His central claim was that his backyard, though enclosed, qualifies as a “Public Yard” under the CC&Rs and that the HOA was therefore responsible for the maintenance and removal of the problematic tree. The HOA’s demand that he handle the tree himself constituted, in his view, a violation of their duties.

Analysis of Arguments and Evidence

The case presented conflicting interpretations of the CC&Rs and opposing accounts of historical maintenance practices.

Petitioner’s Position (Travis Prall)

The Petitioner’s case was built on his interpretation of the CC&Rs and inferences drawn from circumstantial evidence.

• CC&R Interpretation: Argued that his backyard is a “Public Yard” because, while enclosed by a four-foot wall (two-foot block plus two-foot aluminum fence), it is “generally visible from Neighboring Property” via a community walkway.

• Claim of Prior Maintenance: Testified that from 2010 to 2013, the HOA did provide landscaping maintenance for his backyard.

• Inferences about Original Landscaping:

◦ Posited that the large size of the tree in 2010 indicated it must have been planted by the original developer around 2000.

◦ Argued that the similar design of irrigation systems across the community suggested they were all installed during original construction, including those in backyards.

◦ Noted that the sprinkler system in his backyard wrapped around the tree, further suggesting they were installed together by the developer.

Respondent’s Position (Villas at Tierra Buena HOA)

The Respondent’s defense relied on its own interpretation of the CC&Rs, consistent historical practice, and direct testimony regarding the community’s development.

• CC&R Interpretation: Argued that an “enclosed” yard is, by definition, a “Private Yard,” making the homeowner responsible for its maintenance.

• Denial of Prior Maintenance: Stated unequivocally that it had never provided landscaping services for any resident’s backyard. Its responsibility is limited to front yards and common areas.

• Practical and Liability Concerns: Argued that it has no access to control backyard irrigation systems and that its workers entering enclosed yards would create liability issues, such as pets escaping.

• Crucial Rehearing Testimony: Presented testimony from Maureen Karpinski, the HOA Board President.

◦ Ms. Karpinski, a real estate agent, purchased her home from the developer in 2002 and was involved with the community during its construction phase.

◦ She testified with certainty that her backyard was “just dirt” with no landscaping or irrigation when she purchased it.

◦ She stated that, to the best of her knowledge, “none of the homes in Respondent’s community were sold with any landscaping or irrigation in the back yards and were just dirt.”

Interpretation of Governing CC&R Sections

The dispute revolved around the specific language in the Declaration of Covenants, Conditions, Restrictions and Easements.

Section

Provision

Significance in the Case

The HOA must “Replace and maintain all landscaping and other Improvements as originally installed by Declarant on the Public Yards of Lots…“

This became the dispositive clause. The Petitioner’s entire claim depended on proving the tree was “originally installed by Declarant.”

“Private Yard” means that portion of a Yard which is enclosed or shielded from view… so that it is not generally Visible from Neighboring Property. “Public Yard” means that portion of a Yard which is generally visible from Neighboring Property…

This created a central point of interpretive conflict. The Petitioner argued the clause meant “enclosed and not visible,” while the HOA argued it meant “enclosed or shielded.” The Judge ultimately did not rule on this ambiguity.

“Visible from Neighboring Property” means… visible to a person six feet tall standing on any part of such neighboring property…

This definition supported the Petitioner’s claim that his backyard was, in fact, “visible” from the common area walkway.

Administrative Law Judge’s Rulings and Rationale

The Administrative Law Judge (ALJ) dismissed the Petitioner’s case in both the initial hearing and the rehearing, focusing on the burden of proof related to a single, critical phrase in the CC&Rs.

Initial Decision (September 24, 2018)

• Avoidance of Ambiguity: The ALJ acknowledged the potential merit of the Petitioner’s interpretation of “Public Yard,” stating “the language of the CC&Rs may lend itself to a reading that Respondent is responsible for the maintenance of the enclosed back yards of the interior homes.” However, the ALJ concluded the tribunal was “not required to reach that issue in this matter.”

• Focus on “Originally Installed by Declarant”: The decision hinged entirely on Section 7.1.4. The ALJ found that the “Petitioner failed to present any evidence that the tree at issue was originally installed by the Declarant.”

• Lack of Proof: The ALJ noted that the tree’s rapid regrowth from 2013 to 2018 made it impossible to conclude that the original tree must have been planted by the developer in 2000.

• Conclusion: The Petitioner failed to meet the “preponderance of the evidence” burden of proof, and the petition was dismissed.

Rehearing Decision (January 31, 2019)

• Rejection of Petitioner’s Inferences: The ALJ characterized the Petitioner’s evidence regarding the tree’s age and the irrigation system as “suppositions and inferences.”

• Credibility of Respondent’s Testimony: In contrast, the ALJ found the testimony of HOA President Maureen Karpinski to be “the only credible evidence offered regarding the landscaping of the homes.”

• Definitive Factual Finding: Based on Ms. Karpinski’s testimony, the ALJ concluded there was “no evidence there was any landscaping or improvements originally installed by Declarant.”

• Final Conclusion: As the precondition of Section 7.1.4 (that landscaping be “originally installed by Declarant”) was not met, the HOA had no maintenance duty for the Petitioner’s backyard. The Petitioner again failed to establish his case by a preponderance of the evidence, and the petition was dismissed with finality.

Study Guide: Prall v. Villas at Tierra Buena HOA

Short Answer Quiz

Instructions: Answer the following ten questions based on the provided legal decisions. Each answer should be two to three sentences long.

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

2. What specific section of the governing documents did the Petitioner allege was violated, and what was the central claim of his petition?

3. Describe the key physical differences between the “interior homes” and “exterior homes” within the Villas at Tierra Buena community as detailed in the hearing.

4. What incident in 2018 prompted the HOA to issue a “Courtesy Letter” to the Petitioner, and what action did the letter request?

5. Explain the two conflicting interpretations of the term “Private Yard” as argued by the Petitioner and the Respondent.

6. What was the Petitioner’s claim regarding the HOA’s past maintenance practices in his backyard, and how did the Respondent counter this assertion?

7. What is the legal standard of proof the Petitioner was required to meet, and how is this standard defined in the legal decision?

8. According to the Administrative Law Judge’s decisions, what was the single most critical point the Petitioner failed to prove, which ultimately led to the dismissal of his case?

9. During the rehearing, what crucial testimony was provided by the HOA’s witness, Maureen Karpinski, and why was it deemed the “only credible evidence” on the matter?

10. What was the final outcome of both the initial hearing on September 4, 2018, and the subsequent rehearing on January 11, 2019?

——————————————————————————–

Answer Key

1. Who were the primary parties in this legal dispute, and what were their respective roles? The Petitioner was Travis Prall, the homeowner who filed the dispute. The Respondent was the Villas at Tierra Buena Homeowners Association (HOA), which was defending against the Petitioner’s claims. The case was heard by Administrative Law Judge Tammy L. Eigenheer.

2. What specific section of the governing documents did the Petitioner allege was violated, and what was the central claim of his petition? The Petitioner alleged a violation of Section 7.1.4 of the Declaration of Covenants, Conditions, Restrictions and Easements (CC&Rs). His central claim was that the HOA violated this section by neglecting its duty to perform yard maintenance in his backyard, which he argued was a “visible public yard.”

3. Describe the key physical differences between the “interior homes” and “exterior homes” within the Villas at Tierra Buena community as detailed in the hearing. The exterior homes feature six to seven-foot-tall block wall fences enclosing their backyards. In contrast, the interior homes, including the Petitioner’s, have a shorter back wall consisting of a two-foot block wall topped with a two-foot aluminum fence, making the total height approximately four feet and more visible from a common walkway.

4. What incident in 2018 prompted the HOA to issue a “Courtesy Letter” to the Petitioner, and what action did the letter request? In 2018, the HOA had a “pony wall” in the Petitioner’s backyard repaired and was informed by the repair company, Sun King Fencing & Gates, that the wall had buckled due to tree roots. Consequently, the HOA issued a Courtesy Letter on May 3, 2018, requesting that the Petitioner “trim or remove the tree in the back yard causing damage to the pony wall.”

5. Explain the two conflicting interpretations of the term “Private Yard” as argued by the Petitioner and the Respondent. The Respondent argued that a yard is considered a “Private Yard” if it is enclosed or shielded from view, meaning any enclosed yard qualified. The Petitioner argued that the definition should be read to mean a yard is private only if it is enclosed so that it is not generally visible from neighboring property, implying visibility was the key factor.

6. What was the Petitioner’s claim regarding the HOA’s past maintenance practices in his backyard, and how did the Respondent counter this assertion? The Petitioner testified that from 2010 to 2013, the HOA had provided landscaping maintenance for his backyard. The Respondent denied this claim, stating that it had never provided any landscaping maintenance to any backyards in the community and raised liability concerns about entering residents’ enclosed yards.

7. What is the legal standard of proof the Petitioner was required to meet, and how is this standard defined in the legal decision? The Petitioner bore the burden of proof to establish his case by a “preponderance of the evidence.” This standard is defined as “such proof as convinces the trier of fact that the contention is more probably true than not,” representing the greater weight of evidence.

8. According to the Administrative Law Judge’s decisions, what was the single most critical point the Petitioner failed to prove, which ultimately led to the dismissal of his case? The judge ruled that the Petitioner failed to present evidence proving that the tree in his backyard was “originally installed by the Declarant” (the developer). According to Section 7.1.4 of the CC&Rs, the HOA’s maintenance responsibility only applied to landscaping and improvements installed by the original community developer.

9. During the rehearing, what crucial testimony was provided by the HOA’s witness, Maureen Karpinski, and why was it deemed the “only credible evidence” on the matter? Maureen Karpinski testified that none of the homes in the community were sold with any landscaping or irrigation in the backyards and that they were “just dirt” at the time of purchase. Her testimony was considered credible because she was a real estate agent involved in the initial sales, had walked the community with many buyers during construction, and was herself an original buyer.

10. What was the final outcome of both the initial hearing on September 4, 2018, and the subsequent rehearing on January 11, 2019? In both the initial decision issued on September 24, 2018, and the final decision issued after the rehearing on January 31, 2019, the Petitioner’s petition was dismissed. The judge concluded in both instances that the Petitioner had failed to establish by a preponderance of the evidence that the HOA had violated the CC&Rs.

——————————————————————————–

Essay Questions

Instructions: The following questions are designed for longer, essay-style answers. Do not provide answers.

1. Analyze the competing interpretations of “Public Yard” versus “Private Yard” as defined in Section 1.38 of the CC&Rs. Explain why the Administrative Law Judge ultimately found it unnecessary to rule on this specific issue to reach a decision.

2. Discuss the concept of “burden of proof” as it applied in this case. How did the “preponderance of the evidence” standard shape the proceedings, and what specific types of evidence (or lack thereof) were most influential in the judge’s final decision?

3. Trace the timeline of the dispute over the tree in Travis Prall’s backyard, from the 2014 storm to the final legal decision in 2019. How did each key event contribute to the escalation of the conflict and the arguments presented at the hearings?

4. Compare the evidence presented by Travis Prall with the evidence presented by the Villas at Tierra Buena HOA at the rehearing. Why did the judge characterize Prall’s evidence as “suppositions and inferences” while deeming the HOA’s evidence “credible”?

5. Section 7.1.4 of the CC&Rs contains the phrase “as originally installed by Declarant.” Explain the critical importance of this phrase to the outcome of the case and how it became the dispositive legal issue, overshadowing all other arguments.

——————————————————————————–

Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official who presides over administrative hearings, weighs evidence, and makes legal decisions, in this case, Tammy L. Eigenheer.

Arizona Department of Real Estate (Department)

The state agency with which the initial Homeowners Association (HOA) Dispute Process Petition was filed.

Burden of Proof

The legal obligation of a party in a dispute to provide sufficient evidence to prove their claim. In this case, the Petitioner bore the burden of proof.

An acronym for Declaration of Covenants, Conditions, Restrictions and Easements, which are the governing legal documents for a planned community.

Common Area

Areas within the community maintained by the HOA for the benefit of all residents. The HOA provides landscaping for these areas.

Courtesy Letter

A formal notice sent by the HOA to a homeowner regarding a potential violation or required action. In this case, it requested the removal of a tree causing damage.

Declarant

The original developer of the planned community who installed the initial infrastructure and landscaping.

HOA Dispute Process Petition

The formal document filed with the Arizona Department of Real Estate by a homeowner to initiate a legal hearing regarding an alleged violation by their HOA.

Improvements

A term used in the CC&Rs referring to any additions to a lot other than the main residential dwelling, including landscaping.

Petitioner

The party who initiates a legal action or files a petition. In this case, the homeowner Travis Prall.

Pony Wall

A term used to describe the short, two-foot-tall block wall in the backyards of the interior homes, which was buckling due to tree roots.

Preponderance of the Evidence

The standard of proof required in this case, defined as evidence that is sufficient to “incline a fair and impartial mind to one side of the issue rather than the other,” making a contention “more probably true than not.”

Private Yard

As defined in the CC&Rs, a portion of a yard “which is enclosed or shielded from view… so that it is not generally Visible from Neighboring Property.” The interpretation of this definition was a point of contention.

Public Yard

As defined in the CC&Rs, the portion of a yard “which is generally visible from Neighboring Property,” regardless of its location on the lot. The HOA is responsible for maintaining landscaping originally installed by the Declarant in Public Yards.

Respondent

The party against whom a petition is filed; the party that must respond to the claims. In this case, the Villas at Tierra Buena HOA.

Visible from Neighboring Property

A term defined in the CC&Rs to mean an object that would be visible to a six-foot-tall person standing on a neighboring property. It includes a specific exception for objects visible only through a wrought iron fence.

As defined in the CC&Rs, “the portion of the Lot devoted to Improvements other than the Residential Dwelling.”

⚖️

18F-H1818053-REL-RHG

2 sources

These documents are two Administrative Law Judge Decisions from the Arizona Office of Administrative Hearings concerning a dispute between Travis Prall, the Petitioner, and the Villas at Tierra Buena HOA, the Respondent. The first document outlines the initial decision, dated September 24, 2018, which dismissed Mr. Prall’s petition arguing the HOA violated their Declaration of Covenants, Conditions, Restrictions, and Easements (CC&Rs) by neglecting yard maintenance. The second document is the decision following a rehearing requested by the Petitioner, dated January 31, 2019, which reaffirmed the initial dismissal, concluding that Mr. Prall failed to prove that the landscaping in question was originally installed by the Declarant, a prerequisite for the HOA’s maintenance responsibility under the CC&Rs. Both decisions rely heavily on interpreting sections of the CC&Rs, particularly the definitions of “Public Yard” versus “Private Yard,” to determine the HOA’s obligation. Ultimately, both rulings found that the Petitioner did not meet his burden of proof by a preponderance of the evidence.

Case Participants

Petitioner Side

  • Travis Prall (petitioner)
    Appeared on his own behalf

Respondent Side

  • Lydia Pierce Linsmeier (HOA attorney)
    Carpenter, Hazlewood, Delgado & Bolen LLP
    Represented Villas at Tierra Buena HOA
  • Nicole Payne (HOA attorney)
    Carpenter, Hazlewood, Delgado & Bolen LLP
    Represented Villas at Tierra Buena HOA
  • Maureen Karpinski (board member)
    Villas at Tierra Buena HOA
    President of the Board; testified
  • Frank Peake (property manager)
    Pride Community Management
    Owner of Pride Community Management; testified
  • Rebecca Stowers (community manager)
    Community Manager; testified at initial hearing

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate

Jay A. Janicek vs. Sycamore Vista NO. 8 Homeowners Association

Posted on by

Case Summary

Case ID 19F-H1918001-REL
Agency ADRE
Tribunal OAH
Decision Date 2019-03-25
Administrative Law Judge Jenna Clark
Outcome total
Filing Fees Refunded $500.00
Civil Penalties $250.00

Parties & Counsel

Petitioner Jay A. Janicek Counsel Jake Kubert
Respondent Sycamore Vista No. 8 Homeowners Association Counsel Evan Thompson

Alleged Violations

ARIZ. REV. STAT. § 33-1804(B); Association Bylaws Article III, Sections 3 & 4; Association Bylaws Article VIII, Section 1

Outcome Summary

The ALJ granted the petition, concluding that the HOA Board’s unilateral amendment of the Bylaws on November 20, 2017, was an invalid action taken without the required vote of the Association members and without statutory notice, violating ARIZ. REV. STAT. § 33-1804(B) and the Association’s governing documents. The amendment was invalidated, and the Respondent was ordered to refund the Petitioner's filing fee and pay a $250.00 civil penalty.

Key Issues & Findings

Whether Sycamore Vista No. 8 Homeowners Association (Respondent) violated Association Bylaws Article III, Sections 3 & 4 and Article VIII, Section 1 in an action taken by the board on November 20, 2017.

The Board of Directors attempted a third amendment to the Bylaws on November 20, 2017, specifically changing the requirements for the Association's financial review (audit, review, or compilation). The ALJ concluded that this action was invalid because it was taken in the absence of a quorum of Association members voting in favor of the amendment, violating both the Bylaws and statutory notice requirements.

Orders: The petition was granted. The third amendment to the Association Bylaws taken on November 20, 2017, was invalidated. Respondent was ordered to pay the Petitioner the filing fee required by ARIZ. REV. STAT. § 32-2199.01 and pay a civil penalty of $250.00 to the Planned Community Hearing Office Fund.

Filing fee: $500.00, Fee refunded: Yes, Civil penalty: $250.00

Disposition: petitioner_win

Cited:

  • ARIZ. REV. STAT. § 33-1804(B)
  • Association Bylaws Article III

Analytics Highlights

Topics: HOA Governance, Bylaws Amendment, Open Meeting Law, ARS 33-1804, Membership Vote, Filing Fee Refund
Additional Citations:

  • ARIZ. REV. STAT. § 33-1804(B)
  • ARIZ. REV. STAT. § 32-2199.02(A)
  • ARIZ. REV. STAT. § 32-2199.05
  • Powell v. Washburn, 125 P.3d 373 (Ariz. 2006)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)

Video Overview

Audio Overview

Decision Documents

19F-H1918001-REL Decision – 696205.pdf

Uploaded 2026-04-26T09:47:21 (169.8 KB)

19F-H1918001-REL Decision – 661797.pdf

Uploaded 2026-04-26T09:47:27 (143.2 KB)

19F-H1918001-REL Decision – 696205.pdf

Uploaded 2026-04-24T11:15:00 (169.8 KB)

19F-H1918001-REL Decision – 661797.pdf

Uploaded 2026-04-24T11:15:08 (143.2 KB)

19F-H1918001-REL Decision – 661797.pdf

Uploaded 2026-01-23T17:25:37 (143.2 KB)

19F-H1918001-REL Decision – 696205.pdf

Uploaded 2026-01-23T17:25:40 (169.8 KB)

Briefing Document: Janicek v. Sycamore Vista No. 8 Homeowners Association

Executive Summary

This document provides a comprehensive analysis of the Administrative Law Judge (ALJ) Decision in the case of Jay A. Janicek v. Sycamore Vista No. 8 Homeowners Association (No. 19F-H1918001-REL-RHG). The central issue was the validity of a bylaw amendment enacted by the Association’s Board of Directors on November 20, 2017, without a vote of the general homeowner membership.

The ALJ ruled decisively in favor of the Petitioner, Jay Janicek, finding that the Board’s action was invalid. The decision hinged on a critical interpretation of the Association’s governing documents, concluding that the term “members” in the context of bylaw amendments unambiguously refers to the homeowner membership, not the Board of Directors. The ruling established that the Board does not have the authority to amend bylaws where that power is reserved for the membership.

Furthermore, the ALJ concluded that the Board’s action violated Arizona’s Open Meeting Law (A.R.S. § 33-1804) by failing to provide the required notice to homeowners for a meeting concerning a proposed bylaw amendment. As a result, the amendment was invalidated, and the Association was ordered to pay the Petitioner’s filing fee and a civil penalty of $250.

Case Background and Procedural History

Parties and Jurisdiction

• Petitioner: Jay A. Janicek, a property owner within the Sycamore Vista subdivision and a member of the Respondent Association.

• Respondent: Sycamore Vista No. 8 Homeowners Association (“the Association”), a homeowners’ association in Tucson, Arizona, governed by its Covenants, Conditions, and Restrictions (CC&Rs) and overseen by a Board of Directors.

• Adjudicating Body: The Arizona Office of Administrative Hearings (OAH), an independent state agency, which received the case on referral from the Arizona Department of Real Estate.

The Central Dispute

The core of the dispute was an action taken by the Association’s Board of Directors during a regular meeting on November 20, 2017. At this meeting, the Board, with three of five directors present, voted to approve a third amendment to the Association’s Bylaws. The amendment altered Article VIII Section 6(d), changing the requirement for an annual financial check from:

“cause an annual audit of the Association books to be made by a public accountant at the completion of each fiscal year”

“cause an annual audit, review, or compilation of the Associations financial records to be made by a public accountant within 180 days after the end of the HOA’s fiscal year.”

The Petitioner contended this action was invalid because it was undertaken without a vote of the general Association membership, as he believed the governing documents required.

Timeline of Adjudication

1. July 25, 2018: Petitioner files a petition with the Arizona Department of Real Estate.

2. September 05, 2018: An initial evidentiary hearing is held before the OAH.

3. September 25, 2018: The OAH issues an ALJ Decision in the Petitioner’s favor.

4. October 23, 2018: The Respondent submits a Request for Rehearing.

5. November 07, 2018: The Department grants the rehearing request and refers the matter back to the OAH.

6. March 05, 2019: A rehearing is conducted, based on legal briefs and closing arguments without new evidence.

7. March 25, 2019: The final ALJ Decision is issued, reaffirming the initial ruling in favor of the Petitioner.

Analysis of Governing Documents and Statutes

The case decision rested on the interpretation of specific articles within the Association’s Bylaws and relevant Arizona state statutes.

Key Bylaw Provisions

Article

Section

Description

Article IV

Section 1

States that the “affairs of this Association shall be managed by a Board of not less than three (3) nor more than five (5) directors.”

Article VI

Section 1

Establishes that regular meetings of the Board of Directors shall be held monthly without notice.

Article VI

Section 2

Governs special meetings of the Board, requiring not less than three days’ notice to each Director.

Article VI

Section 3

Defines a quorum for Board meetings as “a majority of the number of Directors.”

Article VII

Section 1

Outlines the Powers and Duties of the Board of Directors. This section does not explicitly grant the Board the power to amend the Bylaws.

Article XIII

Section 1

(The central provision in the dispute) States: “These Bylaws may be amended at a regular or special meeting of the Board of Directors of the Association by a vote of a majority of a quorum of members present in person or by proxy.”

Relevant Arizona Statutes

• A.R.S. § 33-1804 (Open Meeting Law): This statute was central to the Petitioner’s argument and the ALJ’s final decision.

◦ Subsection (A): Requires that all meetings of the members’ association and the board of directors be open to all members of the association.

◦ Subsection (B): Mandates specific notice requirements for any meeting of the members, stating that notice “shall also state the purpose for which the meeting is called, including the general nature of any proposed amendment to the declaration or bylaws.”

◦ Subsection (F): The ALJ noted that this section codifies the legislative intent of the statute, which, as cited from a Governor’s message, is to “promote transparency and participation for all residents in homeowners’ association governance.”

Arguments of the Parties

Petitioner’s Position (Jay Janicek)

The Petitioner’s case was built on a textual interpretation of the Bylaws and adherence to state law.

• Interpretation of “Members”: The Petitioner argued that the word “members” in Article XIII, Section 1 refers to the general homeowner membership of the Association, not the members of the Board of Directors.

• Textual Differentiation: The drafters of the Bylaws intentionally used the words “members” and “directors” distinctly throughout the document. Where the intent was to refer to the Board, the word “Director” was specifically used (e.g., Article VI).

• Proxy Voting: The inclusion of the term “proxy” in Article XIII supports the argument that the vote is for the general membership, as Board members are not permitted to vote by proxy.

• Lack of Explicit Power: Article VII, which details the Board’s powers, does not grant the authority to amend the Bylaws, implying such power is reserved for the membership.

• Statutory Violation: The Board’s action violated A.R.S. § 33-1804 because the required notice for a meeting concerning a bylaw amendment was not provided to the general membership.

• Legal Precedent: The Petitioner cited Powell v. Washburn, an Arizona Supreme Court case holding that restrictive covenants (which he argued include the Bylaws) should be interpreted to give effect to the intention of the parties as determined from the entire document.

Respondent’s Position (Sycamore Vista No. 8 HOA)

The Association argued that its actions were a valid exercise of the Board’s authority.

• Broad Authority: The Respondent cited Article IV, which states the “affairs of this Association shall be managed by a Board,” to assert its general authority.

• Valid Board Meeting: The amendment occurred at a regular monthly Board meeting as allowed by Article VI. The meeting had three directors present, which constituted a valid quorum for transacting business.

• Interpretation of Article XIII: The Respondent argued that the phrase “at a regular or special meeting of the Board of Directors” in Article XIII indicates that the Board is the body empowered to make the amendment, and the word “members” in that context refers to the members of the Board.

• No Open Meeting Law Violation: The Respondent contended its conduct was not a violation because the action occurred during a regular Board meeting with a proper quorum of directors.

Administrative Law Judge’s Decision and Rationale

The ALJ’s conclusions were unequivocal, fully adopting the Petitioner’s interpretation of the governing documents and state law.

Conclusions of Law

• Burden of Proof: The ALJ found that the Petitioner successfully sustained his burden of proving by a preponderance of the evidence that the Respondent violated A.R.S. § 33-1804.

• Interpretation of “Members” vs. “Directors”: The decision states that the governing documents are clear: “‘members’ refers to the body of owners who make up the membership of the Association, and ‘directors’ refers to the few who are elected to the membership’s Board.” The ALJ found the differentiation to be intentional by the drafters.

• Avoiding Absurdity: The decision holds that construing the Bylaws to allow the Board to amend them would create an absurdity. The ALJ wrote, “The voices of few cannot speak for all, unless all have bestowed those few with the power and authority to speak on their behalf.”

• Violation of Statute and Bylaws: The ALJ concluded that the Board’s action on November 20, 2017, violated both A.R.S. § 33-1804(B) due to a lack of notice and Article III of the Association Bylaws.

• Rejection of Respondent’s Argument: The decision explicitly states, “The Tribunal is not swayed by Respondent’s closing arguments.”

Final Order

Based on the findings and conclusions, the ALJ issued the following binding order:

1. Petition Granted: The Petitioner’s petition was officially granted.

2. Amendment Invalidated: The third amendment to the Association Bylaws, as enacted on November 20, 2017, was invalidated.

3. Fees and Penalties: The Respondent was ordered to pay the Petitioner’s filing fee and a civil penalty of $250.00 to the Planned Community Hearing Office Fund.

Study Guide: Janicek v. Sycamore Vista No. 8 Homeowners Association

Short-Answer Quiz

1. Who were the primary parties in the case No. 19F-H1918001-REL-RHG, and what were their respective roles?

2. What specific action taken by the Respondent on November 20, 2017, prompted the Petitioner to file a complaint?

3. According to the Petitioner, what was the crucial difference in meaning between the terms “members” and “directors” as used in the Association’s Bylaws?

4. What was the Respondent’s central argument for why the Board of Directors had the authority to amend the Bylaws at its regular meeting?

5. What is Arizona’s Open Meeting Law, and how did the Petitioner argue that the Respondent violated it?

6. What was the financial concern that the Petitioner argued could potentially impact him as a homeowner due to the Board’s amendment?

7. Describe the procedural history of this case after the initial Administrative Law Judge (ALJ) Decision on September 25, 2018.

8. What case did the Petitioner cite regarding the interpretation of restrictive covenants, and what principle did it establish?

9. What is the legal standard of proof required in this proceeding, and how is it defined in the document?

10. What was the final outcome of the case, including the specific orders issued by the Administrative Law Judge?

——————————————————————————–

Answer Key

1. The primary parties were Jay A. Janicek, the Petitioner, and the Sycamore Vista No. 8 Homeowners Association, the Respondent. The Petitioner is a property owner and member of the Association who brought the legal action, while the Respondent is the homeowners’ association governed by a Board of Directors.

2. On November 20, 2017, the Respondent’s Board of Directors held a regular meeting where they voted to approve a third amendment to the Association’s Bylaws. This amendment changed the requirement for an “annual audit…by a public accountant” to an “annual audit, review, or compilation” of financial records.

3. The Petitioner argued that the term “members” in Article XIII of the Bylaws refers to the entire body of property owners in the Association, not the Board of Directors. He contended that if the drafter had intended to give amendment power to the Board, the specific word “directors” would have been used, as it was in other sections of the Bylaws.

4. The Respondent argued that its actions were proper because the Bylaws empower the Board to manage the Association’s affairs at regular monthly meetings. They contended that since a quorum of three directors was present at the November 20, 2017 meeting, the Board was empowered to transact business, which they interpreted to include amending the bylaws as described in Article XIII.

5. Arizona’s Open Meeting Law is ARIZ. REV. STAT. § 33-1804, which requires meetings of a homeowners’ association’s board and members to be open to all members. The Petitioner argued the Respondent violated this by amending a bylaw without proper notice to the full membership, which is required for any proposed bylaw amendment, thus undermining the law’s legislative intent of transparency.

6. The Petitioner was concerned that the amendment weakened the financial oversight of the Association. It modified a requirement for a third-party audit to a less stringent “review, or compilation,” creating a risk that the Association could perform its own financial checks, and as a homeowner, he had an interest in ensuring the Association’s financials were correct.

7. After the initial decision in the Petitioner’s favor on September 25, 2018, the Respondent submitted a Request for Rehearing on October 23, 2018. The Department of Real Estate granted this request on November 7, 2018, and the matter was referred back to the Office of Administrative Hearings for a rehearing, which ultimately took place on March 5, 2019.

8. The Petitioner cited Powell v. Washburn. This case established the principle that restrictive covenants should be interpreted to give effect to the intention of the parties, as determined from the language of the entire document and the purpose for which the covenants were created.

9. The legal standard of proof was a “preponderance of the evidence.” The document defines this as “such proof as convinces the trier of fact that the contention is more probably true than not” and as evidence with the most “convincing force” that inclines an impartial mind to one side of an issue.

10. The final outcome was a ruling in favor of the Petitioner. The ALJ granted the petition, invalidated the third amendment to the Bylaws that was passed on November 20, 2017, and ordered the Respondent to pay the Petitioner’s filing fee and a civil penalty of $250.00.

——————————————————————————–

Essay Questions

1. Analyze the Administrative Law Judge’s reasoning in differentiating between the terms “members” and “directors.” How did the principle of avoiding absurdity and considering the drafter’s intent, as seen throughout the Bylaws, contribute to the final decision?

2. Discuss the interplay between the Association’s governing documents (CC&Rs and Bylaws) and state law (ARIZ. REV. STAT. § 33-1804). Explain which authority took precedence in this case and why the Board’s actions were found to violate both.

3. Evaluate the legal strategy employed by the Petitioner, Jay A. Janicek. Consider his use of specific Bylaw articles, the citation of Powell v. Washburn, and his argument regarding the legislative intent of the Open Meeting Law.

4. Examine the arguments presented by the Respondent, Sycamore Vista No. 8 Homeowners Association. Why did the Judge find their interpretation of the Bylaws unconvincing, despite their claims that the Board was empowered to transact business with a quorum present?

5. Based on the text, discuss the broader implications of this ruling for homeowners’ associations in Arizona. How does this decision reinforce the principles of transparency and the limitations of a Board’s power relative to the association’s general membership?

——————————————————————————–

Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An independent judge, in this case Jenna Clark, who presides over administrative hearings at the Office of Administrative Hearings (OAH).

ARIZ. REV. STAT. § 33-1804

A section of the Arizona Revised Statutes, also known as Arizona’s Open Meeting Law, which mandates that meetings of an HOA’s members and board of directors must be open to all members and requires specific notice for meetings where bylaw amendments will be considered.

Bylaws

A set of rules that govern the internal operations of the homeowners’ association. In this case, key articles discussed include Article VI (Meeting of Directors), Article VII (Powers of the Board), and Article XIII (Amendments).

Covenants, Conditions, and Restrictions. These are governing documents that form an enforceable contract between the Association and each property owner, empowering the Association to control certain aspects of property use.

Member

As defined in the Association’s documents, a person entitled to membership by virtue of being a property owner within the Sycamore Vista subdivision. The Judge concluded this term refers to the body of owners, not the Board of Directors.

Office of Administrative Hearings (OAH)

An independent state agency in Arizona, unaffiliated with the parties, responsible for conducting evidentiary hearings and making legal decisions in disputes like this one.

Petitioner

The party who files a petition initiating a legal case. In this matter, the Petitioner was Jay A. Janicek, a homeowner in the Association.

Preponderance of the evidence

The burden of proof in this case. It is defined as evidence that is more likely true than not and has the most convincing force, sufficient to incline a fair and impartial mind to one side of an issue.

The authority to represent someone else, especially in voting. The document notes that the term “proxy” applies to votes of the members, as members of the Board are not permitted to vote by proxy.

Quorum

The minimum number of members of a deliberative assembly necessary to conduct the business of that group. For the Respondent’s Board of Directors, a quorum is defined as a majority of the number of Directors.

Respondent

The party against whom a petition is filed. In this matter, the Respondent was the Sycamore Vista No. 8 Homeowners Association.

Restrictive Covenants

Legal obligations imposed in a deed to real property to do or not do something. The Petitioner argued this term included the CC&Rs, Bylaws, and rules of the Association.

Tribunal

A body established to settle certain types of dispute. In this document, it refers to the Administrative Law Judge at the Office of Administrative Hearings.

Select all sources
696205.pdf

No emoji found

Loading

19F-H1918001-REL-RHG

1 source

The provided text is an Administrative Law Judge Decision from the Office of Administrative Hearings regarding a dispute between Jay A. Janicek (Petitioner) and the Sycamore Vista No. 8 Homeowners Association (Respondent). The core issue of the case, designated No. 19F-H1918001-REL-RHG, revolves around whether the Homeowners Association violated its Bylaws and Arizona state statute (§ 33-1804) when its Board of Directors unilaterally amended the Bylaws on November 20, 2017. The Administrative Law Judge determined that the Board’s action was invalid because the power to amend the Bylaws was delegated to the Association’s general membership, not the Board of Directors, and the Board failed to provide the required notice for such an amendment. Consequently, the Petitioner’s request was granted, the amendment was invalidated, and the Association was ordered to pay the Petitioner’s filing fee and a civil penalty.

1 source

What central conflict drove the administrative hearing and subsequent rehearing process?
How did governing documents and Arizona statutes shape the final legal decision?
What ultimate implications does this ruling have for homeowners association governance and member rights?

Based on 1 source

00:00
00:00

NotebookLM can be inaccurate; please double check its responses.

Case Participants

Petitioner Side

  • Jay A. Janicek (petitioner)
    Appeared on his own behalf at initial hearing; Observed rehearing
  • Jake Kubert (petitioner attorney)
    Dessaules Law Group
    Appeared at rehearing

Respondent Side

  • Evan Thompson (HOA attorney)
    Thompson Krone, P.L.C.
  • Maxwell T. Riddiough (HOA attorney)
    Thompson Krone, P.L.C.
  • Andrew F. Vizcarra (property manager)
    Tucson Realty & Trust Co. Management
    Recipient of correspondence for Respondent HOA

Neutral Parties

  • Jenna Clark (ALJ)
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate

Other Participants

  • Dennis Legere (observer)
    Present at initial hearing
  • Becky Nutt (observer)
    Present at initial hearing
  • Caleb Rhodes (observer)
    Present at initial hearing

Patricia Davies-Brown vs. Starwood Estates Homeowners Association

Posted on by

Case Summary

Case ID 18F-H1818039-REL
Agency ADRE
Tribunal OAH
Decision Date 2018-09-14
Administrative Law Judge Velva Moses-Thompson
Outcome The Petitioners' request alleging that the Starwood Estates Homeowners Association violated community documents by approving a copper-colored metal roof was denied. The Administrative Law Judge concluded that Petitioners failed to establish the violation by a preponderance of the evidence, noting that the guidelines prohibiting reflective surfaces applied primarily to windows and doors, not roofs.
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Patricia Davies-Brown, Individually and as Trustee of the Trust; BART A. BROWN, JR.; SCOTT R. DAVIES Counsel —
Respondent Starwood Estates Homeowners Association Counsel Daniel Campbell & Kristopher L. Smith

Alleged Violations

CC&Rs; Bylaws; Architectural Guidelines

Outcome Summary

The Petitioners' request alleging that the Starwood Estates Homeowners Association violated community documents by approving a copper-colored metal roof was denied. The Administrative Law Judge concluded that Petitioners failed to establish the violation by a preponderance of the evidence, noting that the guidelines prohibiting reflective surfaces applied primarily to windows and doors, not roofs.

Why this result: Petitioners failed to establish by a preponderance of the evidence that Respondent violated its CC&Rs, Bylaws, or Architectural Guidelines.

Key Issues & Findings

Violation of Exterior Appearance and Colors provisions regarding copper-colored metal roof approval

Petitioners alleged that the HOA improperly approved a copper-colored metal roof because it constituted a reflective surface and did not blend with the natural surroundings, violating the community documents. The ALJ denied the petition, finding Petitioners failed to establish by a preponderance of the evidence that the HOA violated its documents, noting the reflective surfaces ban applied to windows and doors, not roofs, and the roof's appearance was acceptable.

Orders: Petitioners' petition is denied.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • 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)
  • Powell v. Washburn, 211 Ariz. 553, 556 ¶ 9, 125 P.3d 373, 376 (2006)
  • Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs., 867 P.2d 70, 75 (Colo. App. 1993)

Analytics Highlights

Topics: architectural control, CC&Rs enforcement, metal roof approval, reflective surfaces, burden of proof
Additional Citations:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • 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)
  • Powell v. Washburn, 211 Ariz. 553, 556 ¶ 9, 125 P.3d 373, 376 (2006)
  • Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs., 867 P.2d 70, 75 (Colo. App. 1993)

Video Overview

Audio Overview

Decision Documents

18F-H1818039-REL Decision – 653217.pdf

Uploaded 2026-04-24T11:12:08 (41.6 KB)

18F-H1818039-REL Decision – 659968.pdf

Uploaded 2026-04-24T11:12:20 (104.6 KB)

Briefing Document: Davies-Brown v. Starwood Estates HOA

Executive Summary

This document summarizes the administrative hearing and decision in case No. 18F-H1818039-REL, concerning a dispute between homeowners Patricia Davies-Brown, Bart A. Brown, Jr., and Scott R. Davies (the “Petitioners”) and the Starwood Estates Homeowners Association (the “Respondent”). The core of the dispute was the HOA Board of Directors’ 2013 approval of a copper-colored metal roof for homeowners Jeff and Karen Martin.

The Petitioners alleged this approval violated the community’s CC&Rs, Bylaws, and Architectural Guidelines. Their primary arguments were that the roof was an impermissible “reflective surface,” that it did not “blend with the natural surrounding and landscape,” and that the Board lacked the authority to approve it without prior review by the Architectural Committee (ACC) and without viewing a physical sample.

The Respondent defended the Board’s decision, arguing that the Board possessed the authority to grant such approvals. They contended the prohibition on reflective surfaces in the community guidelines applies specifically to windows and doors, not roofing. Furthermore, they asserted that the roof was aesthetically compliant and that other reflective metal roofs exist within the community.

The Administrative Law Judge (ALJ), Velva Moses-Thompson, ruled in favor of the Respondent. The decision, issued on September 14, 2018, denied the petition, concluding that the Petitioners failed to meet their burden of proof. The ALJ found that the Board had the authority to approve the roof, the ban on reflective surfaces did not apply to roofing, and the Petitioners did not establish that the roof failed to blend with its natural surroundings.

——————————————————————————–

Case Overview

• Case Name: Patricia Davies-Brown, et al. vs. Starwood Estates Homeowners Association

• Case Number: 18F-H1818039-REL

• Forum: Arizona Office of Administrative Hearings

• Presiding Judge: Velva Moses-Thompson, Administrative Law Judge

• Hearing Dates: July 10, 2018, and August 13, 2018

• Final Decision Date: September 14, 2018

Key Parties and Representatives

Name(s)

Representation / Contact

Petitioners

Patricia Davies-Brown, Bart A. Brown, Jr., Scott R. Davies

Appeared on behalf of themselves
9777 E Dreyfus Ave., Scottsdale, AZ 85260
[email protected]

Respondent

Starwood Estates Homeowners Association

Kristopher L. Smith, Esq.
O’Connor & Campbell, P.C.
7955 S Priest Dr., Tempe, AZ 85284
[email protected]

Homeowners

Jeff and Karen Martin

Owners of the property with the disputed roof at 8500 Skywood Drive, Pinetop, Arizona (Lot 40 of Starwood Estates).

Core Dispute: The Martin Residence Roof

The central conflict originated in the summer of 2013 when the Starwood Estates Board of Directors approved a request from Jeff and Karen Martin to install a copper-colored metal roof on their home. The approval was passed by a 5-1 vote. Petitioner Scott R. Davies was the sole board member who voted against the approval at that time.

The Board reviewed a brochure containing the roof’s color before granting approval but did not observe a physical sample. However, one Board member, Pat Knight, was reportedly familiar with the appearance of such roofs from a previous home she owned nearby. The petition challenging this 2013 decision was filed on or about March 26, 2018.

Petitioners’ Allegations and Arguments

The Petitioners filed their petition with the Arizona Department of Real Estate, alleging that the HOA violated community governing documents. Their case was built on three central questions:

1. Does the exterior appearance of the Martins’ aluminum copper-colored metal roof blend with the “natural surrounding and landscape” of Starwood Estates?

2. Does such roof constitute a “reflective surface”?

3. If the answer to (1) above is no and/or the answer to (2) above is yes, did the ACC and the Board of Starwood Estates erroneously violate the provisions of the CC&R’s and GUIDELINES in permitting the Martins to install such aluminum copper-colored metal roof…?

During the hearing, the Petitioners expanded on these points, arguing:

• Reflective Surface: The copper-colored roof was a prohibited reflective surface under the Architectural Guidelines.

• Aesthetic Incompatibility: The roof did not blend with the natural surroundings as required.

• Procedural Violations:

◦ The Board violated the CC&Rs by approving the roof without first viewing a physical sample of the material.

◦ The approval was invalid because it should have first been granted by the two-person Architectural Committee (ACC) appointed by the Board.

Respondent’s Defense and Arguments

The Starwood Estates HOA maintained that its approval of the Martin roof was proper and compliant with all governing documents. Their key arguments were:

• Board Authority: The HOA asserted that either the Board of Directors or the Architectural Committee had the authority to approve the roof.

• Interpretation of “Reflective Surfaces”: The Respondent argued that the prohibition on “reflective surfaces” within the Architectural Guidelines applies specifically to windows and doors, not to roofing, which is addressed in a separate section of the guidelines.

• Aesthetic Compliance: They contended the roof, while having a “shine,” was not a barred reflective surface and did blend in with the natural surroundings.

• Precedent: The HOA noted that several other metal roofs that are reflective had been previously approved in Starwood Estates. They submitted images of reflective green and red roofs in the Pinetop Country Club area as evidence.

Referenced Governing Documents

The decision cited specific sections from the HOA’s governing documents to adjudicate the dispute.

• Section 3.1.4: Requires prior written approval from the Architectural Committee for any work that alters the exterior appearance of a Lot.

• Section 5.2: States that approvals or actions to be taken by the Association “shall be valid if given or taken by the Board.”

• Article VII, Section A(2): Grants the Board authority to exercise all powers and duties vested in the Association unless reserved to the membership.

• Article VII, Section B: Empowers the Board to “Review and approve any architectural plan for the building of any improvements on any Lots.”

• Exterior Appearance and Colors: Mandates that exterior appearance “shall blend with the natural surroundings and landscape.” It also states, “Clear aluminum window and doorframes are not permitted, nor are reflective surfaces.” A note requires the owner to submit samples of materials for ACC approval.

• Roofs, Materials, and Pitches: Stipulates that “Metal roofs are permitted only with ACC approval” and that all pitched roof materials “shall promote a continuity of texture and color.”

Evidence Presented

• Petitioner’s Exhibit 13: A photograph of the Martins’ copper-colored roof. The ALJ’s decision noted that while the image showed a reflection, the photograph itself was “blurred.”

• Respondent’s Exhibit 26: The brochure containing the color of the copper-colored roof that the Board reviewed before its 2013 approval.

• Respondent’s Exhibit 7: Images of other reflective green and red metal roofs located in the Pinetop Country Club area, which were previously approved.

• Testimony: Board member Pat Knight’s familiarity with the appearance of copper-colored roofs was noted.

Administrative Law Judge’s Decision and Rationale

The petition was denied. The ALJ found that the Petitioners failed to establish by a preponderance of the evidence that the Respondent violated its CC&Rs, Bylaws, or Architectural Guidelines.

Conclusions of Law

1. Burden of Proof: The Petitioners bore the burden of proving their claims by a “preponderance of the evidence,” defined as evidence that is more probably true than not. They failed to meet this standard.

2. Board Authority: The ALJ concluded that the governing documents allowed for the roof to be approved by either the Architectural Committee or the Board of Directors. The Board’s action was therefore valid.

3. Interpretation of Reflective Surfaces: The evidence established that the prohibition on “reflective surfaces” in the Architectural Guidelines applies to windows and doors. Roofs are addressed in a separate section of the guidelines. The existence of other approved shiny metal roofs further supported this interpretation.

4. Aesthetic Compliance: The Petitioners did not provide sufficient evidence to prove that the copper-colored roof failed to blend in with the natural surroundings.

Final Order

IT IS ORDERED that Petitioners’ petition is denied because Petitioners have not established that Respondent violated the Community Bylaws, Community CC&Rs, and the Community Architectural Guidelines when Respondent approved the Martins’ request to install the copper-colored roof.

The order was made binding unless a rehearing was requested within 30 days of service.

Study Guide: Davies-Brown v. Starwood Estates HOA (Case No. 18F-H1818039-REL)

This guide provides a comprehensive review of the administrative hearing case between Patricia Davies-Brown, et al., and the Starwood Estates Homeowners Association. It includes a short-answer quiz to test factual recall, essay questions for deeper analysis, and a glossary of key terms as defined within the context of the provided legal documents.

——————————————————————————–

Short-Answer Quiz

Answer the following questions in two to three sentences, drawing exclusively from the information presented in the case documents.

1. Who were the primary parties involved in Case No. 18F-H1818039-REL?

2. What specific architectural feature was the central point of the dispute?

3. What were the three main questions the Petitioners raised in their petition filed on March 26, 2018?

4. How did the Respondent (Starwood Estates HOA) justify the approval of other reflective metal roofs in the community?

5. According to the Petitioners, which two procedural errors did the Board of Directors commit when approving the Martins’ roof?

6. What was the Administrative Law Judge’s conclusion regarding the prohibition of “reflective surfaces” in the Architectural Guidelines?

7. What is the legal standard of proof the Petitioners were required to meet, and did they succeed?

8. Which governing documents grant the Board of Directors the authority to approve architectural plans?

9. When was the disputed roof originally approved by the Board, and what was the vote count?

10. What evidence did the Board review before its initial approval, and what evidence was not reviewed at that time?

——————————————————————————–

Answer Key

1. The Petitioners were Patricia Davies-Brown (Individually and as Trustee of the Trust), Bart A. Brown, Jr., and Scott R. Davies. The Respondent was the Starwood Estates Homeowners Association.

2. The central dispute was an aluminum, “copper-colored metal roof” installed by homeowners Jeff and Karen Martin on their property at Lot 40 of Starwood Estates. The Petitioners challenged the HOA Board’s approval of this roof.

3. The Petitioners’ petition questioned whether the roof blended with the “natural surrounding and landscape,” whether it constituted a “reflective surface,” and if so, whether the Board and ACC violated the CC&Rs and Guidelines by permitting it.

4. The Respondent submitted evidence of other reflective green and red metal roofs within the Pinetop Country Club area that had been previously approved by the Board. This was used to argue that roofs with a shine were not explicitly barred.

5. The Petitioners contended the Board violated the CC&Rs by approving the roof without first viewing a physical sample. They also argued that the roof required approval from the two-person Architectural Committee (ACC) and could not be approved by the Board alone.

6. The Judge concluded that the bar on reflective surfaces, as written in the Architectural Guidelines, applies specifically to windows and doors. Roofs are addressed in a separate section of the guidelines that does not contain the same prohibition.

7. The Petitioners bore the burden of proof to establish their case by a “preponderance of the evidence,” which means showing their contention is more probably true than not. The Judge ruled that they failed to meet this standard.

8. Section 5.2 of the CC&Rs states that actions taken by the Board are valid, and Article VII of the Starwood Bylaws grants the Board the power to exercise Association authority and to review and approve architectural plans. The Judge found this authority allowed the Board to approve the roof.

9. The roof was approved by the Board of Directors in the summer of 2013. The approval passed with a 5-1 vote, with Petitioner Scott R. Davies being the sole board member who voted against it.

10. Before approving the roof, the Board reviewed a brochure containing the color of the copper-colored roof. However, the Board did not observe a physical sample of the actual roofing material.

——————————————————————————–

Essay Questions for Further Study

The following questions are designed for deeper, analytical consideration of the case. Answers are not provided.

1. Analyze the conflict between CC&Rs Section 3.1.4 (requiring ACC approval) and other governing documents (like CC&Rs Section 5.2 and Bylaws Article VII) that grant broad authority to the Board. How did the Administrative Law Judge resolve this apparent contradiction in the final decision?

2. Discuss the concept of “burden of proof” as it applied in this case. Explain what “preponderance of the evidence” means and detail why the Petitioners failed to meet this standard with respect to their claims about the roof’s reflective nature and its harmony with the natural surroundings.

3. Examine the interpretation of the Architectural Guidelines regarding “reflective surfaces.” How did the Respondent and the Administrative Law Judge construe this rule, and what evidence and reasoning supported their interpretation over the Petitioners’ broader application?

4. Evaluate the evidence presented by both the Petitioners and the Respondent. Discuss the strengths and weaknesses of each party’s evidence (e.g., the blurred photograph vs. the brochure and photos of other roofs) and explain how this likely influenced the outcome of the case.

5. Based on the issues raised in this case, what specific changes or clarifications could be made to the community’s CC&Rs and Architectural Guidelines to prevent similar disputes in the future?

——————————————————————————–

Glossary of Key Terms

Definition in Context

ACC (Architectural Committee)

A committee, as referenced in the CC&Rs and Architectural Guidelines, responsible for approving exterior alterations and ensuring all building materials and colors conform to community standards.

Administrative Law Judge (ALJ)

The presiding official (Velva Moses-Thompson) at the Office of Administrative Hearings who conducts hearings, evaluates evidence, and issues a binding decision on the matter.

Architectural Guidelines

A set of community documents establishing goals and specific rules for exterior appearance, colors, materials, and site development to retain the character of Starwood Estates.

Board of Directors (Board)

The governing body of the Starwood Estates Homeowners Association, which is empowered by the CC&Rs and Bylaws to conduct the affairs of the Association and approve architectural plans.

Bylaws

The rules and regulations that govern the internal operations of the Starwood Estates Homeowners Association, including the powers and duties of the Board of Directors.

Covenants, Conditions, and Restrictions. Legally binding rules recorded with the property deeds in the Starwood Estates community that govern what homeowners may or may not do with their property.

Conclusions of Law

The section of the ALJ’s decision that applies legal principles, statutes, and case law to the established facts of the case to reach a final judgment.

Findings of Fact

The section of the ALJ’s decision that formally lists the factual determinations made by the judge based on the evidence presented at the hearing.

Petitioner

The party that initiates a legal action by filing a petition. In this case, Patricia Davies-Brown, Bart A. Brown, Jr., and Scott R. Davies, who brought the complaint against the HOA.

Preponderance of the evidence

The standard of proof required in this administrative hearing. It is defined as evidence that is more convincing and has a greater weight than the evidence offered in opposition, persuading the fact-finder that a contention is more likely true than not.

Respondent

The party against whom a petition is filed. In this case, the Starwood Estates Homeowners Association, which had to defend its decision to approve the roof.

Restrictive Covenant

A provision in a deed or community document (like a CC&R) that limits the use of the property. In Arizona, if unambiguous, these are enforced to give effect to the intent of the parties.

This Copper Roof Caused a Legal Battle: 3 Surprising Lessons Every Homeowner Should Learn

Introduction: The Neighborhood Dispute That Went to Court

The relationship between homeowners and their Homeowners Association (HOA) can be a delicate balance. Architectural rules, designed to maintain a community’s aesthetic, often become a source of friction. But what happens when a disagreement over design choices escalates?

In the case of Davies-Brown v. Starwood Estates Homeowners Association, a dispute over Jeff and Karen Martin’s new copper-colored metal roof didn’t just cause whispers over the fence—it went all the way to a formal administrative hearing. When the HOA board approved the roof in a 5-1 vote, the lone dissenting board member, Scott R. Davies, joined two other homeowners to formally challenge the decision.

This seemingly simple disagreement over a roofing material reveals several powerful, and often counter-intuitive, lessons for anyone living in a planned community. From the structural placement of a single sentence to the evidentiary power of a blurry photograph, this case offers a masterclass in HOA law. Here are three surprising lessons every homeowner should learn.

——————————————————————————–

1. The Devil in the Document: How a Single Sentence Can Decide Everything

The first major lesson from this case is that the hyper-specific wording and structure of your community guidelines are paramount. The location and context of a rule can be just as important as the rule itself.

The petitioners’ core argument was that the copper-colored roof violated the Architectural Guidelines because it was a “reflective surface,” which they believed was forbidden. On the surface, this seems like a straightforward complaint.

However, the HOA mounted a successful counter-argument based on document structure. The Administrative Law Judge agreed with the HOA’s interpretation. The rules for roofs were addressed in a distinct section titled “Roofs, Materials, and Pitches.” The ban on “reflective surfaces,” meanwhile, was located in an entirely separate section, “Exterior Appearance and Colors,” which also contained rules for windows and doors. This seemingly minor structural detail was the deciding factor on this point.

The exact rule the petitioners cited, found in the “Exterior Appearance and Colors” section, illustrates the point perfectly:

Clear aluminum window and doorframes are not permitted, nor are reflective surfaces.

Because this prohibition was not located in the roofing section, the judge concluded it applied only to windows, doors, and general exterior surfaces—not roofs. This case highlights that homeowners must read their community documents with extreme care. A prohibition you think is universal might, in fact, be limited to a very specific context by its placement in the text.

2. The Power of Precedent: What Your Neighbors Did Years Ago Matters Today

The second key takeaway is that an HOA board’s decisions can be heavily influenced by the character of the surrounding area, not just by what has been approved inside the development’s gates.

During the hearing, the HOA presented evidence of other reflective metal roofs, including green and red ones, that existed in the broader Pinetop Country Club area. Starwood Estates is part of this larger community, and the judge’s official findings noted this evidence, which significantly supported the HOA’s position to approve the Martins’ copper-colored roof.

This reveals a nuanced lesson: an HOA doesn’t exist in a vacuum. Once a certain style or material becomes common in the surrounding region, it can establish a de facto community standard. This makes it significantly more difficult for other homeowners to argue against a similar request, as the board can point to the broader neighborhood aesthetic to justify its decision. Before you challenge a project, it’s crucial to look not only at what has been approved within your HOA, but also at the character of the community at large.

3. The Burden of Proof: Your Complaint Is Only as Good as Your Evidence

The third critical lesson is that in any formal dispute, the quality of your evidence is non-negotiable. A subjective feeling or personal opinion holds little weight without objective proof.

The petitioners attempted to prove the roof was overly reflective by submitting a photograph as evidence. However, the judge’s official findings delivered a devastating blow, noting with precise and revealing language: “Although the image showed a reflective the image, the photograph was blurred.”

This detail underscores a vital point: in a legal or formal setting, a complaint must be backed by clear, objective proof. Weak or poor-quality evidence, like a blurred photo, can completely undermine an otherwise valid concern. Even though the image hinted at the issue, its poor quality rendered it useless. If you are going to make a claim, the burden is on you to prove it with convincing, high-quality evidence. Without it, your case is likely to be dismissed.

——————————————————————————–

Conclusion: Before You Build or Battle, Do Your Homework

The Starwood Estates case serves as a powerful reminder that navigating HOA rules requires diligence. From this single dispute over a copper roof, we learn to read the fine print—and the structure—of governing documents, understand the power of aesthetic standards in the broader community, and ensure any complaint is backed by strong, clear evidence.

The next time you plan a home project or question a neighbor’s, ask yourself: have you really done your homework on the rules, the history, and the facts?

Case Participants

Petitioner Side

  • Patricia Davies-Brown (petitioner)
    Appeared on behalf of petitioners
  • Bart A. Brown, Jr. (petitioner)
  • Scott R. Davies (petitioner, board member)
    Starwood Estates HOA Board
    Voted against the roof approval

Respondent Side

  • Kristopher L. Smith (HOA attorney)
    O'Connor & Campbell, P.C.
    Appeared on behalf of Respondent
  • Daniel Campbell (HOA attorney)
    O'Connor & Campbell, P.C.
  • Pat Knight (board member)
    Starwood Estates HOA Board

Neutral Parties

  • Velva Moses-Thompson (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
  • L Dettorre (ADRE Staff)
    Arizona Department of Real Estate
  • A Hansen (ADRE Staff)
    Arizona Department of Real Estate
  • D Jones (ADRE Staff)
    Arizona Department of Real Estate
  • D Gardner (ADRE Staff)
    Arizona Department of Real Estate
  • N Cano (ADRE Staff)
    Arizona Department of Real Estate
  • C Serrano (OAH Staff)
    Office of Administrative Hearings
    Transmitted the order

Other Participants

  • Jeff Martin (Starwood Estates resident)
    Starwood Estates
    Property owner whose roof was subject of the dispute
  • Karen Martin (Starwood Estates resident)
    Starwood Estates
    Property owner whose roof was subject of the dispute

Lawrence M. Stewart v. Canyon Gate Condominium Association, Inc.

Posted on by

Case Summary

Case ID 18F-H1818052-REL
Agency Arizona Department of Real Estate
Tribunal —
Decision Date 9/14/2018
Administrative Law Judge TS
Outcome complete
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Lawrence M. Stewart Counsel Pro Se
Respondent Canyon Gate Condominium Association, Inc. Counsel Mark K. Sahl, Esq., Nicolas C. S. Nogami, Esq.

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

18F-H1818052-REL Decision – 683622.pdf

Uploaded 2026-04-24T11:13:55 (95.5 KB)

18F-H1818052-REL Decision – 694095.pdf

Uploaded 2026-04-24T11:13:58 (90.8 KB)

18F-H1818052-REL Decision – 660026.pdf

Uploaded 2026-04-24T11:14:03 (91.5 KB)

18F-H1818052-REL Decision – 720468.pdf

Uploaded 2026-04-24T11:14:06 (103.5 KB)

Administrative Decision Briefing: Stewart v. Canyon Gate Condominium Association, Inc.

This briefing document provides a comprehensive analysis of the legal proceedings and final administrative decisions regarding the dispute between Lawrence M. Stewart and the Canyon Gate Condominium Association, Inc. (Case No. 18F-H1818052-REL and 18F-H1818052-REL-RHG).

Executive Summary

The matter originated from a petition filed by Lawrence M. Stewart on May 21, 2018, alleging that the Canyon Gate Condominium Association, Inc. violated Association Bylaws, specifically Section 5.4, regarding the denial of a variance for unauthorized changes made to common or limited common areas.

Mr. Stewart, while serving as a Board member, modified areas around his unit without prior authorization. Upon being notified of a violation of Section 5.1 of the Covenants, Conditions, and Restrictions (CC&Rs), he sought a formal variance. The Board, consisting of two other members, denied this request on February 18, 2018, leading to Mr. Stewart's resignation and subsequent legal action.

Across two hearings—an initial hearing on September 6, 2018, and a rehearing on January 2, 2019—Administrative Law Judge Thomas Shedden consistently ruled in favor of the Association. The central legal finding was that Bylaw Section 5.4 serves as a "shield" against liability for Board members rather than a "sword" for petitioners to challenge Board decisions. Consequently, the petition was dismissed, and the Association was deemed the prevailing party.

Detailed Analysis of Key Themes

1. Interpretation of Bylaw Section 5.4 (Indemnification and Liability)

The crux of the Petitioner's argument rested on Section 5.4 of the Association Bylaws. Mr. Stewart used this section to assert a "good faith" requirement for Board decisions.

  • The Provision: Section 5.4 states that as long as a Board member acts in "good faith on the basis of information actually possessed," they shall not be liable for damages or loss related to the approval or disapproval of plans or any act/failure to act by the Association.
  • The Legal Conflict: The Association argued that Section 5.4 was inapplicable because no Board member had been charged with an act requiring indemnity.
  • The Ruling: The Administrative Law Judge (ALJ) determined that Section 5.4 does not impose a duty on the Board to act in a specific way toward owners; rather, it is a liability shield. Mr. Stewart eventually acknowledged that Section 5.4 acts as a "shield" and not a "sword," admitting he cited it only because he could find no other "good faith" reference in the governing documents.
2. Allegations of Bias and Lack of Good Faith

Mr. Stewart contended that the Board's decision was not made in good faith and that Board member David Larson was specifically biased against him.

  • Evidence of Bias: Stewart cited Mr. Larson’s biography, meeting notes from November 2017 regarding "Fair Notice" of enforcement (towing, violation notices), and a letter Larson wrote in October 2018 urging members not to vote for Stewart in an election.
  • Evidence of Bad Faith: Stewart testified that the Board members were unwilling to physically inspect his changes and only took a "cursory look" at his photographs.
  • The Ruling: The ALJ found the evidence insufficient to prove bias or bad faith by a preponderance of the evidence. Regarding the meeting notes, Larson’s refusal to discuss Board business in driveways or his intent to enforce CC&Rs did not constitute legal bias against Mr. Stewart’s specific variance request.
3. "Pandora's Box" and Reasonable Enforcement

A significant theme was the Board's rationale for denying the variance.

  • The Association's Defense: The Board denied the request on the basis that granting it would "open a Pandora’s Box," encouraging other owners to request similar variances for common areas.
  • Selective Enforcement Claims: Mr. Stewart argued he was treated unfairly, presenting photos of other units allegedly not in conformity with the CC&Rs.
  • The Ruling: The ALJ determined that the Board's fear of a "Pandora's Box" was a reasonable position for a condominium association. Furthermore, the specifics of Stewart’s changes were deemed not germane to the decision if the Board's policy was to prevent a precedent of common area modifications. The evidence of other non-conforming units was dismissed because there was no proof those owners had requested or been denied variances, nor was it known if they had received prior approval.

Important Quotes with Context

Quote Context
"Mr. Stewart appeared to acknowledge that section 5.4 acts as a 'shield' and not a 'sword,' but he testified to the effect that that was the only section that included a 'good faith' requirement." Findings of Fact, Para 21 (Initial Decision). This highlights the Petitioner's struggle to find a legal basis for his claim within the governing documents.
"The Board disapproved his changes because they were fearful of opening a Pandora’s Box of people requesting changes to the common area. This was not an unreasonable position for the Board of a condominium association." Conclusions of Law, Para 7. The Judge validates the Association’s right to deny variances based on the risk of setting a precedent.
"A preponderance of the evidence is… 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." Conclusions of Law, Para 3. This defines the standard of proof Mr. Stewart failed to meet in his allegations of bias.
"Bylaws Section 5.4 does not impose any duty on the Board members, but rather shields them from liability if they have acted in good faith." Conclusions of Law, Para 5 (Rehearing). This is the definitive legal interpretation that led to the dismissal of the petition.

Actionable Insights

For Homeowners and Board Members
  • Prior Authorization is Mandatory: Modifications to common or limited common areas must receive written approval before work begins. Attempting to secure a "variance" after the fact (as Mr. Stewart did) places the owner in a precarious legal position where the Board has broad discretion to deny the request to prevent setting a precedent.
  • Understanding Bylaw Limitations: General "good faith" clauses found in indemnification sections are typically intended to protect the Association and its officers from lawsuits; they do not necessarily provide a cause of action for an owner to overturn a Board's discretionary decision.
  • Evidence Standards in Administrative Hearings: To prove bias or "bad faith," a petitioner must provide specific, probative evidence that links the bias directly to the decision in question. General disagreements or a Board member’s rigorous enforcement of rules do not legally equate to bias.
  • Burden of Proof: In these administrative matters, the petitioner bears the burden of proof by a "preponderance of the evidence." If the evidence is equally balanced or insufficient to "incline a fair and impartial mind" to the petitioner's side, the case will be dismissed.
For Association Governance
  • Consistency in Rationale: The Board's use of a consistent rationale (preventing a "Pandora's Box") was viewed as reasonable by the court. Boards should document the policy-based reasons for denying variances to withstand legal scrutiny.
  • Recusal Protocols: While Mr. Stewart disputed whether he had agreed to recuse himself, the case underscores the importance of clear, documented recusal when a Board member has a personal interest in a matter before the Board.

Study Guide: Stewart v. Canyon Gate Condominium Association, Inc.

This study guide provides a comprehensive overview of the administrative law cases between Lawrence M. Stewart (Petitioner) and the Canyon Gate Condominium Association, Inc. (Respondent). It explores the legal disputes regarding condominium governance, homeowners' association (HOA) board conduct, and the interpretation of association bylaws.

Case Overview and Entities

The conflict arose when Lawrence M. Stewart, a condominium owner and former board member, made unauthorized changes to the common or limited common areas surrounding his unit. The resulting legal proceedings focused on whether the Association Board acted in good faith and within its authority when it denied Mr. Stewart's request for a variance to keep those changes.

Key Entities and Figures
Entity/Figure Role
Lawrence M. Stewart Petitioner; unit owner and former Board member of Canyon Gate Condominium Association.
Canyon Gate Condominium Association, Inc. Respondent; the homeowners' association governing the condominium complex.
Thomas Shedden Administrative Law Judge (ALJ) who presided over the hearings and issued the decisions.
David Larson Board member of the Association; accused of bias by Mr. Stewart.
Sandra Fernandez Board member of the Association during the dispute.
Arizona Department of Real Estate The state agency with authority over the matter under Ariz. Rev. Stat. Title 32.

Core Themes and Legal Principles

1. The Nature of Association Bylaws

Bylaws are legally viewed as a contract between the Association and the owners. Both parties are required to comply with the terms of this contract. When exercising authority under these bylaws, the Association must act reasonably.

2. The "Shield vs. Sword" Interpretation of Section 5.4

A central point of contention was Bylaws Article V, Section 5.4 (Liability).

  • The Provision: It states that Board members are not liable for damages or prejudice resulting from their acts (including approval or disapproval of plans) as long as they act in good faith based on information they possess.
  • The Interpretation: The court determined that Section 5.4 acts as a "shield" (protecting board members from liability) rather than a "sword" (a provision that owners can use to sue the board for lack of good faith in administrative decisions).
3. Standards of Evidence
  • Burden of Proof: The Petitioner (Mr. Stewart) carries the burden of proving his claims.
  • Preponderance of the Evidence: The standard of proof required. This is defined as evidence with the most "convincing force" or "superior evidentiary weight," sufficient to incline an impartial mind toward one side of the issue.
4. Board Reasonableness: The "Pandora’s Box" Defense

The Board denied Mr. Stewart’s variance request because they believed granting it would open a "Pandora’s Box," leading other owners to demand similar changes to common areas. The ALJ ruled this was a reasonable position for a condominium association board to take.

Procedural History

Date Event
November 15, 2017 Association counsel informs Mr. Stewart he is in violation of CC&Rs Section 5.1.
December 27, 2017 Association attorney erroneously writes that Mr. Stewart recused himself from the matter.
February 18, 2018 Board meeting held. Mr. Stewart resigns. The Board votes to deny the variance and orders restoration of the area.
May 21, 2018 Mr. Stewart files his petition with the Arizona Department of Real Estate.
September 6, 2018 Initial hearing conducted at the Office of Administrative Hearings.
September 14, 2018 ALJ issues decision dismissing the petition.
January 2, 2019 Rehearing conducted.
January 17, 2019 Final ALJ decision issued, again dismissing the petition and affirming the Association as the prevailing party.

Short-Answer Practice Questions

1. What specific section of the CC&Rs did the Association claim Mr. Stewart violated?

Answer: Section 5.1, by making changes to common or limited common areas without prior written permission.

2. Why did the ALJ conclude that the specific details of Mr. Stewart’s changes were not "germane" to the Board's decision?

Answer: Because the Board's denial was based on the policy of not wanting to set a precedent ("opening a Pandora’s Box") for common area modifications, the physical specifics of the changes were irrelevant to that policy-based refusal.

3. What evidence did Mr. Stewart provide to suggest David Larson was biased against him?

Answer: Mr. Stewart cited a biography of Larson, meeting notes where Larson gave "Fair Notice" of enforcement actions, Larson's refusal to discuss board business in driveways, and an October 2018 letter Larson wrote urging members not to vote for Stewart in an election.

4. Why was Mr. Stewart’s evidence regarding other non-conforming units deemed not probative?

Answer: Mr. Stewart could not prove those units had requested and been granted variances (as opposed to having pre-approval or being older than two years), meaning their status did not prove the Board treated him unfairly regarding his specific variance request.

5. How did the ALJ define "Preponderance of the Evidence"?

Answer: It is the greater weight of evidence that has the most convincing force; it is superior evidentiary weight that inclines a fair mind to one side even if it doesn't free the mind of all reasonable doubt.

Essay Prompts for Deeper Exploration

Prompt 1: The Scope of Good Faith and Liability

Analyze the Association’s Bylaw Section 5.4. Discuss the legal distinction between a provision that shields a director from personal liability and a provision that creates an actionable duty of "good faith" toward individual homeowners. Why did the ALJ determine that Mr. Stewart could not use Section 5.4 as a "sword"?

Prompt 2: Fairness in HOA Enforcement

Mr. Stewart argued that he was treated unfairly because other units were not in conformity with the CC&Rs. Evaluate the evidentiary requirements for a "selective enforcement" claim based on the case text. What must a petitioner prove to demonstrate that the board is acting inconsistently or in bad faith when denying a variance?

Prompt 3: Judicial Deference to Board Decisions

The ALJ found the Board’s "Pandora’s Box" argument to be a "reasonable position." Explore the balance of power between individual property rights and the collective authority of a homeowners' association. Under what circumstances should an Administrative Law Judge overrule the discretionary decision of a community board?

Glossary of Important Terms

  • Administrative Law Judge (ALJ): An official who presides over hearings and makes decisions regarding disputes involving government agencies (in this case, the Department of Real Estate).
  • CC&Rs: Covenants, Conditions, and Restrictions; the governing documents that dictate the rules for a planned community or condominium.
  • Common Area: Spaces within a condominium project that are owned or used by all members of the association.
  • Good Faith: An honest intent to act without taking an unfair advantage over another person; acting on the basis of information actually possessed.
  • Indemnification: A legal agreement to provide financial protection against loss or liability.
  • Limited Common Area: A portion of the common area reserved for the exclusive use of one or more (but fewer than all) of the units (e.g., a patio or walkway directly outside a unit).
  • Preponderance of the Evidence: The standard of proof in civil and administrative cases requiring that a fact be more likely true than not.
  • Recusal: The act of a person (like a board member) disqualifying themselves from participating in a decision due to a potential conflict of interest.
  • Variance: An official deviation from the set rules or bylaws granted by the governing body (the Board).

The "Pandora’s Box" Dilemma: Lessons from the Stewart vs. Canyon Gate HOA Dispute

1. Introduction: When Home Improvements Meet HOA Realities

Imagine the satisfaction of completing a home improvement project, only to receive a cease-and-desist letter from your HOA Board. This is the nightmare scenario for many homeowners: you’ve modified a common area or balcony, believing it was your right, only to find you have bypassed the Association’s governing documents. What follows is often a high-stakes legal chess match over board authority and the elusive definition of "good faith."

The dispute in Lawrence M. Stewart vs. Canyon Gate Condominium Association, Inc. serves as a masterclass in this conflict. When Mr. Stewart implemented unauthorized changes to the common areas around his unit, he triggered a legal battle that reached the Arizona Office of Administrative Hearings—not once, but twice. This case provides a critical look at why a Board’s decision to deny a variance is often legally fortified and illustrates the steep uphill climb homeowners face when alleging "bad faith."

2. The Conflict: Unauthorized Changes and the Request for a Variance

The friction began when Mr. Stewart modified common or limited common areas without securing prior Board approval. On November 15, 2017, the Association’s legal counsel issued a stark ultimatum: submit a written request for a variance or face a civil lawsuit to compel the restoration of the area.

At the time, the situation was complicated by the fact that Mr. Stewart was a sitting member of the Board. During a tense Board meeting on February 18, 2018, the atmosphere soured. Sensing that his colleagues, Sandra Fernandez and David Larson, had already made up their minds, Mr. Stewart resigned his position mid-meeting. Immediately following his resignation, the remaining two members voted unanimously to deny the variance.

Perhaps the most telling aspect of the legal proceedings that followed was that the Association presented no witnesses. They did not need to. By relying purely on the legal interpretation of the governing documents and the Petitioner’s failure to meet his burden of proof, the Association successfully defended its position without a single person taking the stand on its behalf.

3. The Legal Tug-of-War: Is Good Faith a "Shield" or a "Sword"?

Mr. Stewart’s primary legal gambit rested on Bylaw Section 5.4, which he argued required the Board to act in "good faith." However, the Association dismantled this argument by clarifying that the bylaw was never intended to be a "sword" used to overturn Board votes. Instead, it is an indemnification provision—a "shield" designed to protect Board members from personal financial liability.

The Administrative Law Judge (ALJ) emphasized that Section 5.4 protects members from damages or monetary loss. Because Mr. Stewart was seeking to validate a variance rather than suing for money, the "shield" was legally irrelevant to his cause of action.

Petitioner’s Interpretation (Mr. Stewart) Association’s Interpretation (Successful Argument)
Argued Section 5.4 imposes a performance duty on the Board to act in "good faith" when denying variances. Argued Section 5.4 is an indemnification provision protecting members from personal liability.
Attempted to use the section as a "sword" to invalidate the Board’s vote. Successfully used the section as a "shield" against liability for damages, not a standard for voting.
4. Proving Bias: Why the "Preponderance of Evidence" Matters

In administrative law, the "burden of proof" is the Petitioner's heaviest lift. Mr. Stewart was required to prove his case by a "Preponderance of Evidence." As defined in Black’s Law Dictionary 1373, this means:

"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… sufficient to incline a fair and impartial mind to one side of the issue rather than the other."

Mr. Stewart alleged that Board member David Larson was personally biased against him. To support this, he presented three pieces of evidence across the initial hearing and a subsequent rehearing:

  • A Professional Biography: A bio of Mr. Larson prepared by the property manager.
  • Meeting Notes: Notes from November 2017 where Mr. Larson used the term "Fair Notice" regarding towing and enforcement, and stated he was too busy to discuss Board business in driveways.
  • Election Correspondence (Rehearing Evidence): A letter from October 2018 where Mr. Larson urged members not to vote for Mr. Stewart in an upcoming election.

The ALJ found these "feelings" of bias legally insufficient. The judge noted that the "Fair Notice" comments were standard enforcement language, and the election letter—though part of a contentious rehearing process—did not prove the original variance denial was made in bad faith. Mr. Stewart could not point to any specific biased information, and the court ruled that personal friction does not automatically equate to a legal breach of duty.

5. The "Pandora’s Box" Defense and Selective Enforcement

The Association’s most potent defense was the "Pandora’s Box" argument. They argued that granting a variance for unauthorized work would set a community-wide precedent, effectively stripping the Board of its ability to enforce standards in the future.

Citing the legal precedent of Tierra Ranchos Homeowners Ass'n v. Kitchukov, the ALJ noted that an Association must act "reasonably." The judge found the "Pandora's Box" concern to be a quintessential example of reasonableness. Even if Mr. Stewart’s changes were not "readily seen by others," the Board’s duty is to the long-term integrity of the governing documents, not the aesthetics of a single unit.

Mr. Stewart also claimed "selective enforcement," providing photos of other non-conforming units. The ALJ rejected this evidence for three reasons:

  1. Lack of History: Stewart could not prove if those units had received variances more than two years prior.
  2. Pre-approval Unknown: He could not confirm if those changes had been pre-approved, rendering a variance unnecessary.
  3. No Probative Value: The photos were legally irrelevant because Stewart failed to show those owners had actually gone through the same variance process and been granted an exception.
6. Conclusion: Navigating HOA Disputes with Clarity

The final ruling was clear: the petition was dismissed, and the Canyon Gate Condominium Association was deemed the prevailing party. This case reinforces that Boards are afforded significant discretion when they act to prevent a "Pandora's Box" of non-compliance. Consistency is a Board's greatest defense, and the burden of overturning a decision is a high bar that requires more than just a sense of unfairness.

Key Takeaways for Homeowners
  • [ ] Prior Approval is Non-Negotiable: Always secure written approval from the Board before modifying common or limited common areas.
  • [ ] The "Shield" is Not a "Sword": Understand that bylaws regarding "good faith" are often designed to protect Board members from personal liability, not to provide a path to overturn their votes.
  • [ ] Evidence Over Emotion: To win an administrative hearing, you must provide a "preponderance of evidence." Personal feelings of bias or animosity are rarely enough.
  • [ ] Respect the Precedent: A Board’s primary responsibility is to the Governing Documents. Decisions based on preventing a negative community-wide precedent are almost always viewed as "reasonable" by the courts.

By adhering strictly to the governing documents and ensuring all approvals are in hand before a single hammer swings, homeowners can avoid the "Pandora’s Box" of costly, protracted litigation.

Case Participants

Petitioner Side

  • Lawrence M. Stewart (Petitioner)
    Appeared on his own behalf

Respondent Side

  • Mark K. Sahl (Counsel for Respondent)
    CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
  • Nichols C. S. Nogami (Counsel for Respondent)
    CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
    Also listed as Nicolas C. S. Nogami in related rehearing documents
  • Sandra Fernandez (Board Member)
    Canyon Gate Condominium Association, Inc.
  • David Larson (Board Member)
    Canyon Gate Condominium Association, Inc.

Neutral Parties

  • Thomas Shedden (Administrative Law Judge)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
  • F. Del Sol (Administrative Staff)
    Office of Administrative Hearings