Michael and Nancy Berent vs, Bell West Ranch Homeowners Association

Posted on September 11, 2018 by [email protected]

Case Summary

Case ID	18F-H1818047-REL
Agency	—
Tribunal	—
Decision Date	2018-09-11
Administrative Law Judge	TE
Outcome	—
Filing Fees Refunded	—
Civil Penalties	—

Parties & Counsel

Petitioner	Michael Berent	Counsel	Pro Se
Respondent	Bell West Ranch Homeowners Association	Counsel	Maria Kupillas

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

18F-H1818047-REL Decision – 659285.pdf

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18F-H1818047-REL Decision – 659287.pdf

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18F-H1818047-REL Decision – 679550.pdf

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18F-H1818047-REL Decision – 952813.pdf

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18F-H1818047-REL Decision – 952828.pdf

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Briefing on Administrative Law Judge Decision: Berent v. Bell West Ranch Homeowners Association

Executive Summary

This briefing document analyzes the administrative legal dispute between Michael and Nancy Berent (Petitioners) and the Bell West Ranch Homeowners Association (Respondent), docketed as No. 18F-H1818047-REL. The case centered on the Petitioners' challenge to a driveway extension installed by their neighbors, which the Petitioners alleged violated the Association's Covenants, Conditions, and Restrictions (CC&Rs) and Arizona Revised Statutes.

The hearing was held in August 2018 before Administrative Law Judge (ALJ) Tammy L. Eigenheer. The Petitioners sought to prove that the Association failed to enforce municipal codes, allowed obstructions in a public utility easement, maintained an improperly staffed Architectural Review Committee (ARC), and failed to impose mandatory penalties.

On September 11, 2018, the ALJ issued a decision dismissing the Petition in its entirety. The ruling concluded that the Petitioners failed to meet the burden of proof required to establish any of the alleged violations. A subsequent attempt by the Petitioners to file additional documents in early 2022 was rejected by the Office of Administrative Hearings (OAH) due to a lack of jurisdiction following the final 2018 decision.

Analysis of Key Themes

1. Responsibility for Regulatory Compliance

A central theme of the dispute was whether the HOA is responsible for enforcing municipal zoning and building codes. The Petitioners argued that because the City of Surprise issued a "Notice of Ordinance Violation" regarding the neighbor's driveway extension, the HOA was obligated to take enforcement action under CC&R Section 8.02.

However, the analysis of the evidence showed:

Homeowner Liability: The HOA’s approval notice explicitly stated that homeowners must follow all local building codes and setback requirements.
Limited HOA Scope: The HOA maintained that its ARC does not check municipal codes prior to approving applications; that responsibility remains with the individual homeowner.
Definition of Structure: The ALJ found that the Petitioners failed to prove a driveway qualified as a "structure" under the specific wording of Section 8.02, which governs construction compliance.

2. Discretionary vs. Mandatory Enforcement

The Petitioners contended that the HOA was required to impose sanctions for violations, citing "common sense" and their own history of receiving notices for minor infractions like weeds.

The legal analysis centered on A.R.S. § 33-1803(B), which states that a board of directors may impose reasonable monetary penalties. The ALJ ruled that the language is permissive, not mandatory. The Respondent successfully argued that its decision not to pursue enforcement was reasonable because the City of Surprise had also declined to take further action after the initial notice of violation.

3. Evidentiary Standards and Burden of Proof

The case highlights the "Preponderance of the Evidence" standard. As the Petitioners, the Berents bore the burden of proving that the HOA committed the alleged violations. The ALJ found their evidence—primarily based on meeting minutes and personal observations—insufficient to overcome the testimony and documentation provided by the Respondent.

4. Interpretation of Easements and Obstructions

The Petitioners argued that the driveway extension interfered with a "public utility easement" due to the proximity of a fire hydrant. The ALJ rejected this theme based on two findings:

Lack of Proof: No evidence was provided to establish that the fire hydrant location was a recorded public utility easement.
Functional Use: Evidence showed the hydrant remained fully accessible. During a fire two houses away, the fire department successfully used the hydrant, running a hose across the Neighbors’ driveway without interference.

Key Parties and Entities

Entity	Role	Key Personnel/Details
Michael and Nancy Berent	Petitioners	Homeowners in Bell West Ranch; filed the dispute.
Bell West Ranch HOA	Respondent	Managed by VISION Community Management.
Tammy L. Eigenheer	ALJ	Presiding Administrative Law Judge.
Regis Salazar	Witness	Represented VISION Community Management.
City of Surprise	Municipal Body	Issued a notice of violation but took no further action.
ARC	Committee	Architectural Review Committee; approved the driveway.

Important Quotes with Context

Quote	Context
"All structures… must be constructed on the Property in compliance with any county or municipal zoning regulations… and must comply with the provisions of this Declaration."	CC&R Section 8.02: The primary regulation cited by Petitioners to argue the HOA must ensure city code compliance.
"The board of directors may impose reasonable monetary penalties on members for violations of the declaration, bylaws and rules of the association."	A.R.S. § 33-1803(B): The statutory basis for the ruling that HOA enforcement is discretionary rather than mandatory.
"A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not."	Legal Standard: Used by the ALJ to explain why the Petitioners' arguments failed despite their extensive testimony.
"Ms. Salazar denied that the ARC checked municipal codes prior to approving an application."	Hearing Testimony: Establishing the HOA's stance that code compliance is the homeowner's burden, not the committee's.
"The Office of Administrative Hearings has had no jurisdiction in this matter since [September 11, 2018]."	March 8, 2022 Minute Entry: Explaining the rejection of late-filed documents by Nancy Berent.

Timeline of Significant Events

July 7, 2015: Neighbors submit a design review application for a 10' x 35' driveway extension.
July 15, 2015: The ARC approves the application with conditions regarding setbacks.
August 2015: Neighbors begin construction; Petitioners begin complaints to the Board.
May 16, 2016: City of Surprise issues a Notice of Ordinance Violation for "Nonconforming Uses and Structures."
April 26, 2018: Petitioners file their HOA Dispute Process Petition with the Arizona Department of Real Estate, paying a $2,000 filing fee.
August 15 & 22, 2018: Hearing dates at the OAH Phoenix office.
September 11, 2018: Final Decision issued dismissing all charges.
March 8, 2022: ALJ issues a "Document Reject" entry regarding recent submissions from Petitioner Nancy Berent.

Actionable Insights from the Ruling

Homeowner Due Diligence: HOA approval for a project does not supersede municipal requirements. Homeowners remain independently liable for city or county zoning compliance even if the HOA approves their design application.
Board Discretion: Association boards have broad discretion in enforcement. A violation of a CC&R does not automatically trigger a legal requirement for the board to penalize a member, especially if municipal authorities have declined to pursue the matter.
Record-Keeping Clarity: The dispute over the ARC's size (three members vs. one) was exacerbated by vague meeting minutes. The ALJ accepted testimony that the minutes merely listed the "reporter" rather than the full committee, but clearer documentation might have prevented this specific allegation.
Finality of OAH Decisions: Once a decision is issued by the OAH and the 30-day window for a rehearing request to the Commissioner of the Department of Real Estate passes, the OAH loses jurisdiction. Parties cannot continue to file evidence or documents with the ALJ after the case is closed.

Study Guide: Berent v. Bell West Ranch Homeowners Association

This study guide provides a comprehensive overview of the administrative hearing between Michael and Nancy Berent (Petitioners) and the Bell West Ranch Homeowners Association (Respondent). It explores the legal issues, factual findings, and statutory interpretations surrounding a dispute over property modifications and HOA enforcement responsibilities.

Key Legal Concepts and Case Background

1. Dispute Origins

The case originated from a 2015 application by the Petitioners' neighbors to install a 10-foot by 35-foot concrete driveway extension. The Architectural Review Committee (ARC) approved the project with conditions requiring compliance with city requirements and building codes. The Petitioners challenged this approval and the subsequent lack of enforcement by the HOA.

2. The Burden of Proof

In administrative hearings of this nature, the Petitioner bears the burden of proof. They must establish that the Respondent committed the alleged violations by a preponderance of the evidence. This standard means the evidence must convince the trier of fact that the contention is "more probably true than not" or carries the "most convincing force."

3. ARC Composition and Reporting

A central point of contention was whether the ARC was properly constituted according to Section 6.02 of the CC&Rs, which requires three individuals. The Petitioners used Board of Director meeting minutes—which often listed only one individual presenting the ARC report—to argue the committee was understaffed. The Respondent successfully argued that the minutes only reflected the person presenting the report, not the total membership of the committee.

4. Discretionary Enforcement

Under A.R.S. § 33-1803(B), a board of directors may impose monetary penalties for violations of the declaration and bylaws. The Administrative Law Judge (ALJ) interpreted this language as permissive rather than mandatory, meaning an HOA is not legally required by this statute to pursue enforcement action against a member.

5. Legal Definitions of "Structure"

The case hinged on whether a driveway constitutes a "structure." Using Black’s Law Dictionary, a structure is defined as "any construction, production, or piece of work artificially built up or composed of parts purposefully joined together." The ALJ determined the Petitioners failed to prove the driveway fell under the purview of CC&R sections governing structures.

Short-Answer Practice Questions

1. What was the filing fee paid by the Petitioners to initiate the HOA Dispute Process? Answer: $2,000.00.

2. According to Section 6.02 of the CC&Rs, how many individuals must compose the Architectural Committee? Answer: Three individuals (who do not necessarily need to be members of the association).

3. Why did the HOA choose not to pursue enforcement action against the neighbors regarding the driveway extension? Answer: The Respondent decided not to pursue action because the City of Surprise had declined to take further enforcement action after issuing an initial Notice of Ordinance Violation.

4. What evidence did the Petitioners provide to suggest the fire hydrant was a public utility easement? Answer: The Petitioners did not provide specific evidence to establish the hydrant as a public utility easement; however, they noted its use by the fire department during a nearby residential fire.

5. What is the time limit for filing a request for a rehearing after an ALJ decision is served? Answer: 30 days.

6. Why did the Office of Administrative Hearings (OAH) reject documents sent by Nancy Berent in March 2022? Answer: The OAH no longer had jurisdiction over the matter, as the final decision had been issued years earlier on September 11, 2018.

Essay Prompts for Deeper Exploration

I. The Interpretation of Mandatory vs. Permissive Language

Analyze the ALJ's conclusion regarding A.R.S. § 33-1803(B). Discuss how the word "may" influences the level of accountability an HOA has toward its members. In your essay, consider whether the Petitioners' "common sense" argument for mandatory enforcement has any legal standing against the plain language of the statute.

II. Evidentiary Weight in Administrative Hearings

Compare the evidentiary value of the Board of Director meeting minutes provided by the Petitioners against the testimony of Regis Salazar from VISION Community Management. Discuss why the ALJ found the witness testimony more convincing regarding the composition of the ARC than the written meeting minutes.

III. The Scope of CC&R Restrictions

Evaluate the Petitioners' claims under Section 8.02 and 8.06. Specifically, address the legal challenge of defining a driveway as a "structure" and an "obstruction." How did the fact that the fire department successfully used the fire hydrant during a fire impact the ALJ’s ruling on the alleged obstruction of an easement?

Glossary of Important Terms

Term	Definition
A.R.S. § 33-1803(B)	The Arizona statute granting HOA boards the power to impose reasonable monetary penalties for violations.
Architectural Review Committee (ARC)	The body responsible for reviewing and approving or denying home modification applications within the HOA.
CC&Rs	Covenants, Conditions, and Restrictions; the governing documents that outline the rules and limitations for property use within a community.
Continuance	A postponement of a hearing or legal proceeding to a later date.
Jurisdiction	The legal authority of a court or administrative body to hear and decide a case.
Nonconforming Use	A land use or structure that was legal when established but does not conform to current zoning or code requirements.
Preponderance of the Evidence	The standard of proof in civil and administrative cases, requiring that a claim be more likely true than not.
Public Utility Easement	A designated area of land reserved for the installation and maintenance of public services (e.g., water, electricity, fire hydrants).
Respondent	The party against whom a petition is filed (in this case, the Bell West Ranch HOA).
Structure	Artificially built-up construction or work composed of purposefully joined parts.

Summary of Findings

Issue	ALJ Ruling	Reasoning
Section 8.02 (Zoning)	No Violation	Petitioners did not establish the driveway as a "structure" under this section.
Section 8.06 (Easements)	No Violation	No evidence that the hydrant was a public utility easement or that the driveway obstructed its use.
A.R.S. § 33-1803(B)	No Violation	The statute is permissive; the HOA is not required to take enforcement action.
Section 6.02 (ARC Size)	No Violation	Witness testimony confirmed three members; minutes only showed the reporter.

The Driveway Dilemma: Lessons from a Real-Life HOA Legal Battle

1. When Homeowner Dreams Clash with Association Rules

Homeownership in a planned community is governed by a delicate balance of individual liberty and collective regulation. However, when those interests collide, the resulting friction often leads to what we in the field call "litigious exhaustion." The case of Michael and Nancy Berent vs. Bell West Ranch Homeowners Association (No. 18F-H1818047-REL) is a quintessential example. What began as a simple neighborly improvement—a driveway extension—devolved into a multi-year administrative battle involving municipal code interpretations, fire safety allegations, and challenges to the Association’s procedural integrity. This case serves as a vital blueprint for understanding the limits of homeowner petitions and the broad scope of Board authority.

2. Chronology of a Conflict: From Concrete to Courtroom

The timeline of this dispute highlights the slow escalation from a standard architectural request to a formal administrative hearing:

July 7, 2015: The Petitioners’ neighbors submitted an Application for Design Review to install a 10×35-foot concrete driveway extension.
July 15–17, 2015: The Architectural Review Committee (ARC) approved the application with a critical "13-inch setback" condition to ensure compliance with city requirements.
August 2015: Construction commenced. The Berents immediately challenged the project, providing photographic evidence to the Board and alleging fire hydrant obstructions.
May 16, 2016: The City of Surprise issued a Notice of Ordinance Violation, labeling the extension a "nonconforming use." Crucially, however, the City ultimately declined to pursue further enforcement.
April 26, 2018: The Berents escalated the matter by filing a formal HOA Dispute Process Petition, incurring a $2,000 filing fee to bring the matter before the Office of Administrative Hearings (OAH).
August 15 & 22, 2018: Administrative Law Judge (ALJ) Tammy L. Eigenheer conducted formal hearings to adjudicate the Petitioners' claims.

3. The Four Legal Challenges: Allegations vs. Evidence

To prevail, the Petitioners had to demonstrate specific violations of the community’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs). The ALJ’s analysis of these four issues underscores the importance of precise legal definitions.

Issue 1: CC&R Section 8.02 (Compliance with Zoning) The Berents alleged the driveway violated municipal zoning because its entrance occupied more than 50 percent of the front lot line. However, Section 8.02 specifically applies to "structures." The ALJ ruled that the Petitioners failed to prove a flat concrete slab met the legal definition of a "structure." Utilizing Black’s Law Dictionary, the court defined a structure as: "Any construction, production, or piece of work artificially built up or composed of parts purposefully joined together." Under this standard, the driveway extension did not fall under the purview of Section 8.02, providing the Association an effective affirmative defense.

Issue 2: CC&R Section 8.06 (Utility Easements) The Petitioners claimed the driveway obstructed a fire hydrant, interfering with a public utility easement. The ALJ found this claim lacked foundational evidence, as the Berents failed to prove a recorded easement even existed. Furthermore, the defense noted that a city-authorized sidewalk already existed in front of the hydrant. Most damaging to the Petitioners' case was their own testimony: they admitted that during a recent nearby fire, the fire department successfully utilized the hydrant by running a hose across the neighbors' driveway without hindrance.

Issue 3: A.R.S. § 33-1803(B) (Enforcement Discretion) A central theme of the Berents' argument was that the HOA must penalize the neighbors following the City’s notice of violation. The ALJ corrected this misconception by pointing to the statutory language of A.R.S. § 33-1803(B), which states a board "may impose reasonable monetary penalties." This grants the Board de facto enforcement discretion. Because the City of Surprise had ceased its own enforcement efforts, the HOA’s decision to mirror that inaction was a valid exercise of administrative finality.

Issue 4: CC&R Section 6.02 (Committee Composition) The Petitioners challenged the validity of the ARC’s approval, arguing it was a one-person committee in violation of the three-person requirement in Section 6.02. They relied on meeting minutes that listed only one name—such as Ken Hawkins or Larry Bolton—under the ARC report. However, Regis Salazar of VISION Community Management testified that these minutes merely identified the individual presenting the report to the Board, not the full committee roster. The ALJ found that the Association maintained a three-member committee at all relevant times.

4. The Burden of Proof: Why the Case Was Dismissed

In administrative law, the burden of persuasion rests solely on the Petitioner. To succeed, the Berents had to establish their claims by a Preponderance of the Evidence, meaning the evidence must prove the contention is "more probably true than not."

The ALJ dismissed the petition in its entirety because the Berents relied almost exclusively on subjective testimony and "common sense" inferences. In the eyes of the law, "common sense" is not a substitute for objective documentation. While the Petitioners inferred a lack of committee members from the brevity of meeting minutes, they failed to produce actual ARC appointment logs or internal records to contradict the Association's testimony. Without superior evidentiary weight, their claims could not survive the Association's rebuttal.

5. Post-Decision Reality: The 2022 Jurisdiction Ruling

The finality of an ALJ decision is absolute once the statutory windows for appeal close. Nearly four years after the 2018 dismissal, Nancy Berent attempted to revive the matter by filing additional documents with the OAH.

In a March 8, 2022, "Minute Entry – Document Reject," the court issued a sharp reminder of legal boundaries. Once a final decision is rendered and the 30-day window for a rehearing request expires, the OAH loses all jurisdiction. Consequently, any subsequent filings are a legal nullity. The court noted that while these documents would be retained in the system, they would receive no response, as the matter was irrevocably closed.

6. Key Takeaways for Homeowners and Boards

The Berent decision offers critical insights for community governance:

Understand Discretionary Power: Statutes and CC&Rs using the word "may" grant Boards the authority to choose whether to pursue enforcement. They are not legally bound to fine a homeowner simply because a neighbor demands it.
Evidence is King: To challenge a Board’s procedure, a Petitioner needs more than inferences from meeting minutes. Direct documentation, such as appointment logs or committee rosters, is required to meet the burden of proof.
Narrow Definitions Matter: As seen with the "structure" definition, legal interpretations are often much narrower than a layperson’s "common sense" understanding.
Respect the Window of Finality: Legal remedies have a "point of no return." In Arizona HOA disputes, the 30-day window for a rehearing is the final opportunity to contest a ruling before the agency loses jurisdiction forever.

7. Conclusion: Seeking Resolution Beyond the Courtroom

The Berents' $2,000 filing fee resulted in a total dismissal, proving that HOA litigation is a high-stakes gamble with significant financial and emotional costs. This case highlights that the "Preponderance of the Evidence" standard is a high bar for homeowners who lack direct access to Association records. To avoid the frustration of a case being "dismissed in its entirety," neighbors should prioritize proactive communication and mediation. In the world of community governance, a conversation across a driveway is almost always more cost-effective than a multi-year battle in the Office of Administrative Hearings.

Case Participants

Petitioner Side

Michael Berent (Petitioner)
Filed the HOA Dispute Process Petition
Nancy Berent (Petitioner)
Testified on her own behalf

Respondent Side

Maria Kupillas (Representative)
Farmers Insurance
Represented Bell West Ranch Homeowners Association
Regis Salazar (Witness)
VISION Community Management
Ken Hawkins (Architectural Review Committee Member)
Bell West Ranch Homeowners Association
Larry Bolton (Architectural Review Committee Member)
Bell West Ranch Homeowners Association
Kelsey Dressen (Representative)
Farmers Insurance

Neutral Parties

Tammy L. Eigenheer (Administrative Law Judge)
Office of Administrative Hearings
Lana Collins (Development Service Specialist)
City of Surprise
Judy Lowe (Commissioner)
Arizona Department of Real Estate
Louis Dettorre (Commissioner)
Arizona Department of Real Estate

Other Participants

Kristin Roebuck Bethell (Attorney)
Horne Slaton, PLLC

Tom Barrs vs Desert Ranch HOA

Posted on August 23, 2018 by [email protected]

Case Summary

Case ID	18F-H1818035-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2018-12-26
Administrative Law Judge	Tammy L. Eigenheer
Outcome	partial
Filing Fees Refunded	$1,000.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Tom Barrs	Counsel	—
Respondent	Desert Ranch HOA	Counsel	—

Alleged Violations

Desert Ranch Bylaw 2.4
A.R.S. § 33-1812(A)(7)
A.R.S. § 33-1804

Outcome Summary

Petitioner was deemed the prevailing party on Issues 2 (retention of election materials) and 3 (open meetings violation). Issue 1 (Bylaw 2.4 objection rule) was dismissed. Respondent was ordered to pay Petitioner $1,000.00, representing the filing fee.

Why this result: Petitioner failed to establish a violation of Bylaw 2.4 as the evidence did not show that a Director was restricted by the Member waiver clause from raising concerns about election validity after the meeting adjourned.

Key Issues & Findings

Respondent violated Bylaw 2.4 when it acted on Mr. Schoeffler’s objection to the election results raised the day after the Annual Meeting.

Petitioner alleged the HOA violated Bylaw 2.4 by investigating or acting upon an objection to election results that was raised by a Director after the Annual Meeting adjourned, thereby waiving the claim according to the bylaw.

Orders: Petition dismissed as to Issue 1.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

Desert Ranch Bylaw 2.4

Respondent violated A.R.S. § 33-1812(A)(7) when it discarded the ballot envelopes at or about the time of the election.

The HOA discarded the ballot envelopes at or about the time of the election, which violated the statutory mandate to retain ballots, envelopes, and related materials for at least one year.

Orders: Petitioner established violation and was deemed the prevailing party regarding this issue. No Civil Penalty was found appropriate. The initial order included an order for Respondent to pay Petitioner the $1,000.00 filing fee.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

A.R.S. § 33-1812(A)(7)

Respondent violated A.R.S. § 33-1804 when it held meetings that were closed and/or without proper notice.

The HOA Board members met with an attorney following the Annual Meeting without providing any notice of the upcoming meeting and/or failing to provide notice that the meeting was closed because it involved legal advice from an attorney.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

A.R.S. § 33-1804

Analytics Highlights

Topics: HOA Election Dispute, Records Retention, Open Meeting Violation, Filing Fee Refund

Additional Citations:

A.R.S. § 33-1812(A)(7)
A.R.S. § 33-1804
Desert Ranch Bylaw 2.4
A.R.S. § 41-2198.01

Video Overview

Audio Overview

Decision Documents

18F-H1818035-REL Decision – 678304.pdf

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18F-H1818035-REL Decision – 678305.pdf

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18F-H1818035-REL Decision – 655766.pdf

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18F-H1818035-REL Decision – 655766.pdf

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18F-H1818035-REL Decision – 678304.pdf

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18F-H1818035-REL Decision – 678305.pdf

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Barrs v. Desert Ranch HOA: Case Briefing

Executive Summary

This briefing document outlines the legal dispute between Petitioner Tom Barrs and the Desert Ranch Homeowners’ Association (HOA) concerning the HOA’s March 18, 2017, Board of Directors election. The petitioner alleged that the HOA improperly overturned the initial election results, mishandled election materials, and held meetings in violation of state law and its own bylaws.

An initial ruling by an Administrative Law Judge found the HOA in violation of state statutes regarding the retention of election materials (A.R.S. § 33-1812(A)(7)) and open meeting laws (A.R.S. § 33-1804). However, the judge ruled against the petitioner on the central claim that the HOA violated Bylaw 2.4 by investigating the election after the annual meeting had concluded.

The petitioner requested and was granted a rehearing, which focused exclusively on the alleged violation of Bylaw 2.4. The final decision on rehearing, issued December 26, 2018, reaffirmed the initial ruling. The judge concluded that the investigation was properly initiated by a board member, not a general member, and that the bylaw restricting post-meeting objections did not apply to the Board of Directors itself. Consequently, the petition regarding the overturning of the election was dismissed.

Case Overview

This document details the findings of fact and conclusions of law in the administrative case No. 18F-H1818035-REL-RHG, heard in the Arizona Office of Administrative Hearings.

Case Detail

Information

Case Number

18F-H1818035-REL-RHG

Petitioner

Tom Barrs

Respondent

Desert Ranch Homeowners’ Association

Presiding Judge

Tammy L. Eigenheer, Administrative Law Judge

Initial Hearing

Not specified in document

Rehearing Date

December 6, 2018

Decision Date

December 26, 2018

Key Individuals:

• Tom Barrs: Petitioner.

• Catherine Overby: HOA President, appeared for Respondent.

• Brian Schoeffler: HOA Vice President, appeared for Respondent; candidate in the disputed election.

• Jerome Klinger: Candidate initially announced as a winner of the election.

• Patrick Rice: Board member at the time of the election.

Chronology of the 2017 Election Dispute

1. Pre-March 18, 2017: Absentee ballots are sent to HOA members listing Catherine Overby and Brian Schoeffler as candidates, with a space for a write-in.

2. March 18, 2017: At the Annual Meeting, ballots are submitted and counted. Catherine Overby and write-in candidate Jerome Klinger are announced as the winners. No members object before the meeting is adjourned. Immediately following, board member Patrick Rice gathers the ballots and expresses concerns about the results.

3. March 19, 2017: Brian Schoeffler sends an email to board members asking for a review and a decision on whether a “revote” is necessary.

4. March 20, 2017: Catherine Overby emails the HOA membership, stating the election has been “contested” and that the board must investigate. She also asserts that bylaws do not allow write-in candidates, meaning she and Schoeffler were the new directors based on the vote count.

5. March 29, 2017: Certain board members, including Overby and Rice, meet with an attorney at Overby’s house. They discover that duplicate and proxy ballots were improperly counted.

6. Post-March 29, 2017: The board determines the valid votes resulted in a tie between Schoeffler and Klinger. A run-off election is scheduled.

7. April 29, 2017: The run-off election is held. Brian Schoeffler is announced as the winner.

8. May 10, 2017: The Board of Directors holds an organizational meeting.

Procedural History and Allegations

Initial Petition and Hearing

• March 19, 2018: Tom Barrs files a single-issue HOA Dispute Petition with the Arizona Department of Real Estate, paying a $500 fee but including a four-page narrative alleging multiple violations.

• April 13, 2018: Barrs files an amended petition, adding an alleged violation of A.R.S. § 33-1812.

• July 30, 2018: Barrs pays to convert the petition to a multiple-issue dispute and submits a “Clarification of Three Issues alleged in Petition.”

The three core issues alleged by the petitioner were:

1. Improper Overturning of Election: The Board of Directors improperly removed Jerome Klinger by overturning the March 18, 2017 election results. The petitioner argued the challenge by the third candidate was barred by Bylaw 2.4, and the methods used violated recall protocols under A.R.S. § 33-1813 and Bylaw 3.3.

2. Improper Handling of Election Materials: The board violated A.R.S. § 33-1812 by disposing of election materials (ballot envelopes) required to be kept for one year and by selectively invalidating votes cast on invalid ballots.

3. Improperly Held Meetings: Meetings related to the 2017 election were held as closed sessions or without proper notice in violation of A.R.S. § 33-1804.

Initial Decision

Following the initial hearing, the Administrative Law Judge (ALJ) issued a decision with the following conclusions:

• Violation Found: The Respondent (HOA) violated A.R.S. § 33-1812(A)(7) by discarding the ballot envelopes around the time of the election.

• Violation Found: The Respondent violated A.R.S. § 33-1804 by holding meetings that were closed and/or without proper notice.

• No Violation Found: The Petitioner failed to prove that the Respondent violated Bylaw 2.4.

Rehearing and Final Order

• October 1, 2018: Barrs files a request for rehearing, citing misconduct, insufficient penalties, errors of law, and a decision not supported by evidence.

• November 2, 2018: The Commissioner of the Arizona Department of Real Estate grants the rehearing request.

• December 6, 2018: At the rehearing, the petitioner states he is only seeking reconsideration of Issue 1 (the improper overturning of the election) and not the lack of penalties for Issues 2 and 3.

Judicial Analysis and Final Rulings

The final decision focused solely on whether the HOA’s actions violated its own bylaws regarding election challenges.

Key Bylaw and Legal Standard

• Desert Ranch Bylaw 2.4: The central bylaw in dispute states:

• Burden of Proof: The petitioner bore the burden of proving the violations by a “preponderance of the evidence,” defined as “such proof as convinces the trier of fact that the contention is more probably true than not.”

Analysis of Issue 1: Violation of Bylaw 2.4

• Petitioner’s Argument: Mr. Barrs argued that because candidate Brian Schoeffler did not object to the election results before the March 18, 2017 meeting adjourned, Bylaw 2.4 barred the board from investigating his concerns raised the following day via email. The petitioner contended that board members are also “Members” and thus are bound by this rule.

• Evidence Presented: Testimony established that Patrick Rice, acting as a Board member, expressed concerns with the vote count immediately after the meeting adjourned. This, not Mr. Schoeffler’s subsequent email, initiated the board’s investigation. At the rehearing, the petitioner presented selected audio clips he had recorded to support his arguments but did not provide the entire recording.

• Conclusion of Law: The ALJ made a critical distinction between the terms used in the HOA’s bylaws.

◦ The terms “Member,” “Directors,” and “Board of Directors” were found to have specific, non-interchangeable meanings throughout the bylaws.

◦ Bylaw 2.4 applies specifically to a “Member.”

◦ The petitioner made no showing that a “Director” or the “Board of Directors” could not raise questions about the validity of election results after a meeting had adjourned.

◦ Since the investigation was initiated by a board member (Rice) and not exclusively by a member’s untimely objection (Schoeffler), the board’s actions did not violate Bylaw 2.4.

Final Order

Based on the analysis from the rehearing, the judge issued the following order:

IT IS ORDERED that the Petition be dismissed as to Issue 1.

This order, resulting from a rehearing, is legally binding on the parties. Any appeal must be filed with the superior court within thirty-five days of the order’s service date.

Study Guide: Barrs v. Desert Ranch Homeowners’ Association (No. 18F-H1818035-REL-RHG)

This guide provides a comprehensive review of the Administrative Law Judge Decision in the case between Petitioner Tom Barrs and Respondent Desert Ranch Homeowners’ Association. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms to facilitate a thorough understanding of the case’s facts, arguments, and legal conclusions.

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Short-Answer Quiz

Answer each of the following questions in 2-3 sentences based on the provided source documents.

1. Who were the primary parties involved in case No. 18F-H1818035-REL-RHG, and what were their roles?

2. What specific event on March 18, 2017, served as the catalyst for the entire legal dispute?

3. What were the initial, announced results of the election held at the March 18, 2017, Annual Meeting?

4. According to the Petitioner, how did the HOA Board violate Bylaw 2.4 following the election?

5. In the initial hearing, which two of the Petitioner’s allegations were found to be valid violations committed by the Respondent?

6. Why did the Commissioner of the Arizona Department of Real Estate grant the Petitioner’s request for a rehearing?

7. During the rehearing on December 6, 2018, what was the single issue that the Petitioner chose to focus on for reconsideration?

8. According to the Administrative Law Judge’s findings, what action initiated the Board’s investigation into the election results, separate from Brian Schoeffler’s email?

9. How did the Judge’s interpretation of the terms “Member” and “Director” in the bylaws defeat the Petitioner’s primary argument on rehearing?

10. What was the final order issued by the Administrative Law Judge regarding Issue 1 after the conclusion of the rehearing?

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Answer Key

1. The primary parties were Tom Barrs, who served as the Petitioner, and the Desert Ranch Homeowners’ Association, which was the Respondent. The Petitioner, Mr. Barrs, appeared on his own behalf, while the Respondent was represented by its President, Catherine Overby, and Vice President, Brian Schoeffler.

2. The dispute was triggered by the election for two vacant seats on the HOA Board of Directors held during the Annual Meeting on March 18, 2017. The subsequent actions by the Board to investigate and ultimately overturn the initial results of this election led the Petitioner to file a dispute.

3. The initially announced results of the March 18, 2017, election declared that Ms. Catherine Overby and Mr. Jerome Klinger were the winning candidates. No members present at the meeting raised an objection to these announced results before the meeting was adjourned.

4. The Petitioner argued that the Board violated Bylaw 2.4 by acting on an objection to the election results raised by Brian Schoeffler the day after the meeting. The bylaw states that any member who fails to object to an irregularity during a meeting “forever waives that claim,” and the Petitioner argued Mr. Schoeffler, as a member, had waived his right to object.

5. In the initial hearing, the Judge found that the Petitioner successfully established two violations by the Respondent. These were a violation of A.R.S. § 33-1812(A)(7) for discarding ballot envelopes and a violation of A.R.S. § 33-1804 for holding closed meetings without proper notice.

6. The Commissioner granted the rehearing “for the reasons outlined in the Petitioner’s Rehearing Request.” The Petitioner’s request cited multiple grounds, including misconduct by the prevailing party, errors of law, and that the initial findings of fact were not supported by the evidence or were contrary to law.

7. At the rehearing, the Petitioner stated he was only seeking reconsideration of the initial decision as it related to Issue 1. This issue was the allegation that the Board improperly overturned the election results in violation of Bylaw 2.4.

8. The Judge found that the Board’s investigation was initiated by Mr. Patrick Rice, a Board member at the time, who expressed his concerns with the vote “immediately after the Annual Meeting adjourned.” This occurred prior to and independent of the email sent by Brian Schoeffler the following day.

9. The Judge noted that throughout the bylaws, the terms “Member,” “Directors,” and “Board of Directors” were used with specific and non-interchangeable meanings. Because the Petitioner made no showing that a “Director” (like Mr. Rice) could not raise questions after a meeting, the restriction on “Members” in Bylaw 2.4 did not apply to the Board’s actions.

10. The final order stated that the Petition was to be dismissed as to Issue 1. The Judge concluded that the Petitioner failed to sustain his burden of proof to establish that the Respondent had violated Bylaw 2.4.

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Essay Questions

1. Analyze the timeline of events from the Annual Meeting on March 18, 2017, to the run-off election on April 29, 2017. Discuss the key actions taken by the HOA Board—including the meeting with an attorney and the discovery of invalid ballots—and explain how these actions led to the legal dispute.

2. Detail the three distinct issues the Petitioner alleged in his “Clarification of Three Issues alleged in Petition.” Based on the outcome of the initial hearing, evaluate the success of these claims and explain why the Petitioner prevailed on some issues but not others.

3. The Petitioner’s case on rehearing hinged on the interpretation of Bylaw 2.4. Construct the Petitioner’s argument regarding this bylaw and then fully explain the Administrative Law Judge’s legal reasoning for ultimately rejecting it, focusing on the distinction between “Members” and “Directors.”

4. Discuss the concept of “burden of proof” as it is defined and applied in this case. Explain the “preponderance of the evidence” standard and analyze how the Petitioner’s failure to meet this standard led to the dismissal of Issue 1 on rehearing.

5. Examine the procedural history of the case, from the initial single-issue petition to the final binding order after rehearing. What were the key procedural steps, such as amending the petition and filing for a rehearing, and how did these steps shape the final scope and outcome of the case?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions. In this case, the ALJ was Tammy L. Eigenheer.

A.R.S.

Abbreviation for Arizona Revised Statutes, the collection of laws for the State of Arizona. The Petitioner alleged violations of several statutes, including A.R.S. § 33-1813, § 33-1811, § 33-1812, and § 33-1804.

Bylaw 2.4

The specific bylaw of the Desert Ranch HOA that was the central focus of the rehearing. It states, “Any Member who fails to object to any perceived or actual irregularity at the meeting… forever waives that claim.”

Burden of Proof

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

Department

The Arizona Department of Real Estate, the state agency with which the Homeowners Association Dispute Process Petition was filed.

Director

An elected member of the HOA’s Board of Directors. The ALJ’s decision distinguished this role from that of a general “Member.”

Homeowners Association (HOA)

The governing organization for the planned community of Desert Ranch, responsible for enforcing community documents and statutes.

Member

A homeowner within the planned community. The ALJ’s decision emphasized that in the bylaws, this term has a specific meaning that is not interchangeable with “Director.”

Petitioner

The party who initiates a legal action or petition. In this case, the Petitioner was Tom Barrs.

Preponderance of the Evidence

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

Rehearing

A second hearing of a case, granted in this instance by the Commissioner of the Arizona Department of Real Estate, to reconsider the initial decision based on alleged errors.

Respondent

The party against whom a petition is filed. In this case, the Respondent was the Desert Ranch Homeowners’ Association.

5 Shocking Lessons from an HOA Election Gone Wrong

Introduction: When “The Rules” Aren’t What You Think

Homeowners’ Associations (HOAs) run on rules. From lawn maintenance to paint colors, the governing documents are the ultimate authority. But what happens when the rules themselves become the center of a dispute? Imagine this scenario: your HOA holds its annual board election. The results are announced, the winners are declared, and everyone goes home. Then, the next day, the board decides to overturn the result.

This isn’t a hypothetical. It’s the core of a real-life legal case that reveals surprising truths about community governance, the power of a single word, and what can happen when an election goes off the rails.

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1. An Election Isn’t Over Until the Board Says It’s Over

The dispute began at the Desert Ranch Homeowners’ Association Annual Meeting on March 18, 2017. The ballots for two open board seats were counted, and Catherine Overby and Jerome Klinger were announced as the winning candidates. Crucially, no members present raised an objection before the meeting adjourned. By all appearances, the election was over.

But it wasn’t. Immediately after the meeting, a board member, Mr. Rice, gathered the ballots and expressed his concerns with the election results. The next day, the losing candidate, Brian Schoeffler, sent an email asking the board to “review the situation” and consider a “revote.” The board then formally announced that the election had been contested and that it was obligated to investigate.

After consulting an attorney, the board discovered several ballot irregularities, including duplicate ballots and an improperly counted proxy ballot. This new tally resulted in a tie between Mr. Schoeffler and Mr. Klinger. The board then forced a run-off election, which Mr. Schoeffler ultimately won. While the losing candidate’s email drew attention, the true turning point had already occurred moments after the meeting ended, when a board member himself questioned the results—an act that would prove legally decisive.

2. A Single Word in the Bylaws Can Change Everything

The homeowner who filed the legal petition, Tom Barrs, built his case on a seemingly straightforward rule in the HOA’s bylaws. He argued that any challenge to the election was invalid because it wasn’t raised before the Annual Meeting adjourned. The bylaw in question, Section 2.4, reads:

Any Member who fails to object to any perceived or actual irregularity at the meeting (whether procedural, parliamentary, substantive or technical) forever waives that claim.

The petitioner’s argument was simple: the challenge was raised after the meeting by a “Member,” so the claim was waived. The case seemed open-and-shut.

However, the Administrative Law Judge made a critical distinction that decided the case. The judge noted that throughout the bylaws, the terms “Member,” “Directors,” and “Board of Directors” were used with specific meanings and were not interchangeable. While a Member had to object during the meeting, the judge found no rule preventing a Director from raising questions later.

Because a board member, Mr. Rice, had expressed concerns immediately following the meeting, the board’s subsequent investigation was deemed permissible. This razor-thin interpretation of a single word highlights the immense power that definitions and precise language hold in governing documents.

3. The Board Broke the Law, But Still Won on the Main Issue

In a surprising twist, the judge determined that the HOA had, in fact, violated Arizona state law on two separate counts during the election controversy. The petitioner successfully proved that the board failed to follow established statutes.

The two violations established in the initial hearing were:

• Improper Destruction of Ballots: The HOA violated A.R.S. § 33-1812(A)(7) when it destroyed all of the ballot envelopes around the time of the election. This act made a true, verifiable recount impossible, directly undermining the integrity of the very election the board was claiming to investigate.

• Improper Meetings: The HOA violated A.R.S. § 33-1804 by holding closed meetings without providing proper notice to the members, particularly a meeting at the home of a board member, Ms. Overby, where the decision to hold a run-off was made. By making these critical decisions behind closed doors, the board created an appearance of secrecy that fueled the dispute and eroded member trust.

Despite proving these clear legal violations, the petitioner still lost on his primary complaint—overturning the run-off and reinstating the original election results. This outcome serves as a stark example of a pyrrhic victory. You can successfully prove that an organization broke the rules without achieving your ultimate goal in the dispute.

4. An Investigation Can Uncover a Cascade of Deeper Problems

The board’s decision to contest its own election results was controversial, but the subsequent investigation brought a cascade of other procedural failures to light. The initial challenge acted like a pulled thread that unraveled a series of previously unknown mistakes.

During the board’s meeting with its attorney, it was discovered that “duplicate ballots and a proxy ballot that were improperly counted” had skewed the original vote. This alone was enough to call the first result into question.

Furthermore, the board itself asserted that its own bylaws “did not allow for a write-in candidate.” This was a significant admission, as one of the original winners, Jerome Klinger, had been a write-in. If true, his victory would have been invalid from the start, regardless of any other challenges. The board’s investigation, initiated to resolve one perceived error, ended up exposing its own systemic incompetence—from improperly counting ballots to being unaware of its own rules regarding write-in candidates. The effort to fix the election proved the election was fundamentally broken from the start.

5. An HOA Board Can Investigate Itself

The petitioner’s case rested on the idea that board members are also “Members” of the association and are therefore bound by the same rules. If a regular member had to object during the meeting, a director should have to as well.

The judge rejected this argument, implicitly affirming the board’s higher-level fiduciary duty to ensure a fair and legal election. The final decision made it clear that the bylaws used “Member” and “Director” with distinct meanings and responsibilities. The bylaw requiring members to object during the meeting was the mechanism for an individual’s challenge; it did not override the board’s inherent duty to govern properly.

The key takeaway from the judge’s decision was unambiguous: The petitioner “made no showing that a Director could not raise questions as to the validity of the election results after the meeting adjourned.” This legally affirms a board’s power to investigate its own processes, a responsibility separate from the rules that govern challenges from the general membership.

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Conclusion: Have You Read Your Bylaws Lately?

This case serves as a powerful reminder that the dense, legalistic language of HOA governing documents is not just boilerplate. These documents have immense real-world power, dictating the outcomes of contentious disputes and shaping the governance of a community. The intricate details and specific wording can mean the difference between a final result and one that is just the beginning of a long and costly fight.

This entire, year-long legal battle hinged on the definition of a single word. When was the last time you read the fine print governing your own community?

Case Participants

Petitioner Side

Tom Barrs (petitioner)
Appeared on his own behalf,.
Stephen Barrs (witness)
Testified for Petitioner,.

Respondent Side

Catherine Overby (board member/president)
Desert Ranch HOA
Appeared on behalf of Respondent,; Board President,; testified at hearing,.
Brian Schoeffler (board member/vice president)
Desert Ranch HOA
Appeared on behalf of Respondent,; Board Vice President,; testified at hearing,.
Patrick Rice (board member)
Desert Ranch HOA
Board member who expressed concerns immediately after the meeting,,,; involved in meeting with attorney,.

Neutral Parties

Tammy L. Eigenheer (ALJ)
Office of Administrative Hearings
Judy Lowe (Commissioner (ADRE))
Arizona Department of Real Estate
Issued Order Granting Rehearing; recipient of decision copy,.
LDettorre (ADRE staff)
Arizona Department of Real Estate
Recipient of decision copy.
AHansen (ADRE staff)
Arizona Department of Real Estate
Recipient of decision copy.
djones (ADRE staff)
Arizona Department of Real Estate
Recipient of decision copy.
DGardner (ADRE staff)
Arizona Department of Real Estate
Recipient of decision copy.
ncano (ADRE staff)
Arizona Department of Real Estate
Recipient of decision copy.

Other Participants

Jerome Klinger (board director)
Desert Ranch HOA
Initially announced as a winning candidate for director,; later removed after contest; involved in run-off,.
Paula Barrs (listed resident)
Listed with Tom Barrs on mailing address.

Peter Biondi, Jr. vs. Lakeshore at Andersen Springs Homeowners

Posted on August 21, 2018 by [email protected]

Case Summary

Case ID	18F-H1818048-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2018-08-21
Administrative Law Judge	Diane Mihalsky
Outcome	The Administrative Law Judge denied the homeowner's petition, finding that the HOA's remaining Director acted permissibly and reasonably upon legal advice in refusing to defend a previous legal action, as the initial Board decision to remove fellow directors was contrary to mandatory statutory procedures outlined in A.R.S. § 33-1243, which requires removal by unit owners, not by the board.
Filing Fees Refunded	$0.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Peter Biondi, Jr.	Counsel	—
Respondent	Lakeshore at Andersen Springs Homeowners Association	Counsel	Maria R. Kupillas

Alleged Violations

A.R.S. §§ 33-1242, 33-1243, Respondent’s Bylaw Article II, Section 3 and Article III, Sections 2 and 3, and Respondent’s CC&Rs Section 8.13

Outcome Summary

The Administrative Law Judge denied the homeowner's petition, finding that the HOA's remaining Director acted permissibly and reasonably upon legal advice in refusing to defend a previous legal action, as the initial Board decision to remove fellow directors was contrary to mandatory statutory procedures outlined in A.R.S. § 33-1243, which requires removal by unit owners, not by the board.

Why this result: The Board's previous action of removing directors was illegal under A.R.S. § 33-1243 because director removal must be performed by a member vote. Because the HOA lacked a legal defense to the directors' challenge, the current petition failed to prove a violation when the sole remaining Director chose not to incur unnecessary fees contesting an unwinnable case, which was permissive under A.R.S. § 33-1242.

Key Issues & Findings

Alleged failure of the sole remaining Director to defend a prior petition challenging the board's removal of two directors.

Petitioner alleged the HOA violated governing documents and statutes when the remaining Director chose not to contest a prior Department petition filed by two removed Directors, resulting in their reinstatement. The ALJ found that the initial removal of the Directors by fellow Directors was illegal under A.R.S. § 33-1243(B) and (H), which reserves removal power to members. Because the HOA lacked a good legal defense, the remaining Director's decision not to defend the prior petition, based on legal advice, was permissive under A.R.S. § 33-1242 and not a violation.

Orders: Petitioner’s petition is denied.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

A.R.S. § 33-1243
A.R.S. § 33-1242
A.R.S. § 32-2199(1)
A.R.S. § 33-1803

Analytics Highlights

Topics: Condominium, HOA Director Removal, Board Authority, Condo Bylaws

Additional Citations:

A.R.S. § 33-1243
A.R.S. § 33-1242
A.R.S. § 32-2199
A.R.S. § 33-1248
A.R.S. § 33-1803
A.A.C. R2-19-119

Video Overview

Audio Overview

Decision Documents

18F-H1818048-REL Decision – 654904.pdf

Uploaded 2026-04-24T11:13:38 (155.5 KB)

Briefing Document: Analysis of Administrative Law Judge Decision in Biondi v. Lakeshore at Andersen Springs HOA

Executive Summary

This document synthesizes the findings of the Administrative Law Judge (ALJ) decision in Case No. 18F-H1818048-REL, where a petition filed by homeowner Peter Biondi, Jr. against the Lakeshore at Andersen Springs Homeowners Association (HOA) was denied. The central conflict revolved around the HOA Board’s removal of two directors, Jim Luzzis and Jerry Dubasquier, for alleged violations of the association’s leasing restrictions.

The ALJ’s decision rested on a critical point of law: the HOA Board acted improperly and in violation of Arizona state statute when it removed two of its own members. According to A.R.S. § 33-1243, the power to remove a board director is reserved exclusively for the association’s members (the unit owners) through a formal petition and vote, not for the Board of Directors itself.

Because the initial removal was legally invalid, the subsequent actions of the sole remaining director, Bonnie Henden, were deemed reasonable and permissible. Her decision not to defend the HOA against a petition from the improperly removed directors, a choice made upon the advice of three separate attorneys, was not a violation of her duties. The governing statute (A.R.S. § 33-1242) uses the permissive term “may” regarding the defense of litigation, and the ALJ concluded that no entity is required to mount a defense that is ill-advised and likely to fail. Consequently, Henden’s reinstatement of the directors was a logical correction of the Board’s unlawful action. The factual question of whether the directors had violated the leasing rules was considered secondary to this overriding procedural and statutory failure by the Board.

Case Background and Procedural History

The dispute originated from complaints by HOA members that two serving directors, Jim Luzzis and Jerry Dubasquier, were violating Section 8.13 of the Covenants, Conditions, and Restrictions (CC&Rs) by renting their units as short-term Vacation Rental By Owner (“VRBOs”).

1. Initial Board Action: The Board of Directors met to consider the complaints, concluded that Luzzis and Dubasquier had violated the CC&Rs, and gave them 14 days to remedy the violation by presenting compliant long-term rental agreements.

2. Removal of Directors: At a contentious executive session on January 4, 2018, the five other directors voted to remove or disqualify Luzzis and Dubasquier from the Board. Board member Bonnie Henden testified that she felt this action was a “vendetta” against the two directors for taking opposing positions on other issues.

3. Board Collapse: Following the removal, the Board structure disintegrated. The petitioner, Peter Biondi, Jr., and another director, Jeffrey Washburn, “decided to resign in order to restore calm in the community.” A third director was removed or resigned due to non-payment of assessments. By March or April 2018, this left Bonnie Henden as the sole remaining director.

4. Legal Challenge and Reinstatement: Luzzis and Dubasquier filed a petition with the Arizona Department of Real Estate to protest their removal. After consulting with three different attorneys, Henden chose not to file an answer on behalf of the HOA. The Department subsequently issued a decision in favor of Luzzis and Dubasquier. Following this outcome, Henden reinstated them to the Board to complete their elected terms and cancelled the planned election for their replacements.

5. Petitioner’s Complaint: On May 9, 2018, Peter Biondi, Jr. filed the current petition, alleging that Henden’s refusal to defend the HOA and her decision to reinstate the two directors constituted a violation of Arizona statutes (§§ 33-1242 and 33-1243), HOA Bylaws, and CC&Rs.

Central Legal Issues and Findings

The ALJ determined that the petitioner, Biondi, bore the burden of proof but that the operative facts of the case were not in dispute. The core of the case was not a factual determination but a legal one.

The Dispositive Question: Legality of Director Removal

The judge identified the central legal question as the primary determinant of the case’s outcome:

“…the dispositive issue is not the factual issue of whether Messrs. Luzzis and Dubasquier violated CC&R Section 8.13 by using their units as short-term VRBOs, but the legal issue of whether the other directors on Respondent’s Board properly removed them from the Board…”

The ruling established that the Board’s method of removal was the critical point of failure, rendering the underlying CC&R violation secondary.

Analysis of Arizona Revised Statutes (A.R.S.)

The decision was grounded in a de novo review of A.R.S. § 33-1243, which governs the powers and removal of a condominium association’s board of directors.

• A.R.S. § 33-1243(B): This subsection explicitly prohibits a board from acting on behalf of the association to “determine the qualifications, powers and duties or terms of office of board of directors members.” The ALJ found that the Board’s vote to disqualify Luzzis and Dubasquier was in direct violation of this provision.

• A.R.S. § 33-1243(H): This subsection establishes the exclusive procedure for removing a director, stating that its provisions apply “notwithstanding any provision of the declaration or bylaws to the contrary.” The statute mandates that removal can only be accomplished by:

1. A petition signed by a specified percentage or number of eligible unit owners (e.g., 25% or 100 votes, whichever is less, for an association of 1,000 or fewer members).

2. A majority vote of the unit owners at a special meeting called for this purpose within 30 days of receiving the petition.

The ALJ’s conclusion was unequivocal: “The referenced provisions of A.R.S. § 33-1243 specifically and unequivocally require that the members who elected a director must remove the director.” Because the Board failed to follow this statutory procedure, its removal of Luzzis and Dubasquier was legally invalid, and the HOA “lacked any good legal defense” to their subsequent petition.

The Legality of the Sole Director’s Actions

Based on the finding that the initial removal was unlawful, the ALJ assessed the actions taken by the sole remaining director, Bonnie Henden.

Decision Not to Defend the HOA

The petitioner argued Henden had a duty to defend the HOA against the petition from Luzzis and Dubasquier. The ALJ rejected this argument by citing A.R.S. § 33-1242(A)(4), which states an association “may… defend or intervene in litigation or administrative proceedings.”

The judge’s legal interpretation was that the word “may” indicates permissive intent, not a mandatory requirement. Henden was not statutorily obligated to contest the petition. Her decision was further supported by the legal advice she received from three attorneys, who advised that a defense would likely fail and result in unnecessary legal fees for the association. The ALJ affirmed this prudence, stating, “No statute requires a condominium association or a director to take an ill-advised act or to mount a defense of a previously taken ill-advised act that likely will fail on its merits.”

Reinstatement of Removed Directors

Henden’s decision to reinstate Luzzis and Dubasquier to the Board was found to be a direct and logical consequence of the legally improper removal. By reinstating them, she was correcting the Board’s previous unlawful action.

Relevant Governing Documents and Testimony

Document/Testimony

Key Provisions or Content

Relevance to Decision

A.R.S. § 33-1243

Prohibits boards from determining member qualifications and mandates that only unit owners can remove directors via a petition and vote.

This was the controlling statute that rendered the Board’s initial removal of Luzzis and Dubasquier unlawful.

A.R.S. § 33-1242

States an association “may” defend itself in litigation.

Provided the legal basis for Henden’s discretionary and permissible decision not to defend the HOA.

HOA CC&Rs Section 8.13

Prohibits leasing for “transient, hotel, club, timeshare or similar purposes” and requires all leases to be for a minimum of six months.

This section was the basis for the original complaint but was deemed not the dispositive issue in the case.

HOA Bylaws Article III

Governs director qualifications, number, and the filling of vacancies.

While relevant to Board governance, these bylaws were superseded by the conflicting and more specific state statute (A.R.S. § 33-1243).

Bonnie Henden Testimony

Stated the removal felt like a “vendetta” and that she consulted three attorneys before deciding not to defend the HOA.

Provided context for the internal Board conflict and established that her actions were taken after seeking extensive legal counsel.

Peter Biondi, Jr. Evidence

Submitted exhibits showing Luzzis and Dubasquier were continuing to advertise their units as VRBOs.

The evidence was acknowledged but deemed irrelevant to the central legal question of whether the Board had the authority to remove them.

Final Order and Conclusion

The Administrative Law Judge ordered that the petitioner’s petition be denied.

The final decision establishes a clear legal principle: a homeowners association’s Board of Directors does not have the authority to remove its own members in Arizona. That power is reserved for the unit owners through a specific statutory process. Any action taken by a board in contravention of this statute is legally invalid. Consequently, a director’s decision not to defend such an invalid action, especially when based on legal advice, is not a breach of duty but a prudent measure to avoid wasting association resources on a defense with no legal merit.

Study Guide: Biondi v. Lakeshore at Andersen Springs Homeowners Association

This guide provides a comprehensive review of the Administrative Law Judge Decision in case No. 18F-H1818048-REL, concerning a dispute between a condominium owner and a homeowners association. It includes a quiz with an answer key, essay questions for deeper analysis, and a glossary of key terms found within the legal document.

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Short-Answer Quiz

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

1. Who were the Petitioner and the Respondent in this case, and what was their relationship?

2. What specific event prompted the Petitioner, Peter Biondi, Jr., to file a petition with the Arizona Department of Real Estate?

3. According to the Respondent’s CC&Rs (Section 8.13), what were the rules regarding the leasing of condominium units?

4. Why were Board Directors Jim Luzzis and Jerry Dubasquier initially removed from their positions by the other directors?

5. How did Bonnie Henden become the sole remaining member of the Respondent’s Board of Directors?

6. What was the “dispositive issue” that the Administrative Law Judge identified as central to the case?

7. According to Arizona Revised Statute (A.R.S.) § 33-1243(H), what is the proper procedure for removing a member of a condominium association’s board of directors?

8. Why did Ms. Henden choose not to defend the association against the petition filed by Messrs. Luzzis and Dubasquier?

9. What does the legal standard “preponderance of the evidence” mean, as defined in the decision?

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

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Answer Key

1. The Petitioner was Peter Biondi, Jr., who is a condominium owner and a member of the Lakeshore at Andersen Springs Homeowners Association. The Respondent was the Lakeshore at Andersen Springs Homeowners Association itself.

2. The Petitioner filed the petition because the Board’s sole remaining member, Bonnie Henden, refused to defend the association against a petition filed by two former directors. Instead of defending the board’s prior action, Ms. Henden reinstated the two directors who had been removed.

3. Section 8.13 of the CC&Rs stipulated that all leases must be for a minimum of six months and that units could not be leased for transient, hotel, or similar purposes. Owners were also limited to leasing their unit no more than two separate times in any 12-month period and had to provide a signed copy of the lease to the association.

4. Messrs. Luzzis and Dubasquier were removed after other Board members concluded they had violated CC&R Section 8.13 by renting their units as short-term Vacation Rentals By Owner (VRBOs). The removal occurred after they were given 14 days to remedy the violation and failed to do so to the Board’s satisfaction.

5. After the removal of Luzzis and Dubasquier, the Petitioner and another director resigned to “restore calm.” A third director was removed or resigned for failing to pay an assessment, which left Ms. Henden as the only director on the Board.

6. The dispositive issue was not the factual question of whether Luzzis and Dubasquier had violated the CC&Rs. Rather, it was the legal issue of whether the other directors had the authority to properly remove them from the Board in the first place.

7. A.R.S. § 33-1243(H) states that unit owners may remove a board member by a majority vote at a meeting. This process must be initiated by a petition signed by a specific percentage or number of the association’s members who are eligible to vote.

8. Ms. Henden consulted three different attorneys who advised her that the association would likely lose the case. Their legal advice was based on A.R.S. § 33-1243, which states that board members cannot remove other board members, and defending the improper removal would incur unnecessary legal fees.

9. “Preponderance of the evidence” is defined as proof that convinces the trier of fact that a contention is more probably true than not. It is described as the greater weight of evidence that is sufficient to incline a fair and impartial mind to one side of an issue over the other.

10. The Administrative Law Judge ordered that the Petitioner’s petition be denied. The judge concluded that the Board’s initial removal of the two directors was improper under state law and that Ms. Henden was not required to defend that ill-advised act.

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Essay Questions

The following questions are designed for longer-form analysis and synthesis of the case details. Answers are not provided.

1. Analyze the conflict between the authority granted to the Board in the Lakeshore at Andersen Springs Bylaws (Article III, Sections 2 & 3) and the limitations placed upon it by Arizona Revised Statute § 33-1243. Explain which document takes precedence in the matter of director removal and why, citing the reasoning used by the Administrative Law Judge.

2. Discuss the role and actions of Bonnie Henden after she became the sole remaining director. Evaluate her decision to reinstate Messrs. Luzzis and Dubasquier, considering the legal advice she received, her powers as the sole director, and the potential consequences for the homeowners association.

3. Trace the procedural history of this dispute, beginning with the initial complaints about VRBOs and culminating in the final Administrative Law Judge Decision. Identify the key actions, legal filings, and turning points for each party involved (Luzzis/Dubasquier, the Board, Peter Biondi, and Bonnie Henden).

4. The judge states that the case hinges on a legal issue, not a factual one. Explain the difference between the factual issue (the VRBO rentals) and the legal issue (the removal process) and detail how this distinction was fundamental to the case’s outcome.

5. Based on the statutes cited in the decision, outline the correct, legally compliant process that the members of the Lakeshore at Andersen Springs Homeowners Association should have followed if they wished to remove Messrs. Luzzis and Dubasquier from the Board of Directors. Contrast this with the actions the Board actually took.

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An independent judge who presides over administrative hearings, in this case Diane Mihalsky from the Office of Administrative Hearings.

A.R.S.

Abbreviation for Arizona Revised Statutes, which are the codified laws of the state of Arizona. The decision references several statutes from Title 33 concerning property and condominiums.

Bylaws

The rules and regulations adopted by an organization, such as a homeowners association, for its internal governance. In this case, they govern matters like annual meetings and the composition of the Board of Directors.

Abbreviation for Covenants, Conditions and Restrictions. These are legally binding rules recorded with the property deed that govern what homeowners can and cannot do with their property. Section 8.13 on leasing was a key CC&R in this case.

De Novo Review

A type of legal review where a court or administrative body decides the issues without reference to any legal conclusions or assumptions made by the previous party that heard the case. It is used for determining the construction and application of statutes.

Department

Refers to the Arizona Department of Real Estate, the state agency authorized to receive and decide on petitions for hearings from members of condominium associations.

Petitioner

The party who files a petition or brings an action in a legal proceeding. In this case, the Petitioner was Peter Biondi, Jr.

Preponderance of the Evidence

The standard of proof in most civil cases. It requires the party with the burden of proof (the Petitioner in this matter) to present evidence that is more convincing and more likely to be true than not.

Respondent

The party against whom a petition is filed or an appeal is brought. In this case, the Respondent was the Lakeshore at Andersen Springs Homeowners Association.

Abbreviation for Vacation Rental By Owner, referring to the practice of renting out properties on a short-term basis, similar to a hotel. This practice was alleged to be in violation of the association’s CC&Rs.