Long Meadow Ranch East Property Owners Association, Inc.
Counsel
Ashley N. Moscarello, Esq.
Alleged Violations
A.R.S. § 33-1805(A)
Outcome Summary
The ALJ denied and dismissed the petition, finding that Petitioner failed to establish that the Respondent HOA violated A.R.S. § 33-1805(A). The documents requested (an email string among Board members) were informal communications and were not considered official records of the association because the Board never took formal action on the incident.
Why this result: The Petitioner failed to meet the burden of proof that the Board created or possessed any official documents related to the incident that they failed to produce, as the emails were deemed private, informal communications rather than official records.
Key Issues & Findings
Failure to produce association records (un-redacted email string)
Petitioner alleged Respondent violated A.R.S. § 33-1805 by failing to produce official documents, specifically an un-redacted email string among Board members concerning an incident where Petitioner's husband allegedly harassed potential property buyers.
Orders: Petition dismissed because the documents sought (un-redacted emails) were informal communications, not official records of the association required to be produced under A.R.S. § 33-1805(A).
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1805(A)
A.R.S. § 33-1804(E)(4)
Analytics Highlights
Topics: homeowner records request, association records, informal communications, board quorum, records disclosure
Additional Citations:
A.R.S. § 33-1805(A)
A.R.S. § 33-1804(E)(4)
A.R.S. § 32-2199(B)
Video Overview
Audio Overview
Decision Documents
19F-H1918028-REL Decision – 684134.pdf
Uploaded 2026-01-23T17:27:32 (149.9 KB)
Briefing Doc – 19F-H1918028-REL
Legal Dispute Briefing: Wiercinski v. Long Meadow Ranch East POA
Executive Summary
This document provides a comprehensive analysis of the legal dispute between homeowner Patricia Wiercinski and the Long Meadow Ranch East Property Owners Association, Inc. (the “Respondent” or “HOA”). The case, adjudicated by the Arizona Office of Administrative Hearings, centered on the HOA’s alleged failure to produce official records in violation of Arizona statute A.R.S. § 33-1805. The dispute originated from a June 19, 2017 incident where Wiercinski’s husband, Wayne Coates, allegedly confronted and verbally abused potential buyers of a neighboring property, causing them to withdraw their interest.
The core of the legal challenge involved an email exchange among HOA board members discussing the incident. Wiercinski’s petition, filed on October 18, 2018, demanded access to what she believed were official HOA documents related to this event. The case proceeded through an initial hearing on January 10, 2019, and a subsequent rehearing on April 22, 2019, both overseen by Administrative Law Judge Diane Mihalsky.
In both hearings, the Judge ruled decisively in favor of the HOA. The central finding was that the private email communications among board members did not constitute an “official record of the association.” Therefore, the HOA had no statutory obligation to produce them or provide an un-redacted version. The judge upheld the HOA’s decision to redact the names of the potential buyers and their agent, citing credible testimony regarding Mr. Coates’ history of “threatening and bullying neighbors” as a reasonable justification for protecting those individuals from potential harassment. Both of Wiercinski’s petitions were ultimately denied and dismissed.
Case Overview and Parties Involved
The dispute was formally adjudicated within the jurisdiction of the Arizona Department of Real Estate and referred to the Office of Administrative Hearings for evidentiary proceedings.
• Case Number: 19F-H1918028-REL
• Initial Hearing Date: January 10, 2019
• Rehearing Date: April 22, 2019
• Presiding Judge: Administrative Law Judge Diane Mihalsky
Key Individuals and Entities
Name/Entity
Patricia Wiercinski
Petitioner; homeowner and member of the HOA.
Wayne Coates
Petitioner’s husband; central figure in the June 19, 2017 incident.
Long Meadow Ranch East POA, Inc.
Respondent; the Homeowners’ Association (“HOA”).
Michael “Mike” Olson
President of the Respondent’s Board of Directors.
Gregg Arthur
Director on the Respondent’s Board and a realtor.
Joe Zielinski
Director on the Respondent’s Board.
Kathy Andrews
Community Manager for the Respondent, employed by HOAMCO.
John Allen
HOA member and owner of the lot being sold.
Ashley N. Moscarello, Esq. (Goodman Law Group)
Legal representative for the Respondent.
Diane Mihalsky
Administrative Law Judge, Office of Administrative Hearings.
The Core Incident of June 19, 2017
The legal dispute stemmed from an encounter on June 19, 2017, involving Wayne Coates and a family considering the purchase of a vacant lot on Puntenney Rd., located across the street from the Wiercinski/Coates residence.
According to an email from the prospective buyers, Mr. Coates confronted them, their son, and their architect as they were viewing the property.
• Coates’ Alleged Actions: He “came out of his house and was belligerent and cursing at them,” claiming “nothing was for sale around here.” The potential buyer described him as “verbally abusive and extremely confrontational,” making “rude remarks while cussing” and displaying “extreme aggressive behavior.”
• Impact on the Sale: The confrontation directly caused the potential buyers to withdraw their offer. In their correspondence, they stated:
• Broader Concerns: The incident was seen by some as detrimental to the entire community. Board Director Gregg Arthur noted, “Wayne thru his actions appears to have interfered with and destroyed a property sale. We need to meet and take action on this matter as it will have a broad and chilling effect amongst the realtor community (effecting us all) not to mention the property owners.”
The Initial Hearing and Decision (January 2019)
The initial hearing focused on whether the HOA had withheld official records of its deliberations or decisions regarding the June 19, 2017 incident.
Petitioner’s Position
Patricia Wiercinski argued that the HOA violated A.R.S. § 33-1805 by failing to produce documents. Her key assertions were:
• Because an email about the incident was sent to a quorum of the Board, the matter constituted official business.
• The Board was legally required to make a formal motion and arrive at a documented decision, even if that decision was to take no action.
• She had never received any such documentation, such as minutes from an executive session or an open meeting.
• She pointed to a Board resolution regarding the electronic storage of documents as evidence that such records must exist.
Respondent’s Position
The HOA, represented by Ashley N. Moscarello, denied any violation. Their defense included:
• The email chain was an informal communication among neighbors and Board members on their personal email servers, not an official HOA record.
• No member had ever requested the Board take official action on the matter.
• The email string was provided voluntarily to the Petitioner.
• The names of the potential buyers and their real estate agent were redacted specifically because “Mr. Coates had a history of bullying and intimidating people.”
• The Board never formally discussed the incident, held a meeting, voted, or took any official action.
• The Community Manager, Kathy Andrews, testified that no official records (agendas, resolutions, minutes, etc.) pertaining to the incident existed.
Outcome and Rationale
The Administrative Law Judge denied the petition. The key conclusions of law were:
• The burden of proof was on the Petitioner to show a violation occurred.
• The simple fact that a quorum of Board members discussed a topic in private emails “does not make it official Board business,” especially when no action is taken.
• Forcing volunteer board members to formally document every informal discussion would be an “unnecessary and burdensome requirement.”
• Because the Petitioner did not establish that any official documents regarding the incident existed, the petition was dismissed.
The Rehearing and Final Decision (May 2019)
Wiercinski requested and was granted a rehearing, alleging “misconduct by the judge.” In this second hearing, she significantly altered her legal argument.
Petitioner’s Evolved Position
Wiercinski abandoned her claim that the Board was required to create a formal record of inaction. Instead, her new theory was:
• The email string itself, having been voluntarily produced by the HOA, must be considered an “official record of the association.”
• As an official record, A.R.S. § 33-1805 required the HOA to produce a complete, un-redacted copy.
• She argued that she and Mr. Coates had a right to know the identities of those who had accused him of belligerence.
Respondent’s Defense
The HOA’s defense remained consistent:
• The redaction of names was a necessary and reasonable measure to protect the individuals from potential harassment by Mr. Coates.
• The incident was a personal dispute between neighbors and did not violate any of the HOA’s governing documents (CC&Rs, bylaws), placing it outside the Board’s enforcement authority.
• Kathy Andrews again testified that the email was not part of the association’s archived business records, as the Board took no official action.
Final Outcome and Rationale
The Judge once again dismissed the petition. The final ruling reinforced the initial decision and provided further clarity:
• The email string was definitively not a “record of the association.”
• Because it was not an official record, A.R.S. § 33-1805 did not compel the HOA to provide an un-redacted version.
• The Judge explicitly validated the HOA’s motive for the redactions, stating that the Board President’s fear that “Mr. Coates would harass the real estate agent and potential purchaser… does not appear unreasonable.”
Key Evidence and Testimony
The email communications provided the primary evidentiary basis for the case.
Incriminating Email Content
Several emails from June 20, 2017, highlighted the severity of the incident and concerns about Wayne Coates:
• From Real Estate Agent to Potential Buyer: “He [John Allen] knows this person, Wayne Coates, and said he has been an issue in the neighborhood before. He has contacted Hoamco and is seeking legal [counsel] to stop this menace.”
• From Director Joe Zielinski to the Board: “The YCSO [Yavapai County Sheriff’s Office] may file charges against Wayne for disorderly conduct/harassment… given Wayne’s arrest record and prison term and criminal history. … I don’t believe Wayne (and Patricia’s) aggressive and disruptive behavior will stop.”
• From Director Gregg Arthur to the Board: “I was hoping that this would not be a situation we would have to encounter with Wayne Coates and Patricia however here it is on our door step.”
Definition of “Official Records”
Testimony from Community Manager Kathy Andrews was crucial in establishing the distinction between official and unofficial communications. She defined official records as including:
• Governing documents and architectural guidelines.
• Board and general meeting minutes.
• Expenditures, receipts, contracts, and financials.
• Anything submitted to the Board for official action.
She confirmed that because the Board took no action on the June 19, 2017 incident, the related emails were not included in Respondent’s archived records.
Study Guide – 19F-H1918028-REL
Wiercinski v. Long Meadow Ranch East POA: A Case Study
This study guide provides a comprehensive overview of the administrative case of Patricia Wiercinski versus the Long Meadow Ranch East Property Owners Association, Inc. The case revolves around a homeowner’s request for association records and the legal definition of what constitutes an official document that a homeowners’ association is required to produce under Arizona law. The material is drawn from two Administrative Law Judge Decisions, dated January 22, 2019, and May 1, 2019.
Key Parties and Individuals
Role / Title
Affiliation
Patricia Wiercinski
Petitioner
Homeowner, Member of Respondent
Wayne Coates
Petitioner’s Husband
Homeowner
Long Meadow Ranch East POA, Inc.
Respondent
Homeowners’ Association (HOA)
Diane Mihalsky
Administrative Law Judge (ALJ)
Office of Administrative Hearings
Ashley N. Moscarello, Esq.
Legal Counsel for Respondent
Goodman Law Group
Michael “Mike” Olson
President of the Board
Respondent (HOA)
Gregg Arthur
Director on the Board
Respondent (HOA)
Kathy Andrews
Community Manager
HOAMCO (Respondent’s management company)
John Allen
Property Owner / HOA Member
Long Meadow Ranch East
Joe Zielinski
Director on the Board
Respondent (HOA)
Jim Robertson
Director on the Board
Respondent (HOA)
Tom Reid
Director on the Board
Respondent (HOA)
Boris Biloskirka
Former Board Member
Respondent (HOA)
Timeline of Key Events
June 19, 2017
An incident occurs where Wayne Coates allegedly acts belligerently toward potential buyers of John Allen’s property.
June 20, 2017
An email exchange regarding the incident occurs between John Allen, his realtor, and members of the HOA Board.
October 18, 2018
Patricia Wiercinski files a petition with the Arizona Department of Real Estate, alleging the HOA violated A.R.S. § 33-1805.
January 10, 2019
The initial evidentiary hearing is held before Administrative Law Judge Diane Mihalsky.
January 22, 2019
The ALJ issues a decision denying Wiercinski’s petition.
Post-Jan 22, 2019
Wiercinski requests a rehearing, alleging misconduct by the judge. The request is granted.
April 22, 2019
The rehearing is held.
May 1, 2019
The ALJ issues a final decision, again dismissing Wiercinski’s petition.
The Core Dispute: The June 19, 2017 Incident
On June 19, 2017, potential buyers, along with their builder, architect, and son, were viewing a lot for sale owned by John Allen on Puntenney Rd. The lot was across the street from the home of Patricia Wiercinski and Wayne Coates. An elderly man, later identified as Wayne Coates, came out of the house and was allegedly “belligerent and cursing” at the group, telling them nothing was for sale and they should not be snooping around. The potential buyers described the individual as “verbally abusive and extremely confrontational,” displaying “extreme aggressive behavior.” As a result of this encounter, the potential buyers decided to remove the lot from their list of considerations, stating they were seeking a “quiet, peaceful, and neighborly place to retire. Not a place with hostility and confrontation.”
This incident prompted John Allen to contact his realtor and members of the HOA Board, seeking action to prevent such behavior from interfering with future property sales.
The Legal Proceedings
Petitioner’s Argument: Patricia Wiercinski alleged that the HOA (Respondent) violated A.R.S. § 33-1805 by failing to produce documents related to its deliberations, decisions, and actions regarding the June 19, 2017 incident. Her core arguments were:
• The email about the incident was sent to a quorum of the Board, making it official business.
• The Board was required to make a formal motion and decision, even if it decided to take no action against her husband.
• She never received documents showing the Board addressed the incident in an executive session or open meeting.
• She did not receive a map referenced in one of the emails or a letter mentioned by board member Joe Zielninski in a video.
• An HOA resolution to electronically store all association business documents meant the requested records must exist.
Respondent’s Argument: The HOA denied violating any statute. Its defense was based on the following points:
• The Board never took any official action against Wiercinski or Coates as a result of the incident.
• The email string was an informal communication among Board Directors on their personal servers and was not kept as an official record. It was provided to Wiercinski voluntarily.
• The names of the potential purchasers and real estate agent were redacted from the emails because Wayne Coates has a known history of “threatening and bullying neighbors and others.”
• No official discussion or vote on the incident ever occurred in an executive session or general meeting.
ALJ’s Decision (January 22, 2019): The Administrative Law Judge denied the petition. The decision concluded that Wiercinski did not meet her burden of proof to establish that any official documents regarding the incident existed that the Respondent failed to produce. The judge reasoned that the mere fact a quorum of Board members informally discusses a topic in private emails does not make it official Board business, especially when no action is taken.
Reason for Rehearing: Wiercinski requested a rehearing, alleging misconduct by the judge. The Commissioner of the Department of Real Estate granted the request without noting any specific misconduct or stating why it should have changed the result.
Petitioner’s Changed Argument: At the rehearing, Wiercinski changed her theory of the case. She no longer argued that the Board failed to produce a record of a formal decision. Instead, she argued that:
• The email string itself was an official record of the association’s business.
• A.R.S. § 33-1805 therefore required the HOA to produce a fully un-redacted copy of the emails.
• She and Mr. Coates had a right to know the names of the individuals accusing Mr. Coates of belligerence.
Respondent’s Rebuttal: The HOA maintained its position:
• The email string was not an official record because the Board never took any action on the matter. The incident did not violate any of the HOA’s CC&Rs, bylaws, or anything else it was empowered to enforce.
• Community Manager Kathy Andrews testified that official records include governing documents, minutes, and items submitted to the Board for action. Since the Board took no action, the email was not included in the association’s archived records.
• The names were redacted because of Mr. Coates’s history of intimidation, and the Board president feared he would harass the individuals involved.
ALJ’s Final Decision (May 1, 2019): The petition was dismissed again. The ALJ reaffirmed that the email string was not a “record of the association.” Therefore, A.R.S. § 33-1805(A) did not require the Respondent to provide an un-redacted version to the Petitioner. The judge also noted that the fear of harassment by Mr. Coates, which prompted the redactions, “does not appear unreasonable.”
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Answer the following questions in 2-3 sentences based on the information provided in the case documents.
1. What specific event on June 19, 2017, initiated the legal dispute?
2. What Arizona statute did Patricia Wiercinski claim the HOA violated, and what does that statute generally require?
3. Why did the HOA state it redacted names from the email chain it provided to Wiercinski?
4. In the initial hearing, what did Wiercinski argue the HOA Board was required to do even if it decided to take no action on the incident?
5. How did Wiercinski’s primary legal argument change between the first hearing and the rehearing?
6. Who is Kathy Andrews, and what was her testimony regarding the HOA’s official records?
7. Did the HOA Board ever hold a formal meeting or take an official vote regarding the incident involving Wayne Coates?
8. According to the ALJ, does an informal email discussion among a quorum of board members automatically constitute “official Board business”?
9. What was the final ruling in the case after the rehearing?
10. What reason did HOA President Mike Olson give for the Board not taking official action on the June 19, 2017 incident?
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Answer Key
1. The event was an alleged confrontation where Wayne Coates was belligerent and verbally abusive toward potential buyers who were viewing a property for sale across the street from his home. This encounter caused the buyers to lose interest in the property.
2. Wiercinski claimed the HOA violated A.R.S. § 33-1805. This statute requires that all financial and other records of a homeowners’ association be made reasonably available for examination by any member.
3. The HOA stated it redacted the names of the potential purchasers and their real estate agent due to Wayne Coates’s history of “threatening and bullying neighbors and others.” Board President Mike Olson testified he feared Mr. Coates would harass the individuals if their identities were revealed.
4. In the initial hearing, Wiercinski argued that the Board was required to make a formal motion and arrive at a formal, documented decision even if it decided it was not going to take any action against her husband.
5. In the rehearing, Wiercinski’s argument shifted from claiming the HOA failed to produce a record of a decision to arguing the email string itself was an official record. She then demanded that the HOA provide a fully un-redacted version of this email string.
6. Kathy Andrews is the community manager for the HOA, employed by the management company Hoamco. She testified that the association’s official records include items like governing documents, meeting minutes, and anything submitted to the Board for action, and that the email was not an official record because the Board took no action.
7. No. Testimony from multiple witnesses, including Mike Olson and Gregg Arthur, confirmed that the Board never discussed the incident at an executive meeting or general membership meeting and never voted or took any official action as a result of the incident.
8. No. The ALJ’s decision states that the mere fact a quorum of Board members discusses a topic does not make it official Board business, especially if they do not take any action to make it so.
9. The final ruling was that the Petitioner’s petition was dismissed. The ALJ found that the email string was not an official record of the association, so the HOA was not required by law to provide an un-redacted version.
10. Mike Olson testified that the Board never voted to take any action because the alleged incident did not violate the Respondent’s CC&Rs, bylaws, or anything else that the HOA was authorized or empowered to enforce.
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Essay Questions
1. Analyze the distinction made by the Administrative Law Judge between informal discussions among board members and “official Board business.” How did this distinction shape the outcome of both hearings?
2. Discuss the evolution of Patricia Wiercinski’s legal strategy from the initial hearing to the rehearing. Was the change in argument effective, and why or why not?
3. Examine the roles of A.R.S. § 33-1805 and A.R.S. § 33-1804 in this case. Explain how the Petitioner and Respondent interpreted these statutes differently and how the Administrative Law Judge ultimately applied them.
4. Based on the testimony of Mike Olson and Kathy Andrews, describe the HOA’s official position on record-keeping and its justification for not treating the email string as an official document.
5. Evaluate the Respondent’s decision to redact the names of non-members from the email string. What reasons were given for this action, and how did the Administrative Law Judge view this justification in the final ruling?
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Glossary
• Administrative Law Judge (ALJ): The impartial judge who presides over administrative hearings, hears evidence, and makes legal decisions. In this case, the ALJ was Diane Mihalsky.
• A.R.S. § 33-1805(A): An Arizona Revised Statute cited in the case which provides that “all financial and other records of the association shall be made reasonably available for examination by any member.”
• A.R.S. § 33-1804(E)(4): An Arizona Revised Statute cited in the case which provides that any quorum of the board of directors that meets informally to discuss association business must comply with open meeting and notice provisions.
• Homeowners’ Association (HOA): An organization in a subdivision, planned community, or condominium building that makes and enforces rules for the properties and its residents. In this case, the Long Meadow Ranch East Property Owners Association, Inc.
• Petitioner: The party who files a petition to initiate a legal proceeding. In this case, Patricia Wiercinski.
• Preponderance of the Evidence: The standard of proof required in this administrative hearing. It is defined 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.”
• Quorum: The minimum number of members of a deliberative assembly (such as a board of directors) necessary to conduct the business of that group. The petitioner argued that because a quorum of the board was included on the emails, the discussion constituted official business.
• Respondent: The party against whom a petition is filed. In this case, the Long Meadow Ranch East Property Owners Association, Inc.
Blog Post – 19F-H1918028-REL
4 Shocking Lessons from an HOA Lawsuit About a “Nightmare Neighbor”
Introduction: Behind the Closed Doors of the HOA Board
Many people live in communities governed by a Homeowners’ Association (HOA), navigating the rules and paying the dues as part of modern suburban life. But what happens when a serious dispute between neighbors erupts? What if one resident’s behavior is so aggressive that it costs another the sale of their property? A real-life administrative law case from Prescott, Arizona, provides a rare and fascinating look into the messy reality of HOA governance. The lawsuit, filed by a homeowner against her HOA for allegedly withholding records, reveals surprising truths about what constitutes “official business” and the real-world limits of an HOA’s power.
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1. Not All HOA Talk is “Official Business”—Even When the Whole Board Is In on It.
The case centered on a dramatic incident. A homeowner’s husband, Wayne Coates, was accused of being “belligerent and cursing” at potential buyers viewing a lot across the street, causing them to back out of the sale. The distressed property seller, John Allen, emailed an HOA board member, Gregg Arthur, who then forwarded the complaint to the entire board. The petitioner, Mr. Coates’ wife, argued that this email chain was an official HOA record.
Her argument rested on a profound misunderstanding of board governance that many residents likely share: she claimed the board was legally required to make a motion and arrive at a formal decision even if it decided to do nothing. The administrative law judge firmly rejected this idea. The emails were deemed informal, private communications, not official records.
The judge clarified that “official business” is triggered when a board moves toward a formal decision or action that would bind the association, such as spending funds, issuing a violation, or changing a rule. These emails were purely informational and investigatory, never reaching that threshold. This distinction is a cornerstone of volunteer board governance, as it protects boards from being paralyzed by procedure. The judge’s decision powerfully refutes the notion that boards must formally document every issue they choose not to pursue:
the mere fact that a quorum of Board members may discuss a topic does not make it official Board business, especially if they do not end up taking any action to make a matter board business. Any other result would impose an unnecessary and burdensome requirement on volunteers who are not compensated for their time who are may be neighbors and who may also be friends, in addition to being Board members.
2. A Neighbor’s Behavior Can Kill a Property Sale, and Your HOA Might Be Powerless.
The impact of Mr. Coates’ alleged actions was immediate and severe. The potential buyers, seeking a peaceful retirement, were so shaken by the confrontation that they explicitly withdrew their interest in the property.
An email from the potential buyer, submitted as evidence, vividly illustrates the direct financial consequence of the neighbor’s behavior:
In closing when we returned one thing that stands out is would we want to live next to this type of behavior of [a] neighbor? The answer is no, this lot was one that we had in our top 2 Lots as a consideration for purchase but due to the volatile potential of this man, we have decided at this point to remove it from our list.
Despite the clear harm to a member, the HOA concluded it could not intervene. According to testimony, Community Manager Kathy Andrews explained that the HOA had “no authority to become involved in a personal dispute between neighbors.” Further, Board President Mike Olson testified that the incident did not violate any specific CC&Rs or bylaws the board was empowered to enforce. This highlights a counter-intuitive reality for many homeowners: not all bad neighbor behavior falls under an HOA’s jurisdiction, even when it negatively affects property sales. However, while the HOA was powerless, the situation was not a dead end for the seller, who court records show did eventually sell his lot to someone else.
3. Transparency Has Limits, Especially When a Resident Is Seen as a Threat.
The petitioner demanded an un-redacted copy of the emails, wanting to know exactly who was accusing her husband. The HOA refused, redacting the names of the potential buyers and their real estate agent.
The reason, according to sworn testimony from HOA President Mike Olson, was that Mr. Coates had a “history of threatening and bullying neighbors and others.” This case highlights the inherent tension between a member’s right to information and the board’s fiduciary duty to protect individuals from harm. While members have a right to access official records, that right is not absolute.
The judge validated the board’s exercise of its duty of care, finding its rationale for the redactions to be sound. In a moment of legal irony, the judge noted that the board’s fear was reasonable, “especially given Mr. Coates’ role in causing Petitioner to prosecute this petition at the original hearing and rehearing.” In effect, the petitioner’s own aggressive pursuit of the case in court helped to legally justify the board’s initial decision to protect identities from her husband.
4. Suing Your HOA Can Put Your Own Dirty Laundry on Display.
Perhaps the greatest irony of the lawsuit is what it ultimately accomplished. In her quest to obtain what she believed were improperly withheld documents, the petitioner’s legal action placed deeply unflattering information about her husband directly into the public record for anyone to see.
Emails submitted as evidence contained damaging statements, including an email from board member Joe Zielinski that is now a permanent part of the court file. It contained severe allegations that went far beyond the initial incident.
The YCSO [Yavapai County Sheriff’s Office] may file charges against Wayne for disorderly conduct/harassment, based on what happened to Mr. Allan and the others in attendance, given Wayne’s arrest record and prison term and criminal history. . . . I don’t believe Wayne (and Patricia’s) aggressive and disruptive behavior will stop.
This serves as a powerful “be careful what you wish for” lesson in HOA litigation. The lawsuit, intended to hold the HOA accountable, permanently enshrined the allegations about her husband’s “arrest record and prison term” in the public court record—the very opposite of the privacy and vindication the petitioner was likely seeking.
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Conclusion: The Fine Line Between Community and Controversy
This case peels back the curtain on the complex world of volunteer-run HOAs. It demonstrates that the line between an informal discussion among neighbors and official, actionable HOA business is finer and more consequential than most residents assume. It shows that an HOA’s power has clear limits and that a board’s duty to protect individuals can sometimes override demands for total transparency. It makes you wonder: when you see a problem in your neighborhood, is it truly the HOA’s business to solve, or is it a personal dispute between neighbors?
Case Participants
Petitioner Side
Patricia Wiercinski(petitioner) Appeared on her own behalf
Wayne Coates(petitioner's husband) Central figure in the June 19, 2017 incident
Respondent Side
Ashley N. Moscarello(HOA attorney) Goodman Law Group Represented Respondent
Michael Olson(board president, witness) President of Respondent's board; testified at hearing and rehearing
Gregg Arthur(board director, witness) Director on Respondent's board; testified at hearing
Kathy Andrews(property manager, witness) HOAMCO Respondent's community manager; employed by HOAMCO; testified at hearing and rehearing
John Allen(member/complainant) Owner trying to sell property across the street from Petitioner; member of Respondent
Jim Robertson(board director) Director on Respondent's board
Joe Zielinski(board director, witness) Director on Respondent's board; mentioned conversation with YCSO deputy
Tom Reid(board director) Director on Respondent's board
Boris Biloskirka(former board member) Recipient of emails; identified as a former Board member
Josh(compliance officer) Referenced in emails regarding compliance inspections
Neutral Parties
Diane Mihalsky(ALJ) Administrative Law Judge
Shelia Polk(head prosecutor) Head of the office Joe Zielinski sought to contact regarding Wayne Coates
YCSO’s deputy(deputy) Yavapai County Sheriff’s Office Conversed with Joe Zielinski regarding the incident
Judy Lowe(commissioner) Arizona Department of Real Estate Commissioner of the Arizona Department of Real Estate
Felicia Del Sol(administrative staff) Transmitted decision electronically
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
18F-H1818052-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2019-01-17
Administrative Law Judge
Thomas Shedden
Outcome
none
Filing Fees Refunded
$0.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Lawrence M. Stewart
Counsel
—
Respondent
Canyon Gate Condominium Association, Inc.
Counsel
Nicolas C. S. Nogami, Esq.
Alleged Violations
Bylaws section 5.4
Outcome Summary
The Administrative Law Judge dismissed the petition filed by homeowner Lawrence M. Stewart against Canyon Gate Condominium Association, Inc., finding that the Petitioner failed to prove the Association violated its Bylaws concerning good faith in denying his request for a variance.
Why this result: The Petitioner failed to meet the burden of proof, as Bylaws Section 5.4 was determined to be a shield protecting the Board from liability rather than a provision imposing a duty of good faith that could be violated by denying a variance.
Key Issues & Findings
Alleged failure of the HOA Board to act in good faith when denying a variance request
Petitioner alleged the Board failed to act in good faith when denying his request for a variance to changes he made, and asserted bias and unfair treatment. The ALJ concluded that Section 5.4 acts as a shield from liability for Board members, not a duty imposed upon them, and Petitioner failed to meet the burden of proof.
Orders: Petitioner Lawrence M. Stewart's petition is dismissed. Respondent is deemed to be the prevailing party in this matter.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
ARIZ. REV. STAT. section 32-2199.02(B)
Analytics Highlights
Topics: HOA governance, bylaw violation, good faith, variance denial, board liability
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Briefing Document: Stewart v. Canyon Gate Condominium Association, Inc.
Executive Summary
This document synthesizes the findings and conclusions from an administrative legal case involving Petitioner Lawrence M. Stewart and Respondent Canyon Gate Condominium Association, Inc. The core of the dispute revolves around Mr. Stewart’s unauthorized modifications to a common area, for which the Association’s Board of Directors denied a retroactive variance. Mr. Stewart alleged the Board violated its bylaws by acting in bad faith, that a specific Board member was biased against him, and that he was subjected to unfair treatment compared to other homeowners.
The Administrative Law Judge, in both an initial hearing and a subsequent rehearing, consistently ruled against Mr. Stewart. The judge determined that the specific bylaw cited (Section 5.4) was an indemnification clause that shields the Board from liability and does not impose a duty of action. Crucially, Mr. Stewart failed to meet the legal burden of proving his claims by a “preponderance of the evidence.” The Board’s rationale for the denial—to avoid setting a precedent, or “opening a Pandora’s Box”—was deemed a reasonable position for a condominium association. Evidence presented to support claims of bias and unequal treatment was found to be insufficient or not probative. Ultimately, Mr. Stewart’s petition was dismissed in its entirety.
Case Overview
This matter, designated as No. 18F-H1818052-REL, was adjudicated by the Office of Administrative Hearings under the authority of the Arizona Department of Real Estate. The case centered on a petition filed by Mr. Stewart on May 21, 2018, alleging a violation of the Association’s Bylaws by the Board of Directors.
Parties Involved
Name / Entity
Representation
Petitioner
Lawrence M. Stewart
On his own behalf
Respondent
Canyon Gate Condominium Association, Inc.
Mark K. Sahl, Esq. & Nichols C. S. Nogami, Esq.
Administrative Law Judge Thomas Shedden
Case Chronology
• November 15, 2017: The Association’s counsel informs Mr. Stewart in a letter that he is in violation of section 5.1 of the CC&Rs for making unapproved changes to a common/limited common area.
• Post-November 15, 2017: Mr. Stewart, then a member of the Board, requests a variance for the changes.
• December 27, 2017: The Association’s attorney sends a letter stating an understanding that Mr. Stewart had recused himself and that the other two Board members (Sandra Fernandez and David Larson) had required the area to be restored.
• January 4, 2018: Mr. Stewart writes to the other Board members, refuting that he had agreed to recuse himself and requesting a formal meeting to consider his variance request.
• February 18, 2018: At a Board meeting, Mr. Stewart resigns from the Board. The remaining two members vote to deny his variance request and require him to restore the area to its original condition.
• May 21, 2018: Mr. Stewart files his petition with the Arizona Department of Real Estate.
• September 6, 2018: The initial administrative hearing is conducted.
• September 14, 2018: The Administrative Law Judge (ALJ) issues a decision dismissing Mr. Stewart’s petition.
• January 2, 2019: A rehearing is conducted.
• January 17, 2019: The ALJ issues a final decision following the rehearing, again dismissing the petition.
Petitioner’s Central Allegations
Mr. Stewart’s case rested on four primary claims against the Association’s Board.
1. Violation of Bylaws Section 5.4
The formal petition alleged a violation of Association Bylaws Article V, Section 5.4 (Liability), which states in part:
“So long as he/she has acted in good faith on the basis of information actually possessed, neither the Board nor any member of the Board nor any officer of the ASSOCIATION shall be liable to the ASSOCIATION, any OWNER, or to any other party for any damage, loss, or prejudice suffered or claimed on account of: (i) the approval or disapproval of any plans, drawings, or specifications, whether or not defective…or (v) any act or failure to act by the ASSOCIATION, or Board.”
Mr. Stewart cited this section because it was the only part of the governing documents he could find that included a “good faith” requirement.
2. Lack of Good Faith by the Board
Mr. Stewart asserted that the Board did not act in good faith when it denied his variance request. He based this claim on several points:
• He resigned from the Board during the February 18, 2018 meeting because he “got the sense ‘right away’ that the other Board members’ minds were made up and that they would not approve his request.”
• He presented unrebutted testimony that the Board members were unwilling to physically look at the changes he had made and only gave a “cursory look” at photographs he provided.
• The Board’s decision appeared to have been made prior to the meeting, as evidenced by the attorney’s December 27, 2017 letter which erroneously stated he had recused himself.
3. Bias of Board Member David Larson
A significant portion of Mr. Stewart’s argument was that Board member David Larson was personally biased against him. The evidence presented to support this included:
• Initial Hearing Evidence:
◦ A biography of Mr. Larson prepared by the property manager. When questioned, Mr. Stewart could not identify specific information showing bias but stated the “entire document coupled with the other statements shows a bias.”
◦ Notes from a November 28, 2017 Board meeting where Mr. Larson informed members that enforcement actions (towing, violation notices) would begin immediately and that he was “too busy to talk to people about Board business in driveways.”
• Rehearing Evidence:
◦ A letter dated October 3, 2018, from Mr. Larson to Association members urging them not to vote for Mr. Stewart in an upcoming election.
4. Unfair and Unequal Treatment
Mr. Stewart claimed he was treated unfairly because other units in the condominium were also not in conformity with the CC&Rs.
• He presented photos of units he believed were out of compliance.
• He testified that he had verified with the Association that none of these units had received a variance in the last two years.
• However, he acknowledged he did not know if variances had been granted more than two years prior or if the changes had received pre-approval, which would not require a variance.
Respondent’s Position and Legal Arguments
The Canyon Gate Condominium Association, represented by counsel, did not present witnesses but argued on legal grounds.
• Inapplicability of Bylaws Section 5.4: The Association’s core argument was that Section 5.4 was not applicable to Mr. Stewart’s complaint. They contended the section is an indemnification clause designed to act as a “shield” to protect Board members from liability when they act in good faith, not a “sword” that imposes an affirmative duty on them that can be violated.
• Reasonableness of Board Decision: The Association maintained that the Board’s decision was reasonable. According to Mr. Stewart’s own testimony, the Board’s basis for denial was the fear that granting his variance would “open a Pandora’s Box where other unit owners would request variances.”
Administrative Law Judge’s Rulings and Conclusions
The ALJ’s decisions in both the initial hearing and the rehearing were consistent, ultimately finding in favor of the Respondent.
Legal Framework
• Burden of Proof: The ALJ established that Mr. Stewart, as the petitioner, bore the burden of proof. The standard of proof was a “preponderance of the evidence,” defined as evidence with “the most convincing force” that is sufficient “to incline a fair and impartial mind to one side of the issue rather than the other.”
• Board’s Duty: The judge noted that while the Bylaws are a contract, the Association, in exercising its authority, must “act reasonably.”
Analysis of Bylaws Section 5.4
• The judge agreed entirely with the Association’s interpretation, concluding that Section 5.4 “does not impose any duty on the Board members, but rather merely shields them from liability if they act in good faith.”
• In the initial hearing, the judge noted Mr. Stewart “appeared to acknowledge that section 5.4 acts as a ‘shield’ and not a ‘sword.'”
• By the rehearing, this was solidified, with the finding that “Mr. Stewart acknowledges that the Association has not violated Bylaws Section 5.4.”
Assessment of ‘Good Faith’ and Bias Claims
• The ALJ concluded that even if Section 5.4 were applicable, Mr. Stewart “has not shown by a preponderance of the evidence that the Board did not act in good faith, that it had a bias against him, or that it treated him unfairly.”
• The judge found the Board’s reasoning for the denial—the “Pandora’s Box” concern—was “not an unreasonable position for the Board of a condominium association.”
• Given this reasoning, the judge stated that “the specifics of the changes Mr. Stewart made would not be germane to the decision,” thereby neutralizing the claim that the Board failed to properly inspect the modifications.
Evaluation of Unfair Treatment Claim
• The evidence of other non-compliant units was deemed “not probative of the issue at hand.”
• The judge reasoned that there was “no evidence to show that they had requested that the Board grant variances,” meaning their situations were not comparable to Mr. Stewart’s, who had made unapproved changes and was subsequently denied a variance.
Final Disposition
• Initial Decision (September 14, 2018): IT IS ORDERED that Petitioner Lawrence M. Stewart’s petition is dismissed. This order was subject to a request for rehearing within 30 days.
• Rehearing Decision (January 17, 2019): IT IS ORDERED that Petitioner Lawrence M. Stewart’s petition is dismissed. This final order was noted as binding on the parties, with any further appeal requiring judicial review filed with the superior court within 35 days.
Study Guide – 18F-H1818052-REL-RHG
Study Guide: Stewart v. Canyon Gate Condominium Association, Inc.
This guide provides a review of the administrative case Lawrence M. Stewart, Petitioner, vs. Canyon Gate Condominium Association, Inc., Respondent (No. 18F-H1818052-REL), including the initial hearing and a subsequent rehearing.
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Short-Answer Quiz
Instructions: Answer the following questions in two to three sentences, based on the provided case documents.
1. What action by Petitioner Lawrence M. Stewart initiated the dispute with the Canyon Gate Condominium Association?
2. What specific provision of the Association Bylaws did Mr. Stewart allege was violated in his petition?
3. Why did Mr. Stewart resign from the Association’s Board during the February 18, 2018 meeting?
4. What was the Board’s stated reason for denying Mr. Stewart’s request for a variance?
5. Explain the legal interpretation of Bylaws Section 5.4 as a “shield” and not a “sword.”
6. List two pieces of evidence Mr. Stewart presented at the initial hearing to support his claim that Board member David Larson was biased against him.
7. What was the legal standard of proof in this case, and which party was required to meet it?
8. How did Mr. Stewart attempt to prove he was being treated unfairly in comparison to other unit owners, and why did the judge find this evidence unconvincing?
9. At the rehearing, what new evidence did Mr. Stewart present regarding Mr. Larson’s alleged bias?
10. What was the final outcome of both the initial administrative hearing and the subsequent rehearing?
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Answer Key
1. Mr. Stewart initiated the dispute by making changes to the common area and/or limited common area around his unit without first receiving permission from the Association. The Association informed him in a letter dated November 15, 2017, that this was a violation of section 5.1 of the CC&Rs.
2. Mr. Stewart alleged in his petition that the Association violated Bylaws Section 5.4. He later acknowledged this section was not technically violated but cited it because it was the only provision in the governing documents he could find that included a “good faith” requirement.
3. Mr. Stewart resigned from the Board because he “got the sense ‘right away’ that the other Board members’ minds were made up” and that they would not approve his request for a variance, regardless of the details.
4. The Board denied Mr. Stewart’s request on the basis that approving it would “open a Pandora’s Box” where other unit owners would then also request variances. The Administrative Law Judge found this was not an unreasonable position for a condominium association board to take.
5. The interpretation of Section 5.4 is that it acts as a “shield” to protect, or indemnify, Board members from liability for damages, loss, or prejudice, provided they have acted in good faith. It is not a “sword” that imposes an affirmative duty on the Board that Mr. Stewart could use to compel a certain action or claim a violation.
6. At the initial hearing, Mr. Stewart presented two of the following: (1) a biography of Mr. Larson; (2) notes from a November 28, 2017 meeting where Mr. Larson stated that enforcement actions would begin immediately; and (3) a letter from the Association’s attorney that erroneously stated Mr. Stewart had recused himself, suggesting the matter was decided without him.
7. The standard of proof was a “preponderance of the evidence.” The burden of proof rested entirely on the petitioner, Mr. Stewart, to show that the Association had acted improperly.
8. Mr. Stewart presented testimony and photos of other units that he believed were not in conformity with the CC&Rs. The judge found this evidence was not probative because Mr. Stewart provided no evidence that those owners had requested and been denied variances, and he acknowledged he did not know if they had received variances more than two years prior or had received preapproval.
9. At the rehearing, Mr. Stewart entered into evidence an October 3, 2018 letter from Mr. Larson to the Association’s members. In this letter, Mr. Larson urged the members not to vote for Mr. Stewart in an upcoming election.
10. In both the initial decision (September 14, 2018) and the decision following the rehearing (January 17, 2019), the Administrative Law Judge ordered that Mr. Stewart’s petition be dismissed. The Respondent, Canyon Gate Condominium Association, Inc., was deemed the prevailing party in the matter.
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Essay Questions
Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive response for each prompt, citing specific facts and legal conclusions from the case documents.
1. Analyze the Administrative Law Judge’s reasoning for concluding that Bylaws Section 5.4 was not applicable to Mr. Stewart’s petition. How did Mr. Stewart’s own testimony during the legal proceedings support this conclusion?
2. Discuss the concept of “preponderance of the evidence” as defined in the case documents. Evaluate the evidence Mr. Stewart presented across both hearings and explain why the judge found it insufficient to meet this standard regarding his claims of bias, bad faith, and unfair treatment.
3. Examine the Canyon Gate Board’s justification for denying the variance request (the “Pandora’s Box” argument). Based on the legal principles cited in the decisions, why was this considered a reasonable position for a condominium association board to take, and why did it render the specifics of Mr. Stewart’s changes non-germane?
4. Trace the procedural timeline of this case from the Association’s initial notice of violation on November 15, 2017, to the final binding order issued on January 17, 2019. Identify the key events, arguments, and decisions at each stage of the administrative process.
5. Mr. Stewart argued that he was treated unfairly because other units were also out of compliance with the CC&Rs. Deconstruct this argument and explain why the judge dismissed this line of reasoning as not being probative to the issue at hand in both the initial hearing and the rehearing.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
The official (Thomas Shedden) who presides over hearings at the Office of Administrative Hearings and issues a decision on the matter.
Association
The Canyon Gate Condominium Association, Inc., the entity responsible for enforcing the Bylaws and CC&Rs. In this case, it is the Respondent.
The governing body of the Association, which at the time of the variance request included Lawrence M. Stewart, Sandra Fernandez, and David Larson.
Burden of Proof
The obligation to prove one’s assertion. In this case, the burden of proof was on the Petitioner, Mr. Stewart.
Bylaws
A contract between the Association and its members. The parties are required to comply with its terms, and the Association must act reasonably in exercising its authority under them.
Covenants, Conditions, and Restrictions. Mr. Stewart was found to be in violation of section 5.1 of the CC&Rs for making unapproved changes.
Common Area / Limited Common Area
The property around a condominium unit that is shared or has restricted use. Mr. Stewart made unauthorized changes to this area.
Good Faith
A standard of conduct mentioned in Bylaws Section 5.4. It protects Board members from liability so long as they act in good faith based on information they possess. Mr. Stewart claimed the Board failed to meet this standard.
Indemnification
The act of compensating for loss or damage. Bylaws Article V, which contains Section 5.4, pertains to indemnification.
Petitioner
The party who files a petition initiating a legal case. In this matter, the petitioner was Lawrence M. Stewart.
Preponderance of the Evidence
The standard of proof required in this case, defined as “The greater weight of the evidence… sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”
Rehearing
A second hearing granted in a legal matter. A rehearing was conducted on January 2, 2019, after which the judge issued a final, binding order.
Respondent
The party against whom a petition is filed. In this matter, the respondent was Canyon Gate Condominium Association, Inc.
Variance
An official exception or deviation from a rule. Mr. Stewart requested a variance to allow the unapproved changes he had made, which the Board denied.
Blog Post – 18F-H1818052-REL-RHG
A Homeowner Sued His HOA and Lost—The Surprising Reasons Why Might Save You Thousands
Introduction: The Perennial Battle Between Homeowner and HOA
For many homeowners, the relationship with their Homeowners’ Association (HOA) can feel like a constant source of friction. From landscaping rules to paint colors, the potential for disputes is endless. But what happens when a homeowner feels so strongly wronged that they take the ultimate step of suing their association? More importantly, what happens when they lose?
This is the story of a homeowner who was also a board member. After making unauthorized changes to his property, he was denied his request for a variance to approve the changes he had already made. Believing the Board had acted in bad faith, he sued the association. His case failed, not on a minor technicality, but due to fundamental misunderstandings of how HOA law and governing documents function.
This outcome highlights a common, and costly, misconception about HOA governance. We will explore the surprising legal realities revealed in the case of Lawrence M. Stewart vs. Canyon Gate Condominium Association, Inc., offering several crucial takeaways for any homeowner before they decide to challenge their HOA.
1. A “Good Faith” Clause Can Be a Shield, Not a Sword
Mr. Stewart based his entire case on the claim that the Board violated Section 5.4 of the bylaws by not acting in “good faith,” as this was the only section in the governing documents he could find that mentioned the phrase.
This is where the case pivots on a crucial legal distinction. The court found that this clause was not intended to impose a duty on the board that a homeowner could sue over (a “sword”). Instead, its function was to protect board members from liability if they acted in good faith (a “shield”). Legally, this is an indemnification clause. Think of it as a form of insurance, designed to protect volunteer board members from being personally sued for making reasonable decisions, not a weapon for homeowners to attack those decisions.
In his testimony, Mr. Stewart even acknowledged this “shield” versus “sword” distinction but proceeded with the argument anyway. The lesson for homeowners is unequivocal: you must understand the precise legal function of a clause within your governing documents, not just its keywords.
2. The “Pandora’s Box” Defense Is a Powerful Argument
The Board’s primary reason for denying Mr. Stewart’s variance request was its fear that approval “would open a Pandora’s Box where other unit owners would request variances.” While a homeowner might hear “Pandora’s Box” and think it’s a lazy excuse, the court viewed it as the board performing its fundamental duty.
The judge stated this reasoning “was not an unreasonable position for the Board of a condominium association.” This validation is incredibly impactful because it shifts the focus from the merits of one homeowner’s request to the Board’s overarching fiduciary duty to uphold the rules consistently for the entire community. It shows that an HOA’s duty to maintain consistent enforcement and avoid setting a messy precedent is a legally sound basis for a decision, making the specific details of one homeowner’s changes irrelevant.
3. Being on the Board Won’t Give You a Pass
In a surprising twist, Mr. Stewart was a member of the HOA Board at the very time he made the unauthorized changes and requested the variance. This created a clear conflict of interest and ultimately did not help his case.
The situation culminated in Mr. Stewart resigning from the Board during the meeting where his request was considered. He stated he resigned because he felt “the other Board members’ minds were made up” and they would not approve his request. This incident serves as a stark reminder: holding a position on the board does not grant special privileges or exceptions to the rules. In fact, it can complicate personal matters and highlight a direct conflict between a board member’s duties to the association and their personal interests.
4. “Whataboutism” Is Not a Legal Strategy
Like many homeowners in a dispute, Mr. Stewart argued that he was being treated unfairly because other units in the community were also out of compliance with the CC&Rs. This is a common defense, but its legal failure in this case is a masterclass in what courts actually require for proof.
Mr. Stewart’s effort was commendable but legally insufficient. He presented photos of other non-conforming units and even “verified with the Association that none of these units had received a variance in the last two years.” However, his evidence collapsed under cross-examination when he “acknowledged… he did not know if any of these units had received variances more than two years ago or whether preapproval for the changes had been granted.”
The judge dismissed his evidence entirely. This transforms the lesson from a simple “don’t point fingers” to a much more sophisticated legal principle: to prove selective enforcement, you must prove others in the identical procedural situation were treated differently, and incomplete evidence is no evidence at all.
5. The Burden of Proof Is Everything
Perhaps the most stunning fact from the case is that the Association “presented no witnesses” at either the initial hearing or the subsequent rehearing. They won the case without putting a single person on the stand to testify.
They could do this because the legal system placed the “burden of proof” squarely on Mr. Stewart. As the petitioner, it was his job to prove his claims of bad faith, bias, and unfair treatment by a “preponderance of the evidence.” The Association didn’t have to prove it acted in good faith; Mr. Stewart had to prove it acted in bad faith. He failed to meet this standard. In other words, he had to prove that his claims were more likely to be true than not—even if only by a 51% to 49% margin.
The court document formally defines this legal standard as:
The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.
In a legal dispute with your HOA, the case is not about who is morally right or wrong. It’s about who can meet their required burden of proof with convincing, relevant evidence.
Conclusion: Know the Rules Before You Fight the Rulers
The case of Lawrence M. Stewart is a cautionary tale that every homeowner should internalize. His failed lawsuit, which likely became a five-figure mistake when factoring in legal fees for both sides, underscores that HOA governing documents are a binding contract. Challenging the Board requires more than a sense of unfairness. It demands a precise, evidence-backed legal argument that aligns with the specific terms of that contract and the applicable legal standards.
Before you declare war on your HOA, ask yourself: are you prepared to prove your case with irrefutable evidence, or are you just banking on a feeling of being wronged?
Case Participants
Petitioner Side
Lawrence M. Stewart(petitioner) Also served as a Board member for Respondent until resigning during the variance request consideration.
Respondent Side
Mark K. Sahl(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent in the initial hearing.
Nicolas C. S. Nogami(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent in both the initial hearing (listed as 'Nichols C. S. Nogami') and the rehearing.
Sandra Fernandez(board member) Canyon Gate Condominium Association, Inc. Voted to deny Petitioner's variance request.
David Larson(board member) Canyon Gate Condominium Association, Inc. Voted to deny Petitioner's variance request; Petitioner alleged he was biased.
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate Recipient of the decision copies.
F. Del Sol(administrative staff) Office of Administrative Hearings Signed the transmission of the decision copies.
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
18F-H1818052-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2019-01-17
Administrative Law Judge
Thomas Shedden
Outcome
loss
Filing Fees Refunded
$0.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Lawrence M. Stewart
Counsel
—
Respondent
Canyon Gate Condominium Association, Inc.
Counsel
Nicolas C. S. Nogami
Alleged Violations
Association Bylaws section 5.4
Outcome Summary
The Administrative Law Judge dismissed Petitioner Lawrence M. Stewart's petition and deemed the Respondent, Canyon Gate Condominium Association, Inc., to be the prevailing party.
Why this result: Petitioner failed to prove the Association violated Bylaws Section 5.4 or acted unreasonably or in bad faith when denying his request for a variance. The Bylaw section cited was determined to be a liability shield for the Board, not a source of duty owed to the homeowner.
Key Issues & Findings
Alleged failure of HOA Board to act in good faith when denying Petitioner's request for a variance for unauthorized common area changes
Petitioner made changes to the common area without permission and the Board denied his subsequent request for a variance. Petitioner alleged the Board violated Bylaws Section 5.4 by failing to act in good faith and showing bias. The ALJ found that Section 5.4 is a liability shield for the Board, not a duty imposed upon them, and Petitioner failed to meet the burden of proof to show bad faith or unreasonableness.
Orders: Petitioner Lawrence M. Stewart’s petition is dismissed. Respondent is deemed to be the prevailing party in this matter.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Analytics Highlights
Topics: HOA governance, variance denial, common area modifications, good faith requirement, board liability shield, prevailing party
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Briefing Document: Stewart v. Canyon Gate Condominium Association, Inc.
Executive Summary
This document synthesizes the findings and conclusions from an administrative legal case involving Petitioner Lawrence M. Stewart and Respondent Canyon Gate Condominium Association, Inc. The core of the dispute revolves around Mr. Stewart’s unauthorized modifications to a common area, for which the Association’s Board of Directors denied a retroactive variance. Mr. Stewart alleged the Board violated its bylaws by acting in bad faith, that a specific Board member was biased against him, and that he was subjected to unfair treatment compared to other homeowners.
The Administrative Law Judge, in both an initial hearing and a subsequent rehearing, consistently ruled against Mr. Stewart. The judge determined that the specific bylaw cited (Section 5.4) was an indemnification clause that shields the Board from liability and does not impose a duty of action. Crucially, Mr. Stewart failed to meet the legal burden of proving his claims by a “preponderance of the evidence.” The Board’s rationale for the denial—to avoid setting a precedent, or “opening a Pandora’s Box”—was deemed a reasonable position for a condominium association. Evidence presented to support claims of bias and unequal treatment was found to be insufficient or not probative. Ultimately, Mr. Stewart’s petition was dismissed in its entirety.
Case Overview
This matter, designated as No. 18F-H1818052-REL, was adjudicated by the Office of Administrative Hearings under the authority of the Arizona Department of Real Estate. The case centered on a petition filed by Mr. Stewart on May 21, 2018, alleging a violation of the Association’s Bylaws by the Board of Directors.
Parties Involved
Name / Entity
Representation
Petitioner
Lawrence M. Stewart
On his own behalf
Respondent
Canyon Gate Condominium Association, Inc.
Mark K. Sahl, Esq. & Nichols C. S. Nogami, Esq.
Administrative Law Judge Thomas Shedden
Case Chronology
• November 15, 2017: The Association’s counsel informs Mr. Stewart in a letter that he is in violation of section 5.1 of the CC&Rs for making unapproved changes to a common/limited common area.
• Post-November 15, 2017: Mr. Stewart, then a member of the Board, requests a variance for the changes.
• December 27, 2017: The Association’s attorney sends a letter stating an understanding that Mr. Stewart had recused himself and that the other two Board members (Sandra Fernandez and David Larson) had required the area to be restored.
• January 4, 2018: Mr. Stewart writes to the other Board members, refuting that he had agreed to recuse himself and requesting a formal meeting to consider his variance request.
• February 18, 2018: At a Board meeting, Mr. Stewart resigns from the Board. The remaining two members vote to deny his variance request and require him to restore the area to its original condition.
• May 21, 2018: Mr. Stewart files his petition with the Arizona Department of Real Estate.
• September 6, 2018: The initial administrative hearing is conducted.
• September 14, 2018: The Administrative Law Judge (ALJ) issues a decision dismissing Mr. Stewart’s petition.
• January 2, 2019: A rehearing is conducted.
• January 17, 2019: The ALJ issues a final decision following the rehearing, again dismissing the petition.
Petitioner’s Central Allegations
Mr. Stewart’s case rested on four primary claims against the Association’s Board.
1. Violation of Bylaws Section 5.4
The formal petition alleged a violation of Association Bylaws Article V, Section 5.4 (Liability), which states in part:
“So long as he/she has acted in good faith on the basis of information actually possessed, neither the Board nor any member of the Board nor any officer of the ASSOCIATION shall be liable to the ASSOCIATION, any OWNER, or to any other party for any damage, loss, or prejudice suffered or claimed on account of: (i) the approval or disapproval of any plans, drawings, or specifications, whether or not defective…or (v) any act or failure to act by the ASSOCIATION, or Board.”
Mr. Stewart cited this section because it was the only part of the governing documents he could find that included a “good faith” requirement.
2. Lack of Good Faith by the Board
Mr. Stewart asserted that the Board did not act in good faith when it denied his variance request. He based this claim on several points:
• He resigned from the Board during the February 18, 2018 meeting because he “got the sense ‘right away’ that the other Board members’ minds were made up and that they would not approve his request.”
• He presented unrebutted testimony that the Board members were unwilling to physically look at the changes he had made and only gave a “cursory look” at photographs he provided.
• The Board’s decision appeared to have been made prior to the meeting, as evidenced by the attorney’s December 27, 2017 letter which erroneously stated he had recused himself.
3. Bias of Board Member David Larson
A significant portion of Mr. Stewart’s argument was that Board member David Larson was personally biased against him. The evidence presented to support this included:
• Initial Hearing Evidence:
◦ A biography of Mr. Larson prepared by the property manager. When questioned, Mr. Stewart could not identify specific information showing bias but stated the “entire document coupled with the other statements shows a bias.”
◦ Notes from a November 28, 2017 Board meeting where Mr. Larson informed members that enforcement actions (towing, violation notices) would begin immediately and that he was “too busy to talk to people about Board business in driveways.”
• Rehearing Evidence:
◦ A letter dated October 3, 2018, from Mr. Larson to Association members urging them not to vote for Mr. Stewart in an upcoming election.
4. Unfair and Unequal Treatment
Mr. Stewart claimed he was treated unfairly because other units in the condominium were also not in conformity with the CC&Rs.
• He presented photos of units he believed were out of compliance.
• He testified that he had verified with the Association that none of these units had received a variance in the last two years.
• However, he acknowledged he did not know if variances had been granted more than two years prior or if the changes had received pre-approval, which would not require a variance.
Respondent’s Position and Legal Arguments
The Canyon Gate Condominium Association, represented by counsel, did not present witnesses but argued on legal grounds.
• Inapplicability of Bylaws Section 5.4: The Association’s core argument was that Section 5.4 was not applicable to Mr. Stewart’s complaint. They contended the section is an indemnification clause designed to act as a “shield” to protect Board members from liability when they act in good faith, not a “sword” that imposes an affirmative duty on them that can be violated.
• Reasonableness of Board Decision: The Association maintained that the Board’s decision was reasonable. According to Mr. Stewart’s own testimony, the Board’s basis for denial was the fear that granting his variance would “open a Pandora’s Box where other unit owners would request variances.”
Administrative Law Judge’s Rulings and Conclusions
The ALJ’s decisions in both the initial hearing and the rehearing were consistent, ultimately finding in favor of the Respondent.
Legal Framework
• Burden of Proof: The ALJ established that Mr. Stewart, as the petitioner, bore the burden of proof. The standard of proof was a “preponderance of the evidence,” defined as evidence with “the most convincing force” that is sufficient “to incline a fair and impartial mind to one side of the issue rather than the other.”
• Board’s Duty: The judge noted that while the Bylaws are a contract, the Association, in exercising its authority, must “act reasonably.”
Analysis of Bylaws Section 5.4
• The judge agreed entirely with the Association’s interpretation, concluding that Section 5.4 “does not impose any duty on the Board members, but rather merely shields them from liability if they act in good faith.”
• In the initial hearing, the judge noted Mr. Stewart “appeared to acknowledge that section 5.4 acts as a ‘shield’ and not a ‘sword.'”
• By the rehearing, this was solidified, with the finding that “Mr. Stewart acknowledges that the Association has not violated Bylaws Section 5.4.”
Assessment of ‘Good Faith’ and Bias Claims
• The ALJ concluded that even if Section 5.4 were applicable, Mr. Stewart “has not shown by a preponderance of the evidence that the Board did not act in good faith, that it had a bias against him, or that it treated him unfairly.”
• The judge found the Board’s reasoning for the denial—the “Pandora’s Box” concern—was “not an unreasonable position for the Board of a condominium association.”
• Given this reasoning, the judge stated that “the specifics of the changes Mr. Stewart made would not be germane to the decision,” thereby neutralizing the claim that the Board failed to properly inspect the modifications.
Evaluation of Unfair Treatment Claim
• The evidence of other non-compliant units was deemed “not probative of the issue at hand.”
• The judge reasoned that there was “no evidence to show that they had requested that the Board grant variances,” meaning their situations were not comparable to Mr. Stewart’s, who had made unapproved changes and was subsequently denied a variance.
Final Disposition
• Initial Decision (September 14, 2018): IT IS ORDERED that Petitioner Lawrence M. Stewart’s petition is dismissed. This order was subject to a request for rehearing within 30 days.
• Rehearing Decision (January 17, 2019): IT IS ORDERED that Petitioner Lawrence M. Stewart’s petition is dismissed. This final order was noted as binding on the parties, with any further appeal requiring judicial review filed with the superior court within 35 days.
Study Guide – 18F-H1818052-REL-RHG
Study Guide: Stewart v. Canyon Gate Condominium Association, Inc.
This guide provides a review of the administrative case Lawrence M. Stewart, Petitioner, vs. Canyon Gate Condominium Association, Inc., Respondent (No. 18F-H1818052-REL), including the initial hearing and a subsequent rehearing.
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Short-Answer Quiz
Instructions: Answer the following questions in two to three sentences, based on the provided case documents.
1. What action by Petitioner Lawrence M. Stewart initiated the dispute with the Canyon Gate Condominium Association?
2. What specific provision of the Association Bylaws did Mr. Stewart allege was violated in his petition?
3. Why did Mr. Stewart resign from the Association’s Board during the February 18, 2018 meeting?
4. What was the Board’s stated reason for denying Mr. Stewart’s request for a variance?
5. Explain the legal interpretation of Bylaws Section 5.4 as a “shield” and not a “sword.”
6. List two pieces of evidence Mr. Stewart presented at the initial hearing to support his claim that Board member David Larson was biased against him.
7. What was the legal standard of proof in this case, and which party was required to meet it?
8. How did Mr. Stewart attempt to prove he was being treated unfairly in comparison to other unit owners, and why did the judge find this evidence unconvincing?
9. At the rehearing, what new evidence did Mr. Stewart present regarding Mr. Larson’s alleged bias?
10. What was the final outcome of both the initial administrative hearing and the subsequent rehearing?
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Answer Key
1. Mr. Stewart initiated the dispute by making changes to the common area and/or limited common area around his unit without first receiving permission from the Association. The Association informed him in a letter dated November 15, 2017, that this was a violation of section 5.1 of the CC&Rs.
2. Mr. Stewart alleged in his petition that the Association violated Bylaws Section 5.4. He later acknowledged this section was not technically violated but cited it because it was the only provision in the governing documents he could find that included a “good faith” requirement.
3. Mr. Stewart resigned from the Board because he “got the sense ‘right away’ that the other Board members’ minds were made up” and that they would not approve his request for a variance, regardless of the details.
4. The Board denied Mr. Stewart’s request on the basis that approving it would “open a Pandora’s Box” where other unit owners would then also request variances. The Administrative Law Judge found this was not an unreasonable position for a condominium association board to take.
5. The interpretation of Section 5.4 is that it acts as a “shield” to protect, or indemnify, Board members from liability for damages, loss, or prejudice, provided they have acted in good faith. It is not a “sword” that imposes an affirmative duty on the Board that Mr. Stewart could use to compel a certain action or claim a violation.
6. At the initial hearing, Mr. Stewart presented two of the following: (1) a biography of Mr. Larson; (2) notes from a November 28, 2017 meeting where Mr. Larson stated that enforcement actions would begin immediately; and (3) a letter from the Association’s attorney that erroneously stated Mr. Stewart had recused himself, suggesting the matter was decided without him.
7. The standard of proof was a “preponderance of the evidence.” The burden of proof rested entirely on the petitioner, Mr. Stewart, to show that the Association had acted improperly.
8. Mr. Stewart presented testimony and photos of other units that he believed were not in conformity with the CC&Rs. The judge found this evidence was not probative because Mr. Stewart provided no evidence that those owners had requested and been denied variances, and he acknowledged he did not know if they had received variances more than two years prior or had received preapproval.
9. At the rehearing, Mr. Stewart entered into evidence an October 3, 2018 letter from Mr. Larson to the Association’s members. In this letter, Mr. Larson urged the members not to vote for Mr. Stewart in an upcoming election.
10. In both the initial decision (September 14, 2018) and the decision following the rehearing (January 17, 2019), the Administrative Law Judge ordered that Mr. Stewart’s petition be dismissed. The Respondent, Canyon Gate Condominium Association, Inc., was deemed the prevailing party in the matter.
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Essay Questions
Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive response for each prompt, citing specific facts and legal conclusions from the case documents.
1. Analyze the Administrative Law Judge’s reasoning for concluding that Bylaws Section 5.4 was not applicable to Mr. Stewart’s petition. How did Mr. Stewart’s own testimony during the legal proceedings support this conclusion?
2. Discuss the concept of “preponderance of the evidence” as defined in the case documents. Evaluate the evidence Mr. Stewart presented across both hearings and explain why the judge found it insufficient to meet this standard regarding his claims of bias, bad faith, and unfair treatment.
3. Examine the Canyon Gate Board’s justification for denying the variance request (the “Pandora’s Box” argument). Based on the legal principles cited in the decisions, why was this considered a reasonable position for a condominium association board to take, and why did it render the specifics of Mr. Stewart’s changes non-germane?
4. Trace the procedural timeline of this case from the Association’s initial notice of violation on November 15, 2017, to the final binding order issued on January 17, 2019. Identify the key events, arguments, and decisions at each stage of the administrative process.
5. Mr. Stewart argued that he was treated unfairly because other units were also out of compliance with the CC&Rs. Deconstruct this argument and explain why the judge dismissed this line of reasoning as not being probative to the issue at hand in both the initial hearing and the rehearing.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
The official (Thomas Shedden) who presides over hearings at the Office of Administrative Hearings and issues a decision on the matter.
Association
The Canyon Gate Condominium Association, Inc., the entity responsible for enforcing the Bylaws and CC&Rs. In this case, it is the Respondent.
The governing body of the Association, which at the time of the variance request included Lawrence M. Stewart, Sandra Fernandez, and David Larson.
Burden of Proof
The obligation to prove one’s assertion. In this case, the burden of proof was on the Petitioner, Mr. Stewart.
Bylaws
A contract between the Association and its members. The parties are required to comply with its terms, and the Association must act reasonably in exercising its authority under them.
Covenants, Conditions, and Restrictions. Mr. Stewart was found to be in violation of section 5.1 of the CC&Rs for making unapproved changes.
Common Area / Limited Common Area
The property around a condominium unit that is shared or has restricted use. Mr. Stewart made unauthorized changes to this area.
Good Faith
A standard of conduct mentioned in Bylaws Section 5.4. It protects Board members from liability so long as they act in good faith based on information they possess. Mr. Stewart claimed the Board failed to meet this standard.
Indemnification
The act of compensating for loss or damage. Bylaws Article V, which contains Section 5.4, pertains to indemnification.
Petitioner
The party who files a petition initiating a legal case. In this matter, the petitioner was Lawrence M. Stewart.
Preponderance of the Evidence
The standard of proof required in this case, defined as “The greater weight of the evidence… sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”
Rehearing
A second hearing granted in a legal matter. A rehearing was conducted on January 2, 2019, after which the judge issued a final, binding order.
Respondent
The party against whom a petition is filed. In this matter, the respondent was Canyon Gate Condominium Association, Inc.
Variance
An official exception or deviation from a rule. Mr. Stewart requested a variance to allow the unapproved changes he had made, which the Board denied.
Blog Post – 18F-H1818052-REL-RHG
A Homeowner Sued His HOA and Lost—The Surprising Reasons Why Might Save You Thousands
Introduction: The Perennial Battle Between Homeowner and HOA
For many homeowners, the relationship with their Homeowners’ Association (HOA) can feel like a constant source of friction. From landscaping rules to paint colors, the potential for disputes is endless. But what happens when a homeowner feels so strongly wronged that they take the ultimate step of suing their association? More importantly, what happens when they lose?
This is the story of a homeowner who was also a board member. After making unauthorized changes to his property, he was denied his request for a variance to approve the changes he had already made. Believing the Board had acted in bad faith, he sued the association. His case failed, not on a minor technicality, but due to fundamental misunderstandings of how HOA law and governing documents function.
This outcome highlights a common, and costly, misconception about HOA governance. We will explore the surprising legal realities revealed in the case of Lawrence M. Stewart vs. Canyon Gate Condominium Association, Inc., offering several crucial takeaways for any homeowner before they decide to challenge their HOA.
1. A “Good Faith” Clause Can Be a Shield, Not a Sword
Mr. Stewart based his entire case on the claim that the Board violated Section 5.4 of the bylaws by not acting in “good faith,” as this was the only section in the governing documents he could find that mentioned the phrase.
This is where the case pivots on a crucial legal distinction. The court found that this clause was not intended to impose a duty on the board that a homeowner could sue over (a “sword”). Instead, its function was to protect board members from liability if they acted in good faith (a “shield”). Legally, this is an indemnification clause. Think of it as a form of insurance, designed to protect volunteer board members from being personally sued for making reasonable decisions, not a weapon for homeowners to attack those decisions.
In his testimony, Mr. Stewart even acknowledged this “shield” versus “sword” distinction but proceeded with the argument anyway. The lesson for homeowners is unequivocal: you must understand the precise legal function of a clause within your governing documents, not just its keywords.
2. The “Pandora’s Box” Defense Is a Powerful Argument
The Board’s primary reason for denying Mr. Stewart’s variance request was its fear that approval “would open a Pandora’s Box where other unit owners would request variances.” While a homeowner might hear “Pandora’s Box” and think it’s a lazy excuse, the court viewed it as the board performing its fundamental duty.
The judge stated this reasoning “was not an unreasonable position for the Board of a condominium association.” This validation is incredibly impactful because it shifts the focus from the merits of one homeowner’s request to the Board’s overarching fiduciary duty to uphold the rules consistently for the entire community. It shows that an HOA’s duty to maintain consistent enforcement and avoid setting a messy precedent is a legally sound basis for a decision, making the specific details of one homeowner’s changes irrelevant.
3. Being on the Board Won’t Give You a Pass
In a surprising twist, Mr. Stewart was a member of the HOA Board at the very time he made the unauthorized changes and requested the variance. This created a clear conflict of interest and ultimately did not help his case.
The situation culminated in Mr. Stewart resigning from the Board during the meeting where his request was considered. He stated he resigned because he felt “the other Board members’ minds were made up” and they would not approve his request. This incident serves as a stark reminder: holding a position on the board does not grant special privileges or exceptions to the rules. In fact, it can complicate personal matters and highlight a direct conflict between a board member’s duties to the association and their personal interests.
4. “Whataboutism” Is Not a Legal Strategy
Like many homeowners in a dispute, Mr. Stewart argued that he was being treated unfairly because other units in the community were also out of compliance with the CC&Rs. This is a common defense, but its legal failure in this case is a masterclass in what courts actually require for proof.
Mr. Stewart’s effort was commendable but legally insufficient. He presented photos of other non-conforming units and even “verified with the Association that none of these units had received a variance in the last two years.” However, his evidence collapsed under cross-examination when he “acknowledged… he did not know if any of these units had received variances more than two years ago or whether preapproval for the changes had been granted.”
The judge dismissed his evidence entirely. This transforms the lesson from a simple “don’t point fingers” to a much more sophisticated legal principle: to prove selective enforcement, you must prove others in the identical procedural situation were treated differently, and incomplete evidence is no evidence at all.
5. The Burden of Proof Is Everything
Perhaps the most stunning fact from the case is that the Association “presented no witnesses” at either the initial hearing or the subsequent rehearing. They won the case without putting a single person on the stand to testify.
They could do this because the legal system placed the “burden of proof” squarely on Mr. Stewart. As the petitioner, it was his job to prove his claims of bad faith, bias, and unfair treatment by a “preponderance of the evidence.” The Association didn’t have to prove it acted in good faith; Mr. Stewart had to prove it acted in bad faith. He failed to meet this standard. In other words, he had to prove that his claims were more likely to be true than not—even if only by a 51% to 49% margin.
The court document formally defines this legal standard as:
The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.
In a legal dispute with your HOA, the case is not about who is morally right or wrong. It’s about who can meet their required burden of proof with convincing, relevant evidence.
Conclusion: Know the Rules Before You Fight the Rulers
The case of Lawrence M. Stewart is a cautionary tale that every homeowner should internalize. His failed lawsuit, which likely became a five-figure mistake when factoring in legal fees for both sides, underscores that HOA governing documents are a binding contract. Challenging the Board requires more than a sense of unfairness. It demands a precise, evidence-backed legal argument that aligns with the specific terms of that contract and the applicable legal standards.
Before you declare war on your HOA, ask yourself: are you prepared to prove your case with irrefutable evidence, or are you just banking on a feeling of being wronged?
Case Participants
Petitioner Side
Lawrence M. Stewart(petitioner) Also served as a Board member for Respondent until resigning during the variance request consideration.
Respondent Side
Mark K. Sahl(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent in the initial hearing.
Nicolas C. S. Nogami(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent in both the initial hearing (listed as 'Nichols C. S. Nogami') and the rehearing.
Sandra Fernandez(board member) Canyon Gate Condominium Association, Inc. Voted to deny Petitioner's variance request.
David Larson(board member) Canyon Gate Condominium Association, Inc. Voted to deny Petitioner's variance request; Petitioner alleged he was biased.
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate Recipient of the decision copies.
F. Del Sol(administrative staff) Office of Administrative Hearings Signed the transmission of the decision copies.
The Administrative Law Judge denied the entire petition. Although the Respondent used a faulty ballot (Issue 2), the Petitioner waived the right to object by failing to raise a complaint prior to the vote. Petitioner also failed to prove his claims for issues 1 and 3.
Why this result: Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection, and failed to prove the claims for Issues 1 and 3.
Key Issues & Findings
Vote count required to amend declaration
Petitioner requested an order declaring the amendment invalid due to insufficient vote count.
Orders: Claim failed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Absence of separate voting opportunity for proposed actions
Petitioner sought an order declaring the amendment invalid because the ballot improperly required a single vote on two separate actions.
Orders: Claim denied on rehearing. Petition denied.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1812(A)
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Allen v. State, 14 Ariz. 458, 130 P. 1114
Unauthorized fines in excess of $50
Petitioner requested an order that the Association cannot levy fines in excess of $50 per violation.
Orders: Claim failed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Analytics Highlights
Topics: HOA elections, absentee ballots, waiver doctrine, amendment procedure, fines
Additional Citations:
A.R.S. § 33-1817(A)(1)
A.R.S. § 33-1812(A)
A.R.S. § 33-1812(B)(2)
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Allen v. State, 14 Ariz. 458, 130 P. 1114
Video Overview
Audio Overview
Decision Documents
18F-H1817018-REL-RHG Decision – 673729.pdf
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18F-H1817018-REL-RHG Decision – 673828.pdf
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18F-H1817018-REL-RHG Decision – 680738.pdf
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Briefing Doc – 18F-H1817018-REL-RHG
Briefing Document: Servilla v. Village of Oakcreek Association (Case No. 18F-H1817018-REL-RHG)
Executive Summary
This briefing document analyzes the Administrative Law Judge (ALJ) Decision in the case of Scott S. Servilla versus the Village of Oakcreek Association. The final order, issued on January 9, 2019, following a rehearing, denied the petitioner’s claims. The central issue revolved around a homeowners association vote held on November 10, 2016, where two distinct amendments—one concerning property leasing and another a schedule of fines—were combined into a single item on the ballot.
The petitioner argued this ballot format violated Arizona statute A.R.S. § 33-1812(A), which requires a separate opportunity to vote for or against each proposed action. However, the ALJ’s decision did not rule on the merits of this statutory violation. Instead, the petition was denied based on the legal doctrine of waiver. The ALJ concluded that the petitioner, having received the allegedly defective ballot more than a month before the vote, had forfeited his right to challenge the procedure by failing to raise any objection until after the vote was completed and the unfavorable outcome was known. The decision heavily relies on the precedent set by the Arizona Supreme Court in Zajac v. City of Casa Grande, which established that a party cannot knowingly allow a flawed election to proceed and then protest only after receiving an undesirable result. The ALJ’s decision is binding, with any appeal required to be filed in superior court.
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I. Case Overview
This matter was a dispute brought before the Arizona Office of Administrative Hearings between a homeowner and a homeowners association regarding the validity of an amendment to the association’s governing documents.
Case Detail
Information
Case Number
18F-H1817018-REL-RHG
Petitioner
Scott Servilla & Heidi H Servilla
Respondent
Village of Oakcreek Association
Administrative Law Judge
Tammy L. Eigenheer
Hearing Date
November 29, 2018
Record Held Open Until
December 20, 2018
Decision Issued
January 9, 2019
II. Procedural History
1. Initial Petition: On or about November 13, 2017, Scott S. Servilla filed a petition with the Arizona Department of Real Estate against the Village of Oakcreek Association, an HOA with 2436 homeowners.
2. Expansion of Claims: The petitioner initially filed a single-issue petition with a $500 fee but was ordered by the ALJ to either specify the single issue or pay for a multi-issue hearing. The petitioner paid an additional $1,000 and proceeded with three distinct claims.
3. First ALJ Decision: Following an initial hearing, the ALJ found that the petitioner failed to prove two of his three claims. On the second claim—the improper ballot format—the judge found a statutory violation had occurred but concluded that “because the statute did not provide an enforcement mechanism to the Administrative Law Judge, no remedy could be ordered.”
4. Request for Rehearing: The petitioner filed a Request for Reconsideration, arguing that the conclusion of “no remedy” was contrary to law.
5. Rehearing Granted: On or about September 21, 2018, the Commissioner for the Arizona Department of Real Estate granted the request for a rehearing, which was held on November 29, 2018.
III. The Central Dispute: The November 10, 2016 Vote
The core of the dispute was the validity of a vote taken during a Special Meeting of Members on November 10, 2016.
• Bundled Amendments: The vote’s stated purpose was to approve the “Leasing and Schedule of Fines Assessment.” This single proposal combined two separate and substantive changes to the Master Declaration:
1. Addition of Section 4.23:Leasing of Lots and Units; Restrictions and Limitations, which established a minimum lease term of 30 days and prohibited leasing less than an entire unit.
2. Replacement of Section 5.08:Schedule of Fines, which permitted the association’s committee to adopt a new schedule specifying fines for violations.
• Ballot Format: The absentee ballot provided members with only a single voting choice: “FOR THE LEASING AND SCHEDULE OF FINES AMENDMENT” or “AGAINST THE LEASING AND SCHEDULE OF FINES AMENDMENT.”
• Statutory Violation Alleged: The petitioner contended this format violated A.R.S. § 33-1812(A), which requires that a ballot “shall set forth each proposed action” and “shall provide an opportunity to vote for or against each proposed action.”
• Vote Outcome: A total of 1,067 ballots were received (approximately 44% of members). Of those, 564 voted in favor of the amendment, constituting approximately 53% of the votes cast.
IV. Key Arguments at Rehearing
• Statutory Violation: The ballot was legally defective because it combined two distinct proposed actions into one vote, denying members the right to vote on each separately as required by statute.
• Evidence of Dissent: The petitioner argued that a subsequent vote in April 2017, in which members rejected a proposal to eliminate the By-Laws’ $50 fine limit, demonstrated that “had the proposed amendment been broken into two parts, the part of the proposed amendment dealing with the fines most likely would have failed.”
• Requested Remedy: The petitioner argued that based on case law, the ALJ was authorized to declare the entire amendment void and unenforceable.
• Waiver of Objection: The respondent’s primary argument was that the petitioner had waived any right to object to the ballot format. The petitioner received the absentee ballot on or about October 4, 2016, but did not raise an objection until April 2017, long after the November 10, 2016 vote was completed.
• Lack of Enforcement Provision: The respondent also maintained its earlier position that even if a violation of A.R.S. § 33-1812(A)(2) occurred, the statute itself provides no enforcement mechanism or remedy.
V. Administrative Law Judge’s Decision and Rationale
The ALJ’s final decision denied the petitioner’s petition in its entirety, based solely on the legal principle of waiver.
The ALJ found that the petitioner’s failure to object to the ballot’s format in a timely manner was fatal to his claim.
• Awareness of Defect: The petitioner received the absentee ballot on October 4, 2016, over a month before the November 10, 2016 vote. This provided sufficient time to identify the procedural issue and raise an objection.
• Failure to Act: By not objecting before the vote, the petitioner allowed the flawed process to proceed. He only lodged a complaint after the results were not in his favor.
• Forfeiture of Rights: The ALJ concluded, “As Petitioner was or should have been aware of the alleged issues with the ballot, he waived his right to bring forth a complaint about the ballot when he allowed the vote to proceed on November 10, 2016.”
The decision rested on the Arizona Supreme Court case Zajac v. City of Casa Grande (2004), which itself relied on Allen v. State (1913). This precedent establishes that a party cannot remain silent about a known procedural defect in an election process and then challenge the process only after an unfavorable outcome.
• Key Principle: The ALJ articulated the principle from Zajac: “one cannot knowingly let a defective vote proceed only to complain and seek redress if the results are not to the individual’s liking.”
• Direct Quotation: The decision directly quotes the ruling in Zajac to finalize its point: “He cannot have it both ways; that is, he cannot allow the [vote] to proceed without objection, and then be permitted thereafter to assert his protest.”
• Petition Denied: “IT IS ORDERED that Petitioner’s petition is denied.”
• Binding Decision: As the decision was issued as a result of a rehearing, it is legally binding on the parties.
• Appeal Process: Any party wishing to appeal the order must file for judicial review with the superior court within thirty-five days from the date the order was served (January 9, 2019).
Study Guide – 18F-H1817018-REL-RHG
Study Guide: Servilla v. Village of Oakcreek Association (Case No. 18F-H1817018-REL-RHG)
This guide provides a comprehensive review of the administrative legal case involving Petitioner Scott Servilla and Respondent Village of Oakcreek Association, as detailed in the Administrative Law Judge Decision of January 9, 2019. It includes a short-answer quiz to test factual recall, a corresponding answer key, suggested essay questions for deeper analysis, and a glossary of key terms.
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Short Answer Quiz
Instructions: Answer the following ten questions in 2-3 sentences each, based entirely on the information provided in the source documents.
1. Who were the primary parties in this case, and what roles did they play?
2. What were the two distinct proposed changes that were combined into a single voting item on the November 10, 2016 absentee ballot?
3. Which specific Arizona Revised Statute did the Petitioner allege was violated by the format of the ballot, and what does that statute require?
4. What was the numerical outcome of the November 10, 2016 vote on the proposed amendment?
5. What was the Respondent’s primary legal argument for why the Petitioner’s complaint about the faulty ballot should be dismissed?
6. What key legal precedent, specifically the case of Zajac v. City of Casa Grande, did the Administrative Law Judge (ALJ) rely upon in the final decision?
7. According to the decision, when did the Petitioner receive the ballot, and why was this date critical to the ALJ’s final ruling?
8. What was the finding in the initial Administrative Law Judge Decision regarding the ballot issue, and why did it lead to a request for a rehearing?
9. Describe the separate vote that occurred in April 2017 and explain how the Petitioner used it to support his argument regarding the 2016 vote.
10. What was the final order issued by Administrative Law Judge Tammy L. Eigenheer on January 9, 2019, and what was the legal basis for this order?
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Answer Key
1. The primary parties were the Petitioner, Scott S. Servilla (who appeared on his own behalf), and the Respondent, the Village of Oakcreek Association (a homeowners association represented by Mark Sahl). The Petitioner filed a complaint against the Respondent with the Arizona Department of Real Estate.
2. The two proposed changes were the addition of a new section, 4.23, concerning “Leasing of Lots and Units; Restrictions and Limitations,” and the complete replacement of an existing section, 5.08, titled “Schedule of Fines.” The ballot presented these as a single item called the “LEASING AND SCHEDULE OF FINES AMENDMENT.”
3. The Petitioner alleged a violation of A.R.S. § 33-1812(A)(2) and A.R.S. § 33-1812(B)(2). The statute requires that an absentee ballot “shall set forth each proposed action” and “shall provide an opportunity to vote for or against each proposed action.”
4. A total of 1067 ballots were received, representing approximately 44 percent of the members. Of those who voted, 564 (approximately 53 percent) voted in favor of the proposed amendment.
5. The Respondent’s primary argument was that the Petitioner had waived any right to object to the ballot’s format. The Respondent contended that the Petitioner should have raised his objection before the vote occurred, rather than waiting until after the results were known.
6. The ALJ relied on the precedent set in Zajac v. City of Casa Grande. This Arizona Supreme Court case established the principle that an individual aware of a procedural issue with an election cannot wait to see the results before lodging a complaint.
7. The Petitioner acknowledged receiving the absentee ballot on or about October 4, 2016, more than a month before the November 10, 2016 vote. This date was critical because it demonstrated that the Petitioner had ample time to object to the ballot’s format before the vote took place, supporting the ALJ’s waiver finding.
8. In the initial decision, the ALJ found that a violation of the statute had occurred regarding the ballot but concluded that no remedy could be ordered because the statute lacked an enforcement mechanism. The Petitioner requested a rehearing, alleging that this conclusion was contrary to the law and that the ALJ did have the authority to declare the amendment void.
9. In April 2017, a separate proposed amendment to eliminate the By-Laws’ $50 fine limitation was voted down by the members. The Petitioner argued this subsequent vote demonstrated that the fines portion of the November 2016 amendment would likely have failed if members had been given a separate opportunity to vote on it.
10. The final order, issued January 9, 2019, denied the Petitioner’s petition. The legal basis was the doctrine of waiver; the ALJ ruled that because the Petitioner was aware of the alleged issues with the ballot before the vote and failed to object, he waived his right to complain about it after the results were announced.
——————————————————————————–
Essay Questions
Instructions: The following questions are designed to encourage deeper analysis of the case. Formulate comprehensive essay responses based on the details and legal reasoning presented in the source documents.
1. Explain the legal doctrine of waiver as applied in this case. How did the timeline of events, from the receipt of the ballot to the filing of the petition, support the Administrative Law Judge’s application of the principles from Zajac v. City of Casa Grande?
2. Analyze the conflicting interpretations of “proposed action” under A.R.S. § 33-1812(A) as presented by the Petitioner and the Respondent. Although the Judge ultimately ruled on procedural grounds, which party’s interpretation of the statute appears more consistent with the law’s text and intent?
3. Discuss the procedural history of this case, from the initial filing with the Arizona Department of Real Estate through the first decision, the request for reconsideration, and the final ruling on rehearing. What does this progression reveal about the administrative hearing process and the remedies available to petitioners?
4. The Petitioner attempted to use the results of an April 2017 vote to argue that the fines portion of the November 2016 amendment would likely have failed if voted on separately. Evaluate the strength and relevance of this argument within the legal context of the case.
5. Imagine the Petitioner had raised his objection to the ballot format before the November 10, 2016 vote. Based on the information in the decision, how might the proceedings and the ultimate outcome have been different?
——————————————————————————–
Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, hears evidence, and issues decisions and orders. In this case, Tammy L. Eigenheer.
A.R.S. (Arizona Revised Statutes)
The collection of laws enacted by the Arizona state legislature. The Petitioner alleged violations of A.R.S. § 33-1817 and § 33-1812.
Absentee Ballot
A ballot that allows a member to vote without being physically present at a meeting. The format of this ballot was the central issue of the rehearing.
By-Laws
The rules that govern the internal operations of an association. The Petitioner cited a violation of By-Laws Section 8, Article VIII concerning a $50 fine limit.
Department (The Department)
The Arizona Department of Real Estate, the state agency where the Petitioner first filed his petition against the homeowners association.
Master Declaration
A core governing document for a homeowners association that establishes rules, restrictions, and obligations for homeowners. The November 10, 2016 vote was to amend this document.
A formal, binding decision issued by a judge. The final document in this case was an order denying the Petitioner’s petition.
Petitioner
The party who initiates a legal action by filing a petition. In this case, Scott Servilla & Heidi H. Servilla.
Preponderance of the Evidence
The standard of proof required in this proceeding. It means the evidence presented is more convincing and likely to be true than the evidence offered in opposition.
Rehearing
A second hearing of a case granted to reconsider the initial decision. A rehearing was granted after the Petitioner argued that the initial finding of “no remedy” was contrary to law.
Respondent
The party against whom a petition is filed and who must respond to the allegations. In this case, the Village of Oakcreek Association.
Waiver
A legal doctrine where a party intentionally or through inaction gives up a known right or claim. The ALJ ruled the Petitioner waived his right to object to the ballot by not raising the issue before the vote.
Zajac v. City of Casa Grande
An Arizona Supreme Court case that established a key legal precedent used in this decision. It holds that a party cannot knowingly allow a defective vote to proceed and then complain only if the results are unfavorable.
Blog Post – 18F-H1817018-REL-RHG
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},
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{
“name”: “Heidi H Servilla”,
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{
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{
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},
{
“name”: “Judy Lowe”,
“role”: “ADRE Commissioner”,
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“affiliation”: “Arizona Department of Real Estate”,
“notes”: null
},
{
“name”: “L. Dettorre”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “A. Hansen”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “D. Jones”,
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“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “D. Gardner”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “N. Cano”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “c. serrano”,
“role”: “transmission clerk”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Signed document transmission for November 29, 2018 order”
},
{
“name”: “Felicia Del Sol”,
“role”: “transmission clerk”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Signed document transmission for January 9, 2019 order”
}
]
}
{ “case”: { “agency”: “ADRE”, “tribunal”: “OAH”, “docket_no”: “18F-H1817018-REL-RHG”, “case_title”: “Scott Servilla & Heidi H Servilla vs. Village of Oakcreek Association”, “decision_date”: “2019-01-09”, “alj_name”: “Tammy L. Eigenheer” }, “parties”: [ { “party_id”: “P1”, “role”: “petitioner”, “name”: “Scott Servilla & Heidi H Servilla”, “party_type”: “homeowner”, “email”: null, “phone”: null, “attorney_name”: null, “attorney_firm”: null, “attorney_email”: null, “attorney_phone”: null }, { “party_id”: “R1”, “role”: “respondent”, “name”: “Village of Oakcreek Association”, “party_type”: “HOA”, “email”: null, “phone”: null, “attorney_name”: “Mark K. Sahl”, “attorney_firm”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”, “attorney_email”: null, “attorney_phone”: null } ], “issues”: [ { “issue_id”: “ISS-001”, “type”: “statute”, “citation”: “A.R.S. § 33-1812(A)”, “caption”: “Failure to provide separate voting opportunity for each proposed action in absentee ballot”, “violation(s)”: “Written ballot used did not provide a separate opportunity to vote for or against each proposed action, violating A.R.S. § 33-1812(B)(2) and the Declaration12.”, “summary”: “Petitioner alleged the November 10, 2016 vote was invalid because the absentee ballot combined two distinct proposed amendments (Leasing restrictions and Schedule of Fines) into a single vote, contravening the requirement that ballots set forth and provide an opportunity to vote for or against each proposed action1….”, “outcome”: “respondent_win”, “filing_fee_paid”: 500.0, “filing_fee_refunded”: false, “civil_penalty_amount”: 0.0, “orders_summary”: “Claim failed because Petitioner waived the right to object to the faulty ballot by allowing the vote to proceed without objection45.”, “why_the_loss”: “Petitioner was aware of the alleged issue with the ballot prior to the November 10, 2016 vote but failed to raise an objection, thus waiving the right to complain thereafter46.”, “cited”: [ “Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297” ] } ], “money_summary”: { “issues_count”: 3, “total_filing_fees_paid”: 1500.0, “total_filing_fees_refunded”: 0.0, “total_civil_penalties”: 0.0 }, “outcomes”: { “petitioner_is_hoa”: false, “petitioner_win”: “loss”, “summarize_judgement”: “The Administrative Law Judge denied the entire petition, finding that the Petitioner waived the right to challenge the outcome of the November 10, 2016 vote concerning the faulty ballot (Issue 2) because he failed to object before the vote proceeded. Petitioner also failed to prove his claims regarding the required vote count (Issue 1) and unauthorized fines (Issue 3)4….”, “why_the_loss”: “Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection after receiving the ballot, and failed to prove the claims for issues 1 and 34….” }, “analytics”: { “cited”: [ “A.R.S. § 33-1817(A)(1)”, “A.R.S. § 33-1812(B)(2)”, “A.R.S. § 33-1812(A)”, “Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”, “Allen v. State, 14 Ariz. 458, 130 P. 1114” ], “tags”: [ “HOA elections”, “absentee ballots”, “waiver doctrine”, “amendment procedure”, “fines” ] } }
{ “rehearing”: { “is_rehearing”: true, “base_case_id”: “18F-H1817018-REL”, “original_decision_status”: “affirmed”, “original_decision_summary”: “In the original decision, the Administrative Law Judge found that the Petitioner failed to prove claims regarding issues one and three1. For issue two (faulty ballot), the ALJ established a statutory violation of A.R.S. § 33-1812(B)(2), but concluded that no remedy could be ordered because the statute did not provide an enforcement mechanism1.”, “rehearing_decision_summary”: “The Commissioner granted the rehearing to address the legal conclusion that no remedy could be ordered for the violation found in Issue 22. Following the rehearing, the Administrative Law Judge denied the entire petition3, concluding that Petitioner waived the right to complain about the faulty ballot because he was aware of the alleged issues but allowed the November 10, 2016 vote to proceed without objection4….”, “issues_challenged”: [ { “issue_number”: 2, “description”: “Violation of A.R.S. § 33-1812(B)(2) because the written ballot used did not provide a separate opportunity to vote for or against each proposed action7.”, “challenge”: “Petitioner challenged the original conclusion that no remedy could be ordered, alleging this was contrary to the law and arguing that the Administrative Law Judge was authorized to declare the amendment void and unenforceable28.”, “rehearing_outcome”: “Denied/Failed. The claim failed because the ALJ ruled that Petitioner waived his right to bring forth a complaint about the ballot by allowing the vote to proceed without objection36.” } ] } }
{
“case”: {
“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla, Petitioner, vs. Village of Oakcreek Association, Respondent.”,
“decision_date”: “January 9, 2019”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Scott Servilla”,
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},
{
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},
{
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{
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{
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“notes”: null
},
{
“name”: “c. serrano”,
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“notes”: “Transmitted documents”
},
{
“name”: “Felicia Del Sol”,
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“affiliation”: null,
“notes”: “Transmitted documents”
}
]
}
This document summarizes the administrative law judge decision in the rehearing case of Scott Servilla & Heidi H Servilla v. Village of Oakcreek Association, Case No. 18F-H1817018-REL-RHG1. This matter was heard by Administrative Law Judge Tammy L. Eigenheer on November 29, 2018, with the record held open until December 20, 20181.
Procedural History (Original Decision vs. Rehearing)
Petitioner Scott Servilla filed a petition with the Arizona Department of Real Estate (ADRE) against the Village of Oakcreek Association (Respondent) alleging multiple violations of statute and the community’s Master Declaration2,3.
Original Decision: The Administrative Law Judge initially ruled on three issues4. The ALJ found that Petitioner failed to prove two claims5. However, the ALJ found that the Respondent violated A.R.S. § 33-1812(B)(2) regarding the written ballot, but concluded that because the statute did not provide an enforcement mechanism, no remedy could be ordered5.
Rehearing Grant: Following this initial decision, Petitioner filed a Request for Reconsideration, arguing the conclusion that no remedy existed was contrary to law6. The ADRE Commissioner granted the request for rehearing6.
Key Facts and Issue for Rehearing
The central issue during the rehearing concerned the statutory violation found in the original decision: whether the November 10, 2016 vote to amend the Master Declaration was invalid because the absentee ballot failed to comply with A.R.S. § 33-1812(A)4,7.
The Ballot Violation: A.R.S. § 33-1812(A) requires that absentee ballots set forth “each proposed action” and provide an opportunity to vote for or against “each proposed action”7. The Respondent’s proposed amendment bundled two distinct actions: the addition of leasing restrictions and the complete replacement of the Schedule of Fines8,9,10. The ballot only allowed members to vote “FOR” or “AGAINST THE LEASING AND SCHEDULE OF FINES AMENDMENT” as a single package9.
Key Legal Argument and Decision
At the rehearing, the core legal debate shifted from whether a violation occurred to whether the Petitioner was entitled to relief, specifically whether the ALJ could declare the amendment void and unenforceable6,11.
Respondent’s Defense and the Doctrine of Waiver: Respondent argued that Petitioner had waived the right to object because he did not raise any complaint about the defective ballot prior to the vote12. Petitioner received the ballot more than one month before the November 10, 2016 vote13.
ALJ Legal Conclusion: Drawing on Arizona Supreme Court precedent (Zajac v. City of Casa Grande)10,14, the Administrative Law Judge concluded that an individual cannot allow a known defective vote to proceed and only complain afterward if dissatisfied with the results15,16. Because Petitioner failed to raise an objection to the faulty ballot prior to the scheduled vote, he waived his right to bring a subsequent complaint about the ballot16.
Based on the application of the waiver doctrine, the ALJ found that Petitioner’s claim as to the ballot must fail16. The Administrative Law Judge ordered that Petitioner’s petition is denied17. This order, resulting from the rehearing, is binding on the parties17.
{
“case”: {
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“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla vs. Village of Oakcreek Association”,
“decision_date”: “2019-01-09”,
“alj_name”: “Tammy L. Eigenheer”
},
“parties”: [
{
“party_id”: “P1”,
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{
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}
],
“issues”: [
{
“issue_id”: “ISS-001”,
“type”: “statute”,
“citation”: “A.R.S. § 33-1817(A)(1)”,
“caption”: “Vote count required to amend declaration”,
“violation(s)”: “Alleged violation of A.R.S. § 33-1817(A)(1) and Declaration regarding the required majority vote (1173 votes) for the November 10, 2016 amendment.”,
“summary”: “Petitioner requested an order declaring the amendment invalid due to insufficient vote count.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim failed.”,
“why_the_loss”: “Petitioner failed to prove the claim.”,
“cited”: []
},
{
“issue_id”: “ISS-002”,
“type”: “statute”,
“citation”: “A.R.S. § 33-1812(A)”,
“caption”: “Absence of separate voting opportunity for proposed actions”,
“violation(s)”: “The written ballot used for the November 10, 2016 amendment violated A.R.S. § 33-1812(A) and (B)(2) because it bundled two distinct proposed actions (Leasing Restrictions and Schedule of Fines) into a single vote.”,
“summary”: “Petitioner sought an order declaring the amendment invalid because the ballot improperly required a single vote on two separate actions.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim denied on rehearing. Petition denied.”,
“why_the_loss”: “Petitioner waived the right to object to the faulty ballot by receiving it over a month prior and allowing the vote to proceed on November 10, 2016, without raising a complaint.”,
“cited”: [
“A.R.S. § 33-1812(A)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”,
“Allen v. State, 14 Ariz. 458, 130 P. 1114”
]
},
{
“issue_id”: “ISS-003”,
“type”: “governing_document”,
“citation”: “By-Laws Section 8, Article VIII”,
“caption”: “Unauthorized fines in excess of $50”,
“violation(s)”: “Respondent allegedly violated By-Laws by imposing fines in excess of $50 per violation, especially after a proposed amendment to raise the fines was voted down.”,
“summary”: “Petitioner requested an order that the Association cannot levy fines in excess of $50 per violation.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim failed.”,
“why_the_loss”: “Petitioner failed to prove the claim.”,
“cited”: []
}
],
“money_summary”: {
“issues_count”: 3,
“total_filing_fees_paid”: 1500.0,
“total_filing_fees_refunded”: 0.0,
“total_civil_penalties”: 0.0
},
“outcomes”: {
“petitioner_is_hoa”: false,
“petitioner_win”: “loss”,
“summarize_judgement”: “The Administrative Law Judge denied the entire petition. Although the Respondent used a faulty ballot (Issue 2), the Petitioner waived the right to object by failing to raise a complaint prior to the vote. Petitioner also failed to prove his claims for issues 1 and 3.”,
“why_the_loss”: “Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection, and failed to prove the claims for Issues 1 and 3.”,
“cited”: [
“A.R.S. § 33-1812(A)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”
]
},
“analytics”: {
“cited”: [
“A.R.S. § 33-1817(A)(1)”,
“A.R.S. § 33-1812(A)”,
“A.R.S. § 33-1812(B)(2)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”,
“Allen v. State, 14 Ariz. 458, 130 P. 1114”
],
“tags”: [
“HOA elections”,
“absentee ballots”,
“waiver doctrine”,
“amendment procedure”,
“fines”
]
}
}
{
“case”: {
“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla, vs. Village of Oakcreek Association”,
“decision_date”: “2019-01-09”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Scott Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: “Appeared on his own behalf at the hearing; also listed as Scott S. Servilla [1], [2]”
},
{
“name”: “Heidi H Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Tammy L. Eigenheer”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “Office of Administrative Hearings”,
“notes”: “Administrative Law Judge [3], [4], [1], [2]”
},
{
“name”: “Mark K. Sahl”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”,
“notes”: “Represented Village of Oakcreek Association [2]”
},
{
“name”: “Judy Lowe”,
“role”: “commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Granted the request for rehearing [5]”
},
{
“name”: “c. serrano”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents on November 29, 2018 [6], [7]”
},
{
“name”: “Felicia Del Sol”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents on January 9, 2019 [8]”
},
{
“name”: “LDettorre”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “AHansen”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “djones”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “DGardner”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “ncano”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
}
]
}
Case Participants
Petitioner Side
Scott Servilla(petitioner) Also referred to as Scott S. Servilla
Heidi H Servilla(petitioner)
Respondent Side
Mark K. Sahl(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Neutral Parties
Tammy L. Eigenheer(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate
The Administrative Law Judge denied the entire petition. Although the Respondent used a faulty ballot (Issue 2), the Petitioner waived the right to object by failing to raise a complaint prior to the vote. Petitioner also failed to prove his claims for issues 1 and 3.
Why this result: Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection, and failed to prove the claims for Issues 1 and 3.
Key Issues & Findings
Vote count required to amend declaration
Petitioner requested an order declaring the amendment invalid due to insufficient vote count.
Orders: Claim failed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Absence of separate voting opportunity for proposed actions
Petitioner sought an order declaring the amendment invalid because the ballot improperly required a single vote on two separate actions.
Orders: Claim denied on rehearing. Petition denied.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1812(A)
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Allen v. State, 14 Ariz. 458, 130 P. 1114
Unauthorized fines in excess of $50
Petitioner requested an order that the Association cannot levy fines in excess of $50 per violation.
Orders: Claim failed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Analytics Highlights
Topics: HOA elections, absentee ballots, waiver doctrine, amendment procedure, fines
Additional Citations:
A.R.S. § 33-1817(A)(1)
A.R.S. § 33-1812(A)
A.R.S. § 33-1812(B)(2)
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Allen v. State, 14 Ariz. 458, 130 P. 1114
Decision Documents
18F-H1817018-REL Decision – 673729.pdf
Uploaded 2025-12-17T18:16:08 (40.8 KB)
18F-H1817018-REL Decision – 673828.pdf
Uploaded 2025-12-17T18:16:08 (48.5 KB)
18F-H1817018-REL Decision – 680738.pdf
Uploaded 2025-12-17T18:16:08 (103.5 KB)
Case Participants
Petitioner Side
Scott Servilla(petitioner) Appeared on his own behalf at the hearing; also listed as Scott S. Servilla,
Heidi H Servilla(petitioner)
Respondent Side
Mark K. Sahl(HOA attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Village of Oakcreek Association
Neutral Parties
Tammy L. Eigenheer(ALJ) Office of Administrative Hearings Administrative Law Judge,,,
Judy Lowe(commissioner) Arizona Department of Real Estate Granted the request for rehearing
LDettorre(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
AHansen(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
djones(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
DGardner(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
ncano(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
Other Participants
c. serrano(staff) Transmitted documents on November 29, 2018,
Felicia Del Sol(staff) Transmitted documents on January 9, 2019
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
18F-H1817018-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2019-01-09
Administrative Law Judge
Tammy L. Eigenheer
Outcome
loss
Filing Fees Refunded
$1,500.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Scott Servilla & Heidi H Servilla
Counsel
—
Respondent
Village of Oakcreek Association
Counsel
Mark K. Sahl
Alleged Violations
A.R.S. § 33-1812(A)
Outcome Summary
The Administrative Law Judge denied the entire petition, finding that the Petitioner waived the right to challenge the outcome of the November 10, 2016 vote concerning the faulty ballot (Issue 2) because he failed to object before the vote proceeded. Petitioner also failed to prove his claims regarding the required vote count (Issue 1) and unauthorized fines (Issue 3).
Why this result: Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection after receiving the ballot, and failed to prove the claims for issues 1 and 3.
Key Issues & Findings
Failure to provide separate voting opportunity for each proposed action in absentee ballot
Petitioner alleged the November 10, 2016 vote was invalid because the absentee ballot combined two distinct proposed amendments (Leasing restrictions and Schedule of Fines) into a single vote, contravening the requirement that ballots set forth and provide an opportunity to vote for or against each proposed action.
Orders: Claim failed because Petitioner waived the right to object to the faulty ballot by allowing the vote to proceed without objection.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Analytics Highlights
Topics: HOA elections, absentee ballots, waiver doctrine, amendment procedure, fines
Additional Citations:
A.R.S. § 33-1817(A)(1)
A.R.S. § 33-1812(B)(2)
A.R.S. § 33-1812(A)
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Allen v. State, 14 Ariz. 458, 130 P. 1114
Video Overview
Audio Overview
Decision Documents
18F-H1817018-REL-RHG Decision – 673729.pdf
Uploaded 2025-10-09T03:32:15 (40.8 KB)
18F-H1817018-REL-RHG Decision – 673828.pdf
Uploaded 2025-10-09T03:32:15 (48.5 KB)
18F-H1817018-REL-RHG Decision – 680738.pdf
Uploaded 2025-10-09T03:32:15 (103.5 KB)
Briefing Doc – 18F-H1817018-REL-RHG
Briefing Document: Servilla v. Village of Oakcreek Association (Case No. 18F-H1817018-REL-RHG)
Executive Summary
This briefing document analyzes the Administrative Law Judge (ALJ) Decision in the case of Scott S. Servilla versus the Village of Oakcreek Association. The final order, issued on January 9, 2019, following a rehearing, denied the petitioner’s claims. The central issue revolved around a homeowners association vote held on November 10, 2016, where two distinct amendments—one concerning property leasing and another a schedule of fines—were combined into a single item on the ballot.
The petitioner argued this ballot format violated Arizona statute A.R.S. § 33-1812(A), which requires a separate opportunity to vote for or against each proposed action. However, the ALJ’s decision did not rule on the merits of this statutory violation. Instead, the petition was denied based on the legal doctrine of waiver. The ALJ concluded that the petitioner, having received the allegedly defective ballot more than a month before the vote, had forfeited his right to challenge the procedure by failing to raise any objection until after the vote was completed and the unfavorable outcome was known. The decision heavily relies on the precedent set by the Arizona Supreme Court in Zajac v. City of Casa Grande, which established that a party cannot knowingly allow a flawed election to proceed and then protest only after receiving an undesirable result. The ALJ’s decision is binding, with any appeal required to be filed in superior court.
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I. Case Overview
This matter was a dispute brought before the Arizona Office of Administrative Hearings between a homeowner and a homeowners association regarding the validity of an amendment to the association’s governing documents.
Case Detail
Information
Case Number
18F-H1817018-REL-RHG
Petitioner
Scott Servilla & Heidi H Servilla
Respondent
Village of Oakcreek Association
Administrative Law Judge
Tammy L. Eigenheer
Hearing Date
November 29, 2018
Record Held Open Until
December 20, 2018
Decision Issued
January 9, 2019
II. Procedural History
1. Initial Petition: On or about November 13, 2017, Scott S. Servilla filed a petition with the Arizona Department of Real Estate against the Village of Oakcreek Association, an HOA with 2436 homeowners.
2. Expansion of Claims: The petitioner initially filed a single-issue petition with a $500 fee but was ordered by the ALJ to either specify the single issue or pay for a multi-issue hearing. The petitioner paid an additional $1,000 and proceeded with three distinct claims.
3. First ALJ Decision: Following an initial hearing, the ALJ found that the petitioner failed to prove two of his three claims. On the second claim—the improper ballot format—the judge found a statutory violation had occurred but concluded that “because the statute did not provide an enforcement mechanism to the Administrative Law Judge, no remedy could be ordered.”
4. Request for Rehearing: The petitioner filed a Request for Reconsideration, arguing that the conclusion of “no remedy” was contrary to law.
5. Rehearing Granted: On or about September 21, 2018, the Commissioner for the Arizona Department of Real Estate granted the request for a rehearing, which was held on November 29, 2018.
III. The Central Dispute: The November 10, 2016 Vote
The core of the dispute was the validity of a vote taken during a Special Meeting of Members on November 10, 2016.
• Bundled Amendments: The vote’s stated purpose was to approve the “Leasing and Schedule of Fines Assessment.” This single proposal combined two separate and substantive changes to the Master Declaration:
1. Addition of Section 4.23:Leasing of Lots and Units; Restrictions and Limitations, which established a minimum lease term of 30 days and prohibited leasing less than an entire unit.
2. Replacement of Section 5.08:Schedule of Fines, which permitted the association’s committee to adopt a new schedule specifying fines for violations.
• Ballot Format: The absentee ballot provided members with only a single voting choice: “FOR THE LEASING AND SCHEDULE OF FINES AMENDMENT” or “AGAINST THE LEASING AND SCHEDULE OF FINES AMENDMENT.”
• Statutory Violation Alleged: The petitioner contended this format violated A.R.S. § 33-1812(A), which requires that a ballot “shall set forth each proposed action” and “shall provide an opportunity to vote for or against each proposed action.”
• Vote Outcome: A total of 1,067 ballots were received (approximately 44% of members). Of those, 564 voted in favor of the amendment, constituting approximately 53% of the votes cast.
IV. Key Arguments at Rehearing
• Statutory Violation: The ballot was legally defective because it combined two distinct proposed actions into one vote, denying members the right to vote on each separately as required by statute.
• Evidence of Dissent: The petitioner argued that a subsequent vote in April 2017, in which members rejected a proposal to eliminate the By-Laws’ $50 fine limit, demonstrated that “had the proposed amendment been broken into two parts, the part of the proposed amendment dealing with the fines most likely would have failed.”
• Requested Remedy: The petitioner argued that based on case law, the ALJ was authorized to declare the entire amendment void and unenforceable.
• Waiver of Objection: The respondent’s primary argument was that the petitioner had waived any right to object to the ballot format. The petitioner received the absentee ballot on or about October 4, 2016, but did not raise an objection until April 2017, long after the November 10, 2016 vote was completed.
• Lack of Enforcement Provision: The respondent also maintained its earlier position that even if a violation of A.R.S. § 33-1812(A)(2) occurred, the statute itself provides no enforcement mechanism or remedy.
V. Administrative Law Judge’s Decision and Rationale
The ALJ’s final decision denied the petitioner’s petition in its entirety, based solely on the legal principle of waiver.
The ALJ found that the petitioner’s failure to object to the ballot’s format in a timely manner was fatal to his claim.
• Awareness of Defect: The petitioner received the absentee ballot on October 4, 2016, over a month before the November 10, 2016 vote. This provided sufficient time to identify the procedural issue and raise an objection.
• Failure to Act: By not objecting before the vote, the petitioner allowed the flawed process to proceed. He only lodged a complaint after the results were not in his favor.
• Forfeiture of Rights: The ALJ concluded, “As Petitioner was or should have been aware of the alleged issues with the ballot, he waived his right to bring forth a complaint about the ballot when he allowed the vote to proceed on November 10, 2016.”
The decision rested on the Arizona Supreme Court case Zajac v. City of Casa Grande (2004), which itself relied on Allen v. State (1913). This precedent establishes that a party cannot remain silent about a known procedural defect in an election process and then challenge the process only after an unfavorable outcome.
• Key Principle: The ALJ articulated the principle from Zajac: “one cannot knowingly let a defective vote proceed only to complain and seek redress if the results are not to the individual’s liking.”
• Direct Quotation: The decision directly quotes the ruling in Zajac to finalize its point: “He cannot have it both ways; that is, he cannot allow the [vote] to proceed without objection, and then be permitted thereafter to assert his protest.”
• Petition Denied: “IT IS ORDERED that Petitioner’s petition is denied.”
• Binding Decision: As the decision was issued as a result of a rehearing, it is legally binding on the parties.
• Appeal Process: Any party wishing to appeal the order must file for judicial review with the superior court within thirty-five days from the date the order was served (January 9, 2019).
Study Guide – 18F-H1817018-REL-RHG
Study Guide: Servilla v. Village of Oakcreek Association (Case No. 18F-H1817018-REL-RHG)
This guide provides a comprehensive review of the administrative legal case involving Petitioner Scott Servilla and Respondent Village of Oakcreek Association, as detailed in the Administrative Law Judge Decision of January 9, 2019. It includes a short-answer quiz to test factual recall, a corresponding answer key, suggested essay questions for deeper analysis, and a glossary of key terms.
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Short Answer Quiz
Instructions: Answer the following ten questions in 2-3 sentences each, based entirely on the information provided in the source documents.
1. Who were the primary parties in this case, and what roles did they play?
2. What were the two distinct proposed changes that were combined into a single voting item on the November 10, 2016 absentee ballot?
3. Which specific Arizona Revised Statute did the Petitioner allege was violated by the format of the ballot, and what does that statute require?
4. What was the numerical outcome of the November 10, 2016 vote on the proposed amendment?
5. What was the Respondent’s primary legal argument for why the Petitioner’s complaint about the faulty ballot should be dismissed?
6. What key legal precedent, specifically the case of Zajac v. City of Casa Grande, did the Administrative Law Judge (ALJ) rely upon in the final decision?
7. According to the decision, when did the Petitioner receive the ballot, and why was this date critical to the ALJ’s final ruling?
8. What was the finding in the initial Administrative Law Judge Decision regarding the ballot issue, and why did it lead to a request for a rehearing?
9. Describe the separate vote that occurred in April 2017 and explain how the Petitioner used it to support his argument regarding the 2016 vote.
10. What was the final order issued by Administrative Law Judge Tammy L. Eigenheer on January 9, 2019, and what was the legal basis for this order?
——————————————————————————–
Answer Key
1. The primary parties were the Petitioner, Scott S. Servilla (who appeared on his own behalf), and the Respondent, the Village of Oakcreek Association (a homeowners association represented by Mark Sahl). The Petitioner filed a complaint against the Respondent with the Arizona Department of Real Estate.
2. The two proposed changes were the addition of a new section, 4.23, concerning “Leasing of Lots and Units; Restrictions and Limitations,” and the complete replacement of an existing section, 5.08, titled “Schedule of Fines.” The ballot presented these as a single item called the “LEASING AND SCHEDULE OF FINES AMENDMENT.”
3. The Petitioner alleged a violation of A.R.S. § 33-1812(A)(2) and A.R.S. § 33-1812(B)(2). The statute requires that an absentee ballot “shall set forth each proposed action” and “shall provide an opportunity to vote for or against each proposed action.”
4. A total of 1067 ballots were received, representing approximately 44 percent of the members. Of those who voted, 564 (approximately 53 percent) voted in favor of the proposed amendment.
5. The Respondent’s primary argument was that the Petitioner had waived any right to object to the ballot’s format. The Respondent contended that the Petitioner should have raised his objection before the vote occurred, rather than waiting until after the results were known.
6. The ALJ relied on the precedent set in Zajac v. City of Casa Grande. This Arizona Supreme Court case established the principle that an individual aware of a procedural issue with an election cannot wait to see the results before lodging a complaint.
7. The Petitioner acknowledged receiving the absentee ballot on or about October 4, 2016, more than a month before the November 10, 2016 vote. This date was critical because it demonstrated that the Petitioner had ample time to object to the ballot’s format before the vote took place, supporting the ALJ’s waiver finding.
8. In the initial decision, the ALJ found that a violation of the statute had occurred regarding the ballot but concluded that no remedy could be ordered because the statute lacked an enforcement mechanism. The Petitioner requested a rehearing, alleging that this conclusion was contrary to the law and that the ALJ did have the authority to declare the amendment void.
9. In April 2017, a separate proposed amendment to eliminate the By-Laws’ $50 fine limitation was voted down by the members. The Petitioner argued this subsequent vote demonstrated that the fines portion of the November 2016 amendment would likely have failed if members had been given a separate opportunity to vote on it.
10. The final order, issued January 9, 2019, denied the Petitioner’s petition. The legal basis was the doctrine of waiver; the ALJ ruled that because the Petitioner was aware of the alleged issues with the ballot before the vote and failed to object, he waived his right to complain about it after the results were announced.
——————————————————————————–
Essay Questions
Instructions: The following questions are designed to encourage deeper analysis of the case. Formulate comprehensive essay responses based on the details and legal reasoning presented in the source documents.
1. Explain the legal doctrine of waiver as applied in this case. How did the timeline of events, from the receipt of the ballot to the filing of the petition, support the Administrative Law Judge’s application of the principles from Zajac v. City of Casa Grande?
2. Analyze the conflicting interpretations of “proposed action” under A.R.S. § 33-1812(A) as presented by the Petitioner and the Respondent. Although the Judge ultimately ruled on procedural grounds, which party’s interpretation of the statute appears more consistent with the law’s text and intent?
3. Discuss the procedural history of this case, from the initial filing with the Arizona Department of Real Estate through the first decision, the request for reconsideration, and the final ruling on rehearing. What does this progression reveal about the administrative hearing process and the remedies available to petitioners?
4. The Petitioner attempted to use the results of an April 2017 vote to argue that the fines portion of the November 2016 amendment would likely have failed if voted on separately. Evaluate the strength and relevance of this argument within the legal context of the case.
5. Imagine the Petitioner had raised his objection to the ballot format before the November 10, 2016 vote. Based on the information in the decision, how might the proceedings and the ultimate outcome have been different?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, hears evidence, and issues decisions and orders. In this case, Tammy L. Eigenheer.
A.R.S. (Arizona Revised Statutes)
The collection of laws enacted by the Arizona state legislature. The Petitioner alleged violations of A.R.S. § 33-1817 and § 33-1812.
Absentee Ballot
A ballot that allows a member to vote without being physically present at a meeting. The format of this ballot was the central issue of the rehearing.
By-Laws
The rules that govern the internal operations of an association. The Petitioner cited a violation of By-Laws Section 8, Article VIII concerning a $50 fine limit.
Department (The Department)
The Arizona Department of Real Estate, the state agency where the Petitioner first filed his petition against the homeowners association.
Master Declaration
A core governing document for a homeowners association that establishes rules, restrictions, and obligations for homeowners. The November 10, 2016 vote was to amend this document.
A formal, binding decision issued by a judge. The final document in this case was an order denying the Petitioner’s petition.
Petitioner
The party who initiates a legal action by filing a petition. In this case, Scott Servilla & Heidi H. Servilla.
Preponderance of the Evidence
The standard of proof required in this proceeding. It means the evidence presented is more convincing and likely to be true than the evidence offered in opposition.
Rehearing
A second hearing of a case granted to reconsider the initial decision. A rehearing was granted after the Petitioner argued that the initial finding of “no remedy” was contrary to law.
Respondent
The party against whom a petition is filed and who must respond to the allegations. In this case, the Village of Oakcreek Association.
Waiver
A legal doctrine where a party intentionally or through inaction gives up a known right or claim. The ALJ ruled the Petitioner waived his right to object to the ballot by not raising the issue before the vote.
Zajac v. City of Casa Grande
An Arizona Supreme Court case that established a key legal precedent used in this decision. It holds that a party cannot knowingly allow a defective vote to proceed and then complain only if the results are unfavorable.
Blog Post – 18F-H1817018-REL-RHG
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{ “rehearing”: { “is_rehearing”: true, “base_case_id”: “18F-H1817018-REL”, “original_decision_status”: “affirmed”, “original_decision_summary”: “In the original decision, the Administrative Law Judge found that the Petitioner failed to prove claims regarding issues one and three1. For issue two (faulty ballot), the ALJ established a statutory violation of A.R.S. § 33-1812(B)(2), but concluded that no remedy could be ordered because the statute did not provide an enforcement mechanism1.”, “rehearing_decision_summary”: “The Commissioner granted the rehearing to address the legal conclusion that no remedy could be ordered for the violation found in Issue 22. Following the rehearing, the Administrative Law Judge denied the entire petition3, concluding that Petitioner waived the right to complain about the faulty ballot because he was aware of the alleged issues but allowed the November 10, 2016 vote to proceed without objection4….”, “issues_challenged”: [ { “issue_number”: 2, “description”: “Violation of A.R.S. § 33-1812(B)(2) because the written ballot used did not provide a separate opportunity to vote for or against each proposed action7.”, “challenge”: “Petitioner challenged the original conclusion that no remedy could be ordered, alleging this was contrary to the law and arguing that the Administrative Law Judge was authorized to declare the amendment void and unenforceable28.”, “rehearing_outcome”: “Denied/Failed. The claim failed because the ALJ ruled that Petitioner waived his right to bring forth a complaint about the ballot by allowing the vote to proceed without objection36.” } ] } }
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This document summarizes the administrative law judge decision in the rehearing case of Scott Servilla & Heidi H Servilla v. Village of Oakcreek Association, Case No. 18F-H1817018-REL-RHG1. This matter was heard by Administrative Law Judge Tammy L. Eigenheer on November 29, 2018, with the record held open until December 20, 20181.
Procedural History (Original Decision vs. Rehearing)
Petitioner Scott Servilla filed a petition with the Arizona Department of Real Estate (ADRE) against the Village of Oakcreek Association (Respondent) alleging multiple violations of statute and the community’s Master Declaration2,3.
Original Decision: The Administrative Law Judge initially ruled on three issues4. The ALJ found that Petitioner failed to prove two claims5. However, the ALJ found that the Respondent violated A.R.S. § 33-1812(B)(2) regarding the written ballot, but concluded that because the statute did not provide an enforcement mechanism, no remedy could be ordered5.
Rehearing Grant: Following this initial decision, Petitioner filed a Request for Reconsideration, arguing the conclusion that no remedy existed was contrary to law6. The ADRE Commissioner granted the request for rehearing6.
Key Facts and Issue for Rehearing
The central issue during the rehearing concerned the statutory violation found in the original decision: whether the November 10, 2016 vote to amend the Master Declaration was invalid because the absentee ballot failed to comply with A.R.S. § 33-1812(A)4,7.
The Ballot Violation: A.R.S. § 33-1812(A) requires that absentee ballots set forth “each proposed action” and provide an opportunity to vote for or against “each proposed action”7. The Respondent’s proposed amendment bundled two distinct actions: the addition of leasing restrictions and the complete replacement of the Schedule of Fines8,9,10. The ballot only allowed members to vote “FOR” or “AGAINST THE LEASING AND SCHEDULE OF FINES AMENDMENT” as a single package9.
Key Legal Argument and Decision
At the rehearing, the core legal debate shifted from whether a violation occurred to whether the Petitioner was entitled to relief, specifically whether the ALJ could declare the amendment void and unenforceable6,11.
Respondent’s Defense and the Doctrine of Waiver: Respondent argued that Petitioner had waived the right to object because he did not raise any complaint about the defective ballot prior to the vote12. Petitioner received the ballot more than one month before the November 10, 2016 vote13.
ALJ Legal Conclusion: Drawing on Arizona Supreme Court precedent (Zajac v. City of Casa Grande)10,14, the Administrative Law Judge concluded that an individual cannot allow a known defective vote to proceed and only complain afterward if dissatisfied with the results15,16. Because Petitioner failed to raise an objection to the faulty ballot prior to the scheduled vote, he waived his right to bring a subsequent complaint about the ballot16.
Based on the application of the waiver doctrine, the ALJ found that Petitioner’s claim as to the ballot must fail16. The Administrative Law Judge ordered that Petitioner’s petition is denied17. This order, resulting from the rehearing, is binding on the parties17.
{
“case”: {
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“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla vs. Village of Oakcreek Association”,
“decision_date”: “2019-01-09”,
“alj_name”: “Tammy L. Eigenheer”
},
“parties”: [
{
“party_id”: “P1”,
“role”: “petitioner”,
“name”: “Scott Servilla & Heidi H Servilla”,
“party_type”: “homeowner”,
“email”: null,
“phone”: null,
“attorney_name”: null,
“attorney_firm”: null,
“attorney_email”: null,
“attorney_phone”: null
},
{
“party_id”: “R1”,
“role”: “respondent”,
“name”: “Village of Oakcreek Association”,
“party_type”: “HOA”,
“email”: null,
“phone”: null,
“attorney_name”: “Mark K. Sahl”,
“attorney_firm”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”,
“attorney_email”: null,
“attorney_phone”: null
}
],
“issues”: [
{
“issue_id”: “ISS-001”,
“type”: “statute”,
“citation”: “A.R.S. § 33-1817(A)(1)”,
“caption”: “Vote count required to amend declaration”,
“violation(s)”: “Alleged violation of A.R.S. § 33-1817(A)(1) and Declaration regarding the required majority vote (1173 votes) for the November 10, 2016 amendment.”,
“summary”: “Petitioner requested an order declaring the amendment invalid due to insufficient vote count.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim failed.”,
“why_the_loss”: “Petitioner failed to prove the claim.”,
“cited”: []
},
{
“issue_id”: “ISS-002”,
“type”: “statute”,
“citation”: “A.R.S. § 33-1812(A)”,
“caption”: “Absence of separate voting opportunity for proposed actions”,
“violation(s)”: “The written ballot used for the November 10, 2016 amendment violated A.R.S. § 33-1812(A) and (B)(2) because it bundled two distinct proposed actions (Leasing Restrictions and Schedule of Fines) into a single vote.”,
“summary”: “Petitioner sought an order declaring the amendment invalid because the ballot improperly required a single vote on two separate actions.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim denied on rehearing. Petition denied.”,
“why_the_loss”: “Petitioner waived the right to object to the faulty ballot by receiving it over a month prior and allowing the vote to proceed on November 10, 2016, without raising a complaint.”,
“cited”: [
“A.R.S. § 33-1812(A)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”,
“Allen v. State, 14 Ariz. 458, 130 P. 1114”
]
},
{
“issue_id”: “ISS-003”,
“type”: “governing_document”,
“citation”: “By-Laws Section 8, Article VIII”,
“caption”: “Unauthorized fines in excess of $50”,
“violation(s)”: “Respondent allegedly violated By-Laws by imposing fines in excess of $50 per violation, especially after a proposed amendment to raise the fines was voted down.”,
“summary”: “Petitioner requested an order that the Association cannot levy fines in excess of $50 per violation.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim failed.”,
“why_the_loss”: “Petitioner failed to prove the claim.”,
“cited”: []
}
],
“money_summary”: {
“issues_count”: 3,
“total_filing_fees_paid”: 1500.0,
“total_filing_fees_refunded”: 0.0,
“total_civil_penalties”: 0.0
},
“outcomes”: {
“petitioner_is_hoa”: false,
“petitioner_win”: “loss”,
“summarize_judgement”: “The Administrative Law Judge denied the entire petition. Although the Respondent used a faulty ballot (Issue 2), the Petitioner waived the right to object by failing to raise a complaint prior to the vote. Petitioner also failed to prove his claims for issues 1 and 3.”,
“why_the_loss”: “Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection, and failed to prove the claims for Issues 1 and 3.”,
“cited”: [
“A.R.S. § 33-1812(A)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”
]
},
“analytics”: {
“cited”: [
“A.R.S. § 33-1817(A)(1)”,
“A.R.S. § 33-1812(A)”,
“A.R.S. § 33-1812(B)(2)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”,
“Allen v. State, 14 Ariz. 458, 130 P. 1114”
],
“tags”: [
“HOA elections”,
“absentee ballots”,
“waiver doctrine”,
“amendment procedure”,
“fines”
]
}
}
{
“case”: {
“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla, vs. Village of Oakcreek Association”,
“decision_date”: “2019-01-09”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Scott Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: “Appeared on his own behalf at the hearing; also listed as Scott S. Servilla [1], [2]”
},
{
“name”: “Heidi H Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Tammy L. Eigenheer”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “Office of Administrative Hearings”,
“notes”: “Administrative Law Judge [3], [4], [1], [2]”
},
{
“name”: “Mark K. Sahl”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”,
“notes”: “Represented Village of Oakcreek Association [2]”
},
{
“name”: “Judy Lowe”,
“role”: “commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Granted the request for rehearing [5]”
},
{
“name”: “c. serrano”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents on November 29, 2018 [6], [7]”
},
{
“name”: “Felicia Del Sol”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents on January 9, 2019 [8]”
},
{
“name”: “LDettorre”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “AHansen”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “djones”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “DGardner”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “ncano”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
}
]
}
Case Participants
Petitioner Side
Scott Servilla(petitioner) Also referred to as Scott S. Servilla
Heidi H Servilla(petitioner)
Respondent Side
Mark K. Sahl(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Neutral Parties
Tammy L. Eigenheer(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate
A.R.S. §§ 33-1803 and 1809; CC&Rs Amendments 1, 2, and 3; Greenlaw Rules and Regulations
Outcome Summary
The Administrative Law Judge denied the petition, finding that the Petitioner failed to establish by a preponderance of the evidence that the HOA violated the cited governing documents (CC&Rs/Rules) or state statutes (A.R.S. §§ 33-1803 and 1809) by banning street parking and contracting for vehicle booting/towing.
Why this result: Petitioner failed to meet the burden of proof regarding violations of CC&Rs Amendments 1, 2, and 3, the Rules and Regulations, and A.R.S. §§ 33-1803 and 1809. The ALJ found the July 2018 revised Rules, which banned parking, were controlling.
Key Issues & Findings
Violation regarding banning parking and use of towing/booting company.
Petitioner alleged the HOA improperly banned street parking and contracted with a towing/booting company, arguing this violated specific CC&R amendments, the Rules and Regulations, and A.R.S. §§ 33-1803 and 1809. He also claimed the 2018 revised Rules were invalid due to improper electronic notice instead of personal delivery or mail.
Administrative Hearing Briefing: William P. Lee v. Greenlaw Townhouses Unit Two
Executive Summary
This document analyzes the Administrative Law Judge Decision in case No. 19F-H1918019-REL-RHG, where Petitioner William P. Lee’s complaint against the Greenlaw Townhouses Unit Two Homeowners Association (Greenlaw) was denied. Mr. Lee, a homeowner, alleged that Greenlaw’s complete ban on street parking and its contract with a towing company to enforce the ban violated the association’s Covenants, Conditions, and Restrictions (CC&Rs).
The Administrative Law Judge (ALJ) found that Mr. Lee failed to meet the required burden of proof. The central conclusion was that Greenlaw’s revised Rules and Regulations, effective July 2018, are the controlling authority and explicitly permit a total ban on street parking. The ALJ determined that the specific parking prohibitions detailed in the CC&R amendments—concerning fire lanes, snow removal, and abandoned vehicles—do not preclude the association from enacting a more comprehensive ban via its rules. Furthermore, the petitioner failed to provide sufficient evidence that Greenlaw had actually taken the alleged enforcement actions (booting or towing) against any member’s vehicle.
Case Overview
Detail
Information
Case Name
William P. Lee v. Greenlaw Townhouses Unit Two
Case Number
19F-H1918019-REL-RHG
Arizona Office of Administrative Hearings
Petitioner
William P. Lee (Homeowner)
Respondent
Greenlaw Townhouses Unit Two (Homeowners Association)
Hearing Date
April 1, 2019 (Rehearing)
Decision Date
April 22, 2019
Final Order
Petitioner’s petition is denied.
Presiding ALJ
Velva Moses-Thompson
Petitioner’s Core Allegations and Arguments
William P. Lee’s petition, filed on September 12, 2018, centered on the claim that Greenlaw acted outside its authority by banning all street parking and contracting with a towing company for enforcement. His arguments were:
• Violation of CC&Rs: The total parking ban directly contradicted CC&R Amendments 1, 2, and 3. Mr. Lee contended these amendments established an exhaustive list of permissible parking restrictions, limited to:
◦ Designated fire lanes (Amendment #1).
◦ Periods of snow removal (Amendment #2).
◦ Vehicles in an obvious state of disrepair for over 72 hours (Amendment #3).
• Invalidity of Revised Rules: Mr. Lee argued that the July 2018 revised Rules and Regulations, which contain the parking ban, were not valid or controlling due to improper notification.
◦ He contended that Greenlaw’s Bylaws (Article V, Section 1) required that such notices be delivered personally or by postal mail.
◦ He received notice only via a July 6, 2018 email, which he claimed did not clearly indicate that the rules had been substantively changed.
• Improper Motive: Mr. Lee contended that “the only reason that the Association banned parking was to please Barbara, a board member who did not want anyone to park behind her property.”
Respondent’s Defense
Greenlaw Townhouses Unit Two asserted that its actions were proper and within the scope of its authority as an HOA. Its defense included the following points:
• Controlling Authority: Greenlaw maintained that its revised Rules and Regulations, effective July 2018, were the controlling documents governing parking.
• Notice Protocol: The association contended that the Bylaw provision requiring personal or postal mail notice applies only to notices mandated by statute or the CC&Rs. Greenlaw argued there is no such requirement for providing notice of amendments to the Rules and Regulations.
• Sufficient Notice: Greenlaw asserted that Mr. Lee received actual notice of the revised rules via the email sent on July 6, 2018.
Analysis of Key Governing Documents
The case revolved around the interpretation of and interplay between several of Greenlaw’s governing documents.
Document
Key Provision / Content
Relevance to Case
CC&R Amendments 1, 2, & 3
These amendments, added to Article II (Permitted Uses), establish specific, conditional parking prohibitions related to fire lanes, snow removal, and abandoned vehicles.
The petitioner argued these amendments represented the only circumstances under which parking could be banned. The ALJ found they were not an exhaustive list.
Bylaws, Article V, Section 1
“Notices to directors and lot owners shall be in writing and delivered personally or mailed to the directors or lot owners at their addresses appearing on the books of the corporation.”
The petitioner cited this to argue that the email notice for the revised rules was improper, thus invalidating the rules. The ALJ sided with the Respondent’s interpretation.
Rules and Regulations (July 2018), Section 8
“Parking is not allowed on any association street or alleyway at any time… cars parked in violation may be booted and/or towed by a contracted independent towing company.” The rule specifies that the streets (Eva, Heidi, Jeffrey Loops) are private and owned by the HOA.
This document contains the explicit, total parking ban at the heart of the dispute. The ALJ found this rule to be the valid and controlling authority.
Administrative Law Judge’s Findings and Conclusions
The ALJ’s decision was based on a comprehensive review of the evidence and legal standards, ultimately concluding that the petitioner failed to prove his case.
Burden of Proof
The decision established that Mr. Lee bore the burden of proof “to establish that Greenlaw violated amendments 1, 2, and 3 of the CC&Rs, and the Greenlaw Rules and Regulations by a preponderance of the evidence.” A preponderance of the evidence is defined as proof that convinces the trier of fact a contention is “more probably true than not.”
Key Conclusions of Law
1. Validity of the 2018 Rules: The ALJ concluded that “the weight of the evidence presented at hearing shows that Greenlaw’s Rules and Regulations were revised effective July 2018 and are the controlling Rules and Regulations of Greenlaw.” Mr. Lee failed to establish that any prior version remained in effect.
2. Scope of CC&R Amendments: The decision found that the CC&R amendments only “provide specific scenarios in which parking on the streets is banned.” They do not restrict the association from implementing a broader ban through its Rules and Regulations. Therefore, the total ban did not violate the CC&Rs.
3. No Violation of Rules: Because the July 2018 rules were found to be controlling, and they explicitly authorize a total parking ban, the ALJ concluded that Greenlaw’s decision did not violate its own Rules and Regulations.
4. Insufficient Evidence of Enforcement: A critical failure in the petitioner’s case was the lack of evidence.
◦ The decision notes, “Mr. Lee provided no evidence that Greenlaw booted or towed any of the vehicles belonging to Greenlaw members.”
◦ His testimony about observing a booted jeep was dismissed as insufficient, as he “did not know who owned the jeep, nor who was responsible for booting the jeep.” The Greenlaw manager’s subsequent comment was not found to be an admission of responsibility.
◦ Mr. Lee did not allege that any of his own vehicles had been booted or towed.
5. No Statutory Violation: The judge found that Mr. Lee failed to establish any violation of Arizona Revised Statutes §§ 33-1803 and 33-1809.
Final Order and Implications
Based on these findings, the Administrative Law Judge issued a final, binding order.
• Order: “IT IS ORDERED that Petitioners’ petition is denied.”
• Appeal Process: As the order resulted from a rehearing, it is binding on the parties. Any party wishing to appeal must seek judicial review in the superior court within thirty-five days from the date the order was served.
Study Guide – 19F-H1918019-REL
Study Guide: Lee v. Greenlaw Townhouses Unit Two (Case No. 19F-H1918019-REL-RHG)
This guide provides a comprehensive review of the administrative law case between William P. Lee and the Greenlaw Townhouses Unit Two Homeowners Association. It covers the central conflict, the arguments presented by both parties, the key legal documents involved, and the final decision rendered by the Administrative Law Judge.
Case Overview
This case centers on a dispute between a homeowner, William P. Lee, and his Homeowners Association (HOA), Greenlaw Townhouses Unit Two. Mr. Lee filed a petition alleging that the HOA’s decision to ban all parking on association streets and contract with a towing company violated the community’s governing documents. The matter was decided by an Administrative Law Judge following a rehearing on April 1, 2019.
Key Parties and Roles
Party/Role
Name / Entity
Description
Petitioner
William P. Lee
A homeowner in Greenlaw Unit Two and member of the HOA who filed the petition against the association.
Respondent
Greenlaw Townhouses Unit Two
The Homeowners Association (HOA) responsible for governing the community, against which the petition was filed.
Legal Counsel
Timothy D. Butterfield, Esq.
Appeared on behalf of the Respondent, Greenlaw Townhouses.
Adjudicator
Velva Moses-Thompson
The Administrative Law Judge from the Office of Administrative Hearings who presided over the rehearing and issued the decision.
Timeline of Key Events
June 16, 1986
Greenlaw Bylaws were recorded at the Coconino County Recorder.
July 2, 1999
Greenlaw Declaration of Covenants, Conditions, and Restrictions (CC&Rs) was recorded.
July 6, 2018
Greenlaw sent an email to members with an attachment containing the revised Rules and Regulations, effective July 2018.
September 12, 2018
William P. Lee filed a petition with the Arizona Department of Real Estate.
December 13, 2018
The original hearing on the petition was conducted.
February 11, 2019
The Department of Real Estate issued an order for a rehearing.
April 1, 2019
The rehearing was held at the Office of Administrative Hearings.
April 22, 2019
The Administrative Law Judge issued the final decision, denying the petitioner’s petition.
The Central Conflict: Parking Regulations
The core of the dispute was Mr. Lee’s allegation that Greenlaw’s comprehensive ban on street parking, as stated in its revised 2018 Rules and Regulations, violated the more specific parking restrictions outlined in the community’s CC&Rs. The validity of the 2018 Rules and Regulations, and the method by which they were distributed to homeowners, was also a key point of contention.
• Violation of CC&Rs: The general ban on street parking violated Amendments 1, 2, and 3 of the CC&Rs, which only banned parking in specific situations (fire lanes, snow removal, abandoned vehicles).
• Improper Notice: Greenlaw failed to provide proper notice of the revised Rules and Regulations. Mr. Lee argued that the HOA’s Bylaws (Article V, Section 1) required notice to be delivered personally or by postal mail, not by email.
• Unclear Communication: The email sent on July 6, 2018, did not clearly state that the rules had been recently changed.
• Invalidity of New Rules: Due to the improper notice, Mr. Lee contended that the 2018 revised Rules and Regulations were not valid or controlling.
• Improper Motivation: Mr. Lee alleged the only reason for the ban was to appease a board member named Barbara who did not want anyone parking behind her property.
• Evidence of Enforcement: Mr. Lee testified that he observed a jeep being booted in a driveway and that the Greenlaw manager’s response implied the HOA’s contracted towing company could boot vehicles in violation.
• Notice Was Sufficient: Greenlaw contended that the Bylaw’s requirement for mail or personal delivery only applied to notices mandated by statute or the CC&Rs.
• No Notice Requirement: The HOA argued that it was not required by law or the CC&Rs to provide homeowners with notice of an amendment to the Rules and Regulations.
• Notice Was Received: Greenlaw asserted that Mr. Lee did, in fact, receive notice of the revised rules via the email sent on July 6, 2018.
• No Proof of Harm: Greenlaw pointed out that Mr. Lee provided no evidence that any vehicles belonging to Greenlaw members had been booted or towed by the association, nor did he allege that one of his own vehicles had been affected.
Governing Documents and Legal Principles
• Amendment #1: Bans parking in designated fire lanes.
• Amendment #2: Bans parking on subdivision roads during snow removal periods.
• Amendment #3: Allows for the towing of vehicles parked at the curb in an obvious state of disrepair for over 72 hours.
• Article V, Section 1: States that notices to directors and lot owners “shall be in writing and delivered personally or mailed.”
• Section 8: Explicitly states, “Parking is not allowed on any association street or alleyway at any time.” It identifies the streets (Eva, Heidi, and Jeffrey Loops) as “Private Fire Access Lanes” owned by the HOA and states that vehicles in violation may be booted and/or towed.
• The petitioner, Mr. Lee, bore the burden of proof to establish his claims by a preponderance of the evidence.
• The source defines preponderance of the evidence 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.”
The Judge’s Decision and Rationale
The Administrative Law Judge, Velva Moses-Thompson, denied Mr. Lee’s petition. The key conclusions of law were:
1. Controlling Document: The 2018 revised Rules and Regulations were found to be the valid and controlling rules for the Greenlaw HOA.
2. Authority to Ban Parking: The 2018 Rules and Regulations explicitly allow the association to ban all parking on its streets and to enforce this rule by booting or towing vehicles.
3. No Violation of CC&Rs: The judge concluded that Mr. Lee failed to prove that the general parking ban violated the specific, situational bans outlined in CC&R Amendments 1, 2, and 3. The amendments did not preclude the HOA from enacting a broader rule.
4. Failure to Meet Burden of Proof: Mr. Lee did not establish by a preponderance of the evidence that Greenlaw’s actions violated either the CC&Rs or the Rules and Regulations.
5. Insufficient Evidence of Enforcement: Mr. Lee failed to provide any evidence that Greenlaw was actually responsible for booting the jeep he observed. His testimony was not sufficient to prove the HOA had taken action against any member.
——————————————————————————–
Quiz: Test Your Understanding
Answer the following questions in 2-3 sentences based on the information in the study guide.
1. What was the central allegation in William P. Lee’s petition against the Greenlaw HOA?
2. What three specific scenarios for parking restrictions are outlined in Amendments 1, 2, and 3 of the Greenlaw CC&Rs?
3. On what grounds did Mr. Lee argue that the 2018 revised Rules and Regulations were not valid?
4. How did Greenlaw defend its use of email to distribute the revised Rules and Regulations to homeowners?
5. According to Section 8 of the revised Rules and Regulations, what are the potential consequences for parking on an association street?
6. What was the judge’s conclusion regarding the validity and authority of the 2018 revised Rules and Regulations?
7. What is the “preponderance of the evidence” standard, and who bore the burden of proof to meet it in this case?
8. Why did the judge find Mr. Lee’s testimony about a booted jeep to be insufficient evidence?
9. Did the judge find that Greenlaw’s general parking ban violated Amendments 1, 2, and 3 of the CC&Rs? Explain why or why not.
10. What was the final order issued by the Administrative Law Judge in this matter?
——————————————————————————–
Answer Key
1. Mr. Lee’s central allegation was that the Greenlaw HOA had violated its CC&Rs and Rules and Regulations. Specifically, he claimed the association’s decision to ban all parking on its streets and to contract with a company to boot vehicles was improper.
2. The CC&R amendments outline three specific parking restrictions. Amendment 1 bans parking in designated fire lanes, Amendment 2 bans parking on roads during snow removal, and Amendment 3 allows for the towing of abandoned vehicles in a state of disrepair for over 72 hours.
3. Mr. Lee argued the 2018 rules were invalid because he was not given proper notice. He contended that the HOA’s Bylaws required notice to be delivered personally or by postal mail, and that the email he received was not a valid method of distribution.
4. Greenlaw defended its use of email by arguing that the Bylaw’s requirement for personal or mail delivery only applied to notices that were required by statute or the CC&Rs. The HOA contended it was not required by law to provide notice for an amendment to its Rules and Regulations.
5. Section 8 states that cars parked in violation on an association street may be booted and/or towed by a contracted independent towing company. The rule identifies the streets as “Private Fire Access Lanes.”
6. The judge concluded that the Rules and Regulations revised in July 2018 were the controlling rules for Greenlaw. Furthermore, the judge found that these rules do allow the association to ban all parking on its streets and to tow or boot cars in violation.
7. A “preponderance of the evidence” is the standard of proof that convinces a judge that a contention is more probably true than not. In this case, the petitioner, William P. Lee, bore the burden of proving his claims by this standard.
8. The evidence was insufficient because Mr. Lee did not know who owned the jeep or who was responsible for booting it. There was no direct evidence provided that proved Greenlaw or its contractor was responsible for the action.
9. No, the judge did not find that the ban violated the CC&Rs. The judge reasoned that the amendments only provided specific scenarios where parking was banned and did not prevent the HOA from enacting a broader, more general parking ban in its Rules and Regulations.
10. The final order issued by the Administrative Law Judge was that the Petitioner’s (Mr. Lee’s) petition is denied.
——————————————————————————–
Essay Questions for Deeper Analysis
The following questions are for further reflection. No answers are provided.
1. Analyze the conflict between Greenlaw’s Bylaws (Article V, Section 1) regarding notice and its 2018 distribution of revised Rules and Regulations. Discuss both parties’ arguments and explain how the judge’s ultimate decision implies a resolution to this conflict.
2. Discuss the legal concept of “burden of proof” as it applies to this case. How did William P. Lee’s failure to meet the “preponderance of the evidence” standard affect the outcome of his claims regarding both the parking ban and the alleged booting/towing incidents?
3. Compare and contrast the parking restrictions detailed in the CC&R Amendments with the broader ban instituted in Section 8 of the 2018 Rules and Regulations. Explain why the existence of the specific amendments did not prevent the HOA from enacting a more general rule.
4. Evaluate the evidence presented by Mr. Lee. What were the strengths and weaknesses of his arguments and testimony, particularly concerning the booted jeep and the motivation behind the parking ban?
5. Imagine you are legal counsel for the Greenlaw HOA. Based on the arguments and outcome of this case, what advice would you give the Board of Directors regarding future amendments to its Rules and Regulations to avoid similar disputes?
——————————————————————————–
Glossary of Key Terms
• Administrative Law Judge (ALJ): An official who presides over hearings at administrative agencies. In this case, Velva Moses-Thompson served as the ALJ for the Office of Administrative Hearings.
• Affirmative Defenses: Arguments made by the respondent that, if proven, can defeat or mitigate the petitioner’s claim. The Respondent (Greenlaw) bears the burden to establish these defenses.
• Burden of Proof: The obligation of a party in a legal case to prove their allegations. In this case, Mr. Lee had the burden of proof to establish his claims.
• Bylaws: A set of rules adopted by an organization, such as an HOA, for governing its internal operations. Greenlaw’s bylaws addressed the method for providing notices to members.
• Covenants, Conditions, and Restrictions (CC&Rs): A set of rules governing the use of land in a planned community or subdivision. Owners agree to be bound by the CC&Rs.
• Homeowners Association (HOA): An organization in a planned community that makes and enforces rules for the properties and its residents. Greenlaw Townhouses Unit Two is the HOA in this case.
• Petitioner: The party who files a petition initiating a legal action. William P. Lee is the Petitioner.
• Preponderance of the Evidence: The standard of proof in which the trier of fact is convinced that a contention is “more probably true than not.” It is described as “the greater weight of the evidence.”
• Respondent: The party against whom a petition is filed; the party who must respond to the claims. Greenlaw Townhouses Unit Two is the Respondent.
• Rules and Regulations: A set of rules established by the HOA, in addition to the CC&Rs and Bylaws, that govern the day-to-day life and conduct within the community. The 2018 revised parking ban was located in Greenlaw’s Rules and Regulations.
Blog Post – 19F-H1918019-REL
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19F-H1918019-REL-RHG
1 source
This document presents an Administrative Law Judge Decision from the Office of Administrative Hearings regarding a dispute between William P. Lee, a homeowner, and Greenlaw Townhouses Unit Two, his Homeowners Association. The central issue revolved around the Greenlaw HOA’s implementation of a comprehensive ban on street parking and its contracting with a towing company to enforce the rule, which Mr. Lee contended violated the association’s governing documents, specifically amendments to the Covenants, Conditions, and Restrictions (CC&Rs), and the proper notification procedures for revised rules. The findings of fact detail the history of the parking rules, the homeowner’s receipt of the electronic notification of the revised rules, and Mr. Lee’s arguments that the association failed to use the required postal mail or personal delivery methods for notice. The Conclusions of Law determined that the controlling rules were the revised July 2018 Rules and Regulations and that Mr. Lee failed to prove by a preponderance of the evidence that the HOA violated either the CC&Rs or relevant Arizona statutes. Consequently, the Judge ordered that the petitioner’s petition be denied.
Based on 1 source
Case Participants
Petitioner Side
William P. Lee(petitioner) Greenlaw Townhouses Unit Two Homeowners Association member Testified on behalf of himself
Respondent Side
Mark K. Sahl(HOA attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Timothy D. Butterfield(HOA attorney) Greenlaw Townhouses Unit Two Homeowners Association
Barbara(board member) Greenlaw Townhouses Unit Two Homeowners Association Contended by Lee to be the reason for the parking ban
Neutral Parties
Velva Moses-Thompson(ALJ) Office of Administrative Hearings
Judy Lowe(Commissioner) Arizona Department of Real Estate
The ALJ denied the petition after rehearing, concluding the Petitioner failed to prove by a preponderance of the evidence that the HOA violated its CC&Rs, controlling Rules and Regulations (revised July 2018), or relevant statutes (A.R.S. §§ 33-1803 and 1809) by banning parking on association streets and implementing a booting/towing contract.
Why this result: The Petitioner failed to meet the burden of proof to establish the alleged violations of community documents or A.R.S. statutes by a preponderance of the evidence.
Key Issues & Findings
Alleged violation of community documents and statutes regarding parking ban and vehicle booting/towing
Petitioner alleged the HOA violated its CC&Rs amendments 1, 2, and 3, and Rules and Regulations, by banning all parking on association streets and contracting for vehicle booting/towing. Petitioner also contested the validity of the 2018 revised Rules and Regulations due to improper notice and alleged violations of A.R.S. §§ 33-1803 and 1809.
Administrative Hearing Briefing: William P. Lee v. Greenlaw Townhouses Unit Two
Executive Summary
This document analyzes the Administrative Law Judge Decision in case No. 19F-H1918019-REL-RHG, where Petitioner William P. Lee’s complaint against the Greenlaw Townhouses Unit Two Homeowners Association (Greenlaw) was denied. Mr. Lee, a homeowner, alleged that Greenlaw’s complete ban on street parking and its contract with a towing company to enforce the ban violated the association’s Covenants, Conditions, and Restrictions (CC&Rs).
The Administrative Law Judge (ALJ) found that Mr. Lee failed to meet the required burden of proof. The central conclusion was that Greenlaw’s revised Rules and Regulations, effective July 2018, are the controlling authority and explicitly permit a total ban on street parking. The ALJ determined that the specific parking prohibitions detailed in the CC&R amendments—concerning fire lanes, snow removal, and abandoned vehicles—do not preclude the association from enacting a more comprehensive ban via its rules. Furthermore, the petitioner failed to provide sufficient evidence that Greenlaw had actually taken the alleged enforcement actions (booting or towing) against any member’s vehicle.
Case Overview
Detail
Information
Case Name
William P. Lee v. Greenlaw Townhouses Unit Two
Case Number
19F-H1918019-REL-RHG
Arizona Office of Administrative Hearings
Petitioner
William P. Lee (Homeowner)
Respondent
Greenlaw Townhouses Unit Two (Homeowners Association)
Hearing Date
April 1, 2019 (Rehearing)
Decision Date
April 22, 2019
Final Order
Petitioner’s petition is denied.
Presiding ALJ
Velva Moses-Thompson
Petitioner’s Core Allegations and Arguments
William P. Lee’s petition, filed on September 12, 2018, centered on the claim that Greenlaw acted outside its authority by banning all street parking and contracting with a towing company for enforcement. His arguments were:
• Violation of CC&Rs: The total parking ban directly contradicted CC&R Amendments 1, 2, and 3. Mr. Lee contended these amendments established an exhaustive list of permissible parking restrictions, limited to:
◦ Designated fire lanes (Amendment #1).
◦ Periods of snow removal (Amendment #2).
◦ Vehicles in an obvious state of disrepair for over 72 hours (Amendment #3).
• Invalidity of Revised Rules: Mr. Lee argued that the July 2018 revised Rules and Regulations, which contain the parking ban, were not valid or controlling due to improper notification.
◦ He contended that Greenlaw’s Bylaws (Article V, Section 1) required that such notices be delivered personally or by postal mail.
◦ He received notice only via a July 6, 2018 email, which he claimed did not clearly indicate that the rules had been substantively changed.
• Improper Motive: Mr. Lee contended that “the only reason that the Association banned parking was to please Barbara, a board member who did not want anyone to park behind her property.”
Respondent’s Defense
Greenlaw Townhouses Unit Two asserted that its actions were proper and within the scope of its authority as an HOA. Its defense included the following points:
• Controlling Authority: Greenlaw maintained that its revised Rules and Regulations, effective July 2018, were the controlling documents governing parking.
• Notice Protocol: The association contended that the Bylaw provision requiring personal or postal mail notice applies only to notices mandated by statute or the CC&Rs. Greenlaw argued there is no such requirement for providing notice of amendments to the Rules and Regulations.
• Sufficient Notice: Greenlaw asserted that Mr. Lee received actual notice of the revised rules via the email sent on July 6, 2018.
Analysis of Key Governing Documents
The case revolved around the interpretation of and interplay between several of Greenlaw’s governing documents.
Document
Key Provision / Content
Relevance to Case
CC&R Amendments 1, 2, & 3
These amendments, added to Article II (Permitted Uses), establish specific, conditional parking prohibitions related to fire lanes, snow removal, and abandoned vehicles.
The petitioner argued these amendments represented the only circumstances under which parking could be banned. The ALJ found they were not an exhaustive list.
Bylaws, Article V, Section 1
“Notices to directors and lot owners shall be in writing and delivered personally or mailed to the directors or lot owners at their addresses appearing on the books of the corporation.”
The petitioner cited this to argue that the email notice for the revised rules was improper, thus invalidating the rules. The ALJ sided with the Respondent’s interpretation.
Rules and Regulations (July 2018), Section 8
“Parking is not allowed on any association street or alleyway at any time… cars parked in violation may be booted and/or towed by a contracted independent towing company.” The rule specifies that the streets (Eva, Heidi, Jeffrey Loops) are private and owned by the HOA.
This document contains the explicit, total parking ban at the heart of the dispute. The ALJ found this rule to be the valid and controlling authority.
Administrative Law Judge’s Findings and Conclusions
The ALJ’s decision was based on a comprehensive review of the evidence and legal standards, ultimately concluding that the petitioner failed to prove his case.
Burden of Proof
The decision established that Mr. Lee bore the burden of proof “to establish that Greenlaw violated amendments 1, 2, and 3 of the CC&Rs, and the Greenlaw Rules and Regulations by a preponderance of the evidence.” A preponderance of the evidence is defined as proof that convinces the trier of fact a contention is “more probably true than not.”
Key Conclusions of Law
1. Validity of the 2018 Rules: The ALJ concluded that “the weight of the evidence presented at hearing shows that Greenlaw’s Rules and Regulations were revised effective July 2018 and are the controlling Rules and Regulations of Greenlaw.” Mr. Lee failed to establish that any prior version remained in effect.
2. Scope of CC&R Amendments: The decision found that the CC&R amendments only “provide specific scenarios in which parking on the streets is banned.” They do not restrict the association from implementing a broader ban through its Rules and Regulations. Therefore, the total ban did not violate the CC&Rs.
3. No Violation of Rules: Because the July 2018 rules were found to be controlling, and they explicitly authorize a total parking ban, the ALJ concluded that Greenlaw’s decision did not violate its own Rules and Regulations.
4. Insufficient Evidence of Enforcement: A critical failure in the petitioner’s case was the lack of evidence.
◦ The decision notes, “Mr. Lee provided no evidence that Greenlaw booted or towed any of the vehicles belonging to Greenlaw members.”
◦ His testimony about observing a booted jeep was dismissed as insufficient, as he “did not know who owned the jeep, nor who was responsible for booting the jeep.” The Greenlaw manager’s subsequent comment was not found to be an admission of responsibility.
◦ Mr. Lee did not allege that any of his own vehicles had been booted or towed.
5. No Statutory Violation: The judge found that Mr. Lee failed to establish any violation of Arizona Revised Statutes §§ 33-1803 and 33-1809.
Final Order and Implications
Based on these findings, the Administrative Law Judge issued a final, binding order.
• Order: “IT IS ORDERED that Petitioners’ petition is denied.”
• Appeal Process: As the order resulted from a rehearing, it is binding on the parties. Any party wishing to appeal must seek judicial review in the superior court within thirty-five days from the date the order was served.
Study Guide – 19F-H1918019-REL
Study Guide: Lee v. Greenlaw Townhouses Unit Two (Case No. 19F-H1918019-REL-RHG)
This guide provides a comprehensive review of the administrative law case between William P. Lee and the Greenlaw Townhouses Unit Two Homeowners Association. It covers the central conflict, the arguments presented by both parties, the key legal documents involved, and the final decision rendered by the Administrative Law Judge.
Case Overview
This case centers on a dispute between a homeowner, William P. Lee, and his Homeowners Association (HOA), Greenlaw Townhouses Unit Two. Mr. Lee filed a petition alleging that the HOA’s decision to ban all parking on association streets and contract with a towing company violated the community’s governing documents. The matter was decided by an Administrative Law Judge following a rehearing on April 1, 2019.
Key Parties and Roles
Party/Role
Name / Entity
Description
Petitioner
William P. Lee
A homeowner in Greenlaw Unit Two and member of the HOA who filed the petition against the association.
Respondent
Greenlaw Townhouses Unit Two
The Homeowners Association (HOA) responsible for governing the community, against which the petition was filed.
Legal Counsel
Timothy D. Butterfield, Esq.
Appeared on behalf of the Respondent, Greenlaw Townhouses.
Adjudicator
Velva Moses-Thompson
The Administrative Law Judge from the Office of Administrative Hearings who presided over the rehearing and issued the decision.
Timeline of Key Events
June 16, 1986
Greenlaw Bylaws were recorded at the Coconino County Recorder.
July 2, 1999
Greenlaw Declaration of Covenants, Conditions, and Restrictions (CC&Rs) was recorded.
July 6, 2018
Greenlaw sent an email to members with an attachment containing the revised Rules and Regulations, effective July 2018.
September 12, 2018
William P. Lee filed a petition with the Arizona Department of Real Estate.
December 13, 2018
The original hearing on the petition was conducted.
February 11, 2019
The Department of Real Estate issued an order for a rehearing.
April 1, 2019
The rehearing was held at the Office of Administrative Hearings.
April 22, 2019
The Administrative Law Judge issued the final decision, denying the petitioner’s petition.
The Central Conflict: Parking Regulations
The core of the dispute was Mr. Lee’s allegation that Greenlaw’s comprehensive ban on street parking, as stated in its revised 2018 Rules and Regulations, violated the more specific parking restrictions outlined in the community’s CC&Rs. The validity of the 2018 Rules and Regulations, and the method by which they were distributed to homeowners, was also a key point of contention.
• Violation of CC&Rs: The general ban on street parking violated Amendments 1, 2, and 3 of the CC&Rs, which only banned parking in specific situations (fire lanes, snow removal, abandoned vehicles).
• Improper Notice: Greenlaw failed to provide proper notice of the revised Rules and Regulations. Mr. Lee argued that the HOA’s Bylaws (Article V, Section 1) required notice to be delivered personally or by postal mail, not by email.
• Unclear Communication: The email sent on July 6, 2018, did not clearly state that the rules had been recently changed.
• Invalidity of New Rules: Due to the improper notice, Mr. Lee contended that the 2018 revised Rules and Regulations were not valid or controlling.
• Improper Motivation: Mr. Lee alleged the only reason for the ban was to appease a board member named Barbara who did not want anyone parking behind her property.
• Evidence of Enforcement: Mr. Lee testified that he observed a jeep being booted in a driveway and that the Greenlaw manager’s response implied the HOA’s contracted towing company could boot vehicles in violation.
• Notice Was Sufficient: Greenlaw contended that the Bylaw’s requirement for mail or personal delivery only applied to notices mandated by statute or the CC&Rs.
• No Notice Requirement: The HOA argued that it was not required by law or the CC&Rs to provide homeowners with notice of an amendment to the Rules and Regulations.
• Notice Was Received: Greenlaw asserted that Mr. Lee did, in fact, receive notice of the revised rules via the email sent on July 6, 2018.
• No Proof of Harm: Greenlaw pointed out that Mr. Lee provided no evidence that any vehicles belonging to Greenlaw members had been booted or towed by the association, nor did he allege that one of his own vehicles had been affected.
Governing Documents and Legal Principles
• Amendment #1: Bans parking in designated fire lanes.
• Amendment #2: Bans parking on subdivision roads during snow removal periods.
• Amendment #3: Allows for the towing of vehicles parked at the curb in an obvious state of disrepair for over 72 hours.
• Article V, Section 1: States that notices to directors and lot owners “shall be in writing and delivered personally or mailed.”
• Section 8: Explicitly states, “Parking is not allowed on any association street or alleyway at any time.” It identifies the streets (Eva, Heidi, and Jeffrey Loops) as “Private Fire Access Lanes” owned by the HOA and states that vehicles in violation may be booted and/or towed.
• The petitioner, Mr. Lee, bore the burden of proof to establish his claims by a preponderance of the evidence.
• The source defines preponderance of the evidence 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.”
The Judge’s Decision and Rationale
The Administrative Law Judge, Velva Moses-Thompson, denied Mr. Lee’s petition. The key conclusions of law were:
1. Controlling Document: The 2018 revised Rules and Regulations were found to be the valid and controlling rules for the Greenlaw HOA.
2. Authority to Ban Parking: The 2018 Rules and Regulations explicitly allow the association to ban all parking on its streets and to enforce this rule by booting or towing vehicles.
3. No Violation of CC&Rs: The judge concluded that Mr. Lee failed to prove that the general parking ban violated the specific, situational bans outlined in CC&R Amendments 1, 2, and 3. The amendments did not preclude the HOA from enacting a broader rule.
4. Failure to Meet Burden of Proof: Mr. Lee did not establish by a preponderance of the evidence that Greenlaw’s actions violated either the CC&Rs or the Rules and Regulations.
5. Insufficient Evidence of Enforcement: Mr. Lee failed to provide any evidence that Greenlaw was actually responsible for booting the jeep he observed. His testimony was not sufficient to prove the HOA had taken action against any member.
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Quiz: Test Your Understanding
Answer the following questions in 2-3 sentences based on the information in the study guide.
1. What was the central allegation in William P. Lee’s petition against the Greenlaw HOA?
2. What three specific scenarios for parking restrictions are outlined in Amendments 1, 2, and 3 of the Greenlaw CC&Rs?
3. On what grounds did Mr. Lee argue that the 2018 revised Rules and Regulations were not valid?
4. How did Greenlaw defend its use of email to distribute the revised Rules and Regulations to homeowners?
5. According to Section 8 of the revised Rules and Regulations, what are the potential consequences for parking on an association street?
6. What was the judge’s conclusion regarding the validity and authority of the 2018 revised Rules and Regulations?
7. What is the “preponderance of the evidence” standard, and who bore the burden of proof to meet it in this case?
8. Why did the judge find Mr. Lee’s testimony about a booted jeep to be insufficient evidence?
9. Did the judge find that Greenlaw’s general parking ban violated Amendments 1, 2, and 3 of the CC&Rs? Explain why or why not.
10. What was the final order issued by the Administrative Law Judge in this matter?
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Answer Key
1. Mr. Lee’s central allegation was that the Greenlaw HOA had violated its CC&Rs and Rules and Regulations. Specifically, he claimed the association’s decision to ban all parking on its streets and to contract with a company to boot vehicles was improper.
2. The CC&R amendments outline three specific parking restrictions. Amendment 1 bans parking in designated fire lanes, Amendment 2 bans parking on roads during snow removal, and Amendment 3 allows for the towing of abandoned vehicles in a state of disrepair for over 72 hours.
3. Mr. Lee argued the 2018 rules were invalid because he was not given proper notice. He contended that the HOA’s Bylaws required notice to be delivered personally or by postal mail, and that the email he received was not a valid method of distribution.
4. Greenlaw defended its use of email by arguing that the Bylaw’s requirement for personal or mail delivery only applied to notices that were required by statute or the CC&Rs. The HOA contended it was not required by law to provide notice for an amendment to its Rules and Regulations.
5. Section 8 states that cars parked in violation on an association street may be booted and/or towed by a contracted independent towing company. The rule identifies the streets as “Private Fire Access Lanes.”
6. The judge concluded that the Rules and Regulations revised in July 2018 were the controlling rules for Greenlaw. Furthermore, the judge found that these rules do allow the association to ban all parking on its streets and to tow or boot cars in violation.
7. A “preponderance of the evidence” is the standard of proof that convinces a judge that a contention is more probably true than not. In this case, the petitioner, William P. Lee, bore the burden of proving his claims by this standard.
8. The evidence was insufficient because Mr. Lee did not know who owned the jeep or who was responsible for booting it. There was no direct evidence provided that proved Greenlaw or its contractor was responsible for the action.
9. No, the judge did not find that the ban violated the CC&Rs. The judge reasoned that the amendments only provided specific scenarios where parking was banned and did not prevent the HOA from enacting a broader, more general parking ban in its Rules and Regulations.
10. The final order issued by the Administrative Law Judge was that the Petitioner’s (Mr. Lee’s) petition is denied.
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Essay Questions for Deeper Analysis
The following questions are for further reflection. No answers are provided.
1. Analyze the conflict between Greenlaw’s Bylaws (Article V, Section 1) regarding notice and its 2018 distribution of revised Rules and Regulations. Discuss both parties’ arguments and explain how the judge’s ultimate decision implies a resolution to this conflict.
2. Discuss the legal concept of “burden of proof” as it applies to this case. How did William P. Lee’s failure to meet the “preponderance of the evidence” standard affect the outcome of his claims regarding both the parking ban and the alleged booting/towing incidents?
3. Compare and contrast the parking restrictions detailed in the CC&R Amendments with the broader ban instituted in Section 8 of the 2018 Rules and Regulations. Explain why the existence of the specific amendments did not prevent the HOA from enacting a more general rule.
4. Evaluate the evidence presented by Mr. Lee. What were the strengths and weaknesses of his arguments and testimony, particularly concerning the booted jeep and the motivation behind the parking ban?
5. Imagine you are legal counsel for the Greenlaw HOA. Based on the arguments and outcome of this case, what advice would you give the Board of Directors regarding future amendments to its Rules and Regulations to avoid similar disputes?
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Glossary of Key Terms
• Administrative Law Judge (ALJ): An official who presides over hearings at administrative agencies. In this case, Velva Moses-Thompson served as the ALJ for the Office of Administrative Hearings.
• Affirmative Defenses: Arguments made by the respondent that, if proven, can defeat or mitigate the petitioner’s claim. The Respondent (Greenlaw) bears the burden to establish these defenses.
• Burden of Proof: The obligation of a party in a legal case to prove their allegations. In this case, Mr. Lee had the burden of proof to establish his claims.
• Bylaws: A set of rules adopted by an organization, such as an HOA, for governing its internal operations. Greenlaw’s bylaws addressed the method for providing notices to members.
• Covenants, Conditions, and Restrictions (CC&Rs): A set of rules governing the use of land in a planned community or subdivision. Owners agree to be bound by the CC&Rs.
• Homeowners Association (HOA): An organization in a planned community that makes and enforces rules for the properties and its residents. Greenlaw Townhouses Unit Two is the HOA in this case.
• Petitioner: The party who files a petition initiating a legal action. William P. Lee is the Petitioner.
• Preponderance of the Evidence: The standard of proof in which the trier of fact is convinced that a contention is “more probably true than not.” It is described as “the greater weight of the evidence.”
• Respondent: The party against whom a petition is filed; the party who must respond to the claims. Greenlaw Townhouses Unit Two is the Respondent.
• Rules and Regulations: A set of rules established by the HOA, in addition to the CC&Rs and Bylaws, that govern the day-to-day life and conduct within the community. The 2018 revised parking ban was located in Greenlaw’s Rules and Regulations.
Blog Post – 19F-H1918019-REL
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19F-H1918019-REL-RHG
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This document presents an Administrative Law Judge Decision from the Office of Administrative Hearings regarding a dispute between William P. Lee, a homeowner, and Greenlaw Townhouses Unit Two, his Homeowners Association. The central issue revolved around the Greenlaw HOA’s implementation of a comprehensive ban on street parking and its contracting with a towing company to enforce the rule, which Mr. Lee contended violated the association’s governing documents, specifically amendments to the Covenants, Conditions, and Restrictions (CC&Rs), and the proper notification procedures for revised rules. The findings of fact detail the history of the parking rules, the homeowner’s receipt of the electronic notification of the revised rules, and Mr. Lee’s arguments that the association failed to use the required postal mail or personal delivery methods for notice. The Conclusions of Law determined that the controlling rules were the revised July 2018 Rules and Regulations and that Mr. Lee failed to prove by a preponderance of the evidence that the HOA violated either the CC&Rs or relevant Arizona statutes. Consequently, the Judge ordered that the petitioner’s petition be denied.
Based on 1 source
Case Participants
Petitioner Side
William P. Lee(petitioner) Greenlaw Townhouses Unit Two Homeowners Association member Testified on behalf of himself
Respondent Side
Mark K. Sahl(HOA attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Timothy D. Butterfield(HOA attorney) Greenlaw Townhouses Unit Two Homeowners Association
Barbara(board member) Greenlaw Townhouses Unit Two Homeowners Association Contended by Lee to be the reason for the parking ban
Neutral Parties
Velva Moses-Thompson(ALJ) Office of Administrative Hearings
Judy Lowe(Commissioner) Arizona Department of Real Estate
The Administrative Law Judge dismissed the petition, finding that the HOA (Respondent) did not violate CC&R Section 3.10. The CC&Rs imposed the duty of keeping the drainage area clear primarily on the Unit Owners, and the HOA only retained the right to enforce this requirement, not an explicit obligation.
Why this result: Petitioner failed to establish by a preponderance of the evidence that Respondent violated the CC&Rs because the HOA did not have an obligation to enforce clearance requirements against unit owners under the cited covenant provisions.
Key Issues & Findings
Alleged violation of CC&Rs § 3.10 by failing to require unit owners to remove vegetation and fencing materials from the stormwater channel behind their homes.
Petitioner alleged the HOA violated CC&Rs § 3.10 by failing to compel unit owners to clear vegetation and debris (including chicken wire) from the stormwater drainage channel, asserting this failure created a flood risk to unit 12. The ALJ found that the CC&Rs placed the primary maintenance responsibility on Unit Owners, and the HOA only had the right, but not the obligation, to enforce clearance requirements.
Orders: The petition was denied and dismissed. No action was required of Respondent because Petitioner failed to establish that Respondent violated the CC&Rs regarding maintenance of the drainage easement.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
A.R.S. § 32-2199.01
Title 33, Chapter 9
A.A.C. R2-19-119(A) and (B)(1)
Vazanno v. Superior Court
A.A.C. R2-19-119(B)(2)
MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5
BLACK’S LAW DICTIONARY
Powell v. Washburn
Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs.
Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs.
Video Overview
Audio Overview
Decision Documents
19F-H1918010-REL Decision – 667122.pdf
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19F-H1918010-REL Decision – 678371.pdf
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Briefing Doc – 19F-H1918010-REL
Briefing Document: Sellers vs. Rancho Madera Condominium Association
Executive Summary
This document synthesizes the legal proceedings and outcomes of the case John A Sellers, Petitioner, vs. Rancho Madera Condominium Association, Respondent (Case No. 19F-H1918010-REL), adjudicated by the Arizona Office of Administrative Hearings. The core of the dispute was a claim by Petitioner John Sellers that his homeowner’s association (HOA) violated its Covenants, Conditions, and Restrictions (CC&Rs) by failing to compel other homeowners to remove vegetation and fencing from a common stormwater drainage channel, which he alleged created a flood risk to his property, Unit 12.
The petitioner’s claim was ultimately unsuccessful. It was denied first in an initial evidentiary hearing and again in a subsequent rehearing. The central finding of the Administrative Law Judges (ALJs) in both decisions was a critical distinction between an HOA’s right to enforce rules and an obligation to do so. The ALJs determined that the CC&Rs placed the primary responsibility for maintaining the drainage easement on the individual unit owners. The HOA’s mandatory duty to intervene was found to be triggered only by actual damage resulting from an owner’s negligence, not by the mere potential for future damage. As no flooding or damage had ever occurred, the HOA was found to have acted within its authority and had not violated the CC&Rs. The petitioner’s personal circumstances, including a contentious divorce and court-ordered sale of the property, were noted but deemed legally irrelevant to the determination of a CC&R violation.
Case Chronology and Procedural History
The case progressed through an initial petition, a hearing, a decision, a request for rehearing, and a final decision on rehearing. A notable procedural anomaly occurred when a hearing scheduled for November 5, 2018, was officially vacated due to a withdrawal notice from the petitioner, yet the hearing proceeded on that date as originally planned.
Details
Aug 23, 2018
Petition Filed
John A. Sellers filed a single-issue petition with the Arizona Department of Real Estate alleging the Rancho Madera Condominium Association violated CC&R § 3.10.
Oct 23, 2018
Hearing Vacated
An order was issued by ALJ Diane Mihalsky vacating the November 5 hearing because the petitioner had notified the Department of his wish to withdraw the petition.
Nov 5 & Dec 12, 2018
Initial Hearing
Despite the prior vacating order, an evidentiary hearing was held before ALJ Mihalsky.
Dec 26, 2018
Initial Decision
ALJ Mihalsky issued a decision finding that the petitioner failed to prove his case. The petition was denied.
Feb 1, 2019
Rehearing Requested
The petitioner filed a request for a rehearing, alleging procedural irregularities and errors in the initial decision.
Feb 22, 2019
Rehearing Granted
The Commissioner of the Department of Real Estate granted the request for a rehearing.
Apr 15, 2019
Rehearing Held
A rehearing was held before a new judge, ALJ Tammy L. Eigenheer.
May 7, 2019
Post-Hearing Filing Stricken
The petitioner submitted an unauthorized supplemental argument after the rehearing. ALJ Eigenheer issued an order striking the filing from the record and closing the record.
May 10, 2019
Final Decision on Rehearing
ALJ Eigenheer issued a final decision, again finding for the respondent and dismissing the petition.
Core Dispute Analysis
Petitioner’s Position and Allegations
• Core Allegation: The petitioner alleged that the Rancho Madera Condominium Association (Respondent) violated CC&R § 3.10 by failing to enforce its rules. Specifically, the Association did not require owners of “Drainage Easement Units” to remove obstructions—such as large succulents, cacti, shrubs, and chicken wire fencing—from a 3′ x 3′ stormwater drainage canal located behind their homes.
• Perceived Risk: The petitioner testified that these items could catch storm debris, clog the channel, and cause flooding that would damage his property, Unit 12. He submitted videos of heavy rains to support his concern.
• Evolving Legal Argument: In the rehearing, the petitioner’s argument shifted. He acknowledged that the CC&Rs gave the Association the right to enforce maintenance standards but argued that “at a certain point exercising a right becomes an obligation,” particularly when matters of safety and property values are implicated.
• Claimed Financial Damages: The petitioner testified he was undergoing a contentious divorce and his condominium was being sold by order of the Maricopa County Superior Court. He asserted that due to the unresolved flood risk, which he was obligated to disclose, the sale price of Unit 12 was “$40,000 less than it would have been.”
Respondent’s Position and Actions
• Denial of Violation: The Association denied it had violated any CC&Rs by its handling of the drainage channel.
• Evidence and Testimony: The Association, represented by its President, Jeffrey Kaplan, presented several key points:
◦ No History of Flooding: Mr. Kaplan testified that Unit 12 had never sustained any flood damage since the development was built in 2012, including during a “100-year storm” in 2014. After a significant rainstorm in August 2018, he personally inspected the easement and saw no water in it.
◦ Origin of Plants: Mr. Kaplan stated that the builder had originally planted the vegetation in the drainage easement that the petitioner was concerned about.
◦ No Other Complaints: No other members of the 46-unit Association had expressed any concerns about drainage.
◦ Proactive Communication: To assuage the petitioner’s concerns, the Association’s management company sent letters to the relevant homeowners on April 18, 2018, and July 19, 2018, reminding them of their responsibility to keep the drainage area free of obstructions.
◦ Due Diligence: Mr. Kaplan contacted officials at the Maricopa County Flood Control District and the Town of Cave Creek, who confirmed the drainage area was not on any official floodplain maps and that the Association was solely responsible for its maintenance.
Key CC&R Provisions and Legal Interpretation
The ALJs’ decisions hinged on a close reading of the Rancho Madera CC&Rs. The analysis consistently differentiated between the duties of individual owners and the duties of the Association.
• CC&R § 3.10.2 — Unit Owner Responsibility: This section places the primary maintenance burden directly on the homeowners of the Drainage Easement Units.
◦ Interpretation: The legal conclusion was that this provision unambiguously makes individual owners responsible for keeping their portion of the easement clear.
• CC&R § 3.10.4 — Association Responsibility: This section defines the specific circumstance under which the Association is required to act.
◦ Interpretation: Both ALJs found that this clause creates a reactionary, not a proactive, duty for the Association. Its obligation to repair is triggered by actual damage occurring, not by a perceived risk of future damage.
• CC&R § 13.1.1 — Association Enforcement Power: This section, highlighted in the rehearing, grants the Association authority to act.
◦ Interpretation: The ALJ in the rehearing ruled that this language grants a discretionary right, not a mandatory obligation. The CC&Rs contain no provision that converts this right into a duty under the circumstances presented by the petitioner.
Judicial Findings and Rulings
Initial Decision (ALJ Diane Mihalsky, Dec 26, 2018)
• Burden of Proof: The petitioner failed to establish his claim by a preponderance of the evidence.
• Findings of Fact: The petitioner successfully established that plants and chicken wire existed in the stormwater canal. However, he failed to establish that these items actually impeded the flow of water.
• Conclusion: The respondent proved that the drainage canal had functioned as intended since 2012 and that Unit 12 had never flooded. The petitioner’s divorce was noted to have “cast a long shadow over his administrative complaint” but was irrelevant to the legal issue. The petition was denied.
Rehearing Decision (ALJ Tammy L. Eigenheer, May 10, 2019)
• Central Legal Finding: The CC&Rs clearly intend for unit owners to bear the primary responsibility for keeping the drainage area clear. The Association’s only specified obligation is to repair damage after it has occurred and bill the responsible owner.
• Right vs. Obligation: The decision explicitly states, “While Respondent has the right to enforce the requirements that the Unit Owners keep the Drainage Easement Area clear, nothing in the CC&Rs provides that Respondent has an obligation to do so.”
• Final Order: The petitioner failed to establish that the respondent violated Section 3.10 of the CC&Rs. The petition was dismissed.
Notable Evidence
A key piece of evidence submitted by the respondent was a June 22, 2018, email from the petitioner’s wife, Debborah Sellers, which directly refuted the petitioner’s claims. In the email, she stated:
“There has never been any issue with the storm drain behind our house and it is not a major disclosure item… Stop making something out of nothing. AND I HOPE YOU AREN[’]T FREAKING POTENTIAL BUYERS AND OTHER REALTORS WITH THIS NONSENSE.”
Study Guide – 19F-H1918010-REL
Study Guide for Case No. 19F-H1918010-REL: Sellers v. Rancho Madera Condominium Association
Short-Answer Quiz
Instructions: Answer the following questions in 2-3 sentences, drawing exclusively from the information provided in the case documents.
1. What was the specific allegation John A. Sellers made against the Rancho Madera Condominium Association in his petition filed on August 23, 2018?
2. Identify the key responsibilities assigned to individual unit owners of Drainage Easement Units according to Section 3.10.2 of the CC&Rs.
3. Who is Jeffrey Kaplan, and what key testimony did he provide on behalf of the Respondent?
4. What specific actions did the Respondent’s management company take in April and July of 2018 to address the Petitioner’s concerns?
5. According to the decision by Administrative Law Judge Diane Mihalsky, what did the Petitioner fail to establish regarding the plants and chicken wire in the drainage canal?
6. On what grounds did John A. Sellers file his Homeowner’s Association (HOA) Dispute Rehearing Request on February 1, 2019?
7. What was the Petitioner’s core argument regarding the Association’s “right to enforce” the CC&Rs versus an “obligation to enforce” them?
8. What was the final conclusion of Administrative Law Judge Tammy L. Eigenheer regarding the Association’s responsibilities under the CC&Rs?
9. What occurred after the April 15, 2019 rehearing when the Petitioner attempted to submit supplemental information to the Office of Administrative Hearings?
10. Describe the evidence presented in an email from Debborah Sellers and its relevance to the case.
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Answer Key
1. John A. Sellers alleged that the Rancho Madera Condominium Association violated Section 3.10 of its Covenants, Conditions, and Restrictions (CC&Rs). He claimed the Association failed to require condominium owners to remove vegetation and fencing materials from the stormwater channel, creating a flood risk for his unit.
2. Section 3.10.2 of the CC&Rs requires each Unit Owner of a Drainage Easement Unit to keep their respective Drainage Easement Area free of weeds and other debris. The purpose is to ensure that stormwater can flow freely and that no improvement, including plant materials, impedes this flow.
3. Jeffrey Kaplan is the President of the Rancho Madera Condominium Association. He testified that the drainage easement had never failed, even during a 100-year storm in 2014, that the original builder had planted the vegetation in question, and that he had consulted with county and town officials about the drainage area.
4. To address the Petitioner’s concerns, the Respondent’s management company sent letters to the owners of the Drainage Easement Units. Letters sent on April 18, 2018, and July 19, 2018, reminded owners of their responsibility to keep the drainage area free of obstructions, weeds, and debris.
5. Judge Mihalsky’s decision on December 26, 2018, concluded that the Petitioner established the presence of plants and chicken wire but failed to establish that these items actually impede the flow of water. The judge found that the drainage system functions as intended and there was no unreasonable risk of flooding.
6. The Petitioner filed for a rehearing based on several alleged issues with the original proceeding. These included an irregularity in the proceedings, the existence of newly discovered evidence, errors in the admission or rejection of evidence, and a belief that the findings of fact or decision were arbitrary, capricious, or not supported by evidence.
7. The Petitioner argued that while the CC&Rs grant the Association the “right to enforce” maintenance requirements, this right becomes an “obligation” when issues of property values and safety are at stake. He maintained that the potential for flooding created such an obligation for the Association to act.
8. Judge Eigenheer concluded that the CC&Rs intend for unit owners to bear the responsibility of keeping the Drainage Easement Area clear. She determined that while the Association has the right to enforce this, nothing in the CC&Rs creates an obligation for it to do so, and its only specified responsibility is to repair damage after it occurs, billing the responsible unit owner.
9. After the rehearing, the Petitioner submitted supplemental authority and argument without having requested leave to do so. The Respondent’s counsel argued this filing was untimely and introduced new arguments, requesting it be struck. On May 7, 2019, Judge Eigenheer ordered the filing struck from the record and closed the record.
10. The Respondent submitted a June 22, 2018 email from Debborah Sellers, the Petitioner’s wife. In the email, she stated there had never been an issue with the storm drain, called his concerns “nonsense,” and noted that the developer had done a good job, undermining the Petitioner’s claim of a significant and obvious flood risk.
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Suggested Essay Questions
1. Analyze the legal reasoning used by Administrative Law Judge Tammy L. Eigenheer to dismiss the petition after the rehearing. Contrast her interpretation of the Association’s duties under the CC&Rs with the findings presented by Judge Diane Mihalsky in the initial decision.
2. Discuss the concept of “preponderance of the evidence” as defined in the legal documents. Evaluate the evidence presented by both the Petitioner and the Respondent, explaining why the Petitioner ultimately failed to meet this burden of proof in both hearings.
3. Trace the complete procedural history of case No. 19F-H1918010-REL. Identify and explain the significance of key events, including the initial petition, the vacated hearing, the first Administrative Law Judge Decision, the request for rehearing, and the final order dismissing the case.
4. Examine the role and responsibilities of the Rancho Madera Condominium Association versus the individual unit owners as defined by Sections 3.10, 3.10.2, 3.10.4, and 13.1.1 of the CC&Rs. How did the interpretation of these sections form the basis of the final legal decision?
5. Evaluate the different types of evidence presented in the hearings, including witness testimony (Sellers, Kaplan), documentary evidence (CC&Rs, letters, emails), and physical evidence (photographs, videos). How did each type of evidence contribute to the final outcome of the case?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An independent judge who presides over administrative hearings, takes evidence, and makes legal decisions and orders. In this case, Diane Mihalsky and Tammy L. Eigenheer served as ALJs.
Covenants, Conditions, and Restrictions (CC&Rs)
The governing legal documents that set up the guidelines for a planned community or condominium association. In this case, the CC&Rs for Rancho Madera were the central document in the dispute.
Drainage Easement
A perpetual, non-exclusive legal right created over a specific portion of property (the eastern five feet of Units 9-18) for constructing and maintaining a stormwater drainage channel.
Drainage Easement Area
The specific portion of land encumbered by the Drainage Easement, defined as the eastern five feet of the designated units.
Drainage Improvements
The physical components of the drainage system, such as the channel, decomposed granite, rip rap (large stones), or concrete, as originally constructed by the developer.
Office of Administrative Hearings (OAH)
An independent state agency in Arizona responsible for conducting evidentiary hearings for other state agencies, such as the Department of Real Estate.
Petitioner
The party who initiates a legal action or files a petition seeking a legal remedy. In this case, John A. Sellers.
Preponderance of the Evidence
The standard of proof in this civil administrative case. It is defined as evidence that is sufficient to incline a fair and impartial mind to one side of an issue rather than the other, making a contention more probably true than not.
Rehearing
A second hearing of a case, granted by the Commissioner in this instance, to re-examine the issues based on claims such as procedural irregularities, newly discovered evidence, or errors in the original decision.
Respondent
The party against whom a petition is filed; the party who must respond to the petitioner’s claims. In this case, the Rancho Madera Condominium Association.
The 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 unit owners’ associations.
Blog Post – 19F-H1918010-REL
I Read an Entire HOA Lawsuit. Here Are 4 Shocking Lessons About Power, Rules, and Reality.
The Anatomy of a Neighborhood War
Living under a Homeowner’s Association (HOA) often means navigating a complex world of rules, regulations, and neighborhood politics. For most, disagreements are minor annoyances. But sometimes, a seemingly small issue can escalate into a full-blown legal war.
This is the story of one homeowner’s single-minded crusade against his HOA over a stormwater drainage channel he believed was a serious flooding risk. After filing a formal petition, the dispute escalated into a multi-stage legal battle that spanned nearly a year. The official court documents reveal that even after a judge ruled decisively against him, the homeowner doubled down, demanding a rare rehearing.
A deep dive into this protracted case reveals a fascinating and cautionary tale. The legal reasoning that ultimately settled the matter highlights several surprising lessons that apply to anyone living in a planned community.
1. Proving a Rule Was Broken Isn’t the Same as Proving Harm
The initial hearing, held before Administrative Law Judge Diane Mihalsky in late 2018, centered on a seemingly straightforward argument from the petitioner, John Sellers. He pointed out that his neighbors had placed plants—including large succulents, shrubs, and cacti—as well as chicken wire in a stormwater drainage channel. This, he argued, was a clear violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs), which stated that no improvement “shall be constructed, installed or allowed to grow… that may… impede the flow of water.”
But in her December 26, 2018 decision, the judge ruled against him. While Sellers successfully proved the obstructions existed, he failed to meet the legal burden of proof that they actually “impede the flow of water.” His claim was defeated by testimony from the HOA President, Jeffrey Kaplan, who stated that the unit had never sustained any flood damage, not even during a “100-year storm in 2014.”
The lesson from this first round is stark: in this legal context, simply pointing out a technical rule break was not enough. The petitioner had to prove that the violation was causing a tangible, negative impact. Without evidence of actual harm or impeded water flow, the theoretical risk was insufficient to win the case.
2. An HOA’s “Right” to Enforce Is Not an “Obligation”
After losing the first round on a question of evidence, Sellers’ argument evolved. He requested a rehearing, which was granted, and the case landed before a new judge, Tammy L. Eigenheer, in the spring of 2019. This shifted the legal focus from physical proof of impeded water flow to a more fundamental question of the HOA’s duties.
Sellers argued that because safety and property values were at stake, the association had a duty to enforce the CC&Rs and compel his neighbors to clear the drainage channel. He contended that at a certain point, an organization’s “right” to act becomes an “obligation.”
The judge’s final decision on May 10, 2019, was clear, absolute, and is where the most powerful lesson of the entire case lies.
“While Respondent has the right to enforce the requirements that the Unit Owners keep the Drainage Easement Area clear, nothing in the CC&Rs provides that Respondent has an obligation to do so.”
This distinction is critical for any homeowner. An HOA can possess the legal power to act but may not be legally compelled to use it. According to the judge’s interpretation, the governing documents placed the responsibility for keeping the channel clear on the individual unit owners. The association’s only stated obligation was to repair damage after it happened, with the cost being billed back to the responsible party.
3. Outside Conflicts Can Cast a Long Shadow
Legal disputes are rarely just about the facts of the case. During the initial hearing, it was revealed that the petitioner was going through a “contentious divorce” and that the condo unit at the center of the dispute was a community asset being sold by the court.
The most dramatic evidence, however, came from an email written by the petitioner’s own wife, Debborah Sellers. The email, submitted as evidence by the HOA, directly undermined his claims about the severity of the drainage issue.
“There has never been any issue with the storm drain behind our house and it is not a major disclosure item… Stop making something out of nothing. AND I HOPE YOU AREN[’]T FREAKING POTENTIAL BUYERS AND OTHER REALTORS WITH THIS NONSENSE.”
In her decision, Judge Mihalsky officially stated that the divorce was “not relevant” to the technical question of whether the HOA violated the CC&Rs. However, she immediately added that the situation “cast a long shadow over his administrative complaint,” suggesting that the personal context, and especially the damaging email, severely harmed the petitioner’s credibility.
4. Writing Letters Isn’t the Same as Being Heard
Throughout the dispute, the petitioner made his concerns known by writing “many letters” to the HOA president. He was persistent in his written communications, attempting to force the issue onto the association’s radar.
Yet, this effort was contrasted with a notable lack of direct participation. According to the testimony of HOA President Kaplan during the first hearing, Sellers “never attended any of Respondent’s noticed Board meetings” where his concerns could have been discussed among the board members.
The HOA’s response to his letters was limited; it sent two general reminder letters to all residents in the affected area but did not take direct enforcement action against any specific homeowner. The practical takeaway is that to effect change or be taken seriously in an HOA dispute, visibility and participation are critical. Writing letters is a start, but attending official meetings to present a case in person can be a more effective strategy for ensuring an issue is formally addressed.
A Cautionary Tale for Any Homeowner
What began as a seemingly straightforward complaint about drainage and rule enforcement devolved into a legal battle that consumed nearly a year, involving two multi-day hearings before two different administrative law judges. The petitioner lost his case on the evidence, then lost it again on the law.
It serves as a potent cautionary tale, demonstrating that in the world of HOA disputes, the obvious path is not always the winning one. It leaves every homeowner with a final, thought-provoking question to ponder: When you see a problem in your community, how do you decide if a fight is worth the cost—not just in money, but in time, credibility, and peace?
Case Participants
Petitioner Side
John A Sellers(petitioner)
Respondent Side
Edward D. O’Brien(HOA attorney) Carpenter, Hazlewood, Delgado & Bolen, PLC/LLP Represented Respondent
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.
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. § 33-1804
Analytics Highlights
Topics: HOA Election Dispute, Records Retention, Open Meeting Violation, Filing Fee Refund
This document synthesizes the findings and rulings from an administrative legal dispute between homeowner Tom Barrs (Petitioner) and the Desert Ranch Homeowners Association (Respondent) concerning the HOA’s board election of March 18, 2017. The core of the dispute involved the HOA board’s decision to investigate and ultimately overturn the initially announced election results, leading to a run-off election.
The Administrative Law Judge (ALJ) overseeing the case and a subsequent rehearing issued a mixed final decision. The Petitioner, Mr. Barrs, successfully proved that the Desert Ranch HOA committed two statutory violations:
1. Destruction of Election Materials: The HOA violated Arizona statute A.R.S. § 33-1812(A)(7) by destroying ballot envelopes shortly after the election, materials which are required to be retained for at least one year.
2. Improper Closed Meeting: The HOA violated Arizona statute A.R.S. § 33-1804 by holding a board meeting with its attorney at a private residence without providing the required notice to its members.
However, the Petitioner’s primary challenge—that the board violated its own Bylaw 2.4 by acting on an objection raised after the annual meeting had adjourned—was dismissed. The ALJ ruled that the bylaw’s waiver of claims applied to general “Members” but not to “Directors” acting in their official capacity. This ruling effectively upheld the board’s authority to investigate the election, which led to the discovery of invalid ballots and the eventual run-off election won by Brian Schoeffler.
As the prevailing party on two of the three issues, Mr. Barrs was awarded a reimbursement of his $1,000.00 filing fee. The judge, however, found that no civil penalty against the HOA was appropriate.
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I. Case Overview
• Parties:
◦ Petitioner: Tom Barrs
◦ Respondent: Desert Ranch HOA, represented by Catherine Overby (President) and Brian Schoeffler (Vice President)
• Case Number: 18F-H1818035-REL
• Adjudicating Body: Arizona Office of Administrative Hearings
• Presiding Judge: Administrative Law Judge Tammy L. Eigenheer
• Subject of Dispute: Alleged violations of Arizona statutes and HOA bylaws related to the handling and outcome of the March 18, 2017, annual board election.
II. Chronology of the Contested Election
The dispute originated from the following sequence of events surrounding the 2017 election for two vacant seats on the Desert Ranch HOA Board of Directors.
1. Pre-Election: Absentee ballots were distributed to members, listing Catherine Overby and Brian Schoeffler as candidates and providing a space for a write-in candidate.
2. March 18, 2017 (Annual Meeting): Ballots were submitted and counted. Catherine Overby and Jerome Klinger (a write-in) were announced as the winning candidates. No members present objected to the results before the meeting was adjourned.
3. Immediately Following the Meeting: Board member Patrick Rice gathered the ballots and “expressed his concerns with the election results.”
4. Circa March 18, 2017: All ballot envelopes from the election were destroyed.
5. March 19, 2017: Candidate Brian Schoeffler sent an email regarding the election, stating, “I’m asking you to review the situation and make a decision if there is enough concern that there should be a revote.”
6. March 20, 2017: Board President Catherine Overby emailed the members, announcing that the election had been “contested.” In the email, she asserted that the bylaws did not permit write-in candidates and declared that she and Mr. Schoeffler were the new directors.
7. March 29, 2017: Certain board members, including Ms. Overby and Mr. Rice, held an unannounced meeting with an attorney at Ms. Overby’s home. During this meeting, it was discovered that “duplicate ballots and a proxy ballot” had been improperly counted.
8. Post-March 29, 2017: After consulting the attorney, the board determined that the valid vote count resulted in a tie between Mr. Schoeffler and Mr. Klinger. The board decided to hold a run-off election.
9. April 29, 2017: The run-off election was held, and Brian Schoeffler was announced as the winner.
10. May 10, 2017: The newly constituted Board of Directors held its organizational meeting.
III. Adjudicated Issues and Rulings
The petition, originally filed as a single issue, was converted to a multiple-issue case. At the hearing, the dispute was clarified into three distinct issues, each with a specific ruling from the ALJ.
Petitioner’s Allegation
Legal Basis
Final Ruling
The HOA improperly overturned the election results based on an objection raised after the annual meeting had adjourned.
Bylaw 2.4
Dismissed
The HOA unlawfully discarded ballot envelopes and related election materials.
A.R.S. § 33-1812(A)(7)
Violation Found
The HOA held closed board meetings without providing proper notice to the membership.
A.R.S. § 33-1804
Violation Found
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A. Issue 1: Violation of Bylaw 2.4 (Improperly Overturning Election)
• Petitioner’s Argument: Mr. Barrs contended that the board was barred from investigating or acting on any concerns about the election after the meeting had concluded. His argument was based on Bylaw 2.4, which states:
• ALJ Finding: The petition on this issue was dismissed. The judge’s finding was affirmed after a rehearing requested by the Petitioner.
• ALJ Rationale:
1. Initiation of Investigation: Testimony established that Board member Patrick Rice expressed concerns “immediately after the Annual Meeting adjourned.” Therefore, Mr. Schoeffler’s email the following day did not initiate the board’s investigation.
2. Distinction Between “Member” and “Director”: The judge noted that throughout the bylaws, the terms “Member,” “Directors,” and “Board of Directors” were used with specific and non-interchangeable meanings. The waiver in Bylaw 2.4 applies specifically to a “Member,” and the Petitioner failed to prove that a “Director” was prohibited from raising questions about the validity of an election after a meeting.
B. Issue 2: Violation of A.R.S. § 33-1812(A)(7) (Destruction of Election Materials)
• Statutory Requirement: Arizona law mandates that “Ballots, envelopes and related materials… shall be retained… for at least one year after completion of the election.”
• Respondent’s Action: The HOA destroyed the ballot envelopes at or around the time of the election.
• ALJ Finding: The Petitioner established that the HOA violated the statute.
• ALJ Rationale: The ruling was based on “uncontroverted evidence” presented at the hearing that established the destruction of the materials.
C. Issue 3: Violation of A.R.S. § 33-1804 (Improper Closed Meetings)
• Statutory Requirement: Arizona law requires all HOA board meetings to be open to all members. A meeting can only be closed for specific reasons, such as receiving legal advice, and the board must provide notice and cite the legal authority for entering a closed session.
• Respondent’s Action: Certain board members met with an attorney at a private residence on March 29, 2017, to discuss the election. No notice was provided to the membership regarding this meeting.
• ALJ Finding: The Petitioner established that the HOA violated the statute.
• ALJ Rationale: The ruling was based on “uncontroverted evidence” that the meeting occurred and that the board “did not provide any notice of the upcoming meeting and/or provide notice that the meeting would be closed because it involved legal advice from an attorney.”
IV. Final Order and Disposition
The final decision, issued on August 23, 2018, and upheld after a rehearing decision on December 26, 2018, ordered the following:
• Dismissal: The petition regarding Issue 1 (violation of Bylaw 2.4) was dismissed.
• Prevailing Party: The Petitioner, Tom Barrs, was deemed the prevailing party as to Issue 2 and Issue 3.
• Monetary Award: The Respondent, Desert Ranch HOA, was ordered to pay the Petitioner his filing fee of $1,000.00.
• Civil Penalty: The judge determined that “No Civil Penalty is found to be appropriate in this matter.”
• Finality: The decision after rehearing was binding on the parties, with any further appeal requiring judicial review in the superior court.
Study Guide – 18F-H1818035-REL-RHG
Study Guide:Barrs v. Desert Ranch HOA
This guide provides a detailed review of the administrative case Tom Barrs v. Desert Ranch HOA, based on the Administrative Law Judge Decisions issued on August 23, 2018, and December 26, 2018.
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Quiz: Short-Answer Questions
Instructions: Answer the following questions in two to three complete sentences, using only information provided in the case documents.
1. Who were the primary parties involved in this case, and what were their roles?
2. What were the initially announced results of the Desert Ranch HOA Board of Directors election on March 18, 2017?
3. What were the two primary procedural violations that the Desert Ranch HOA Board committed following the March 18, 2017 election?
4. What was the Petitioner’s central argument regarding the violation of Desert Ranch Bylaw 2.4?
5. On what grounds did the Administrative Law Judge (ALJ) dismiss the Petitioner’s claim regarding Bylaw 2.4?
6. Explain the violation related to Arizona Revised Statute (A.R.S.) § 33-1812(A)(7) that the ALJ found the Respondent had committed.
7. Describe the violation of A.R.S. § 33-1804 concerning open meetings.
8. What was the final order from the initial hearing on August 23, 2018?
9. What was the specific focus of the rehearing held on December 6, 2018?
10. What was the ultimate outcome of the rehearing, and what legal recourse was available to the parties afterward?
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Answer Key
1. The primary parties were Petitioner Tom Barrs, who filed the dispute, and Respondent Desert Ranch HOA. The HOA was represented by its President, Catherine Overby, and Vice President, Brian Schoeffler. The case was heard by Administrative Law Judge Tammy L. Eigenheer.
2. At the Annual Board Meeting on March 18, 2017, the ballots were counted and Catherine Overby and Jerome Klinger were announced as the winning candidates for the two vacant seats on the Board of Directors. No members present raised an objection before the meeting was adjourned.
3. The HOA Board committed two primary procedural violations. First, they destroyed the ballot envelopes at or around the time of the election, and second, certain Board members met with an attorney without providing notice to the association members that a meeting was being held or that it would be a closed session.
4. The Petitioner argued that candidate Brian Schoeffler’s challenge to the election was invalid because it was raised the day after the meeting adjourned. According to Bylaw 2.4, any “Member” who fails to object to an irregularity at the meeting waives their claim, and the Petitioner argued this rule should also apply to Board members.
5. The ALJ dismissed the claim because the investigation was initiated by Board member Patrick Rice, who expressed concerns immediately after the meeting, not by Mr. Schoeffler’s later email. The judge also determined that throughout the bylaws, the terms “Member,” “Directors,” and “Board of Directors” were used with specific, non-interchangeable meanings, and the Petitioner failed to show that a Director was barred from raising concerns after a meeting.
6. The ALJ found that the Respondent violated A.R.S. § 33-1812(A)(7) based on uncontroverted evidence presented at the hearing. This statute requires that ballots, envelopes, and related election materials be retained for at least one year after an election, but the HOA discarded the ballot envelopes around the time of the election.
7. The Respondent violated A.R.S. § 33-1804 when certain Board members met with an attorney at Ms. Overby’s house on March 29, 2017. The HOA failed to provide any notice of this meeting to the members and did not announce that the meeting would be closed to discuss legal advice, as required by the statute.
8. In the initial order, the ALJ dismissed the petition as to Issue 1 (the Bylaw 2.4 violation) but found the Petitioner to be the prevailing party on Issues 2 and 3 (the statutory violations). The judge ordered the Respondent HOA to pay the Petitioner his filing fee of $1,000.00 but found that no civil penalty was appropriate.
9. The rehearing focused exclusively on the first issue from the initial hearing: whether the Respondent violated Bylaw 2.4 when it acted on objections to the election results after the Annual Meeting had adjourned. The Petitioner did not seek reconsideration of the lack of penalties for the other two violations.
10. The rehearing upheld the original decision, dismissing the petition as to Issue 1. The decision from the rehearing was final and binding, and any party wishing to appeal the order was required to seek judicial review in the superior court within thirty-five days.
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Essay Questions
Instructions: The following questions are designed to encourage deeper analysis of the case. Formulate a comprehensive response to each, drawing upon specific facts and legal arguments presented in the source documents.
1. Analyze the Administrative Law Judge’s interpretation of Desert Ranch Bylaw 2.4, specifically the distinction between a “Member” and a “Director.” Discuss the strength of the Petitioner’s counter-argument and why the judge’s reasoning ultimately prevailed.
2. Examine the series of actions taken by the Desert Ranch HOA Board of Directors following the March 18, 2017 election announcement. Evaluate whether their actions to investigate irregularities, consult an attorney, and hold a run-off election were ultimately justified, despite the procedural violations they committed.
3. Discuss the concept of “preponderance of the evidence” as the burden of proof in this case. For each of the three issues presented, explain how the Petitioner either met or failed to meet this standard, citing specific evidence mentioned in the decisions.
4. Based on the events described, from the initial election to the final administrative ruling, critique the effectiveness of the HOA’s internal governance and dispute resolution processes. What systemic failures are evident, and how did they lead to a formal administrative hearing?
5. Although the Petitioner was the “prevailing party” on two of the three issues, the remedy was limited to a refund of his filing fee, with no civil penalty imposed. Argue for or against the appropriateness of this remedy, considering the nature of the HOA’s violations and their impact on the integrity of the election process.
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Glossary of Key Terms
Term / Statute
Definition
Administrative Law Judge (ALJ)
The official who presides over the administrative hearing at the Office of Administrative Hearings and issues a decision based on evidence and law. In this case, Tammy L. Eigenheer.
A.R.S. § 33-1804
An Arizona Revised Statute requiring that all meetings of a homeowners’ association and its board of directors be open to all members. A meeting may only be closed for specific reasons, such as receiving legal advice, and the board must state the statutory reason for closing the meeting.
A.R.S. § 33-1812(A)(7)
An Arizona Revised Statute that mandates the retention of election materials, including ballots and envelopes, in either electronic or paper format for at least one year after the completion of an election for member inspection.
A.R.S. § 41-2198.01
An Arizona statute that permits an owner or a planned community organization to file a petition with the Department of Real Estate for a hearing concerning violations of community documents or statutes.
Burden of Proof
The obligation of a party in a trial to produce the evidence that will prove the claims they have made against the other party. In this case, the Petitioner bore the burden of proof.
Desert Ranch Bylaw 2.4
A provision in the HOA’s bylaws stating, “Any Member who fails to object to any perceived or actual irregularity at the meeting… forever waives that claim.”
Homeowners Association (HOA) Dispute Process Petition
The formal document filed with the Arizona Department of Real Estate by a homeowner to initiate a legal proceeding against their HOA for alleged violations.
Petitioner
The party who files a petition initiating a legal action. In this case, Tom Barrs.
Preponderance of the evidence
The standard of proof in this administrative hearing. It is defined as evidence that convinces the trier of fact that a contention is “more probably true than not,” representing the greater weight of the evidence.
Rehearing
A second hearing of a case to consider a decision that has already been made, typically granted if there are perceived errors of law, misconduct, or if the decision was not supported by the evidence.
Respondent
The party against whom a petition is filed. In this case, the Desert Ranch HOA.
Blog Post – 18F-H1818035-REL-RHG
A Homeowner Sued His HOA Over a Botched Election—Here Are 3 Lessons Every Board Should Learn
Friction between homeowners and their Homeowners Association (HOA) board is a common feature of community living, and nowhere is that friction more apparent than in disputes over elections and rule enforcement. But what happens when a board, trying to correct an error, makes the situation exponentially worse?
This article is a deep dive into the real administrative law case of Barrs v. Desert Ranch HOA, a seemingly straightforward dispute that reveals surprising and practical lessons for anyone living in or governing a planned community. It’s a story of a cascade of errors, where initial election confusion led to a panicked and procedurally flawed response, compounded by a pre-existing failure in record-keeping. As we’ll see, the outcome wasn’t what anyone expected, and the board’s biggest mistakes weren’t the ones they thought they were fighting.
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1. You Can Lose the Main Argument But Still Win the Case
The dispute began at the Desert Ranch HOA’s annual meeting, where election results were announced. The trouble started immediately after the meeting adjourned when a board Director, Patrick Rice, gathered the ballots and expressed concerns about irregularities. A day later, a losing candidate, Brian Schoeffler, echoed those concerns via email. Citing the Director’s objection, the board overturned the initial results, prompting homeowner Tom Barrs to file a petition arguing this was a violation of the HOA’s own rules.
Barrs’ case hinged on Bylaw 2.4, which stated that any “Member” must object to irregularities during the meeting itself, or else they waive their right to complain. Barrs argued that since no one objected before adjournment, the results should stand. However, the judge disagreed, pointing to two critical distinctions in the evidence. First, the investigation was triggered by the concerns of a “Director,” not the losing candidate’s later email. Second, a close reading of the bylaws showed that the terms “Member” and “Director” were used as distinct categories and were not interchangeable. Since the bylaw only restricted “Members,” it did not prevent a Director from raising concerns after the meeting. Barrs lost his primary argument.
Despite this, in a counter-intuitive twist, the judge declared Barrs the “prevailing party” in the overall case and ordered the HOA to repay his $1,000 filing fee. Why? Because while investigating the petitioner’s main claim, the judge found the board had committed other clear violations of state law while trying to “fix” the election. This outcome underscores a critical principle for all boards: procedural integrity is paramount. The HOA won the battle over its right to review the election but lost the war because of its flawed process.
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2. Your Records (or Lack Thereof) Will Be Your Downfall
One of the board’s most significant errors was a simple but critical failure of administrative duty: they destroyed election materials in direct violation of state law. The HOA was found to have violated A.R.S. § 33-1812(A)(7), which is unambiguous about an HOA’s responsibility.
According to A.R.S. § 33-1812(A)(7), “Ballots, envelopes and related materials…shall be retained…for at least one year after completion of the election.”
The legal decision states the evidence was “uncontroverted” that the HOA discarded the ballot envelopes around the time of the election. Because the HOA could not dispute this fact, it was an easy violation for the petitioner to prove.
This wasn’t just a minor administrative oversight; it was a catastrophic error. By destroying the envelopes, the board not only violated the law but also eliminated any possibility of independently verifying the vote count after their own director discovered irregularities. This single failure trapped them in a procedural corner of their own making. It made a definitive resolution of the election challenge impossible, leading to the messy and expensive situation of declaring a tie and holding a run-off, all of which could have been avoided if the primary evidence had been preserved as required by law.
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3. “Private” Board Business Can Be an Illegal Secret Meeting
In an attempt to resolve the election dispute correctly, the board took what it likely considered a responsible step: seeking legal advice. After the election was contested, certain board members met with an attorney at a board member’s house to figure out how to proceed. However, the way they did it constituted another clear violation of state law.
This private meeting violated Arizona’s open meeting law, A.R.S. § 33-1804. While the statute does allow a board to enter a closed session to receive legal advice, it has strict procedural requirements. The board must first provide notice of the meeting to all members and then, at that public meeting, officially vote to enter the closed session for that specific, legally permissible reason. The evidence was “uncontroverted” that the board failed to provide any notice of this meeting to the association members.
The board’s desire for confidential legal advice was understandable, but their method created an unforced legal error. The correct procedure—notifying members of a meeting and then voting to enter a closed session—protects the board by demonstrating procedural propriety. The shortcut they took exposed them to a clear-cut violation that was impossible to defend. For an HOA board, transparency is the default, and secrecy is a narrow, legally defined exception. The process of going private matters as much as the reason for doing so.
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Conclusion: It’s Not Just What You Do, It’s How You Do It
The Desert Ranch HOA board, in its attempt to correct a perceived election error, committed two clear statutory violations. In their haste, they held an illegal secret meeting and were hamstrung by their prior failure to properly retain election records—the very evidence needed for a clean resolution. These procedural missteps ultimately cost them the case.
The ultimate lesson from Barrs v. Desert Ranch HOA is that for any governing body, procedural correctness is just as important as substantive correctness. This case serves as a stark reminder that good intentions are no defense against procedural law. When a crisis hits, does your board have the discipline to follow procedure, or will the rush to find a solution lead you to commit unforced errors that are far worse than the original problem?
Case Participants
Petitioner Side
Tom Barrs(petitioner) Appeared on his own behalf
Stephen Barrs(witness) Testified for Petitioner
Respondent Side
Catherine Overby(board president, witness) Desert Ranch HOA Appeared on behalf of Respondent
Brian Schoeffler(board vice president, witness) Desert Ranch HOA Appeared on behalf of Respondent
Patrick Rice(board member) Desert Ranch HOA Board member who expressed concerns with election results
Neutral Parties
Tammy L. Eigenheer(ALJ) OAH
Judy Lowe(Commissioner) Arizona Department of Real Estate
Other Participants
Jerome Klinger(board member) Desert Ranch HOA Director elected in disputed election
