Blue Ridge Estates of Coconino County Homeowners' Association
Counsel
Paul K. Frame, Esq.
Alleged Violations
CC&Rs § 3.1(a)
Outcome Summary
The Administrative Law Judge denied the homeowner's petition in its entirety, finding the homeowner failed to meet the burden of proof to show the HOA violated CC&R § 3.1(a) when denying the construction of a cedar patio structure.
Why this result: Petitioner failed to establish that the HOA violated CC&R 3.1(a). The proposed structure was found to be a second detached structure and/or a temporary structure barred by the community documents, and the Petitioner had previously failed to submit sufficient information for an attached structure proposal.
Key Issues & Findings
Alleged violation of CC&Rs § 3.1(a) by denying request for patio structure while allowing another member to erect a Tuff Shed.
Petitioner alleged the HOA improperly denied his request for a detached cedar patio structure (150 sq ft) based on CC&R § 3.1(A) which limits properties to one detached structure (Petitioner already had a tool shed). The ALJ found Petitioner failed to establish the violation, concluding the proposed structure was a second barred detached structure or a temporary structure (as concrete pavers were not equivalent to a required cement/block foundation). Petitioner also failed to provide sufficient architectural details for an attached structure request.
Blue Ridge Estates of Coconino County Homeowners' Association
Counsel
Paul K. Frame, Esq.
Alleged Violations
CC&Rs § 3.1(a)
Outcome Summary
The Administrative Law Judge denied the homeowner's petition in its entirety, finding the homeowner failed to meet the burden of proof to show the HOA violated CC&R § 3.1(a) when denying the construction of a cedar patio structure.
Why this result: Petitioner failed to establish that the HOA violated CC&R 3.1(a). The proposed structure was found to be a second detached structure and/or a temporary structure barred by the community documents, and the Petitioner had previously failed to submit sufficient information for an attached structure proposal.
Key Issues & Findings
Alleged violation of CC&Rs § 3.1(a) by denying request for patio structure while allowing another member to erect a Tuff Shed.
Petitioner alleged the HOA improperly denied his request for a detached cedar patio structure (150 sq ft) based on CC&R § 3.1(A) which limits properties to one detached structure (Petitioner already had a tool shed). The ALJ found Petitioner failed to establish the violation, concluding the proposed structure was a second barred detached structure or a temporary structure (as concrete pavers were not equivalent to a required cement/block foundation). Petitioner also failed to provide sufficient architectural details for an attached structure request.
Briefing Document: Mandela v. Blue Ridge Estates HOA
Executive Summary
This document synthesizes the findings and conclusions from two administrative law hearings concerning a dispute between homeowner Charles P. Mandela and the Blue Ridge Estates Homeowners Association of Coconino County (“Blue Ridge”). The core of the dispute was Blue Ridge’s repeated denial of Mr. Mandela’s requests to construct a 150-square-foot cedar patio structure on his property.
The Administrative Law Judge (ALJ) ultimately denied Mr. Mandela’s petition in both an initial hearing and a subsequent rehearing, finding that the homeowner failed to meet the burden of proof to establish any violation of the association’s governing documents. The ALJ’s decisions affirmed that Blue Ridge acted within its authority and correctly applied its Covenants, Conditions, and Restrictions (CC&Rs) and architectural regulations.
Key takeaways from the rulings include:
• Violation of Detached Structure Limit: Mr. Mandela’s request for a detached patio was denied because he already had a tool shed, and the HOA rules explicitly permit only one detached structure per property.
• Improper “Play Structure” Request: An initial request framing the patio as a “play structure” was correctly denied as its proposed 150 sq. ft. size exceeded the 80 sq. ft. limit for certain play structures.
• Insufficient Plans for Attached Structure: A separate request to attach the structure to his home was denied due to Mr. Mandela’s failure to provide the required detailed architectural plans and construction drawings, which the HOA deemed necessary for approval.
• Arguments Found Lacking: Mr. Mandela’s arguments—including claims of selective enforcement, discrimination against homeowners without children, and misinterpretation of the term “temporary structure”—were found to be unsubstantiated by evidence. The ALJ concluded the structure would be a prohibited temporary structure as the proposed concrete pavers do not constitute a permanent foundation under the HOA’s definition.
Case Overview
Parties Involved
Description
Petitioner
Charles P. Mandela
A homeowner and member of the Blue Ridge Estates HOA.
Respondent
Blue Ridge Estates Homeowners Association of Coconino County
The governing homeowners’ association for the Blue Ridge Estates development.
Adjudicator
Velva Moses-Thompson
Administrative Law Judge, Office of Administrative Hearings.
Timeline of Key Events
c. Feb 1, 2018
Mr. Mandela submits his first request for a 150 sq. ft. patio, using a “Play Structure Approval Request” form. Blue Ridge denies it for exceeding the size limit.
c. Mar 2, 2018
Mr. Mandela submits a second request, this time to attach a cedar patio shade to his home. Blue Ridge requests detailed plans and materials.
c. Mar 8, 2018
Blue Ridge denies the request for an attached structure due to “incomplete information,” instructing Mr. Mandela to provide formal drawings as per CC&R guidelines.
c. Mar 23, 2018
Mr. Mandela files an internal appeal with Blue Ridge, which is subsequently denied for the same reason of incomplete construction information.
Post-Mar 23, 2018
Mr. Mandela submits a third request for a detached 150 sq. ft. cedar patio structure. Blue Ridge denies it because he already has a detached tool shed.
c. Jul 31, 2018
Mr. Mandela files a petition with the Arizona Department of Real Estate, alleging Blue Ridge violated CC&R § 3.1(a) by denying his request while allowing another member a Tuff Shed.
Oct 17, 2018
An evidentiary hearing is held before the Office of Administrative Hearings.
Nov 6, 2018
The ALJ issues the initial decision, denying Mr. Mandela’s petition.
Dec 12, 2018
The Arizona Department of Real Estate orders a rehearing of the matter.
Feb 8, 2019
The rehearing is held before the same ALJ.
Feb 28, 2019
The ALJ issues the final decision, again finding in favor of Blue Ridge and denying Mr. Mandela’s petition.
Analysis of Construction Requests and Denials
Mr. Mandela made three distinct applications to the Blue Ridge Architectural Committee for his proposed 150 sq. ft. cedar patio structure, each of which was denied for different reasons based on the HOA’s governing documents.
Request 1: Detached “Play Structure”
Mr. Mandela’s initial application on February 1, 2018, was submitted using a “Play Structure Approval Request” form.
• HOA Rule: The form, based on modified Rules and Regulations from April 6, 2016, states: “Cannot exceed 80 SF if it’s a Tree House, Tree Viewing Stand, Play House/Fort.”
• Denial Rationale: Blue Ridge denied the request because the proposed 150 sq. ft. size of the structure exceeded the 80 sq. ft. limit specified for this type of structure.
Request 2: Attached Cedar Patio Shade
On March 2, 2018, Mr. Mandela submitted a new request to attach the structure to his home.
• HOA Action: The committee chairman, John Hart, requested documents showing the structure would not be free-standing, such as plans and material specifications.
• Mandela’s Response: In a March 3 email, Mr. Mandela stated: “I am building this myself. I am not an Architect, I have not software to show (6) 2 by 4”s to attach from the single family roof lie to the roof lien of the same roof.” He asserted that photos of other attached structures were sufficient.
• Denial Rationale: The request was denied on March 8 due to “incomplete information.” The denial letter explicitly instructed Mr. Mandela to submit all required documents, including drawings that “match exactly what you are going to build,” per CC&R Section 10.3. His subsequent appeal was also denied, with Blue Ridge noting that a manufacturer’s representative stated they would not warranty the product if the design was altered and reiterating the need for detailed elevation drawings.
Request 3: Detached Cedar Patio Structure
Following the denial of his appeal, Mr. Mandela submitted a third request for a detached version of the patio.
• HOA Rule: According to CC&R § 3.1(A) and Architectural Committee Aligned Standard 3(D), “One detached structure may… be constructed on a property.”
• Denial Rationale: Blue Ridge denied this request because Mr. Mandela already had one detached structure—a tool shed—on his property. The rules permit only one such structure.
Key Arguments and Rulings from Administrative Hearings
At the initial hearing and subsequent rehearing, both parties presented arguments regarding the application of the HOA’s rules. The ALJ systematically addressed and ruled on each point, ultimately concluding that the petitioner failed to prove his case.
Petitioner’s Core Arguments (Charles P. Mandela)
• Definition of “Detached Structure”: He argued that his proposed patio was not a “detached structure” under the CC&Rs because, based on his misinterpretation of a prior administrative ruling, a detached structure is one that can be easily converted into a second residence.
• Selective Enforcement: He alleged that Blue Ridge approved a “Tuff Shed” for another member and was not enforcing the 80 sq. ft. play structure size limit against other homeowners, thus discriminating against him.
• Discriminatory Rules: He contended that the rule allowing a second detached structure if it is a “play structure” violates CC&R 3.1 because it discriminates against people without children. He stated he wanted the patio for his mother.
• Definition of “Temporary Structure”: He asserted the structure was not a prohibited temporary structure because he planned to use concrete pavers, which he claimed constituted a “cement foundation” under the rules, and the materials had a 5-year warranty.
• One Detached Structure Rule: The rules unambiguously limit homeowners to one detached structure, and Mr. Mandela already had one.
• Incomplete Submissions: The request for an attached structure lacked the necessary architectural details to ensure it was properly and safely constructed, as required by the CC&Rs. Joseph Hancock, Vice President of Blue Ridge and a former contractor, testified that Mr. Mandela failed to consider critical factors like height and width differentials.
• Temporary Structure Violation: Mr. Hancock testified that a concrete paver is not the equivalent of a “cement or slab foundation.” Therefore, the proposed structure would be a prohibited temporary structure under the CC&Rs.
• No Selective Enforcement: Mr. Hancock refuted Mr. Mandela’s claims of selective enforcement, testifying that the lots Mr. Mandela cited either had structures built before 2003 (predating certain rules) or had no detached structures at all.
Administrative Law Judge’s Final Conclusions
The ALJ found that Mr. Mandela failed to establish his claims by a preponderance of the evidence. The final order denied his petition based on the following conclusions of law:
• Burden of Proof: The petitioner did not meet his burden to prove that Blue Ridge violated CC&R Article III, Section 3.1(a).
• Second Detached Structure: It was undisputed that Mr. Mandela had a shed on his property. The proposed 150 sq. ft. patio therefore constituted a barred second detached structure.
• Prior Rulings Not Precedent: The ALJ noted that Mr. Mandela misinterpreted the prior administrative decision he cited and, furthermore, that “prior administrative law judge decisions are not precedent or binding on future administrative law decisions.”
• Temporary Structure: The preponderance of the evidence showed the proposed structure is a temporary structure under the CC&Rs because “concrete pavers are not the equivalent of cement or block foundation.”
• Denial of Attached Structure: The denial of the request to attach the structure was proper, as the “Petitioner failed to provide sufficient details to illustrate how he would attach the cedar patio structure to his home.”
• No Evidence of Discrimination: The petitioner failed to establish that Blue Ridge approved other oversized play structures or that the denial of his requests was discriminatory. The ALJ also noted the tribunal lacked jurisdiction over potential constitutional claims under the Fourteenth Amendment.
Relevant HOA Governing Documents
Document/Section
Key Provision / Definition
CC&R § 3.1
Permitted Uses and Restrictions – Single Family: “No building or structure shall be erected or maintained separate from the Single Family Residence located on any Lot, other than a garage…”
Architectural Committee Aligned Standard 3(D)
Detached Structures: “One detached structure may, with Architectural Committee approval, be constructed on a property.”
CC&R § 3.6 & Aligned Standard
Temporary Structures: Prohibits temporary structures. A temporary structure is defined as one “without a cement or block foundation to which the structure or building is permanently attached.”
Modified Rules and Regulations (April 6, 2016)
Play Structures: Allows up to two play structures but specifies they “Cannot exceed 80 SF if it’s a Tree House, Tree Viewing Stand, Play House/Fort.”
CC&R § 3.24
Architectural Approval: “No building, fence, wall, screen, residence or other structure shall be commenced, erected, maintained, improved or altered… without the prior written approval of the… Architectural Committee.”
CC&R § 10.3
Architectural Submission Guidelines: Specifies the format and information required for submittals to the architectural committee.
CC&R § 12.2
Declaration Amendments: Requires an affirmative vote or written consent of members owning at least 75% of all lots to amend the Declaration.
Study Guide – 19F-H1918006-REL
Study Guide: Mandela v. Blue Ridge Estates HOA
This study guide provides a comprehensive review of the administrative legal dispute between petitioner Charles P. Mandela and respondent Blue Ridge Estates Homeowners Association of Coconino County. The case revolves around Mr. Mandela’s multiple attempts to gain approval for a patio structure on his property and the subsequent legal proceedings. The material is drawn from two Administrative Law Judge Decisions, dated November 6, 2018, and February 28, 2019.
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Instructions: Answer the following questions in 2-3 complete sentences, drawing your information directly from the provided case documents.
1. What were the three distinct requests Mr. Mandela submitted to the Blue Ridge Estates HOA, and what was the outcome of each?
2. Explain the HOA’s rule regarding detached structures and why Mr. Mandela’s third request for a detached patio was denied under this rule.
3. On what grounds did the HOA deny Mr. Mandela’s second request to attach a cedar patio shade to his home?
4. What was Mr. Mandela’s primary allegation in his initial petition filed with the Department of Real Estate on July 31, 2018?
5. How do the Blue Ridge rules define a “temporary structure,” and why did the Administrative Law Judge conclude Mr. Mandela’s proposed patio fell into this category?
6. Describe Mr. Mandela’s discrimination argument regarding the HOA’s policy on play structures.
7. What is the legal standard of proof the petitioner was required to meet in this case, and what does this standard mean?
8. Mr. Mandela cited a prior administrative law judge decision to support his case. What was his interpretation of that decision, and how did the presiding judge respond to this line of argument?
9. Who is Joseph Hancock, and what key pieces of testimony did he provide on behalf of the HOA during the rehearing?
10. According to the CC&Rs, what is the procedural difference between amending the Declaration (the CC&Rs themselves) versus adopting new “Rules and Regulations”?
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Answer Key
1. Mr. Mandela first submitted a “Play Structure Approval Request” for a 150-square-foot patio, which was denied for exceeding the 80-square-foot size limit for such structures. His second request was to attach a cedar patio shade to his home, which was denied due to incomplete information and a lack of adequate plans. His third request was for a detached 150-square-foot patio structure, which was denied because he already had another detached structure on his property.
2. According to CC&Rs § 3.1(A) and Architectural Committee regulation 3(D), a property is permitted to have only one detached structure. Mr. Mandela’s third request was denied because it was undisputed that he already had a tool shed on his property. The proposed detached patio would have constituted a prohibited second detached structure.
3. The HOA denied the request to attach the patio shade because Mr. Mandela submitted incomplete information and failed to provide sufficient plans. The HOA requested detailed elevation drawings showing construction methods, dimensions, foundation details, and attachment methods, which Mr. Mandela did not provide.
4. In his petition of July 31, 2018, Mr. Mandela alleged that the Blue Ridge HOA had violated CC&Rs § 3.1(a). His specific claim was that the HOA discriminated against him by denying his request to place a patio structure in his backyard while allowing another member to erect a Tuff Shed.
5. The Architectural Committee rules define a temporary structure as one “without a cement or block foundation to which the structure or building is permanently attached.” The judge concluded the proposed patio was a temporary structure because Mr. Mandela planned to use concrete pavers, which, according to the credible testimony of Joseph Hancock, are not the equivalent of a permanent cement or block foundation.
6. Mr. Mandela argued that the modified rule allowing a second detached play structure (up to 80 sq ft) violates CC&R 3.1 because it discriminates against people who do not have children. He asserted the policy was unfair because he wanted to build the structure for his mother to rest outside, not for children’s play.
7. The petitioner, Mr. Mandela, had the burden of proof to establish his claim by a “preponderance of the evidence.” This standard is defined as evidence that has the most convincing force and is sufficient to incline a fair and impartial mind to one side of an issue rather than the other, meaning the contention is more probably true than not.
8. Mr. Mandela argued that a prior administrative law judge decision had found that a “detached structure” under Blue Ridge CC&Rs is a structure that can be easily converted into a second residence, which his patio could not. The presiding judge dismissed this by stating that Mr. Mandela misinterpreted the prior ruling and, more importantly, that prior administrative law judge decisions are not binding precedent for future decisions.
9. Joseph Hancock is the Vice President of the Blue Ridge HOA and a former general, electrical, and HVAC contractor. He testified that concrete pavers are not equivalent to a cement or block foundation, that Mr. Mandela’s plans for attaching the structure were insufficient, and that he had investigated lots Mr. Mandela cited for alleged violations and found none.
10. According to the CC&Rs, adopting, amending, or repealing “Rules and Regulations” can be done by a majority vote of the Board (§ 4.2). In contrast, amending the Declaration of CC&Rs themselves is a much more stringent process, requiring the affirmative vote or written consent of members owning at least seventy-five percent (75%) of all lots (§ 12.2).
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Essay Questions
Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate your answers in a standard essay format, using specific evidence from the source documents to support your arguments.
1. Analyze the progression of Mr. Mandela’s three distinct requests to the HOA. How did the denial of his first request (as a “Play Structure”) appear to influence his subsequent applications and legal arguments?
2. Discuss the concept of “burden of proof” as it applies in this case. Explain why Mr. Mandela ultimately failed to convince the Administrative Law Judge that the HOA violated its own rules, citing specific examples of his failed arguments (e.g., the temporary structure definition, claims of selective enforcement, and the adequacy of his submitted plans).
3. Examine the distinction made in the Blue Ridge Estates governing documents between the core CC&Rs and the “Rules and Regulations” adopted by the Board. How did this distinction allow the HOA to have a rule permitting a second “play structure” while the main CC&Rs seem to limit properties to a single residence and one other detached structure (a garage)?
4. The HOA denied Mr. Mandela’s request for an attached structure due to “incomplete information.” Based on the evidence presented in the decisions, evaluate the reasonableness of the HOA’s request for detailed plans versus Mr. Mandela’s assertion that he had provided sufficient information for approval.
5. Trace Mr. Mandela’s various claims of unfair treatment, including selective enforcement (the Tuff Shed), discrimination (the play structure rule), and his interpretation of key terms like “detached structure.” For each claim, explain the HOA’s counter-position or the Administrative Law Judge’s final conclusion.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An independent judge who presides over administrative hearings for state agencies, such as the one between Mr. Mandela and the HOA. In this case, the ALJ was Velva Moses-Thompson.
Architectural Committee
A committee within the HOA granted authority by CC&R § 10.2 to approve or deny proposed construction and promulgate regulations aligned with the CC&Rs. It denied all of Mr. Mandela’s requests.
Burden of Proof
The legal obligation of a party in a dispute to provide sufficient evidence to prove their claim. In this case, the petitioner (Mr. Mandela) bore the burden of proof.
Covenants, Conditions, and Restrictions. These are the primary governing documents for the Blue Ridge Estates community, outlining land use, permitted structures, and rules members must follow.
Detached Structure
A building or structure on a property that is separate from the main single-family residence. According to Architectural Committee regulation 3(D), only one such structure is permitted per lot.
Petitioner
The party who files a petition initiating a legal action. In this case, Charles P. Mandela is the petitioner.
Play Structure
A structure defined by the HOA’s modified rules to include items like Swing Sets, Jungle Gyms, Tree Houses, and Ground Placed Play Houses/Forts. Play Houses/Forts and Tree Houses are limited to 80 square feet.
Preponderance of the Evidence
The standard of proof required in this case. It is defined as “proof as convinces the trier of fact that the contention is more probably true than not,” representing the greater weight of the evidence.
Respondent
The party against whom a petition is filed. In this case, the Blue Ridge Estates Homeowners Association is the respondent.
Rules and Regulations
Rules that can be adopted, amended, or repealed by a majority vote of the HOA Board, as distinct from the CC&Rs which require a 75% vote of all lot owners to amend. The “Play Structure” rules are an example.
Temporary Structure
As defined by the Architectural Committee regulations, a structure “without a cement or block foundation to which the structure or building is permanently attached.” Such structures are prohibited by CC&R § 3.6.
Blog Post – 19F-H1918006-REL
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19F-H1918006-REL-RHG
2 sources
These sources document two decisions from the Office of Administrative Hearings concerning a dispute between Charles P. Mandela and the Blue Ridge Estates Homeowners Association (HOA). The first document presents the initial Administrative Law Judge (ALJ) Decision which denied Mr. Mandela’s petition, finding he failed to prove the HOA violated its governing documents by denying his request to build a patio structure. The second document is the ALJ Decision following a rehearing, which reaffirms the initial denial, concluding that Mr. Mandela’s proposed structure was either a prohibited second detached structure or a temporary structure lacking a proper foundation, and that he failed to provide sufficient plans for an attached structure. Both sources establish that Mr. Mandela did not meet his burden of proof to show the HOA discriminated against him or otherwise violated the Covenants, Conditions, and Restrictions (CC&Rs).
What were the specific reasons the HOA denied Charles Mandela’s requests?
How did the HOA Covenants, Conditions, and Restrictions govern detached structures?
What was the ultimate outcome of Charles Mandela’s petition and subsequent rehearing?
Based on 2 sources
Case Participants
Petitioner Side
Charles P. Mandela(petitioner)
Respondent Side
Paul Frame(HOA attorney) FRAME LAW PLLC
John Hart(HOA Chairman) Blue Ridge Estates Homeowners Association Reviewed petitioner's requests
Joseph Hancock(HOA Vice President, witness) Blue Ridge Estates Homeowners Association Presented testimony
Neutral Parties
Velva Moses-Thompson(ALJ) OAH
Judy Lowe(ADRE Commissioner) Arizona Department of Real Estate Recipient of transmitted decision
Other Participants
Felicia Del Sol(administrative staff) Transmitted decision electronically
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
18F-H1818045-REL
Agency
ADRE
Tribunal
OAH
Decision Date
2018-10-18
Administrative Law Judge
Thomas Shedden
Outcome
partial
Filing Fees Refunded
$500.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Warren R. Brown
Counsel
—
Respondent
Mogollon Airpark, Inc.
Counsel
Gregory A. Stein, Esq.; Mark K. Sahl, Esq.
Alleged Violations
ARIZ. REV. STAT. section 33-1803(A)
Outcome Summary
The matter was consolidated with two other petitions concerning assessment increases (18F-H1818029-REL-RHG and 18F-H1818054-REL). The ALJ dismissed the claims regarding the $325 assessment increase (029 and 054 matters) against the HOA. However, Petitioner Brown prevailed in the 045 matter, proving the HOA violated ARIZ. REV. STAT. section 33-1803(A) by charging a $25 late fee, resulting in an order for rescission of the fee and refund of his $500 filing fee.
Why this result: Petitioner Brown (029 matter) and Petitioner Stevens (054 matter) lost their claims regarding the $325 assessment increase because they failed to show by a preponderance of the evidence that Mogollon violated section 33-1803(A). The ALJ determined that the petitioners' definition of 'regular assessment' as referring to process (motion, second, vote) was not supported by principles of statutory construction.
Key Issues & Findings
Late payment charges limitation
Petitioner Brown alleged that the HOA violated ARS § 33-1803 by charging a late fee of $25 and interest of 18% on late payments, asserting the statute limits late charges to the greater of $15.00 or 10%. The ALJ agreed, concluding the statute's limit on late charges applies to all assessments, not just regular assessments, and found the $25 late charge violated the statute.
Orders: Mogollon Airpark Inc. must rescind the $25 late fee assessed against Mr. Brown and must pay him his filing fee of $500.00 within thirty days of the Order.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
Cited:
ARIZ. REV. STAT. section 33-1803(A)
Video Overview
Audio Overview
Decision Documents
18F-H1818029-REL-RHG Decision – 666285.pdf
Uploaded 2025-10-09T03:32:33 (151.9 KB)
18F-H1818029-REL-RHG Decision – 672623.pdf
Uploaded 2025-10-09T03:32:33 (144.6 KB)
Briefing Doc – 18F-H1818029-REL-RHG
Briefing Document: Brown and Stevens v. Mogollon Airpark, Inc.
Executive Summary
This document synthesizes the findings and conclusions of an Administrative Law Judge (ALJ) decision concerning three consolidated petitions filed by residents Warren R. Brown and Brad W. Stevens against their homeowners’ association, Mogollon Airpark, Inc. The core of the dispute revolves around a significant 2018 assessment increase and the legality of associated late fees under Arizona statute.
The central legal question was the interpretation of ARIZ. REV. STAT. section 33-1803(A), which limits an HOA’s ability to “impose a regular assessment that is more than twenty percent greater than the immediately preceding fiscal year’s assessment.” The petitioners argued that the HOA’s total 39.4% increase violated this cap. The HOA contended the increase was comprised of a compliant “regular assessment” and a separate “special assessment” not subject to the cap.
The ALJ’s decision resulted in a split outcome:
• On the Assessment Increase: The judge ruled in favor of Mogollon Airpark, Inc. The petitions challenging the assessment increase were dismissed. The ALJ’s rationale was that statutory construction requires distinguishing between “regular” and “special” assessments, and the 20% cap applies only to the former.
• On the Late Fees: The judge ruled in favor of Petitioner Warren R. Brown. The HOA’s $25 late fee was found to be in violation of the statutory limit, which applies to “assessments” in general, not just “regular assessments.” The HOA was ordered to rescind the fee and reimburse the petitioner’s filing costs.
Underlying these specific legal challenges were broader allegations by the petitioners of deceptive accounting practices and financial mismanagement by the HOA’s treasurer, which they claimed were intended to create a false justification for the assessment increase. These allegations were noted but not adjudicated in this hearing.
I. Case Overview
The matter concerns a consolidated hearing held on September 28, 2018, at the Office of Administrative Hearings in Phoenix, Arizona. Administrative Law Judge Thomas Shedden presided over the case, which combined three separate petitions against the respondent, Mogollon Airpark, Inc.
• Petitioners: Warren R. Brown and Brad W. Stevens.
• Respondent: Mogollon Airpark, Inc.
• Docket Numbers:
◦ 18F-H1818029-REL-RHG (“029 matter”): Warren R. Brown, Petitioner
◦ 18F-H1818045-REL (“045 matter”): Warren R. Brown, Petitioner
◦ 18F-H1818054-REL (“054 matter”): Brad W. Stevens, Petitioner
II. Central Disputes and Allegations
A. The 2018 Assessment Increase (Matters 029 & 054)
The primary dispute centered on Mogollon Airpark’s 2018 assessment changes.
• Previous Assessment (2017): $825
• 2018 Increase: $325, representing a 39.4% total increase.
• HOA’s Breakdown of Increase:
◦ Regular Assessment Increase: $116 (a 14.1% increase over $825)
◦ Special Assessment: $209
• Legal Challenge: The petitioners alleged the total $325 increase violated ARIZ. REV. STAT. section 33-1803(A), which prohibits an HOA from imposing a “regular assessment that is more than [20%] greater than the immediately preceding fiscal year’s assessment” without member approval.
B. Late Fees and Interest Charges (Matter 045)
The second dispute, raised by Mr. Brown, concerned new penalties for late payments.
• New Charges: A $25 late fee and 18% interest on past-due accounts.
• Legal Challenge: Mr. Brown alleged these charges violated the same statute, which limits late fees to “the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.” He presented an invoice showing he was charged a $25 late fee and $1.57 in interest.
C. Underlying Allegations of Financial Impropriety
Although the hearing’s scope was limited, the petitions were rooted in serious allegations of financial misconduct by the HOA. These claims formed the petitioners’ motive for challenging the assessments but were not the direct subject of the ALJ’s ruling.
• Core Claim: The petitioners asserted that Mogollon’s treasurer and others used “deceptive and nonstandard accounting methods,” including keeping two sets of books, to create the appearance of a financial shortfall.
• Alleged Purpose: This “fabricated shortfall” was allegedly used to convince the Board of Directors that a 39.4% dues increase was necessary.
• Petitioners’ Financial View: Mr. Stevens testified that he believed the HOA possessed funds in excess of $1 million and therefore did not require the increased assessment.
• ALJ’s Acknowledgment: The decision noted, “Considering the nature of Messrs. Brown and Stevens’s allegations, the civil courts may be better suited than an administrative tribunal to address the issues they raise. Regardless, the substance of their allegations was not addressed in this hearing.”
III. Arguments of the Parties
The central legal conflict hinged on the interpretation of the term “regular assessment” within the statute.
Petitioners’ Position (Brown & Stevens)
Respondent’s Position (Mogollon Airpark, Inc.)
Assessment Increase
The term “regular assessment” in § 33-1803(A) describes the process by which an assessment is instituted (i.e., by motion, second, and vote). Therefore, the entire $325 increase is a single assessment subject to and in violation of the 20% statutory cap. They further argued the HOA’s governing documents provide no authority to impose “special assessments.”
“Regular assessment” and “special assessment” are distinct types of assessments and industry terms of art. The 20% cap applies only to the regular portion. The $116 regular increase (14.1%) was compliant. The existence of the term “special assessment” in another statute (§ 33-1806) proves the legislature intended this distinction.
Late Fees
The 25latefeeisaclearviolationofthestatutorylimitof”15.00 or 10%.” The statutory text for late fees applies to “assessments” generally, not just “regular assessments.”
The statutory limit on late fees applies only to regular assessments. Since the late fee was charged on a special assessment, it did not violate the statute.
IV. Administrative Law Judge’s Decision and Rationale
The ALJ applied principles of statutory construction to arrive at a split decision, finding for the respondent on the main issue of the assessment increase but for the petitioner on the secondary issue of late fees.
A. Ruling on the Assessment Increase (Matters 029 & 054)
• Conclusion: The petitions filed by Mr. Brown and Mr. Stevens were dismissed. Mogollon Airpark, Inc. was deemed the prevailing party.
• Rationale: The judge concluded that the petitioners had not shown by a preponderance of the evidence that the statute was violated. Their definition of “regular assessment” as a procedural term was found to be inconsistent with principles of statutory construction. The judge reasoned that if “regular” simply meant the standard process of passing an assessment, the word would be redundant (“trivial or void”) because all assessments must follow that process. This interpretation supports the view that the legislature intended to differentiate between types of assessments, and that the 20% cap applies only to the “regular” type.
B. Ruling on Late Fees (Matter 045)
• Conclusion: Petitioner Warren R. Brown was deemed the prevailing party.
• Rationale: The judge rejected Mogollon’s argument that late fee limits apply only to regular assessments. The statutory text states, “Charges for the late payment of assessments are limited to…” without the “regular” qualifier. The ALJ determined that adding the word “regular” where the legislature chose to omit it would violate statutory construction principles. Therefore, the $25 late fee, being greater than the allowed $15 or 10%, was illegal.
V. Final Orders
The ALJ issued the following binding orders on October 18, 2018:
• ORDER FOR DOCKET NO. 18F-H1818029-REL-RHG (Brown vs. Mogollon):
◦ The petition is dismissed.
• ORDER FOR DOCKET NO. 18F-H1818045-REL (Brown vs. Mogollon):
◦ Petitioner Warren R. Brown is deemed the prevailing party.
◦ Mogollon Airpark Inc. must rescind the $25 late fee it assessed against Mr. Brown.
◦ Mogollon Airpark Inc. must pay Mr. Brown his filing fee of $500.00 within thirty days.
• ORDER FOR DOCKET NO. 18F-H1818054-REL (Stevens vs. Mogollon):
◦ The petition is dismissed.
Study Guide – 18F-H1818029-REL-RHG
Study Guide: Brown and Stevens v. Mogollon Airpark, Inc.
This study guide provides a review of the consolidated administrative hearing involving petitioners Warren R. Brown and Brad W. Stevens against the respondent, Mogollon Airpark, Inc. The case centers on disputes over Homeowners Association (HOA) assessments and fees under Arizona law.
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Short-Answer Quiz
Instructions: Answer the following questions in 2-3 sentences based on the information provided in the case documents.
1. Who were the primary parties involved in this consolidated matter and what were their respective roles?
2. What specific actions did Mogollon Airpark, Inc. take in 2018 that led to the legal petitions?
3. What was the total percentage increase of the 2018 assessment, and how did Mogollon Airpark, Inc. break down this increase?
4. Explain the petitioners’ main legal argument regarding the assessment increase and which statute they claimed was violated.
5. How did Mogollon Airpark, Inc. legally defend its decision to increase the assessment by more than 20%?
6. What was the central issue in the “045 matter” filed by Warren R. Brown?
7. Upon what legal principle did the Administrative Law Judge primarily rely to reach his conclusions on both the assessment increase and the late fee?
8. Why did the judge rule in favor of Mogollon Airpark on the assessment increase but in favor of Warren R. Brown on the late fee?
9. What were the underlying allegations made by the petitioners concerning Mogollon Airpark’s financial management that were not addressed in the hearing?
10. What was the final outcome and order for each of the three consolidated petitions (029, 045, and 054)?
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Answer Key
1. The petitioners were Warren R. Brown (dockets 029 and 045) and Brad W. Stevens (docket 054), who were members of the HOA. The respondent was Mogollon Airpark, Inc., the HOA being challenged. The matter was decided by Administrative Law Judge Thomas Shedden.
2. Mogollon Airpark, Inc. raised its 2018 assessment by a total of $325. It also instituted a new $25 fee for late payments and began charging 18% interest on past-due accounts.
3. The total increase of $325 over the previous year’s assessment of $825 constituted a 39.4% increase. Mogollon classified this increase as two separate parts: a $116 (14.1%) increase to the “regular assessment” and a $209 “special assessment.”
4. The petitioners argued that the total $325 increase violated ARIZ. REV. STAT. section 33-1803(A), which prohibits an HOA from imposing a “regular assessment” that is more than 20% greater than the previous year’s assessment. They contended that the term “regular assessment” refers to the standard process of levying an assessment (motion, second, vote), not a specific type of assessment.
5. Mogollon Airpark, Inc. argued that the 20% limit in section 33-1803(A) applies only to “regular assessments” and not to “special assessments,” which it claimed is a separate term of art in the industry. Since the increase to the regular assessment was only $116 (14.1%), it was below the 20% statutory threshold and therefore legal.
6. The central issue in the “045 matter” was Warren R. Brown’s allegation that Mogollon’s $25 late fee and 18% interest charge violated section 33-1803(A). The statute limits late charges to the greater of fifteen dollars or ten percent of the unpaid assessment.
7. The judge primarily relied on principles of statutory construction. This involved giving meaning to every word in the statute and not reading words into a provision where the legislature omitted them, which led to different interpretations of the statute’s clauses on assessments versus late fees.
8. The judge ruled against the petitioners on the assessment because their interpretation would make the word “regular” in the statute redundant. However, he ruled for Brown on the late fee because the statutory text limits charges on “assessments” in general, not just “regular assessments,” and to rule otherwise would require adding a word the legislature did not include.
9. The petitioners alleged that Mogollon’s treasurer engaged in deceptive and nonstandard accounting practices, including keeping two sets of books, to create a “fabricated shortfall.” They claimed this was done to falsely justify the need for the assessment increase, as the HOA actually had over $1 million in funds.
10. The petitions in the 029 matter (Brown) and 054 matter (Stevens) concerning the assessment increase were both dismissed. The petition in the 045 matter (Brown) concerning the late fee was successful; Mogollon was ordered to rescind the $25 fee and reimburse Brown’s $500 filing fee.
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Essay Questions
Instructions: Consider the following questions for a more in-depth analysis of the case. Formulate a comprehensive response based solely on the information in the provided legal decision.
1. Analyze the role of statutory construction in the Administrative Law Judge’s decision. How did the interpretation of the specific word “regular” and the general term “assessments” shape the final, divergent outcomes for the consolidated petitions?
2. Discuss the petitioners’ underlying allegations of deceptive accounting practices. Although not the central issue of the hearing, how did these claims frame the dispute, and why did the judge note that civil courts might be better suited to address them?
3. Compare and contrast the legal arguments presented by the petitioners and the respondent regarding the interpretation of ARIZ. REV. STAT. section 33-1803(A). Evaluate the strengths and weaknesses of each side’s position as described in the decision.
4. Trace the procedural history of the “029 matter,” from its initial filing and dismissal to the rehearing. What does this progression reveal about the procedural requirements for filing a successful petition with the Office of Administrative Hearings?
5. Evaluate the outcome of the consolidated hearing. Why was one petitioner successful on one claim while both were unsuccessful on another, despite the claims originating from the same set of actions by the HOA?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
The official, in this case Thomas Shedden, who presides over hearings at the Office of Administrative Hearings and issues decisions and orders.
ARIZ. REV. STAT. section 33-1803(A)
The specific Arizona statute at the center of the dispute. It limits HOA “regular assessment” increases to 20% over the prior year and caps late payment charges at the greater of $15 or 10% of the unpaid assessment.
Assessment
A fee imposed by an HOA on its members. The case distinguishes between a “regular assessment” (a recurring charge) and a “special assessment” (a one-time charge for a specific purpose).
Burden of Proof
The obligation of the petitioners, Messrs. Brown and Stevens, to prove their allegations against the respondent.
Consolidated Matter
The joining of multiple, separate legal petitions (in this case, 029, 045, and 054) into a single hearing because they involved the same parties and related issues.
Petitioner
A party who files a petition initiating a legal action. In this matter, Warren R. Brown and Brad W. Stevens were the petitioners.
Preponderance of the Evidence
The standard of proof required in this administrative hearing. It is defined as evidence with the most convincing force that inclines an impartial mind to one side of an issue over the other.
Respondent
The party against whom a petition is filed. In this matter, Mogollon Airpark, Inc. was the respondent.
Single-Issue Petition
A petition filed with the Department of Real Estate that is limited to a single allegation, which in the case of Mr. Stevens’s 054 matter required a $500 filing fee.
Statutory Construction
The legal process of interpreting and applying legislation. The judge used principles of statutory construction to determine the meaning of “regular assessment” and “assessments” in the relevant statute.
Blog Post – 18F-H1818029-REL-RHG
How One Word Created an HOA Loophole for a 40% Fee Hike—And How Another Word Gave a Homeowner a Key Victory
1.0 Introduction: The Dreaded HOA Letter
It’s the letter every homeowner dreads opening. A crisp envelope from the Homeowners Association lands in your mailbox, and inside is a notice that your mandatory fees are about to skyrocket. For a group of homeowners in Arizona’s Mogollon Airpark, this scenario became a reality when their HOA announced a staggering 39.4% increase in their annual assessments.
What followed was a legal battle that provides a fascinating and cautionary tale for every homeowner living under an HOA. The dispute, which pitted homeowners Warren Brown and Brad Stevens against Mogollon Airpark, Inc., didn’t hinge on fairness or financial need, but on the legal interpretation of a single word. This article distills the surprising and counter-intuitive lessons learned from their fight, revealing loopholes and legal technicalities that can make all the difference.
2.0 A 40% Fee Hike Can Be Legal Thanks to the “Special Assessment” Loophole
The core of the dispute was the massive fee hike. Mogollon Airpark, Inc. raised its 2018 assessment by $325 from the previous year’s $825—a 39.4% increase. This seemed to be a clear violation of Arizona law (ARIZ. REV. STAT. section 33-1803(A)), which explicitly prohibits an HOA from increasing a “regular assessment” by more than 20% in one year without a majority vote from members.
The HOA, however, employed a clever strategy. It split the $325 increase into two distinct parts:
• A $116 “regular assessment” increase, which amounted to a legal 14.1% hike.
• A separate $209 “special assessment.”
The HOA argued that the 20% statutory cap only applied to the “regular” portion of the increase, making their move perfectly legal.
The homeowners countered that this was a deceptive maneuver. They argued that the term “regular assessment” in the law refers to the process of creating an assessment (a motion, a second, and a vote), not a specific type of assessment. From their perspective, the entire 39.4% increase was a single action and was therefore illegal.
In a surprising ruling, the Administrative Law Judge sided with the HOA. The judge reasoned that if the homeowners’ interpretation was correct and all assessments followed the same “regular” process, then the word “regular” in the statute would be rendered “trivial or void.” By giving meaning to that single word, the judge affirmed that “regular assessments” and “special assessments” are different categories, and the 20% cap only applies to the former. This interpretation effectively creates a significant loophole for HOAs to bypass statutory limits and implement large fee increases.
3.0 The Devil Is in the Details: “Regular Assessment” vs. “Assessments”
While the HOA won the main argument over the 39.4% increase, they lost on a smaller but crucial point: late fees. Along with the assessment hike, the HOA instituted a new $25 late fee for overdue payments.
Homeowner Warren Brown challenged this fee, pointing to the same state law. He argued that the statute limits late fees to “the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.” Since the new $25 fee exceeded this limit, it was a direct violation.
Emboldened by their victory on the assessment increase, the HOA extended its logic, arguing that since the late fee was applied to a special assessment, the statutory limit—which they claimed was intended for regular assessments—did not apply.
This time, the judge decisively ruled in favor of the homeowner. The judge highlighted a critical distinction in the law’s wording. The part of the statute limiting assessment increases uses the specific term “regular assessment.” However, the part of the law limiting late charges uses the broader, more general term “assessments.” The omission of the word “regular” was the key.
The judge’s reasoning was a masterclass in statutory construction:
This argument fails because the statute’s limit on late charges applies to “assessments,” not “regular assessments.” Under Mogollon’s interpretation, it is necessary to add the word “regular” where the legislature chose not to use it. This violates principles of statutory construction.
This outcome underscores the immense importance of precise legal language. The legislature’s choice to omit a single word in one clause of a law gave the homeowner a clear victory and held the HOA accountable.
4.0 Serious Allegations Don’t Guarantee a Day in Court
Underlying the homeowners’ legal challenge were serious allegations of financial misconduct. Mr. Brown and Mr. Stevens claimed the HOA treasurer used “deceptive and nonstandard accounting methods,” kept “two sets of books,” and created a “fabricated shortfall” to justify the assessment increase and “convince the Board that a 39.4% increase in dues was required.”
Surprisingly, none of these explosive allegations were addressed during the hearing. The reason for this is a crucial lesson in legal strategy. The homeowners had filed “single-issue petitions,” which legally limited the scope of the administrative hearing to one narrow question: did the HOA violate the specific statute governing assessment increases (ARIZ. REV. STAT. section 33-1803(A))? All other matters, including the allegations of accounting improprieties, were outside the hearing’s jurisdiction.
The judge explicitly noted this limitation in a footnote to the decision:
Considering the nature of Messrs. Brown and Stevens’s allegations, the civil courts may be better suited than an administrative tribunal to address the issues they raise. Regardless, the substance of their allegations was not addressed in this hearing.
This case is a powerful reminder that in law, the structure of your argument can be more important than the weight of your accusations. By filing a narrow petition, the homeowners guaranteed a hearing on that one issue but forfeited the chance to have their broader, more serious claims heard in that venue.
5.0 A Partial Victory Is Still a Victory
The final outcome of the consolidated case was decidedly mixed. The homeowners lost their primary challenge, and the court upheld the HOA’s $325 assessment increase.
However, Mr. Brown was officially deemed the “prevailing party” in his case regarding the illegal late fees. This was not just a moral victory; it came with a direct order from the judge. Mogollon Airpark Inc. was ordered to:
• Rescind the $25 late fee it assessed against Mr. Brown.
• Pay Mr. Brown back his $500 filing fee for the case.
While it wasn’t the total win they had hoped for, this outcome demonstrates that a single, well-prepared homeowner can successfully hold their HOA accountable for breaking the law, even on smaller matters. It proves that knowing the rules and persevering can lead to tangible results, forcing an association to correct its illegal actions and compensating the homeowner for the cost of the fight.
6.0 Conclusion: Know the Law, Word by Word
The case of Brown and Stevens vs. Mogollon Airpark is a potent lesson in how legal battles are won and lost in the margins. A single word—”regular”—opened a loophole for the HOA to impose a nearly 40% fee hike, while the deliberate absence of that same word in a later clause empowered a homeowner to strike back and win.
This case serves as a powerful reminder that when it comes to the laws governing your community, every word matters. It poses a vital question for all homeowners: are the protections you count on in state law as ironclad as you think, or could they evaporate based on the interpretation of a single adjective?
Case Participants
Petitioner Side
Warren R. Brown(petitioner) Appeared on his own behalf
Brad W. Stevens(petitioner) Appeared on his own behalf; presented testimony
Respondent Side
Gregory A. Stein(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Counsel for Respondent Mogollon Airpark, Inc.
Mark K. Sahl(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Counsel for Respondent Mogollon Airpark, Inc.
Neutral Parties
Thomas Shedden(ALJ)
Judy Lowe(Commissioner) Arizona Department of Real Estate
The ALJ found Mogollon did not violate ARS § 33-1803(A) concerning the 39.4% assessment increase (Matters 029 and 054), rejecting the Petitioners' interpretation of 'regular assessment.' However, Petitioner Brown prevailed in Matter 045, proving Mogollon violated the late charge limit of ARS § 33-1803(A) by charging a $25 late fee, resulting in a refund of his $500 filing fee and rescission of the fee.
Why this result: The assessment increase claims (029 and 054) were lost because the ALJ determined that interpreting 'regular assessment' as referring to the procedural method (motion, second, vote) would render the word 'regular' trivial or void in the statute.
Key Issues & Findings
Late payment charges limitation (045 Matter)
Petitioner Brown (045 matter) alleged the HOA violated ARS § 33-1803(A) by charging a $25 late fee. The ALJ found that the statutory limitation on late charges applies to all 'assessments,' not just 'regular assessments,' and found the $25 late charge was in violation.
Orders: Mogollon Airpark Inc. must rescind the $25 late fee assessed against Mr. Brown; Mogollon must pay Mr. Brown his filing fee of $500.00 within thirty days.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
Cited:
ARIZ. REV. STAT. section 33-1803(A)
Assessment increase greater than 20% limit (029 Matter)
Petitioner Brown (029-RHG matter) argued the 39.4% increase violated the 20% cap because 'regular assessment' refers to the procedure for instituting any assessment. The ALJ rejected this interpretation, finding it rendered the word 'regular' void in the statute.
Orders: Petition dismissed.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
ARIZ. REV. STAT. section 33-1803(A)
Assessment increase greater than 20% limit (054 Matter)
Petitioner Stevens (054 matter) alleged the HOA's $325 assessment increase was unlawful under the 20% cap. The ALJ dismissed the petition, applying the same statutory interpretation as in the 029 matter, holding that Mogollon's classification of the majority of the increase as a special assessment was valid under the statute.
Orders: Petition dismissed.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
ARIZ. REV. STAT. section 33-1803(A)
Decision Documents
18F-H1818029-REL Decision – 666285.pdf
Uploaded 2025-12-17T18:16:26 (151.9 KB)
18F-H1818029-REL Decision – 672623.pdf
Uploaded 2025-12-17T18:16:27 (144.6 KB)
Case Participants
Petitioner Side
Warren R. Brown(petitioner) Appeared on his own behalf
Brad W. Stevens(petitioner; witness) Appeared on his own behalf; presented testimony at hearing
Respondent Side
Gregory A. Stein(HOA attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Counsel for Respondent Mogollon Airpark, Inc.
Mark K. Sahl(HOA attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Counsel for Respondent Mogollon Airpark, Inc.
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(Commissioner) Arizona Department of Real Estate
The ALJ dismissed the petitions regarding the assessment increase (Dockets 029 and 054), ruling that A.R.S. § 33-1803(A)'s 20% cap applies only to 'regular assessments' and not special assessments. However, the ALJ ruled in favor of Petitioner Brown regarding late fees (Docket 045), finding that the statutory limit on late charges applies to all assessments, ordering the HOA to rescind the $25 fee and refund the filing fee.
Why this result: For the assessment issues, the ALJ rejected the petitioners' interpretation that 'regular' refers to the approval process rather than the assessment type, finding that applying the cap to special assessments would violate principles of statutory construction.
Key Issues & Findings
Assessment Increase (Docket 029 – Brown)
Petitioner alleged the HOA violated the statute by increasing assessments by $325 (39.4%), exceeding the 20% limit.
Orders: Petition dismissed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Late Fees (Docket 045 – Brown)
Petitioner alleged the HOA charged a $25 late fee, which exceeds the statutory limit of the greater of $15 or 10%.
Orders: Respondent ordered to rescind the $25 late fee and refund the $500 filing fee.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
Assessment Increase (Docket 054 – Stevens)
Petitioner alleged the $325 assessment increase violated the statutory 20% cap and that the HOA used deceptive accounting.
Orders: Petition dismissed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Decision Documents
18F-H1818045-REL Decision – 666285.pdf
Uploaded 2026-01-27T21:14:50 (151.9 KB)
18F-H1818045-REL Decision – 672623.pdf
Uploaded 2026-01-27T21:14:51 (144.6 KB)
Based on the provided administrative hearing records, here is a summary of the proceedings for case **18F-H1818045-REL**.
### **Case Overview**
* **Case Number:** 18F-H1818045-REL (The "045" matter).
* **Petitioner:** Warren R. Brown.
* **Respondent:** Mogollon Airpark, Inc..
* **Administrative Law Judge (ALJ):** Thomas Shedden.
* **Hearing Date:** September 28, 2018.
### **Proceedings**
The hearing was a consolidated matter addressing three separate petitions: two filed by Mr. Brown (the "029" and "045" matters) and one by Brad W. Stevens (the "054" matter). While the petitions initially contained broad allegations regarding accounting improprieties and the Board's authority, the hearing was limited to specific legal questions regarding violations of **ARIZ. REV. STAT. § 33-1803(A)**,.
In the 045 matter, Mr. Brown and Mogollon agreed that the issues could be resolved as a matter of law without presenting witnesses,.
### **Key Facts and Main Issues**
Mogollon Airpark raised its 2018 assessment by $325 and instituted a **$25 late fee** and **18% interest** for past due accounts.
**The specific issue in the 045 matter** was whether these late charges violated A.R.S. § 33-1803(A).
* **Statutory Context:** The statute states that charges for late payment are limited to "the greater of fifteen dollars or ten percent of the amount of the unpaid assessment".
* **Petitioner's Argument:** Mr. Brown argued that the $25 fee exceeded the statutory limit of "$15.00 or 10%",. He requested the unlawful penalties be voided.
* **Respondent's Argument:** Mogollon argued that the statutory limits in § 33-1803(A) apply only to "regular assessments." They contended that because the late fee was applied to a "special assessment," the statutory cap did not apply,.
### **Legal Analysis and Decision**
The Administrative Law Judge ruled in favor of Mr. Brown regarding the 045 matter.
**Statutory Interpretation:**
The ALJ rejected Mogollon's argument that the late fee cap applies only to regular assessments. The decision noted that while the statute mentions "regular assessment" in the context of capping annual increases, the sentence regarding late fees refers simply to "assessments",.
* The ALJ cited principles of statutory construction, stating that courts should not read terms (such as the word "regular") into a section where the legislature chose to omit them,.
* Consequently, the statutory cap applies to *all* assessments, rendering Mogollon's $25 late fee a violation of the statute,.
### **Final Outcome**
While the petitions challenging the assessment increase itself (029 and 054) were dismissed, Mr. Brown prevailed in the 045 matter regarding the late fees.
**Order:**
1. **Violation Found:** Mr. Brown showed by a preponderance of the evidence that the $25 late charge violated § 33-1803(A),.
2. **Remedy:** Mogollon Airpark, Inc. was ordered to **rescind the $25 late fee** assessed against Mr. Brown,.
3. **Costs:** Mogollon was ordered to reimburse Mr. Brown his **$500.00 filing fee** within 30 days of the Order,.
Case Participants
Petitioner Side
Warren R. Brown(petitioner) Petitioner in docket Nos. 18F-H1818029-REL-RHG and 18F-H1818045-REL; appeared on his own behalf
Brad W. Stevens(petitioner) Petitioner in docket No. 18F-H1818054-REL; appeared on his own behalf
Respondent Side
Gregory A. Stein(respondent attorney) Carpenter, Hazlewood, Delgado & Bolen LLP Attorney for Respondent Mogollon Airpark, Inc.
Mark K. Sahl(respondent attorney) Carpenter, Hazlewood, Delgado & Bolen LLP Attorney for Respondent Mogollon Airpark, Inc.
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings Administrative Law Judge presiding over the consolidated hearing
Judy Lowe(Commissioner) Arizona Department of Real Estate Recipient of the transmitted decision
Felicia Del Sol(clerk) Office of Administrative Hearings Transmitted the decision
18F-H1818045-REL (Consolidated with 18F-H1818029-REL-RHG & 18F-H1818054-REL)
Agency
ADRE
Tribunal
OAH
Decision Date
2018-10-18
Administrative Law Judge
Thomas Shedden
Outcome
partial
Filing Fees Refunded
$500.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Warren R. Brown
Counsel
—
Respondent
Mogollon Airpark, Inc.
Counsel
Gregory A. Stein, Esq.
Alleged Violations
ARIZ. REV. STAT. section 33-1803(A)
Outcome Summary
Petitioner Brown prevailed in the 045 matter regarding the excessive late fee ($25 instead of $15 or 10%) in violation of ARS 33-1803(A). However, both petitioners (Brown in 029, Stevens in 054) failed to prove a violation of ARS 33-1803(A) regarding the overall 39.4% assessment increase, resulting in those petitions being dismissed.
Why this result: Petitioners lost the challenge to the assessment increase because their definition of “regular assessment” was not supported by principles of statutory construction, which would have rendered the word “regular” trivial or void in the statute.
Key Issues & Findings
HOA charging excessive late payment fees and interest.
Mogollon charged a $25 late fee, exceeding the statutory limit set in ARS 33-1803(A), which limits late charges to the greater of $15 or 10% of the unpaid assessment.
Orders: Mogollon Airpark Inc. must rescind the $25 late fee assessed against Mr. Brown and must pay to Mr. Brown his filing fee of $500.00 within thirty days.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
Cited:
ARIZ. REV. STAT. section 33-1803(A)
Analytics Highlights
Topics: HOA assessment increase, Late fees, Statutory interpretation, Regular vs Special assessment, Homeowner petition
Additional Citations:
ARIZ. REV. STAT. section 33-1803(A)
ARIZ. REV. STAT. section 33-1806
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.)
Audio Overview
Decision Documents
18F-H1818029-REL-RHG Decision – 666285.pdf
Uploaded 2025-10-08T07:04:50 (151.9 KB)
18F-H1818029-REL-RHG Decision – 672623.pdf
Uploaded 2025-10-08T07:04:51 (144.6 KB)
Briefing Doc – 18F-H1818029-REL-RHG
Administrative Law Decision Briefing: Brown and Stevens vs. Mogollon Airpark, Inc.
Executive Summary
This document provides a detailed analysis of the Administrative Law Judge (ALJ) Decision from October 18, 2018, concerning three consolidated petitions filed by homeowners Warren R. Brown and Brad W. Stevens against their homeowners’ association (HOA), Mogollon Airpark, Inc. The core of the dispute centers on Mogollon’s 2018 financial actions, specifically a 39.4% increase in total annual assessments and the imposition of new late payment penalties.
The case produced a split decision. The ALJ ruled in favor of Mogollon Airpark on the primary issue of the assessment increase. The judge determined that the statutory 20% cap on annual increases, as defined in ARIZ. REV. STAT. § 33-1803(A), applies exclusively to “regular assessments” and not to “special assessments.” Mogollon had structured its $325 increase as a combination of a compliant 14.1% regular assessment hike and a separate $209 special assessment, a practice the ALJ found permissible under the law.
Conversely, the ALJ ruled in favor of Petitioner Brown regarding the HOA’s $25 late fee. The judge found this fee to be in direct violation of § 33-1803(A), which limits such charges to “the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.” The ALJ’s rationale was that this statutory limit applies to all “assessments” without qualification, not just regular ones.
While the hearing was limited to these specific statutory violations, the petitions were underpinned by serious allegations from Brown and Stevens of deceptive accounting practices and financial mismanagement by Mogollon’s leadership, intended to create a “fabricated shortfall” to justify the fee increases. These underlying allegations were not substantively addressed in the hearing.
Case Overview
This consolidated matter combines three separate petitions heard before the Arizona Office of Administrative Hearings. The hearing was conducted on September 28, 2018, with Thomas Shedden serving as the Administrative Law Judge.
• Petitioners: Warren R. Brown and Brad W. Stevens.
• Respondent: Mogollon Airpark, Inc.
• Docket Numbers:
◦ 18F-H1818029-REL-RHG (“029 matter”), Petitioner: Warren R. Brown
◦ 18F-H1818045-REL (“045 matter”), Petitioner: Warren R. Brown
◦ 18F-H1818054-REL (“054 matter”), Petitioner: Brad W. Stevens
Core Issues Contested
The dispute arose from Mogollon Airpark’s 2018 decision to increase assessments and institute new fees for late payments and past-due accounts.
1. The 2018 Assessment Increase
The central conflict involved the legality of a significant increase in annual homeowner assessments.
• Financial Details:
◦ Previous Year’s Assessment (2017): $825
◦ 2018 Total Increase: $325
◦ Total Percentage Increase: 39.4%
• Mogollon’s Breakdown of the Increase:
◦ Regular Assessment Increase: $116 (a 14.1% increase over $825)
◦ Special Assessment: $209
Argument on the Assessment Increase
Petitioners (Brown & Stevens)
Argued that the entire $325 increase constituted a single assessment action. Because the 39.4% increase exceeded the 20% annual cap stipulated in ARIZ. REV. STAT. § 33-1803(A), it was unlawful. They contended that the term “regular assessment” in the statute refers to the process by which an assessment is created (i.e., by motion, second, and vote), not a specific type of assessment. They further alleged that Mogollon’s governing documents provided no authority to levy a “special assessment.”
Respondent (Mogollon Airpark, Inc.)
Asserted that § 33-1803(A) applies only to “regular assessments.” They argued that their regular assessment increase of $116 (14.1%) was well within the 20% limit. The $209 portion was a “special assessment,” which they described as a “term of art in the industry” not subject to the 20% cap. They cited the use of the term “special assessment” in another statute, § 33-1806, as evidence of legislative intent to differentiate between assessment types.
2. Late Payment Charges
Petitioner Brown separately challenged the legality of newly instituted penalties for late payments.
• Charges Implemented by Mogollon:
◦ A flat $25 fee for late payments.
◦ 18% interest on past-due accounts.
• Petitioner’s Argument (Brown): The $25 late fee violated the plain language of § 33-1803(A), which explicitly limits late payment charges to “the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.” Brown provided an invoice showing he was charged a $25 late fee and $1.57 in interest.
• Respondent’s Argument (Mogollon): The HOA argued that the statutory limits on late fees did not apply in this case because the fee was charged on a special assessment, which they contended was outside the scope of § 33-1803(A).
Underlying Allegations of Financial Misconduct
Although the hearing was limited to the narrow legal questions above, the petitioners’ filings contained extensive allegations of financial impropriety against Mogollon’s treasurer and board. These claims formed the motive for the contested assessments.
• Core Allegation: The petitioners asserted that the HOA leadership engaged in “numerous accounting improprieties” and used “deceptive and nonstandard accounting methods, including keeping two sets of books.”
• Alleged Purpose: The goal was to create a “fabricated shortfall” and present an “inaccurate picture of the HOA finances.” This was done, according to Mr. Brown, “ostensibly to show that the 2016 board of directors left office showing a loss of funds,” when in fact they had improved the treasury by approximately $200,000.
• Justification for Increase: This artificially created financial need was then used “to convince the Board that a 39.4% increase in dues was required.”
• Evidence and Testimony: Mr. Stevens submitted a 45-page petition with over 600 pages of exhibits detailing the alleged accounting practices. He testified that Mogollon possessed over $1 million and did not need an assessment increase. He also stated his belief that the $209 special assessment was a “trial run” for future assessments for purposes not authorized by the governing documents.
• ALJ’s Position: The judge noted these underlying allegations but stated, “the substance of their allegations was not addressed in this hearing.” A footnote suggested that “the civil courts may be better suited than an administrative tribunal to address the issues they raise.”
Administrative Law Judge’s Decision and Rationale
The ALJ issued a split decision, ruling for the Respondent on the assessment increase and for the Petitioner on the late fee. The decision was based on established principles of statutory construction.
Legal Principles Applied
• Burden of Proof: Placed on Petitioners Brown and Stevens to prove their allegations by a preponderance of the evidence.
• Statutory Construction:
1. Statutes must be interpreted to yield a “fair and sensible result” and avoid “absurd and unreasonable construction.”
2. Every word and phrase in a statute must be given meaning so that no part is “void, inert, redundant, or trivial.”
3. When a term is used in one part of a statute but omitted in another, it should not be read into the section where it is absent.
Conclusion on the Assessment Increase (Matters 029 & 054)
• Verdict: The petitions of Mr. Brown and Mr. Stevens were dismissed. Mogollon Airpark, Inc. was deemed the prevailing party.
• Rationale: The ALJ rejected the petitioners’ definition of “regular assessment.” The judge reasoned that if “regular” simply meant passed by a regular process (motion, second, vote), then the word would be meaningless (“trivial or void”), as all assessments are assumed to follow that process. This would violate a core principle of statutory construction. Therefore, the legislature must have intended “regular assessment” to be a specific type of assessment, distinct from others like “special assessments.” Because the 20% cap in § 33-1803(A) explicitly applies only to regular assessments, Mogollon’s $209 special assessment was not subject to that limit.
Conclusion on the Late Fee (Matter 045)
• Verdict: Petitioner Warren R. Brown was deemed the prevailing party.
• Rationale: The ALJ found that the statutory clause limiting late fees applies to “assessments” in general, not specifically to “regular assessments.” The legislature’s omission of the word “regular” in this part of the statute was deliberate. Mogollon’s argument that the limit only applied to regular assessments required reading a word into the statute that was not there, which “violates principles of statutory construction.” The $25 fee clearly exceeded the allowable limit.
Final Orders
The ALJ issued separate orders for each consolidated docket, reflecting the split decision.
The Administrative Law Judge dismissed the Petition because the Petitioner failed to prove the Respondent Board violated the Bylaws. The Board was found to have the necessary authority under Bylaws Section 3.11 to enter into the Well Agreement 2 as a variance, and this action did not constitute an improper amendment of the CC&Rs.
Why this result: The Board was authorized to grant a variance to the CC&Rs regarding the well on Lot 2, a power delegated to the Association, meaning the Board did not exceed its authority under the Bylaws.
Key Issues & Findings
Alleged violation of the American Ranch Bylaws, Article 3.11, when the Board entered into the 'Well Agreement' (Well Agreement 2).
Petitioner asserted that the Board violated the Bylaws by entering into Well Agreement 2, claiming the Board lacked the authority to grant exceptions or variances to the CC&Rs regarding the use of a private water well on Lot 2. The Board agreed the well existed in violation of CC&Rs Section 3.26, but argued Well Agreement 2 constituted a variance, not an amendment.
Orders: The Petition was dismissed.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
A.R.S. § 41-2198.01
A.R.S. § 41-1092.07(G)(2)
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)
A.A.C. R2-19-119(B)(2)
A.R.S. § 32-2199.02(B)
A.R.S. § 32-2199.04
A.R.S. § 41-1092.09
Analytics Highlights
Topics: HOA authority, Bylaws 3.11, CC&Rs, Variance, Amendment, Well Agreement, Burden of Proof, Dismissal
Additional Citations:
A.R.S. § 41-2198.01
A.R.S. § 41-1092.07(G)(2)
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)
A.A.C. R2-19-119(B)(2)
A.R.S. § 32-2199.02(B)
A.R.S. § 32-2199.04
A.R.S. § 41-1092.09
Video Overview
Audio Overview
Decision Documents
18F-H1818050-REL Decision – 664186.pdf
Uploaded 2025-10-09T03:33:00 (112.4 KB)
Briefing Doc – 18F-H1818050-REL
Briefing Document: Mathews v. American Ranch Community Association
Executive Summary
This briefing document outlines the findings and decision in case number 18F-H1818050-REL, a dispute between Petitioner Brent J. Mathews and the American Ranch Community Association (HOA). The Administrative Law Judge dismissed the petition, concluding that Mr. Mathews failed to prove his allegations by a preponderance of the evidence.
The central issue was whether the HOA’s Board of Directors violated Article 3.11 of its Bylaws by entering into a “Well Agreement” with the owners of Lot 2 on August 9, 2016. The Petitioner argued that this agreement constituted an unauthorized amendment to the community’s Covenants, Conditions, and Restrictions (CC&Rs) because the Board does not have the power to grant exceptions.
The judge found this argument “faulty,” determining that the agreement was not an amendment but a variance. The CC&Rs explicitly grant the authority to issue variances to the Architectural Review Committee. Per the Bylaws, the Board is empowered to exercise any authority delegated to the Association that is not specifically reserved for the general membership. Therefore, the judge concluded that the Board acted within its authority when it executed the agreement. The decision was based on the Board’s need to resolve a problematic prior agreement under time-sensitive circumstances related to a property sale.
1. Case Overview
Case Number
18F-H1818050-REL
Petitioner
Brent J. Mathews
Respondent
American Ranch Community Association
Hearing Date
September 21, 2018
Decision Date
October 11, 2018
Presiding Judge
Administrative Law Judge Tammy L. Eigenheer
The dispute originated from a petition filed by Brent J. Mathews on May 16, 2018, with the Arizona Department of Real Estate. The core of the complaint was an alleged Open Meeting Violation concerning an “Action Outside of Meeting” that resulted in a “Well Agreement” between the Association and homeowners Mark and Diane Kaplan.
2. Petitioner’s Core Allegation
After being directed to clarify his petition to a single issue, Mr. Mathews submitted the following statement on August 23, 2018:
“When the Board entered into the ‘Well Agreement’ they may have assumed they had the power to grant exceptions to the CC&R’s. The American Ranch Community Association Bylaws do not empower the Board to grant exceptions to the CC&R’s. Therefore the single complaint is an alleged violation of the American Ranch Bylaws, Article 3.11.”
The Petitioner’s legal argument was that the Board’s action in creating the “Well Agreement 2” was effectively an amendment of the CC&Rs. According to Section 9.3.1 of the CC&Rs, amendments require the written approval or affirmative vote of 75 percent of the total owners. Since this did not occur, the Petitioner concluded the Board lacked the authority to enter into the agreement.
3. Factual Background and Chronology of Events
The case revolves around a water well on Lot 2 of the American Ranch community, which was installed in violation of the governing documents.
A water well is installed on Lot 2. This installation violates Section 3.26 of the CC&Rs, which prohibits wells on all lots except Equestrian Lots and, even then, only with prior approval from the Architectural Review Committee (ARC) for specific purposes.
June 2011
The owners of Lot 2 and the HOA Board enter into the first “Well and Easement Agreement” (Well Agreement 1). This agreement permitted the continued use of the well for irrigation but required the owners to install a water meter and pay the HOA for water usage at the same rate as the local water district.
November 23, 2013
Lot 2 is sold to Steven and Frances Galliano.
July 30, 2016
Mark and Diane Kaplan, who are in escrow to purchase Lot 2, email the Community Manager, Tiffany Taylor. They express concern over Well Agreement 1 and state they cannot proceed with the purchase without clarity on the HOA’s position. They also note that the Gallianos told them they had never been charged for water from the well.
August 2016
Facing a time-sensitive situation due to the pending property sale, the HOA Board decides to enter into a new agreement to invalidate Well Agreement 1. The Board’s decision was based in part on the belief that it lacked the authority to enter into the original agreement, specifically because it had no power to bill residents for water usage—a function of the water district.
August 9, 2016
The HOA Board and the Kaplans execute a new “Well Agreement” (Well Agreement 2). This agreement permits the continued use of the well for irrigation purposes but explicitly states the owners will not be billed for the water used.
4. Administrative Law Judge’s Findings and Legal Reasoning
The Judge’s decision rested on a critical distinction between a CC&R amendment and a variance, and a detailed analysis of the powers granted to the Board by the governing documents.
A. Burden of Proof
The Petitioner, Brent J. Mathews, bore the burden of proof to establish that the HOA committed the alleged violation by a “preponderance of the evidence.” This standard requires proof that a contention is more probably true than not.
B. Variance vs. Amendment
The central point of the Judge’s legal conclusion was the rejection of the Petitioner’s argument.
• Petitioner’s Argument: Well Agreement 2 was an amendment to the CC&Rs.
• Judge’s Finding: The argument is “faulty.” The decision states, “A variance granted to an individual owner from a restriction under the CC&Rs does not constitute an amendment of the CC&Rs.”
The Judge found that the CC&Rs themselves, in Section 3.31, provide a specific mechanism for granting variances. The ARC is authorized to grant variances in “extenuating circumstances” if a restriction creates an “unreasonable hardship or burden” and the variance does not have a “substantial adverse effect” on the community.
C. The Board’s Delegated Authority
The Judge established a clear chain of authority that empowered the Board to act as it did:
1. CC&R Section 3.31: Delegates the power to grant variances to the Architectural Review Committee.
2. Bylaw Section 3.11.8: States the Board shall have the power to “Exercise for the Association all powers, duties and authority vested in or delegated to the Association and not reserved to the membership by other provisions of the Project Documents.”
3. Conclusion: Because the power to grant variances was delegated to the ARC (and thus to the Association) and not reserved for the membership, the Board had the authority to grant the variance embodied in Well Agreement 2.
5. Final Order
Based on the foregoing analysis, the Administrative Law Judge issued the following order:
• Decision: The Petition filed by Brent J. Mathews is dismissed.
• Reasoning: “Petitioner failed to establish by a preponderance of the evidence that the Board of Directors lacked the authority to enter into Well Agreement 2. Thus, Petitioner failed to sustain his burden to establish a violation of Section 3.11 of the Bylaws.”
The order was finalized and transmitted to the parties on October 11, 2018.
Study Guide – 18F-H1818050-REL
Study Guide: Mathews v. American Ranch Community Association (Case No. 18F-H1818050-REL)
This guide provides a comprehensive review of the Administrative Law Judge Decision in the case between Petitioner Brent J. Mathews and Respondent American Ranch Community Association. It is designed to test and deepen understanding of the facts, legal arguments, and final ruling presented in the source document.
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Short-Answer Quiz
Instructions: Answer the following questions in 2-3 complete sentences based on the information provided in the case document.
1. Who were the primary parties involved in this case, and what were their respective roles?
2. What was the initial, overarching subject of Brent J. Mathews’s complaint filed on May 16, 2018?
3. After being asked to clarify, what single issue did the Petitioner choose to proceed with for the hearing?
4. According to the CC&Rs, what are the specific rules regarding the use of water wells on lots within American Ranch?
5. What were the key terms of “Well Agreement 1,” established in June 2011 with the original owners of Lot 2?
6. Why did the American Ranch Board of Directors believe they lacked the authority to enforce “Well Agreement 1”?
7. What were the terms of “Well Agreement 2,” which was executed on August 9, 2016, with the new owners of Lot 2, the Kaplans?
8. What was Petitioner Mathews’s primary legal argument against the Board’s authority to enter into “Well Agreement 2”?
9. How did the Administrative Law Judge distinguish between a “variance” and an “amendment” to the CC&Rs in the final decision?
10. What was the final order issued by the Administrative Law Judge on October 11, 2018?
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Answer Key
1. The primary parties were Petitioner Brent J. Mathews, who filed the complaint, and Respondent American Ranch Community Association (HOA), which was the subject of the complaint. Mathews represented himself, while the Association was represented by Lynn Krupnik and Timothy Krupnik.
2. The initial complaint’s subject was an “Open Meeting Violation regarding an ‘Action Outside of Meeting’” that took place on August 6, 2016. This action concerned the Association entering into a “Well Agreement” with Mark and Diane Kaplan.
3. The Petitioner clarified his single issue was an alleged violation of the American Ranch Bylaws, Article 3.11. He argued that the Board entered into the “Well Agreement” assuming they had the power to grant exceptions to the CC&Rs, a power he claimed the Bylaws did not grant them.
4. Section 3.26 of the CC&Rs prohibits water wells on all lots except Equestrian Lots. On Equestrian Lots, wells are permitted only with prior written approval from the Architectural Review Committee and must be used solely to irrigate pasture land and provide drinking water for horses.
5. “Well Agreement 1” acknowledged that the owners of Lot 2 were using their well for irrigation in violation of the CC&Rs. The agreement allowed them to continue this use, provided they installed a water meter and paid the Association the same per-gallon charge as other owners paid to the water district.
6. The Board of Directors believed they did not have the authority to enter into “Well Agreement 1” because they had no ability or authority to bill the lot owners for water used from a private well. They reasoned that billing for water was the responsibility of the water district, not the HOA.
7. “Well Agreement 2” stated that the private water well on Lot 2 would continue to be used for irrigation purposes. Crucially, it specified that the owners (the Kaplans) would not be billed for the water used from this well.
8. Petitioner Mathews argued that “Well Agreement 2” constituted an amendment of the CC&Rs. He contended that under Section 9.3.1 of the CC&Rs, an amendment requires the written approval or affirmative vote of 75 percent of the total owners, and therefore the Board acted outside its authority.
9. The Judge ruled that “Well Agreement 2” was a variance granted to an individual owner, not an amendment to the CC&Rs. The CC&Rs specifically provide a method for granting variances via the Architectural Review Committee, and this power is delegated to the Association and thus exercisable by the Board.
10. The final order, issued on October 11, 2018, was that the Petition be dismissed. The Judge concluded that the Petitioner failed to establish by a preponderance of the evidence that the Board of Directors lacked the authority to enter into “Well Agreement 2.”
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Essay Questions
Instructions: The following questions are designed for a more in-depth, essay-style response. Use the case document to construct a thorough and well-supported argument for each prompt. Answers are not provided.
1. Analyze the evolution of the dispute, from the initial installation of the well on Lot 2 to the final Administrative Law Judge Decision. Discuss the key events and agreements (Well Agreement 1 and Well Agreement 2) and explain how each contributed to the legal conflict.
2. Explain the legal reasoning used by the Administrative Law Judge to dismiss the Petitioner’s claim. Detail the specific sections of the Bylaws and CC&Rs cited (3.11, 3.26, 3.31, 9.3.1) and explain the distinction the Judge made between a “variance” and an “amendment.”
3. Discuss the concept of “burden of proof” as it applies to this case. Who held the burden of proof, what was the required standard (“preponderance of the evidence”), and why did the Petitioner ultimately fail to meet this standard?
4. Evaluate the actions of the American Ranch Community Association Board of Directors regarding Lot 2’s well. Discuss their reasoning for invalidating Well Agreement 1 and creating Well Agreement 2, and analyze whether their actions were consistent with the powers granted to them by the community’s governing documents.
5. Based on the procedural history outlined in the “Findings of Fact,” describe the process of an HOA dispute in this jurisdiction, from the initial filing of a petition to the final order from the Office of Administrative Hearings.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official (Tammy L. Eigenheer) who presides over administrative hearings and issues a decision on the matter.
A.R.S. (Arizona Revised Statutes)
The statutory laws of the state of Arizona, sections of which regulate planned communities and the administrative hearing process.
Architectural Review Committee
A body within the Association delegated the authority by the CC&Rs (Section 3.31) to grant variances from certain restrictions in extenuating circumstances.
Board of Directors
The governing body of the American Ranch Community Association, which has the powers and duties necessary for administering the Association’s affairs.
Burden of Proof
The obligation of a party in a legal case to prove their claims. In this case, the Petitioner had the burden to establish the alleged violations.
Bylaws
The rules governing the internal administration of the Association. Petitioner alleged a violation of Bylaw 3.11, which outlines the powers and duties of the Board.
Covenants, Conditions, and Restrictions. These are the governing documents that set rules for properties within the community, such as the prohibition of certain water wells (Section 3.26).
Department
Refers to the Arizona Department of Real Estate, the agency with which the initial Homeowners Association Dispute Process Petition was filed.
Office of Administrative Hearings
An independent state agency to which the Department refers HOA dispute cases for a formal hearing.
Petition
The formal document filed by Brent J. Mathews to initiate the HOA dispute process with the Arizona Department of Real Estate.
Petitioner
The party who brings the legal action or complaint. In this case, Brent J. Mathews.
Preponderance of the Evidence
The standard of proof required in this hearing. It is defined as proof that convinces the trier of fact that a contention is “more probably true than not.”
Respondent
The party against whom the petition is filed. In this case, the American Ranch Community Association.
Variance
An officially granted exception from a restriction in the CC&Rs for an individual owner. The Judge determined Well Agreement 2 was a variance, not an amendment.
Well Agreement 1
A June 2011 agreement that allowed the owners of Lot 2 to use a non-compliant well for irrigation, provided they paid the Association for the water.
Well Agreement 2
An August 2016 agreement that invalidated Well Agreement 1 and allowed the new owners of Lot 2 (the Kaplans) to continue using the well for irrigation without being billed for the water.
Blog Post – 18F-H1818050-REL
Your HOA Board Might Be More Powerful Than You Think: 3 Lessons from a Legal Showdown
1.0 Introduction: The Predictable Fight with an Unpredictable Outcome
It’s a scenario familiar to many homeowners: you suspect your Homeowners Association (HOA) board is playing favorites, bending the rules for one resident while holding everyone else to the letter of the law. This feeling of frustration often leads to heated disputes, but what happens when a homeowner decides to take that fight to court? You might expect a simple verdict based on the community’s clear, written rules.
That’s exactly what homeowner Brent J. Mathews thought. He discovered his HOA board had made a special agreement with a neighbor, allowing a water well that clearly violated the community’s governing documents. He filed a formal complaint, arguing the board had illegally overstepped its authority.
The case that followed, however, didn’t turn on one obvious rule. Instead, the judge’s decision hinged on how different governing documents—the CC&Rs and the Bylaws—interact. The outcome reveals some surprising and counter-intuitive truths about where power really lies within an HOA, offering critical lessons for every homeowner.
2.0 Takeaway 1: A Special Exception Isn’t the Same as Changing the Rules for Everyone
Mr. Mathews’ central argument was straightforward and, on its face, perfectly logical. He contended that the board’s “Well Agreement 2” with his neighbor was effectively an amendment to the community’s Covenants, Conditions, and Restrictions (CC&Rs).
According to the community’s CC&Rs (Section 9.3.1), amending the rules is a serious undertaking that requires the written approval of 75 percent of all homeowners. The board clearly did not have this approval, so it seemed to be a clear-cut case of an illegal action. Many homeowners would have made the same reasonable assumption: the board can’t just change the rules on its own.
However, the judge found a critical distinction. The board’s action was not an “amendment”—a permanent change to the rules for the entire community. Instead, it was legally considered a “variance”—a one-time exception granted to a single homeowner. Because the CC&Rs contained a separate, specific process for granting variances (Section 3.31), the board was not illegally rewriting the rulebook; it was simply using a different, pre-existing tool in the governing documents.
3.0 Takeaway 2: The Board Can Wield Powers Given to Its Own Committees
This distinction raised another logical objection. The CC&Rs (Section 3.31) explicitly state that the power to grant variances belongs to the “Architectural Review Committee” (ARC), not the Board of Directors. It appeared Mr. Mathews had found his checkmate: even if the action was a variance, the wrong body had granted it.
This is where the case took its most surprising turn. The judge looked beyond the CC&Rs and consulted a different governing document: the Bylaws. This document contained a foundational clause about the board’s authority that proved decisive.
According to Bylaw 3.11.8, the Board of Directors is empowered to exercise any authority of the Association that is not specifically and exclusively reserved for the members themselves. Since the power to grant variances was delegated to a committee (the ARC) and not reserved for a vote by the general membership, the Board had the authority to step in and exercise that power itself. The judge’s decision made this clear.
“As the power to grant variances was delegated to the Architectural Review Committee and was not reserved to the membership, the Board had the authority to grant such a variance.”
This finding reveals a crucial principle of HOA governance: powers delegated to a committee are not the same as powers reserved for the entire membership. Unless a power is explicitly reserved for a member vote, the Bylaws can grant the Board ultimate authority over it.
4.0 Takeaway 3: A Messy History Can Justify an Unusual Solution
While the legal arguments are complex, the context behind the board’s decision is equally important. The board wasn’t making a special deal out of the blue; it was trying to solve a messy problem it had inherited.
The well on Lot 2 was originally installed around 2007 in violation of Section 3.26 of the CC&Rs. The board’s first attempt to fix this, “Well Agreement 1” in or about June 2011, allowed the well’s use but required the owner to pay the association for the water consumed. This arrangement, however, was deeply flawed.
When new buyers (the Kaplans) were in escrow to purchase the property in 2016, the situation came to a head. The Kaplans discovered the unusual agreement and informed the board they would be “unable to proceed with the purchase” unless its status was clarified. With the real estate deal on the line, the board recognized that “time was of the essence.”
The board’s decision to execute “Well Agreement 2” was driven by two realities. First, they believed the original agreement was legally invalid, as the board had no authority to bill a resident for water. Second, the agreement was a failure in practice; the Kaplans had been told by the prior owners that “they had never been charged for the water used from the well.” Facing an unenforceable and un-enforced agreement that was now threatening a home sale, the board acted pragmatically to resolve the decade-old violation once and for all.
5.0 Conclusion: Know the Rules—And Who Has the Power to Bend Them
The core lesson from this case is that HOA governance is a complex web of interlocking documents. The rules you read in the CC&Rs might not tell the whole story. Power and authority can be defined, and even transferred, by provisions buried in the Bylaws or other governing texts. What may seem like an obvious violation can be justified by a clause a homeowner might easily overlook.
This case is a powerful reminder for every homeowner. It’s not enough to know the rules of your community. You also need to understand the system of governance that enforces, interprets, and sometimes, grants exceptions to them. It prompts a critical question: Do you know not just the rules in your community, but who really has the authority to grant exceptions?
Case Participants
Petitioner Side
Brent J. Mathews(petitioner) Appeared on his own behalf
The Administrative Law Judge dismissed the Petition because the Petitioner failed to prove the Respondent Board violated the Bylaws. The Board was found to have the necessary authority under Bylaws Section 3.11 to enter into the Well Agreement 2 as a variance, and this action did not constitute an improper amendment of the CC&Rs.
Why this result: The Board was authorized to grant a variance to the CC&Rs regarding the well on Lot 2, a power delegated to the Association, meaning the Board did not exceed its authority under the Bylaws.
Key Issues & Findings
Alleged violation of the American Ranch Bylaws, Article 3.11, when the Board entered into the 'Well Agreement' (Well Agreement 2).
Petitioner asserted that the Board violated the Bylaws by entering into Well Agreement 2, claiming the Board lacked the authority to grant exceptions or variances to the CC&Rs regarding the use of a private water well on Lot 2. The Board agreed the well existed in violation of CC&Rs Section 3.26, but argued Well Agreement 2 constituted a variance, not an amendment.
Orders: The Petition was dismissed.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
A.R.S. § 41-2198.01
A.R.S. § 41-1092.07(G)(2)
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)
A.A.C. R2-19-119(B)(2)
A.R.S. § 32-2199.02(B)
A.R.S. § 32-2199.04
A.R.S. § 41-1092.09
Analytics Highlights
Topics: HOA authority, Bylaws 3.11, CC&Rs, Variance, Amendment, Well Agreement, Burden of Proof, Dismissal
Additional Citations:
A.R.S. § 41-2198.01
A.R.S. § 41-1092.07(G)(2)
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)
A.A.C. R2-19-119(B)(2)
A.R.S. § 32-2199.02(B)
A.R.S. § 32-2199.04
A.R.S. § 41-1092.09
Video Overview
Audio Overview
Decision Documents
18F-H1818050-REL Decision – 664186.pdf
Uploaded 2026-01-23T17:24:56 (112.4 KB)
Briefing Doc – 18F-H1818050-REL
Briefing Document: Mathews v. American Ranch Community Association
Executive Summary
This briefing document outlines the findings and decision in case number 18F-H1818050-REL, a dispute between Petitioner Brent J. Mathews and the American Ranch Community Association (HOA). The Administrative Law Judge dismissed the petition, concluding that Mr. Mathews failed to prove his allegations by a preponderance of the evidence.
The central issue was whether the HOA’s Board of Directors violated Article 3.11 of its Bylaws by entering into a “Well Agreement” with the owners of Lot 2 on August 9, 2016. The Petitioner argued that this agreement constituted an unauthorized amendment to the community’s Covenants, Conditions, and Restrictions (CC&Rs) because the Board does not have the power to grant exceptions.
The judge found this argument “faulty,” determining that the agreement was not an amendment but a variance. The CC&Rs explicitly grant the authority to issue variances to the Architectural Review Committee. Per the Bylaws, the Board is empowered to exercise any authority delegated to the Association that is not specifically reserved for the general membership. Therefore, the judge concluded that the Board acted within its authority when it executed the agreement. The decision was based on the Board’s need to resolve a problematic prior agreement under time-sensitive circumstances related to a property sale.
1. Case Overview
Case Number
18F-H1818050-REL
Petitioner
Brent J. Mathews
Respondent
American Ranch Community Association
Hearing Date
September 21, 2018
Decision Date
October 11, 2018
Presiding Judge
Administrative Law Judge Tammy L. Eigenheer
The dispute originated from a petition filed by Brent J. Mathews on May 16, 2018, with the Arizona Department of Real Estate. The core of the complaint was an alleged Open Meeting Violation concerning an “Action Outside of Meeting” that resulted in a “Well Agreement” between the Association and homeowners Mark and Diane Kaplan.
2. Petitioner’s Core Allegation
After being directed to clarify his petition to a single issue, Mr. Mathews submitted the following statement on August 23, 2018:
“When the Board entered into the ‘Well Agreement’ they may have assumed they had the power to grant exceptions to the CC&R’s. The American Ranch Community Association Bylaws do not empower the Board to grant exceptions to the CC&R’s. Therefore the single complaint is an alleged violation of the American Ranch Bylaws, Article 3.11.”
The Petitioner’s legal argument was that the Board’s action in creating the “Well Agreement 2” was effectively an amendment of the CC&Rs. According to Section 9.3.1 of the CC&Rs, amendments require the written approval or affirmative vote of 75 percent of the total owners. Since this did not occur, the Petitioner concluded the Board lacked the authority to enter into the agreement.
3. Factual Background and Chronology of Events
The case revolves around a water well on Lot 2 of the American Ranch community, which was installed in violation of the governing documents.
A water well is installed on Lot 2. This installation violates Section 3.26 of the CC&Rs, which prohibits wells on all lots except Equestrian Lots and, even then, only with prior approval from the Architectural Review Committee (ARC) for specific purposes.
June 2011
The owners of Lot 2 and the HOA Board enter into the first “Well and Easement Agreement” (Well Agreement 1). This agreement permitted the continued use of the well for irrigation but required the owners to install a water meter and pay the HOA for water usage at the same rate as the local water district.
November 23, 2013
Lot 2 is sold to Steven and Frances Galliano.
July 30, 2016
Mark and Diane Kaplan, who are in escrow to purchase Lot 2, email the Community Manager, Tiffany Taylor. They express concern over Well Agreement 1 and state they cannot proceed with the purchase without clarity on the HOA’s position. They also note that the Gallianos told them they had never been charged for water from the well.
August 2016
Facing a time-sensitive situation due to the pending property sale, the HOA Board decides to enter into a new agreement to invalidate Well Agreement 1. The Board’s decision was based in part on the belief that it lacked the authority to enter into the original agreement, specifically because it had no power to bill residents for water usage—a function of the water district.
August 9, 2016
The HOA Board and the Kaplans execute a new “Well Agreement” (Well Agreement 2). This agreement permits the continued use of the well for irrigation purposes but explicitly states the owners will not be billed for the water used.
4. Administrative Law Judge’s Findings and Legal Reasoning
The Judge’s decision rested on a critical distinction between a CC&R amendment and a variance, and a detailed analysis of the powers granted to the Board by the governing documents.
A. Burden of Proof
The Petitioner, Brent J. Mathews, bore the burden of proof to establish that the HOA committed the alleged violation by a “preponderance of the evidence.” This standard requires proof that a contention is more probably true than not.
B. Variance vs. Amendment
The central point of the Judge’s legal conclusion was the rejection of the Petitioner’s argument.
• Petitioner’s Argument: Well Agreement 2 was an amendment to the CC&Rs.
• Judge’s Finding: The argument is “faulty.” The decision states, “A variance granted to an individual owner from a restriction under the CC&Rs does not constitute an amendment of the CC&Rs.”
The Judge found that the CC&Rs themselves, in Section 3.31, provide a specific mechanism for granting variances. The ARC is authorized to grant variances in “extenuating circumstances” if a restriction creates an “unreasonable hardship or burden” and the variance does not have a “substantial adverse effect” on the community.
C. The Board’s Delegated Authority
The Judge established a clear chain of authority that empowered the Board to act as it did:
1. CC&R Section 3.31: Delegates the power to grant variances to the Architectural Review Committee.
2. Bylaw Section 3.11.8: States the Board shall have the power to “Exercise for the Association all powers, duties and authority vested in or delegated to the Association and not reserved to the membership by other provisions of the Project Documents.”
3. Conclusion: Because the power to grant variances was delegated to the ARC (and thus to the Association) and not reserved for the membership, the Board had the authority to grant the variance embodied in Well Agreement 2.
5. Final Order
Based on the foregoing analysis, the Administrative Law Judge issued the following order:
• Decision: The Petition filed by Brent J. Mathews is dismissed.
• Reasoning: “Petitioner failed to establish by a preponderance of the evidence that the Board of Directors lacked the authority to enter into Well Agreement 2. Thus, Petitioner failed to sustain his burden to establish a violation of Section 3.11 of the Bylaws.”
The order was finalized and transmitted to the parties on October 11, 2018.
Study Guide – 18F-H1818050-REL
Study Guide: Mathews v. American Ranch Community Association (Case No. 18F-H1818050-REL)
This guide provides a comprehensive review of the Administrative Law Judge Decision in the case between Petitioner Brent J. Mathews and Respondent American Ranch Community Association. It is designed to test and deepen understanding of the facts, legal arguments, and final ruling presented in the source document.
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Short-Answer Quiz
Instructions: Answer the following questions in 2-3 complete sentences based on the information provided in the case document.
1. Who were the primary parties involved in this case, and what were their respective roles?
2. What was the initial, overarching subject of Brent J. Mathews’s complaint filed on May 16, 2018?
3. After being asked to clarify, what single issue did the Petitioner choose to proceed with for the hearing?
4. According to the CC&Rs, what are the specific rules regarding the use of water wells on lots within American Ranch?
5. What were the key terms of “Well Agreement 1,” established in June 2011 with the original owners of Lot 2?
6. Why did the American Ranch Board of Directors believe they lacked the authority to enforce “Well Agreement 1”?
7. What were the terms of “Well Agreement 2,” which was executed on August 9, 2016, with the new owners of Lot 2, the Kaplans?
8. What was Petitioner Mathews’s primary legal argument against the Board’s authority to enter into “Well Agreement 2”?
9. How did the Administrative Law Judge distinguish between a “variance” and an “amendment” to the CC&Rs in the final decision?
10. What was the final order issued by the Administrative Law Judge on October 11, 2018?
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Answer Key
1. The primary parties were Petitioner Brent J. Mathews, who filed the complaint, and Respondent American Ranch Community Association (HOA), which was the subject of the complaint. Mathews represented himself, while the Association was represented by Lynn Krupnik and Timothy Krupnik.
2. The initial complaint’s subject was an “Open Meeting Violation regarding an ‘Action Outside of Meeting’” that took place on August 6, 2016. This action concerned the Association entering into a “Well Agreement” with Mark and Diane Kaplan.
3. The Petitioner clarified his single issue was an alleged violation of the American Ranch Bylaws, Article 3.11. He argued that the Board entered into the “Well Agreement” assuming they had the power to grant exceptions to the CC&Rs, a power he claimed the Bylaws did not grant them.
4. Section 3.26 of the CC&Rs prohibits water wells on all lots except Equestrian Lots. On Equestrian Lots, wells are permitted only with prior written approval from the Architectural Review Committee and must be used solely to irrigate pasture land and provide drinking water for horses.
5. “Well Agreement 1” acknowledged that the owners of Lot 2 were using their well for irrigation in violation of the CC&Rs. The agreement allowed them to continue this use, provided they installed a water meter and paid the Association the same per-gallon charge as other owners paid to the water district.
6. The Board of Directors believed they did not have the authority to enter into “Well Agreement 1” because they had no ability or authority to bill the lot owners for water used from a private well. They reasoned that billing for water was the responsibility of the water district, not the HOA.
7. “Well Agreement 2” stated that the private water well on Lot 2 would continue to be used for irrigation purposes. Crucially, it specified that the owners (the Kaplans) would not be billed for the water used from this well.
8. Petitioner Mathews argued that “Well Agreement 2” constituted an amendment of the CC&Rs. He contended that under Section 9.3.1 of the CC&Rs, an amendment requires the written approval or affirmative vote of 75 percent of the total owners, and therefore the Board acted outside its authority.
9. The Judge ruled that “Well Agreement 2” was a variance granted to an individual owner, not an amendment to the CC&Rs. The CC&Rs specifically provide a method for granting variances via the Architectural Review Committee, and this power is delegated to the Association and thus exercisable by the Board.
10. The final order, issued on October 11, 2018, was that the Petition be dismissed. The Judge concluded that the Petitioner failed to establish by a preponderance of the evidence that the Board of Directors lacked the authority to enter into “Well Agreement 2.”
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Essay Questions
Instructions: The following questions are designed for a more in-depth, essay-style response. Use the case document to construct a thorough and well-supported argument for each prompt. Answers are not provided.
1. Analyze the evolution of the dispute, from the initial installation of the well on Lot 2 to the final Administrative Law Judge Decision. Discuss the key events and agreements (Well Agreement 1 and Well Agreement 2) and explain how each contributed to the legal conflict.
2. Explain the legal reasoning used by the Administrative Law Judge to dismiss the Petitioner’s claim. Detail the specific sections of the Bylaws and CC&Rs cited (3.11, 3.26, 3.31, 9.3.1) and explain the distinction the Judge made between a “variance” and an “amendment.”
3. Discuss the concept of “burden of proof” as it applies to this case. Who held the burden of proof, what was the required standard (“preponderance of the evidence”), and why did the Petitioner ultimately fail to meet this standard?
4. Evaluate the actions of the American Ranch Community Association Board of Directors regarding Lot 2’s well. Discuss their reasoning for invalidating Well Agreement 1 and creating Well Agreement 2, and analyze whether their actions were consistent with the powers granted to them by the community’s governing documents.
5. Based on the procedural history outlined in the “Findings of Fact,” describe the process of an HOA dispute in this jurisdiction, from the initial filing of a petition to the final order from the Office of Administrative Hearings.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official (Tammy L. Eigenheer) who presides over administrative hearings and issues a decision on the matter.
A.R.S. (Arizona Revised Statutes)
The statutory laws of the state of Arizona, sections of which regulate planned communities and the administrative hearing process.
Architectural Review Committee
A body within the Association delegated the authority by the CC&Rs (Section 3.31) to grant variances from certain restrictions in extenuating circumstances.
Board of Directors
The governing body of the American Ranch Community Association, which has the powers and duties necessary for administering the Association’s affairs.
Burden of Proof
The obligation of a party in a legal case to prove their claims. In this case, the Petitioner had the burden to establish the alleged violations.
Bylaws
The rules governing the internal administration of the Association. Petitioner alleged a violation of Bylaw 3.11, which outlines the powers and duties of the Board.
Covenants, Conditions, and Restrictions. These are the governing documents that set rules for properties within the community, such as the prohibition of certain water wells (Section 3.26).
Department
Refers to the Arizona Department of Real Estate, the agency with which the initial Homeowners Association Dispute Process Petition was filed.
Office of Administrative Hearings
An independent state agency to which the Department refers HOA dispute cases for a formal hearing.
Petition
The formal document filed by Brent J. Mathews to initiate the HOA dispute process with the Arizona Department of Real Estate.
Petitioner
The party who brings the legal action or complaint. In this case, Brent J. Mathews.
Preponderance of the Evidence
The standard of proof required in this hearing. It is defined as proof that convinces the trier of fact that a contention is “more probably true than not.”
Respondent
The party against whom the petition is filed. In this case, the American Ranch Community Association.
Variance
An officially granted exception from a restriction in the CC&Rs for an individual owner. The Judge determined Well Agreement 2 was a variance, not an amendment.
Well Agreement 1
A June 2011 agreement that allowed the owners of Lot 2 to use a non-compliant well for irrigation, provided they paid the Association for the water.
Well Agreement 2
An August 2016 agreement that invalidated Well Agreement 1 and allowed the new owners of Lot 2 (the Kaplans) to continue using the well for irrigation without being billed for the water.
Blog Post – 18F-H1818050-REL
Your HOA Board Might Be More Powerful Than You Think: 3 Lessons from a Legal Showdown
1.0 Introduction: The Predictable Fight with an Unpredictable Outcome
It’s a scenario familiar to many homeowners: you suspect your Homeowners Association (HOA) board is playing favorites, bending the rules for one resident while holding everyone else to the letter of the law. This feeling of frustration often leads to heated disputes, but what happens when a homeowner decides to take that fight to court? You might expect a simple verdict based on the community’s clear, written rules.
That’s exactly what homeowner Brent J. Mathews thought. He discovered his HOA board had made a special agreement with a neighbor, allowing a water well that clearly violated the community’s governing documents. He filed a formal complaint, arguing the board had illegally overstepped its authority.
The case that followed, however, didn’t turn on one obvious rule. Instead, the judge’s decision hinged on how different governing documents—the CC&Rs and the Bylaws—interact. The outcome reveals some surprising and counter-intuitive truths about where power really lies within an HOA, offering critical lessons for every homeowner.
2.0 Takeaway 1: A Special Exception Isn’t the Same as Changing the Rules for Everyone
Mr. Mathews’ central argument was straightforward and, on its face, perfectly logical. He contended that the board’s “Well Agreement 2” with his neighbor was effectively an amendment to the community’s Covenants, Conditions, and Restrictions (CC&Rs).
According to the community’s CC&Rs (Section 9.3.1), amending the rules is a serious undertaking that requires the written approval of 75 percent of all homeowners. The board clearly did not have this approval, so it seemed to be a clear-cut case of an illegal action. Many homeowners would have made the same reasonable assumption: the board can’t just change the rules on its own.
However, the judge found a critical distinction. The board’s action was not an “amendment”—a permanent change to the rules for the entire community. Instead, it was legally considered a “variance”—a one-time exception granted to a single homeowner. Because the CC&Rs contained a separate, specific process for granting variances (Section 3.31), the board was not illegally rewriting the rulebook; it was simply using a different, pre-existing tool in the governing documents.
3.0 Takeaway 2: The Board Can Wield Powers Given to Its Own Committees
This distinction raised another logical objection. The CC&Rs (Section 3.31) explicitly state that the power to grant variances belongs to the “Architectural Review Committee” (ARC), not the Board of Directors. It appeared Mr. Mathews had found his checkmate: even if the action was a variance, the wrong body had granted it.
This is where the case took its most surprising turn. The judge looked beyond the CC&Rs and consulted a different governing document: the Bylaws. This document contained a foundational clause about the board’s authority that proved decisive.
According to Bylaw 3.11.8, the Board of Directors is empowered to exercise any authority of the Association that is not specifically and exclusively reserved for the members themselves. Since the power to grant variances was delegated to a committee (the ARC) and not reserved for a vote by the general membership, the Board had the authority to step in and exercise that power itself. The judge’s decision made this clear.
“As the power to grant variances was delegated to the Architectural Review Committee and was not reserved to the membership, the Board had the authority to grant such a variance.”
This finding reveals a crucial principle of HOA governance: powers delegated to a committee are not the same as powers reserved for the entire membership. Unless a power is explicitly reserved for a member vote, the Bylaws can grant the Board ultimate authority over it.
4.0 Takeaway 3: A Messy History Can Justify an Unusual Solution
While the legal arguments are complex, the context behind the board’s decision is equally important. The board wasn’t making a special deal out of the blue; it was trying to solve a messy problem it had inherited.
The well on Lot 2 was originally installed around 2007 in violation of Section 3.26 of the CC&Rs. The board’s first attempt to fix this, “Well Agreement 1” in or about June 2011, allowed the well’s use but required the owner to pay the association for the water consumed. This arrangement, however, was deeply flawed.
When new buyers (the Kaplans) were in escrow to purchase the property in 2016, the situation came to a head. The Kaplans discovered the unusual agreement and informed the board they would be “unable to proceed with the purchase” unless its status was clarified. With the real estate deal on the line, the board recognized that “time was of the essence.”
The board’s decision to execute “Well Agreement 2” was driven by two realities. First, they believed the original agreement was legally invalid, as the board had no authority to bill a resident for water. Second, the agreement was a failure in practice; the Kaplans had been told by the prior owners that “they had never been charged for the water used from the well.” Facing an unenforceable and un-enforced agreement that was now threatening a home sale, the board acted pragmatically to resolve the decade-old violation once and for all.
5.0 Conclusion: Know the Rules—And Who Has the Power to Bend Them
The core lesson from this case is that HOA governance is a complex web of interlocking documents. The rules you read in the CC&Rs might not tell the whole story. Power and authority can be defined, and even transferred, by provisions buried in the Bylaws or other governing texts. What may seem like an obvious violation can be justified by a clause a homeowner might easily overlook.
This case is a powerful reminder for every homeowner. It’s not enough to know the rules of your community. You also need to understand the system of governance that enforces, interprets, and sometimes, grants exceptions to them. It prompts a critical question: Do you know not just the rules in your community, but who really has the authority to grant exceptions?
Case Participants
Petitioner Side
Brent J. Mathews(petitioner) Appeared on his own behalf
The Administrative Law Judge denied the petition, concluding that the Petitioner failed to prove the HOA violated the governing documents or relevant statutes in assessing fines for unauthorized parking.
Why this result: Petitioner continually violated CC&R § 4.7 and failed to prove Respondent violated any CC&R or statute, particularly as A.R.S. § 33-1242 did not apply to disputes concerning the use of limited common elements.
Key Issues & Findings
HOA violation of CC&Rs and Statutes by imposing parking fines
Petitioner challenged the HOA's decision to assess continuous fines against her account totaling $2,544.00 for repeatedly parking in spaces that were not assigned to her unit 52, arguing the fines and enforcement lacked proper statutory process and violated CC&Rs. The ALJ found that Petitioner failed to meet her burden of proof and that the statute cited (A.R.S. § 33-1242) concerning property condition notices did not apply to this dispute regarding limited common elements (parking spaces).
Orders: Petitioner Michelle Ruffo’s petition against Respondent Reflections in the Catalinas Condo Association is denied.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
A.R.S. § 33-1242
A.R.S. § 33-1803
CC&R § 4.7
CC&R § 2.8.3
Analytics Highlights
Topics: parking violation, fines, HOA enforcement, limited common elements, due process, Arizona Department of Real Estate
Additional Citations:
A.R.S. § 32-2199
A.R.S. § 33-1242
A.R.S. § 33-1248
A.R.S. § 33-1803
A.R.S. § 33-1805
A.R.S. § 12-349
CC&R § 4.7
CC&R § 2.8.3
Video Overview
Audio Overview
Decision Documents
18F-H1818044-REL Decision – 663567.pdf
Uploaded 2025-10-09T03:32:52 (270.9 KB)
Briefing Doc – 18F-H1818044-REL
Briefing Document: Ruffo v. Reflections in the Catalinas Condo Association
Executive Summary
This document provides a comprehensive analysis of the Administrative Law Judge (ALJ) Decision in case number 18F-H1818044-REL, involving Petitioner Michelle Ruffo and Respondent Reflections in the Catalinas Condo Association. The core of the dispute centers on a series of fines levied by the Association against Ms. Ruffo for repeatedly parking in condominium parking spaces not assigned to her unit.
The Petitioner argued that she had informal written permission from other residents to use their spaces, that the Association’s notices of violation were procedurally flawed, that she was the victim of retaliatory harassment, and that her own assigned space was frequently occupied by others. The Respondent maintained that its actions were in strict accordance with the community’s Covenants, Conditions, and Restrictions (CC&Rs), which unambiguously require owners to use only their assigned parking spaces and outline a formal process for reallocating them, a process the Petitioner did not follow.
The ALJ ultimately denied the petition, finding that Ms. Ruffo failed to meet her burden of proof. The decision concluded that the Association acted within its rights, that its enforcement actions were consistent with its governing documents, and that the Petitioner’s reliance on informal agreements represented the very “evils that the CC&Rs were designed to prevent.” As of the hearing date, the outstanding balance of fines, interest, and fees on the Petitioner’s account totaled $2,544.00.
Case Background
Parties Involved
Name / Entity
Representation / Key Details
Petitioner
Michelle Ruffo
Owner of unit 52, assigned parking space #131. Appeared on her own behalf.
Respondent
Reflections in the Catalinas Condo Assoc.
The condominium unit owners’ association. Represented by Nathan Tennyson, Esq. of Brown Olcott, PLLC.
Adjudicator
Diane Mihalsky
Administrative Law Judge, Office of Administrative Hearings.
Witnesses
Carol Lundberg
Testified for the Petitioner.
Vanessa Chapman Lubinsky & Gabino Trejo
Former and current property managers, respectively, who testified for the Respondent.
Core Dispute
The central issue is the Association’s imposition of fines against Ms. Ruffo for violating the community’s parking regulations. On or about April 17, 2018, Ms. Ruffo filed a petition alleging the Association violated its CC&Rs and several Arizona statutes by fining her for parking in spaces #38 and #40, which were not assigned to her unit #52. The Association denied any violation, asserting it was enforcing valid community rules.
Chronology of the Dispute
The conflict escalated over a period of approximately two years, marked by a series of notices, fines, and failed attempts at resolution.
• August 2, 2016: The Association sends a “Friendly Reminder” to Ms. Ruffo to cease parking in space #40 and use her assigned space, #131.
• August 5, 2016: A “Notice of Violation” is sent for the same issue, serving as a second warning.
• March 14, 2017: A “Final Non-Compliance Notice” is issued, noting violations in both space #40 and #38. The notice informs Ms. Ruffo of her right to a hearing with the Board of Directors if requested within 14 days.
• March 30, 2017: The first fine of $50.00 is assessed after Ms. Ruffo’s vehicle is again observed in space #38.
• April 17, 2017: Ms. Ruffo responds in writing, claiming she has permission to use the spaces and requests the fine be waived.
• April 27, 2017: The Association’s Board reviews and denies the waiver request. Ms. Ruffo was invited to address the Board but did not attend.
• June 6, 2017: A $200.00 fine is assessed for two observed violations in space #40.
• June 26, 2017: Another $200.00 fine is assessed for violations in spaces #40 and #38.
• July 11, 2017: The Association warns that access to community amenities (pool, fitness room) will be denied if fines remain unpaid. This action is later taken.
• August 31, 2017: A Board meeting is scheduled for Ms. Ruffo and her attorney, Mark F. Williman, to attend. Neither party attends, and they fail to provide advance notice. The Association incurs a $200 legal fee for its attorney’s attendance.
• September 25, 2017: Fines totaling $1,400.00 are assessed for multiple observed violations.
• September 27, 2017: The Association attempts to tow Ms. Ruffo’s vehicle. The attempt is aborted after she refuses to exit the vehicle and calls the Pima County Sheriff’s Office.
• October 4, 2017: The Association’s attorney informs Ms. Ruffo that another hearing will not be scheduled until she reimburses the Association for the $200 legal fee from the missed August 31 meeting.
• October 2017 – January 2018: A series of additional fines are assessed for ongoing violations, and Ms. Ruffo sends multiple letters requesting a hearing and protesting the fines and the $200 reimbursement requirement.
• April 17, 2018: Ms. Ruffo files the formal petition with the Arizona Department of Real Estate.
• September 18, 2018: The evidentiary hearing is held before the Office of Administrative Hearings.
Analysis of Arguments and Evidence
Petitioner’s Position (Michelle Ruffo)
Ms. Ruffo’s defense was multi-faceted, based on claims of permission, procedural errors by the Association, and alleged harassment.
• Claim of Permission: Ms. Ruffo testified that since 2005, she had been parking in spaces #38 and #40 with written permission. She claimed a 2006 agreement with the Morleys, then owners of unit #56, for space #40. She also submitted a 2018 email from Julie Ruiz, a tenant in unit #53, granting permission to use space #38.
• Allegations of Improper Notices: She argued the Association’s notices violated A.R.S. § 33-1242(C) because they did not always identify the person who observed the violation or provide photographic evidence.
• Allegations of Harassment and Retaliation: Through an attorney, Ms. Ruffo alleged she was being “unlawfully discriminated against and harassed in retaliation for her role related to allegations that HOA President Mitch Treese misappropriated HOA funds.” The ALJ noted that no evidence was submitted at the hearing to support this claim.
• Counter-Evidence: Ms. Ruffo submitted photographs dated from October 2016 to July 2017 showing other vehicles, including those of Associa maintenance and a landscaping contractor, parked in her assigned space #131.
• Dispute over Hearing Preconditions: She argued that the Association’s demand for a $200 reimbursement for its attorney’s fees as a condition for a new hearing was unlawful and not permitted under the CC&Rs.
Respondent’s Position (The Association)
The Association’s case rested on the explicit language of its governing documents and its adherence to established enforcement procedures.
• Primacy of the CC&Rs: The Association argued that its governing documents are unambiguous. Section 4.7 explicitly forbids owners from parking in any space other than the one assigned to their unit as a Limited Common Element.
• Formal Reallocation Process: Per Section 2.8.3, reallocating a Limited Common Element like a parking space requires a formal, written amendment executed by the unit owners involved and submitted to the Board for approval. Ms. Ruffo never followed this procedure.
• Rejection of Informal Agreements: The property manager testified that such private agreements are not legally binding or enforceable by the Association and create confusion, as evidenced by complaints from subsequent owners and tenants who were unable to use their assigned spaces.
• Adherence to Enforcement Policy: The Association followed its documented Violation Enforcement Policy, starting with a friendly reminder and escalating to formal notices and fines for continued non-compliance.
• Opportunity to Be Heard: Ms. Ruffo was provided opportunities to address the Board on April 27, 2017, and August 31, 2017. She failed to attend either meeting, and her failure to provide notice for the latter caused the Association to incur unnecessary legal fees.
• Witness Testimony: The former property manager, Ms. Chapman, testified that she had personally witnessed all the charged violations.
Governing Documents and Statutes
The case hinged on the interpretation of the Association’s CC&Rs and relevant Arizona state law.
Key CC&R Provisions
Section
Provision
Relevance
Motor Vehicles: “no Owner, Lessee or Occupant may park any . . . motor vehicle . . . in any Parking Spaces other than the Parking Space assigned to the Unit as a Limited Common Element.”
The central rule that the Petitioner was found to have repeatedly violated.
§ 2.8.3
Reallocation of Limited Common Elements: A reallocation requires a formal, recorded amendment executed by the owners and submitted to the Board.
The official procedure for changing parking space assignments, which the Petitioner did not follow for her informal agreements.
§ 13.1
Enforcement: Grants the Association the right to impose monetary penalties, suspend an owner’s right to use facilities, and tow vehicles in violation of the rules, after notice and an opportunity to be heard.
Provides the legal authority within the governing documents for the Association’s actions (fines, suspension of amenity access, attempted tow).
§ 1.36
“Parking Space” Definition: Defines a parking space as a portion of the Limited Common Elements.
Legally classifies the disputed parking spaces, making them subject to the rules governing Limited Common Elements.
Arizona Revised Statutes (A.R.S.)
The Petitioner cited A.R.S. § 33-1242(C), which requires an association, upon written request from an owner, to provide details of an alleged violation, including the observer’s name and the date. The ALJ determined this statute was inapplicable to the dispute. The judge’s reasoning was that the statute applies specifically to notices regarding the “condition of the property owned by the unit owner” (i.e., her physical condo unit #52), not her use of Limited Common Elements like parking spaces, which she does not own.
Administrative Law Judge’s Decision and Rationale
The ALJ’s decision was a conclusive denial of the petition, siding entirely with the Association.
Final Order: “IT IS ORDERED that Petitioner Michelle Ruffo’s petition against Respondent Reflections in the Catalinas Condo Association is denied because Petitioner has not established that Respondent violated the CC&Rs or any statute in assessing fines against her for her repeated violations of CC&R § 4.7 by parking in spaces that were not assigned to her unit #52.”
Key Legal Conclusions
• Burden of Proof: The Petitioner bore the burden of proving her claims by a preponderance of the evidence and failed to do so.
• Unambiguous Covenants: The CC&Rs regarding parking are unambiguous and must be enforced to give effect to the intent of the parties. CC&R § 4.7 clearly requires owners to park in their assigned spaces.
• Invalidity of Informal Agreements: The ALJ found that the Petitioner’s reliance on informal agreements illustrated “the evils that the CC&Rs were designed to prevent.” These undocumented side deals create instability and conflict when properties are sold or new tenants arrive, undermining the security and order of the community’s parking plan.
• Respondent’s Proper Conduct: The Association was found to have followed its own enforcement policy and provided the Petitioner with opportunities to be heard.
• Attorney’s Fee Condition: While the CC&Rs do not explicitly authorize charging an owner for attorney’s fees as a precondition for a hearing, the ALJ noted that A.R.S. § 33-1242(A)(18) allows an association to “exercise any . . . powers necessary and proper for the governance and operation.” Furthermore, civil statutes often require a party to pay for fees they cause an opponent to incur unnecessarily.
• Futility of a Board Hearing: The ALJ concluded that, in light of the Petitioner’s arguments and her “continued violation of Respondent’s parking policy over nearly two years,” a hearing before the Association’s Board would not have changed her behavior or the outcome of the matter.
Financial Implications
The conflict resulted in significant financial penalties for the Petitioner. The fines were assessed on an escalating basis for continued violations.
• March 30, 2017: $50.00
• June 6, 2017: $200.00
• June 26, 2017: $200.00
• August 9, 2017: $200.00
• September 25, 2017: $1,400.00
• October 17, 2017: $100.00
• November 6, 2017: $100.00
As of the hearing on September 18, 2018, the total outstanding balance on Ms. Ruffo’s account, including interest and certified letter fees, was $2,544.00.
Study Guide – 18F-H1818044-REL
Study Guide: Ruffo v. Reflections in the Catalinas Condo Association
This guide is designed to review and assess understanding of the Administrative Law Judge Decision in case number 18F-H1818044-REL, Michelle Ruffo v. Reflections in the Catalinas Condo Association.
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Short-Answer Quiz
Instructions: Answer the following questions in 2-3 complete sentences, drawing all information directly from the provided legal decision.
1. Who are the primary parties in this case, and what is the central dispute between them?
2. What was the Petitioner’s main justification for parking in spaces that were not assigned to her unit?
3. According to the Association’s CC&Rs, what is the formal procedure required to reallocate a Limited Common Element, such as a parking space?
4. Describe the key enforcement actions the Condo Association took against the Petitioner in response to the ongoing parking violations.
5. Why did the Administrative Law Judge determine that Arizona Revised Statute § 33-1242(B) and (C) did not apply in this case?
6. Summarize the incident involving the tow truck on September 27, 2017.
7. What reason did the Association’s attorney provide for requiring the Petitioner to pay a $200 fee before another hearing would be scheduled?
8. What evidence did the Petitioner submit to demonstrate that her own assigned parking space, #131, was frequently occupied by others?
9. Identify the two property managers who provided telephonic testimony on behalf of the Respondent.
10. What was the final ruling in this case, and what was the judge’s primary reason for this decision?
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Answer Key
1. The primary parties are Michelle Ruffo, the Petitioner and owner of unit 52, and Reflections in the Catalinas Condo Association, the Respondent. The central dispute is over fines imposed by the Association against Ms. Ruffo for her repeated violations of parking rules by parking in spaces not assigned to her unit.
2. The Petitioner justified her actions by claiming she had long-standing written permission from other unit owners or tenants to use their spaces. Specifically, she cited a 2006 agreement with the owners of unit #56 to use space #40 and more recent permission from a tenant in unit #53 to use space #38.
3. According to Section 2.8.3 of the CC&Rs, reallocating a Limited Common Element requires an amendment to the Declaration. This amendment must be executed by the owners involved, state how the element is being reallocated, and be submitted to the Board of Directors for approval before it can be recorded.
4. The Association’s enforcement actions escalated over time, beginning with a “Friendly Reminder” and moving to a “Notice of Violation” and a “Final Non-Compliance Notice.” Subsequently, the Association assessed escalating monetary fines, suspended the Petitioner’s access to amenities like the pool and fitness room, and attempted to have her vehicle towed.
5. The judge ruled the statute did not apply because it specifically pertains to written notices about the condition of the property owned by the unit owner. The dispute in this case was not about the condition of Ms. Ruffo’s unit (#52) but about her use of Limited Common Elements (parking spaces) that were not assigned to her.
6. On September 27, 2017, the Association attempted to tow the Petitioner’s vehicle from a space not assigned to her. The Petitioner was inside her vehicle and refused to leave, calling the Pima County Sheriff’s Office. The responding officer instructed the tow truck driver to remove the equipment and try again at another time.
7. The Association required the $200 fee to reimburse it for the attorney’s fees it incurred for a Board meeting scheduled on August 31, 2017. The Petitioner and her attorney at the time, Mr. Williman, failed to attend this meeting and did not provide notice of their absence until a few minutes before it was scheduled to begin.
8. The Petitioner submitted a series of dated photographs showing various other vehicles parked in her assigned space, #131. These vehicles included maintenance trucks bearing the Associa logo, a landscaping contractor’s truck and trailer, and several other private cars.
9. The two property managers who testified for the Respondent were Gabino Trejo, the current manager, and Vanessa Chapman Lubinsky (referred to as Ms. Chapman), the former manager.
10. The final ruling was a denial of Michelle Ruffo’s petition. The judge found that the Petitioner had not established that the Respondent violated any CC&Rs or statutes, concluding that the Association was justified in assessing fines for her repeated and clear violations of CC&R § 4.7, which requires owners to park in their assigned spaces.
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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 to each, structuring your answer in a standard essay format.
1. Analyze the arguments and evidence presented by both the Petitioner and the Respondent. Discuss the specific CC&R sections, witness testimonies, and exhibits each side used to support their claims, and explain why the Administrative Law Judge ultimately found the Respondent’s position more convincing.
2. The concept of “Limited Common Elements” is central to this case. Using the definitions provided in the CC&Rs (Sections 1.31, 1.36, and 2.8.1(e)), explain the legal significance of this designation in the dispute over parking spaces. How did the specific rules for reallocating these elements (CC&R § 2.8.3) undermine the Petitioner’s primary defense?
3. Trace the timeline of communication and escalating enforcement actions taken by the Reflections in the Catalinas Condo Association against Michelle Ruffo, beginning with the “Friendly Reminder” in August 2016. Evaluate whether the Association followed its own Violation Enforcement Policy and the powers granted to it in the CC&Rs throughout this process.
4. Discuss the role of legal representation and the various attorneys involved in this case (Nathan Tennyson, Mark F. Williman, Eric J. Thomae, Jonathan Olcott). How did their actions, communications, and, in one instance, inaction, impact the proceedings and the relationship between the Petitioner and the Respondent?
5. The Petitioner argued that her right to due process was violated because the violation notices she received did not contain photographs or identify the person who observed the violation. Explain the Administrative Law Judge’s legal reasoning for rejecting this argument, specifically referencing the interpretation of A.R.S. § 33-1242 and the distinction made between a violation concerning the “condition of the property owned” versus the use of common elements.
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Glossary of Key Terms and Entities
Term / Entity
Definition
Administrative Law Judge (ALJ)
An independent judge who presides over administrative hearings. In this case, Diane Mihalsky presided over the hearing at the Office of Administrative Hearings.
A.R.S. (Arizona Revised Statutes)
The codified laws of the state of Arizona. Several statutes, including those under Title 33 (Property) and Title 32 (Professions and Occupations), were cited in the case.
Associa Property Management Services
The property management company employed by the Respondent to manage the condominium complex. Both Ms. Chapman and Mr. Trejo were employees of Associa.
CC&Rs (Covenants, Conditions, and Restrictions)
The governing legal documents that set out the guidelines for a planned community or condominium. The CC&Rs define the rights and obligations of the homeowners’ association and its members.
Gabino Trejo
The current property manager for the Respondent at the time of the hearing.
Limited Common Elements
As defined in CC&R § 1.31, a portion of the Common Elements allocated for the exclusive use of one or more, but fewer than all, of the Units. Parking spaces are explicitly defined as Limited Common Elements.
Mark F. Williman, Esq.
An attorney and friend of the Petitioner who agreed to help her resolve issues with the Board. He failed to attend a scheduled Board meeting on her behalf on August 31, 2017.
Michelle Ruffo
The Petitioner in the case, owner of condominium unit 52, and member of the Respondent association.
Parking Space
As defined in CC&R § 1.36, a portion of the Limited Common Elements intended for parking a single motor vehicle and allocated to a specific Unit Owner for their exclusive use.
Petitioner
The party who files a petition or brings an action in a legal proceeding. In this case, Michelle Ruffo.
Preponderance of the Evidence
The standard of proof in this case, defined as evidence that is more convincing and has superior weight, inclining an impartial mind to one side of the issue rather than the other.
Reflections in the Catalinas Condo Association
The Respondent in the case; the condominium unit owners’ association for the development where the Petitioner resides.
Respondent
The party against whom a petition is filed or an action is brought. In this case, the Reflections in the Catalinas Condo Association.
Vanessa Chapman Lubinsky (Ms. Chapman)
The former property manager for the Respondent (from 2012 to early 2018) who handled most of the interactions and sent most of the violation notices to the Petitioner.
Violation Enforcement Policy
The Respondent’s official policy that outlines the procedure for addressing violations, including sending a “Friendly Reminder” and a “Notice of Violation,” and provides for a hearing if requested within 14 days.
Blog Post – 18F-H1818044-REL
How a Parking Spot Deal Led to a Tow Truck Standoff and a $2,544 HOA Bill: 4 Lessons
Introduction: The Handshake Deal That Cost a Fortune
It’s a common scenario in community living: you make a friendly, informal agreement with a neighbor. Maybe you agree to switch parking spots for convenience or let them use your guest pass. These simple handshake deals seem harmless, but what happens when they collide with the ironclad rules of a homeowners’ association (HOA)?
The real-life case of Michelle Ruffo and her condo association serves as a stark cautionary tale. A long-standing, informal parking arrangement escalated into a bitter dispute that culminated in a tow truck standoff, loss of amenities, and a final bill for $2,544 in fines and fees. This case reveals several surprising and critical lessons for anyone living in a community governed by an association.
1. Your Neighbor’s Permission Can Be Legally Worthless
The core of the dispute was Ms. Ruffo’s belief that she had the right to park in spaces other than her own. Since 2006, she had an agreement with another owner to use space #40. Later, she began parking in space #38, believing she had permission from that unit’s tenant. From her perspective, she had done her due diligence. This is the core conflict in community living: the perceived authority of a neighbor’s handshake versus the legal authority of the governing documents.
The association, however, operated under its official Covenants, Conditions, and Restrictions (CC&Rs). Those documents told a different story.
• Section 4.7 explicitly required owners to park only in their assigned spaces.
• Section 2.8.3 detailed the only valid procedure for changing parking allocations. Because parking spaces are “Limited Common Elements,” any reallocation required a formal, written amendment executed by the unit owners involved, submitted to the Board for approval, and then officially recorded.
Crucially, the property manager testified that the owner of the unit assigned to space #38 had explicitly denied giving Ms. Ruffo permission and reported that his tenants were complaining. Because Ms. Ruffo never followed the formal procedure, her informal agreements were not recognized or enforceable. The Administrative Law Judge’s decision highlighted the critical importance of these rules:
Because Petitioner never submitted any written agreement with another owner regarding reallocation of parking spaces to Respondent’s Board for its tacit approval, as CC&R § 2.8.3 requires, subsequent tenants and owners have no notice of Petitioner’s alleged agreements with their predecessors regarding parking spaces. If everyone adopted Petitioner’s sense of entitlement as to parking spaces at the Reflections, no one would be able to park their car with any security or plan.
2. Ignoring Official Notices Leads to More Than Just Fines
This conflict didn’t begin with a massive fine. The property management company, Associa, followed a documented escalation process that provided Ms. Ruffo with multiple opportunities to comply. For any homeowner, this documented paper trail should have been a five-alarm fire, signaling a problem that required immediate and formal resolution.
The warnings began on August 2, 2016, with a “Friendly Reminder,” followed by a “Notice of Violation” and a “Final Non-Compliance Notice.” The first fine of just $50 wasn’t assessed until March 30, 2017. But as the violations continued, so did the consequences. After a July 11, 2017 letter, the association shut off Ms. Ruffo’s “electric-key access to the pool and fitness center for the community,” a tangible loss of amenities.
The financial penalties then began to skyrocket. Fines of $200 were assessed in June and August. Then, on September 25, 2017, the association dropped the hammer: a single letter assessing $1,400 for 14 separate observed violations. Just two days later, on September 27, the dispute reached its climax. The association attempted to tow Ms. Ruffo’s vehicle. She was inside the car and refused to leave, prompting her to call the Sheriff’s Office to intervene. The situation had moved from letters and fines to a physical standoff in the parking lot.
3. Skipping a Hearing Can Get You a Bill for the HOA’s Lawyer
After retaining an attorney, Ms. Ruffo was scheduled to have her case heard by the Board on August 31, 2017. The association, anticipating a formal legal discussion, also had its own attorney present. In any formal dispute, failing to appear at your own requested hearing is a critical error. In this case, it not only cost Ruffo credibility but also came with an immediate invoice.
Minutes before the meeting, while the Board and its lawyer were waiting, Ruffo’s attorney sent a message that neither he nor his client would be attending. This last-minute cancellation had a direct financial consequence. The association’s attorney charged it $200 for the time spent on the aborted meeting. The Board then refused to schedule another hearing until Ms. Ruffo reimbursed the association for that $200 fee. This failure to engage was immediately followed by the association’s most severe actions: the $1,400 fine and the attempt to tow her vehicle.
4. “But They Do It Too!” Is Not a Winning Legal Defense
A common response to a violation notice is to point out that others are breaking the rules as well. Ms. Ruffo attempted this strategy, presenting photographic evidence that her own assigned space, #131, was frequently occupied by other vehicles, including maintenance vans bearing the property management company’s logo.
While the property manager testified that she had addressed the issue with the maintenance crew, the Judge ultimately found this argument unpersuasive. The ruling contained a crucial insight: The lesson isn’t just that this defense failed, but why it failed. The Judge noted that Ms. Ruffo “did not present any evidence… that she made any effort to report others parking in her assigned space when there was something that the property manager or Respondent could have done about it.” By failing to formally and properly report her own issue, she undermined her claim that the association was negligent, making it impossible to excuse her own persistent violations.
Conclusion: Read the Fine Print Before You Shake On It
This case serves as a powerful reminder of a fundamental truth of community living: in an HOA, the official, written governing documents are the ultimate authority. Informal “handshake deals,” no matter how reasonable they seem, can lead to serious consequences when they conflict with the rules. This dispute didn’t just involve letters; it led to escalating fines, the loss of amenities, a physical standoff with a tow truck, and ultimately a legal judgment.
This entire conflict, which cost thousands of dollars and countless hours, started with a parking spot—when was the last time you read your community’s rules?
Case Participants
Petitioner Side
Michelle Ruffo(petitioner) Appeared on her own behalf.
Carol Lundberg(witness) Resides in Unit 45; presented testimony by Petitioner.
Julie Ruiz(witness) Unit 53 Tenant Provided email confirming she gave Petitioner permission to park in Unit 53's space.
Mark F. Williman(attorney) Retained by Petitioner; failed to attend the August 31, 2017 Board meeting.
Eric J. Thomae(attorney) Retained by Petitioner sometime after October 24, 2017.
Respondent Side
Nathan Tennyson(HOA attorney) Brown Olcott, PLLC
Vanessa Chapman Lubinsky(property manager) Associa Property Management Services Former manager; referred to as Ms. Chapman in the decision.
Gabino Trejo(property manager) Associa Property Management Services Current manager.
John Pohlig(unit owner) Owner of unit assigned space #38; communicated he had not given Petitioner permission to park there.
Jonathan Olcott(HOA attorney)
Mitch Treese(HOA president) Alleged by Petitioner's attorney to have misappropriated HOA funds.
Neutral Parties
Diane Mihalsky(ALJ) Office of Administrative Hearings
Judy Lowe(Commissioner) Arizona Department of Real Estate
Felicia Del Sol(administrative staff) Transmitted decision electronically.
The Administrative Law Judge denied the petition, concluding that the Petitioner failed to prove the HOA violated the governing documents or relevant statutes in assessing fines for unauthorized parking.
Why this result: Petitioner continually violated CC&R § 4.7 and failed to prove Respondent violated any CC&R or statute, particularly as A.R.S. § 33-1242 did not apply to disputes concerning the use of limited common elements.
Key Issues & Findings
HOA violation of CC&Rs and Statutes by imposing parking fines
Petitioner challenged the HOA's decision to assess continuous fines against her account totaling $2,544.00 for repeatedly parking in spaces that were not assigned to her unit 52, arguing the fines and enforcement lacked proper statutory process and violated CC&Rs. The ALJ found that Petitioner failed to meet her burden of proof and that the statute cited (A.R.S. § 33-1242) concerning property condition notices did not apply to this dispute regarding limited common elements (parking spaces).
Orders: Petitioner Michelle Ruffo’s petition against Respondent Reflections in the Catalinas Condo Association is denied.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
A.R.S. § 33-1242
A.R.S. § 33-1803
CC&R § 4.7
CC&R § 2.8.3
Analytics Highlights
Topics: parking violation, fines, HOA enforcement, limited common elements, due process, Arizona Department of Real Estate
Additional Citations:
A.R.S. § 32-2199
A.R.S. § 33-1242
A.R.S. § 33-1248
A.R.S. § 33-1803
A.R.S. § 33-1805
A.R.S. § 12-349
CC&R § 4.7
CC&R § 2.8.3
Video Overview
Audio Overview
Decision Documents
18F-H1818044-REL Decision – 663567.pdf
Uploaded 2026-01-23T17:24:18 (270.9 KB)
Briefing Doc – 18F-H1818044-REL
Briefing Document: Ruffo v. Reflections in the Catalinas Condo Association
Executive Summary
This document provides a comprehensive analysis of the Administrative Law Judge (ALJ) Decision in case number 18F-H1818044-REL, involving Petitioner Michelle Ruffo and Respondent Reflections in the Catalinas Condo Association. The core of the dispute centers on a series of fines levied by the Association against Ms. Ruffo for repeatedly parking in condominium parking spaces not assigned to her unit.
The Petitioner argued that she had informal written permission from other residents to use their spaces, that the Association’s notices of violation were procedurally flawed, that she was the victim of retaliatory harassment, and that her own assigned space was frequently occupied by others. The Respondent maintained that its actions were in strict accordance with the community’s Covenants, Conditions, and Restrictions (CC&Rs), which unambiguously require owners to use only their assigned parking spaces and outline a formal process for reallocating them, a process the Petitioner did not follow.
The ALJ ultimately denied the petition, finding that Ms. Ruffo failed to meet her burden of proof. The decision concluded that the Association acted within its rights, that its enforcement actions were consistent with its governing documents, and that the Petitioner’s reliance on informal agreements represented the very “evils that the CC&Rs were designed to prevent.” As of the hearing date, the outstanding balance of fines, interest, and fees on the Petitioner’s account totaled $2,544.00.
Case Background
Parties Involved
Name / Entity
Representation / Key Details
Petitioner
Michelle Ruffo
Owner of unit 52, assigned parking space #131. Appeared on her own behalf.
Respondent
Reflections in the Catalinas Condo Assoc.
The condominium unit owners’ association. Represented by Nathan Tennyson, Esq. of Brown Olcott, PLLC.
Adjudicator
Diane Mihalsky
Administrative Law Judge, Office of Administrative Hearings.
Witnesses
Carol Lundberg
Testified for the Petitioner.
Vanessa Chapman Lubinsky & Gabino Trejo
Former and current property managers, respectively, who testified for the Respondent.
Core Dispute
The central issue is the Association’s imposition of fines against Ms. Ruffo for violating the community’s parking regulations. On or about April 17, 2018, Ms. Ruffo filed a petition alleging the Association violated its CC&Rs and several Arizona statutes by fining her for parking in spaces #38 and #40, which were not assigned to her unit #52. The Association denied any violation, asserting it was enforcing valid community rules.
Chronology of the Dispute
The conflict escalated over a period of approximately two years, marked by a series of notices, fines, and failed attempts at resolution.
• August 2, 2016: The Association sends a “Friendly Reminder” to Ms. Ruffo to cease parking in space #40 and use her assigned space, #131.
• August 5, 2016: A “Notice of Violation” is sent for the same issue, serving as a second warning.
• March 14, 2017: A “Final Non-Compliance Notice” is issued, noting violations in both space #40 and #38. The notice informs Ms. Ruffo of her right to a hearing with the Board of Directors if requested within 14 days.
• March 30, 2017: The first fine of $50.00 is assessed after Ms. Ruffo’s vehicle is again observed in space #38.
• April 17, 2017: Ms. Ruffo responds in writing, claiming she has permission to use the spaces and requests the fine be waived.
• April 27, 2017: The Association’s Board reviews and denies the waiver request. Ms. Ruffo was invited to address the Board but did not attend.
• June 6, 2017: A $200.00 fine is assessed for two observed violations in space #40.
• June 26, 2017: Another $200.00 fine is assessed for violations in spaces #40 and #38.
• July 11, 2017: The Association warns that access to community amenities (pool, fitness room) will be denied if fines remain unpaid. This action is later taken.
• August 31, 2017: A Board meeting is scheduled for Ms. Ruffo and her attorney, Mark F. Williman, to attend. Neither party attends, and they fail to provide advance notice. The Association incurs a $200 legal fee for its attorney’s attendance.
• September 25, 2017: Fines totaling $1,400.00 are assessed for multiple observed violations.
• September 27, 2017: The Association attempts to tow Ms. Ruffo’s vehicle. The attempt is aborted after she refuses to exit the vehicle and calls the Pima County Sheriff’s Office.
• October 4, 2017: The Association’s attorney informs Ms. Ruffo that another hearing will not be scheduled until she reimburses the Association for the $200 legal fee from the missed August 31 meeting.
• October 2017 – January 2018: A series of additional fines are assessed for ongoing violations, and Ms. Ruffo sends multiple letters requesting a hearing and protesting the fines and the $200 reimbursement requirement.
• April 17, 2018: Ms. Ruffo files the formal petition with the Arizona Department of Real Estate.
• September 18, 2018: The evidentiary hearing is held before the Office of Administrative Hearings.
Analysis of Arguments and Evidence
Petitioner’s Position (Michelle Ruffo)
Ms. Ruffo’s defense was multi-faceted, based on claims of permission, procedural errors by the Association, and alleged harassment.
• Claim of Permission: Ms. Ruffo testified that since 2005, she had been parking in spaces #38 and #40 with written permission. She claimed a 2006 agreement with the Morleys, then owners of unit #56, for space #40. She also submitted a 2018 email from Julie Ruiz, a tenant in unit #53, granting permission to use space #38.
• Allegations of Improper Notices: She argued the Association’s notices violated A.R.S. § 33-1242(C) because they did not always identify the person who observed the violation or provide photographic evidence.
• Allegations of Harassment and Retaliation: Through an attorney, Ms. Ruffo alleged she was being “unlawfully discriminated against and harassed in retaliation for her role related to allegations that HOA President Mitch Treese misappropriated HOA funds.” The ALJ noted that no evidence was submitted at the hearing to support this claim.
• Counter-Evidence: Ms. Ruffo submitted photographs dated from October 2016 to July 2017 showing other vehicles, including those of Associa maintenance and a landscaping contractor, parked in her assigned space #131.
• Dispute over Hearing Preconditions: She argued that the Association’s demand for a $200 reimbursement for its attorney’s fees as a condition for a new hearing was unlawful and not permitted under the CC&Rs.
Respondent’s Position (The Association)
The Association’s case rested on the explicit language of its governing documents and its adherence to established enforcement procedures.
• Primacy of the CC&Rs: The Association argued that its governing documents are unambiguous. Section 4.7 explicitly forbids owners from parking in any space other than the one assigned to their unit as a Limited Common Element.
• Formal Reallocation Process: Per Section 2.8.3, reallocating a Limited Common Element like a parking space requires a formal, written amendment executed by the unit owners involved and submitted to the Board for approval. Ms. Ruffo never followed this procedure.
• Rejection of Informal Agreements: The property manager testified that such private agreements are not legally binding or enforceable by the Association and create confusion, as evidenced by complaints from subsequent owners and tenants who were unable to use their assigned spaces.
• Adherence to Enforcement Policy: The Association followed its documented Violation Enforcement Policy, starting with a friendly reminder and escalating to formal notices and fines for continued non-compliance.
• Opportunity to Be Heard: Ms. Ruffo was provided opportunities to address the Board on April 27, 2017, and August 31, 2017. She failed to attend either meeting, and her failure to provide notice for the latter caused the Association to incur unnecessary legal fees.
• Witness Testimony: The former property manager, Ms. Chapman, testified that she had personally witnessed all the charged violations.
Governing Documents and Statutes
The case hinged on the interpretation of the Association’s CC&Rs and relevant Arizona state law.
Key CC&R Provisions
Section
Provision
Relevance
Motor Vehicles: “no Owner, Lessee or Occupant may park any . . . motor vehicle . . . in any Parking Spaces other than the Parking Space assigned to the Unit as a Limited Common Element.”
The central rule that the Petitioner was found to have repeatedly violated.
§ 2.8.3
Reallocation of Limited Common Elements: A reallocation requires a formal, recorded amendment executed by the owners and submitted to the Board.
The official procedure for changing parking space assignments, which the Petitioner did not follow for her informal agreements.
§ 13.1
Enforcement: Grants the Association the right to impose monetary penalties, suspend an owner’s right to use facilities, and tow vehicles in violation of the rules, after notice and an opportunity to be heard.
Provides the legal authority within the governing documents for the Association’s actions (fines, suspension of amenity access, attempted tow).
§ 1.36
“Parking Space” Definition: Defines a parking space as a portion of the Limited Common Elements.
Legally classifies the disputed parking spaces, making them subject to the rules governing Limited Common Elements.
Arizona Revised Statutes (A.R.S.)
The Petitioner cited A.R.S. § 33-1242(C), which requires an association, upon written request from an owner, to provide details of an alleged violation, including the observer’s name and the date. The ALJ determined this statute was inapplicable to the dispute. The judge’s reasoning was that the statute applies specifically to notices regarding the “condition of the property owned by the unit owner” (i.e., her physical condo unit #52), not her use of Limited Common Elements like parking spaces, which she does not own.
Administrative Law Judge’s Decision and Rationale
The ALJ’s decision was a conclusive denial of the petition, siding entirely with the Association.
Final Order: “IT IS ORDERED that Petitioner Michelle Ruffo’s petition against Respondent Reflections in the Catalinas Condo Association is denied because Petitioner has not established that Respondent violated the CC&Rs or any statute in assessing fines against her for her repeated violations of CC&R § 4.7 by parking in spaces that were not assigned to her unit #52.”
Key Legal Conclusions
• Burden of Proof: The Petitioner bore the burden of proving her claims by a preponderance of the evidence and failed to do so.
• Unambiguous Covenants: The CC&Rs regarding parking are unambiguous and must be enforced to give effect to the intent of the parties. CC&R § 4.7 clearly requires owners to park in their assigned spaces.
• Invalidity of Informal Agreements: The ALJ found that the Petitioner’s reliance on informal agreements illustrated “the evils that the CC&Rs were designed to prevent.” These undocumented side deals create instability and conflict when properties are sold or new tenants arrive, undermining the security and order of the community’s parking plan.
• Respondent’s Proper Conduct: The Association was found to have followed its own enforcement policy and provided the Petitioner with opportunities to be heard.
• Attorney’s Fee Condition: While the CC&Rs do not explicitly authorize charging an owner for attorney’s fees as a precondition for a hearing, the ALJ noted that A.R.S. § 33-1242(A)(18) allows an association to “exercise any . . . powers necessary and proper for the governance and operation.” Furthermore, civil statutes often require a party to pay for fees they cause an opponent to incur unnecessarily.
• Futility of a Board Hearing: The ALJ concluded that, in light of the Petitioner’s arguments and her “continued violation of Respondent’s parking policy over nearly two years,” a hearing before the Association’s Board would not have changed her behavior or the outcome of the matter.
Financial Implications
The conflict resulted in significant financial penalties for the Petitioner. The fines were assessed on an escalating basis for continued violations.
• March 30, 2017: $50.00
• June 6, 2017: $200.00
• June 26, 2017: $200.00
• August 9, 2017: $200.00
• September 25, 2017: $1,400.00
• October 17, 2017: $100.00
• November 6, 2017: $100.00
As of the hearing on September 18, 2018, the total outstanding balance on Ms. Ruffo’s account, including interest and certified letter fees, was $2,544.00.
Study Guide – 18F-H1818044-REL
Study Guide: Ruffo v. Reflections in the Catalinas Condo Association
This guide is designed to review and assess understanding of the Administrative Law Judge Decision in case number 18F-H1818044-REL, Michelle Ruffo v. Reflections in the Catalinas Condo Association.
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Short-Answer Quiz
Instructions: Answer the following questions in 2-3 complete sentences, drawing all information directly from the provided legal decision.
1. Who are the primary parties in this case, and what is the central dispute between them?
2. What was the Petitioner’s main justification for parking in spaces that were not assigned to her unit?
3. According to the Association’s CC&Rs, what is the formal procedure required to reallocate a Limited Common Element, such as a parking space?
4. Describe the key enforcement actions the Condo Association took against the Petitioner in response to the ongoing parking violations.
5. Why did the Administrative Law Judge determine that Arizona Revised Statute § 33-1242(B) and (C) did not apply in this case?
6. Summarize the incident involving the tow truck on September 27, 2017.
7. What reason did the Association’s attorney provide for requiring the Petitioner to pay a $200 fee before another hearing would be scheduled?
8. What evidence did the Petitioner submit to demonstrate that her own assigned parking space, #131, was frequently occupied by others?
9. Identify the two property managers who provided telephonic testimony on behalf of the Respondent.
10. What was the final ruling in this case, and what was the judge’s primary reason for this decision?
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Answer Key
1. The primary parties are Michelle Ruffo, the Petitioner and owner of unit 52, and Reflections in the Catalinas Condo Association, the Respondent. The central dispute is over fines imposed by the Association against Ms. Ruffo for her repeated violations of parking rules by parking in spaces not assigned to her unit.
2. The Petitioner justified her actions by claiming she had long-standing written permission from other unit owners or tenants to use their spaces. Specifically, she cited a 2006 agreement with the owners of unit #56 to use space #40 and more recent permission from a tenant in unit #53 to use space #38.
3. According to Section 2.8.3 of the CC&Rs, reallocating a Limited Common Element requires an amendment to the Declaration. This amendment must be executed by the owners involved, state how the element is being reallocated, and be submitted to the Board of Directors for approval before it can be recorded.
4. The Association’s enforcement actions escalated over time, beginning with a “Friendly Reminder” and moving to a “Notice of Violation” and a “Final Non-Compliance Notice.” Subsequently, the Association assessed escalating monetary fines, suspended the Petitioner’s access to amenities like the pool and fitness room, and attempted to have her vehicle towed.
5. The judge ruled the statute did not apply because it specifically pertains to written notices about the condition of the property owned by the unit owner. The dispute in this case was not about the condition of Ms. Ruffo’s unit (#52) but about her use of Limited Common Elements (parking spaces) that were not assigned to her.
6. On September 27, 2017, the Association attempted to tow the Petitioner’s vehicle from a space not assigned to her. The Petitioner was inside her vehicle and refused to leave, calling the Pima County Sheriff’s Office. The responding officer instructed the tow truck driver to remove the equipment and try again at another time.
7. The Association required the $200 fee to reimburse it for the attorney’s fees it incurred for a Board meeting scheduled on August 31, 2017. The Petitioner and her attorney at the time, Mr. Williman, failed to attend this meeting and did not provide notice of their absence until a few minutes before it was scheduled to begin.
8. The Petitioner submitted a series of dated photographs showing various other vehicles parked in her assigned space, #131. These vehicles included maintenance trucks bearing the Associa logo, a landscaping contractor’s truck and trailer, and several other private cars.
9. The two property managers who testified for the Respondent were Gabino Trejo, the current manager, and Vanessa Chapman Lubinsky (referred to as Ms. Chapman), the former manager.
10. The final ruling was a denial of Michelle Ruffo’s petition. The judge found that the Petitioner had not established that the Respondent violated any CC&Rs or statutes, concluding that the Association was justified in assessing fines for her repeated and clear violations of CC&R § 4.7, which requires owners to park in their assigned spaces.
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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 to each, structuring your answer in a standard essay format.
1. Analyze the arguments and evidence presented by both the Petitioner and the Respondent. Discuss the specific CC&R sections, witness testimonies, and exhibits each side used to support their claims, and explain why the Administrative Law Judge ultimately found the Respondent’s position more convincing.
2. The concept of “Limited Common Elements” is central to this case. Using the definitions provided in the CC&Rs (Sections 1.31, 1.36, and 2.8.1(e)), explain the legal significance of this designation in the dispute over parking spaces. How did the specific rules for reallocating these elements (CC&R § 2.8.3) undermine the Petitioner’s primary defense?
3. Trace the timeline of communication and escalating enforcement actions taken by the Reflections in the Catalinas Condo Association against Michelle Ruffo, beginning with the “Friendly Reminder” in August 2016. Evaluate whether the Association followed its own Violation Enforcement Policy and the powers granted to it in the CC&Rs throughout this process.
4. Discuss the role of legal representation and the various attorneys involved in this case (Nathan Tennyson, Mark F. Williman, Eric J. Thomae, Jonathan Olcott). How did their actions, communications, and, in one instance, inaction, impact the proceedings and the relationship between the Petitioner and the Respondent?
5. The Petitioner argued that her right to due process was violated because the violation notices she received did not contain photographs or identify the person who observed the violation. Explain the Administrative Law Judge’s legal reasoning for rejecting this argument, specifically referencing the interpretation of A.R.S. § 33-1242 and the distinction made between a violation concerning the “condition of the property owned” versus the use of common elements.
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Glossary of Key Terms and Entities
Term / Entity
Definition
Administrative Law Judge (ALJ)
An independent judge who presides over administrative hearings. In this case, Diane Mihalsky presided over the hearing at the Office of Administrative Hearings.
A.R.S. (Arizona Revised Statutes)
The codified laws of the state of Arizona. Several statutes, including those under Title 33 (Property) and Title 32 (Professions and Occupations), were cited in the case.
Associa Property Management Services
The property management company employed by the Respondent to manage the condominium complex. Both Ms. Chapman and Mr. Trejo were employees of Associa.
CC&Rs (Covenants, Conditions, and Restrictions)
The governing legal documents that set out the guidelines for a planned community or condominium. The CC&Rs define the rights and obligations of the homeowners’ association and its members.
Gabino Trejo
The current property manager for the Respondent at the time of the hearing.
Limited Common Elements
As defined in CC&R § 1.31, a portion of the Common Elements allocated for the exclusive use of one or more, but fewer than all, of the Units. Parking spaces are explicitly defined as Limited Common Elements.
Mark F. Williman, Esq.
An attorney and friend of the Petitioner who agreed to help her resolve issues with the Board. He failed to attend a scheduled Board meeting on her behalf on August 31, 2017.
Michelle Ruffo
The Petitioner in the case, owner of condominium unit 52, and member of the Respondent association.
Parking Space
As defined in CC&R § 1.36, a portion of the Limited Common Elements intended for parking a single motor vehicle and allocated to a specific Unit Owner for their exclusive use.
Petitioner
The party who files a petition or brings an action in a legal proceeding. In this case, Michelle Ruffo.
Preponderance of the Evidence
The standard of proof in this case, defined as evidence that is more convincing and has superior weight, inclining an impartial mind to one side of the issue rather than the other.
Reflections in the Catalinas Condo Association
The Respondent in the case; the condominium unit owners’ association for the development where the Petitioner resides.
Respondent
The party against whom a petition is filed or an action is brought. In this case, the Reflections in the Catalinas Condo Association.
Vanessa Chapman Lubinsky (Ms. Chapman)
The former property manager for the Respondent (from 2012 to early 2018) who handled most of the interactions and sent most of the violation notices to the Petitioner.
Violation Enforcement Policy
The Respondent’s official policy that outlines the procedure for addressing violations, including sending a “Friendly Reminder” and a “Notice of Violation,” and provides for a hearing if requested within 14 days.
Blog Post – 18F-H1818044-REL
How a Parking Spot Deal Led to a Tow Truck Standoff and a $2,544 HOA Bill: 4 Lessons
Introduction: The Handshake Deal That Cost a Fortune
It’s a common scenario in community living: you make a friendly, informal agreement with a neighbor. Maybe you agree to switch parking spots for convenience or let them use your guest pass. These simple handshake deals seem harmless, but what happens when they collide with the ironclad rules of a homeowners’ association (HOA)?
The real-life case of Michelle Ruffo and her condo association serves as a stark cautionary tale. A long-standing, informal parking arrangement escalated into a bitter dispute that culminated in a tow truck standoff, loss of amenities, and a final bill for $2,544 in fines and fees. This case reveals several surprising and critical lessons for anyone living in a community governed by an association.
1. Your Neighbor’s Permission Can Be Legally Worthless
The core of the dispute was Ms. Ruffo’s belief that she had the right to park in spaces other than her own. Since 2006, she had an agreement with another owner to use space #40. Later, she began parking in space #38, believing she had permission from that unit’s tenant. From her perspective, she had done her due diligence. This is the core conflict in community living: the perceived authority of a neighbor’s handshake versus the legal authority of the governing documents.
The association, however, operated under its official Covenants, Conditions, and Restrictions (CC&Rs). Those documents told a different story.
• Section 4.7 explicitly required owners to park only in their assigned spaces.
• Section 2.8.3 detailed the only valid procedure for changing parking allocations. Because parking spaces are “Limited Common Elements,” any reallocation required a formal, written amendment executed by the unit owners involved, submitted to the Board for approval, and then officially recorded.
Crucially, the property manager testified that the owner of the unit assigned to space #38 had explicitly denied giving Ms. Ruffo permission and reported that his tenants were complaining. Because Ms. Ruffo never followed the formal procedure, her informal agreements were not recognized or enforceable. The Administrative Law Judge’s decision highlighted the critical importance of these rules:
Because Petitioner never submitted any written agreement with another owner regarding reallocation of parking spaces to Respondent’s Board for its tacit approval, as CC&R § 2.8.3 requires, subsequent tenants and owners have no notice of Petitioner’s alleged agreements with their predecessors regarding parking spaces. If everyone adopted Petitioner’s sense of entitlement as to parking spaces at the Reflections, no one would be able to park their car with any security or plan.
2. Ignoring Official Notices Leads to More Than Just Fines
This conflict didn’t begin with a massive fine. The property management company, Associa, followed a documented escalation process that provided Ms. Ruffo with multiple opportunities to comply. For any homeowner, this documented paper trail should have been a five-alarm fire, signaling a problem that required immediate and formal resolution.
The warnings began on August 2, 2016, with a “Friendly Reminder,” followed by a “Notice of Violation” and a “Final Non-Compliance Notice.” The first fine of just $50 wasn’t assessed until March 30, 2017. But as the violations continued, so did the consequences. After a July 11, 2017 letter, the association shut off Ms. Ruffo’s “electric-key access to the pool and fitness center for the community,” a tangible loss of amenities.
The financial penalties then began to skyrocket. Fines of $200 were assessed in June and August. Then, on September 25, 2017, the association dropped the hammer: a single letter assessing $1,400 for 14 separate observed violations. Just two days later, on September 27, the dispute reached its climax. The association attempted to tow Ms. Ruffo’s vehicle. She was inside the car and refused to leave, prompting her to call the Sheriff’s Office to intervene. The situation had moved from letters and fines to a physical standoff in the parking lot.
3. Skipping a Hearing Can Get You a Bill for the HOA’s Lawyer
After retaining an attorney, Ms. Ruffo was scheduled to have her case heard by the Board on August 31, 2017. The association, anticipating a formal legal discussion, also had its own attorney present. In any formal dispute, failing to appear at your own requested hearing is a critical error. In this case, it not only cost Ruffo credibility but also came with an immediate invoice.
Minutes before the meeting, while the Board and its lawyer were waiting, Ruffo’s attorney sent a message that neither he nor his client would be attending. This last-minute cancellation had a direct financial consequence. The association’s attorney charged it $200 for the time spent on the aborted meeting. The Board then refused to schedule another hearing until Ms. Ruffo reimbursed the association for that $200 fee. This failure to engage was immediately followed by the association’s most severe actions: the $1,400 fine and the attempt to tow her vehicle.
4. “But They Do It Too!” Is Not a Winning Legal Defense
A common response to a violation notice is to point out that others are breaking the rules as well. Ms. Ruffo attempted this strategy, presenting photographic evidence that her own assigned space, #131, was frequently occupied by other vehicles, including maintenance vans bearing the property management company’s logo.
While the property manager testified that she had addressed the issue with the maintenance crew, the Judge ultimately found this argument unpersuasive. The ruling contained a crucial insight: The lesson isn’t just that this defense failed, but why it failed. The Judge noted that Ms. Ruffo “did not present any evidence… that she made any effort to report others parking in her assigned space when there was something that the property manager or Respondent could have done about it.” By failing to formally and properly report her own issue, she undermined her claim that the association was negligent, making it impossible to excuse her own persistent violations.
Conclusion: Read the Fine Print Before You Shake On It
This case serves as a powerful reminder of a fundamental truth of community living: in an HOA, the official, written governing documents are the ultimate authority. Informal “handshake deals,” no matter how reasonable they seem, can lead to serious consequences when they conflict with the rules. This dispute didn’t just involve letters; it led to escalating fines, the loss of amenities, a physical standoff with a tow truck, and ultimately a legal judgment.
This entire conflict, which cost thousands of dollars and countless hours, started with a parking spot—when was the last time you read your community’s rules?
Case Participants
Petitioner Side
Michelle Ruffo(petitioner) Appeared on her own behalf.
Carol Lundberg(witness) Resides in Unit 45; presented testimony by Petitioner.
Julie Ruiz(witness) Unit 53 Tenant Provided email confirming she gave Petitioner permission to park in Unit 53's space.
Mark F. Williman(attorney) Retained by Petitioner; failed to attend the August 31, 2017 Board meeting.
Eric J. Thomae(attorney) Retained by Petitioner sometime after October 24, 2017.
Respondent Side
Nathan Tennyson(HOA attorney) Brown Olcott, PLLC
Vanessa Chapman Lubinsky(property manager) Associa Property Management Services Former manager; referred to as Ms. Chapman in the decision.
Gabino Trejo(property manager) Associa Property Management Services Current manager.
John Pohlig(unit owner) Owner of unit assigned space #38; communicated he had not given Petitioner permission to park there.
Jonathan Olcott(HOA attorney)
Mitch Treese(HOA president) Alleged by Petitioner's attorney to have misappropriated HOA funds.
Neutral Parties
Diane Mihalsky(ALJ) Office of Administrative Hearings
Judy Lowe(Commissioner) Arizona Department of Real Estate
Felicia Del Sol(administrative staff) Transmitted decision electronically.
