The rule in one sentence

Case Participants

What happened and why it matters

Homeowner Robert Jashinsky sued his homeowners’ association, Dorada Estates Community Association, Inc., after its Design Review Committee (DRC) repeatedly denied his proposal to build an 879-square-foot backyard casita with an attached pergola. The community’s recorded Declaration gave the DRC “sole and absolute discretion” over design proposals, but internal board emails suggested the committee was searching for a reason to deny the project and ultimately relied on Design Guidelines adopted after Jashinsky’s submission. A three-day Maricopa County jury trial produced a $52,740 damages award for breach of the covenant of good faith and fair dealing and breach of the association’s duty to act reasonably, and the superior court separately granted equitable and declaratory relief ordering the association to permit the construction. On appeal, Division One affirmed. It held that the homeowner’s testimony about estimated building costs was admissible (not hearsay under State v. Printz); that the court lacked jurisdiction to review the sufficiency of the evidence because the association never moved for a new trial or renewed judgment as a matter of law (A.R.S. section 12-2102(C)); that whether the HOA acted reasonably was a fact question for the jury; that the failure to plead injunctive relief was cured by raising the issue in the joint pretrial statement; and that the equitable remedy was within the trial court’s discretion. This is an unpublished memorandum decision and is not precedential under Ariz. R. Sup. Ct. 111(c).

The Court of Appeals addressed five arguments. First, on the evidentiary challenge, the court reviewed for abuse of discretion and held that Jashinsky’s testimony about the casita’s estimated $200-per-square-foot building cost was not inadmissible hearsay. Applying State v. Printz, 125 Ariz. 300 (1980), the court explained that knowledge of value does not necessarily rest on hearsay; when a witness acquires first-hand knowledge of value through multiple negotiations or consultations rather than a single out-of-court assertion offered for its truth, the resulting estimate is admissible. Because Jashinsky derived his estimate from consultations with an architect and a contractor, the superior court did not abuse its discretion in overruling the hearsay objection.

Second, the court held it lacked jurisdiction to review the sufficiency of the evidence supporting the damages award. Under A.R.S. section 12-2102(C) and Marquette Venture Partners II, L.P. v. Leonesio, an appellant who made a Rule 50(a) motion at the close of evidence must move for a new trial or for renewed judgment as a matter of law to preserve a sufficiency challenge on appeal. Because Dorada Estates did neither, appellate jurisdiction over that issue was absent.

Third, and most significant for HOA law, the court held that whether the association acted reasonably was a factual question reserved for the jury. Even where governing documents afford broad discretion, that discretion is constrained by duties the association owes its members: the implied covenant of good faith and fair dealing (Restatement (Second) of Contracts section 205; Restatement (Third) of Property (Servitudes) section 4.1) and the duty under Restatement (Third) of Property (Servitudes) section 6.13(1)(b), (c) to treat members fairly and act reasonably in exercising discretionary powers, including design-control powers. Arizona adopted this approach in Tierra Ranchos Homeowners Ass’n v. Kitchukov, 216 Ariz. 195 (App. 2007), and whether an association breached those duties is a question of fact (Maleki; Est. of Reinen). By awarding damages, the jury implicitly found Dorada Estates breached both duties, and the record supported that finding: the jury could have concluded the DRC gave only pretextual reasons and denied the revised request based on Design Guidelines not in effect when Jashinsky submitted it.

Fourth, the court rejected the argument that Jashinsky’s failure to plead injunctive relief barred his equitable recovery. Under Murphy Farrell Development and Carlton v. Emhardt, listing a claim as a material contested issue in the joint pretrial statement effectively amends the complaint; Jashinsky’s estoppel questions in the joint pretrial statement asked for essentially the relief he obtained. Fifth, the court held the equitable remedy was not an abuse of discretion. Whether to decline enforcement of a covenant turns on equitable considerations such as relative hardship, misconduct, the public interest, and the adequacy of other remedies (Swain; Ahwatukee; Loiselle). The court could weigh the association’s misconduct and the inadequacy of damages, because Jashinsky’s ultimate goal was permission to build, not money. The declaratory and equitable-estoppel judgment ordering the association to allow the construction was therefore affirmed, and the court awarded Jashinsky his appellate attorneys’ fees and costs under the Declaration and A.R.S. section 12-341.

This decision is a clear application of the principle that an HOA’s architectural-review discretion, even when the governing documents describe it as “sole and absolute,” is not unlimited. Division One reaffirmed that Arizona associations owe their members an implied duty of good faith and fair dealing and a duty to act reasonably in exercising design-control powers, and that a jury may find those duties breached where the record shows pretextual denials or reliance on guidelines adopted after a member’s application. For boards and design committees, the practical lesson is that broad discretionary language does not immunize a denial that a factfinder could view as arbitrary, unreasonable, or applied retroactively.

The case also illustrates important procedural and remedial points. On the procedural side, it shows that a Rule 50(a) motion alone does not preserve a sufficiency-of-the-evidence challenge for appeal; a party must also move for a new trial or renewed judgment as a matter of law under A.R.S. section 12-2102(C). On the remedial side, it shows that a court may order an association to permit a proposed modification as equitable relief, and that failing to formally plead injunctive relief is not fatal when the issue is raised in the joint pretrial statement. Although unpublished and non-precedential under Ariz. R. Sup. Ct. 111(c), the decision is a useful illustration of how Arizona courts police the outer limits of HOA architectural discretion.

Step-by-step litigation record

Case Dossier

This generated dossier mirrors the structured data surfaced on the OAH/ADRE case pages. It is added from the curated court-case record and the custom page source package, while the hand-authored analysis below remains intact.

Case Summary

Parties, Court, and Research Coverage

Key Issues & Findings