Not captured — Turtle Rock III HOA v. Fisher ↑ top
- Source
- Minute Source
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
TURTLE ROCK III HOMEOWNERS ASSOCIATION, Plaintiff/Appellee,
v.
LYNNE A. FISHER, Defendant/Appellant.
No. 1 CA-CV 16-0455
Appeal from the Superior Court in Maricopa County
No. CV2015-095897
The Honorable David M. Talamante, Judge
AFFIRMED IN PART; REVERSED IN PART
COUNSEL
The Law Offices of J. Roger Wood, PLLC, Tempe
By James Roger Wood, Erin S. Iungerich
Counsel for Defendant/Appellant
Goodman Law Group, LLP, Mesa
By Clint G. Goodman, Ashely N. Moscarello, Maura A. Abernathy
Counsel for Plaintiff/Appellee
OPINION
Judge Jon W. Thompson delivered the Opinion of the Court, in which
Presiding Judge Kent E. Cattani and Judge Paul J. McMurdie joined.
T H O M P S O N, Judge:
FILED 10-26-2017
TURTLE ROCK v. FISHER
Opinion of the Court
2
¶1
This matter involves a dispute between the Turtle Rock III
Homeowners Association (HOA) and homeowner Lynne A. Fisher (Fisher).
Fisher appeals from an injunction requiring her to clean up or repair certain
parts of her property and from a judgment in favor of the HOA for penalties
in the amount of $3850. The injunction is affirmed. The award of monetary
penalties and attorneys’ fees against Fisher below is reversed.
FACTUAL AND PROCEDURAL HISTORY
¶2
Fisher’s home is in a planned community with recorded deed
restrictions (CC&Rs). The CC&Rs require owners to maintain their
property in a “clean and attractive condition.” The CC&Rs provide that the
failure to maintain the property in a manner satisfactory to the HOA Board
will result in a notice specifying the nature of the violation and, in the event
the violation is not cured within thirty days, the HOA has the right to fine
the owner. The HOA sent Fisher many such notices and statements of fines
being levied beginning in January 2014.
¶3
In November 2015, the HOA filed a complaint in superior
court asserting breach of the CC&Rs and requesting an injunction after
Fisher failed to keep up maintenance on her property. The HOA asserted
that Fisher was using the home as a storage facility and she had allowed
parts of the exterior to become broken, missing, or dilapidated. The HOA
further asserted that Fisher had “excessive items within the home that can
be viewed from neighboring property and/or constitute a health and safety
hazard to the rest of the members in the community.” It asserted that Fisher
was accumulating fines at a rate of $25 per day.
¶4
An evidentiary hearing was scheduled to address both the
monetary penalties and the ongoing maintenance violations. The HOA
submitted a pretrial statement; Fisher did not. HOA officers attended the
hearing with counsel; Fisher’s counsel attended the hearing, but Fisher did
not. The HOA presented one witness and five exhibits, including
photographs of the property, a voluminous number of letters to Fisher from
the HOA, a ledger of the accrued fines, and the HOA CC&Rs. The HOA
did not provide the fine schedule. Fisher’s counsel waived any presentation
of testimony and did not introduce any evidence.
¶5
The trial court entered an order that stated there was no
objection by Fisher to the HOA’s requested exterior maintenance repairs or
to the requested interior changes–namely, moving any interior items that
prevent the blinds from closing properly and replacing the dilapidated
blinds. On the issue of the monetary penalties, the court addressed Fisher’s
TURTLE ROCK v. FISHER
Opinion of the Court
3
counsel’s apparent objection that there was no written fine schedule in
evidence and that the HOA had deviated from the CC&Rs’ requirement
that a homeowner have thirty days’ notice to cure any defect before the
assessment of any fines. The court’s order concluded the HOA had
complied with the thirty day notice requirement and that the HOA’s
witness had presented sufficient testimony as to the fine assessment.
¶6
The trial court issued a judgment in favor of the HOA. It
ordered all the requested maintenance, $10,839.70 in attorneys’ fees, $3850
in penalties, and $474 in costs against Fisher. The order was signed and
was issued pursuant to Arizona Rule of Civil Procedure 54(c). Fisher
timely appealed.
DISCUSSION
¶7
On appeal, Fisher raises two issues: (1) whether the trial court
erred in issuing an injunction requiring her to make changes to the interior
of her property, and (2) whether the award of penalties against Fisher
ignored the express language of the CC&Rs and Arizona law, and violated
her due process rights.
¶8
The grant or denial of injunctive relief rests within the sound
discretion of the trial court. Fin. Assocs., Inc. v. Hub Props., Inc., 143 Ariz.
543, 545, 694 P.2d 831, 833 (App. 1984). The interpretation of deed
restrictions is a question of law, which we resolve de novo. Arizona Biltmore
Estates Ass’n v. Tezak, 177 Ariz. 447, 448, 868 P.2d 1030, 1031 (1993)
(upholding HOA’s restrictions).
¶9
Fisher’s argument about having to remedy the interior of her
house is made for the first time on appeal. She filed no pretrial statement
making this argument. She did not testify or present evidence at trial. And,
below, the trial court noted she offered no objection as to the enumerated
maintenance items, which specifically included the interior—although
limited to items that interfered with the operation of blinds that can be seen
from the exterior. “[A]rguments raised for the first time on appeal are
untimely and deemed waived.” Odom v. Farmers Ins. Co. of Ariz., 216 Ariz.
530, 535, ¶ 18, 169 P.3d 120, 125 (App. 2007). Further, because the hearing
transcript is missing, we must presume the missing transcript would have
supported the trial court's ruling. See Myrick v. Maloney, 235 Ariz. 491, 495,
¶ 11, 333 P.3d 818, 822 (App. 2014). The trial court’s injunction is affirmed
as to the interior of Fisher’s house.
¶10
Fisher next argues that the $3850 in penalties for maintenance
violations were imposed without a contractual or legal basis, and before she
TURTLE ROCK v. FISHER
Opinion of the Court
4
had proper notice and an opportunity to be heard.1 She maintains that
because there was no written schedule enumerating penalties in evidence,
such charges were unreasonable and inconsistent with Arizona Revised
Statutes (A.R.S.) § 33-1803(B) (2014)2 which requires monetary penalties to
be reasonable.3 To this end she cites Villas at Hidden Lakes Condos Assoc. v.
Geupel Constr. Co., 174 Ariz. 72, 81, 847 P.2d 117, 126 (App. 1992) (finding it
unreasonable for a HOA to impose late fees pursuant to a retroactively
adopted fee schedule). Fisher further asserts that under the CC&Rs she
1 We reject the HOA’s contention that because Fisher failed to appear at
trial, all of her issues on appeal are waived. The case cited for this
proposition, Bloch v. Bentfield, 1 Ariz. App. 412, 418, 403 P.2d 559, 565 (1965),
is inapposite. Bloch was a matter where a party was representing himself
and failed to appear for trial. In the instant matter, Fisher’s counsel
appeared and presented argument on the issue of penalties.
2 Some of Fisher’s citations regarding penalties are to A.R.S. § 33-1803(A)
(relating to assessments), rather than to A.R.S. § 33-1803(B), which relates
to penalties.
3 Section 33-1803(B) provides:
After notice and an opportunity to be heard, the board of
directors may impose reasonable monetary penalties on
members for violations of the declaration, bylaws and rules of
the association. Notwithstanding any provision in the
community documents, the board of directors shall not
impose a charge for a late payment of a penalty that exceeds
the greater of fifteen dollars or ten percent of the amount of
the unpaid penalty. A payment is deemed late if it is unpaid
fifteen or more days after its due date, unless the declaration,
bylaws or rules of the association provide for a longer period.
Any monies paid by a member for an unpaid penalty shall be
applied first to the principal amount unpaid and then to the
interest accrued. Notice pursuant to this subsection shall
include information pertaining to the manner in which the
penalty shall be enforced. (Emphasis added.)
Under A.R.S. § 33-1803(C) Fisher could have challenged any alleged
violation within ten business days of such notice by certified mail, but she
did not do so.
TURTLE ROCK v. FISHER
Opinion of the Court
5
should have been entitled to a full thirty day opportunity to cure or object
before any penalty was assessed, and because she was not given such an
opportunity, the penalties were all invalid.4 She further argues that a daily
or weekly fine is akin to a punitive damage award and, to this end, cites
Kalenka v. Taylor, 896 P.2d 222 (Alaska 1995) (addressing breach of contract
construction penalties).
¶11
In response, the HOA asserts the penalties were reasonable
and supported by the HOA’s witness’s uncontroverted testimony at trial.
The HOA submitted a ledger detailing the charges. On appeal, the HOA
did not respond to Fisher’s citation to Villas for the proposition that there
must be evidence in the record of a promulgated fee schedule for fines to
be reasonable.
¶12
As to the thirty day argument, the HOA further insists Fisher
had abundant notice and opportunity to be heard and failed to avail herself
of those opportunities both before the HOA and before the trial court. In
fact, Fisher received in the range of ninety separate notices between January
2014 and the time of trial notifying her that she was incurring escalating
monetary penalties for her failure to cure those same few property
violations. While the HOA admits the $25 fines were initially applied
before the expiration of thirty days, it argues that fact does not invalidate
any subsequent fines for the same violation--especially in light of the court
awarding only the penalties that accrued after September 16, 2015, which
was the date the HOA’s lawyer finally wrote to Fisher. 5
¶13
We view the evidence presented to the trial court in the light
most favorable to upholding decision to award the HOA $3850 in penalties.
See Bell–Kilbourn v. Bell–Kilbourn, 216 Ariz. 521, 522, n.1, 169 P.3d 111, 112,
n.1 (App. 2007). The trial court enjoys broad discretion in its evaluation of
4 Specifically, Fisher asserts “The Association’s habit was to send a second
notice to Ms. Fisher prior to the expiration of the required 30 day notice.
Then, at the time of the second notice (day 20 of the 30 day notice period),
the fine would be imposed and added to her account ledger.” In other
words, the notices gave her ten days to cure or additional action would be
taken under the Enforcement Policy. It also gave her ten days to request a
hearing. Fisher argues “This consistent habit and practice did not comply
with the law and the documents and should work to invalidate any and all
such penalties.”
5 The trial court, sua sponte, reduced the penalties from the requested
$9,165.25 to $3850.
TURTLE ROCK v. FISHER
Opinion of the Court
6
evidence. Conant v. Whitney, 190 Ariz. 290, 292, 947 P.2d 864, 866 (App.
1997). However, we review issues of law de novo. See Keenen v. Biles, 199
Ariz. 266, 267, ¶ 4, 17 P.3d 111, 112 (App. 2001).
¶14
Monetary fines must be reasonable. See A.R.S. § 33-1803(B).
Ad hoc fines are per se unreasonable. Villas, 174 Ariz. at 81, 847 P.2d at 126.
Villas is dispositive on this issue. Under Villas, even where the HOA has
the authority to levy fines, it must promulgate the schedule of fines prior to
imposing the fines, and the failure to prove promulgation is fatal. Id.
¶15
As Fisher noted below, no fee schedule was introduced into
evidence or presented to the trial court. There is a bare assertion in the
HOA’s briefs that it provided Fisher a copy of the “fine policy” after the
hearing, however no evidence in the record corroborates this claim. The
trial court did not make a finding that a promulgated fee schedule existed
and we do not find the trial court’s reference to Ms. Curtiss’ testimony
sufficient to establish that fact. Based on the way the trial court phrased its
order, stating “the Court finds Ms. Curtiss’ testimony sufficient under the
circumstances to support as a matter of evidence the fine assessment of $25
per day,” the witness could have been testifying to HOA policy or facts
related to the violations.6
¶16
Next, the HOA argues that Fisher never provided evidence
controverting that the fine schedule authorized reasonable monetary
penalties. Fisher was not required to present evidence controverting the
existence of the fee schedule. To bring an action for the breach of the
contract, the plaintiff has the burden of proving the elements of the claim.
Clark v. Compania Ganadera de Cananea, S.A., 95 Ariz. 90, 94, 387 P.2d 235, 238
(1963). And, where a litigant seeks to prove the terms of a writing, the
original document itself must be produced unless shown to be unavailable
due to no fault of the litigant seeking to prove such terms. Higgins v. Arizona
Sav. and Loan Ass'n, 90 Ariz. 55, 68, 365 P.2d 476, 486 (1961); see also Ariz. R.
Evid. 1002 (“An original writing, recording, or photograph is required in
order to prove its content unless these rules or an applicable statute
provides otherwise.”).
6 Fisher asserted in her opposition to monetary penalties that “No evidence
of the reasonable nature of the fines was presented at trial and when asked,
the Association’s witness (board member) could not produce or recall that
the Association’s documents provided for such daily fines.”
TURTLE ROCK v. FISHER
Opinion of the Court
7
When the contents of a writing are at issue, oral testimony as
to the terms of the writing is subject to a greater risk of error
than oral testimony as to events or other situations. The
human memory is not often capable of reciting the precise
terms of a writing, and when the terms are in dispute only the
writing itself, or a true copy, provides reliable evidence. To
summarize then, we observe that the importance of the
precise terms of writings in the world of legal relations, the
fallibility of the human memory as reliable evidence of the
terms, and the hazards of inaccurate or incomplete
duplication are the concerns addressed by the best evidence
rule.
Seiler v. Lucasfilm, Ltd., 808 F.2d 1316, 1319 (9th Cir. 1986) (citing 5 Louisell
& Mueller, Federal Evidence, § 550 at 283; McCormick on Evidence (3d ed.
1984) § 231 at 704; Cleary & Strong, The Best Evidence Rule: An Evaluation
in Context, 51 Iowa L.Rev. 825, 828 (1966)).
¶17
There is also no support in the record for a determination that
a fine of $25 per day, for any violation, is reasonable. A stipulated damages
provision made in advance of a breach is a penalty, and is generally
unenforceable. Larson–Hegstrom & Assocs., Inc. v. Jeffries, 145 Ariz. 329, 333,
701 P.2d 587, 591 (App. 1985). And, that the trial court attempted to remedy
the HOA’s overreach by slashing the assessed fines by 58% cannot establish
the reasonableness of HOA’s fine scheme. Rather, the exact opposite is true.
¶18
Therefore, although the HOA had the authority under state
statutes and the CC&Rs to promulgate a fine schedule for monetary
penalties, there is no competent evidence in the record before us that it did
so. Without competent evidence of a fee schedule timely promulgated
demonstrating the fine amounts and the appropriateness of such amounts,
monetary penalties are per se unreasonable. Even if a fee schedule existed,
the HOA had the burden to prove its damages. Given our resolution of this
matter, we need not address Fisher’s due process claim related to the
required thirty day notice of a penalty. The trial court’s award of monetary
penalties is reversed and the attorneys’ fees award below is reversed.
ATTORNEYS’ FEES
¶19
Both parties request attorneys’ fees on appeal. The HOA cites
both the CC&Rs and A.R.S. § 12-341.01(2016) as the basis for its fees. We
grant neither party their fees as neither party was wholly successful.
TURTLE ROCK v. FISHER
Opinion of the Court
8
CONCLUSION
¶20
For the above stated reasons, the trial court’s injunction is
affirmed and the judgment for monetary penalties in the amount of $3850
is reversed.
AMY M. WOOD • Clerk of the Court
FILED: AA
2017-10-26 — Turtle Rock III Homeowners Association v. Fisher ↑ top
- Source
- Minute Source
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
TURTLE ROCK III HOMEOWNERS ASSOCIATION, Plaintiff/Appellee,
v.
LYNNE A. FISHER, Defendant/Appellant.
No. 1 CA-CV 16-0455
Appeal from the Superior Court in Maricopa County
No. CV2015-095897
The Honorable David M. Talamante, Judge
AFFIRMED IN PART; REVERSED IN PART
COUNSEL
The Law Offices of J. Roger Wood, PLLC, Tempe
By James Roger Wood, Erin S. Iungerich
Counsel for Defendant/Appellant
Goodman Law Group, LLP, Mesa
By Clint G. Goodman, Ashely N. Moscarello, Maura A. Abernathy
Counsel for Plaintiff/Appellee
OPINION
Judge Jon W. Thompson delivered the Opinion of the Court, in which
Presiding Judge Kent E. Cattani and Judge Paul J. McMurdie joined.
T H O M P S O N, Judge:
FILED 10-26-2017
TURTLE ROCK v. FISHER
Opinion of the Court
2
¶1
This matter involves a dispute between the Turtle Rock III
Homeowners Association (HOA) and homeowner Lynne A. Fisher (Fisher).
Fisher appeals from an injunction requiring her to clean up or repair certain
parts of her property and from a judgment in favor of the HOA for penalties
in the amount of $3850. The injunction is affirmed. The award of monetary
penalties and attorneys’ fees against Fisher below is reversed.
FACTUAL AND PROCEDURAL HISTORY
¶2
Fisher’s home is in a planned community with recorded deed
restrictions (CC&Rs). The CC&Rs require owners to maintain their
property in a “clean and attractive condition.” The CC&Rs provide that the
failure to maintain the property in a manner satisfactory to the HOA Board
will result in a notice specifying the nature of the violation and, in the event
the violation is not cured within thirty days, the HOA has the right to fine
the owner. The HOA sent Fisher many such notices and statements of fines
being levied beginning in January 2014.
¶3
In November 2015, the HOA filed a complaint in superior
court asserting breach of the CC&Rs and requesting an injunction after
Fisher failed to keep up maintenance on her property. The HOA asserted
that Fisher was using the home as a storage facility and she had allowed
parts of the exterior to become broken, missing, or dilapidated. The HOA
further asserted that Fisher had “excessive items within the home that can
be viewed from neighboring property and/or constitute a health and safety
hazard to the rest of the members in the community.” It asserted that Fisher
was accumulating fines at a rate of $25 per day.
¶4
An evidentiary hearing was scheduled to address both the
monetary penalties and the ongoing maintenance violations. The HOA
submitted a pretrial statement; Fisher did not. HOA officers attended the
hearing with counsel; Fisher’s counsel attended the hearing, but Fisher did
not. The HOA presented one witness and five exhibits, including
photographs of the property, a voluminous number of letters to Fisher from
the HOA, a ledger of the accrued fines, and the HOA CC&Rs. The HOA
did not provide the fine schedule. Fisher’s counsel waived any presentation
of testimony and did not introduce any evidence.
¶5
The trial court entered an order that stated there was no
objection by Fisher to the HOA’s requested exterior maintenance repairs or
to the requested interior changes–namely, moving any interior items that
prevent the blinds from closing properly and replacing the dilapidated
blinds. On the issue of the monetary penalties, the court addressed Fisher’s
TURTLE ROCK v. FISHER
Opinion of the Court
3
counsel’s apparent objection that there was no written fine schedule in
evidence and that the HOA had deviated from the CC&Rs’ requirement
that a homeowner have thirty days’ notice to cure any defect before the
assessment of any fines. The court’s order concluded the HOA had
complied with the thirty day notice requirement and that the HOA’s
witness had presented sufficient testimony as to the fine assessment.
¶6
The trial court issued a judgment in favor of the HOA. It
ordered all the requested maintenance, $10,839.70 in attorneys’ fees, $3850
in penalties, and $474 in costs against Fisher. The order was signed and
was issued pursuant to Arizona Rule of Civil Procedure 54(c). Fisher
timely appealed.
DISCUSSION
¶7
On appeal, Fisher raises two issues: (1) whether the trial court
erred in issuing an injunction requiring her to make changes to the interior
of her property, and (2) whether the award of penalties against Fisher
ignored the express language of the CC&Rs and Arizona law, and violated
her due process rights.
¶8
The grant or denial of injunctive relief rests within the sound
discretion of the trial court. Fin. Assocs., Inc. v. Hub Props., Inc., 143 Ariz.
543, 545, 694 P.2d 831, 833 (App. 1984). The interpretation of deed
restrictions is a question of law, which we resolve de novo. Arizona Biltmore
Estates Ass’n v. Tezak, 177 Ariz. 447, 448, 868 P.2d 1030, 1031 (1993)
(upholding HOA’s restrictions).
¶9
Fisher’s argument about having to remedy the interior of her
house is made for the first time on appeal. She filed no pretrial statement
making this argument. She did not testify or present evidence at trial. And,
below, the trial court noted she offered no objection as to the enumerated
maintenance items, which specifically included the interior—although
limited to items that interfered with the operation of blinds that can be seen
from the exterior. “[A]rguments raised for the first time on appeal are
untimely and deemed waived.” Odom v. Farmers Ins. Co. of Ariz., 216 Ariz.
530, 535, ¶ 18, 169 P.3d 120, 125 (App. 2007). Further, because the hearing
transcript is missing, we must presume the missing transcript would have
supported the trial court's ruling. See Myrick v. Maloney, 235 Ariz. 491, 495,
¶ 11, 333 P.3d 818, 822 (App. 2014). The trial court’s injunction is affirmed
as to the interior of Fisher’s house.
¶10
Fisher next argues that the $3850 in penalties for maintenance
violations were imposed without a contractual or legal basis, and before she
TURTLE ROCK v. FISHER
Opinion of the Court
4
had proper notice and an opportunity to be heard.1 She maintains that
because there was no written schedule enumerating penalties in evidence,
such charges were unreasonable and inconsistent with Arizona Revised
Statutes (A.R.S.) § 33-1803(B) (2014)2 which requires monetary penalties to
be reasonable.3 To this end she cites Villas at Hidden Lakes Condos Assoc. v.
Geupel Constr. Co., 174 Ariz. 72, 81, 847 P.2d 117, 126 (App. 1992) (finding it
unreasonable for a HOA to impose late fees pursuant to a retroactively
adopted fee schedule). Fisher further asserts that under the CC&Rs she
1 We reject the HOA’s contention that because Fisher failed to appear at
trial, all of her issues on appeal are waived. The case cited for this
proposition, Bloch v. Bentfield, 1 Ariz. App. 412, 418, 403 P.2d 559, 565 (1965),
is inapposite. Bloch was a matter where a party was representing himself
and failed to appear for trial. In the instant matter, Fisher’s counsel
appeared and presented argument on the issue of penalties.
2 Some of Fisher’s citations regarding penalties are to A.R.S. § 33-1803(A)
(relating to assessments), rather than to A.R.S. § 33-1803(B), which relates
to penalties.
3 Section 33-1803(B) provides:
After notice and an opportunity to be heard, the board of
directors may impose reasonable monetary penalties on
members for violations of the declaration, bylaws and rules of
the association. Notwithstanding any provision in the
community documents, the board of directors shall not
impose a charge for a late payment of a penalty that exceeds
the greater of fifteen dollars or ten percent of the amount of
the unpaid penalty. A payment is deemed late if it is unpaid
fifteen or more days after its due date, unless the declaration,
bylaws or rules of the association provide for a longer period.
Any monies paid by a member for an unpaid penalty shall be
applied first to the principal amount unpaid and then to the
interest accrued. Notice pursuant to this subsection shall
include information pertaining to the manner in which the
penalty shall be enforced. (Emphasis added.)
Under A.R.S. § 33-1803(C) Fisher could have challenged any alleged
violation within ten business days of such notice by certified mail, but she
did not do so.
TURTLE ROCK v. FISHER
Opinion of the Court
5
should have been entitled to a full thirty day opportunity to cure or object
before any penalty was assessed, and because she was not given such an
opportunity, the penalties were all invalid.4 She further argues that a daily
or weekly fine is akin to a punitive damage award and, to this end, cites
Kalenka v. Taylor, 896 P.2d 222 (Alaska 1995) (addressing breach of contract
construction penalties).
¶11
In response, the HOA asserts the penalties were reasonable
and supported by the HOA’s witness’s uncontroverted testimony at trial.
The HOA submitted a ledger detailing the charges. On appeal, the HOA
did not respond to Fisher’s citation to Villas for the proposition that there
must be evidence in the record of a promulgated fee schedule for fines to
be reasonable.
¶12
As to the thirty day argument, the HOA further insists Fisher
had abundant notice and opportunity to be heard and failed to avail herself
of those opportunities both before the HOA and before the trial court. In
fact, Fisher received in the range of ninety separate notices between January
2014 and the time of trial notifying her that she was incurring escalating
monetary penalties for her failure to cure those same few property
violations. While the HOA admits the $25 fines were initially applied
before the expiration of thirty days, it argues that fact does not invalidate
any subsequent fines for the same violation--especially in light of the court
awarding only the penalties that accrued after September 16, 2015, which
was the date the HOA’s lawyer finally wrote to Fisher. 5
¶13
We view the evidence presented to the trial court in the light
most favorable to upholding decision to award the HOA $3850 in penalties.
See Bell–Kilbourn v. Bell–Kilbourn, 216 Ariz. 521, 522, n.1, 169 P.3d 111, 112,
n.1 (App. 2007). The trial court enjoys broad discretion in its evaluation of
4 Specifically, Fisher asserts “The Association’s habit was to send a second
notice to Ms. Fisher prior to the expiration of the required 30 day notice.
Then, at the time of the second notice (day 20 of the 30 day notice period),
the fine would be imposed and added to her account ledger.” In other
words, the notices gave her ten days to cure or additional action would be
taken under the Enforcement Policy. It also gave her ten days to request a
hearing. Fisher argues “This consistent habit and practice did not comply
with the law and the documents and should work to invalidate any and all
such penalties.”
5 The trial court, sua sponte, reduced the penalties from the requested
$9,165.25 to $3850.
TURTLE ROCK v. FISHER
Opinion of the Court
6
evidence. Conant v. Whitney, 190 Ariz. 290, 292, 947 P.2d 864, 866 (App.
1997). However, we review issues of law de novo. See Keenen v. Biles, 199
Ariz. 266, 267, ¶ 4, 17 P.3d 111, 112 (App. 2001).
¶14
Monetary fines must be reasonable. See A.R.S. § 33-1803(B).
Ad hoc fines are per se unreasonable. Villas, 174 Ariz. at 81, 847 P.2d at 126.
Villas is dispositive on this issue. Under Villas, even where the HOA has
the authority to levy fines, it must promulgate the schedule of fines prior to
imposing the fines, and the failure to prove promulgation is fatal. Id.
¶15
As Fisher noted below, no fee schedule was introduced into
evidence or presented to the trial court. There is a bare assertion in the
HOA’s briefs that it provided Fisher a copy of the “fine policy” after the
hearing, however no evidence in the record corroborates this claim. The
trial court did not make a finding that a promulgated fee schedule existed
and we do not find the trial court’s reference to Ms. Curtiss’ testimony
sufficient to establish that fact. Based on the way the trial court phrased its
order, stating “the Court finds Ms. Curtiss’ testimony sufficient under the
circumstances to support as a matter of evidence the fine assessment of $25
per day,” the witness could have been testifying to HOA policy or facts
related to the violations.6
¶16
Next, the HOA argues that Fisher never provided evidence
controverting that the fine schedule authorized reasonable monetary
penalties. Fisher was not required to present evidence controverting the
existence of the fee schedule. To bring an action for the breach of the
contract, the plaintiff has the burden of proving the elements of the claim.
Clark v. Compania Ganadera de Cananea, S.A., 95 Ariz. 90, 94, 387 P.2d 235, 238
(1963). And, where a litigant seeks to prove the terms of a writing, the
original document itself must be produced unless shown to be unavailable
due to no fault of the litigant seeking to prove such terms. Higgins v. Arizona
Sav. and Loan Ass'n, 90 Ariz. 55, 68, 365 P.2d 476, 486 (1961); see also Ariz. R.
Evid. 1002 (“An original writing, recording, or photograph is required in
order to prove its content unless these rules or an applicable statute
provides otherwise.”).
6 Fisher asserted in her opposition to monetary penalties that “No evidence
of the reasonable nature of the fines was presented at trial and when asked,
the Association’s witness (board member) could not produce or recall that
the Association’s documents provided for such daily fines.”
TURTLE ROCK v. FISHER
Opinion of the Court
7
When the contents of a writing are at issue, oral testimony as
to the terms of the writing is subject to a greater risk of error
than oral testimony as to events or other situations. The
human memory is not often capable of reciting the precise
terms of a writing, and when the terms are in dispute only the
writing itself, or a true copy, provides reliable evidence. To
summarize then, we observe that the importance of the
precise terms of writings in the world of legal relations, the
fallibility of the human memory as reliable evidence of the
terms, and the hazards of inaccurate or incomplete
duplication are the concerns addressed by the best evidence
rule.
Seiler v. Lucasfilm, Ltd., 808 F.2d 1316, 1319 (9th Cir. 1986) (citing 5 Louisell
& Mueller, Federal Evidence, § 550 at 283; McCormick on Evidence (3d ed.
1984) § 231 at 704; Cleary & Strong, The Best Evidence Rule: An Evaluation
in Context, 51 Iowa L.Rev. 825, 828 (1966)).
¶17
There is also no support in the record for a determination that
a fine of $25 per day, for any violation, is reasonable. A stipulated damages
provision made in advance of a breach is a penalty, and is generally
unenforceable. Larson–Hegstrom & Assocs., Inc. v. Jeffries, 145 Ariz. 329, 333,
701 P.2d 587, 591 (App. 1985). And, that the trial court attempted to remedy
the HOA’s overreach by slashing the assessed fines by 58% cannot establish
the reasonableness of HOA’s fine scheme. Rather, the exact opposite is true.
¶18
Therefore, although the HOA had the authority under state
statutes and the CC&Rs to promulgate a fine schedule for monetary
penalties, there is no competent evidence in the record before us that it did
so. Without competent evidence of a fee schedule timely promulgated
demonstrating the fine amounts and the appropriateness of such amounts,
monetary penalties are per se unreasonable. Even if a fee schedule existed,
the HOA had the burden to prove its damages. Given our resolution of this
matter, we need not address Fisher’s due process claim related to the
required thirty day notice of a penalty. The trial court’s award of monetary
penalties is reversed and the attorneys’ fees award below is reversed.
ATTORNEYS’ FEES
¶19
Both parties request attorneys’ fees on appeal. The HOA cites
both the CC&Rs and A.R.S. § 12-341.01(2016) as the basis for its fees. We
grant neither party their fees as neither party was wholly successful.
TURTLE ROCK v. FISHER
Opinion of the Court
8
CONCLUSION
¶20
For the above stated reasons, the trial court’s injunction is
affirmed and the judgment for monetary penalties in the amount of $3850
is reversed.
AMY M. WOOD • Clerk of the Court
FILED: AA
