ARIZ. REV. STAT. § 33-1803; Bylaws Article IV, Section 6
Outcome Summary
The Administrative Law Judge denied the Petitioner's request, finding that the HOA's action to uniformly assess all CR-1 Lots (including Petitioner's two uncombined lots) adhered to the Association Bylaws, which require uniform rates, and did not violate ARS § 33-1803. The governing documents took precedence over any prior reduced assessment granted by a previous Board Order.
Why this result: Petitioner failed to prove the Association’s interpretation of the Bylaws requiring uniform assessment for all CR-1 lots was incorrect or unlawful, as her lots remained separate parcels according to the county map.
Key Issues & Findings
Whether Sin Vacas Property Owners Association (Respondent) arbitrarily and capriciously raised annual assessments for some homeowners and not others in contravention of decades of past board practice and contractual agreements.
Petitioner challenged the Association's decision to raise her assessment from 150% to 200% (full rate for two lots) based on the Association's interpretation that the Bylaws require uniform assessment rates for all CR-1 lots, arguing the new rate violated a long-standing prior Board Order (2003) granting her a reduced rate.
Orders: Petitioner’s petition is denied.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
ARIZ. REV. STAT. § 32-2102
ARIZ. REV. STAT. § 32-2199 et seq.
ARIZ. REV. STAT. § 32-2199.05
ARIZ. REV. STAT. § 32-2199(2)
ARIZ. REV. STAT. § 32-2199.01(A)
ARIZ. REV. STAT. § 32-2199.01(D)
ARIZ. REV. STAT. § 32-2199.02
ARIZ. REV. STAT. § 41-1092 et seq.
ARIZ. REV. STAT. § 33-1803
ARIZ. REV. STAT. § 33-1802(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Bylaws Article IV, Covenant For Maintenance Assessments, Section 6
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
BLACK’S LAW DICTIONARY 1220 (8th ed. 1999)
Video Overview
Audio Overview
Decision Documents
19F-H1918017-REL Decision – 698354.pdf
Uploaded 2026-01-23T17:26:53 (137.2 KB)
Briefing Doc – 19F-H1918017-REL
Briefing Document: Brokaw v. Sin Vacas Property Owners Association (Case No. 19F-H1918017-REL)
Executive Summary
This document synthesizes the findings of the Administrative Law Judge Decision in the case of Loraine Brokaw versus the Sin Vacas Property Owners Association (POA). The central conflict concerned the POA Board’s decision to increase Ms. Brokaw’s annual assessment from 150% to 200% for a single residence constructed across two separate lots.
The Petitioner, Ms. Brokaw, argued that this increase was unlawful and capricious, violating a nearly thirty-year practice that had been formalized by a 2003 Board decision granting her a reduced assessment. The POA contended that its action, taken on the advice of counsel, was necessary to comply with the Association’s governing documents, which mandate uniform assessments for all lots.
The Administrative Law Judge (ALJ) ultimately denied the homeowner’s petition. The decision established a critical legal precedent for the Association: the unambiguous language of the governing Covenants, Conditions, and Restrictions (CC&Rs) takes precedence over any past Board decisions, informal agreements, or long-standing practices, regardless of their duration. Because the Petitioner owns two distinct, legally unconsolidated lots, the ALJ found that the Board’s action to assess each lot at the full, uniform rate was not a violation, but rather a correct and required application of the community’s Bylaws.
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I. Case Overview
• Parties: Loraine Brokaw (Petitioner) vs. Sin Vacas Property Owners Association (Respondent).
• Jurisdiction: Office of Administrative Hearings (OAH), State of Arizona.
• Case Number: 19F-H1918017-REL.
• Presiding Judge: Administrative Law Judge Jenna Clark.
• Hearing Date: March 25, 2019.
• Decision Date: April 01, 2019.
II. Central Issue of the Dispute
The hearing was convened to address the following issue, as stated in the NOTICE OF HEARING:
“Whether Sin Vacas Property Owners Association (Respondent) arbitrarily and capriciously raised annual assessments for some homeowners and not others in contravention of decades of past board practice and contractual agreements based on utterly flawed legal theory, which, in fact, changed from attorney to attorney.”
The core of the dispute was the Association Board’s decision in 2017 to increase the annual assessment for the Petitioner’s property—a single home built across two adjacent lots—from 150% to 200% of the standard single-lot assessment rate. The Petitioner sought to compel the Board to revert to the 150% assessment schedule and reimburse her for costs associated with the petition.
III. Petitioner’s Position and Key Testimony
• Property History: The Petitioner testified that her husband first bought property in Sin Vacas in 1979. In 2003, the couple purchased an adjacent lot and constructed a new home that spanned across both properties (Lots 156 and 157).
• Claim of Lot Combination: The Petitioner claimed to have legally combined the two lots but presented no supporting documentation to the tribunal.
• Historical Assessment Practice: The Petitioner testified that as of 2003, the Association’s practice was to assess properties as follows:
◦ 100%: For a home on a single lot.
◦ 25%: For an undeveloped vacant lot.
◦ 150%: For a residence situated on two lots.
• 2003 Board Decision: On March 24, 2003, the Petitioner received written confirmation from the Board that it had voted to grant her a reduced assessment of 150%, formalizing the existing practice for her property.
• 2017 Assessment Change: On or about December 4, 2017, the Petitioner received a letter from the Association’s management company advising that the Board had decided to raise her assessment to 200%, citing “advice of counsel.”
• Rationale for Increase: The Petitioner stated she was given varying reasons for the change but was ultimately informed that the Board determined all plats needed to be assessed uniformly according to the Association’s governing documents. She was also told that to be assessed as a single lot, she would need to formally combine the lots on the county plat map, a process estimated to cost between $3,000 and $10,000 and require the permission of every other homeowner in the community.
IV. Respondent’s Position
The Sin Vacas Property Owners Association declined to present witnesses or exhibits. Its position at the hearing was that the dispute arose from differing interpretations of the language within the governing Bylaws. The Association’s counsel stated that the matter would be resolved based on the tribunal’s interpretation of the relevant governing texts.
V. Analysis of Governing Documents
The decision rested heavily on the interpretation of the Association’s Covenants, Conditions, and Restrictions (CC&Rs), recorded on April 13, 1978.
Document Section
Key Provision
Relevance to the Case
Bylaws Article I, Section 5
Defines a “Lot” as “any numbered lot shown upon any recorded subdivision map of the Sin Vacas Properties.”
This established that the Petitioner’s two properties, being separately numbered on the subdivision map, constitute two distinct lots for assessment purposes.
Bylaws Article IV, Section 6
“Special assessments must be fixed and apportioned at a uniform rate for all CR-1 lots, SR lots, and each 20,000 square feet of TR lots.”
This clause was central to the Judge’s decision. It establishes a clear mandate for uniformity in assessments across all lots of the same type (CR-1), which the 150% rate violated by treating two CR-1 lots differently from others.
Bylaws Article IV, Section 7
States the Board of Directors shall “fix the amount of the annual assessment against each Lot.”
This empowers the Board to set assessments but reinforces that they must do so on a per-lot basis, consistent with the uniformity requirement.
VI. Judge’s Findings and Conclusions of Law
The Administrative Law Judge made the following key determinations, leading to the denial of the petition:
• Failure to Meet Burden of Proof: The Petitioner failed to prove by a preponderance of the evidence that the Association violated community documents or Arizona statutes.
• Undisputed Material Facts: The Judge found it undisputed that:
1. The Petitioner owns two distinct CR-1 lots (Lot 156 and Lot 157).
2. The lots have never been legally combined or consolidated on the Pima County Assessor’s plat map.
3. The Petitioner’s residence is constructed across both lots.
• Primacy of Governing Documents: The central conclusion of the decision was that the Association’s governing documents supersede any past Board decisions or long-standing informal agreements. The Judge stated:
• Uniformity is Mandatory: The Bylaws require that the Association assess all developed CR-1 lots at a uniform rate. By assessing both of the Petitioner’s lots at the same full rate as every other developed CR-1 lot, the Association was found to be complying with the Declaration.
• Board’s Action as Corrective: The 2017 Board’s action was not a breach of contract or an unlawful act. Instead, it was an appropriate correction of the previous Board’s 2003 order, which was inconsistent with the Bylaws’ uniformity mandate. The Petitioner’s argument that the 2003 order should supersede the 2017 order was deemed inaccurate.
VII. Final Order
Based on the findings and legal conclusions, the Administrative Law Judge ordered that the Petitioner’s petition be denied.
The decision affirmed that the Sin Vacas Property Owners Association Board’s action to uniformly assess all CR-1 lots did not violate Arizona state law (ARIZ. REV. STAT. § 33-1803) or the Association’s Bylaws.
Study Guide – 19F-H1918017-REL
Study Guide: Brokaw v. Sin Vacas Property Owners Association
This guide reviews the key facts, legal arguments, and final ruling in the administrative hearing case No. 19F-H1918017-REL, Loraine Brokaw v. Sin Vacas Property Owners Association.
Short-Answer Quiz
Answer each question in 2-3 sentences, based on the provided source document.
1. Who were the primary parties involved in the hearing, and what were their respective roles?
2. What specific relief did the Petitioner request from the Office of Administrative Hearings?
3. What specific action taken by the Respondent prompted the Petitioner to file her petition?
4. Describe the assessment practice that the Sin Vacas Board had in place for the Petitioner’s property from 2003 until the change in 2017.
5. What was the Association’s stated reason for increasing the Petitioner’s assessment from 150% to 200%?
6. According to the Association’s Bylaws, what is the rule for how special assessments must be fixed and apportioned?
7. On what grounds did the Administrative Law Judge determine that the Petitioner owned two separate lots?
8. What is the legal standard of proof required in this case, and did the Petitioner successfully meet it?
9. Why did the Judge rule that the 2003 Board Order reducing the Petitioner’s assessment was not a binding contract?
10. What was the final order issued by the Administrative Law Judge in this matter?
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Answer Key
1. The primary parties were Loraine Brokaw, the Petitioner, who brought the action, and the Sin Vacas Property Owners Association, the Respondent. The case was heard by Administrative Law Judge Jenna Clark from the Office of Administrative Hearings.
2. The Petitioner requested that the Association’s Board be compelled to honor the 30-year assessment schedule and charge her the 150% assessment rate. She also requested that the Board reimburse her for the costs of bringing the petition.
3. The Petitioner filed her petition after receiving a letter on or about December 4, 2017, from the Association’s management company. This letter advised her that the Board had decided to raise her assessment from 150% to 200% based on “advice of counsel.”
4. Beginning in 2003, the Association assessed a home on a single lot at 100%, an undeveloped vacant lot at 25%, and a residence spanning two lots, like the Petitioner’s, at 150%. The Petitioner received written confirmation of her reduced 150% assessment from the Board on March 24, 2003.
5. The Association’s Board increased the assessment after determining that all plats needed to be assessed uniformly, per the Association’s Restatement. The increase was meant to bring her two lots into compliance with the governing documents.
6. Bylaws Article IV, Section 6 states that “Special assessments must be fixed and apportioned at a uniform rate for all CR-1 lots, SR lots, and each 20,000 square feet of TR lots.”
7. The Judge’s conclusion was based on the undisputed fact that the Petitioner’s two properties, Lots 156 and 157, have never been officially combined or consolidated into a single numbered lot on the Pima County Assessor’s Office plat map.
8. The required standard of proof was a “preponderance of the evidence,” which means proving a contention is more probably true than not. The Judge found that the Petitioner failed to sustain her burden of proof.
9. The Judge ruled that the 2003 Board Order was not a binding contract because the Petitioner provided no proof of consideration tendered to the Association. Therefore, the Association’s governing documents took precedence over the informal agreement.
10. The Administrative Law Judge ordered that the Petitioner’s petition be denied. The Judge concluded that the Board’s action to uniformly assess all CR-1 lots did not violate state statutes or the Association’s Bylaws.
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Essay Questions
The following questions are designed for longer, more analytical responses. No answers are provided.
1. Analyze the legal reasoning behind the Administrative Law Judge’s decision. Discuss the hierarchy of authority between the Association’s governing documents (CC&Rs) and a Board Order, as interpreted in this case.
2. Explain the concept of “burden of proof” in the context of this hearing. How did the Petitioner’s failure to meet the “preponderance of the evidence” standard lead to the denial of her petition?
3. The Petitioner’s case relied heavily on past practice and a 2003 Board decision to grant her a reduced assessment. Discuss why this argument was ultimately insufficient to overcome the explicit language of the Association’s governing documents.
4. Examine the contractual nature of a homeowners’ association’s CC&Rs as described in the Findings of Fact. How does this contractual relationship between the Association and each property owner shape the obligations and rights of both parties?
5. The Respondent (Sin Vacas POA) declined to present witnesses or exhibits, taking a passive stance at the hearing. Discuss the potential legal strategy behind this approach and how the undisputed material facts of the case made this a viable option.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official, in this case Jenna Clark, who presides over administrative hearings, reviews evidence, makes Findings of Fact and Conclusions of Law, and issues orders.
Association
The Sin Vacas Property Owners Association, a homeowners’ association for the Sin Vacas subdivision in Tucson, Arizona, responsible for managing, maintaining, and improving the property.
Assessment
A fee levied by the Association on property owners to promote the recreation, health, safety, and welfare of residents and for the improvement and maintenance of common areas and private streets.
Bylaws
The specific articles and sections within the CC&Rs that govern the Association’s operations, including definitions, assessment rules, and voting procedures.
CC&Rs (Covenants, Conditions, and Restrictions)
The governing documents for the Association, recorded with Pima County on April 13, 1978. They form an enforceable contract between the Association and each property owner.
Department
The Arizona Department of Real Estate, which is authorized by statute to receive and decide petitions for hearings from members of homeowners’ associations.
Any numbered lot shown upon any recorded subdivision map of the Sin Vacas Properties, with the exception of the Common Area. This case deals specifically with CR-1 lots.
OAH (Office of Administrative Hearings)
An independent state agency to which the Department refers matters for evidentiary hearings. The OAH has the authority to hear and decide contested cases and interpret contracts between parties.
Petitioner
Loraine Brokaw, a property owner in the Sin Vacas subdivision and member of the Association who filed the petition against the Association.
Planned Community
A real estate development where owners of separately owned lots are mandatory members of a nonprofit association and are required to pay assessments for the purpose of managing, maintaining, or improving the property.
Preponderance of the evidence
The standard of proof required for the Petitioner to win her case. It is defined as “such proof as convinces the trier of fact that the contention is more probably true than not” and represents the greater weight of evidence.
Respondent
The Sin Vacas Property Owners Association, the entity against whom the petition was filed.
Blog Post – 19F-H1918017-REL
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19F-H1918017-REL
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The provided text is an Administrative Law Judge Decision from the Office of Administrative Hearings regarding a dispute between Loraine Brokaw (Petitioner) and the Sin Vacas Property Owners Association (Respondent). The Petitioner challenged the Association’s decision to raise her annual assessment, arguing that the increase was arbitrary and contravened a decades-long practice of assessing her two lots at a combined 150% rate, rather than the new 200% rate. The decision outlines the Findings of Fact and Conclusions of Law, confirming that the Association is governed by its Covenants, Conditions, and Restrictions (CC&Rs) and Bylaws, which require uniform assessment rates for all developed lots. Ultimately, the Administrative Law Judge concluded that the Petitioner failed to prove the Association violated any community documents or statutes, reasoning that the governing documents take precedence over any prior informal agreement, and denied the Petitioner’s request.
What was the core legal basis for rejecting the petitioner’s assessment challenge?
How did the Association’s governing documents dictate uniform assessment requirements?
What legal implications arose from the Board’s decision to change long-standing practice?
Based on 1 source
Case Participants
Petitioner Side
Loraine Brokaw(petitioner)
Respondent Side
Jason Smith(HOA attorney) Carpenter, Hazlewood, Delgado & Bolen LLP Counsel for Sin Vacas Property Owners Association
Sean Moynihan(HOA attorney) Carpenter, Hazlewood, Delgado & Bolen LLP Counsel for Sin Vacas Property Owners Association
Neutral Parties
Jenna Clark(ALJ) Office of Administrative Hearings
Judy Lowe(Commissioner) Arizona Department of Real Estate
The ALJ ruled that Mogollon Airpark, Inc. violated A.R.S. § 33-1803(A) by charging a $25 late fee, as the statutory limit applies to all assessments,. However, the ALJ found no violation regarding the $325 assessment increase because the $209 portion was a special assessment and the remaining regular increase did not exceed the 20% limit,,.
Why this result: The Petitioners' primary loss on the assessment cap issue was due to a failed legal interpretation that 'regular assessment' encompasses all assessments, a view the ALJ found would render statutory language redundant,.
Key Issues & Findings
Challenge to $325 Assessment Increase (Docket 029-RHG)
Petitioner Brown argued that 'regular assessment' refers to the procedure (motion, second, vote) and thus the entire $325 increase should be subject to the 20% cap,. The ALJ rejected this, finding that $116 was a regular increase (14.1%) and $209 was a special assessment, to which the cap did not apply,.
Orders: Petition in Docket No. 18F-H1818029-REL-RHG is dismissed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1803(A)
Deer Valley v. Houser
Excessive Late Fee and Interest (Docket 045)
Petitioner Brown alleged that the $25 late charge and interest rate exceeded the limits of A.R.S. § 33-1803(A). The ALJ ruled that the statutory limit on late fees applies to all 'assessments', not just 'regular assessments', and found the HOA in violation,.
Orders: Respondent must rescind the $25 late fee and pay Petitioner his $500 filing fee within thirty days.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
Cited:
A.R.S. § 33-1803(A)
U.S. Parking Sys v. City of Phoenix
Challenge to $325 Assessment Increase (Docket 054 & Rehearing)
Petitioner Stevens argued the entire $325 must be a regular assessment because the HOA lacked authority to impose special assessments or used deceptive accounting to justify the increase,,. The ALJ found that 'regular assessment' is a specific type of assessment and the $116 increase (14.1%) did not exceed the cap,,.
Orders: Petition in Docket No. 18F-H1818054-REL and the subsequent rehearing are dismissed,.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1803(A)
A.R.S. § 33-1806
Northwest Fire District v. U.S. Home of Arizona
Analytics Highlights
Topics: Assessment Increase Cap, Regular Assessment vs Special Assessment, Late Fee Limit, Statutory Construction, Accounting Impropriety Allegations, Rehearing, Consolidated Matter
Additional Citations:
A.R.S. § 33-1803(A)
A.R.S. § 33-1806
A.R.S. § 32-2199.02(B)
A.R.S. Title 32, Ch. 20, Art. 11
A.A.C. § R2-19-119
Deer Valley v. Houser, 214 Ariz. 293, 296, 152 P.3d 490, 493 (2007)
U.S. Parking Sys v. City of Phoenix, 160 Ariz. 210, 211, 772 P.2d 33, 34 (App. 1989)
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Gutierrez v. Industrial Commission of Arizona
State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968)
Northwest Fire District v. U.S. Home of Arizona, 215 Ariz. 492 (2007)
Decision Documents
18F-H1818054-REL Decision – 666285.pdf
Uploaded 2025-12-19T15:21:24 (151.9 KB)
18F-H1818054-REL Decision – 672623.pdf
Uploaded 2025-12-19T15:21:25 (144.6 KB)
Case Participants
Petitioner Side
Warren R. Brown(petitioner) Appeared on his own behalf
Brad W. Stevens(petitioner) Appeared on his own behalf and testified
Respondent Side
Gregory A. Stein(respondent attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Counsel for Respondent, referred to as Greg Stein in rehearing
Mark K. Sahl(respondent attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Counsel for Respondent (also spelled Sahl/Saul)
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate
The Administrative Law Judge dismissed the petition, ruling that the Petitioner failed to meet the burden of proof that the HOA violated ARS § 33-1803(A). The increase in the regular assessment (14.1%) was below the statutory 20% limit, and the overall increase included a special assessment which the statute does not cover.
Why this result: The Petitioner's definition of 'regular assessment' was rejected as not supported by statutory construction principles, and the issue was limited to the definition and application of ARS § 33-1803(A).
Key Issues & Findings
Whether the HOA violated ARS § 33-1803(A) by increasing the regular assessment more than 20%.
Petitioner alleged that the HOA's total assessment increase of $325 (which was 39.4% over the previous assessment of $825) constituted an unlawful increase of the 'regular assessment' under ARS § 33-1803(A). The HOA argued the increase to the 'regular assessment' was only 14.1% ($116 increase), and the remaining $209 was a separate, one-time assessment.
Orders: Petitioner Brad W. Stevens’s petition is dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
ARIZ. REV. STAT. section 33-1803(A)
ARIZ. ADMIN. CODE § R2-19-119
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. REV. STAT. section 33-1806
Northwest Fire District v. U.S. Home of Arizona, 215 Ariz. 492 (2007)
Gutierrez v. Industrial Commission of Arizona
State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968)
Deer Valley, v. Houser, 214 Ariz. 293, 296, 152 P.3d 490, 493 (2007)
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Analytics Highlights
Topics: HOA Assessment, Statutory Interpretation, Regular Assessment, Special Assessment, ARS 33-1803(A)
Additional Citations:
ARIZ. REV. STAT. section 33-1803(A)
ARIZ. ADMIN. CODE § R2-19-119
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. REV. STAT. section 33-1806
Northwest Fire District v. U.S. Home of Arizona, 215 Ariz. 492 (2007)
Gutierrez v. Industrial Commission of Arizona
State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968)
Deer Valley, v. Houser, 214 Ariz. 293, 296, 152 P.3d 490, 493 (2007)
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Audio Overview
Decision Documents
18F-H1818054-REL-RHG Decision – 692388.pdf
Uploaded 2025-10-08T07:06:21 (102.8 KB)
Briefing Doc – 18F-H1818054-REL-RHG
Briefing Document: Stevens v. Mogollon Airpark, Inc. (Case No. 18F-H1818054-REL-RHG)
Executive Summary
This document summarizes the Administrative Law Judge (ALJ) Decision in the matter of Brad W. Stevens versus Mogollon Airpark, Inc., a case centered on the legality of a homeowner association (HOA) assessment increase. The ALJ, Thomas Shedden, ultimately dismissed the petition filed by Mr. Stevens, finding he failed to prove by a preponderance of the evidence that Mogollon Airpark violated Arizona state law.
The core of the dispute was a $325 increase to the annual assessment for 2018, which represented a 39.4% increase over the previous year’s $825 fee. The petitioner alleged this violated ARIZ. REV. STAT. § 33-1803(A), which prohibits HOAs from increasing a “regular assessment” by more than 20% without member approval. The respondent, Mogollon Airpark, argued the increase was composed of two distinct parts: a 14.1% ($116) increase to the regular assessment to cover a budget shortfall, and a separate $209 one-time “special assessment” to replenish a reserve fund.
The ALJ’s decision rested on a critical interpretation of statutory language, concluding that “regular assessments” and “special assessments” are legally distinct categories. The judge rejected the petitioner’s argument that “regular” refers to the process of an assessment rather than its type, deeming this interpretation contrary to principles of statutory construction and nonsensical. Furthermore, the judge found the petitioner’s legal citations to be inapplicable and confirmed that the scope of the hearing was limited strictly to the alleged violation of the 20% rule, not the HOA’s general authority to levy special assessments.
Case Background and Procedural History
• Parties:
◦ Petitioner: Brad W. Stevens
◦ Respondent: Mogollon Airpark, Inc. (HOA)
• Adjudicating Body: Arizona Office of Administrative Hearings, on behalf of the Arizona Department of Real Estate.
• Presiding Judge: Administrative Law Judge Thomas Shedden.
• Timeline:
◦ June 7, 2018: Mr. Stevens files a single-issue petition with the Department of Real Estate.
◦ September 28, 2018: An initial hearing is conducted on the matter, consolidated with two others.
◦ January 2, 2019: The Department of Real Estate issues a Notice of Rehearing.
◦ February 11, 2019: The rehearing is conducted.
◦ March 1, 2019: The Administrative Law Judge Decision is issued, dismissing the petition.
The matter came before the Office of Administrative Hearings for a rehearing after Mr. Stevens alleged errors of law and an abuse of discretion in the original hearing’s decision.
The Core Dispute: The 2018 Assessment Increase
The central facts of the case revolve around a decision made at a Mogollon Airpark board meeting in November 2017. To address a shortage in its operating budget and to replenish approximately $53,000 borrowed from its reserve fund, the Board approved a two-part increase to its annual fees.
Assessment Component
Previous Year (2017)
2018 Increase
Justification
Percentage Increase
Regular Assessment
+ $116
Cover operating budget shortfall
Special Assessment
+ $209
Replenish reserve fund
Total Assessment
+ $325
Total for 2018
This total 39.4% increase formed the basis of Mr. Stevens’s legal challenge under A.R.S. § 33-1803(A), which limits increases to “regular assessments” to 20% over the preceding fiscal year.
Analysis of Arguments
Petitioner’s Position (Brad W. Stevens)
Mr. Stevens’s case was built on the assertion that the entire $325 increase constituted a single “regular assessment” and was therefore illegal. His key arguments were:
• Definition of “Regular”: He contended that “regular” in the statute refers to the process by which an assessment is created—i.e., one that is “according to rule.” He argued that it does not denote a type of assessment (e.g., recurring vs. one-time).
• Lack of Authority for Special Assessments: Mr. Stevens argued that Mogollon Airpark has no authority to issue special assessments. Therefore, any assessment it imposes, regardless of its label, must legally be considered a “regular assessment.”
• Legal Precedent: He cited Northwest Fire District v. U.S. Home of Arizona to define a “special assessment,” arguing that the $209 charge did not qualify because he received no “particularized benefit” as required by that case. He also presented definitions from Black’s Law Dictionary.
Respondent’s Position (Mogollon Airpark, Inc.)
Mogollon Airpark’s defense was straightforward and relied on the distinction between the two components of the assessment increase:
• Statutory Limitation: The respondent argued that A.R.S. § 33-1803(A) applies only to “regular assessments.”
• Compliance with Statute: The increase to the regular assessment was $116, a 14.1% rise over the previous year’s $825 fee. This amount is well within the 20% statutory limit.
• Distinct Nature of Assessments: The $209 charge was a separate, one-time “special assessment” intended for a specific purpose (replenishing the reserve fund) and is not subject to the 20% limitation governing regular assessments.
Administrative Law Judge’s Findings and Conclusions
The ALJ systematically dismantled the petitioner’s arguments, finding they were not supported by evidence or principles of statutory construction.
Rejection of Petitioner’s Statutory Interpretation
• The ALJ found that Mr. Stevens’s definition of “regular” as referring to the assessment process was an insupportable interpretation. If all validly passed assessments were “regular,” the word “regular” in the statute would be “void, inert, redundant, or trivial.”
• To support this conclusion, the decision points to A.R.S. § 33-1806, where the legislature explicitly references “regular assessments” and “special assessment[s],” demonstrating a clear intent to treat them as different types of assessments.
• The judge characterized the petitioner’s logic as leading to a “nonsensical result.” Under Mr. Stevens’s reasoning, an unauthorized special assessment would become a valid regular assessment, a position deemed not to be a “sensible interpretation of the statute.” A more reasonable conclusion, the judge noted, would be that an unauthorized assessment is simply void.
Misapplication of Legal Precedent
• The petitioner’s reliance on Northwest Fire District was deemed “misplaced.” The judge clarified that this case applies to special taxing districts created under ARIZ. REV. STAT. Title 48, a legal framework that does not govern an HOA like Mogollon Airpark.
Scope of the Hearing and Burden of Proof
• The ALJ emphasized that the hearing was limited by the petitioner’s “single-issue petition.” The only question properly before the tribunal was whether A.R.S. § 33-1803(A) had been violated.
• Consequently, the broader question of whether Mogollon Airpark’s bylaws grant it the authority to impose special assessments was “not at issue.” This rendered the various definitions of “special assessment” offered by Mr. Stevens as having “no substantial probative value” to the case at hand.
• The final legal conclusion was that Mr. Stevens, who bore the burden of proof, failed to show by a “preponderance of the evidence” that Mogollon Airpark violated the statute.
Final Order and Disposition
Based on the findings and conclusions, the Administrative Law Judge ordered the following:
• Order: The petition of Brad W. Stevens is dismissed.
• Prevailing Party: Mogollon Airpark, Inc. is deemed the prevailing party.
• Binding Nature: The decision, issued as a result of a rehearing, is binding on the parties.
• Appeal Process: Any appeal must be filed for judicial review with the superior court within thirty-five days from the date the order was served.
The Administrative Law Judge ruled partially in favor of Petitioner Warren R. Brown, finding that Mogollon Airpark, Inc. violated ARIZ. REV. STAT. section 33-1803(A) by imposing a $25 late payment fee, and ordered the fee rescinded and the $500 filing fee refunded,,,. The ALJ ruled against both Petitioners (Brown and Stevens) regarding the challenge to the $325 assessment increase, dismissing those petitions because they failed to prove the HOA violated A.R.S. § 33-1803(A),,,.
Why this result: Petitioners Warren R. Brown and Brad W. Stevens failed to prove by a preponderance of the evidence that the combined $325 assessment increase violated ARIZ. REV. STAT. section 33-1803(A) because their definition of 'regular assessment' as encompassing all assessments enacted through proper procedures was not supported by statutory construction principles,.
Key Issues & Findings
Challenge to assessment increase exceeding 20% limit (Brown Docket 18F-H1818029-REL-RHG)
Petitioner Brown alleged the combined $325 increase, consisting of a $116 regular increase and a $209 special assessment, violated A.R.S. § 33-1803(A) because 'regular assessment' refers to the creation process, making the total increase subject to the 20% cap,,,,.
Orders: Petition dismissed. Respondent Mogollon Airpark, Inc. deemed the prevailing party in the 029 matter,,,.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
4
6
32
33
35
36
73
74
76
77
Challenge to assessment increase exceeding 20% limit (Stevens Docket 18F-H1818054-REL)
Petitioner Stevens alleged the total $325 assessment increase violated A.R.S. § 33-1803(A) and raised accompanying allegations of deceptive accounting and lack of authority to impose special assessments,,.
Orders: Petition dismissed. Respondent deemed the prevailing party in the 054 matter,,,,.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
7
20
32
33
35
36
38
61
73
74
76
77
79
94
99
101
Challenge to late payment charges (Brown Docket 18F-H1818045-REL)
Petitioner Brown alleged that the $25 late fee and 18% interest charged by Mogollon violated the statutory limits set forth in A.R.S. § 33-1803(A),,. The ALJ found the $25 late charge violated the statute because the limit applies to all 'assessments',.
Orders: Petitioner Warren R. Brown deemed the prevailing party. Mogollon Airpark Inc. must rescind the $25 late fee and pay Mr. Brown his filing fee of $500.00 within thirty days,.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
Cited:
5
7
32
34
37
46
47
59
73
75
78
Analytics Highlights
Topics: HOA assessment cap, Late fee violation, Statutory construction, Regular assessment definition, Special assessment, Filing fee refund
Additional Citations:
ARIZ. REV. STAT. section 33-1803(A)
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.)
Deer Valley, v. Houser, 214 Ariz. 293, 296, 152 P.3d 490, 493 (2007)
U.S. Parking Sys v. City of Phoenix, 160 Ariz. 210, 211, 772 P.2d 33, 34 (App. 1989)
Briefing Document: Brown and Stevens vs. Mogollon Airpark, Inc.
Executive Summary
This document synthesizes the findings and conclusions from a consolidated administrative law case involving petitioners Warren R. Brown and Brad W. Stevens against their homeowners’ association (HOA), Mogollon Airpark, Inc. The central dispute concerned a 2018 assessment increase of $325, which represented a 39.4% increase over the previous year, and the imposition of a new $25 late fee.
The petitioners argued that the entire assessment increase violated Arizona Revised Statute § 33-1803(A), which limits annual regular assessment increases to 20%. They contended that the term “regular” describes the procedural enactment of an assessment, making the entire 325increaseasingleregularassessment.Conversely,theHOAassertedthatithadbifurcatedtheincreaseintoacompliant14.1116) regular assessment increase and a separate $209 special assessment, which is not subject to the 20% statutory cap.
The Administrative Law Judge (ALJ) ultimately sided with Mogollon Airpark on the assessment increase, dismissing the petitions of both Mr. Brown and Mr. Stevens. The ALJ’s rationale, based on principles of statutory construction, was that “regular assessment” refers to a type of assessment, distinct from a “special assessment,” and that to rule otherwise would render the word “regular” meaningless in the statute. A subsequent rehearing requested by Mr. Stevens was also denied on the same grounds.
However, the ALJ ruled in favor of Mr. Brown on the matter of the late fee. The decision found that the statutory limit on late fees applies to all “assessments,” not just regular ones, making the HOA’s $25 fee a clear violation. Underlying the legal challenges were substantial allegations by the petitioners of deceptive accounting and financial mismanagement by the HOA to create a “fabricated shortfall,” though the ALJ noted these issues were outside the narrow scope of the administrative hearing and better suited for civil court.
Case Overview and Parties Involved
This matter consolidates three separate petitions filed with the Arizona Department of Real Estate, which were heard by the Office of Administrative Hearings.
• Petitioners:
◦ Warren R. Brown (Docket Nos. 18F-H1818029-REL-RHG & 18F-H1818045-REL)
◦ Brad W. Stevens (Docket No. 18F-H1818054-REL)
• Respondent:
◦ Mogollon Airpark, Inc.
• Venue and Adjudication:
◦ Tribunal: Office of Administrative Hearings, Phoenix, Arizona
◦ Administrative Law Judge: Thomas Shedden
◦ Hearing Date (Consolidated Matters): September 28, 2018
◦ Rehearing Date (Stevens Matter): February 11, 2019
Key Financial Figures
Amount/Rate
Calculation/Note
Previous Year’s Assessment (2017)
The baseline for calculating the increase percentage.
Total 2018 Assessment Increase
The total amount disputed by the petitioners.
Total Increase Percentage
($325 / $825)
“Regular Assessment” Increase
As classified by Mogollon Airpark, Inc. (14.1% increase).
“Special Assessment”
As classified by Mogollon Airpark, Inc.
New Late Fee
Challenged as exceeding statutory limits.
New Interest Rate
For past-due accounts.
Statutory Late Fee Limit
Greater of $15 or 10%
Per ARIZ. REV. STAT. § 33-1803(A).
Statutory Assessment Increase Limit
20% over prior year
Per ARIZ. REV. STAT. § 33-1803(A), applies to regular assessments.
Analysis of Core Legal Disputes
The hearings focused on two primary violations of Arizona statute alleged by the petitioners.
The 2018 Assessment Increase (39.4%)
The crux of the case in dockets 029 and 054 was the interpretation of the term “regular assessment” within ARIZ. REV. STAT. § 33-1803(A).
• Petitioners’ Position (Brown & Stevens):
◦ The total $325 increase, constituting a 39.4% hike, is a clear violation of the 20% statutory cap.
◦ The term “regular assessment” as used in the statute refers to the process by which an assessment is created (i.e., by motion, second, and vote). As the entire $325 was passed via this standard procedure, it constitutes a single regular assessment.
◦ They further argued that Mogollon Airpark, Inc.’s governing documents (Bylaws and CC&Rs) do not provide any explicit authority to impose “special assessments,” meaning any assessment levied must be a regular one.
• Respondent’s Position (Mogollon Airpark, Inc.):
◦ The assessment was properly bifurcated into two distinct parts: a $116 increase to the regular assessment (a 14.1% increase, well within the 20% limit) and a $209 special assessment.
◦ “Regular assessment” and “special assessment” are established terms of art in the HOA industry, denoting different types of assessments, not the process of their creation.
◦ The existence of both terms in other parts of Arizona law, such as § 33-1806, demonstrates the legislature’s intent to treat them as separate categories.
Late Fees and Interest Charges
In docket 045, Mr. Brown challenged the legality of the newly instituted penalties for late payments.
• Petitioner’s Position (Brown):
◦ The statute explicitly limits late fees to “the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.”
◦ The HOA’s imposition of a flat $25 late fee is a direct violation of this provision. An invoice provided as evidence showed Mr. Brown was charged this $25 fee plus $1.57 in interest.
• Respondent’s Position (Mogollon Airpark, Inc.):
◦ The HOA argued that the statutory limitation on late fees applied only to regular assessments, not to special assessments. This argument was explicitly rejected by the ALJ.
Underlying Allegations of Financial Misconduct
While the administrative hearings were limited to the specific statutory violations, the petitions were motivated by deep-seated concerns over the HOA’s financial management. These allegations were not adjudicated but were noted by the ALJ.
• Core Allegation: The petitioners claimed the HOA treasurer and others engaged in “deceptive and nonstandard accounting methods” to manufacture a financial crisis and justify the assessment increase.
• Specific Claims:
◦ Mr. Brown alleged that the accounting was “deliberately misleading” to obscure the fact that the 2016 board left the treasury approximately “$200,000 better off.”
◦ Mr. Stevens submitted a 45-page petition with over 600 pages of exhibits detailing the alleged improprieties, including “keeping two sets of books,” to create a “fabricated shortfall.” He testified that he believed the HOA possessed over $1 million and did not need an increase.
• Judicial Comment: The ALJ noted that these complex financial allegations were not addressed in the hearing and suggested that “the civil courts may be better suited than an administrative tribunal to address the issues they raise.”
Judicial Decisions and Rationale
The ALJ issued separate findings and orders for each docket, culminating in a split decision. The rulings on the assessment increase were further solidified in a subsequent rehearing.
Summary of Outcomes
Docket No.
Petitioner
Core Issue
Ruling
Prevailing Party
18F-H1818029-REL-RHG
Warren R. Brown
Assessment Increase
Petition Dismissed
Mogollon Airpark, Inc.
18F-H1818054-REL
Brad W. Stevens
Assessment Increase
Petition Dismissed
Mogollon Airpark, Inc.
18F-H1818045-REL
Warren R. Brown
$25 Late Fee
Violation Found
Warren R. Brown
Rationale for Initial Decision (October 18, 2018)
• On the Assessment Increase: The ALJ found that the petitioners failed to prove by a preponderance of the evidence that a violation occurred. The ruling rested on statutory interpretation:
◦ The petitioners’ definition of “regular assessment” as a process was rejected because it would render the word “regular” in the statute “trivial or void,” as all assessments are presumed to follow a regular process.
◦ The only “fair and sensible result” that gives meaning to every word in the statute is to interpret “regular” and “special” as distinct types of assessments.
• On the Late Fees: The ALJ found that Mr. Brown successfully proved a violation.
◦ The statutory text on late fees applies to “assessments” generally, without the qualifier “regular.”
◦ Mogollon’s argument required adding the word “regular” where the legislature did not use it, which violates principles of statutory construction.
◦ Order: Mogollon was ordered to rescind the $25 fee assessed against Mr. Brown and reimburse his $500 filing fee.
Rationale for Rehearing Decision (March 1, 2019)
Mr. Stevens’s request for a rehearing on his dismissed petition was granted but ultimately denied again.
• Mr. Stevens’s Rehearing Arguments: He argued the ALJ erred by not applying a definition of “special assessment” from the case Northwest Fire District v. U.S. Home of Arizona and reasserted that an assessment unauthorized by the HOA’s documents must logically be a regular one.
• ALJ’s Rejection:
◦ The reliance on Northwest Fire District was “misplaced” because that case applies to special taxing districts created under a different state title, not private HOAs.
◦ The argument that an unauthorized special assessment becomes a regular one was deemed “nonsensical.” The ALJ noted, “More reasonably, if Mogollon has no authority to issue a special assessment, any such assessment would be void.”
◦ The core statutory interpretation from the initial hearing was affirmed. The petition was dismissed a final time.
Study Guide – 18F-H1818054-REL-RHG
Study Guide: Brown and Stevens v. Mogollon Airpark, Inc.
Short Answer Quiz
Instructions: Answer the following questions in 2-3 sentences each, based on the provided legal documents.
1. Identify the petitioners and the respondent in this consolidated legal matter and describe their relationship.
2. What specific financial changes did Mogollon Airpark, Inc. implement in 2018 that led to the legal dispute?
3. What was the central legal argument presented by petitioners Warren R. Brown and Brad W. Stevens regarding the assessment increase?
4. How did Mogollon Airpark, Inc. justify its total assessment increase of $325 in the face of the legal challenge?
5. Explain the Administrative Law Judge’s primary reason for dismissing the petitions concerning the assessment increase (the 029 and 054 matters).
6. What was the specific subject of the petition in the 045 matter, and what was the final ruling in that case?
7. What was the judge’s legal reasoning for finding Mogollon’s $25 late fee to be in violation of the statute?
8. Why did the hearing not address the petitioners’ underlying allegations of deceptive accounting and financial impropriety?
9. What is the standard of proof required in this matter, and which parties were responsible for meeting it?
10. In the rehearing for the 054 matter, what was Brad Stevens’s argument regarding the definition of “special assessment,” and why did the judge find his reliance on the Northwest Fire District case to be misplaced?
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Quiz Answer Key
1. The petitioners were Warren R. Brown and Brad W. Stevens, who were members of the homeowners’ association (HOA). The respondent was Mogollon Airpark, Inc., the HOA itself. The dispute arose from actions taken by the HOA board that the petitioners, as members, believed to be unlawful.
2. In 2018, Mogollon Airpark, Inc. raised its total annual assessment by $325 over the previous year’s $825. Additionally, the HOA instituted a new late payment fee of $25 and began charging 18% interest on past-due accounts.
3. The petitioners’ central argument was that the total $325 assessment increase, representing a 39.4% hike over the prior year, violated ARIZ. REV. STAT. section 33-1803(A). This statute prohibits an HOA from imposing a “regular assessment” that is more than 20% greater than the previous year’s assessment without member approval.
4. Mogollon Airpark, Inc. argued that the $325 increase was composed of two separate parts: a $116 increase to the “regular assessment” (14.1%) and a $209 “special assessment.” They contended that the 20% statutory limit in section 33-1803(A) applies only to regular assessments, not special assessments, and therefore their actions were lawful.
5. The judge dismissed the petitions based on principles of statutory construction. He concluded that “regular assessment” is a specific type of assessment, distinct from a “special assessment,” and that if “regular” merely referred to the process of passing an assessment (motion, second, vote), the word would be redundant and meaningless in the statute. Since the regular assessment portion of the increase was below the 20% threshold, no violation occurred.
6. The 045 matter, filed by Warren R. Brown, specifically challenged Mogollon’s new $25 late fee and 18% interest charge. The judge ruled in favor of Mr. Brown, deeming him the prevailing party, and ordered Mogollon to rescind the $25 late fee and refund his $500 filing fee.
7. The judge found the $25 late fee violated the statute because the section of ARIZ. REV. STAT. section 33-1803(A) limiting late charges applies to “assessments” generally, not just “regular assessments.” Unlike the clause on assessment increases, the legislature did not use the limiting word “regular,” so applying that limitation would violate principles of statutory construction.
8. The hearing did not address the allegations of deceptive accounting because the petitions filed by Mr. Brown (029) and Mr. Stevens (054) were “single-issue petitions.” This limited the scope of the hearing strictly to the question of whether Mogollon violated the specific statute, section 33-1803(A). The judge noted that civil courts may be a more suitable venue for the financial allegations.
9. The standard of proof required was a “preponderance of the evidence.” The burden of proof was on the petitioners, Messrs. Brown and Stevens, to prove their respective allegations against the respondent, Mogollon Airpark, Inc.
10. Mr. Stevens argued that the definition of “special assessment” from the case Northwest Fire District v. U.S. Home of Arizona should be applied, which it failed to meet. The judge found this reliance misplaced because that case applies to special taxing districts created under ARIZ. REV. STAT. Title 48, and Mogollon Airpark, Inc. is an HOA, not such a taxing district.
——————————————————————————–
Essay Questions
Instructions: The following questions are designed for a more in-depth, essay-format response. Do not provide answers.
1. Analyze the competing interpretations of the term “regular assessment” as presented by the petitioners and the respondent. Discuss the Administrative Law Judge’s final interpretation and the principles of statutory construction used to arrive at that conclusion.
2. The Administrative Law Judge’s decision distinguishes between the legality of the assessment increase and the legality of the late fee. Explain the legal reasoning behind this split decision, focusing on the specific wording of ARIZ. REV. STAT. section 33-1803(A) and the different statutory construction applied to each clause.
3. Discuss the procedural limitations of the hearings as described in the legal decision, specifically referencing the concept of a “single-issue petition.” How did this limitation affect the scope of the case and prevent the judge from ruling on certain serious allegations made by Brown and Stevens?
4. Based on the “Findings of Fact,” describe the background allegations of financial misconduct made by the petitioners against Mogollon’s treasurer and board. Although not ruled upon, explain how these allegations served as the primary motivation for their legal challenges regarding the assessment and fee increases.
5. Trace the procedural history of the “029 matter,” from its original petition and dismissal to the eventual rehearing and final order. What does this process reveal about the requirements for filing a successful petition with the Office of Administrative Hearings?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, weighs evidence, and makes legal rulings and decisions, in this case, Judge Thomas Shedden.
ARIZ. REV. STAT. section 33-1803(A)
The specific Arizona statute at the heart of the dispute. It limits HOA regular assessment increases to 20% over the prior year and caps late payment charges to the greater of $15 or 10% of the unpaid assessment.
Assessment
A fee or charge levied by a homeowners’ association on its members to cover operating expenses, reserve funds, and other costs.
Bylaws
A set of rules adopted by an organization, like an HOA, to govern its internal management and operations. Part of the governing documents.
Covenants, Conditions & Restrictions. These are legal obligations recorded in the deed of a property, governing its use and maintenance. Part of the governing documents.
Consolidated Matter
A legal procedure where multiple separate cases or petitions involving common questions of law or fact are combined into a single hearing to promote efficiency.
Docket Number
A unique number assigned by a court or administrative office to identify a specific case. The matters in this case were identified as 029, 045, and 054.
Governing Documents
The collection of legal documents, including CC&Rs and Bylaws, that establish the rules and authority of a homeowners’ association.
Petitioner
The party who files a petition initiating a legal action in an administrative or court proceeding. In this case, Warren R. Brown and Brad W. Stevens.
Preponderance of the Evidence
The standard of proof in this case. It means the greater weight of the evidence shows that a fact is more likely than not to be true.
Regular Assessment
As interpreted by the ALJ, a specific type of recurring annual assessment for an HOA’s general operating budget, subject to the 20% increase limit in section 33-1803(A).
Respondent
The party against whom a petition is filed. In this case, Mogollon Airpark, Inc.
Single-Issue Petition
A petition that limits the scope of the administrative hearing to a single, specific legal question or alleged violation, as was the case for the 029 and 054 matters.
Special Assessment
As interpreted by the ALJ, a one-time or non-recurring assessment levied for a specific purpose (e.g., replenishing a reserve fund). The ALJ found it is not subject to the 20% annual increase cap that applies to regular assessments.
Statutory Construction
The process and principles used by judges to interpret and apply legislation. The judge used these principles to determine the meaning of “regular” and “assessment” in the statute.
Blog Post – 18F-H1818054-REL-RHG
How One Word Let an HOA Raise Dues by 40%—And 4 Surprising Lessons for Every Homeowner
Imagine opening your annual bill from your Homeowner’s Association (HOA) and discovering your dues have skyrocketed by nearly 40% overnight. This isn’t a hypothetical scenario. It’s precisely what happened to homeowners in the Mogollon Airpark community in Arizona when their HOA board raised the annual assessment by $325, from $825 to $1,150—a staggering 39.4% increase.
But the homeowners weren’t just angry about the amount; they alleged the increase was justified by a “fabricated shortfall” created through “deceptive and nonstandard accounting methods.” At first glance, the hike also seemed legally impossible. Arizona state law, specifically ARIZ. REV. STAT. section 33-1803(A), clearly states that an HOA cannot impose a regular assessment that is more than 20% greater than the previous year’s. So how did the Mogollon Airpark board legally circumvent this cap? The answer, found in the fine print of an administrative law judge’s decision, reveals critical lessons for every homeowner about the power of language, legal strategy, and reading the fine print.
1. The Power of a Name: The “Special Assessment” Loophole
The HOA’s strategy was deceptively simple. Instead of raising the annual assessment by the full $325, the Mogollon Airpark board split the increase into two distinct parts. First, it raised the “regular assessment” by $116. This amounted to a 14.1% increase over the previous year’s $825, keeping it well within the 20% legal limit. The remaining $209 was then levied as a separate fee, which the board classified as a “special assessment.”
When homeowners challenged this, the Administrative Law Judge sided with the HOA. The judge’s ruling was based on a strict reading of the statute: the 20% cap applies only to “regular assessments,” not “special assessments.” By simply calling a portion of the increase a “special assessment,” the HOA legally circumvented the very law designed to protect homeowners from massive, sudden fee hikes.
Lesson 1 for Homeowners: The name of a fee is everything. State-mandated caps on “regular” assessments offer zero protection if your HOA can simply reclassify an increase as a “special” assessment.
2. Every Word Is a Battlefield: “Regular” Doesn’t Mean What You Think
The homeowners, petitioners Warren Brown and Brad Stevens, built their case on a common-sense interpretation of the law. They argued that the term “regular assessment” in the statute referred to the process by which an assessment is created—that is, any fee approved through a regular motion, second, and vote by the board. By this logic, the entire $325 increase was a single “regular assessment” and therefore violated the 20% cap. They also argued that the HOA had no authority under its own governing documents to impose a special assessment in the first place.
The judge, however, rejected this definition. The judge reasoned that lawmakers don’t add words to statutes for no reason. If “regular” simply meant “voted on normally,” the word would be redundant, as all assessments are assumed to be passed this way. To give the word meaning, it must refer to a specific type of assessment. To support this interpretation, the judge pointed to another Arizona statute, 33-1806, which explicitly uses the distinct terms “regular assessments” and “special assessment[s].” This proved that the state legislature intended for them to be entirely different categories of fees, cementing the HOA’s victory on the main issue.
Lesson 2 for Homeowners: Every word in a statute has a purpose. Courts assume lawmakers don’t use words accidentally, and a layperson’s “common-sense” definition of a term can be easily defeated by established principles of legal interpretation.
3. A Small Victory on a Technicality: Why You Should Still Read the Fine Print
While the homeowners lost the battle over the 39.4% dues increase, one petitioner, Mr. Brown, secured a small but significant win on a separate issue: late fees. The Mogollon Airpark board had instituted a new $25 late fee, which Mr. Brown challenged.
Arizona law limits late fees to “the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.” The HOA argued that this limit, like the 20% cap, only applied to regular assessments. This time, the judge disagreed. The judge’s logic was a textbook example of statutory interpretation: when lawmakers include a specific word in one part of a law but omit it from another, courts assume the omission was deliberate. In the section of the law governing late fees, the limit applies to “assessments” in general; the word “regular” is conspicuously absent.
Because the HOA’s $25 fee exceeded the legal limit, the judge ruled in favor of Mr. Brown. The court ordered the HOA to rescind the illegal late fee and, importantly, to reimburse Mr. Brown for his $500 filing fee.
Lesson 3 for Homeowners: The fine print cuts both ways. While one word can create a loophole for an HOA, the absence of that same word elsewhere can be your most powerful weapon.
4. Fighting the Right Battle in the Right Place: The Allegations a Judge Couldn’t Hear
Underlying the dispute over the 20% cap were much more serious allegations. The homeowners’ petitions claimed the HOA board used “deceptive and nonstandard accounting methods,” including keeping “two sets of books,” to create a “fabricated shortfall” and justify the massive fee increase.
Yet, none of these explosive claims were ever addressed during the hearing. The reason was a crucial matter of legal procedure. The homeowners had filed what are known as “single-issue petitions,” which focused narrowly and exclusively on the violation of the 20% assessment cap in statute 33-1803(A). This strategic choice legally prevented the judge from considering the broader allegations of financial mismanagement, regardless of their merit.
In a pointed footnote, the judge highlighted the procedural constraints and suggested the homeowners had chosen the wrong legal venue for their most serious claims:
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.
Lesson 4 for Homeowners: Your legal strategy is as important as your evidence. Choosing the right claims to file and the right venue to file them in can determine whether a judge is even allowed to hear your most compelling arguments.
Conclusion: Your Most Powerful Tool
The case of Mogollon Airpark is a powerful illustration of how legal battles are won and lost not on broad principles of fairness, but on the precise definitions of individual words. The presence of the word “regular” in one clause of the law cost the homeowners their central fight, allowing the HOA to circumvent the 20% cap. In a stunning contrast, the absence of that very same word in another clause handed them a clear victory on late fees.
This case is a stark reminder of the power hidden in legal definitions and fine print. It leaves every homeowner with a critical question: Do you really know what your governing documents—and the state laws that bind them—truly allow?
Case Participants
Petitioner Side
Warren R. Brown(petitioner) Appeared pro se
Brad W. Stevens(petitioner) Appeared pro se; presented testimony/evidence
Respondent Side
Gregory A. Stein(respondent attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Mark K. Sahl(respondent attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Spelled Mark K. Saul in some transmissions
Neutral Parties
Thomas Shedden(ALJ) OAH
Judy Lowe(Commissioner) Arizona Department of Real Estate
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
18F-H1818053-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2019-01-31
Administrative Law Judge
Tammy L. Eigenheer
Outcome
loss
Filing Fees Refunded
$0.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Travis Prall
Counsel
—
Respondent
Villas at Tierra Buena Homeowners Association
Counsel
Lydia Pierce Linsmeier
Alleged Violations
Section 7.1.4 of the CC&Rs
Outcome Summary
The Administrative Law Judge dismissed the Petition following a rehearing, concluding that the Petitioner failed to meet the burden of proof to show the HOA violated Section 7.1.4 of the CC&Rs because there was no credible evidence that the disputed landscaping (tree) had been originally installed by the developer.
Why this result: Petitioner failed to establish by a preponderance of the evidence that the landscaping was originally installed by the Declarant, which was a prerequisite for HOA maintenance responsibility under the relevant CC&R section.
Key Issues & Findings
Neglecting yard maintenance in visible public yards
Petitioner alleged the HOA violated CC&R Section 7.1.4 by failing to maintain a tree in his back yard, arguing the back yard qualified as a 'Public Yard' and the tree was originally installed by the Declarant.
Orders: The Petition was dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 41-2198.01
A.R.S. § 32-2199.02(B)
A.R.S. § 41-1092.08(H)
A.R.S. § 12-904(A)
Analytics Highlights
Topics: HOA maintenance, CC&R interpretation, burden of proof, landscaping
This briefing synthesizes the findings from two administrative law hearings concerning a dispute between homeowner Travis Prall (Petitioner) and the Villas at Tierra Buena Homeowners Association (Respondent). The core of the conflict was the Petitioner’s allegation that the HOA violated its governing documents by failing to maintain landscaping—specifically a large tree—in his backyard, which he contended was a “Public Yard” under the community’s Covenants, Conditions, and Restrictions (CC&Rs).
The dispute culminated in two separate rulings by an Administrative Law Judge (ALJ), one in September 2018 and another following a rehearing in January 2019. In both instances, the petition was dismissed.
The central issue did not turn on the ambiguous definition of “Public Yard” vs. “Private Yard” in the CC&Rs, a point of significant debate between the parties. Instead, the case was decided on a critical qualifying phrase in the governing documents: the HOA’s maintenance obligation under Section 7.1.4 is limited to landscaping “as originally installed by Declarant” (the original developer).
The Petitioner failed to meet the burden of proof to establish that the tree in question was installed by the developer. In the initial hearing, this conclusion was based on inference. In the rehearing, the HOA presented credible witness testimony from a board member involved in the community’s initial sales, who stated that all homes were sold with no landscaping or irrigation in the backyards, which were “just dirt.” The ALJ found this to be the only credible evidence on the matter, leading to the final dismissal of the case.
Case Overview
Case Name
Travis Prall (Petitioner) vs. Villas at Tierra Buena HOA (Respondent)
Case Number
18F-H1818053-REL
Office of Administrative Hearings, Phoenix, Arizona
Presiding Judge
Administrative Law Judge Tammy L. Eigenheer
Core Allegation
The Petitioner alleged the HOA violated Section 7.1.4 of the CC&Rs by “neglecting yard maintenance in visible public yards.”
Factual Background and Timeline
The dispute is centered within the Villas at Tierra Buena, a gated community comprising 43 homes on the outer perimeter with tall block fences and 19 interior homes with four-foot-tall walls (two feet of block with a two-foot aluminum fence on top). The Petitioner owns one of these interior homes.
• 2010: Travis Prall purchases his home. He believes, based on his reading of the CC&Rs, that the HOA is responsible for maintaining both his front and back yards. A large tree is present in the backyard at the time of purchase.
• 2010–2013: Prall testifies that the HOA provided landscaping maintenance to his front and back yards during this period. The HOA denies ever providing maintenance to any backyards in the community.
• July 26, 2014: A storm knocks over the tree in Prall’s backyard. Prall pays for its removal but asserts at the time that it was the HOA’s responsibility.
• Post-2014: The tree regrows from the remaining stump.
• 2018: The HOA observes that the “pony wall” near the regrown tree is buckling. A repair company, Sun King Fencing & Gates, confirms “the reason the pony wall buckled was the tree roots in the area” and recommends the tree’s removal.
• May 3, 2018: The HOA issues a “Courtesy Letter” to Prall, stating, “Please trim or remove the tree in the back yard causing damage to the pony wall.”
• June 4, 2018: Prall files an HOA Dispute Process Petition with the Arizona Department of Real Estate.
• September 4, 2018: The initial administrative hearing is held.
• September 24, 2018: The ALJ issues a decision dismissing the petition.
• Post-September 2018: Prall’s request for a rehearing is granted.
• January 11, 2019: The rehearing is conducted.
• January 31, 2019: The ALJ issues a final decision, again dismissing the petition.
Central Point of Contention: Interpretation of CC&Rs
The primary disagreement focused on whether the Petitioner’s enclosed but visible backyard constituted a “Public Yard” or a “Private Yard” under the CC&Rs. The HOA’s maintenance obligation under Section 7.1.4 applies only to Public Yards.
Relevant CC&R Sections
Section
Language
Respondent must “Replace and maintain all landscaping and other Improvements as originally installed by Declarant on the Public Yards of Lots…” (Emphasis added)
“‘Private Yard’ means that portion of a Yard which is enclosed or shielded from view by walls, fences, hedges or the like so that it is not generally Visible from Neighboring Property. ‘Public Yard’ means that portion of a Yard which is generally visible from Neighboring Property, whether or not it is located in front of, beside, or behind the Residential Dwelling.”
“‘Visible from Neighboring Property’ means, with respect to any given object, that such object is or would be visible to a person six feet tall standing on any part of such neighboring property…”
Competing Interpretations
• Petitioner’s Interpretation: A yard is “Private” only if it is both enclosed/shielded AND not generally visible. Because his backyard is enclosed but visible through the four-foot wall/fence, he argued it qualifies as a “Public Yard” that the HOA must maintain.
• Respondent’s Interpretation: A yard is “Private” if it is either enclosed or shielded from view. Because the Petitioner’s backyard is enclosed, it is a Private Yard, and the HOA has no maintenance responsibility.
While the ALJ acknowledged that “the language of the CC&Rs may lend itself to a reading that Respondent is responsible for the maintenance of the enclosed back yards,” she explicitly stated that the tribunal was “not required to reach that issue in this matter.” The case was decided on other grounds.
Analysis of Arguments and Evidence
The Petitioner bore the burden of proof to establish a violation by a preponderance of the evidence.
Petitioner’s Position (Travis Prall)
• Argued that the HOA performed backyard maintenance from 2010 to 2013, establishing a precedent.
• Posited that the large size of the tree when he bought the home in 2010 indicated it must have been planted by the original developer.
• Suggested that the presence of just two types of irrigation systems across the community, accessible from the front, implied a uniform developer installation for both front and back yards.
• Noted that his backyard sprinkler system wrapped around the tree, suggesting they were installed together by the developer.
Respondent’s Position (Villas at Tierra Buena HOA)
• Denied ever providing landscaping maintenance to any backyards, stating it only controls front yard irrigation and sprinkler systems.
• Raised liability concerns about maintenance workers entering residents’ enclosed backyards where pets could escape.
• Presented critical testimony from Board President Maureen Karpinski during the rehearing. Ms. Karpinski, a real estate agent who was involved with the community’s development and sales from 2002, stated that to her knowledge, none of the homes were sold with any landscaping or irrigation in the backyards, which were “just dirt.”
Administrative Law Judge’s Decisions and Rationale
The ALJ’s rulings in both hearings hinged on the specific requirement in Section 7.1.4 that the landscaping must have been “originally installed by Declarant.”
Initial Hearing Decision (September 24, 2018)
• Ruling: The Petition was dismissed.
• Rationale: The Petitioner failed to present evidence that the tree was installed by the developer. The ALJ noted that the tree had regrown to a significant height in approximately five years after being cut down in 2014. From this, she concluded that “it cannot be concluded that the tree in the photograph from 2010 was planted as part of the original landscape plan around 2000.”
Rehearing Decision (January 31, 2019)
• Ruling: The Petition was dismissed.
• Rationale: The ALJ found the Petitioner’s arguments to be “suppositions and inferences.” In contrast, she deemed the testimony of Maureen Karpinski to be “the only credible evidence offered regarding the landscaping of the homes.” Ms. Karpinski’s statement that backyards were sold as “just dirt” directly refuted the claim that any landscaping was “originally installed by Declarant.”
• The final conclusion stated: “As there was no evidence there was any landscaping or improvements originally installed by Declarant, there is no reason to conclude Respondent would be required to replace and maintain Petitioner’s back yard under the terms of Section 7.1.4 of the CC&Rs.”
Final Disposition
The Administrative Law Judge ordered that the Petition be dismissed. The order resulting from the rehearing was final and binding on the parties. Any further appeal would require seeking judicial review in the superior court within 35 days of the order.
Study Guide – 18F-H1818053-REL-RHG
Study Guide: Prall v. Villas at Tierra Buena HOA
This study guide provides a comprehensive review of the administrative case between Travis Prall and the Villas at Tierra Buena Homeowners Association, based on the legal decisions from September 2018 and January 2019. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms to facilitate a thorough understanding of the dispute, arguments, and legal reasoning involved.
Short-Answer Quiz
Answer each question in 2-3 sentences, based on the provided source context.
1. What specific violation of the community’s CC&Rs did the Petitioner, Travis Prall, allege in his petition?
2. What was the key physical difference between the backyards of the “interior homes” and the “exterior homes” in the Villas at Tierra Buena community?
3. What was the central point of disagreement between the Petitioner and the Respondent regarding the definition of a “Private Yard” versus a “Public Yard”?
4. According to Section 7.1.4 of the CC&Rs, what specific condition must be met for the HOA to be responsible for maintaining landscaping in a Public Yard?
5. What was the “Courtesy Letter” issued by the Respondent on May 3, 2018, and what did it request of the Petitioner?
6. What was the Petitioner’s primary argument for why the tree in his backyard must have been installed by the original developer?
7. What is the legal standard of proof the Petitioner was required to meet, and what does it mean?
8. In the first hearing, why did the Administrative Law Judge conclude that the tree was not part of the original landscape plan?
9. During the rehearing, what “credible evidence” was presented by the Respondent that refuted the Petitioner’s claims about original backyard landscaping?
10. Why did the Administrative Law Judge state that it was not necessary to rule on the interpretation of “Public Yard” vs. “Private Yard” in either decision?
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Answer Key
1. Petitioner Travis Prall alleged that the Villas at Tierra Buena HOA violated Section 7.1.4 of the Declaration of Covenants, Conditions, Restrictions and Easements (CC&Rs). The specific allegation was that the HOA neglected its duty for yard maintenance in visible public yards.
2. The exterior homes have six to seven-foot-tall block wall fences enclosing the backyards. The interior homes, like the Petitioner’s, have a shorter back wall, consisting of a two-foot-tall block wall topped with a two-foot-tall aluminum fence, making the backyards more visible.
3. The Petitioner argued that a yard must be both enclosed and not generally visible to be private, meaning his visible, enclosed yard was public. The Respondent argued that a yard was private if it was enclosed or shielded from view, meaning the Petitioner’s enclosed yard was private regardless of visibility.
4. According to Section 7.1.4, the HOA is required to “replace and maintain all landscaping and other Improvements as originally installed by Declarant on the Public Yards of Lots.” This means the landscaping in question must have been part of the original developer’s installation.
5. The “Courtesy Letter” was a notice from the HOA to the Petitioner concerning the tree in his backyard. It requested that he “Please trim or remove the tree in the back yard causing damage to the pony wall,” which had buckled due to the tree’s roots.
6. The Petitioner posited that the tree must have been installed by the developer due to its large size when he bought the home in 2010. He also noted that the backyard sprinkler system wrapped around the tree, suggesting they were installed together during original construction.
7. The Petitioner was required to meet the “preponderance of the evidence” standard. This standard is defined as proof that convinces the trier of fact that a contention is more probably true than not; it is the greater weight of evidence.
8. The judge noted that after the original tree was removed in 2014, the present tree grew to a similar height in approximately five years from the remaining stump. Therefore, the judge concluded that the tree’s size in 2010 did not prove it was planted as part of the original landscape plan around the year 2000.
9. The Respondent presented the testimony of Maureen Karpinski, the Board President and a real estate agent who sold homes in the community during its development. She stated that to the best of her knowledge, none of the homes were sold with any landscaping or irrigation in the backyards and that they were “just dirt.”
10. The judge did not need to rule on the yard definition because the Petitioner first had to prove the tree was “originally installed by the Declarant” per Section 7.1.4. Since the Petitioner failed to provide sufficient evidence for this foundational claim in both hearings, the question of whether the yard was public or private became irrelevant to the outcome.
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Suggested Essay Questions
These questions are designed to test a deeper, more analytical understanding of the case. Answers are not provided.
1. Explain the concept of “burden of proof” and analyze how the Petitioner’s failure to meet the “preponderance of the evidence” standard was the determining factor in the dismissal of his petition in both the initial hearing and the rehearing.
2. Provide a detailed analysis of the competing interpretations of “Private Yard” and “Public Yard” as defined in Section 1.38 of the CC&Rs. Discuss the arguments made by both the Petitioner and the Respondent and explain why, despite this being a central point of contention, the final ruling did not hinge on this issue.
3. Compare the evidence presented by Travis Prall with the evidence presented by the Villas at Tierra Buena HOA. How did the nature and credibility of the evidence, particularly witness testimony versus suppositions, influence the Administrative Law Judge’s final decision?
4. Trace the procedural history of this case, starting from the initial event that triggered the HOA’s notice through the final decision after the rehearing. What were the key decision points and legal options available to the parties at each stage?
5. Discuss the significance of Maureen Karpinski’s testimony in the rehearing. How did her personal and professional experience with the community’s development directly address the central weakness of the Petitioner’s case from the first hearing?
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Glossary of Key Terms
Definition
Administrative Law Judge
The judicial officer who presides over hearings at the Office of Administrative Hearings and issues legal decisions, in this case, Tammy L. Eigenheer.
An abbreviation for the Declaration of Covenants, Conditions,Restrictions and Easements, the legal documents that govern a planned community or HOA.
Common Area
Land within the community for the common use and enjoyment of the owners; the HOA is responsible for maintaining landscaping in these areas.
Courtesy Letter
A formal notice issued by the HOA to a resident. In this case, it was a letter dated May 3, 2018, requesting that the Petitioner trim or remove a tree causing damage to a wall.
Declarant
The original developer who installed the initial landscaping and improvements in the community.
An abbreviation for Homeowners Association. In this case, the Villas at Tierra Buena HOA, which was the Respondent.
Petitioner
The party who files a petition initiating a legal action. In this case, homeowner Travis Prall.
Preponderance of the evidence
The standard of proof in this case. It is defined as “such proof as convinces the trier of fact that the contention is more probably true than not” and represents the “greater weight of the evidence.”
Private Yard
As defined in Section 1.38 of the CC&Rs, it is the portion of a Yard “which is enclosed or shielded from view by walls, fences, hedges or the like so that it is not generally Visible from Neighboring Property.” The interpretation of this definition was a key dispute in the case.
Public Yard
As defined in Section 1.38 of the CC&Rs, it is the portion of a Yard “which is generally visible from Neighboring Property, whether or not it is located in front of, beside, or behind the Residential Dwelling.”
Respondent
The party against whom a petition is filed. In this case, the Villas at Tierra Buena HOA.
Visible from Neighboring Property
A term defined in Section 1.37 of the CC&Rs. An object is considered visible if it can be seen by a six-foot-tall person standing on a neighboring property, with a specific exception for objects visible only through a wrought iron fence.
As defined in Section 1.38 of the CC&Rs, it is “the portion of the Lot devoted to Improvements other than the Residential Dwelling.”
Blog Post – 18F-H1818053-REL-RHG
He Fought His HOA Over a Single Tree—And Lost Because of a Clause Everyone Missed
For many homeowners, the relationship with their Homeowners Association is a delicate balance of rules, fees, and occasional frustrations. It’s a familiar story: a dispute arises over a seemingly minor issue, and suddenly you’re deep in the weeds of your community’s governing documents, convinced you’re in the right.
This was exactly the position of homeowner Travis Prall. He believed the rules for his community, the Villas at Tierra Buena HOA, clearly stated they were responsible for maintaining a troublesome tree in his backyard. Confident in his interpretation of the Covenants, Conditions, and Restrictions (CC&Rs), he took his case to an administrative law judge.
But the outcome of his legal battle hinged not on the clause he was arguing, but on details everyone had overlooked. The way he lost—first in an initial hearing, and then decisively in a rehearing he himself requested—reveals crucial lessons for any homeowner hidden within the dense language of community documents.
The Definition You Debate Isn’t Always the One That Matters
The core of Mr. Prall’s argument was a battle of definitions. According to the CC&Rs, the HOA was responsible for maintaining “Public Yards.” The rules defined a “Public Yard” as any part of a yard “which is generally visible from Neighboring Property.” Even though his backyard was enclosed by a four-foot wall, it was visible to his neighbors, so he argued it qualified.
The HOA countered with its own interpretation. They pointed to the definition of a “Private Yard,” which included any yard that is “enclosed.” Since his yard was enclosed, they claimed, it was his responsibility, regardless of visibility.
The two sides were locked in a debate over these competing definitions. But in the first hearing, the judge delivered a surprising twist: the entire debate was irrelevant. The judge acknowledged that Prall’s reading of the rules might even be plausible but declared that the tribunal was “not required to reach that issue.” Why? Because Prall had failed to clear an even more fundamental hurdle first. The judge found that Prall had “failed to present any evidence that the tree at issue was originally installed by the Declarant,” a fatal flaw that sidestepped his primary argument entirely.
“While the language of the CC&Rs may lend itself to a reading that Respondent is responsible for the maintenance of the enclosed back yards of the interior homes even if that is contrary to the intention of the drafters of the CC&Rs, the tribunal is not required to reach that issue in this matter.”
Prall had lost the first round not because his interpretation was wrong, but because he hadn’t proven his case on a different, more critical point.
It All Comes Down to “As Originally Installed”
Unsatisfied with the outcome, Prall requested and was granted a rehearing—a second chance to make his case. But this second chance also gave the HOA an opportunity to sharpen its defense, and it zeroed in on the exact clause that had decided the first hearing.
The case was ultimately decided by Section 7.1.4. This clause stated the HOA was only responsible for landscaping “as originally installed by Declarant”—a legal term for the original developer of the community.
This single phrase shifted the entire focus of the dispute. The question was no longer about “Public vs. Private” yards, but about the historical fact of what the developer had installed when the homes were first built around the year 2000.
At the rehearing, the HOA introduced the knockout blow: the testimony of Maureen Karpinski, an early resident and real estate agent who had sold homes in the community during its construction. She testified that to her knowledge, none of the homes were sold with any landscaping in the backyards. Her exact description was that the yards were “just dirt.”
The judge found this to be the “only credible evidence offered.” It completely undermined Prall’s case. If the developer never installed any landscaping in the backyards, there was no “original” landscaping for the HOA to maintain. Their responsibility under the governing documents was zero.
“Suppositions and Inferences” Aren’t Enough
In any formal dispute, the person making a claim has the “burden of proof.” Mr. Prall needed to prove his case by a “preponderance of the evidence,” a legal standard meaning it was more likely true than not.
He tried to meet this burden with logical arguments. He “posited that, given the size of the tree” in a 2010 photograph, it must have been planted when the home was built. He added that the “sprinkler system in his back yard wrapped around the tree as further evidence” that they were installed together by the developer.
But these deductions failed to convince the judge. In the final decision after the rehearing, these arguments were dismissed as the petitioner’s “suppositions and inferences.”
This stands in stark contrast to the HOA’s evidence. While Prall offered logical conclusions, the HOA offered direct testimony from someone who was there at the beginning. This case underscores a fundamental legal truth: personal belief and common-sense deductions are no substitute for verifiable facts and credible, first-hand testimony.
The Final Word is in the Fine Print
This homeowner’s fight over a single tree serves as a powerful cautionary tale. He built a logical case based on his interpretation of a key definition, only to lose because of a clause and a historical fact he hadn’t sufficiently proven.
The lessons are clear. Winning a dispute requires understanding every relevant clause in the governing documents, not just the one that seems most obvious. It requires acknowledging that the history of the community can be more powerful than a present-day interpretation of the rules. And most importantly, it requires presenting concrete proof, not just strong beliefs.
For any homeowner in an HOA, this story poses a crucial question: When was the last time you read your HOA’s documents from start to finish, and what hidden details might be waiting for you?
Case Participants
Petitioner Side
Travis Prall(petitioner)
Respondent Side
Maureen Karpinski(board member) President of the Board; witness
Frank Peake(property manager) Pride Community Management Witness; Owner of Pride Community Management
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
18F-H1818053-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2019-01-31
Administrative Law Judge
Tammy L. Eigenheer
Outcome
loss
Filing Fees Refunded
$0.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Travis Prall
Counsel
—
Respondent
Villas at Tierra Buena HOA
Counsel
Lydia Pierce Linsmeier
Alleged Violations
CC&R Section 7.1.4
Outcome Summary
The Administrative Law Judge dismissed the petition following a rehearing, finding the homeowner failed to meet the burden of proof to show the HOA violated the CC&Rs (Section 7.1.4) by neglecting yard maintenance, specifically because the homeowner did not provide credible evidence that the landscaping at issue was 'originally installed by Declarant'.
Why this result: Petitioner failed to present credible evidence that the landscaping/tree in question was 'originally installed by Declarant', which was necessary to trigger the Respondent's maintenance obligation under CC&R Section 7.1.4.
Key Issues & Findings
The Petitioner alleges that the Villas at Tierra Buena Homeowner’s Association (Respondent) violated the Association’s CC&R’s Article 7.1 by neglecting yard maintenance in visible public yards.
Petitioner asserted the HOA was responsible for the maintenance and replacement of landscaping, specifically a tree, in his back yard under CC&R Section 7.1.4, claiming it was a Public Yard and the tree was originally installed by the Declarant. The HOA denied responsibility.
Orders: The Petition was dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 41-2198.01
A.R.S. § 32-2199.02(B)
A.R.S. § 41-1092.08(H)
A.R.S. § 12-904(A)
A.R.S. § 41-1092.07(G)(2)
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)
Analytics Highlights
Topics: HOA maintenance responsibility, CC&R interpretation, burden of proof, originally installed by declarant, public yard vs private yard, rehearing
This briefing synthesizes the findings from two administrative law hearings concerning a dispute between homeowner Travis Prall (Petitioner) and the Villas at Tierra Buena Homeowners Association (Respondent). The core of the conflict was the Petitioner’s allegation that the HOA violated its governing documents by failing to maintain landscaping—specifically a large tree—in his backyard, which he contended was a “Public Yard” under the community’s Covenants, Conditions, and Restrictions (CC&Rs).
The dispute culminated in two separate rulings by an Administrative Law Judge (ALJ), one in September 2018 and another following a rehearing in January 2019. In both instances, the petition was dismissed.
The central issue did not turn on the ambiguous definition of “Public Yard” vs. “Private Yard” in the CC&Rs, a point of significant debate between the parties. Instead, the case was decided on a critical qualifying phrase in the governing documents: the HOA’s maintenance obligation under Section 7.1.4 is limited to landscaping “as originally installed by Declarant” (the original developer).
The Petitioner failed to meet the burden of proof to establish that the tree in question was installed by the developer. In the initial hearing, this conclusion was based on inference. In the rehearing, the HOA presented credible witness testimony from a board member involved in the community’s initial sales, who stated that all homes were sold with no landscaping or irrigation in the backyards, which were “just dirt.” The ALJ found this to be the only credible evidence on the matter, leading to the final dismissal of the case.
Case Overview
Case Name
Travis Prall (Petitioner) vs. Villas at Tierra Buena HOA (Respondent)
Case Number
18F-H1818053-REL
Office of Administrative Hearings, Phoenix, Arizona
Presiding Judge
Administrative Law Judge Tammy L. Eigenheer
Core Allegation
The Petitioner alleged the HOA violated Section 7.1.4 of the CC&Rs by “neglecting yard maintenance in visible public yards.”
Factual Background and Timeline
The dispute is centered within the Villas at Tierra Buena, a gated community comprising 43 homes on the outer perimeter with tall block fences and 19 interior homes with four-foot-tall walls (two feet of block with a two-foot aluminum fence on top). The Petitioner owns one of these interior homes.
• 2010: Travis Prall purchases his home. He believes, based on his reading of the CC&Rs, that the HOA is responsible for maintaining both his front and back yards. A large tree is present in the backyard at the time of purchase.
• 2010–2013: Prall testifies that the HOA provided landscaping maintenance to his front and back yards during this period. The HOA denies ever providing maintenance to any backyards in the community.
• July 26, 2014: A storm knocks over the tree in Prall’s backyard. Prall pays for its removal but asserts at the time that it was the HOA’s responsibility.
• Post-2014: The tree regrows from the remaining stump.
• 2018: The HOA observes that the “pony wall” near the regrown tree is buckling. A repair company, Sun King Fencing & Gates, confirms “the reason the pony wall buckled was the tree roots in the area” and recommends the tree’s removal.
• May 3, 2018: The HOA issues a “Courtesy Letter” to Prall, stating, “Please trim or remove the tree in the back yard causing damage to the pony wall.”
• June 4, 2018: Prall files an HOA Dispute Process Petition with the Arizona Department of Real Estate.
• September 4, 2018: The initial administrative hearing is held.
• September 24, 2018: The ALJ issues a decision dismissing the petition.
• Post-September 2018: Prall’s request for a rehearing is granted.
• January 11, 2019: The rehearing is conducted.
• January 31, 2019: The ALJ issues a final decision, again dismissing the petition.
Central Point of Contention: Interpretation of CC&Rs
The primary disagreement focused on whether the Petitioner’s enclosed but visible backyard constituted a “Public Yard” or a “Private Yard” under the CC&Rs. The HOA’s maintenance obligation under Section 7.1.4 applies only to Public Yards.
Relevant CC&R Sections
Section
Language
Respondent must “Replace and maintain all landscaping and other Improvements as originally installed by Declarant on the Public Yards of Lots…” (Emphasis added)
“‘Private Yard’ means that portion of a Yard which is enclosed or shielded from view by walls, fences, hedges or the like so that it is not generally Visible from Neighboring Property. ‘Public Yard’ means that portion of a Yard which is generally visible from Neighboring Property, whether or not it is located in front of, beside, or behind the Residential Dwelling.”
“‘Visible from Neighboring Property’ means, with respect to any given object, that such object is or would be visible to a person six feet tall standing on any part of such neighboring property…”
Competing Interpretations
• Petitioner’s Interpretation: A yard is “Private” only if it is both enclosed/shielded AND not generally visible. Because his backyard is enclosed but visible through the four-foot wall/fence, he argued it qualifies as a “Public Yard” that the HOA must maintain.
• Respondent’s Interpretation: A yard is “Private” if it is either enclosed or shielded from view. Because the Petitioner’s backyard is enclosed, it is a Private Yard, and the HOA has no maintenance responsibility.
While the ALJ acknowledged that “the language of the CC&Rs may lend itself to a reading that Respondent is responsible for the maintenance of the enclosed back yards,” she explicitly stated that the tribunal was “not required to reach that issue in this matter.” The case was decided on other grounds.
Analysis of Arguments and Evidence
The Petitioner bore the burden of proof to establish a violation by a preponderance of the evidence.
Petitioner’s Position (Travis Prall)
• Argued that the HOA performed backyard maintenance from 2010 to 2013, establishing a precedent.
• Posited that the large size of the tree when he bought the home in 2010 indicated it must have been planted by the original developer.
• Suggested that the presence of just two types of irrigation systems across the community, accessible from the front, implied a uniform developer installation for both front and back yards.
• Noted that his backyard sprinkler system wrapped around the tree, suggesting they were installed together by the developer.
Respondent’s Position (Villas at Tierra Buena HOA)
• Denied ever providing landscaping maintenance to any backyards, stating it only controls front yard irrigation and sprinkler systems.
• Raised liability concerns about maintenance workers entering residents’ enclosed backyards where pets could escape.
• Presented critical testimony from Board President Maureen Karpinski during the rehearing. Ms. Karpinski, a real estate agent who was involved with the community’s development and sales from 2002, stated that to her knowledge, none of the homes were sold with any landscaping or irrigation in the backyards, which were “just dirt.”
Administrative Law Judge’s Decisions and Rationale
The ALJ’s rulings in both hearings hinged on the specific requirement in Section 7.1.4 that the landscaping must have been “originally installed by Declarant.”
Initial Hearing Decision (September 24, 2018)
• Ruling: The Petition was dismissed.
• Rationale: The Petitioner failed to present evidence that the tree was installed by the developer. The ALJ noted that the tree had regrown to a significant height in approximately five years after being cut down in 2014. From this, she concluded that “it cannot be concluded that the tree in the photograph from 2010 was planted as part of the original landscape plan around 2000.”
Rehearing Decision (January 31, 2019)
• Ruling: The Petition was dismissed.
• Rationale: The ALJ found the Petitioner’s arguments to be “suppositions and inferences.” In contrast, she deemed the testimony of Maureen Karpinski to be “the only credible evidence offered regarding the landscaping of the homes.” Ms. Karpinski’s statement that backyards were sold as “just dirt” directly refuted the claim that any landscaping was “originally installed by Declarant.”
• The final conclusion stated: “As there was no evidence there was any landscaping or improvements originally installed by Declarant, there is no reason to conclude Respondent would be required to replace and maintain Petitioner’s back yard under the terms of Section 7.1.4 of the CC&Rs.”
Final Disposition
The Administrative Law Judge ordered that the Petition be dismissed. The order resulting from the rehearing was final and binding on the parties. Any further appeal would require seeking judicial review in the superior court within 35 days of the order.
Study Guide – 18F-H1818053-REL-RHG
Study Guide: Prall v. Villas at Tierra Buena HOA
This study guide provides a comprehensive review of the administrative case between Travis Prall and the Villas at Tierra Buena Homeowners Association, based on the legal decisions from September 2018 and January 2019. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms to facilitate a thorough understanding of the dispute, arguments, and legal reasoning involved.
Short-Answer Quiz
Answer each question in 2-3 sentences, based on the provided source context.
1. What specific violation of the community’s CC&Rs did the Petitioner, Travis Prall, allege in his petition?
2. What was the key physical difference between the backyards of the “interior homes” and the “exterior homes” in the Villas at Tierra Buena community?
3. What was the central point of disagreement between the Petitioner and the Respondent regarding the definition of a “Private Yard” versus a “Public Yard”?
4. According to Section 7.1.4 of the CC&Rs, what specific condition must be met for the HOA to be responsible for maintaining landscaping in a Public Yard?
5. What was the “Courtesy Letter” issued by the Respondent on May 3, 2018, and what did it request of the Petitioner?
6. What was the Petitioner’s primary argument for why the tree in his backyard must have been installed by the original developer?
7. What is the legal standard of proof the Petitioner was required to meet, and what does it mean?
8. In the first hearing, why did the Administrative Law Judge conclude that the tree was not part of the original landscape plan?
9. During the rehearing, what “credible evidence” was presented by the Respondent that refuted the Petitioner’s claims about original backyard landscaping?
10. Why did the Administrative Law Judge state that it was not necessary to rule on the interpretation of “Public Yard” vs. “Private Yard” in either decision?
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Answer Key
1. Petitioner Travis Prall alleged that the Villas at Tierra Buena HOA violated Section 7.1.4 of the Declaration of Covenants, Conditions, Restrictions and Easements (CC&Rs). The specific allegation was that the HOA neglected its duty for yard maintenance in visible public yards.
2. The exterior homes have six to seven-foot-tall block wall fences enclosing the backyards. The interior homes, like the Petitioner’s, have a shorter back wall, consisting of a two-foot-tall block wall topped with a two-foot-tall aluminum fence, making the backyards more visible.
3. The Petitioner argued that a yard must be both enclosed and not generally visible to be private, meaning his visible, enclosed yard was public. The Respondent argued that a yard was private if it was enclosed or shielded from view, meaning the Petitioner’s enclosed yard was private regardless of visibility.
4. According to Section 7.1.4, the HOA is required to “replace and maintain all landscaping and other Improvements as originally installed by Declarant on the Public Yards of Lots.” This means the landscaping in question must have been part of the original developer’s installation.
5. The “Courtesy Letter” was a notice from the HOA to the Petitioner concerning the tree in his backyard. It requested that he “Please trim or remove the tree in the back yard causing damage to the pony wall,” which had buckled due to the tree’s roots.
6. The Petitioner posited that the tree must have been installed by the developer due to its large size when he bought the home in 2010. He also noted that the backyard sprinkler system wrapped around the tree, suggesting they were installed together during original construction.
7. The Petitioner was required to meet the “preponderance of the evidence” standard. This standard is defined as proof that convinces the trier of fact that a contention is more probably true than not; it is the greater weight of evidence.
8. The judge noted that after the original tree was removed in 2014, the present tree grew to a similar height in approximately five years from the remaining stump. Therefore, the judge concluded that the tree’s size in 2010 did not prove it was planted as part of the original landscape plan around the year 2000.
9. The Respondent presented the testimony of Maureen Karpinski, the Board President and a real estate agent who sold homes in the community during its development. She stated that to the best of her knowledge, none of the homes were sold with any landscaping or irrigation in the backyards and that they were “just dirt.”
10. The judge did not need to rule on the yard definition because the Petitioner first had to prove the tree was “originally installed by the Declarant” per Section 7.1.4. Since the Petitioner failed to provide sufficient evidence for this foundational claim in both hearings, the question of whether the yard was public or private became irrelevant to the outcome.
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Suggested Essay Questions
These questions are designed to test a deeper, more analytical understanding of the case. Answers are not provided.
1. Explain the concept of “burden of proof” and analyze how the Petitioner’s failure to meet the “preponderance of the evidence” standard was the determining factor in the dismissal of his petition in both the initial hearing and the rehearing.
2. Provide a detailed analysis of the competing interpretations of “Private Yard” and “Public Yard” as defined in Section 1.38 of the CC&Rs. Discuss the arguments made by both the Petitioner and the Respondent and explain why, despite this being a central point of contention, the final ruling did not hinge on this issue.
3. Compare the evidence presented by Travis Prall with the evidence presented by the Villas at Tierra Buena HOA. How did the nature and credibility of the evidence, particularly witness testimony versus suppositions, influence the Administrative Law Judge’s final decision?
4. Trace the procedural history of this case, starting from the initial event that triggered the HOA’s notice through the final decision after the rehearing. What were the key decision points and legal options available to the parties at each stage?
5. Discuss the significance of Maureen Karpinski’s testimony in the rehearing. How did her personal and professional experience with the community’s development directly address the central weakness of the Petitioner’s case from the first hearing?
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Glossary of Key Terms
Definition
Administrative Law Judge
The judicial officer who presides over hearings at the Office of Administrative Hearings and issues legal decisions, in this case, Tammy L. Eigenheer.
An abbreviation for the Declaration of Covenants, Conditions,Restrictions and Easements, the legal documents that govern a planned community or HOA.
Common Area
Land within the community for the common use and enjoyment of the owners; the HOA is responsible for maintaining landscaping in these areas.
Courtesy Letter
A formal notice issued by the HOA to a resident. In this case, it was a letter dated May 3, 2018, requesting that the Petitioner trim or remove a tree causing damage to a wall.
Declarant
The original developer who installed the initial landscaping and improvements in the community.
An abbreviation for Homeowners Association. In this case, the Villas at Tierra Buena HOA, which was the Respondent.
Petitioner
The party who files a petition initiating a legal action. In this case, homeowner Travis Prall.
Preponderance of the evidence
The standard of proof in this case. It is defined as “such proof as convinces the trier of fact that the contention is more probably true than not” and represents the “greater weight of the evidence.”
Private Yard
As defined in Section 1.38 of the CC&Rs, it is the portion of a Yard “which is enclosed or shielded from view by walls, fences, hedges or the like so that it is not generally Visible from Neighboring Property.” The interpretation of this definition was a key dispute in the case.
Public Yard
As defined in Section 1.38 of the CC&Rs, it is the portion of a Yard “which is generally visible from Neighboring Property, whether or not it is located in front of, beside, or behind the Residential Dwelling.”
Respondent
The party against whom a petition is filed. In this case, the Villas at Tierra Buena HOA.
Visible from Neighboring Property
A term defined in Section 1.37 of the CC&Rs. An object is considered visible if it can be seen by a six-foot-tall person standing on a neighboring property, with a specific exception for objects visible only through a wrought iron fence.
As defined in Section 1.38 of the CC&Rs, it is “the portion of the Lot devoted to Improvements other than the Residential Dwelling.”
Blog Post – 18F-H1818053-REL-RHG
He Fought His HOA Over a Single Tree—And Lost Because of a Clause Everyone Missed
For many homeowners, the relationship with their Homeowners Association is a delicate balance of rules, fees, and occasional frustrations. It’s a familiar story: a dispute arises over a seemingly minor issue, and suddenly you’re deep in the weeds of your community’s governing documents, convinced you’re in the right.
This was exactly the position of homeowner Travis Prall. He believed the rules for his community, the Villas at Tierra Buena HOA, clearly stated they were responsible for maintaining a troublesome tree in his backyard. Confident in his interpretation of the Covenants, Conditions, and Restrictions (CC&Rs), he took his case to an administrative law judge.
But the outcome of his legal battle hinged not on the clause he was arguing, but on details everyone had overlooked. The way he lost—first in an initial hearing, and then decisively in a rehearing he himself requested—reveals crucial lessons for any homeowner hidden within the dense language of community documents.
The Definition You Debate Isn’t Always the One That Matters
The core of Mr. Prall’s argument was a battle of definitions. According to the CC&Rs, the HOA was responsible for maintaining “Public Yards.” The rules defined a “Public Yard” as any part of a yard “which is generally visible from Neighboring Property.” Even though his backyard was enclosed by a four-foot wall, it was visible to his neighbors, so he argued it qualified.
The HOA countered with its own interpretation. They pointed to the definition of a “Private Yard,” which included any yard that is “enclosed.” Since his yard was enclosed, they claimed, it was his responsibility, regardless of visibility.
The two sides were locked in a debate over these competing definitions. But in the first hearing, the judge delivered a surprising twist: the entire debate was irrelevant. The judge acknowledged that Prall’s reading of the rules might even be plausible but declared that the tribunal was “not required to reach that issue.” Why? Because Prall had failed to clear an even more fundamental hurdle first. The judge found that Prall had “failed to present any evidence that the tree at issue was originally installed by the Declarant,” a fatal flaw that sidestepped his primary argument entirely.
“While the language of the CC&Rs may lend itself to a reading that Respondent is responsible for the maintenance of the enclosed back yards of the interior homes even if that is contrary to the intention of the drafters of the CC&Rs, the tribunal is not required to reach that issue in this matter.”
Prall had lost the first round not because his interpretation was wrong, but because he hadn’t proven his case on a different, more critical point.
It All Comes Down to “As Originally Installed”
Unsatisfied with the outcome, Prall requested and was granted a rehearing—a second chance to make his case. But this second chance also gave the HOA an opportunity to sharpen its defense, and it zeroed in on the exact clause that had decided the first hearing.
The case was ultimately decided by Section 7.1.4. This clause stated the HOA was only responsible for landscaping “as originally installed by Declarant”—a legal term for the original developer of the community.
This single phrase shifted the entire focus of the dispute. The question was no longer about “Public vs. Private” yards, but about the historical fact of what the developer had installed when the homes were first built around the year 2000.
At the rehearing, the HOA introduced the knockout blow: the testimony of Maureen Karpinski, an early resident and real estate agent who had sold homes in the community during its construction. She testified that to her knowledge, none of the homes were sold with any landscaping in the backyards. Her exact description was that the yards were “just dirt.”
The judge found this to be the “only credible evidence offered.” It completely undermined Prall’s case. If the developer never installed any landscaping in the backyards, there was no “original” landscaping for the HOA to maintain. Their responsibility under the governing documents was zero.
“Suppositions and Inferences” Aren’t Enough
In any formal dispute, the person making a claim has the “burden of proof.” Mr. Prall needed to prove his case by a “preponderance of the evidence,” a legal standard meaning it was more likely true than not.
He tried to meet this burden with logical arguments. He “posited that, given the size of the tree” in a 2010 photograph, it must have been planted when the home was built. He added that the “sprinkler system in his back yard wrapped around the tree as further evidence” that they were installed together by the developer.
But these deductions failed to convince the judge. In the final decision after the rehearing, these arguments were dismissed as the petitioner’s “suppositions and inferences.”
This stands in stark contrast to the HOA’s evidence. While Prall offered logical conclusions, the HOA offered direct testimony from someone who was there at the beginning. This case underscores a fundamental legal truth: personal belief and common-sense deductions are no substitute for verifiable facts and credible, first-hand testimony.
The Final Word is in the Fine Print
This homeowner’s fight over a single tree serves as a powerful cautionary tale. He built a logical case based on his interpretation of a key definition, only to lose because of a clause and a historical fact he hadn’t sufficiently proven.
The lessons are clear. Winning a dispute requires understanding every relevant clause in the governing documents, not just the one that seems most obvious. It requires acknowledging that the history of the community can be more powerful than a present-day interpretation of the rules. And most importantly, it requires presenting concrete proof, not just strong beliefs.
For any homeowner in an HOA, this story poses a crucial question: When was the last time you read your HOA’s documents from start to finish, and what hidden details might be waiting for you?
Case Participants
Petitioner Side
Travis Prall(petitioner)
Respondent Side
Maureen Karpinski(board member) President of the Board; witness
Frank Peake(property manager) Pride Community Management Witness; Owner of Pride Community Management
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
18F-H1818052-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2019-01-17
Administrative Law Judge
Thomas Shedden
Outcome
loss
Filing Fees Refunded
$0.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Lawrence M. Stewart
Counsel
—
Respondent
Canyon Gate Condominium Association, Inc.
Counsel
Nicolas C. S. Nogami
Alleged Violations
Association Bylaws section 5.4
Outcome Summary
The Administrative Law Judge dismissed Petitioner Lawrence M. Stewart's petition and deemed the Respondent, Canyon Gate Condominium Association, Inc., to be the prevailing party.
Why this result: Petitioner failed to prove the Association violated Bylaws Section 5.4 or acted unreasonably or in bad faith when denying his request for a variance. The Bylaw section cited was determined to be a liability shield for the Board, not a source of duty owed to the homeowner.
Key Issues & Findings
Alleged failure of HOA Board to act in good faith when denying Petitioner's request for a variance for unauthorized common area changes
Petitioner made changes to the common area without permission and the Board denied his subsequent request for a variance. Petitioner alleged the Board violated Bylaws Section 5.4 by failing to act in good faith and showing bias. The ALJ found that Section 5.4 is a liability shield for the Board, not a duty imposed upon them, and Petitioner failed to meet the burden of proof to show bad faith or unreasonableness.
Orders: Petitioner Lawrence M. Stewart’s petition is dismissed. Respondent is deemed to be the prevailing party in this matter.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Analytics Highlights
Topics: HOA governance, variance denial, common area modifications, good faith requirement, board liability shield, prevailing party
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Briefing Document: Stewart v. Canyon Gate Condominium Association, Inc.
Executive Summary
This document synthesizes the findings and conclusions from an administrative legal case involving Petitioner Lawrence M. Stewart and Respondent Canyon Gate Condominium Association, Inc. The core of the dispute revolves around Mr. Stewart’s unauthorized modifications to a common area, for which the Association’s Board of Directors denied a retroactive variance. Mr. Stewart alleged the Board violated its bylaws by acting in bad faith, that a specific Board member was biased against him, and that he was subjected to unfair treatment compared to other homeowners.
The Administrative Law Judge, in both an initial hearing and a subsequent rehearing, consistently ruled against Mr. Stewart. The judge determined that the specific bylaw cited (Section 5.4) was an indemnification clause that shields the Board from liability and does not impose a duty of action. Crucially, Mr. Stewart failed to meet the legal burden of proving his claims by a “preponderance of the evidence.” The Board’s rationale for the denial—to avoid setting a precedent, or “opening a Pandora’s Box”—was deemed a reasonable position for a condominium association. Evidence presented to support claims of bias and unequal treatment was found to be insufficient or not probative. Ultimately, Mr. Stewart’s petition was dismissed in its entirety.
Case Overview
This matter, designated as No. 18F-H1818052-REL, was adjudicated by the Office of Administrative Hearings under the authority of the Arizona Department of Real Estate. The case centered on a petition filed by Mr. Stewart on May 21, 2018, alleging a violation of the Association’s Bylaws by the Board of Directors.
Parties Involved
Name / Entity
Representation
Petitioner
Lawrence M. Stewart
On his own behalf
Respondent
Canyon Gate Condominium Association, Inc.
Mark K. Sahl, Esq. & Nichols C. S. Nogami, Esq.
Administrative Law Judge Thomas Shedden
Case Chronology
• November 15, 2017: The Association’s counsel informs Mr. Stewart in a letter that he is in violation of section 5.1 of the CC&Rs for making unapproved changes to a common/limited common area.
• Post-November 15, 2017: Mr. Stewart, then a member of the Board, requests a variance for the changes.
• December 27, 2017: The Association’s attorney sends a letter stating an understanding that Mr. Stewart had recused himself and that the other two Board members (Sandra Fernandez and David Larson) had required the area to be restored.
• January 4, 2018: Mr. Stewart writes to the other Board members, refuting that he had agreed to recuse himself and requesting a formal meeting to consider his variance request.
• February 18, 2018: At a Board meeting, Mr. Stewart resigns from the Board. The remaining two members vote to deny his variance request and require him to restore the area to its original condition.
• May 21, 2018: Mr. Stewart files his petition with the Arizona Department of Real Estate.
• September 6, 2018: The initial administrative hearing is conducted.
• September 14, 2018: The Administrative Law Judge (ALJ) issues a decision dismissing Mr. Stewart’s petition.
• January 2, 2019: A rehearing is conducted.
• January 17, 2019: The ALJ issues a final decision following the rehearing, again dismissing the petition.
Petitioner’s Central Allegations
Mr. Stewart’s case rested on four primary claims against the Association’s Board.
1. Violation of Bylaws Section 5.4
The formal petition alleged a violation of Association Bylaws Article V, Section 5.4 (Liability), which states in part:
“So long as he/she has acted in good faith on the basis of information actually possessed, neither the Board nor any member of the Board nor any officer of the ASSOCIATION shall be liable to the ASSOCIATION, any OWNER, or to any other party for any damage, loss, or prejudice suffered or claimed on account of: (i) the approval or disapproval of any plans, drawings, or specifications, whether or not defective…or (v) any act or failure to act by the ASSOCIATION, or Board.”
Mr. Stewart cited this section because it was the only part of the governing documents he could find that included a “good faith” requirement.
2. Lack of Good Faith by the Board
Mr. Stewart asserted that the Board did not act in good faith when it denied his variance request. He based this claim on several points:
• He resigned from the Board during the February 18, 2018 meeting because he “got the sense ‘right away’ that the other Board members’ minds were made up and that they would not approve his request.”
• He presented unrebutted testimony that the Board members were unwilling to physically look at the changes he had made and only gave a “cursory look” at photographs he provided.
• The Board’s decision appeared to have been made prior to the meeting, as evidenced by the attorney’s December 27, 2017 letter which erroneously stated he had recused himself.
3. Bias of Board Member David Larson
A significant portion of Mr. Stewart’s argument was that Board member David Larson was personally biased against him. The evidence presented to support this included:
• Initial Hearing Evidence:
◦ A biography of Mr. Larson prepared by the property manager. When questioned, Mr. Stewart could not identify specific information showing bias but stated the “entire document coupled with the other statements shows a bias.”
◦ Notes from a November 28, 2017 Board meeting where Mr. Larson informed members that enforcement actions (towing, violation notices) would begin immediately and that he was “too busy to talk to people about Board business in driveways.”
• Rehearing Evidence:
◦ A letter dated October 3, 2018, from Mr. Larson to Association members urging them not to vote for Mr. Stewart in an upcoming election.
4. Unfair and Unequal Treatment
Mr. Stewart claimed he was treated unfairly because other units in the condominium were also not in conformity with the CC&Rs.
• He presented photos of units he believed were out of compliance.
• He testified that he had verified with the Association that none of these units had received a variance in the last two years.
• However, he acknowledged he did not know if variances had been granted more than two years prior or if the changes had received pre-approval, which would not require a variance.
Respondent’s Position and Legal Arguments
The Canyon Gate Condominium Association, represented by counsel, did not present witnesses but argued on legal grounds.
• Inapplicability of Bylaws Section 5.4: The Association’s core argument was that Section 5.4 was not applicable to Mr. Stewart’s complaint. They contended the section is an indemnification clause designed to act as a “shield” to protect Board members from liability when they act in good faith, not a “sword” that imposes an affirmative duty on them that can be violated.
• Reasonableness of Board Decision: The Association maintained that the Board’s decision was reasonable. According to Mr. Stewart’s own testimony, the Board’s basis for denial was the fear that granting his variance would “open a Pandora’s Box where other unit owners would request variances.”
Administrative Law Judge’s Rulings and Conclusions
The ALJ’s decisions in both the initial hearing and the rehearing were consistent, ultimately finding in favor of the Respondent.
Legal Framework
• Burden of Proof: The ALJ established that Mr. Stewart, as the petitioner, bore the burden of proof. The standard of proof was a “preponderance of the evidence,” defined as evidence with “the most convincing force” that is sufficient “to incline a fair and impartial mind to one side of the issue rather than the other.”
• Board’s Duty: The judge noted that while the Bylaws are a contract, the Association, in exercising its authority, must “act reasonably.”
Analysis of Bylaws Section 5.4
• The judge agreed entirely with the Association’s interpretation, concluding that Section 5.4 “does not impose any duty on the Board members, but rather merely shields them from liability if they act in good faith.”
• In the initial hearing, the judge noted Mr. Stewart “appeared to acknowledge that section 5.4 acts as a ‘shield’ and not a ‘sword.'”
• By the rehearing, this was solidified, with the finding that “Mr. Stewart acknowledges that the Association has not violated Bylaws Section 5.4.”
Assessment of ‘Good Faith’ and Bias Claims
• The ALJ concluded that even if Section 5.4 were applicable, Mr. Stewart “has not shown by a preponderance of the evidence that the Board did not act in good faith, that it had a bias against him, or that it treated him unfairly.”
• The judge found the Board’s reasoning for the denial—the “Pandora’s Box” concern—was “not an unreasonable position for the Board of a condominium association.”
• Given this reasoning, the judge stated that “the specifics of the changes Mr. Stewart made would not be germane to the decision,” thereby neutralizing the claim that the Board failed to properly inspect the modifications.
Evaluation of Unfair Treatment Claim
• The evidence of other non-compliant units was deemed “not probative of the issue at hand.”
• The judge reasoned that there was “no evidence to show that they had requested that the Board grant variances,” meaning their situations were not comparable to Mr. Stewart’s, who had made unapproved changes and was subsequently denied a variance.
Final Disposition
• Initial Decision (September 14, 2018): IT IS ORDERED that Petitioner Lawrence M. Stewart’s petition is dismissed. This order was subject to a request for rehearing within 30 days.
• Rehearing Decision (January 17, 2019): IT IS ORDERED that Petitioner Lawrence M. Stewart’s petition is dismissed. This final order was noted as binding on the parties, with any further appeal requiring judicial review filed with the superior court within 35 days.
Study Guide – 18F-H1818052-REL-RHG
Study Guide: Stewart v. Canyon Gate Condominium Association, Inc.
This guide provides a review of the administrative case Lawrence M. Stewart, Petitioner, vs. Canyon Gate Condominium Association, Inc., Respondent (No. 18F-H1818052-REL), including the initial hearing and a subsequent rehearing.
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Short-Answer Quiz
Instructions: Answer the following questions in two to three sentences, based on the provided case documents.
1. What action by Petitioner Lawrence M. Stewart initiated the dispute with the Canyon Gate Condominium Association?
2. What specific provision of the Association Bylaws did Mr. Stewart allege was violated in his petition?
3. Why did Mr. Stewart resign from the Association’s Board during the February 18, 2018 meeting?
4. What was the Board’s stated reason for denying Mr. Stewart’s request for a variance?
5. Explain the legal interpretation of Bylaws Section 5.4 as a “shield” and not a “sword.”
6. List two pieces of evidence Mr. Stewart presented at the initial hearing to support his claim that Board member David Larson was biased against him.
7. What was the legal standard of proof in this case, and which party was required to meet it?
8. How did Mr. Stewart attempt to prove he was being treated unfairly in comparison to other unit owners, and why did the judge find this evidence unconvincing?
9. At the rehearing, what new evidence did Mr. Stewart present regarding Mr. Larson’s alleged bias?
10. What was the final outcome of both the initial administrative hearing and the subsequent rehearing?
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Answer Key
1. Mr. Stewart initiated the dispute by making changes to the common area and/or limited common area around his unit without first receiving permission from the Association. The Association informed him in a letter dated November 15, 2017, that this was a violation of section 5.1 of the CC&Rs.
2. Mr. Stewart alleged in his petition that the Association violated Bylaws Section 5.4. He later acknowledged this section was not technically violated but cited it because it was the only provision in the governing documents he could find that included a “good faith” requirement.
3. Mr. Stewart resigned from the Board because he “got the sense ‘right away’ that the other Board members’ minds were made up” and that they would not approve his request for a variance, regardless of the details.
4. The Board denied Mr. Stewart’s request on the basis that approving it would “open a Pandora’s Box” where other unit owners would then also request variances. The Administrative Law Judge found this was not an unreasonable position for a condominium association board to take.
5. The interpretation of Section 5.4 is that it acts as a “shield” to protect, or indemnify, Board members from liability for damages, loss, or prejudice, provided they have acted in good faith. It is not a “sword” that imposes an affirmative duty on the Board that Mr. Stewart could use to compel a certain action or claim a violation.
6. At the initial hearing, Mr. Stewart presented two of the following: (1) a biography of Mr. Larson; (2) notes from a November 28, 2017 meeting where Mr. Larson stated that enforcement actions would begin immediately; and (3) a letter from the Association’s attorney that erroneously stated Mr. Stewart had recused himself, suggesting the matter was decided without him.
7. The standard of proof was a “preponderance of the evidence.” The burden of proof rested entirely on the petitioner, Mr. Stewart, to show that the Association had acted improperly.
8. Mr. Stewart presented testimony and photos of other units that he believed were not in conformity with the CC&Rs. The judge found this evidence was not probative because Mr. Stewart provided no evidence that those owners had requested and been denied variances, and he acknowledged he did not know if they had received variances more than two years prior or had received preapproval.
9. At the rehearing, Mr. Stewart entered into evidence an October 3, 2018 letter from Mr. Larson to the Association’s members. In this letter, Mr. Larson urged the members not to vote for Mr. Stewart in an upcoming election.
10. In both the initial decision (September 14, 2018) and the decision following the rehearing (January 17, 2019), the Administrative Law Judge ordered that Mr. Stewart’s petition be dismissed. The Respondent, Canyon Gate Condominium Association, Inc., was deemed the prevailing party in the matter.
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Essay Questions
Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive response for each prompt, citing specific facts and legal conclusions from the case documents.
1. Analyze the Administrative Law Judge’s reasoning for concluding that Bylaws Section 5.4 was not applicable to Mr. Stewart’s petition. How did Mr. Stewart’s own testimony during the legal proceedings support this conclusion?
2. Discuss the concept of “preponderance of the evidence” as defined in the case documents. Evaluate the evidence Mr. Stewart presented across both hearings and explain why the judge found it insufficient to meet this standard regarding his claims of bias, bad faith, and unfair treatment.
3. Examine the Canyon Gate Board’s justification for denying the variance request (the “Pandora’s Box” argument). Based on the legal principles cited in the decisions, why was this considered a reasonable position for a condominium association board to take, and why did it render the specifics of Mr. Stewart’s changes non-germane?
4. Trace the procedural timeline of this case from the Association’s initial notice of violation on November 15, 2017, to the final binding order issued on January 17, 2019. Identify the key events, arguments, and decisions at each stage of the administrative process.
5. Mr. Stewart argued that he was treated unfairly because other units were also out of compliance with the CC&Rs. Deconstruct this argument and explain why the judge dismissed this line of reasoning as not being probative to the issue at hand in both the initial hearing and the rehearing.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
The official (Thomas Shedden) who presides over hearings at the Office of Administrative Hearings and issues a decision on the matter.
Association
The Canyon Gate Condominium Association, Inc., the entity responsible for enforcing the Bylaws and CC&Rs. In this case, it is the Respondent.
The governing body of the Association, which at the time of the variance request included Lawrence M. Stewart, Sandra Fernandez, and David Larson.
Burden of Proof
The obligation to prove one’s assertion. In this case, the burden of proof was on the Petitioner, Mr. Stewart.
Bylaws
A contract between the Association and its members. The parties are required to comply with its terms, and the Association must act reasonably in exercising its authority under them.
Covenants, Conditions, and Restrictions. Mr. Stewart was found to be in violation of section 5.1 of the CC&Rs for making unapproved changes.
Common Area / Limited Common Area
The property around a condominium unit that is shared or has restricted use. Mr. Stewart made unauthorized changes to this area.
Good Faith
A standard of conduct mentioned in Bylaws Section 5.4. It protects Board members from liability so long as they act in good faith based on information they possess. Mr. Stewart claimed the Board failed to meet this standard.
Indemnification
The act of compensating for loss or damage. Bylaws Article V, which contains Section 5.4, pertains to indemnification.
Petitioner
The party who files a petition initiating a legal case. In this matter, the petitioner was Lawrence M. Stewart.
Preponderance of the Evidence
The standard of proof required in this case, defined as “The greater weight of the evidence… sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”
Rehearing
A second hearing granted in a legal matter. A rehearing was conducted on January 2, 2019, after which the judge issued a final, binding order.
Respondent
The party against whom a petition is filed. In this matter, the respondent was Canyon Gate Condominium Association, Inc.
Variance
An official exception or deviation from a rule. Mr. Stewart requested a variance to allow the unapproved changes he had made, which the Board denied.
Blog Post – 18F-H1818052-REL-RHG
A Homeowner Sued His HOA and Lost—The Surprising Reasons Why Might Save You Thousands
Introduction: The Perennial Battle Between Homeowner and HOA
For many homeowners, the relationship with their Homeowners’ Association (HOA) can feel like a constant source of friction. From landscaping rules to paint colors, the potential for disputes is endless. But what happens when a homeowner feels so strongly wronged that they take the ultimate step of suing their association? More importantly, what happens when they lose?
This is the story of a homeowner who was also a board member. After making unauthorized changes to his property, he was denied his request for a variance to approve the changes he had already made. Believing the Board had acted in bad faith, he sued the association. His case failed, not on a minor technicality, but due to fundamental misunderstandings of how HOA law and governing documents function.
This outcome highlights a common, and costly, misconception about HOA governance. We will explore the surprising legal realities revealed in the case of Lawrence M. Stewart vs. Canyon Gate Condominium Association, Inc., offering several crucial takeaways for any homeowner before they decide to challenge their HOA.
1. A “Good Faith” Clause Can Be a Shield, Not a Sword
Mr. Stewart based his entire case on the claim that the Board violated Section 5.4 of the bylaws by not acting in “good faith,” as this was the only section in the governing documents he could find that mentioned the phrase.
This is where the case pivots on a crucial legal distinction. The court found that this clause was not intended to impose a duty on the board that a homeowner could sue over (a “sword”). Instead, its function was to protect board members from liability if they acted in good faith (a “shield”). Legally, this is an indemnification clause. Think of it as a form of insurance, designed to protect volunteer board members from being personally sued for making reasonable decisions, not a weapon for homeowners to attack those decisions.
In his testimony, Mr. Stewart even acknowledged this “shield” versus “sword” distinction but proceeded with the argument anyway. The lesson for homeowners is unequivocal: you must understand the precise legal function of a clause within your governing documents, not just its keywords.
2. The “Pandora’s Box” Defense Is a Powerful Argument
The Board’s primary reason for denying Mr. Stewart’s variance request was its fear that approval “would open a Pandora’s Box where other unit owners would request variances.” While a homeowner might hear “Pandora’s Box” and think it’s a lazy excuse, the court viewed it as the board performing its fundamental duty.
The judge stated this reasoning “was not an unreasonable position for the Board of a condominium association.” This validation is incredibly impactful because it shifts the focus from the merits of one homeowner’s request to the Board’s overarching fiduciary duty to uphold the rules consistently for the entire community. It shows that an HOA’s duty to maintain consistent enforcement and avoid setting a messy precedent is a legally sound basis for a decision, making the specific details of one homeowner’s changes irrelevant.
3. Being on the Board Won’t Give You a Pass
In a surprising twist, Mr. Stewart was a member of the HOA Board at the very time he made the unauthorized changes and requested the variance. This created a clear conflict of interest and ultimately did not help his case.
The situation culminated in Mr. Stewart resigning from the Board during the meeting where his request was considered. He stated he resigned because he felt “the other Board members’ minds were made up” and they would not approve his request. This incident serves as a stark reminder: holding a position on the board does not grant special privileges or exceptions to the rules. In fact, it can complicate personal matters and highlight a direct conflict between a board member’s duties to the association and their personal interests.
4. “Whataboutism” Is Not a Legal Strategy
Like many homeowners in a dispute, Mr. Stewart argued that he was being treated unfairly because other units in the community were also out of compliance with the CC&Rs. This is a common defense, but its legal failure in this case is a masterclass in what courts actually require for proof.
Mr. Stewart’s effort was commendable but legally insufficient. He presented photos of other non-conforming units and even “verified with the Association that none of these units had received a variance in the last two years.” However, his evidence collapsed under cross-examination when he “acknowledged… he did not know if any of these units had received variances more than two years ago or whether preapproval for the changes had been granted.”
The judge dismissed his evidence entirely. This transforms the lesson from a simple “don’t point fingers” to a much more sophisticated legal principle: to prove selective enforcement, you must prove others in the identical procedural situation were treated differently, and incomplete evidence is no evidence at all.
5. The Burden of Proof Is Everything
Perhaps the most stunning fact from the case is that the Association “presented no witnesses” at either the initial hearing or the subsequent rehearing. They won the case without putting a single person on the stand to testify.
They could do this because the legal system placed the “burden of proof” squarely on Mr. Stewart. As the petitioner, it was his job to prove his claims of bad faith, bias, and unfair treatment by a “preponderance of the evidence.” The Association didn’t have to prove it acted in good faith; Mr. Stewart had to prove it acted in bad faith. He failed to meet this standard. In other words, he had to prove that his claims were more likely to be true than not—even if only by a 51% to 49% margin.
The court document formally defines this legal standard as:
The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.
In a legal dispute with your HOA, the case is not about who is morally right or wrong. It’s about who can meet their required burden of proof with convincing, relevant evidence.
Conclusion: Know the Rules Before You Fight the Rulers
The case of Lawrence M. Stewart is a cautionary tale that every homeowner should internalize. His failed lawsuit, which likely became a five-figure mistake when factoring in legal fees for both sides, underscores that HOA governing documents are a binding contract. Challenging the Board requires more than a sense of unfairness. It demands a precise, evidence-backed legal argument that aligns with the specific terms of that contract and the applicable legal standards.
Before you declare war on your HOA, ask yourself: are you prepared to prove your case with irrefutable evidence, or are you just banking on a feeling of being wronged?
Case Participants
Petitioner Side
Lawrence M. Stewart(petitioner) Also served as a Board member for Respondent until resigning during the variance request consideration.
Respondent Side
Mark K. Sahl(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent in the initial hearing.
Nicolas C. S. Nogami(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent in both the initial hearing (listed as 'Nichols C. S. Nogami') and the rehearing.
Sandra Fernandez(board member) Canyon Gate Condominium Association, Inc. Voted to deny Petitioner's variance request.
David Larson(board member) Canyon Gate Condominium Association, Inc. Voted to deny Petitioner's variance request; Petitioner alleged he was biased.
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate Recipient of the decision copies.
F. Del Sol(administrative staff) Office of Administrative Hearings Signed the transmission of the decision copies.
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
18F-H1818052-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2019-01-17
Administrative Law Judge
Thomas Shedden
Outcome
none
Filing Fees Refunded
$0.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Lawrence M. Stewart
Counsel
—
Respondent
Canyon Gate Condominium Association, Inc.
Counsel
Nicolas C. S. Nogami, Esq.
Alleged Violations
Bylaws section 5.4
Outcome Summary
The Administrative Law Judge dismissed the petition filed by homeowner Lawrence M. Stewart against Canyon Gate Condominium Association, Inc., finding that the Petitioner failed to prove the Association violated its Bylaws concerning good faith in denying his request for a variance.
Why this result: The Petitioner failed to meet the burden of proof, as Bylaws Section 5.4 was determined to be a shield protecting the Board from liability rather than a provision imposing a duty of good faith that could be violated by denying a variance.
Key Issues & Findings
Alleged failure of the HOA Board to act in good faith when denying a variance request
Petitioner alleged the Board failed to act in good faith when denying his request for a variance to changes he made, and asserted bias and unfair treatment. The ALJ concluded that Section 5.4 acts as a shield from liability for Board members, not a duty imposed upon them, and Petitioner failed to meet the burden of proof.
Orders: Petitioner Lawrence M. Stewart's petition is dismissed. Respondent is deemed to be the prevailing party in this matter.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
ARIZ. REV. STAT. section 32-2199.02(B)
Analytics Highlights
Topics: HOA governance, bylaw violation, good faith, variance denial, board liability
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Briefing Document: Stewart v. Canyon Gate Condominium Association, Inc.
Executive Summary
This document synthesizes the findings and conclusions from an administrative legal case involving Petitioner Lawrence M. Stewart and Respondent Canyon Gate Condominium Association, Inc. The core of the dispute revolves around Mr. Stewart’s unauthorized modifications to a common area, for which the Association’s Board of Directors denied a retroactive variance. Mr. Stewart alleged the Board violated its bylaws by acting in bad faith, that a specific Board member was biased against him, and that he was subjected to unfair treatment compared to other homeowners.
The Administrative Law Judge, in both an initial hearing and a subsequent rehearing, consistently ruled against Mr. Stewart. The judge determined that the specific bylaw cited (Section 5.4) was an indemnification clause that shields the Board from liability and does not impose a duty of action. Crucially, Mr. Stewart failed to meet the legal burden of proving his claims by a “preponderance of the evidence.” The Board’s rationale for the denial—to avoid setting a precedent, or “opening a Pandora’s Box”—was deemed a reasonable position for a condominium association. Evidence presented to support claims of bias and unequal treatment was found to be insufficient or not probative. Ultimately, Mr. Stewart’s petition was dismissed in its entirety.
Case Overview
This matter, designated as No. 18F-H1818052-REL, was adjudicated by the Office of Administrative Hearings under the authority of the Arizona Department of Real Estate. The case centered on a petition filed by Mr. Stewart on May 21, 2018, alleging a violation of the Association’s Bylaws by the Board of Directors.
Parties Involved
Name / Entity
Representation
Petitioner
Lawrence M. Stewart
On his own behalf
Respondent
Canyon Gate Condominium Association, Inc.
Mark K. Sahl, Esq. & Nichols C. S. Nogami, Esq.
Administrative Law Judge Thomas Shedden
Case Chronology
• November 15, 2017: The Association’s counsel informs Mr. Stewart in a letter that he is in violation of section 5.1 of the CC&Rs for making unapproved changes to a common/limited common area.
• Post-November 15, 2017: Mr. Stewart, then a member of the Board, requests a variance for the changes.
• December 27, 2017: The Association’s attorney sends a letter stating an understanding that Mr. Stewart had recused himself and that the other two Board members (Sandra Fernandez and David Larson) had required the area to be restored.
• January 4, 2018: Mr. Stewart writes to the other Board members, refuting that he had agreed to recuse himself and requesting a formal meeting to consider his variance request.
• February 18, 2018: At a Board meeting, Mr. Stewart resigns from the Board. The remaining two members vote to deny his variance request and require him to restore the area to its original condition.
• May 21, 2018: Mr. Stewart files his petition with the Arizona Department of Real Estate.
• September 6, 2018: The initial administrative hearing is conducted.
• September 14, 2018: The Administrative Law Judge (ALJ) issues a decision dismissing Mr. Stewart’s petition.
• January 2, 2019: A rehearing is conducted.
• January 17, 2019: The ALJ issues a final decision following the rehearing, again dismissing the petition.
Petitioner’s Central Allegations
Mr. Stewart’s case rested on four primary claims against the Association’s Board.
1. Violation of Bylaws Section 5.4
The formal petition alleged a violation of Association Bylaws Article V, Section 5.4 (Liability), which states in part:
“So long as he/she has acted in good faith on the basis of information actually possessed, neither the Board nor any member of the Board nor any officer of the ASSOCIATION shall be liable to the ASSOCIATION, any OWNER, or to any other party for any damage, loss, or prejudice suffered or claimed on account of: (i) the approval or disapproval of any plans, drawings, or specifications, whether or not defective…or (v) any act or failure to act by the ASSOCIATION, or Board.”
Mr. Stewart cited this section because it was the only part of the governing documents he could find that included a “good faith” requirement.
2. Lack of Good Faith by the Board
Mr. Stewart asserted that the Board did not act in good faith when it denied his variance request. He based this claim on several points:
• He resigned from the Board during the February 18, 2018 meeting because he “got the sense ‘right away’ that the other Board members’ minds were made up and that they would not approve his request.”
• He presented unrebutted testimony that the Board members were unwilling to physically look at the changes he had made and only gave a “cursory look” at photographs he provided.
• The Board’s decision appeared to have been made prior to the meeting, as evidenced by the attorney’s December 27, 2017 letter which erroneously stated he had recused himself.
3. Bias of Board Member David Larson
A significant portion of Mr. Stewart’s argument was that Board member David Larson was personally biased against him. The evidence presented to support this included:
• Initial Hearing Evidence:
◦ A biography of Mr. Larson prepared by the property manager. When questioned, Mr. Stewart could not identify specific information showing bias but stated the “entire document coupled with the other statements shows a bias.”
◦ Notes from a November 28, 2017 Board meeting where Mr. Larson informed members that enforcement actions (towing, violation notices) would begin immediately and that he was “too busy to talk to people about Board business in driveways.”
• Rehearing Evidence:
◦ A letter dated October 3, 2018, from Mr. Larson to Association members urging them not to vote for Mr. Stewart in an upcoming election.
4. Unfair and Unequal Treatment
Mr. Stewart claimed he was treated unfairly because other units in the condominium were also not in conformity with the CC&Rs.
• He presented photos of units he believed were out of compliance.
• He testified that he had verified with the Association that none of these units had received a variance in the last two years.
• However, he acknowledged he did not know if variances had been granted more than two years prior or if the changes had received pre-approval, which would not require a variance.
Respondent’s Position and Legal Arguments
The Canyon Gate Condominium Association, represented by counsel, did not present witnesses but argued on legal grounds.
• Inapplicability of Bylaws Section 5.4: The Association’s core argument was that Section 5.4 was not applicable to Mr. Stewart’s complaint. They contended the section is an indemnification clause designed to act as a “shield” to protect Board members from liability when they act in good faith, not a “sword” that imposes an affirmative duty on them that can be violated.
• Reasonableness of Board Decision: The Association maintained that the Board’s decision was reasonable. According to Mr. Stewart’s own testimony, the Board’s basis for denial was the fear that granting his variance would “open a Pandora’s Box where other unit owners would request variances.”
Administrative Law Judge’s Rulings and Conclusions
The ALJ’s decisions in both the initial hearing and the rehearing were consistent, ultimately finding in favor of the Respondent.
Legal Framework
• Burden of Proof: The ALJ established that Mr. Stewart, as the petitioner, bore the burden of proof. The standard of proof was a “preponderance of the evidence,” defined as evidence with “the most convincing force” that is sufficient “to incline a fair and impartial mind to one side of the issue rather than the other.”
• Board’s Duty: The judge noted that while the Bylaws are a contract, the Association, in exercising its authority, must “act reasonably.”
Analysis of Bylaws Section 5.4
• The judge agreed entirely with the Association’s interpretation, concluding that Section 5.4 “does not impose any duty on the Board members, but rather merely shields them from liability if they act in good faith.”
• In the initial hearing, the judge noted Mr. Stewart “appeared to acknowledge that section 5.4 acts as a ‘shield’ and not a ‘sword.'”
• By the rehearing, this was solidified, with the finding that “Mr. Stewart acknowledges that the Association has not violated Bylaws Section 5.4.”
Assessment of ‘Good Faith’ and Bias Claims
• The ALJ concluded that even if Section 5.4 were applicable, Mr. Stewart “has not shown by a preponderance of the evidence that the Board did not act in good faith, that it had a bias against him, or that it treated him unfairly.”
• The judge found the Board’s reasoning for the denial—the “Pandora’s Box” concern—was “not an unreasonable position for the Board of a condominium association.”
• Given this reasoning, the judge stated that “the specifics of the changes Mr. Stewart made would not be germane to the decision,” thereby neutralizing the claim that the Board failed to properly inspect the modifications.
Evaluation of Unfair Treatment Claim
• The evidence of other non-compliant units was deemed “not probative of the issue at hand.”
• The judge reasoned that there was “no evidence to show that they had requested that the Board grant variances,” meaning their situations were not comparable to Mr. Stewart’s, who had made unapproved changes and was subsequently denied a variance.
Final Disposition
• Initial Decision (September 14, 2018): IT IS ORDERED that Petitioner Lawrence M. Stewart’s petition is dismissed. This order was subject to a request for rehearing within 30 days.
• Rehearing Decision (January 17, 2019): IT IS ORDERED that Petitioner Lawrence M. Stewart’s petition is dismissed. This final order was noted as binding on the parties, with any further appeal requiring judicial review filed with the superior court within 35 days.
Study Guide – 18F-H1818052-REL-RHG
Study Guide: Stewart v. Canyon Gate Condominium Association, Inc.
This guide provides a review of the administrative case Lawrence M. Stewart, Petitioner, vs. Canyon Gate Condominium Association, Inc., Respondent (No. 18F-H1818052-REL), including the initial hearing and a subsequent rehearing.
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Short-Answer Quiz
Instructions: Answer the following questions in two to three sentences, based on the provided case documents.
1. What action by Petitioner Lawrence M. Stewart initiated the dispute with the Canyon Gate Condominium Association?
2. What specific provision of the Association Bylaws did Mr. Stewart allege was violated in his petition?
3. Why did Mr. Stewart resign from the Association’s Board during the February 18, 2018 meeting?
4. What was the Board’s stated reason for denying Mr. Stewart’s request for a variance?
5. Explain the legal interpretation of Bylaws Section 5.4 as a “shield” and not a “sword.”
6. List two pieces of evidence Mr. Stewart presented at the initial hearing to support his claim that Board member David Larson was biased against him.
7. What was the legal standard of proof in this case, and which party was required to meet it?
8. How did Mr. Stewart attempt to prove he was being treated unfairly in comparison to other unit owners, and why did the judge find this evidence unconvincing?
9. At the rehearing, what new evidence did Mr. Stewart present regarding Mr. Larson’s alleged bias?
10. What was the final outcome of both the initial administrative hearing and the subsequent rehearing?
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Answer Key
1. Mr. Stewart initiated the dispute by making changes to the common area and/or limited common area around his unit without first receiving permission from the Association. The Association informed him in a letter dated November 15, 2017, that this was a violation of section 5.1 of the CC&Rs.
2. Mr. Stewart alleged in his petition that the Association violated Bylaws Section 5.4. He later acknowledged this section was not technically violated but cited it because it was the only provision in the governing documents he could find that included a “good faith” requirement.
3. Mr. Stewart resigned from the Board because he “got the sense ‘right away’ that the other Board members’ minds were made up” and that they would not approve his request for a variance, regardless of the details.
4. The Board denied Mr. Stewart’s request on the basis that approving it would “open a Pandora’s Box” where other unit owners would then also request variances. The Administrative Law Judge found this was not an unreasonable position for a condominium association board to take.
5. The interpretation of Section 5.4 is that it acts as a “shield” to protect, or indemnify, Board members from liability for damages, loss, or prejudice, provided they have acted in good faith. It is not a “sword” that imposes an affirmative duty on the Board that Mr. Stewart could use to compel a certain action or claim a violation.
6. At the initial hearing, Mr. Stewart presented two of the following: (1) a biography of Mr. Larson; (2) notes from a November 28, 2017 meeting where Mr. Larson stated that enforcement actions would begin immediately; and (3) a letter from the Association’s attorney that erroneously stated Mr. Stewart had recused himself, suggesting the matter was decided without him.
7. The standard of proof was a “preponderance of the evidence.” The burden of proof rested entirely on the petitioner, Mr. Stewart, to show that the Association had acted improperly.
8. Mr. Stewart presented testimony and photos of other units that he believed were not in conformity with the CC&Rs. The judge found this evidence was not probative because Mr. Stewart provided no evidence that those owners had requested and been denied variances, and he acknowledged he did not know if they had received variances more than two years prior or had received preapproval.
9. At the rehearing, Mr. Stewart entered into evidence an October 3, 2018 letter from Mr. Larson to the Association’s members. In this letter, Mr. Larson urged the members not to vote for Mr. Stewart in an upcoming election.
10. In both the initial decision (September 14, 2018) and the decision following the rehearing (January 17, 2019), the Administrative Law Judge ordered that Mr. Stewart’s petition be dismissed. The Respondent, Canyon Gate Condominium Association, Inc., was deemed the prevailing party in the matter.
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Essay Questions
Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive response for each prompt, citing specific facts and legal conclusions from the case documents.
1. Analyze the Administrative Law Judge’s reasoning for concluding that Bylaws Section 5.4 was not applicable to Mr. Stewart’s petition. How did Mr. Stewart’s own testimony during the legal proceedings support this conclusion?
2. Discuss the concept of “preponderance of the evidence” as defined in the case documents. Evaluate the evidence Mr. Stewart presented across both hearings and explain why the judge found it insufficient to meet this standard regarding his claims of bias, bad faith, and unfair treatment.
3. Examine the Canyon Gate Board’s justification for denying the variance request (the “Pandora’s Box” argument). Based on the legal principles cited in the decisions, why was this considered a reasonable position for a condominium association board to take, and why did it render the specifics of Mr. Stewart’s changes non-germane?
4. Trace the procedural timeline of this case from the Association’s initial notice of violation on November 15, 2017, to the final binding order issued on January 17, 2019. Identify the key events, arguments, and decisions at each stage of the administrative process.
5. Mr. Stewart argued that he was treated unfairly because other units were also out of compliance with the CC&Rs. Deconstruct this argument and explain why the judge dismissed this line of reasoning as not being probative to the issue at hand in both the initial hearing and the rehearing.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
The official (Thomas Shedden) who presides over hearings at the Office of Administrative Hearings and issues a decision on the matter.
Association
The Canyon Gate Condominium Association, Inc., the entity responsible for enforcing the Bylaws and CC&Rs. In this case, it is the Respondent.
The governing body of the Association, which at the time of the variance request included Lawrence M. Stewart, Sandra Fernandez, and David Larson.
Burden of Proof
The obligation to prove one’s assertion. In this case, the burden of proof was on the Petitioner, Mr. Stewart.
Bylaws
A contract between the Association and its members. The parties are required to comply with its terms, and the Association must act reasonably in exercising its authority under them.
Covenants, Conditions, and Restrictions. Mr. Stewart was found to be in violation of section 5.1 of the CC&Rs for making unapproved changes.
Common Area / Limited Common Area
The property around a condominium unit that is shared or has restricted use. Mr. Stewart made unauthorized changes to this area.
Good Faith
A standard of conduct mentioned in Bylaws Section 5.4. It protects Board members from liability so long as they act in good faith based on information they possess. Mr. Stewart claimed the Board failed to meet this standard.
Indemnification
The act of compensating for loss or damage. Bylaws Article V, which contains Section 5.4, pertains to indemnification.
Petitioner
The party who files a petition initiating a legal case. In this matter, the petitioner was Lawrence M. Stewart.
Preponderance of the Evidence
The standard of proof required in this case, defined as “The greater weight of the evidence… sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”
Rehearing
A second hearing granted in a legal matter. A rehearing was conducted on January 2, 2019, after which the judge issued a final, binding order.
Respondent
The party against whom a petition is filed. In this matter, the respondent was Canyon Gate Condominium Association, Inc.
Variance
An official exception or deviation from a rule. Mr. Stewart requested a variance to allow the unapproved changes he had made, which the Board denied.
Blog Post – 18F-H1818052-REL-RHG
A Homeowner Sued His HOA and Lost—The Surprising Reasons Why Might Save You Thousands
Introduction: The Perennial Battle Between Homeowner and HOA
For many homeowners, the relationship with their Homeowners’ Association (HOA) can feel like a constant source of friction. From landscaping rules to paint colors, the potential for disputes is endless. But what happens when a homeowner feels so strongly wronged that they take the ultimate step of suing their association? More importantly, what happens when they lose?
This is the story of a homeowner who was also a board member. After making unauthorized changes to his property, he was denied his request for a variance to approve the changes he had already made. Believing the Board had acted in bad faith, he sued the association. His case failed, not on a minor technicality, but due to fundamental misunderstandings of how HOA law and governing documents function.
This outcome highlights a common, and costly, misconception about HOA governance. We will explore the surprising legal realities revealed in the case of Lawrence M. Stewart vs. Canyon Gate Condominium Association, Inc., offering several crucial takeaways for any homeowner before they decide to challenge their HOA.
1. A “Good Faith” Clause Can Be a Shield, Not a Sword
Mr. Stewart based his entire case on the claim that the Board violated Section 5.4 of the bylaws by not acting in “good faith,” as this was the only section in the governing documents he could find that mentioned the phrase.
This is where the case pivots on a crucial legal distinction. The court found that this clause was not intended to impose a duty on the board that a homeowner could sue over (a “sword”). Instead, its function was to protect board members from liability if they acted in good faith (a “shield”). Legally, this is an indemnification clause. Think of it as a form of insurance, designed to protect volunteer board members from being personally sued for making reasonable decisions, not a weapon for homeowners to attack those decisions.
In his testimony, Mr. Stewart even acknowledged this “shield” versus “sword” distinction but proceeded with the argument anyway. The lesson for homeowners is unequivocal: you must understand the precise legal function of a clause within your governing documents, not just its keywords.
2. The “Pandora’s Box” Defense Is a Powerful Argument
The Board’s primary reason for denying Mr. Stewart’s variance request was its fear that approval “would open a Pandora’s Box where other unit owners would request variances.” While a homeowner might hear “Pandora’s Box” and think it’s a lazy excuse, the court viewed it as the board performing its fundamental duty.
The judge stated this reasoning “was not an unreasonable position for the Board of a condominium association.” This validation is incredibly impactful because it shifts the focus from the merits of one homeowner’s request to the Board’s overarching fiduciary duty to uphold the rules consistently for the entire community. It shows that an HOA’s duty to maintain consistent enforcement and avoid setting a messy precedent is a legally sound basis for a decision, making the specific details of one homeowner’s changes irrelevant.
3. Being on the Board Won’t Give You a Pass
In a surprising twist, Mr. Stewart was a member of the HOA Board at the very time he made the unauthorized changes and requested the variance. This created a clear conflict of interest and ultimately did not help his case.
The situation culminated in Mr. Stewart resigning from the Board during the meeting where his request was considered. He stated he resigned because he felt “the other Board members’ minds were made up” and they would not approve his request. This incident serves as a stark reminder: holding a position on the board does not grant special privileges or exceptions to the rules. In fact, it can complicate personal matters and highlight a direct conflict between a board member’s duties to the association and their personal interests.
4. “Whataboutism” Is Not a Legal Strategy
Like many homeowners in a dispute, Mr. Stewart argued that he was being treated unfairly because other units in the community were also out of compliance with the CC&Rs. This is a common defense, but its legal failure in this case is a masterclass in what courts actually require for proof.
Mr. Stewart’s effort was commendable but legally insufficient. He presented photos of other non-conforming units and even “verified with the Association that none of these units had received a variance in the last two years.” However, his evidence collapsed under cross-examination when he “acknowledged… he did not know if any of these units had received variances more than two years ago or whether preapproval for the changes had been granted.”
The judge dismissed his evidence entirely. This transforms the lesson from a simple “don’t point fingers” to a much more sophisticated legal principle: to prove selective enforcement, you must prove others in the identical procedural situation were treated differently, and incomplete evidence is no evidence at all.
5. The Burden of Proof Is Everything
Perhaps the most stunning fact from the case is that the Association “presented no witnesses” at either the initial hearing or the subsequent rehearing. They won the case without putting a single person on the stand to testify.
They could do this because the legal system placed the “burden of proof” squarely on Mr. Stewart. As the petitioner, it was his job to prove his claims of bad faith, bias, and unfair treatment by a “preponderance of the evidence.” The Association didn’t have to prove it acted in good faith; Mr. Stewart had to prove it acted in bad faith. He failed to meet this standard. In other words, he had to prove that his claims were more likely to be true than not—even if only by a 51% to 49% margin.
The court document formally defines this legal standard as:
The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.
In a legal dispute with your HOA, the case is not about who is morally right or wrong. It’s about who can meet their required burden of proof with convincing, relevant evidence.
Conclusion: Know the Rules Before You Fight the Rulers
The case of Lawrence M. Stewart is a cautionary tale that every homeowner should internalize. His failed lawsuit, which likely became a five-figure mistake when factoring in legal fees for both sides, underscores that HOA governing documents are a binding contract. Challenging the Board requires more than a sense of unfairness. It demands a precise, evidence-backed legal argument that aligns with the specific terms of that contract and the applicable legal standards.
Before you declare war on your HOA, ask yourself: are you prepared to prove your case with irrefutable evidence, or are you just banking on a feeling of being wronged?
Case Participants
Petitioner Side
Lawrence M. Stewart(petitioner) Also served as a Board member for Respondent until resigning during the variance request consideration.
Respondent Side
Mark K. Sahl(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent in the initial hearing.
Nicolas C. S. Nogami(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent in both the initial hearing (listed as 'Nichols C. S. Nogami') and the rehearing.
Sandra Fernandez(board member) Canyon Gate Condominium Association, Inc. Voted to deny Petitioner's variance request.
David Larson(board member) Canyon Gate Condominium Association, Inc. Voted to deny Petitioner's variance request; Petitioner alleged he was biased.
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate Recipient of the decision copies.
F. Del Sol(administrative staff) Office of Administrative Hearings Signed the transmission of the decision copies.
The Administrative Law Judge denied the entire petition. Although the Respondent used a faulty ballot (Issue 2), the Petitioner waived the right to object by failing to raise a complaint prior to the vote. Petitioner also failed to prove his claims for issues 1 and 3.
Why this result: Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection, and failed to prove the claims for Issues 1 and 3.
Key Issues & Findings
Vote count required to amend declaration
Petitioner requested an order declaring the amendment invalid due to insufficient vote count.
Orders: Claim failed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Absence of separate voting opportunity for proposed actions
Petitioner sought an order declaring the amendment invalid because the ballot improperly required a single vote on two separate actions.
Orders: Claim denied on rehearing. Petition denied.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1812(A)
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Allen v. State, 14 Ariz. 458, 130 P. 1114
Unauthorized fines in excess of $50
Petitioner requested an order that the Association cannot levy fines in excess of $50 per violation.
Orders: Claim failed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Analytics Highlights
Topics: HOA elections, absentee ballots, waiver doctrine, amendment procedure, fines
Additional Citations:
A.R.S. § 33-1817(A)(1)
A.R.S. § 33-1812(A)
A.R.S. § 33-1812(B)(2)
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Allen v. State, 14 Ariz. 458, 130 P. 1114
Decision Documents
18F-H1817018-REL Decision – 673729.pdf
Uploaded 2025-12-17T18:16:08 (40.8 KB)
18F-H1817018-REL Decision – 673828.pdf
Uploaded 2025-12-17T18:16:08 (48.5 KB)
18F-H1817018-REL Decision – 680738.pdf
Uploaded 2025-12-17T18:16:08 (103.5 KB)
Case Participants
Petitioner Side
Scott Servilla(petitioner) Appeared on his own behalf at the hearing; also listed as Scott S. Servilla,
Heidi H Servilla(petitioner)
Respondent Side
Mark K. Sahl(HOA attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Village of Oakcreek Association
Neutral Parties
Tammy L. Eigenheer(ALJ) Office of Administrative Hearings Administrative Law Judge,,,
Judy Lowe(commissioner) Arizona Department of Real Estate Granted the request for rehearing
LDettorre(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
AHansen(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
djones(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
DGardner(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
ncano(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
Other Participants
c. serrano(staff) Transmitted documents on November 29, 2018,
Felicia Del Sol(staff) Transmitted documents on January 9, 2019
The Administrative Law Judge denied the entire petition. Although the Respondent used a faulty ballot (Issue 2), the Petitioner waived the right to object by failing to raise a complaint prior to the vote. Petitioner also failed to prove his claims for issues 1 and 3.
Why this result: Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection, and failed to prove the claims for Issues 1 and 3.
Key Issues & Findings
Vote count required to amend declaration
Petitioner requested an order declaring the amendment invalid due to insufficient vote count.
Orders: Claim failed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Absence of separate voting opportunity for proposed actions
Petitioner sought an order declaring the amendment invalid because the ballot improperly required a single vote on two separate actions.
Orders: Claim denied on rehearing. Petition denied.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1812(A)
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Allen v. State, 14 Ariz. 458, 130 P. 1114
Unauthorized fines in excess of $50
Petitioner requested an order that the Association cannot levy fines in excess of $50 per violation.
Orders: Claim failed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Analytics Highlights
Topics: HOA elections, absentee ballots, waiver doctrine, amendment procedure, fines
Additional Citations:
A.R.S. § 33-1817(A)(1)
A.R.S. § 33-1812(A)
A.R.S. § 33-1812(B)(2)
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Allen v. State, 14 Ariz. 458, 130 P. 1114
Video Overview
Audio Overview
Decision Documents
18F-H1817018-REL-RHG Decision – 673729.pdf
Uploaded 2026-01-23T17:22:28 (40.8 KB)
18F-H1817018-REL-RHG Decision – 673828.pdf
Uploaded 2026-01-23T17:22:31 (48.5 KB)
18F-H1817018-REL-RHG Decision – 680738.pdf
Uploaded 2026-01-23T17:22:34 (103.5 KB)
Briefing Doc – 18F-H1817018-REL-RHG
Briefing Document: Servilla v. Village of Oakcreek Association (Case No. 18F-H1817018-REL-RHG)
Executive Summary
This briefing document analyzes the Administrative Law Judge (ALJ) Decision in the case of Scott S. Servilla versus the Village of Oakcreek Association. The final order, issued on January 9, 2019, following a rehearing, denied the petitioner’s claims. The central issue revolved around a homeowners association vote held on November 10, 2016, where two distinct amendments—one concerning property leasing and another a schedule of fines—were combined into a single item on the ballot.
The petitioner argued this ballot format violated Arizona statute A.R.S. § 33-1812(A), which requires a separate opportunity to vote for or against each proposed action. However, the ALJ’s decision did not rule on the merits of this statutory violation. Instead, the petition was denied based on the legal doctrine of waiver. The ALJ concluded that the petitioner, having received the allegedly defective ballot more than a month before the vote, had forfeited his right to challenge the procedure by failing to raise any objection until after the vote was completed and the unfavorable outcome was known. The decision heavily relies on the precedent set by the Arizona Supreme Court in Zajac v. City of Casa Grande, which established that a party cannot knowingly allow a flawed election to proceed and then protest only after receiving an undesirable result. The ALJ’s decision is binding, with any appeal required to be filed in superior court.
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I. Case Overview
This matter was a dispute brought before the Arizona Office of Administrative Hearings between a homeowner and a homeowners association regarding the validity of an amendment to the association’s governing documents.
Case Detail
Information
Case Number
18F-H1817018-REL-RHG
Petitioner
Scott Servilla & Heidi H Servilla
Respondent
Village of Oakcreek Association
Administrative Law Judge
Tammy L. Eigenheer
Hearing Date
November 29, 2018
Record Held Open Until
December 20, 2018
Decision Issued
January 9, 2019
II. Procedural History
1. Initial Petition: On or about November 13, 2017, Scott S. Servilla filed a petition with the Arizona Department of Real Estate against the Village of Oakcreek Association, an HOA with 2436 homeowners.
2. Expansion of Claims: The petitioner initially filed a single-issue petition with a $500 fee but was ordered by the ALJ to either specify the single issue or pay for a multi-issue hearing. The petitioner paid an additional $1,000 and proceeded with three distinct claims.
3. First ALJ Decision: Following an initial hearing, the ALJ found that the petitioner failed to prove two of his three claims. On the second claim—the improper ballot format—the judge found a statutory violation had occurred but concluded that “because the statute did not provide an enforcement mechanism to the Administrative Law Judge, no remedy could be ordered.”
4. Request for Rehearing: The petitioner filed a Request for Reconsideration, arguing that the conclusion of “no remedy” was contrary to law.
5. Rehearing Granted: On or about September 21, 2018, the Commissioner for the Arizona Department of Real Estate granted the request for a rehearing, which was held on November 29, 2018.
III. The Central Dispute: The November 10, 2016 Vote
The core of the dispute was the validity of a vote taken during a Special Meeting of Members on November 10, 2016.
• Bundled Amendments: The vote’s stated purpose was to approve the “Leasing and Schedule of Fines Assessment.” This single proposal combined two separate and substantive changes to the Master Declaration:
1. Addition of Section 4.23:Leasing of Lots and Units; Restrictions and Limitations, which established a minimum lease term of 30 days and prohibited leasing less than an entire unit.
2. Replacement of Section 5.08:Schedule of Fines, which permitted the association’s committee to adopt a new schedule specifying fines for violations.
• Ballot Format: The absentee ballot provided members with only a single voting choice: “FOR THE LEASING AND SCHEDULE OF FINES AMENDMENT” or “AGAINST THE LEASING AND SCHEDULE OF FINES AMENDMENT.”
• Statutory Violation Alleged: The petitioner contended this format violated A.R.S. § 33-1812(A), which requires that a ballot “shall set forth each proposed action” and “shall provide an opportunity to vote for or against each proposed action.”
• Vote Outcome: A total of 1,067 ballots were received (approximately 44% of members). Of those, 564 voted in favor of the amendment, constituting approximately 53% of the votes cast.
IV. Key Arguments at Rehearing
• Statutory Violation: The ballot was legally defective because it combined two distinct proposed actions into one vote, denying members the right to vote on each separately as required by statute.
• Evidence of Dissent: The petitioner argued that a subsequent vote in April 2017, in which members rejected a proposal to eliminate the By-Laws’ $50 fine limit, demonstrated that “had the proposed amendment been broken into two parts, the part of the proposed amendment dealing with the fines most likely would have failed.”
• Requested Remedy: The petitioner argued that based on case law, the ALJ was authorized to declare the entire amendment void and unenforceable.
• Waiver of Objection: The respondent’s primary argument was that the petitioner had waived any right to object to the ballot format. The petitioner received the absentee ballot on or about October 4, 2016, but did not raise an objection until April 2017, long after the November 10, 2016 vote was completed.
• Lack of Enforcement Provision: The respondent also maintained its earlier position that even if a violation of A.R.S. § 33-1812(A)(2) occurred, the statute itself provides no enforcement mechanism or remedy.
V. Administrative Law Judge’s Decision and Rationale
The ALJ’s final decision denied the petitioner’s petition in its entirety, based solely on the legal principle of waiver.
The ALJ found that the petitioner’s failure to object to the ballot’s format in a timely manner was fatal to his claim.
• Awareness of Defect: The petitioner received the absentee ballot on October 4, 2016, over a month before the November 10, 2016 vote. This provided sufficient time to identify the procedural issue and raise an objection.
• Failure to Act: By not objecting before the vote, the petitioner allowed the flawed process to proceed. He only lodged a complaint after the results were not in his favor.
• Forfeiture of Rights: The ALJ concluded, “As Petitioner was or should have been aware of the alleged issues with the ballot, he waived his right to bring forth a complaint about the ballot when he allowed the vote to proceed on November 10, 2016.”
The decision rested on the Arizona Supreme Court case Zajac v. City of Casa Grande (2004), which itself relied on Allen v. State (1913). This precedent establishes that a party cannot remain silent about a known procedural defect in an election process and then challenge the process only after an unfavorable outcome.
• Key Principle: The ALJ articulated the principle from Zajac: “one cannot knowingly let a defective vote proceed only to complain and seek redress if the results are not to the individual’s liking.”
• Direct Quotation: The decision directly quotes the ruling in Zajac to finalize its point: “He cannot have it both ways; that is, he cannot allow the [vote] to proceed without objection, and then be permitted thereafter to assert his protest.”
• Petition Denied: “IT IS ORDERED that Petitioner’s petition is denied.”
• Binding Decision: As the decision was issued as a result of a rehearing, it is legally binding on the parties.
• Appeal Process: Any party wishing to appeal the order must file for judicial review with the superior court within thirty-five days from the date the order was served (January 9, 2019).
Study Guide – 18F-H1817018-REL-RHG
Study Guide: Servilla v. Village of Oakcreek Association (Case No. 18F-H1817018-REL-RHG)
This guide provides a comprehensive review of the administrative legal case involving Petitioner Scott Servilla and Respondent Village of Oakcreek Association, as detailed in the Administrative Law Judge Decision of January 9, 2019. It includes a short-answer quiz to test factual recall, a corresponding answer key, suggested essay questions for deeper analysis, and a glossary of key terms.
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Short Answer Quiz
Instructions: Answer the following ten questions in 2-3 sentences each, based entirely on the information provided in the source documents.
1. Who were the primary parties in this case, and what roles did they play?
2. What were the two distinct proposed changes that were combined into a single voting item on the November 10, 2016 absentee ballot?
3. Which specific Arizona Revised Statute did the Petitioner allege was violated by the format of the ballot, and what does that statute require?
4. What was the numerical outcome of the November 10, 2016 vote on the proposed amendment?
5. What was the Respondent’s primary legal argument for why the Petitioner’s complaint about the faulty ballot should be dismissed?
6. What key legal precedent, specifically the case of Zajac v. City of Casa Grande, did the Administrative Law Judge (ALJ) rely upon in the final decision?
7. According to the decision, when did the Petitioner receive the ballot, and why was this date critical to the ALJ’s final ruling?
8. What was the finding in the initial Administrative Law Judge Decision regarding the ballot issue, and why did it lead to a request for a rehearing?
9. Describe the separate vote that occurred in April 2017 and explain how the Petitioner used it to support his argument regarding the 2016 vote.
10. What was the final order issued by Administrative Law Judge Tammy L. Eigenheer on January 9, 2019, and what was the legal basis for this order?
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Answer Key
1. The primary parties were the Petitioner, Scott S. Servilla (who appeared on his own behalf), and the Respondent, the Village of Oakcreek Association (a homeowners association represented by Mark Sahl). The Petitioner filed a complaint against the Respondent with the Arizona Department of Real Estate.
2. The two proposed changes were the addition of a new section, 4.23, concerning “Leasing of Lots and Units; Restrictions and Limitations,” and the complete replacement of an existing section, 5.08, titled “Schedule of Fines.” The ballot presented these as a single item called the “LEASING AND SCHEDULE OF FINES AMENDMENT.”
3. The Petitioner alleged a violation of A.R.S. § 33-1812(A)(2) and A.R.S. § 33-1812(B)(2). The statute requires that an absentee ballot “shall set forth each proposed action” and “shall provide an opportunity to vote for or against each proposed action.”
4. A total of 1067 ballots were received, representing approximately 44 percent of the members. Of those who voted, 564 (approximately 53 percent) voted in favor of the proposed amendment.
5. The Respondent’s primary argument was that the Petitioner had waived any right to object to the ballot’s format. The Respondent contended that the Petitioner should have raised his objection before the vote occurred, rather than waiting until after the results were known.
6. The ALJ relied on the precedent set in Zajac v. City of Casa Grande. This Arizona Supreme Court case established the principle that an individual aware of a procedural issue with an election cannot wait to see the results before lodging a complaint.
7. The Petitioner acknowledged receiving the absentee ballot on or about October 4, 2016, more than a month before the November 10, 2016 vote. This date was critical because it demonstrated that the Petitioner had ample time to object to the ballot’s format before the vote took place, supporting the ALJ’s waiver finding.
8. In the initial decision, the ALJ found that a violation of the statute had occurred regarding the ballot but concluded that no remedy could be ordered because the statute lacked an enforcement mechanism. The Petitioner requested a rehearing, alleging that this conclusion was contrary to the law and that the ALJ did have the authority to declare the amendment void.
9. In April 2017, a separate proposed amendment to eliminate the By-Laws’ $50 fine limitation was voted down by the members. The Petitioner argued this subsequent vote demonstrated that the fines portion of the November 2016 amendment would likely have failed if members had been given a separate opportunity to vote on it.
10. The final order, issued January 9, 2019, denied the Petitioner’s petition. The legal basis was the doctrine of waiver; the ALJ ruled that because the Petitioner was aware of the alleged issues with the ballot before the vote and failed to object, he waived his right to complain about it after the results were announced.
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Essay Questions
Instructions: The following questions are designed to encourage deeper analysis of the case. Formulate comprehensive essay responses based on the details and legal reasoning presented in the source documents.
1. Explain the legal doctrine of waiver as applied in this case. How did the timeline of events, from the receipt of the ballot to the filing of the petition, support the Administrative Law Judge’s application of the principles from Zajac v. City of Casa Grande?
2. Analyze the conflicting interpretations of “proposed action” under A.R.S. § 33-1812(A) as presented by the Petitioner and the Respondent. Although the Judge ultimately ruled on procedural grounds, which party’s interpretation of the statute appears more consistent with the law’s text and intent?
3. Discuss the procedural history of this case, from the initial filing with the Arizona Department of Real Estate through the first decision, the request for reconsideration, and the final ruling on rehearing. What does this progression reveal about the administrative hearing process and the remedies available to petitioners?
4. The Petitioner attempted to use the results of an April 2017 vote to argue that the fines portion of the November 2016 amendment would likely have failed if voted on separately. Evaluate the strength and relevance of this argument within the legal context of the case.
5. Imagine the Petitioner had raised his objection to the ballot format before the November 10, 2016 vote. Based on the information in the decision, how might the proceedings and the ultimate outcome have been different?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, hears evidence, and issues decisions and orders. In this case, Tammy L. Eigenheer.
A.R.S. (Arizona Revised Statutes)
The collection of laws enacted by the Arizona state legislature. The Petitioner alleged violations of A.R.S. § 33-1817 and § 33-1812.
Absentee Ballot
A ballot that allows a member to vote without being physically present at a meeting. The format of this ballot was the central issue of the rehearing.
By-Laws
The rules that govern the internal operations of an association. The Petitioner cited a violation of By-Laws Section 8, Article VIII concerning a $50 fine limit.
Department (The Department)
The Arizona Department of Real Estate, the state agency where the Petitioner first filed his petition against the homeowners association.
Master Declaration
A core governing document for a homeowners association that establishes rules, restrictions, and obligations for homeowners. The November 10, 2016 vote was to amend this document.
A formal, binding decision issued by a judge. The final document in this case was an order denying the Petitioner’s petition.
Petitioner
The party who initiates a legal action by filing a petition. In this case, Scott Servilla & Heidi H. Servilla.
Preponderance of the Evidence
The standard of proof required in this proceeding. It means the evidence presented is more convincing and likely to be true than the evidence offered in opposition.
Rehearing
A second hearing of a case granted to reconsider the initial decision. A rehearing was granted after the Petitioner argued that the initial finding of “no remedy” was contrary to law.
Respondent
The party against whom a petition is filed and who must respond to the allegations. In this case, the Village of Oakcreek Association.
Waiver
A legal doctrine where a party intentionally or through inaction gives up a known right or claim. The ALJ ruled the Petitioner waived his right to object to the ballot by not raising the issue before the vote.
Zajac v. City of Casa Grande
An Arizona Supreme Court case that established a key legal precedent used in this decision. It holds that a party cannot knowingly allow a defective vote to proceed and then complain only if the results are unfavorable.
Blog Post – 18F-H1817018-REL-RHG
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“name”: “A. Hansen”,
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“name”: “D. Jones”,
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“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
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“name”: “D. Gardner”,
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“notes”: “Signed document transmission for November 29, 2018 order”
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{
“name”: “Felicia Del Sol”,
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{ “rehearing”: { “is_rehearing”: true, “base_case_id”: “18F-H1817018-REL”, “original_decision_status”: “affirmed”, “original_decision_summary”: “In the original decision, the Administrative Law Judge found that the Petitioner failed to prove claims regarding issues one and three1. For issue two (faulty ballot), the ALJ established a statutory violation of A.R.S. § 33-1812(B)(2), but concluded that no remedy could be ordered because the statute did not provide an enforcement mechanism1.”, “rehearing_decision_summary”: “The Commissioner granted the rehearing to address the legal conclusion that no remedy could be ordered for the violation found in Issue 22. Following the rehearing, the Administrative Law Judge denied the entire petition3, concluding that Petitioner waived the right to complain about the faulty ballot because he was aware of the alleged issues but allowed the November 10, 2016 vote to proceed without objection4….”, “issues_challenged”: [ { “issue_number”: 2, “description”: “Violation of A.R.S. § 33-1812(B)(2) because the written ballot used did not provide a separate opportunity to vote for or against each proposed action7.”, “challenge”: “Petitioner challenged the original conclusion that no remedy could be ordered, alleging this was contrary to the law and arguing that the Administrative Law Judge was authorized to declare the amendment void and unenforceable28.”, “rehearing_outcome”: “Denied/Failed. The claim failed because the ALJ ruled that Petitioner waived his right to bring forth a complaint about the ballot by allowing the vote to proceed without objection36.” } ] } }
{
“case”: {
“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla, Petitioner, vs. Village of Oakcreek Association, Respondent.”,
“decision_date”: “January 9, 2019”,
“tribunal”: “OAH”,
“agency”: “ADRE”
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},
{
“name”: “Tammy L. Eigenheer”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “Office of Administrative Hearings”,
“notes”: null
},
{
“name”: “Mark K. Sahl”,
“role”: “attorney”,
“side”: “respondent”,
“affiliation”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”,
“notes”: null
},
{
“name”: “Judy Lowe”,
“role”: “commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: null
},
{
“name”: “c. serrano”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents”
},
{
“name”: “Felicia Del Sol”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents”
}
]
}
This document summarizes the administrative law judge decision in the rehearing case of Scott Servilla & Heidi H Servilla v. Village of Oakcreek Association, Case No. 18F-H1817018-REL-RHG1. This matter was heard by Administrative Law Judge Tammy L. Eigenheer on November 29, 2018, with the record held open until December 20, 20181.
Procedural History (Original Decision vs. Rehearing)
Petitioner Scott Servilla filed a petition with the Arizona Department of Real Estate (ADRE) against the Village of Oakcreek Association (Respondent) alleging multiple violations of statute and the community’s Master Declaration2,3.
Original Decision: The Administrative Law Judge initially ruled on three issues4. The ALJ found that Petitioner failed to prove two claims5. However, the ALJ found that the Respondent violated A.R.S. § 33-1812(B)(2) regarding the written ballot, but concluded that because the statute did not provide an enforcement mechanism, no remedy could be ordered5.
Rehearing Grant: Following this initial decision, Petitioner filed a Request for Reconsideration, arguing the conclusion that no remedy existed was contrary to law6. The ADRE Commissioner granted the request for rehearing6.
Key Facts and Issue for Rehearing
The central issue during the rehearing concerned the statutory violation found in the original decision: whether the November 10, 2016 vote to amend the Master Declaration was invalid because the absentee ballot failed to comply with A.R.S. § 33-1812(A)4,7.
The Ballot Violation: A.R.S. § 33-1812(A) requires that absentee ballots set forth “each proposed action” and provide an opportunity to vote for or against “each proposed action”7. The Respondent’s proposed amendment bundled two distinct actions: the addition of leasing restrictions and the complete replacement of the Schedule of Fines8,9,10. The ballot only allowed members to vote “FOR” or “AGAINST THE LEASING AND SCHEDULE OF FINES AMENDMENT” as a single package9.
Key Legal Argument and Decision
At the rehearing, the core legal debate shifted from whether a violation occurred to whether the Petitioner was entitled to relief, specifically whether the ALJ could declare the amendment void and unenforceable6,11.
Respondent’s Defense and the Doctrine of Waiver: Respondent argued that Petitioner had waived the right to object because he did not raise any complaint about the defective ballot prior to the vote12. Petitioner received the ballot more than one month before the November 10, 2016 vote13.
ALJ Legal Conclusion: Drawing on Arizona Supreme Court precedent (Zajac v. City of Casa Grande)10,14, the Administrative Law Judge concluded that an individual cannot allow a known defective vote to proceed and only complain afterward if dissatisfied with the results15,16. Because Petitioner failed to raise an objection to the faulty ballot prior to the scheduled vote, he waived his right to bring a subsequent complaint about the ballot16.
Based on the application of the waiver doctrine, the ALJ found that Petitioner’s claim as to the ballot must fail16. The Administrative Law Judge ordered that Petitioner’s petition is denied17. This order, resulting from the rehearing, is binding on the parties17.
{
“case”: {
“agency”: “ADRE”,
“tribunal”: “OAH”,
“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla vs. Village of Oakcreek Association”,
“decision_date”: “2019-01-09”,
“alj_name”: “Tammy L. Eigenheer”
},
“parties”: [
{
“party_id”: “P1”,
“role”: “petitioner”,
“name”: “Scott Servilla & Heidi H Servilla”,
“party_type”: “homeowner”,
“email”: null,
“phone”: null,
“attorney_name”: null,
“attorney_firm”: null,
“attorney_email”: null,
“attorney_phone”: null
},
{
“party_id”: “R1”,
“role”: “respondent”,
“name”: “Village of Oakcreek Association”,
“party_type”: “HOA”,
“email”: null,
“phone”: null,
“attorney_name”: “Mark K. Sahl”,
“attorney_firm”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”,
“attorney_email”: null,
“attorney_phone”: null
}
],
“issues”: [
{
“issue_id”: “ISS-001”,
“type”: “statute”,
“citation”: “A.R.S. § 33-1817(A)(1)”,
“caption”: “Vote count required to amend declaration”,
“violation(s)”: “Alleged violation of A.R.S. § 33-1817(A)(1) and Declaration regarding the required majority vote (1173 votes) for the November 10, 2016 amendment.”,
“summary”: “Petitioner requested an order declaring the amendment invalid due to insufficient vote count.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim failed.”,
“why_the_loss”: “Petitioner failed to prove the claim.”,
“cited”: []
},
{
“issue_id”: “ISS-002”,
“type”: “statute”,
“citation”: “A.R.S. § 33-1812(A)”,
“caption”: “Absence of separate voting opportunity for proposed actions”,
“violation(s)”: “The written ballot used for the November 10, 2016 amendment violated A.R.S. § 33-1812(A) and (B)(2) because it bundled two distinct proposed actions (Leasing Restrictions and Schedule of Fines) into a single vote.”,
“summary”: “Petitioner sought an order declaring the amendment invalid because the ballot improperly required a single vote on two separate actions.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim denied on rehearing. Petition denied.”,
“why_the_loss”: “Petitioner waived the right to object to the faulty ballot by receiving it over a month prior and allowing the vote to proceed on November 10, 2016, without raising a complaint.”,
“cited”: [
“A.R.S. § 33-1812(A)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”,
“Allen v. State, 14 Ariz. 458, 130 P. 1114”
]
},
{
“issue_id”: “ISS-003”,
“type”: “governing_document”,
“citation”: “By-Laws Section 8, Article VIII”,
“caption”: “Unauthorized fines in excess of $50”,
“violation(s)”: “Respondent allegedly violated By-Laws by imposing fines in excess of $50 per violation, especially after a proposed amendment to raise the fines was voted down.”,
“summary”: “Petitioner requested an order that the Association cannot levy fines in excess of $50 per violation.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim failed.”,
“why_the_loss”: “Petitioner failed to prove the claim.”,
“cited”: []
}
],
“money_summary”: {
“issues_count”: 3,
“total_filing_fees_paid”: 1500.0,
“total_filing_fees_refunded”: 0.0,
“total_civil_penalties”: 0.0
},
“outcomes”: {
“petitioner_is_hoa”: false,
“petitioner_win”: “loss”,
“summarize_judgement”: “The Administrative Law Judge denied the entire petition. Although the Respondent used a faulty ballot (Issue 2), the Petitioner waived the right to object by failing to raise a complaint prior to the vote. Petitioner also failed to prove his claims for issues 1 and 3.”,
“why_the_loss”: “Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection, and failed to prove the claims for Issues 1 and 3.”,
“cited”: [
“A.R.S. § 33-1812(A)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”
]
},
“analytics”: {
“cited”: [
“A.R.S. § 33-1817(A)(1)”,
“A.R.S. § 33-1812(A)”,
“A.R.S. § 33-1812(B)(2)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”,
“Allen v. State, 14 Ariz. 458, 130 P. 1114”
],
“tags”: [
“HOA elections”,
“absentee ballots”,
“waiver doctrine”,
“amendment procedure”,
“fines”
]
}
}
{
“case”: {
“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla, vs. Village of Oakcreek Association”,
“decision_date”: “2019-01-09”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Scott Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: “Appeared on his own behalf at the hearing; also listed as Scott S. Servilla [1], [2]”
},
{
“name”: “Heidi H Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Tammy L. Eigenheer”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “Office of Administrative Hearings”,
“notes”: “Administrative Law Judge [3], [4], [1], [2]”
},
{
“name”: “Mark K. Sahl”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”,
“notes”: “Represented Village of Oakcreek Association [2]”
},
{
“name”: “Judy Lowe”,
“role”: “commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Granted the request for rehearing [5]”
},
{
“name”: “c. serrano”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents on November 29, 2018 [6], [7]”
},
{
“name”: “Felicia Del Sol”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents on January 9, 2019 [8]”
},
{
“name”: “LDettorre”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “AHansen”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “djones”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “DGardner”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “ncano”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
}
]
}
Case Participants
Petitioner Side
Scott Servilla(petitioner) Also referred to as Scott S. Servilla
Heidi H Servilla(petitioner)
Respondent Side
Mark K. Sahl(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Neutral Parties
Tammy L. Eigenheer(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate
