Case Summary
| Case ID | 20F-H2020064-REL-RHG |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2021-03-24 |
| Administrative Law Judge | Tammy L. Eigenheer |
| Outcome | full |
| Filing Fees Refunded | $500.00 |
| Civil Penalties | $2,500.00 |
Parties & Counsel
| Petitioner | Nancy L. Babington | Counsel | — |
|---|---|---|---|
| Respondent | Park Scottsdale II Townhouse Corporation | Counsel | Mark K. Sahl and Scott B. Carpenter |
Alleged Violations
A.R.S. § 33-1258(A)
Outcome Summary
Following a rehearing based on newly discovered evidence, the Administrative Law Judge found that Respondent violated A.R.S. § 33-1258(A) by failing to timely provide records it possessed. Respondent was ordered to reimburse the Petitioner $500.00 for the filing fee and pay a $2,500.00 civil penalty to the Department of Real Estate.
Key Issues & Findings
Failure to make association financial and other records reasonably available for examination/provide copies within ten business days.
Petitioner alleged Respondent violated A.R.S. § 33-1258 by failing to provide requested records (including bank statements and contracts) following a formal request on May 1, 2020. The Administrative Law Judge, in the rehearing, found that the evidence showed Respondent was in possession of bank statements and two signed contracts at the time of the request, contradicting prior testimony, thereby establishing a violation of the statute.
Orders: Respondent was ordered to pay Petitioner $500.00 for the filing fee reimbursement and pay a civil penalty of $2,500.00 to the Department of Real Estate, both payments due within 30 days.
Filing fee: $500.00, Fee refunded: Yes, Civil penalty: $2,500.00
Disposition: petitioner_win
- A.R.S. § 33-1258
- A.R.S. § 32-2199.02
- A.A.C. R2-19-119
Analytics Highlights
- A.R.S. § 33-1258
- A.R.S. § 32-2199.02
- A.A.C. R2-19-119
Video Overview
Audio Overview
Decision Documents
20F-H2020064-REL-RHG Decision – 866802.pdf
20F-H2020064-REL-RHG Decision – ../20F-H2020064-REL/823263.pdf
Briefing Document: Babington v. Park Scottsdale II Townhouse Corporation
Executive Summary
This document synthesizes the key findings, arguments, and outcomes from the administrative case of Nancy L. Babington (Petitioner) versus the Park Scottsdale II Townhouse Corporation (Respondent). The dispute centered on the Respondent’s failure to provide association records as required by Arizona state law (A.R.S. § 33-1258).
The case progressed through two distinct phases: an initial hearing that ruled in favor of the Respondent, and a subsequent rehearing that reversed the decision. The initial ruling was based on the Respondent’s testimony that it did not possess the requested records due to a dispute with a former management company. However, the rehearing was granted based on newly discovered evidence proving the Respondent, through its management company and board, did possess key documents at the time of the request.
The final judgment established that the Respondent had violated state law. The Administrative Law Judge rejected the Respondent’s defense, including the argument that records held in a corporate satellite office were not in its possession. As a result, the Respondent was ordered to reimburse the Petitioner’s $500 filing fee and pay a $2,500 civil penalty to the Arizona Department of Real Estate.
Case Background and Timeline
The dispute arose from a records request made by Petitioner Nancy L. Babington to her condominium association, Park Scottsdale II Townhouse Corporation, and its management company, Associa Arizona. The timeline of key events is as follows:
June-July 2019
Respondent’s prior management company, Community Management & Consulting, LLC (CMC), terminates its agreement.
Post-July 2019
Respondent hires Associa Arizona (Associa). Associa and the Respondent encounter difficulty obtaining records from CMC due to a financial dispute.
April 29, 2020
Petitioner sends a formal email requesting association records from September 1, 2019, to April 28, 2020, citing A.R.S. § 33-1258.
May 1, 2020
Petitioner provides a specific, nine-point list of requested documents, including bank statements, financial statements, and contracts.
May 28, 2020
Having received no documents, Petitioner files a petition with the Arizona Department of Real Estate.
August 28, 2020
The Office of Administrative Hearings conducts the initial hearing.
September 17, 2020
The Administrative Law Judge (ALJ) issues a decision denying the petition.
Post-Sept 2020
Respondent provides some of the requested documents to the Petitioner. Upon review, Petitioner discovers evidence that the documents had been in the Respondent’s possession prior to her request.
Date Unspecified
Petitioner files a request for rehearing based on newly discovered material evidence.
March 4, 2021
A rehearing is held.
March 24, 2021
The ALJ issues a new decision, reversing the original finding and ruling in favor of the Petitioner.
The Initial Hearing: Petition Denied
The initial hearing on August 28, 2020, focused on whether the Respondent had violated its statutory obligation to provide records.
Petitioner’s Allegation
The Petitioner’s case was based on her formal request for records on April 29, 2020, and the Respondent’s failure to produce any documents. Her petition stated:
“After repeated attempts since the beginning of this year to get information, on April 29, 2020 I emailed Associa Arizona and the Board of Directors of Park Scottsdale II formally requesting records per ARS 33-1258 and to date, May 25, 2020, I have not received anything.”
Respondent’s Defense
The Respondent’s primary defense was that it could not provide documents that were not in its possession.
• Withheld Records: Joseph Silberschlag, Secretary of the Board of Directors, testified that due to ongoing issues with the former management company (CMC), neither the association nor Associa had possession of many documents, including previous financial records.
• Inability to Create Documents: Mr. Silberschlag stated that without the starting balances from CMC, it was not possible to create current financial statements.
• No Obligation to Create: The Respondent argued it was “under no statutory obligation to create documents to respond to Petitioner’s request.”
Ruling and Rationale
The ALJ sided with the Respondent in the initial decision. The judge noted that while there was no dispute that the documents were not provided within the 10-day statutory period, the Petitioner had not provided any authority showing the Respondent was required to create a document responsive to her request. The ruling concluded:
“Respondent did not have possession of any of the documents requested at the time of Petitioner’s request… Thus, Petitioner failed to establish by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A).”
The petition was subsequently denied on September 17, 2020.
The Rehearing: Decision Reversed
A rehearing was granted after the Petitioner discovered that, contrary to the testimony at the initial hearing, the Respondent had possessed several of the requested documents. The rehearing on March 4, 2021, introduced new evidence that fundamentally changed the outcome of the case.
New Evidence and Testimony
The Petitioner presented evidence focusing on three categories of documents she had requested:
• Bank Statements: Petitioner testified that bank statements she received after the initial hearing showed they had been sent to Associa starting in August 2019. Evelyn Shanley, Community Director for Associa, testified that the statements were sent to a national office in Richardson, Texas, and admitted she did not contact that office to obtain them in response to the Petitioner’s request.
• Contracts: Petitioner received two contracts signed by board members on March 27 and March 31, 2020, which were in existence prior to her request. Ms. Shanley admitted these were not provided because the board members had not given them to Associa.
• 1099s: Petitioner noted a document indicating four vendors were eligible for 1099s for 2019. Ms. Shanley denied that any 1099s had been issued.
Respondent’s Evolved Arguments
Faced with the new evidence, the Respondent’s arguments shifted:
• “Immediate Possession”: Counsel argued that the requested documents were not in the “immediate possession” of Associa’s local office.
• Concession on Bank Statements: During closing arguments, Respondent’s counsel acknowledged that “‘one could concede’ the bank statements located in Richardson, Texas were in the possession of Associa and should have been provided to Petitioner in response to her request.”
• Mootness and Penalties: Counsel argued the matter was now moot because the documents had been provided. It was further argued that a civil penalty was inappropriate because the Petitioner did not specifically request one on her initial petition form.
Final Ruling and Rationale
The ALJ found the new evidence compelling and decisive.
• Direct Contradiction: The ruling stated that “the evidence presented during the rehearing was directly contradictory” to the representation made at the initial hearing that Respondent did not have possession of the documents.
• Violation Established: The ALJ concluded that the Petitioner successfully “established by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A).”
• Authority for Civil Penalty: The ALJ firmly rejected the Respondent’s argument against a civil penalty. The decision cited A.R.S. § 32-2199.02, noting that the plain language of the statute grants the judge the authority to levy a penalty for established violations. The judge wrote, “Nothing in the statute limits the available remedies to those specifically requested by a petitioner.”
Final Order and Penalties
Given the established violation, the ALJ found that a civil penalty was appropriate. The final order, issued March 24, 2021, mandated the following actions by the Respondent within 30 days of the decision’s mailing date:
1. Reimbursement of Filing Fee: Pay the Petitioner, Nancy L. Babington, her filing fee of $500.00.
2. Payment of Civil Penalty: Pay the Arizona Department of Real Estate a civil penalty of $2,500.00.
Study Guide: Babington v. Park Scottsdale II Townhouse Corporation
This study guide provides a comprehensive review of the administrative case Nancy L. Babington vs. Park Scottsdale II Townhouse Corporation. It covers the initial hearing, the subsequent rehearing, the key arguments presented by both parties, and the final legal outcome. The materials are designed to test and deepen understanding of the case’s facts, legal principles, and timeline.
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Short-Answer Quiz
Instructions: Answer the following questions in two to three complete sentences, using only information provided in the case documents.
1. What specific Arizona statute did Petitioner Nancy L. Babington allege that the Respondent, Park Scottsdale II Townhouse Corporation, had violated?
2. What was the Respondent’s primary defense during the initial hearing for not providing the requested documents within the statutory timeframe?
3. What was the official outcome of the first Administrative Law Judge Decision issued on September 17, 2020?
4. On what legal grounds did the Petitioner successfully request a rehearing of the case?
5. What new evidence regarding the requested bank statements was introduced during the rehearing?
6. How did the Respondent’s management company, Associa Arizona, explain its failure to produce the two contracts signed in March 2020?
7. What was the Respondent’s counsel’s argument at the rehearing for why a civil penalty should not be levied?
8. How did the Administrative Law Judge counter the Respondent’s argument regarding the imposition of a civil penalty?
9. What two financial penalties were included in the final order issued on March 24, 2021?
10. What is the standard of proof the Petitioner was required to meet, and what is its definition according to the case file?
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Answer Key
1. The Petitioner alleged that the Respondent had violated A.R.S. Title 33, Chapter 16, Section 33-1258. This statute requires a condominium owners association to make its financial and other records reasonably available for examination by any member within ten business days of a request.
2. During the initial hearing, the Respondent argued that it was unable to provide the documents because they were not in its possession. This was attributed to a financial disagreement with its former management company, Community Management & Consulting (CMC), which was withholding records.
3. The first decision, issued on September 17, 2020, was in favor of the Respondent. The Administrative Law Judge denied the Petitioner’s petition, concluding she had failed to establish by a preponderance of the evidence that the Respondent violated the statute, as it was not required to create or provide documents it did not possess.
4. A rehearing was granted based on the Petitioner’s claim of “newly discovered material evidence that could not with reasonable diligence have been discovered and produced at the original hearing.” After the initial ruling, the Respondent provided some documents, which revealed that it had, in fact, been in possession of them prior to the Petitioner’s formal request.
5. During the rehearing, it was revealed that bank statements were being sent to Associa’s national central office in Richardson, Texas, starting in August 2019. An Associa representative admitted that the local office never contacted the central office to obtain these statements in response to the Petitioner’s request.
6. Associa’s representative, Evelyn Shanley, admitted that two signed contracts existed but had not been provided to the Petitioner. She stated this was because the members of the Board of Directors who signed them had not yet provided the contracts to Associa.
7. The Respondent’s counsel argued that a civil penalty was not appropriate because the Petitioner did not specifically request one by checking the corresponding box on the initial petition. Counsel asserted that the rehearing process was not designed for the Petitioner to change the relief requested.
8. The Judge rejected the Respondent’s argument, stating it was an erroneous interpretation of A.R.S. § 32-2199.02. The Judge clarified that the plain language of the statute allows the Administrative Law Judge to levy a civil penalty for established violations, and nothing in the statute limits available remedies to only those specifically requested by a petitioner.
9. The final order required the Respondent to pay the Petitioner her filing fee of $500.00. Additionally, the Respondent was ordered to pay a civil penalty of $2,500.00 to the Arizona Department of Real Estate.
10. The required standard of proof was a “preponderance of the evidence.” The case document defines this as “Evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.”
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Essay Questions
Instructions: The following questions are designed for essay-style responses. Formulate a comprehensive argument using only the evidence and legal reasoning presented in the source documents.
1. Analyze the concept of “possession” as it applied to the association’s records in this case. How did the distinction between Associa’s local Arizona office and its national central office in Texas impact the initial ruling versus the outcome of the rehearing?
2. Trace the evolution of the Respondent’s legal arguments from the first hearing to the second. Discuss the strengths and weaknesses of their positions at each stage, including the “mootness” argument, and explain why their defense ultimately failed.
3. Discuss the legal standard of “preponderance of the evidence.” How did the Petitioner fail to meet this standard in the initial hearing but succeed in the rehearing? Use specific examples of evidence related to the bank statements and contracts to support the analysis.
4. Examine the role and authority of the Administrative Law Judge in this case, particularly concerning the decision to grant a rehearing and the authority to levy a civil penalty even when not explicitly requested by the petitioner.
5. Evaluate the significance of A.R.S. § 33-1258 for condominium owners. Using the facts of this case, explain the rights it grants to members and the obligations it places on associations and their management companies regarding record-keeping and transparency.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions and orders. In this case, the ALJ was Tammy L. Eigenheer.
A.R.S. § 33-1258
The specific Arizona Revised Statute that requires condominium associations to make all financial and other records reasonably available for examination by a member within ten business days of a request.
Associa Arizona (Associa)
The management company hired by Park Scottsdale II Townhouse Corporation after the termination of the previous management agreement. Associa was responsible for handling the Petitioner’s records request on behalf of the association.
Civil Penalty
A monetary penalty levied by a government agency or administrative judge for a violation of a statute or regulation. In this case, a $2,500 penalty was levied against the Respondent for violating A.R.S. § 33-1258.
Community Management & Consulting, LLC (CMC)
The previous management company for Park Scottsdale II Townhouse Corporation. CMC terminated its agreement in 2019 and was withholding records from the association due to a financial disagreement.
Department of Real Estate
The Arizona state agency with jurisdiction to hear disputes between property owners and condominium owners associations. The Petitioner filed her initial petition with this department.
HOA Dispute Rehearing Request
The formal request filed by the Petitioner with the Department of Real Estate to have the case reheard. It was granted based on the discovery of new material evidence.
Petitioner
The party who files a petition initiating a legal action. In this case, the Petitioner was Nancy L. Babington, a member of the condominium association.
Preponderance of the Evidence
The standard of proof required in this administrative hearing. It is defined as evidence that is more convincing and shows that the fact sought to be proved is more probable than not.
Respondent
The party against whom a petition is filed. In this case, the Respondent was Park Scottsdale II Townhouse Corporation, the condominium owners association.
She Sued Her HOA and Lost. What Happened Next Reversed Everything: 4 Lessons from a Homeowner’s Fight for Records
For too many homeowners, the Homeowner’s Association is a black box. Simple requests for financial records or board contracts—information you are legally entitled to—are met with delays, excuses, or outright silence. This isn’t just an annoyance; it’s an abuse of power that can leave residents feeling helpless against a secretive body that controls their property and their money. But what happens when one homeowner refuses to accept the stonewalling?
The case of Nancy L. Babington versus her Scottsdale, Arizona HOA provides a powerful playbook for fighting back. Documented in public legal records, her journey began with a standard request for records, escalated to a legal petition that she initially lost, and ended with a stunning reversal that holds critical lessons for every homeowner in America. Her fight demonstrates how persistence, diligence, and an understanding of the law can turn a seemingly hopeless situation into a victory for transparency.
Here are the four essential lessons from her successful battle for accountability.
1. Lesson One: An Initial Loss Isn’t the Final Word
Nancy Babington’s initial petition against her HOA was denied. At the first hearing on August 28, 2020, the HOA presented a seemingly plausible defense: they couldn’t provide the records because of an ongoing dispute with a former management company, CMC, which they claimed was withholding the documents.
The judge sided with the HOA. In a decision issued on September 17, 2020, the judge ruled against Babington, stating she had not sufficiently proven her case. The official ruling found she “failed to establish by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A).” For most people, this would have been the end of the story.
But then the HOA made a critical, almost theatrical, miscalculation. After their victory, they provided Babington with some of the documents she had requested. As she reviewed them, she discovered the bombshell: the records proved the HOA had possessed crucial documents like bank statements and signed board contracts all along. These documents had nothing to do with the former management company, CMC, making the HOA’s initial defense appear to be a deliberate misdirection. This was the “newly discovered material evidence” she needed. The homeowner turned the HOA’s own actions against them, securing a rehearing on March 4, 2021, that would unravel their entire case.
2. Lesson Two: “Possession” Is More Than What’s in the Local Office
During the rehearing, the HOA pivoted to a new excuse, this time concerning bank statements. Their national management company, Associa, had its bank statements sent to a central office in Richardson, Texas. Because the records weren’t physically in the local Arizona office, the HOA argued they were not in their “immediate possession” and therefore not subject to the production deadline.
Under questioning, the Community Director, Evelyn Shanley, admitted she never even contacted the Texas office to get the statements for the homeowner. The HOA’s legal argument rested on the idea that their own corporate geography could shield them from transparency laws.
The judge flatly rejected this logic. An organization is responsible for its own records, no matter where they are stored. The argument was so weak that the HOA’s own lawyer was forced to backpedal during the hearing. The final decision noted:
Counsel acknowledged during closing arguments that “one could concede” the bank statements located in Richardson, Texas were in the possession of Associa and should have been provided to Petitioner in response to her request.
This ruling is a critical precedent: Your HOA cannot hide records in a corporate vault in another state and claim they are out of reach. If the documents belong to the association, they are in its possession, period.
3. Lesson Three: The Board Is the HOA, Not a Separate Entity
The next fight was over two contracts signed by board members in March 2020—documents that were created months after the dispute with the old management company. The excuse for not providing them? The management company claimed the contracts “had not been provided by the members of the Board of Directors to Associa.”
This was an attempt to create a legal fiction—that the Board of Directors and the HOA’s management company are separate entities, and that if the Board withholds a document from its own agent, the HOA can claim ignorance. The court did not buy it. By holding the HOA (the Respondent) responsible for the failure to produce the documents, the judge made it clear that this distinction is invalid.
For the purposes of records law, the Board is the HOA. The lesson is clear: The buck stops with the HOA. Board members cannot play a shell game with documents to evade their legal duty.
4. Lesson Four: Justice Doesn’t Require You to Check the Right Box
Having lost on the facts, the HOA’s counsel made one last-ditch effort to avoid a penalty. They argued that a civil penalty was inappropriate because the petitioner “did not indicate in her petition that she was seeking a civil penalty.” In essence, they claimed that because she hadn’t checked the right box on a form, the judge was powerless to punish them for breaking the law.
The Administrative Law Judge swiftly dismantled this procedural excuse. The judge’s final decision, issued on March 24, 2021, explicitly called out the HOA’s flawed logic:
Respondent erroneously interpreted A.R.S. § 32-2199.02 to require a petitioner to identify the requested relief in the petition when the plain language of the statute provides that the Administrative Law Judge may levy a civil penalty for violations that are established. Nothing in the statute limits the available remedies to those specifically requested by a petitioner.
The final ruling was the tangible consequence of the HOA’s failed arguments and lack of transparency. The judge ordered the HOA to reimburse Babington’s $500 filing fee and levied a separate $2,500 civil penalty payable to the Arizona Department of Real Estate. The message was unmistakable: the law has teeth, and a judge can use them based on the facts, regardless of which boxes were checked on a form.
Conclusion: Knowledge is Power
Nancy Babington’s fight is a masterclass in homeowner advocacy. Her journey from a seemingly hopeless loss to a precedent-setting victory proves that a single resident, armed with facts and relentless persistence, can force an HOA to follow the law. This case affirms that transparency is a legal requirement, not an optional courtesy. It serves as a powerful reminder that while the law is on the side of transparency, it often falls to diligent homeowners to hold their associations accountable.
This case was won because the facts came to light—do you know what your rights are, and what records you’re entitled to see from your own HOA?
Case Participants
Petitioner Side
- Nancy L. Babington (petitioner)
Appeared on her own behalf at both the initial hearing and the rehearing.,
Respondent Side
- Lydia Linsmeier (HOA attorney)
CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Represented Respondent at the initial hearing., - Mark K. Sahl (HOA attorney)
CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Represented Respondent at the rehearing., - Scott B. Carpenter (HOA attorney)
CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Represented Respondent at the rehearing., - Joseph Silberschlag (board member)
Park Scottsdale II Townhouse Corporation
Secretary of the Board of Directors; testified at the initial hearing; also referred to as 'Joe Silberschlag' in the petition request.,,, - Debbie Schumacher (board member)
Park Scottsdale II Townhouse Corporation
Named in Petitioner's record request email., - Marty Shuford (board member)
Park Scottsdale II Townhouse Corporation
Named in Petitioner's record request email., - Angelina Rajenovich (board member)
Park Scottsdale II Townhouse Corporation
Named in Petitioner's record request email., - Dermot Brown (board member)
Park Scottsdale II Townhouse Corporation
Named in Petitioner's record request email., - Lori Nusbaum (board member)
Park Scottsdale II Townhouse Corporation
Named in Petitioner's record request email., - Linda Parker (property manager)
Associa Arizona
Director of Client Services; responded to Petitioner's record requests.,,, - Evelyn Shanley (property manager/witness)
Associa Arizona
Community Director; previously communicated with Petitioner; testified at the rehearing.,,, - Laura Smith (property manager)
Associa Arizona
Previously communicated with Petitioner regarding records.,
Neutral Parties
- Tammy L. Eigenheer (ALJ)
Office of Administrative Hearings - Judy Lowe (Commissioner)
Arizona Department of Real Estate - c. serrano (admin staff)
Transmitted the initial decision.
Other Participants
- Stephen Silberschlag (unknown)
Petitioner requested proof of his liability insurance.,
