Case Summary
| Case ID |
07F-H067035-BFS |
| Agency |
DFBLS |
| Tribunal |
OAH |
| Decision Date |
2007-09-06 |
| Administrative Law Judge |
Michael K. Carroll |
| Outcome |
yes |
| Filing Fees Refunded |
$550.00 |
| Civil Penalties |
$0.00 |
Parties & Counsel
| Petitioner |
William M. Brown |
Counsel |
— |
| Respondent |
Terravita Community Association, Inc. |
Counsel |
Kristina L. Pywowarczuk, Lynn M. Krupnik |
Alleged Violations
A.R.S. § 33-1812(A)
Outcome Summary
The ALJ ruled in favor of the Petitioner, determining that the HOA's delegate voting system for Board elections constituted a proxy system prohibited by A.R.S. § 33-1812(A). The Respondent was ordered to comply with the statute and reimburse the Petitioner's filing fee.
Key Issues & Findings
Prohibition against proxy voting (Delegate System)
Petitioner alleged that the Respondent's system of electing Board members via neighborhood 'voting delegates' violated A.R.S. § 33-1812(A), which prohibits votes cast pursuant to a proxy. The ALJ found that the delegate system effectively removed voting rights from individual members and functioned as a proxy, violating the statute.
Orders: Respondent ordered to abide by A.R.S. § 33-1812(A); Respondent ordered to reimburse Petitioner's $550 filing fee.
Filing fee: $550.00, Fee refunded: Yes
Disposition: petitioner_win
Cited:
- A.R.S. § 33-1812
- A.R.S. § 10-3101
- A.R.S. § 10-3724
Decision Documents
07F-H067035-BFS Decision – 175608.pdf
Uploaded 2026-01-25T15:20:41 (93.5 KB)
Briefing Doc – 07F-H067035-BFS
Briefing Document: Legal Implications of Delegate Voting in Planned Communities (Brown v. Terravita)
Executive Summary
The following document provides a synthesis of the legal findings in the case of William M. Brown vs. Terravita Community Association, Inc. (No. 07F-H067035-BFS). The central conflict of the case was whether a “delegate” system of representative governance in a homeowners’ association (HOA) violates Arizona Revised Statutes (A.R.S.) §33-1812(A), which prohibits the use of proxy voting.
The Administrative Law Judge (ALJ) concluded that Terravita’s delegate system functioned as a proxy by substituting the discretion of a few representatives for the direct voting rights of the membership. The ruling established that such systems circumvent legislative intent to minimize fraud and maximize member participation, effectively disenfranchising the vast majority of association members. The Respondent was ordered to cease these practices and align with state statutes requiring direct member voting via in-person or absentee ballots.
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Background and Organizational Structure
Terravita Community Association is a planned community comprised of 1,380 homes and residential lots. Its governance is dictated by its Declaration of Covenants, Conditions, and Restrictions (“Declaration”), Articles of Incorporation, and By-Laws.
The Neighborhood Delegate System
The Association’s governing documents established a tiered voting structure:
• Geographic Divisions: The community is divided into 22 distinct neighborhoods.
• Election of Delegates: Each neighborhood elects one “voting delegate” and one “alternate voting delegate” annually.
• Member Rights: Association members (lot owners) are entitled to one vote per lot owned, but their voting rights are restricted to the selection of these delegates.
• Delegate Discretion: Once elected, delegates cast votes in all elections—including those for the Board of Directors—as they “deem appropriate in [their] sole discretion.”
• Exceptions to Discretion: Delegates only lose this unlimited discretion in specific instances:
1. Instituting litigation.
2. Imposing Special Assessments beyond Declaration limits.
3. Amending the Declaration.
4. Terminating a management agent.
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Core Legal Dispute
The Petitioner, William M. Brown, challenged a May 15, 2007, Board election where 18 voting delegates (representing 1,094 members) elected three new Board members. The Petitioner alleged this system violated A.R.S. §33-1812(A).
The Relevant Statute
A.R.S. §33-1812(A) states:
Arguments Presented
Argument Category
Respondent (Terravita) Position
Administrative Law Judge (ALJ) Position
Definition of Proxy
Delegates are a form of “corporate governance”; proxies are merely a form of “vote delivery.”
A proxy is “one who is authorized to act as a substitute for another.” Delegates are, by definition, substitutes.
Member Rights
Members have no right to vote for the Board under the Declaration; therefore, no right is being “proxied.”
This logic would allow associations to circumvent the law by simply removing all member voting rights.
Risk of Abuse
Delegate systems avoid the fraud (forgery) risks associated with traditional proxies.
Delegate systems create more potential for abuse by disenfranchising members and allowing a small group to control the association.
Contractual Rights
Prohibiting delegates impairs the contractual rights of the Association and its members.
An association is its members; expanding member participation rights does not compromise the interests of the association.
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Detailed Judicial Analysis
The Disenfranchisement Factor
The ALJ found that the delegate system “effectively disenfranchises” almost all members. In the May 2007 election, only 18 out of 1,380 members had a direct say in the Board’s composition.
Under the Bylaws:
• As few as 12 delegates can elect a Board member.
• A candidate opposed by 1,367 members could still be elected if they secure the support of just 12 delegates.
• Political reality dictates a candidate only needs to convince 12 people rather than the broad membership.
Comparison of Traditional Proxies vs. Delegates
The ALJ identified that the delegate system is actually more restrictive than traditional proxy voting, which the legislature sought to ban:
1. Revocability: Traditional proxies are revoked if a member appears at an election or executes a written revocation.
2. Permanent Delegation: Under Terravita’s system, members cannot exercise individual preferences or revoke their vote once a delegate is elected for their one-year term (except through a majority removal petition).
3. Lack of Accountability: Delegates are explicitly not required to vote in accordance with the wishes of the neighborhood majority.
“Distinction Without a Difference”
The Court dismissed the Respondent’s argument that delegates were not proxies because they were the only ones with the “right” to vote. The ALJ noted that this would mean the prohibition against proxies could be bypassed by transferring the voting rights of 1,380 members to a handful of individuals. The ALJ termed the Respondent’s attempts to differentiate the two a “classic ‘distinction without a difference.'”
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Final Decision and Orders
The Office of Administrative Hearings determined that the use of voting delegates violated the clear language and intent of A.R.S. §33-1812(A).
The Order:
• Compliance: Terravita Community Association, Inc. is ordered to abide by A.R.S. §33-1812(A) and cease casting votes pursuant to a proxy (delegate system).
• Restitution: The Respondent must reimburse the Petitioner for the filing fee of $550.
• Finality: This order is the final administrative decision and is enforceable through contempt of court proceedings.
Study Guide – 07F-H067035-BFS
Study Guide: Brown v. Terravita Community Association, Inc.
This study guide reviews the administrative law case William M. Brown v. Terravita Community Association, Inc. (No. 07F-H067035-BFS). The case centers on the legality of “delegate” voting systems in Arizona homeowners’ associations and whether such systems violate statutory prohibitions against proxy voting.
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Part I: Short-Answer Quiz
Instructions: Answer the following questions in two to three sentences based on the provided source context.
1. What was the primary allegation made by the Petitioner in his challenge against the Terravita Community Association?
2. How is the Terravita Community Association geographically and politically structured for the purpose of elections?
3. According to the Association’s Declaration, what degree of discretion does a “voting delegate” have when casting a vote?
4. What are the few specific exceptions where a delegate’s discretion is limited under the Declaration?
5. What does Arizona Revised Statutes §33-1812(A) state regarding the use of proxies in community associations?
6. How did the Respondent (Terravita) distinguish between “proxies” and “delegates” in its legal argument?
7. How does the revocation of a proxy in a non-profit corporation differ from the removal of a delegate in the Terravita system?
8. What was the Administrative Law Judge’s (ALJ) definition of a “proxy,” and how did it apply to delegates?
9. According to the ALJ’s analysis, how many people could effectively control the outcome of a Board election under the delegate system?
10. What was the final ruling and order issued by the Administrative Law Judge in this case?
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Part II: Answer Key
1. The Petitioner alleged that three members of the Respondent’s Board of Directors were elected using a proxy system that violated A.R.S. §33-1812. He specifically challenged the neighborhood voting delegate system as being a prohibited proxy vote.
2. The Association consists of 1,380 residential lots divided into 22 distinct geographic neighborhoods. Each neighborhood elects one “voting delegate” and one “alternate voting delegate” to represent the members of that neighborhood in Board elections.
3. Once elected, a voting delegate has the authority to cast votes in all elections as they “deem appropriate in [their] sole discretion.” This means they are not legally obligated to vote according to the wishes or interests of the majority of owners in their neighborhood.
4. The Declaration limits delegate discretion only during votes to institute litigation, impose certain Special Assessments, amend the Declaration, or terminate a management agent. For standard Board elections, the delegate maintains full discretionary power.
5. The statute mandates that after the period of declarant control ends, votes allocated to a unit may not be cast via proxy. It requires associations to allow for votes to be cast in person, by absentee ballot, or through other forms of delivery.
6. The Respondent argued that a proxy is a “form of vote delivery” used by a person who holds the right to vote, whereas a delegate is a “form of corporate governance.” They claimed that since individual members have no right to vote for the Board under their documents, no proxy was being used.
7. In non-profit corporations, a proxy is revoked if the member appears at the election or executes a written revocation. In Terravita’s delegate system, members cannot exercise individual preferences or revoke the delegate’s authority for a specific vote once the delegate is elected for their one-year term.
8. The ALJ used Black’s Law Dictionary to define a proxy as “one who is authorized to act as a substitute for another.” The ALJ concluded that because delegates are authorized to act as substitutes for members regarding association votes, they are, by definition, proxies.
9. The ALJ noted that because there are only 22 delegates, as few as 12 individuals could elect a Board member. This system could theoretically allow 12 delegates to override the opposition of the other 1,367 members of the association.
10. The ALJ ordered the Respondent to abide by A.R.S. §33-1812(A), which prohibits votes cast by proxy. Additionally, the Respondent was ordered to reimburse the Petitioner for his $550 filing fee.
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Part III: Essay Questions
Instructions: Use the case facts and legal arguments provided in the source context to develop comprehensive responses to the following prompts.
1. The Conflict of Governance Models: Analyze the Respondent’s argument that the delegate system is a form of “representative government” rather than a “proxy” system. Evaluate why the ALJ found this distinction to be a “distinction without a difference.”
2. Statutory Intent and Consumer Protection: The ALJ referenced the Legislature’s motivation to minimize “fraud and abuse” in association elections. Discuss how the delegate system, as described in the case, potentially increases the risks of disenfranchisement or abuse compared to traditional proxy voting.
3. The Disenfranchisement Argument: Examine the ALJ’s mathematical breakdown of the election results (18 delegates casting votes for 1,094 members). Discuss the implications of a system where a candidate could be elected to a Board despite being opposed by the vast majority of the community members.
4. Contractual Rights vs. Legislative Mandates: The Respondent argued that prohibiting delegate voting would unconstitutionally impair the contractual rights of the Association and its members. Critique this argument using the ALJ’s perspective that the “association is its members.”
5. Defining the Voter: Explore the irony identified by the ALJ in the Respondent’s claim that individual members are not “disenfranchised” because they have no right to vote for Board members under the Association’s Declaration. How does this claim conflict with the requirements of A.R.S. §33-1812(A)?
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Part IV: Glossary of Key Terms
Definition
A.R.S. §33-1812(A)
The Arizona Revised Statute that prohibits votes allocated to a unit from being cast via proxy after the period of declarant control ends.
Administrative Law Judge (ALJ)
The presiding official (in this case, Michael K. Carroll) who hears evidence and issues a decision in a dispute involving state agency regulations.
Absentee Ballot
A method of voting allowed by statute that permits a member to cast their vote without being physically present at a meeting.
Articles of Incorporation
One of the primary governing documents of the Association that establishes its existence as a legal entity.
By-Laws
The rules adopted by the Association for the regulation and management of its affairs.
Declaration (CC&Rs)
The Declaration of Covenants, Conditions, and Restrictions; the legal document that outlines the rules and structure of the planned community.
Declarant Control
A period during which the developer/builder maintains control over the association before it is turned over to the homeowners.
Discretion
The freedom or power of a delegate to make a decision (such as a vote) based on their own judgment rather than a mandate from others.
Disenfranchisement
The deprivation of a right or privilege, specifically the right to vote.
Petitioner
The party who brings a legal petition or claim to the court (in this case, William M. Brown).
A person authorized to act as a substitute for another, particularly for voting purposes.
Respondent
The party against whom a legal petition is filed (in this case, Terravita Community Association, Inc.).
Voting Delegate
A representative elected by a neighborhood within the community to cast the collective votes of that neighborhood in Association matters.
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End of Study Guide
Blog Post – 07F-H067035-BFS
Case Summary: William M. Brown v. Terravita Community Association, Inc. Case No. 07F-H067035-BFS
Hearing Details The hearing was held on August 9, 2007, before Administrative Law Judge Michael K. Carroll at the Office of Administrative Hearings in Phoenix, Arizona1,2. The dispute involved Petitioner William M. Brown, a lot owner, and Respondent Terravita Community Association, Inc., a planned community consisting of 1,380 homes1,3.
Key Facts and Background Terravita is divided into 22 neighborhoods. Under its governing documents, members in each neighborhood elect a “voting delegate” rather than voting directly for the Board of Directors3,4. These delegates possess sole discretion to cast votes in Board elections on behalf of the neighborhood5.
On May 15, 2007, the Association held an election for three Board positions. Eighteen voting delegates cast votes representing 1,094 members6. Following this election, the Petitioner filed a challenge alleging that this “delegate” system constituted voting by proxy, which is prohibited by Arizona state law2,7.
Legal Issue The central legal issue was whether a “delegate” form of representative government violates A.R.S. §33-1812(A), which states that “votes allocated to a unit may not be cast pursuant to a proxy”7,8.
Key Arguments
• Petitioner’s Position: The Petitioner argued that the neighborhood voting delegate system functions as a proxy vote, thereby violating the statutory prohibition7.
• Respondent’s Position: The Association argued that delegates are not proxies. They contended that proxies are a form of “vote delivery,” whereas delegates represent a form of “corporate governance”9. Furthermore, the Association argued that under their documents, individual owners have no right to vote for the Board directly, meaning there was no individual vote to be cast by proxy in the first place10. They also claimed that ruling against the delegate system would impair contractual rights11.
Tribunal Analysis and Findings The Administrative Law Judge rejected the Association’s arguments, providing the following legal analysis:
1. Definition of Proxy: Citing Black’s Law Dictionary, the ALJ defined a proxy as one authorized to act as a substitute for another. Because delegates are authorized to act as substitutes for groups of members, the ALJ determined they are, by definition, proxies9,12.
2. Disenfranchisement: The ALJ noted that the delegate system creates a “unique form of proxy” that is more restrictive than traditional proxies. Unlike standard proxies, which can be revoked by the member, Terravita members cannot revoke their delegation or exercise individual preference once a delegate is elected13. The system effectively disenfranchised 1,362 of the 1,380 members in the Board election, allowing as few as 12 delegates to decide the outcome14.
3. Legislative Intent: The ALJ found that the Association’s argument—that members technically have no vote to proxy—was an attempt to circumvent the Legislature’s intent to prohibit proxies and prevent fraud15,16.
4. Contractual Rights: The ALJ dismissed the claim regarding impairment of contract, noting that an association is its members, and requiring membership-wide voting does not compromise the association’s rights17.
Final Decision and Order The ALJ ruled that the voting delegate system creates a “distinction without a difference” and that delegates are proxies18. Consequently, the use of delegates violates the clear language of A.R.S. §33-1812(A)18.
Outcome:
• The Respondent was ordered to abide by A.R.S. §33-1812(A), prohibiting votes cast pursuant to a proxy18.
• The Respondent was ordered to reimburse the Petitioner’s filing fee of $55019.
The decision was issued on September 6, 200719.
Case Participants
Petitioner Side
- William M. Brown (petitioner)
Lot owner and member of Association
Respondent Side
- Kristina L. Pywowarczuk (Respondent Attorney)
Ekmark & Ekmark, LLC
- Lynn M. Krupnik (Respondent Attorney)
Ekmark & Ekmark, LLC
- Quentin T. Phillips (Respondent Attorney)
Ekmark & Ekmark, LLC
Listed in mailing distribution
Neutral Parties
- Michael K. Carroll (ALJ)
Office of Administrative Hearings
- Robert Barger (Agency Official)
Department of Fire Building and Life Safety
H/C (Hearing Coordinator or similar)
- Joyce Kesterman (Agency Official)
Department of Fire Building and Life Safety
