Case Summary
| Case ID | 07F-H067005-BFS |
|---|---|
| Agency | Department of Fire, Building, and Life Safety |
| Tribunal | OAH |
| Decision Date | 2007-01-30 |
| Administrative Law Judge | Diane Mihalsky |
| Outcome | yes |
| Filing Fees Refunded | $500.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Scott R. Ketchum | Counsel | — |
|---|---|---|---|
| Respondent | San Marcos Manor Homeowners Association | Counsel | Kristen L. Rosenbeck |
Alleged Violations
CC&Rs Section 3.1, Section 7.7; Architectural Guidelines
Outcome Summary
The ALJ granted the petition, finding that the HOA's refusal to exercise discretion to consider the play structure application (unless lowered to 6 feet) was arbitrary and capricious, as neither the CC&Rs nor Architectural Guidelines contained an absolute prohibition on structures exceeding wall height. The HOA was ordered to process the application properly.
Key Issues & Findings
Arbitrary denial of architectural approval for play structure
The Homeowner installed a 13.5' play structure. The HOA denied approval and refused to exercise discretion to consider the application, citing a 6' wall height limit not explicitly contained in the CC&Rs or Guidelines as an absolute prohibition.
Orders: Respondent is ordered to exercise its discretion under the CC&Rs and Architectural Guidelines to consider Petitioner's request for approval; Respondent must refund the filing fee.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
- CC&Rs Section 1.14
- CC&Rs Section 3.1
- CC&Rs Section 7.7
- Architectural Guidelines (Feb 2001 and April 2006)
Video Overview
Audio Overview
Decision Documents
07F-H067005-BFS Decision – 160975.pdf
Administrative Law Judge Decision: Ketchum v. San Marcos Manor Homeowners Association
Executive Summary
This briefing document summarizes the administrative law proceedings and final decision in the matter of Scott R. Ketchum v. San Marcos Manor Homeowners Association (No. 07F-H067005-BFS). The central conflict involved the HOA’s denial of a 13.5-foot-high backyard play structure and the subsequent imposition of escalating fines.
The Administrative Law Judge (ALJ) determined that while the petitioner was bound by the community’s Covenants, Conditions, and Restrictions (CC&Rs) and required to seek approval for the structure, the HOA acted in an arbitrary and capricious manner. The HOA’s Architectural Committee and Board refused to exercise their discretion, effectively enforcing a categorical height prohibition that did not exist in the governing documents. Consequently, the ALJ ordered the HOA to reconsider the petitioner’s request using proper discretion and to reimburse the petitioner’s filing fees.
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1. Legal and Regulatory Framework
The dispute was governed by the community’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and subsequent Architectural Guidelines.
1.1 Key CC&R Provisions
• Section 1.14 (Improvements): Defines “Improvement” broadly to include buildings, fences, walls, and “all other structures.”
• Section 1.24 (Visibility): Defines “Visible from Neighboring Property” as an object visible to a person six feet tall standing on neighboring property at an elevation no greater than the base of the object.
• Section 3.1 & 3.2: Establishes the Architectural Committee’s authority to adopt rules and standards. It grants the Board the final decision on appeals.
• Section 7.7: Prohibits any improvement or alteration that changes the exterior appearance of a property without prior written approval from the Architectural Committee.
• Section 13.10: Stipulates that by accepting a deed, owners are bound by all provisions, restrictions, and rules of the Association.
1.2 Architectural Guidelines (2001 vs. 2006)
The guidelines evolved during the period of dispute, specifically regarding rear yard improvements:
Feature
February 2001 Guidelines
April 2006 Guidelines
Approval Requirement
Not required for items under 6 feet.
Required for items exceeding wall height.
Playground Equipment
Specifically listed as an example of an item under 6 feet not requiring approval.
Removed from the list of examples under wall height.
General Principle
Discretion of homeowner unless it impacts adjacent property.
Committee approval required for anything exceeding wall height.
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2. Chronology of the Dispute
The conflict began shortly after Scott R. Ketchum purchased his residence in April 2005.
• November 2005: The petitioner installed a “Rainbow Play System” in his backyard. The structure measured 17 feet long, 14.5 feet deep, and 13.5 feet high.
• December 2005: The HOA notified the petitioner that the playset was an unapproved architectural change.
• January – February 2006: The petitioner formally requested approval. The Architectural Committee denied the request, stating that “structures cannot be higher than wall height” (6 feet).
• April – May 2006: The petitioner appealed to the Board, citing that no absolute prohibition on height existed in the CC&Rs. The Board denied the appeal, maintaining the wall-height requirement.
• June 2006: The HOA began a formal fining process. The petitioner offered to add tree screening, but the HOA continued enforcement.
• August 2006: The HOA offered a compromise to allow the structure if it were lowered to within 18 inches of the wall height. The petitioner refused.
• October 2006: The petitioner filed a petition for a hearing with the Arizona Department of Fire, Building, and Life Safety.
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3. HOA Fine Policy and Accrued Costs
The HOA enforced a “Fine Policy Resolution” adopted in April 2006. The escalating fine schedule for the play structure was as follows:
• Initial Notices: Courtesy and Second notices (warnings).
• Third Notice: $25.00 fine.
• Fourth Notice: $50.00 fine.
• Continuing Violations: $100.00 assessed every seven days.
By the time of the hearing on January 11, 2007, the total financial impact claimed by the HOA included:
• Accrued Fines: $2,161.04.
• Attorney’s Fees: $2,651.43.
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4. Evidence and Testimony
4.1 Petitioner’s Arguments
• Oral Assurances: The petitioner testified that the former Community Manager, Dodi Gorski, told him the HOA did not care what was in the backyard as long as neighbors approved.
• Neighbor Support: The petitioner provided letters from neighbors stating the playset did not obstruct their views and was acceptable to them.
• Expert Testimony: Larry Paprocki, an HOA expert, testified that the HOA cannot categorically prohibit improvements higher than 6 feet without amending the CC&Rs. He argued that the absence of written standards for height meant the HOA was creating unwritten rules “as the situation arises.”
4.2 Respondent’s Arguments
• Consistency: The HOA provided records showing they had consistently denied play structure requests exceeding 6 feet for other members since 2000.
• Aesthetics: Photos showed the 13.5-foot structure was more than twice the height of the perimeter fence and was visible from multiple vantage points, featuring redwood and colored canvas that contrasted with the stucco and beige tones of the community.
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5. Conclusions of Law and Final Order
5.1 Judicial Findings
The ALJ reached the following legal conclusions:
1. Contractual Obligation: The petitioner was legally bound by the CC&Rs and was required to seek approval for the structure as it constituted an “improvement.”
2. Unreasonable Reliance: The petitioner’s claim of oral approval from the former manager was deemed unreasonable as it contradicted the plain language of the CC&Rs requiring written approval.
3. Arbitrary and Capricious Conduct: While the HOA had the right to review the structure, its refusal to consider any structure over 6 feet was a failure to exercise discretion. The ALJ noted that neither the CC&Rs nor the Guidelines “absolutely prohibited improvements higher than 6’.”
4. Improper Compromise: The HOA’s later offer to allow a height within 18 inches of the wall was not supported by any specific provision in the CC&Rs or Guidelines.
5.2 The Order
The ALJ issued the following mandates:
• Granting of Petition: The HOA was ordered to exercise its discretion and properly consider the petitioner’s request for approval based on factors such as style, color, and compatibility, rather than an arbitrary height limit.
• Reimbursement: The HOA was ordered to pay the petitioner his filing fee.
• Denial of Fines and Fees: The HOA’s request for accrued fines and attorney’s fees was denied. The ALJ ruled that an administrative proceeding does not constitute an “action” that allows for the awarding of attorney’s fees under Arizona law.
Case Study Analysis: Ketchum v. San Marcos Manor Homeowners Association
This study guide provides a comprehensive review of the administrative law case Scott R. Ketchum v. San Marcos Manor Homeowners Association (No. 07F-H067005-BFS). It examines the legal standards, contractual obligations, and procedural disputes involving architectural control within a master-planned community.
Short-Answer Quiz
Instructions: Answer the following questions in two to three sentences based on the provided source context.
1. How do the CC&Rs define an “Improvement” in the context of San Marcos Manor?
2. What is the specific legal definition of “Visible from Neighboring Property” according to Section 1.24 of the CC&Rs?
3. What were the specific dimensions of the “Rainbow Play System” that Scott Ketchum sought to have approved?
4. What was the basis for the Architectural Committee’s denial of Ketchum’s play structure in January 2006?
5. According to the April 2006 Fine Policy Resolution, what are the steps and monetary penalties for a continuing violation?
6. Why did the Administrative Law Judge (ALJ) determine that Ketchum’s reliance on Dodi Gorski’s alleged oral assurances was not reasonable?
7. What evidence did the HOA provide to demonstrate it had consistently enforced a height restriction on play structures in the past?
8. On what grounds did the ALJ find the HOA Board’s refusal to exercise discretion “arbitrary and capricious”?
9. Why was the HOA’s request for attorney’s fees denied by the Administrative Law Judge?
10. What was the final Order issued by the Administrative Law Judge regarding the play structure?
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Answer Key
1. How do the CC&Rs define an “Improvement” in the context of San Marcos Manor? According to Section 1.14, an “Improvement” includes buildings, roads, driveways, parking areas, fences, walls, rocks, hedges, plantings, and all other structures or landscaping of every type and kind. This broad definition encompasses the play structure at the center of the dispute.
2. What is the specific legal definition of “Visible from Neighboring Property” according to Section 1.24 of the CC&Rs? It means an object is or would be visible to a person six feet tall standing on any part of a neighboring property. This visibility is determined from an elevation no greater than the elevation of the base of the object being viewed.
3. What were the specific dimensions of the “Rainbow Play System” that Scott Ketchum sought to have approved? The schematic diagram provided by Ketchum showed the play system was 17 feet long and 14.5 feet deep. Most significantly, the structure reached a height of 13.5 feet, more than double the height of the six-foot perimeter wall.
4. What was the basis for the Architectural Committee’s denial of Ketchum’s play structure in January 2006? The Committee denied the request because the structure was visible over the perimeter wall. They stated that the Association consistently held to a standard where structures could not be higher than the wall height, and the play structure would need to be modified to meet this requirement.
5. According to the April 2006 Fine Policy Resolution, what are the steps and monetary penalties for a continuing violation? The policy begins with a Courtesy Notice, followed by a Second Notice with a warning, and a Third Notice with a $25 fine. If the violation continues, a Fourth Notice carries a $50 fine, followed by $100 fines assessed every seven days until the violation is resolved.
6. Why did the Administrative Law Judge (ALJ) determine that Ketchum’s reliance on Dodi Gorski’s alleged oral assurances was not reasonable? The ALJ ruled that any oral approval would have contradicted the plain language of the CC&Rs and Architectural Guidelines requiring written submission. Furthermore, such oral assurances were inconsistent with the established course of dealing between Ketchum and the HOA regarding previous architectural approvals.
7. What evidence did the HOA provide to demonstrate it had consistently enforced a height restriction on play structures in the past? The HOA admitted records of three previous requests (Smolkavski, Hack, and Burns) for play sets exceeding six feet, all of which were denied or required modifications. In the Burns case, the HOA even employed legal counsel to demand the removal of an unapproved structure.
8. On what grounds did the ALJ find the HOA Board’s refusal to exercise discretion “arbitrary and capricious”? The ALJ found that neither the CC&Rs nor the Guidelines absolutely prohibited structures higher than six feet; they merely required approval for them. Because the Board refused to even consider the application unless the structure was lowered to a height that required no approval at all, they failed to actually exercise the discretion granted to them.
9. Why was the HOA’s request for attorney’s fees denied by the Administrative Law Judge? The ALJ determined that the HOA was not the prevailing party and that an administrative proceeding does not constitute an “action” under Arizona law for the purpose of awarding attorney’s fees. Additionally, the HOA had not filed a petition for affirmative relief or paid the necessary filing fees to pursue such a claim.
10. What was the final Order issued by the Administrative Law Judge regarding the play structure? The ALJ granted Ketchum’s petition and ordered the HOA to exercise its discretion to properly consider the request for approval based on factors like style and compatibility. The HOA was also ordered to reimburse Ketchum for his administrative filing fee, while all other requests for relief were denied.
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Essay Questions
1. Discretion vs. Prohibition: Analyze the distinction the Administrative Law Judge made between an HOA’s right to require approval for a structure and an HOA’s categorical prohibition of that structure. How did the Board’s “wall-height” standard conflict with the discretionary language of the CC&Rs?
2. Contractual Obligations in Master-Planned Communities: Discuss the legal weight of CC&Rs as a contract between a homeowner and an Association. Using the Ketchum case, explain how the acceptance of a deed binds an owner to these restrictions and what limits exist on the Association’s power to enforce them.
3. The Role of Procedural Fairness: Examine the HOA’s fine and notification process. To what extent did the HOA follow its own “Fine Policy Resolution,” and how did the timeline of these notices impact the legal standing of both parties during the hearing?
4. Architectural Guidelines Evolution: Compare and contrast the February 2001 Architectural Guidelines with the April 2006 revision. Discuss how the removal of “Playground equipment” as an example of an item not requiring approval (if under six feet) influenced the arguments regarding notice and standards.
5. Estoppel and Agency: Evaluate the argument of “estoppel” regarding the oral statements made by the Community Manager. Why is it difficult for a homeowner to claim they relied on oral advice when written CC&Rs and Guidelines are in place?
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Glossary of Key Terms
• Administrative Law Judge (ALJ): A professional presiding officer who hears evidence and makes decisions in disputes involving government agencies or specific statutory petitions.
• Arbitrary and Capricious: A legal standard used to describe a decision made without adequate consideration of the facts, or a failure to exercise honest judgment or discretion.
• Architectural Committee: A body established by the HOA Board to review and approve or deny changes to the exterior appearance of properties within the community.
• Covenants, Conditions, and Restrictions (CC&Rs): A recorded legal document that sets out the rules and restrictions for a planned community, which are binding on all property owners.
• Declarant: The developer or entity that originally established the community and recorded the CC&Rs.
• Estoppel: A legal principle that prevents a party from arguing something or asserting a right that contradicts what they previously said or agreed to by law.
• Improvement: Broadly defined in this case to include any building, structure, wall, or landscaping that alters the exterior appearance of a property.
• Preponderance of the Evidence: The burden of proof in civil and administrative cases, requiring that a fact is “more probably true than not.”
• Remand: To send a case or a specific issue back to a lower tribunal or committee (in this case, the Architectural Committee) for further action.
• Visible from Neighboring Property: A standard of visibility based on a six-foot-tall person standing at a neighboring property’s elevation.| Item | Height/Standard | Status | | :— | :— | :— | | Perimeter Wall | 6 Feet | Baseline for approval | | Ketchum Play System | 13.5 Feet | Denied/Remanded | | Items under 6 feet | < 6 Feet | No approval required | | HOA Proposed Compromise | Within 18 inches of wall | Refused by Petitioner |
Beyond the Backyard Battle: 5 Surprising Lessons from a $4,000 Swing Set Dispute
The HOA Nightmare You Never Expected
Imagine the excitement of a young family moving into a new home in a master-planned community. With three children ages five to nine, Scott Ketchum and his wife did what many parents do: they invested in a high-quality Rainbow Play System for their backyard. Built of natural redwood and designed for a lifetime of play, the 13.5-foot structure was meant to be a family sanctuary. Instead, it became the centerpiece of a multi-year “David vs. Goliath” legal war against the San Marcos Manor Homeowners Association.
As a legal journalist covering residential governance, I’ve seen many HOAs overreach, but Scott Ketchum vs. San Marcos Manor HOA is a masterclass in how an entrenched Board can turn a minor architectural detail into a high-stakes financial battle. What started as a “Friendly Reminder” ended in an Administrative Law Judge (ALJ) ruling that exposed the limits of HOA power.
The Danger of “The Manager Said It Was Fine”
One of the most common traps for homeowners is relying on the verbal word of community management. Mr. Ketchum testified that he consulted the former manager, Dodi Gorski, in October 2005. According to Ketchum, she gave him a classic “green light,” stating the association didn’t care what was in the backyard as long as the neighbors approved.
The trouble started on December 28, 2005, when the HOA sent a violation notice for the “unapproved” structure. While Ketchum felt he had permission, he was fighting against the ironclad text of Section 7.7 of the CC&Rs, which requires written approval before any structure is “commenced, erected, or maintained.” The ALJ eventually ruled that relying on hearsay was “not reasonable,” as oral assurances cannot override the written law of the community.
The “Wall Height” Myth and the Goliath Mentality
The HOA’s primary weapon was the “Wall Height Myth.” The Board argued that because the play system was taller than the 6-foot perimeter wall, it was automatically prohibited under the “Visible from Neighboring Property” definition (Section 1.24).
However, a Legal Expert looking at the evolution of the rules sees a tightening of the noose. The 2001 Architectural Guidelines (Finding 4) specifically listed “playground equipment” as an example of items under 6 feet not requiring approval. By the April 2006 revision (Finding 5), the Board had scrubbed that example. This subtle shift highlighted a Board determined to enforce a blanket ban that wasn’t actually in the written rules.
“Requires Approval” vs. “Prohibited” The guidelines only stated that items over 6 feet require approval—not that they are banned. Ketchum wasn’t the first victim of this rigid interpretation; the record shows the Board had previously used this “wall height” logic to deny homeowners like the Smolkavskis, the Hacks, and the Burnses. This wasn’t just about one swing set; it was about a Board enforcing an unwritten rule to maintain a “clean” skyline at all costs.
When Enforcement Becomes “Arbitrary and Capricious”
The “smoking gun” in this case was the Board’s refusal to actually exercise the discretion they claimed to have. Internal emails revealed the “Goliath” mentality: Board member Elliott Shapero admitted that while backyards were generally out of their jurisdiction, they had to enforce the play-structure ban “as we have in the past,” despite it being “against our guidelines.”
The irony was peak bureaucracy: the Board repeatedly told Ketchum they would only consider his application if he lowered the structure to 6 feet. As the ALJ pointed out in Conclusion of Law #8, if the structure were 6 feet tall, Ketchum wouldn’t have needed the Board’s approval in the first place. By demanding he “undo” the height that triggered their review, the Board effectively refused to perform the very review the CC&Rs required.
The Math of a Play Structure: A Financial David vs. Goliath
HOA disputes can become a financial black hole with terrifying speed. By the time this case reached a hearing, the “fine clock” had turned a backyard toy into a $4,800 liability. Here is the breakdown of the potential costs Ketchum faced:
• Initial Fines (3rd and 4th Notices): $75.00
• Escalating Weekly Fines ($100/week): $2,086.04
• Total Accrued Fines: $2,161.04
• HOA Attorney’s Fees: $2,651.43
• Total Financial Liability: $4,812.47
In a massive win for the “little guy,” the ALJ denied the HOA’s claim to collect these fees and fines. Because the Board failed to follow proper procedures and acted arbitrarily, they lost their right to the $4,800 payday. This is a crucial lesson: the “Goliath” doesn’t always get to collect the bill for its own legal overreach.
The “Remand” Reality Check and the Power of Expertise
To win this battle, Ketchum brought in professional firepower: expert witness Larry Paprocki, a community management veteran. Paprocki testified that an HOA cannot categorically prohibit structures that the CC&Rs merely require them to “review.” His expertise helped prove that the Board was acting outside of industry standards.
Despite the victory, Ketchum faced the “Remand Reality Check.” In administrative law, winning doesn’t always mean a permanent “yes.” The ALJ issued a remand, which is essentially a “fair second chance.” The court ordered the HOA to go back and actually do its job: review the application based on design, color, and compatibility, rather than just pointing at a 6-foot wall and saying “no.”
Conclusion: Who Rules the Backyard?
The Ketchum case is a stark reminder that an HOA is not a kingdom; it is a governed entity bound by the specific text of its own rules. While the Board may want a perfectly uniform horizon, they cannot invent prohibitions that do not exist in the CC&Rs.
For homeowners, the lessons are clear: Get it in writing, know your guidelines better than the Board does, and don’t be afraid to call out “arbitrary” enforcement. In the ongoing battle between community aesthetics and the right of a family to enjoy their own property, the law requires more than just a 6-foot rule—it requires actual fairness. In the end, we must ask: where should the line be drawn between a clean skyline and a child’s right to play?
Case Participants
Petitioner Side
- Scott R. Ketchum (petitioner)
Homeowner
Appeared on his own behalf - Krista Kay (homeowner)
Petitioner's wife - Eric Rel (witness)
Neighbor
Provided letter supporting Petitioner - Larry Paprocki (expert witness)
Purported expert on HOAs
Respondent Side
- Kristen L. Rosenbeck (HOA attorney)
Mulcahy Law Firm, P.C. - Dodi Gorski (property manager)
San Marcos Manor HOA
Former Community Manager - John Wahman (property manager)
Planned Development Services
Replaced Ms. Gorski; Witness for HOA - Luci Crackau (committee member)
Architectural Committee - Elliott Shapero (committee member)
Architectural Committee - Bob J. McCullough (attorney)
Former attorney for HOA (2003)
Neutral Parties
- Diane Mihalsky (ALJ)
Office of Administrative Hearings - Robert Barger (director)
Department of Fire Building and Life Safety
Agency Director listed on distribution - Joyce Kesterman (agency staff)
Department of Fire Building and Life Safety
Listed on distribution
Other Participants
- Kevin Smolkavski (homeowner)
Mentioned in evidence regarding past architectural requests - Jennifer Smolkavski (homeowner)
Mentioned in evidence regarding past architectural requests - Thomas Hack (homeowner)
Mentioned in evidence regarding past architectural requests - Michael Burns (homeowner)
Mentioned in evidence regarding past architectural requests - Caroline Burns (homeowner)
Mentioned in evidence regarding past architectural requests
