Case Summary
| Case ID | 20F-H2020053-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2021-02-10 |
| Administrative Law Judge | Adam D. Stone |
| Outcome | none |
| Filing Fees Refunded | $0.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Erik R. Pierce | Counsel | James C. Frisch |
|---|---|---|---|
| Respondent | Sierra Morado Community Association | Counsel | Nicholas C.S. Nogami and Heather M. Hampstead |
Alleged Violations
Article 11, Section 11.1
Outcome Summary
The Administrative Law Judge denied the petition, concluding that the Respondent HOA did not violate CC&R Section 11.1 because that section grants the Board discretion, rather than a mandatory obligation, in the timing of enforcement actions.
Why this result: The Petitioner failed to meet the burden of proof to establish that the Respondent violated CC&R Section 11.1, as the ALJ found the Board's decision to temporarily delay enforcement pending litigation and settlement discussions fell within the discretion granted by the CC&R.
Key Issues & Findings
Failure of HOA to Enforce Architectural Approval Conditions (Hot Tub Screening)
Petitioner alleged that the HOA failed to enforce the mandatory installation of a pergola and screening around a neighbor's hot tub, a condition imposed by the Architectural Review Committee when retroactively approving the installation.
Orders: Petitioner's petition is denied.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
- A.R.S. § 32-2199(B)
- A.A.C. R2-19-119(A)
- A.A.C. R2-19-119(B)(1)
- CC&R Article 11, Section 11.1
- CC&R Article 4, Section 4.27
Analytics Highlights
- A.R.S. § 32-2199(B)
- A.R.S. § 32-2199.02(B)
- A.R.S. § 32-2199.04
- A.R.S. § 41-1092.07(G)(2)
- A.R.S. § 41-1092.09
- A.A.C. R2-19-119(A)
- A.A.C. R2-19-119(B)(1)
- A.A.C. R2-19-119(B)(2)
- CC&R Article 4, Section 4.27
- CC&R Article 11, Section 11.1
- Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)
- MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
- BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999)
Video Overview
Audio Overview
Decision Documents
20F-H2020053-REL Decision – 850237.pdf
20F-H2020053-REL Decision – 850239.pdf
20F-H2020053-REL Decision – 853778.pdf
Administrative Hearing Briefing: Pierce v. Sierra Morado Community Association
Executive Summary
This briefing synthesizes the key findings and judicial decision in the administrative case of Erik R. Pierce versus the Sierra Morado Community Association (SMCA), Case No. 20F-H2020053-REL. The petition, filed by homeowner Erik R. Pierce, was ultimately denied by the Administrative Law Judge on February 10, 2021.
The core of the dispute was Pierce’s allegation that the SMCA failed to enforce its Covenants, Conditions, and Restrictions (CC&Rs) against his neighbors, the Kinstles, who installed a hot tub visible from Pierce’s property, creating a privacy violation. While the SMCA Board retroactively approved the hot tub, it did so with the explicit condition that a pergola and screening be installed to mitigate the visibility issue. The Kinstles subsequently failed to install the required screening.
The judge concluded that the SMCA’s conditional approval resolved the initial violation claim under CC&R Section 4.27. The central issue then became whether the SMCA’s subsequent failure to compel the installation of the screening constituted a violation of its enforcement duty under CC&R Section 11.1. The judge ruled that it did not, finding that the CC&Rs grant the Association a discretionary right to enforce its rules, not an absolute obligation. The judge found persuasive the SMCA’s testimony that it delayed enforcement actions due to the ongoing litigation and in an attempt to foster a settlement between the neighbors. This exercise of discretion was deemed permissible under the Association’s governing documents.
1. Case Overview
Parties and Legal Representation
Entity
Legal Counsel
Petitioner
Erik R. Pierce
James C. Frisch, Esq. & Michael Resare, Esq. (King & Frisch, P.C.)
Respondent
Sierra Morado Community Association (SMCA)
Heather M. Hampstead, Esq. & Nicholas C.S. Nogami, Esq. (Carpenter, Hazlewood, Delgado & Bolen, LLP)
Key Case Details
• Case Number: 20F-H2020053-REL
• Presiding Judge: Adam D. Stone, Administrative Law Judge
• Hearing Date: January 25, 2021 (conducted via Google Meet)
• Decision Date: February 10, 2021
• Jurisdiction: The Arizona Department of Real Estate (ADRE) is statutorily authorized to hear petitions from homeowners’ association members. This case was referred by the ADRE to the Office of Administrative Hearings for an evidentiary hearing.
2. Core Dispute and Allegations
Petitioner’s Complaint
On March 23, 2020, Erik R. Pierce filed a complaint with the ADRE alleging that the SMCA was in violation of its own CC&Rs, specifically Sections 4.27 (Swimming Pools and Spas) and 11.1 (Enforcement).
The dispute originated with the installation of a hot tub by Pierce’s neighbors, the Kinstles. Pierce testified that the hot tub and its occupants were visible from inside his house, and that occupants of the hot tub could look directly into his home, violating his right to privacy.
Timeline of Key Events
• September 4, 2019: Pierce submits his initial complaint to the SMCA, noting the hot tub’s visibility and asserting that the Kinstles had failed to obtain prior approval from the Architectural Review Committee (ARC).
• Post-September 2019: The SMCA informs the Kinstles that they installed the hot tub without approval and directs them to submit plans for the proper approval process.
• February 10, 2020: After several rejections, the SMCA Board approves the Kinstles’ hot tub installation on the condition that a pergola and screening are installed.
• March 3, 2020: Pierce receives a letter from the property management company, AAM, LLC, stating that the installation was approved with the screening requirement and that the complaint was closed.
• January 25, 2021: At the time of the hearing, the Kinstles had still not installed the required pergola and screening.
3. Analysis of Key Testimonies
The decision was informed by testimony from four witnesses presented by the Petitioner.
• Erik R. Pierce (Petitioner): Outlined the timeline of the dispute, the visibility of the neighbors’ hot tub, the resulting privacy violation, and the SMCA Board’s failure to enforce its own conditional approval requiring a pergola and screening.
• Bill Oliver (Former SMCA President, Fall 2019 – April 2020): Confirmed that the Board approved the hot tub retroactively with the stipulation for a pergola and screening. He stated the Board had a “rigorous process of enforcement” but could not recall if a specific violation letter was sent to the Kinstles after the conditional approval was granted.
• Jodie Cervantes (Former Community Manager, 2019 – June 2020): Testified that she believed the CC&Rs were enforced and the matter was closed. She suggested the Kinstles had a six-month period to comply with the screening requirement, which she believed was in the Design Guidelines, but could not point to the specific language.
• Martin Douglas (Current SMCA President, from April 2020): Stated he had been to the Pierce residence for another matter and the hot tub was not visible to him. He attributed the lack of enforcement action to the “ongoing litigation and multiple settlement offers which were being exchanged.” He testified that upon resolution of the case, the Board “will follow through with enforcement actions should the Kinstle’s fail to comply.”
4. Judicial Reasoning and Decision
The Administrative Law Judge’s decision centered on the interpretation of the SMCA’s CC&Rs and the discretionary power of its Board.
Governing CC&R Provisions
The ruling rested on the specific language of two sections of the SMCA CC&Rs:
• Section 4.27 (Swimming Pools and Spas): This section permits the installation of a hot tub only if it is “properly screened… if neither it nor its occupants are Visible from Neighboring Property, and with the prior written approval of the Architectural Review Committee.”
• Section 11.1 (Enforcement): This section states that “The Association or any Owner shall have the right to enforce the Project Documents… The failure of the Association or an Owner to take enforcement action with respect to a violation of the Project Documents shall not constitute or be deemed a waiver of the right of the Association or any Owner to enforce the Project Documents in the future.”
Administrative Law Judge’s Conclusions
1. Resolution of the Section 4.27 Claim: The judge determined that the initial issue regarding the unapproved hot tub “was essentially resolved by the Board instructing the Kinstle’s erect a pergola and install screening.” By making its approval conditional on a privacy solution, the Board addressed the core requirement of the section.
2. The “Heart of the Matter” – Section 11.1 Enforcement: The judge identified the central question as whether the SMCA violated Section 11.1 by failing to enforce the screening requirement against the Kinstles.
3. Discretionary vs. Mandatory Enforcement: The judge concluded that the language of Section 11.1 grants the Board a “right to enforce, not an absolute obligation.”
4. Rationale for Delayed Enforcement: The judge found the testimony of the current SMCA President, Martin Douglas, to be “more persuasive.” Douglas’s explanation—that the Board delayed enforcement to “foster an agreement with the neighbors” amid ongoing litigation—was accepted as a valid exercise of the Board’s discretion.
5. Final Ruling: The judge stated, “Section 11.1 expressly granted the Board this discretion, and it should not be disturbed.” Consequently, the judge ruled that the Petitioner failed to prove by a preponderance of the evidence that the Respondent had violated CC&R Section 11.1.
Final Order
IT IS ORDERED that Petitioners’ petition is denied.
The order was issued on February 10, 2021, and is binding unless a rehearing is granted.
Study Guide: Pierce v. Sierra Morado Community Association (Case No. 20F-H2020053-REL)
This study guide provides a review of the administrative hearing concerning the dispute between Erik R. Pierce and the Sierra Morado Community Association. It includes a short-answer quiz, an answer key, suggested essay questions, and a comprehensive glossary of terms and entities involved in the case.
Short-Answer Quiz
Answer each of the following questions in two to three complete sentences, based on the provided source documents.
1. Who were the primary parties in this case, and what were their respective roles?
2. What was the initial reason for Mr. Pierce’s complaint against his neighbors, the Kinstles?
3. Which two sections of the Sierra Morado Community Association (SMCA) CC&Rs did Mr. Pierce allege were violated?
4. What action did the SMCA Board take after being informed that the Kinstles had installed a hot tub without prior approval?
5. What specific conditions did the SMCA Board require for the retroactive approval of the Kinstles’ hot tub installation?
6. According to former Board President Bill Oliver’s testimony, what was the Board’s common practice regarding architectural requests made after an installation?
7. What reason did Community Manager Jodie Cervantes give for her belief that no further enforcement action could be taken against the Kinstles?
8. According to current SMCA Board President Martin Douglas, why had the Board delayed enforcement actions against the Kinstles?
9. What was the Administrative Law Judge’s final decision regarding the alleged violation of CC&R Section 11.1?
10. How did the judge interpret the Board’s enforcement power as described in Section 11.1 of the CC&Rs?
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Answer Key
1. The primary parties were Erik R. Pierce, who was the Petitioner filing the complaint, and the Sierra Morado Community Association (SMCA), which was the Respondent. Mr. Pierce is a homeowner and member of the SMCA.
2. Mr. Pierce’s complaint originated because his neighbors, the Kinstles, installed a hot tub that was visible from his backyard. He testified that occupants in the hot tub were visible from inside his house, violating his privacy.
3. The Petitioner, Mr. Pierce, alleged that the Respondent, SMCA, was in violation of sections 4.27 and 11.1 of the SMCA CC&Rs. Section 4.27 pertains to the installation of spas, and Section 11.1 addresses the enforcement of project documents.
4. After Mr. Pierce filed his complaint, the SMCA informed the Kinstles that they had installed the hot tub without approval. The Board then directed the Kinstles to submit their plans and go through the proper architectural approval process.
5. The Kinstles’ hot tub was approved retroactively on February 10, 2020, on the condition that they install a pergola and screening. This was intended to address the visibility of the hot tub from Mr. Pierce’s property.
6. Bill Oliver, the SMCA President from fall 2019 to April 2020, testified that the Board would approve architectural requests retroactively. He confirmed that this is what occurred in the case of the Kinstles’ hot tub.
7. Jodie Cervantes, the Community Manager, testified that she believed the matter was closed because the Kinstles had six months to comply with the pergola and screening requirements. She believed this six-month deadline was outlined in the Design Guidelines, though she could not locate the specific language.
8. Martin Douglas, who became Board President in April 2020, testified that the Board delayed enforcement actions due to the ongoing litigation. He stated that multiple settlement offers were being exchanged in an effort to foster an agreement between the neighbors.
9. The Administrative Law Judge ordered that the Petitioner’s petition be denied. The judge concluded that Mr. Pierce did not establish by a preponderance of the evidence that the SMCA had violated CC&R Section 11.1.
10. The judge determined that Section 11.1 grants the Board a right to enforce the rules, not an absolute obligation to do so. This interpretation means the Board has the discretion to delay enforcement, which it did in this case to facilitate a potential settlement.
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Essay Questions
The following questions are designed for longer, essay-style responses. Use evidence and testimony from the case documents to construct a thorough analysis. No answers are provided.
1. Explain the legal standard of “preponderance of the evidence” as defined in the Administrative Law Judge’s decision. Analyze why the Petitioner, Erik R. Pierce, failed to meet this burden of proof concerning the violation of CC&R Section 11.1.
2. Trace the timeline of events from Mr. Pierce’s initial complaint on September 4, 2019, to the final decision on February 10, 2021. Discuss the key actions, delays, and decisions made by the SMCA Board during this period.
3. Compare and contrast the testimonies of Bill Oliver, Jodie Cervantes, and Martin Douglas. How do their different roles and timeframes with the SMCA shape their perspectives on the association’s enforcement process and the specific handling of the Kinstle case?
4. Analyze the Administrative Law Judge’s interpretation of CC&R Section 11.1. Discuss the distinction made between a “right to enforce” and an “absolute obligation,” and explain how this interpretation was central to the final ruling.
5. Based on the judge’s findings and the testimony of Martin Douglas, what are the likely next steps for the SMCA regarding the Kinstles’ non-compliance with the pergola and screening requirement? Evaluate the potential for future conflict or resolution between the parties involved.
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Glossary of Key Terms
Term / Entity
Definition
AAM, LLC
The property management company that employed Community Manager Jodie Cervantes and managed the Sierra Morado Community Association during the period of the dispute.
Administrative Law Judge (ALJ)
The official who presides over administrative hearings. In this case, the ALJ was Adam D. Stone of the Office of Administrative Hearings.
Architectural Committee (ARC)
The committee within the SMCA responsible for approving construction, installations, and alterations to properties, as referenced in CC&R Section 4.27.
Arizona Department of Real Estate (ADRE)
The state agency authorized by statute to receive and decide Petitions for Hearing from members of homeowners’ associations. Mr. Pierce filed his initial complaint with this department.
Burden of Proof
The obligation on a party in a legal case to prove its allegations. In this case, the Petitioner had the burden to establish his claim by a “preponderance of the evidence.”
Covenants, Conditions, and Restrictions. These are the governing documents or rules of a planned community. The dispute centered on alleged violations of Sections 4.27 (Swimming Pools and Spas) and 11.1 (Enforcement).
Hearing
The formal proceeding held on January 25, 2021, where the parties presented exhibits and witness testimony to the Administrative Law Judge.
Office of Administrative Hearings
An independent state agency that conducts evidentiary hearings for other state agencies, such as the Department of Real Estate.
Petitioner
The party who files a petition or complaint to initiate a legal proceeding. In this case, the Petitioner was Erik R. Pierce.
Preponderance of the Evidence
The evidentiary standard required for the Petitioner to win the case. It is defined as proof that convinces the trier of fact that a contention is “more probably true than not.”
Respondent
The party against whom a petition or complaint is filed. In this case, the Respondent was the Sierra Morado Community Association (SMCA).
Retroactive Approval
The act of approving an architectural installation (such as a hot tub) after it has already been completed, which the SMCA Board did in this case.
Sierra Morado Community Association (SMCA)
The homeowners’ association in Tucson, Arizona, of which Erik R. Pierce and the Kinstles are members.
Stipulation
An agreement between the parties in a legal proceeding. In this case, the parties stipulated to enter all submitted exhibits into the record.
Your HOA Can Ignore Its Own Rules? A Surprising Legal Case Every Homeowner Needs to Understand
Introduction: The Homeowner’s Dilemma
Most homeowners in a planned community operate under a simple assumption: if a neighbor violates a clear rule, you can file a complaint, and the Homeowners Association (HOA) is required to take action. It’s the fundamental promise of an HOA—consistent enforcement to protect property values and quality of life.
But what happens when the HOA agrees a violation has occurred, demands a fix, and then… does nothing to enforce it?
A real-world legal case, Erik R. Pierce versus the Sierra Morado Community Association, provides a surprising and cautionary answer. The final court decision reveals a critical loophole that may exist in your own HOA agreement. This article will break down the three most counter-intuitive takeaways from that case that every homeowner should understand.
Takeaway 1: “A Right to Enforce” Isn’t an “Obligation to Enforce”
The core of the dispute was straightforward. Homeowner Erik Pierce filed a complaint because his neighbors, the Kinstles, installed a hot tub that was visible from his property, a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs)—the legally binding rules that govern the community. The HOA’s Architectural Committee retroactively approved the hot tub, but only on the condition that the neighbors install a pergola and screening to shield it from view.
The neighbors never installed the required screening, yet the HOA took no further enforcement action. This inaction led Mr. Pierce to sue the HOA.
The judge’s decision hinged on a crucial interpretation of the HOA’s governing documents. The judge ruled in favor of the HOA because the documents gave the Board the right to enforce the rules, not an absolute obligation to do so. This distinction granted the HOA discretion to choose its strategy. The judge found the board’s reasoning for the delay persuasive: it was deliberately choosing negotiation over immediate punitive action to resolve the conflict. The board’s discretion wasn’t just a right to do nothing; it was a right to choose a different path to compliance.
The key phrase here is “shall have the right to enforce.” Had the documents stated the board “shall enforce,” the outcome would likely have been entirely different. This single phrase transforms enforcement from a mandate into a strategic option for the board.
The Administrative Law Judge’s decision highlights this critical point:
“…Section 11.1 only gives the Board a right to enforce, not an absolute obligation. While Petitioner is understandably upset that there has yet to be any follow through on enforcement of the screening requirements, this tribunal finds the testimony of Mr. Douglas more persuasive, namely that the Board has delayed in enforcing because it was trying to foster an agreement with the neighbors. Section 11.1 expressly granted the Board this discretion, and it should not be disturbed.”
This finding is shocking for most homeowners, who reasonably assume that the rules laid out in their CC&Rs are mandates for the board, not a menu of discretionary options.
Takeaway 2: Suing Your HOA Can Ironically Pause Enforcement
The board’s discretionary power was put on full display when Mr. Pierce filed his lawsuit, creating a legal Catch-22. The current SMCA Board President, Martin Douglas, testified that the board deliberately paused formal enforcement actions against the neighbors who had violated the architectural requirement.
The judge ultimately found that the board’s rationale for this pause was a valid exercise of its discretion. The decision to delay was framed not as inaction, but as a strategic choice “to foster an agreement with the neighbors” amidst the complexities of litigation.
This reveals a deep irony: by filing a petition to force the HOA’s hand, the homeowner inadvertently provided the context for the HOA to justify a delay. The judge accepted that the board’s attempt to find a negotiated solution instead of escalating fines and penalties during an active lawsuit was a reasonable use of its discretionary authority. This case demonstrates how legal action, intended to accelerate a resolution, can sometimes be used by an HOA board to justify a different, slower approach.
Takeaway 3: A Clear Rule Violation Doesn’t Guarantee a Win in Court
One of the most surprising aspects of this case is that the facts of the violation were not in dispute. The judge explicitly acknowledged that the neighbors were in violation of the Architectural Review Committee’s requirement. The official decision states:
“Based upon the evidence provided, the Kinstle’s are in violation of the requirement the ARC Committee imposed on them.”
Despite this clear violation by the neighbor, the homeowner, Mr. Pierce, still lost his case against the HOA.
The case was lost on a critical legal distinction: the lawsuit was not about the neighbor’s violation, but about the HOA’s alleged failure to act. Since the judge determined the HOA had the discretionary right—not the mandatory obligation—to enforce the rule, its choice to pursue negotiation rather than immediate punitive action was not considered a violation of its duties.
The lesson here is profound: proving a neighbor is breaking the rules is only the first step. To win a case against your HOA for non-enforcement, you must also prove that its response (or lack thereof) constitutes a breach of its specific duties as outlined in your community’s governing documents.
Conclusion: Know Your Documents, Temper Your Expectations
The case of Pierce v. Sierra Morado Community Association serves as a stark reminder that HOA governance is often more complex than it appears. The precise wording of your community’s CC&Rs is critically important, as a single phrase can be the difference between a mandatory duty and a discretionary power. This case illustrates that the gap between a rule existing on paper and the board’s power to enforce it can be vast.
As a homeowner, your first step should be to obtain a copy of your community’s most recent CC&Rs and search for the enforcement clause—does it say your board “shall” enforce the rules, or does it say they have the “right” to?
This case forces every homeowner to ask: If your governing documents give your board the ‘right’ to act, what leverage do you truly have to ensure they actually will?
Case Participants
Petitioner Side
- Erik R. Pierce (petitioner)
- James C. Frisch (petitioner attorney)
King & Frisch, P.C. - Michael Resare (petitioner attorney)
Respondent Side
- Nicholas C.S. Nogami (respondent attorney)
Carpenter, Hazlewood, Delgado & Bolen, LLP - Heather M. Hampstead (respondent attorney)
Carpenter, Hazlewood, Delgado & Bolen, LLP - Jodie Cervantes (property manager/witness)
AAM, LLC
Community Manager for Respondent SMCA - Bill Oliver (board member/witness)
Former SMCA President (Fall 2019 to April 2020) - Martin Douglas (board member/witness)
Current SMCA Board President (since April 2020)
Neutral Parties
- Adam D. Stone (ALJ)
- Judy Lowe (Commissioner)
Arizona Department of Real Estate - LDettorre (unknown)
Arizona Department of Real Estate
Transmission recipient - AHansen (unknown)
Arizona Department of Real Estate
Transmission recipient - djones (unknown)
Arizona Department of Real Estate
Transmission recipient - DGardner (unknown)
Arizona Department of Real Estate
Transmission recipient - ncano (unknown)
Arizona Department of Real Estate
Transmission recipient - c. serrano (clerk)
Signed document transmission
