Case Summary
| Case ID | 23F-H035-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2023-04-17 |
| Administrative Law Judge | Velva Moses-Thompson |
| Outcome | full |
| Filing Fees Refunded | $500.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Barbara J. Ryan | Counsel | — |
|---|---|---|---|
| Respondent | Dragoon Mountain Ranch Phase I Meadows Property Owners Association | Counsel | Jody Corrales, Esq. |
Alleged Violations
A.R.S. § 33-1804, A.R.S. § 33-1318, Respondent’s Bylaws sections 7.1, 7.2, 12.1 – 12.3
Outcome Summary
The Petitioner was deemed the prevailing party. The ALJ found the Respondent violated Bylaw section 7.1 by failing to hold an annual members meeting in 2021 and 2022. Respondent was ordered to refund the $500 filing fee and ensure future compliance with Bylaw section 7.1. No civil penalty was imposed.
Why this result: The violation (failure to hold an annual member meeting) was undisputed by the Respondent, and Respondent's counsel conceded there were no legal defenses to this fact.
Key Issues & Findings
Failure to hold an annual members meeting in two years and ignoring members written petitions and requests for a meeting
It was undisputed that the Respondent HOA failed to hold an annual meeting of the members from March 2020 to the time of the hearing. The ALJ found by a preponderance of the evidence that the Respondent violated section 7.1 of its Bylaws.
Orders: Respondent must pay the Petitioner's filing fee of $500.00 within thirty days and is directed to comply with section 7.1 of its Bylaws going forward. No civil penalty was found appropriate.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
- A.R.S. § 33-1804
- A.R.S. § 33-1318
- Respondent’s Bylaws sections 7.1
- Respondent’s Bylaws sections 7.2
- Respondent’s Bylaws sections 12.1 – 12.3
- A.R.S. § 32-2199(B)
- A.R.S. § 33-1803
- A.R.S. § 41-1092.07(G)(2)
- A.A.C. R2-19-119(A)
- A.A.C. R2-19-119(B)(1)
- A.A.C. R2-19-119(B)(2)
- A.R.S. §32-2199.02(B)
- A.R.S. § 41-1092.09
Analytics Highlights
- A.R.S. § 33-1804
- A.R.S. § 33-1318
- Respondent’s Bylaws sections 7.1
- Respondent’s Bylaws sections 7.2
- Respondent’s Bylaws sections 12.1 – 12.3
- A.R.S. § 32-2199(B)
- A.R.S. § 33-1803
- A.R.S. § 41-1092.07(G)(2)
- A.A.C. R2-19-119(A)
- A.A.C. R2-19-119(B)(1)
- A.A.C. R2-19-119(B)(2)
- A.R.S. §32-2199.02(B)
- A.R.S. § 41-1092.09
Video Overview
Audio Overview
https://open.spotify.com/episode/427Jtvhv86O3eSaVHmEQjV
Decision Documents
23F-H035-REL Decision – 1043132.pdf
23F-H035-REL Decision – 1048244.pdf
23F-H035-REL Decision – 1049662.pdf
23F-H035-REL Decision – 1049665.pdf
23F-H035-REL Decision – 1049666.pdf
Questions
Question
Can an HOA skip annual member meetings due to ongoing litigation or bankruptcy proceedings?
Short Answer
No. Legal defenses based on external issues like litigation or bankruptcy may not validate the failure to hold meetings required by bylaws.
Detailed Answer
In this case, the HOA attempted to argue that bankruptcy and litigation prevented them from holding meetings. However, the ALJ noted that the Respondent's own counsel eventually admitted there were no legal defenses for failing to hold the meeting, and the failure was ruled a violation.
Alj Quote
Respondent’s counsel stated that there were no legal defenses to Respondent’s failure to hold a board meeting.
Legal Basis
Bylaws Section 7.1
Topic Tags
- annual meetings
- HOA defenses
- bankruptcy
Question
If I include multiple complaints in my petition but only pay the fee for one, will the judge hear all of them?
Short Answer
No. The Administrative Law Judge will likely only address the specific issue for which the filing fee was paid.
Detailed Answer
The petitioner included allegations regarding failure to respond to requests for special meetings and removal of directors, but because she only paid the $500 fee for one issue (failure to hold annual meetings), the other allegations were not addressed in the decision.
Alj Quote
The petition included other allegations including, but not limited to, the Board failure to respond to requests for a special meeting of members and/or a meeting to remove directors from the Board. However, Petitioner has paid for only one issue.
Legal Basis
Procedural Rule
Topic Tags
- filing fees
- petition scope
- administrative procedure
Question
Does the failure to hold an annual meeting automatically invalidate the HOA's corporate actions?
Short Answer
Not necessarily. Bylaws often contain specific provisions stating that the failure to hold a meeting does not affect the validity of corporate actions.
Detailed Answer
The decision cites a specific section of the HOA's bylaws which explicitly states that missing the fixed time for an annual meeting does not invalidate corporate actions.
Alj Quote
The failure to hold an annual or regular meeting at a time stated in or fixed in accordance with the Bylaws does not affect the validity of any corporate action.
Legal Basis
Bylaws Section 7.1
Topic Tags
- corporate actions
- validity
- bylaws
Question
What standard of proof must a homeowner meet to win a hearing against their HOA?
Short Answer
The homeowner must prove the violation by a 'preponderance of the evidence'.
Detailed Answer
The burden is on the petitioner to show that their contention is 'more probably true than not.' It is not based on the number of witnesses but on the convincing force of the evidence.
Alj Quote
Petitioner bears the burden of proof to establish that Respondent violated on its CC&Rs by a preponderance of the evidence.
Legal Basis
A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A)
Topic Tags
- burden of proof
- legal standard
- evidence
Question
Can I be reimbursed for my filing fee if I win my case against the HOA?
Short Answer
Yes. The ALJ has the authority to order the HOA to pay the filing fee back to the prevailing homeowner.
Detailed Answer
After ruling in favor of the petitioner regarding the failure to hold meetings, the judge ordered the HOA to pay the petitioner the $500 filing fee within 30 days.
Alj Quote
IT IS FURTHER ORDERED that Respondent Dragoon Mountain Ranch Phase I Meadows Property Owners Association must pay to Petitioner her filing fee of $500.00 within thirty days of receipt of this Order.
Legal Basis
Order of the ALJ
Topic Tags
- reimbursement
- filing fees
- penalties
Question
Will the HOA always be fined a civil penalty if they are found to have violated the bylaws?
Short Answer
No. The judge may decide that a civil penalty is not appropriate even if a violation is found.
Detailed Answer
Although the HOA was found to have violated the bylaws by not holding meetings for two years, the judge explicitly declined to assess a civil penalty in this specific matter.
Alj Quote
No Civil Penalty is found to be appropriate in this matter.
Legal Basis
Judicial Discretion
Topic Tags
- civil penalty
- fines
- enforcement
Case
- Docket No
- 23F-H035-REL
- Case Title
- Barbara J. Ryan vs Dragoon Mountain Ranch Phase I Meadows Property Owners Association
- Decision Date
- 2023-04-17
- Alj Name
- Velva Moses-Thompson
- Tribunal
- OAH
- Agency
- ADRE
Questions
Question
Can an HOA skip annual member meetings due to ongoing litigation or bankruptcy proceedings?
Short Answer
No. Legal defenses based on external issues like litigation or bankruptcy may not validate the failure to hold meetings required by bylaws.
Detailed Answer
In this case, the HOA attempted to argue that bankruptcy and litigation prevented them from holding meetings. However, the ALJ noted that the Respondent's own counsel eventually admitted there were no legal defenses for failing to hold the meeting, and the failure was ruled a violation.
Alj Quote
Respondent’s counsel stated that there were no legal defenses to Respondent’s failure to hold a board meeting.
Legal Basis
Bylaws Section 7.1
Topic Tags
- annual meetings
- HOA defenses
- bankruptcy
Question
If I include multiple complaints in my petition but only pay the fee for one, will the judge hear all of them?
Short Answer
No. The Administrative Law Judge will likely only address the specific issue for which the filing fee was paid.
Detailed Answer
The petitioner included allegations regarding failure to respond to requests for special meetings and removal of directors, but because she only paid the $500 fee for one issue (failure to hold annual meetings), the other allegations were not addressed in the decision.
Alj Quote
The petition included other allegations including, but not limited to, the Board failure to respond to requests for a special meeting of members and/or a meeting to remove directors from the Board. However, Petitioner has paid for only one issue.
Legal Basis
Procedural Rule
Topic Tags
- filing fees
- petition scope
- administrative procedure
Question
Does the failure to hold an annual meeting automatically invalidate the HOA's corporate actions?
Short Answer
Not necessarily. Bylaws often contain specific provisions stating that the failure to hold a meeting does not affect the validity of corporate actions.
Detailed Answer
The decision cites a specific section of the HOA's bylaws which explicitly states that missing the fixed time for an annual meeting does not invalidate corporate actions.
Alj Quote
The failure to hold an annual or regular meeting at a time stated in or fixed in accordance with the Bylaws does not affect the validity of any corporate action.
Legal Basis
Bylaws Section 7.1
Topic Tags
- corporate actions
- validity
- bylaws
Question
What standard of proof must a homeowner meet to win a hearing against their HOA?
Short Answer
The homeowner must prove the violation by a 'preponderance of the evidence'.
Detailed Answer
The burden is on the petitioner to show that their contention is 'more probably true than not.' It is not based on the number of witnesses but on the convincing force of the evidence.
Alj Quote
Petitioner bears the burden of proof to establish that Respondent violated on its CC&Rs by a preponderance of the evidence.
Legal Basis
A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A)
Topic Tags
- burden of proof
- legal standard
- evidence
Question
Can I be reimbursed for my filing fee if I win my case against the HOA?
Short Answer
Yes. The ALJ has the authority to order the HOA to pay the filing fee back to the prevailing homeowner.
Detailed Answer
After ruling in favor of the petitioner regarding the failure to hold meetings, the judge ordered the HOA to pay the petitioner the $500 filing fee within 30 days.
Alj Quote
IT IS FURTHER ORDERED that Respondent Dragoon Mountain Ranch Phase I Meadows Property Owners Association must pay to Petitioner her filing fee of $500.00 within thirty days of receipt of this Order.
Legal Basis
Order of the ALJ
Topic Tags
- reimbursement
- filing fees
- penalties
Question
Will the HOA always be fined a civil penalty if they are found to have violated the bylaws?
Short Answer
No. The judge may decide that a civil penalty is not appropriate even if a violation is found.
Detailed Answer
Although the HOA was found to have violated the bylaws by not holding meetings for two years, the judge explicitly declined to assess a civil penalty in this specific matter.
Alj Quote
No Civil Penalty is found to be appropriate in this matter.
Legal Basis
Judicial Discretion
Topic Tags
- civil penalty
- fines
- enforcement
Case
- Docket No
- 23F-H035-REL
- Case Title
- Barbara J. Ryan vs Dragoon Mountain Ranch Phase I Meadows Property Owners Association
- Decision Date
- 2023-04-17
- Alj Name
- Velva Moses-Thompson
- Tribunal
- OAH
- Agency
- ADRE
Case Participants
Petitioner Side
- Barbara J. Ryan (petitioner)
Appeared on behalf of herself - Bill Nethery (witness)
Meadows Property Association member
Listed as a witness on Petitioner's petition - Damon Rosen (applicant for board vacancy)
Dragoon Mountain Ranch Phase I Meadows Property Owners Association member
Individual who submitted a resume to serve on the board
Respondent Side
- Jody A. Corrales (HOA attorney)
DeConcini McDonald Yetwin & Lacy
Represented the Respondent, Dragoon Mountain Ranch Phase I Meadows Property Owners Association - Dorothy Marine (board member/witness)
Dragoon Mountain Ranch Phase I Meadows Property Owners Association
Director and President of the board; testified at hearing - Cindy Celeste (board member)
Dragoon Mountain Ranch Phase I Meadows Property Owners Association
Director - Jim Kasa (board member)
Dragoon Mountain Ranch Phase I Meadows Property Owners Association
Director
Neutral Parties
- Velva Moses-Thompson (ALJ)
OAH
Also introduced herself as Sales Thompson - Susan Nicolson (Commissioner)
Arizona Department of Real Estate - AHansen (ADRE staff)
Arizona Department of Real Estate - vnunez (ADRE staff)
Arizona Department of Real Estate - djones (ADRE staff)
Arizona Department of Real Estate - labril (ADRE staff)
Arizona Department of Real Estate
Other Participants
- Gail Olia (former board member)
Dragoon Mountain Ranch Phase I Meadows Property Owners Association
Director who resigned; also referred to as Jill Olia - Sorl Tate (homeowner)
Dragoon Mountain Ranch Phase I Meadows Property Owners Association member
Individual whose prior contentious state court proceeding against the HOA contributed to the bankruptcy
