Case Summary
| Case ID | 12F-H1212002-BFS, 12F-H1212009-BFS |
|---|---|
| Agency | Department of Fire, Building and Life Safety |
| Tribunal | OAH |
| Decision Date | 2013-01-17 |
| Administrative Law Judge | M. Douglas |
| Outcome | The ALJ dismissed both petitions (consolidated). The judge ruled that the Architectural Review Committee meetings were not regularly scheduled and thus not subject to open meeting notice requirements. Additionally, the judge ruled that the records requested by Petitioners were properly withheld under attorney-client privilege. |
| Filing Fees Refunded | $0.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | John and Debborah Sellers | Counsel | — |
|---|---|---|---|
| Respondent | Crossings at Willow Creek Property Owners Association | Counsel | Joshua M. Bolen |
Alleged Violations
A.R.S. § 33-1804
A.R.S. § 33-1805
Outcome Summary
The ALJ dismissed both petitions (consolidated). The judge ruled that the Architectural Review Committee meetings were not regularly scheduled and thus not subject to open meeting notice requirements. Additionally, the judge ruled that the records requested by Petitioners were properly withheld under attorney-client privilege.
Why this result: Petitioners failed to prove by a preponderance of the evidence that the HOA violated statutes or governing documents; specific exceptions for non-regularly scheduled meetings and privileged records applied.
Key Issues & Findings
Failure to notice and conduct publicly ARC Meetings
Petitioners alleged that the ARC failed to notice and conduct meetings publicly. The HOA argued ARC meetings are not regularly scheduled and occur only as necessary, thus not requiring notice.
Orders: Petition dismissed; no action required.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Failure to provide requested HOA records
Petitioners requested attorney invoices and communications. The HOA denied the request based on attorney-client privilege.
Orders: Petition dismissed; no action required.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Video Overview
Audio Overview
Decision Documents
12F-H1212002-BFS Decision – 321619.pdf
12F-H1212002-BFS Decision – 327760.pdf
12F-H1212002-BFS Decision – 321619.pdf
12F-H1212002-BFS Decision – 327760.pdf
Briefing Document: Sellers v. Crossings at Willow Creek Property Owners Association
Executive Summary
This briefing document summarizes the administrative litigation (Case Nos. 12F-H1212002-BFS and 12F-H1212009-BFS) involving John and Debborah Sellers (Petitioners) and the Crossings at Willow Creek Property Owners Association (Respondent). The disputes, heard by the Arizona Office of Administrative Hearings, centered on two primary allegations: the Association’s failure to notice and conduct public Architectural Review Committee (ARC) meetings, and the Association’s refusal to provide specific records, including attorney invoices and third-party communications.
Following hearings held on September 26, 2012, and January 4, 2013, Administrative Law Judge (ALJ) M. Douglas issued a decision on January 17, 2013, dismissing both petitions. The ALJ concluded that the ARC meetings were not "regularly scheduled" and therefore not subject to statutory notice requirements. Furthermore, the ALJ ruled that the records withheld by the Association were protected under attorney-client privilege and pending litigation exceptions. This decision was officially certified as the final administrative decision on February 28, 2013.
Detailed Analysis of Key Themes
1. The Distinction of "Regularly Scheduled" Meetings
A central theme of the litigation was the interpretation of A.R.S. § 33-1804(A), which mandates that "regularly scheduled committee meetings" be open to all members. The Petitioners argued that the ARC’s failure to notice these meetings violated both state law and community documents.
However, testimony from Association representatives established a different operational reality:
- Ad Hoc Scheduling: ARC meetings were described as occurring "from time to time as necessary" or "on demand," depending entirely on the submission of architectural applications.
- Bylaw Compliance: The Association’s Bylaws (Article XI Section 3) explicitly state the ARC shall meet "from time to time as necessary."
- Informal Venue: Testimony revealed that meetings often took place at committee members' residences and, while not formally noticed, had never been closed to a member who specifically requested to attend.
The ALJ determined that because the meetings were irregular and demand-driven rather than "regularly scheduled," the Association was not legally obligated to provide public notice.
2. Statutory Records Disclosure vs. Legal Privilege
The second major theme involved the balance between a homeowner's right to examine Association records (A.R.S. § 33-1805) and the Association's right to protect sensitive legal information. The Petitioners sought invoices from the Association’s attorneys and communications with third parties, arguing these did not constitute privileged material.
The Association successfully defended its refusal to disclose these documents by citing:
- Pending Litigation: The City of Prescott was involved in civil litigation with the Association at the time of the hearing.
- Attorney-Client Privilege: The Association argued that the withheld documents related to legal advice or pending/contemplated litigation.
- Statutory Exceptions: A.R.S. § 33-1805(B) explicitly allows associations to withhold records related to privileged communications and pending litigation.
The ALJ found that the Association’s refusal was consistent with these statutory protections, and the Petitioners failed to prove that the refusal violated the law or community documents.
3. Burden of Proof in Administrative Proceedings
The case highlights the procedural requirement that the party asserting a claim—in this case, the Petitioners—bears the "burden of proof." Under Arizona Administrative Code R2-19-119, the standard of proof is a "preponderance of the evidence," meaning the petitioner must prove their claims are "more likely true than not." The ALJ repeatedly noted that the Petitioners failed to meet this threshold for both the meeting notice and the records disclosure claims.
Important Quotes and Context
Regarding ARC Meeting Frequency
"The Architectural Review Committee shall meet from time to time as necessary to perform its duties hereunder… The Committee shall keep and maintain a written record of all actions taken by it at such meetings or otherwise."
— Crossings’ Bylaws, Article XI Section 3 (Context: This provision was used to establish that the ARC was not required to have a regular, predictable schedule).
"ARC meetings are not noticed but are open to all members… the committee has never denied access to any member to attend an ARC meeting… the committee has never received a request from an owner to attend an ARC meeting."
— Brenda Doziar, Board and ARC Member (Context: Testimony provided to show the Association did not intentionally exclude members, but rather operated informally based on submission volume).
Regarding Open Meeting Statutes
"Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the members' association and the board of directors, and any regularly scheduled committee meetings, are open to all members of the association…"
— A.R.S. § 33-1804(A) (Context: The legal baseline for the Petitioners’ argument, which ultimately failed because the ARC meetings were deemed not "regularly scheduled").
Regarding Records Exceptions
"Books and records kept by or on behalf of the association and the board may be withheld from disclosure to the extent that the portion withheld relates to any of the following: 1. Privileged communication between an attorney for the association and the association. 2. Pending litigation."
— A.R.S. § 33-1805(B) (Context: The legal justification used by the Association to deny the Petitioners' request for attorney invoices and third-party correspondence).
Actionable Insights
Based on the findings and conclusions of the Administrative Law Judge, the following insights can be derived regarding Association governance and member rights:
- Definition of Committee Schedules: Associations can avoid the statutory requirement for public meeting notices if committees (like the ARC) meet on an "as-needed" basis rather than on a "regularly scheduled" basis. If a committee meeting is not on a fixed recurring schedule, it may not trigger the notice requirements of A.R.S. § 33-1804.
- Documentation of "As-Needed" Status: To defend against claims of secret meetings, Associations should ensure their Bylaws or CC&Rs explicitly state that committees meet "as necessary" or "from time to time," and they should maintain minutes of these meetings to document all actions taken.
- Protection of Legal Records: Associations are within their rights to withhold attorney invoices and correspondence if they relate to pending litigation or legal advice. Homeowners seeking such records face a high bar to prove that such documents do not fall under the statutory exceptions of A.R.S. § 33-1805.
- Member Requests for Attendance: While notice may not be required for ad hoc meetings, refusing a member's specific request to attend an open session could create legal vulnerability. In this case, the Association’s defense was strengthened by the fact that they had never denied a request for attendance.
- Burden of Evidence: Petitioners in administrative hearings must provide concrete evidence that a violation occurred. Mere allegations of non-compliance are insufficient to meet the "preponderance of the evidence" standard required to prevail against an Association.
Study Guide: Sellers v. Crossings at Willow Creek Property Owners Association
This study guide provides a comprehensive overview of the administrative legal proceedings between John and Debborah Sellers and the Crossings at Willow Creek Property Owners Association. It examines the application of Arizona Revised Statutes (A.R.S.) regarding homeowners' association (HOA) governance, open meeting requirements, and the disclosure of association records.
1. Case Overview and Key Entities
The consolidated cases (No. 12F-H1212002-BFS and No. 12F-H1212009-BFS) involve a dispute over the transparency of committee meetings and the accessibility of specific legal and financial records within a planned community.
Key Parties and Entities
| Entity | Role/Description |
|---|---|
| John and Debborah Sellers | Petitioners; homeowners and members of the Crossings at Willow Creek. |
| Crossings at Willow Creek POA | Respondent; the homeowners' association (HOA) governing the community in Prescott, Arizona. |
| Office of Administrative Hearings | The Arizona state agency responsible for conducting the hearing and issuing the decision. |
| Dept. of Fire, Building and Life Safety | The state department authorized to receive petitions from HOA members and associations. |
| Architectural Review Committee (ARC) | A committee within the HOA responsible for reviewing property applications and architectural guidelines. |
Significant Individuals
- M. Douglas: The Administrative Law Judge (ALJ) who presided over the hearings and issued the Findings of Fact and Conclusions of Law.
- G. Eugene Neil: Interim City Attorney for Prescott; testified regarding public records and ongoing litigation between the City and the HOA.
- Brenda Doziar: HOA Board member and ARC member; provided testimony on ARC meeting procedures.
- Robert Balzano: Former statutory agent and manager of the HOA; testified regarding the lack of regularly scheduled ARC meetings.
- Cliff J. Vanell: Director of the Office of Administrative Hearings; certified the ALJ decision as the final administrative decision.
2. Core Legal Issues and Arguments
Issue 1: ARC Meeting Transparency
The Petitioners alleged that the HOA failed to notice and conduct Architectural Review Committee (ARC) meetings publicly, in violation of A.R.S. § 33-1804 and community documents.
- Petitioner Argument: ARC meetings should be noticed and open to the public.
- Respondent Argument: ARC meetings are not "regularly scheduled" but occur "on demand" based on submissions; therefore, statutory notice requirements for regularly scheduled meetings do not apply.
Issue 2: Access to Records
The Petitioners alleged the HOA refused to provide specific records, specifically attorney invoices and communications between HOA attorneys and third parties.
- Petitioner Argument: Communications with third parties are not protected by attorney-client privilege. They also sought invoices to understand the HOA's legal expenditures.
- Respondent Argument: The withheld records were protected under attorney-client privilege and related to pending litigation, which are statutory exceptions to the disclosure requirement.
3. Statutory Framework and Bylaws
The case relies heavily on specific Arizona statutes and the HOA's internal bylaws:
A.R.S. § 33-1804: Open Meetings
- General Rule: All meetings of the association, the board, and any regularly scheduled committee meetings are open to all members or their designated representatives.
- Executive Session Exceptions: Meetings may be closed only for specific reasons, including legal advice, pending/contemplated litigation, personal/health/financial info of members or employees, and job performance discussions.
A.R.S. § 33-1805: Association Records
- General Rule: Financial and other records must be made reasonably available for examination within ten business days.
- Withholding Exceptions: Records may be withheld if they relate to privileged attorney-client communications, pending litigation, or specific personal/health/financial records of individuals.
A.R.S. § 12-2234: Attorney-Client Privilege
- In civil actions, attorneys and their staff cannot be examined regarding communications made by the client or advice given during professional employment without the client's consent.
HOA Bylaws (Article XI, Section 3)
- The ARC is directed to meet "from time to time as necessary."
- The committee must maintain a written record of all actions taken.
4. Short-Answer Practice Questions
1. According to the ALJ's decision, why did the ARC meetings not require public notice? Answer: The meetings were found to be held "as necessary" or "on demand" rather than being "regularly scheduled." A.R.S. § 33-1804 only mandates notice and open access for regularly scheduled committee meetings.
2. What is the "burden of proof" in this administrative hearing, and who carries it? Answer: The burden of proof falls on the party asserting a claim (the Petitioners). The standard of proof is a "preponderance of the evidence."
3. What does "preponderance of the evidence" mean in a legal context? Answer: It means the evidence must be sufficient to persuade the finder of fact that the proposition is "more likely true than not."
4. Name two reasons an HOA board may legally close a portion of a meeting (Executive Session). Answer: Possible answers include: Legal advice from an attorney, pending or contemplated litigation, personal/financial information of a member/employee, or matters relating to employee job performance.
5. How many business days does an association have to fulfill a request for the examination of records? Answer: Ten business days.
6. Under A.R.S. § 33-1805, what is the maximum per-page fee an association can charge for copies of records? Answer: Fifteen cents per page.
5. Essay Prompts for Deeper Exploration
1. The Distinction Between "Regularly Scheduled" and "As Necessary": Analyze how the distinction between "regularly scheduled" and meetings held "from time to time" impacted the outcome of Case No. 12F-H1212002-BFS. Discuss whether this distinction creates a potential loophole for HOAs to avoid transparency, or if it serves as a practical necessity for committees with fluctuating workloads.
2. Attorney-Client Privilege in the Context of HOA Governance: The Petitioners argued that communications between HOA attorneys and third parties should not be privileged. Based on A.R.S. § 12-2234 and the ALJ's conclusions, evaluate the scope of attorney-client privilege. How does the law balance a homeowner's right to financial transparency (specifically regarding legal invoices) with the association’s right to confidential legal strategy?
3. The Role of Testimony in Establishing Facts: Examine the testimony of Brenda Doziar and Robert Balzano. How did their descriptions of the ARC's operational habits (e.g., meeting at private residences, lack of a formal schedule) influence the ALJ’s Findings of Fact? Contrast their testimony with the Petitioners' claims to show why the Petitioners failed to meet the preponderance of the evidence standard.
6. Glossary of Terms
- Administrative Law Judge (ALJ): An official who presides over an administrative hearing, hears evidence, and makes findings of fact and legal conclusions.
- A.R.S. (Arizona Revised Statutes): The codified laws of the State of Arizona.
- Burden of Proof: The obligation of a party in a trial or hearing to produce the evidence that will prove the claims they have made against the other party.
- Community Documents: The collective term for an HOA's declaration, bylaws, and other governing rules.
- Executive Session: A portion of a meeting that is closed to the general membership to discuss sensitive or confidential matters as defined by statute.
- Member: In the context of an HOA, a property owner who is subject to the association's governing documents and holds voting rights.
- Preponderance of the Evidence: A legal standard where a claim is proven if it is shown to be more likely true than not (greater than 50% probability).
- Respondent: The party against whom a petition or complaint is filed; in this case, the Crossings at Willow Creek POA.
- Statutory Agent: An individual or entity designated to receive legal documents and service of process on behalf of a corporation or association.
HOA Transparency and Member Rights: Lessons from Sellers v. Crossings at Willow Creek
1. Introduction: The Tension Between Homeowners and Associations
Friction between homeowners and Property Owners Associations (POAs) often centers on the perceived "black box" of governance. Many homeowners feel that critical decisions—especially those regarding the aesthetic and structural integrity of the community—are made behind closed doors without proper oversight. Conversely, volunteer boards and their agents often struggle to navigate the granular requirements of state law while managing the day-to-day administrative needs of the association.
This tension is perfectly encapsulated in the consolidated cases of John and Debborah Sellers v. Crossings at Willow Creek Property Owners Association (2013). By analyzing this administrative ruling, we can gain a clearer understanding of how Arizona law distinguishes between "open meetings" and "access to records." For homeowners and board members alike, this case serves as a vital lesson in the nuances of the Arizona Revised Statutes (A.R.S.) and the high evidentiary bar required to prove a violation of member rights.
2. The Conflict Over Architectural Review Committee (ARC) Meetings
In the first petition (12F-H1212002-BFS), the Sellers alleged that the Crossings at Willow Creek failed to provide notice for and conduct Architectural Review Committee (ARC) meetings in a public forum. They contended that the lack of formal notice violated A.R.S. § 33-1804 and the community’s governing documents.
The Association’s defense relied on the operational reality of the committee. Brenda Doziar, a member of both the Board and the ARC, testified that the committee’s process was not a standard deliberative assembly but a functional review of applications. Specifically, she noted that the ARC meets to review plans alongside the association’s professional architect to determine if a project should be accepted, modified, or rejected.
Robert Balzano, the former manager and statutory agent for the Association, further testified that the ARC did not follow a fixed calendar. Instead, meetings were held "on-demand" at private residences based on the volume of architectural submissions. The legal pivot point of the case was the specific language found in Arizona's open meeting law for planned communities:
"Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the members' association and the board of directors, and any regularly scheduled committee meetings, are open to all members of the association…" — A.R.S. § 33-1804(A)
3. Defining "Regularly Scheduled": The Legal Turning Point
The Administrative Law Judge (ALJ) focused on the distinction between a "regularly scheduled" meeting and one that occurs intermittently. The Association’s Bylaws (Article XI, Section 3) explicitly state that the ARC shall meet "from time to time as necessary" to perform its duties. Because the meetings were contingent upon the receipt of homeowner applications rather than a set monthly or quarterly schedule, they did not fall under the statutory mandate for public notice.
The ALJ dismissed the complaint regarding meeting notices based on these factors:
- Contingent Nature of Meetings: Evidence showed that meetings depended entirely on architectural submissions; in some months, the committee met multiple times, while in others, it did not meet at all.
- Adherence to Bylaws: The Association followed its own governing documents, which authorized the committee to act "from time to time as necessary" rather than on a regular schedule.
- Professional Consultation: Testimony established that the meetings involved technical reviews with an architect, a process that is functionally different from a standard board meeting.
- Accessibility Without Formal Notice: The committee never denied a member’s request to attend, and the specific applicant was always invited to the meeting where their plans were discussed.
4. The Records Dispute: What Can Homeowners Actually See?
The second petition (12F-H1212009-BFS) concerned the Sellers' demand for records, specifically invoices from the association’s legal counsel—the firm of Carpenter, Hazlewood, Delgado & Bolen, PLC—and communications between those attorneys and third parties. The Sellers argued that third-party communications, by definition, cannot be protected by attorney-client privilege.
The Association successfully countered this by invoking A.R.S. § 33-1805, which governs association records, and A.R.S. § 12-2234, which protects attorney-client communications. The sensitivity of these records was heightened by a pending Declaratory Action—a legal proceeding initiated by the City of Prescott against the association members to determine the legal rights and obligations of the parties involved.
The case established a clear hierarchy of record accessibility:
- Public Records: The City of Prescott provided the Petitioners with ninety pages of documents via subpoena. As these were public records held by a municipality, they were fully accessible.
- Privileged Association Records: Internal documents, including attorney invoices and correspondence with the insurance agent, Larry Harding, were protected. Mr. Harding testified that such correspondence typically relates to potential insurance claims, which are sensitive legal matters. Under A.R.S. § 33-1805(B), the Association is permitted to withhold records that "tip its hand" regarding pending litigation or privileged legal advice.
5. Final Verdict: The ALJ Decision
On January 17, 2013, ALJ M. Douglas issued a decision dismissing both petitions, a ruling later certified by Director Cliff J. Vanell. The decision was rooted in the burden of proof established by the Arizona Administrative Code (A.A.C.) R2-19-119, which requires the party asserting a claim to prove their case by a "Preponderance of the Evidence."
In simple terms, the Sellers were required to prove that their allegations were "more likely true than not." The ALJ concluded they failed to meet this burden. The Association proved that its ARC meetings were not "regularly scheduled" and that the withheld legal records fell squarely within the statutory exceptions for attorney-client privilege and pending litigation.
6. Key Takeaways for HOA Members and Boards
The Sellers v. Crossings at Willow Creek case serves as a definitive guide for interpreting A.R.S. Title 33. Homeowners and board members should internalize the following lessons:
- The "Regularly Scheduled" Threshold: Under A.R.S. § 33-1804(A), only committee meetings that occur on a set, recurring basis require formal notice to the membership. "On-demand" or "as-necessary" meetings are legally distinct and do not carry the same notice requirements.
- Statutory Symmetry in Confidentiality: There is a direct parallel between the reasons a board may close a meeting under A.R.S. § 33-1804(A)(1-5) and the reasons it may withhold records under A.R.S. § 33-1805(B). Legal advice and pending litigation are strictly protected in both contexts to preserve the association's legal position.
- The Importance of Precise Bylaws: The phrase "from time to time as necessary" in the Crossings' Bylaws was a primary factor in the Association's victory. Boards must ensure their governing documents are aligned with state statutes to provide maximum operational flexibility.
- The Burden of Proof is on the Accuser: Per A.A.C. R2-19-119, the association is not required to prove it followed the law; rather, the homeowner must provide credible evidence that a violation occurred. Mere disagreement with a board's administrative style does not constitute a legal violation.
As a homeowner, you have a right to transparency, but that right is not unlimited. As a board member, you have a duty to be open, but you also have a duty to protect the association’s legal interests. Review your community’s bylaws and A.R.S. Title 33 immediately. Understanding these boundaries is the only way to ensure your community remains governed by law rather than by conflict.
Case Participants
Petitioner Side
- John Sellers (petitioner)
Homeowner
appeared through John Sellers - Debborah Sellers (petitioner)
Homeowner
Testified; interior designer
Respondent Side
- Joshua M. Bolen (attorney)
Carpenter, Hazlewood, Delgado & Bolen, PLC
Attorney for Crossings at Willow Creek Property Owners Association - Brenda Doziar (board member)
Crossings at Willow Creek Property Owners Association
ARC member - Robert Balzano (witness)
Former statutory agent and manager of Crossings - Kenneth Burnett (board member)
Crossings at Willow Creek Property Owners Association
Neutral Parties
- M. Douglas (ALJ)
Office of Administrative Hearings - G. Eugene Neil (witness)
City of Prescott
Interim City Attorney - Larry Harding (witness)
Commercial insurance agent for Crossings - Gene Palma (agency director)
Department of Fire, Building and Life Safety - Cliff J. Vanell (agency director)
Office of Administrative Hearings
Director who certified the decision - Joni Cage (agency staff)
Department of Fire, Building and Life Safety
Recipient of decision copy