Case Summary
| Case ID | 19F-H1919070-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2019-12-02 |
| Administrative Law Judge | Thomas Shedden |
| Outcome | The ALJ dismissed the petition, finding that the Respondent provided all responsive records in its possession. The tribunal held that A.R.S. § 33-1805(A) does not require an association to obtain and produce records it does not have. |
| Filing Fees Refunded | $500.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Mangus (AKA Gary) L.D. MacLeod Grantor and Trustee | Counsel | — |
|---|---|---|---|
| Respondent | Mogollon Airpark, Inc. | Counsel | Gregory Stein |
Alleged Violations
A.R.S. § 33-1805
Outcome Summary
The ALJ dismissed the petition, finding that the Respondent provided all responsive records in its possession. The tribunal held that A.R.S. § 33-1805(A) does not require an association to obtain and produce records it does not have.
Why this result: Petitioner failed to meet the burden of proof; the ALJ ruled that the statutory requirement to make records available does not extend to records not in the association's possession.
Key Issues & Findings
Failure to provide records (CD history trail)
Petitioner requested specific historical records regarding four CDs. Respondent provided records in its possession and some obtained from banks, but Petitioner argued Respondent was required to obtain further 'history trails' it did not possess.
Orders: Petition dismissed.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
- A.R.S. § 33-1805(A)
Video Overview
Audio Overview
Decision Documents
19F-H1919070-REL Decision – 756469.pdf
19F-H1919070-REL Decision – 756469.pdf
Administrative Law Judge Decision: MacLeod v. Mogollon Airpark, Inc.
Executive Summary
On December 2, 2019, Administrative Law Judge Thomas Shedden issued a decision in the matter of Mangus L.D. MacLeod v. Mogollon Airpark, Inc. (Case No. 19F-H1919070-REL). The dispute centered on whether the Respondent, Mogollon Airpark, Inc., violated Arizona Revised Statutes (A.R.S.) § 33-1805 by failing to provide certain financial records requested by the Petitioner, Mangus MacLeod.
The Petitioner contended that the Association was legally obligated to obtain and produce bank records related to four Certificates of Deposit (CDs) from 2017, even if those records were not currently in the Association's possession. The Respondent maintained that it had provided all responsive records it possessed and had even assisted the Petitioner in obtaining additional records directly from financial institutions.
The Administrative Law Judge (ALJ) ruled in favor of the Respondent, concluding that A.R.S. § 33-1805(A) does not require an association to procure records it does not have. Consequently, the petition was dismissed.
Detailed Analysis of Key Themes
1. Statutory Interpretation of A.R.S. § 33-1805(A)
The central legal question was the scope of an association's duty to make "financial and other records" available. The Petitioner argued that because certain records (like bank history trails) are mentioned in an association’s records retention policy, they must be produced upon request regardless of whether the association actually possesses them.
The ALJ rejected this interpretation, noting that:
- Statutes must be interpreted to provide "fair and sensible" results.
- The tribunal cannot expand a statute to include requirements not explicitly stated in its provisions.
- Requiring an association to obtain records it does not possess would constitute an "absurd and unreasonable construction" of the law.
2. Possession vs. Acquisition
The case distinguished between records held by the Association and records held by third-party entities (banks).
- Respondent's Position: On April 22, 2019, the Association provided all records it currently had, including some newly acquired from banks via the Board president's proactive efforts.
- Petitioner's Position: The Association was responsible for obtaining the full "history trail" of the CDs from the banks to facilitate a proper audit.
The ALJ found that once the Association provided all records in its possession, it had fulfilled its statutory duty.
3. Evidentiary Standards and Burden of Proof
The Petitioner bore the burden of proof by a preponderance of the evidence. The ALJ determined that the Petitioner failed to:
- Identify any responsive records that were actually in the Respondent’s possession at the time of the request.
- Provide substantial evidence that the Respondent failed to comply with a second records request.
4. Good Faith Cooperation
The findings of fact highlight that the Respondent, specifically Board president Craig Albright and the management company (HOAMCO), acted cooperatively. This included:
- Contacting three banks to solicit records.
- Directly accompanying the Petitioner to banks in June 2019 to help produce records.
- Maintaining communication regarding the lack of hardcopy or electronic formats for older 2017 records.
Key Quotes and Contextual Analysis
| Quote | Source Context | Significance |
|---|---|---|
| "The 'core' issue in this matter is whether 'other records' as used in ARIZ. REV. STAT. section 33-1805(A) includes all records listed in that retention policy regardless of whether Respondent actually has those records." | Finding of Fact #18 | Defines the Petitioner's legal theory: that a retention policy creates an absolute mandate to produce, even if the records must be sought from third parties. |
| "Courts will not place an absurd and unreasonable construction on statutes." | Conclusion of Law #4 (Citing State v. McFall) | Establishes the judicial boundary for interpreting HOA records laws; the ALJ used this to dismiss the idea that HOAs must "hunt" for missing records. |
| "Mr. MacLeod acknowledged that he could not identify any records that were responsive to his requests that were in the possession of Respondent when he made those requests." | Finding of Fact #20 | This admission was fatal to the Petitioner's case, as the statute governs existing records of the association. |
| "The preponderance of the evidence shows that Respondent provided Mr. MacLeod with copies of all records it had that were responsive to his first request." | Conclusion of Law #8 | The ultimate factual finding that cleared the Respondent of the alleged violation. |
Actionable Insights
For Homeowners' Associations (HOAs)
- Possession is the Metric: Compliance with A.R.S. § 33-1805(A) is generally measured by the production of records currently in the association's possession (either physical or electronic).
- Documentation of Effort: The Respondent’s success was bolstered by the ability to show they contacted banks and worked with the management company (HOAMCO) to find responsive documents. Associations should document all efforts to fulfill record requests.
- Third-Party Suggestion: When records are held by third parties (like banks), suggesting that the requester contact those entities directly is a valid and helpful response, though not strictly required by the statute to obtain those records for them.
For Petitioners/Members
- Identifying Possession: Before filing a petition, a member should be able to provide evidence that the association actually holds the records being withheld.
- Retention Policy vs. Statute: A retention policy dictates what an association should keep, but the statutory penalty for non-production under § 33-1805 applies to what the association has available for examination.
- Meeting the Standard of Proof: Petitioners must provide "substantial evidence" (evidence that would permit a reasonable person to conclude the finding is substantiated) to prevail in administrative hearings.
Procedural Takeaway
- Cooperation as Defense: While the hearing involved "hours of testimony" and "a thousand pages of proposed exhibits," the ALJ focused on the Respondent’s cooperative behavior and the credible testimony of the Board president regarding the April 22nd production of documents. This suggests that demonstrating "good faith" can be a powerful defense in administrative disputes.
MacLeod v. Mogollon Airpark, Inc.: A Study Guide on Association Records and Statutory Requirements
This study guide provides a comprehensive overview of the administrative law case Mangus L.D. MacLeod v. Mogollon Airpark, Inc. (No. 19F-H1919070-REL). The case centers on the interpretation of Arizona Revised Statutes (A.R.S.) § 33-1805 regarding the duty of a homeowners' association to provide records to its members.
Key Concepts and Case Overview
Core Dispute
The primary issue in this matter is whether an association is legally required to obtain and produce records that are not currently in its possession to satisfy a member’s request under A.R.S. § 33-1805. The Petitioner, Mangus MacLeod, sought the "history trail" for four Certificates of Deposit (CDs) held by Mogollon Airpark, Inc. dating back to 2017.
Legal Venue and Parties
- Tribunal: Arizona Office of Administrative Hearings.
- Petitioner: Mangus (AKA Gary) L.D. MacLeod, Grantor and Trustee.
- Respondent: Mogollon Airpark, Inc. (managed by HOAMCO).
- Administrative Law Judge: Thomas Shedden.
Statutory Framework: A.R.S. § 33-1805(A)
This statute governs the availability of association records:
- Availability: All financial and other records of the association must be made reasonably available for examination.
- Timeline for Examination: The association has ten business days to fulfill a request for examination.
- Timeline for Copies: The association has ten business days to provide copies of requested records upon a request for purchase.
Summary of Findings and Legal Conclusions
Factual Timeline
| Date | Event |
|---|---|
| April 13 & May 3, 2019 | Mr. MacLeod makes formal requests for CD records from 2017. |
| April 22, 2019 | HOAMCO (Respondent's management) provides all records currently in possession. |
| June 12, 2019 | Mr. MacLeod files a petition alleging non-compliance. |
| June 2019 | Board president Craig Albright assists MacLeod by visiting banks to produce further records. |
| Oct & Nov 2019 | Administrative hearings are conducted. |
| December 2, 2019 | Administrative Law Judge issues a decision dismissing the petition. |
Judicial Reasoning
- Possession of Records: The court found that the Respondent provided all records it had in its possession at the time of the request. The Respondent even went beyond its legal duty by soliciting new records from banks to assist the Petitioner.
- Statutory Interpretation: The judge ruled that A.R.S. § 33-1805(A) does not require an association to obtain records it does not have. Expanding the statute to include such a requirement would be "absurd and unreasonable."
- Burden of Proof: The Petitioner failed to provide "substantial evidence" that the Respondent withheld any records that were actually in its possession.
Short-Answer Practice Questions
1. Who bears the burden of proof in this administrative hearing? Answer: The Petitioner (Mangus MacLeod).
2. What is the standard of proof required for this case? Answer: Preponderance of the evidence.
3. According to A.R.S. § 33-1805(A), how many business days does an association have to provide copies of requested records? Answer: Ten business days.
4. Why did the Administrative Law Judge dismiss Mr. MacLeod’s petition? Answer: Because the Respondent provided all records it possessed that were responsive to the request, and the law does not require associations to obtain records from third parties (like banks) that they do not currently hold.
5. How did the Board president, Craig Albright, demonstrate cooperation after the petition was filed? Answer: He accompanied Mr. MacLeod to several banks in June 2019 to help have records produced directly for him.
Essay Questions for Deeper Exploration
1. Statutory Construction and Judicial Restraint
The decision references State ex rel. Morrison v. Anway, stating that a tribunal "may not expand or extend a statute to include that which is not within its provisions." Discuss how this principle applied to the Judge’s interpretation of "other records" in A.R.S. § 33-1805(A). Why would requiring an association to retrieve third-party records be considered an "absurd and unreasonable" construction of the law?
2. The Definition of "Reasonably Available"
Under A.R.S. § 33-1805(A), records must be made "reasonably available." Based on the findings of fact in this case, evaluate whether Mogollon Airpark, Inc. and its management company, HOAMCO, met this standard. Consider the actions taken by the Board president to contact banks and the information sent via email on April 22, 2019.
3. Evidentiary Weight and Witness Credibility
On the first day of the hearing, witness Craig Albright was described as "confused" regarding when certain bank records were obtained. On the second day, however, the Judge found his testimony "credible." Analyze the importance of witness credibility in administrative hearings and how the final determination of facts (Findings of Fact #15 and #16) influenced the legal outcome.
Glossary of Important Terms
- A.R.S. § 33-1805: The specific Arizona statute governing the inspection and copying of association records by members.
- Administrative Law Judge (ALJ): A judge who moves over trials and adjudicates disputes involving administrative agencies.
- HOAMCO: The management company for Mogollon Airpark, Inc.
- Petitioner: The party who initiates a lawsuit or petition (in this case, Mangus MacLeod).
- Preponderance of the Evidence: The standard of proof where the evidence has the "most convincing force" and shows that a fact is more likely true than not.
- Respondent: The party against whom a petition is filed (in this case, Mogollon Airpark, Inc.).
- Substantial Evidence: Evidence that would permit a reasonable person to conclude that a proposed finding should be substantiated.
- Tribunal: A court or forum of justice; in this context, the Office of Administrative Hearings.
The Limits of Transparency: Lessons from MacLeod v. Mogollon Airpark, Inc.
1. Introduction: The Tension Between Transparency and Practicality
In the world of community association governance, transparency is a statutory mandate, yet it is frequently tested by the practical realities of record-keeping. A recurring flashpoint for litigation involves a fundamental question: does an association’s duty to provide records extend to documents it does not actually possess?
This tension reached a definitive conclusion in a dispute between homeowner Mangus MacLeod and Mogollon Airpark, Inc. The matter, litigated before the Arizona Department of Real Estate (Case No. 19F-H1919070-REL) and heard by the Office of Administrative Hearings, serves as a critical boundary-marker for the rights of members and the administrative obligations of boards. The ruling clarifies that while transparency is essential, the law does not require an association to perform the impossible or the extra-statutory.
2. The Request: A Search for the "History Trail"
The conflict began in the spring of 2019. On April 13 and May 3, Petitioner Mangus MacLeod submitted formal requests to Mogollon Airpark, Inc. to examine and copy records dating back to 2017 concerning four Certificates of Deposit (CDs) held by the association. Mr. MacLeod's stated motive was to establish a "history trail" for these assets, which he argued was necessary for a "proper audit" of the association’s financial standing.
In response, Board President Craig Albright took proactive steps to satisfy the request. He coordinated with the association’s treasurer and contacted three separate financial institutions to retrieve the records. While two banks cooperated electronically, a third refused. The gathered documents, combined with records already in the association’s possession, were delivered to MacLeod via the management company, HOAMCO, on April 22, 2019.
Despite these efforts, MacLeod remained dissatisfied. He contended that the association was legally required to obtain the missing 2017 bank records, asserting that the association’s responsibility was not limited by what was currently in its filing cabinets but extended to any records it should have according to its internal policies.
3. Arguments from Both Sides
| Petitioner (MacLeod) | Respondent (Mogollon Airpark, Inc.) |
|---|---|
| Statutory Expansion: Argued that the term "other records" in A.R.S. § 33-1805(A) should be interpreted to include all documents listed in the HOA’s records retention policy, regardless of whether the HOA actually possesses them. | Possession-Based Compliance: Asserted that the association satisfied its legal duty by providing all responsive records currently in its possession or control. |
| Mandatory Procurement: Claimed the HOA has an affirmative legal obligation to retrieve records from third parties (banks) if a member requests them for an audit. | Reasonable Effort: Argued that there is no statutory mandate to "create" a record or "procure" third-party documents that the association does not hold. |
| The "Audit" Motive: Asserted that the "history trail" was essential for financial oversight and that the HOA’s failure to produce it hindered member transparency. | Good Faith Action: Highlighted Board President Albright’s extensive efforts to assist, including personally accompanying the Petitioner to banks to attempt to retrieve the data. |
4. The Legal Verdict: Interpreting A.R.S. § 33-1805(A)
Administrative Law Judge (ALJ) Thomas Shedden focused the ruling on the strict construction of A.R.S. § 33-1805(A), which requires that association records be made "reasonably available for examination."
In his analysis, the ALJ firmly constrained the scope of the statute, refusing to "legislate from the bench" by expanding the law’s requirements. The court relied on three core legal principles to reach its decision:
- Avoidance of Absurdity: Citing Gutierrez v. Industrial Commission of Arizona and State v. McFall, the ALJ noted that statutes must be interpreted to provide a "fair and sensible result" and that courts must reject "absurd and unreasonable construction."
- Statutory Limits: Referencing State ex rel. Morrison v. Anway, the ALJ emphasized that a tribunal may not expand or extend a statute to include requirements not expressly written in its provisions.
- Defining "Reasonably Available": The ALJ clarified that "reasonably available" pertains to the manner and timing of access to records the association actually has—it does not create a mandate for the association to hunt down, procure, or produce records held by third parties.
The ALJ concluded that equating a "retention policy" list with a "mandatory production" list was an unreasonable construction of the law.
5. Critical Takeaways for Homeowners and Boards
The MacLeod decision provides a roadmap for handling records disputes with precision and professional distance:
- Possession vs. Obligation: A board’s duty is to produce what it has. The law does not require an association to "go hunting" for third-party records. If a record is not in the association's possession or control, the association has no statutory obligation to go out and get it.
- The Credibility of Good Faith: During the hearing, Board President Albright was initially "confused" about the exact dates some records were obtained. However, because his underlying documentation (Exhibit 11) was solid and his actions—such as accompanying the petitioner to the bank—showed a clear intent to cooperate, the ALJ found his testimony credible.
- The Burden of Proof is Substantial: Under Arizona Administrative Code § R2-19-119, the Petitioner bears the burden of proof by a "preponderance of the evidence." The "smoking gun" in this case was MacLeod’s own admission: he could not identify a single record that the HOA actually possessed that was being withheld.
- Internal Policies are Not Statutes: While a "records retention policy" is a best-practice internal document, it does not expand the association’s legal liability under A.R.S. § 33-1805. A homeowner cannot use an internal policy to force a board to perform duties that the state legislature did not expressly authorize.
6. Conclusion: A Fair and Sensible Result
The ruling in MacLeod v. Mogollon Airpark, Inc. reinforces a standard of reasonableness. While transparency is the law, it is not an unlimited license for members to demand administrative labor from their boards. By adhering to the "fair and sensible" standard, the ALJ protected community associations from being forced to act as private investigators for individual members. For boards, the takeaway is clear: document your records, cooperate in good faith, and rest assured that your legal obligations end where your actual possession of records begins.
Case Participants
Petitioner Side
- Mangus (AKA Gary) L.D. MacLeod (Petitioner)
Appeared and testified
Respondent Side
- Gregory Stein (Attorney for Respondent)
Carpenter, Hazlewood, Delgado & Bolen LLP - Craig Albright (Board President)
Mogollon Airpark, Inc.
Witness; testified - Brian Dye (Community Manager)
HOAMCO
Neutral Parties
- Thomas Shedden (Administrative Law Judge)
Office of Administrative Hearings - Judy Lowe (Commissioner)
Arizona Department of Real Estate
Recipient of the order - Felicia Del Sol (Administrative Staff)
Office of Administrative Hearings
Transmitted the order