Case Summary
| Case ID | 14F-H1415007-BFS |
|---|---|
| Agency | Department of Fire, Building and Life Safety |
| Tribunal | OAH |
| Decision Date | 2015-02-16 |
| Administrative Law Judge | M. Douglas |
| Outcome | partial |
| Filing Fees Refunded | $2,000.00 |
| Civil Penalties | $200.00 |
Parties & Counsel
| Petitioner | William P. Lee | Counsel | — |
|---|---|---|---|
| Respondent | Greenlaw Townhouses Unit Two HOA | Counsel | Keith Hammond |
Alleged Violations
A.R.S. § 33-1812(A)(4); A.R.S. § 33-1804
A.R.S. § 33-1813(A)(1)
A.R.S. § 33-1804
Outcome Summary
The HOA violated A.R.S. § 33-1813(A)(1) by failing to obtain a requisite signed petition from members before holding a special meeting to remove the Petitioner from the Board of Directors. However, the HOA did not violate statutes or bylaws regarding the vote to increase the number of directors. Petitioner was awarded half of the filing fees ($1,000) and the HOA was assessed a $200 civil penalty.
Why this result: Regarding the board expansion and other claims, the ALJ found the preponderance of evidence failed to support that the vote violated bylaws or statutes.
Key Issues & Findings
Improper Amendment of Bylaws/Board Expansion
Petitioner alleged the vote to increase the board size from 3 to 5/7 violated bylaws and statutes regarding absentee ballots and open meetings.
Orders: Denied; evidence failed to support finding of violation.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
Removal from Board without Petition
HOA held a special meeting to remove Petitioner from the Board without first obtaining a petition signed by the required percentage of members.
Orders: HOA ordered to comply with A.R.S. § 33-1813(A)(1) in the future; civil penalty assessed.
Filing fee: $500.00, Fee refunded: Yes, Civil penalty: $200.00
Disposition: petitioner_win
Misuse of Emergency Meeting
Petitioner alleged the Board misused an emergency meeting and resulting notice to harass and libel him.
Orders: Denied; insufficient evidence.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
Decision Documents
14F-H1415007-BFS Decision – 428996.pdf
14F-H1415007-BFS Decision – 435021.pdf
**Case Summary: William P. Lee v. Greenlaw Townhouses Unit Two HOA**
**Case No. 14F-H1415007-BFS**
**Overview**
This administrative hearing, held on February 4, 2015, before Administrative Law Judge M. Douglas, addressed a petition filed by homeowner William P. Lee against Greenlaw Townhouses Unit Two HOA ("Greenlaw"). The Petitioner alleged that the HOA violated Arizona statutes and association bylaws regarding the amendment of board composition and the procedure used to remove him from the Board of Directors,.
**Key Facts and Arguments**
The Petitioner, a member of the HOA and former director, raised two primary issues:
1. **Board Expansion:** Lee alleged the HOA fraudulently amended Bylaw Article IV to increase the number of directors from three to five or seven without proper authority,.
2. **Removal from Board:** Lee alleged the "Secret Ballot" and Special Meeting used to remove him from the Board violated A.R.S. § 33-1813(A)(1) and association bylaws.
Greenlaw’s defense included the following points:
* **Regarding Expansion:** The Board argued the increase was necessary to achieve quorums and was approved by a vote of the members, complying with bylaws allowing shareholders to change the number of directors,.
* **Regarding Removal:** Greenlaw conceded that it failed to obtain a signed petition by the members calling for Lee's removal prior to holding the vote, as required by A.R.S. § 33-1813(A)(1). However, the Board argued the removal was justified because Lee was "aggressive and volatile," created dissension, and sent unauthorized letters to litigants involved in lawsuits against the HOA,. The vote to remove him was 70 to 4.
**Legal Findings**
The Administrative Law Judge (ALJ) applied the preponderance of the evidence standard to the claims.
1. **Violation of Removal Statute:** The ALJ found that Greenlaw violated A.R.S. § 33-1813(A)(1). The statute requires a specific petition signed by members before a special meeting for removal can be called. The HOA admitted it failed to obtain this petition before holding the vote to remove the Petitioner,.
2. **No Violation Regarding Board Expansion:** The ALJ ruled against the Petitioner regarding the board size amendment. The evidence showed that Article XI of the bylaws allows members to vote on changing the authorized number of directors, and the Petitioner failed to prove that the vote conducted violated the bylaws or A.R.S. § 33-1812,.
**Outcome and Final Order**
The ALJ deemed William P. Lee the prevailing party based on the violation regarding his removal.
* **Compliance:** Greenlaw was ordered to comply with A.R.S. § 33-1813(A)(1) in future actions.
* **Monetary Sanctions:** Greenlaw was ordered to pay the Petitioner $1,000.00 (one-half of his filing fee) and pay a $200.00 civil penalty to the Department.
The decision was certified as the final administrative decision on April 1, 2015, after the Department of Fire, Building and Life Safety took no action to reject or modify the ALJ's ruling,.
Case Participants
Petitioner Side
- William P. Lee (petitioner)
Homeowner and former board member
Respondent Side
- Keith Hammond (attorney)
Keith A. Hammond P.C. - Judith W. Kyrala (witness)
Greenlaw Townhouses Unit Two HOA
Board Secretary - Melanie Lashlee (property manager)
HOMECO
Community Association Manager; witness
Neutral Parties
- M. Douglas (ALJ)
Office of Administrative Hearings - Gene Palma (agency director)
Department of Fire Building and Life Safety - Greg Hanchett (agency director)
Office of Administrative Hearings
Interim Director; certified the decision - Joni Cage (staff)
Department of Fire Building and Life Safety
c/o for Gene Palma - Rosella J. Rodriguez (staff)
Office of Administrative Hearings
Clerk who mailed copies
