Tag Archives: SF

JOHN R KRAHN LIVING TRUST / JANET KRAHN LIVING TRUST v. TONTO FOREST ESTATES HOMEOWNERS ASSOCIATION

Posted on by

Case Summary

Case ID 25F-H076-REL
Agency Arizona Department of Real Estate
Tribunal —
Decision Date 2025-11-18
Administrative Law Judge SF
Outcome Petitioner failed to meet his burden that the documents were not made reasonably available and that Respondent failed to meet their requirement to produce those documents within ten days.
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner JOHN R KRAHN LIVING TRUST / JANET KRAHN LIVING TRUST Counsel —
Respondent TONTO FOREST ESTATES HOMEOWNERS ASSOCIATION Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H076-REL Decision – 1356556.pdf

Uploaded 2026-04-24T12:54:46 (46.4 KB)

25F-H076-REL Decision – 1357642.pdf

Uploaded 2026-04-24T12:54:50 (49.7 KB)

25F-H076-REL Decision – 1359021.pdf

Uploaded 2026-04-24T12:54:54 (8.2 KB)

25F-H076-REL Decision – 1369428.pdf

Uploaded 2026-04-24T12:54:58 (115.8 KB)

Briefing Document: Krahn Living Trust v. Tonto Forest Estates HOA (Case No. 25F-H076-REL)

Executive Summary

This document synthesizes the proceedings and outcome of Case No. 25F-H076-REL, heard by the Arizona Office of Administrative Hearings (OAH). The case centered on a petition filed by the John R Krahn Living Trust (“Petitioner”) against the Tonto Forest Estates Homeowners Association (“Respondent”), alleging a violation of A.R.S. § 33-1805 for failing to provide association records within the statutory 10-business-day deadline.

The Petitioner’s case was built on the assertion that a valid written request was sent via email on June 1, 2025, to the HOA Secretary, followed by another email and two voicemails. The Petitioner presented extensive arguments based on the legal principle of “rebuttable presumption of receipt” and a statistical analysis claiming the probability of all communication attempts failing was astronomically low, thus evidencing bad faith and intentional non-compliance by the Respondent.

The Respondent’s defense was that they never received the email or voicemails in question. They argued that email is an unreliable communication method and that the burden of proof for delivery and receipt rested solely with the Petitioner. They further contended that established protocol required requests to be made through the community manager.

The final decision, issued by Administrative Law Judge (ALJ) Samuel Fox, found in favor of the Respondent. The ruling hinged on a Cease and Desist letter issued by the HOA to the Petitioner in March 2025. The ALJ determined this letter established a new, “reasonable” process for communication, requiring the Petitioner to submit all future correspondence via physical mail to the management office. By sending his request via email, the Petitioner disregarded this specific directive. Consequently, the ALJ concluded that the Petitioner failed to meet his burden of proof, as a reasonable method for submitting requests was available but was not used.

Case Overview

Case Number

25F-H076-REL

Tribunal

Arizona Office of Administrative Hearings (OAH)

Presiding Judge

Samuel Fox, Administrative Law Judge

Petitioner

John R Krahn Living Trust / Janet Krahn Living Trust (Represented by John R. Krahn)

Respondent

Tonto Forest Estates Homeowners Association (Represented by Dwight A. Jolivette, President)

Core Allegation

Violation of A.R.S. § 33-1805 by failing to provide requested association records within the statutory 10-business-day deadline.

Final Outcome

Respondent deemed the prevailing party.

Chronology of Key Events

March 21, 2025

Respondent issues a formal Cease and Desist letter to Petitioner, directing that future correspondence be submitted in writing and mailed to the management office.

June 1, 2025

Petitioner sends an email with a records request to three known email addresses for HOA Secretary Kenneth Riley.

June 3, 2025

Petitioner sends a follow-up email to the same three addresses.

June 16, 2025 (approx.)

The 10-business-day statutory deadline for a response passes.

June 23, 2025

Petitioner leaves voicemail messages for Secretary Riley and Community Manager Barbara Bonilla regarding the overdue request.

July 25, 2025

Petitioner files a petition with the Arizona Department of Real Estate alleging a violation of A.R.S. § 33-1805.

September 29, 2025

A subpoena is issued in the matter.

October 3, 2025

ALJ Fox issues an order quashing the September 29 subpoena.

October 6, 2025

Petitioner submits a Motion to Reconsider.

October 14, 2025

ALJ Fox denies the Motion to Reconsider and a motion for summary judgment, and sets preliminary disclosure deadlines for October 24, 2025.

October 29, 2025

The administrative hearing is held.

November 18, 2025

ALJ Fox issues the final decision, ruling in favor of the Respondent.

Petitioner’s Central Arguments and Evidence

The Petitioner’s case was built on the premise that multiple, redundant communication attempts were made in good faith and that the Respondent’s claim of non-receipt was statistically impossible and indicative of bad faith.

• Statutory Compliance: The Petitioner argued that A.R.S. § 33-1805 simply requires a “written request” and that his emails on June 1 and June 3 satisfied this requirement. He stated, “Email is in writing and is a method used extensively by respondent.”

• Proper Recipient: The request was directed to HOA Secretary Ken Riley, who, according to bylaw 5.5, “shall have charge of all of the association’s books, records, and papers.” The Petitioner included this bylaw in his email to the Secretary.

• Rebuttable Presumption of Receipt: The Petitioner cited Arizona case law (Lee v. State) and the “mailbox rule,” arguing that sending an email to a correct, functioning address without a bounce notification creates a legal presumption of receipt. This, he claimed, shifted the burden to the Respondent to prove non-receipt with evidence such as server logs, which they failed to provide.

• Evidence of Intentional Evasion: The Petitioner introduced an email from Secretary Riley dated October 13, 2025 (Exhibit 6), as proof of intentional obstruction. In it, Mr. Riley stated:

◦ “You are currently blocked from sending emails to my work and will continue to be blocked.”

◦ “since your email earlier email did not bounce you clearly know I have seen it.” The Petitioner argued this was a “direct admission that the absence of a bounce notification to a known good email address confirms receipt.”

• Statistical Improbability of Failure: A core part of the Petitioner’s argument was a mathematical analysis suggesting the probability of all communication attempts failing was infinitesimal.

◦ The odds of four emails failing was calculated as 1 in 6.25 million.

◦ The odds of two independent voicemails failing was calculated as 1 in 10,000.

◦ The combined probability of all six attempts failing was stated to be “approximately 1 in 62.5 billion.”

• Pattern of Non-Compliance: The Petitioner claimed this was the Respondent’s “fourth time they violate 1805” and that this pattern justified a civil penalty to deter future misconduct.

Respondent’s Central Arguments and Evidence

The Respondent’s defense was centered on a simple claim of non-receipt, the unreliability of electronic communication, and the assertion that the Petitioner failed to follow the proper procedure for requests.

• Claim of Non-Receipt: The Respondent’s primary position was, “Our position is very simple, straightforward. We didn’t get it.” They framed the dispute as a “he said she said situation where neither side can definitively prove their position.”

• Unreliability of Technology: Respondent’s representative, Dwight Jolivette, drew on his military background in information systems to argue that technology is not perfectly reliable. He cited potential issues like work-controlled laptops, server filters, travel, and other variables as reasons the email may not have been delivered. He stated, “technology especially in the communications area as much as we like to believe opposite is not as reliable as people think.”

• Burden of Proof: The Respondent consistently maintained that the burden was on the Petitioner to prove that the “email reached its intended destination.” They argued, “How are we supposed to respond to an email that we don’t have?”

• Cease and Desist Directive: The Respondent argued that a cease and desist letter sent in March 2025 established a specific communication protocol for the Petitioner, requiring him to use U.S. mail for all correspondence with the management company.

• Established Protocol: Mr. Jolivette testified that the unwritten “best practice” was for records requests to be sent to the community manager, who holds the documents, rather than the volunteer board secretary.

• Submitted Evidence: Respondent submitted written statements (Exhibits A and B) from Secretary Ken Riley and Community Manager Barbara Bonilla, both stating they had no record of receiving the emails or voicemails in question.

Final Decision and Rationale

ALJ Samuel Fox’s decision on November 18, 2025, sided with the Respondent. The ruling did not focus on the technical arguments about email delivery but on the legal standard of “reasonability” established by A.R.S. § 33-1805.

• Key Findings of Fact:

◦ On March 21, 2025, Respondent issued a Cease and Desist letter demanding the Petitioner stop email communication with the community manager.

◦ The letter specified a new procedure: “any concerns or correspondence must be submitted in written form and mailed to the Association’s management office at the following address.”

◦ The letter also stated that Respondent would continue to comply with records requests.

◦ Prior to this letter, it was undisputed that the community manager was the appropriate recipient for such requests.

• Conclusions of Law and Rationale:

◦ The ALJ determined that A.R.S. § 33-1805 does not prohibit an association from establishing a specific, reasonable process for requesting documents.

◦ The Cease and Desist letter provided a “clear process for future requests” for this specific Petitioner.

◦ The requirement to submit requests via physical mail was deemed “reasonable.”

◦ The decision states, “the preponderance of the evidence established that Respondent informed Petitioner about how to submit future requests, and Petitioner disregarded that information.”

◦ The final conclusion was that the Petitioner “failed to meet his burden that the documents were not made reasonably available and that Respondent failed to meet their requirement to produce those documents within ten days.”

The judge noted that the outcome would have been different if the Petitioner had been completely prohibited from contacting the community manager, but the letter provided a specific, alternative method of contact (mail) which the Petitioner chose not to use.

Case Study Guide: John R. Krahn Living Trust v. Tonto Forest Estates HOA

This study guide provides a comprehensive analysis of the legal dispute between the John R. Krahn Living Trust and the Tonto Forest Estates Homeowners Association (HOA), adjudicated under Case No. 25F-H076-REL at the Arizona Office of Administrative Hearings (OAH).

I. Key Legal Concepts and Statutes

A. Arizona Revised Statutes (A.R.S.) § 33-1805

The central statute in this matter governs the availability of association records. It mandates that all financial and other records of an HOA must be made "reasonably available" for examination by any member. Once a written request is made, the association has 10 business days to fulfill it.

B. Burden of Proof: Preponderance of the Evidence

In administrative hearings of this nature, the Petitioner bears the burden of proof. They must demonstrate that the Respondent violated the statute by a "preponderance of the evidence," meaning the contention is "more probably true than not." Conversely, the Respondent bears the same burden for any affirmative defenses raised.

C. The "Mailbox Rule" and Rebuttable Presumption

This legal principle suggests that proof of proper mailing (or, by analogy, sending an email to a functioning address) creates a rebuttable presumption that the recipient received the communication. In this case, the Petitioner argued that the lack of a "bounce notification" for his emails functioned as near-certain proof of delivery.

D. Administrative Reasonability

The Administrative Law Judge (ALJ) interpreted A.R.S. § 33-1805 through the lens of "reasonability." The statute does not prohibit associations from establishing specific processes for requests, nor does it mandate that associations must accept requests via email, provided a reasonably accessible method (such as physical mail) is available.

II. Case Timeline and Factual Background

Date Event
March 21, 2025 HOA issues a formal Cease and Desist (C&D) letter to Petitioner, requiring all future correspondence to be sent via physical mail to the management office.
June 1, 2025 Petitioner sends an email record request to Secretary Kenneth Riley at three known email addresses.
June 3, 2025 Petitioner sends a follow-up email regarding the June 1st request.
June 16, 2025 The statutory 10-business-day deadline for the June 1st request expires.
June 23, 2025 Petitioner leaves voicemails for Secretary Riley and Community Manager Barbara Bonilla.
July 25, 2025 Petitioner files a formal petition with the Arizona Department of Real Estate alleging a violation of A.R.S. § 33-1805.
Oct 29, 2025 Formal hearing held at the OAH in Phoenix, Arizona.
Nov 18, 2025 ALJ Samuel Fox issues the final decision, ruling in favor of the Respondent (HOA).

III. Short-Answer Practice Questions

  1. Who was the designated custodian of association records according to the Tonto Forest Estates Bylaws?
  • Answer: The Secretary of the Board (specifically Kenneth Riley during the period in question).
  1. What was the primary reason the ALJ ruled against the Petitioner despite the Petitioner proving he sent multiple emails?
  • Answer: A prior Cease and Desist letter had established a specific, reasonable protocol for communication (physical mail), which the Petitioner disregarded by using email.
  1. According to the Petitioner's mathematical analysis, what were the odds that all of his communication attempts (six emails and two voicemails) failed purely due to technical error?
  • Answer: Approximately 1 in 62.5 billion.
  1. What specific record was the Petitioner seeking in his June 1, 2025, request?
  • Answer: An unprivileged invoice from CAI LLC.
  1. Where is the Office of Administrative Hearings located?
  • Answer: 1740 West Adams Street, Lower Level, Phoenix, Arizona 85007.
  1. How did the Respondent (HOA) justify the claim that technology is unreliable for legal notice?
  • Answer: The HOA President cited his military background in satellite communications and "Information Systems Command," arguing that "gremlins" and technical blind spots can prevent delivery without generating bounce notifications.
  1. Does A.R.S. § 33-1805 explicitly require HOAs to accept record requests via email?
  • Answer: No. The statute does not specify the medium; it requires only that records be made "reasonably available."

IV. Essay Prompts for Deeper Exploration

1. The Intersection of Bylaws and Operational Protocols

Prompt: The Petitioner argued that Bylaw 5.5 made the Secretary the "custodian of records," and therefore his emails to the Secretary were legally sufficient. The Respondent argued that document requests were delegated to the Community Manager. Analyze how the ALJ resolved this conflict. In your response, address whether an HOA’s internal delegation of tasks can override statutory or bylaw-defined roles.

2. Evaluating "Reasonability" in the Digital Age

Prompt: A.R.S. § 33-1805 hinges on the "reasonability" of access. The ALJ ruled that requiring record requests via physical mail is reasonable, even if email is the faster, modern standard. Construct an argument either supporting the ALJ’s focus on established procedural protocols or critiquing it as an "extra-statutory burden" that undermines the intent of transparency in HOA governance.

3. Procedural Evasion vs. Technical Failure

Prompt: The Petitioner alleged "bad faith" and "intentional evasion," citing a pattern of hostility and the fact that the Board Secretary later admitted to blocking the Petitioner's email. The Respondent argued "technical failure" and a lack of a "meeting of the minds." Evaluate the evidence provided regarding the Secretary's blocking of emails and determine how much weight this should have carried in the final decision.

V. Glossary of Important Terms

  • Administrative Law Judge (ALJ): A judge who overrules or presides over trials and adjudicates disputes involving administrative agencies.
  • A.R.S. § 33-1805: The specific Arizona statute governing the inspection of planned community (HOA) records.
  • Bounce Notification: An automated electronic message informing the sender that their email was not delivered to the recipient.
  • Cease and Desist (C&D): A formal letter or order demanding that a party stop a specific activity (in this case, email communication) and refrain from doing it in the future.
  • Motion to Quash: A legal request to a court or tribunal to render a subpoena or other legal order invalid.
  • Motion to Reconsider: A request for the judge to review a previous decision based on new evidence or perceived errors in the original ruling.
  • Petitioner: The party who initiates the legal action or petition (The Krahn Living Trust).
  • Prevailing Party: The party in a lawsuit or hearing that wins the case.
  • Respondent: The party against whom a petition is filed (Tonto Forest Estates HOA).
  • Summary Judgment: A legal decision made by a court without a full trial, usually when there is no dispute as to the material facts of the case.
  • Tribunal: A court of justice or an administrative body with the authority to adjudicate disputes.

Digital vs. Direct: The High-Stakes Battle Over HOA Record Requests

1. Introduction: The 10-Day Clock and the Digital Divide

In the regulatory landscape of Arizona homeowners associations, transparency is governed by a strict statutory timeline. At the center of Case No. 25F-H076-REL lies A.R.S. § 33-1805, which mandates that association records be made "reasonably available" within 10 business days of a written request.

This case highlights the growing friction between homeowners seeking digital transparency and boards insisting on formal communication protocols. The dispute involves the John R. Krahn Living Trust (Petitioner) and the Tonto Forest Estates Homeowners Association (Respondent). The core legal trigger was a June 2025 request for a specific invoice from "CAI LLC," which evolved into a high-stakes debate over whether an HOA can legally restrict record requests to physical mail when a "challenged relationship" exists between the parties.

2. The Petitioner’s Case: Math, "Gremlins," and the Mailbox Rule

Beginning June 1, 2025, Petitioner John Krahn attempted to secure an invoice through what he termed a "Redundancy Strategy." To overcome any potential technical failures, Krahn executed six independent communication attempts:

  • Four Emails: Sent to three separate, known addresses for the Board Secretary—a "verify concrete" work email, a "GCTA" work email, and a personal Gmail address.
  • Two Voicemails: Left for both the Board Secretary and the community manager.

Krahn presented a "Mathematical Certainty" argument, asserting that based on industry failure rates, the probability of all six communications failing to reach their recipients was 1 in 62.5 billion. He further invoked the "Mailbox Rule" via Lee v. State, arguing that proof of transmission to a correct address creates a rebuttable presumption of receipt.

The Petitioner's most compelling evidence—though it ultimately did not sway the legal outcome regarding the request process—was a "smoking gun" admission in Petitioner’s Exhibit 6. In an October 13, 2025, email, Board Secretary Tim Riley admitted that Krahn was "blocked from sending emails" to his work address. Riley further acknowledged that since Krahn’s previous emails did not "bounce," it was clear that Riley had seen them. Krahn argued this proved the HOA was acting in bad faith by denying receipt of the June requests while actively obstructing his digital access.

3. The HOA’s Defense: The "Technology Gap" and the Cease-and-Desist

Respondent’s President, Dwight Jolivette, offered a defense that combined technical skepticism with administrative "Best Practices." Paradoxically, Jolivette is a ten-year Army veteran who served with the Information Systems Command at the NSA, specializing in satellite communications. Despite his background as a technology expert, Jolivette testified that digital transmission is fundamentally unreliable, governed by "ones and zeros" that can fall into "blind spots."

Jolivette attributed the alleged non-receipt of the emails to "Gremlins" in the system, arguing that the Board could not be held liable for failing to fulfill a request they never saw. Beyond the technical defense, the HOA argued that routing document requests through individual Board members—even if the Bylaw 5.5 names the Secretary as the "custodian" of records—is a poor administrative practice. Jolivette maintained that requests should be routed through the community manager to ensure oversight and continuity, particularly when Board members travel for work.

4. The Turning Point: The March 2025 Cease-and-Desist Letter

The HOA's defense rested heavily on a Cease-and-Desist letter issued to Krahn on March 21, 2025. Following a period of high-volume communication and a "challenged relationship," the HOA attempted to "close the loop" on communication. The "close the loop" concept refers to the HOA’s demand for a delivery method that provides inherent confirmation (such as physical mail or certified delivery) rather than the "open loop" of standard email, which can be subject to silent failures or blocking.

The letter contained a specific directive:

"Going forward, any concerns or correspondence must be submitted in written form and mailed to the Association’s management office…"

The HOA argued that this letter established a "prescribed manner" for all future correspondence, effectively revoking the Petitioner's privilege to use email for official record requests.

5. The ALJ Decision: Why "Reasonable Process" Won the Day

On November 18, 2025, Administrative Law Judge (ALJ) Samuel Fox dismissed the petition. The ruling did not focus on whether the emails were actually received (rendering the "1 in 62 billion" math moot), but rather on whether the HOA’s established process was "reasonable."

The ALJ applied a two-pronged "Reasonability" test based on A.R.S. § 33-1805:

  1. Did the HOA make the ability to request documents reasonably available?
  2. Were the documents themselves reasonably available?

The Judge concluded that while the statute requires records to be made available, it is silent on the method of request. Crucially, the ALJ found that the statute does not prohibit an association from setting a specific process, nor does it require a board to accept email. Because the parties had a "challenged relationship" (finding of fact #8), the Judge ruled that the HOA’s requirement for physical mail was a "reasonable" administrative safeguard. By disregarding this prescribed process and continuing to use email, the Petitioner failed to meet the burden of proof.

6. Key Takeaways for Homeowners and HOAs

This case provides a roadmap for navigating the tension between statutory rights and board-established protocols.

  • Established Processes Supersede Bylaw Roles: While Bylaw 5.5 designated the Secretary as the "custodian," the Board’s March 2025 directive established a formal process for delivery. In Arizona, a board’s reasonable administrative directive on how to submit a request can override the informal custodial roles defined in bylaws.
  • The Limits of Digital Proof: Even with a "1 in 62 billion" probability and evidence of blocked emails, a requester cannot ignore a prescribed non-digital channel. If an association identifies a specific person and manner for requests, the burden of compliance rests on the member.
  • The High Cost of "Litigating to the Max": The hearing highlighted the devastating financial consequences of persistent litigation within small communities. Constant legal battles in this 52-member HOA contributed to a 750% increase in insurance premiums and a 50-fold increase in the insurance deductible.
  • The Value of Alternative Dispute Resolution (ADR): The ALJ’s ruling underscores the importance of exhausting "free ADR" and mediation. Entering a tribunal with a "litigate to the max" strategy often results in binary win/loss outcomes that do nothing to repair the underlying "challenged relationship" or the community's financial stability.

Case Participants

Petitioner Side

  • John R. Krahn (Petitioner Representative)
    John R Krahn Living Trust / Janet Krahn Living Trust

Respondent Side

  • Dwight A. Jolivette (Respondent Representative)
    Tonto Forest Estates Homeowners Association
    President of the Board of Directors
  • Kenneth Riley (Secretary)
    Tonto Forest Estates Homeowners Association
    Secretary of the Board of Directors
  • Barbara Bonilla (Community Manager)
    Tonto Forest Estates Homeowners Association

Neutral Parties

  • Samuel Fox (Administrative Law Judge)
    Office of Administrative Hearings
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

Michele Beauchamp V. The Villages at Rio Paseo Condominium Association

Posted on by

Case Summary

Case ID 24F-H051-REL
Agency ADRE
Tribunal OAH
Decision Date 2025-07-18
Administrative Law Judge Samuel Fox
Outcome The ALJ ruled in favor of the Petitioner, finding that the Respondent's Code of Conduct was not properly enacted at the time of the alleged violation in December 2020. Consequently, the notice of violation was inappropriately issued. The ALJ rejected the Respondent's argument that the matter was moot because the fine had been removed, stating a violation is not nullified by the removal of a fine.
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Michele Beauchamp Counsel —
Respondent The Villages at Rio Paseo Condominium Association Counsel Madeline Gegg

Alleged Violations

ARS 33-1242; ARS 33-1248; CC&Rs

Outcome Summary

The ALJ ruled in favor of the Petitioner, finding that the Respondent's Code of Conduct was not properly enacted at the time of the alleged violation in December 2020. Consequently, the notice of violation was inappropriately issued. The ALJ rejected the Respondent's argument that the matter was moot because the fine had been removed, stating a violation is not nullified by the removal of a fine.

Key Issues & Findings

Improper Enactment of Code of Conduct and Subsequent Violation Notice

Petitioner challenged a violation notice and fine issued regarding her conduct at a board meeting. The parties stipulated that the Code of Conduct used as the basis for the violation was not properly enacted until January 2025. Respondent argued the issue was moot because the fine was waived. The ALJ ruled the violation was not nullified by the removal of the fine.

Orders: Respondent is ordered to pay Petitioner the filing fee of $500.00 within 30 days. Respondent is directed to comply with the requirements of its Community Documents going forward.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • 3480
  • 3482
  • 3483
  • 3487
  • 3488

Video Overview

Audio Overview

Synthesis of Operations, Governance, and Legal Compliance for The Village at Rio Paseo Condominium Association

This briefing document provides a comprehensive analysis of the operational, financial, and legal landscape of The Village at Rio Paseo Condominium Association, based on internal board communications, meeting transcripts, financial reports, and regulatory guidelines.

Executive Summary

The Association is currently navigating a complex transition in management and governance, characterized by significant administrative cleanup and internal conflict. Key takeaways include:

• Management Transition Hurdles: The shift from previous management to AAM, LLC has revealed substantial “messes,” including unorganized contracts, utility billing errors, and a lack of transparency regarding vendor relationships.

• Financial Discrepancies: Audits of recent financials have identified over $7,000 in misallocated electrical payments for individual units and highly inconsistent fire monitoring fees across different buildings.

• Infrastructure Priorities: Critical focus is required for fire safety inspections to prevent insurance lapses, addressing recurring sewage backups in specific units, and resolving community-wide issues such as pigeon infestations and parking shortages.

• Governance and Conduct: The Board has formally adopted a Code of Conduct to address professional lapses during meetings. Legal mediation is currently underway between a resident/board member and the Association through the Office of Administrative Hearings.

• Legal Compliance: Adherence to the Fair Housing Act (FHA) regarding reasonable accommodations is a core requirement, emphasizing the Association’s duty to provide equal opportunity for residents with disabilities without imposing undue financial burdens.

——————————————————————————–

I. Governance and Internal Conflict

Adoption of the Code of Conduct

On December 14, 2020, the Board of Directors unanimously adopted a formal Code of Conduct pursuant to Section 15.4 of the CC&Rs and Arizona Revised Statutes Section 10-3821. This resolution aims to:

• Govern the personal conduct of Members, Board Members, and invitees at all Association meetings.

• Establish reasonable rules for expediting Association business.

• Ensure participants treat others with courtesy and respect and behave in a professional, businesslike manner.

Allegations of Misconduct

Immediately following the adoption of the Code of Conduct, the Board President, Charlotte Morgan, issued a verbal warning via email to a fellow board member, Michelle. The warning cited several violations during a Zoom meeting held on December 14, 2020:

• Lack of Engagement: The member was observed texting, speaking with others in her home while on mute, and appearing uninterested during a Reserve Study vote.

• Disruptive Behavior: Recurring interruptions of other speakers and a condescending tone toward the Board during parking discussions.

• Potential Sanctions: The President noted that failure to correct this behavior would lead to formal fines and noted the member’s right to appeal as established in the Code.

Ongoing Litigation

As of August 2024, the matter of Michele Beauchamp v. The Villages at Rio Paseo Condominium Association (No. 24F-H051-REL) is pending before the Arizona Office of Administrative Hearings. The parties have requested mediation, and a previously scheduled status update for November 2024 has been vacated pending those results.

——————————————————————————–

II. Operational and Financial Management

Transition from Previous Management

The Board has expressed significant frustration with the “mess” left by previous property management (specifically citing an individual named “Sam”). Critical issues identified during the transition to AAM, LLC include:

• Missing Documentation: The Board lacked copies of active vendor contracts, forcing them to conduct an “email blast” to vendors to identify existing agreements and account codes.

• Inconsistent Monitoring Fees: Board members discovered that one building was being charged $236 for monitoring while others ranged from $26 to $42. There were also concerns about being billed for a building that was no longer being constructed.

Financial Audits and Utility Errors

In-depth reviews of invoices revealed substantial financial mismanagement:

• Electrical Overpayments: The Association paid over $7,000 for electricity for two individual units because the accounts were mistakenly left in the Association’s name and categorized as “street lights.”

• Billing Delays: Previous management reportedly failed to pay bills on time or in full, leading to deficits in certain months.

• Budgetary Surpluses: Despite these errors, the November 2020 Budget Comparison Statement showed a Year-to-Date (YTD) surplus of $42,635.54 in the operating fund and $54,714.84 in the reserve fund.

Reserve Study Analysis

The Association evaluated multiple proposals for a required Reserve Study update in late 2020/early 2021:

Vendor

Proposed Fee

Association Reserves

$2,230

Recommended by AAM; 15-week turnaround; specialized in HOAs.

Reserve Advisors

$3,950

Includes a cloud-based software solution (ForeSite).

Advanced Reserve Solutions

$1,400 – $3,000

Previous vendor; AAM warned of potential errors/missing components in their work.

——————————————————————————–

III. Infrastructure, Maintenance, and Safety

Fire Safety and Insurance

A critical deadline was identified for September 24 (likely 2021), by which fire safety inspections must be completed to prevent Farmers Insurance from dropping the fire hazard policy. The Board is working to ensure they do not pay for “re-inspections” of systems that already have valid certificates.

Plumbing and Sewer Issues

A November 2020 inspection by Schroeder Plumbing LLC revealed systemic issues following a sewage backup in a unit. Key findings included:

• Design Flaws: All units in the building share a common sewer line.

• Physical Obstructions: A “major lip on fittings” just outside the building was identified as a likely cause of backups.

• Damage: Evidence showed water and sewage backing up through kitchen sinks and into dishwashers, causing dried water stains and debris.

Pigeons and Community Feedback

A community survey revealed that residents consider the pigeon infestation a major issue, with some describing it as “beyond reflectors and spikes.” Residents have reported that pigeon droppings make outdoor spaces unusable. The Board is considering various control methods, including shock strips and nest removal.

Parking and Striping

The Fire Marshal for the City of Goodyear clarified that all streets within the community are considered “fire apparatus access roads.” Because the streets are 26 feet wide or less, parking must be restricted on both sides at all times.

• Enforcement: Since the streets are private, the HOA is responsible for enforcement.

• Maintenance: The Association received bids for parking re-striping ranging from $750 (Cactus Asphalt) to $3,900 (Associated Contracting Resources).

——————————————————————————–

IV. Legal Frameworks: Reasonable Accommodations

The Association is bound by the Fair Housing Act regarding “Reasonable Accommodations” for persons with disabilities. According to joint statements from the DOJ and HUD:

• Definition: A reasonable accommodation is a change or adjustment to a rule, policy, or service necessary to afford a person with a disability an equal opportunity to use and enjoy a dwelling.

• The Interactive Process: When a request is made, providers should engage in an interactive process to discuss the need and potential alternatives if the initial request is deemed an “undue financial and administrative burden” or a “fundamental alteration” of operations.

• Verification: If a disability is not obvious, providers may request reliable disability-related information to verify the need for the accommodation but may not inquire into the specific nature or severity of the disability.

• No Extra Fees: Associations may not charge extra fees or deposits as a condition of granting a reasonable accommodation (e.g., waiving a “no pets” policy for an assistance animal).

——————————————————————————–

V. Key Perspectives and Insights

“I want what I asked for back in October. I want to see the contracts… because it’s going to be a learning experience on what a mess this association is in.” — Michelle, Board Member

“Our community has been really hurt very bad… they were sold a bill of goods that wasn’t true. Our assessments were supposed to be at 236 and now they’re at 310 and our property doesn’t look like it.” — Monique, Board President

“A current, reliable Reserve Study is a hallmark of well-managed associations, and an important part of a homeowner board’s fiduciary duty to act in the best interest of their association members.” — Association Reserves Proposal

Comprehensive Study Guide: The Village at Rio Paseo Condominium Association and Fair Housing Compliance

This study guide provides an in-depth review of the governance, financial management, and legal obligations of The Village at Rio Paseo Condominium Association, alongside federal guidelines for reasonable accommodations under the Fair Housing Act.

——————————————————————————–

Part I: Short-Answer Quiz

Instructions: Answer the following ten questions based on the provided source context. Each response should be between 2 and 3 sentences.

1. What specific behaviors were cited as violations of the Code of Conduct during the December 14, 2020, Board meeting?

2. Under the Fair Housing Act, what constitutes a “reasonable accommodation”?

3. According to the Association’s resolution, who is responsible for the cost of repairs if damage occurs solely to a single Lot and the amount is less than the insurance deductible?

4. What are the four criteria required for an item to be considered a “Reserve Component” in a Reserve Study?

5. How does the Goodyear Fire Marshal define “fire apparatus access roads,” and what are the associated parking restrictions?

6. What legal process is required for the Association to decrease the number of Board members from five to three?

7. What is a “fundamental alteration” in the context of a housing provider’s operations under the Fair Housing Act?

8. What did the Schroeder Plumbing leak detection report conclude regarding the sewage backup at the condo?

9. According to the Joint Statement from HUD and the DOJ, what must a housing provider do before excluding an individual with a disability who is perceived as a “direct threat”?

10. What was the outcome of the August 2, 2024, Order from the Office of Administrative Hearings regarding the matter of Michele Beauchamp v. The Villages at Rio Paseo?

——————————————————————————–

Part II: Answer Key

1. Code of Conduct Violations: A Board member was cited for lack of engagement, specifically for muting audio to speak with others at home and texting or using a phone during the meeting. Additionally, the member was accused of interrupting others, missing votes on proposals, and displaying condescension toward the Board.

2. Reasonable Accommodation: A reasonable accommodation is a change, exception, or adjustment to a rule, policy, practice, or service necessary to provide a person with a disability an equal opportunity to use and enjoy a dwelling. This includes adjustments to public and common use spaces, such as allowing assistance animals in “no pets” buildings or assigning specific parking spaces.

3. Insurance Deductible Responsibility: If damage occurs solely to one Lot and the cost is less than the Association’s deductible, the individual Lot Owner is responsible for the full cost of repair or restoration. While the Board reserves the right to determine if the Association will make repairs to certain portions like roofs, the financial burden remains with the Owner.

4. Reserve Component Criteria: To be included in a Reserve Study, a component must be the association’s responsibility and have a limited useful life. It must also have a predictable remaining useful life and a cost that exceeds a specific “threshold cost.”

5. Fire Marshal Restrictions: Fire apparatus access roads include public and private streets, fire lanes, and parking lot lanes used by fire stations to access buildings. On streets that are 26 feet wide or less, parking must be restricted on both sides at all times to maintain required clear width.

6. Decreasing Board Size: According to the Association’s attorney, the bylaws require approval from 75% of the membership (homeowners) to decrease the Board size from five to three. This change must be placed on the ballot for a vote during an annual meeting.

7. Fundamental Alteration: A fundamental alteration is a modification that changes the essential nature of a housing provider’s operations. For example, a provider is not required to provide transportation or grocery shopping services if such services are not part of their standard business model.

8. Plumbing Report Conclusion: The technician found no sign of a pressurized or drain leak on the plumbing system but observed that all units in the building share a common sewer line. The report indicated a sewage backup from the kitchen sink into the dishwasher, likely caused by a major lip on fittings just outside the building.

9. Direct Threat Assessment: A housing provider must perform an individualized assessment based on reliable objective evidence, such as recent overt acts, rather than stereotypes or fear. The assessment must consider the nature and severity of the risk, the probability of injury, and whether any reasonable accommodation could eliminate the threat.

10. OAH Order Outcome: The Administrative Law Judge vacated the Status Update originally scheduled for November 22, 2024, because the parties had requested mediation. Additionally, the Respondent’s Motion to Continue was denied, and the office planned to contact parties with mediation session details.

——————————————————————————–

Part III: Essay Questions

Instructions: Use the source context to develop comprehensive responses for the following five topics.

1. The Intersection of Fiduciary Duty and Board Conduct: Discuss how the expectations of professional behavior outlined in the Code of Conduct relate to a Board member’s fiduciary duty to the community.

2. Navigating Financial Transparency and Stewardship: Analyze the challenges faced by the Board regarding utility billing errors, contract management, and the importance of regular Reserve Studies in maintaining property values.

3. Balance of Rights in Fair Housing: Evaluate the “interactive process” between housing providers and residents. Discuss how providers can balance the needs of disabled residents with the limitations of “undue financial burden” and “fundamental alteration.”

4. Infrastructure and Safety Management: Examine the complexities of managing fire safety compliance, including the roles of the Fire Marshal, insurance providers, and specialized vendors in an HOA setting.

5. Community Governance and Membership Participation: Reflect on the survey results regarding pigeons and parking. How should a Board integrate varied (and sometimes conflicting) homeowner opinions into formal resolutions and enforcement policies?

——————————————————————————–

Part IV: Glossary of Key Terms

Definition

ARS (Arizona Revised Statutes)

The laws enacted by the Arizona State Legislature; specifically referenced regarding non-profit corporation actions (Section 10-3821) and HOA open meetings (Section 33-1804).

Declaration of Covenants, Conditions, and Restrictions; the governing documents that outline the rules for the Association and the responsibilities of the Board and members.

Common Elements

Areas of the condominium project intended for the use and enjoyment of all owners, which the Association is typically responsible for maintaining.

Fair Housing Act (FHA)

Federal legislation prohibiting discrimination in housing based on race, color, religion, sex, national origin, familial status, and disability.

Fundamental Alteration

A requested modification to a housing provider’s rules or services that would significantly change the essential nature of the provider’s business.

Interactive Process

The dialogue between a housing provider and a resident to discuss a disability-related need and identify effective, reasonable accommodations.

Major Life Activity

Functions of central importance to daily life, such as walking, seeing, hearing, breathing, learning, and performing manual tasks.

Physical or Mental Impairment

A broad range of conditions—including orthopedic, visual, speech, and hearing impairments, as well as chronic diseases and emotional illness—that may qualify an individual for protection under the FHA.

Reasonable Accommodation

A necessary adjustment to a rule or policy that allows a person with a disability an equal opportunity to use and enjoy their home.

Reserve Study

A long-term financial planning document used to forecast and fund major repair and replacement projects for an association’s common components.

Undue Financial and Administrative Burden

A situation where a requested accommodation is too costly or complex for a provider to implement, determined by a case-by-case analysis of resources and benefits.

Working Capital Fees

Fees typically collected at the time of a home sale to ensure the association has sufficient funds for initial or ongoing operations.

The HOA Paradox: 5 Impactful Lessons from the Front Lines of Community Governance

1. Introduction

The “HOA horror story” is a staple of suburban lore, typically featuring overzealous boards issuing fines for a non-compliant shade of beige or a wayward blade of grass. Yet, this caricature ignores a far more complex reality: Homeowners Associations are essentially micro-governments. They manage multi-million dollar asset portfolios, oversee critical infrastructure, and navigate a labyrinth of federal and state statutory mandates—all while being led by volunteers.

The friction occurs when professional standards and legal compliance collide with the informal nature of residential living. Using the governance challenges at The Village at Rio Paseo as a case study, we can distill five critical lessons in fiduciary duty, administrative forensics, and the high cost of failing to bridge the “professionalism gap.”

2. The Digital Professionalism Gap: A Failure of Deliberate Governance

The transition to digital board meetings has birthed a dangerous informality. Because directors join from their living rooms, there is a tendency to treat official proceedings with the casualness of a family Zoom call. However, a domestic environment does not relax a director’s fiduciary obligations.

In December 2020, Charlotte Morgan, President of the Rio Paseo board, issued a formal verbal warning to a fellow director, Michelle, regarding her conduct during a recorded session. This was not merely a breach of etiquette; it was a failure to maintain a record of deliberate governance. Michelle was cited for muting her audio to engage in private household discussions and texting on camera. Most critically, these distractions led her to miss a key vote on the Reserve Study proposal and caused her to repeatedly interrupt other speakers, including a specific individual named Sean.

“The members expect the Board of Directors to focus on the meeting and be fully engaged as items on the agenda are discussed.”

The professionalism gap also surfaced as condescension during technical discussions regarding parking—a bridge to the community’s larger infrastructure challenges. For a senior consultant, this behavior represents a “Code of Conduct” violation that risks financial penalties for the individual director and potential liability for the Association. When a board operates without decorum, it risks making uninformed decisions that jeopardize the community’s legal standing.

3. The Legal Nuance of “Reasonable”: The Interactive Process as a Safe Harbor

Navigating the federal Fair Housing Act (FHA) is a high-stakes exercise in statutory compliance. Boards often view “Reasonable Accommodations” as an erosion of their authority, but the joint statements from HUD and the DOJ reveal a different perspective: the “Interactive Process” is actually a safe harbor for the board.

Three critical takeaways define this legal landscape:

1. Legal Equivalence: Under federal law, “disability” and “handicap” are legally interchangeable. The FHA protects individuals with physical or mental impairments that substantially limit major life activities.

2. Individualized Assessment vs. Stereotype: A board cannot exclude a resident based on a “direct threat” if that threat is rooted in fear or speculation. Any exclusion must be supported by reliable objective evidence (e.g., recent overt acts) and an assessment of whether an accommodation can mitigate that threat.

3. The Interactive Process: This is the legal pivot point. When a resident requests an exception to a “no pets” policy for an assistance animal, the board must engage in a documented dialogue. This process allows the board to find solutions that avoid “undue financial and administrative burdens.”

The ultimate factor is the “nexus”—the identifiable relationship between the disability and the requested change. By focusing on the nexus, boards can avoid HUD complaints while maintaining the integrity of their governing documents.

4. The Infrastructure Trap: Developer Legacies and Fire Safety

HOA boards are frequently left to play the “villain” in enforcement scenarios that are actually the result of developer-designed infrastructure. At Rio Paseo, the conflict between resident convenience and municipal safety code reached a head over visitor parking.

Correspondence from the Goodyear Fire Marshal, Michael Brune, clarified the technical reality: any street 26 feet wide or less—specifically measured from face of curb to face of curb—must prohibit parking on both sides to serve as a “fire apparatus access road.” At Rio Paseo, the main loop was exactly 26 feet wide, and common drives were 25 feet wide.

This is the infrastructure trap: the HOA can be cited for fire code violations even on private streets. The burden of enforcement shifts from the city to the Association. While residents may clamor for street parking, the board’s fiduciary duty to ensure emergency vehicle access overrides resident convenience. Failure to enforce these restrictions isn’t just a neighborly dispute; it is a liability risk that could lead to the loss of hazard insurance coverage.

5. Financial Forensics: The High Cost of Management Transitions

A transition between management companies—in this case, moving from the previous entity, Americanade (managed by “Sam”), to AAM—often exposes significant fiduciary dereliction. The audit process at Rio Paseo revealed a series of administrative “messes” that carried a heavy price tag.

The forensic discovery included:

• Utility Mismanagement: The Association discovered it had paid over $7,000 in electricity bills for two private units. The previous manager had mislabeled these private accounts as “streetlights,” and a lack of board oversight allowed these invoices to be paid without review.

• The “Value vs. Price” Dilemma: During the search for a new Reserve Study, the board faced a bid from ARS for $1,400. However, the Association’s budget analyst, Ann Salas, recommended against them, noting their previous work contained “too many errors and missing components.” The board opted for the $2,230 bid from Association Reserves, choosing capital reserve health over a lower price point.

• Contract Redundancy: Discovered confusion over fire monitoring and backflow inspection contracts led to fears of double-billing and lapsed certifications.

The human impact of these discoveries was stark: resident assessments rose from $236 to $310 to stabilize the budget. As Michelle reflected during the transition:

“It’s going to be a learning experience on what a mess this association is in.”

The lesson for any board is clear: total delegation to a management company is not a substitute for oversight. Boards must perform their own regular audits of invoices and contracts to prevent systemic financial leakage.

6. Conclusion: The Fiduciary Future

Successful community governance requires a delicate balance between “passion” and “process.” As the Village at Rio Paseo demonstrates, the long-term health of a community depends on transparency, technical rigor, and a proactive approach to statutory compliance. When a board prioritizes the “process” of governance—adhering to a strict Code of Conduct and performing financial due diligence—it protects the property values and peace of mind of every stakeholder.

In a community where every neighbor is a stakeholder, is your board operating as a professional entity or just a group of people in a Zoom room?

Case Participants

Petitioner Side

  • Michele Beauchamp (petitioner)
    Homeowner
    Homeowner at The Villages at Rio Paseo.

Respondent Side

  • Madeline Gegg (attorney)
    Mulcahy Law Firm, P.C.
    Represented the Respondent Association.
  • The Villages at Rio Paseo Condominium Association (respondent)
    HOA
    Respondent Association.

Neutral Parties

  • Samuel Fox (ALJ)
    Office of Administrative Hearings
    Administrative Law Judge.

George Wolchko v. Victoria Manor Management & Property Owners Association

Posted on by

Case Summary

Case ID 25F-H025-REL
Agency —
Tribunal —
Decision Date 5/5/2025
Administrative Law Judge SF
Outcome —
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner George Wolchko Counsel —
Respondent Victoria Manor Management & Property Owners Association Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H025-REL Decision – 1268559.pdf

Uploaded 2026-04-24T12:36:53 (55.5 KB)

25F-H025-REL Decision – 1276022.pdf

Uploaded 2026-04-24T12:36:56 (57.0 KB)

25F-H025-REL Decision – 1276027.pdf

Uploaded 2026-04-24T12:37:03 (7.3 KB)

25F-H025-REL Decision – 1282178.pdf

Uploaded 2026-04-24T12:37:08 (49.3 KB)

25F-H025-REL Decision – 1288973.pdf

Uploaded 2026-04-24T12:37:18 (52.0 KB)

25F-H025-REL Decision – 1290761.pdf

Uploaded 2026-04-24T12:37:24 (50.5 KB)

25F-H025-REL Decision – 1301417.pdf

Uploaded 2026-04-24T12:37:30 (224.5 KB)

Briefing Document: Wolchko v. Victoria Manor Management & Property Owners Association

Executive Summary

This document synthesizes the key proceedings, arguments, and outcomes of the administrative case George Wolchko v. Victoria Manor Management & Property Owners Association, Case No. 25F-H025-REL, adjudicated by the Arizona Office of Administrative Hearings. The Petitioner, George Wolchko, a homeowner, filed a four-issue petition against the Respondent, his Homeowners Association (HOA), alleging violations of Arizona statutes and the community’s governing documents.

The hearing, held on April 14, 2025, resulted in a mixed but largely favorable outcome for the Petitioner. The Administrative Law Judge (ALJ) found the HOA in violation on three of the four claims:

1. Failure to Provide Documents: The HOA violated A.R.S. § 33-1805 by not making its management contract with Kachina Management available within the legally mandated ten-business-day period.

2. Failure to Repair Common Wall: The HOA violated its own Bylaws and CC&Rs by failing its duty to maintain and repair a common element (an exterior wall and electrical conduit) after its hired contractor performed improper work, leaving a hole that was not weatherproof.

3. Failure to Fill Board Vacancy: The HOA violated its Bylaws, which mandate a board of no fewer than three members, by operating with only two directors since October 2024.

The HOA prevailed on one claim, Failure to Hold a Special Meeting, as the ALJ determined the Petitioner’s request, while clear in intent, was technically deficient under the Bylaws. The final order deemed Mr. Wolchko the prevailing party on three issues, ordering the HOA to reimburse him $1,500.00 in filing fees, to comply with community documents going forward, and levying a civil penalty of $150.00 against the Association.

Case Overview

Case Number

25F-H025-REL

Jurisdiction

Arizona Office of Administrative Hearings (OAH)

Presiding Judge

Administrative Law Judge Samuel Fox

Hearing Date

April 14, 2025

Petitioner

George Wolchko

Respondent

Victoria Manor Management & Property Owners Association

Respondent’s Counsel

Christopher Duren (of Gottlieb Law, PLC)

Key Parties and Witnesses

• George Wolchko: The Petitioner, owner of a home in the Victoria Manor community since 2018 and a former board member (2018-2023). Testified on his own behalf.

• Victoria Manor Management & Property Owners Association: The Respondent, a planned community in Mesa, Arizona, consisting of eight units and seven owners.

• Joseph Kidd: A current HOA board member, serving since November 2022. Testified for the Respondent.

• Michael Mott: A current HOA board member. Was present at the hearing but did not testify.

• Kachina Management, Inc.: The HOA’s management company, contracted in April 2024.

• Chris Jones: Elected to the board in September 2024 but resigned shortly thereafter, creating the board vacancy at the heart of Claim 4.

Analysis of Claims, Evidence, and Findings

Claim 1: Violation of AZ Law on Delivery of Community Documents

• Petitioner’s Allegation: The HOA violated A.R.S. § 33-1805 and its governing documents by failing to provide a copy of the Kachina Management contract despite numerous requests beginning in May 2024.

• Petitioner’s Testimony & Evidence (Wolchko):

◦ Made his first formal email request for the contract on May 6, 2024. He followed up on May 12 and May 26.

◦ The management company, Kachina, responded on May 29, offering an in-person review on June 3 or 4.

◦ Wolchko testified that driving 45 minutes each way was not a “reasonably available” means of access, especially when a digital copy existed and he travels internationally. He noted the CC&Rs explicitly allow for delivery by mail.

◦ After canceling an in-person appointment due to an emergency, his repeated requests for a digital or mailed copy were met with insistence on in-person review.

◦ The contract was finally produced in February 2025, nearly a year after the initial request and only after the petition was filed.

• Respondent’s Position:

◦ Argued that by offering in-person inspection at their office, they fulfilled their statutory obligation to make records “reasonably available for examination.”

◦ Emails from Kachina Management to Wolchko confirmed they had prepared the documents for his review on the dates offered. They stated Wolchko canceled the appointment and never rescheduled.

• ALJ’s Finding: Violation Found. The ALJ concluded that more than ten business days passed between the initial request on May 6, 2024, and the date the documents were made available for examination on June 3, 2024. This delay constituted a failure to comply with A.R.S. § 33-1805.

Claim 2: Failure to Hold a Special HOA Meeting

• Petitioner’s Allegation: The HOA violated A.R.S. § 33-1804(A) and its Bylaws by failing to hold a special meeting requested via a valid petition signed by 25% of the members (Wolchko and Terrance Greer).

• Petitioner’s Testimony & Evidence (Wolchko):

◦ Submitted a formal, signed request on June 19, 2024, to hold an “emergency HOA meeting to address repairs on a community common wall.”

◦ He argued this was a valid petition for a special meeting and that the Board ignored it.

◦ The Respondent falsely claimed the meeting was held during the September annual meeting, but the annual meeting notice and minutes contained no mention of the special meeting’s purpose.

• Respondent’s Position:

◦ Argued the request was for an “emergency meeting,” which, under statute, can only be called by the Board of Directors, not by member petition.

◦ Contended there is no provision in the governing documents for 25% of members to call an emergency meeting.

◦ Noted that at the annual meeting in September, Wolchko was explicitly asked if he had any issues to discuss and he declined.

• ALJ’s Finding: No Violation. The ALJ found that although the intent was clearly to request a special meeting, the petition was technically deficient. It used the term “emergency meeting,” did not include a place for the meeting, and did not use the phrase “special meeting.” While a “mere technicality,” this was sufficient to deem the petition ineffective. The Respondent was deemed the prevailing party on this issue.

Claim 3: Failure to Uphold CCRs Regarding Common Wall Repairs

• Petitioner’s Allegation: The HOA failed its duty to repair a common wall damaged by its own electrician in February 2024.

• Petitioner’s Testimony & Evidence (Wolchko):

◦ In February 2024, an HOA-hired contractor, Blue State Electric, performed work on an electrical conduit on his building’s exterior wall, which the board had previously designated a “true common area” with shared 50/50 maintenance costs.

◦ The work left a hole filled with foam that was not watertight. His immediate notification on March 15, 2024, was dismissed by board member Joseph Kidd, who claimed the hole was a pre-existing condition exposed by the work and therefore not the HOA’s responsibility.

◦ After months of the board refusing to act, he investigated the box himself, discovering an HOA wire running through his wall. He stated he only touched the box to prove it was an HOA issue after being told to “deal with it myself.”

◦ He disputed the validity of an $1,867 invoice from a second contractor (Canyon State), stating it was solicited by the board to blame him for damage he did not cause.

• Respondent’s Testimony & Evidence (Kidd):

◦ The electrical box and conduit are common elements that serve four buildings.

◦ Wolchko is not a licensed Arizona electrician and had no authorization to touch the common element.

◦ Kidd testified that after Wolchko sent a video of himself pulling the box out, the board hired Canyon State to inspect it.

◦ He acknowledged offering to help Wolchko patch the stucco but denied authorizing any electrical work.

• ALJ’s Finding: Violation Found. The ALJ determined that the preponderance of evidence supported that the “Board-hired electrician installed the wrong kind of box and left a section of the wall exposed without proper weather proofing.” Because the wall and electrical conduit were common elements, the board had a duty to maintain them in good repair. The board “declined to correct the problem its contractor caused,” thus violating the Bylaws and CC&Rs.

Claim 4: Failure to Maintain Required Number of Board Members

• Petitioner’s Allegation: The HOA violated its Bylaws (Article IV, Section 1), which require a board of “no less than three (3) persons,” by operating with only two members.

• Petitioner’s Testimony & Evidence (Wolchko):

◦ Following the September 19, 2024 election, three members were elected: Joseph Kidd, Michael Mott, and Chris Jones.

◦ Chris Jones resigned almost immediately, leaving the board with two members.

◦ He argued that while the bylaws state a vacancy “may be filled” by the remaining directors, this grants authority, it does not waive the fundamental requirement of having at least three members.

◦ He noted that two other owners (himself and Terrance Greer), representing 25% of the HOA, were willing to serve, so the vacancy could be filled.

• Respondent’s Testimony & Evidence (Kidd):

◦ Confirmed Jones resigned by early October 2024.

◦ Stated the board reached out to other members who expressed no interest in serving.

◦ Testified that Kachina Management advised them that filling the seat was at their discretion.

◦ The Respondent’s legal argument was that the Bylaw’s use of the word “may” (“may be filled”) makes filling the vacancy optional, not mandatory.

• ALJ’s Finding: Violation Found. The ALJ was “not persuasive” by the Respondent’s argument. The decision states: “This provision allows for the appointment, rather than the election, of a Director to a vacant seat. It does not absolve the Board from having the minimum number of Directors.” The preponderance of evidence established that the HOA violated its Bylaws by not having enough Board members.

Final Decision and Order

• Prevailing Party: George Wolchko was deemed the prevailing party on Petition Issues 1, 3, and 4. Victoria Manor was deemed the prevailing party on Issue 2.

• Reimbursement: The Respondent was ordered to pay the Petitioner $1,500.00 for filing fees within thirty days.

• Compliance: The Respondent was directed to “comply with the requirements of its Community Documents going forward.”

• Civil Penalty: A civil penalty of $150.00 was levied against the Respondent.

• Decision Date: May 5, 2025.

Questions

Question

How long does the HOA have to provide records after I request them?

Short Answer

The HOA has ten business days to fulfill a request to examine or provide copies of records.

Detailed Answer

Under A.R.S. § 33-1805, an association must strictly adhere to a ten-business-day timeframe. In this case, providing access nearly a month after the initial request was found to be a violation of state law.

Alj Quote

A.R.S. § 33-1805 provides an association 'ten business days to fulfill a request for examination' or 'to provide copies of the requested records.' … More than ten business days passed between May 6, 2024, and June 3, 2024. Petitioner demonstrated by a preponderance of the evidence that Respondent, through Kachina, failed to comply with A.R.S. § 33-1805.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • records request
  • deadlines
  • HOA obligations

Question

Can homeowners call an 'emergency meeting' regarding repairs?

Short Answer

Generally, no. Homeowners should request a 'special meeting' instead, as 'emergency meetings' are typically reserved for the Board.

Detailed Answer

While homeowners may petition for a meeting, using the correct terminology is critical. In this case, a petition for an 'emergency meeting' was deemed ineffective because that specific type of meeting is a Board function, whereas homeowners are authorized to request 'special meetings'.

Alj Quote

In the context of the communications about this meeting, it is clear that Petitioner was requesting a 'special meeting' not an 'emergency meeting,' which can only be called by the Board.

Legal Basis

Bylaws

Topic Tags

  • meetings
  • procedure
  • homeowner rights

Question

What specific details must be included in a petition for a special meeting?

Short Answer

The petition must usually include the date, hour, place of the meeting, and the specific purpose or topic.

Detailed Answer

Failure to include all technical details required by the Bylaws—such as the specific place of the meeting or the correct label ('special meeting')—can render a petition invalid, even if it has the required number of signatures.

Alj Quote

The petition did not include a place for the meeting, the topic to be discussed, or the phrase 'special meeting.' … Petitioner’s special meeting request did not fully comply with the requirements of the Bylaws. Although it is a mere technicality, it is sufficient to deem the petition for a special meeting ineffective.

Legal Basis

Bylaws Article III, Section 4

Topic Tags

  • meetings
  • petitions
  • technicalities

Question

Is the HOA responsible if a contractor they hired does poor work on a common element?

Short Answer

Yes. The HOA has a duty to maintain common elements and correct problems caused by their contractors.

Detailed Answer

If an HOA-hired contractor installs incorrect equipment or leaves a common element exposed to damage (like weather), the Board cannot decline to fix it. They retain the obligation to maintain the area in good repair.

Alj Quote

The preponderance of the evidence supports that the Board-hired electrician installed the wrong kind of box and left a section of the wall exposed without proper weather proofing… The Board declined to correct the problem its contractor caused… The preponderance of the evidence supports that the Board failed to maintain this area in good repair in violation of the Bylaws and CC&R.

Legal Basis

Bylaws Article IV, Section 3; CC&R Section 4.05(2)

Topic Tags

  • maintenance
  • common elements
  • contractors

Question

Can the HOA Board operate with fewer members than the Bylaws require?

Short Answer

No. If the Bylaws state a minimum number of directors, the Board must maintain that number.

Detailed Answer

The Board cannot choose to operate with fewer directors than mandated. In this case, operating with two directors when the Bylaws required a minimum of three was a violation.

Alj Quote

Article IV, section 1 of the Bylaws require a Board of no fewer than three people. The preponderance of the evidence established that the Board has consisted of two people for some time… The preponderance of the evidence supports that Respondent violated the Bylaws by not having enough Board members.

Legal Basis

Bylaws Article IV, Section 1

Topic Tags

  • board composition
  • bylaws
  • vacancies

Question

Does a Bylaw saying a vacancy 'may be filled' mean the Board can choose to leave a seat empty?

Short Answer

No. That language typically describes the method of filling the seat (appointment) rather than permission to leave it vacant below the required minimum.

Detailed Answer

HOAs cannot use the word 'may' in vacancy provisions to justify ignoring minimum board size requirements. The provision allows for appointment rather than election to fill the spot, but does not absolve the Board of the duty to have the required number of members.

Alj Quote

Respondent argued that Section 5, Vacancies does not require the Board to fill a vacant position… This argument was not persuasive. This provision allows for the appointment, rather than the election, of a Director to a vacant seat. It does not absolve the Board from having the minimum number of Directors.

Legal Basis

Bylaws

Topic Tags

  • legal interpretation
  • board vacancies
  • bylaws

Question

If I win my hearing against the HOA, can I get my filing fee back?

Short Answer

Yes, the Administrative Law Judge can order the HOA to reimburse the petitioner for the filing fee.

Detailed Answer

In this decision, the HOA was ordered to pay the $1,500.00 filing fee directly to the homeowners within 30 days because the homeowners prevailed on the majority of their issues.

Alj Quote

IT IS ORDERED that Respondent pay Petitioners the filing fee of $1,500.00, to be paid directly to Petitioners within thirty (30) days of this Order.

Legal Basis

Administrative Order

Topic Tags

  • reimbursement
  • fees
  • penalties

Question

Can the HOA be fined for these violations?

Short Answer

Yes, a civil penalty may be levied, though it may be a nominal amount compared to the filing fees.

Detailed Answer

The ALJ has the authority to levy civil penalties for violations of statutes or community documents. In this specific case, a penalty of $150.00 was deemed appropriate.

Alj Quote

A Civil Penalty of $150.00 is found to be appropriate in this matter.

Legal Basis

A.R.S. § 32-2199.02

Topic Tags

  • fines
  • civil penalty
  • enforcement

Case

Docket No
25F-H025-REL
Case Title
George Wolchko v. Victoria Manor Management & Property Owners Association
Decision Date
2025-05-05
Alj Name
Samuel Fox
Tribunal
OAH
Agency
ADRE

Questions

Question

How long does the HOA have to provide records after I request them?

Short Answer

The HOA has ten business days to fulfill a request to examine or provide copies of records.

Detailed Answer

Under A.R.S. § 33-1805, an association must strictly adhere to a ten-business-day timeframe. In this case, providing access nearly a month after the initial request was found to be a violation of state law.

Alj Quote

A.R.S. § 33-1805 provides an association 'ten business days to fulfill a request for examination' or 'to provide copies of the requested records.' … More than ten business days passed between May 6, 2024, and June 3, 2024. Petitioner demonstrated by a preponderance of the evidence that Respondent, through Kachina, failed to comply with A.R.S. § 33-1805.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • records request
  • deadlines
  • HOA obligations

Question

Can homeowners call an 'emergency meeting' regarding repairs?

Short Answer

Generally, no. Homeowners should request a 'special meeting' instead, as 'emergency meetings' are typically reserved for the Board.

Detailed Answer

While homeowners may petition for a meeting, using the correct terminology is critical. In this case, a petition for an 'emergency meeting' was deemed ineffective because that specific type of meeting is a Board function, whereas homeowners are authorized to request 'special meetings'.

Alj Quote

In the context of the communications about this meeting, it is clear that Petitioner was requesting a 'special meeting' not an 'emergency meeting,' which can only be called by the Board.

Legal Basis

Bylaws

Topic Tags

  • meetings
  • procedure
  • homeowner rights

Question

What specific details must be included in a petition for a special meeting?

Short Answer

The petition must usually include the date, hour, place of the meeting, and the specific purpose or topic.

Detailed Answer

Failure to include all technical details required by the Bylaws—such as the specific place of the meeting or the correct label ('special meeting')—can render a petition invalid, even if it has the required number of signatures.

Alj Quote

The petition did not include a place for the meeting, the topic to be discussed, or the phrase 'special meeting.' … Petitioner’s special meeting request did not fully comply with the requirements of the Bylaws. Although it is a mere technicality, it is sufficient to deem the petition for a special meeting ineffective.

Legal Basis

Bylaws Article III, Section 4

Topic Tags

  • meetings
  • petitions
  • technicalities

Question

Is the HOA responsible if a contractor they hired does poor work on a common element?

Short Answer

Yes. The HOA has a duty to maintain common elements and correct problems caused by their contractors.

Detailed Answer

If an HOA-hired contractor installs incorrect equipment or leaves a common element exposed to damage (like weather), the Board cannot decline to fix it. They retain the obligation to maintain the area in good repair.

Alj Quote

The preponderance of the evidence supports that the Board-hired electrician installed the wrong kind of box and left a section of the wall exposed without proper weather proofing… The Board declined to correct the problem its contractor caused… The preponderance of the evidence supports that the Board failed to maintain this area in good repair in violation of the Bylaws and CC&R.

Legal Basis

Bylaws Article IV, Section 3; CC&R Section 4.05(2)

Topic Tags

  • maintenance
  • common elements
  • contractors

Question

Can the HOA Board operate with fewer members than the Bylaws require?

Short Answer

No. If the Bylaws state a minimum number of directors, the Board must maintain that number.

Detailed Answer

The Board cannot choose to operate with fewer directors than mandated. In this case, operating with two directors when the Bylaws required a minimum of three was a violation.

Alj Quote

Article IV, section 1 of the Bylaws require a Board of no fewer than three people. The preponderance of the evidence established that the Board has consisted of two people for some time… The preponderance of the evidence supports that Respondent violated the Bylaws by not having enough Board members.

Legal Basis

Bylaws Article IV, Section 1

Topic Tags

  • board composition
  • bylaws
  • vacancies

Question

Does a Bylaw saying a vacancy 'may be filled' mean the Board can choose to leave a seat empty?

Short Answer

No. That language typically describes the method of filling the seat (appointment) rather than permission to leave it vacant below the required minimum.

Detailed Answer

HOAs cannot use the word 'may' in vacancy provisions to justify ignoring minimum board size requirements. The provision allows for appointment rather than election to fill the spot, but does not absolve the Board of the duty to have the required number of members.

Alj Quote

Respondent argued that Section 5, Vacancies does not require the Board to fill a vacant position… This argument was not persuasive. This provision allows for the appointment, rather than the election, of a Director to a vacant seat. It does not absolve the Board from having the minimum number of Directors.

Legal Basis

Bylaws

Topic Tags

  • legal interpretation
  • board vacancies
  • bylaws

Question

If I win my hearing against the HOA, can I get my filing fee back?

Short Answer

Yes, the Administrative Law Judge can order the HOA to reimburse the petitioner for the filing fee.

Detailed Answer

In this decision, the HOA was ordered to pay the $1,500.00 filing fee directly to the homeowners within 30 days because the homeowners prevailed on the majority of their issues.

Alj Quote

IT IS ORDERED that Respondent pay Petitioners the filing fee of $1,500.00, to be paid directly to Petitioners within thirty (30) days of this Order.

Legal Basis

Administrative Order

Topic Tags

  • reimbursement
  • fees
  • penalties

Question

Can the HOA be fined for these violations?

Short Answer

Yes, a civil penalty may be levied, though it may be a nominal amount compared to the filing fees.

Detailed Answer

The ALJ has the authority to levy civil penalties for violations of statutes or community documents. In this specific case, a penalty of $150.00 was deemed appropriate.

Alj Quote

A Civil Penalty of $150.00 is found to be appropriate in this matter.

Legal Basis

A.R.S. § 32-2199.02

Topic Tags

  • fines
  • civil penalty
  • enforcement

Case

Docket No
25F-H025-REL
Case Title
George Wolchko v. Victoria Manor Management & Property Owners Association
Decision Date
2025-05-05
Alj Name
Samuel Fox
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • George Wolchko (Petitioner)
    Homeowner of Building 4
  • Terrance Greer (Homeowner)
    Signed the petition for a special meeting alongside George Wolchko

Respondent Side

  • Christopher Duren (Counsel for Respondent)
    Gottlieb Law, PLC
  • Benjamin L. Gottlieb (Counsel for Respondent)
    Gottlieb Law, PLC
  • Joseph Kidd (Board Member / Witness)
    Victoria Manor Management & Property Owners Association
  • Michael Mott (Board Member)
    Victoria Manor Management & Property Owners Association
  • Chris Jones (Former Board Member)
    Victoria Manor Management & Property Owners Association
    Resigned from the board
  • R. Mark Rounsaville (Representative)
    Kachina Management, Inc.
    Filed written answer to the Petition on behalf of Respondent
  • Ashley Love (Property Manager)
    Tri City Property Management
  • Deja Rabone (Property Manager)
    Tri City Property Management

Neutral Parties

  • Samuel Fox (Administrative Law Judge)
    Office of Administrative Hearings
  • Alexis Madrid (Administrative Law Judge)
    Office of Administrative Hearings
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

Debbie Westerman v. Bridgewood Nine 30 Homeowners Association

Posted on by

Case Summary

Case ID 25F-H029-REL
Agency Office of Administrative Hearings
Tribunal —
Decision Date 2025-03-12
Administrative Law Judge SF
Outcome —
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Debbie Westerman Counsel —
Respondent Bridgewood Nine 30 Homeowners Association Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H029-REL Decision – 1282218.pdf

Uploaded 2026-04-24T12:38:09 (95.6 KB)

Briefing Document: Westerman v. Bridgewood Nine 30 Homeowners Association (Case No. 25F-H029-REL)

Executive Summary

This document provides a comprehensive analysis of the administrative hearing and subsequent decision regarding the matter of Debbie Westerman v. Bridgewood Nine 30 Property Owners Association. The dispute centered on a records request initiated by Westerman (Petitioner) against the Association (Respondent) concerning legal expenditures and financial documentation spanning the last decade.

The core of the conflict involved the Petitioner’s demand for detailed legal billing statements to investigate potential fund misappropriation, while the Respondent maintained that such records were exempt from disclosure under Arizona's statutory protections for attorney-client privilege. Following an evidentiary hearing held on February 20, 2025, Administrative Law Judge (ALJ) Samuel Fox ruled in favor of the Association, determining that the requested documents were privileged and that the Petitioner failed to prove a violation of the relevant condominium statutes.

Case Overview and Participants

The hearing was conducted at the Office of Administrative Hearings as an independent state agency matter pursuant to A.R.S. § 41-1092.

Role Name Affiliation
Administrative Law Judge Samuel Fox Office of Administrative Hearings
Petitioner Debbie Westerman Homeowner/Member, Bridgewood Nine 30
Respondent Counsel Mark Lines Attorney, Shaw & Lines, LLC
Witness (Respondent) Michael Brubaker President of the Board/Community Manager
Witness (Respondent) Roy Shot Board Member

Detailed Analysis of Key Themes

1. Statutory Framework and Procedural Accuracy

A significant portion of the proceedings addressed the specific statutes governing records requests. The Petitioner originally filed the petition citing A.R.S. § 33-1805, which pertains to Planned Communities. However, the Respondent is a Condominium Association, making the applicable law A.R.S. § 33-1258.

The Respondent’s counsel argued that the Petitioner's request was "procedurally and substantively flawed" because:

  • It cited the incorrect statutory scheme.
  • It failed to formally request an inspection of records, which is the primary right granted under the statute.
  • It did not provide notice that legal action would be pursued if records were not produced within the statutory 10-day window.

The ALJ ultimately decided to address the matter based on the correct condominium statute (A.R.S. § 33-1258), noting no "undue prejudice" in correcting the reference.

2. Attorney-Client Privilege vs. Transparency

The Petitioner sought "all statements from Shaw and Lines from 2015 through today" to verify legal spending, citing a specific concern regarding $50,000 spent in 2018. She clarified during the hearing that she only desired "numbers" and was not interested in confidential details.

The Association countered that under A.R.S. § 33-1258(B)(1), books and records may be withheld if they relate to privileged communications between the association and its attorney. The Respondent argued that legal invoices constitute privileged work product and communications. The ALJ upheld this position, finding that the Petitioner failed to meet her burden of proof because the documents she sought were legally exempt from disclosure.

3. Allegations of Financial Mismanagement

The Petitioner raised several concerns regarding the Association's financial operations:

  • Report Distribution: Allegations that financial reports are prepared and distributed by Board members (Michael Brubaker and Roy Shot) rather than the official accountant.
  • Operating Practices: Concerns that Board members are "running a business" within the association.
  • Lack of Transparency: Claims that the Board "passed these issues with everyone's knowledge and consent" but failed to provide verification of expenditures to the members.

The Association disputed these claims, providing a financial flowchart and meeting minutes as evidence of their standard operating procedures and efforts to advise the community on accounting methods.

4. Communication and Meeting Invitations

A point of contention was the communication between the parties following the November 26, 2024, request.

  • The 10-Day Rule: The Association admitted to not responding within the statutory ten business days but highlighted subsequent efforts to engage.
  • The Meeting Invitation: Respondent provided evidence that the Petitioner was invited to a Board meeting on January 9, 2025, to discuss her concerns. The Petitioner claimed she was "uninvited" via a note from Michael Brubaker, who allegedly stated her participation was "unwise" due to ongoing litigation against the Association.
  • Document Production: The Association produced several documents (flowcharts, rules, and minutes) on January 18, 2025. The Petitioner testified she received these but had not reviewed them prior to the hearing.

Important Quotes with Context

From Petitioner (Debbie Westerman)

"I would just like to know how much money our association has paid in legal fees in the last decade… I don't care who it's for. I don't care what it was about. I just want the figures."

  • Context: This statement defines the Petitioner’s primary objective: a purely financial audit of legal costs to ensure funds were not misappropriated.
From Respondent Counsel (Mark Lines)

"Miss Westerman is quick to rush to seek legal redress based on insufficient and procedurally deficient methods of request. And it's ironic… she is probing into legal fees… when she herself has been involved in the litigation with my client over many years."

  • Context: The Respondent argued that the Petitioner's own history of filing lawsuits (in city, state, and bankruptcy courts) was a primary driver of the high legal fees she was now questioning.
From the Administrative Law Judge (Samuel Fox)

"Based upon counsel’s representation that the requested documents were privileged, the Tribunal finds that the preponderance of the evidence supports the requested documents were privileged."

  • Context: This is the pivotal legal finding of the March 12, 2025, decision, which concluded that the Association had the legal right to withhold the specific records requested.

Actionable Insights

For Association Boards
  • Strict Adherence to Timelines: Although the Association prevailed, the ALJ noted the failure to respond within ten business days. Boards should prioritize responding to records requests—even if the response is a formal denial based on privilege—within the statutory window to avoid administrative petitions.
  • Clear Distinction of Privilege: When withholding records, Boards should explicitly cite A.R.S. § 33-1258(B) (for condos) or A.R.S. § 33-1805(B) (for planned communities) to provide a legal basis for non-disclosure.
  • Record Maintenance: The Respondent noted that statutes typically require maintaining records for three years. Demands for ten years of records (as requested in this case) may be considered "overburdensome" and beyond statutory requirements.
For Association Members
  • Verify Statutory Basis: Before filing a petition, members must ensure they are citing the correct chapter of Title 33 (Condominiums vs. Planned Communities).
  • Understand Inspection Rights: The statutory right is primarily for the examination and copying of records. A request for an association to generate new reports or "email all statements" may not be technically covered under the right to inspect.
  • Review Produced Materials: The Petitioner’s failure to review documents provided by the Association prior to the hearing weakened her position. Members should thoroughly audit any produced materials to identify specific gaps before proceeding to a hearing.

Final Decision

The Administrative Law Judge ordered that the Respondent be deemed the prevailing party. The Petitioner's request for the intervention of the Arizona Department of Real Estate (ADRE) was denied because the Association acted within its rights to withhold privileged attorney-client communications.

Study Guide: Westerman v. Bridgewood Nine 30 Homeowners Association

This study guide provides a comprehensive overview of the administrative hearing and subsequent decision regarding the matter of Debbie Westerman v. Bridgewood Nine 30 Homeowners Association (Case No. 25F-H029-REL). It analyzes the legal arguments, statutory framework, and the final ruling issued by the Office of Administrative Hearings.

I. Case Overview and Key Concepts

Central Dispute

The case originated from a petition filed by Debbie Westerman (Petitioner), a homeowner in the Bridgewood Nine 30 condominium complex, against the Bridgewood Nine 30 Property Owners Association (Respondent). The Petitioner sought access to financial records—specifically, legal billing statements from the law firm Shaw & Lines—covering the period from 2015 to 2024. The Petitioner’s stated goal was to verify expenditures and address concerns regarding the potential misappropriation of funds for legal representation.

Timeline of Significant Events
  • November 26, 2024: Petitioner sends an email request for legal statements from 2015 to the present.
  • December 16, 2024: Petitioner files a formal petition with the Arizona Department of Real Estate (ADRE).
  • December 30, 2024: Board President Michael Brubaker invites Petitioner to a board meeting (which she ultimately did not attend).
  • January 18, 2025: Respondent provides certain records, including a financial flowchart and meeting minutes.
  • February 20, 2025: Evidentiary hearing held before Administrative Law Judge (ALJ) Samuel Fox.
  • March 12, 2025: ALJ issues a decision in favor of the Respondent.
Core Legal Issues
  1. Statutory Application: Whether the dispute was governed by the Planned Community Act or the Condominium Act.
  2. Compliance with the "10-Day Rule": Whether the Association failed to fulfill a records request within the statutory timeframe.
  3. Privileged Communications: Whether legal billing invoices are exempt from disclosure under attorney-client privilege.
  4. Procedural Validity: Whether the Petitioner’s request was "procedurally and substantively flawed" due to citing incorrect statutes and failing to request an inspection.

II. Statutory Framework

The following Arizona Revised Statutes (A.R.S.) were central to the adjudication of this matter:

Statute Description Relevance to Case
A.R.S. § 33-1258 Condominium Act: Records The governing statute for this case. It requires associations to make records available within 10 business days.
A.R.S. § 33-1258(B)(1) Privilege Exemption Allows associations to withhold "privileged communication between an attorney for the association and the association."
A.R.S. § 33-1805 Planned Community Act Incorrectly cited by the Petitioner in the initial filing; applies to planned communities, not condominiums.
A.R.S. § 32-2199.01 ADRE Jurisdiction Permits members of condominium associations to file petitions for hearings regarding alleged statutory violations.
A.R.S. § 41-1092 OAH Authority Authorizes the Office of Administrative Hearings to conduct hearings on state regulations.

III. Short-Answer Practice Questions

1. Who represented the Respondent during the hearing, and what was his primary argument regarding the legal records?

  • Answer: Mark Lines represented the Respondent. He argued that the legal billing statements were privileged attorney-client communications and were therefore explicitly exempt from disclosure under A.R.S. § 33-1258(B)(1).

2. Why did the Petitioner specifically seek legal records from 2018?

  • Answer: The Petitioner heard at an annual meeting that the association spent approximately $50,000 in court costs in 2018 and wanted to verify if the board at that time had authorized those expenditures with the community’s knowledge.

3. What was the "10-day requirement" discussed during the hearing?

  • Answer: Under A.R.S. § 33-1258, an association has ten business days to fulfill a request for the examination of records or to provide copies of requested records.

4. What procedural error did the Respondent’s counsel point out regarding the Petitioner’s initial filing?

  • Answer: The Petitioner cited A.R.S. § 33-1805 (Planned Community statute) instead of the correct statute for condominiums, A.R.S. § 33-1258.

5. What was the ALJ’s ultimate finding regarding the Petitioner’s burden of proof?

  • Answer: The ALJ found that the Petitioner failed to meet her burden of proof because the documents she requested were privileged. Therefore, the 10-day production requirement did not apply to those specific records.

6. Did the Petitioner attend the board meeting scheduled for January 9, 2025? Why or why not?

  • Answer: No. While the Petitioner was initially invited, she claimed she was later "uninvited" by Michael Brubaker, who reportedly stated it was "unwise" for her to participate in community projects while in litigation against the association.

IV. Essay Prompts for Deeper Exploration

1. Transparency vs. Privilege: The Scope of A.R.S. § 33-1258. Analyze the tension between a homeowner's right to inspect financial records and an association’s right to protect privileged legal communications. In your essay, discuss whether the "privilege" exemption in the statute creates an obstacle to financial transparency, using the Westerman case as a primary example.

2. Procedural Formality in Records Requests. The Respondent’s counsel argued that the Petitioner's request was deficient because it did not specify a "right to inspect" or a "time schedule." Discuss the importance of procedural compliance in administrative law. Should a pro se petitioner (someone representing themselves) be held to the same standard of statutory precision as a legal professional? Refer to the ALJ's comments regarding "undue prejudice" in your answer.

3. The Role of the Office of Administrative Hearings (OAH). Describe the function of the OAH in resolving disputes between homeowners and associations. Based on the transcript and the decision, explain the rules of evidence in this forum, the role of the ALJ, and the timeline for issuing a decision. How does this forum differ from a standard civil trial?

V. Glossary of Important Terms

  • Administrative Law Judge (ALJ): An independent official (in this case, Sam Fox) appointed to preside over hearings and issue decisions regarding state regulations.
  • A.R.S. (Arizona Revised Statutes): The codified laws of the state of Arizona.
  • Burden of Proof: The obligation of a party (the Petitioner) to prove their allegations. In this case, the standard was a "preponderance of the evidence."
  • Condominium Act: The set of Arizona laws specifically governing the management and records of condominium associations.
  • Petitioner: The party who initiates the legal action or petition (Debbie Westerman).
  • Preponderance of the Evidence: A legal standard meaning that the evidence shows the contention is "more probably true than not."
  • Privileged Communication: Confidential interactions between an attorney and a client that are protected from disclosure in legal proceedings.
  • Respondent: The party against whom a petition is filed (Bridgewood Nine 30 Homeowners Association).
  • Statutory Compliance: The act of adhering to the requirements set forth in a law or statute.

HOA Transparency vs. Legal Privilege: Lessons from the Westerman v. Bridgewood Hearing

1. Introduction: The High Cost of Curiosity

On February 20, 2025, the Office of Administrative Hearings convened for Matter 25F-H029-REL, a case that serves as a sobering masterclass in the friction between homeowner transparency and board-level legal privilege. For homeowners, the case highlights that curiosity carries a literal price: Petitioner Debbie Westerman paid a $500 filing fee to the Arizona Department of Real Estate (ADRE) to challenge the Bridgewood Nine 30 Property Owners Association.

The dispute centered on a homeowner’s decade-long quest for legal billing records. However, as the hearing unfolded, it became clear that even when a homeowner’s intent is oversight, a failure to adhere to procedural precision can turn a $500 petition into an expensive lesson in administrative law. This case pitted a member’s "right to know" against a board’s duty to protect the confidentiality of its legal strategy.

2. The Paper Trail: Analyzing the Request

The conflict was ignited by a November 26, 2024, email from Westerman to the board. Seeking to "dispel concerns of having misappropriated funds for legal representation," she demanded all legal statements from the firm Shaw and Lines from 2015 to the present.

During the hearing, Westerman maintained a "numbers only" defense, arguing she only sought the financial figures—not the legal strategy—to ensure the board had properly voted on the expenditures. The Association, represented by Community Manager and Board President Michael Brubaker, countered by highlighting a breakdown in communication. While the board invited Westerman to a meeting on January 9, 2025, to discuss the records, she did not attend. Westerman testified she felt "uninvited" after receiving a note suggesting her participation was "problematic" due to pending litigation. This "uninvited" narrative illustrates a common pitfall in HOA governance: once a dispute enters the realm of litigation, the collaborative relationship necessary for transparency often collapses.

3. Navigating the Legal Maze: A.R.S. § 33-1258

A pivotal moment in the hearing involved the Petitioner’s citation of the wrong statute. Westerman initially filed under the Planned Community Act, but Bridgewood is legally organized as a condominium.

Statutory Comparison

Petitioner's Cited Authority (Planned Communities) Correct Statutory Authority (Condominiums)
A.R.S. § 33-1805 A.R.S. § 33-1258

Administrative Law Judge (ALJ) Samuel Fox corrected the record, but the error was more than a technicality. For an HOA board, a homeowner citing the wrong statute can be framed as a failure of "notice." The Association argued the petition was "procedurally and substantively flawed" because Westerman failed to specify a time for inspection or cite the correct governing law, effectively providing the board a procedural escape hatch to deny the request.

4. The 10-Day Rule and the "Privilege" Exception

Arizona law generally requires associations to fulfill records requests within 10 business days. However, this "10-day clock" is not universal. Under A.R.S. § 33-1258(B)(1), an association may withhold records that constitute privileged communication between the association and its attorney.

The Association’s counsel, Mark Lines, argued—and the ALJ agreed—that legal invoices containing descriptions of services are inherently privileged. The critical legal synthesis here is that because the documents were privileged under Subsection B, the 10-day production mandate never actually applied.

Furthermore, the Association challenged the scope of the request. While Westerman requested a decade of data, Counsel Lines noted that associations are generally only required to maintain financial records for three years. Requesting records back to 2015 was deemed "overburdensome" and beyond the statutory requirement, regardless of the privilege issue.

5. The Verdict: Why the Petition Failed

ALJ Samuel Fox ruled in favor of the Association, designating Bridgewood as the prevailing party. The decision was based on two primary conclusions:

  • The Privilege Shield: Because the requested invoices were privileged under § 33-1258(B)(1), the Association did not violate the law by withholding them.
  • The Compliance Threshold: The Association was found to have "substantially complied" with its duties by providing non-privileged materials, such as financial flowcharts and meeting minutes, even if they did not satisfy the Petitioner's specific demand for invoices.

The Judge also refused to litigate historical grievances prior to the November 2024 request, narrowing the focus strictly to the legal validity of that specific records demand.

6. Essential Takeaways for Homeowners and Boards

This hearing offers high-stakes lessons for anyone involved in community governance:

  • Specify "Inspection and Copying": To trigger statutory protections, homeowners should request to "inspect and copy" records at the association's office rather than demanding "statements" via email.
  • Acknowledge Data Limits: Boards are only legally obligated to provide records from the last three years. Requests for a "decade of data" are frequently "dead on arrival" due to being overburdensome.
  • Review Before You Sue: A homeowner’s credibility is severely undermined if they file a petition claiming "non-responsiveness" but admit in testimony they never opened the attachments the board did send. In this case, Westerman admitted she had not reviewed the flowcharts the board provided on January 18.
  • Privilege is Absolute: Even if a homeowner "only wants numbers," legal invoices are protected. Strategy and billing are often inextricably linked, and the court will protect that privilege.
7. Conclusion: Seeking Harmony over Litigation

The Westerman v. Bridgewood case highlights a "circular financial drain" that plagues many HOAs. As the Association's counsel noted, repeated administrative petitions increase the very legal fees that homeowners are trying to investigate.

While transparency is a pillar of HOA law, it is not an absolute right to every document. Homeowners who skip board meetings or choose litigation over collaborative inquiry often find themselves paying $500 to lose a case on a procedural technicality. For boards, maintaining a clear paper trail of "substantial compliance" remains the best defense. Ultimately, the most effective way to manage a community's legal budget is to prioritize collaborative problem-solving over the redress of the court.

Case Participants

Petitioner Side

  • Debbie Westerman (Petitioner)

Respondent Side

  • Mark Lines (Attorney)
    Shaw & Lines, LLC
  • Michael L. Brubaker (President and Community Manager)
    Bridgewood Nine 30 Homeowners Association
  • Roy Shot (Board Member)
    Bridgewood Nine 30 Homeowners Association
  • Danny Hudro (Secretary)
    Bridgewood Nine 30 Homeowners Association

Neutral Parties

  • Samuel Fox (Administrative Law Judge)
    Office of Administrative Hearings
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

Millard C. and Samantha Finch v. Mountain Gate Community aka Copper Canyon Ranch

Posted on by

Case Summary

Case ID 25F-H017-REL
Agency —
Tribunal Arizona Office of Administrative Hearings
Decision Date 2/26/2025
Administrative Law Judge SF
Outcome complete
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Millard C. Finch Counsel —
Respondent Mountain Gate Community aka Copper Canyon Ranch Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H017-REL Decision – 1316094.pdf

Uploaded 2026-04-24T12:33:56 (51.5 KB)

25F-H017-REL Decision – 1325522.pdf

Uploaded 2026-04-24T12:34:00 (120.7 KB)

25F-H017-REL Decision – 1277396.pdf

Uploaded 2026-04-24T12:34:04 (207.4 KB)

Briefing Document: Analysis of Finch v. Mountain Gate Community Re-hearing

Executive Summary

This document provides a comprehensive analysis of the administrative re-hearing in the matter of Samantha and Millard C. Finch v. Mountain Gate Community, Case No. 25F-H017-REL-RHG. The re-hearing, held on June 13, 2025, resulted in a definitive dismissal of the Petitioners’ Dispute Petition, as formalized in the Administrative Law Judge (ALJ) Decision issued on July 3, 2025.

The core of the proceeding was a fundamental misunderstanding by the Petitioners regarding the re-hearing’s legally restricted scope. The Arizona Department of Real Estate granted the re-hearing solely on the narrow grounds of potential procedural errors—specifically, “error in the administration or rejection of evidence or other errors of law occurring during the proceeding.” However, the Petitioners consistently attempted to re-litigate the merits of the original case, arguing against the initial ALJ’s findings of fact and legal conclusions.

The presiding ALJ, Kay A. Abramsohn, repeatedly clarified that disagreement with the outcome of the original decision was not a permissible basis for this re-hearing. The Petitioners’ specific claims of procedural error were systematically addressed and found to be without merit:

• Rejected Evidence: The claim that evidence was rejected was unsubstantiated. The official record showed the Petitioners’ exhibits were admitted in the original hearing, and a challenged line of questioning was identified as judicial guidance on argumentation, not a rejection of evidence.

• Improper Statute: The allegation that the Respondent used a “counterfeit” statute (A.R.S. § 33-1807) was refuted. The Respondent’s counsel explained that the version submitted was the one legally in effect during the period of the dispute, prior to a 2024 legislative amendment.

• Procedural Unfairness: The Petitioners’ concerns about insufficient time to prepare were directed at the Arizona Department of Real Estate, a separate agency from the Office of Administrative Hearings, which has no jurisdiction over the Department’s timelines.

Ultimately, the Petitioners failed to meet their burden of proof to demonstrate any procedural or legal errors occurred during the initial hearing. The re-hearing confirmed the integrity of the original proceeding, and the initial decision stands.

Case Overview

Detail

Case Name

Samantha and Millard C. Finch, Petitioners, v. Mountain Gate Community aka Copper Canyon Ranch, Respondent.

Original Case No.

25F-H017-REL

Re-hearing Case No.

25F-H017-REL-RHG

Presiding ALJ (Re-hearing)

Kay A. Abramsohn

Petitioner Representative

Samantha Finch (representing herself and Millard C. Finch)

Respondent Representative

Attorney B. Austin Baillio (Maxwell & Morgan, P.C.)

Timeline of Key Events

• February 7, 2025: The original administrative hearing is held.

• February 26, 2025: The initial ALJ Decision is issued, finding the Respondent to be the prevailing party.

• March 28, 2025: The Petitioners file a timely Dispute Rehearing Petition.

• April 29, 2025: The Arizona Department of Real Estate (ADRE) issues an Order Granting Re-Hearing on limited grounds.

• June 13, 2025: The re-hearing is conducted before the Office of Administrative Hearings (OAH).

• July 3, 2025: The final ALJ Decision on the re-hearing is issued, dismissing the Petitioners’ petition.

The Central Issue: Limited Scope of the Re-hearing

The defining characteristic of the June 13, 2025, re-hearing was the persistent disconnect between its mandated legal scope and the arguments advanced by Petitioner Samantha Finch.

Granted vs. Denied Grounds for Re-hearing

The ADRE’s Order on April 29, 2025, granted the re-hearing on one specific ground:

• Granted: “Error in the administration or rejection of evidence or other errors of law occurring during the proceeding.”

Crucially, the ADRE did not grant a re-hearing on other grounds requested by the Petitioners, including:

• Denied: “That the findings of fact or decision was arbitrary, capricious, or an abuse of discretion.”

• Denied: “That the findings of fact or decision was not supported by the evidence or was contrary to law.”

Petitioner’s Misinterpretation of Scope

Throughout the hearing, Ms. Finch repeatedly attempted to argue the substance of the original case, focusing on her disagreement with the initial ALJ’s factual findings and conclusions. Her arguments centered on topics such as the classification of a December payment as a “prepayment” and the application of funds to late fees, which she believed were contrary to the evidence she presented.

ALJ Abramsohn was compelled to repeatedly intervene to clarify the proceeding’s purpose:

“If you disagree with the way in which the judge came to conclusion based on the evidence that was admitted to the record, that is number seven and eight and that is not what the reharing was granted.”

“This hearing is not to appeal your disagreement with the decision. And Mr. Balio would agree with me on that. That would be I mean take a look at your petition number seven and eight.”

This fundamental misapprehension shaped the entire course of the re-hearing, with the Petitioners’ arguments consistently falling outside the established jurisdiction.

Analysis of Petitioners’ Key Arguments

The Petitioners’ attempts to demonstrate procedural error focused on three primary claims, none of which were substantiated by the record.

1. Argument: Improper Rejection of Evidence

The Petitioners contended that the original ALJ either rejected or failed to consider their evidence.

• Claim: Missing Exhibit Copies: Ms. Finch argued that her evidence must have been rejected because when she requested copies of all hearing exhibits from the OAH, she received only the Respondent’s exhibits. She believed this implied her own evidence was not part of the record used for the decision.

◦ Finding: This claim was incorrect. The ALJ noted that the initial decision explicitly stated that Petitioners’ exhibits had been admitted into evidence. Furthermore, the act of a staff member not returning copies of a party’s own documents is an administrative process issue, not a judicial act of rejecting evidence during a hearing.

• Claim: Blocked Line of Questioning: Ms. Finch asserted that the original ALJ prevented her from presenting evidence when he stopped her from questioning a witness about whether the Respondent had a “court order” to apply payments in a certain way.

◦ Finding: Examination of the self-prepared transcript provided by Ms. Finch revealed that the original judge did not reject evidence. Instead, he guided the pro se litigant by stating the question was “sort of asking for a legal conclusion” and advised her, “If you’d like to make that argument, you are welcome to do that.” This constitutes judicial management of a hearing, not the rejection of evidence. The Respondent’s counsel confirmed that Ms. Finch did, in fact, make this argument during her closing statement in the original hearing.

2. Argument: Use of an Improper Statute (A.R.S. § 33-1807)

In their Dispute Petition, the Petitioners alleged that the version of Arizona Revised Statute § 33-1807 used by the original ALJ was “unsubstantiated,” not authentic, and different from the version they had submitted.

• Claim: The ALJ based his decision on a “counterfeit” or incorrect version of the law provided by the Respondent.

◦ Finding: Respondent’s attorney, B. Austin Baillio, provided a clear explanation. The statute in question was amended by the legislature in 2024. The version his client submitted was the version that was legally in effect at the time the disputed payment actions occurred (beginning in 2019). He stated: “The version that my client admitted was the version of that statute that was in effect at the time payments were being applied to the ledger, which was a previous version than what exists today.” He further argued that even if it were an error, it was harmless, as the outcome would have been the same under either version of the law. The ALJ had both versions in the record and could apply the law accordingly.

3. Argument: Procedural Unfairness and Lack of Time

Ms. Finch repeatedly stated that she was not given enough time by the ADRE to prepare her “statement in response to the decision” and that her request for an extension was improperly handled.

• Claim: The ADRE did not provide an adequate extension, hindering her ability to fully articulate her case for a re-hearing.

◦ Finding: ALJ Abramsohn explained the jurisdictional separation between the agencies: “I can’t do anything about [that] because I’m not real estate. We’re a separate state agency.” The OAH is responsible only for conducting the hearing as scheduled by the ADRE. Any grievance regarding timelines or extensions granted by the Department must be addressed with that department, as it falls outside the OAH’s authority. The final decision noted that the Petitioners contacted the Department on May 9, 2025, but the case had already been forwarded to the OAH on April 25, 2025.

Final Disposition and Legal Conclusions

The ALJ Decision issued on July 3, 2025, formally dismissed the Petitioners’ case, finding that they failed to meet their legal burden.

Final Order: “IT IS ORDERED that Petitioners’ Dispute Petition is Dismissed.”

Conclusions of Law

The decision was based on the following legal conclusions:

1. Burden of Proof: The Petitioners bore the burden to prove by a “preponderance of the evidence” that a procedural or legal error occurred during the February 7, 2025, proceeding. They failed to meet this burden.

2. No Evidence of Rejection: The re-hearing evidence demonstrated that the Petitioners’ submitted documents were, in fact, admitted to the original administrative hearing record.

3. No Evidence of Error: The Petitioners failed to present any credible evidence that they were prevented from presenting evidence or that any errors of law occurred during the original hearing.

4. Improper Arguments: The Petitioners’ arguments disagreeing with the original ALJ’s Findings of Fact and Decision were improperly raised in the re-hearing, as the ADRE had not granted a re-hearing on those grounds. These arguments were consequently dismissed.

Finch v. Mountain Gate Community: A Case Study Guide

Short-Answer Quiz

Instructions: Answer the following questions in two to three complete sentences, drawing exclusively from the information provided in the case documents.

1. Identify the four primary issues raised by Millard and Samantha Finch in their initial petition to the Arizona Department of Real Estate.

2. What was the Respondent’s central argument for why the Finches’ account was consistently marked as delinquent, even when they made monthly payments?

3. Explain the legal distinction made by the Administrative Law Judge (ALJ) between the “15.00LateCharge”andthe”30.00 Late Notice Fee.”

4. According to the hearing evidence, what was the specific function of the “20.00RebillFee”andthe”30.00 Late Notice Fee,” and who ultimately bore the cost?

5. What specific event in November 2022 exacerbated the delinquency issue on the Petitioners’ account, and what was the result from January 2023 to February 2025?

6. On what grounds did the ALJ in the initial decision dismiss the Petitioners’ fourth complaint regarding threats of foreclosure and legal action?

7. What was the sole, limited ground on which the Department of Real Estate granted the Petitioners a rehearing?

8. During the rehearing, what was the Respondent’s explanation for why the version of A.R.S. § 33-1807 they submitted differed from the current version of the statute?

9. According to the second ALJ’s decision, why were the Petitioners’ arguments about disagreeing with the first decision’s findings of fact improperly raised at the rehearing?

10. What was the final outcome of the rehearing, and what does the final order state about the binding nature of the decision?

——————————————————————————–

Answer Key

1. The four issues were: (1) levying a $45.00 charge on an account that was paid on time; (2) the $45.00 charge exceeding the statutory limit of $15.00 for a late fee; (3) the 20/30 “late notice fees” being monetary penalties imposed without proper notice; and (4) improper threats of foreclosure and legal action when the account was not delinquent.

2. The Respondent argued that the Finches had fallen behind on their April 2020 assessment. Pursuant to A.R.S. § 33-1807(K), all subsequent payments were correctly applied first to the oldest unpaid assessments. This created a rolling delinquency where each new payment covered the previous month’s balance, causing the current month’s assessment to become late.

3. The ALJ determined that the “15.00LateCharge”wasafeeforthelatepaymentofanassessment,limitedbyA.R.S.§33−1803.The”30.00 Late Notice Fee,” however, was found to be a collection cost incurred by the Association for services provided by its managing agent (FSR) and was not subject to the statutory limit for late fees.

4. The “20.00RebillFee”and”30.00 Late Notice Fee” were charges for collection services provided by the managing agent, First Service Residential (FSR). An FSR employee would review overdue accounts and send collection notices, and FSR charged the Association for this service, a cost which was then directly passed on to the homeowner.

5. In November 2022, the Petitioners attempted to prepay their December assessment, but because the charge had not yet been posted and they did not communicate their intent, the payment was applied to past due amounts. This led them to believe they were current, resulting in their payments from January 2023 through February 2025 being consistently late and incurring a Late Charge and Late Notice Fee every month.

6. The ALJ dismissed the fourth complaint because it was unclear, did not allege actionable conduct, and was not supported by evidence. The Respondent’s witnesses testified that no legal action was ever taken, and the Petitioners submitted no evidence to support the allegation that threats were made.

7. The Department of Real Estate granted the rehearing on the single, specific ground of “Error in the administration or rejection of evidence or other errors occurring during the proceeding.” It did not grant a rehearing based on the Petitioners’ claims that the decision was arbitrary, capricious, or not supported by evidence.

8. The Respondent’s attorney explained that the version of A.R.S. § 33-1807 they submitted was the version in effect at the time the payment actions in question occurred. The statute had been amended in 2024, and those changes were prospective, not applicable to past events.

9. The second ALJ found these arguments were improperly raised because the Department had explicitly not granted a rehearing on the basis of disagreeing with the first decision. The scope of the rehearing was strictly limited to procedural errors, such as the wrongful admission or rejection of evidence during the hearing itself, not a re-evaluation of the facts or the judge’s conclusions.

10. The final outcome was that the Petitioners’ Dispute Petition was dismissed, and the original decision deeming the Respondent the prevailing party was upheld. The final order states that the decision is binding on the parties and any appeal must be filed with the superior court within thirty-five days.

——————————————————————————–

Essay Questions

Instructions: The following questions are designed for deeper analysis of the case. Formulate a comprehensive response based solely on the facts, legal arguments, and procedural history presented in the source documents.

1. Analyze the legal distinction between a “late fee,” a “monetary penalty,” and a “collection cost” as presented in this case. How did the classification of the “$30.00 Late Notice Fee” as a collection cost become the pivotal factor in the dismissal of Petitioners’ Issues 2 and 3?

2. Trace the procedural journey of the Finches’ complaint from the initial petition to the final decision after the rehearing. What does this process reveal about the specific and limited grounds for a rehearing in this administrative context, and how did the Petitioners’ misunderstanding of this scope affect their arguments?

3. Examine the role and application of A.R.S. § 33-1807(K) regarding the allocation of payments. Explain how the Respondent’s adherence to this statute created a “domino effect” of delinquency that the Petitioners failed to understand, leading to the core conflict.

4. Discuss the concept of “burden of proof” in this case. For each of the four initial complaints, explain why the Administrative Law Judge concluded that the Petitioners “failed to demonstrate by a preponderance of the evidence” that a violation occurred.

5. Based on the transcript of the rehearing and the final ALJ decision, describe the fundamental disagreement between Samantha Finch’s perception of the legal process and ALJ Kay Abramsohn’s explanation of it. What specific examples illustrate the difference between disagreeing with a decision’s outcome versus identifying a procedural error during a hearing?

——————————————————————————–

Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An independent judge who presides over administrative hearings. In this case, Samuel Fox presided over the initial hearing and Kay A. Abramsohn presided over the rehearing.

A.R.S. § 33-1242(A)(11)

Arizona Revised Statute cited by Petitioners, which allows an association board to impose reasonable monetary penalties on members for violations, but only after providing notice and an opportunity to be heard.

A.R.S. § 33-1803(A) & (B)

Arizona Revised Statutes governing charges for late payment of assessments. It limits late charges to the greater of $15 or 10% of the unpaid assessment and requires notice before imposition. It distinguishes these charges from monetary penalties.

A.R.S. § 33-1807(A) & (K)

Arizona Revised Statutes governing assessment liens. Subsection (A) specifies conditions for foreclosing a lien, requiring delinquency of one year or $1,200. Subsection (K) dictates the order for applying payments, requiring they first be applied to unpaid assessments and related costs before other fees or penalties.

Burden of Proof

The obligation of a party in a trial to produce evidence that proves the claims they have made. In this case, the Petitioners bore the burden of proof to establish their claims by a preponderance of the evidence.

Covenants, Conditions, and Restrictions. These are the governing legal documents that set up the rules for a planned community. Several sections, including 6.1.1, 6.9, 6.10.1, and 6.10.5, were cited in the case.

ClickPay

The online portal used by Petitioners to make assessment payments. The portal included a notice that payments should be scheduled on or after the 1st of each billing cycle.

Collection Fees / Costs

Charges incurred by the Association in the process of collecting delinquent assessments. In this case, the “20.00RebillFee”and”30.00 Late Notice Fee” were identified as collection costs passed on from FSR to the homeowner.

First Service Residential (FSR)

The managing agent employed by the Respondent to perform duties such as collecting assessments and providing collection services for overdue accounts.

Late Charge

A specific charge, limited by statute to $15.00, for the late payment of an assessment. This was deemed distinct from a collection fee or monetary penalty.

Late Notice Fee

A $30.00 fee charged to the Finches’ account. The ALJ determined this was a collection cost charged by FSR for sending overdue-payment paperwork, not a late fee subject to the $15 statutory limit.

Office of Administrative Hearings (OAH)

An independent state agency in Arizona where administrative hearings are conducted.

Petitioners

Millard C. and Samantha Finch, who owned a home in the Mountain Gate Community and filed the petition against the association.

Preponderance of the Evidence

The evidentiary standard required for the Petitioners to win their case. It is defined as proof that convinces the trier of fact that a contention is “more probably true than not.”

Rebill Fee

A $20.00 fee charged to the Finches’ account. Like the Late Notice Fee, this was identified as a charge for collection services provided by FSR.

Respondent

Mountain Gate Community aka Copper Canyon Ranch, the planned community association (HOA) of which the Finches were members.

Tribunal

A term used in the final decision to refer to the Office of Administrative Hearings (OAH).

{
“case”: {
“docket_no”: “25F-H017-REL-RHG”,
“case_title”: “Samantha and Millard C. Finch, Petitioners, v. Mountain Gate Community aka Copper Canyon Ranch, Respondent.”,
“decision_date”: “2025-07-03”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Millard C. Finch”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Samantha Finch”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “B. Austin Baillio”,
“role”: “attorney”,
“side”: “respondent”,
“affiliation”: “Maxwell & Morgan, P.C.”,
“notes”: null
},
{
“name”: “Samuel Fox”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: null,
“notes”: “ALJ for initial hearing”
},
{
“name”: “Kay A. Abramsohn”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: null,
“notes”: “ALJ for rehearing”
},
{
“name”: “Jonathan Sweat”,
“role”: “witness”,
“side”: “respondent”,
“affiliation”: null,
“notes”: “Former Community Manager”
},
{
“name”: “Melinda Montoya”,
“role”: “witness”,
“side”: “respondent”,
“affiliation”: “First Service Residential”,
“notes”: “Accounts Receivable Manager”
},
{
“name”: “Susan Nicolson”,
“role”: “Commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: null
}
]
}

{
“case”: {
“docket_no”: “25F-H017-REL-RHG”,
“case_title”: “Samantha and Millard C. Finch, Petitioners, v. Mountain Gate Community aka Copper Canyon Ranch, Respondent.”,
“decision_date”: “2025-07-03”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Millard C. Finch”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Samantha Finch”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: “Appeared for herself and Millard C. Finch”
},
{
“name”: “B. Austin Baillio”,
“role”: “respondent attorney”,
“side”: “respondent”,
“affiliation”: “Maxwell & Morgan, P.C.”,
“notes”: null
},
{
“name”: “Samuel Fox”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “OAH”,
“notes”: “ALJ for the initial decision (No. 25F-H017-REL)”
},
{
“name”: “Kay A. Abramsohn”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “OAH”,
“notes”: “ALJ for the rehearing decision (No. 25F-H017-REL-RHG)”
},
{
“name”: “Jonathan Sweat”,
“role”: “witness”,
“side”: “respondent”,
“affiliation”: “First Service Residential (former Community Manager)”,
“notes”: “Testified for Respondent”
},
{
“name”: “Melinda Montoya”,
“role”: “witness”,
“side”: “respondent”,
“affiliation”: “First Service Residential (Accounts Receivable Manager)”,
“notes”: “Testified for Respondent”
},
{
“name”: “Susan Nicolson”,
“role”: “ADRE Commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate (ADRE)”,
“notes”: null
},
{
“name”: “V. Nunez”,
“role”: “ADRE/OAH staff”,
“side”: “neutral”,
“affiliation”: “ADRE/OAH”,
“notes”: “Involved in decision transmission list ([email protected])”
},
{
“name”: “D. Jones”,
“role”: “ADRE/OAH staff”,
“side”: “neutral”,
“affiliation”: “ADRE/OAH”,
“notes”: “Involved in decision transmission list ([email protected])”
},
{
“name”: “L. Abril”,
“role”: “ADRE/OAH staff”,
“side”: “neutral”,
“affiliation”: “ADRE/OAH”,
“notes”: “Involved in decision transmission list ([email protected])”
},
{
“name”: “M. Neat”,
“role”: “ADRE/OAH staff”,
“side”: “neutral”,
“affiliation”: “ADRE/OAH”,
“notes”: “Involved in decision transmission list ([email protected])”
},
{
“name”: “L. Recchia”,
“role”: “ADRE/OAH staff”,
“side”: “neutral”,
“affiliation”: “ADRE/OAH”,
“notes”: “Involved in decision transmission list ([email protected])”
},
{
“name”: “G. Osborn”,
“role”: “ADRE/OAH staff”,
“side”: “neutral”,
“affiliation”: “ADRE/OAH”,
“notes”: “Involved in decision transmission list ([email protected])”
}
]
}

{ “case”: { “agency”: “ADRE”, “tribunal”: “OAH”, “docket_no”: “25F-H017-REL”, “case_title”: “Samantha and Millard C. Finch, Petitioners, v. Mountain Gate Community aka Copper Canyon Ranch, Respondent.”, “decision_date”: “2025-07-03”, “alj_name”: “Kay A. Abramsohn” }, “parties”: [ { “party_id”: “P1”, “role”: “petitioner”, “name”: “Samantha and Millard C. Finch”, “party_type”: “homeowner”, “email”: “[email protected]”, “phone”: null, “attorney_name”: null, “attorney_firm”: null, “attorney_email”: null, “attorney_phone”: null }, { “party_id”: “R1”, “role”: “respondent”, “name”: “Mountain Gate Community aka Copper Canyon Ranch”, “party_type”: “HOA”, “email”: null, “phone”: null, “attorney_name”: “B. Austin Baillio”, “attorney_firm”: “Maxwell & Morgan, P.C.”, “attorney_email”: “[email protected]”, “attorney_phone”: null } ], “issues”: [ { “issue_id”: “ISS-001”, “type”: “statute”, “citation”: “A.R.S. u00a7 33-1803(A)”, “caption”: “Excessive Late Charges vs. Collection Fees”, “violation(s)”: “Charging 45.00(15 late charge + $30 late notice fee) per delinquent assessment instance, exceeding the statutory limit of $15.00 for late payment charges.”, “summary”: “Petitioners argued that the total 45.00chargeleviedforlatepaymentsexceededthestatutorylimitforlatepaymentcharges(15.00) prescribed by A.R.S. u00a7 33-1803(A) and CC&R 6.10.112. The ALJ concluded that the $30.00 “late notice fee” (or “rebill fee”) was a collection cost allowed under ARS u00a7 33-1807(K) and the CC&Rs, not a late fee restricted by ARS u00a7 33-1803(A)$34.”,”outcome”:”petitioner
l
​

oss”,”filing
f
​

ee
p
​

aid”:2000.0,”filing
f
​

ee
r
​

efunded”:false,”civil
p
​

enalty
a
​

mount”:0.0,”orders
s
​

ummary”:”TheinitialALJdecisiondeemedRespondenttheprevailingpartyonallfourpetitionissues5.Thesubsequentrehearingpetitiononproceduralerrorwasdismissed6.”,”why
t
​

he
l
​

oss”:”Petitionersfailedtodemonstratebyapreponderanceoftheevidencethatthefeesinquestion(30 Late Notice Fee / Rebill Fee) were late fees subject to the $15 limit under A.R.S. u00a7 33-1803(A), as opposed to permissible collection costs under A.R.S. u00a7 33-1807(K)34.”, “cited”: [ “A.R.S. u00a7 33-1803(A)”, “A.R.S. u00a7 33-1807(K)”, “CCu0026R Section 6.10.1” ] } ], “money_summary”: { “issues_count”: 4, “total_filing_fees_paid”: 2000.0, “total_filing_fees_refunded”: 0.0, “total_civil_penalties”: 0.0 }, “outcomes”: { “petitioner_is_hoa”: false, “petitioner_win”: “none”, “summarize_judgement”: “The initial ALJ Decision found Respondent the prevailing party on all four petition issues5. Petitioners requested a rehearing, but the rehearing was limited to alleged errors in the admission or rejection of evidence during the initial proceeding7. The ALJ in the rehearing concluded that Petitioners failed to meet their burden of proof regarding the alleged errors, and the Dispute Petition was dismissed68.”, “why_the_loss”: “Petitioners failed to meet the burden of proof for the underlying violations in the initial hearing4…, and failed to meet the burden of proof for the limited grounds granted for the rehearing (error in the administration or rejection of evidence)811.” }, “analytics”: { “cited”: [ “A.R.S. u00a7 33-1803(A)”, “A.R.S. u00a7 33-1803(B)”, “A.R.S. u00a7 33-1807(A)”, “A.R.S. u00a7 33-1807(K)”, “A.R.S. u00a7 33-1242(A)(11)”, “CCu0026R Section 6.10.1”, “CCu0026R Section 6.10.5” ], “tags”: [ “HOA Dispute”, “Late Fees”, “Collection Costs”, “Statutory Interpretation”, “Rehearing” ] } }

The case involves Millard C. and Samantha Finch (Petitioners), members of the Mountain Gate Community aka Copper Canyon Ranch (Respondent), disputing alleged violations of Planned Community Statutes and community documents regarding assessment charges and collection practices1…. The matter proceeded through the Arizona Office of Administrative Hearings (OAH)45.

Key Facts and Main Issues (Initial Hearing – February 7, 2025)

Petitioners raised four main issues, focusing primarily on the imposition of a $45.00 charge for delinquent assessments, which consisted of a $15.00 late charge and a $30.00 “late notice fee” or “Rebill Fee”3…. Petitioners argued that this $45.00 sum exceeded the statutory limit for late charges—the greater of $15.00 or 10% of the unpaid assessment, as stipulated in A.R.S. § 33-1803(A) and the CC&Rs6…. They also challenged the imposition of fees when they believed their payments were timely, resulting from the HOA applying payments to previously delinquent balances in accordance with A.R.S. § 33-1807(K)1112. Finally, they challenged the legitimacy of the “late notice fees” as impermissible penalties imposed without proper notice and alleged inappropriate threats of foreclosure1314.

Legal Points and Initial Outcome

The Administrative Law Judge (ALJ) Samuel Fox found that Petitioners failed to meet their burden of proof on all four issues12…. The crucial legal distinction was that the $30.00 “Late Notice Fee” and “Rebill Fee” were determined to be collection fees, which are legally separate from, and permissible in addition to, the $15.00 statutory late charge15…. Collection fees and costs are contemplated under A.R.S. § 33-1807(K) and the CC&Rs1719. The ALJ determined that the Respondent (HOA) and its manager correctly applied payments first to delinquent assessments, causing subsequent monthly fees, as mandated by A.R.S. § 33-1807(K)1112. Regarding foreclosure threats, no evidence was entered to support the allegation, and Respondent’s witness testified that no foreclosure efforts had been made2021. The Respondent was deemed the prevailing party in the initial matter16.

Rehearing Proceedings (June 13, 2025)

Petitioners filed a request for rehearing, which the Department of Real Estate granted on the limited issue of “Error in the administration or rejection of evidence or other errors occurring during the proceeding”2223. The Department explicitly denied rehearing based on disagreement with the factual findings or the underlying decision2425.

At the rehearing, conducted by ALJ Kay A. Abramsohn, Petitioners primarily argued that the previous ALJ had relied on an unsubstantiated or incorrect version of A.R.S. § 33-1807 and that their evidence was not properly considered2627. The Respondent noted that the statute version used was the one legally in effect at the time of the actions (prior to a 2024 amendment), and its application was harmless to the outcome28…. Petitioners repeatedly sought to re-argue their disagreement with the initial factual findings and decision, but were reminded by the ALJ that the scope was restricted to procedural errors during the original hearing31….

Final Decision (Rehearing)

The ALJ concluded that Petitioners failed to meet their burden of proof that any error occurred in the administration or rejection of evidence, or any error of law, during the initial February 7, 2025 hearing34. The rehearing evidence confirmed that Petitioners’ exhibits were, in fact, admitted to the record and that the statutes relied upon were contained within the record34. Arguments concerning disagreement with the initial ALJ’s Findings of Fact and Conclusions of Law were dismissed as improperly raised under the limited scope of the granted rehearing33. The ALJ Dismissed Petitioners’ Dispute Petition35.

{ “case”: { “agency”: “ADRE”, “tribunal”: “OAH”, “docket_no”: “25F-H017-REL”, “case_title”: “Millard C. and Samantha Finch Petitioners, v. Mountain Gate Community aka Copper Canyon Ranch, Respondent.”, “decision_date”: “2025-07-03”, “alj_name”: “Kay A. Abramsohn” }, “parties”: [ { “party_id”: “P1”, “role”: “petitioner”, “name”: “Millard C. and Samantha Finch”, “party_type”: “homeowner”, “email”: “[email protected]”, “phone”: null, “attorney_name”: null, “attorney_firm”: null, “attorney_email”: null, “attorney_phone”: null }, { “party_id”: “R1”, “role”: “respondent”, “name”: “Mountain Gate Community aka Copper Canyon Ranch”, “party_type”: “HOA”, “email”: null, “phone”: null, “attorney_name”: “B. Austin Baillio”, “attorney_firm”: “Maxwell & Morgan, P.C.”, “attorney_email”: “[email protected]”, “attorney_phone”: null } ], “issues”: [ { “issue_id”: “ISS-001”, “type”: “statute”, “citation”: “A.R.S. § 33-1803(B); Association Rules and Design Guidelines, Article 5.2, Article 6.10.5, and Article 6.9”, “caption”: “Charging a 45.00fee(15.00 late charge + $30.00 ‘late notice fee’) when assessment is paid before or on the due date1.”, “violation(s)”: “ARS 33-1803(B); Association Rules and Design Guidelines, Article 5.2, Article 6.10.5, and Article 6.9”, “summary”: “Petitioners argued that payments were charged as late despite being timely, but the ALJ found payments were correctly applied to previous delinquent balances per A.R.S. § 33-1807(K)2….”, “outcome”: “respondent_win”, “filing_fee_paid”: 500.0, “filing_fee_refunded”: false, “civil_penalty_amount”: 0.0, “orders_summary”: “Respondent deemed the prevailing party on this issue5.”, “why_the_loss”: “Petitioners failed to demonstrate by a preponderance of the evidence that Respondent charged Late Charges for payments that were not late4.”, “cited”: [“3”, “13”, “33”, “36”] }, { “issue_id”: “ISS-002”, “type”: “statute”, “citation”: “A.R.S. § 33-1803(A); CC&R Article 6, Section 6.10.1”, “caption”: “The $45.00 charge exceeds the statutory limit of 15.00fordelinquentassessments6$.”,
“violation(s)”: “ARS 33-1803(A); CC&R Article 6, Section 6.10.1”,
“summary”: “Petitioners argued the total fee exceeded the statutory late charge limit, but the ALJ found the additional fees ($30 ‘late notice fee’) were permissible collection costs, distinct from late fees78.”, “outcome”: “respondent_win”, “filing_fee_paid”: 500.0, “filing_fee_refunded”: false, “civil_penalty_amount”: 0.0, “orders_summary”: “Respondent deemed the prevailing party on this issue5.”, “why_the_loss”: “Petitioners failed to demonstrate that the Late Notice Fee or Rebill Fee were late fees limited under A.R.S. § 33-1803(A)8.”, “cited”: [“4”, “12”, “37”, “42”] }, { “issue_id”: “ISS-003”, “type”: “statute”, “citation”: “A.R.S. §§ 33-1803(B), 33-1242(A)(11); Association Rules and Design Guidelines”, “caption”: “30.00/20.00 “late notice fees” levied against the account without providing notice, violating statutes regarding monetary penalties9.”, “violation(s)”: “ARS §33-1803(B), ARS §33-1242(A)(11), Association Rules and Design Guidelines”, “summary”: “Petitioners alleged collection fees were impermissible penalties imposed without notice and hearing, but the ALJ determined they were collection costs, distinct from monetary penalties per A.R.S. § 33-1807(K)1011.”, “outcome”: “respondent_win”, “filing_fee_paid”: 500.0, “filing_fee_refunded”: false, “civil_penalty_amount”: 0.0, “orders_summary”: “Respondent deemed the prevailing party on this issue5.”, “why_the_loss”: “Petitioners failed to meet their burden that Respondent impermissibly applied monetary penalties, as the fees were collection fees1011.”, “cited”: [“5”, “13”, “16”, “44”] }, { “issue_id”: “ISS-004”, “type”: “statute”, “citation”: “A.R.S. § 33-1807(A); CC&Rs Article 6, Section 6.10.5(ii), 6.10.5(i), and 6.10.2”, “caption”: “Pre-legal team threatening foreclosure and legal action when Petitioners are not delinquent12.”, “violation(s)”: “ARS 33-1807(A); CC&Rs Article 6, Section 6.10.5(ii), 6.10.5(i), and 6.10.2”, “summary”: “Petitioners challenged Respondent’s authority to threaten legal action without proven delinquency. The ALJ found no evidence of foreclosure threats and deemed the complaint unclear or not ripe5….”, “outcome”: “respondent_win”, “filing_fee_paid”: 500.0, “filing_fee_refunded”: false, “civil_penalty_amount”: 0.0, “orders_summary”: “Respondent deemed the prevailing party in this matter regarding Petition Issue 45.”, “why_the_loss”: “The complaint either did not allege actionable conduct or was not yet ripe for resolution, and Petitioners failed to submit evidence of threats or meet their burden5….”, “cited”: [“6”, “14”, “47”] } ], “money_summary”: { “issues_count”: 4, “total_filing_fees_paid”: 2000.0, “total_filing_fees_refunded”: 0.0, “total_civil_penalties”: 0.0 }, “outcomes”: { “petitioner_is_hoa”: false, “petitioner_win”: “none”, “summarize_judgement”: “The Administrative Law Judge Decision in the underlying matter (25F-H017-REL), which found Respondent the prevailing party on all four petition issues, stands, as Petitioners’ Dispute Petition for Rehearing was dismissed5…. Petitioners failed to meet the burden of proof that there was error in the administration or rejection of evidence or other errors occurring during the initial proceeding1718.”, “why_the_loss”: “Petitioners failed to establish by a preponderance of the evidence that Respondent violated applicable statutes, CC&Rs, and/or Bylaws in the underlying dispute4…. Subsequently, Petitioners failed to meet the burden during rehearing to demonstrate error in the initial administrative proceeding17.” }, “analytics”: { “cited”: [ “A.R.S. § 33-1803(A)”, “A.R.S. § 33-1803(B)”, “A.R.S. § 33-1242(A)(11)”, “A.R.S. § 33-1807(A)”, “A.R.S. § 33-1807(K)”, “A.R.S. § 32-2199.02(B)”, “A.R.S. § 32-2199.04” ], “tags”: [ “HOA dispute”, “late fees”, “collection costs”, “assessment payment application”, “rehearing dismissal”, “A.R.S. Title 33 Chapter 16” ] } }

{
“rehearing”: {
“is_rehearing”: true,
“base_case_id”: “25F-H017-REL”,
“original_decision_status”: “affirmed”,
“original_decision_summary”: “The original decision (25F-H017-REL) found the Respondent (Mountain Gate Community) to be the prevailing party on all four petition issues related to late fees, collection costs, the proper application of assessment payments under A.R.S. § 33-1807(K), and threats of legal action [1], [2]. The ALJ found Petitioners failed to meet their burden of proof on all claims [3], [4], [5], [1].”,
“rehearing_decision_summary”: “The Department granted the rehearing on the limited ground of: ‘Error in the administration or rejection of evidence or other errors occurring during the proceeding’ [6], [7]. The rehearing ALJ found that Petitioners failed to meet their burden of proof to show such errors occurred during the original hearing [8], [9]. The Petitioners’ Dispute Petition was dismissed, affirming the underlying findings and conclusions of the original decision [10], [11].”,
“issues_challenged”: [
{
“issue”: “Issue 1: Charging a $45.00 fee ($15.00 late charge + $30.00 ‘late notice fee’) when assessment is paid before or on the due date.”,
“challenge_status”: “Affirmed (Petitioner failed to prove procedural/evidentiary error)”
},
{
“issue”: “Issue 2: The $45.00 charge exceeds the statutory limit of $15.00 for delinquent assessments.”,
“challenge_status”: “Affirmed (Petitioner failed to prove procedural/evidentiary error)”
},
{
“issue”: “Issue 3: $30.00/$20.00 “late notice fees” levied against the account without providing notice, violating statutes regarding monetary penalties.”,
“challenge_status”: “Affirmed (Petitioner failed to prove procedural/evidentiary error)”
},
{
“issue”: “Issue 4: Pre-legal team threatening foreclosure and legal action when Petitioners are not delinquent.”,
“challenge_status”: “Affirmed (Petitioner failed to prove procedural/evidentiary error)”
}
]
}
}

{
“case”: {
“docket_no”: “25F-H017-REL-RHG”,
“case_title”: “Samantha and Millard C. Finch, Petitioners, v. Mountain Gate Community aka Copper Canyon Ranch, Respondent.”,
“decision_date”: “2025-07-03”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Samantha Finch”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Millard C. Finch”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “B. Austin Baillio”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “Maxwell & Morgan, P.C.”,
“notes”: null
},
{
“name”: “Samuel Fox”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “OAH”,
“notes”: “Presided over initial hearing (25F-H017-REL)”
},
{
“name”: “Kay A. Abramsohn”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “OAH”,
“notes”: “Presided over rehearing (25F-H017-REL-RHG)”
},
{
“name”: “Jonathan Sweat”,
“role”: “witness (former community manager)”,
“side”: “respondent”,
“affiliation”: “First Service Residential”,
“notes”: “Testified for Respondent”
},
{
“name”: “Melinda Montoya”,
“role”: “witness (accounts receivable manager)”,
“side”: “respondent”,
“affiliation”: “First Service Residential”,
“notes”: “Testified for Respondent”
},
{
“name”: “Susan Nicolson”,
“role”: “ADRE Commissioner”,
“side”: “neutral”,
“affiliation”: “ADRE”,
“notes”: null
},
{
“name”: “vnunez”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “ADRE”,
“notes”: “Listed as recipient of decisions”
},
{
“name”: “djones”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “ADRE”,
“notes”: “Listed as recipient of decisions”
},
{
“name”: “labril”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “ADRE”,
“notes”: “Listed as recipient of decisions”
},
{
“name”: “mneat”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “ADRE”,
“notes”: “Listed as recipient of decisions”
},
{
“name”: “lrecchia”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “ADRE”,
“notes”: “Listed as recipient of decisions”
},
{
“name”: “gosborn”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “ADRE”,
“notes”: “Listed as recipient of decisions”
}
]
}

This summary details the proceedings and decisions of the underlying legal dispute and the subsequent administrative rehearing concerning alleged violations of planned community statutes and governing documents.

——————————————————————————–

Case Title: 25F-H017-REL (Original Decision)

Parties: Millard C. and Samantha Finch (Petitioners) versus Mountain Gate Community aka Copper Canyon Ranch (Respondent)1. Hearing Date: February 7, 20251. Key Facts: The Petitioners, homeowners in the community, became involved in a dispute over late assessment payments2. The core issue stemmed from payments applied according to A.R.S. § 33-1807(K), which dictates that payments received must be applied first to delinquent assessments, then to collection fees, and then to other amounts3,4. An attempt by Petitioners to pre-pay the December 2022 assessment was unsuccessful and the payment was applied to past due amounts, leading to a continuous cycle of late charges and collection fees through February 20255,6.

Main Issues (Original Case): Petitioners raised four complaints, primarily alleging that Respondent violated law and community documents by:

1. Levying a **45.00charge∗∗(15.00 late charge plus $30.00 “late notice fee”) when assessments were allegedly paid on time7.

2. Levying a total charge ($45.00) that exceeded the statutory $15.00 limit for late payment charges set by A.R.S. § 33-1803(A) and CC&R 6.10.18,9.

3. Imposing 30.00/20.00 “late notice fees” (Rebill Fees) without proper notice, treating them as penalties10,11.

4. Threatening foreclosure and legal action without proper cause12,13.

Outcome and Key Legal Points (Original Case): The Administrative Law Judge (ALJ Samuel Fox) ordered that the Respondent was the prevailing party regarding all four Petition Issues14,15.

• The ALJ found that Respondent correctly applied payments to delinquent assessments first, pursuant to A.R.S. § 33-1807(K), and that Petitioners failed to prove the charges were levied against timely payments4,16.

• Crucially, the ALJ determined that the $30.00 “Late Notice Fee” or “Rebill Fee” was a collection cost, not a “late charge” restricted by the $15.00 limit in A.R.S. § 33-1803(A)17,11. A.R.S. § 33-1807(K) differentiates between collection fees/costs and monetary penalties/late charges, allowing for the application of collection costs incurred by the association3,18.

——————————————————————————–

Case Title: 25F-H017-REL-RHG (Rehearing)

Procedural History: This matter constitutes a rehearing (RHG), granted by the Arizona Department of Real Estate (DRE) following Petitioners’ timely request19,20. Rehearing Date: June 13, 202521. Scope of Rehearing: The DRE limited the sole issue for rehearing to: “Error in the administration or rejection of evidence or other errors occurring during the proceeding” of the original hearing22,23,24. The DRE explicitly denied rehearing requests based on disagreement with the original findings of fact or the overall decision (e.g., that the decision was arbitrary or unsupported by evidence)25,26.

Key Arguments (Rehearing): Petitioners (represented by Samantha Finch) argued that:

• The original ALJ erred by using an “unsubstantiated” version of A.R.S. § 33-1807, suggesting that their version, which they believed was the proper law, would have changed the outcome27,28.

• The original ALJ rejected or failed to consider their evidence, evidenced partially by the fact they did not receive copies of their own exhibits after the decision29.

• The original ALJ improperly prevented them from questioning a witness about the need for a “court order” regarding payment application, ruling the question sought a legal conclusion30,31.

Outcome and Key Legal Points (Rehearing): The Administrative Law Judge (ALJ Kay A. Abramsohn) concluded that Petitioners failed to meet their burden of proof regarding any alleged error within the limited scope of the rehearing32,33.

• The rehearing evidence confirmed that Petitioners’ documents were admitted to the record of the original hearing33.

• The ALJ found no evidence that Petitioners were prevented from presenting any evidence during the February 7, 2025 hearing34.

• The ALJ dismissed Petitioners’ repeated arguments concerning their disagreement with the original findings of fact and conclusions of law because those issues were improperly raised and outside the limited scope of the granted rehearing26.

Final Decision: The Tribunal Dismissed Petitioners’ Dispute Petition35. This order is binding, and any subsequent appeal must be filed with the superior court35.

Case Participants

Petitioner Side

  • Millard C. Finch (Petitioner)
    Homeowner
  • Samantha Finch (Petitioner)
    Homeowner and witness

Respondent Side

  • B. Austin Baillio (Attorney)
    Maxwell & Morgan, P.C.
    Legal counsel for respondent
  • Jonathan Sweat (Witness)
    First Service Residential
    Former Community Manager
  • Melinda Montoya (Witness)
    First Service Residential
    Accounts Receivable Manager

Neutral Parties

  • Samuel Fox (Administrative Law Judge)
    Office of Administrative Hearings
    Presided over original hearing
  • Kay A. Abramsohn (Administrative Law Judge)
    Office of Administrative Hearings
    Presided over the re-hearing
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

The Gregory M and Donna P Hulbert Family Trust dated May 25, 1995 v.

Posted on by

Case Summary

Case ID 24F-H055-REL
Agency —
Tribunal —
Decision Date 2025-01-21
Administrative Law Judge SF
Outcome complete
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner The Gregory M and Donna P Hulbert Family Trust dated May 25, 1995 Counsel —
Respondent The Summit at Copper Square Condominium Association Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

24F-H055-REL Decision – 1214040.pdf

Uploaded 2026-04-24T12:25:43 (45.7 KB)

24F-H055-REL Decision – 1218977.pdf

Uploaded 2026-04-24T12:25:46 (46.3 KB)

24F-H055-REL Decision – 1218981.pdf

Uploaded 2026-04-24T12:25:49 (5.9 KB)

24F-H055-REL Decision – 1219895.pdf

Uploaded 2026-04-24T12:25:53 (40.5 KB)

24F-H055-REL Decision – 1235253.pdf

Uploaded 2026-04-24T12:25:56 (47.1 KB)

24F-H055-REL Decision – 1264402.pdf

Uploaded 2026-04-24T12:26:00 (277.9 KB)

Briefing Document: Hulbert Family Trust v. The Summit at Copper Square Condominium Association

Executive Summary

This briefing document analyzes the consolidated administrative matters (Nos. 24F-H049-REL and 24F-H055-REL) involving the Gregory M. and Donna P. Hulbert Family Trust (the "Petitioner") and The Summit at Copper Square Condominium Association (the "Association" or "Respondent"). The case, presided over by Administrative Law Judge (ALJ) Samuel Fox, centers on allegations of fiduciary neglect, financial mismanagement, and violations of the Association’s Declaration (CC&Rs).

The Petitioner, represented by Donna Hulbert, argues that the Association’s Board of Directors has failed in its stewardship of a 23-story residential high-rise. Key grievances include a multi-year delay in addressing structural damage caused by a swimming pool leak, a critically underfunded reserve and operating budget, and unauthorized modifications to common areas. The Respondent contends that these matters fall within the Board’s broad discretionary powers and that they have acted reasonably by following the advice of hired professionals.

Detailed Analysis of Key Themes

1. Structural Integrity and Maintenance Delays

The central physical issue involves a persistent leak from the fifth-floor swimming pool area through an 18-inch concrete slab into the fourth-floor garage ceiling.

  • Timeline of Neglect: Evidence suggests damage was noted as early as January 2020. Despite recommendations for investigation in 2022, no formal forensic investigation occurred until September 2023.
  • Expert Findings: Reports from Jervasio (April and July 2024) identified water infiltration causing ongoing damage, including rebar corrosion (evidenced by staining) and deterioration of the slab.
  • Controversy of Action: The Petitioner alleges the Board intentionally delayed remediation by seeking redundant opinions from the same firm. The Respondent argues the delay was necessary to identify the specific source of the leak, which has only recently been repaired.
  • Long-term Risks: Experts indicate that while there is no immediate loss of slab strength, the deterioration is progressive due to chloride ions from pool water adhering to the rebar, which continues to corrode even after the leak is stopped.
2. Financial Stewardship and Budgetary Practices

The Petitioner presents a detailed critique of the Association's financial health, alleging the Board ignores standard accounting and management practices provided by their management company, First Service.

  • Operating Fund Deficiencies: Management recommends an operating account funded at three times monthly expenses. The Petitioner alleges it is currently funded at approximately 0.3 times expenses (30%).
  • Reserve Fund Crisis: The Petitioner calculates that if all required reserve projects for the current year are executed, the reserves will be exhausted, potentially leaving a $150,000 deficit. The current funding level is estimated at 25-29%, whereas a level below 30% is considered a high risk for special assessments.
  • Budgeting Methodology: Allegations state the Board sets the budget based on the prior year's budget plus a flat 7.5% increase, rather than using "actual" historical expenditures. This has led to significant overruns, specifically in plumbing/water damage (budgeted $20k vs. ~$89k actual in 2023).
  • Reserve Borrowing: To cover operating shortfalls, the Association reportedly borrowed nearly $400,000 from the reserve fund between 2022 and 2023.
3. Declaration Violations and Common Area Use

The dispute extends to the Board’s interpretation of the Association's Declaration regarding common elements.

  • The "Puppy Potty": The Board installed a dog pad on the roof. The Petitioner argues this violates Article 5 of the Declaration, which prohibits pets on common areas except for ingress and egress through specific service areas.
  • Third-Party Access: The Board allowed news crews onto common areas during the Diamondbacks' playoffs. The Petitioner contends the Declaration limits common area access to owners and their guests, and the Board lacks the unilateral authority to grant easements to strangers for media purposes.
  • Governance Discretion: The Respondent argues the Board has the "sole discretion" regarding the use, maintenance, and repair of common areas.
4. Transparency and Governance

Petitioner claims a systematic effort to marginalize homeowner participation:

  • Meeting Conduct: Meeting agendas are described as lacking specifics. Homeowners are limited to 30 minutes of total collective comment.
  • Information Access: The Petitioner alleges critical reports (like the Jervasio structural report) were withheld until forced by formal document requests.
  • Remote Access: The Board recently eliminated remote access (Google Meet/Teams) for board meetings, which the Petitioner views as an attempt to silence opposition from non-resident owners.

Important Quotes

Donna Hulbert (Petitioner)

"In large part, the most important evidence here today is that there has been leaking from the fifth floor swimming pool area down through an 18-inch concrete slab to the fourth floor garage ceiling… It’s been going on for over five years."

"We have an operating account that according to our management company should be funded at three times operating expenses. It is funded at 0.3 times operating expenses."

"As early as January of 2020, there was evidence of damage… the deterioration would continue… if not remediated, there would be loss of strength of a concrete slab."

"You don’t just get to as the board president, no matter how well-meaning, disregard all the documents and put a puppy potty on the roof."

Darl Wilson (Respondent Counsel)

"These are board decisions where the board has a lot of discretion, especially in the budgetary and the repairs… The CC&R specifically states that the repairs and maintenance are the sole discretion of the board."

"Just because there’s leaking and cracking doesn't necessarily mean that there is a structural problem that needs to be repaired. Concrete cracks and leaks all the time."

"Miss Hulbert wants her budget her way and she wants things to be ran at the complex her way. And even if she was a board member, she doesn't get it her way."

Administrative Law Judge Samuel Fox

"My power to order things is extremely limited to requiring that they follow the documents and the law… I cannot create an enforceable order for them to do anything in particular."

Summary of Financial Data Points

Category Recommended/Budgeted Actual/Reported
Operating Fund Level 3.0x Monthly Expenses 0.3x Monthly Expenses
Reserve Funding Level Fully Funded (~$5M range) 25% – 29% Funded
Plumbing/Water Repair (2023) $20,000 ~$89,000
Legal Expenses (2023) $20,000 $35,000
Reserve Borrowing N/A ~$400,000 (to cover operations)
Billboard Revenue (2023) N/A $120,000 – $160,000
Unbudgeted Tax Payment $0 ~$36,000

Actionable Insights

  • Structural Remediation: Destructive testing (coring) was scheduled to begin in late August 2024. The results of this testing are critical for determining the extent of rebar corrosion and the necessary scope of remediation.
  • Fiscal Correction: The Association's reliance on reserve borrowing to fund operating expenses is unsustainable. A transition to budgeting based on actual historical costs—particularly for recurring water and plumbing issues—is necessary to prevent future deficits.
  • Reserve Stabilization: At a funding level near 25%, the Association faces a high probability of a special assessment. The Board must reconcile the "fully funded" recommendations of the reserve study with current spending on capital improvements.
  • Legal Compliance: If the Board wishes to maintain the roof-top dog pad or allow third-party media access, they may need to seek a formal amendment to the Declaration to avoid ongoing claims of breach of fiduciary duty.
  • Transparency Protocols: Improving the specificity of meeting agendas and providing proposals to homeowners in advance of votes would mitigate claims of "governance by whim" and ensure meaningful homeowner participation.

Study Guide: The Hulbert Family Trust v. The Summit at Copper Square Condominium Association

This study guide provides a comprehensive overview of the administrative hearing regarding the dispute between The Gregory M and Donna P Hulbert Family Trust (Petitioner) and The Summit at Copper Square Condominium Association (Respondent). It explores issues of high-rise structural maintenance, fiduciary duties in association management, and the financial complexities of reserve funding.

I. Overview of the Administrative Proceeding

The matter involves consolidated cases (No. 24F-H049-REL and 24F-H055-REL) heard in the Office of Administrative Hearings (OAH). The OAH is an independent state agency authorized under ARS § 41-1092 to conduct hearings regarding state regulations.

Key Entities and Parties
  • The Petitioner: Donna Hulbert, representing her family trust as a homeowner at The Summit.
  • The Respondent: The Summit at Copper Square Condominium Association, a 23-story residential high-rise managed by First Service Residential.
  • Presiding Official: Administrative Law Judge (ALJ) Sam Foss (also referred to as Samuel Fox in documents).
  • Central Argument: The Petitioner alleges the Board of Directors failed in its stewardship, specifically regarding structural repairs, financial budgeting, and adherence to the community’s Declaration (CC&Rs).

II. Key Concept: Structural Integrity and the "Duty to Maintain"

A primary point of contention is the physical maintenance of the common elements, specifically an ongoing leak from the fifth-floor pool area.

Timeline of the Structural Issue
Date Event
January 2020 Initial evidence of damage/cracking noted in the fourth-floor garage ceiling.
2022 Area re-investigated; cracks noted to have extended.
September 2023 Initial forensic investigation by a registered architect.
January 2024 Additional investigation conducted by Jervasio (engineering firm).
April 2024 Report by Ward Holland (Jervasio) indicates water infiltration is causing ongoing damage to the structural slab.
July 2024 Second Jervasio report (Jack Gordon) confirms deterioration and recommends destructive testing (core samples).
August 2024 Destructive testing scheduled to begin.
Technical Considerations
  • Concrete Slab: The pool area sits above an 18-inch concrete slab that separates the pool from the garage.
  • Corrosion Mechanism: Chlorinated water from the pool seeps into the concrete, causing chloride ions to bond with and corrode the steel rebar within the slab. This process continues even if the leak is stopped because the chemicals remain in the concrete.
  • Destructive vs. Visual Testing: Visual inspections only identified staining and cracking. Destructive testing involves "coring" samples of the concrete for laboratory analysis to determine the extent of rebar corrosion and loss of structural strength.

III. Key Concept: Financial Stewardship and Reserve Funding

The Petitioner argues that the Board violated Article 7 of the Declaration, which requires the adoption of a budget that estimates total funds needed for common expenses and adequate reserves.

Financial Health Metrics
  1. Operating Reserves: Management recommendations suggest an operating account should hold three times monthly operating expenses. Evidence suggests the Association’s account was funded at approximately 0.3 times expenses.
  2. The "30% Rule": Reserve studies and management advice indicate that if reserves fall below 30% funding, the association faces a high risk of a "special assessment" (an unplanned fee charged to all owners).
  3. Revenue vs. Expense Budgeting: The Petitioner alleges the Board used "surface level" planning—raising rates by a flat percentage (7.5%) rather than analyzing actual historical costs (e.g., plumbing and water damage repairs consistently exceeded their $20,000 budget, reaching nearly $90,000).
Accounting Discrepancies Cited
  • Billboard Income: The Association received over $120,000 (up to $170,000 in some years) from billboards. Taxes on this income were reportedly not estimated or paid quarterly as required by corporate tax rates, leading to unplanned lump-sum payments ($36,000).
  • Reserve Borrowing: The Board allegedly borrowed nearly $400,000 from the reserve account to cover operating shortfalls in previous years.
  • Accrual Errors: Invoices (such as an insurance deposit and a $35,400 plumbing bill) were reportedly held for months due to cash flow issues or misclassified across fiscal years to make balance sheets appear healthier.

IV. Key Concept: Adherence to the Declaration (CC&Rs)

Disputes arose over the Board's discretion versus the mandatory language of the Association's governing documents.

  • Article 5: States the Association shall maintain, repair, and replace all common elements. The Petitioner argues this is a mandatory duty, not a discretionary choice for the Board.
  • Common Area Usage: The Declaration prohibits pets on common areas except for "ingress and egress" (entering and exiting). The Board allowed a "dog pad" on the roof.
  • Third-Party Access: The Petitioner challenged the Board's decision to allow news crews onto common areas during baseball playoffs, citing the Declaration's clause that common areas are for owners and their guests.
  • Transparency: Issues were raised regarding meeting notices that lacked specific proposals or writing, and the decision to limit or remove remote (virtual) access to board meetings.

V. Short-Answer Practice Questions

  1. What is the legal basis for the Office of Administrative Hearings' authority in this case?
  • Answer: The OAH is authorized under ARS section 41-1092 to conduct hearings arising out of state regulations, including condominium act disputes.
  1. Why did the Petitioner argue that stopping the pool leak was insufficient to stop the structural damage?
  • Answer: Because the chlorinated water introduced chloride ions into the 18-inch concrete slab, which continue to corrode the rebar even after the water source is removed.
  1. According to the Petitioner, what is the "straw man" defense used by the Respondent?
  • Answer: The Respondent characterized the Petitioner as a "disgruntled homeowner" to dismiss her claims, rather than addressing the factual merits of the maintenance and financial allegations.
  1. What specific financial risk occurs when an Association’s reserves fall to 20-30%?
  • Answer: It creates a high likelihood of a special assessment, and property values may decline as the units are viewed as "fire sale" risks.
  1. How did the Board justify its decisions regarding repairs and budgeting?
  • Answer: The Board argued they have "sole discretion" under the CC&Rs and that they were following the advice of hired professionals.

VI. Essay Prompts for Deeper Exploration

  1. Mandatory Duty vs. Board Discretion: Compare the Petitioner’s interpretation of Article 5 (the duty to maintain) with the Respondent’s assertion of "sole discretion." At what point does a Board’s delay in maintenance constitute a breach of fiduciary duty?
  2. The Ethics of Transparency in HOA Governance: Discuss the impact of removing remote access to meetings and providing vague agendas. Does the law’s requirement for "meaningful comment" by homeowners necessitate providing all proposals and documents prior to the meeting?
  3. Fiscal Sustainability in High-Rise Management: Analyze the dangers of "surface level budget planning." Using the Summit at Copper Square as a case study, explain how underestimating tax liabilities and ignoring historical expense trends (like plumbing) can lead to a "special assessment" crisis.

VII. Glossary of Important Terms

Term Definition
Accrual Expense An accounting term for an expense that has been incurred but not yet paid; often used in the hearing to track when work was performed versus when it hit the balance sheet.
CC&Rs / Declaration The Covenants, Conditions, and Restrictions; the primary governing document that outlines the rules of the condominium and the duties of the Board.
Common Elements Parts of the condominium property that are not owned by a single unit owner but are shared by all (e.g., the pool, garage, roof).
Destructive Testing An engineering method involving the removal of physical samples (coring) of a structure to test internal integrity.
Fiduciary Duty The legal and ethical obligation of Board members to act in the best interests of the Association and its homeowners.
Post-Tension Cable A system of high-strength steel cables used to reinforce concrete slabs; accidentally cutting these during repairs is expensive and dangerous.
Reserve Study A budget planning tool conducted by experts every three years to estimate the remaining life of building components and the funds needed for their eventual replacement.
Special Assessment A one-time fee charged to all homeowners to cover a budget shortfall or an unplanned major repair.
Stack Jetting A high-pressure water cleaning process for a building's vertical plumbing pipes to prevent backups.
Variance Report An accounting document that compares actual expenses to the budgeted amounts, highlighting discrepancies over a certain threshold (e.g., $500).

Cracks in the Foundation: Key Takeaways from the Summit at Copper Square HOA Legal Dispute

1. Introduction: A High-Rise at a Crossroads

Standing 23 stories tall directly across from Chase Field, The Summit at Copper Square is a landmark of the Phoenix skyline currently mired in a cautionary tale of governance failure. The legal battle in the Office of Administrative Hearings, The Gregory M. and Donna P. Hulbert Family Trust v. The Summit at Copper Square Condominium Association, exposes a widening rift between professional stewardship and board-level "whims."

As an analyst, I must first frame the limitations of this conflict: Administrative Law Judge Sam Fox explicitly noted that his power is "extremely limited" to requiring compliance with governing documents and law. He cannot order specific repair methods or substitute his discretion for the board’s. This leaves homeowners in a precarious "crossroads"—fighting for oversight in a system where a judge can identify a breach but cannot always hammer the nails of the remedy.

2. The Structural Crisis: The 18-Inch Slab and the Five-Year Leak

The most damning evidence involves a persistent leak from the fifth-floor pool area through an 18-inch concrete slab into the fourth-floor garage. The timeline illustrates a pattern of deferred maintenance that borders on negligence:

  1. January 2020: Cracks first identified in the garage ceiling and marked for monitoring.
  2. 2022: Visual evidence confirms the cracks have extended; professional investigation is recommended but ignored.
  3. March/April 2023: The "Rally & Reynolds" forensic report is completed. This 435-page document (with 37 core pages of analysis) highlights corrosion and structural concerns, yet action remains stalled.
  4. September 2023: Jervasio & Associates (Ward Holland) performs a visual inspection but requests further time.
  5. January 2024: Jervasio conducts a follow-up investigation.
  6. April 2024: Formal report issued, indicating water infiltration is causing ongoing damage to the structural slab and recommending destructive testing.
  7. July 2024: A second Jervasio report (Jack Gordon) confirms slab deterioration and staining indicating rebar corrosion.
  8. August 2024: Destructive testing—drilling core samples to expose rebar—is finally scheduled to begin the Monday following the legal hearing.

The Technical Reality: The board’s defense—that the leak has now been "stopped"—is scientifically flawed. Chlorinated water introduces chloride ions that bond chemically to the steel rebar. These ions remain adhered to the metal even in a dry environment, continuing the corrosion process and expanding the metal until the concrete spalls and the slab loses structural integrity. Stopping the water is only the first step; the contaminated concrete must be remediated to halt the chemical decay.

3. Financial Red Flags: Reserves, Budgets, and "Blunders"

The Association’s financial health is in a state of managed decline. Beyond typical underfunding, the board has engaged in what the petitioner accurately characterized as "unsustainable" financial maneuvers.

The Reserve Fund Reality Check
Metric Management/Expert Recommendation Actual Status (Mid-2024)
Operating Account Balance 3.0x monthly operating expenses 0.3x monthly operating expenses
Monthly Reserve Contribution ~$45,000 / month $29,000 / month
Reserve Funding Level >30% (to avoid special assessments) 25%–29% (Projected)
Absolute Net Position Maintain positive liquidity $150,000 Deficit (If current-year study items are completed)

Budget Blunders and Negligence:

  • The $400,000 "Loan": Between 2022 and 2023, the board transferred approximately $400,000 from the reserve fund to cover operating expenses. This is a clear indicator that the operating budget is decoupled from reality.
  • Tax Liability Negligence: The HOA received $120,000–$160,000 in billboard revenue. Despite homeowner warnings, the board failed to budget for the resulting tax liability (estimated at $36,000), paying only $1,300 in estimated taxes initially.
  • Surface-Level Planning: The board utilized a flat 7.5% "escalation rate" for budget line items instead of analyzing actual history. For example, "Water Damage Repairs" was budgeted at $20,000 in 2023, while actual expenditures reached $89,000.
4. Governance and the Declaration: Pets, Guests, and "Puppy Patties"

The board’s exercise of discretion has frequently bypassed the Association’s Declaration, specifically Articles 5 and 7.

  • Article 5 (Ingress and Egress): The Declaration limits pets in common areas strictly to entering and exiting the building via the service elevator and loading dock. The permanent installation of a "Puppy Potty" (dog pad) on the roof is a direct violation of these location restrictions and the 40-pound weight limit.
  • Breach of Exclusive Use: During the Arizona Diamondbacks’ playoff run, the board allowed news crews and non-residents to occupy common areas. Article 5 guarantees common areas for the "exclusive use" of owners and their guests. The board’s defense—that this provides "community exposure"—does not override the recorded Declaration.
5. The Transparency Gap: Communication and Participation

Governance has moved toward a "closed-loop" system that marginalizes the membership. A notable shift was the transition from virtual/remote meeting access to in-person-only meetings. This move specifically disenfranchised owners like the Hulberts, who reside in California and cannot fly to Phoenix for every board discussion.

Furthermore, the board implemented a 30-minute total window for all homeowner comments. In a building with over 150 units, this allows for mere seconds per owner, rendering meaningful dialogue on complex structural or financial issues mathematically impossible. Agendas often lack specific proposals or background documents, preventing residents from offering informed input before votes are cast.

6. Conclusion: Lessons for the Modern Homeowner

The Summit at Copper Square dispute is a textbook case of "straw man defense" tactics—where a board dismisses data-driven criticism by labeling the messenger a "disgruntled homeowner." However, the data does not lie: five years of a known leak and a $400,000 reserve raid are not "matters of opinion."

Three Critical Takeaways
  1. The High Cost of Deferment: Proactive investigation in 2020 would have cost a fraction of the looming remediation. Delaying structural repairs is not a cost-saving measure; it is a high-interest loan taken against the building's future.
  2. The Fiction of Flat-Rate Increases: Budgeting based on a 7.5% "escalation" while actual plumbing costs exceed the budget by 300% is a failure of fiduciary care. Financial planning must be grounded in actual historical data, not arbitrary caps designed to keep dues artificially low.
  3. Rule of Law vs. Board Discretion: The Declaration is the supreme law of the community. Board discretion is not a "blank check" to bypass rules regarding pet locations or common area usage. If a board wishes to change the culture of a building, they must amend the documents, not ignore them.

In high-rise living, the stability of the concrete is inextricably linked to the transparency of the boardroom. When one cracks, the other inevitably follows.

Case Participants

Petitioner Side

  • Donna Hulbert (Petitioner / Representative)
    The Gregory M and Donna P Hulbert Family Trust dated May 25, 1995
    Trustee of the petitioner trust and resident of Unit 1302.
  • Jay Perry Erb (Witness / Former Board Treasurer)
    The Summit at Copper Square Condominium Association
    Former treasurer of the board of directors; called as a witness by the petitioner.

Respondent Side

  • Daryl Wilson (Attorney)
    Gordon Rees
    Attorney representing the respondent, The Summit at Copper Square Condominium Association.
  • Greg Axelrod (Witness / Board President)
    The Summit at Copper Square Condominium Association
    Current board president; called as a witness by the respondent.
  • Zackary Beckham (Witness / Former Board President)
    The Summit at Copper Square Condominium Association
    Former board president; called as a witness by the respondent.

Neutral Parties

  • Samuel Fox (Administrative Law Judge)
    Office of Administrative Hearings
    Presiding Administrative Law Judge who issued the final decision.
  • Felicia Del Sol (Administrative Law Judge)
    Office of Administrative Hearings
    Administrative Law Judge who issued an order granting a continuance.
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate
    Commissioner to whom the orders and decisions were transmitted.
  • Ward Holland (Inspector / Engineer)
    Gervasio & Assoc., Inc.
    Conducted an initial inspection of the garage cracks and ceiling damage.
  • Jack Gordon (Engineer)
    Gervasio & Assoc., Inc.
    Authored the July 15th structural report regarding concrete testing and corrosion.

Other Participants

  • Brad Palmer (Former General Manager)
    First Service Residential
    Former general manager for the association mentioned during testimony.
  • Dan Harvey (General Manager)
    First Service Residential
    General manager for the association mentioned during testimony.
  • Carla Chung (Senior Vice President of Cash Management and Lending)
    First Service Financial
    Mentioned in testimony regarding the restructuring of the reserve portfolio.
  • Kimberly Greenland (Financial Controller)
    First Service Residential
    Financial controller mentioned during testimony regarding budget and reserve accounts.
  • Frank Derso (Manager)
    First Service Residential
    Mentioned during testimony regarding the granting of access to the news crew.
  • Angelica Romero (Assistant General Manager)
    First Service Residential
    Mentioned during testimony as the person who handled meeting organization and notices.
  • Deborah Goodwin (Former Board Member)
    The Summit at Copper Square Condominium Association
    Former board member with financial experience who consulted on the budget.
  • Christy Woodruff (Board Member)
    The Summit at Copper Square Condominium Association
    Mentioned as a board member contacted regarding the news crew presence.
  • Scott McCain (Budget Committee Member)
    The Summit at Copper Square Condominium Association
    Mentioned as a resident participating on the budget committee.
  • Dana Knight (Board Member)
    The Summit at Copper Square Condominium Association
    Mentioned as the newest board member.

The Gregory M and Donna P Hulbert Family Trust dated May 25, 1995 v. The Summit at Copper Square Condominium Association (ROOT)

Posted on by

Case Summary

Case ID 24F-H049-REL
Agency —
Tribunal —
Decision Date 1/21/2025
Administrative Law Judge SF
Outcome —
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner The Gregory M and Donna P Hulbert Family Trust dated May 25, 1995 Counsel —
Respondent The Summit at Copper Square Condominium Association Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

24F-H049-REL Decision – 1214040.pdf

Uploaded 2026-04-25T10:21:08 (45.7 KB)

24F-H049-REL Decision – 1218977.pdf

Uploaded 2026-04-25T10:21:14 (46.3 KB)

24F-H049-REL Decision – 1218981.pdf

Uploaded 2026-04-25T10:21:22 (5.9 KB)

24F-H049-REL Decision – 1219895.pdf

Uploaded 2026-04-25T10:21:25 (40.5 KB)

24F-H049-REL Decision – 1235253.pdf

Uploaded 2026-04-25T10:21:28 (47.1 KB)

24F-H049-REL Decision – 1264402.pdf

Uploaded 2026-04-25T10:21:33 (277.9 KB)

24F-H049-REL Decision – 1214040.pdf

Uploaded 2026-04-24T12:24:39 (45.7 KB)

24F-H049-REL Decision – 1218977.pdf

Uploaded 2026-04-24T12:24:43 (46.3 KB)

24F-H049-REL Decision – 1218981.pdf

Uploaded 2026-04-24T12:24:46 (5.9 KB)

24F-H049-REL Decision – 1219895.pdf

Uploaded 2026-04-24T12:24:49 (40.5 KB)

24F-H049-REL Decision – 1235253.pdf

Uploaded 2026-04-24T12:24:52 (47.1 KB)

24F-H049-REL Decision – 1264402.pdf

Uploaded 2026-04-24T12:24:56 (277.9 KB)

Briefing on Hulbert Family Trust v. The Summit at Copper Square Condominium Association

Executive Summary

This briefing document synthesizes the key arguments, evidence, and conclusions from the administrative hearing concerning the consolidated matters The Gregory M and Donna P Hulbert Family Trust v. The Summit at Copper Square Condominium Association (Case Nos. 24F-H049-REL & 24F-H055-REL). The hearing, adjudicated by Administrative Law Judge (ALJ) Samuel Fox, addressed five distinct complaints filed by Petitioner Donna Hulbert against the Respondent Homeowners Association (HOA) Board of Directors.

The core of the dispute revolved around the Petitioner’s allegations that the HOA Board acted in violation of the Condominium Declaration and Arizona state law regarding its financial management, use of common areas, meeting procedures, and timeliness of structural repairs. The Respondent contended that its actions fell within the Board’s discretionary authority and were reasonable under the circumstances.

The ALJ’s final decision delivered a split verdict. The Petitioner prevailed on two claims: the installation of a “puppy potty” on the roof was found to be a clear violation of the Declaration’s rules on pets in common areas, and the Board’s meeting agendas were found to be statutorily deficient. The Respondent prevailed on three claims: the ALJ found no violation in the Board’s budget and reserve management, its decision to allow a news crew on common property, or the pace of its response to structural damage from a pool leak. The final order required the HOA to pay a portion of the Petitioner’s filing fees, levied a civil penalty for the “puppy potty” violation, and directed the Board to comply with state law regarding meeting notices.

——————————————————————————–

Procedural History and Key Parties

• Parties:

◦ Petitioner: The Gregory M and Donna P Hulbert Family Trust, represented by Donna Hulbert, owner of Unit 1302.

◦ Respondent: The Summit at Copper Square Condominium Association, represented by Attorney Daryl Wilson.

• Venue: Arizona Office of Administrative Hearings.

• Case Numbers: 24F-H049-REL and 24F-H055-REL, consolidated on August 21, 2024, under 24F-H049-REL.

• Presiding Judge: Administrative Law Judge Samuel Fox.

• Hearing Dates: August 28, 2024, and October 24, 2024.

• Key Witnesses:

◦ For Petitioner: Donna Hulbert; Jay Parry Erb (former Board Treasurer).

◦ For Respondent: Greg Axelrod (current Board President); Zackary Beckham (former Board President).

——————————————————————————–

Analysis of Complaints and Adjudication

Complaint 1: Budget and Reserve Funding

Allegation: The HOA violated Declaration Sections 7.1, 7.12, and 7.14 by borrowing from reserves to fund operating expenses and failing to create a budget that adequately funded reserves for future expenses.

Petitioner’s Arguments & Evidence

Respondent’s Arguments & Evidence

ALJ’s Findings & Conclusion

The HOA’s budget is structurally inadequate, evidenced by a history of borrowing from reserves (~$400,000 in 2023) to cover operating shortfalls.

The Board has sole discretion over the budget. The budgets for 2023 and 2024 met operating expenses and did not have a shortfall.

No Violation Found.

The 2024 budget was improperly based on the overrun 2023 budget figures plus a 7.5% increase, rather than on actual historical expenses.

The Association has met its budgeted contributions to the reserve fund and is not currently borrowing from reserves to pay operating expenses.

The Declaration requires a reasonable estimate for the budget, not a perfect one. It does not mandate that the budget reflect the reserve study or past unexpected expenses.

Operating expenses (e.g., pool leak testing, security fob installation) are being misclassified as reserve expenses to conceal operating deficits.

The Board relies on the professional guidance of its management company, First Service Residential, and its accountants for financial reporting and budget creation.

As of July 2024, the budget had a surplus, and monthly reserve contributions (45,365avg.)exceededthereservestudy′srecommendation(45,000).

The operating account is funded at 0.3 times monthly expenses, far below the management company’s recommendation of 3 times.

The Board fulfilled its obligation to adopt a budget containing an estimate of required funds. The Petitioner failed to prove otherwise by a preponderance of the evidence.

Outcome: Respondent deemed the prevailing party on this issue.

The HOA has a history of delaying payments to vendors (e.g., an RKS Plumbing invoice was paid seven months late), indicating cash flow issues.

Witness Jay Erb (former Treasurer): Testified to discovering a ~$392,000 deficit in the operating fund being covered by reserves upon joining the Board. He stated that these transfers lacked the two board member signatures required by Declaration Section 7.14.1 for reserve withdrawals.

Complaint 2: The “Puppy Potty”

Allegation: The HOA installed a “puppy potty” on the roof, a common element, in violation of Declaration Sections 4.6.1 and 4.6.2, constituting a nuisance.

Petitioner’s Arguments & Evidence

Respondent’s Arguments & Evidence

ALJ’s Findings & Conclusion

Declaration Section 4.6.2 constitutes an “absolute prohibition” against pets on common elements, except for ingress and egress through the service elevator.

Board President Greg Axelrod testified the installation was not an official Board action but was proposed by the general manager.

Violation Found.

The roof is defined as a “Common Element” under Declaration Section 1.12 (“all portions of the Condominium other than the Units”).

Mr. Axelrod argued the roof was not a common element in practice, as the door leading to it had always been locked and the area was unused by residents.

The roof area is part of the Common Elements by the Declaration’s explicit definition, regardless of its previous accessibility.

The “puppy potty” is a “structure for the care…of any Permitted Pet” which is explicitly forbidden on any portion of the Common Elements.

The potty was installed as an amenity for residents, particularly for the safety of women walking their dogs late at night in downtown Phoenix. It cost only 600−700.

The puppy potty is a structure for the care of pets, which is prohibited on Common Elements under Section 4.6.2.

The installation creates an odor and presents a safety hazard, as it requires an industrial roof area with unenclosed openings to be accessible.

The area is cleaned by maintenance staff at least three times per week. Most residents appreciate the amenity.

The installation of the puppy potty violates Section 4.6.2 of the Declaration.

The decision was made unilaterally by the Board President without a formal board meeting or vote.

Outcome: Petitioner deemed the prevailing party. A $500 civil penalty was levied against the Respondent.

Complaint 3: News Crew on Common Area

Allegation: The HOA allowed a news crew to use the common area during the 2023 baseball postseason, violating residents’ easement of enjoyment (Sections 3.3.1, 3.3.2) and creating a nuisance (Section 4.13).

Petitioner’s Arguments & Evidence

Respondent’s Arguments & Evidence

ALJ’s Findings & Conclusion

The easement of enjoyment in common elements is for owners and their guests. The news crew members were “strangers.”

The news crews were on the property twice: for the Diamondbacks’ opening day and for the World Series.

No Violation Found.

The crew created a nuisance with bright lights shining into units and a drone camera. At times, the crew was unsupervised.

The crew was present during a larger HOA-hosted party on the fifth-floor pool deck and was confined to a specific, underutilized area within the party.

The Declaration allows for invitees, guests, and their agents (Section 13.12). The news crew was invited to the party.

The action violated residents’ right to quiet enjoyment. A single board member approved the crew’s presence without a formal board action or recorded easement.

Having the news crew on-site provided a benefit to the Association by giving positive public exposure to the building.

The evidence did not establish that the lights and noise were unreasonable under the circumstances of a large party occurring above a public block party. The Petitioner failed to prove the drone belonged to the news crew.

The crew’s presence did not fall under any exception in the Declaration.

The crew did not displace any resident from using the area. No easement was conveyed or encumbered.

The Petitioner failed to meet the burden of proof to demonstrate the news crew was a nuisance or that any resident was deprived of their easement of enjoyment.

Outcome: Respondent deemed the prevailing party on this issue.

Complaint 4: Meeting Notices and Agendas

Allegation: The HOA fails to provide required notice for all quorum meetings and provides agendas with inadequate information, violating A.R.S. § 33-1248 (E) and (F).

Petitioner’s Arguments & Evidence

Respondent’s Arguments & Evidence

ALJ’s Findings & Conclusion

A.R.S. § 33-1248 requires open meetings and agendas with information “reasonably necessary to inform the unit owners of the matters to be discussed or decided.”

All topics the Board intends to discuss are included on the agendas, which are posted and emailed at least 48 hours in advance.

Violation Found.

Agendas are often vague, using terms like “Old Business” or “New Business,” which prevents homeowners from meaningfully preparing comments.

Board President Axelrod testified that if an urgent, non-emergency topic arises within 48 hours of a meeting, it may be added, but this has only happened once.

A.R.S. § 33-1248(F) reflects a state policy in favor of open meetings and reasonably informative agendas.

The Petitioner cited a May 29th meeting where a $33,000 expenditure for patio furniture was discussed and approved under a vague agenda item, without prior notice to homeowners.

Regarding executive sessions, Mr. Axelrod testified they are held only for permissible topics (legal, financial, employee matters) and are properly noticed.

The preponderance of evidence established that on at least one occasion, the Board failed to include a non-emergency topic on its agenda, leaving owners uninformed.

The Board holds executive sessions before open meetings without providing an agenda detailing the specific closed items being discussed.

Mr. Axelrod admitted that during his first one or two meetings as president, he may have discussed impermissible topics in executive session out of ignorance, but this was corrected.

Evidence also supported that on at least one occasion, the Board discussed inappropriate topics in an executive session.

Outcome: Petitioner deemed the prevailing party. The HOA was ordered to comply with A.R.S. § 33-1248.

Complaint 5: Structural Damage Repair

Allegation: The HOA violated its duty under Declaration Section 5.1 to “maintain, repair and replace all Common Elements” by failing to act expediently to repair structural damage from a pool leak.

Petitioner’s Arguments & Evidence

Respondent’s Arguments & Evidence

ALJ’s Findings & Conclusion

The HOA has demonstrated a history of slow response to a significant structural issue. Water leaks and cracks in the 4th-floor garage ceiling were noted as early as January 2020.

The Board has sole discretion over the “appropriate maintenance, repair, and replacement” of common elements.

No Violation Found.

Despite a March 2023 report (Rowley & Reynolds) and an April 2024 report (Gervasio) confirming ongoing damage and recommending destructive investigation, progress has been slow.

The Board has been following the recommendations of its hired experts. The first necessary step was locating the source of the leak, which was difficult and took time.

The Declaration requires the Board to maintain elements in “good condition and repair.” The Board’s discretion is the sole judge of what is appropriate.

The Petitioner believes the filing of the petition was the primary catalyst for the Board to finally take concrete action (destructive testing).

After the leak was fixed, the Board hired Gervasio to proceed with the next step, which was destructive testing.

The Board, if slowly, followed the recommendations of its experts.

The ongoing delay constitutes a failure of the Board’s duty to maintain the property.

The Board is actively addressing the issue. Mr. Axelrod testified that there was no indication of any immediate danger to the structure.

The Petitioner’s dissatisfaction with the pace of the action is not sufficient to prove that the Board failed to comply with the requirements of the Declaration.

Outcome: Respondent deemed the prevailing party on this issue.

——————————————————————————–

Final Order

The Administrative Law Judge issued the following orders on January 21, 2025:

1. Prevailing Parties: The Petitioner was deemed the prevailing party on Issues 2 (Puppy Potty) and 4 (Meetings/Notice). The Respondent was deemed the prevailing party on Issues 1 (Budget), 3 (News Crew), and 5 (Structural Damage).

2. Filing Fee Reimbursement: Respondent was ordered to pay Petitioner $1,000 for the filing fee within 30 days.

3. Compliance Order: Respondent was directed to comply with the requirements of A.R.S. § 33-1248 and its Community Documents going forward.

4. Civil Penalty: A civil penalty of $500 was levied against the Respondent for the violation related to the “puppy potty” (Issue 2).

Questions

Question

Does my HOA have to strictly follow the reserve study when creating the budget?

Short Answer

No, the budget is a reasonable estimate and does not need to perfectly reflect the reserve study.

Detailed Answer

The ALJ ruled that the HOA Declaration required the Board to create a budget based on what they believed would be required, but it did not mandate a perfect budget or one that strictly adhered to the reserve study or funded reserves at a specific level.

Alj Quote

The Declaration did not require a perfect budget; it required a reasonable estimate. . . . The Declaration did not require the reserve account to be funded at a specific level. The Declaration did not require the budget to reflect the reserve study.

Legal Basis

Declaration Section 7.1.1

Topic Tags

  • Budget
  • Reserves
  • HOA Discretion

Question

Can the HOA install a structure for pets (like a dog run) on the roof if the CC&Rs prohibit pets on common elements?

Short Answer

No, if the CC&Rs prohibit pets on common elements and the roof is defined as part of the common elements.

Detailed Answer

Even if an area like a roof is locked or inaccessible to residents, it is still considered a Common Element. If the Declaration prohibits pets on Common Elements (except for ingress/egress) and prohibits structures for pet care there, the HOA cannot install a facility like a 'puppy potty'.

Alj Quote

“Common Elements” included all parts of the building except for the units. Accordingly, the roof area was part of the Common Elements, even if it was previously inaccessible to residents. . . . The preponderance of the evidence established that the puppy potty violated Section 4.6.2 of the Declaration.

Legal Basis

Declaration Section 4.6.2

Topic Tags

  • Common Elements
  • Pets
  • CC&R Violation

Question

Can I force my HOA to make repairs faster if I am unhappy with the pace?

Short Answer

Generally no, as long as the Board is taking action and following expert advice.

Detailed Answer

The ALJ found that even if a homeowner is dissatisfied with the speed of repairs, it does not constitute a violation of the Declaration if the Board is exercising its discretion, engaging in testing, and following the recommendations of hired experts.

Alj Quote

The preponderance of the evidence did not establish that the Board of Directors failed to fulfil its obligations even if Petitioner was dissatisfied with the pace of action by the Board of Directors.

Legal Basis

Declaration Section 5.1

Topic Tags

  • Maintenance
  • Repairs
  • Board Discretion

Question

Must the HOA list all topics to be discussed on the meeting agenda?

Short Answer

Yes, for non-emergency topics, the agenda must inform owners of matters to be discussed.

Detailed Answer

State law requires agendas to contain information reasonably necessary to inform unit owners of matters to be discussed or decided. Failing to include a non-emergency topic on the agenda leaves owners uninformed and violates this requirement.

Alj Quote

The preponderance of the evidence established that on at least one occasion, the Board failed to include a non-emergency topic on its agenda, leaving unit owners uninformed about what would be discussed or decided.

Legal Basis

A.R.S. § 33-1248(E) and (F)

Topic Tags

  • Open Meetings
  • Agendas
  • Procedural Requirements

Question

Can the Board discuss any topic they want in an executive (closed) session?

Short Answer

No, executive sessions are limited to specific permissible topics.

Detailed Answer

The Board cannot discuss general business in executive sessions. In this case, evidence supported that the Board discussed inappropriate topics in a closed session, which is a violation.

Alj Quote

Additionally, the preponderance of the evidence supports that on at least one occasion, the Board discussed inappropriate topics in an executive session.

Legal Basis

A.R.S. § 33-1248

Topic Tags

  • Executive Session
  • Open Meetings

Question

Is loud noise or light from a party on common property automatically a 'nuisance'?

Short Answer

No, ordinary party activities are not inherently unreasonable or offensive.

Detailed Answer

The ALJ determined that lights and noise associated with a party (even involving a news crew) in a downtown urban environment were not a nuisance because they were not proven to be offensive or an annoyance to a reasonable person.

Alj Quote

Ordinary components of a party, such as lights and noise, were not inherently offensive or an annoyance just because one was unfamiliar with those individuals causing the noise and light.

Legal Basis

Declaration Section 4.13

Topic Tags

  • Nuisance
  • Common Area Use

Question

Does the HOA Board have the final say on maintenance decisions?

Short Answer

Yes, the Board typically has sole discretion over appropriate maintenance.

Detailed Answer

The Declaration in this case granted the Board sole discretion to judge appropriate maintenance and repairs, provided the common elements were kept in good condition.

Alj Quote

The Board of Directors had sole discretion over the appropriate maintenance, repair, and replacement of all Common Elements.

Legal Basis

Declaration Section 5.1

Topic Tags

  • Maintenance
  • Board Powers

Case

Docket No
24F-H055-REL (Consolidated with 24F-H049-REL)
Case Title
The Gregory M and Donna P Hulbert Family Trust dated May 25, 1995 v. The Summit at Copper Square Condominium Association
Decision Date
2025-01-21
Alj Name
Samuel Fox
Tribunal
OAH
Agency
ADRE

Questions

Question

Does my HOA have to strictly follow the reserve study when creating the budget?

Short Answer

No, the budget is a reasonable estimate and does not need to perfectly reflect the reserve study.

Detailed Answer

The ALJ ruled that the HOA Declaration required the Board to create a budget based on what they believed would be required, but it did not mandate a perfect budget or one that strictly adhered to the reserve study or funded reserves at a specific level.

Alj Quote

The Declaration did not require a perfect budget; it required a reasonable estimate. . . . The Declaration did not require the reserve account to be funded at a specific level. The Declaration did not require the budget to reflect the reserve study.

Legal Basis

Declaration Section 7.1.1

Topic Tags

  • Budget
  • Reserves
  • HOA Discretion

Question

Can the HOA install a structure for pets (like a dog run) on the roof if the CC&Rs prohibit pets on common elements?

Short Answer

No, if the CC&Rs prohibit pets on common elements and the roof is defined as part of the common elements.

Detailed Answer

Even if an area like a roof is locked or inaccessible to residents, it is still considered a Common Element. If the Declaration prohibits pets on Common Elements (except for ingress/egress) and prohibits structures for pet care there, the HOA cannot install a facility like a 'puppy potty'.

Alj Quote

“Common Elements” included all parts of the building except for the units. Accordingly, the roof area was part of the Common Elements, even if it was previously inaccessible to residents. . . . The preponderance of the evidence established that the puppy potty violated Section 4.6.2 of the Declaration.

Legal Basis

Declaration Section 4.6.2

Topic Tags

  • Common Elements
  • Pets
  • CC&R Violation

Question

Can I force my HOA to make repairs faster if I am unhappy with the pace?

Short Answer

Generally no, as long as the Board is taking action and following expert advice.

Detailed Answer

The ALJ found that even if a homeowner is dissatisfied with the speed of repairs, it does not constitute a violation of the Declaration if the Board is exercising its discretion, engaging in testing, and following the recommendations of hired experts.

Alj Quote

The preponderance of the evidence did not establish that the Board of Directors failed to fulfil its obligations even if Petitioner was dissatisfied with the pace of action by the Board of Directors.

Legal Basis

Declaration Section 5.1

Topic Tags

  • Maintenance
  • Repairs
  • Board Discretion

Question

Must the HOA list all topics to be discussed on the meeting agenda?

Short Answer

Yes, for non-emergency topics, the agenda must inform owners of matters to be discussed.

Detailed Answer

State law requires agendas to contain information reasonably necessary to inform unit owners of matters to be discussed or decided. Failing to include a non-emergency topic on the agenda leaves owners uninformed and violates this requirement.

Alj Quote

The preponderance of the evidence established that on at least one occasion, the Board failed to include a non-emergency topic on its agenda, leaving unit owners uninformed about what would be discussed or decided.

Legal Basis

A.R.S. § 33-1248(E) and (F)

Topic Tags

  • Open Meetings
  • Agendas
  • Procedural Requirements

Question

Can the Board discuss any topic they want in an executive (closed) session?

Short Answer

No, executive sessions are limited to specific permissible topics.

Detailed Answer

The Board cannot discuss general business in executive sessions. In this case, evidence supported that the Board discussed inappropriate topics in a closed session, which is a violation.

Alj Quote

Additionally, the preponderance of the evidence supports that on at least one occasion, the Board discussed inappropriate topics in an executive session.

Legal Basis

A.R.S. § 33-1248

Topic Tags

  • Executive Session
  • Open Meetings

Question

Is loud noise or light from a party on common property automatically a 'nuisance'?

Short Answer

No, ordinary party activities are not inherently unreasonable or offensive.

Detailed Answer

The ALJ determined that lights and noise associated with a party (even involving a news crew) in a downtown urban environment were not a nuisance because they were not proven to be offensive or an annoyance to a reasonable person.

Alj Quote

Ordinary components of a party, such as lights and noise, were not inherently offensive or an annoyance just because one was unfamiliar with those individuals causing the noise and light.

Legal Basis

Declaration Section 4.13

Topic Tags

  • Nuisance
  • Common Area Use

Question

Does the HOA Board have the final say on maintenance decisions?

Short Answer

Yes, the Board typically has sole discretion over appropriate maintenance.

Detailed Answer

The Declaration in this case granted the Board sole discretion to judge appropriate maintenance and repairs, provided the common elements were kept in good condition.

Alj Quote

The Board of Directors had sole discretion over the appropriate maintenance, repair, and replacement of all Common Elements.

Legal Basis

Declaration Section 5.1

Topic Tags

  • Maintenance
  • Board Powers

Case

Docket No
24F-H055-REL (Consolidated with 24F-H049-REL)
Case Title
The Gregory M and Donna P Hulbert Family Trust dated May 25, 1995 v. The Summit at Copper Square Condominium Association
Decision Date
2025-01-21
Alj Name
Samuel Fox
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • Donna Hulbert (petitioner)
    The Gregory M and Donna P Hulbert Family Trust dated May 25, 1995
    Trustee and representative of Petitioner; also testified as a witness.
  • Jay Parry Erb (witness)
    Former Board Treasurer (April 2023 – August 2023).
  • Debbie Goodwin (witness)
    Prior board member and financial professional consulted by Mr. Erb.

Respondent Side

  • Daryl Wilson (HOA attorney)
    Gordon Rees
  • Greg Axelrod (board member)
    The Summit at Copper Square Condominium Association
    Current Board President as of hearing.
  • Zackary Beckham (board member)
    The Summit at Copper Square Condominium Association
    Former Board President.
  • Christy Woodruff (board member)
    The Summit at Copper Square Condominium Association
  • Mr. Grodier (board member)
    The Summit at Copper Square Condominium Association
  • Dana Knight (board member)
    The Summit at Copper Square Condominium Association
    Newest board member.

Neutral Parties

  • Samuel Fox (ALJ)
    OAH
  • Susan Nicolson (ADRE Commissioner)
    Arizona Department of Real Estate
  • Felicia Del Sol (ALJ)
    OAH
    Signed continuance order.

Other Participants

  • Brad Palmer (property manager)
    First Service Residential
    Former General Manager.
  • Dan Harvey (property manager)
    First Service Residential
    General Manager.
  • Kimberly Greenland (property manager)
    First Service Financial
    Financial Controller.
  • Carla Chung (property manager)
    First Service Financial
    Senior VP of Cash Management and Lending.
  • Angelica Romero (property manager)
    HOA Management
    Assistant General Manager.
  • Ward Holland (witness)
    Gervasio & Assoc., Inc. Consulting Engineers
    Engineer/Architect who performed inspections.
  • Jack Gordon (witness)
    Gervasio & Assoc., Inc. Consulting Engineers
    Engineer who performed inspections.
  • Frank Derso (property manager)
    HOA Management
    Manager/Supervisor mentioned regarding easement claims.
  • Holly (property manager)
    First Service Residential
    Mid-level manager.
  • Hal (committee member)
    Resident involved in budget committee.
  • Scott McCain (committee member)
    Resident involved in budget committee.
  • Tony Carro (engineer)
    Building engineer/staff.
  • Keith (engineer)
    Building engineer/staff.

R.L. Whitmer v. Hilton Casitas Council of Homeowners

Posted on by

Case Summary

Case ID 25F-H001-REL
Agency —
Tribunal —
Decision Date 11/12/2024
Administrative Law Judge SF
Outcome —
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner R.L. Whitmer [1]. Counsel —
Respondent Hilton Casitas Council of Homeowners [1]. Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H001-REL Decision – 1235116.pdf

Uploaded 2026-04-24T12:26:29 (44.0 KB)

25F-H001-REL Decision – 1241814.pdf

Uploaded 2026-04-24T12:26:32 (115.8 KB)

Briefing on Administrative Hearing Case No. 25F-H001-REL

Executive Summary

This briefing document synthesizes the proceedings and outcome of the administrative hearing case R.L. Whitmer v. Hilton Casitas Council of Homeowners (No. 25F-H001-REL). The central issue was whether the Respondent Homeowners Association’s (HOA) governing Declaration complied with Arizona Revised Statutes (A.R.S.) § 33-1215(A)(1), which mandates that the Declaration contain both the name of the condominium (with the word “condominium”) and the specific name of the association.

In a decision issued on November 12, 2024, Administrative Law Judge (ALJ) Samuel Fox ruled in favor of the Petitioner, R.L. Whitmer. The ALJ found that while the Declaration’s associated plat satisfied the requirement for the condominium’s name, the Declaration failed to contain the association’s actual, current legal name, “Hilton Casitas Council of Homeowners.”

The Respondent HOA advanced three primary defenses, all of which were rejected by the tribunal:

1. Constructive Compliance: The HOA argued that the Declaration’s reference to its predecessor entity (“Council of Co-owners”), combined with numerous court rulings affirming the current HOA as its legal successor, constituted compliance. The ALJ dismissed this, stating the statute requires the actual name to be present and that “constructive compliance” is not sufficient.

2. Statute of Limitations: The HOA claimed the petition was barred by a four-year statute of limitations (A.R.S. § 12-550), as the Petitioner had notice of the Declaration’s contents since 2014. The ALJ ruled that this statute applies only to “actions” in a “court,” and that proceedings before the Office of Administrative Hearings (OAH), an executive branch agency, do not qualify.

3. Impossibility of Unilateral Action: The HOA contended that it could not be ordered to amend the Declaration because such an action requires a membership vote and is not unilaterally achievable. The ALJ found this was not a valid legal defense, as the procedural requirements for achieving statutory compliance do not excuse non-compliance.

The final order declared the Petitioner the prevailing party, ordered the Respondent to pay the Petitioner’s $500 filing fee, and mandated that the Respondent comply with A.R.S. § 33-1215(A)(1). No civil penalty was imposed.

Case Overview

• Case Number: 25F-H001-REL

• Forum: Office of Administrative Hearings (OAH), State of Arizona

• Petitioner: R.L. Whitmer

• Respondent: Hilton Casitas Council of Homeowners

• Presiding Judge: Administrative Law Judge Samuel Fox

• Respondent’s Counsel: Emily H. Mann

• Core Legal Issue: Whether the Respondent’s Declaration of Horizontal Property Regime for Hilton Casitas violates A.R.S. § 33-1215(A)(1), which states:

Procedural History

• Petition Filed: On or about June 27, 2024, R.L. Whitmer filed a petition with the Arizona Department of Real Estate alleging the violation.

• Motion to Dismiss: On October 1, 2024, the Respondent filed a motion for summary judgment (or to dismiss), which was denied by the OAH on October 18, 2024.

• Evidentiary Hearing: A hearing was held on October 25, 2024, though the hearing transcript is dated October 26, 2024.

• ALJ Decision Issued: The final Administrative Law Judge Decision was issued on November 12, 2024.

Analysis of Key Arguments and Rulings

The case centered on three distinct legal arguments presented by the Respondent HOA and the subsequent rulings by the ALJ.

1. Statutory Compliance of the Declaration

The fundamental dispute was whether the Declaration, as written, satisfied the plain language of A.R.S. § 33-1215(A)(1).

Argument / Position

Supporting Evidence / Rationale

Petitioner (Whitmer)

The Declaration is non-compliant because the legal name “Hilton Casitas Council of Homeowners” is not present anywhere in the document.

The Declaration refers to the “Council of Co-owners,” an unincorporated association created in 1972. The current non-profit corporation, formed in 1994, is not named. The Petitioner argued, “It’s just not there.”

Respondent (HOA)

The Declaration is compliant when its constituent parts are read together with established case law.

1. Condominium Name: The plat, which is legally part of the Declaration per A.R.S. § 33-1219(A), contains the phrase “HILTON CASITAS A CONDOMINIUM DEVELOPMENT.”
2. Association Name: Section 1.4 of the Declaration defines “Council” as the “Council of Co-owners.” Multiple Arizona Court of Appeals decisions have held that the “Hilton Casitas Council of Homeowners” is the legal successor entity to the “Council of Co-owners.” Therefore, a reference to the old name legally constitutes a reference to the current name.

ALJ Ruling

Violation Established. The Declaration does not contain the name of the association as required.

The ALJ agreed with the Respondent that the plat satisfied the condominium name requirement. However, the judge rejected the “successor entity” argument for the association’s name, concluding: > “The statute requires ‘the name of the association,’ not merely a reference to it. Even if the current association was the entity with standing, its name was not present in the Declaration. Assuming that there is some purpose for the statutory requirement, a reader should be able to identify the association from the declaration. Accordingly, the Tribunal is not willing to accept constructive compliance.”

2. The Statute of Limitations Defense

The Respondent argued that even if a violation existed, the Petitioner’s claim was filed too late.

Argument / Position

Supporting Evidence / Rationale

Petitioner (Whitmer)

The statute of limitations does not apply because the violation is a continuous act.

The Petitioner framed the non-compliant Declaration as a “cloud on the title,” a type of defect to which a statute of limitations is never a bar.

Respondent (HOA)

The claim is time-barred by the four-year default statute of limitations under A.R.S. § 12-550.

The Petitioner acquired his property in August 2014 and thus had constructive notice of the Declaration’s contents. The four-year period to file a claim expired in August 2018, making the 2024 petition six years too late.

ALJ Ruling

Defense Rejected. The statute of limitations does not apply to OAH proceedings.

The ALJ performed a statutory analysis, noting that A.R.S. § 12-550 applies to an “action” which is defined as “any matter or proceeding in a court.” Because the OAH is an agency of the executive branch and not a court, its proceedings are not “actions” under the statute. Therefore, the general statute of limitations is inapplicable.

3. The “Impossibility” of Unilateral Compliance

The Respondent argued that the relief sought by the Petitioner—an order to amend the Declaration—was not something the tribunal could grant because the HOA Board could not comply on its own.

Argument / Position

Supporting Evidence / Rationale

Petitioner (Whitmer)

The HOA has a clear path to compliance.

The Petitioner stated that the HOA simply needs to “call the election, amend the… or propose an amendment that cures this problem and ask the membership to approve it.” He offered to stipulate that he would not seek a contempt order if the HOA made a good-faith effort.

Respondent (HOA)

An order to amend would be inappropriate because the HOA cannot unilaterally amend the Declaration.

Amending the Declaration requires a vote of the membership (either 51% or 67%) and consent from an entity referred to as “the corporation.” If a vote failed, the HOA could not comply with the order, exposing it to further litigation from the Petitioner seeking to hold it in contempt.

ALJ Ruling

Defense Rejected. Procedural requirements for compliance do not constitute a legal defense against non-compliance.

The ALJ noted that it is ordinary for an HOA board or membership to have to vote to enact compliance with a statute. The ruling states: > “Technical procedures and responsibility for amending the Declaration, under a condominium’s documents and Arizona statues, is not a legal defense in this matter.” The tribunal’s role is to determine compliance and order it where it is lacking.

Final Order

The Administrative Law Judge Decision concluded with the following orders:

1. Prevailing Party: The Petitioner, R.L. Whitmer, is deemed the prevailing party.

2. Filing Fee: The Respondent must pay the Petitioner the filing fee of $500.00 within thirty days of the order.

3. Compliance: The Respondent shall comply with A.R.S. § 33-1215(A)(1) going forward.

4. Civil Penalty: No civil penalty was found to be appropriate in the matter.

The decision is binding unless a rehearing is requested with the Commissioner of the Department of Real Estate within 30 days.

Questions

Question

Does the 4-year statute of limitations for civil lawsuits apply to HOA disputes filed with the Arizona Department of Real Estate?

Short Answer

No. The general statute of limitations applies to court 'actions,' and administrative hearings are not considered court actions.

Detailed Answer

The Administrative Law Judge ruled that the general 4-year statute of limitations (A.R.S. § 12-550) does not apply to petitions filed with the Department of Real Estate/OAH. This is because the Office of Administrative Hearings is part of the executive branch, not the judicial branch, and its proceedings are not defined as 'actions' by the legislature.

Alj Quote

Accordingly, proceedings before OAH are not 'actions' as defined by the legislature, and the general statute of limitations does not apply.

Legal Basis

A.R.S. § 12-550; A.R.S. § 1-215

Topic Tags

  • statute of limitations
  • jurisdiction
  • filing deadlines

Question

Must the HOA's Declaration explicitly state the full legal name of the Association?

Short Answer

Yes. The Declaration must contain the actual name of the association, not just a definition or reference like 'The Council'.

Detailed Answer

State law requires the Declaration to contain the specific name of the association. The Judge rejected the argument that defining a term like 'Council' to mean the association was sufficient. The actual name must appear to ensure a reader can identify the association from the document.

Alj Quote

The statute requires 'the name of the association,' not merely a reference to it. The name of the association as stated in the defined term 'Council' is not the name of the association.

Legal Basis

A.R.S. § 33-1215(A)(1)

Topic Tags

  • CC&Rs
  • governing documents
  • HOA name

Question

Can an HOA avoid an order to amend its documents by claiming it requires a vote of the membership?

Short Answer

No. Procedural difficulties, such as needing a membership vote, are not a valid legal defense for non-compliant documents.

Detailed Answer

An HOA cannot use the difficulty of obtaining a membership vote as a defense against a violation finding. If the documents are non-compliant with state law, the Tribunal can order compliance regardless of the internal procedures required to fix them.

Alj Quote

Technical procedures and responsibility for amending the Declaration, under a condominium’s documents and Arizona statues, is not a legal defense in this matter.

Legal Basis

Administrative Authority

Topic Tags

  • amendments
  • voting
  • defenses

Question

If I win my case against the HOA, will I be reimbursed for the filing fee?

Short Answer

Yes, the Judge can order the HOA to reimburse the $500 filing fee to the prevailing homeowner.

Detailed Answer

When a homeowner prevails in proving a violation, the Administrative Law Judge has the authority to order the Respondent (HOA) to pay the filing fee directly to the Petitioner.

Alj Quote

IT IS ORDERED that Respondent pay Petitioner the filing fee of $500.00, to be paid directly to Petitioner within thirty (30) days of this Order.

Legal Basis

Administrative Remedy

Topic Tags

  • fees
  • remedies
  • costs

Question

Does proving an HOA violation automatically result in a civil penalty (fine) against the Association?

Short Answer

No. A violation does not automatically trigger a civil penalty unless the Judge deems it appropriate.

Detailed Answer

Even if a homeowner proves that the HOA violated a statute or the community documents, the Judge has discretion regarding civil penalties. In this case, despite finding a violation regarding the naming in the Declaration, the Judge decided no civil penalty was necessary.

Alj Quote

No Civil Penalty is found to be appropriate in this matter.

Legal Basis

Administrative Discretion

Topic Tags

  • fines
  • civil penalties
  • enforcement

Question

What is the burden of proof for a homeowner filing a petition against their HOA?

Short Answer

The homeowner must prove the violation by a 'preponderance of the evidence'.

Detailed Answer

The petitioner (homeowner) is responsible for providing enough evidence to show that their contention is 'more probably true than not.'

Alj Quote

Petitioner bore the burden of proof to establish that Respondent violated applicable statutes by a preponderance of the evidence.

Legal Basis

A.A.C. R2-19-119(A)

Topic Tags

  • evidence
  • burden of proof
  • legal standards

Case

Docket No
25F-H001-REL
Case Title
R.L. Whitmer v. Hilton Casitas Council of Homeowners
Decision Date
2024-11-12
Alj Name
Samuel Fox
Tribunal
OAH
Agency
ADRE

Questions

Question

Does the 4-year statute of limitations for civil lawsuits apply to HOA disputes filed with the Arizona Department of Real Estate?

Short Answer

No. The general statute of limitations applies to court 'actions,' and administrative hearings are not considered court actions.

Detailed Answer

The Administrative Law Judge ruled that the general 4-year statute of limitations (A.R.S. § 12-550) does not apply to petitions filed with the Department of Real Estate/OAH. This is because the Office of Administrative Hearings is part of the executive branch, not the judicial branch, and its proceedings are not defined as 'actions' by the legislature.

Alj Quote

Accordingly, proceedings before OAH are not 'actions' as defined by the legislature, and the general statute of limitations does not apply.

Legal Basis

A.R.S. § 12-550; A.R.S. § 1-215

Topic Tags

  • statute of limitations
  • jurisdiction
  • filing deadlines

Question

Must the HOA's Declaration explicitly state the full legal name of the Association?

Short Answer

Yes. The Declaration must contain the actual name of the association, not just a definition or reference like 'The Council'.

Detailed Answer

State law requires the Declaration to contain the specific name of the association. The Judge rejected the argument that defining a term like 'Council' to mean the association was sufficient. The actual name must appear to ensure a reader can identify the association from the document.

Alj Quote

The statute requires 'the name of the association,' not merely a reference to it. The name of the association as stated in the defined term 'Council' is not the name of the association.

Legal Basis

A.R.S. § 33-1215(A)(1)

Topic Tags

  • CC&Rs
  • governing documents
  • HOA name

Question

Can an HOA avoid an order to amend its documents by claiming it requires a vote of the membership?

Short Answer

No. Procedural difficulties, such as needing a membership vote, are not a valid legal defense for non-compliant documents.

Detailed Answer

An HOA cannot use the difficulty of obtaining a membership vote as a defense against a violation finding. If the documents are non-compliant with state law, the Tribunal can order compliance regardless of the internal procedures required to fix them.

Alj Quote

Technical procedures and responsibility for amending the Declaration, under a condominium’s documents and Arizona statues, is not a legal defense in this matter.

Legal Basis

Administrative Authority

Topic Tags

  • amendments
  • voting
  • defenses

Question

If I win my case against the HOA, will I be reimbursed for the filing fee?

Short Answer

Yes, the Judge can order the HOA to reimburse the $500 filing fee to the prevailing homeowner.

Detailed Answer

When a homeowner prevails in proving a violation, the Administrative Law Judge has the authority to order the Respondent (HOA) to pay the filing fee directly to the Petitioner.

Alj Quote

IT IS ORDERED that Respondent pay Petitioner the filing fee of $500.00, to be paid directly to Petitioner within thirty (30) days of this Order.

Legal Basis

Administrative Remedy

Topic Tags

  • fees
  • remedies
  • costs

Question

Does proving an HOA violation automatically result in a civil penalty (fine) against the Association?

Short Answer

No. A violation does not automatically trigger a civil penalty unless the Judge deems it appropriate.

Detailed Answer

Even if a homeowner proves that the HOA violated a statute or the community documents, the Judge has discretion regarding civil penalties. In this case, despite finding a violation regarding the naming in the Declaration, the Judge decided no civil penalty was necessary.

Alj Quote

No Civil Penalty is found to be appropriate in this matter.

Legal Basis

Administrative Discretion

Topic Tags

  • fines
  • civil penalties
  • enforcement

Question

What is the burden of proof for a homeowner filing a petition against their HOA?

Short Answer

The homeowner must prove the violation by a 'preponderance of the evidence'.

Detailed Answer

The petitioner (homeowner) is responsible for providing enough evidence to show that their contention is 'more probably true than not.'

Alj Quote

Petitioner bore the burden of proof to establish that Respondent violated applicable statutes by a preponderance of the evidence.

Legal Basis

A.A.C. R2-19-119(A)

Topic Tags

  • evidence
  • burden of proof
  • legal standards

Case

Docket No
25F-H001-REL
Case Title
R.L. Whitmer v. Hilton Casitas Council of Homeowners
Decision Date
2024-11-12
Alj Name
Samuel Fox
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • R.L. Whitmer (Petitioner)

Respondent Side

  • Emily H. Mann (Attorney)
    Phillips, Maceyko & Battock, PLLC
  • Robert Westbrook (President)
    Hilton Casitas Council of Homeowners

Neutral Parties

  • Samuel Fox (Administrative Law Judge)
    Office of Administrative Hearings
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

Justin R. Sheakley v. Arizona Hillcrest Community Association

Posted on by

Case Summary

Case ID 24F-H056-REL
Agency —
Tribunal —
Decision Date 10/21/2024
Administrative Law Judge SF
Outcome —
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Justin R. Sheakley Counsel —
Respondent Arizona Hillcrest Community Association Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

24F-H056-REL Decision – 1211424.pdf

Uploaded 2026-04-27T09:52:51 (55.5 KB)

24F-H056-REL Decision – 1235391.pdf

Uploaded 2026-04-27T09:52:55 (125.4 KB)

24F-H056-REL Decision – 1211424.pdf

Uploaded 2026-04-24T12:26:18 (55.5 KB)

24F-H056-REL Decision – 1235391.pdf

Uploaded 2026-04-24T12:26:21 (125.4 KB)

Briefing Document: Sheakley v. Arizona Hillcrest Community Association

Executive Summary

This document synthesizes the key facts, arguments, and legal outcome of the dispute between homeowner Justin R. Sheakley (Petitioner) and the Arizona Hillcrest Community Association (Respondent). The central conflict revolves around the required repairs for a common boundary wall at the Petitioner’s property and the associated cost-sharing obligations under the community’s Covenants, Conditions, and Restrictions (CC&Rs).

The Petitioner alleged the wall only required cosmetic repairs (stucco and paint) and that the Association’s demand for a complete rebuild, with costs split 50/50, constituted a violation of the CC&Rs and was an act of retaliation for his previous opposition to a larger community project. He supported his position with a structural engineer’s report stating there was “no structural reason for the wall to be replaced.”

The Respondent countered that the wall possessed genuine structural damage, including cracking, leaning, and deflection, which necessitated a rebuild rather than a surface-level patch. The Association argued its actions were consistent with CC&R Article 11, Section 11.2, which mandates a 50/50 cost split for repairs involving structural damage. They presented expert testimony from a construction defect specialist and maintained that the Board of Directors acted within its discretionary authority to determine the appropriate level of maintenance.

The matter was adjudicated by the Office of Administrative Hearings. On October 21, 2024, an Administrative Law Judge issued a decision finding that the Petitioner failed to demonstrate by a preponderance of the evidence that the Association had violated its Community Documents. The judge ruled that the Board’s determination of structural damage was not unreasonable and that it had the authority to order the repairs and require payment from the homeowner. The Respondent was deemed the prevailing party.

Case Overview

Details

Case Number

24F-H056-REL

Petitioner

Justin R. Sheakley (Owner of 3234 W. Bajada Dr., Lot 52)

Respondent

Arizona Hillcrest Community Association

Respondent’s Attorney

Quinten Cupps, Vial Fotheringham, LLP

Presiding Judge

Samuel Fox, Office of Administrative Hearings

Hearing Date

September 30, 2024

Decision Date

October 21, 2024

Core Legal Issue

Alleged violation of CC&Rs, Article 11, Section 11.2, concerning maintenance and repair responsibilities for a common wall.

The Central Dispute: The Common Wall at Lot 52

The conflict originated from the Arizona Hillcrest Community Association’s determination that a section of the common boundary wall adjacent to Justin Sheakley’s property (Lot 52) required a complete teardown and rebuild due to structural damage. The Association proposed to undertake the repair through its chosen contractor, Elite Construction and Painting, at a total cost of approximately 4,900,andinvoicedMr.Sheakleyfor502,450), citing cost-sharing provisions for structural damage in the CC&Rs.

Mr. Sheakley disputed the classification of the damage as “structural,” arguing the issues were cosmetic. This disagreement over the scope of necessary work and the interpretation of the CC&Rs formed the basis of his petition to the Arizona Department of Real Estate, leading to the hearing.

Petitioner’s Position and Arguments (Justin R. Sheakley)

Mr. Sheakley’s case was built on the following key arguments:

• Damage is Cosmetic, Not Structural: He contended that the wall’s issues were limited to “stucco delamination” and peeling paint on the bottom courses, which did not compromise its structural integrity. His position was that the wall simply needed to be “restuckled and repainted.”

• Contradictory Assessments: He highlighted that an initial 2020 assessment by a licensed structural engineering firm, Criterium-Kessler Engineers, recommended only “routine repair of sub repair and painting” for his specific wall. He argued the Association improperly shifted its reliance from this professional engineering opinion to the opinions of general contractors (Evolution Construction and Elite Construction) who advocated for a more drastic and expensive rebuild.

• Retaliation: Mr. Sheakley testified that he believed the Association’s actions were “a retaliation for me stopping the construction in 2020 to the sum of $100,000.” This refers to his successful effort to organize residents to pause a large-scale wall repair project at the beginning of the COVID-19 pandemic.

• Potential Conflict of Interest: He raised concerns about the relationship between the contractors, noting that the owner of Elite Construction, Peter Alesi, was a former employee of Evolution Construction. He stated, “I would suspect that evolution construction was looked over and had this grow report written by the same person that owns the Elite Construction of Painting.”

• Supporting Expert Evidence: Mr. Sheakley commissioned his own report from Bringham Engineering Consultants, dated July 27, 2024, which concluded: “It is our opinion that flaking paint and discoloration of the paint has not affected the structural integrity of the wall. There is no structural reason for the wall to be replace.”

Respondent’s Position and Arguments (Arizona Hillcrest Community Association)

The Association, represented by Quinten Cupps, presented the following defense:

• Presence of Structural Damage: The Association maintained the wall suffered from significant structural issues beyond surface cosmetics. Their expert witness, Peter Alesi, testified to observing a lean towards the homeowner’s property, “deflection” (side-to-side movement), and a linear crack at the bottom course of blocks. He asserted that any simple stucco patch would “just pop right back off due to the deflection of that panel.”

• Authority Under CC&Rs: Their central legal argument rested on Article 11, Section 11.2 of the CC&Rs, which states: “In the case of destruction of both sides of such wall or structural damage, the Owner(s) owning Lots adjacent to the wall shall be responsible for one half of the cost of replacement or repair of the wall and the Association shall be responsible for the other one-half.”

• Board Discretion and Due Process: Community Manager Melanie Page testified that the Board followed a deliberate process. They obtained reports, bids, reviewed a “matrix” from Evolution mapping the damage, personally walked the community to inspect the walls, and held a vote during a board meeting to approve the repairs. The CC&Rs grant the Board sole discretion in determining the appropriate level of maintenance.

• Jurisdictional Challenge: The Association’s counsel argued that the OAH was not the proper forum for the dispute, stating, “it’s not about not a violation of 11.2, it’s an issue of whether or not we should be repairing the wall. And that’s not what for this court to decide in our opinion.” They claimed the Association was actively trying to comply with its maintenance obligations under the CC&Rs.

• Homeowner Contribution to Damage: During cross-examination, it was established that Mr. Sheakley had planted Ficus trees in January 2022 and anchored them to the wall with cables drilled into the structure. Their expert noted that Ficus trees have “very aggressive roots” that can compromise walls, and photos showed the trees touching the wall and support columns.

Key Evidence and Testimony

Witness Testimony

• Justin R. Sheakley (Petitioner): Testified about the history of the wall issue, the 2020 Criterium-Kessler report, his opposition to the initial project, his belief that the current action is retaliatory, and presented his own engineering report from Bringham Engineering.

• Melanie Page (Community Manager for AAM): Described the HOA’s multi-year process of assessing the walls, obtaining bids, and the Board’s review and approval process. She confirmed that multiple notices were sent to Mr. Sheakley regarding the planned repairs and his financial obligation.

• Peter Alesi (Owner, Elite Construction and Painting): Provided expert testimony as a general contractor with 24 years of experience, including 18 years as a certified construction defect expert. He detailed the specific structural failings of the wall, including movement, cracking, and a lean of up to 3/4 of an inch. He stated that a simple stucco repair would not fix the underlying problem.

Documentary and Physical Evidence

• CC&Rs, Article 11, Section 11.2: The foundational document governing the dispute, outlining cost-sharing responsibilities for walls with structural damage.

• Criterium-Kessler Engineers Report (2020): A structural engineering report that identified various wall issues in the community but recommended only “routine repair” for Mr. Sheakley’s lot.

• Evolution Construction Report/Matrix (2022): A report by a general contractor that mapped wall damage lot-by-lot, identifying “moderate damage” and “block cracks” at Lot 52. Mr. Sheakley used this document to point out inconsistencies, such as Elite Construction rebuilding a wall at Lot 111 that Evolution had deemed in “good condition.”

• Bringham Engineering Consultants Report (2024): Commissioned by Mr. Sheakley, this report concluded there was no structural reason to replace the wall, focusing on paint and discoloration. The judge later noted this report did not address the visible cracking.

• Photographs: Both parties submitted photographs showing stucco delamination, peeling paint, a linear crack at the base of the wall, Ficus trees anchored to the wall, and measurements demonstrating the wall’s lean.

• Google Earth Images: Mr. Sheakley presented images from 2011 and 2019 to show the wall had long-standing issues, predating his planting of the Ficus trees.

Legal Proceedings and Final Decision

The hearing was held on September 30, 2024, before Administrative Law Judge Samuel Fox. After hearing testimony and reviewing all evidence, the judge issued a decision on October 21, 2024.

Conclusions of Law

1. Burden of Proof: The Petitioner, Mr. Sheakley, bore the burden to prove by a preponderance of the evidence that the Association violated its Community Documents.

2. Definition of “Structural Damage”: As the term was not defined in the CC&Rs, the judge assigned it its ordinary meaning: “damage to the integrity of a structure that is more serious than mere cosmetic damage… damaged beyond the surface.” The judge noted that the documents do not require a specific severity of damage to trigger the repair clauses.

3. Board Authority: The Community Documents grant the Board “significant discretion and authority over walls” and other common areas.

4. Failure to Meet Burden: The judge concluded, “Petitioner did not demonstrate by a preponderance of the evidence that the Board was unreasonable when determining the wall at issue was structurally damaged.”

5. No Violation Found: The final conclusion was that “the preponderance of the evidence established that Petitioner failed to meet his burden that Respondent failed to abide by its Community Documents.”

Based on these conclusions, the judge issued the following order:

“IT IS ORDERED that Respondent be deemed the prevailing party in this matter.”

Questions

Question

Who is responsible for paying to repair a shared wall between my home and the common area?

Short Answer

Costs are split 50/50 if the damage is structural, but surface maintenance is individual.

Detailed Answer

According to the decision, standard surface maintenance (like painting) is the responsibility of the party facing that side of the wall. However, if there is 'structural damage' or destruction of the wall, the cost of repair or replacement is shared equally between the homeowner and the HOA.

Alj Quote

In the case of destruction of both sides of such wall or structural damage, the Owner(s) owning Lots adjacent to the wall shall be responsible for one half of the cost of replacement or repair of the wall and the Association shall be responsible for the other one-half.

Legal Basis

CC&Rs Article 11, Section 11.2

Topic Tags

  • maintenance
  • shared walls
  • assessments

Question

What is the legal definition of 'structural damage' if it isn't defined in the CC&Rs?

Short Answer

It means damage to the integrity of the structure that goes beyond mere cosmetic issues.

Detailed Answer

The ALJ determined that undefined terms should be given their ordinary meaning. Structural damage does not require the structure to be 'fatally flawed' or about to collapse; it simply means the damage affects the integrity of the structure and is more serious than surface-level cosmetic issues.

Alj Quote

Structural damage means damage to the integrity of a structure that is more serious than mere cosmetic damage. … Structural damage does not mean that the structure is fatally flawed; it means that the structure is damaged beyond the surface.

Legal Basis

Ordinary Meaning / Judicial Interpretation

Topic Tags

  • definitions
  • maintenance
  • legal interpretation

Question

Who has the burden of proof when a homeowner sues their HOA?

Short Answer

The homeowner (Petitioner) must prove the violation occurred.

Detailed Answer

The homeowner filing the petition bears the burden of proving that the HOA violated the statutes, CC&Rs, or Bylaws. They must prove this by a 'preponderance of the evidence,' meaning it is more likely than not that the violation occurred.

Alj Quote

Petitioner bears the burden of proof to establish that Respondent violated applicable statutes, CC&Rs, and/or Bylaws by a preponderance of the evidence.

Legal Basis

A.A.C. R2-19-119(A) and (B)(1)

Topic Tags

  • procedural
  • burden of proof
  • evidence

Question

Can the Administrative Law Judge order the HOA to pay for other damages or remediation?

Short Answer

No, the ALJ's authority is limited to ordering compliance with documents and levying civil penalties.

Detailed Answer

The tribunal has limited jurisdiction. It can order a party to abide by the statute or community documents and can levy civil penalties for those specific violations, but it cannot order other types of remediation or penalties for conduct outside that scope.

Alj Quote

This Tribunal is not authorized to order other remediation or order civil penalties for other conduct.

Legal Basis

A.R.S. § 32-2199.02

Topic Tags

  • jurisdiction
  • remedies
  • penalties

Question

Does the HOA Board have the authority to decide when a repair is necessary?

Short Answer

Yes, Boards typically have significant discretion to determine maintenance needs.

Detailed Answer

Unless the governing documents state otherwise, the Board has significant discretion and authority to determine the appropriate level of maintenance and when repairs or replacements are necessary for areas the Association is responsible for.

Alj Quote

The Community Documents in the record … grant the Board significant discretion and authority over walls and other areas that Respondent is responsible for maintaining.

Legal Basis

Community Documents / Board Discretion

Topic Tags

  • board authority
  • governance
  • maintenance

Question

If I hire an engineer who says repairs aren't needed, will that override the HOA's decision?

Short Answer

Not necessarily, if the HOA's decision was reasonable and supported by evidence.

Detailed Answer

Even if a homeowner provides a conflicting report, they must prove the Board acted unreasonably. In this case, the homeowner's report focused on cosmetic issues (paint), while the HOA's decision was based on evidence of structural damage. The homeowner failed to prove the Board's determination was unreasonable.

Alj Quote

Petitioner did not demonstrate by a preponderance of the evidence that the Board was unreasonable when determining the wall at issue was structurally damaged.

Legal Basis

Preponderance of Evidence

Topic Tags

  • expert testimony
  • disputes
  • evidence

Case

Docket No
24F-H056-REL
Case Title
Justin R. Sheakley v. Arizona Hillcrest Community Association
Decision Date
2024-10-21
Alj Name
Samuel Fox
Tribunal
OAH
Agency
ADRE

Questions

Question

Who is responsible for paying to repair a shared wall between my home and the common area?

Short Answer

Costs are split 50/50 if the damage is structural, but surface maintenance is individual.

Detailed Answer

According to the decision, standard surface maintenance (like painting) is the responsibility of the party facing that side of the wall. However, if there is 'structural damage' or destruction of the wall, the cost of repair or replacement is shared equally between the homeowner and the HOA.

Alj Quote

In the case of destruction of both sides of such wall or structural damage, the Owner(s) owning Lots adjacent to the wall shall be responsible for one half of the cost of replacement or repair of the wall and the Association shall be responsible for the other one-half.

Legal Basis

CC&Rs Article 11, Section 11.2

Topic Tags

  • maintenance
  • shared walls
  • assessments

Question

What is the legal definition of 'structural damage' if it isn't defined in the CC&Rs?

Short Answer

It means damage to the integrity of the structure that goes beyond mere cosmetic issues.

Detailed Answer

The ALJ determined that undefined terms should be given their ordinary meaning. Structural damage does not require the structure to be 'fatally flawed' or about to collapse; it simply means the damage affects the integrity of the structure and is more serious than surface-level cosmetic issues.

Alj Quote

Structural damage means damage to the integrity of a structure that is more serious than mere cosmetic damage. … Structural damage does not mean that the structure is fatally flawed; it means that the structure is damaged beyond the surface.

Legal Basis

Ordinary Meaning / Judicial Interpretation

Topic Tags

  • definitions
  • maintenance
  • legal interpretation

Question

Who has the burden of proof when a homeowner sues their HOA?

Short Answer

The homeowner (Petitioner) must prove the violation occurred.

Detailed Answer

The homeowner filing the petition bears the burden of proving that the HOA violated the statutes, CC&Rs, or Bylaws. They must prove this by a 'preponderance of the evidence,' meaning it is more likely than not that the violation occurred.

Alj Quote

Petitioner bears the burden of proof to establish that Respondent violated applicable statutes, CC&Rs, and/or Bylaws by a preponderance of the evidence.

Legal Basis

A.A.C. R2-19-119(A) and (B)(1)

Topic Tags

  • procedural
  • burden of proof
  • evidence

Question

Can the Administrative Law Judge order the HOA to pay for other damages or remediation?

Short Answer

No, the ALJ's authority is limited to ordering compliance with documents and levying civil penalties.

Detailed Answer

The tribunal has limited jurisdiction. It can order a party to abide by the statute or community documents and can levy civil penalties for those specific violations, but it cannot order other types of remediation or penalties for conduct outside that scope.

Alj Quote

This Tribunal is not authorized to order other remediation or order civil penalties for other conduct.

Legal Basis

A.R.S. § 32-2199.02

Topic Tags

  • jurisdiction
  • remedies
  • penalties

Question

Does the HOA Board have the authority to decide when a repair is necessary?

Short Answer

Yes, Boards typically have significant discretion to determine maintenance needs.

Detailed Answer

Unless the governing documents state otherwise, the Board has significant discretion and authority to determine the appropriate level of maintenance and when repairs or replacements are necessary for areas the Association is responsible for.

Alj Quote

The Community Documents in the record … grant the Board significant discretion and authority over walls and other areas that Respondent is responsible for maintaining.

Legal Basis

Community Documents / Board Discretion

Topic Tags

  • board authority
  • governance
  • maintenance

Question

If I hire an engineer who says repairs aren't needed, will that override the HOA's decision?

Short Answer

Not necessarily, if the HOA's decision was reasonable and supported by evidence.

Detailed Answer

Even if a homeowner provides a conflicting report, they must prove the Board acted unreasonably. In this case, the homeowner's report focused on cosmetic issues (paint), while the HOA's decision was based on evidence of structural damage. The homeowner failed to prove the Board's determination was unreasonable.

Alj Quote

Petitioner did not demonstrate by a preponderance of the evidence that the Board was unreasonable when determining the wall at issue was structurally damaged.

Legal Basis

Preponderance of Evidence

Topic Tags

  • expert testimony
  • disputes
  • evidence

Case

Docket No
24F-H056-REL
Case Title
Justin R. Sheakley v. Arizona Hillcrest Community Association
Decision Date
2024-10-21
Alj Name
Samuel Fox
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • Justin R. Sheakley (Petitioner)
    Homeowner appearing on his own behalf.

Respondent Side

  • Quinten Cupps (Attorney)
    Vial Fotheringham, LLP
    Attorney representing Respondent Arizona Hillcrest Community Association.
  • Melanie Veach (Community Manager)
    Habitat Management / AAM
    Testified for the Respondent. Identified as Melanie Page in the oral transcript but listed as Melanie Veach in the ALJ decision.
  • Peter Alesi (Owner / Witness)
    Elite Construction and Painting
    Testified for the Respondent; previously employed at Evolution Construction Services.

Neutral Parties

  • Samuel Fox (Administrative Law Judge)
    Office of Administrative Hearings
    Presided over the September 30, 2024 hearing and issued the final decision.
  • Sondra J. Vanella (Administrative Law Judge)
    Office of Administrative Hearings
    Signed the Order Granting Continuance on August 14, 2024.
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate
    Recipient of transmitted orders and decisions.

Brian & Rosalie Gordon v. Tucson Estate No. Two Owner’s Association

Posted on by

Case Summary

Case ID 24F-H043-REL
Agency ADRE
Tribunal OAH
Decision Date 2024-07-10
Administrative Law Judge Samuel Fox
Outcome Petitioners were deemed the prevailing party regarding Petition Issues 1 and 4, and Respondent was deemed the prevailing party regarding Issues 2 and 3. Respondent was ordered to pay Petitioners $1,000.00 of the filing fee. Respondent was also directed to comply with Community Documents and A.R.S. § 33-1805 going forward. No Civil Penalty was levied.
Filing Fees Refunded $2,000.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Brian Gordon and Rosalie Gordon Counsel —
Respondent Tucson Estate No. Two Owner's Association Counsel Jason Smith

Alleged Violations

Bylaws Article 10; Finance Committee rules
A.R.S. § 33-1805; Bylaws Article 10
A.R.S. § 33-1805; Bylaws Article 10
A.R.S. § 33-1805; Bylaws Article 10

Outcome Summary

Petitioners were deemed the prevailing party regarding Petition Issues 1 and 4, and Respondent was deemed the prevailing party regarding Issues 2 and 3. Respondent was ordered to pay Petitioners $1,000.00 of the filing fee. Respondent was also directed to comply with Community Documents and A.R.S. § 33-1805 going forward. No Civil Penalty was levied.

Why this result: Petitioners failed to meet the burden of proof for Complaints 2 and 3, establishing that Respondent violated A.R.S. § 33-1805 or failed to abide by Community Documents, because Respondent provided all available records or offered additional reports.

Key Issues & Findings

Violation of Community Documents by not recording and making available the minutes of all Finance Committee Meetings held in 2023.

Petitioners requested minutes for five 2023 Finance Committee Meetings. The Committee rules required minutes of its meetings as a permanent record of its actions. The Respondent failed to record meeting minutes as required.

Orders: Respondent directed to comply with the requirements of its Community Documents going forward.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1805
  • A.R.S. § 10-11601
  • Bylaws Article 10

Violation by not keeping and making financial and other HOA business documentation (Budget Working Papers) available for review.

Petitioners requested copies of Budget Working Papers. Respondent provided all available documents (unapproved budget, general ledger, and draft), maintaining only one version of a proprietary spreadsheet. Petitioners failed to meet their burden to prove Respondent did not make records available.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1805
  • A.R.S. § 10-11601
  • Bylaws Article 10

Violation by not keeping and making financial and other HOA business documentation (Accounts Payable journal with GL detail) available for review.

Petitioners requested Accounts Payable journal/reports multiple times. Respondent provided copies of available accounts payable reports (check receipts and general ledger). When Respondent later identified an additional detailed report available for purchase, Petitioners refused it.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1805
  • A.R.S. § 10-11601
  • Bylaws Article 10

Violation by not keeping and making financial and other HOA business documentation (IRS Tax filings and backup documentation) available for review.

Petitioners requested IRS Tax filings. Respondent initially provided only photocopies of two pages of the 1120-h form, missing schedules and backup documentation. Respondent failed to provide full tax returns or backup documentation in a timely manner (within ten business days).

Orders: Respondent is directed to comply with the requirements of A.R.S. § 33-1805 going forward.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1805
  • A.R.S. § 10-11601
  • Bylaws Article 10

Analytics Highlights

Topics: HOA records dispute, Finance Committee minutes, budget working papers, accounts payable journal, IRS tax filings, record retention, A.R.S. § 33-1805 violation
Additional Citations:

  • A.R.S. § 33-1805
  • A.R.S. § 10-11601
  • Bylaws Article 10
  • A.R.S. § 32-2199.02

Video Overview

Audio Overview

Decision Documents

24F-H043-REL Decision – 1176916.pdf

Uploaded 2026-04-24T12:23:58 (53.5 KB)

24F-H043-REL Decision – 1198119.pdf

Uploaded 2026-04-24T12:24:02 (203.0 KB)

24F-H043-REL Decision – 1200350.pdf

Uploaded 2026-04-24T12:24:06 (37.2 KB)

24F-H043-REL Decision – 1176916.pdf

Uploaded 2026-01-23T18:07:38 (53.5 KB)

24F-H043-REL Decision – 1198119.pdf

Uploaded 2026-01-23T18:07:41 (203.0 KB)

24F-H043-REL Decision – 1200350.pdf

Uploaded 2026-01-23T18:07:45 (37.2 KB)

This case involves a records dispute between Petitioners Brian and Rosalie Gordon (members) and the Tucson Estate No. Two Owner's Association (Respondent/HOA), heard by Administrative Law Judge (ALJ) Samuel Fox at the Office of Administrative Hearings (OAH) on June 21, 2024. The OAH's authority is limited to adjudicating alleged violations of the Arizona Planned Community Statutes (A.R.S. Title 33, Chapter 16) and the HOA's Community Documents.

Key Facts and Main Issues

The Petitioners filed a four-issue complaint alleging the Respondent violated A.R.S. § 33-1805 (requiring records to be made available for examination) and the HOA's Bylaws, primarily by failing to provide specific financial documentation requested in 2022 and 2023.

The four contested issues were:

  1. Finance Committee Minutes: Failure to record and make available minutes of 2023 Finance Committee Meetings.
  2. Budget Working Papers: Refusal to provide copies of draft budget working papers.
  3. Accounts Payable (AP) Journal: Failure to provide AP journals with General Ledger (GL) detail.
  4. Tax Filings Backup: Provision of incomplete IRS tax filings (just two pages of the 1120-h form) and lack of supporting backup documentation.

Key Arguments During the Hearing

Petitioners' Position: The Gordons argued that all financial and other records must be made reasonably available for examination by any member under A.R.S. § 33-1805. They contended that the HOA’s own Finance Committee policy required minutes of all its meetings as a permanent record of its "actions". They also claimed that essential documents (budget working papers, AP detail, and full tax backups) either existed and were being withheld, or should have been maintained by the HOA according to policy, even if created by its vendor, AAM.

Respondent's Position: The HOA, represented by Jason Smith, argued that the OAH’s jurisdiction is narrow. They maintained that they provided every document they possessed. For the minutes, they argued the Finance Committee is purely advisory, does not take corporate "action," and therefore minutes are not required. For the budget documents (Issue 2) and AP journal (Issue 3), the HOA claimed that the requested specific documents did not exist (as the budget utilized a single constantly updated spreadsheet, and the AP detail was handled by a third party not required to generate a specific report for the HOA). The HOA stressed that they are not required to create or reorganize information to satisfy a homeowner's request.

Final Decision and Outcome

The ALJ issued a decision on July 10, 2024, finding that the Petitioners prevailed on Issues 1 and 4, while the Respondent prevailed on Issues 2 and 3.

Legal Conclusions:

  • Issue 1 (Finance Minutes): VIOLATION FOUND. The HOA failed to abide by its Community Documents. Although the Finance Committee is advisory, its rules established that its activities (advising, reviewing, making recommendations) constituted "actions" for which minutes were required to be kept.
  • Issue 4 (Tax Filings Backup): VIOLATION FOUND. The HOA violated A.R.S. § 33-1805 because the preponderance of evidence showed Petitioners did not receive the complete tax returns or backup documentation in a timely manner (within the required ten business days of their October requests), even though the records were eventually available or accessible through the HOA’s agents.
  • Issues 2 & 3 (Working Papers & AP Journal): NO VIOLATION FOUND. The ALJ concluded that the Petitioners failed to meet their burden of proof, noting that A.R.S. § 33-1805 and the Bylaws do not require the HOA to create documents that it does not possess in response to a request. Respondent was found to have provided all available records related to these complaints.

Order:

The Respondent was ordered to comply with its Community Documents and the requirements of A.R.S. § 33-1805 going forward. The

Questions

Question

Is my HOA required to keep minutes for advisory committees?

Short Answer

Yes, if the community documents (like a committee charter or policy) state that minutes must be kept.

Detailed Answer

Even if an HOA argues a committee is only 'advisory' and doesn't take 'actions,' the ALJ ruled that activities like advising, reviewing, and recommending constitute 'actions' within the scope of the committee's duties. Therefore, if the committee's rules say minutes must be kept, failing to do so violates the community documents.

Alj Quote

When the Committee advised, assisted, reviewed, analyzed, recommended, or otherwise took action within the parameters of its Responsibilities and Duties, that was an 'action' by the Committee as established by the Board.

Legal Basis

Community Documents / Bylaws

Topic Tags

  • meeting minutes
  • committees
  • record keeping

Question

Can I demand that the HOA create a specific report to answer my financial questions?

Short Answer

No, the HOA is not required to create new documents that do not already exist.

Detailed Answer

The law requires the HOA to make existing records available for examination. It does not compel the HOA to generate new reports, compile data in a specific format, or create documents they do not currently possess to satisfy a homeowner's request.

Alj Quote

It does not require Respondent to provide documents that it does not have nor does it require Respondent to create documents in response to a request.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • financial records
  • document creation
  • requests

Question

If the management company holds the records, can the HOA claim they don't have them?

Short Answer

No, records held by the management company are considered to be in the HOA's custody.

Detailed Answer

The ALJ explicitly ruled that documents in the custody of the management agent (e.g., AAM) are legally in the custody of the HOA. The HOA is obligated to provide them to members upon request.

Alj Quote

Documents in the custody of AAM are in the custody of Respondent, and Respondent is obligated to provide them to members under A.R.S. § 33-1805.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • management company
  • record custody
  • access to records

Question

Are personal notes taken by committee members considered official HOA records?

Short Answer

No, personal notes or drafts on personal devices are generally not HOA records.

Detailed Answer

The ALJ found that notes, drafts, edits, or comments made by committee members on their personal versions of documents were not records of the Association if the Association did not collect, track, or record them.

Alj Quote

Any notes, drafts, edits, or comments that committee members made on their personal versions were not records of Respondent, which did not collect, track, or record the committee members’ individual notes.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • personal notes
  • official records
  • committees

Question

Does the HOA have to provide previous drafts of a budget or 'working papers'?

Short Answer

Only if they actually kept them. If they overwrite the file, they don't have to produce previous versions.

Detailed Answer

In this case, the HOA used a single spreadsheet that was updated and overwritten as the budget process moved forward. The ALJ ruled that since the HOA did not maintain multiple versions, they were not required to produce previous drafts they no longer possessed.

Alj Quote

Respondent only maintained one version of the spreadsheet, and when changes were made, the spreadsheet was updated… Petitioners failed to meet their burden to support that Respondent did not make records available for review.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • budget
  • draft documents
  • record retention

Question

Is providing the first two pages of a tax return sufficient to fulfill a records request?

Short Answer

No, the HOA must provide the complete tax return and backup documentation.

Detailed Answer

The ALJ found the HOA in violation for providing only the first two pages of Form 1120-H. The homeowner was entitled to the complete tax form and the backup documentation (which the management company or CPA had access to) within 10 days.

Alj Quote

The preponderance of the evidence establishes that Petitioners did not receive full copies of Respondent’s tax returns or backup documentation for the tax returns within ten days of their respective October requests.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • tax returns
  • financial records
  • transparency

Question

Can the ALJ enforce IRS regulations or the Nonprofit Corporation Act during this hearing?

Short Answer

No, the ALJ's jurisdiction is limited to Planned Community statutes and Community Documents.

Detailed Answer

The Administrative Law Judge explicitly stated that the tribunal is not authorized to adjudicate complaints arising from the Arizona Nonprofit Corporations Act or IRS regulations, only Title 33 (Planned Communities) and the specific HOA documents.

Alj Quote

This Tribunal is not authorized to adjudicate complaints arising from the Arizona Nonprofit Corporations Act, Internal Revenue Service regulations, or other laws or regulations.

Legal Basis

A.R.S. § 32-2199

Topic Tags

  • jurisdiction
  • legal authority
  • IRS
  • nonprofit act

Question

If I win my hearing against the HOA, can I get my filing fee back?

Short Answer

Yes, the ALJ has the discretion to order the HOA to reimburse the filing fee.

Detailed Answer

In this case, because the homeowners prevailed on two of their four issues, the ALJ ordered the HOA to pay the homeowners $1,000.00 (half of the $2,000 filing fee).

Alj Quote

IT IS ORDERED that Respondent pay Petitioners the filing fee of $1,000.00, to be paid directly to Petitioners within thirty (30) days of this Order.

Legal Basis

A.R.S. § 32-2199.02

Topic Tags

  • filing fees
  • penalties
  • reimbursement

Case

Docket No
24F-H043-REL
Case Title
Brian Gordon and Rosalie Gordon v. Tucson Estate No. Two Owner's Association
Decision Date
2024-07-10
Alj Name
Samuel Fox
Tribunal
OAH
Agency
ADRE

Questions

Question

Is my HOA required to keep minutes for advisory committees?

Short Answer

Yes, if the community documents (like a committee charter or policy) state that minutes must be kept.

Detailed Answer

Even if an HOA argues a committee is only 'advisory' and doesn't take 'actions,' the ALJ ruled that activities like advising, reviewing, and recommending constitute 'actions' within the scope of the committee's duties. Therefore, if the committee's rules say minutes must be kept, failing to do so violates the community documents.

Alj Quote

When the Committee advised, assisted, reviewed, analyzed, recommended, or otherwise took action within the parameters of its Responsibilities and Duties, that was an 'action' by the Committee as established by the Board.

Legal Basis

Community Documents / Bylaws

Topic Tags

  • meeting minutes
  • committees
  • record keeping

Question

Can I demand that the HOA create a specific report to answer my financial questions?

Short Answer

No, the HOA is not required to create new documents that do not already exist.

Detailed Answer

The law requires the HOA to make existing records available for examination. It does not compel the HOA to generate new reports, compile data in a specific format, or create documents they do not currently possess to satisfy a homeowner's request.

Alj Quote

It does not require Respondent to provide documents that it does not have nor does it require Respondent to create documents in response to a request.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • financial records
  • document creation
  • requests

Question

If the management company holds the records, can the HOA claim they don't have them?

Short Answer

No, records held by the management company are considered to be in the HOA's custody.

Detailed Answer

The ALJ explicitly ruled that documents in the custody of the management agent (e.g., AAM) are legally in the custody of the HOA. The HOA is obligated to provide them to members upon request.

Alj Quote

Documents in the custody of AAM are in the custody of Respondent, and Respondent is obligated to provide them to members under A.R.S. § 33-1805.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • management company
  • record custody
  • access to records

Question

Are personal notes taken by committee members considered official HOA records?

Short Answer

No, personal notes or drafts on personal devices are generally not HOA records.

Detailed Answer

The ALJ found that notes, drafts, edits, or comments made by committee members on their personal versions of documents were not records of the Association if the Association did not collect, track, or record them.

Alj Quote

Any notes, drafts, edits, or comments that committee members made on their personal versions were not records of Respondent, which did not collect, track, or record the committee members’ individual notes.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • personal notes
  • official records
  • committees

Question

Does the HOA have to provide previous drafts of a budget or 'working papers'?

Short Answer

Only if they actually kept them. If they overwrite the file, they don't have to produce previous versions.

Detailed Answer

In this case, the HOA used a single spreadsheet that was updated and overwritten as the budget process moved forward. The ALJ ruled that since the HOA did not maintain multiple versions, they were not required to produce previous drafts they no longer possessed.

Alj Quote

Respondent only maintained one version of the spreadsheet, and when changes were made, the spreadsheet was updated… Petitioners failed to meet their burden to support that Respondent did not make records available for review.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • budget
  • draft documents
  • record retention

Question

Is providing the first two pages of a tax return sufficient to fulfill a records request?

Short Answer

No, the HOA must provide the complete tax return and backup documentation.

Detailed Answer

The ALJ found the HOA in violation for providing only the first two pages of Form 1120-H. The homeowner was entitled to the complete tax form and the backup documentation (which the management company or CPA had access to) within 10 days.

Alj Quote

The preponderance of the evidence establishes that Petitioners did not receive full copies of Respondent’s tax returns or backup documentation for the tax returns within ten days of their respective October requests.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • tax returns
  • financial records
  • transparency

Question

Can the ALJ enforce IRS regulations or the Nonprofit Corporation Act during this hearing?

Short Answer

No, the ALJ's jurisdiction is limited to Planned Community statutes and Community Documents.

Detailed Answer

The Administrative Law Judge explicitly stated that the tribunal is not authorized to adjudicate complaints arising from the Arizona Nonprofit Corporations Act or IRS regulations, only Title 33 (Planned Communities) and the specific HOA documents.

Alj Quote

This Tribunal is not authorized to adjudicate complaints arising from the Arizona Nonprofit Corporations Act, Internal Revenue Service regulations, or other laws or regulations.

Legal Basis

A.R.S. § 32-2199

Topic Tags

  • jurisdiction
  • legal authority
  • IRS
  • nonprofit act

Question

If I win my hearing against the HOA, can I get my filing fee back?

Short Answer

Yes, the ALJ has the discretion to order the HOA to reimburse the filing fee.

Detailed Answer

In this case, because the homeowners prevailed on two of their four issues, the ALJ ordered the HOA to pay the homeowners $1,000.00 (half of the $2,000 filing fee).

Alj Quote

IT IS ORDERED that Respondent pay Petitioners the filing fee of $1,000.00, to be paid directly to Petitioners within thirty (30) days of this Order.

Legal Basis

A.R.S. § 32-2199.02

Topic Tags

  • filing fees
  • penalties
  • reimbursement

Case

Docket No
24F-H043-REL
Case Title
Brian Gordon and Rosalie Gordon v. Tucson Estate No. Two Owner's Association
Decision Date
2024-07-10
Alj Name
Samuel Fox
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • Brian Gordon (petitioner)
  • Rosalie Gordon (petitioner)
  • James Tilly (witness)
    Member of Respondent who testified.
  • Leonard Vidovic (witness)
    Also referred to as Leonard Judbec.

Respondent Side

  • Jason E. Smith (HOA attorney)
    SMITH & WAMSLEY, PLLC
  • Sean K. Moynihan (attorney)
    Smith & Wamsley, PLLC
  • Mandy Bates (property manager)
    Associated Asset Management
    Community Manager for Tucson Estates No. Two Owner's Association.
  • Trudy Peterson (finance chair)
    Treasurer and Finance Chair.
  • Rose Spank (board member)
    HOA President in 2012.
  • Janelle Richmond (board member)
    HOA Secretary in 2012.
  • Sharon Matthews (AAM staff)
    AAM
    Referenced in emails regarding accounting procedures (also referred to as Karen Matthews).

Neutral Parties

  • Samuel Fox (ALJ)
    OAH
    Administrative Law Judge for the decision and hearing.
  • Sondra J. Vanella (ALJ)
    OAH
    Signed the initial Order Setting Hearing.
  • Susan Nicolson (ADRE Commissioner)
    Arizona Department of Real Estate
  • vnunez (ADRE staff)
    Arizona Department of Real Estate
    Listed on transmission/service list.
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Listed on transmission/service list.
  • labril (ADRE staff)
    Arizona Department of Real Estate
    Listed on transmission/service list.
  • mneat (ADRE staff)
    Arizona Department of Real Estate
    Listed on transmission/service list.
  • lrecchia (ADRE staff)
    Arizona Department of Real Estate
    Listed on transmission/service list.
  • gosborn (ADRE staff)
    Arizona Department of Real Estate
    Listed on transmission/service list.