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Arleen D Jouxson v. The Villages at Aviano Condominium Association

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Case Summary

Case ID 22F-H2222030-REL
Agency ADRE
Tribunal OAH
Decision Date 2022-08-04
Administrative Law Judge Thomas Shedden
Outcome The ALJ dismissed the petition. Petitioner withdrew the issue regarding the lack of quorum. Regarding the remaining issue, the ALJ found that the Association did not violate governing documents or statutes by seating board members pursuant to a settlement agreement that certified the results of the 2021 election.
Filing Fees Refunded $1,000.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Arleen D. Jouxson Counsel Ellen B. Davis
Respondent The Villages at Aviano Condominium Association Counsel Diana J. Elston

Alleged Violations

A.R.S. § 33-1243(B); Bylaws Article 3 §3.1; Declaration Article 6 §6.2
Bylaws Article 3 §3.9

Outcome Summary

The ALJ dismissed the petition. Petitioner withdrew the issue regarding the lack of quorum. Regarding the remaining issue, the ALJ found that the Association did not violate governing documents or statutes by seating board members pursuant to a settlement agreement that certified the results of the 2021 election.

Why this result: Petitioner withdrew one issue and failed to meet the burden of proof on the other, as the ALJ found the settlement agreement valid and the evidence of election irregularities insufficient.

Key Issues & Findings

Board Appointment via Settlement Agreement

Petitioner alleged the Association violated state statutes and governing documents by seating two board members pursuant to a settlement agreement from a prior lawsuit, rather than through a membership election.

Orders: Petition dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 33-1243(B)
  • Bylaws Article 3 §3.1
  • Declaration Article 6 §6.2

Quorum at Special Board Meeting

Petitioner alleged it was impermissible for the Board to conduct and transact business at a Special Board Meeting on June 25, 2021, without the required quorum.

Orders: Issue withdrawn by Petitioner.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • Bylaws Article 3 §3.9

Related election workflow tool

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Decision Documents

22F-H2222030-REL Decision – 959436.pdf

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22F-H2222030-REL Decision – 964645.pdf

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22F-H2222030-REL Decision – 964646.pdf

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22F-H2222030-REL Decision – 964678.pdf

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22F-H2222030-REL Decision – 973808.pdf

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22F-H2222030-REL Decision – 975982.pdf

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22F-H2222030-REL Decision – 978159.pdf

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22F-H2222030-REL Decision – 989914.pdf

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22F-H2222030-REL Decision – HO22-22030_ElectronicNotice_Petition.pdf

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22F-H2222030-REL Decision – HO22-22030_HearingScheduled.pdf

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22F-H2222030-REL Decision – HO22-22030_Motion_Dismiss.pdf

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22F-H2222030-REL Decision – HO22-22030_Notice_Appearance_Resp..pdf

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22F-H2222030-REL Decision – HO22-22030_Notice_Hearing.pdf

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22F-H2222030-REL Decision – HO22-22030_Notice_Petition.pdf

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22F-H2222030-REL Decision – HO22-22030_Payment.pdf

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22F-H2222030-REL Decision – HO22-22030_PetRequest_RespondToRespondent’s Response.pdf

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22F-H2222030-REL Decision – HO22-22030_Petition&Narrative.pdf

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22F-H2222030-REL Decision – HO22-22030_Response&CompletedForm.pdf

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22F-H2222030-REL Decision – HO22-22030_Response_NoForm.pdf

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22F-H2222030-REL Decision – HO22-22033_ Expedited Request for Waiver of Conflict to Represent The Villages at Aviano Condominium Association.pdf

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The legal case, *Arleen D Jouxson vs. The Villages at Aviano Condominium Association* (No. 22F-H2222030-REL), centered on whether the Association violated its governing documents and state statutes when seating two new board members following a disputed election and a subsequent settlement agreement.

Key Facts and Procedural History

The dispute stemmed from the Association's Annual Member Meeting and election for two board seats, scheduled for April 13, 2021. The Association, a non-profit corporation comprising 392 units, distributed absentee ballots to its members. Forty ballots were required for a quorum, but 191 completed ballots were received by the time the Zoom meeting convened at 6:01 p.m., at which point quorum was announced.

Shortly after convening, the Board President, Tony Basuini, moved to postpone the election, a motion that passed 2-0 by the two sitting Board members (Basuini and Joe Orr). The ballots were not counted, and the meeting was terminated.

Candidate Eloise Figueroa, represented by attorney Jonathan Dessaules, filed a lawsuit in Maricopa County Superior Court seeking declaratory and injunctive relief to validate the election and seat herself and Linda Bahr (the other candidate). This led to a Settlement Agreement in which the Association counted the received ballots and certified that Figueroa and Bahr had received the highest number of votes, thus electing them to the Board. The lawsuit was subsequently dismissed with prejudice. Figueroa and Bahr were then seated as Board members.

Main Issues and Arguments

Petitioner Jouxson filed a petition with the Office of Administrative Hearings (OAH) raising two issues, ultimately pursuing only Issue 1: Whether the agreement to seat Figueroa and Bahr violated the Association’s Bylaws, Declaration, and state statutes (specifically ARS § 33-1243.B, which prohibits the Board from electing its own members) and should therefore be nullified. Jouxson argued the election was canceled and that the Board, through the contract, usurped the members’ authority to elect directors.

The Association argued that the election was valid, as a quorum was met and members acted by submitting their votes. They contended the Settlement Agreement merely enforced the members' act by counting and certifying the votes.

The Administrative Law Judge (ALJ) Thomas Shedden initially granted the Association's motion to dismiss Issue 1, but later granted Jouxson's motion for reconsideration, allowing the issue of the election’s validity to proceed to the full hearing on June 21, 2022. At the hearing, Jouxson relied primarily on calling Figueroa to testify and submitted her case, agreeing to submit written closing arguments.

Final Decision and Outcome

The ALJ issued an Order dismissing Arleen D. Jouxson’s petition.

The decision emphasized that the Petitioner bore the burden of proof to show, by a preponderance of the evidence, that a violation occurred.

The ALJ concluded that Jouxson did not meet this burden of proof because she failed to show that Figueroa and Bahr were seated without an election by the members. While the Board acted inappropriately by postponing the member meeting on April 13, 2021, the Association subsequently counted all valid ballots that had been cast by the members, which confirmed that Figueroa and Bahr had won the election. Therefore, the ALJ determined that Jouxson failed to prove that the Board, rather than the membership, had elected the new directors.

Study Guide: Case No. 22F-H2222030-REL — Jouxson vs. The Villages at Aviano Condominium Association

This study guide provides a comprehensive overview of the legal proceedings, core arguments, and regulatory frameworks involved in the dispute between Petitioner Arleen D. Jouxson and Respondent The Villages at Aviano Condominium Association.

Key Concepts and Case Overview

Central Dispute

The case centers on the governance of The Villages at Aviano Condominium Association ("the Association") following a disputed 2021 annual election. The primary conflict involves the seating of board members through a Superior Court settlement agreement rather than a standard membership election, and whether the Board of Directors exceeded its authority by bypasssing Association bylaws and state statutes.

The Parties
  • Petitioner: Arleen D. Jouxson, a homeowner and member of the Association.
  • Respondent: The Villages at Aviano Condominium Association, represented by the Board of Directors and legal counsel.
  • Key Figures:
  • Eloise Figueroa & Linda Bahr: Individuals seated on the Board via a settlement agreement.
  • Tony Basuni: Former President of the Association who signed the settlement agreement.
  • Administrative Law Judge (ALJ) Thomas Shedden: Presiding judge from the Office of Administrative Hearings (OAH).
Primary Legal Issues
  1. Validity of Board Seating: Whether the agreement to seat Figueroa and Bahr violated the Association's Bylaws, Declaration, and A.R.S. § 33-1243.B, which prohibits a board from electing its own members.
  2. Quorum Violations: Whether business conducted at a Special Board Meeting on June 25, 2021, was invalid due to the lack of a quorum as required by Bylaws Section 3.9. (Note: This issue was eventually withdrawn by the Petitioner).
Jurisdictional Boundaries

A critical theme in this case is the limit of the Department of Real Estate’s (ADRE) authority. The Respondent argued that because the seating of directors was the result of a Superior Court settlement, the OAH lacked jurisdiction to "void" or "nullify" a contract entered into in a higher court. Conversely, the Petitioner argued that the Board cannot use a contract to circumvent the fundamental rights of owners to elect their representatives.

Short-Answer Practice Questions

1. What specific Arizona Revised Statute (A.R.S.) did the Petitioner cite to argue that the Board cannot elect its own members?

  • Answer: A.R.S. § 33-1243.B, which states that the board of directors shall not act on behalf of the association to elect members of the board.

2. Why did the Respondent move to dismiss the first issue regarding the seating of Figueroa and Bahr?

  • Answer: The Respondent argued that the seating was mandated by a Superior Court Settlement Agreement to resolve a separate lawsuit (Figueroa vs. Villages at Aviano), and that such an agreement is not a "community document" within the tribunal's scope of authority under A.R.S. § 32-2199.

3. What was the Association’s justification for claiming Figueroa and Bahr were legitimately seated?

  • Answer: The Association certified in the settlement agreement that Figueroa and Bahr had received the highest number of votes in the April 2021 election, even though that election was allegedly canceled or continued by the previous board.

4. According to the "pay-as-you-go" system of the ADRE, how are petitions for hearing funded?

  • Answer: Petitioners must pay a fee (e.g., $500 per issue) to have the ADRE adjudicate complaints. If a petitioner prevails, the Association is required by statute to refund this filing fee.

5. What happened to the second issue regarding the June 25, 2021, Special Board Meeting?

  • Answer: During the June 21, 2022 hearing, the Petitioner’s counsel confirmed they were no longer pursuing the second issue regarding the lack of a quorum at that meeting.

6. What evidence did the Petitioner provide to suggest the 2021 "election" results were untrustworthy?

  • Answer: The Petitioner pointed to batches of absentee ballots delivered to the management company (BCMI) from a single OfficeMax location, miles from the condominium, including 19 ballots faxed within a 22-minute span.

Essay Prompts for Deeper Exploration

1. The Intersection of Contract Law and Community Governance

Evaluate the argument that a board-signed settlement agreement can supersede community bylaws and state statutes. If a board enters into a contract that violates the Association's Declaration (e.g., Article 6, Section 6.2 regarding the election of directors), does the "contract" status of that agreement protect it from administrative oversight by the OAH? Discuss the potential for a "slippery slope" if boards are permitted to contract away membership rights.

2. Statutory Interpretation and Tribal Authority

Analyze the limitations placed on an Administrative Law Judge under A.R.S. § 32-2199.02. To what extent can an ALJ order a party to "abide by the statutes" if those statutes conflict with a court-ordered settlement? Contrast the Respondent's view (that the ALJ cannot provide injunctive relief or void contracts) with the Petitioner’s view (that the ALJ has the duty to ensure compliance with Title 33, Chapter 9).

3. The Rights of Disenfranchised Homeowners

In the context of the Aviano dispute, discuss the "most fundamental right" of homeowners as described by the Petitioner’s counsel. How does the cancellation of an annual meeting and the subsequent seating of directors via litigation impact the transparency and democratic process within a Condominium Association? Use the facts regarding the April 13, 2021 meeting to support your analysis.

Glossary of Important Terms

Term Definition
Administrative Law Judge (ALJ) An official who presides over administrative hearings, takes evidence, decides facts, and applies law to make a decision in HOA/Condo disputes.
Bylaws The governing rules of the Association that dictate operating procedures, such as how meetings are called and how many directors constitute a quorum.
Community Documents Collective term for the Declaration (CC&Rs), Articles of Incorporation, Bylaws, and Association Rules.
Declaration (CC&Rs) The "Covenants, Conditions, and Restrictions" that govern the use of the property and the rights of the owners; recorded with the county.
Notice of Hearing The official document issued by the Department of Real Estate setting the time, date, and specific legal issues to be adjudicated.
Quorum The minimum number of members or directors required to be present at a meeting to make the proceedings of that meeting valid (e.g., a majority of the prescribed number of directors per Bylaws 3.9).
Res Judicata A legal principle preventing a matter from being litigated again if it has already been judged on its merits by a competent court.
Settlement Agreement A legally binding contract between parties to resolve a dispute, often resulting in the dismissal of a lawsuit "with prejudice."
Title 33, Chapter 9 The section of the Arizona Revised Statutes specifically governing Condominiums.
Void/Nullify To declare a document or action legally invalid and of no binding force.
Procedural Timeline Summary
Date Event
April 13, 2021 Original date for the Annual Member Meeting; canceled/continued by the Board.
April 27, 2021 Eloise Figueroa files a lawsuit in Maricopa Superior Court against the Association.
June 22, 2021 Superior Court lawsuit dismissed with prejudice following a Settlement Agreement.
June 25, 2021 Special Board Meeting held where Figueroa and Bahr were seated.
January 26, 2022 ADRE notifies the Association of Arleen Jouxson's Petition.
April 1, 2022 ALJ Shedden grants partial dismissal of Issue #1, pending reconsideration.
April 12, 2022 Oral argument held regarding the Motion for Reconsideration.
June 21, 2022 Evidentiary hearing conducted on the remaining issues.

HOA Governance vs. Court Settlements: Lessons from The Villages at Aviano

1. The "Election That Never Was": A Community in Conflict

What happens when the most fundamental right of a homeowner—the right to elect the leadership that governs their community—is traded away in a private legal settlement? This central question fueled a protracted legal battle between homeowner Arleen D. Jouxson and The Villages at Aviano Condominium Association.

The dispute stems from an annual election scheduled for April 13, 2021. Despite the fact that 81 absentee ballots had been returned by the deadline—more than enough to satisfy the 10% quorum requirement—the Board abruptly canceled or "continued" the meeting, citing unspecified "unfairness" in the process. The voting was never completed. Instead, the Board eventually seated two directors through a private settlement agreement following a Superior Court lawsuit. This move bypassed the ballot box entirely, sparking a procedural tug-of-war at the Arizona Office of Administrative Hearings (OAH).

2. The Legal Flashpoint: Seating Directors via Settlement

The core of the OAH proceedings, designated as "Issue #1," was whether the Association violated its governing documents and state law by seating Eloise Figueroa and Linda Bahr via a court settlement rather than a traditional member election.

The Petitioner’s Argument

  • Prohibited Seating Method: Directors cannot be "elected" by a board contract or settlement agreement.
  • Breach of Governance Rights: The Association allegedly violated Bylaw 3.1 and Declaration 6.2, which reserve the right to elect the board exclusively to the unit owners.
  • Statutory Violation: The action ran afoul of ARS § 33-1243.B, which expressly prohibits a board from acting on behalf of the association to elect its own members.
  • The Quorum Reality: Petitioner noted that 81 absentee ballots were returned by the deadline, proving a quorum was met and the cancellation of the election was unnecessary and improper.

The Respondent’s Defense

  • Superior Court Resolution: The seating was the result of a settlement in a Superior Court lawsuit (CV 2021-006916) filed by Ms. Figueroa specifically to enforce her being seated on the board despite the election’s cancellation.
  • Vote Certification: The Association claimed it certified that Figueroa and Bahr had received the highest number of votes from the pre-election ballots that were submitted.
  • Jurisdictional Shield: The Association argued that a settlement agreement is a private contract, not a "community document" subject to the OAH tribunal’s authority under ARS § 32-2199.

3. Jurisdiction and the "Community Document" Dilemma

Administrative Law Judge (ALJ) Thomas Shedden initially struggled with the jurisdictional boundaries of this case. He first granted a Motion to Dismiss regarding the election issue, reasoning that a "Settlement Agreement" entered in Superior Court is a private contract, distinct from "Community Documents" like Bylaws or Declarations.

However, the Petitioner’s Motion for Reconsideration brought a "meteor" of a legal argument to the forefront: ARS § 33-1203. This statute explicitly states that provisions of the condominium chapter cannot be varied by agreement. Petitioner’s counsel, Ellen Davis, argued that if a board could use a private contract to bypass statutory election requirements, it would create a "slippery slope" or a "parade of horribles." Under such a theory, a board could theoretically use a contract to sell off common elements or even dissolve the association without member consent. This "silver bullet" argument forced the tribunal to take supplemental arguments on whether the Board had the power to contract away member rights.

4. The Quorum Question: A Secondary Dispute

A secondary issue ("Issue #2") concerned a Special Board Meeting held on June 25, 2021. The Petitioner alleged that Figueroa and Bahr, newly seated via the settlement, conducted business without a quorum in violation of Bylaw 3.9.

While this issue initially survived the Association's efforts to dismiss it, the narrative focus of the case eventually shifted. By the June 21, 2022, session, Petitioner’s counsel confirmed that this second issue was no longer being pursued as the community’s focus narrowed to the fundamental right of members to hold an actual election.

5. Behind the Scenes: Evidence and "Cumulative" Testimony

Modern HOA litigation carries significant logistical weight. The hearings were managed via Google Meet, which the ALJ used not just for remote participation but to record the official proceedings.

The ALJ was notably firm regarding judicial efficiency, issuing warnings against "unnecessary cumulative evidence" and limiting the number of witnesses who could testify to the same facts.

Call-Out: Judicial Efficiency & Record Integrity ALJ Shedden requested that any audio recordings intended for evidence be accompanied by written transcripts. He noted that playing raw audio during a hearing is time-consuming and makes it nearly impossible to clearly identify speakers for the official record. Reflecting on his approach to the complex jurisdictional questions, the Judge remarked, "I’d rather promise that I’ll do something thoroughly, which is more my style anyway."

6. Final Takeaways: What Every Homeowner Should Know

The conflict at The Villages at Aviano serves as a stark warning about the high stakes of community litigation and the limits of board power:

  1. The Power of the Ballot: Member voting is not a suggestion; it is a fundamental right. When boards cancel meetings where a quorum (like the 81 ballots here) is present, they invite severe legal scrutiny.
  2. The "Slippery Slope" of Settlements: Boards must be wary of using private court settlements to bypass bylaws. If a board can seat directors by contract, the integrity of the entire governing structure is at risk.
  3. The $500 Prevailing Insight: For homeowners, a vital practical takeaway is the filing fee. Under the pay-as-you-go system, if a petitioner prevails on an issue, the association must refund their $500 fee. As ALJ Shedden noted, even if a violation is "cured" before the hearing, a petitioner can still "prevail" simply to recover that cost.
  4. Administrative Limits: The OAH has specific, limited jurisdiction. While it can order compliance with community documents, it cannot always provide the same injunctive relief found in Superior Court.
  5. Document Integrity: Clear minutes are essential. The Board’s failure to maintain records for the "canceled" meeting on April 13 created a vacuum of transparency that fueled the ensuing litigation.

In the end, transparency in leadership is the only effective defense against the high costs of community division. When board seats are filled in a "private room" rather than at the ballot box, the entire community pays the price in both legal fees and lost trust.

Source Reference Note

The information in this article is derived from the official records of the Arizona Office of Administrative Hearings, Case No. 22F-H2222030-REL.

Case Participants

Petitioner Side

  • Arleen D. Jouxson (petitioner)
    The Villages at Aviano Condominium Association (Member)
    Unit owner of Unit 1369
  • Ellen B. Davis (petitioner attorney)
    Henze Cook Murphy, PLLC
  • Conrad Kampp (witness)
    Listed as witness by Petitioner; present at hearing
  • Diane Potter (witness)
    Listed as witness by Petitioner; present at hearing
  • Carol Lehan (witness)
    Listed as witness by Petitioner; present at hearing
  • Barbara Kampp (witness)
    Listed as witness by Petitioner; present at hearing
  • Dave Barren (witness)
    Listed as witness by Petitioner; appeared remotely
  • Lisa Le (witness)
    Listed as witness by Petitioner
  • Carrie Y (witness)
    Listed as witness by Petitioner; present at hearing

Respondent Side

  • The Villages at Aviano Condominium Association (respondent)
    Entity
  • Diana J. Elston (HOA attorney)
    Jones, Skelton & Hochuli, P.L.C.
  • Eloise Figueroa (board member)
    The Villages at Aviano Condominium Association
    Board President; called as witness by Petitioner; Plaintiff in underlying Superior Court case
  • Linda Bahr (board member)
    The Villages at Aviano Condominium Association
    Seated on board via settlement agreement
  • Tony Basuini (board member)
    The Villages at Aviano Condominium Association
    Former Board President; signed settlement agreement
  • Joseph Orr (board member)
    The Villages at Aviano Condominium Association
    Former board member
  • Tony Cancilla (board member)
    The Villages at Aviano Condominium Association
    Former board member
  • Jonathan A. Dessaules (witness)
    Dessaules Law Group
    Attorney for Eloise Figueroa in Superior Court case; testified at OAH hearing
  • Natasha DeCoto (property manager)
    PMG Services
    Current community manager
  • Michael Sgro (property manager)
    Brown Community Management
    Former community manager
  • Marshall Chess (property manager)
    Brown Community Management
    Former community manager
  • Tim Butterfield (HOA attorney)
    Carpenter Hazlewood
    Represented HOA in settlement negotiations
  • Curtis Ekmark (HOA attorney)
    Ekmark & Ekmark
    General Counsel for HOA at time of 2021 election

Neutral Parties

  • Thomas Shedden (ALJ)
    Office of Administrative Hearings
  • Pamela Gates (judge)
    Maricopa County Superior Court
    Presided over CV2021-006916
  • Louis Dettorre (Commissioner)
    Arizona Department of Real Estate
  • Dan Gardner (agency staff)
    Arizona Department of Real Estate
    HOA Coordinator

James Iannuzo v. Moonrise at Starr Pass Community Association

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Case Summary

Case ID 22F-H2221014-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-12-30
Administrative Law Judge Thomas Shedden
Outcome The Petitioner prevailed by showing the Association violated ARIZ. REV. STAT. section 33-1243. The Association was ordered to refund the $500.00 filing fee. Petitioner's requests for voiding election results, assessing a civil penalty, and appointing an administrator were denied.
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner James Iannuzo Counsel —
Respondent Moonrise at Starr Pass Community Association Counsel Jason E. Smith

Alleged Violations

ARIZ. REV. STAT. section 33-1243(H)(4)

Outcome Summary

The Petitioner prevailed by showing the Association violated ARIZ. REV. STAT. section 33-1243. The Association was ordered to refund the $500.00 filing fee. Petitioner's requests for voiding election results, assessing a civil penalty, and appointing an administrator were denied.

Key Issues & Findings

Violation of statutory procedure for board member removal concerning ballot tabulation after deadline.

The Association violated the statute by tabulating ballots for a recall election at the August 19, 2021 meeting, as those ballots were only valid for the canceled June 30, 2021 special meeting.

Orders: Respondent must pay the Petitioner his filing fee of $500.00 within thirty days of the Order. Other requested remedies (voiding results, assessing civil penalty, appointing administrator) were denied.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • ARIZ. REV. STAT. § 33-1243
  • ARIZ. REV. STAT. § 33-1243(H)(4)
  • ARIZ. REV. STAT. § 33-1250(C)(3)

Analytics Highlights

Topics: HOA board recall, Ballot tabulation, Quorum dispute, Statutory violation, Filing fee refund
Additional Citations:

  • ARIZ. REV. STAT. § 33-1243
  • ARIZ. REV. STAT. § 33-1250
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. ADMIN. CODE § R2-19-119
  • Whitmer v. Hilton Casitas Homeowners Ass'n
  • Gutierrez v. Industrial Commission of Arizona
  • State v. McFall

Related election workflow tool

Many HOA election disputes start with preventable workflow problems: unclear ballot language, separate-vote issues, quorum tracking, paper/online reconciliation, proxy handling, or incomplete records. HOABallot is a separate platform built to document the voting workflow from notice through certification.

Preview HOABallot election workflows

Video Overview

Audio Overview

Decision Documents

22F-H2221014-REL Decision – 935534.pdf

Uploaded 2026-01-23T17:41:19 (128.9 KB)

22F-H2221014-REL Decision – 945764.pdf

Uploaded 2026-01-23T17:41:24 (48.2 KB)

22F-H2221014-REL Decision – 949683.pdf

Uploaded 2026-01-23T17:41:26 (49.4 KB)

This is a summary of the Administrative Law Judge (ALJ) Decision regarding the Petitioner, James Iannuzo, versus the Respondent, Moonrise at Starr Pass Community Association. The hearing took place on December 13, 2021.

Key Facts and Procedural History

The case centered on the Association's handling of a petition to recall and remove two board members, specifically addressing violations of ARIZ. REV. STAT. section 33-1243.

The Association received the recall petitions and scheduled a Special Meeting for June 30, 2021. This meeting was required to be "called, noticed and held within thirty days after receipt of the petition" pursuant to A.R.S. § 33-1243(H)(4)(c). A quorum required 20% of eligible voters (45 ballots).

The Association required ballots to be received by June 29, 2021. On the morning of June 30, 2021, the Association canceled the meeting, announcing that it had failed to achieve a quorum. Subsequently, on or about July 14, 2021, the Association announced that late-received ballots provided a quorum and scheduled a new meeting for August 19, 2021, solely to count the ballots originally issued for the June 30th meeting.

The single issue pursued by Petitioner Iannuzo was that the tabulation of Special Meeting ballots received after the statutory deadline violated ARIZ. REV. STAT. section 33-1243(H)(4).

Key Arguments

Petitioner's Argument: Iannuzo argued that the August 19, 2021, recount results should be voided because the ballots, notice, and voting instructions specifically stated the ballots were valid only for the June 30, 2021, Special Meeting.

Respondent's Argument: The Association argued that it could not hold the June 30th meeting due to lack of a quorum. They contended that merely setting the meeting was sufficient to satisfy the 30-day requirement of A.R.S. § 33-1243(H)(4)(c), and the statute does not specify when votes must be tallied.

Legal Findings and Outcome

The Administrative Law Judge (ALJ) found that the Association violated ARIZ. REV. STAT. section 33-1243.

  1. Statutory Violation: The Association acknowledged it did not conduct the June 30th special meeting, meaning no meeting was conducted within 30 days of receiving the recall petitions, a violation of A.R.S. § 33-1243(H)(4)(c).
  2. Invalid Ballot Counting: The decision to count the votes at the August 19th meeting was a violation because, under statute (A.R.S. § 33-1250(C)(3)) and by the Association’s own documentation, the ballot was valid only for the specified June 30th election or meeting. The use of these ballots at the August 19th meeting was non-compliant.

Final Decision and Order:

  • James Iannuzo was declared the prevailing party.
  • The Association was ordered to pay Mr. Iannuzo his filing fee of $500.00 within thirty days of the Order.
  • The ALJ declined Iannuzo’s requests to void the election results, assess a civil penalty, or appoint an oversight administrator, concluding these remedies were outside the scope of the tribunal’s authority under ARIZ. REV. STAT. § 32-2199.02(A).

Subsequent Advisement: Following the Order, the Office of Administrative Hearings later advised the parties that OAH's enabling statutes do not provide authority for it to compel the Respondent to comply with the Order (the fee refund).

Questions

Question

What is the deadline for an HOA to hold a special meeting after receiving a petition to recall board members?

Short Answer

The meeting must be held within 30 days of receiving the petition.

Detailed Answer

According to Arizona statute, once an HOA receives a petition for the removal of a board member, it is legally required to call, notice, and actually hold the special meeting within a 30-day timeframe.

Alj Quote

The special meeting shall be called, noticed and held within thirty days after receipt of the petition.

Legal Basis

ARIZ. REV. STAT. § 33-1243(H)(4)(c)

Topic Tags

  • recall election
  • deadlines
  • board removal

Question

Can an HOA count ballots collected for a specific meeting date at a later, rescheduled meeting?

Short Answer

No, ballots are only valid for the specific meeting they were issued for.

Detailed Answer

An HOA cannot use ballots collected for a canceled meeting at a subsequent meeting held on a different date. The decision clarified that counting such ballots violates the statute because the ballots are strictly limited to the meeting for which they were originally valid.

Alj Quote

The Association’s decision to count the ballots at the August 19th meeting does not comply with section 33-1243 because those ballots were valid only for the June 30th meeting as evidenced by the ballots, the Notice, and the voting instructions.

Legal Basis

ARIZ. REV. STAT. § 33-1250(C)(3)

Topic Tags

  • voting
  • ballots
  • meetings

Question

Can an Administrative Law Judge (ALJ) void an HOA election or remove board members?

Short Answer

No, the ALJ does not have the authority to void election results or appoint administrators.

Detailed Answer

While an ALJ can determine if a violation occurred and levy penalties, they cannot order an election to be voided or appoint an independent administrator to oversee the HOA. These remedies are outside the tribunal's statutory scope.

Alj Quote

Mr. Iannuzo’s requests that the tribunal void the election results and that an oversight administrator be appointed have not been shown to be within the scope of the tribunal’s authority.

Legal Basis

ARIZ. REV. STAT. § 32-2199.02(A)

Topic Tags

  • legal remedies
  • ALJ authority
  • elections

Question

Is an HOA allowed to determine a quorum based solely on mail-in ballots before the meeting starts?

Short Answer

Likely no; the quorum should be determined based on eligible voters present at the time of the meeting.

Detailed Answer

The ALJ noted that the statute calls for a quorum to be determined based on the number of eligible voters at the time of the meeting, implying that canceling a meeting beforehand based solely on returned ballots is not supported by persuasive legal argument.

Alj Quote

The Association presented no persuasive legal argument or authority showing that in determining whether a quorum existed it was appropriate for the Association to use only the ballots returned by June 29th, rather than using the ballots and the members present at the meeting on June 30th.

Legal Basis

ARIZ. REV. STAT. § 33-1243(H)(4)(d)

Topic Tags

  • quorum
  • meetings
  • voting

Question

If I win my case against the HOA, can I get my filing fee refunded?

Short Answer

Yes, if the homeowner prevails, the HOA must be ordered to pay the filing fee.

Detailed Answer

If the Administrative Law Judge determines that the homeowner has prevailed in proving a violation, the law mandates that the Judge order the HOA to reimburse the petitioner for the filing fee.

Alj Quote

If the petitioner prevails, the administrative law judge shall order the respondent to pay to the petitioner the filing fee required by section 32-2199.01.

Legal Basis

ARIZ. REV. STAT. § 32-2199.02(A)

Topic Tags

  • fees
  • penalties
  • reimbursement

Question

Can an HOA fix a violation for missing the 30-day recall meeting deadline by holding the meeting later?

Short Answer

No, this specific violation cannot be cured after the fact.

Detailed Answer

Once the 30-day window for holding a recall meeting has passed, the violation is established and cannot be retroactively fixed by holding the meeting late.

Alj Quote

And although the Association did not conduct the required meeting within 30 days of receiving the recall petitions, this violation cannot be cured.

Legal Basis

ARIZ. REV. STAT. § 33-1243

Topic Tags

  • violations
  • compliance
  • deadlines

Case

Docket No
22F-H2221014-REL
Case Title
James Iannuzo vs. Moonrise at Starr Pass Community Association
Decision Date
2021-12-30
Alj Name
Thomas Shedden
Tribunal
OAH
Agency
ADRE

Questions

Question

What is the deadline for an HOA to hold a special meeting after receiving a petition to recall board members?

Short Answer

The meeting must be held within 30 days of receiving the petition.

Detailed Answer

According to Arizona statute, once an HOA receives a petition for the removal of a board member, it is legally required to call, notice, and actually hold the special meeting within a 30-day timeframe.

Alj Quote

The special meeting shall be called, noticed and held within thirty days after receipt of the petition.

Legal Basis

ARIZ. REV. STAT. § 33-1243(H)(4)(c)

Topic Tags

  • recall election
  • deadlines
  • board removal

Question

Can an HOA count ballots collected for a specific meeting date at a later, rescheduled meeting?

Short Answer

No, ballots are only valid for the specific meeting they were issued for.

Detailed Answer

An HOA cannot use ballots collected for a canceled meeting at a subsequent meeting held on a different date. The decision clarified that counting such ballots violates the statute because the ballots are strictly limited to the meeting for which they were originally valid.

Alj Quote

The Association’s decision to count the ballots at the August 19th meeting does not comply with section 33-1243 because those ballots were valid only for the June 30th meeting as evidenced by the ballots, the Notice, and the voting instructions.

Legal Basis

ARIZ. REV. STAT. § 33-1250(C)(3)

Topic Tags

  • voting
  • ballots
  • meetings

Question

Can an Administrative Law Judge (ALJ) void an HOA election or remove board members?

Short Answer

No, the ALJ does not have the authority to void election results or appoint administrators.

Detailed Answer

While an ALJ can determine if a violation occurred and levy penalties, they cannot order an election to be voided or appoint an independent administrator to oversee the HOA. These remedies are outside the tribunal's statutory scope.

Alj Quote

Mr. Iannuzo’s requests that the tribunal void the election results and that an oversight administrator be appointed have not been shown to be within the scope of the tribunal’s authority.

Legal Basis

ARIZ. REV. STAT. § 32-2199.02(A)

Topic Tags

  • legal remedies
  • ALJ authority
  • elections

Question

Is an HOA allowed to determine a quorum based solely on mail-in ballots before the meeting starts?

Short Answer

Likely no; the quorum should be determined based on eligible voters present at the time of the meeting.

Detailed Answer

The ALJ noted that the statute calls for a quorum to be determined based on the number of eligible voters at the time of the meeting, implying that canceling a meeting beforehand based solely on returned ballots is not supported by persuasive legal argument.

Alj Quote

The Association presented no persuasive legal argument or authority showing that in determining whether a quorum existed it was appropriate for the Association to use only the ballots returned by June 29th, rather than using the ballots and the members present at the meeting on June 30th.

Legal Basis

ARIZ. REV. STAT. § 33-1243(H)(4)(d)

Topic Tags

  • quorum
  • meetings
  • voting

Question

If I win my case against the HOA, can I get my filing fee refunded?

Short Answer

Yes, if the homeowner prevails, the HOA must be ordered to pay the filing fee.

Detailed Answer

If the Administrative Law Judge determines that the homeowner has prevailed in proving a violation, the law mandates that the Judge order the HOA to reimburse the petitioner for the filing fee.

Alj Quote

If the petitioner prevails, the administrative law judge shall order the respondent to pay to the petitioner the filing fee required by section 32-2199.01.

Legal Basis

ARIZ. REV. STAT. § 32-2199.02(A)

Topic Tags

  • fees
  • penalties
  • reimbursement

Question

Can an HOA fix a violation for missing the 30-day recall meeting deadline by holding the meeting later?

Short Answer

No, this specific violation cannot be cured after the fact.

Detailed Answer

Once the 30-day window for holding a recall meeting has passed, the violation is established and cannot be retroactively fixed by holding the meeting late.

Alj Quote

And although the Association did not conduct the required meeting within 30 days of receiving the recall petitions, this violation cannot be cured.

Legal Basis

ARIZ. REV. STAT. § 33-1243

Topic Tags

  • violations
  • compliance
  • deadlines

Case

Docket No
22F-H2221014-REL
Case Title
James Iannuzo vs. Moonrise at Starr Pass Community Association
Decision Date
2021-12-30
Alj Name
Thomas Shedden
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • James Iannuzo (petitioner)
    Appeared and testified on his own behalf

Respondent Side

  • Jason E. Smith (respondent attorney)
    Smith & Wamsley, PLLC
    Counsel for Respondent

Neutral Parties

  • Thomas Shedden (ALJ)
    Office of Administrative Hearings
  • Louis Dettorre (Commissioner)
    Arizona Department of Real Estate
  • Miranda Alvarez (clerk)
    Transmitted Decision
  • c. serrano (clerk)
    Transmitted Advisements
  • AHansen (staff)
    Arizona Department of Real Estate
    Recipient of transmission (Attn)
  • djones (staff)
    Arizona Department of Real Estate
    Recipient of transmission (Attn)
  • DGardner (staff)
    Arizona Department of Real Estate
    Recipient of transmission (Attn)
  • vnunez (staff)
    Arizona Department of Real Estate
    Recipient of transmission (Attn)

Susan L Jarzabek v. Hillcrest Improvement Association #2

Posted on by

Case Summary

Case ID 22F-H2221008-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-11-19
Administrative Law Judge Thomas Shedden
Outcome Petitioner's complaint regarding the wrongful assessment of attorney's fees was dismissed because she failed to prove, by a preponderance of the evidence, that the HOA violated its Policy regarding pre-attorney notification requirements.
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Susan L Jarzabek Counsel —
Respondent Hillcrest Improvement Association #2 Counsel Haidyn DiLorenzo, Esq.

Alleged Violations

CC&R Article 1, Section 10; Enforcement, Fines and Appeals Policy ("Policy")

Outcome Summary

Petitioner's complaint regarding the wrongful assessment of attorney's fees was dismissed because she failed to prove, by a preponderance of the evidence, that the HOA violated its Policy regarding pre-attorney notification requirements.

Why this result: Petitioner failed to meet her burden of proof; the ALJ found the Policy does not require the two notices prior to attorney escalation, as Petitioner had alleged.

Key Issues & Findings

Alleged violation of Policy concerning attorney's fees assessment and required pre-litigation notices.

Petitioner alleged the Association wrongfully assessed attorney's fees, arguing the Policy required providing the owner two warning notices and a certified letter before escalating a matter to attorney involvement.

Orders: Petitioner's petition is dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.02(A)
  • Johnson v. The Pointe Community Association, 205 Ariz. 485, 73 P.3d 616 (App. 2003)
  • ARIZ. REV. STAT. section 32-2199.02(B)
  • ARIZ. REV. STAT. section 32-2199.04
  • ARIZ. REV. STAT. § 41-1092.07(F)(6)

Analytics Highlights

Topics: attorney fees, HOA policy enforcement, notice requirements, CC&Rs, due process
Additional Citations:

  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.02(A)
  • Johnson v. The Pointe Community Association, 205 Ariz. 485, 73 P.3d 616 (App. 2003)
  • ARIZ. REV. STAT. section 32-2199.02(B)
  • ARIZ. REV. STAT. section 32-2199.04
  • ARIZ. REV. STAT. § 41-1092.07(F)(6)

Video Overview

Audio Overview

Decision Documents

22F-H2221008-REL Decision – 926455.pdf

Uploaded 2026-04-24T11:38:50 (93.9 KB)

This summary pertains to the Administrative Law Judge Decision in the case of Susan L Jarzabek (Petitioner) vs. Hillcrest Improvement Association #2 (Respondent), heard on November 5, 2021.

Key Facts and Main Issues

The Petitioner, Susan L. Jarzabek, filed a petition alleging that the Respondent Association violated CC&R Article 1, Section 10 and its Enforcement, Fines and Appeals Policy ("Policy") by wrongfully charging her attorney’s fees. The underlying dispute involved a neighbor's complaint regarding a tree on Ms. Jarzabek's property.

Ms. Jarzabek, the sole record owner, argued that the Association’s Policy requires the owner of record to be provided two warning notices and a certified letter before a matter can be escalated to attorney involvement, thus making the assessment of fees improper. She also contended she was denied due process because she did not receive proper notice of the allegations. Although the Association assessed fines and interest related to the violation, these charges were rescinded prior to the hearing.

The Association’s documents grant it the ability to recover enforcement costs, including attorney’s fees (CC&R Art. VIII, Section 1). Crucially, the Association’s Policy provides that if a matter is escalated to the attorney, the standard notice-procedure will no longer apply, and the owner is responsible for the associated fees and costs.

The facts showed that the Association sent a certified letter (January 15, 2019) regarding the tree violation, but it was addressed to Ms. Jarzabek’s husband, John Jarzabek, and was not claimed by either party. Furthermore, this January 15, 2019 letter did not meet all the required elements for a Notice of Violation under the Association’s policy. The Association engaged counsel (The Mulcahy Law Firm) on October 15, 2019, which subsequently sent Notices of Violation to Ms. Jarzabek.

Legal Analysis and Outcome

The matter was governed by the Department of Real Estate's authority concerning alleged violations of community documents. The Petitioner bore the burden of proof to show the alleged violation occurred by a preponderance of the evidence. The Administrative Law Judge (ALJ) considered the Policy a contract with which both parties must comply.

The ALJ concluded that Ms. Jarzabek did not meet her burden to prove the Association violated the Policy. The central legal finding was that the Policy, as written, does not require that an owner receive two notices before a matter is escalated to attorney involvement.

Final Decision

Based on this finding, the ALJ ordered that Susan L. Jarzabek’s petition be dismissed. The ALJ noted that the tribunal lacked jurisdiction to determine whether the attorney’s fees levied against Ms. Jarzabek constituted a valid debt, offering no opinion on that specific debt issue.

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“name”: “Beth Mulcahy”,
“role”: “HOA attorney”,
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{
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{ “case”: { “docket_no”: “22F-H2221008-REL”, “case_title”: “Susan L Jarzabek vs. Hillcrest Improvement Association #2”, “decision_date”: “2021-11-19”, “alj_name”: “Thomas Shedden”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “Can my HOA send a violation directly to their attorney without sending me warning letters first?”, “short_answer”: “Yes, if the community’s enforcement policy allows for immediate escalation to legal counsel.”, “detailed_answer”: “In this case, the ALJ ruled that the HOA did not violate its policy by involving a lawyer without prior notices, because the policy contained a provision stating that the standard notice procedure ceases to apply once a matter is escalated to an attorney.”, “alj_quote”: “The Policy also provides in pertinent part that the Association may escalate a matter to its attorney for further action, if a matter is escalated to the attorney, the notice-procedure will no longer apply”, “legal_basis”: “HOA Enforcement Policy / Contract Law”, “topic_tags”: [ “enforcement process”, “attorney referral”, “notice requirements” ] }, { “question”: “If the HOA sends my violation to a lawyer, do I have to pay the attorney’s fees?”, “short_answer”: “Yes, generally, if the CC&Rs and enforcement policy state that the owner is responsible for enforcement costs.”, “detailed_answer”: “The decision notes that the governing documents (CC&Rs) specifically allow the Association to recover enforcement costs, including attorney’s fees, from the owner. Additionally, the specific policy noted that upon escalation, the owner becomes responsible for these costs.”, “alj_quote”: “CC&R Art. VIII, Section 1, Enforcement, provides that the Association may recover from an owner its enforcement costs, including attorney’s fees.”, “legal_basis”: “CC&Rs Article VIII, Section 1”, “topic_tags”: [ “attorney fees”, “fines and penalties”, “collection costs” ] }, { “question”: “Who has to prove that the HOA did something wrong in a hearing?”, “short_answer”: “The homeowner (petitioner) filing the complaint bears the burden of proof.”, “detailed_answer”: “When a homeowner petitions the Department of Real Estate alleging a violation by the HOA, it is up to the homeowner to provide sufficient evidence to prove that the violation occurred.”, “alj_quote”: “Ms. Jarzabek bears the burden of proof to show that the alleged violation occurred.”, “legal_basis”: “ARIZ. ADMIN. CODE § R2-19-119”, “topic_tags”: [ “burden of proof”, “legal procedure”, “hearing standards” ] }, { “question”: “Is an HOA’s enforcement policy legally considered a binding contract?”, “short_answer”: “Yes, the policy is treated as part of the contract between the HOA and the homeowners.”, “detailed_answer”: “The Administrative Law Judge affirmed that community policies are part of the contractual agreement between the parties, meaning both the homeowner and the HOA are legally required to follow the terms written in that policy.”, “alj_quote”: “The Policy is part of contract between the parties and the parties are required to comply with its terms.”, “legal_basis”: “Contract Law; Johnson v. The Pointe Community Association”, “topic_tags”: [ “contract law”, “governing documents”, “policy enforcement” ] }, { “question”: “Can the Administrative Law Judge cancel the specific debt or fees I owe the HOA?”, “short_answer”: “Not necessarily; the tribunal’s jurisdiction may be limited to determining if a violation of documents occurred, not the validity of the debt itself.”, “detailed_answer”: “The ALJ explicitly noted in a footnote that while they can determine if the HOA violated its policy, they did not have the jurisdiction to decide if the specific attorney’s fees charged constituted a valid debt.”, “alj_quote”: “it is not within this tribunal’s jurisdiction to determine whether the attorney’s fees levied against Ms. Jarzabek are a valid debt, and the tribunal offers no opinion on that issue.”, “legal_basis”: “ARIZ. REV. STAT. § 41-1092.07(F)(6)”, “topic_tags”: [ “jurisdiction”, “debt validity”, “tribunal limitations” ] }, { “question”: “What standard of evidence is used to make a decision in an HOA dispute?”, “short_answer”: “Preponderance of the evidence.”, “detailed_answer”: “The standard is ‘preponderance of the evidence,’ which means the evidence must show it is more likely than not that the claim is true. It is described as the greater weight of the evidence.”, “alj_quote”: “The standard of proof on all issues in this matter is that of a preponderance of the evidence.”, “legal_basis”: “ARIZ. ADMIN. CODE § R2-19-119”, “topic_tags”: [ “legal standards”, “evidence”, “administrative hearing” ] } ] }

{
“case”: {
“docket_no”: “22F-H2221008-REL”,
“case_title”: “Susan L Jarzabek, Petitioner, vs. Hillcrest Improvement Association #2, Respondent”,
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“tribunal”: “OAH”,
“agency”: “ADRE”
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{
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{
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{
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{
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“notes”: null
},
{
“name”: “John Jarzabek”,
“role”: “spouse”,
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“affiliation”: null,
“notes”: “Petitioner’s husband, named on certified letter sent by Association”
},
{
“name”: “Louis Dettorre”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmission”
},
{
“name”: “AHansen”,
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“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmission (via email)”
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{
“name”: “djones”,
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“notes”: “Recipient of transmission (via email)”
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{
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},
{
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},
{
“name”: “Beth Mulcahy”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “Mulcahy Law Firm, PC”,
“notes”: “Recipient of transmission; firm engaged by Association”
},
{
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“role”: “OAH staff”,
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“affiliation”: null,
“notes”: “Transmitter of Decision”
}
]
}

{ “case”: { “docket_no”: “22F-H2221008-REL”, “case_title”: “Susan L Jarzabek vs. Hillcrest Improvement Association #2”, “decision_date”: “2021-11-19”, “alj_name”: “Thomas Shedden”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “Can my HOA send a violation directly to their attorney without sending me warning letters first?”, “short_answer”: “Yes, if the community’s enforcement policy allows for immediate escalation to legal counsel.”, “detailed_answer”: “In this case, the ALJ ruled that the HOA did not violate its policy by involving a lawyer without prior notices, because the policy contained a provision stating that the standard notice procedure ceases to apply once a matter is escalated to an attorney.”, “alj_quote”: “The Policy also provides in pertinent part that the Association may escalate a matter to its attorney for further action, if a matter is escalated to the attorney, the notice-procedure will no longer apply”, “legal_basis”: “HOA Enforcement Policy / Contract Law”, “topic_tags”: [ “enforcement process”, “attorney referral”, “notice requirements” ] }, { “question”: “If the HOA sends my violation to a lawyer, do I have to pay the attorney’s fees?”, “short_answer”: “Yes, generally, if the CC&Rs and enforcement policy state that the owner is responsible for enforcement costs.”, “detailed_answer”: “The decision notes that the governing documents (CC&Rs) specifically allow the Association to recover enforcement costs, including attorney’s fees, from the owner. Additionally, the specific policy noted that upon escalation, the owner becomes responsible for these costs.”, “alj_quote”: “CC&R Art. VIII, Section 1, Enforcement, provides that the Association may recover from an owner its enforcement costs, including attorney’s fees.”, “legal_basis”: “CC&Rs Article VIII, Section 1”, “topic_tags”: [ “attorney fees”, “fines and penalties”, “collection costs” ] }, { “question”: “Who has to prove that the HOA did something wrong in a hearing?”, “short_answer”: “The homeowner (petitioner) filing the complaint bears the burden of proof.”, “detailed_answer”: “When a homeowner petitions the Department of Real Estate alleging a violation by the HOA, it is up to the homeowner to provide sufficient evidence to prove that the violation occurred.”, “alj_quote”: “Ms. Jarzabek bears the burden of proof to show that the alleged violation occurred.”, “legal_basis”: “ARIZ. ADMIN. CODE § R2-19-119”, “topic_tags”: [ “burden of proof”, “legal procedure”, “hearing standards” ] }, { “question”: “Is an HOA’s enforcement policy legally considered a binding contract?”, “short_answer”: “Yes, the policy is treated as part of the contract between the HOA and the homeowners.”, “detailed_answer”: “The Administrative Law Judge affirmed that community policies are part of the contractual agreement between the parties, meaning both the homeowner and the HOA are legally required to follow the terms written in that policy.”, “alj_quote”: “The Policy is part of contract between the parties and the parties are required to comply with its terms.”, “legal_basis”: “Contract Law; Johnson v. The Pointe Community Association”, “topic_tags”: [ “contract law”, “governing documents”, “policy enforcement” ] }, { “question”: “Can the Administrative Law Judge cancel the specific debt or fees I owe the HOA?”, “short_answer”: “Not necessarily; the tribunal’s jurisdiction may be limited to determining if a violation of documents occurred, not the validity of the debt itself.”, “detailed_answer”: “The ALJ explicitly noted in a footnote that while they can determine if the HOA violated its policy, they did not have the jurisdiction to decide if the specific attorney’s fees charged constituted a valid debt.”, “alj_quote”: “it is not within this tribunal’s jurisdiction to determine whether the attorney’s fees levied against Ms. Jarzabek are a valid debt, and the tribunal offers no opinion on that issue.”, “legal_basis”: “ARIZ. REV. STAT. § 41-1092.07(F)(6)”, “topic_tags”: [ “jurisdiction”, “debt validity”, “tribunal limitations” ] }, { “question”: “What standard of evidence is used to make a decision in an HOA dispute?”, “short_answer”: “Preponderance of the evidence.”, “detailed_answer”: “The standard is ‘preponderance of the evidence,’ which means the evidence must show it is more likely than not that the claim is true. It is described as the greater weight of the evidence.”, “alj_quote”: “The standard of proof on all issues in this matter is that of a preponderance of the evidence.”, “legal_basis”: “ARIZ. ADMIN. CODE § R2-19-119”, “topic_tags”: [ “legal standards”, “evidence”, “administrative hearing” ] } ] }

Case Participants

Petitioner Side

  • Susan L Jarzabek (petitioner, witness)

Respondent Side

  • Haidyn DiLorenzo (HOA attorney)
    Counsel for Respondent
  • Robert Cody (board president, witness)
    Hillcrest Improvement Association #2
  • Beth Mulcahy (HOA attorney)
    Mulcahy Law Firm, PC
    Recipient of transmission; firm engaged by Association

Neutral Parties

  • Thomas Shedden (ALJ)
  • Louis Dettorre (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission
  • AHansen (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission (via email)
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission (via email)
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission (via email)
  • vnunez (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission (via email)
  • Miranda Alvarez (OAH staff)
    Transmitter of Decision

Other Participants

  • John Jarzabek (spouse)
    Petitioner's husband, named on certified letter sent by Association

Richard J. Jones v. Desert Oasis of Surprise Master Association

Posted on by

Case Summary

Case ID 21F-H2121038-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-11-15
Administrative Law Judge Thomas Shedden
Outcome The Administrative Law Judge dismissed the petition, finding that Petitioner Richard J. Jones failed to meet his burden of proof to show the Association violated its Design Guidelines or engaged in selective enforcement.
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Richard J Jones Counsel —
Respondent Desert Oasis of Surprise Master Association Counsel Troy Stratman, Esq.

Alleged Violations

Design Guidelines; CC&Rs Section 4.1.1

Outcome Summary

The Administrative Law Judge dismissed the petition, finding that Petitioner Richard J. Jones failed to meet his burden of proof to show the Association violated its Design Guidelines or engaged in selective enforcement.

Why this result: Petitioner did not show by a preponderance of the evidence that the Association violated the Guidelines or engaged in selective enforcement. Evidence indicated that the Petitioner was in violation of the existing Guidelines by failing to obtain prior approval for his driveway extension and failing to meet the required setback.

Key Issues & Findings

Petitioner alleged the Association violated Design Guidelines regarding setback requirements for driveway extensions and engaged in selective enforcement.

Petitioner filed a single issue petition asserting that Design Guidelines did not require a twelve-inch setback for driveway extensions from the property line and that the Association was selectively enforcing its rules. The Petitioner had installed a concrete driveway extension without obtaining prior ARC approval, and approval was denied due to the lack of the twelve-inch setback.

Orders: Richard J. Jones’s petition is dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.02(A)
  • Johnson v. The Pointe Community Association, 205 Ariz. 485, 73 P.3d 616 (App. 2003)
  • Tierra Ranchos Homeowners Ass’n v Kitchukov, 216 Ariz. 173, 165 P.3d 173 (App. 2007)

Analytics Highlights

Topics: Driveway Extension, Architectural Review Committee, Setback Requirements, Design Guidelines, Selective Enforcement, HOA Violation
Additional Citations:

  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.02(A)
  • ARIZ. REV. STAT. section 32-2199.02(B)
  • ARIZ. REV. STAT. section 32-2199.04
  • ARIZ. REV. STAT. section 41-1092.09
  • Johnson v. The Pointe Community Association, 205 Ariz. 485, 73 P.3d 616 (App. 2003)
  • Tierra Ranchos Homeowners Ass’n v Kitchukov, 216 Ariz. 173, 165 P.3d 173 (App. 2007)

Video Overview

Audio Overview

Decision Documents

21F-H2121038-REL Decision – 924982.pdf

Uploaded 2026-04-24T11:34:04 (100.9 KB)

21F-H2121038-REL Decision – 924983.pdf

Uploaded 2026-04-24T11:34:07 (94.9 KB)

Briefing Document: Jones v. Desert Oasis of Surprise Master Association

Executive Summary

This document synthesizes the findings and conclusions of the Administrative Law Judge in the case of Richard J. Jones versus the Desert Oasis of Surprise Master Association (Case No. 21F-H2121038-REL). The dispute centered on a concrete driveway extension installed by Mr. Jones without the prior approval of the Association’s Architectural Review Committee (ARC). Mr. Jones contested the Association’s denial of his post-installation application, alleging that the Design Guidelines were misinterpreted and selectively enforced.

The Administrative Law Judge, Thomas Shedden, ultimately dismissed Mr. Jones’s petition. The decision rested on three key determinations:

1. Clear Violation: Mr. Jones was in direct violation of the Design Guidelines by failing to obtain prior approval for the modification and by not adhering to a mandatory 12-inch setback from the common block wall, a fact he acknowledged.

2. Reasonable Interpretation: The Association’s interpretation that the 12-inch setback requirement applied to the entire property line—not just the block wall—was deemed “not unreasonable,” particularly since the common wall is part of the property line.

3. Failure to Prove Selective Enforcement: Mr. Jones did not meet the “preponderance of the evidence” standard to prove his claim of selective enforcement. The Association provided credible evidence demonstrating consistent application of the setback rule to other homeowners.

The final order upholds the Association’s enforcement actions and dismisses the petitioner’s claims.

Case Overview

Parties and Jurisdictional Details

Name / Entity

Representation

Petitioner

Richard J. Jones

On his own behalf

Respondent

Desert Oasis of Surprise Master Association

Troy Stratman, Esq.

Adjudicator

Thomas Shedden

Administrative Law Judge

Case No.

21F-H2121038-REL

Hearing Date

November 2, 2021

Decision Date

November 15, 2021

Core Dispute

The central conflict arose from a concrete driveway extension installed by Richard J. Jones on his property on May 11, 2020. The installation was performed without submitting a request for prior approval to the Association’s Architectural Review Committee (ARC), a violation of the community’s CC&Rs. Following the installation, the ARC denied Mr. Jones’s retroactive application, citing its failure to meet a required 12-inch setback from the property line. This led to a notice of non-compliance and a fine, prompting Mr. Jones to file a petition with the Arizona Department of Real Estate.

Chronology of Events

• April 2020: Mr. Jones contacted AAM, LLC, the Association’s property management company, to inquire about adding concrete strips. He was informed this was not allowed but that an employee could assist with an approval process for a paver driveway extension.

• May 11, 2020: Having not received further guidance from the management company, Mr. Jones proceeded to have the concrete driveway extension installed.

• Post-May 11, 2020: Mr. Jones submitted an application to the ARC for retroactive approval of the already-installed extension.

• December 2, 2020: The ARC formally denied Mr. Jones’s application. The denial letter stated the extension did not meet the 12-inch setback requirement and advised him to reapply after cutting the driveway back from the property line.

• January 12, 2021: The Association issued a Second Notice of Non-compliance/Fine.

• February 12, 2021: Mr. Jones filed a petition with the Department of Real Estate, alleging the Association was misinterpreting and selectively enforcing its Design Guidelines.

• November 2, 2021: The administrative hearing was conducted.

• November 15, 2021: The Administrative Law Judge issued a decision dismissing Mr. Jones’s petition.

Analysis of Arguments and Evidence

Petitioner’s Position (Richard J. Jones)

Mr. Jones’s case was built on two primary arguments:

• Interpretation of Design Guidelines: He contended that the Guidelines in effect at the time of installation required a 12-inch setback from the “common wall” but were silent regarding the “property line.” He argued that since the Guidelines explicitly mandated a property line setback for sidewalks, the absence of such language for driveway extensions meant the requirement did not apply.

• Allegation of Selective Enforcement: He asserted that the Association was applying its Guidelines and Rules inconsistently among homeowners.

During testimony, Mr. Jones acknowledged that his driveway extension did not comply with the 12-inch setback from the common wall and expressed a willingness to correct that specific deficiency. He also testified that his neighbors did not object to the extension as installed.

Respondent’s Position (Desert Oasis of Surprise Master Association)

The Association, represented by counsel, presented a multi-faceted defense:

• Procedural Failure: A core issue was Mr. Jones’s failure to obtain prior approval from the ARC before installation, as mandated by Section 4.1.1 of the CC&Rs.

• Violation of Setback Rule: The Association maintained that the extension violated the required 12-inch setback. The property manager, Paul Favale, testified that this rule is intended to ensure water does not drain onto a neighbor’s property.

• Evidence of Consistent Enforcement: To counter the claim of selective enforcement, the Association submitted an “Architectural Status Report” for the period of August 27, 2020, through April 21, 2021. This report demonstrated that other homeowners’ requests for driveway extensions had also been denied for failing to meet the 12-inch property line setback.

It was also noted that the Design Guidelines have since been modified to explicitly require a 12-inch setback from both the common wall and the property line.

Administrative Law Judge’s Findings and Conclusions

The Judge’s decision was based on a thorough analysis of the evidence presented and the applicable legal standards.

Key Findings of Fact

• Mr. Jones installed the driveway extension on May 11, 2020, without prior approval from the ARC.

• The extension does not have a 12-inch setback from the common block wall, which is part of the property line.

• The Design Guidelines at the time explicitly required a 12-inch setback from the block wall.

• Mr. Jones acknowledged his non-compliance with the block wall setback requirement.

Conclusions of Law

The Judge concluded that Mr. Jones failed to meet his burden of proof, which required demonstrating a violation by the Association by a “preponderance of the evidence.”

1. Petitioner’s Violation: Mr. Jones was found to be in violation of the Guidelines. His acknowledgment that the driveway did not comply with the 12-inch setback from the common wall was a critical factor.

2. Reasonableness of Association’s Interpretation: The Judge determined that the Association’s interpretation of the Guidelines—requiring a 12-inch setback along the entire property line—was “not unreasonable.” This conclusion was supported by two points: the common wall is physically part of the property line, and Mr. Jones had failed to follow the required prior approval process, where such ambiguities would have been clarified.

3. No Evidence of Selective Enforcement: The Association presented “credible evidence” via its Architectural Status Report showing that other members were subject to the same rule. Consequently, Mr. Jones “did not show by a preponderance of the evidence that the Association was selectively enforcing the Guidelines.”

Final Order and Implications

• Order: The Judge ordered that Richard J. Jones’s petition be dismissed.

• Legal Standing: The decision is binding on both parties.

• Appeal Process: The order can only be challenged through a request for rehearing, which must be filed with the Commissioner of the Department of Real Estate within 30 days of the service of the order (November 15, 2021).

Study Guide: Jones v. Desert Oasis of Surprise Master Association

This guide provides a comprehensive review of the administrative case No. 21F-H2121038-REL, involving Petitioner Richard J. Jones and Respondent Desert Oasis of Surprise Master Association. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms to facilitate a thorough understanding of the case’s facts, legal arguments, and final judgment.

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Short-Answer Quiz

Answer each of the following questions in 2-3 sentences based on the provided case documents.

1. Who were the primary parties involved in this administrative hearing, and what were their roles?

2. What specific modification did Richard J. Jones make to his property, and on what date did he complete it?

3. What critical step did Mr. Jones fail to take before installing the modification, as required by Section 4.1.1 of the CC&Rs?

4. According to the Design Guidelines in effect at the time of installation, what was the specific rule regarding the placement of driveway extensions that Mr. Jones’s project violated?

5. What was Mr. Jones’s main argument regarding the ambiguity of the Design Guidelines concerning the twelve-inch setback requirement?

6. What justification did the Association’s property manager, Paul Favale, provide for the setback requirement?

7. What were the two primary claims Mr. Jones made against the Association in his petition filed on February 12, 2021?

8. What is the standard of proof required in this matter, and which party carried the burden of meeting that standard?

9. How did the Association counter Mr. Jones’s claim that it was selectively enforcing its rules?

10. What was the final order issued by the Administrative Law Judge in this case?

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Answer Key

1. The primary parties were the Petitioner, Richard J. Jones, a homeowner who appeared on his own behalf, and the Respondent, the Desert Oasis of Surprise Master Association, which was represented by its counsel, Troy Stratman, Esq.

2. On May 11, 2020, Mr. Jones added a concrete driveway running from the street to a side gate on his property. This modification is referred to in the documents as a “driveway extension.”

3. Mr. Jones did not submit a request for prior approval to the Architectural Review Committee (ARC) before installing his driveway extension. This pre-approval is required for such modifications under the Association’s CC&Rs.

4. The driveway extension violated the rule requiring a twelve-inch setback from the common block wall. Mr. Jones acknowledged that his driveway did not comply with this specific requirement of the Design Guidelines.

5. Mr. Jones argued that since the Design Guidelines explicitly required a twelve-inch setback from the property line for sidewalks but did not explicitly state the same for driveway extensions, the requirement did not apply to his project along the full property line.

6. Mr. Favale testified that the purpose of the setback requirement is functional. It is designed to help ensure that water does not drain from one property onto a neighboring property.

7. Mr. Jones’s petition asserted that the Design Guidelines for driveway extensions did not require a setback from the property line (only the common wall). He also claimed that the Association was selectively enforcing its Guidelines and Rules against him.

8. The standard of proof was a preponderance of the evidence. The Petitioner, Mr. Jones, bore the burden of proof to show that the Association had violated its own guidelines.

9. The Association submitted an Architectural Status Report covering August 27, 2020, to April 21, 2021. This report provided credible evidence that other Association members had also been denied requests for driveway extensions due to a failure to meet the twelve-inch setback requirement.

10. The Administrative Law Judge, Thomas Shedden, ordered that Richard J. Jones’s petition be dismissed. The judge concluded that Mr. Jones had not met his burden of proof to show the Association had violated its guidelines or enforced them selectively.

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Essay Questions

The following questions are designed to encourage deeper analysis of the case. Answers are not provided.

1. Discuss the concept of “burden of proof” and the “preponderance of the evidence” standard as they were applied in this case. Explain specifically how Mr. Jones failed to meet this burden for both of his primary claims.

2. Analyze the legal reasoning used by the Administrative Law Judge to determine that the Association’s interpretation of its Design Guidelines was “not unreasonable.” Consider the judge’s reference to the common wall being part of the property line and Mr. Jones’s failure to obtain prior approval.

3. Trace the timeline of events from Mr. Jones’s initial inquiry to AAM, LLC in April 2020 to the final order in November 2021. Discuss how Mr. Jones’s decision to proceed with construction without explicit approval ultimately weakened his legal position.

4. Evaluate the claim of “selective enforcement.” What kind of evidence would Mr. Jones have needed to present to successfully prove this claim, and why was the Association’s Architectural Status Report considered more compelling evidence by the court?

5. The “Conclusions of Law” section states that the Design Guidelines are part of a contract between the parties. Using the facts of this case, explain the legal and practical implications of this principle for a homeowner living within a master association.

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Glossary of Key Terms

Definition

AAM, LLC

The property management company for the Desert Oasis of Surprise Master Association.

Administrative Law Judge (ALJ)

The judge who presides over administrative hearings and renders decisions. In this case, the ALJ was Thomas Shedden.

Architectural Review Committee (ARC)

The committee within the homeowners’ association responsible for reviewing and granting prior approval for modifications to properties, such as driveway extensions.

Burden of Proof

The obligation on a party in a dispute to provide sufficient evidence to support their claim. In this case, the burden of proof was on the petitioner, Mr. Jones.

An abbreviation for Covenants, Conditions, and Restrictions, which are the governing legal documents for a planned community or homeowners’ association.

Design Guidelines

A set of rules that are part of the contract between homeowners and the association, detailing requirements for property modifications.

Driveway Extension

As defined by the parties, a concrete driveway running from the street to a gate at the side of a house.

Petitioner

The party who files a petition to initiate a legal proceeding. In this case, Richard J. Jones.

Preponderance of the Evidence

The standard of proof required in this case. It is defined as evidence that has “the most convincing force” and is sufficient to “incline a fair and impartial mind to one side of the issue rather than the other.”

Respondent

The party against whom a petition is filed. In this case, the Desert Oasis of Surprise Master Association.

Selective Enforcement

The legal claim that an association is not applying its rules and guidelines uniformly, instead penalizing some members while allowing others to violate the same rules.

Setback

A required distance that a structure must be located away from a property line or other feature, such as a common wall. In this case, the requirement was for a twelve-inch setback.

He Fought the HOA Over 12 Inches of Concrete—and Lost. Here Are 4 Surprising Lessons from His Case.

Navigating the rules of a Homeowners’ Association (HOA) can feel like walking through a minefield of regulations, where a small misstep can lead to notices, fines, and protracted disputes. For one homeowner, Richard J. Jones, a conflict with his HOA, the Desert Oasis of Surprise Master Association, over a new driveway extension escalated all the way to a formal hearing. The official legal decision in his case reveals several counter-intuitive truths about how these disputes are won and lost, offering valuable lessons for any homeowner living under HOA governance.

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1. “Asking for Forgiveness” is a Losing Strategy.

The first major takeaway is that violating rules first and hoping for retroactive approval is an approach doomed to fail, even when the situation feels complex. The story here is more nuanced than simple defiance. In April 2020, before any work began, Mr. Jones contacted the HOA’s management company about his plans. After being told his initial idea for “two concrete strips” was not allowed, he was directed to another employee for help with an application for a different design. According to the case file, Mr. Jones “did not hear back from her and he had the driveway extension installed” on May 11, 2020.

While his frustration is relatable, this impatient miscalculation was his crucial error. Section 4.1.1 of the community’s CC&Rs requires prior approval from the Architectural Review Committee (ARC). By proceeding without securing this written approval, Mr. Jones was in immediate violation. His subsequent application, submitted only after the work was done, was predictably denied on December 2, 2020. The lesson is stark: a breakdown in communication does not absolve a homeowner of their responsibility to follow procedure. The moment unapproved work begins, you are in breach of the community’s governing documents, and the merits of the project become secondary to the procedural failure.

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2. You Have to Prove the HOA is Wrong—Not the Other Way Around.

Many homeowners assume that in a dispute, the burden is on the HOA to prove the homeowner is wrong. The legal reality is the exact opposite. The Administrative Law Judge’s decision formally stated in Conclusion of Law #2 that Mr. Jones, as the petitioner who brought the case, bore the “burden of proof.”

To win, he had to demonstrate that the Association committed a violation by a “preponderance of the evidence.” The judge’s decision cites the formal definition from Black’s Law Dictionary, which essentially means the evidence presented must be convincing enough to incline a fair and impartial mind to one side of the issue rather than the other. The reality for homeowners is surprising and crucial: in a formal dispute, the legal scales are not neutral. You must actively build a case and convincingly prove the HOA has violated its own rules. Mr. Jones failed to meet this standard.

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3. A Small Loophole Isn’t Enough to Win.

Mr. Jones’s central argument rested on a perceived loophole in the governing documents. He claimed the Design Guidelines required a 12-inch setback from the “common wall” but were silent about the “property line” as a whole, and therefore the rule didn’t apply to the entirety of his project. This highlights a key aspect of HOA governance: the purpose behind a rule matters. The property manager testified that the setback requirement exists to “ensure that water does not drain to the neighbor’s property,” transforming the rule from an arbitrary measurement into a practical and defensible standard.

Ultimately, the judge was unpersuaded by the loophole argument, and the reason is a masterclass in how these cases are decided. The judge’s decision, articulated in Conclusion of Law #7, pointed out that the common wall is fundamentally part of the property line. More importantly, the decision explicitly connected this conclusion to Mr. Jones’s prior actions: “…considering that Mr. Jones did not obtain prior approval from ARC before constructing his driveway extension, the Association’s interpretation…is not unreasonable.” This is the crucial insight: his procedural failure (Lesson #1) directly weakened his ability to argue about ambiguous wording. An HOA’s reasonable interpretation of its own rules is far more likely to be upheld when the homeowner has already disregarded clear procedural mandates. Tellingly, the Association later modified the guidelines to explicitly close this perceived loophole.

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4. Proving “Selective Enforcement” is Harder Than You Think.

A common defense from homeowners is that the HOA is engaging in “selective enforcement”—singling them out while letting others get away with similar violations. Mr. Jones made this exact claim, but the Association came prepared with meticulous documentation to defeat it.

As detailed in Finding of Fact #21, the HOA presented an “Architectural Status Report” covering August 27, 2020 through April 21, 2021. This document provided time-stamped evidence that other homeowners’ requests for similar driveway extensions had also been consistently denied for failing to meet the same 12-inch setback requirement. This report systematically dismantled the selective enforcement argument. For homeowners, this underscores a critical point: the feeling of being singled out is not evidence. To win a selective enforcement claim, you must provide clear proof that other members in the exact same situation were treated differently, a high bar that an HOA with good records can easily overcome.

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Conclusion: A Contract is a Contract

The overarching theme from this case is that HOA governing documents are not merely suggestions; they are legally binding. As stated in Conclusion of Law #5, the Design Guidelines are part of a contract between the homeowner and the association. While HOA rules can often feel arbitrary or frustrating, they carry the weight of a contract. The path to successfully challenging them is narrow and requires a clear, well-documented case that proves the HOA, not the homeowner, has breached its duties.

This case serves as a powerful reminder for all community members. How well do you really know the contract you’re living under?

Case Participants

Petitioner Side

  • Richard J Jones (petitioner)
    Appeared and testified on his own behalf

Respondent Side

  • Troy Stratman (attorney)
    Stratman Law Firm, PLC
    Counsel for Respondent
  • Paul Favale (property manager)
    Desert Oasis of Surprise Master Association
    Testified for Respondent
  • Angela Pate (property manager employee)
    AAM, LLC
    Contacted by Petitioner regarding installation inquiry

Neutral Parties

  • Thomas Shedden (ALJ)
    Office of Administrative Hearings
  • Louis Dettorre (Commissioner)
    Arizona Department of Real Estate
    Recipient of decision
  • AHansen (ADRE staff)
    Arizona Department of Real Estate
    Recipient of decision (email alias listed)
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Recipient of decision (email alias listed)
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
    Recipient of decision (email alias listed)
  • Miranda Alvarez (Staff)
    Transmitted decision

Ronald Borruso v. Sunland Village East Association

Posted on by

Case Summary

Case ID 21F-H2121062-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-09-21
Administrative Law Judge Thomas Shedden
Outcome The Administrative Law Judge dismissed the petition filed by Ronald Borruso, finding that the Petitioner failed to meet the standard of proof (preponderance of the evidence) regarding the alleged violations of ARIZ. REV. STAT. § 33-1804 concerning meeting procedures and unauthorized board actions.
Filing Fees Refunded $1,500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Ronald Borruso Counsel —
Respondent Sunland Village East Association Counsel Nicholas Nogami, Esq. and Nikolas Eicher, Esq.

Alleged Violations

ARIZ. REV. STAT. § 33-1804

Outcome Summary

The Administrative Law Judge dismissed the petition filed by Ronald Borruso, finding that the Petitioner failed to meet the standard of proof (preponderance of the evidence) regarding the alleged violations of ARIZ. REV. STAT. § 33-1804 concerning meeting procedures and unauthorized board actions.

Why this result: The Petitioner failed to carry the burden of proof to show that the alleged violations of ARIZ. REV. STAT. § 33-1804 occurred.

Key Issues & Findings

Alleged violations regarding member speaking rights at May 27, 2021 meeting and unauthorized board meetings concerning Operations Manager job qualifications

Petitioner alleged the HOA violated open meeting laws by restricting member speaking rights during deliberations at a special meeting on May 27, 2021, and by holding improperly noticed meetings to approve job qualifications for an Operations Manager.

Orders: Ronald Borruso’s petition is dismissed.

Filing fee: $1,500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. § 33-1804
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.02(A)
  • Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)
  • State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968)

Analytics Highlights

Topics: Open Meetings, Right to Speak, Statute Violation, Burden of Proof, Dismissal, Filing Fee
Additional Citations:

  • ARIZ. REV. STAT. § 33-1804
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.02(A)
  • Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)
  • State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968)

Video Overview

Audio Overview

Decision Documents

21F-H2121062-REL Decision – 912276.pdf

Uploaded 2026-01-23T17:38:53 (114.4 KB)

This summary details the Administrative Law Judge (ALJ) Decision in the case of Ronald Borruso, Petitioner, vs. Sunland Village East Association, Respondent (No. 21F-H2121062-REL), heard on September 3, 2021. The Petitioner, Ronald Borruso, alleged that the Association violated its Bylaws and specific provisions of ARIZ. REV. STAT. section 33-1804.

Key Facts and Legal Standard

The Department of Real Estate had jurisdiction over the matter. The Petitioner bore the burden of proving the alleged violations occurred by a preponderance of the evidence. Borruso refined his allegations to two main issues, both centering on the violation of association meeting requirements under ARIZ. REV. STAT. § 33-1804(A) and (C).

Main Issues and Arguments

Issue 1: Member Participation at the May 27, 2021 Special Meeting

  • Petitioner's Claim: Borruso alleged that during a special meeting concerning a recall petition, the Board denied members the right to speak at an appropriate time during proceedings, violating § 33-1804(A). He argued the meeting was improperly divided into a "closed" session where members could not offer substantive comments, followed by an "Open Session Q & A" after adjournment.
  • Association's Argument: The Association maintained there was only one meeting, and it was not a violation to restrict members’ comments until after the Board provided its statements. They argued they used the term "closed" inartfully, noting that members were allowed to attend the entire 3-hour meeting, and ample opportunity was provided for comments during the Q & A session (lasting about 90 minutes).
  • Legal Point: ARIZ. REV. STAT. section 33-1804(A) permits members to attend and speak at an appropriate time during deliberations, and mandates they speak once after the Board discusses an agenda item but before formal action. The ALJ noted that legally, a "closed" meeting refers to an executive session, which the Board did not conduct.

Issue 2: Unnoticed Meeting to Approve Operations Manager Qualifications

  • Petitioner's Claim: Borruso alleged the Board held un-noticed meetings to write and approve job qualifications for an Operations Manager, violating sections 33-1804(A) and (C). His primary evidence was a former Board President, Ms. Haynie, confirming in a May 6, 2021 meeting that the Board had written and approved the job description.
  • Association's Argument: Current Board members testified credibly that Ms. Haynie was wrong and that the Board had never met or voted on the job description. The description posted was similar to a previous one, and Ms. Haynie had allegedly prepared and posted it without Board approval.

Outcome and Final Decision

The Administrative Law Judge concluded that Mr. Borruso failed to meet the required standard of proof (preponderance of the evidence) on both issues.

  1. Regarding the May 27th Meeting: The Petitioner did not prove a violation of § 33-1804(A). Although the Board was not precise in its terminology, members were allowed to attend the entire meeting, and the evidence showed it was a single meeting where members spoke after the Board's presentation.
  2. Regarding the Job Qualifications: The Petitioner failed to prove that an un-noticed meeting occurred, as the credible testimony indicated that the former President had been mistaken about the Board’s approval. Therefore, there was no violation of sections 33-1804(A) and (C).

The petition was dismissed.

Questions

Question

Can the HOA Board restrict when homeowners are allowed to speak during a meeting?

Short Answer

Yes, the Board is allowed to place reasonable time restrictions on speakers and determine the appropriate time for comments.

Detailed Answer

The ALJ cited Arizona law stating that while members have a right to speak, the Board may impose reasonable time restrictions. In this case, requiring members to wait until after the Board's presentation to speak was not a violation.

Alj Quote

The board may place reasonable time restrictions on those persons speaking during the meeting but shall permit a member or member's designated representative to speak once after the board has discussed a specific agenda item but before the board takes formal action on that item

Legal Basis

A.R.S. § 33-1804(A)

Topic Tags

  • meetings
  • homeowner rights
  • speaking limits

Question

If the Board calls part of a meeting 'closed', is it automatically an illegal executive session?

Short Answer

No, not if members are still allowed to attend and observe.

Detailed Answer

Even if the Board uses the term 'closed' inartfully to mean 'no comments allowed yet,' it is not an illegal meeting if members are physically permitted to attend. A true 'closed' meeting (executive session) is one members cannot attend.

Alj Quote

Consequently, although the Board referred to the initial part of the meeting as being 'closed' because it would not take members’ comments in that portion of the meeting, it was using that word in a different sense than it is used in section 33-1804.

Legal Basis

A.R.S. § 33-1804(A) and (C)

Topic Tags

  • meetings
  • executive session
  • definitions

Question

What standard of proof do I need to meet to win a case against my HOA?

Short Answer

You must prove your case by a 'preponderance of the evidence'.

Detailed Answer

The homeowner (petitioner) bears the burden of proof. This means showing that the allegations are more likely true than not—having the 'greater weight' of evidence.

Alj Quote

The standard of proof on all issues in this matter is that of a preponderance of the evidence.

Legal Basis

A.A.C. § R2-19-119

Topic Tags

  • legal standards
  • burden of proof
  • procedure

Question

Is a Board President's verbal admission enough to prove an illegal meeting occurred?

Short Answer

Not necessarily, especially if other testimony contradicts it and there are no records.

Detailed Answer

In this case, a Board President said 'yes' when asked if the Board met to approve a job description. However, the ALJ found this insufficient because other Board members testified credibly that she was wrong and no such meeting took place.

Alj Quote

Although Ms. Haynie did answer 'yes' when asked, Messrs. Thurn and Fretwell provided credible testimony that she was wrong. … Consequently, the preponderance of the evidence shows that there is no violation

Legal Basis

Preponderance of Evidence

Topic Tags

  • evidence
  • board meetings
  • testimony

Question

Can I file a single petition for multiple different complaints against my HOA?

Short Answer

Yes, but you must pay the appropriate fee for a multi-issue hearing.

Detailed Answer

When filing a petition, you must either identify a single issue or pay the Department the fee required for a multi-issue hearing.

Alj Quote

Mr. Borruso that he was required either to identify a single issue for hearing or to pay to the Department the appropriate fee for a multi-issue hearing.

Legal Basis

Administrative Procedure

Topic Tags

  • filing fees
  • procedure
  • petitions

Question

Does the Board have to let me speak before they take a formal vote?

Short Answer

Yes, homeowners must be allowed to speak after discussion but before the vote.

Detailed Answer

The statute explicitly states that a member must be permitted to speak once after the board has discussed a specific item but before formal action is taken.

Alj Quote

[S]hall permit a member or member's designated representative to speak once after the board has discussed a specific agenda item but before the board takes formal action on that item

Legal Basis

A.R.S. § 33-1804(A)

Topic Tags

  • voting
  • meetings
  • homeowner rights

Case

Docket No
21F-H2121062-REL
Case Title
Ronald Borruso vs. Sunland Village East Association
Decision Date
2021-09-21
Alj Name
Thomas Shedden
Tribunal
OAH
Agency
ADRE

Questions

Question

Can the HOA Board restrict when homeowners are allowed to speak during a meeting?

Short Answer

Yes, the Board is allowed to place reasonable time restrictions on speakers and determine the appropriate time for comments.

Detailed Answer

The ALJ cited Arizona law stating that while members have a right to speak, the Board may impose reasonable time restrictions. In this case, requiring members to wait until after the Board's presentation to speak was not a violation.

Alj Quote

The board may place reasonable time restrictions on those persons speaking during the meeting but shall permit a member or member's designated representative to speak once after the board has discussed a specific agenda item but before the board takes formal action on that item

Legal Basis

A.R.S. § 33-1804(A)

Topic Tags

  • meetings
  • homeowner rights
  • speaking limits

Question

If the Board calls part of a meeting 'closed', is it automatically an illegal executive session?

Short Answer

No, not if members are still allowed to attend and observe.

Detailed Answer

Even if the Board uses the term 'closed' inartfully to mean 'no comments allowed yet,' it is not an illegal meeting if members are physically permitted to attend. A true 'closed' meeting (executive session) is one members cannot attend.

Alj Quote

Consequently, although the Board referred to the initial part of the meeting as being 'closed' because it would not take members’ comments in that portion of the meeting, it was using that word in a different sense than it is used in section 33-1804.

Legal Basis

A.R.S. § 33-1804(A) and (C)

Topic Tags

  • meetings
  • executive session
  • definitions

Question

What standard of proof do I need to meet to win a case against my HOA?

Short Answer

You must prove your case by a 'preponderance of the evidence'.

Detailed Answer

The homeowner (petitioner) bears the burden of proof. This means showing that the allegations are more likely true than not—having the 'greater weight' of evidence.

Alj Quote

The standard of proof on all issues in this matter is that of a preponderance of the evidence.

Legal Basis

A.A.C. § R2-19-119

Topic Tags

  • legal standards
  • burden of proof
  • procedure

Question

Is a Board President's verbal admission enough to prove an illegal meeting occurred?

Short Answer

Not necessarily, especially if other testimony contradicts it and there are no records.

Detailed Answer

In this case, a Board President said 'yes' when asked if the Board met to approve a job description. However, the ALJ found this insufficient because other Board members testified credibly that she was wrong and no such meeting took place.

Alj Quote

Although Ms. Haynie did answer 'yes' when asked, Messrs. Thurn and Fretwell provided credible testimony that she was wrong. … Consequently, the preponderance of the evidence shows that there is no violation

Legal Basis

Preponderance of Evidence

Topic Tags

  • evidence
  • board meetings
  • testimony

Question

Can I file a single petition for multiple different complaints against my HOA?

Short Answer

Yes, but you must pay the appropriate fee for a multi-issue hearing.

Detailed Answer

When filing a petition, you must either identify a single issue or pay the Department the fee required for a multi-issue hearing.

Alj Quote

Mr. Borruso that he was required either to identify a single issue for hearing or to pay to the Department the appropriate fee for a multi-issue hearing.

Legal Basis

Administrative Procedure

Topic Tags

  • filing fees
  • procedure
  • petitions

Question

Does the Board have to let me speak before they take a formal vote?

Short Answer

Yes, homeowners must be allowed to speak after discussion but before the vote.

Detailed Answer

The statute explicitly states that a member must be permitted to speak once after the board has discussed a specific item but before formal action is taken.

Alj Quote

[S]hall permit a member or member's designated representative to speak once after the board has discussed a specific agenda item but before the board takes formal action on that item

Legal Basis

A.R.S. § 33-1804(A)

Topic Tags

  • voting
  • meetings
  • homeowner rights

Case

Docket No
21F-H2121062-REL
Case Title
Ronald Borruso vs. Sunland Village East Association
Decision Date
2021-09-21
Alj Name
Thomas Shedden
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • Ronald Borruso (petitioner)
  • Thomas Huston (witness)
    Testified for Petitioner

Respondent Side

  • Nicholas Nogami (respondent attorney)
    Carpenter Hazlewood Delgado & Bolen, LLP
  • Nikolas Eicher (respondent attorney)
    Carpenter Hazlewood Delgado & Bolen, LLP
  • Mark Thurn (board member)
    Sunland Village East Association
    Current Board President, testified for Respondent
  • Marvin Fretwell (board member)
    Sunland Village East Association
    Testified for Respondent
  • Joyce Haynie (board member)
    Sunland Village East Association
    Former President, subject of recall petition
  • Kim Shallue (board member)
    Sunland Village East Association
    Presided over May 27th meeting

Neutral Parties

  • Thomas Shedden (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
  • AHansen (ADRE staff)
    Arizona Department of Real Estate
    Recipient of decision transmission
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Recipient of decision transmission
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
    Recipient of decision transmission

Donald S Fern & Judith A. Hedges vs.

Posted on by

Case Summary

Case ID 21F-H2120005-REL
Agency ADRE
Tribunal OAH
Decision Date 2020-11-20
Administrative Law Judge Thomas Shedden
Outcome Petitioners were the prevailing party because the Respondent acknowledged violating the CC&Rs by approving the pergola. Respondent was ordered to refund the $500.00 filing fee, but the request for a civil penalty was denied.
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Donald S Fern & Judith A. Hedges Counsel Lance Leslie
Respondent San Ignacio Heights, Inc. Counsel Michael S. Shupe

Alleged Violations

CC&R Article VI(D)

Outcome Summary

Petitioners were the prevailing party because the Respondent acknowledged violating the CC&Rs by approving the pergola. Respondent was ordered to refund the $500.00 filing fee, but the request for a civil penalty was denied.

Key Issues & Findings

View Obstruction by Pergola Approval

Petitioners alleged that Respondent, by granting approval in February 2018 for the construction of a pergola on lot 47, violated the CC&Rs requirement that an unobstructed view of the Santa Rita Mountains be maintained for owners of View Lots (Lot 46) and sought a civil penalty.

Orders: Respondent acknowledged the violation, rescinded the pergola approval prior to the Notice of Hearing, and was ordered to pay Petitioners the $500.00 filing fee. A civil penalty was sought but denied.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. REV. STAT. § 32-2199.02(A)

Analytics Highlights

Topics: CC&R Violation, View Obstruction, Architectural Review Committee, Filing Fee Refund, Civil Penalty Denial
Additional Citations:

  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.02(A)
  • BLACK’S LAW DICTIONARY 1373 (10th ed. 2014)

Video Overview

Audio Overview

Decision Documents

21F-H2120005-REL Decision – 838563.pdf

Uploaded 2026-04-24T11:29:42 (90.6 KB)

Administrative Hearing Briefing: Fern & Hedges v. San Ignacio Heights, Inc.

Executive Summary

This briefing document analyzes the Administrative Law Judge (ALJ) Decision in the case of Donald S. Fern & Judith A. Hedges v. San Ignacio Heights, Inc. (No. 21F-H2120005-REL). The central conflict involved an allegation by Petitioners that the Respondent, their homeowners’ association, violated its own Covenants, Conditions, and Restrictions (CC&Rs) by approving a pergola on an adjacent property that obstructed their mountain view.

The Respondent initially defended its approval but, after the Petitioners filed a formal complaint, reversed its position, admitted the approval was an error, and rescinded it. Despite this corrective action, the hearing proceeded. The ALJ’s final decision declared the Petitioners the “prevailing party,” as their legal action prompted the resolution. Consequently, the Respondent was ordered to reimburse the Petitioners’ $500 filing fee. However, the ALJ denied the Petitioners’ request for an additional civil penalty, stating they had not met the burden of proof for such an assessment. The decision effectively resolved the core dispute in the Petitioners’ favor while limiting the financial penalty on the Respondent.

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Case Overview

This matter was brought before the Arizona Office of Administrative Hearings concerning a dispute over view obstruction within a planned community.

Case Detail

Information

Case Name

Donald S. Fern & Judith A. Hedges, Petitioner, vs. San Ignacio Heights, Inc., Respondent.

Case Number

21F-H2120005-REL

Presiding Judge

Administrative Law Judge Thomas Shedden

Hearing Date

November 3, 2020

Decision Date

November 20, 2020

Core Allegation

Respondent violated its own CC&Rs, specifically Article VI (D) “View Obstructions,” which mandates that “An unobstructed view of the Santa Rita Mountains shall be maintained for Owners of View Lots.”

Petitioners’ Property

Lot 46, located at 1546 West Acala Street in Green Valley, a designated “view lot.”

Disputed Structure

A pergola constructed on the neighboring Lot 47.

The hearing was conducted without testimony, with the decision based on the administrative record and closing arguments from both parties.

Chronology of Key Events

The dispute unfolded over a period of more than two years, marked by the Respondent’s significant change in position after formal legal action was initiated.

• February 2018: The Respondent’s Architectural Review Committee (ARC) grants approval to the owners of Lot 47 to construct a pergola.

• On or Before July 30, 2018: Petitioners purchase Lot 46. They contend the pergola was built after the previous owners of their lot had moved but before their purchase was finalized.

• December 2019: Petitioners attempt to resolve the issue directly with the owners of Lot 47 but are unsuccessful.

• January 15, 2020: In a letter, the Respondent’s Board informs the Petitioners that it is standing by its February 2018 decision to approve the pergola.

• July 24, 2020: Petitioners file a formal petition with the Arizona Department of Real Estate.

• August 20, 2020: The Respondent’s Board holds a special executive session and determines that the approval of the pergola was “made in error.” The Board rescinds the approval.

• August 25, 2020: The Respondent files its answer to the petition, stating the approval has been rescinded and requesting the Department dismiss the matter.

• October 5, 2020: The Department does not dismiss the matter and issues a Notice of Hearing.

• November 3, 2020: At the hearing, the Respondent’s counsel informs the tribunal that a contractor is scheduled to remove the pergola on the following day.

Central Arguments and Positions

Petitioners (Donald S. Fern & Judith A. Hedges)

• Violation: The pergola on Lot 47 constitutes a view obstruction in direct violation of CC&R Article VI(D).

• Relief Sought: The Petitioners initially sought the removal of the structure. After the Respondent rescinded its approval, the Petitioners argued that the Respondent should be assessed a civil penalty for the violation.

Respondent (San Ignacio Heights, Inc.)

• Initial Defense (Pre-Litigation): The Respondent offered two primary reasons for upholding its initial approval:

1. The previous owners of the Petitioners’ lot (Lot 46) were given notice of the pergola request and did not object at the time of its approval in February 2018.

2. The configuration of the nine lots on West Acala Street makes a “truly unobstructed view” impossible, and for the Petitioners, achieving such a view would require removing eight other houses.

• Post-Petition Position: After the formal petition was filed, the Respondent’s position shifted entirely.

1. Admission of Error: The Respondent formally acknowledged that the approval of the pergola was a mistake and rescinded it.

2. Mootness: The Respondent argued that because it had provided the relief the Petitioners requested (rescission of approval), the matter was resolved and should be dismissed.

Administrative Law Judge’s Decision and Rationale

The ALJ’s decision addressed the acknowledged violation, the status of the parties, and the appropriateness of financial penalties.

Findings on the Violation

• The Respondent explicitly acknowledged its violation of CC&R Article VI(D) by granting approval for the pergola.

• Because the Respondent had already rescinded its approval and the structure was scheduled for removal, the ALJ determined that an order compelling the Respondent to abide by the CC&Rs was unnecessary.

Prevailing Party Status

• Despite the Respondent’s admission of error and corrective actions occurring before the formal hearing, the ALJ designated the Petitioners as the prevailing party.

• The rationale is that the Petitioners’ legal action was the catalyst for the Respondent’s decision to rescind its approval and resolve the violation.

Financial Orders and Penalties

• Filing Fee: Pursuant to ARIZ. REV. STAT. § 32-2199.02(A), the ALJ is required to order the respondent to pay the petitioner’s filing fee if the petitioner prevails. Consequently, the Respondent was ordered to pay the Petitioners’ $500.00 filing fee.

• Civil Penalty: The Petitioners argued for the assessment of a civil penalty against the Respondent. The ALJ denied this request, stating in the Conclusions of Law that “Petitioners have not proven that the Respondent should be assessed a civil penalty.” The decision does not provide further detail on the reasoning for this conclusion.

Legal Framework

• Jurisdiction: The Arizona Department of Real Estate has authority over the matter under ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11, as the case involves alleged violations of community documents.

• Standard of Proof: The Petitioners bore the burden of proof, which is a “preponderance of the evidence” as defined in ARIZ. ADMIN. CODE § R2-19-119.

Final Order

The decision, issued on November 20, 2020, concluded with the following binding orders:

1. IT IS ORDERED that Petitioners Donald S. Fern and Judith A. Hedges are the prevailing party in this matter.

2. IT IS FURTHER ORDERED that Respondent San Ignacio Heights Inc. must pay to Petitioners their filing fee of $500.00 within thirty days of receipt of the Order.

The order is final unless a party files for a rehearing with the Commissioner of the Department of Real Estate within 30 days of service.

Study Guide: Fern & Hedges v. San Ignacio Heights, Inc. (Case No. 21F-H2120005-REL)

This study guide provides a detailed review of the Administrative Law Judge Decision in the matter between Donald S. Fern & Judith A. Hedges (Petitioners) and San Ignacio Heights, Inc. (Respondent). It includes a quiz to test comprehension, essay questions for deeper analysis, and a comprehensive glossary of key terms.

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Short Answer Quiz

Answer the following questions in 2-3 sentences based on the provided source document.

1. Who were the primary parties involved in this case, and what was their relationship?

2. What specific rule from the community’s governing documents was at the center of the dispute?

3. What physical structure caused the dispute, and where was it located relative to the Petitioners’ property?

4. What two arguments did the Respondent initially use to defend its decision to approve the structure?

5. At what point did the Respondent’s Board change its position, and what action did it take?

6. What is the legal standard of proof required in this case, and which party had the burden of meeting it?

7. Despite the Respondent admitting its error before the hearing, why were the Petitioners declared the “prevailing party”?

8. What specific financial penalty was ordered against the Respondent in the final decision?

9. Why did the Administrative Law Judge decide not to levy a civil penalty against the Respondent?

10. What did the Respondent’s counsel state at the hearing regarding the future of the structure in question?

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Answer Key

1. The primary parties were the Petitioners, homeowners Donald S. Fern and Judith A. Hedges, and the Respondent, their homeowners’ association, San Ignacio Heights, Inc. The Petitioners filed a complaint against the homeowners’ association for allegedly violating community rules.

2. The dispute centered on Article VI (D) of the “Second Amended and Restated Declaration of CC&Rs,” titled “View Obstructions.” This rule states that “An unobstructed view of the Santa Rita Mountains shall be maintained for Owners of View Lots.”

3. The dispute was caused by a pergola that the Respondent’s Architectural Review Committee (ARC) approved for construction on lot 47. This lot was adjacent to the Petitioners’ property, lot 46, which is designated as a “view lot” under the CC&Rs.

4. The Respondent initially argued that the approval was valid because (1) the previous owners of lot 46 were notified but did not object, and (2) the configuration of the lots meant a truly unobstructed view was impossible and would require removing eight other houses.

5. The Board changed its position on August 20, 2020, after the Petitioners had already filed their complaint. In a special executive session, the Board determined its February 2018 approval of the pergola was an error and officially rescinded that approval.

6. The standard of proof is a “preponderance of the evidence,” defined as evidence with the most convincing force. The Petitioners bore the burden of proof to show that the alleged violation occurred.

7. The Petitioners were declared the “prevailing party” because their legal action was the cause of the Respondent’s decision to rescind the erroneous approval. Under Arizona statute, a tribunal is required to order the respondent to pay the filing fee to the prevailing party.

8. The Judge ordered the Respondent, San Ignacio Heights Inc., to pay the Petitioners their filing fee of $500.00. The payment was to be made within thirty days of receipt of the order.

9. The Judge did not levy a civil penalty because the decision explicitly states, “Petitioners have not proven that the Respondent should be assessed a civil penalty.”

10. At the November 3, 2020 hearing, the Respondent’s counsel informed the tribunal that the owners of lot 47 had a contractor scheduled to remove the pergola the very next day.

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Essay Questions for Further Study

The following questions are designed for a more in-depth analysis of the case. Answers are not provided.

1. Analyze the timeline of events from the initial approval of the pergola in February 2018 to the final order in November 2020. How did the Respondent’s actions and communications contribute to the escalation of the dispute, and at what points could it have potentially been resolved before reaching a formal hearing?

2. Discuss the legal concept of the “prevailing party” as it applies to this case. Explain why the Petitioners were granted this status and what financial remedy it entitled them to, even though the Respondent had already conceded the central issue before the hearing.

3. Examine the two initial arguments made by the Respondent to justify its approval of the pergola. Based on the case outcome, why were these arguments ultimately insufficient to defend its position, leading the Board to rescind its approval?

4. Based on the “Conclusions of Law” section, explain the role and authority of the Administrative Law Judge in this type of dispute. What specific powers did the judge have according to Arizona statutes, and how were they applied or not applied in the final order?

5. The decision notes that no testimony was taken and the ruling was based on the administrative record. Discuss the potential advantages and disadvantages of this approach for both the Petitioners and the Respondent in this specific case.

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official (Thomas Shedden) who presides over hearings at the Office of Administrative Hearings and renders a binding legal decision and order.

ARIZ. ADMIN. CODE § R2-19-119

The section of Arizona’s administrative rules cited in the decision that establishes the “preponderance of the evidence” as the standard of proof for the matter.

ARIZ. REV. STAT. § 32-2199.02(A)

The Arizona state law that grants the ALJ the authority to order parties to abide by community documents, levy civil penalties, and order a losing respondent to pay the prevailing petitioner’s filing fee.

Burden of Proof

The legal obligation of a party in a dispute to provide sufficient evidence to prove their claim. In this case, the Petitioners bore the burden of proof.

An acronym for Covenants, Conditions, and Restrictions. In this case, it refers to the “Second Amended and Restated Declaration of CC&Rs,” the official governing documents for the San Ignacio Heights community.

Civil Penalty

A monetary fine that an ALJ may levy for each violation of a statute or community document. A civil penalty was considered but not assessed in this case.

Department of Real Estate

The Arizona state agency with legal authority over disputes concerning alleged violations of a community’s CC&Rs.

Filing Fee

The fee ($500.00 in this case) required by Arizona statute to file a petition with the Department of Real Estate. The Judge ordered the Respondent to repay this fee to the Petitioners.

Petitioner

The party that initiates a legal proceeding by filing a petition. In this case, homeowners Donald S. Fern and Judith A. Hedges.

Preponderance of the Evidence

The standard of proof required in the hearing. It is defined as “The greater weight of the evidence… sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Prevailing Party

The party that wins a legal case. The Petitioners were declared the prevailing party, which legally entitled them to have their filing fee reimbursed by the Respondent.

Respondent

The party against whom a petition is filed and who must respond to the allegations. In this case, the homeowners’ association, San Ignacio Heights, Inc.

View Lot

A specific property designation defined in the CC&Rs, such as the Petitioners’ lot 46, which is guaranteed an unobstructed view of the Santa Rita Mountains.

View Obstructions

The title of Article VI (D) of the CC&Rs, the specific rule that the Petitioners alleged the Respondent violated by approving the construction of the pergola.

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21F-H2120005-REL

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This administrative law judge decision details a dispute between Petitioners Donald S. Fern and Judith A. Hedges and Respondent San Ignacio Heights, Inc. regarding a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs). The petitioners alleged that a pergola approved by the Respondent’s Architectural Review Committee was a view obstruction in violation of Article VI(D) of the CC&Rs. Although the Respondent acknowledged its error and rescinded the approval for the pergola before the hearing, the matter was not dismissed. The Administrative Law Judge ultimately found the Petitioners to be the prevailing party and ordered the Respondent to pay the petitioners’ $500 filing fee, though no additional civil penalty was assessed.

1 source

What are the core legal and procedural issues decided in this administrative hearing?
How did the Respondent’s actions impact the Petitioners’ prevailing party status and remedy?
What is the significance of the CC&Rs and view obstruction clause in this dispute?

Audio Overview

Video Overview

Video Overview

Mind Map Mind Map

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Flashcards

Flashcards

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Case Participants

Petitioner Side

  • Donald S Fern (petitioner)
  • Judith A. Hedges (petitioner)
  • Lance Leslie (petitioner attorney)
    Law Office of Susan A Siwek

Respondent Side

  • Michael S. Shupe (respondent attorney)
    Goldschmidt | Shupe, PLLC

Neutral Parties

  • Thomas Shedden (ALJ)
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
  • LDettorre (ADRE staff)
    Arizona Department of Real Estate
    Listed as recipient of transmission
  • AHansen (ADRE staff)
    Arizona Department of Real Estate
    Listed as recipient of transmission
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Listed as recipient of transmission
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
    Listed as recipient of transmission
  • ncano (ADRE staff)
    Arizona Department of Real Estate
    Listed as recipient of transmission

Robert S. Nickell v. Holiday Harbour Property Owners Association

Posted on by

Case Summary

Case ID 20F-H2019008-REL
Agency ADRE
Tribunal OAH
Decision Date 2019-12-09
Administrative Law Judge Thomas Shedden
Outcome The Administrative Law Judge dismissed the petition, ruling that the Association did not violate A.R.S. § 33-1817(B)(3). The Association's enforcement of the height restriction was reasonable as they allowed for excavation to meet height requirements, and the Petitioner did not demonstrate the necessary hardship for a waiver.
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Robert S. Nickell Counsel —
Respondent Holiday Harbour Property Owners Association Counsel —

Alleged Violations

A.R.S. § 33-1817(B)(3)

Outcome Summary

The Administrative Law Judge dismissed the petition, ruling that the Association did not violate A.R.S. § 33-1817(B)(3). The Association's enforcement of the height restriction was reasonable as they allowed for excavation to meet height requirements, and the Petitioner did not demonstrate the necessary hardship for a waiver.

Why this result: Petitioner failed to meet the burden of proof to show the Association acted unreasonably or that the height restriction caused extreme hardship.

Key Issues & Findings

Unreasonable withholding of architectural design approval

Petitioner alleged the Association unreasonably denied his request to build a home 17 feet in height, violating the 15-foot limit in the CC&Rs, and failed to grant a variance for hardship.

Orders: The petition is dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1817(B)(3)
  • CC&Rs Section 6
  • CC&Rs Section 11

Video Overview

Audio Overview

Decision Documents

20F-H2019008-REL Decision – 757400.pdf

Uploaded 2026-04-24T05:35:18 (107.8 KB)

20F-H2019008-REL Decision – 757626.pdf

Uploaded 2026-04-24T05:35:23 (108.4 KB)

Case Analysis: Nickell v. Holiday Harbour Property Owners Association (No. 20F-H2019008-REL)

Executive Summary

This briefing document analyzes the administrative law decision and subsequent amended decision regarding a dispute between Robert S. Nickell (Petitioner) and the Holiday Harbour Property Owners Association (Respondent). The conflict centered on the Association’s denial of Mr. Nickell's request to construct a residence and attached RV garage with a height of 17 feet, which exceeded the 15-foot limit stipulated in the community's Covenants, Conditions, and Restrictions (CC&Rs).

The Petitioner argued that the Association's denial was unreasonable and sought a variance based on claims of selective enforcement and potential drainage issues. However, the Administrative Law Judge (ALJ) determined that the Petitioner failed to meet the burden of proof required to show that the Association acted unreasonably or that the height restriction caused an "extreme or material hardship." Consequently, the petition was dismissed, upholding the Association's right to enforce its established architectural standards.

Case Overview
Category Details
Case Number 20F-H2019008-REL
Petitioner Robert S. Nickell
Respondent Holiday Harbour Property Owners Association
Administrative Law Judge Thomas Shedden
Hearing Date November 19, 2019
Core Dispute Denial of a 17-foot structure in a 15-foot limit zone
Legal Basis A.R.S. § 33-1817(B)(3); CC&Rs Sections 6 and 11
Final Decision Petition Dismissed

Detailed Analysis of Key Themes

1. Architectural Standards and "Lot Grade" Interpretation

The primary technical dispute involved the definition of "lot grade" as the starting point for measuring the 15-foot height restriction mandated by Section 6 of the CC&Rs.

  • Association's Position: The Association interprets "lot grade" as the "highest buildable point," specifically the elevation where the original house on the lot was located. They define the highest buildable point as an area within required setbacks capable of accommodating a structure with 800 square feet of livable space.
  • Petitioner’s Argument: Mr. Nickell contended that the Association had previously used different definitions of lot grade and argued that since his lot had been excavated down by 3.4 feet, he should be permitted a total height of 18.4 feet.
  • Adjudication: The ALJ found the Association’s interpretation reasonable. Testimony from Board member Douglas Clark clarified that the "highest buildable point" identified by the Petitioner was actually outside the required setbacks, undermining the Petitioner's measurement claims.
2. Reasonableness of Architectural Control (A.R.S. § 33-1817(B))

Under Arizona law, an Association cannot unreasonably withhold approval of architectural designs. The Petitioner alleged the Association violated this statute.

  • Proposed Mitigation: The Association demonstrated reasonableness by offering an alternative: they informed Mr. Nickell he could build his 17-foot-2-inch structure if he excavated down from the established lot grade. This would allow him the desired building height while maintaining the community's elevation profile.
  • Fairness vs. Aesthetics: The Association testified that the height restriction is enforced as a "matter of fairness" rather than strictly to preserve specific views. The ALJ concluded that because the Association provided a path to compliance via excavation, their denial of the original non-compliant plan was not unreasonable.
3. Hardship and the Variance Standard

Section 11 of the CC&Rs allows the Association to grant a variance at its discretion if the height restriction causes "extreme or material hardship."

  • Hardship Claims: Mr. Nickell argued that excavation was unfeasible due to drainage concerns. He also rejected the Association’s suggestion to reverse the house footprint, citing impacts on his personal views and the utility of an existing garage bathroom.
  • Legal Conclusion: The ALJ ruled that these inconveniences did not rise to the level of "extreme or material hardship." The Petitioner failed to provide sufficient evidence that the lot could not be drained properly if excavated.
4. Consistency in Enforcement

The Petitioner attempted to argue selective enforcement by providing photographs of other homes with RV garages exceeding 15 feet.

  • Association Rebuttal: The Association successfully argued that the homes identified by the Petitioner were compliant because those owners had excavated down from the lot grade to accommodate the taller structures.
  • Exceptions: While the Association admitted to granting one 17-foot waiver previously, it was for a specific waterfront lot on the west side of Highway 95, which did not establish a precedent for the Petitioner's inland lot.

Important Quotes with Context

On the Burden of Proof

"Mr. Nickell bears the burden of proof, and the standard of proof on all issues in this matter is that of a preponderance of the evidence." (Conclusion of Law No. 2)

Context: This establishes that the Petitioner was legally required to prove that it was more likely than not that the Association acted improperly.

Legal Definition of Preponderance of Evidence

"The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force…" (Conclusion of Law No. 3, quoting Black’s Law Dictionary)

Context: The ALJ used this to evaluate the conflicting testimonies regarding the "highest buildable point" and the feasibility of excavation.

On Contractual Compliance

"The CC&Rs are a contract between the parties and the parties are required to comply with its terms." (Conclusion of Law No. 5)

Context: This reinforces that the 15-foot height limit is a binding contractual obligation that the Association has a right and duty to enforce.

Regarding the Reasonableness of the Association

"The Association allows members to excavate down from the highest buildable point to accommodate structures that are taller than fifteen feet… This was not unreasonable, and Mr. Nickell has not proven that the Association violated ARIZ. REV. STAT. section 33-1817(B)(3)." (Conclusion of Law No. 7)

Context: This quote is the crux of the decision, highlighting that providing an alternative path to compliance (excavation) satisfies the legal requirement for an Association to act reasonably.

Actionable Insights

  • Establishing "Lot Grade" Protocols: Associations should clearly define "lot grade" and "highest buildable point" within their architectural guidelines—ideally referencing areas within setbacks—to avoid disputes during new construction or major renovations.
  • The Power of Compromise: The Association’s willingness to suggest excavation and footprint reversals served as strong evidence of "reasonableness" in the eyes of the court. Proposing alternative solutions to non-compliant homeowners can protect an Association from claims of being "unreasonable."
  • Hardship is a High Bar: For homeowners seeking variances, "hardship" must be more than a preference for a specific view or the convenience of an existing bathroom. "Extreme or material hardship" typically requires proof of physical or structural impossibility.
  • Documentation of Compliance: The Association was able to successfully defend against claims of selective enforcement because they had records showing that other "tall" buildings in the neighborhood had followed the excavation rules. Maintaining a clear paper trail of how previous exceptions or compliant tall structures were handled is vital for legal defense.
  • Correction of Errors: The issuance of the Amended Decision on December 9, 2019, to correct a typographical error in Conclusion of Law No. 9 demonstrates the necessity for parties to review final orders immediately for technical accuracy to ensure the legal record is clear.

Study Guide: Robert S. Nickell v. Holiday Harbour Property Owners Association

This study guide provides a comprehensive overview of the administrative hearing between Robert S. Nickell and the Holiday Harbour Property Owners Association (Case No. 20F-H2019008-REL). It covers the core legal issues regarding height restrictions in planned communities, the application of Arizona Revised Statutes (A.R.S.), and the standards for architectural approval.

I. Overview of the Dispute

The case centers on a petition filed by Robert S. Nickell (Petitioner) against the Holiday Harbour Property Owners Association (Respondent). The Petitioner sought to build a home with a height of seventeen feet on his lot at 4835 Marina View. The Association denied the request based on its Covenants, Conditions, and Restrictions (CC&Rs).

Central Legal Questions
  • Architectural Approval: Did the Association unreasonably withhold approval of the Petitioner’s construction plans in violation of A.R.S. § 33-1817(B)(3)?
  • Variances and Hardships: Did the Petitioner qualify for a height variance under Section 11 of the CC&Rs based on "extreme or material hardship"?
  • Definition of Lot Grade: How is "lot grade" determined for the purposes of enforcing height restrictions?

II. Key Concepts and Findings

1. The Height Restriction (CC&R Section 6)

The Association’s CC&Rs explicitly state that structures may not exceed fifteen (15) feet in height above lot grade. The Association interprets "lot grade" as the "highest buildable point," which in this specific case was the elevation where the original house on the lot was located.

2. Methods of Compliance

The Association allows homeowners to build structures taller than fifteen feet provided they excavate down from the lot grade. This ensures the total height above the original grade does not exceed the 15-foot limit. The Association informed the Petitioner he could build his requested 17-foot, 2-inch structure if he excavated accordingly.

3. The "Highest Buildable Point" Dispute

The Petitioner argued that his lot had already been excavated by 3.4 feet and that the "highest buildable point" should allow for an 18.4-foot structure. However, the Association provided testimony that the point identified by the Petitioner was located outside the required setbacks, and therefore did not qualify as the highest buildable point.

4. Variance Criteria (CC&R Section 11)

A variance or waiver of the height restriction can be granted at the Association's discretion if the restriction causes extreme or material hardship. The Petitioner cited drainage issues and the potential loss of his own views as hardships, but these were not found to meet the legal standard of extreme or material hardship.

5. Legal Standards for Administrative Hearings
  • Authority: The Arizona Department of Real Estate has authority over these matters under A.R.S. Title 32, Ch. 20, Art. 11.
  • Burden of Proof: The Petitioner carries the burden of proof.
  • Standard of Proof: The case is decided based on a preponderance of the evidence, meaning the evidence has the most convincing force and is sufficient to incline an impartial mind to one side.

III. Short-Answer Practice Questions

Q1: What is the maximum height permitted for structures under Section 6 of the Holiday Harbour CC&Rs?

  • Answer: Fifteen (15) feet above lot grade.

Q2: How does the Association define the "highest buildable point" for a lot?

  • Answer: It is an area inside the required setbacks that can accommodate a structure with 800 square feet of livable space.

Q3: Under A.R.S. § 33-1817(B)(3), what is the limitation placed on an Association regarding architectural designs?

  • Answer: Approval of a construction project's architectural designs, plans, and amendments shall not be unreasonably withheld.

Q4: Why did the Petitioner reject the Association's suggestion to reverse the footprint of his proposed house?

  • Answer: He claimed it would affect his own views and his ability to use a bathroom located in the existing garage.

Q5: What was the Petitioner's argument regarding his neighbor's home?

  • Answer: He argued that because the neighboring home was at a higher elevation, his proposed 17-foot home would still be six to eight feet lower than the neighbor’s and would not affect their views.

Q6: What specific reason did the Association give for enforcing height restrictions if not to preserve views?

  • Answer: The Association enforces height restrictions as a matter of fairness.

IV. Essay Prompts for Deeper Exploration

1. The Intersection of Contract Law and HOA Governance

The decision references Johnson v. The Pointe Community Association, noting that CC&Rs are a contract between parties. Discuss the implications of viewing CC&Rs as a contract. How does this contractual nature limit or empower an Association’s Board when enforcing restrictions like height limits?

2. Evaluating "Reasonableness" in Architectural Denials

Under A.R.S. § 33-1817(B)(3) and Tierra Ranchos Homeowners Ass'n v. Kitchukov, an Association must act reasonably. Analyze the Association's actions in this case. Was the offer to allow the Petitioner to build a 17-foot home—contingent on excavation—a "reasonable" compromise? Why did the Administrative Law Judge conclude that the Petitioner failed to prove the Association acted unreasonably?

3. The Challenge of Proving "Extreme or Material Hardship"

The Petitioner argued that excavation was impossible due to drainage issues and that changing his house footprint would negatively impact his personal views and garage access. Compare these claims against the standard of "extreme or material hardship." Why might a court or ALJ find these personal preferences insufficient to warrant a variance?

V. Glossary of Important Terms

Term Definition
A.R.S. § 33-1817(B)(3) An Arizona statute stating that HOAs cannot unreasonably withhold approval of construction architectural designs or plans.
CC&Rs Covenants, Conditions, and Restrictions; a contract between the Association and property owners governing the use of land.
Highest Buildable Point The elevation used to determine lot grade; specifically, an area within setbacks that can hold 800 sq. ft. of livable space.
Lot Grade The reference point for measuring structure height; in this case, the elevation at which the original house was located.
Preponderance of the Evidence The legal standard of proof where the evidence presented is more convincing than the evidence opposed to it.
Setbacks Required distances between a structure and the property lines or other features where building is prohibited.
Variance An exception to the established rules (CC&Rs) granted by the Association, typically in cases of extreme hardship.
Waiver The voluntary relinquishment of a known right or the decision not to enforce a specific restriction in the CC&Rs.

Heights and Hardships: Navigating HOA Construction Disputes

1. Introduction: The Battle for the Extra Two Feet

Homeowners, take note: spending thousands of dollars on architectural designs before clearing the legal hurdles of your CC&Rs is a recipe for a very expensive heartbreak. The case of Robert S. Nickell vs. Holiday Harbour Property Owners Association serves as a textbook example of what happens when a homeowner’s dream of a custom RV garage collides with a Board’s duty to enforce community standards. What began as a request for an extra two feet of height evolved into a legal battle that reaffirmed a fundamental truth in property law: your "vision" for your property does not override the binding contract you signed when you bought into an HOA.

2. The Rulebook: Understanding CC&Rs Section 6 and 11

The dispute hinged on the interpretation of two critical sections of the Holiday Harbour governing documents. As a consultant, I always tell my clients that these are not mere suggestions; they are the boundaries of your property rights.

  • The Height Limit: Section 6 explicitly prohibits any structure from exceeding 15 feet in height when measured above the "lot grade."
  • The Variance Clause: Section 11 provides the Board with the discretion to waive this restriction, but only in instances where the petitioner can demonstrate an "extreme or material hardship."
3. The Homeowner’s Argument: Why 17 Feet?

Petitioner Robert S. Nickell approached the Arizona Department of Real Estate seeking to overturn the Association’s denial of his 17-foot design. His strategy relied on an escalating set of interpretations and grievances:

  • The "Precedent" Claim: Nickell argued the Association was being arbitrary, presenting photos of other homes with RV garages that appeared to exceed the 15-foot limit.
  • A Moving Target: While the initial dispute was over a 17-foot home, Nickell’s demands escalated during the process. He eventually argued for a height of 18.4 feet, based on his own calculations of excavation and "highest buildable point."
  • Subjective Interpretation of Grade: He contended that "lot grade" should be defined as the "highest buildable point" on the property—a definition that favored his desired elevation.
  • The Subjective View Argument: Nickell claimed that because a neighboring home was at a higher elevation, his 17-foot home would not obstruct any neighbor's view. Conversely, he rejected the Association's suggestion to reverse his house footprint because it would negatively impact his own view from a garage bathroom.
  • Practical Hardship: He claimed excavation was impossible due to drainage concerns, asserting that the height limit effectively barred him from his desired build.
4. The Association’s Defense: Fairness Over Views

The Association, supported by testimony from Board members Douglas Clark and Michael Frue, maintained a defense rooted in consistency and mathematical precision. Their rebuttal offered a masterclass in how Boards should handle challenges:

  • Defining "Lot Grade": The Association successfully argued that "lot grade" refers to the historical elevation of the original home on the site.
  • The Setback Criticality: In a move that highlights the importance of surveyed boundaries, the Board proved that the "highest buildable point" Nickell used for his 18.4-foot claim was actually located outside the required property setbacks, rendering it legally irrelevant for height calculations.
  • The Compromise Offer: To prove they were not being "unreasonable," the Association informed Nickell he could build a structure up to 17 feet, 2 inches in total height, provided he excavated down from the lot grade—a standard they had applied to every other "tall" home in the community.
  • The Waterfront Exception: While Nickell pointed to a 17-foot home that had received a waiver, the Association clarified this was one of only six waterfront lots west of Highway 95. This specific class of lot did not set a precedent for Nickell’s inland property.
  • The Fairness Doctrine: The Board testified that height restrictions are enforced to ensure community-wide fairness, not to manage the subjective "views" of individual owners.
5. The Legal Verdict: Defining "Unreasonable"

The Administrative Law Judge (ALJ) reviewed the case under A.R.S. § 33-1817(B), which states that architectural approval shall not be "unreasonably withheld." The court reaffirmed the principle that the petitioner bears the burden of proof under a specific legal standard:

Preponderance of the Evidence: The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other. BLACK’S LAW DICTIONARY 1373 (10th ed. 2014).

The ALJ determined the Association acted reasonably. By offering a compromise (the 17' 2" excavation option) that was consistent with past enforcement, the Board met its legal obligations.

6. Key Takeaways for Homeowners and HOAs

The lesson for Boards and owners alike is clear. The ruling provides three actionable insights:

  1. Definitions are Legal, Not Subjective: "Lot grade" is typically tied to historical or surveyed points (like the original house footprint), not the most convenient mound of dirt on the property. Nickell’s attempt to use a point outside the setbacks was a fatal flaw in his argument.
  2. The Hardship Bar is Immense: To secure a variance, you must show more than a "preference." The court found that wanting an RV garage or refusing to move a footprint to protect a "garage bathroom view" does not constitute an "extreme or material hardship." Personal amenities are not legal rights.
  3. Case Law Protects the Contract: The court cited Johnson v. The Pointe Community Association and Tierra Ranchos v. Kitchukov to emphasize that CC&Rs are binding contracts. If an Association enforces its rules consistently—even if it offers a path to compromise like excavation—the courts will generally stay out of their hair.
7. Conclusion: The Final Order

The Administrative Law Judge ordered that Robert S. Nickell’s petition be dismissed in its entirety. This case serves as a stark warning: the "highest buildable point" on your lot isn't just where the ground is highest; it's where the law and your contract say it is. Before you break ground, ensure your architect is designing to the CC&Rs, not just your wishlist. In the world of HOAs, the rulebook always stands taller than your extra two feet.

Case Participants

Petitioner Side

  • Robert S. Nickell (Petitioner)
    Appeared on his own behalf

Respondent Side

  • Larry Boquette (HOA President)
    Holiday Harbour Property Owners Association
    Also listed as Lawrence E Boquette; appeared for Respondent
  • Douglas Clark (Board member)
    Holiday Harbour Property Owners Association
    Provided testimony
  • Michael Frue (Board member)
    Holiday Harbour Property Owners Association
    Provided testimony

Neutral Parties

  • Thomas Shedden (ALJ)
    Office of Administrative Hearings
    Administrative Law Judge
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
    Recipient of order

Mangus (AKA Gary) L.D. MacLeod Grantor and Trustee v. Mogollon

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Case Summary

Case ID 19F-H1919070-REL
Agency ADRE
Tribunal OAH
Decision Date 2019-12-02
Administrative Law Judge Thomas Shedden
Outcome The ALJ dismissed the petition, finding that the Respondent provided all responsive records in its possession. The tribunal held that A.R.S. § 33-1805(A) does not require an association to obtain and produce records it does not have.
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Mangus (AKA Gary) L.D. MacLeod Grantor and Trustee Counsel —
Respondent Mogollon Airpark, Inc. Counsel Gregory Stein

Alleged Violations

A.R.S. § 33-1805

Outcome Summary

The ALJ dismissed the petition, finding that the Respondent provided all responsive records in its possession. The tribunal held that A.R.S. § 33-1805(A) does not require an association to obtain and produce records it does not have.

Why this result: Petitioner failed to meet the burden of proof; the ALJ ruled that the statutory requirement to make records available does not extend to records not in the association's possession.

Key Issues & Findings

Failure to provide records (CD history trail)

Petitioner requested specific historical records regarding four CDs. Respondent provided records in its possession and some obtained from banks, but Petitioner argued Respondent was required to obtain further 'history trails' it did not possess.

Orders: Petition dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 33-1805(A)

Video Overview

Audio Overview

Decision Documents

19F-H1919070-REL Decision – 756469.pdf

Uploaded 2026-04-24T11:21:44 (91.2 KB)

Administrative Law Judge Decision: MacLeod v. Mogollon Airpark, Inc.

Executive Summary

On December 2, 2019, Administrative Law Judge Thomas Shedden issued a decision in the matter of Mangus L.D. MacLeod v. Mogollon Airpark, Inc. (Case No. 19F-H1919070-REL). The dispute centered on whether the Respondent, Mogollon Airpark, Inc., violated Arizona Revised Statutes (A.R.S.) § 33-1805 by failing to provide certain financial records requested by the Petitioner, Mangus MacLeod.

The Petitioner contended that the Association was legally obligated to obtain and produce bank records related to four Certificates of Deposit (CDs) from 2017, even if those records were not currently in the Association's possession. The Respondent maintained that it had provided all responsive records it possessed and had even assisted the Petitioner in obtaining additional records directly from financial institutions.

The Administrative Law Judge (ALJ) ruled in favor of the Respondent, concluding that A.R.S. § 33-1805(A) does not require an association to procure records it does not have. Consequently, the petition was dismissed.

Detailed Analysis of Key Themes

1. Statutory Interpretation of A.R.S. § 33-1805(A)

The central legal question was the scope of an association's duty to make "financial and other records" available. The Petitioner argued that because certain records (like bank history trails) are mentioned in an association’s records retention policy, they must be produced upon request regardless of whether the association actually possesses them.

The ALJ rejected this interpretation, noting that:

  • Statutes must be interpreted to provide "fair and sensible" results.
  • The tribunal cannot expand a statute to include requirements not explicitly stated in its provisions.
  • Requiring an association to obtain records it does not possess would constitute an "absurd and unreasonable construction" of the law.
2. Possession vs. Acquisition

The case distinguished between records held by the Association and records held by third-party entities (banks).

  • Respondent's Position: On April 22, 2019, the Association provided all records it currently had, including some newly acquired from banks via the Board president's proactive efforts.
  • Petitioner's Position: The Association was responsible for obtaining the full "history trail" of the CDs from the banks to facilitate a proper audit.

The ALJ found that once the Association provided all records in its possession, it had fulfilled its statutory duty.

3. Evidentiary Standards and Burden of Proof

The Petitioner bore the burden of proof by a preponderance of the evidence. The ALJ determined that the Petitioner failed to:

  • Identify any responsive records that were actually in the Respondent’s possession at the time of the request.
  • Provide substantial evidence that the Respondent failed to comply with a second records request.
4. Good Faith Cooperation

The findings of fact highlight that the Respondent, specifically Board president Craig Albright and the management company (HOAMCO), acted cooperatively. This included:

  • Contacting three banks to solicit records.
  • Directly accompanying the Petitioner to banks in June 2019 to help produce records.
  • Maintaining communication regarding the lack of hardcopy or electronic formats for older 2017 records.

Key Quotes and Contextual Analysis

Quote Source Context Significance
"The 'core' issue in this matter is whether 'other records' as used in ARIZ. REV. STAT. section 33-1805(A) includes all records listed in that retention policy regardless of whether Respondent actually has those records." Finding of Fact #18 Defines the Petitioner's legal theory: that a retention policy creates an absolute mandate to produce, even if the records must be sought from third parties.
"Courts will not place an absurd and unreasonable construction on statutes." Conclusion of Law #4 (Citing State v. McFall) Establishes the judicial boundary for interpreting HOA records laws; the ALJ used this to dismiss the idea that HOAs must "hunt" for missing records.
"Mr. MacLeod acknowledged that he could not identify any records that were responsive to his requests that were in the possession of Respondent when he made those requests." Finding of Fact #20 This admission was fatal to the Petitioner's case, as the statute governs existing records of the association.
"The preponderance of the evidence shows that Respondent provided Mr. MacLeod with copies of all records it had that were responsive to his first request." Conclusion of Law #8 The ultimate factual finding that cleared the Respondent of the alleged violation.

Actionable Insights

For Homeowners' Associations (HOAs)
  • Possession is the Metric: Compliance with A.R.S. § 33-1805(A) is generally measured by the production of records currently in the association's possession (either physical or electronic).
  • Documentation of Effort: The Respondent’s success was bolstered by the ability to show they contacted banks and worked with the management company (HOAMCO) to find responsive documents. Associations should document all efforts to fulfill record requests.
  • Third-Party Suggestion: When records are held by third parties (like banks), suggesting that the requester contact those entities directly is a valid and helpful response, though not strictly required by the statute to obtain those records for them.
For Petitioners/Members
  • Identifying Possession: Before filing a petition, a member should be able to provide evidence that the association actually holds the records being withheld.
  • Retention Policy vs. Statute: A retention policy dictates what an association should keep, but the statutory penalty for non-production under § 33-1805 applies to what the association has available for examination.
  • Meeting the Standard of Proof: Petitioners must provide "substantial evidence" (evidence that would permit a reasonable person to conclude the finding is substantiated) to prevail in administrative hearings.
Procedural Takeaway
  • Cooperation as Defense: While the hearing involved "hours of testimony" and "a thousand pages of proposed exhibits," the ALJ focused on the Respondent’s cooperative behavior and the credible testimony of the Board president regarding the April 22nd production of documents. This suggests that demonstrating "good faith" can be a powerful defense in administrative disputes.

MacLeod v. Mogollon Airpark, Inc.: A Study Guide on Association Records and Statutory Requirements

This study guide provides a comprehensive overview of the administrative law case Mangus L.D. MacLeod v. Mogollon Airpark, Inc. (No. 19F-H1919070-REL). The case centers on the interpretation of Arizona Revised Statutes (A.R.S.) § 33-1805 regarding the duty of a homeowners' association to provide records to its members.

Key Concepts and Case Overview

Core Dispute

The primary issue in this matter is whether an association is legally required to obtain and produce records that are not currently in its possession to satisfy a member’s request under A.R.S. § 33-1805. The Petitioner, Mangus MacLeod, sought the "history trail" for four Certificates of Deposit (CDs) held by Mogollon Airpark, Inc. dating back to 2017.

Legal Venue and Parties
  • Tribunal: Arizona Office of Administrative Hearings.
  • Petitioner: Mangus (AKA Gary) L.D. MacLeod, Grantor and Trustee.
  • Respondent: Mogollon Airpark, Inc. (managed by HOAMCO).
  • Administrative Law Judge: Thomas Shedden.
Statutory Framework: A.R.S. § 33-1805(A)

This statute governs the availability of association records:

  • Availability: All financial and other records of the association must be made reasonably available for examination.
  • Timeline for Examination: The association has ten business days to fulfill a request for examination.
  • Timeline for Copies: The association has ten business days to provide copies of requested records upon a request for purchase.

Summary of Findings and Legal Conclusions

Factual Timeline
Date Event
April 13 & May 3, 2019 Mr. MacLeod makes formal requests for CD records from 2017.
April 22, 2019 HOAMCO (Respondent's management) provides all records currently in possession.
June 12, 2019 Mr. MacLeod files a petition alleging non-compliance.
June 2019 Board president Craig Albright assists MacLeod by visiting banks to produce further records.
Oct & Nov 2019 Administrative hearings are conducted.
December 2, 2019 Administrative Law Judge issues a decision dismissing the petition.
Judicial Reasoning
  1. Possession of Records: The court found that the Respondent provided all records it had in its possession at the time of the request. The Respondent even went beyond its legal duty by soliciting new records from banks to assist the Petitioner.
  2. Statutory Interpretation: The judge ruled that A.R.S. § 33-1805(A) does not require an association to obtain records it does not have. Expanding the statute to include such a requirement would be "absurd and unreasonable."
  3. Burden of Proof: The Petitioner failed to provide "substantial evidence" that the Respondent withheld any records that were actually in its possession.

Short-Answer Practice Questions

1. Who bears the burden of proof in this administrative hearing? Answer: The Petitioner (Mangus MacLeod).

2. What is the standard of proof required for this case? Answer: Preponderance of the evidence.

3. According to A.R.S. § 33-1805(A), how many business days does an association have to provide copies of requested records? Answer: Ten business days.

4. Why did the Administrative Law Judge dismiss Mr. MacLeod’s petition? Answer: Because the Respondent provided all records it possessed that were responsive to the request, and the law does not require associations to obtain records from third parties (like banks) that they do not currently hold.

5. How did the Board president, Craig Albright, demonstrate cooperation after the petition was filed? Answer: He accompanied Mr. MacLeod to several banks in June 2019 to help have records produced directly for him.

Essay Questions for Deeper Exploration

1. Statutory Construction and Judicial Restraint

The decision references State ex rel. Morrison v. Anway, stating that a tribunal "may not expand or extend a statute to include that which is not within its provisions." Discuss how this principle applied to the Judge’s interpretation of "other records" in A.R.S. § 33-1805(A). Why would requiring an association to retrieve third-party records be considered an "absurd and unreasonable" construction of the law?

2. The Definition of "Reasonably Available"

Under A.R.S. § 33-1805(A), records must be made "reasonably available." Based on the findings of fact in this case, evaluate whether Mogollon Airpark, Inc. and its management company, HOAMCO, met this standard. Consider the actions taken by the Board president to contact banks and the information sent via email on April 22, 2019.

3. Evidentiary Weight and Witness Credibility

On the first day of the hearing, witness Craig Albright was described as "confused" regarding when certain bank records were obtained. On the second day, however, the Judge found his testimony "credible." Analyze the importance of witness credibility in administrative hearings and how the final determination of facts (Findings of Fact #15 and #16) influenced the legal outcome.

Glossary of Important Terms

  • A.R.S. § 33-1805: The specific Arizona statute governing the inspection and copying of association records by members.
  • Administrative Law Judge (ALJ): A judge who moves over trials and adjudicates disputes involving administrative agencies.
  • HOAMCO: The management company for Mogollon Airpark, Inc.
  • Petitioner: The party who initiates a lawsuit or petition (in this case, Mangus MacLeod).
  • Preponderance of the Evidence: The standard of proof where the evidence has the "most convincing force" and shows that a fact is more likely true than not.
  • Respondent: The party against whom a petition is filed (in this case, Mogollon Airpark, Inc.).
  • Substantial Evidence: Evidence that would permit a reasonable person to conclude that a proposed finding should be substantiated.
  • Tribunal: A court or forum of justice; in this context, the Office of Administrative Hearings.

The Limits of Transparency: Lessons from MacLeod v. Mogollon Airpark, Inc.

1. Introduction: The Tension Between Transparency and Practicality

In the world of community association governance, transparency is a statutory mandate, yet it is frequently tested by the practical realities of record-keeping. A recurring flashpoint for litigation involves a fundamental question: does an association’s duty to provide records extend to documents it does not actually possess?

This tension reached a definitive conclusion in a dispute between homeowner Mangus MacLeod and Mogollon Airpark, Inc. The matter, litigated before the Arizona Department of Real Estate (Case No. 19F-H1919070-REL) and heard by the Office of Administrative Hearings, serves as a critical boundary-marker for the rights of members and the administrative obligations of boards. The ruling clarifies that while transparency is essential, the law does not require an association to perform the impossible or the extra-statutory.

2. The Request: A Search for the "History Trail"

The conflict began in the spring of 2019. On April 13 and May 3, Petitioner Mangus MacLeod submitted formal requests to Mogollon Airpark, Inc. to examine and copy records dating back to 2017 concerning four Certificates of Deposit (CDs) held by the association. Mr. MacLeod's stated motive was to establish a "history trail" for these assets, which he argued was necessary for a "proper audit" of the association’s financial standing.

In response, Board President Craig Albright took proactive steps to satisfy the request. He coordinated with the association’s treasurer and contacted three separate financial institutions to retrieve the records. While two banks cooperated electronically, a third refused. The gathered documents, combined with records already in the association’s possession, were delivered to MacLeod via the management company, HOAMCO, on April 22, 2019.

Despite these efforts, MacLeod remained dissatisfied. He contended that the association was legally required to obtain the missing 2017 bank records, asserting that the association’s responsibility was not limited by what was currently in its filing cabinets but extended to any records it should have according to its internal policies.

3. Arguments from Both Sides
Petitioner (MacLeod) Respondent (Mogollon Airpark, Inc.)
Statutory Expansion: Argued that the term "other records" in A.R.S. § 33-1805(A) should be interpreted to include all documents listed in the HOA’s records retention policy, regardless of whether the HOA actually possesses them. Possession-Based Compliance: Asserted that the association satisfied its legal duty by providing all responsive records currently in its possession or control.
Mandatory Procurement: Claimed the HOA has an affirmative legal obligation to retrieve records from third parties (banks) if a member requests them for an audit. Reasonable Effort: Argued that there is no statutory mandate to "create" a record or "procure" third-party documents that the association does not hold.
The "Audit" Motive: Asserted that the "history trail" was essential for financial oversight and that the HOA’s failure to produce it hindered member transparency. Good Faith Action: Highlighted Board President Albright’s extensive efforts to assist, including personally accompanying the Petitioner to banks to attempt to retrieve the data.
4. The Legal Verdict: Interpreting A.R.S. § 33-1805(A)

Administrative Law Judge (ALJ) Thomas Shedden focused the ruling on the strict construction of A.R.S. § 33-1805(A), which requires that association records be made "reasonably available for examination."

In his analysis, the ALJ firmly constrained the scope of the statute, refusing to "legislate from the bench" by expanding the law’s requirements. The court relied on three core legal principles to reach its decision:

  1. Avoidance of Absurdity: Citing Gutierrez v. Industrial Commission of Arizona and State v. McFall, the ALJ noted that statutes must be interpreted to provide a "fair and sensible result" and that courts must reject "absurd and unreasonable construction."
  2. Statutory Limits: Referencing State ex rel. Morrison v. Anway, the ALJ emphasized that a tribunal may not expand or extend a statute to include requirements not expressly written in its provisions.
  3. Defining "Reasonably Available": The ALJ clarified that "reasonably available" pertains to the manner and timing of access to records the association actually has—it does not create a mandate for the association to hunt down, procure, or produce records held by third parties.

The ALJ concluded that equating a "retention policy" list with a "mandatory production" list was an unreasonable construction of the law.

5. Critical Takeaways for Homeowners and Boards

The MacLeod decision provides a roadmap for handling records disputes with precision and professional distance:

  • Possession vs. Obligation: A board’s duty is to produce what it has. The law does not require an association to "go hunting" for third-party records. If a record is not in the association's possession or control, the association has no statutory obligation to go out and get it.
  • The Credibility of Good Faith: During the hearing, Board President Albright was initially "confused" about the exact dates some records were obtained. However, because his underlying documentation (Exhibit 11) was solid and his actions—such as accompanying the petitioner to the bank—showed a clear intent to cooperate, the ALJ found his testimony credible.
  • The Burden of Proof is Substantial: Under Arizona Administrative Code § R2-19-119, the Petitioner bears the burden of proof by a "preponderance of the evidence." The "smoking gun" in this case was MacLeod’s own admission: he could not identify a single record that the HOA actually possessed that was being withheld.
  • Internal Policies are Not Statutes: While a "records retention policy" is a best-practice internal document, it does not expand the association’s legal liability under A.R.S. § 33-1805. A homeowner cannot use an internal policy to force a board to perform duties that the state legislature did not expressly authorize.
6. Conclusion: A Fair and Sensible Result

The ruling in MacLeod v. Mogollon Airpark, Inc. reinforces a standard of reasonableness. While transparency is the law, it is not an unlimited license for members to demand administrative labor from their boards. By adhering to the "fair and sensible" standard, the ALJ protected community associations from being forced to act as private investigators for individual members. For boards, the takeaway is clear: document your records, cooperate in good faith, and rest assured that your legal obligations end where your actual possession of records begins.

Case Participants

Petitioner Side

  • Mangus (AKA Gary) L.D. MacLeod (Petitioner)
    Appeared and testified

Respondent Side

  • Gregory Stein (Attorney for Respondent)
    Carpenter, Hazlewood, Delgado & Bolen LLP
  • Craig Albright (Board President)
    Mogollon Airpark, Inc.
    Witness; testified
  • Brian Dye (Community Manager)
    HOAMCO

Neutral Parties

  • Thomas Shedden (Administrative Law Judge)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
    Recipient of the order
  • Felicia Del Sol (Administrative Staff)
    Office of Administrative Hearings
    Transmitted the order

Michael J Stoltenberg v. Rancho Del Oro Homeowners Association

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Case Summary

Case ID 19F-H1919068-REL
Agency ADRE
Tribunal OAH
Decision Date 2019-09-04
Administrative Law Judge Thomas Shedden
Outcome The ALJ found the HOA violated CC&R 4.3 regarding the timing of budget delivery. While the Petitioner prevailed on the violation and was awarded the $500 filing fee, the ALJ denied the request to rescind the dues increase and denied civil penalties.
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Michael J. Stoltenberg Counsel —
Respondent Rancho Del Oro Homeowners Association Counsel Nicole Payne

Alleged Violations

CC&R 4.3

Outcome Summary

The ALJ found the HOA violated CC&R 4.3 regarding the timing of budget delivery. While the Petitioner prevailed on the violation and was awarded the $500 filing fee, the ALJ denied the request to rescind the dues increase and denied civil penalties.

Key Issues & Findings

Failure to deliver budget 15 days prior to meeting

Petitioner alleged the HOA violated CC&R 4.3 by failing to deliver the budget 15 days before the meeting. The HOA mailed the budget exactly 15 days prior (Jan 2 for Jan 17 meeting), but the ALJ ruled the contract required delivery, not just mailing, 15 days prior.

Orders: Respondent must pay to Petitioner his filing fee of $500.00 within thirty days.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Video Overview

Audio Overview

Decision Documents

19F-H1919068-REL Decision – 735330.pdf

Uploaded 2026-04-24T11:21:24 (80.1 KB)

Administrative Decision Briefing: Stoltenberg v. Rancho Del Oro Homeowners Association

Executive Summary

This document provides a comprehensive analysis of the administrative law decision in Case No. 19F-H1919068-REL, involving Petitioner Michael J. Stoltenberg and Respondent Rancho Del Oro Homeowners Association. The central dispute concerned whether the Association complied with its Covenants, Conditions, and Restrictions (CC&Rs) regarding the timely delivery of budget documentation to members.

The Administrative Law Judge (ALJ), Thomas Shedden, determined that the Association violated CC&R section 4.3 by failing to deliver the 2019 budget to the Petitioner at least fifteen days before the annual meeting. While the Petitioner was declared the prevailing party and awarded a refund of his $500 filing fee, the court declined to rescind the 2019 dues increase or issue civil penalties.

Detailed Analysis of Key Themes

1. Interpretation of Delivery Timelines

The core of the legal dispute rested on the distinction between "mailing" and "delivery." CC&R section 4.3 stipulates that the Board must cause a copy of the budget and assessment amounts to be delivered to each unit owner at least fifteen days prior to the meeting where the budget is presented.

The evidence established that:

  • The annual meeting occurred on January 17, 2019.
  • The Association mailed the budget on January 2, 2019 (exactly fifteen days before the meeting).
  • The Petitioner did not actually receive the budget fifteen days before the meeting.

The ALJ concluded that merely placing the budget in the mail fifteen days prior does not satisfy a requirement for "delivery" by that same date, as the transit time naturally delays the delivery beyond the required window.

2. Contractual Nature of CC&Rs

The decision reinforces the legal principle that CC&Rs constitute a binding contract between a Homeowners Association and its members. The tribunal emphasized that:

  • Both parties are required to comply with the explicit terms of the CC&Rs.
  • The court must give effect to the "clear and unambiguous terms" of these documents.
  • The Association’s failure to meet the specific delivery deadline constituted a breach of its contractual duty under section 4.3.
3. Burden of Proof and Evidentiary Standards

The Petitioner bore the burden of proof under the standard of a "preponderance of the evidence." This case highlights how credible personal testimony, combined with physical evidence (such as a postmarked envelope), can meet this standard. The ALJ found the Petitioner's testimony regarding the receipt of the budget to be credible, which was sufficient to incline the "fair and impartial mind" toward his side of the issue.

4. Remedies and Judicial Discretion

While the Petitioner successfully proved a violation, the court exercised discretion regarding the requested remedies. The decision illustrates a distinction between a procedural violation and the substantive validity of Association actions:

  • Procedural Violation: Confirmed (Late delivery of budget).
  • Awarded Remedy: Refund of the $500 filing fee to the Petitioner.
  • Denied Remedies: The court refused to rescind the 10% dues increase and declined to issue civil penalties, as the Petitioner failed to demonstrate that such measures were appropriate or necessary.

Key Case Data

Category Details
Case Number 19F-H1919068-REL
Administrative Law Judge Thomas Shedden
Hearing Date August 21, 2019
Decision Date September 4, 2019
Relevant CC&R Section 4.3 (Budget Delivery)
Prevailing Party Michael J. Stoltenberg
Financial Award $500.00 (Filing Fee Reimbursement)

Important Quotes with Context

On the Definition of Preponderance of Evidence

"The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that… is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other." (Citing Black’s Law Dictionary)

Context: This quote establishes the legal threshold the Petitioner had to meet to prove the Association violated the CC&Rs.

On Contractual Compliance

"The CC&Rs are a contract between the parties and the parties are required to comply with its terms… the tribunal must give effect to a contract’s clear and unambiguous terms."

Context: The ALJ used this to explain why the Association could not be excused from the strict 15-day delivery requirement, regardless of their mailing efforts.

On the Specific Violation

"The preponderance of the evidence shows that the Association placed the budget in the mail on January 2, 2019, which is fifteen days before the meeting, but it was not delivered to Mr. Stoltenberg on that date and was not delivered to him fifteen days before the meeting as required."

Context: This finding is the pivot point of the decision, clarifying that mailing a document on the deadline date is insufficient if the requirement is "delivery."

Actionable Insights

For Homeowners Associations
  • Buffer Mailing Dates: When CC&Rs require "delivery" by a certain date, Associations should account for mail transit times. Mailing exactly on the deadline (e.g., 15 days before a meeting for a 15-day requirement) will likely result in a violation if the document is not received on that same day.
  • Review Mandatory Timelines: Associations must strictly adhere to the timelines set in their CC&Rs for budget preparation (60 days prior to fiscal year) and member notification (30 days prior to meetings).
  • Dues Increase Authority: The case notes that dues increases up to 10% do not require membership approval under these specific CC&Rs, though procedural notice requirements still apply.
For Association Members
  • Documenting Receipts: Maintaining evidence of postmarks and arrival dates is crucial when alleging procedural violations by an Association.
  • Single-Issue Petitions: Petitioners should be aware that administrative hearings may require identifying a single issue or paying additional fees for multi-issue hearings.
  • Limited Remedies: Even if a violation is proven, the court may only award the recovery of filing fees rather than the rescission of Association financial decisions (like dues increases) unless a specific harm or lack of authority is demonstrated.

Study Guide: Stoltenberg v. Rancho Del Oro Homeowners Association

This study guide provides a comprehensive overview of the administrative law case Michael J. Stoltenberg v. Rancho Del Oro Homeowners Association (No. 19F-H1919068-REL). It covers the legal standards, factual findings, and final rulings issued by the Arizona Office of Administrative Hearings.

Core Case Overview

The case centers on a dispute regarding the procedural requirements for notifying homeowners of annual budgets and assessment increases. The Petitioner, Michael J. Stoltenberg, alleged that the Rancho Del Oro Homeowners Association (the Association) failed to comply with its Covenants, Conditions, and Restrictions (CC&Rs) regarding the timely delivery of budget documentation.

Key Legal Standards
  • Jurisdiction: The Arizona Department of Real Estate has authority over this matter pursuant to ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11.
  • Burden of Proof: The Petitioner bears the burden of proof.
  • Standard of Proof: The standard is a "preponderance of the evidence," defined as the greater weight of the evidence or evidence that has the most convincing force.
  • Contractual Nature of CC&Rs: Legal precedent establishes that CC&Rs are a contract between the parties, and the tribunal must give effect to the contract’s clear and unambiguous terms.

Factual Findings and Timeline

The dispute focused on the Association's actions leading up to the 2019 fiscal year and its annual meeting.

2019 Budget and Dues Increase
  • Meeting Date: The Association conducted its annual meeting on January 17, 2019.
  • Dues Adjustment: Monthly dues were increased by 10% to a total of $154 per month. Under the Association's rules, dues increases of up to 10% do not require membership approval.
  • Notice of Increase: The Association informed members of the dues increase in November 2018.
CC&R Section 4.3 Requirements

Section 4.3 of the CC&Rs outlines specific timelines for the Board of Directors:

  1. Preparation: The budget must be prepared at least 60 days before the fiscal year and at least 30 days before the meeting where it is presented.
  2. Delivery: A copy of the budget and assessment amounts must be delivered to each unit owner at least 15 days prior to the meeting.
The Violation

The evidence showed that the Association postmarked the 2019 budget on January 2, 2019. While this was 15 days before the January 17 meeting, the budget was not actually delivered to Mr. Stoltenberg 15 days prior. The Administrative Law Judge (ALJ) determined that mailing the document on the 15th day did not satisfy the requirement for delivery "at least fifteen days prior" to the meeting.

Short-Answer Practice Questions

1. Who had the burden of proof in this matter, and what was the required standard?

The Petitioner (Michael J. Stoltenberg) had the burden of proof, and the required standard was a "preponderance of the evidence."

2. Why was the Petitioner required to limit his petition to a single issue?

The Administrative Law Judge informed the Petitioner that his initial petition encompassed multiple issues (violations of CC&R 1.8, 1.9, 2.1, 3.1, etc.). He was required to either identify a single issue for the hearing or pay a fee for a multi-issue hearing.

3. What specific violation did the ALJ find the Association committed?

The Association violated CC&R section 4.3 by failing to deliver a copy of the budget to the Petitioner at least 15 days before the meeting at which the budget was considered.

4. What was the Association’s defense regarding the timing of the budget notification?

The Association postmarked the budget on January 2, 2019, exactly 15 days before the meeting; however, the law requires delivery, not just mailing, by that deadline.

5. Did the dues increase of 10% require a vote from the membership?

No. Dues increases of up to 10% do not require approval of the membership under the Association's governing documents.

6. What was the final remedy awarded to the Petitioner?

The Petitioner was deemed the prevailing party, and the Association was ordered to reimburse his $500 filing fee.

Essay Prompts for Deeper Exploration

1. The Distinction Between Mailing and Delivery in Contractual Obligations Analyze the ALJ’s interpretation of CC&R section 4.3. Discuss why the postmark date of January 2nd was insufficient to meet a "fifteen-day delivery" requirement for a meeting held on January 17th. How does this distinction affect how Homeowners Associations should manage their administrative timelines?

2. Remedies and Limits of Administrative Authority The Petitioner requested that the 2019 dues increase be rescinded and a civil penalty be issued. However, the ALJ denied these requests despite finding a violation. Based on the source context, explore the potential reasons why the procedural violation regarding the budget delivery did not automatically invalidate the dues increase itself.

Glossary of Important Terms

Term Definition
Administrative Law Judge (ALJ) A judge who presides over hearings and adjudicates disputes involving government agencies (in this case, the Office of Administrative Hearings).
CC&Rs Covenants, Conditions, and Restrictions; the governing documents and rules that constitute a contract between a Homeowners Association and its members.
Filing Fee The cost paid by a petitioner to initiate a legal matter. In this case, the fee was $500.00.
Fiscal Year The 12-month period used by the Association for budgeting and financial reporting.
Preponderance of the Evidence The standard of proof where the evidence is of "superior evidentiary weight" and more "convincing" than the opposing evidence.
Prevailing Party The party in a lawsuit or legal proceeding who succeeds on the main issues.
Petitioner The party who brings a legal petition or complaint to the tribunal (Michael J. Stoltenberg).
Respondent The party against whom a legal action is brought (Rancho Del Oro Homeowners Association).
Rescinded To cancel, revoke, or repeal a decision or agreement.

The "Delivery" Deadline: Lessons in HOA Transparency from Stoltenberg v. Rancho Del Oro

1. Introduction: When Procedure Meets Property Rights

For many homeowners, the relationship with their Homeowners Association (HOA) is a balancing act between community standards and personal property rights. However, as any seasoned legal analyst will tell you, this relationship is governed strictly by contract law. When a Board fails to adhere to the procedural requirements of its own governing documents, it risks not only community trust but also a formal administrative remedy.

The case of Michael J. Stoltenberg vs. Rancho Del Oro Homeowners Association stands as a pivotal cautionary tale. It demonstrates that even when an Association acts in good faith to announce a dues increase, a single procedural oversight regarding the definition of the word "delivered" can result in a legal defeat. This post analyzes how a $500 filing fee refund turned on the precise timing of a budget distribution.

2. The Dispute: A Question of Timing

In early 2019, Petitioner Michael J. Stoltenberg challenged the Rancho Del Oro Homeowners Association following a budget meeting that resulted in an assessment increase. While Mr. Stoltenberg’s initial petition alleged a wide array of violations—including CC&Rs 1.8, 1.9, 2.1, 3.1, and various parts of Article 4—he ultimately employed a focused legal strategy, narrowing his claim to a single, provable issue of procedural non-compliance.

The conflict centered on the following facts:

  • The Annual Meeting: Conducted on January 17, 2019.
  • The Assessment Change: A 10% increase, raising monthly dues to $154.
  • The Regulatory Conflict: CC&R Section 4.3, which mandates specific timelines for budget distribution.

The Petitioner’s primary allegation was that the Association committed a contractual breach by failing to deliver the 2019 budget within the mandatory 15-day window prior to the meeting.

3. The Legal Threshold: CC&R Section 4.3 Analyzed

The Association’s obligations were not mere suggestions; they were contractual mandates. The Board's failure to distinguish between "mailing" and "delivery" created the grounds for the dispute.

Legal Spotlight: CC&R Section 4.3 Requirements Under the Association’s governing documents, the Board has two distinct temporal duties: 1. Preparation Duties: The Board must prepare a budget at least 60 days before the fiscal year and at least 30 days before the meeting at which it is presented. 2. Delivery Duties: The Board "shall cause a copy of the budget and the amount of the assessments… to be delivered to each unit owner at least fifteen days prior to that meeting."

The Association, represented by the testimony of Diana Crites of Crites Property Management, argued that they had fulfilled their duty by informing members of the increase in November 2018 and mailing the budget on January 2, 2019. However, the legal standard for "delivery" is not met by the mere act of placing an item into the stream of transit.

4. The ALJ’s Decision: Mailing is Not Delivery

Administrative Law Judge (ALJ) Thomas Shedden applied the Preponderance of the Evidence standard to this matter. As defined in Black’s Law Dictionary, this is "the greater weight of the evidence… sufficient to incline a fair and impartial mind to one side of the issue rather than the other."

The ALJ’s logic focused on the "15-day math." If a meeting is held on the 17th, and the document is mailed on the 2nd, it is physically and legally impossible for the document to be "delivered" (received) on that same day.

HOA's Position The ALJ's Ruling Legal Logic
The Association mailed the budget on January 2, 2019, exactly 15 days prior to the meeting. Mailing on the deadline day is insufficient to satisfy a delivery requirement. "Delivery" implies receipt. Because the document was in transit on the 15th day, it was not delivered "at least 15 days prior."

The Verdict: The ALJ ruled that the Association violated Section 4.3. As a result, the Association was ordered to pay Mr. Stoltenberg $500 to reimburse his filing fee—effectively shifting the cost of litigation to the non-compliant Association.

5. Nuance in the Verdict: Limits to Homeowner Remedies

While the Petitioner secured a victory on the procedural point, the ruling highlights the limitations of administrative remedies. Homeowners should note that a procedural "win" does not always result in a total reversal of Association policy:

  1. Dues Increase Upheld: Because the 10% increase did not exceed the threshold requiring membership approval under the CC&Rs, the ALJ did not rescind the increase. The $154 monthly rate remained valid.
  2. No Civil Penalties: The ALJ determined that while a violation of the CC&Rs occurred, the circumstances did not warrant additional punitive civil penalties beyond the reimbursement of the filing fee.
6. Final Takeaways for Homeowners and Boards

The Stoltenberg case offers three high-impact lessons for community governance:

  • For Boards: Delivery Means Receipt. If governing documents require "delivery" by a specific deadline, mailing the document on that day is a breach of contract. Boards and management companies—such as Crites Property Management in this instance—must account for postal transit times to ensure documents are in the homeowners' hands by the deadline.
  • For Homeowners: Document Everything. Mr. Stoltenberg’s case was won on evidence, not just anecdotally. His presentation of the January 2nd postmark on the envelope was the pivotal "smoking gun" that proved the Association's timeline was flawed.
  • For Both: Contracts Matter. This ruling reinforces the precedent set in Johnson v. The Pointe Community Association (205 Ariz. 485), which establishes that CC&Rs are binding contracts. Tribunals are legally bound to give effect to the clear and unambiguous terms of these documents. Procedural transparency is a contractual obligation, not a courtesy.
7. Conclusion: The Value of Accountability

The Stoltenberg v. Rancho Del Oro decision serves as a vital reminder that in the world of HOAs, details matter. While the Association had notified members of the increase as early as November, their failure to strictly adhere to the 15-day delivery window for the final budget resulted in a financial penalty and a formal finding of violation. Ultimately, strict adherence to procedural deadlines is the only way for a Board to insulate itself from the costs and scrutiny of administrative litigation.

Case Participants

Petitioner Side

  • Michael J. Stoltenberg (petitioner)
    Appeared on his own behalf

Respondent Side

  • Nicole Payne (respondent attorney)
    Carpenter, Hazlewood, Delgado & Bolen LLP
  • Diana Crites (witness)
    Crites Property Management
    Testified for the Association
  • Lydia A. Peirce Linsmeier (respondent attorney)
    Carpenter, Hazlewood, Delgado & Bolen LLP
    Listed in transmission block

Neutral Parties

  • Thomas Shedden (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
    Recipient of transmitted order
  • F. Del Sol (clerk/staff)
    Office of Administrative Hearings
    Signed the transmission of the order

Bonnie Senftner v. Desert Wind Condominium Association

Posted on by

Case Summary

Case ID 19F-H1919056-REL
Agency ADRE
Tribunal OAH
Decision Date 2019-07-22
Administrative Law Judge Thomas Shedden
Outcome The ALJ dismissed the petition, ruling that the Petitioner failed to prove the Association violated the CC&Rs. The preponderance of evidence showed the damage was caused by an adjoining unit owner, and the CC&Rs assign liability to that owner, not the Association.
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Bonnie Senftner Counsel —
Respondent Desert Wind Condominium Association Counsel Shlomit Gruber

Alleged Violations

Article XIV, Section 14.2

Outcome Summary

The ALJ dismissed the petition, ruling that the Petitioner failed to prove the Association violated the CC&Rs. The preponderance of evidence showed the damage was caused by an adjoining unit owner, and the CC&Rs assign liability to that owner, not the Association.

Why this result: Petitioner relied on a CC&R section that assigns liability to the specific owner causing damage rather than the HOA, and failed to produce evidence or legal authority obligating the HOA to pay.

Key Issues & Findings

Party Walls and Damage by Adjoining Owners

Petitioner alleged the HOA violated the CC&Rs regarding party walls by not reimbursing her for mold testing costs after a washing machine in an adjoining unit caused water damage. The ALJ found the cited section places responsibility on the owner causing the damage, not the HOA.

Orders: Petition dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • Article XIV, Section 14.2
  • Section 1.12
  • Section 10.5

Video Overview

Audio Overview

Decision Documents

19F-H1919056-REL Decision – 724318.pdf

Uploaded 2026-04-24T11:20:01 (88.8 KB)

Administrative Law Judge Decision: Senftner v. Desert Wind Condominium Association

Executive Summary

This document provides a comprehensive briefing on the administrative hearing (Case No. 19F-H1919056-REL) between Bonnie Senftner (Petitioner) and the Desert Wind Condominium Association (Respondent). The dispute centered on alleged violations of the Association’s Covenants, Conditions, and Restrictions (CC&Rs) regarding damage to a party wall.

The Petitioner sought reimbursement for mold testing and argued that the Association’s voluntary repair of water damage constituted an admission of liability. However, the Administrative Law Judge (ALJ) determined that under the specific language of the CC&Rs, the responsibility for damage caused by an adjoining owner lies with that owner, not the Association. Consequently, the petition was dismissed on July 22, 2019.

Detailed Analysis of Key Themes

Interpretation of CC&R Section 14.2 (Party Walls)

The core of the dispute rested on the interpretation of Article XIV, Section 14.2 of the Association’s CC&Rs. The Petitioner alleged that the Association violated this provision when it failed to reimburse her for mold testing following water damage.

The ALJ's analysis focused on two primary definitions within the CC&Rs:

  • Party Wall Definition: Section 1.12 defines a party wall as a wall located on the division line between adjoining units used by both owners.
  • Liability for Damage: Section 14.2 explicitly states that if a party wall is damaged by the act of an adjoining owner (whether willful, negligent, or accidental), that owner is responsible for the repairs "without cost to the other adjoining Owner."

The findings established that the Association is not an "adjoining owner" in the context of a party wall between two private units. Therefore, the obligation to repair under Section 14.2 falls upon the owner of the unit where the damage originated, not the Association.

Causation and Association Intervention

The evidence presented during the hearing identified the source of the damage as unit 216. A plumber's inspection revealed that a washing machine in unit 216 was improperly installed, draining into a sink and over-topping a drain pipe. A second inspection confirmed that the discharge had damaged the pipe shared with unit 116 (owned by the Petitioner's LLC).

Despite the CC&R language placing responsibility on the unit owner, the Association voluntarily:

  1. Repaired the damaged pipe.
  2. Completed mold remediation.
  3. Repaired the drywall.

The Petitioner argued that these actions evidenced the Association's acceptance of legal responsibility. The ALJ rejected this, noting that the Petitioner provided no legal authority to support the claim that voluntary repairs create a mandatory obligation for further reimbursements.

Jurisdictional and Procedural Scope

The ALJ clarified the limits of the Association's duty to intervene in owner-to-owner disputes. While the Petitioner argued that the Association must act when unit owners disagree on repair costs, she could provide no CC&R provision to support this. The ALJ noted that while CC&R Section 10.5 involves arbitration, it is strictly limited to disputes regarding common areas, not private party walls.

Important Quotes with Context

Quote Source/Context Significance
"If any party wall is damaged or destroyed through the act or acts of one adjoining Owner… such adjoining Owner shall forthwith proceed to rebuild or repair the same to as good a condition as formerly, without cost to the other adjoining Owner." CC&R Section 14.2 This is the primary clause used to determine liability, placing the burden on the neighbor rather than the HOA.
"Petitioner presented no credible evidence or legal authority showing that by making those repairs, Respondent became obligated to reimburse Petitioner for any expenses she incurred." Conclusion of Law #5 This addresses the Petitioner's argument that the HOA's voluntary repairs established a legal precedent for liability.
"The preponderance of the evidence shows that the water damage for which Petitioner seeks redress was caused by the Owner of unit 218 [sic], and Section 14.2 imposes no duty on the Respondent to repair such damage." Conclusion of Law #5 This summarizes the legal basis for the dismissal, confirming the Association has no duty under the cited section.
"A wall located upon or at the division line between adjoining Units and used by both Owners of such Units…" CC&R Section 1.12 Provides the technical definition of a "party wall" used to apply the rules of Article XIV.

Actionable Insights

For Association Governance
  • Voluntary Repairs Do Not Equal Liability: An Association may choose to perform repairs to mitigate damage or mold within the community without necessarily assuming legal liability for all associated costs (such as third-party testing conducted by owners).
  • Clear Distinction of Roles: It is critical to distinguish between "Common Areas" and "Party Walls." Association responsibilities and arbitration requirements for common areas (Section 10.5) do not automatically extend to disputes between individual unit owners regarding shared walls.
For Unit Owners
  • Burden of Proof: In administrative hearings, the Petitioner bears the burden of proof by a "preponderance of the evidence." To succeed, a Petitioner must prove it is "more likely than not" that a specific CC&R violation occurred.
  • Direct Recourse Against Adjoining Owners: Under Section 14.2, when damage is caused by a neighbor’s appliance or negligence, the legal remedy is typically against that neighbor directly, rather than the Association.
  • Citing Specific Authority: Claims regarding an Association’s duty to mediate or pay for testing must be backed by specific language in the CC&Rs. General assertions of "responsibility" are insufficient if the contract language (CC&Rs) points elsewhere.

Case Study Guide: Senftner v. Desert Wind Condominium Association

This study guide provides a comprehensive overview of the administrative law case Bonnie Senftner v. Desert Wind Condominium Association (No. 19F-H1919056-REL). It covers the legal frameworks, factual findings, and judicial conclusions derived from the July 10, 2019, hearing before the Arizona Office of Administrative Hearings.

Key Legal Concepts and Factual Overview

The Nature of CC&Rs

Covenants, Conditions, and Restrictions (CC&Rs) function as a contract between a homeowners association and the unit owners. Under Arizona law (specifically referencing Johnson v. The Pointe Community Association), all parties are required to comply with the terms set forth in these documents.

Party Wall Definitions and Liabilities

Under the Desert Wind Condominium Association CC&Rs:

  • Definition (Section 1.12): A "party wall" is a wall located at the division line between adjoining units and used by both owners in the construction of their respective units.
  • Liability (Section 14.2): If a party wall is damaged or destroyed by the acts of an adjoining owner (or their guests, tenants, or agents), that owner is responsible for rebuilding or repairing the wall to its former condition at their own cost. This applies whether the act was willful, negligent, or accidental.
The Dispute

The Petitioner, Bonnie Senftner, alleged that the Respondent, Desert Wind Condominium Association, violated Article XIV, Section 14.2 of the CC&Rs. The core of the dispute involved water damage to a wall in unit 116 (owned by Senftner) caused by an issue in unit 216.

Factual Findings
  • Source of Damage: A washing machine in unit 216 was improperly installed, draining into a sink. The discharge exceeded the drain pipe's capacity, causing water to enter the wall.
  • Association Actions: The Association hired plumbers to investigate, repaired the damaged pipe, completed mold remediation, and performed drywall repairs.
  • Petitioner's Argument: Senftner argued that because the Association performed these repairs, they accepted legal responsibility for the damage and should therefore reimburse her for independent mold testing she conducted.

Short-Answer Practice Questions

1. Who bears the burden of proof in this administrative hearing, and what is the required standard of proof?

Answer: The Petitioner (Bonnie Senftner) bears the burden of proof. The standard of proof is a "preponderance of the evidence."

2. According to CC&R Section 14.2, who is responsible for the cost of repairing a party wall damaged by a tenant's negligence?

Answer: The "adjoining Owner" whose tenant caused the damage is responsible for the cost.

3. What specific mechanical failure led to the water damage in unit 116?

Answer: A washing machine in unit 216 was draining into a sink; the drain pipe was over-topped because it could not accommodate the volume of the washer’s discharge.

4. Why did the Administrative Law Judge (ALJ) determine that CC&R Section 10.5 did not apply to this case?

Answer: Section 10.5 deals with disputes between the Association and owners regarding repairs to common areas, whereas this dispute involved a party wall between two owners.

5. Does the Association's voluntary repair of a pipe or mold remediation constitute a legal admission of liability under the CC&Rs?

Answer: No. The ALJ found no credible evidence or legal authority suggesting that making repairs obligated the Association to reimburse the Petitioner for additional expenses.

Essay Prompts for Deeper Exploration

1. The Distinction Between Common Areas and Party Walls

Explain the legal distinction between common area disputes and party wall disputes as outlined in the case. In your essay, analyze why the Petitioner's inability to cite a specific CC&R provision regarding Association mediation of owner-to-owner disputes was fatal to her claim.

2. Contractual Obligations and Voluntary Performance

The Petitioner argued that the Association "accepted responsibility" by performing repairs. Discuss the implications of this argument in the context of contract law. Should an Association be penalized for taking proactive steps to mitigate damage (such as mold remediation) even if they are not strictly required to do so by the CC&Rs?

3. Analyzing the "Preponderance of the Evidence"

Define "preponderance of the evidence" as used in this decision. Use the facts of the Senftner case to demonstrate how the evidence "inclined a fair and impartial mind" toward the Respondent’s side, despite the Association’s decision to pay for the initial repairs.

Glossary of Important Terms

Term Definition
Adjoining Owner The owner of a unit that shares a common boundary or party wall with another unit.
CC&Rs Covenants, Conditions, and Restrictions; the governing legal documents that establish the rules for a common interest development.
Common Areas Portions of the condominium project intended for the use and enjoyment of all owners, typically managed by the Association.
Party Wall A wall located on or at the division line between adjoining units, used by both owners.
Preponderance of the Evidence The standard of proof in civil cases where the evidence must show that a fact is more likely true than not; the "greater weight" of the evidence.
Petitioner The party who brings a petition or claim to a court or administrative body (in this case, Bonnie Senftner).
Respondent The party against whom a petition or claim is filed (in this case, Desert Wind Condominium Association).
Administrative Law Judge (ALJ) A judge who presides over hearings and adjudicates disputes involving administrative agencies.

Who Pays for the Leak? A Lesson in HOA Liability and Party Walls

1. The "Neighbor's Leak" Nightmare: An Introduction

It is a scenario every condo owner dreads: you return home to find a water stain spreading across your ceiling or dampness buckling your drywall. When the source is identified as a neighbor’s unit, the immediate reaction is often to call the Homeowners Association (HOA) and demand they "fix it." But as many owners learn the hard way, just because a leak happens inside an Association building doesn't mean the Association is the one who has to pay for it.

The case of Bonnie Senftner vs. Desert Wind Condominium Association, adjudicated by the Arizona Department of Real Estate, provides a masterclass in the boundaries of HOA responsibility. It centers on a critical question: If an HOA steps in to help with initial repairs, does that voluntary act make them legally liable for every other related cost?

2. The Incident: When Washing Machines Go Wrong

The dispute began when Unit 116 (owned by a family LLC) suffered water damage to a wall shared with the unit above. To resolve the mystery, the Association sent in two different plumbers to investigate.

The findings were a classic example of "owner-induced" damage. The first plumber discovered that a washing machine in Unit 216 had been improperly installed. Rather than having a dedicated discharge line, the machine was draining directly into a sink. Because the sink’s drain pipe couldn't handle the high-volume discharge of a washing machine, the pipe would "over-top"—essentially overflowing—and send water into the wall. A second plumber confirmed that this excessive discharge had physically damaged the drain line where Unit 216 ties into the line for Unit 116.

Recognizing the potential for the water to spread and damage structural studs or other units, the Association acted quickly. They paid for the pipe repair, mold remediation, and drywall restoration. However, when the owner of Unit 116 conducted her own private mold testing and demanded reimbursement, the Association drew a line in the sand.

3. Understanding the "Party Wall" Rule

The resolution of this case hinged on whether the damaged area was a "Common Area" (the HOA’s responsibility) or a "Party Wall." Per CC&R Section 1.12, a party wall is any wall located on the division line between adjoining units that is used by both owners.

The governing rules for these walls are found in the "Gold Standard" provision of the Association’s documents:

CC&R Article XIV, Section 14.2: Damage by One of the Adjoining Owners "If any party wall is damaged or destroyed through the act or acts of one adjoining Owner, or any of his guests, tenants, licensees, agents, servants or members of his family (whether such act is willful, negligent or accidental), such adjoining Owner shall forthwith proceed to rebuild or repair the same to as good a condition as formerly, without cost to the other adjoining Owner."

The Legal Obligation: This section is unambiguous. If an owner (or their tenant) causes damage to a shared wall, that owner is the one legally responsible for the costs—not the innocent neighbor and not the Association.

4. The Turning Point: When Good Deeds Don't Equal Legal Liability

The Petitioner argued that because the Association paid for the remediation and drywall, they had effectively admitted liability for the entire event. As a consultant, I see this misunderstanding often: owners assume that "management is fixing it" equals "management is responsible."

The Administrative Law Judge dismissed this logic. Here is why the Petitioner’s claim for mold testing reimbursement failed:

  • Strategic Mitigation vs. Admission of Fault: The Association likely stepped in to mitigate damage to shared structural elements. The judge found no legal authority suggesting that an HOA’s choice to facilitate repairs creates a binding obligation to pay for an owner’s private, ancillary expenses.
  • The 10.5 vs. 14.2 Distinction: The Petitioner attempted to cite Section 10.5, which involves the Association’s role in arbitrating disputes. However, the judge clarified that Section 10.5 applies to Common Areas. Because this was a Party Wall dispute between two owners, Section 14.2 was the only relevant rule.
  • The "Preponderance of Evidence" Burden: In legal disputes, the Petitioner bears the "Burden of Proof." The judge used the definition from Black’s Law Dictionary, noting that the Petitioner must provide evidence with "convincing force" that inclines an impartial mind to their side. Since the Petitioner "could cite no provision in the CC&Rs" to shift the cost of testing to the Association, she failed this standard.
  • A Note on Accuracy: While the Judge’s final conclusion (Finding #5) mistakenly references Unit 218, the established facts of the case (Finding #6) confirm Unit 216 was the source. This minor clerical discrepancy did not change the reality: the upstairs owner, not the HOA, was the liable party.
5. Key Takeaways for Condo Owners

This case is a vital reminder that the HOA is a community manager, not a free insurance policy for individual negligence.

  1. Identify the Source of Origin Immediately: Determining exactly where a leak started is the only way to trigger Section 14.2.
  • Consultant’s Tip: Always secure a written plumber’s report that identifies the "point of origin" before any walls are closed back up. Without this evidence, you cannot hold a neighbor accountable.
  1. Audit Your Governing Documents for "Party Wall" Specifics: Do not assume every wall is a "common element." Knowing the difference between Section 10.5 (Common Areas) and Section 14.2 (Party Walls) can save you thousands in legal fees.
  2. Understand the "Voluntary Act" Logic: If your HOA offers to help with remediation, they are likely doing so to protect the building's shell and prevent a larger insurance claim. This is a protective measure for the community, not an admission of guilt.
  3. Owner-to-Owner Liability: Recognize that many interior leaks are private civil matters between two unit owners. The HOA is often a bystander, even if they provide the plumber who finds the leak.
6. Conclusion: The Final Verdict

The Administrative Law Judge ultimately ordered the petition dismissed. The ruling was clear: the water damage was caused by the upstairs owner's improperly installed appliance. Under the CC&Rs, the Association had no duty to pay for the repairs in the first place, and certainly no duty to reimburse the Petitioner for her private testing.

Living in a community association requires a sophisticated understanding of where your property rights—and your liabilities—begin. While an HOA will often act to preserve the integrity of the building, the ultimate financial responsibility for "neighbor-to-neighbor" damage rests with the person who caused it. Read your CC&Rs, document everything, and remember: a helping hand from the board is not a blank check for your private expenses.

Case Participants

Petitioner Side

  • Bonnie Senftner (Petitioner)
    Owner of LLC that owns unit 116
  • Michael Senftner (Witness)
    Husband of Petitioner

Respondent Side

  • Shlomit Gruber (Respondent Attorney)
    Resnick & Louis, P.C.
    Counsel for Desert Wind Condominium Association
  • Harman Cadis (Witness)
    Focus HOA Management

Neutral Parties

  • Thomas Shedden (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
    Listed on mailing distribution
  • Felicia Del Sol (Administrative Staff)
    Mailed/processed the order