The petition was dismissed as the Petitioner failed to prove by a preponderance of the evidence that the Association violated CC&R section 7.1(C) or ARIZ. REV. STAT. section 33-1248. The rule limiting sign use was deemed reasonable.
Why this result: Petitioner failed to meet the burden of proof on both issues.
Key Issues & Findings
Alleged unreasonable discrimination in adopting rules regarding common elements (monument sign)
Petitioner alleged the Association violated CC&R 7.1(C) by adopting a rule limiting the use of the common element monument sign to only owners in Building B, arguing this was unreasonable discrimination against Building A owners.
Orders: Petition dismissed for this issue.
Filing fee: $250.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
CC&R section 7.1(C)
CC&R section 6.26(a)
ARIZ. REV. STAT. section 33-1217
Alleged open meeting law violation at the June 10, 2020 Board meeting
Petitioner alleged the Board violated open meeting laws by communicating via email and reaching a decision prior to the June 10, 2020 meeting, claiming the President called for a vote without discussion.
Orders: Petition dismissed for this issue.
Filing fee: $250.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
ARIZ. REV. STAT. section 33-1248
Analytics Highlights
Topics: Condominium, Commercial HOA, Signage rules, Open meeting law, Discrimination
Additional Citations:
ARIZ. REV. STAT. section 33-1248
CC&R section 7.1(C)
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
ARIZ. REV. STAT. § 41-1092.07(F)(6)
Video Overview
Audio Overview
Decision Documents
21F-H2120003-REL Decision – 837073.pdf
Uploaded 2026-01-23T17:34:29 (103.9 KB)
Briefing Doc – 21F-H2120003-REL
Smith v. Sierra Foothills Condominium Association: A Briefing on the Monument Sign Dispute
Executive Summary
This briefing document synthesizes two Administrative Law Judge (ALJ) decisions concerning a dispute between Keith D. Smith, a commercial condominium unit owner, and the Sierra Foothills Condominium Association. The core of the dispute is a rule enacted by the Association on June 10, 2020, which restricts the use of a common element monument sign exclusively to unit owners in one of the property’s two buildings.
Mr. Smith filed a petition alleging two primary violations:
1. Unreasonable Discrimination: The sign rule violated the Association’s Covenants, Conditions, and Restrictions (CC&Rs) by unfairly discriminating against owners in his building.
2. Open Meeting Law Violation: The Association’s Board violated state open meeting laws by allegedly deciding on the rule via email before the public meeting and calling for a vote without discussion.
The Administrative Law Judge dismissed Mr. Smith’s petition in an initial decision on November 16, 2020, and again after a rehearing in a final decision on June 3, 2021. The judge concluded that Mr. Smith failed to meet his burden of proof on both claims. The sign rule was deemed a reasonable measure to address the differing visibility and street frontage of the two buildings. The allegation of an open meeting law violation was dismissed due to a lack of substantial evidence from the petitioner and credible contradictory testimony from the Association’s representatives.
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Case Overview
This matter was adjudicated by the Office of Administrative Hearings for the Arizona Department of Real Estate. The case involves a petition filed by a unit owner against his condominium association regarding rules governing common elements.
July 24, 2020: Petition filed by Keith D. Smith. October 26, 2020: Original hearing conducted. November 16, 2020: Initial decision issued, dismissing the petition. June 3, 2021: Rehearing decision issued, reaffirming dismissal.
Central Issues and Allegations
The dispute centered on a monument sign with space for only five businesses at a commercial condominium property consisting of two buildings, Building A and Building B.
1. The Monument Sign Rule (CC&R Violation)
At a meeting on June 10, 2020, the Association’s Board adopted a rule limiting the use of the monument sign to unit owners in Building B. Mr. Smith, an owner in Building A, alleged this violated the Association’s governing documents.
• Petitioner’s Allegations:
◦ The rule violates CC&R Section 7.1(C), which states that rules “shall not unreasonably discriminate among Owners and Occupants.”
◦ The rule violates the principle of CC&R Section 6.26(a), which requires use restrictions within Article 6 of the CC&Rs to be applicable to all occupants.
◦ As an owner, Mr. Smith holds an undivided interest in the common elements, meaning no owner should have exclusive use of the sign. He argued the rule amounted to an improper “partition” of a common element.
• Respondent’s Position:
◦ The rule is reasonable and non-discriminatory because it addresses a fundamental inequity in property layout: Building A has street frontage for signage, while Building B does not.
◦ The limited space on the monument sign (five slots) necessitates a managed approach to its use.
◦ While initially questioning if the sign was a common element, the Association waived this argument by acknowledging it as such in its official answer.
2. The June 10, 2020 Board Meeting (Open Meeting Law Violation)
Mr. Smith alleged that the Board’s conduct during the meeting at which the rule was passed violated Arizona’s open meeting law, specifically ARIZ. REV. STAT. section 33-1248.
• Petitioner’s Allegations:
◦ The Association’s president called for a vote on the new rule “without discussion,” implying a decision had already been made.
◦ Mr. Smith asserted that Board members must have “Obviously communicated with each other via email and reached their decision without ever hearing my argument.”
• Respondent’s Position:
◦ Association President Stuart Rayburn and witness Harold Bordelon provided “credible testimony” that a “protracted discussion lasting about an hour and a half” occurred before the vote.
◦ They testified that Mr. Smith himself spoke for approximately twenty minutes during this discussion.
Evidence and Proposed Solutions
• Petitioner’s Evidence: Mr. Smith testified on his own behalf and submitted an email from the City of Phoenix regarding signage rules. He also presented two estimates for altering the monument sign to accommodate more businesses—one by reducing the size of existing signs (which he offered to fund) and another by enlarging the monument itself.
• Respondent’s Evidence: The Association presented testimony from its president, Stuart Rayburn, and Harold Bordelon. They submitted Section 705 of the City of Phoenix’s Zoning Ordinance, which they argued showed flexibility in the sign code. Mr. Bordelon testified that some of Mr. Smith’s proposed alterations to the sign did not comply with the city code.
Administrative Law Judge’s Rulings and Rationale
The ALJ’s decisions in both the original hearing and the rehearing were consistent, leading to the dismissal of Mr. Smith’s petition. The core rationale rested on the petitioner’s failure to meet the required burden of proof.
Original Decision (November 16, 2020)
The initial ruling found decisively in favor of the Association.
• On the CC&R Violation: The ALJ concluded that Mr. Smith did not prove a violation of CC&R Section 7.1(C) for two primary reasons:
1. The rule was not unreasonable, as it rationally addressed the physical disadvantage of Building B, which “does not have street frontage,” compared to Building A, which does.
2. Mr. Smith’s reliance on CC&R Section 6.26(a) was misplaced, as “by its express terms, CC&R section 6.26 applies only to CC&R Article 6, and not Article 7,” where the Board’s authority to make rules resides.
• On the Open Meeting Law Violation: The ALJ found the allegation unsupported.
◦ Mr. Smith “offered no substantial evidence” for his claim of pre-meeting communication.
◦ His testimony that the Board called for a vote “without discussion is proven to be in error” based on credible opposing testimony.
Rehearing Decision (June 3, 2021)
Mr. Smith requested a rehearing on several grounds, including alleged irregularities, errors of law, and claims that the findings were arbitrary or not supported by evidence. The ALJ granted the rehearing but ultimately reaffirmed the original decision.
• Scope of the Rehearing: The judge clarified that the rehearing was limited to the two original issues and could not consider new evidence or allegations not raised in the initial petition.
◦ Evidence that Mr. Smith claimed to have (an email supporting the open meeting violation) was not considered because it was not offered at the original hearing.
◦ Arguments related to new statutes (e.g., ARIZ. REV. STAT. section 33-1217 on partitioning common elements) were dismissed as they were not part of the original petition.
• Reaffirmation of Rulings:
◦ The judge reiterated that CC&R Section 6.26(a) explicitly limits its effect to Article 6. He noted that Mr. Smith himself had argued the CC&Rs “should be read and applied as one continuous document unless the document clearly states otherwise,” which it did in this case.
◦ The conclusion that the sign rule was reasonable was upheld.
◦ The dismissal of the open meeting law claim was reaffirmed, as Mr. Smith still presented no substantial evidence, instead relying on a “rhetorical question” about how a vote could be called without prior communication.
Key Legal Standards Applied
The ALJ’s decisions were guided by specific legal principles and administrative codes.
Standard
Application in the Case
Burden of Proof
The Petitioner, Keith D. Smith, bore the burden to prove his allegations by a “preponderance of the evidence.” The ALJ concluded this standard was not met.
Preponderance of the Evidence
Defined as evidence with the “most convincing force” that is sufficient to “incline a fair and impartial mind to one side of the issue rather than the other.”
Substantial Evidence
The standard required for an ALJ’s decision, defined as evidence a “reasonable mind would use to reach a conclusion.”
Scope of Adjudication
The hearing and subsequent decisions were strictly limited to the issues formally raised and paid for in the original petition, pursuant to ARIZ. REV. STAT. § 41-1092.07(F)(6).
Admissibility of Evidence
Evidence not presented at the original hearing cannot be considered in a rehearing, as established by ARIZ. ADMIN. CODE § R2-19-115.
Study Guide – 21F-H2120003-REL
Study Guide: Smith v. Sierra Foothills Condominium Association
This guide provides a comprehensive review of the administrative case Keith D. Smith v. Sierra Foothills Condominium Association, based on the initial Administrative Law Judge Decision and the subsequent Decision on Rehearing. It is designed to test and deepen understanding of the facts, legal arguments, and outcomes of the proceedings.
Quiz: Short Answer Questions
Instructions: Answer the following questions in 2-3 sentences based on the provided case documents.
1. Who were the primary parties in this case, and what were their respective roles?
2. What were the two central allegations Keith D. Smith made against the Sierra Foothills Condominium Association in his petition?
3. What specific action did the Association’s Board take on June 10, 2020, that initiated this dispute?
4. What justification did the Association provide for creating a rule that exclusively benefited the owners of units in Building B?
5. On what grounds did the Administrative Law Judge (ALJ) reject Mr. Smith’s argument that the sign rule violated CC&R section 6.26(a)?
6. What was the “preponderance of the evidence” standard, and who bore the burden of meeting it in this case?
7. Why was Mr. Smith’s allegation of an open meeting law violation dismissed in the original hearing?
8. What were the primary grounds Mr. Smith cited when requesting a rehearing of the initial decision?
9. In the rehearing, Mr. Smith mentioned having an email that supported his open meeting law claim. Why did the ALJ refuse to consider this evidence?
10. What was the final outcome of both the original hearing on October 26, 2020, and the subsequent rehearing decision on June 3, 2021?
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Quiz Answer Key
1. The primary parties were Keith D. Smith, the Petitioner, and the Sierra Foothills Condominium Association, the Respondent. Mr. Smith, an owner of a unit in Building A, filed a petition alleging violations by the Association, which manages the common elements of the condominium complex.
2. Mr. Smith alleged that the Association had violated CC&R section 7.1(C) by creating an unreasonable and discriminatory rule. He also alleged a violation of the open meeting law, ARIZ. REV. STAT. section 33-1248, claiming the Board made its decision before the public meeting.
3. On June 10, 2020, the Association’s Board adopted a new rule regarding the monument sign, a common element. This rule limited the use of the sign, which had space for only five businesses, to the owners of units located in Building B.
4. The Association argued the rule was reasonable because Building A has street frontage where signs can be hung, providing visibility. In contrast, Building B lacks street frontage, making the monument sign a critical advertising tool for its occupants.
5. The ALJ rejected the argument because the text of CC&R section 6.26(a) explicitly states its applicability is limited to the restrictions “contained in this Article 6.” The disputed rule was created under the authority of Article 7, so the non-discrimination clause of Article 6 did not apply.
6. The “preponderance of the evidence” is the standard of proof requiring that the evidence be of greater weight and more convincing force, inclining a fair mind to one side of the issue. In this administrative hearing, the Petitioner, Keith D. Smith, bore the burden of proof to show the alleged violations occurred by this standard.
7. The allegation was dismissed due to a lack of substantial evidence. Mr. Smith acknowledged he had no emails to support his claim of prior communication, and the credible testimony of Stuart Rayburn and Harold Bordelon established that a lengthy discussion did occur at the meeting before the vote was taken.
8. Mr. Smith requested a rehearing on several grounds, including alleged irregularity in the proceedings, abuse of discretion by the ALJ, errors of law (such as in the admission or rejection of evidence), and that the decision was arbitrary, capricious, and not supported by the evidence.
9. The ALJ refused to consider the email because evidence must be presented during the original hearing. Since Mr. Smith did not offer the document at the October 26, 2020 hearing, it could not be introduced for the first time in a request for a rehearing.
10. In both the original hearing decision (November 16, 2020) and the rehearing decision (June 3, 2021), Keith D. Smith’s petition was dismissed. The ALJ consistently found that Mr. Smith had failed to meet his burden of proof for both the CC&R violation and the open meeting law violation.
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Essay Questions
Instructions: Formulate detailed responses to the following prompts, synthesizing evidence and arguments from both administrative decisions.
1. Analyze the legal reasoning employed by Administrative Law Judge Thomas Shedden to conclude that the monument sign rule was not an “unreasonable” discrimination among owners under CC&R section 7.1(c).
2. Trace the evolution of Keith D. Smith’s open meeting law allegation from his initial petition through his request for rehearing. Discuss the specific evidence presented (or lack thereof) and explain why the ALJ found his claims unconvincing at every stage.
3. Explain the concept of procedural limitations in administrative hearings, using Mr. Smith’s case as an example. Focus on why the ALJ could only consider two issues, why new evidence was rejected on rehearing, and why other “perceived deficiencies” were not addressed.
4. Discuss the significance of the “common elements” in this dispute. How did Mr. Smith’s claim of an “undivided interest” in the monument sign contrast with the Association’s right to regulate its use, and how was this conflict ultimately resolved by the ALJ?
5. Evaluate the arguments presented regarding CC&R section 6.26(a). Explain Mr. Smith’s interpretation of the clause and the ALJ’s contrary interpretation based on the explicit text of the document.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions. In this case, the ALJ was Thomas Shedden.
ARIZ. REV. STAT.
Abbreviation for Arizona Revised Statutes, which are the codified laws of the state of Arizona. Sections 33-1248 (open meeting law) and 33-1217 (partition of common elements) were cited.
Burden of Proof
The obligation on a party in a legal case to prove their allegations. In this matter, the burden of proof was on the Petitioner, Keith D. Smith.
CC&Rs (Covenants, Conditions & Restrictions)
The governing legal documents that set up the guidelines for a planned community or condominium. The key sections in this case were 6.10, 6.24, 6.26(a), and 7.1(c).
Common Elements
Parts of a condominium property that are owned in common by all unit owners and managed by the association. The monument sign was acknowledged by the Association as a common element.
Monument Sign
A freestanding sign at the property entrance that was the central subject of the dispute. It had space for only five businesses to advertise.
Office of Administrative Hearings (OAH)
The state agency where the hearings for this case were conducted.
Open Meeting Law
A state statute (ARIZ. REV. STAT. section 33-1248) requiring that meetings of governing bodies, like an HOA board, be conducted in public with proper notice and opportunity for member input.
Petitioner
The party who files a petition initiating a legal or administrative action. In this case, Keith D. Smith.
Preponderance of the Evidence
The standard of proof in this case, defined as evidence that has the most convincing force and is sufficient to incline a fair and impartial mind to one side of an issue over the other.
Rehearing
A second hearing of a case to reconsider the initial decision, typically granted on specific grounds such as procedural error or a decision contrary to evidence. Mr. Smith’s request for rehearing was granted but the original decision was upheld.
Respondent
The party against whom a petition is filed. In this case, the Sierra Foothills Condominium Association.
Substantial Evidence
Evidence that a reasonable mind would use to reach a conclusion. The ALJ found that Mr. Smith offered no substantial evidence for his open meeting law claim.
Waived
The voluntary relinquishment of a known right or argument. The Association waived its argument that the monument sign was not a common element by acknowledging that it was in its official Answer.
Blog Post – 21F-H2120003-REL
I Read a 17-Page HOA Lawsuit Over a Sign. Here Are 5 Surprising Lessons for Every Homeowner.
Introduction: The Signpost to a Bigger Story
For anyone living in a community with a Homeowner or Condominium Association, the rulebook can feel like a source of endless frustration. The rules often seem complex, arbitrary, and difficult to challenge. But what really happens when an owner decides to fight back?
I recently analyzed the initial ruling and final rehearing decision—17 pages in all—from just such a fight: a formal petition filed by Keith D. Smith against the Sierra Foothills Condominium Association. This wasn’t a residential dispute over lawn ornaments or paint colors; it was a commercial conflict over who was allowed to use a single monument sign. But within this seemingly small micro-drama are universal lessons that are shockingly relevant to any owner navigating a dispute with their association.
Here are five surprising lessons from Mr. Smith’s legal battle that every owner should understand.
1. Read the Fine Print. No,ReallyRead It.
Mr. Smith’s primary argument was one of unfair discrimination. He owned a unit in Building A and was prohibited from using the monument sign, a common element, while owners in Building B were allowed to use it. He pointed to a specific rule in the governing documents, CC&R section 6.26(a), which stated that use restrictions must be applicable to all owners. This seemed like a clear-cut case of the board violating its own rules.
He lost. The reason was a tiny but critical detail in the fine print. The judge found that the non-discrimination clause Mr. Smith cited explicitly stated it only applied to rules “contained in this Article 6.” The board’s authority to create the sign rule came from a different section entirely, “Article 7,” specifically section 7.1(c), which did not contain the same mandate for equal application.
The judge’s finding on the rehearing was conclusive:
“Section 6.26(a) provides that the use restrictions ‘contained in this Article 6’ are applicable to all owners. Consequently, section 6.26(a) cannot be read to require that rules promulgated under section 7.1(c) must apply to all owners.”
The specific structure and wording of your governing documents are paramount. An assumption about a rule’s general intent is not enough. A single phrase—like “in this Article 6″—can make or break an entire legal argument.
2. What Feels Unfair Isn’t Always Legally “Unreasonable”
From Mr. Smith’s perspective, the situation was fundamentally unfair. As a property owner, he had an undivided interest in all common elements, including the monument sign. To be completely excluded from using it felt like a violation of his ownership rights.
However, the Association and the judge saw it differently. The rule was deemed legally “reasonable” for two logical and practical reasons:
1. The sign had a very limited number of spaces—only five businesses could be advertised.
2. Building A, where Mr. Smith’s unit was located, had valuable street frontage where businesses could place their own signs. Building B, in contrast, had no street frontage, making the monument sign the primary and essential tool for visibility for those businesses.
This is where the fine print from the first lesson comes roaring back. The judge noted that the board’s authority under section 7.1(c) “on its face allows discrimination among owners” as long as it wasn’t unreasonable. The specific language of the documents gave the board the explicit power to treat owners differently, provided there was a rational basis—which, in this case, there was. In association disputes, the legal standard is often “reasonableness,” which is evaluated based on context and logic, not just an individual’s feeling of fairness.
3. Suspecting a “Secret Meeting” Isn’t Enough to Prove It
Mr. Smith also alleged that the board violated the open meeting law. He claimed that when the sign issue came up at the board meeting, the president immediately called for a vote without any discussion. This led him to believe the decision had already been made in secret via email.
In his petition, he stated his certainty in plain terms:
“Obviously, the board members communicated with each other via email and reached their decision without ever hearing my argument.”
This claim failed completely. At the hearing, Mr. Smith acknowledged that he had no emails or other documents to support his allegation. Furthermore, the Association’s president and another member presented “credible testimony” that, contrary to Mr. Smith’s recollection, a “protracted” discussion lasting about an hour and a half had, in fact, taken place before the vote was called.
An accusation, no matter how “obvious” it seems to you, is not evidence. To successfully challenge an association’s procedure, you must provide proof. Suspicion and personal interpretation of events are not enough to win a legal claim.
4. Your First Shot Is Often Your Only Shot
After the judge dismissed his initial petition, Mr. Smith filed for a rehearing. In this new request, he tried to introduce new arguments and evidence to bolster his case. Specifically, he raised:
• A brand-new claim that the sign rule violated a state statute (ARIZ. REV. STAT. section 33-1217) concerning the partitioning of common elements.
• A reference to an email he now claimed to possess that would support his open meeting law violation argument.
The judge flatly rejected these new points. The reason was purely procedural: the rules of the legal process require all claims and evidence to be presented in the initial petition and at the original hearing. You cannot hold arguments in reserve to see how the first ruling goes.
The judge’s decision was unequivocal:
“Consequently, evidence that Mr. Smith did not present at the original hearing cannot be considered in this rehearing.”
The legal process is not flexible. You must build your entire case and present all your evidence from the very beginning. Your first shot is often your only shot.
5. The Burden of Proof Is on the Accuser
This may be the most crucial lesson of all. In a dispute like this, the legal responsibility, or “burden of proof,” was on Mr. Smith to prove that the Association had acted improperly. It was not the Association’s job to prove its innocence.
The standard he had to meet was “a preponderance of the evidence.” The judge’s decision included a formal definition of this standard, which clearly explains the high bar an accuser must clear:
“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.”
Ultimately, the judge concluded that Mr. Smith “did not prove” that either of his claims met this standard. His feelings of unfairness and his suspicions of improper procedure were not supported by superior evidentiary weight, and his petition was dismissed. If you decide to formally challenge your association, you are the accuser, and you carry the burden of proof.
Conclusion: Know the Rules of the Game
A seemingly minor dispute over a commercial sign reveals fundamental truths about navigating any rule-based organization, especially an HOA or Condo Association. The outcome hinged on the precise language of the documents, the legal definition of “reasonable,” the high bar for proving misconduct, and the rigid procedures of the hearing process. Mr. Smith’s case serves as a powerful reminder that to successfully challenge the rules, you must first master the rules of the game.
This entire conflict hinged on the specific wording of a few sentences in a thick rulebook. When was the last time you truly read the documents that govern your own community, and what crucial details might be hiding in plain sight?
Case Participants
Petitioner Side
Keith D Smith(petitioner) Appeared on his own behalf; Unit Owner
Respondent Side
Stuart Rayburn(association president) Sierra Foothills Condominium Association Representative for Respondent
Harold Bordelon(witness) Sierra Foothills Condominium Association Testified for the Association
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate Recipient of transmission
LDettorre(ADRE staff) Arizona Department of Real Estate Recipient of transmission (email handle)
AHansen(ADRE staff) Arizona Department of Real Estate Recipient of transmission (email handle)
djones(ADRE staff) Arizona Department of Real Estate Recipient of transmission (email handle)
DGardner(ADRE staff) Arizona Department of Real Estate Recipient of transmission (email handle)
ncano(ADRE staff) Arizona Department of Real Estate Recipient of transmission (email handle)
The petition was dismissed because the Petitioner failed to demonstrate a violation by the Association, conceding that the Association was not in violation of the cited CC&R section.
Why this result: Petitioner acknowledged the Association was not in violation of CC&R section 2.7, the single issue raised in the petition.
Key Issues & Findings
Alleged violation of CC&R section 2.7 by the Association (later asserted as estoppel regarding enforcement)
Petitioner alleged the Respondent Association violated CC&R section 2.7. At the hearing, Petitioner acknowledged the Association was not actually in violation of section 2.7, but argued the Association was estopped from enforcing the provision requiring a six-foot gate for RV storage. Petitioner sought invalidation of outstanding fines.
Orders: Don France's petition is dismissed.
Filing fee: $500.00, 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)
ARIZ. REV. STAT. § 41-1092.07(F)(6)
ARIZ. REV. STAT. section 32-2199.02(B)
ARIZ. REV. STAT. section 32-2199.04
ARIZ. REV. STAT. section 41-1092.09
Analytics Highlights
Topics: CC&R, RV storage, Estoppel, Fines
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. § 41-1092.07(F)(6)
ARIZ. REV. STAT. section 32-2199.02(B)
ARIZ. REV. STAT. section 32-2199.04
ARIZ. REV. STAT. section 41-1092.09
Video Overview
Audio Overview
Decision Documents
20F-H2020056-REL Decision – 823714.pdf
Uploaded 2026-01-23T17:32:50 (96.1 KB)
Briefing Doc – 20F-H2020056-REL
Administrative Hearing Briefing: France v. Mesa East Property Owners Association
Executive Summary
This document provides a detailed analysis of the administrative hearing decision in case number 20F-H2020056-REL, involving petitioner Don France and respondent Mesa East Property Owners Association (the “Association”). The core of the dispute was the Association’s enforcement of its Covenants, Conditions, and Restrictions (CC&Rs), specifically section 2.7, which requires a six-foot-high gate for Recreational Vehicles (RVs) stored on a property.
The petitioner, Mr. France, was fined by the Association in 2019 for not having the required gate on an RV structure that the Association itself had approved in 2014. Mr. France initially filed a petition alleging the Association was in violation of its own CC&Rs. However, at the September 1, 2020 hearing, he conceded this was not the case and instead argued the Association was “estopped”—or legally prevented—from enforcing the rule due to its prior approval.
The Administrative Law Judge ultimately dismissed Mr. France’s petition on procedural grounds. The judge determined that since Mr. France acknowledged his petition’s central claim was incorrect, he had failed to meet his burden of proof. The new arguments concerning estoppel and the legality of the fines were deemed not properly before the tribunal because they were not included in the original petition. The decision underscores the critical importance of aligning claims made in a formal petition with the arguments presented at a hearing.
Case Overview
Case Number
No. 20F-H2020056-REL
In the Office of Administrative Hearings
Petitioner
Don France
Respondent
Mesa East Property Owners Association
Respondent’s Counsel
B. Austin Bailio, Esq.
Administrative Law Judge
Thomas Shedden
Hearing Date
September 1, 2020
Decision Date
September 21, 2020
The central issue of the case revolves around the enforcement of CC&R section 2.7, which mandates that RVs stored on a property must be screened behind a structure with a six-foot-high gate. This requirement is mirrored by a City of Mesa municipal code.
Chronology of Key Events
• 2014: Mr. France applies for and receives approval from the Association’s Architectural Review Committee (ARC) to build an RV port. In his application, he acknowledges he will abide by deed restrictions and City of Mesa codes.
• October 21, 2014: The Association issues its final approval for the structure, which is built without a gate.
• Circa 2018: Following threats of litigation from other residents over non-enforcement of the CC&Rs, the Association begins a new enforcement campaign for the six-foot gate rule. The City of Mesa denies the Association’s request to “grandfather in” non-compliant homes.
• 2019: The deadline for residents to come into compliance passes.
• March 11, 2019: The Association issues a Notice of Violation (NOV) to Mr. France for lacking the required gate.
• April 5, 2019: Through an attorney, Mr. France asserts that the Association is estopped from enforcing the rule due to its 2014 approval.
• May 15, 2019: The Association’s attorney rejects the estoppel claim and informs Mr. France’s attorney that fines of $500 per week will be assessed.
• May 31, 2019: The Association assesses a $500 fine against Mr. France, with additional fines assessed later.
• July 24, 2019: The City of Mesa issues its own NOV to Mr. France, citing a violation of city code 11-34-5(B), which also requires a six-foot screening fence for RVs.
• April 16, 2020: Mr. France files a petition alleging the Association is in violation of CC&R section 2.7.
• Prior to Hearing: To comply with the City of Mesa’s NOV, Mr. France installs a temporary gate at a cost of approximately $800.
• September 1, 2020: The administrative hearing is conducted.
Analysis of Arguments and Testimonies
Petitioner’s Position (Don France)
• Initial Petition: The formal petition, filed on April 16, 2020, was based on the single issue that the Mesa East Property Owners Association had violated its own CC&R section 2.7.
• Revised Argument at Hearing: During the hearing, Mr. France acknowledged that the Association was not, in fact, violating section 2.7. His argument shifted to a claim of estoppel, asserting that the Association could not enforce the rule against him because its own ARC had approved his gateless structure in 2014.
• Requested Relief: Mr. France asked the judge to rule that the Association could not require him to install a gate and to invalidate any outstanding fines levied against him.
• Supporting Testimony: Joann Van Kirk, the chairperson of the ARC in 2014, testified on Mr. France’s behalf. She stated that she had been informed by a past chair that no gate was required for structures like Mr. France’s, citing other properties that had RV shelters without gates. She also testified that she called the City of Mesa at the time and was told a gate was not required if the structure was attached to the house.
Respondent’s Position (Mesa East POA)
• Basis for Enforcement: The Association began strictly enforcing the gate requirement around 2018 after being threatened with lawsuits by other members for failing to enforce the CC&Rs.
• Enforcement Actions: After an unsuccessful attempt to have the City of Mesa grandfather in non-compliant properties, the Association notified members of the requirement via its newsletter and online, setting a compliance deadline of 2019. When Mr. France did not comply, the Association issued an NOV and subsequently began assessing fines.
• Legal Stance: The Association’s counsel formally rejected Mr. France’s estoppel argument in May 2019.
• Supporting Testimony: Donald Smith testified that at the time the NOV was issued to Mr. France, eleven other residents were also non-compliant. By the hearing date, six remained in violation, five of whom had agreed to comply. This testimony was intended to show that the enforcement was not targeted solely at Mr. France.
Independent Municipal Action
The City of Mesa’s regulations played a significant and independent role in the matter.
• City Code: The City of Mesa has its own ordinance, Code section 11-34-5(B), which requires RVs taller than six feet to be screened by a six-foot-tall fence.
• Notice of Violation: On July 24, 2019, the City issued its own NOV to Mr. France for violating this code.
• Consequence: This municipal enforcement action compelled Mr. France to install a temporary gate to avoid penalties from the City, regardless of the outcome of his dispute with the Property Owners Association.
Administrative Law Judge’s Decision and Rationale
Final Order: IT IS ORDERED that Don France’s petition is dismissed.
The judge’s decision to dismiss the case was based on a precise legal and procedural rationale, rather than the merits of the estoppel argument.
• Failure of the Core Claim: The judge noted that Mr. France’s petition was limited to the single claim that the Association had violated CC&R section 2.7. At the hearing, Mr. France himself admitted this was not the case. As the petitioner, Mr. France bore the burden of proof, and his own testimony demonstrated that the “preponderance of the evidence shows that there is no violation.”
• Jurisdictional Limitation: The new issues raised by Mr. France at the hearing—namely the estoppel argument and the legality of the fines—were declared “not properly before the tribunal.” The judge reasoned that these claims were not included in the original petition, a separate filing fee was not paid for a second issue, and the claims were not listed in the official Notice of Hearing. This procedural failure prevented the judge from ruling on the substance of these arguments.
Conclusion and Post-Decision Protocol
The dismissal of Mr. France’s petition represents a conclusive finding in favor of the respondent based on the specific claims filed. The decision illustrates that the scope of an administrative hearing is strictly defined by the issues raised in the initial petition.
According to the decision document, the order is binding on both parties unless a rehearing is granted. A request for a rehearing must be filed with the Commissioner of the Arizona Department of Real Estate within 30 days of the service of the order, pursuant to Arizona Revised Statutes.
Study Guide – 20F-H2020056-REL
Study Guide: France v. Mesa East Property Owners Association (No. 20F-H2020056-REL)
This guide provides a comprehensive review of the administrative hearing decision in the case between Don France (Petitioner) and the Mesa East Property Owners Association (Respondent), as decided by Administrative Law Judge Thomas Shedden.
——————————————————————————–
Short-Answer Questions
Instructions: Answer the following questions in two to three complete sentences, drawing all information directly from the provided legal decision.
1. Who are the primary parties in this case, and what was the single issue alleged in the Petitioner’s original petition filed on April 16, 2020?
2. According to CC&R section 2.7 and the City of Mesa’s code, what is the specific requirement for storing a recreational vehicle (RV) on a property?
3. What enforcement actions did the Mesa East Property Owners Association take against Don France in the spring of 2019?
4. What was Don France’s primary legal argument against the Association’s enforcement, which he revealed at the September 1, 2020 hearing?
5. What was the state of compliance on Mr. France’s property regarding the RV gate as of the hearing date, and what prompted this action?
6. According to the testimony of Donald Smith, what prompted the Association to begin enforcing the six-foot gate requirement around 2018?
7. What key information did Joann Van Kirk, the 2014 chairperson of the Architectural Review Committee, provide in her testimony?
8. How did the Petitioner’s argument at the hearing differ from the allegation in his initial petition, and why was this difference critical to the case’s outcome?
9. Why did the Administrative Law Judge decline to rule on the legality of the fines the Association had levied against Mr. France?
10. What was the ultimate order issued by the Administrative Law Judge, and what was the legal reasoning behind this decision?
——————————————————————————–
Answer Key for Short-Answer Questions
1. The primary parties are Don France, the Petitioner, and the Mesa East Property Owners Association, the Respondent. The single issue alleged in Mr. France’s petition was that the Association was in violation of its own CC&R section 2.7.
2. Both CC&R section 2.7 (the 1994 version) and the City of Mesa’s code (section 11-34-5(B)) require that RVs stored on a property must be screened behind a structure with a gate that is at least six feet high. The CC&Rs also specified the fence and gate must be tall enough to prevent a person from seeing the RV.
3. On March 11, 2019, the Association issued a Notice of Violation to Mr. France because his RV structure lacked a six-foot gate. Subsequently, on May 31, 2019, the Association fined him $500 for the same violation.
4. At the hearing, Mr. France’s primary argument was that the Association was “estopped” from finding him in violation of section 2.7. He argued this because the Association’s Architectural Review Committee had approved his RV structure in 2014 without the gate.
5. As of the hearing date, Mr. France had installed a temporary six-foot gate at a cost of about $800. This action was taken to comply with a Notice of Violation issued to him by the City of Mesa on July 24, 2019.
6. Donald Smith testified that around 2018, people were threatening to sue the Association if it did not enforce the CC&Rs. After meeting with the City of Mesa, which would not allow non-compliant homes to be grandfathered in, the Association began enforcing the gate requirement.
7. Joann Van Kirk testified that in 2014, she had learned from the past ARC chair that no gate was required because other owners had shelters without gates. She also testified that she called the City of Mesa and was told no gate was required if the structure was attached to the house.
8. While his petition alleged the Association had violated section 2.7, at the hearing Mr. France acknowledged this was not the case and argued instead that the Association was estopped from enforcing that section against him. This was critical because the judge could only rule on the single issue raised in the petition, which Mr. France conceded had no merit.
9. The judge declined to rule on the legality of the fines because the issue was not raised in Mr. France’s original petition. Therefore, it was not properly before the tribunal as a filing fee had not been paid for a second issue and it was not included in the Notice of Hearing.
10. The judge ordered that Don France’s petition be dismissed. The reasoning was that the petition was limited to the single issue of whether the Association had violated CC&R section 2.7, and Mr. France himself acknowledged at the hearing that no such violation by the Association had occurred.
——————————————————————————–
Essay Questions
Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive essay-format response for each, citing specific facts from the case decision to support your arguments.
1. Analyze the concept of estoppel as it applies to this case. Explain why Don France believed the Association was estopped from enforcing the gate requirement, referencing the 2014 approvals, and discuss why the Association disagreed and proceeded with enforcement actions.
2. Discuss the procedural limitations that shaped the outcome of this hearing. How did the specific wording of Mr. France’s initial petition and the rules governing administrative hearings ultimately prevent the judge from considering the central issues of estoppel and the validity of the fines?
3. Examine the conflict between a property owner’s reliance on past approvals and a Property Owners Association’s duty to enforce its CC&Rs. Use the testimony of Joann Van Kirk and Donald Smith to illustrate the differing perspectives and pressures that led to this dispute.
4. Trace the timeline of events from Mr. France’s 2014 application to the 2020 hearing. Detail the key actions taken by Mr. France, the Association’s Architectural Review Committee, the Association’s Board, and the City of Mesa, and explain how their interactions created the legal conflict.
5. Evaluate the standard of proof required in this case, the “preponderance of the evidence.” Although the case was dismissed on a procedural issue, discuss which party presented a more convincing case regarding the underlying dispute over the RV gate, and why.
——————————————————————————–
Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official (Thomas Shedden in this case) who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions and orders.
Architectural Review Committee (ARC)
A committee within the Property Owners Association responsible for reviewing and approving applications for property improvements, such as Mr. France’s RV port in 2014.
Burden of Proof
The responsibility of a party in a legal case to prove their allegations. In this matter, Mr. France bore the burden of proof to show the Association violated its CC&Rs.
Covenants, Conditions, and Restrictions. These are the governing community documents that set rules for property use, such as section 2.7 which requires a six-foot gate for RV storage.
Conclusions of Law
The section of the judge’s decision that applies legal principles and statutes to the established facts of the case to reach a final ruling.
Estoppel
A legal principle asserted by Mr. France arguing that the Association should be prevented from enforcing a rule (the gate requirement) against him because of its prior action (approving his structure without a gate in 2014).
Findings of Fact
A formal, numbered list of facts in the judge’s decision that are established by the evidence and testimony presented during the hearing.
Notice of Violation (NOV)
A formal notice issued by the Association or the City of Mesa to a property owner informing them that they are in violation of a specific rule or code.
Petitioner
The party who initiates a legal action by filing a petition. In this case, Don France is the Petitioner.
Preponderance of the Evidence
The standard of proof required in this hearing. It is defined as evidence with “the most convincing force” that is sufficient to incline an impartial mind to one side of an issue over the other.
Respondent
The party against whom a petition is filed. In this case, the Mesa East Property Owners Association is the Respondent.
Blog Post – 20F-H2020056-REL
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20F-H2020056-REL
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The provided text is an Administrative Law Judge Decision from the Office of Administrative Hearings concerning the case of Don France versus the Mesa East Property Owners Association. The document details a dispute where Petitioner Don France alleged that the Respondent Association violated a community covenant regarding the storage of recreational vehicles (RVs), specifically CC&R section 2.7, which requires RVs to be stored behind a six-foot gate. Although Mr. France initially brought the petition alleging the Association violated the rule, he ultimately argued that the Association was estopped from enforcing the rule against him due to past approval of his RV structure without a gate. The decision includes a summary of the Findings of Fact related to Mr. France’s structure, the Association’s attempts to enforce the gate requirement against him and other residents, and the resulting fines he incurred before installing a gate to comply with a separate City of Mesa Notice of Violation. Ultimately, the Administrative Law Judge determined that Mr. France failed to meet the burden of proof to show the Association violated the CC&Rs, and his petition was dismissed because he acknowledged the Association was not actually in violation of section 2.7.
What were the legal and factual grounds for the case’s dismissal?
How did the Association’s past actions relate to the estoppel claim?
What was the core conflict between the homeowner, HOA, and city codes?
Based on 1 source
Case Participants
Petitioner Side
Don France(petitioner) Appeared on his own behalf and testified
Joann Van Kirk(witness) Testified for Petitioner; was chairperson of Architectural Review Committee ('ARC') in 2014
Respondent Side
B. Austin Bailio(HOA attorney) Maxwell & Morgan, P.C. Attorney for Respondent Mesa East Property Owners Association
Michael Estey(witness) Testified for Respondent
Donald Smith(witness) Testified for Respondent
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate
The petition was dismissed because the Petitioner failed to demonstrate a violation by the Association, conceding that the Association was not in violation of the cited CC&R section.
Why this result: Petitioner acknowledged the Association was not in violation of CC&R section 2.7, the single issue raised in the petition.
Key Issues & Findings
Alleged violation of CC&R section 2.7 by the Association (later asserted as estoppel regarding enforcement)
Petitioner alleged the Respondent Association violated CC&R section 2.7. At the hearing, Petitioner acknowledged the Association was not actually in violation of section 2.7, but argued the Association was estopped from enforcing the provision requiring a six-foot gate for RV storage. Petitioner sought invalidation of outstanding fines.
Orders: Don France's petition is dismissed.
Filing fee: $500.00, 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)
ARIZ. REV. STAT. § 41-1092.07(F)(6)
ARIZ. REV. STAT. section 32-2199.02(B)
ARIZ. REV. STAT. section 32-2199.04
ARIZ. REV. STAT. section 41-1092.09
Analytics Highlights
Topics: CC&R, RV storage, Estoppel, Fines
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. § 41-1092.07(F)(6)
ARIZ. REV. STAT. section 32-2199.02(B)
ARIZ. REV. STAT. section 32-2199.04
ARIZ. REV. STAT. section 41-1092.09
Video Overview
Audio Overview
Decision Documents
20F-H2020056-REL Decision – 823714.pdf
Uploaded 2025-10-09T03:35:18 (96.1 KB)
Briefing Doc – 20F-H2020056-REL
Administrative Hearing Briefing: France v. Mesa East Property Owners Association
Executive Summary
This document provides a detailed analysis of the administrative hearing decision in case number 20F-H2020056-REL, involving petitioner Don France and respondent Mesa East Property Owners Association (the “Association”). The core of the dispute was the Association’s enforcement of its Covenants, Conditions, and Restrictions (CC&Rs), specifically section 2.7, which requires a six-foot-high gate for Recreational Vehicles (RVs) stored on a property.
The petitioner, Mr. France, was fined by the Association in 2019 for not having the required gate on an RV structure that the Association itself had approved in 2014. Mr. France initially filed a petition alleging the Association was in violation of its own CC&Rs. However, at the September 1, 2020 hearing, he conceded this was not the case and instead argued the Association was “estopped”—or legally prevented—from enforcing the rule due to its prior approval.
The Administrative Law Judge ultimately dismissed Mr. France’s petition on procedural grounds. The judge determined that since Mr. France acknowledged his petition’s central claim was incorrect, he had failed to meet his burden of proof. The new arguments concerning estoppel and the legality of the fines were deemed not properly before the tribunal because they were not included in the original petition. The decision underscores the critical importance of aligning claims made in a formal petition with the arguments presented at a hearing.
Case Overview
Case Number
No. 20F-H2020056-REL
In the Office of Administrative Hearings
Petitioner
Don France
Respondent
Mesa East Property Owners Association
Respondent’s Counsel
B. Austin Bailio, Esq.
Administrative Law Judge
Thomas Shedden
Hearing Date
September 1, 2020
Decision Date
September 21, 2020
The central issue of the case revolves around the enforcement of CC&R section 2.7, which mandates that RVs stored on a property must be screened behind a structure with a six-foot-high gate. This requirement is mirrored by a City of Mesa municipal code.
Chronology of Key Events
• 2014: Mr. France applies for and receives approval from the Association’s Architectural Review Committee (ARC) to build an RV port. In his application, he acknowledges he will abide by deed restrictions and City of Mesa codes.
• October 21, 2014: The Association issues its final approval for the structure, which is built without a gate.
• Circa 2018: Following threats of litigation from other residents over non-enforcement of the CC&Rs, the Association begins a new enforcement campaign for the six-foot gate rule. The City of Mesa denies the Association’s request to “grandfather in” non-compliant homes.
• 2019: The deadline for residents to come into compliance passes.
• March 11, 2019: The Association issues a Notice of Violation (NOV) to Mr. France for lacking the required gate.
• April 5, 2019: Through an attorney, Mr. France asserts that the Association is estopped from enforcing the rule due to its 2014 approval.
• May 15, 2019: The Association’s attorney rejects the estoppel claim and informs Mr. France’s attorney that fines of $500 per week will be assessed.
• May 31, 2019: The Association assesses a $500 fine against Mr. France, with additional fines assessed later.
• July 24, 2019: The City of Mesa issues its own NOV to Mr. France, citing a violation of city code 11-34-5(B), which also requires a six-foot screening fence for RVs.
• April 16, 2020: Mr. France files a petition alleging the Association is in violation of CC&R section 2.7.
• Prior to Hearing: To comply with the City of Mesa’s NOV, Mr. France installs a temporary gate at a cost of approximately $800.
• September 1, 2020: The administrative hearing is conducted.
Analysis of Arguments and Testimonies
Petitioner’s Position (Don France)
• Initial Petition: The formal petition, filed on April 16, 2020, was based on the single issue that the Mesa East Property Owners Association had violated its own CC&R section 2.7.
• Revised Argument at Hearing: During the hearing, Mr. France acknowledged that the Association was not, in fact, violating section 2.7. His argument shifted to a claim of estoppel, asserting that the Association could not enforce the rule against him because its own ARC had approved his gateless structure in 2014.
• Requested Relief: Mr. France asked the judge to rule that the Association could not require him to install a gate and to invalidate any outstanding fines levied against him.
• Supporting Testimony: Joann Van Kirk, the chairperson of the ARC in 2014, testified on Mr. France’s behalf. She stated that she had been informed by a past chair that no gate was required for structures like Mr. France’s, citing other properties that had RV shelters without gates. She also testified that she called the City of Mesa at the time and was told a gate was not required if the structure was attached to the house.
Respondent’s Position (Mesa East POA)
• Basis for Enforcement: The Association began strictly enforcing the gate requirement around 2018 after being threatened with lawsuits by other members for failing to enforce the CC&Rs.
• Enforcement Actions: After an unsuccessful attempt to have the City of Mesa grandfather in non-compliant properties, the Association notified members of the requirement via its newsletter and online, setting a compliance deadline of 2019. When Mr. France did not comply, the Association issued an NOV and subsequently began assessing fines.
• Legal Stance: The Association’s counsel formally rejected Mr. France’s estoppel argument in May 2019.
• Supporting Testimony: Donald Smith testified that at the time the NOV was issued to Mr. France, eleven other residents were also non-compliant. By the hearing date, six remained in violation, five of whom had agreed to comply. This testimony was intended to show that the enforcement was not targeted solely at Mr. France.
Independent Municipal Action
The City of Mesa’s regulations played a significant and independent role in the matter.
• City Code: The City of Mesa has its own ordinance, Code section 11-34-5(B), which requires RVs taller than six feet to be screened by a six-foot-tall fence.
• Notice of Violation: On July 24, 2019, the City issued its own NOV to Mr. France for violating this code.
• Consequence: This municipal enforcement action compelled Mr. France to install a temporary gate to avoid penalties from the City, regardless of the outcome of his dispute with the Property Owners Association.
Administrative Law Judge’s Decision and Rationale
Final Order: IT IS ORDERED that Don France’s petition is dismissed.
The judge’s decision to dismiss the case was based on a precise legal and procedural rationale, rather than the merits of the estoppel argument.
• Failure of the Core Claim: The judge noted that Mr. France’s petition was limited to the single claim that the Association had violated CC&R section 2.7. At the hearing, Mr. France himself admitted this was not the case. As the petitioner, Mr. France bore the burden of proof, and his own testimony demonstrated that the “preponderance of the evidence shows that there is no violation.”
• Jurisdictional Limitation: The new issues raised by Mr. France at the hearing—namely the estoppel argument and the legality of the fines—were declared “not properly before the tribunal.” The judge reasoned that these claims were not included in the original petition, a separate filing fee was not paid for a second issue, and the claims were not listed in the official Notice of Hearing. This procedural failure prevented the judge from ruling on the substance of these arguments.
Conclusion and Post-Decision Protocol
The dismissal of Mr. France’s petition represents a conclusive finding in favor of the respondent based on the specific claims filed. The decision illustrates that the scope of an administrative hearing is strictly defined by the issues raised in the initial petition.
According to the decision document, the order is binding on both parties unless a rehearing is granted. A request for a rehearing must be filed with the Commissioner of the Arizona Department of Real Estate within 30 days of the service of the order, pursuant to Arizona Revised Statutes.
Study Guide – 20F-H2020056-REL
Study Guide: France v. Mesa East Property Owners Association (No. 20F-H2020056-REL)
This guide provides a comprehensive review of the administrative hearing decision in the case between Don France (Petitioner) and the Mesa East Property Owners Association (Respondent), as decided by Administrative Law Judge Thomas Shedden.
——————————————————————————–
Short-Answer Questions
Instructions: Answer the following questions in two to three complete sentences, drawing all information directly from the provided legal decision.
1. Who are the primary parties in this case, and what was the single issue alleged in the Petitioner’s original petition filed on April 16, 2020?
2. According to CC&R section 2.7 and the City of Mesa’s code, what is the specific requirement for storing a recreational vehicle (RV) on a property?
3. What enforcement actions did the Mesa East Property Owners Association take against Don France in the spring of 2019?
4. What was Don France’s primary legal argument against the Association’s enforcement, which he revealed at the September 1, 2020 hearing?
5. What was the state of compliance on Mr. France’s property regarding the RV gate as of the hearing date, and what prompted this action?
6. According to the testimony of Donald Smith, what prompted the Association to begin enforcing the six-foot gate requirement around 2018?
7. What key information did Joann Van Kirk, the 2014 chairperson of the Architectural Review Committee, provide in her testimony?
8. How did the Petitioner’s argument at the hearing differ from the allegation in his initial petition, and why was this difference critical to the case’s outcome?
9. Why did the Administrative Law Judge decline to rule on the legality of the fines the Association had levied against Mr. France?
10. What was the ultimate order issued by the Administrative Law Judge, and what was the legal reasoning behind this decision?
——————————————————————————–
Answer Key for Short-Answer Questions
1. The primary parties are Don France, the Petitioner, and the Mesa East Property Owners Association, the Respondent. The single issue alleged in Mr. France’s petition was that the Association was in violation of its own CC&R section 2.7.
2. Both CC&R section 2.7 (the 1994 version) and the City of Mesa’s code (section 11-34-5(B)) require that RVs stored on a property must be screened behind a structure with a gate that is at least six feet high. The CC&Rs also specified the fence and gate must be tall enough to prevent a person from seeing the RV.
3. On March 11, 2019, the Association issued a Notice of Violation to Mr. France because his RV structure lacked a six-foot gate. Subsequently, on May 31, 2019, the Association fined him $500 for the same violation.
4. At the hearing, Mr. France’s primary argument was that the Association was “estopped” from finding him in violation of section 2.7. He argued this because the Association’s Architectural Review Committee had approved his RV structure in 2014 without the gate.
5. As of the hearing date, Mr. France had installed a temporary six-foot gate at a cost of about $800. This action was taken to comply with a Notice of Violation issued to him by the City of Mesa on July 24, 2019.
6. Donald Smith testified that around 2018, people were threatening to sue the Association if it did not enforce the CC&Rs. After meeting with the City of Mesa, which would not allow non-compliant homes to be grandfathered in, the Association began enforcing the gate requirement.
7. Joann Van Kirk testified that in 2014, she had learned from the past ARC chair that no gate was required because other owners had shelters without gates. She also testified that she called the City of Mesa and was told no gate was required if the structure was attached to the house.
8. While his petition alleged the Association had violated section 2.7, at the hearing Mr. France acknowledged this was not the case and argued instead that the Association was estopped from enforcing that section against him. This was critical because the judge could only rule on the single issue raised in the petition, which Mr. France conceded had no merit.
9. The judge declined to rule on the legality of the fines because the issue was not raised in Mr. France’s original petition. Therefore, it was not properly before the tribunal as a filing fee had not been paid for a second issue and it was not included in the Notice of Hearing.
10. The judge ordered that Don France’s petition be dismissed. The reasoning was that the petition was limited to the single issue of whether the Association had violated CC&R section 2.7, and Mr. France himself acknowledged at the hearing that no such violation by the Association had occurred.
——————————————————————————–
Essay Questions
Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive essay-format response for each, citing specific facts from the case decision to support your arguments.
1. Analyze the concept of estoppel as it applies to this case. Explain why Don France believed the Association was estopped from enforcing the gate requirement, referencing the 2014 approvals, and discuss why the Association disagreed and proceeded with enforcement actions.
2. Discuss the procedural limitations that shaped the outcome of this hearing. How did the specific wording of Mr. France’s initial petition and the rules governing administrative hearings ultimately prevent the judge from considering the central issues of estoppel and the validity of the fines?
3. Examine the conflict between a property owner’s reliance on past approvals and a Property Owners Association’s duty to enforce its CC&Rs. Use the testimony of Joann Van Kirk and Donald Smith to illustrate the differing perspectives and pressures that led to this dispute.
4. Trace the timeline of events from Mr. France’s 2014 application to the 2020 hearing. Detail the key actions taken by Mr. France, the Association’s Architectural Review Committee, the Association’s Board, and the City of Mesa, and explain how their interactions created the legal conflict.
5. Evaluate the standard of proof required in this case, the “preponderance of the evidence.” Although the case was dismissed on a procedural issue, discuss which party presented a more convincing case regarding the underlying dispute over the RV gate, and why.
——————————————————————————–
Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official (Thomas Shedden in this case) who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions and orders.
Architectural Review Committee (ARC)
A committee within the Property Owners Association responsible for reviewing and approving applications for property improvements, such as Mr. France’s RV port in 2014.
Burden of Proof
The responsibility of a party in a legal case to prove their allegations. In this matter, Mr. France bore the burden of proof to show the Association violated its CC&Rs.
Covenants, Conditions, and Restrictions. These are the governing community documents that set rules for property use, such as section 2.7 which requires a six-foot gate for RV storage.
Conclusions of Law
The section of the judge’s decision that applies legal principles and statutes to the established facts of the case to reach a final ruling.
Estoppel
A legal principle asserted by Mr. France arguing that the Association should be prevented from enforcing a rule (the gate requirement) against him because of its prior action (approving his structure without a gate in 2014).
Findings of Fact
A formal, numbered list of facts in the judge’s decision that are established by the evidence and testimony presented during the hearing.
Notice of Violation (NOV)
A formal notice issued by the Association or the City of Mesa to a property owner informing them that they are in violation of a specific rule or code.
Petitioner
The party who initiates a legal action by filing a petition. In this case, Don France is the Petitioner.
Preponderance of the Evidence
The standard of proof required in this hearing. It is defined as evidence with “the most convincing force” that is sufficient to incline an impartial mind to one side of an issue over the other.
Respondent
The party against whom a petition is filed. In this case, the Mesa East Property Owners Association is the Respondent.
Blog Post – 20F-H2020056-REL
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20F-H2020056-REL
1 source
The provided text is an Administrative Law Judge Decision from the Office of Administrative Hearings concerning the case of Don France versus the Mesa East Property Owners Association. The document details a dispute where Petitioner Don France alleged that the Respondent Association violated a community covenant regarding the storage of recreational vehicles (RVs), specifically CC&R section 2.7, which requires RVs to be stored behind a six-foot gate. Although Mr. France initially brought the petition alleging the Association violated the rule, he ultimately argued that the Association was estopped from enforcing the rule against him due to past approval of his RV structure without a gate. The decision includes a summary of the Findings of Fact related to Mr. France’s structure, the Association’s attempts to enforce the gate requirement against him and other residents, and the resulting fines he incurred before installing a gate to comply with a separate City of Mesa Notice of Violation. Ultimately, the Administrative Law Judge determined that Mr. France failed to meet the burden of proof to show the Association violated the CC&Rs, and his petition was dismissed because he acknowledged the Association was not actually in violation of section 2.7.
What were the legal and factual grounds for the case’s dismissal?
How did the Association’s past actions relate to the estoppel claim?
What was the core conflict between the homeowner, HOA, and city codes?
Based on 1 source
Case Participants
Petitioner Side
Don France(petitioner) Appeared on his own behalf and testified
Joann Van Kirk(witness) Testified for Petitioner; was chairperson of Architectural Review Committee ('ARC') in 2014
Respondent Side
B. Austin Bailio(HOA attorney) Maxwell & Morgan, P.C. Attorney for Respondent Mesa East Property Owners Association
Michael Estey(witness) Testified for Respondent
Donald Smith(witness) Testified for Respondent
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
20F-H2019032-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2020-08-11
Administrative Law Judge
Thomas Shedden
Outcome
loss
Filing Fees Refunded
$500.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
John R Ashley
Counsel
—
Respondent
Rancho Reyes II Community Association, Inc.
Counsel
Wendy Erlich
Alleged Violations
Bylaws Article III, Section 4
Outcome Summary
The ALJ dismissed the petition upon rehearing, finding that the Petitioner failed to prove by a preponderance of the evidence that Respondent violated Bylaws Article III, Section 4, because that provision is unambiguous and applies only to member quorums, not requiring a quorum of Board members at membership meetings.
Why this result: Petitioner failed to carry the burden of proof. The Bylaws were interpreted as a contract whose unambiguous terms (Article III, Section 4) do not support the Petitioner's claim regarding Board quorum at member meetings.
Key Issues & Findings
Failure to establish a quorum of Board members at membership meetings
Petitioner alleged Respondent violated Bylaws Article III, Section 4 by conducting member-meetings without a quorum of Board members present. The ALJ concluded the cited Bylaw provision was unambiguous and imposed no such requirement, only defining a quorum as 1/10th of the membership votes for action at a member meeting.
Orders: The Administrative Law Judge dismissed the petition following the rehearing, concluding the Petitioner had not shown the Respondent violated the cited Bylaws provision.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Grubb & Ellis Management Services, Inc. v. 407417 B.C., L.L.C., 213 Ariz. 83, 138 P.3d 1210 (App. 2006)
Rowland v. Union Hills Country Club, 157 Ariz. 301, 757 P.2d 105 (1988 App.)
Briefing Document: Ashley v. Rancho Reyes II Community Association, Inc.
Executive Summary
This document synthesizes the key facts, arguments, and legal rulings in the administrative case of John R Ashley v. Rancho Reyes II Community Association, Inc. (No. 20F-H2019032-REL). The central issue revolved around Petitioner John R. Ashley’s allegation that the Respondent, his homeowners’ association, violated its bylaws by conducting member meetings without a quorum of its Board of Directors present.
The Administrative Law Judge (ALJ) ultimately dismissed the petition, a decision that was upheld after a full rehearing. The core of the ruling rested on a plain-text interpretation of the association’s bylaws. The ALJ found that Bylaws Article III, Section 4 unambiguously defines a quorum for member meetings as one-tenth (1/10th) of the general membership, with no requirement for a Board quorum. The separate requirements for a Board quorum are distinctly located in Article VI, which governs meetings of the Directors.
The Petitioner’s arguments—that the Board constituted a separate “class of member” requiring a quorum and that Robert’s Rules of Order should apply—were found to be unsubstantiated by evidence. The ALJ concluded that the Petitioner failed to meet his burden of proof, and the Respondent association was deemed the prevailing party in the matter.
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Case Background and Procedural History
Parties Involved
Entity / Individual
Petitioner
John R. Ashley
Respondent
Rancho Reyes II Community Association, Inc.
Attorney for Respondent
Wendy Erlich, Esq.
Tribunal
Arizona Office of Administrative Hearings (OAH)
Presiding Judge
Thomas Shedden, Administrative Law Judge
Oversight Agency
Arizona Department of Real Estate
Core Allegation
The petitioner, John R. Ashley, filed a single-issue petition on or around December 9, 2019. He alleged that the Rancho Reyes II Community Association, Inc. violated its bylaws, specifically Article III, Section 4, by failing to establish a quorum of its Board of Directors at the annual membership meetings held in December 2017 and December 2018.
Procedural Timeline
• c. December 9, 2019: John R. Ashley files a petition with the Arizona Department of Real Estate.
• February 10, 2020: The Respondent files a Motion to Dismiss Petition, arguing that the cited bylaw does not require a Board quorum at member meetings.
• February 18, 2020: Mr. Ashley files a notice confirming his single issue is the alleged violation of Article III, Section 4.
• March 3, 2020: The ALJ, Thomas Shedden, grants the Respondent’s Motion to Dismiss. The hearing scheduled for March 16, 2020 is vacated.
• March 10, 2020: Mr. Ashley files a Request for Rehearing with the Department of Real Estate.
• March 27, 2020: The Department of Real Estate issues an Order Granting Rehearing.
• July 28, 2020: A full rehearing is conducted at the OAH. Mr. Ashley testifies on his own behalf; the Respondent is represented by counsel but presents no witnesses.
• August 11, 2020: The ALJ issues a final decision after the rehearing, once again dismissing Mr. Ashley’s petition.
Analysis of the Central Dispute: Bylaw Interpretation
The case hinged entirely on the interpretation of the quorum requirements as defined in the association’s bylaws. The Petitioner and Respondent presented conflicting views on the applicability of these rules to member meetings versus director meetings.
Petitioner’s Position (John R. Ashley)
• Primary Argument: Mr. Ashley asserted that Article III, Section 4 required a quorum of the Board of Directors to be present at all meetings of the general membership.
• “Board Membership Class” Theory: He argued that the Board of Directors constituted a third “class of member” alongside homeowners and the original developers. Under this theory, this “class” would need its own quorum at member meetings. The ALJ found no substantial evidence to support the existence of this class in the bylaws.
• Reliance on Robert’s Rules of Order: Mr. Ashley referenced Robert’s Rules of Order to support his position. However, he presented no evidence to show that these rules were incorporated into the association’s Articles of Incorporation, Declaration, or Bylaws, making them inapplicable under the tribunal’s statutory authority.
Respondent’s Position (Rancho Reyes II Community Association, Inc.)
• Plain Text Interpretation: The Respondent argued that Article III, Section 4 is unambiguous and applies solely to the quorum requirements for the general membership, not the Board of Directors.
• Distinct Quorum Rules: The association contended that the bylaws clearly separate the rules for member meetings (Article III) from the rules for director meetings (Article VI). Article VI, Section 3 explicitly sets the quorum for the transaction of business by the Board of Directors.
Controlling Bylaw Provisions
Article
Pertinent Text / Description
Article III, Section 4
Meetings of Members; Quorum
“The presence at the meeting of Members entitled to cast, or of proxies entitled to cast, one-tenth (1/10th) of the votes of each class of membership will constitute a quorum for any action except as otherwise provided…”
Article VI, Section 3
Meetings of Directors; Quorum
Sets out the quorum requirements specifically for Board of Director meetings, showing that a majority of Directors constitutes a quorum for the transaction of business.
Administrative Law Judge’s Findings and Rulings
The ALJ’s decisions, both in the initial dismissal and the final order after rehearing, were consistent and based on established principles of contract law and the evidence presented.
Initial Dismissal (March 3, 2020)
In the initial order, the ALJ granted the Respondent’s Motion to Dismiss based on a direct reading of the bylaws. The ruling stated:
• The bylaws are a contract between the parties.
• The terms of Article III, Section 4 are unambiguous and contain “no requirement for a quorum of Board members to be present at a meeting of the membership.”
• Because the bylaw does not contain the requirement alleged by Mr. Ashley, a violation could not have occurred.
Rehearing Decision (August 11, 2020)
The rehearing allowed for a more extensive review but ultimately affirmed the initial conclusion. The ALJ made several key Conclusions of Law:
• Burden of Proof: Mr. Ashley, as the petitioner, bore the burden of proving his case by a preponderance of the evidence.
• Bylaws as Contract: Citing legal precedent (McNally v. Sun Lakes Homeowners Ass’n #1, Inc.), the decision reiterated that bylaws function as a binding contract.
• Unambiguous Terms: The tribunal is required to give effect to the unambiguous terms of a contract. Article III, Section 4 was found to be clear and unambiguous in its meaning.
• Lack of Evidence: Mr. Ashley failed to present substantial evidence for his key claims:
◦ He did not show that Robert’s Rules of Order were applicable to the matter.
◦ He did not show that the bylaws included a “Board membership class.”
• Final Conclusion: Because Article III, Section 4 does not require a quorum of Board members at a member meeting, Mr. Ashley failed to prove by a preponderance of the evidence that the Respondent had violated it.
Final Order and Implications
Based on the findings from the rehearing, the Administrative Law Judge issued a final, binding order on August 11, 2020.
• Order: “IT IS ORDERED that Petitioner John R. Ashley’s petition is dismissed.”
• Prevailing Party: The Respondent, Rancho Reyes II Community Association, Inc., was deemed the prevailing party in the matter.
• Appeal Rights: The order noted that, as a decision resulting from a rehearing, it is binding on the parties. Any further appeal must be sought through judicial review by filing with the superior court within thirty-five days from the date of service, as prescribed by Arizona Revised Statutes.
Study Guide – 20F-H2019032-REL-RHG
Study Guide: Case No. 20F-H2019032-REL
This guide is designed to review the key facts, legal arguments, and procedural history of the administrative case involving John R. Ashley and the Rancho Reyes II Community Association, Inc.
Short-Answer Quiz
Instructions: Answer the following questions in two to three sentences, using only the information provided in the source documents.
1. Who were the Petitioner and Respondent in case No. 20F-H2019032-REL, and what was the primary institution hearing the case?
2. What was the central allegation made by John R. Ashley in his initial petition filed on December 9, 2019?
3. According to the provided documents, what did Bylaws Article III, Section 4 actually require to establish a quorum for a meeting of the members?
4. On what grounds did the Respondent, Rancho Reyes II Community Association, Inc., file its Motion to Dismiss?
5. What was the initial outcome of Mr. Ashley’s petition, as decided in the Administrative Law Judge Decision dated March 3, 2020?
6. Upon what legal standard did the Administrative Law Judge state that bylaws should be interpreted, and what two court cases were cited to support this principle?
7. During the rehearing, Mr. Ashley introduced an argument about different “classes of membership.” What was this argument, and why was it rejected?
8. What role did Robert’s Rules of Order play in Mr. Ashley’s arguments, and what was the tribunal’s official position on construing these rules?
9. What is the standard of proof required in this matter, and which party bore the burden of meeting it?
10. What was the final order issued on August 11, 2020, and what was the specified recourse for a party wishing to appeal it?
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Answer Key
1. The Petitioner was John R. Ashley, and the Respondent was Rancho Reyes II Community Association, Inc. The case was heard in the State of Arizona’s Office of Administrative Hearings (OAH).
2. Mr. Ashley’s central allegation was that the Respondent violated its own Bylaws, specifically Article III, Section 4, by conducting member meetings in December 2017 and December 2018 without a quorum of Board members present.
3. Bylaws Article III, Section 4 required the presence of members or proxies entitled to cast one-tenth (1/10th) of the votes of each class of membership. It contained no provision requiring a quorum of the Board of Directors to be present at a member meeting.
4. The Respondent filed its Motion to Dismiss on the grounds that the petition should be dismissed because Article III, Section 4 of the Bylaws is unambiguous and does not require a quorum of Board members to be present for a meeting of the members.
5. The Administrative Law Judge granted the Respondent’s Motion to Dismiss in an order dated March 3, 2020. Mr. Ashley’s petition was dismissed, and the hearing scheduled for March 16, 2020, was vacated.
6. The judge stated that the Bylaws are a contract between the parties, and unambiguous terms must be given effect. The cases cited were McNally v. Sun Lakes Homeowners Ass’n #1, Inc. and Grubb & Ellis Management Services, Inc. v. 407417 B.C., L.L.C.
7. Mr. Ashley argued that a “Board membership class” existed and that Article III, Section 4 required a quorum of this class. The argument was rejected because he presented no substantial evidence that the Bylaws included such a class.
8. Mr. Ashley argued that Robert’s Rules of Order supported his position. The tribunal determined that construing these rules was not within the scope of its authority and noted that Mr. Ashley failed to provide evidence showing the rules were part of the association’s governing documents.
9. The standard of proof was a “preponderance of the evidence.” The Petitioner, Mr. Ashley, bore the burden of proof on all issues in the matter.
10. The final order, issued after the rehearing, was that Mr. Ashley’s petition was dismissed and the Respondent was deemed the prevailing party. A party wishing to appeal the order was required to seek judicial review with the superior court within thirty-five days from the date the order was served.
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Essay Questions
Instructions: The following questions are designed to test a deeper, synthesized understanding of the case. Formulate comprehensive responses based on the details in the source documents.
1. Discuss the legal reasoning used by the Administrative Law Judge to dismiss the petition, referencing the specific bylaws (Article III, Section 4 and Article VI, Section 3) and legal precedents cited in the decision.
2. Analyze the evolution of John R. Ashley’s arguments from his initial petition to the rehearing. How did his claims change, and why were they ultimately unsuccessful according to the final decision?
3. Explain the distinction between a quorum for a “Meeting of Members” and a “Meeting of Directors” as outlined in the Rancho Reyes II Community Association’s Bylaws. How was this distinction central to the case’s outcome?
4. Describe the procedural timeline of the case from the initial filing on December 9, 2019, to the final order after rehearing on August 11, 2020. What were the key procedural steps and decisions made by the Office of Administrative Hearings and the Department of Real Estate?
5. Based on the legal standards cited in the decision, explain the concepts of “burden of proof” and “preponderance of the evidence.” How did these standards apply to Mr. Ashley’s case and contribute to its dismissal?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions, such as Thomas Shedden in this case.
Burden of Proof
The obligation of a party in a legal case to provide sufficient evidence to support their claim. In this matter, the burden of proof was on the Petitioner, John R. Ashley.
Bylaws
A set of rules governing the internal management of an organization, such as a homeowners association. In this case, they are treated as a binding contract between the association and its members.
Department of Real Estate
The Arizona state agency that has authority over planned communities and homeowner associations, and which granted Mr. Ashley’s request for a rehearing.
Judicial Review
The process by which a party can appeal a decision from an administrative agency (like the OAH) to a court of law (the superior court).
Motion to Dismiss
A formal request filed by a party asking for a case to be dismissed. In this matter, the Respondent filed one arguing that the petitioner’s claim had no legal basis under the Bylaws.
Office of Administrative Hearings (OAH)
The state agency that conducts impartial hearings for other state agencies. The OAH is located at 1740 West Adams Street, Phoenix, Arizona.
Petitioner
The party who initiates a legal action or petition. In this case, John R. Ashley.
Preponderance of the Evidence
The standard of proof in this case, 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 who wins a legal dispute. The Respondent was deemed the prevailing party in the final order.
Quorum
The minimum number of members of an assembly or society that must be present at any of its meetings to make the proceedings of that meeting valid.
Rehearing
A second hearing of a case, granted in this matter by the Department of Real Estate after the initial petition was dismissed.
Respondent
The party against whom a petition is filed. In this case, Rancho Reyes II Community Association, Inc.
Blog Post – 20F-H2019032-REL-RHG
4 Surprising Legal Lessons from One Man’s Fight With His Homeowners Association
Introduction: The Rules We All Live By
If you live in a planned community, condominium, or cooperative, you live by a set of rules. For the most part, we assume these governing documents—like the bylaws of a Homeowners Association (HOA)—are straightforward. We pay our dues, keep our lawns tidy, and expect the association to manage the common areas.
But what happens when there’s a disagreement over what those rules actually mean? Disputes can arise from simple misunderstandings, and the consequences can be more complex than anyone anticipates.
A close look at a real administrative case, the dispute between John R. Ashley and the Rancho Reyes II Community Association, reveals some surprisingly impactful lessons about how community rules are interpreted in a legal setting. His fight provides a playbook of critical legal principles, revealing how the literal text of community documents can override common assumptions and even procedural standards.
The Takeaways
Here are the core lessons that emerged from the Administrative Law Judge’s decisions in the case.
The most fundamental principle guiding the judge’s decision was simple: an HOA’s bylaws are not just a set of community guidelines. They are a formal, legally binding contract between the association and its members. This concept was directly referenced from a previous case, McNally v. Sun Lakes Homeowners Ass’n #1, Inc.
This contractual nature means that the exact terms must be followed to the letter by both parties—the homeowners and the association’s board. This means that when a document’s language is unambiguous, a court will not consider outside evidence or ‘common sense’ understandings to alter its meaning. The words on the page are all that matters. The judge’s decision underscored this point with a powerful statement:
and the parties are required to comply with the terms of that contract.
A core legal principle is that when the terms of a contract are clear and unambiguous, they must be given their plain and ordinary meaning. You cannot add requirements that simply aren’t there.
Mr. Ashley’s entire case rested on his belief that a quorum of the Board of Directors was required to be present at member meetings. However, the Administrative Law Judge dismissed this argument by pointing directly to the text of the bylaws. Article III, Section 4, which governs member meetings, only required a quorum of “one-tenth (1/10th) of the votes of each class of membership.”
A separate section, Article VI, set the quorum requirements for Board meetings. The judge noted this clear distinction, stating that the tribunal is required to “give effect to those unambiguous terms.” This demonstrates a crucial principle of contract law: the structure of the document is part of its meaning. A requirement located under the ‘Meetings of Directors’ article cannot be unilaterally applied to the ‘Meetings of Members’ article.
In his petition, Mr. Ashley referenced Robert’s Rules of Order to support his position on meeting procedures. Many organizations use this manual as a standard for conducting business, and it’s often assumed to be a universal default.
However, the judge found this argument irrelevant. Why? Because Mr. Ashley “presented no evidence to show that Roberts Rules are part of the ‘Articles of Incorporation, the Declaration, or [the] Bylaws.'” The judge also noted that interpreting such external rules was not within the tribunal’s authority. This provides a critical lesson: external standards, no matter how common, only apply if an organization’s own governing documents explicitly adopt them.
Just as external rules can’t be imported without being explicitly adopted, internal rules cannot be invented out of thin air, as Mr. Ashley’s next argument demonstrated.
During a rehearing, Mr. Ashley presented a creative but ultimately unsuccessful argument. He claimed that the Board of Directors constituted a “third class of member” and, therefore, required its own separate quorum at member meetings according to the language in Article III, Section 4.
The Administrative Law Judge swiftly rejected this novel interpretation. The decision concluded that Mr. Ashley “did not present substantial evidence that the Bylaws include a ‘Board membership class.'” This final point reinforces the central theme: arguments must be grounded in the literal text of the contract (the bylaws). This underscores the ultimate lesson: the burden of proof was on Mr. Ashley to show his interpretations were supported by the text. His failure to do so, both in referencing Robert’s Rules and in proposing a new ‘Board membership class,’ was the foundation of the judge’s decision.
Conclusion: Read the Fine Print
The dismissal of John R. Ashley’s petition is a stark reminder for every homeowner living under association rules. In the world of community governance, good intentions, common practices, and creative interpretations take a back seat. Precision, clarity, and—above all—the literal text of the governing documents are paramount.
When was the last time you read the specific documents that govern your own community?
Case Participants
Petitioner Side
John R Ashley(petitioner) Appeared on his own behalf
Respondent Side
Wendy Erlich(respondent attorney) Wendy Erlich Attorney PLLC Represented Rancho Reyes II Community Association, Inc.
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate
LDettorre(ADRE staff recipient) Arizona Department of Real Estate Recipient of final order transmission
AHansen(ADRE staff recipient) Arizona Department of Real Estate Recipient of final order transmission
djones(ADRE staff recipient) Arizona Department of Real Estate Recipient of final order transmission
DGardner(ADRE staff recipient) Arizona Department of Real Estate Recipient of final order transmission
ncano(ADRE staff recipient) Arizona Department of Real Estate Recipient of final order transmission
Other Participants
A. Leverette(clerical staff) Signed document transmission in initial order
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
20F-H2019032-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2020-08-11
Administrative Law Judge
Thomas Shedden
Outcome
loss
Filing Fees Refunded
$500.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
John R Ashley
Counsel
—
Respondent
Rancho Reyes II Community Association, Inc.
Counsel
Wendy Erlich
Alleged Violations
Bylaws Article III, Section 4
Outcome Summary
The Administrative Law Judge dismissed the petition upon rehearing, finding that Petitioner failed to prove by a preponderance of the evidence that Respondent violated Bylaws Article III, Section 4, because the provision does not require a quorum of Board members at membership meetings.
Why this result: Petitioner failed to carry the burden of proof, as Article III, Section 4 of the Bylaws was found to be unambiguous in not requiring a quorum of Board members to be present at a meeting of the membership.
Key Issues & Findings
Failure to establish a quorum of Board members at membership meetings
Petitioner alleged Respondent violated Bylaws Article III, Section 4 by conducting member-meetings without a quorum of Board members present. The ALJ concluded the cited Bylaw provision was unambiguous and imposed no such requirement.
Orders: The Administrative Law Judge dismissed the petition following the rehearing, concluding the Petitioner had not shown the Respondent violated the cited Bylaws provision.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Grubb & Ellis Management Services, Inc. v. 407417 B.C., L.L.C., 213 Ariz. 83, 138 P.3d 1210 (App. 2006)
Briefing Document: Ashley v. Rancho Reyes II Community Association, Inc.
Executive Summary
This document synthesizes the key facts, arguments, and legal rulings in the administrative case of John R Ashley v. Rancho Reyes II Community Association, Inc. (No. 20F-H2019032-REL). The central issue revolved around Petitioner John R. Ashley’s allegation that the Respondent, his homeowners’ association, violated its bylaws by conducting member meetings without a quorum of its Board of Directors present.
The Administrative Law Judge (ALJ) ultimately dismissed the petition, a decision that was upheld after a full rehearing. The core of the ruling rested on a plain-text interpretation of the association’s bylaws. The ALJ found that Bylaws Article III, Section 4 unambiguously defines a quorum for member meetings as one-tenth (1/10th) of the general membership, with no requirement for a Board quorum. The separate requirements for a Board quorum are distinctly located in Article VI, which governs meetings of the Directors.
The Petitioner’s arguments—that the Board constituted a separate “class of member” requiring a quorum and that Robert’s Rules of Order should apply—were found to be unsubstantiated by evidence. The ALJ concluded that the Petitioner failed to meet his burden of proof, and the Respondent association was deemed the prevailing party in the matter.
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Case Background and Procedural History
Parties Involved
Entity / Individual
Petitioner
John R. Ashley
Respondent
Rancho Reyes II Community Association, Inc.
Attorney for Respondent
Wendy Erlich, Esq.
Tribunal
Arizona Office of Administrative Hearings (OAH)
Presiding Judge
Thomas Shedden, Administrative Law Judge
Oversight Agency
Arizona Department of Real Estate
Core Allegation
The petitioner, John R. Ashley, filed a single-issue petition on or around December 9, 2019. He alleged that the Rancho Reyes II Community Association, Inc. violated its bylaws, specifically Article III, Section 4, by failing to establish a quorum of its Board of Directors at the annual membership meetings held in December 2017 and December 2018.
Procedural Timeline
• c. December 9, 2019: John R. Ashley files a petition with the Arizona Department of Real Estate.
• February 10, 2020: The Respondent files a Motion to Dismiss Petition, arguing that the cited bylaw does not require a Board quorum at member meetings.
• February 18, 2020: Mr. Ashley files a notice confirming his single issue is the alleged violation of Article III, Section 4.
• March 3, 2020: The ALJ, Thomas Shedden, grants the Respondent’s Motion to Dismiss. The hearing scheduled for March 16, 2020 is vacated.
• March 10, 2020: Mr. Ashley files a Request for Rehearing with the Department of Real Estate.
• March 27, 2020: The Department of Real Estate issues an Order Granting Rehearing.
• July 28, 2020: A full rehearing is conducted at the OAH. Mr. Ashley testifies on his own behalf; the Respondent is represented by counsel but presents no witnesses.
• August 11, 2020: The ALJ issues a final decision after the rehearing, once again dismissing Mr. Ashley’s petition.
Analysis of the Central Dispute: Bylaw Interpretation
The case hinged entirely on the interpretation of the quorum requirements as defined in the association’s bylaws. The Petitioner and Respondent presented conflicting views on the applicability of these rules to member meetings versus director meetings.
Petitioner’s Position (John R. Ashley)
• Primary Argument: Mr. Ashley asserted that Article III, Section 4 required a quorum of the Board of Directors to be present at all meetings of the general membership.
• “Board Membership Class” Theory: He argued that the Board of Directors constituted a third “class of member” alongside homeowners and the original developers. Under this theory, this “class” would need its own quorum at member meetings. The ALJ found no substantial evidence to support the existence of this class in the bylaws.
• Reliance on Robert’s Rules of Order: Mr. Ashley referenced Robert’s Rules of Order to support his position. However, he presented no evidence to show that these rules were incorporated into the association’s Articles of Incorporation, Declaration, or Bylaws, making them inapplicable under the tribunal’s statutory authority.
Respondent’s Position (Rancho Reyes II Community Association, Inc.)
• Plain Text Interpretation: The Respondent argued that Article III, Section 4 is unambiguous and applies solely to the quorum requirements for the general membership, not the Board of Directors.
• Distinct Quorum Rules: The association contended that the bylaws clearly separate the rules for member meetings (Article III) from the rules for director meetings (Article VI). Article VI, Section 3 explicitly sets the quorum for the transaction of business by the Board of Directors.
Controlling Bylaw Provisions
Article
Pertinent Text / Description
Article III, Section 4
Meetings of Members; Quorum
“The presence at the meeting of Members entitled to cast, or of proxies entitled to cast, one-tenth (1/10th) of the votes of each class of membership will constitute a quorum for any action except as otherwise provided…”
Article VI, Section 3
Meetings of Directors; Quorum
Sets out the quorum requirements specifically for Board of Director meetings, showing that a majority of Directors constitutes a quorum for the transaction of business.
Administrative Law Judge’s Findings and Rulings
The ALJ’s decisions, both in the initial dismissal and the final order after rehearing, were consistent and based on established principles of contract law and the evidence presented.
Initial Dismissal (March 3, 2020)
In the initial order, the ALJ granted the Respondent’s Motion to Dismiss based on a direct reading of the bylaws. The ruling stated:
• The bylaws are a contract between the parties.
• The terms of Article III, Section 4 are unambiguous and contain “no requirement for a quorum of Board members to be present at a meeting of the membership.”
• Because the bylaw does not contain the requirement alleged by Mr. Ashley, a violation could not have occurred.
Rehearing Decision (August 11, 2020)
The rehearing allowed for a more extensive review but ultimately affirmed the initial conclusion. The ALJ made several key Conclusions of Law:
• Burden of Proof: Mr. Ashley, as the petitioner, bore the burden of proving his case by a preponderance of the evidence.
• Bylaws as Contract: Citing legal precedent (McNally v. Sun Lakes Homeowners Ass’n #1, Inc.), the decision reiterated that bylaws function as a binding contract.
• Unambiguous Terms: The tribunal is required to give effect to the unambiguous terms of a contract. Article III, Section 4 was found to be clear and unambiguous in its meaning.
• Lack of Evidence: Mr. Ashley failed to present substantial evidence for his key claims:
◦ He did not show that Robert’s Rules of Order were applicable to the matter.
◦ He did not show that the bylaws included a “Board membership class.”
• Final Conclusion: Because Article III, Section 4 does not require a quorum of Board members at a member meeting, Mr. Ashley failed to prove by a preponderance of the evidence that the Respondent had violated it.
Final Order and Implications
Based on the findings from the rehearing, the Administrative Law Judge issued a final, binding order on August 11, 2020.
• Order: “IT IS ORDERED that Petitioner John R. Ashley’s petition is dismissed.”
• Prevailing Party: The Respondent, Rancho Reyes II Community Association, Inc., was deemed the prevailing party in the matter.
• Appeal Rights: The order noted that, as a decision resulting from a rehearing, it is binding on the parties. Any further appeal must be sought through judicial review by filing with the superior court within thirty-five days from the date of service, as prescribed by Arizona Revised Statutes.
Study Guide – 20F-H2019032-REL-RHG
Study Guide: Case No. 20F-H2019032-REL
This guide is designed to review the key facts, legal arguments, and procedural history of the administrative case involving John R. Ashley and the Rancho Reyes II Community Association, Inc.
Short-Answer Quiz
Instructions: Answer the following questions in two to three sentences, using only the information provided in the source documents.
1. Who were the Petitioner and Respondent in case No. 20F-H2019032-REL, and what was the primary institution hearing the case?
2. What was the central allegation made by John R. Ashley in his initial petition filed on December 9, 2019?
3. According to the provided documents, what did Bylaws Article III, Section 4 actually require to establish a quorum for a meeting of the members?
4. On what grounds did the Respondent, Rancho Reyes II Community Association, Inc., file its Motion to Dismiss?
5. What was the initial outcome of Mr. Ashley’s petition, as decided in the Administrative Law Judge Decision dated March 3, 2020?
6. Upon what legal standard did the Administrative Law Judge state that bylaws should be interpreted, and what two court cases were cited to support this principle?
7. During the rehearing, Mr. Ashley introduced an argument about different “classes of membership.” What was this argument, and why was it rejected?
8. What role did Robert’s Rules of Order play in Mr. Ashley’s arguments, and what was the tribunal’s official position on construing these rules?
9. What is the standard of proof required in this matter, and which party bore the burden of meeting it?
10. What was the final order issued on August 11, 2020, and what was the specified recourse for a party wishing to appeal it?
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Answer Key
1. The Petitioner was John R. Ashley, and the Respondent was Rancho Reyes II Community Association, Inc. The case was heard in the State of Arizona’s Office of Administrative Hearings (OAH).
2. Mr. Ashley’s central allegation was that the Respondent violated its own Bylaws, specifically Article III, Section 4, by conducting member meetings in December 2017 and December 2018 without a quorum of Board members present.
3. Bylaws Article III, Section 4 required the presence of members or proxies entitled to cast one-tenth (1/10th) of the votes of each class of membership. It contained no provision requiring a quorum of the Board of Directors to be present at a member meeting.
4. The Respondent filed its Motion to Dismiss on the grounds that the petition should be dismissed because Article III, Section 4 of the Bylaws is unambiguous and does not require a quorum of Board members to be present for a meeting of the members.
5. The Administrative Law Judge granted the Respondent’s Motion to Dismiss in an order dated March 3, 2020. Mr. Ashley’s petition was dismissed, and the hearing scheduled for March 16, 2020, was vacated.
6. The judge stated that the Bylaws are a contract between the parties, and unambiguous terms must be given effect. The cases cited were McNally v. Sun Lakes Homeowners Ass’n #1, Inc. and Grubb & Ellis Management Services, Inc. v. 407417 B.C., L.L.C.
7. Mr. Ashley argued that a “Board membership class” existed and that Article III, Section 4 required a quorum of this class. The argument was rejected because he presented no substantial evidence that the Bylaws included such a class.
8. Mr. Ashley argued that Robert’s Rules of Order supported his position. The tribunal determined that construing these rules was not within the scope of its authority and noted that Mr. Ashley failed to provide evidence showing the rules were part of the association’s governing documents.
9. The standard of proof was a “preponderance of the evidence.” The Petitioner, Mr. Ashley, bore the burden of proof on all issues in the matter.
10. The final order, issued after the rehearing, was that Mr. Ashley’s petition was dismissed and the Respondent was deemed the prevailing party. A party wishing to appeal the order was required to seek judicial review with the superior court within thirty-five days from the date the order was served.
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Essay Questions
Instructions: The following questions are designed to test a deeper, synthesized understanding of the case. Formulate comprehensive responses based on the details in the source documents.
1. Discuss the legal reasoning used by the Administrative Law Judge to dismiss the petition, referencing the specific bylaws (Article III, Section 4 and Article VI, Section 3) and legal precedents cited in the decision.
2. Analyze the evolution of John R. Ashley’s arguments from his initial petition to the rehearing. How did his claims change, and why were they ultimately unsuccessful according to the final decision?
3. Explain the distinction between a quorum for a “Meeting of Members” and a “Meeting of Directors” as outlined in the Rancho Reyes II Community Association’s Bylaws. How was this distinction central to the case’s outcome?
4. Describe the procedural timeline of the case from the initial filing on December 9, 2019, to the final order after rehearing on August 11, 2020. What were the key procedural steps and decisions made by the Office of Administrative Hearings and the Department of Real Estate?
5. Based on the legal standards cited in the decision, explain the concepts of “burden of proof” and “preponderance of the evidence.” How did these standards apply to Mr. Ashley’s case and contribute to its dismissal?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions, such as Thomas Shedden in this case.
Burden of Proof
The obligation of a party in a legal case to provide sufficient evidence to support their claim. In this matter, the burden of proof was on the Petitioner, John R. Ashley.
Bylaws
A set of rules governing the internal management of an organization, such as a homeowners association. In this case, they are treated as a binding contract between the association and its members.
Department of Real Estate
The Arizona state agency that has authority over planned communities and homeowner associations, and which granted Mr. Ashley’s request for a rehearing.
Judicial Review
The process by which a party can appeal a decision from an administrative agency (like the OAH) to a court of law (the superior court).
Motion to Dismiss
A formal request filed by a party asking for a case to be dismissed. In this matter, the Respondent filed one arguing that the petitioner’s claim had no legal basis under the Bylaws.
Office of Administrative Hearings (OAH)
The state agency that conducts impartial hearings for other state agencies. The OAH is located at 1740 West Adams Street, Phoenix, Arizona.
Petitioner
The party who initiates a legal action or petition. In this case, John R. Ashley.
Preponderance of the Evidence
The standard of proof in this case, 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 who wins a legal dispute. The Respondent was deemed the prevailing party in the final order.
Quorum
The minimum number of members of an assembly or society that must be present at any of its meetings to make the proceedings of that meeting valid.
Rehearing
A second hearing of a case, granted in this matter by the Department of Real Estate after the initial petition was dismissed.
Respondent
The party against whom a petition is filed. In this case, Rancho Reyes II Community Association, Inc.
Blog Post – 20F-H2019032-REL-RHG
4 Surprising Legal Lessons from One Man’s Fight With His Homeowners Association
Introduction: The Rules We All Live By
If you live in a planned community, condominium, or cooperative, you live by a set of rules. For the most part, we assume these governing documents—like the bylaws of a Homeowners Association (HOA)—are straightforward. We pay our dues, keep our lawns tidy, and expect the association to manage the common areas.
But what happens when there’s a disagreement over what those rules actually mean? Disputes can arise from simple misunderstandings, and the consequences can be more complex than anyone anticipates.
A close look at a real administrative case, the dispute between John R. Ashley and the Rancho Reyes II Community Association, reveals some surprisingly impactful lessons about how community rules are interpreted in a legal setting. His fight provides a playbook of critical legal principles, revealing how the literal text of community documents can override common assumptions and even procedural standards.
The Takeaways
Here are the core lessons that emerged from the Administrative Law Judge’s decisions in the case.
The most fundamental principle guiding the judge’s decision was simple: an HOA’s bylaws are not just a set of community guidelines. They are a formal, legally binding contract between the association and its members. This concept was directly referenced from a previous case, McNally v. Sun Lakes Homeowners Ass’n #1, Inc.
This contractual nature means that the exact terms must be followed to the letter by both parties—the homeowners and the association’s board. This means that when a document’s language is unambiguous, a court will not consider outside evidence or ‘common sense’ understandings to alter its meaning. The words on the page are all that matters. The judge’s decision underscored this point with a powerful statement:
and the parties are required to comply with the terms of that contract.
A core legal principle is that when the terms of a contract are clear and unambiguous, they must be given their plain and ordinary meaning. You cannot add requirements that simply aren’t there.
Mr. Ashley’s entire case rested on his belief that a quorum of the Board of Directors was required to be present at member meetings. However, the Administrative Law Judge dismissed this argument by pointing directly to the text of the bylaws. Article III, Section 4, which governs member meetings, only required a quorum of “one-tenth (1/10th) of the votes of each class of membership.”
A separate section, Article VI, set the quorum requirements for Board meetings. The judge noted this clear distinction, stating that the tribunal is required to “give effect to those unambiguous terms.” This demonstrates a crucial principle of contract law: the structure of the document is part of its meaning. A requirement located under the ‘Meetings of Directors’ article cannot be unilaterally applied to the ‘Meetings of Members’ article.
In his petition, Mr. Ashley referenced Robert’s Rules of Order to support his position on meeting procedures. Many organizations use this manual as a standard for conducting business, and it’s often assumed to be a universal default.
However, the judge found this argument irrelevant. Why? Because Mr. Ashley “presented no evidence to show that Roberts Rules are part of the ‘Articles of Incorporation, the Declaration, or [the] Bylaws.'” The judge also noted that interpreting such external rules was not within the tribunal’s authority. This provides a critical lesson: external standards, no matter how common, only apply if an organization’s own governing documents explicitly adopt them.
Just as external rules can’t be imported without being explicitly adopted, internal rules cannot be invented out of thin air, as Mr. Ashley’s next argument demonstrated.
During a rehearing, Mr. Ashley presented a creative but ultimately unsuccessful argument. He claimed that the Board of Directors constituted a “third class of member” and, therefore, required its own separate quorum at member meetings according to the language in Article III, Section 4.
The Administrative Law Judge swiftly rejected this novel interpretation. The decision concluded that Mr. Ashley “did not present substantial evidence that the Bylaws include a ‘Board membership class.'” This final point reinforces the central theme: arguments must be grounded in the literal text of the contract (the bylaws). This underscores the ultimate lesson: the burden of proof was on Mr. Ashley to show his interpretations were supported by the text. His failure to do so, both in referencing Robert’s Rules and in proposing a new ‘Board membership class,’ was the foundation of the judge’s decision.
Conclusion: Read the Fine Print
The dismissal of John R. Ashley’s petition is a stark reminder for every homeowner living under association rules. In the world of community governance, good intentions, common practices, and creative interpretations take a back seat. Precision, clarity, and—above all—the literal text of the governing documents are paramount.
When was the last time you read the specific documents that govern your own community?
Case Participants
Petitioner Side
John R Ashley(petitioner) Appeared on his own behalf
Respondent Side
Wendy Erlich(respondent attorney) Wendy Erlich Attorney PLLC Represented Rancho Reyes II Community Association, Inc.
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate
LDettorre(ADRE staff recipient) Arizona Department of Real Estate Recipient of final order transmission
AHansen(ADRE staff recipient) Arizona Department of Real Estate Recipient of final order transmission
djones(ADRE staff recipient) Arizona Department of Real Estate Recipient of final order transmission
DGardner(ADRE staff recipient) Arizona Department of Real Estate Recipient of final order transmission
ncano(ADRE staff recipient) Arizona Department of Real Estate Recipient of final order transmission
Other Participants
A. Leverette(clerical staff) Signed document transmission in initial order
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
19F-H1919059-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2020-01-30
Administrative Law Judge
Thomas Shedden
Outcome
loss
Filing Fees Refunded
$500.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Mary J Bartle
Counsel
—
Respondent
Saguaro West Owner's Association
Counsel
Nicole Payne, Esq.
Alleged Violations
Bylaws Article VIII, section 8(d)
Outcome Summary
The Administrative Law Judge affirmed the original conclusion and dismissed the petition, finding that the Petitioner failed to meet the burden of proof that the Association violated Bylaws Article VIII, section 8(d) regarding the contested $49,000.50 fund transaction.
Why this result: Petitioner failed to show by a preponderance of the evidence that the transactions violated the specific duties of the treasurer set out in Bylaws Article VIII, section 8(d).
Key Issues & Findings
Alleged violation of Treasurer duties regarding fund transactions
The petitioner alleged the Association violated Bylaws Article VIII, section 8(d) by withdrawing and redepositing $49,000.50 from the operating account. The ALJ concluded that Petitioner failed to show by a preponderance of the evidence that these transactions violated the specific duties of the treasurer set forth in that section.
Orders: Petitioner Mary J. Bartle’s petition is dismissed and Respondent is deemed the prevailing party in this matter.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
BLACK’S LAW DICTIONARY 1373 (10th ed. 2014)
ARIZ. REV. STAT. section 32-2199.02(B)
ARIZ. REV. STAT. section and title 12, chapter 7, article 6
ARIZ. REV. STAT. section 12-904(A)
Analytics Highlights
Topics: HOA, Bylaws, Treasurer Duties, Dismissal, Burden of Proof, Rehearing
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
BLACK’S LAW DICTIONARY 1373 (10th ed. 2014)
ARIZ. REV. STAT. section 32-2199.02(B)
ARIZ. REV. STAT. section and title 12, chapter 7, article 6
ARIZ. REV. STAT. section 12-904(A)
Video Overview
Audio Overview
Decision Documents
19F-H1919059-REL-RHG Decision – 767041.pdf
Uploaded 2026-01-23T17:29:24 (94.6 KB)
Briefing Doc – 19F-H1919059-REL-RHG
Briefing Document: Bartle vs. Saguaro West Owner’s Association (Case No. 19F-H1919059-REL-RHG)
Executive Summary
This briefing document analyzes the Administrative Law Judge Decision in the matter of Mary J. Bartle vs. Saguaro West Owner’s Association. The final order, issued on January 30, 2020, dismissed the petition brought by Ms. Bartle. The core of the case revolved around a financial transaction where $49,000.50 was withdrawn from the Association’s operating account on October 22, 2018, and redeposited on November 30, 2018.
The petitioner, Ms. Bartle, alleged this transaction violated a specific provision of the Association’s bylaws—Article VIII, section 8(d)—which outlines the duties of the Treasurer. Despite two hearings, the Administrative Law Judge consistently concluded that Ms. Bartle failed to meet her burden of proof. The central finding was that while evidence suggested the transaction “may have been in violation of the law or otherwise improper,” the petitioner did not demonstrate, by a preponderance of the evidence, how this transaction specifically violated any of the enumerated duties of the Treasurer as set forth in the cited bylaw. The decision underscores a critical legal distinction between a potentially improper act and a proven violation of the specific bylaw under which the complaint was filed.
Case Overview
Case Name
Mary J. Bartle, Petitioner, vs. Saguaro West Owner’s Association, Respondent
Case Number
19F-H1919059-REL-RHG
Jurisdiction
Arizona Department of Real Estate, Office of Administrative Hearings (OAH)
Presiding Judge
Administrative Law Judge Thomas Shedden
Petitioner
Mary J. Bartle (representing herself)
Respondent
Saguaro West Owner’s Association (represented by Nicole Payne, Esq.)
Rehearing Date
January 14, 2020
Final Decision Date
January 30, 2020
Procedural History and Core Allegation
The case proceeded through an initial hearing and a subsequent rehearing, following a specific timeline of events:
• April 22, 2019: Ms. Bartle filed the initial petition with the Arizona Department of Real Estate.
• August 29, 2019: The first hearing was held. At the outset, a discussion was held to narrow the scope of the hearing. Ms. Bartle agreed to limit her petition to a single issue.
• The Single Issue: Whether the Association violated Bylaws Article VIII, section 8(d) through a withdrawal of $49,000.50 on October 22, 2018, and a redeposit of the same amount on November 30, 2018.
• September 18, 2019: The initial Administrative Law Judge Decision was issued, dismissing Ms. Bartle’s petition.
• October 23, 2019: Ms. Bartle filed a request for a rehearing, asserting an error in the admission of evidence.
• November 18, 2019: The Department of Real Estate granted the request for a rehearing.
• January 14, 2020: The rehearing was convened. Ms. Bartle testified, while the Respondent presented no witnesses.
• January 30, 2020: The final Administrative Law Judge Decision was issued, reaffirming the dismissal of the petition.
At the rehearing, Ms. Bartle testified “to the effect that laws must have been violated by the withdrawal and redepositing of the $49,000.50 without the Association’s members being provided any notice of these transactions.”
Analysis of Bylaw and Judicial Findings
Bylaw Article VIII, Section 8(d): The Treasurer’s Duties
The entirety of the petitioner’s case rested on proving a violation of the specific duties outlined for the Treasurer in the Association’s bylaws. The text of the bylaw is as follows:
The Treasurer shall receive and deposit in the Association’s bank accounts all monies received by the Association and shall disburse such funds as directed by resolution [of] the Board of Directors; shall properly prepare and sign all checks before presenting them to be co-signed; keep proper books of account; cause an annual audit of the Association’s books to be made by a public accountant at the completion of each fiscal year; and shall prepare an annual budget to be presented to the membership at the annual meeting; to cause all Federal and State reports to be prepared; and shall prepare all monthly statements of finance for the Board of Directors.
Key Judicial Findings and Conclusions
The Administrative Law Judge’s decision hinged on the petitioner’s failure to connect the disputed financial transaction to a specific violation of the duties listed above. The judge made a clear distinction between the potential impropriety of the transaction and the narrow scope of the legal claim.
• Initial Hearing Conclusion: The decision from the first hearing, which the judge took notice of in the rehearing, established the core finding:
• Rehearing Conclusion: The final decision after the rehearing reinforced this exact point, stating:
Ultimately, the case was dismissed because Ms. Bartle did not meet the legal standard required to prove her specific claim.
Legal Framework and Final Order
Applicable Legal Standards
The decision was grounded in several key legal principles cited by the Administrative Law Judge:
• Jurisdiction: The Arizona Department of Real Estate possesses authority over the matter pursuant to ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11.
• Burden of Proof: Ms. Bartle, as the petitioner, bore the burden of proof on all issues.
• Standard of Proof: The standard was a “preponderance of the evidence,” 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.”
• Contractual Nature of Bylaws: Citing McNally v. Sun Lakes Homeowners Ass’n #1, Inc., the decision notes that “The Bylaws are a contract between the parties and the parties are required to comply with its terms.”
Final Order and Implications
Based on the failure to meet the burden of proof, the Administrative Law Judge issued a binding order with the following key points:
1. Dismissal: Petitioner Mary J. Bartle’s petition is dismissed.
2. Prevailing Party: The Respondent, Saguaro West Owner’s Association, is deemed the prevailing party.
3. Appeal Rights: A party wishing to appeal the order must seek judicial review with the superior court within thirty-five days from the date the order was served, as prescribed by ARIZ. REV. STAT. sections 12-904(A) and Title 12, Chapter 7, Article 6.
Study Guide – 19F-H1919059-REL-RHG
Study Guide: Bartle v. Saguaro West Owner’s Association
This guide provides a detailed review of the Administrative Law Judge Decision in case number 19F-H1919059-REL-RHG. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms to facilitate a comprehensive understanding of the legal matter.
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Quiz: Short-Answer Questions
Instructions: Answer the following questions in two to three complete sentences, drawing all information directly from the case document.
1. Who were the primary parties in this legal matter, and what were their respective roles?
2. What specific financial transaction was the central subject of the petitioner’s complaint?
3. Which specific article and section of the Association’s Bylaws did the petitioner claim was violated?
4. What was the legal standard of proof that the petitioner was required to meet, and who had the burden of proof?
5. On what grounds did Ms. Bartle file her request for a rehearing after the initial decision?
6. According to the judge’s decision, what was the key failure in the petitioner’s argument regarding the financial transaction?
7. What was the final order issued by the Administrative Law Judge on January 30, 2020?
8. Although the judge dismissed the petition, what did the decision state about the nature of the financial transactions?
9. Which government department granted the request for a rehearing and has authority over this type of matter?
10. What options does a party have if they wish to appeal the final administrative law judge order?
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Answer Key
1. The primary parties were the Petitioner, Mary J. Bartle, and the Respondent, Saguaro West Owner’s Association. Ms. Bartle brought the petition against the Association, alleging a violation of its bylaws.
2. The central subject was the withdrawal of $49,000.50 from the Association’s operating account on October 22, 2018. The same amount was subsequently redeposited into the account on November 30, 2018.
3. The petitioner claimed the Association violated Bylaws Article VIII, section 8(d). This section outlines the specific duties and responsibilities of the Association’s Treasurer.
4. The standard of proof was a “preponderance of the evidence.” The burden of proof was on the petitioner, Ms. Bartle, to demonstrate that the Association had violated the bylaw.
5. Ms. Bartle filed her Rehearing Request on the grounds that there was an error in the admission of evidence. She specifically referenced documents dated July 5, August 6, and September 13, 2019, in her request.
6. The key failure was that Ms. Bartle did not show by a preponderance of the evidence that the withdrawal and redeposit specifically violated any of the treasurer’s duties as explicitly listed in Bylaws Article VIII, section 8(d). Her claim was too narrow for the evidence she presented.
7. The final order was that Petitioner Mary J. Bartle’s petition be dismissed. The Respondent, Saguaro West Owner’s Association, was deemed to be the prevailing party in the matter.
8. The decision stated that there was evidence to suggest that the withdrawal and redeposit of the $49,000.50 “may have been in violation of the law or otherwise improper.” However, this was not sufficient to prove a violation of the specific bylaw in question.
9. The Arizona Department of Real Estate granted the rehearing on November 18, 2019. This department has authority over the matter as established by ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11.
10. A party wishing to appeal the order must seek judicial review as prescribed by Arizona Revised Statutes. The appeal must be filed with the superior court within thirty-five days from the date the order was served upon the parties.
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Essay Questions
Instructions: Consider the following questions for a deeper analysis of the case. Formulate a comprehensive response based solely on the information provided in the source document.
1. Analyze the concept of “preponderance of the evidence” as defined in the decision. Explain why Mary J. Bartle failed to meet this standard, despite the judge’s acknowledgment that the transaction may have been “improper” or in “violation of the law.”
2. Discuss the procedural significance of limiting the hearing to the single issue of Bylaws Article VIII, section 8(d). How might the case’s outcome have differed if the scope of the hearing had been broader?
3. Trace the complete timeline of the case from the initial petition filing in April 2019 to the final order in January 2020. What do the key events and dates reveal about the process of administrative hearings and rehearings?
4. Based on the full text of Bylaws Article VIII, section 8(d), what specific types of evidence would the petitioner have needed to present to successfully prove that the treasurer’s duties were violated by the $49,000.50 transaction?
5. Evaluate the distinction made by the Administrative Law Judge between a transaction that is potentially illegal or improper and a transaction that specifically violates the duties enumerated in Bylaws Article VIII, section 8(d). Why is this distinction critical to the final order of dismissal?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, weighs evidence, and issues decisions on matters under the jurisdiction of a government agency. In this case, the ALJ was Thomas Shedden.
ARIZ. ADMIN. CODE
The Arizona Administrative Code, a compilation of rules and regulations of Arizona’s state agencies. Section R2-19-119 is cited as establishing the standard of proof.
ARIZ. REV. STAT.
The Arizona Revised Statutes, which are the codified laws of the state of Arizona. Various sections are cited to establish jurisdiction and the appeals process.
Bylaws
A set of rules established by an organization, such as a homeowners’ association, to regulate itself. In this case, the bylaws are treated as a binding contract between the parties.
Conclusion of Law
The section of a legal decision where the judge applies legal principles and statutes to the established facts of the case.
Finding of Fact
The section of a legal decision that lists the factual determinations made by the judge based on the evidence presented during the hearing.
Judicial Review
The process by which a court of law reviews the decision of a lower court or an administrative agency to determine if the decision was legally sound.
Office of Administrative Hearings (OAH)
A state agency that provides a neutral forum for conducting administrative hearings for other state agencies. The hearings in this matter were held at the OAH.
Petitioner
The party who initiates a lawsuit or files a petition seeking a legal remedy. In this case, the petitioner was Mary J. Bartle.
Preponderance of the Evidence
The standard of proof in most civil cases. It is met when the evidence presented has the most convincing force and is sufficient to incline a fair and impartial mind to one side of an issue over the other.
Prevailing Party
The party in a legal dispute who is successful and in whose favor the judgment is rendered. In this case, the Respondent was deemed the prevailing party.
Rehearing
A second hearing of a case to consider new evidence or to argue against the original decision on the basis of an error. Ms. Bartle’s request for a rehearing was granted.
Respondent
The party against whom a petition is filed. In this case, the respondent was the Saguaro West Owner’s Association.
Blog Post – 19F-H1919059-REL-RHG
A Homeowner Found a Mysterious $49,000 Transaction in Her HOA’s Books. The Reason She Lost in Court Is a Lesson for Everyone.
Introduction: The David-vs-Goliath Fight That Didn’t Go as Planned
For many homeowners, dealing with a Homeowners’ Association (HOA) can feel like a constant battle for transparency and fairness. It’s a common story: a resident raises concerns about financial decisions made behind closed doors, only to be met with resistance or silence. But what happens when a homeowner pushes back and takes that fight to an administrative hearing?
After an initial hearing and a persistent request for a rehearing, the final decision in Mary J. Bartle’s case against the Saguaro West Owner’s Association seemed, on the surface, like a clear-cut quest for accountability. The dispute centered on a single, alarming event: the withdrawal and subsequent redeposit of $49,000.50 from the association’s operating account without any notice to the members. It appeared to be a straightforward case of a concerned resident demanding answers.
However, the ruling from the administrative hearing offers a surprising and crucial lesson in how the legal system operates. The outcome reveals that suspicion, no matter how justified, is not enough to win. This article breaks down the top counter-intuitive takeaways from the judge’s decision and what they mean for any homeowner considering a legal challenge against their HOA.
Takeaway 1: A “Suspicious” Act Isn’t a Guaranteed Win
Feeling Something Is Wrong Isn’t the Same as Proving It.
The core facts of the case were not in dispute. On October 22, 2018, $49,000.50 was withdrawn from the Saguaro West Owner’s Association’s operating account. On November 30, 2018, the exact same amount was redeposited. Members were not notified of these transactions. To any reasonable observer, this activity raises immediate questions.
Even the Administrative Law Judge presiding over the case acknowledged the questionable nature of the transaction. In his final decision, he validated Ms. Bartle’s initial concerns with a striking statement:
The evidence shows that $49,000.50 was withdrawn from the Association’s account in October 2018 and the same amount was deposited in November 2018, and there is evidence to suggest that the transactions may have been in violation of the law.
This is the most stunning part of the case: the judge agreed that the transaction looked suspicious and might have broken the law, yet Ms. Bartle still lost. This reveals a critical distinction in legal proceedings. A judge is not an arbiter of general fairness but an interpreter of specific laws and rules. The judge’s comment shows he understood the spirit of Ms. Bartle’s complaint, but his hands were tied by the letter of her petition. The legal system requires more than a gut feeling; it demands specific proof that a specific rule was violated, which leads directly to the next critical lesson.
Takeaway 2: You Must Prove theExactRule Was Broken
Specificity Is Your Only Weapon.
Ms. Bartle’s case was ultimately narrowed to a single, highly specific issue: whether the $49,000.50 transaction violated Article VIII, section 8(d) of the association’s bylaws. This is a crucial detail because courts and administrative bodies require this rigid specificity to ensure fairness, prevent “moving goalposts,” and keep proceedings focused on the actual claims filed, not a general feeling of grievance.
Her entire case hinged on proving a violation of that specific section and no other. The rule in question outlines the treasurer’s duties, which include the power to: “receive and deposit…all monies,” “disburse such funds as directed,” “sign all checks,” and “keep proper books of account.”
The judge’s conclusion was brutally precise. He found that Ms. Bartle had “not shown by a preponderance of the evidence” that the transaction violated any of those specific, listed duties. She couldn’t prove the treasurer failed to deposit money or keep proper books; she could only prove a strange transaction occurred that wasn’t explicitly forbidden by the rule she cited. This is a critical lesson: it doesn’t matter if an HOA’s action feels wrong; what matters is whether you can prove it violated the precise rule you cited in your petition.
Takeaway 3: The Burden of Proof Rests Entirely on the Accuser
It’s Your Job to Build the Case, Not Theirs to Disprove It.
In a civil administrative hearing like this, the petitioner—Ms. Bartle—carries the “burden of proof.” The standard she had to meet was the “preponderance of the evidence.” The legal definition for this is:
“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.”
In simple terms, she had to present enough convincing evidence to make the judge believe that her version of events was more likely true than not. The judge’s decision explicitly states that Ms. Bartle bore this burden and ultimately failed to meet it.
One of the most powerful details from the case file illustrates this point perfectly: the Saguaro West Owner’s Association, though represented by legal counsel, “presented no witnesses.” They didn’t have to. They didn’t need to explain the transaction or justify their actions because Ms. Bartle failed to build a strong enough case to prove her specific claim. The onus was completely on her to prove her argument, and when it fell short, the case was dismissed.
Conclusion: A Sobering Reminder for Homeowners
The case of Mary Bartle is a sobering reminder that winning a legal fight against a well-resourced entity like an HOA is less about moral rightness and more about meticulous legal strategy and precision.
While the judge acknowledged that Ms. Bartle’s concerns about the $49,000.50 transaction were potentially valid, her petition was dismissed not on a simple technicality, but because of a core principle of law: the failure to prove that the specific rule cited had actually been broken. Her case highlights the immense challenge for individual homeowners seeking transparency. It leaves us asking, if the legal bar is this specific, what practical recourse do residents have when they feel something is fundamentally wrong?
Case Participants
Petitioner Side
Mary J Bartle(petitioner) Appeared on her own behalf and testified
Respondent Side
Nicole Payne(attorney) Carpenter, Hazlewood, Delgado & Bolen, PLC Counsel for Saguaro West Owner's Association
Edith Rudder(attorney) Carpenter, Hazlewood, Delgado & Bolen, PLC Counsel for Saguaro West Owner's Association
Neutral Parties
Thomas Shedden(ALJ)
Judy Lowe(Commissioner) Arizona Department of Real Estate
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
19F-H1919059-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2020-01-30
Administrative Law Judge
Thomas Shedden
Outcome
loss
Filing Fees Refunded
$500.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Mary J Bartle
Counsel
—
Respondent
Saguaro West Owner's Association
Counsel
Nicole Payne, Esq.
Alleged Violations
Bylaws Article VIII, section 8(d)
Outcome Summary
The Administrative Law Judge dismissed Petitioner Mary J. Bartle’s petition, concluding that she failed to meet the burden of proof to demonstrate that the Saguaro West Owner's Association violated Bylaws Article VIII, section 8(d).
Why this result: Petitioner failed to meet the burden of proof by a preponderance of the evidence to show that the $49,000.50 transaction violated the specific duties of the treasurer set forth in Bylaws Article VIII, section 8(d).
Key Issues & Findings
Alleged violation of Treasurer duties regarding fund transactions
The petitioner alleged the Association violated Bylaws Article VIII, section 8(d) by withdrawing and redepositing $49,000.50 from the operating account without adequate notification or justification, but failed to prove a violation of the specific duties listed in that section by a preponderance of the evidence.
Orders: Petition dismissed and Respondent deemed the prevailing party.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
BLACK’S LAW DICTIONARY 1373 (10th ed. 2014)
ARIZ. REV. STAT. section 32-2199.02(B)
ARIZ. REV. STAT. section and title 12, chapter 7, article 6
ARIZ. REV. STAT. section 12-904(A)
Analytics Highlights
Topics: HOA, Bylaws, Treasurer Duties, Dismissal, Burden of Proof
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
BLACK’S LAW DICTIONARY 1373 (10th ed. 2014)
ARIZ. REV. STAT. section 32-2199.02(B)
ARIZ. REV. STAT. section and title 12, chapter 7, article 6
ARIZ. REV. STAT. section 12-904(A)
Video Overview
Audio Overview
Decision Documents
19F-H1919059-REL-RHG Decision – 767041.pdf
Uploaded 2025-10-09T03:34:15 (94.6 KB)
Briefing Doc – 19F-H1919059-REL-RHG
Briefing Document: Bartle vs. Saguaro West Owner’s Association (Case No. 19F-H1919059-REL-RHG)
Executive Summary
This briefing document analyzes the Administrative Law Judge Decision in the matter of Mary J. Bartle vs. Saguaro West Owner’s Association. The final order, issued on January 30, 2020, dismissed the petition brought by Ms. Bartle. The core of the case revolved around a financial transaction where $49,000.50 was withdrawn from the Association’s operating account on October 22, 2018, and redeposited on November 30, 2018.
The petitioner, Ms. Bartle, alleged this transaction violated a specific provision of the Association’s bylaws—Article VIII, section 8(d)—which outlines the duties of the Treasurer. Despite two hearings, the Administrative Law Judge consistently concluded that Ms. Bartle failed to meet her burden of proof. The central finding was that while evidence suggested the transaction “may have been in violation of the law or otherwise improper,” the petitioner did not demonstrate, by a preponderance of the evidence, how this transaction specifically violated any of the enumerated duties of the Treasurer as set forth in the cited bylaw. The decision underscores a critical legal distinction between a potentially improper act and a proven violation of the specific bylaw under which the complaint was filed.
Case Overview
Case Name
Mary J. Bartle, Petitioner, vs. Saguaro West Owner’s Association, Respondent
Case Number
19F-H1919059-REL-RHG
Jurisdiction
Arizona Department of Real Estate, Office of Administrative Hearings (OAH)
Presiding Judge
Administrative Law Judge Thomas Shedden
Petitioner
Mary J. Bartle (representing herself)
Respondent
Saguaro West Owner’s Association (represented by Nicole Payne, Esq.)
Rehearing Date
January 14, 2020
Final Decision Date
January 30, 2020
Procedural History and Core Allegation
The case proceeded through an initial hearing and a subsequent rehearing, following a specific timeline of events:
• April 22, 2019: Ms. Bartle filed the initial petition with the Arizona Department of Real Estate.
• August 29, 2019: The first hearing was held. At the outset, a discussion was held to narrow the scope of the hearing. Ms. Bartle agreed to limit her petition to a single issue.
• The Single Issue: Whether the Association violated Bylaws Article VIII, section 8(d) through a withdrawal of $49,000.50 on October 22, 2018, and a redeposit of the same amount on November 30, 2018.
• September 18, 2019: The initial Administrative Law Judge Decision was issued, dismissing Ms. Bartle’s petition.
• October 23, 2019: Ms. Bartle filed a request for a rehearing, asserting an error in the admission of evidence.
• November 18, 2019: The Department of Real Estate granted the request for a rehearing.
• January 14, 2020: The rehearing was convened. Ms. Bartle testified, while the Respondent presented no witnesses.
• January 30, 2020: The final Administrative Law Judge Decision was issued, reaffirming the dismissal of the petition.
At the rehearing, Ms. Bartle testified “to the effect that laws must have been violated by the withdrawal and redepositing of the $49,000.50 without the Association’s members being provided any notice of these transactions.”
Analysis of Bylaw and Judicial Findings
Bylaw Article VIII, Section 8(d): The Treasurer’s Duties
The entirety of the petitioner’s case rested on proving a violation of the specific duties outlined for the Treasurer in the Association’s bylaws. The text of the bylaw is as follows:
The Treasurer shall receive and deposit in the Association’s bank accounts all monies received by the Association and shall disburse such funds as directed by resolution [of] the Board of Directors; shall properly prepare and sign all checks before presenting them to be co-signed; keep proper books of account; cause an annual audit of the Association’s books to be made by a public accountant at the completion of each fiscal year; and shall prepare an annual budget to be presented to the membership at the annual meeting; to cause all Federal and State reports to be prepared; and shall prepare all monthly statements of finance for the Board of Directors.
Key Judicial Findings and Conclusions
The Administrative Law Judge’s decision hinged on the petitioner’s failure to connect the disputed financial transaction to a specific violation of the duties listed above. The judge made a clear distinction between the potential impropriety of the transaction and the narrow scope of the legal claim.
• Initial Hearing Conclusion: The decision from the first hearing, which the judge took notice of in the rehearing, established the core finding:
• Rehearing Conclusion: The final decision after the rehearing reinforced this exact point, stating:
Ultimately, the case was dismissed because Ms. Bartle did not meet the legal standard required to prove her specific claim.
Legal Framework and Final Order
Applicable Legal Standards
The decision was grounded in several key legal principles cited by the Administrative Law Judge:
• Jurisdiction: The Arizona Department of Real Estate possesses authority over the matter pursuant to ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11.
• Burden of Proof: Ms. Bartle, as the petitioner, bore the burden of proof on all issues.
• Standard of Proof: The standard was a “preponderance of the evidence,” 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.”
• Contractual Nature of Bylaws: Citing McNally v. Sun Lakes Homeowners Ass’n #1, Inc., the decision notes that “The Bylaws are a contract between the parties and the parties are required to comply with its terms.”
Final Order and Implications
Based on the failure to meet the burden of proof, the Administrative Law Judge issued a binding order with the following key points:
1. Dismissal: Petitioner Mary J. Bartle’s petition is dismissed.
2. Prevailing Party: The Respondent, Saguaro West Owner’s Association, is deemed the prevailing party.
3. Appeal Rights: A party wishing to appeal the order must seek judicial review with the superior court within thirty-five days from the date the order was served, as prescribed by ARIZ. REV. STAT. sections 12-904(A) and Title 12, Chapter 7, Article 6.
Study Guide – 19F-H1919059-REL-RHG
Study Guide: Bartle v. Saguaro West Owner’s Association
This guide provides a detailed review of the Administrative Law Judge Decision in case number 19F-H1919059-REL-RHG. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms to facilitate a comprehensive understanding of the legal matter.
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Quiz: Short-Answer Questions
Instructions: Answer the following questions in two to three complete sentences, drawing all information directly from the case document.
1. Who were the primary parties in this legal matter, and what were their respective roles?
2. What specific financial transaction was the central subject of the petitioner’s complaint?
3. Which specific article and section of the Association’s Bylaws did the petitioner claim was violated?
4. What was the legal standard of proof that the petitioner was required to meet, and who had the burden of proof?
5. On what grounds did Ms. Bartle file her request for a rehearing after the initial decision?
6. According to the judge’s decision, what was the key failure in the petitioner’s argument regarding the financial transaction?
7. What was the final order issued by the Administrative Law Judge on January 30, 2020?
8. Although the judge dismissed the petition, what did the decision state about the nature of the financial transactions?
9. Which government department granted the request for a rehearing and has authority over this type of matter?
10. What options does a party have if they wish to appeal the final administrative law judge order?
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Answer Key
1. The primary parties were the Petitioner, Mary J. Bartle, and the Respondent, Saguaro West Owner’s Association. Ms. Bartle brought the petition against the Association, alleging a violation of its bylaws.
2. The central subject was the withdrawal of $49,000.50 from the Association’s operating account on October 22, 2018. The same amount was subsequently redeposited into the account on November 30, 2018.
3. The petitioner claimed the Association violated Bylaws Article VIII, section 8(d). This section outlines the specific duties and responsibilities of the Association’s Treasurer.
4. The standard of proof was a “preponderance of the evidence.” The burden of proof was on the petitioner, Ms. Bartle, to demonstrate that the Association had violated the bylaw.
5. Ms. Bartle filed her Rehearing Request on the grounds that there was an error in the admission of evidence. She specifically referenced documents dated July 5, August 6, and September 13, 2019, in her request.
6. The key failure was that Ms. Bartle did not show by a preponderance of the evidence that the withdrawal and redeposit specifically violated any of the treasurer’s duties as explicitly listed in Bylaws Article VIII, section 8(d). Her claim was too narrow for the evidence she presented.
7. The final order was that Petitioner Mary J. Bartle’s petition be dismissed. The Respondent, Saguaro West Owner’s Association, was deemed to be the prevailing party in the matter.
8. The decision stated that there was evidence to suggest that the withdrawal and redeposit of the $49,000.50 “may have been in violation of the law or otherwise improper.” However, this was not sufficient to prove a violation of the specific bylaw in question.
9. The Arizona Department of Real Estate granted the rehearing on November 18, 2019. This department has authority over the matter as established by ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11.
10. A party wishing to appeal the order must seek judicial review as prescribed by Arizona Revised Statutes. The appeal must be filed with the superior court within thirty-five days from the date the order was served upon the parties.
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Essay Questions
Instructions: Consider the following questions for a deeper analysis of the case. Formulate a comprehensive response based solely on the information provided in the source document.
1. Analyze the concept of “preponderance of the evidence” as defined in the decision. Explain why Mary J. Bartle failed to meet this standard, despite the judge’s acknowledgment that the transaction may have been “improper” or in “violation of the law.”
2. Discuss the procedural significance of limiting the hearing to the single issue of Bylaws Article VIII, section 8(d). How might the case’s outcome have differed if the scope of the hearing had been broader?
3. Trace the complete timeline of the case from the initial petition filing in April 2019 to the final order in January 2020. What do the key events and dates reveal about the process of administrative hearings and rehearings?
4. Based on the full text of Bylaws Article VIII, section 8(d), what specific types of evidence would the petitioner have needed to present to successfully prove that the treasurer’s duties were violated by the $49,000.50 transaction?
5. Evaluate the distinction made by the Administrative Law Judge between a transaction that is potentially illegal or improper and a transaction that specifically violates the duties enumerated in Bylaws Article VIII, section 8(d). Why is this distinction critical to the final order of dismissal?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, weighs evidence, and issues decisions on matters under the jurisdiction of a government agency. In this case, the ALJ was Thomas Shedden.
ARIZ. ADMIN. CODE
The Arizona Administrative Code, a compilation of rules and regulations of Arizona’s state agencies. Section R2-19-119 is cited as establishing the standard of proof.
ARIZ. REV. STAT.
The Arizona Revised Statutes, which are the codified laws of the state of Arizona. Various sections are cited to establish jurisdiction and the appeals process.
Bylaws
A set of rules established by an organization, such as a homeowners’ association, to regulate itself. In this case, the bylaws are treated as a binding contract between the parties.
Conclusion of Law
The section of a legal decision where the judge applies legal principles and statutes to the established facts of the case.
Finding of Fact
The section of a legal decision that lists the factual determinations made by the judge based on the evidence presented during the hearing.
Judicial Review
The process by which a court of law reviews the decision of a lower court or an administrative agency to determine if the decision was legally sound.
Office of Administrative Hearings (OAH)
A state agency that provides a neutral forum for conducting administrative hearings for other state agencies. The hearings in this matter were held at the OAH.
Petitioner
The party who initiates a lawsuit or files a petition seeking a legal remedy. In this case, the petitioner was Mary J. Bartle.
Preponderance of the Evidence
The standard of proof in most civil cases. It is met when the evidence presented has the most convincing force and is sufficient to incline a fair and impartial mind to one side of an issue over the other.
Prevailing Party
The party in a legal dispute who is successful and in whose favor the judgment is rendered. In this case, the Respondent was deemed the prevailing party.
Rehearing
A second hearing of a case to consider new evidence or to argue against the original decision on the basis of an error. Ms. Bartle’s request for a rehearing was granted.
Respondent
The party against whom a petition is filed. In this case, the respondent was the Saguaro West Owner’s Association.
Blog Post – 19F-H1919059-REL-RHG
A Homeowner Found a Mysterious $49,000 Transaction in Her HOA’s Books. The Reason She Lost in Court Is a Lesson for Everyone.
Introduction: The David-vs-Goliath Fight That Didn’t Go as Planned
For many homeowners, dealing with a Homeowners’ Association (HOA) can feel like a constant battle for transparency and fairness. It’s a common story: a resident raises concerns about financial decisions made behind closed doors, only to be met with resistance or silence. But what happens when a homeowner pushes back and takes that fight to an administrative hearing?
After an initial hearing and a persistent request for a rehearing, the final decision in Mary J. Bartle’s case against the Saguaro West Owner’s Association seemed, on the surface, like a clear-cut quest for accountability. The dispute centered on a single, alarming event: the withdrawal and subsequent redeposit of $49,000.50 from the association’s operating account without any notice to the members. It appeared to be a straightforward case of a concerned resident demanding answers.
However, the ruling from the administrative hearing offers a surprising and crucial lesson in how the legal system operates. The outcome reveals that suspicion, no matter how justified, is not enough to win. This article breaks down the top counter-intuitive takeaways from the judge’s decision and what they mean for any homeowner considering a legal challenge against their HOA.
Takeaway 1: A “Suspicious” Act Isn’t a Guaranteed Win
Feeling Something Is Wrong Isn’t the Same as Proving It.
The core facts of the case were not in dispute. On October 22, 2018, $49,000.50 was withdrawn from the Saguaro West Owner’s Association’s operating account. On November 30, 2018, the exact same amount was redeposited. Members were not notified of these transactions. To any reasonable observer, this activity raises immediate questions.
Even the Administrative Law Judge presiding over the case acknowledged the questionable nature of the transaction. In his final decision, he validated Ms. Bartle’s initial concerns with a striking statement:
The evidence shows that $49,000.50 was withdrawn from the Association’s account in October 2018 and the same amount was deposited in November 2018, and there is evidence to suggest that the transactions may have been in violation of the law.
This is the most stunning part of the case: the judge agreed that the transaction looked suspicious and might have broken the law, yet Ms. Bartle still lost. This reveals a critical distinction in legal proceedings. A judge is not an arbiter of general fairness but an interpreter of specific laws and rules. The judge’s comment shows he understood the spirit of Ms. Bartle’s complaint, but his hands were tied by the letter of her petition. The legal system requires more than a gut feeling; it demands specific proof that a specific rule was violated, which leads directly to the next critical lesson.
Takeaway 2: You Must Prove theExactRule Was Broken
Specificity Is Your Only Weapon.
Ms. Bartle’s case was ultimately narrowed to a single, highly specific issue: whether the $49,000.50 transaction violated Article VIII, section 8(d) of the association’s bylaws. This is a crucial detail because courts and administrative bodies require this rigid specificity to ensure fairness, prevent “moving goalposts,” and keep proceedings focused on the actual claims filed, not a general feeling of grievance.
Her entire case hinged on proving a violation of that specific section and no other. The rule in question outlines the treasurer’s duties, which include the power to: “receive and deposit…all monies,” “disburse such funds as directed,” “sign all checks,” and “keep proper books of account.”
The judge’s conclusion was brutally precise. He found that Ms. Bartle had “not shown by a preponderance of the evidence” that the transaction violated any of those specific, listed duties. She couldn’t prove the treasurer failed to deposit money or keep proper books; she could only prove a strange transaction occurred that wasn’t explicitly forbidden by the rule she cited. This is a critical lesson: it doesn’t matter if an HOA’s action feels wrong; what matters is whether you can prove it violated the precise rule you cited in your petition.
Takeaway 3: The Burden of Proof Rests Entirely on the Accuser
It’s Your Job to Build the Case, Not Theirs to Disprove It.
In a civil administrative hearing like this, the petitioner—Ms. Bartle—carries the “burden of proof.” The standard she had to meet was the “preponderance of the evidence.” The legal definition for this is:
“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.”
In simple terms, she had to present enough convincing evidence to make the judge believe that her version of events was more likely true than not. The judge’s decision explicitly states that Ms. Bartle bore this burden and ultimately failed to meet it.
One of the most powerful details from the case file illustrates this point perfectly: the Saguaro West Owner’s Association, though represented by legal counsel, “presented no witnesses.” They didn’t have to. They didn’t need to explain the transaction or justify their actions because Ms. Bartle failed to build a strong enough case to prove her specific claim. The onus was completely on her to prove her argument, and when it fell short, the case was dismissed.
Conclusion: A Sobering Reminder for Homeowners
The case of Mary Bartle is a sobering reminder that winning a legal fight against a well-resourced entity like an HOA is less about moral rightness and more about meticulous legal strategy and precision.
While the judge acknowledged that Ms. Bartle’s concerns about the $49,000.50 transaction were potentially valid, her petition was dismissed not on a simple technicality, but because of a core principle of law: the failure to prove that the specific rule cited had actually been broken. Her case highlights the immense challenge for individual homeowners seeking transparency. It leaves us asking, if the legal bar is this specific, what practical recourse do residents have when they feel something is fundamentally wrong?
Case Participants
Petitioner Side
Mary J Bartle(petitioner) Appeared on her own behalf and testified
Respondent Side
Nicole Payne(attorney) Carpenter, Hazlewood, Delgado & Bolen, PLC Counsel for Saguaro West Owner's Association
Edith Rudder(attorney) Carpenter, Hazlewood, Delgado & Bolen, PLC Counsel for Saguaro West Owner's Association
Neutral Parties
Thomas Shedden(ALJ)
Judy Lowe(Commissioner) Arizona Department of Real Estate
The Administrative Law Judge dismissed the petition, ruling that the Architectural Committee meetings of the HOA were not 'regularly scheduled' within the meaning of ARIZ. REV. STAT. § 33-1804, and therefore the HOA was not required to hold them open to association members.
Why this result: The petitioner failed to prove that the committee meetings met the requirement of being 'regularly scheduled' because the committee did not meet at fixed or uniform intervals, but rather considered applications as they were received.
Key Issues & Findings
Whether the Architectural Committee meetings are 'regularly scheduled' and thus required to be open to members.
Petitioner alleged the HOA violated ARS 33-1804 by failing to hold open meetings of its Architectural Committee (ARC). The ALJ found that because the ARC did not meet on a set schedule or at uniform intervals, it did not hold 'regularly scheduled' meetings as required by the statute, and thus was not required to be open.
Orders: Petitioner's petition is dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
ARIZ. REV. STAT. § 33-1804
ARIZ. REV. STAT. § 33-1805
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona
State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968)
U.S. Parking v. City of Phoenix, 160 Ariz. 210, 772 P.2d 33 (App. 1989)
Deer Valley, v. Houser, 214 Ariz. 293, 296, 152 P.3d 490, 493 (2007)
Analytics Highlights
Topics: HOA Open Meetings, Architectural Review Committee, Statutory Interpretation, Regularly Scheduled
Additional Citations:
ARIZ. REV. STAT. § 33-1804
ARIZ. REV. STAT. § 33-1805
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona
State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968)
U.S. Parking v. City of Phoenix, 160 Ariz. 210, 772 P.2d 33 (App. 1989)
Deer Valley, v. Houser, 214 Ariz. 293, 296, 152 P.3d 490, 493 (2007)
Video Overview
Audio Overview
Decision Documents
19F-H1919047-REL Decision – 713039.pdf
Uploaded 2026-01-23T17:29:01 (89.8 KB)
Briefing Doc – 19F-H1919047-REL
Briefing Document: Pattarozzi vs. Estrella Vista Homeowners Association (Case No. 19F-H1919047-REL)
Executive Summary
This document provides an analysis of the Administrative Law Judge Decision in the matter of Victor L. Pattarozzi vs. Estrella Vista Homeowners Association, Case No. 19F-H1919047-REL. The central issue was whether the homeowner association’s Architectural Review Committee (ARC) was in violation of Arizona state law by not holding open meetings for its members.
The petition, brought by Mr. Pattarozzi, was ultimately dismissed. The Administrative Law Judge, Thomas Shedden, concluded that the Petitioner failed to prove that the Respondent violated ARIZ. REV. STAT. § 33-1804. The decision hinged on the interpretation of the phrase “regularly scheduled committee meetings.” The Judge found that since the ARC did not meet at fixed, uniform, or recurring intervals, but rather on an as-needed basis to review applications, its meetings were not “regularly scheduled” within the meaning of the statute. Consequently, the legal requirement for such meetings to be open to all association members did not apply. The Judge further determined that the state’s declared policy in favor of open meetings explicitly referenced only the association’s and board of directors’ meetings, not committee meetings, and therefore could not be used to compel the ARC meetings to be open.
Case Overview
Case Number
19F-H1919047-REL
Petitioner
Victor L. Pattarozzi
Respondent
Estrella Vista Homeowners Association
Presiding Judge
Thomas Shedden, Administrative Law Judge
Hearing Date
May 16, 2019
Decision Date
June 5, 2019
Jurisdiction
Office of Administrative Hearings, Arizona Department of Real Estate
Allegation: The Petitioner, Victor L. Pattarozzi, alleged that the Estrella Vista Homeowners Association violated ARIZ. REV. STAT. § 33-1804 by failing to hold open meetings for its Architectural Committee (referred to as the Architectural Review Committee or ARC).
Defense: The Respondent association contended that its ARC meetings were not required to be open to members because the meetings were not “regularly scheduled.”
Central Legal Issue: The Definition of “Regularly Scheduled”
The case revolved entirely around the interpretation of a key phrase within Arizona’s planned community statutes.
“Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the members’ association and the board of directors, and any regularly scheduled committee meetings, are open to all members of the association….”
The core legal question was whether the ARC’s method of conducting business constituted “regularly scheduled” meetings.
Competing Arguments
• Petitioner’s Position (Mr. Pattarozzi):
◦ Mr. Pattarozzi argued that the association could hold weekly ARC meetings and simply cancel them if no applications were pending for review.
◦ He supplied dictionary definitions for “regular” and “regularly” to support his interpretation:
▪ Regularly: (1) “in a regular manner”; (2) “on a regular basis: at regular intervals”.
▪ Regular: (1) “constituted, conducted, scheduled, or done in conformity with established or prescribed usages, rules, or discipline”; (2) “recurring, attending, or functioning at fixed, uniform, or normal intervals”.
◦ He also contended that the state’s declared policy in favor of open meetings, as outlined in subsection 33-1804(F), should be broadly construed to require ARC meetings to be open.
• Respondent’s Position (Estrella Vista HOA):
◦ The association maintained that its ARC meetings were not required to be open because they do not occur on a set schedule. Instead, they are convened only as needed when applications are received.
Findings of Fact
The decision outlined the specific operational procedures of the Architectural Review Committee.
• Composition and Process: The ARC consists of five members. It does not meet on a predetermined schedule. Instead, applications are forwarded by the management company to the Board President, Stuart Glenn.
• “Rubber Stamp” Approvals: The ARC has a pre-approved “rubber stamp” process for certain requests, such as solar panel installations and repainting with a pre-approved color. These requests are approved without further review by the full committee.
• Application Volume: As of the May 16, 2019 hearing, the ARC had received twelve applications in 2019. Of these, eight were subject to the “rubber stamp” approval process.
• Non-Standard Applications: For any application not meeting the rubber-stamp criteria, Mr. Glenn forwards it to the other four ARC members, who individually report back on their approval or disapproval.
Legal Reasoning and Decision
The Administrative Law Judge’s conclusions of law provided a detailed statutory interpretation that led to the dismissal of the petition.
Interpretation of “Regularly Scheduled”
The Judge determined that the legislature intentionally distinguished between different types of meetings. While the law mandates that all meetings of the members’ association and the board of directors must be open, it applies a specific qualifier—”regularly scheduled”—to committee meetings. This implies that not all committee meetings must be open.
The Judge adopted the Petitioner’s second definition of “regular”: “recurring, attending, or functioning at fixed, uniform, or normal intervals.” This interpretation was deemed to provide a fair and sensible result.
The Judge explicitly rejected the Petitioner’s first definition—”done in conformity with established or prescribed usages, rules, or discipline”—on the grounds that it would render the word “regular” redundant. The Judge reasoned that all committee meetings are presumed to be conducted according to established rules, so applying this definition would make the statutory language trivial.
Rejection of the “Open Meeting Policy” Argument
The Petitioner argued that subsection 33-1804(F), which declares a state policy in favor of open meetings, should apply. The Judge rejected this argument based on the specific text of the statute:
“It is the policy of this state as reflected in this section that all meetings of a planned community, whether meetings of the members’ association or meetings of the board of directors of the association, be conducted openly ….”
The Judge noted that this policy statement explicitly references only meetings of the “members’ association” and the “board of directors,” and omits any mention of committee meetings. Therefore, the policy could not be used to compel the ARC meetings to be open.
Final Order
Ruling: IT IS ORDERED that Victor L. Pattarozzi’s petition is dismissed.
Justification: The Petitioner, who bore the burden of proof, did not establish by a preponderance of the evidence that the Estrella Vista Homeowners Association violated ARIZ. REV. STAT. § 33-1804. The Judge concluded that the ARC “does not hold ‘regularly scheduled’ meetings within the meaning of” the statute.
Next Steps: The decision is binding unless a party files a request for rehearing with the Commissioner of the Department of Real Estate within 30 days of the service of the Order.
Study Guide – 19F-H1919047-REL
Study Guide: Pattarozzi v. Estrella Vista Homeowners Association
This study guide provides a comprehensive review of the Administrative Law Judge Decision in case number 19F-H1919047-REL, concerning a dispute between Victor L. Pattarozzi and the Estrella Vista Homeowners Association. The guide includes a quiz with an answer key, a set of essay questions for deeper analysis, and a glossary of key terms found within the legal decision.
Quiz: Short-Answer Questions
Answer the following questions in 2-3 complete sentences, based on the information provided in the source document.
1. Who were the primary parties involved in this case, and what were their respective roles?
2. What specific violation did Petitioner Victor L. Pattarozzi allege against the Respondent, the Estrella Vista Homeowners Association?
3. What was the central argument made by the Estrella Vista Homeowners Association to defend its Architectural Review Committee’s meeting practices?
4. Describe the composition of the Architectural Review Committee (ARC) and its method for reviewing applications.
5. What was the “rubber stamp” process used by the ARC, and how many of the 12 applications received in 2019 were approved this way?
6. What suggestion did Mr. Pattarozzi offer for how the ARC could schedule its meetings to comply with his interpretation of the statute?
7. Which of Mr. Pattarozzi’s proposed definitions for the word “regular” did the Administrative Law Judge ultimately accept as the most appropriate interpretation in this context?
8. According to the judge’s Conclusions of Law, why was Mr. Pattarozzi’s argument regarding the open meetings policy statement in subsection 33-1804(F) rejected?
9. Who bears the burden of proof in this matter, and what is the required standard of proof?
10. What was the final Order issued by the Administrative Law Judge in this case, and on what date was it issued?
——————————————————————————–
Answer Key
1. The primary parties were the Petitioner, Victor L. Pattarozzi, who brought the complaint, and the Respondent, the Estrella Vista Homeowners Association, which was defending its actions. Mr. Pattarozzi appeared on his own behalf, while the HOA was represented by Andrew Apodaca, Esq. and its Board president, Stuart Glenn.
2. Mr. Pattarozzi alleged that the Estrella Vista Homeowners Association violated ARIZ. REV. STAT. sections 33-1804 and 33-1805. His specific claim was that the HOA’s Architectural Review Committee (ARC) was failing to hold open meetings as required by section 33-1804.
3. The HOA’s position was that its ARC meetings were not required to be open to all members because the meetings were not “regularly scheduled.” The statute only mandates that “regularly scheduled committee meetings” must be open.
4. The ARC consists of five members and does not meet on a set schedule, instead considering applications as they are received. The Board president, Mr. Glenn, receives applications, determines if they meet “rubber-stamp” criteria, and if not, forwards them to the other four members for their agreement or disagreement.
5. The “rubber stamp” process was a pre-approved method for approving requests for solar panels and repainting using preapproved colors without further review. Of the twelve applications received by the ARC in 2019, eight were subject to this rubber-stamp approval.
6. Mr. Pattarozzi argued that the Respondent could schedule ARC meetings on a weekly basis. If there were no applications pending for a given week, the HOA could simply cancel the meeting.
7. The judge accepted Mr. Pattarozzi’s second definition of “regular,” which was “recurring, attending, or functioning at fixed, uniform, or normal intervals.” The judge concluded this meant only committee meetings scheduled on a recurring basis at uniform intervals must be open.
8. The argument was rejected because the policy statement in subsection 33-1804(F) explicitly references only the “meetings of the members’ association or meetings of the board of directors.” Because committee meetings were not mentioned in that specific subsection, the judge ruled that its strong policy in favor of open meetings did not apply to them.
9. The Petitioner, Mr. Pattarozzi, bears the burden of proof. The standard of proof required to decide all issues in the matter is a “preponderance of the evidence.”
10. The final Order was that Victor L. Pattarozzi’s petition be dismissed. This Order was issued on June 5, 2019.
——————————————————————————–
Essay Questions
1. Analyze the Administrative Law Judge’s interpretation of ARIZ. REV. STAT. section 33-1804. Discuss how the judge used principles of statutory interpretation, such as giving meaning to every word and considering legislative intent, to differentiate between board meetings and committee meetings.
2. Evaluate the strength of Victor L. Pattarozzi’s case. What were his key arguments, including his use of dictionary definitions and the policy statement in subsection 33-1804(F), and why did the judge ultimately find them unconvincing?
3. Discuss the concept of “preponderance of the evidence” as defined in the decision. Explain how this standard of proof applied to Mr. Pattarozzi’s petition and why he failed to meet it.
4. Examine the operational procedures of the Architectural Review Committee (ARC). How did the “rubber stamp” process and the ad-hoc nature of their meetings support the Respondent’s position that the meetings were not “regularly scheduled”?
5. Based on the judge’s reasoning, what specific changes would the Estrella Vista Homeowners Association’s Architectural Committee need to make for its meetings to be considered “regularly scheduled” and therefore required to be open to all members under Arizona law?
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Glossary of Key Terms
Definition
Administrative Law Judge
An official, in this case Thomas Shedden, who presides over administrative hearings, weighs evidence, and makes legal decisions and orders.
Architectural Review Committee (ARC)
A committee of the Estrella Vista Homeowners Association, consisting of five members, responsible for reviewing and approving member applications for things like solar panels and house painting.
ARIZ. ADMIN. CODE
The Arizona Administrative Code, a set of state regulations. In this case, § R2-19-119 established the standard of proof.
ARIZ. REV. STAT.
Arizona Revised Statutes, the laws enacted by the Arizona state legislature. Sections 33-1804 and 33-1805 were the statutes central to this case.
Burden of Proof
The obligation to prove one’s assertion. In this matter, the burden of proof was on the Petitioner, Mr. Pattarozzi.
Department of Real Estate
The Arizona state agency with legal authority over this matter, which issued the initial Notice of Hearing.
Dismissed
The legal term for the final Order in this case, meaning the Petitioner’s petition was rejected and no action was taken against the Respondent.
Office of Administrative Hearings
The venue where the hearing for this case was held on May 16, 2019.
Petitioner
The party who files a petition or brings a legal action against another. In this case, Victor L. Pattarozzi.
Preponderance of the Evidence
The standard of proof required in this case, 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.”
Respondent
The party against whom a petition is filed or an action is brought. In this case, the Estrella Vista Homeowners Association.
Statutory Interpretation
The process by which judges interpret and apply legislation. The decision outlines several principles, such as giving words their ordinary meanings and ensuring no part of a statute is redundant.
Blog Post – 19F-H1919047-REL
Briefing Document: Pattarozzi vs. Estrella Vista Homeowners Association (Case No. 19F-H1919047-REL)
Executive Summary
This document provides an analysis of the Administrative Law Judge Decision in the matter of Victor L. Pattarozzi vs. Estrella Vista Homeowners Association, Case No. 19F-H1919047-REL. The central issue was whether the homeowner association’s Architectural Review Committee (ARC) was in violation of Arizona state law by not holding open meetings for its members.
The petition, brought by Mr. Pattarozzi, was ultimately dismissed. The Administrative Law Judge, Thomas Shedden, concluded that the Petitioner failed to prove that the Respondent violated ARIZ. REV. STAT. § 33-1804. The decision hinged on the interpretation of the phrase “regularly scheduled committee meetings.” The Judge found that since the ARC did not meet at fixed, uniform, or recurring intervals, but rather on an as-needed basis to review applications, its meetings were not “regularly scheduled” within the meaning of the statute. Consequently, the legal requirement for such meetings to be open to all association members did not apply. The Judge further determined that the state’s declared policy in favor of open meetings explicitly referenced only the association’s and board of directors’ meetings, not committee meetings, and therefore could not be used to compel the ARC meetings to be open.
Case Overview
Case Number
19F-H1919047-REL
Petitioner
Victor L. Pattarozzi
Respondent
Estrella Vista Homeowners Association
Presiding Judge
Thomas Shedden, Administrative Law Judge
Hearing Date
May 16, 2019
Decision Date
June 5, 2019
Jurisdiction
Office of Administrative Hearings, Arizona Department of Real Estate
Allegation: The Petitioner, Victor L. Pattarozzi, alleged that the Estrella Vista Homeowners Association violated ARIZ. REV. STAT. § 33-1804 by failing to hold open meetings for its Architectural Committee (referred to as the Architectural Review Committee or ARC).
Defense: The Respondent association contended that its ARC meetings were not required to be open to members because the meetings were not “regularly scheduled.”
Central Legal Issue: The Definition of “Regularly Scheduled”
The case revolved entirely around the interpretation of a key phrase within Arizona’s planned community statutes.
“Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the members’ association and the board of directors, and any regularly scheduled committee meetings, are open to all members of the association….”
The core legal question was whether the ARC’s method of conducting business constituted “regularly scheduled” meetings.
Competing Arguments
• Petitioner’s Position (Mr. Pattarozzi):
◦ Mr. Pattarozzi argued that the association could hold weekly ARC meetings and simply cancel them if no applications were pending for review.
◦ He supplied dictionary definitions for “regular” and “regularly” to support his interpretation:
▪ Regularly: (1) “in a regular manner”; (2) “on a regular basis: at regular intervals”.
▪ Regular: (1) “constituted, conducted, scheduled, or done in conformity with established or prescribed usages, rules, or discipline”; (2) “recurring, attending, or functioning at fixed, uniform, or normal intervals”.
◦ He also contended that the state’s declared policy in favor of open meetings, as outlined in subsection 33-1804(F), should be broadly construed to require ARC meetings to be open.
• Respondent’s Position (Estrella Vista HOA):
◦ The association maintained that its ARC meetings were not required to be open because they do not occur on a set schedule. Instead, they are convened only as needed when applications are received.
Findings of Fact
The decision outlined the specific operational procedures of the Architectural Review Committee.
• Composition and Process: The ARC consists of five members. It does not meet on a predetermined schedule. Instead, applications are forwarded by the management company to the Board President, Stuart Glenn.
• “Rubber Stamp” Approvals: The ARC has a pre-approved “rubber stamp” process for certain requests, such as solar panel installations and repainting with a pre-approved color. These requests are approved without further review by the full committee.
• Application Volume: As of the May 16, 2019 hearing, the ARC had received twelve applications in 2019. Of these, eight were subject to the “rubber stamp” approval process.
• Non-Standard Applications: For any application not meeting the rubber-stamp criteria, Mr. Glenn forwards it to the other four ARC members, who individually report back on their approval or disapproval.
Legal Reasoning and Decision
The Administrative Law Judge’s conclusions of law provided a detailed statutory interpretation that led to the dismissal of the petition.
Interpretation of “Regularly Scheduled”
The Judge determined that the legislature intentionally distinguished between different types of meetings. While the law mandates that all meetings of the members’ association and the board of directors must be open, it applies a specific qualifier—”regularly scheduled”—to committee meetings. This implies that not all committee meetings must be open.
The Judge adopted the Petitioner’s second definition of “regular”: “recurring, attending, or functioning at fixed, uniform, or normal intervals.” This interpretation was deemed to provide a fair and sensible result.
The Judge explicitly rejected the Petitioner’s first definition—”done in conformity with established or prescribed usages, rules, or discipline”—on the grounds that it would render the word “regular” redundant. The Judge reasoned that all committee meetings are presumed to be conducted according to established rules, so applying this definition would make the statutory language trivial.
Rejection of the “Open Meeting Policy” Argument
The Petitioner argued that subsection 33-1804(F), which declares a state policy in favor of open meetings, should apply. The Judge rejected this argument based on the specific text of the statute:
“It is the policy of this state as reflected in this section that all meetings of a planned community, whether meetings of the members’ association or meetings of the board of directors of the association, be conducted openly ….”
The Judge noted that this policy statement explicitly references only meetings of the “members’ association” and the “board of directors,” and omits any mention of committee meetings. Therefore, the policy could not be used to compel the ARC meetings to be open.
Final Order
Ruling: IT IS ORDERED that Victor L. Pattarozzi’s petition is dismissed.
Justification: The Petitioner, who bore the burden of proof, did not establish by a preponderance of the evidence that the Estrella Vista Homeowners Association violated ARIZ. REV. STAT. § 33-1804. The Judge concluded that the ARC “does not hold ‘regularly scheduled’ meetings within the meaning of” the statute.
Next Steps: The decision is binding unless a party files a request for rehearing with the Commissioner of the Department of Real Estate within 30 days of the service of the Order.
Case Participants
Petitioner Side
Victor L Pattarozzi(petitioner) Appeared and testified on his own behalf
Respondent Side
Andrew Apodaca(attorney) Goering, Roberts, Rubin, Brogna, Enos & Treadwell-Rubin, P.C. Attorney for Respondent Estrella Vista Homeowners Association
Stuart Glenn(board member) Estrella Vista Homeowners Association Board president who presented testimony for Respondent
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(ADRE Commissioner) Arizona Department of Real Estate Recipient of transmittal
Felicia Del Sol(Administrative Staff) Listed in the final section of the document
The Administrative Law Judge dismissed the petition, ruling that the Architectural Committee meetings of the HOA were not 'regularly scheduled' within the meaning of ARIZ. REV. STAT. § 33-1804, and therefore the HOA was not required to hold them open to association members.
Why this result: The petitioner failed to prove that the committee meetings met the requirement of being 'regularly scheduled' because the committee did not meet at fixed or uniform intervals, but rather considered applications as they were received.
Key Issues & Findings
Whether the Architectural Committee meetings are 'regularly scheduled' and thus required to be open to members.
Petitioner alleged the HOA violated ARS 33-1804 by failing to hold open meetings of its Architectural Committee (ARC). The ALJ found that because the ARC did not meet on a set schedule or at uniform intervals, it did not hold 'regularly scheduled' meetings as required by the statute, and thus was not required to be open.
Orders: Petitioner's petition is dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
ARIZ. REV. STAT. § 33-1804
ARIZ. REV. STAT. § 33-1805
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona
State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968)
U.S. Parking v. City of Phoenix, 160 Ariz. 210, 772 P.2d 33 (App. 1989)
Deer Valley, v. Houser, 214 Ariz. 293, 296, 152 P.3d 490, 493 (2007)
Analytics Highlights
Topics: HOA Open Meetings, Architectural Review Committee, Statutory Interpretation, Regularly Scheduled
Additional Citations:
ARIZ. REV. STAT. § 33-1804
ARIZ. REV. STAT. § 33-1805
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona
State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968)
U.S. Parking v. City of Phoenix, 160 Ariz. 210, 772 P.2d 33 (App. 1989)
Deer Valley, v. Houser, 214 Ariz. 293, 296, 152 P.3d 490, 493 (2007)
Video Overview
Audio Overview
Decision Documents
19F-H1919047-REL Decision – 713039.pdf
Uploaded 2025-10-09T03:34:08 (89.8 KB)
Briefing Doc – 19F-H1919047-REL
Briefing Document: Pattarozzi vs. Estrella Vista Homeowners Association (Case No. 19F-H1919047-REL)
Executive Summary
This document provides an analysis of the Administrative Law Judge Decision in the matter of Victor L. Pattarozzi vs. Estrella Vista Homeowners Association, Case No. 19F-H1919047-REL. The central issue was whether the homeowner association’s Architectural Review Committee (ARC) was in violation of Arizona state law by not holding open meetings for its members.
The petition, brought by Mr. Pattarozzi, was ultimately dismissed. The Administrative Law Judge, Thomas Shedden, concluded that the Petitioner failed to prove that the Respondent violated ARIZ. REV. STAT. § 33-1804. The decision hinged on the interpretation of the phrase “regularly scheduled committee meetings.” The Judge found that since the ARC did not meet at fixed, uniform, or recurring intervals, but rather on an as-needed basis to review applications, its meetings were not “regularly scheduled” within the meaning of the statute. Consequently, the legal requirement for such meetings to be open to all association members did not apply. The Judge further determined that the state’s declared policy in favor of open meetings explicitly referenced only the association’s and board of directors’ meetings, not committee meetings, and therefore could not be used to compel the ARC meetings to be open.
Case Overview
Case Number
19F-H1919047-REL
Petitioner
Victor L. Pattarozzi
Respondent
Estrella Vista Homeowners Association
Presiding Judge
Thomas Shedden, Administrative Law Judge
Hearing Date
May 16, 2019
Decision Date
June 5, 2019
Jurisdiction
Office of Administrative Hearings, Arizona Department of Real Estate
Allegation: The Petitioner, Victor L. Pattarozzi, alleged that the Estrella Vista Homeowners Association violated ARIZ. REV. STAT. § 33-1804 by failing to hold open meetings for its Architectural Committee (referred to as the Architectural Review Committee or ARC).
Defense: The Respondent association contended that its ARC meetings were not required to be open to members because the meetings were not “regularly scheduled.”
Central Legal Issue: The Definition of “Regularly Scheduled”
The case revolved entirely around the interpretation of a key phrase within Arizona’s planned community statutes.
“Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the members’ association and the board of directors, and any regularly scheduled committee meetings, are open to all members of the association….”
The core legal question was whether the ARC’s method of conducting business constituted “regularly scheduled” meetings.
Competing Arguments
• Petitioner’s Position (Mr. Pattarozzi):
◦ Mr. Pattarozzi argued that the association could hold weekly ARC meetings and simply cancel them if no applications were pending for review.
◦ He supplied dictionary definitions for “regular” and “regularly” to support his interpretation:
▪ Regularly: (1) “in a regular manner”; (2) “on a regular basis: at regular intervals”.
▪ Regular: (1) “constituted, conducted, scheduled, or done in conformity with established or prescribed usages, rules, or discipline”; (2) “recurring, attending, or functioning at fixed, uniform, or normal intervals”.
◦ He also contended that the state’s declared policy in favor of open meetings, as outlined in subsection 33-1804(F), should be broadly construed to require ARC meetings to be open.
• Respondent’s Position (Estrella Vista HOA):
◦ The association maintained that its ARC meetings were not required to be open because they do not occur on a set schedule. Instead, they are convened only as needed when applications are received.
Findings of Fact
The decision outlined the specific operational procedures of the Architectural Review Committee.
• Composition and Process: The ARC consists of five members. It does not meet on a predetermined schedule. Instead, applications are forwarded by the management company to the Board President, Stuart Glenn.
• “Rubber Stamp” Approvals: The ARC has a pre-approved “rubber stamp” process for certain requests, such as solar panel installations and repainting with a pre-approved color. These requests are approved without further review by the full committee.
• Application Volume: As of the May 16, 2019 hearing, the ARC had received twelve applications in 2019. Of these, eight were subject to the “rubber stamp” approval process.
• Non-Standard Applications: For any application not meeting the rubber-stamp criteria, Mr. Glenn forwards it to the other four ARC members, who individually report back on their approval or disapproval.
Legal Reasoning and Decision
The Administrative Law Judge’s conclusions of law provided a detailed statutory interpretation that led to the dismissal of the petition.
Interpretation of “Regularly Scheduled”
The Judge determined that the legislature intentionally distinguished between different types of meetings. While the law mandates that all meetings of the members’ association and the board of directors must be open, it applies a specific qualifier—”regularly scheduled”—to committee meetings. This implies that not all committee meetings must be open.
The Judge adopted the Petitioner’s second definition of “regular”: “recurring, attending, or functioning at fixed, uniform, or normal intervals.” This interpretation was deemed to provide a fair and sensible result.
The Judge explicitly rejected the Petitioner’s first definition—”done in conformity with established or prescribed usages, rules, or discipline”—on the grounds that it would render the word “regular” redundant. The Judge reasoned that all committee meetings are presumed to be conducted according to established rules, so applying this definition would make the statutory language trivial.
Rejection of the “Open Meeting Policy” Argument
The Petitioner argued that subsection 33-1804(F), which declares a state policy in favor of open meetings, should apply. The Judge rejected this argument based on the specific text of the statute:
“It is the policy of this state as reflected in this section that all meetings of a planned community, whether meetings of the members’ association or meetings of the board of directors of the association, be conducted openly ….”
The Judge noted that this policy statement explicitly references only meetings of the “members’ association” and the “board of directors,” and omits any mention of committee meetings. Therefore, the policy could not be used to compel the ARC meetings to be open.
Final Order
Ruling: IT IS ORDERED that Victor L. Pattarozzi’s petition is dismissed.
Justification: The Petitioner, who bore the burden of proof, did not establish by a preponderance of the evidence that the Estrella Vista Homeowners Association violated ARIZ. REV. STAT. § 33-1804. The Judge concluded that the ARC “does not hold ‘regularly scheduled’ meetings within the meaning of” the statute.
Next Steps: The decision is binding unless a party files a request for rehearing with the Commissioner of the Department of Real Estate within 30 days of the service of the Order.
Study Guide – 19F-H1919047-REL
Study Guide: Pattarozzi v. Estrella Vista Homeowners Association
This study guide provides a comprehensive review of the Administrative Law Judge Decision in case number 19F-H1919047-REL, concerning a dispute between Victor L. Pattarozzi and the Estrella Vista Homeowners Association. The guide includes a quiz with an answer key, a set of essay questions for deeper analysis, and a glossary of key terms found within the legal decision.
Quiz: Short-Answer Questions
Answer the following questions in 2-3 complete sentences, based on the information provided in the source document.
1. Who were the primary parties involved in this case, and what were their respective roles?
2. What specific violation did Petitioner Victor L. Pattarozzi allege against the Respondent, the Estrella Vista Homeowners Association?
3. What was the central argument made by the Estrella Vista Homeowners Association to defend its Architectural Review Committee’s meeting practices?
4. Describe the composition of the Architectural Review Committee (ARC) and its method for reviewing applications.
5. What was the “rubber stamp” process used by the ARC, and how many of the 12 applications received in 2019 were approved this way?
6. What suggestion did Mr. Pattarozzi offer for how the ARC could schedule its meetings to comply with his interpretation of the statute?
7. Which of Mr. Pattarozzi’s proposed definitions for the word “regular” did the Administrative Law Judge ultimately accept as the most appropriate interpretation in this context?
8. According to the judge’s Conclusions of Law, why was Mr. Pattarozzi’s argument regarding the open meetings policy statement in subsection 33-1804(F) rejected?
9. Who bears the burden of proof in this matter, and what is the required standard of proof?
10. What was the final Order issued by the Administrative Law Judge in this case, and on what date was it issued?
——————————————————————————–
Answer Key
1. The primary parties were the Petitioner, Victor L. Pattarozzi, who brought the complaint, and the Respondent, the Estrella Vista Homeowners Association, which was defending its actions. Mr. Pattarozzi appeared on his own behalf, while the HOA was represented by Andrew Apodaca, Esq. and its Board president, Stuart Glenn.
2. Mr. Pattarozzi alleged that the Estrella Vista Homeowners Association violated ARIZ. REV. STAT. sections 33-1804 and 33-1805. His specific claim was that the HOA’s Architectural Review Committee (ARC) was failing to hold open meetings as required by section 33-1804.
3. The HOA’s position was that its ARC meetings were not required to be open to all members because the meetings were not “regularly scheduled.” The statute only mandates that “regularly scheduled committee meetings” must be open.
4. The ARC consists of five members and does not meet on a set schedule, instead considering applications as they are received. The Board president, Mr. Glenn, receives applications, determines if they meet “rubber-stamp” criteria, and if not, forwards them to the other four members for their agreement or disagreement.
5. The “rubber stamp” process was a pre-approved method for approving requests for solar panels and repainting using preapproved colors without further review. Of the twelve applications received by the ARC in 2019, eight were subject to this rubber-stamp approval.
6. Mr. Pattarozzi argued that the Respondent could schedule ARC meetings on a weekly basis. If there were no applications pending for a given week, the HOA could simply cancel the meeting.
7. The judge accepted Mr. Pattarozzi’s second definition of “regular,” which was “recurring, attending, or functioning at fixed, uniform, or normal intervals.” The judge concluded this meant only committee meetings scheduled on a recurring basis at uniform intervals must be open.
8. The argument was rejected because the policy statement in subsection 33-1804(F) explicitly references only the “meetings of the members’ association or meetings of the board of directors.” Because committee meetings were not mentioned in that specific subsection, the judge ruled that its strong policy in favor of open meetings did not apply to them.
9. The Petitioner, Mr. Pattarozzi, bears the burden of proof. The standard of proof required to decide all issues in the matter is a “preponderance of the evidence.”
10. The final Order was that Victor L. Pattarozzi’s petition be dismissed. This Order was issued on June 5, 2019.
——————————————————————————–
Essay Questions
1. Analyze the Administrative Law Judge’s interpretation of ARIZ. REV. STAT. section 33-1804. Discuss how the judge used principles of statutory interpretation, such as giving meaning to every word and considering legislative intent, to differentiate between board meetings and committee meetings.
2. Evaluate the strength of Victor L. Pattarozzi’s case. What were his key arguments, including his use of dictionary definitions and the policy statement in subsection 33-1804(F), and why did the judge ultimately find them unconvincing?
3. Discuss the concept of “preponderance of the evidence” as defined in the decision. Explain how this standard of proof applied to Mr. Pattarozzi’s petition and why he failed to meet it.
4. Examine the operational procedures of the Architectural Review Committee (ARC). How did the “rubber stamp” process and the ad-hoc nature of their meetings support the Respondent’s position that the meetings were not “regularly scheduled”?
5. Based on the judge’s reasoning, what specific changes would the Estrella Vista Homeowners Association’s Architectural Committee need to make for its meetings to be considered “regularly scheduled” and therefore required to be open to all members under Arizona law?
——————————————————————————–
Glossary of Key Terms
Definition
Administrative Law Judge
An official, in this case Thomas Shedden, who presides over administrative hearings, weighs evidence, and makes legal decisions and orders.
Architectural Review Committee (ARC)
A committee of the Estrella Vista Homeowners Association, consisting of five members, responsible for reviewing and approving member applications for things like solar panels and house painting.
ARIZ. ADMIN. CODE
The Arizona Administrative Code, a set of state regulations. In this case, § R2-19-119 established the standard of proof.
ARIZ. REV. STAT.
Arizona Revised Statutes, the laws enacted by the Arizona state legislature. Sections 33-1804 and 33-1805 were the statutes central to this case.
Burden of Proof
The obligation to prove one’s assertion. In this matter, the burden of proof was on the Petitioner, Mr. Pattarozzi.
Department of Real Estate
The Arizona state agency with legal authority over this matter, which issued the initial Notice of Hearing.
Dismissed
The legal term for the final Order in this case, meaning the Petitioner’s petition was rejected and no action was taken against the Respondent.
Office of Administrative Hearings
The venue where the hearing for this case was held on May 16, 2019.
Petitioner
The party who files a petition or brings a legal action against another. In this case, Victor L. Pattarozzi.
Preponderance of the Evidence
The standard of proof required in this case, 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.”
Respondent
The party against whom a petition is filed or an action is brought. In this case, the Estrella Vista Homeowners Association.
Statutory Interpretation
The process by which judges interpret and apply legislation. The decision outlines several principles, such as giving words their ordinary meanings and ensuring no part of a statute is redundant.
Blog Post – 19F-H1919047-REL
Briefing Document: Pattarozzi vs. Estrella Vista Homeowners Association (Case No. 19F-H1919047-REL)
Executive Summary
This document provides an analysis of the Administrative Law Judge Decision in the matter of Victor L. Pattarozzi vs. Estrella Vista Homeowners Association, Case No. 19F-H1919047-REL. The central issue was whether the homeowner association’s Architectural Review Committee (ARC) was in violation of Arizona state law by not holding open meetings for its members.
The petition, brought by Mr. Pattarozzi, was ultimately dismissed. The Administrative Law Judge, Thomas Shedden, concluded that the Petitioner failed to prove that the Respondent violated ARIZ. REV. STAT. § 33-1804. The decision hinged on the interpretation of the phrase “regularly scheduled committee meetings.” The Judge found that since the ARC did not meet at fixed, uniform, or recurring intervals, but rather on an as-needed basis to review applications, its meetings were not “regularly scheduled” within the meaning of the statute. Consequently, the legal requirement for such meetings to be open to all association members did not apply. The Judge further determined that the state’s declared policy in favor of open meetings explicitly referenced only the association’s and board of directors’ meetings, not committee meetings, and therefore could not be used to compel the ARC meetings to be open.
Case Overview
Case Number
19F-H1919047-REL
Petitioner
Victor L. Pattarozzi
Respondent
Estrella Vista Homeowners Association
Presiding Judge
Thomas Shedden, Administrative Law Judge
Hearing Date
May 16, 2019
Decision Date
June 5, 2019
Jurisdiction
Office of Administrative Hearings, Arizona Department of Real Estate
Allegation: The Petitioner, Victor L. Pattarozzi, alleged that the Estrella Vista Homeowners Association violated ARIZ. REV. STAT. § 33-1804 by failing to hold open meetings for its Architectural Committee (referred to as the Architectural Review Committee or ARC).
Defense: The Respondent association contended that its ARC meetings were not required to be open to members because the meetings were not “regularly scheduled.”
Central Legal Issue: The Definition of “Regularly Scheduled”
The case revolved entirely around the interpretation of a key phrase within Arizona’s planned community statutes.
“Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the members’ association and the board of directors, and any regularly scheduled committee meetings, are open to all members of the association….”
The core legal question was whether the ARC’s method of conducting business constituted “regularly scheduled” meetings.
Competing Arguments
• Petitioner’s Position (Mr. Pattarozzi):
◦ Mr. Pattarozzi argued that the association could hold weekly ARC meetings and simply cancel them if no applications were pending for review.
◦ He supplied dictionary definitions for “regular” and “regularly” to support his interpretation:
▪ Regularly: (1) “in a regular manner”; (2) “on a regular basis: at regular intervals”.
▪ Regular: (1) “constituted, conducted, scheduled, or done in conformity with established or prescribed usages, rules, or discipline”; (2) “recurring, attending, or functioning at fixed, uniform, or normal intervals”.
◦ He also contended that the state’s declared policy in favor of open meetings, as outlined in subsection 33-1804(F), should be broadly construed to require ARC meetings to be open.
• Respondent’s Position (Estrella Vista HOA):
◦ The association maintained that its ARC meetings were not required to be open because they do not occur on a set schedule. Instead, they are convened only as needed when applications are received.
Findings of Fact
The decision outlined the specific operational procedures of the Architectural Review Committee.
• Composition and Process: The ARC consists of five members. It does not meet on a predetermined schedule. Instead, applications are forwarded by the management company to the Board President, Stuart Glenn.
• “Rubber Stamp” Approvals: The ARC has a pre-approved “rubber stamp” process for certain requests, such as solar panel installations and repainting with a pre-approved color. These requests are approved without further review by the full committee.
• Application Volume: As of the May 16, 2019 hearing, the ARC had received twelve applications in 2019. Of these, eight were subject to the “rubber stamp” approval process.
• Non-Standard Applications: For any application not meeting the rubber-stamp criteria, Mr. Glenn forwards it to the other four ARC members, who individually report back on their approval or disapproval.
Legal Reasoning and Decision
The Administrative Law Judge’s conclusions of law provided a detailed statutory interpretation that led to the dismissal of the petition.
Interpretation of “Regularly Scheduled”
The Judge determined that the legislature intentionally distinguished between different types of meetings. While the law mandates that all meetings of the members’ association and the board of directors must be open, it applies a specific qualifier—”regularly scheduled”—to committee meetings. This implies that not all committee meetings must be open.
The Judge adopted the Petitioner’s second definition of “regular”: “recurring, attending, or functioning at fixed, uniform, or normal intervals.” This interpretation was deemed to provide a fair and sensible result.
The Judge explicitly rejected the Petitioner’s first definition—”done in conformity with established or prescribed usages, rules, or discipline”—on the grounds that it would render the word “regular” redundant. The Judge reasoned that all committee meetings are presumed to be conducted according to established rules, so applying this definition would make the statutory language trivial.
Rejection of the “Open Meeting Policy” Argument
The Petitioner argued that subsection 33-1804(F), which declares a state policy in favor of open meetings, should apply. The Judge rejected this argument based on the specific text of the statute:
“It is the policy of this state as reflected in this section that all meetings of a planned community, whether meetings of the members’ association or meetings of the board of directors of the association, be conducted openly ….”
The Judge noted that this policy statement explicitly references only meetings of the “members’ association” and the “board of directors,” and omits any mention of committee meetings. Therefore, the policy could not be used to compel the ARC meetings to be open.
Final Order
Ruling: IT IS ORDERED that Victor L. Pattarozzi’s petition is dismissed.
Justification: The Petitioner, who bore the burden of proof, did not establish by a preponderance of the evidence that the Estrella Vista Homeowners Association violated ARIZ. REV. STAT. § 33-1804. The Judge concluded that the ARC “does not hold ‘regularly scheduled’ meetings within the meaning of” the statute.
Next Steps: The decision is binding unless a party files a request for rehearing with the Commissioner of the Department of Real Estate within 30 days of the service of the Order.
Case Participants
Petitioner Side
Victor L Pattarozzi(petitioner) Appeared and testified on his own behalf
Respondent Side
Andrew Apodaca(attorney) Goering, Roberts, Rubin, Brogna, Enos & Treadwell-Rubin, P.C. Attorney for Respondent Estrella Vista Homeowners Association
Stuart Glenn(board member) Estrella Vista Homeowners Association Board president who presented testimony for Respondent
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(ADRE Commissioner) Arizona Department of Real Estate Recipient of transmittal
Felicia Del Sol(Administrative Staff) Listed in the final section of the document
The ALJ found that the Respondents violated the CC&Rs by operating a business that created traffic and parking. The Respondents were ordered to cease business operations and pay a $500.00 civil penalty. The Petitioner's request for a refund of its filing fee was denied.
Why this result: Petitioner's request for refund of the filing fee was denied because they cited no authority showing that the refund was within the tribunal’s authority.
Key Issues & Findings
Violation of Residential Use covenant prohibiting traffic/parking generation by business
The Petitioner HOA alleged that the Respondents, co-owners of the unit, violated CC&Rs Article 3, section 3.1 by operating a payroll processing company out of the unit. The ALJ found that the business required two employees to drive to the unit daily, thereby creating traffic and parking, which clearly and unambiguously violates the CC&R provision prohibiting non-residential use that creates traffic or parking.
Orders: Respondents were ordered to cease business operations at the unit (720 E. North Lane, Unit 1) within thirty-five days to comply with CC&R Article 3, section 3.1, and pay a civil penalty of $500.00 to the Department of Real Estate within sixty days. The Petitioner's request for refund of the filing fee was denied.
Filing fee: $0.00, Fee refunded: No, Civil penalty: $500.00
Disposition: petitioner_win
Cited:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
BLACK’S LAW DICTIONARY 1373 (10th ed. 2014)
Johnson v. The Pointe Community Association, 205 Ariz. 485, 73 P.3d 616 (App. 2003)
Grubb & Ellis Management Services, Inc. v. 407417 B.C., L.L.C., 213 Ariz. 83, 138 P.3d 1210 (App. 2006)
ARIZ. REV. STAT. § 32-2199.02
ARIZ. REV. STAT. section 32-2199.04
ARIZ. REV. STAT. section 41-1092.09
Video Overview
Audio Overview
Decision Documents
19F-H1919044-REL Decision – 706518.pdf
Uploaded 2026-01-23T17:28:45 (36.5 KB)
19F-H1919044-REL Decision – 706560.pdf
Uploaded 2026-01-23T17:28:49 (108.8 KB)
Briefing Doc – 19F-H1919044-REL
Administrative Hearing Briefing: Pointe Tapatio Community Association vs. Wilkey
Executive Summary
This document details the findings and decision of an administrative law judge in the case of Pointe Tapatio Community Association versus residents Layne C. and Devin E. Wilkey. The core issue was the operation of a payroll processing company, Devau Human Resources, from the Wilkeys’ residential unit. The Association alleged this violated community CC&Rs, which prohibit non-residential uses that create traffic or parking. The Wilkeys admitted that two employees commuted to the unit daily but argued they had received permission from a former property manager.
The judge found in favor of the Association, concluding that the daily commute of two employees constituted the creation of “traffic and parking,” a direct and unambiguous violation of the CC&Rs. The judge deemed the residents’ claims of verbal permission to be unsubstantiated and irrelevant, as the covenant’s language was clear. Consequently, the judge ordered the Wilkeys to cease all business operations at the unit within 35 days and imposed a civil penalty of $500.
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Case Overview
Case Name
Pointe Tapatio Community Association, Petitioner, vs. Lanye C. Wilkey and Devin E. Wilkey, Respondent.
Case Number
19F-H1919044-REL
Jurisdiction
Office of Administrative Hearings (Arizona Department of Real Estate)
Hearing Date
April 26, 2019
Decision Date
May 7, 2019
Administrative Law Judge
Thomas Shedden
Petitioner’s Counsel
Lauren Vie, Esq.
Respondent’s Counsel
Joseph Velez, Esq.
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Central Allegation and Governing Covenant
The Pointe Tapatio Community Association (Petitioner) alleged that Layne C. Wilkey and Devin E. Wilkey (Respondents) violated the community’s Covenants, Conditions, and Restrictions (CC&Rs) by using their residential unit as an office for their business.
The specific provision at issue is Article 3, Section 3.1 of the CC&Rs, which states:
“Residential. Each Residence shall be used, improved, and devoted exclusively to first class residential use, and no gainful occupation, profession, trade, business, religion, or other non-residential use which creates traffic [or] parking … shall be conducted from any Residence [or part thereof.]”
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Key Findings of Fact
The Business Operation
• Respondents: Layne C. Wilkey (mother) and Devin E. Wilkey (son) are co-owners of the unit at 720 E. North Lane, Unit 1 (Lot 50).
• Company: They own and operate Devau Human Resources, a payroll processing company, from this unit. The business also operates from a second, commercial site in Tempe.
• History: The business was moved into the residential unit from a commercial location in late 2009.
• Public Presence: Devau’s website and Google Maps both list the 720 E. North Lane address as an office location, with stated office hours from 9:00 a.m. to 5:00 p.m., Monday through Friday. The website notes it is a “mailing address only.”
• Admission: Ms. Wilkey acknowledged during testimony that they consider the unit to be an office.
Employee Activity and Impact
• The Wilkeys acknowledged that two Devau employees commute to the unit to work.
• One employee works from 9:30 a.m. to 4:00 p.m., Monday through Thursday.
• A second employee works from 9:30 a.m. to 5:00 p.m., Monday through Friday.
• These employees at times park their vehicles on the community’s streets.
• The business does not have clients or customers who visit the unit.
The Dispute Over Permission
• Respondents’ Claim: The Wilkeys asserted they had permission to operate the business from Howard Flisser, a former property manager. They admitted they had no written confirmation and had never spoken to Mr. Flisser directly about it.
◦ Ms. Wilkey testified that in 2009, she asked her husband, who asked a salesperson, who then allegedly asked Mr. Flisser and relayed that it was permissible.
◦ Mr. Wilkey testified that his now-deceased father would not have taken the risk of moving the business without permission.
• Petitioner’s Rebuttal: Board member Paula Duistermars testified that Mr. Flisser stated a few days before the hearing that he could not recall giving permission and, on two occasions during the conversation, volunteered that he had never given permission.
• Authority: Ms. Duistermars also testified that Mr. Flisser lacked the authority to grant such permission; only the Board of Directors could do so.
Association’s Stance and Actions
• Notification: Through a letter dated August 8, 2018, the Association informed the Wilkeys of the violation and required compliance by August 31, 2018.
• Petition: The Association filed the petition that initiated the hearing on or about January 17, 2019.
• Other Businesses: The Association permits certain home-based businesses that do not generate traffic or parking, such as telecommuting and online teaching, without requiring Board permission.
• Complaints: Ms. Duistermars acknowledged she was unaware of any specific complaints regarding traffic, parking, or noise from the Wilkeys’ unit. However, she testified that the Board was first made aware of the business operation when another resident brought the issue to its attention.
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Legal Analysis and Conclusions
• Standard of Proof: The judge determined all issues based on a “preponderance of the evidence,” defined as evidence with the most convincing force.
• CC&Rs as Contract: The CC&Rs are a legally binding contract between the Association and the residents.
• Unambiguous Language: The judge found the language in CC&R Article 3, Section 3.1 to be clear and unambiguous. Such covenants must be enforced to give effect to the parties’ original intent.
• Direct Violation: The judge concluded that the evidence overwhelmingly showed the Wilkeys were operating a business from their unit. The admission that two employees drive to the unit and park on the street proves that the business creates both traffic and parking.
• Violation Trigger: The creation of any traffic or parking by the business is sufficient to constitute a violation. The CC&R does not require that the traffic or parking cause a secondary violation or generate resident complaints. Therefore, the lack of other complaints was deemed to have little probative value.
• Final Conclusion: Based on the facts, the Wilkeys are in clear violation of CC&R Article 3, Section 3.1.
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Final Order and Penalties
Based on the findings of fact and conclusions of law, the Administrative Law Judge issued the following orders:
1. Compliance Order: Respondent Layne C. Wilkey and Devin E. Wilkey must cease all business operations at 720 E. North Lane, Unit 1 (Lot 50) within thirty-five (35) days of the Order’s effective date.
2. Civil Penalty: The Respondents must pay a civil penalty of $500.00 to the Department of Real Estate within sixty (60) days of the Order’s effective date. Payment must be made by cashier’s check or money order.
3. Filing Fee: The Petitioner’s request for a refund of its filing fee was denied, as the judge found no legal authority to grant it.
The Order is binding unless a request for rehearing is filed with the Commissioner of the Department of Real Estate within 30 days of service.
Study Guide – 19F-H1919044-REL
Study Guide:Pointe Tapatio Community Association v. Wilkey
This guide provides a comprehensive overview of the administrative law case Pointe Tapatio Community Association v. Wilkey, Case No. 19F-H1919044-REL, heard before the Arizona Office of Administrative Hearings. It details the central conflict, the arguments presented by both parties, the legal standards applied, and the final judgment.
Case Summary
The Pointe Tapatio Community Association (Petitioner) filed a complaint against homeowners Layne C. Wilkey and Devin E. Wilkey (Respondent), alleging that they were violating the community’s Covenants, Conditions, and Restrictions (CC&Rs) by operating a business, Devau Human Resources, from their residential unit. The Association argued that the business, which employed two individuals who commuted to the property, generated traffic and parking, explicitly prohibited by the CC&Rs for non-residential activities. The Wilkeys contended they had received verbal permission years prior and that the business was not disruptive. The Administrative Law Judge found in favor of the Association, ruling that the Wilkeys were in clear violation of the community’s governing documents.
Key Parties & Entities
Name / Entity
Key Actions & Involvement
Pointe Tapatio Community Association
Petitioner
The homeowners’ association that filed the petition alleging a CC&R violation. Represented by Lauren Vie, Esq.
Layne C. Wilkey & Devin E. Wilkey
Respondent
Mother and son, co-owners of the unit at 720 E. North Lane, Unit 1. Operators of Devau Human Resources. Represented by Joseph Velez, Esq.
Thomas Shedden
Administrative Law Judge (ALJ)
Presided over the hearing, made findings of fact, drew conclusions of law, and issued the final order.
Arizona Department of Real Estate
Regulatory Body
Issued the initial Notice of Hearing and has legal authority over such disputes under ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11.
Paula Duistermars
Board Member, Pointe Tapatio
Testified on behalf of the Association, detailing the Board’s position and interactions regarding the violation.
Howard Flisser
Property Manager (Former or Current)
Named by the Wilkeys as the source of verbal permission to operate their business; Flisser denied recalling this.
Devau Human Resources
Business Entity
A payroll processing company owned by the Wilkeys, operating out of the residential unit and a commercial site in Tempe.
Office of Administrative Hearings
Adjudicative Body
The venue for the hearing, located at 1740 West Adams Street, Lower Level, in Phoenix, Arizona.
Case Timeline
• Late 2009: The Wilkeys move their business, Devau Human Resources, from a commercial location into their unit at Pointe Tapatio.
• August 8, 2018: Pointe Tapatio sends a letter informing the Wilkeys they are out of compliance with the CC&Rs and must comply by August 31, 2018.
• January 17, 2019 (approx.): Pointe Tapatio files a petition with the Arizona Department of Real Estate.
• February 28, 2019: The Arizona Department of Real Estate issues a Notice of Hearing.
• April 26, 2019: The administrative hearing is held before ALJ Thomas Shedden.
• May 7, 2019: ALJ Thomas Shedden issues the final decision and order.
Central Conflict: CC&R Article 3, Section 3.1
The core of the dispute revolved around the interpretation and enforcement of a specific restrictive covenant within the community’s governing documents.
• The Allegation: Pointe Tapatio alleged that the Wilkeys were using their unit as an office for a “gainful occupation,” which is not a “first class residential use.”
• The Specific Provision: Article 3, Section 3.1 of the CC&Rs states:
• The Triggering Condition: The prohibition is not absolute. It applies specifically to non-residential uses that create traffic or parking.
Arguments and Evidence
Arguments & Evidence Presented
Petitioner (Pointe Tapatio)
Employee Activity: The Wilkeys acknowledged two employees drive to the unit to work Monday through Friday, creating traffic and parking on community streets.
Public Information: Devau’s website and Google Maps listed the residential unit as an office address with set business hours (9:00 a.m. to 5:00 p.m.).
Owner Admission: Ms. Wilkey acknowledged during testimony that they consider the unit to be an office.
Lack of Authority: Board member Paula Duistermars testified that property manager Howard Flisser did not have the authority to grant permission for a business; only the Board could. She also testified that Flisser could not recall giving permission and had volunteered that he never did.
Respondent (The Wilkeys)
Verbal Permission: The Wilkeys claimed they received verbal permission from property manager Howard Flisser in 2009. They admitted they never spoke to him directly and had nothing in writing.
Implied Permission: Mr. Wilkey argued his father would not have taken the risk of moving the payroll business without permission, implying it must have been granted.
No Direct Complaints: It was acknowledged that the Association was not aware of specific complaints filed against the Wilkeys for traffic, parking, or noise issues.
Residential Use: Mr. Wilkey testified that he considers the unit one of his two primary residences, though he did not provide a responsive answer when asked how often he stayed there.
The Judge’s Decision & Legal Reasoning
ALJ Thomas Shedden concluded that the Wilkeys were in violation of the CC&Rs based on a “preponderance of the evidence.”
• The Wilkeys operate Devau Human Resources, a payroll processing company, from the unit.
• Two employees commute to the unit for work and sometimes park on community streets.
• The business is publicly listed at the residential address.
• The Wilkeys’ claim of verbal permission from Howard Flisser was not substantiated. Testimony from Paula Duistermars indicated Flisser could not recall, and in fact denied, giving such permission.
• The Association does permit some home businesses (e.g., telecommuting, online teaching) that do not create traffic or parking and do not require Board permission.
1. CC&Rs as a Contract: The CC&Rs constitute a binding contract between the homeowners and the Association.
2. Unambiguous Language: The language in Article 3, section 3.1 is clear and unambiguous. It prohibits businesses that create traffic or parking.
3. Violation Proven: The evidence clearly showed the Wilkeys’ business created both traffic and parking due to its two commuting employees. This is a direct violation of the unambiguous terms of the CC&R.
4. No Other Violation Needed: The fact that no other rules (e.g., specific parking ordinances) were broken is irrelevant. The creation of any traffic or parking by the business is sufficient to trigger the violation as written.
1. Cease Operations: The Wilkeys were ordered to comply with CC&R Article 3, section 3.1 by ceasing business operations at the unit within 35 days.
2. Civil Penalty: The Wilkeys were ordered to pay a civil penalty of $500.00 to the Department of Real Estate within 60 days.
3. Filing Fee Request Denied: The Association’s request to have its filing fee refunded was denied because it cited no legal authority showing the judge had the power to grant it.
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Answer the following questions in 2-3 complete sentences based on the information in the case file.
1. Who were the petitioner and the respondents in this case, and what was their relationship?
2. What specific activity led the petitioner to claim the respondents were violating the CC&Rs?
3. According to Article 3, section 3.1, what condition makes a non-residential use of a property a violation?
4. What was the respondents’ primary defense for operating their business from the unit?
5. Why did the Administrative Law Judge find the respondents’ primary defense unconvincing?
6. What two specific pieces of evidence demonstrated that the business created traffic and parking?
7. What is the legal standard of proof required in this type of administrative hearing, and what does it mean?
8. What two penalties were imposed on the Wilkeys in the final order?
9. Does the Pointe Tapatio Community Association prohibit all home-based businesses? Explain.
10. Who was Howard Flisser, and what was his significance to the respondents’ case?
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Answer Key
1. The petitioner was the Pointe Tapatio Community Association. The respondents were Layne C. Wilkey and Devin E. Wilkey, who were homeowners within the community and co-owners of the unit in question.
2. The Wilkeys were operating their payroll processing company, Devau Human Resources, out of their residential unit. This included having two employees commute to the property to work during business hours.
3. A non-residential use becomes a violation if it “creates traffic [or] parking.” The rule does not require a certain amount of traffic or parking, only that it is created by the business activity.
4. The respondents’ primary defense was that they had received verbal permission to operate the business from the community’s property manager, Howard Flisser, back in 2009.
5. The judge found the defense unconvincing because the Wilkeys had no written proof, had not spoken to Mr. Flisser directly, and testimony from a board member indicated Mr. Flisser could not recall—and later denied—ever giving such permission. Furthermore, the property manager likely lacked the authority to grant it.
6. The evidence was the Wilkeys’ own acknowledgement that two of their employees drive to the unit to work on a weekly basis. This commuting by non-resident employees necessarily creates traffic and, at times, requires them to park on community streets.
7. The standard of proof is a “preponderance of the evidence.” This means the greater weight of the evidence must be sufficient to incline a fair and impartial mind to one side of the issue over the other, even if it does not remove all reasonable doubt.
8. The Wilkeys were ordered to cease all business operations at the unit within 35 days. They were also ordered to pay a civil penalty of $500.00 to the Department of Real Estate within 60 days.
9. No, the association does not prohibit all home-based businesses. It allows for activities like telecommuting and teaching online classes, which do not require board permission because they do not create traffic or parking.
10. Howard Flisser was the property manager whom the Wilkeys claimed gave them verbal permission to run their business. His significance was central to their defense, but his alleged permission was unsubstantiated and contradicted by later testimony.
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Essay Questions
The following questions are designed for longer-form analysis. No answers are provided.
1. Analyze the concept of “preponderance of the evidence” as applied in this case. How did the evidence presented by Pointe Tapatio meet this standard, while the Wilkeys’ evidence did not?
2. Discuss the legal principle that CC&Rs are treated as contracts. Explain how Judge Shedden applied contract law principles, particularly regarding “unambiguous” language, to reach his conclusion.
3. Evaluate the Wilkeys’ defense strategy, focusing on their claim of verbal permission from Howard Flisser. Why was this argument legally insufficient? What kind of evidence would have been necessary to make it successful?
4. Examine the distinction the Pointe Tapatio Community Association makes between permissible home-based businesses (like telecommuting) and impermissible ones (like Devau Human Resources). What is the key factor in this distinction according to the CC&Rs, and how does it relate to the core purpose of residential covenants?
5. Based on the judge’s order, discuss the remedies available to a homeowner’s association in Arizona when a CC&R violation is proven. What penalties were imposed, and what penalty was requested but denied?
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Glossary of Key Terms
• Administrative Law Judge (ALJ): A judge and trier of fact who presides over administrative hearings, such as disputes handled by the Office of Administrative Hearings. The ALJ renders decisions, called orders, based on evidence and legal arguments.
• CC&Rs (Covenants, Conditions, and Restrictions): The governing legal documents that set out the rules for a planned community or subdivision. In this case, they are treated as a legally binding contract between the association and the homeowners.
• Civil Penalty: A monetary fine levied by a government agency or administrative court for a violation of a statute or rule. In this case, a $500 penalty was imposed on the Wilkeys for violating the community documents.
• Conclusions of Law: The section of a judicial decision where the judge applies legal principles and statutes to the established facts of the case to reach a judgment.
• Findings of Fact: The section of a judicial decision that formally lists the factual determinations made by the judge based on the evidence presented at the hearing.
• Order: The final ruling or judgment issued by an Administrative Law Judge that directs the parties on what actions they must take.
• Petitioner: The party who initiates a legal action or files a petition seeking a legal remedy. In this case, the Pointe Tapatio Community Association.
• Preponderance of the Evidence: The standard of proof in most civil and administrative cases. It requires the trier of fact to believe that it is more likely than not that a claim is true, based on the evidence presented.
• Respondent: The party against whom a petition is filed or an appeal is brought. In this case, Layne C. Wilkey and Devin E. Wilkey.
Blog Post – 19F-H1919044-REL
4 Surprising Lessons from an HOA Lawsuit That Shut Down a 10-Year-Old Home Business
Introduction: The Rise of the Home Office and the Rules You Didn’t Know Existed
In an age where the line between the living room and the corner office has all but vanished, millions of us have embraced working from home. But as we settle into our home-based routines, a critical question often goes unasked: Are you truly familiar with your homeowner’s association (HOA) rules regarding home-based businesses?
For the Wilkey family, owners of Devau Human Resources, the answer to that question proved to be a costly one. After operating their payroll processing company from their home for nearly a decade without a single complaint, they found themselves in a legal battle that ultimately shut them down. Their case serves as a powerful cautionary tale about what can happen when long-standing home businesses collide with the fine print of HOA rules.
1. It’s Not About Complaints, It’s About the Contract
One of the most chilling lessons from the Wilkey case is that the HOA’s action wasn’t triggered by angry neighbors complaining about noise or traffic. In fact, Board member Paula Duistermars testified that she was unaware of any such complaints. The issue arose simply because “a resident brought the issue to [the Board’s] attention.”
This reveals a crucial legal reality: your business’s existence, not its impact, can be the sole trigger for enforcement. It doesn’t take a chorus of angry neighbors—just one person notifying the Board of a potential rule violation is enough. The Covenants, Conditions, and Restrictions (CC&Rs) are a legally binding contract, and the court’s decision was not based on whether the business was a nuisance, but simply whether it complied with the contract’s terms. Your takeaway: You must operate as if the rulebook will be enforced literally, because it can be.
2. The Deciding Factor: A Single Clause About “Traffic and Parking”
The entire legal dispute hinged on the precise wording of one specific rule. The HOA wasn’t enforcing a vague, blanket ban on all home businesses; its power came from a single, carefully worded clause in the CC&Rs.
The relevant section, Article 3, section 3.1, stated:
“Each Residence shall be used, improved, and devoted exclusively to first class residential use, and no gainful occupation, profession, trade, business, religion, or other non-residential use which creates traffic [or] parking … shall be conducted from any Residence [or part thereof.]”
As a legal analyst, I can tell you why this clause was so powerful: its focus on a tangible impact (“creates traffic [or] parking”) made it highly defensible. A blanket prohibition on “all businesses” might be open to challenge, but this specific, impact-based rule was nearly impossible to argue against once the facts were established. The Wilkeys’ business was found in violation specifically because it created traffic and parking, which is also why the HOA permitted other home businesses, like telecommuting, that did not.
3. Your Two-Person TeamIsa Traffic Problem
Many homeowners assume that business traffic rules are meant to prevent a steady stream of clients visiting a residential property. The Wilkeys had no clients come to their unit. However, this did not protect them.
The undisputed fact that proved decisive was that two of the company’s employees commuted to the home to work—one from Monday to Thursday and the other from Monday to Friday. The judge concluded that this daily employee commute constituted the creation of “traffic and parking” as prohibited by the CC&Rs. The employees at times parking on the community’s common streets provided concrete, undeniable evidence of this. This case sets a precedent that a micro-business with just one or two employees commuting to the home can be deemed in violation—a scenario many entrepreneurs wouldn’t even consider a “traffic” issue.
4. “He Said We Could” Is Not a Legal Defense
The Wilkeys asserted that they had received verbal permission to operate their business from the property manager back in 2009. This defense completely fell apart under legal scrutiny.
Courts prioritize written agreements and official board actions over “he said/she said” accounts, especially when they involve multi-level hearsay (in this case, a husband asking a salesperson who asked the manager). The defense failed for several clear reasons: the Wilkeys had no written proof, the manager denied recalling or ever giving such permission, and most importantly, a Board member testified that the manager lacked the authority to grant this permission anyway. Only the Board could.
The takeaway is unambiguous: Never rely on verbal assurances. Get all permissions from your HOA Board in writing, or they do not legally exist.
Conclusion: Know Your Rules Before You Unpack Your Desk
The story of the Wilkey family is a stark reminder that HOA documents are not mere suggestions; they are legally binding contracts where every word matters. The Wilkeys’ experience is a costly lesson for every home-based professional. Proactive compliance is your only true protection. The final outcome was an order for them to cease all business operations from their home within 35 days and pay a $500 civil penalty.
You might have been working from home for years without a problem, but have you ever read the fine print on what your community actually allows?
Case Participants
Petitioner Side
Lauren Vie(HOA attorney) Attorney for Petitioner
Paula Duistermars(board member) Pointe Tapatio Community Association Presented testimony for Petitioner
Beth Mulchay(HOA attorney) Mulchay Law Firm, P.C. Listed on transmission list
Respondent Side
Layne C. Wilkey(respondent)
Devin E. Wilkey(respondent)
Joseph A Velez(respondent attorney) For Respondent
Neutral Parties
Thomas Shedden(ALJ)
Judy Lowe(Commissioner) Arizona Department of Real Estate
Other Participants
Howard Flisser(property manager) Statements regarding alleged business permission were discussed
