Administrative Hearing Brief: Van Dan Elzen v. Carter Ranch Homeowners Association

Executive Summary

This document synthesizes the findings and conclusions from two administrative law judge decisions concerning a dispute between homeowner Thomas J. Van Dan Elzen and the Carter Ranch Homeowners Association (HOA). The core conflict arose from Mr. Van Dan Elzen’s display of a “Trump 2020” flag, which the HOA deemed a violation of its “Flag Display Rule.” Mr. Van Dan Elzen petitioned the Arizona Department of Real Estate, alleging the HOA’s rule was invalid and violated Arizona Revised Statutes (A.R.S.) § 33-1808.

The Administrative Law Judge (ALJ) ultimately dismissed the petition, both in the initial hearing and upon a subsequent rehearing. The central findings were that the petitioner failed to meet his burden of proof to demonstrate that the HOA’s rule was inconsistent with its governing documents (CC&Rs) or that the HOA had violated the state statute. The HOA’s authority to create rules restricting the use of lots, granted by its CC&Rs, was upheld. The final decision affirmed the HOA as the prevailing party, concluding a legal challenge that centered on the distinction between statutorily protected flags and political displays.

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I. Case Background and Chronology

The dispute was adjudicated by the Office of Administrative Hearings, with Velva Moses-Thompson serving as the Administrative Law Judge. The case involved a petition filed by a homeowner against his HOA regarding flag display regulations.

Parties Involved:

• Petitioner: Thomas J. Van Dan Elzen (appeared on his own behalf)

• Respondent: Carter Ranch Homeowners Association (represented by Augustus H. Shaw IV, Esq.)

Key Events:

Date (2019-2020)

May 21, 2019

Carter Ranch HOA notifies Mr. Van Dan Elzen that his “Trump 2020” flag violates association rules.

June 14, 2019

Mr. Van Dan Elzen files a petition with the Arizona Department of Real Estate, alleging a violation of A.R.S. § 33-1808.

July 16, 2019

The Department of Real Estate issues a Notice of Hearing.

Sept. 9, 2019

The initial administrative hearing is held.

Sept. 30, 2019

The ALJ issues a decision dismissing the petitioner’s case.

Nov. 18, 2019

The Department of Real Estate issues an order for a rehearing.

Jan. 10, 2020

A rehearing is held.

Jan. 30, 2020

The ALJ issues a final decision on the rehearing, again dismissing the petition.

II. The Core Dispute and Competing Arguments

The central issue was the legality of the Carter Ranch HOA’s rule prohibiting Mr. Van Dan Elzen’s “Trump 2020” flag and the scope of the HOA’s authority to regulate such displays.

A. The Petitioner’s Position (Thomas J. Van Dan Elzen)

Mr. Van Dan Elzen’s challenge was based on the premise that the HOA’s “Flag Display Rule” was invalid because it was not explicitly supported by the language of the community’s Covenants, Conditions, and Restrictions (CC&Rs).

• Primary Argument: He asserted that because the CC&Rs do not specifically contain the word “flag,” any rule created by the HOA Board regulating flags is inconsistent with the CC&Rs and therefore unenforceable.

• Petition Allegation: In his formal petition, Mr. Van Dan Elzen stated the violation was “based on 33-1808 Flags and Sings [sic].” He further argued that the HOA’s rule referenced section 3.14 of the CC&Rs, which he claimed “ONLY defines SIGNS and has no reference to Flags whatsoever.”

B. The Respondent’s Position (Carter Ranch HOA)

The Carter Ranch HOA maintained that its “Flag Display Rule” was a valid exercise of the authority granted to its Board by the community’s governing documents.

• Basis of Authority: The HOA contended that it was authorized to adopt the rule under Article V, Section 5.3 of its CC&Rs.

• Defense of the Rule: The HOA argued that the Flag Display Rule was not inconsistent with the CC&Rs and was properly adopted.

• Argument for Dismissal: Carter Ranch asserted that the petition should be dismissed because the petitioner had not successfully alleged a violation of any statute or provision within the governing documents.

III. Governing Documents and Legal Framework

The case was decided based on an interpretation of both state law and the HOA’s internal governing documents.

A. Carter Ranch Homeowners Association Rules

• The “Flag Display Rule”: The association’s rules and regulations explicitly prohibit the flying of any flag other than the following:

◦ The American Flag

◦ Official or replica flags of the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard

◦ A POW/MIA flag

◦ The Arizona State flag

◦ An Arizona Indian Nations flag

◦ The Gadsden Flag

• CC&Rs, Article V, Section 5.3: This section grants the HOA Board broad rule-making authority. The text states, in relevant part:

B. Arizona Revised Statutes § 33-1808

This state statute places specific limitations on an HOA’s ability to prohibit certain flags and political signs.

• Section A – Protected Flags: The statute mandates that an HOA “shall not prohibit the outdoor display” of the exact list of flags enumerated in the Carter Ranch “Flag Display Rule” (American, military, POW/MIA, state, etc.). A “Trump 2020” flag is not included in this list of protected flags.

• Section C – Political Signs: The statute addresses political signs separately from flags.

◦ Definition: A “political sign” is defined as “a sign that attempts to influence the outcome of an election.”

◦ Regulation: An HOA may prohibit political signs “earlier than seventy-one days before the day of an election and later than three days after an election day.”

◦ Size/Number: An HOA may regulate the size and number of signs, provided the rules are no more restrictive than local ordinances. If no local ordinance exists, an HOA cannot limit the number of signs but can cap the maximum aggregate dimensions at nine square feet.

IV. Administrative Law Judge’s Conclusions and Final Order

Across both the initial hearing and the rehearing, the ALJ’s conclusions of law consistently favored the respondent HOA. The petitioner failed to meet the required legal standard to prove his case.

A. Burden of Proof

The ALJ established that the petitioner, Mr. Van Dan Elzen, bore the burden of proving by a “preponderance of the evidence” that the HOA had violated A.R.S. § 33-1808. A preponderance of the evidence means showing the fact sought to be proved is “more probable than not.”

B. Key Conclusions of Law

• Validity of the “Flag Display Rule”: The ALJ concluded that the petitioner “had not established that the Association improperly adopted the Flag Display Rule under its CC&Rs.” In the rehearing, this was stated as the petitioner having “not established that the Flag Display Rule was inconsistent with the CC&Rs.”

• No Statutory Violation: A critical conclusion in both decisions was that the petitioner “has not alleged that Carter Ranch violated A.R.S. § 33-1808.”

• Final Judgment: Based on these conclusions, the ALJ determined that Mr. Van Dan Elzen’s petition should be dismissed and that the Carter Ranch HOA should be deemed the prevailing party.

C. Final Order

• Initial Decision (September 30, 2019): “IT IS ORDERED that Petitioner Thomas J. Van Dan Elzen’s petition is dismissed.”

• Rehearing Decision (January 30, 2020): The order to dismiss was reaffirmed. The final notice specified that this order was binding on the parties and that any appeal must be filed for judicial review with the superior court within thirty-five days.

Administrative Hearing Briefing: Van Dan Elzen v. Carter Ranch HOA

Executive Summary

This document provides a comprehensive analysis of the Administrative Law Judge (ALJ) Decision in the case of Thomas J. Van Dan Elzen versus the Carter Ranch Homeowners Association (HOA), case number 19F-H1919071-REL-RHG. The dispute centered on the HOA’s prohibition of a “Trump 2020” flag displayed by Mr. Van Dan Elzen at his property. The petitioner alleged this prohibition violated Arizona state law.

The ALJ ultimately dismissed the petition, ruling in favor of the Carter Ranch HOA. The decision was based on the petitioner’s failure to prove by a preponderance of the evidence that the HOA’s “Flag Display Rule” was inconsistent with its foundational Covenants, Conditions, and Restrictions (CC&Rs) or that the rule was improperly adopted. Crucially, the ALJ found that the petitioner had not sufficiently alleged a direct violation of the relevant state statute, A.R.S. § 33-1808. The ruling effectively upholds the HOA’s authority, granted by its CC&Rs, to regulate the display of flags not explicitly protected by Arizona law.

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I. Case Overview

• Case Name: Thomas J. Van Dan Elzen, Petitioner, vs. Carter Ranch Homeowners Association, Respondent.

• Case Number: 19F-H1919071-REL-RHG

• Adjudicating Body: Arizona Office of Administrative Hearings

• Presiding Judge: Administrative Law Judge Velva Moses-Thompson

• Hearing Date: January 10, 2020

• Decision Date: January 30, 2020

• Subject of Dispute: The validity of an HOA rule prohibiting the display of a “Trump 2020” political flag, which the petitioner claimed violated A.R.S. § 33-1808.

II. Chronology of Key Events

• May 21, 2019: Carter Ranch HOA notifies petitioner Thomas J. Van Dan Elzen that his “Trump 2020” flag violates Association Rules.

• June 14, 2019: Mr. Van Dan Elzen files a petition with the Arizona Department of Real Estate, alleging the HOA violated A.R.S. § 33-1808.

• November 18, 2019: The Department of Real Estate issues an order setting the matter for a rehearing.

• January 10, 2020: The rehearing is held before an Administrative Law Judge.

III. Petitioner’s Position (Thomas J. Van Dan Elzen)

Mr. Van Dan Elzen’s case was predicated on the argument that the HOA’s rules regarding flags were inconsistent with its own governing documents, specifically the Covenants, Conditions, and Restrictions (CC&Rs).

• Core Allegation: The HOA’s enforcement action violated A.R.S. § 33-1808, which governs flags and signs.

• Primary Argument: Mr. Van Dan Elzen contended that the HOA’s “Flag Display Rule” was invalid because the CC&Rs do not explicitly mention the word “flag.” He argued that the relevant section of the governing documents, DCC&R 3.14, only defines “SIGNS.”

• Direct Quotation from Petition: The petition stated the following, highlighting the perceived discrepancy:

IV. Respondent’s Position (Carter Ranch HOA)

The Carter Ranch HOA maintained that its “Flag Display Rule” was valid, properly enacted, and did not violate state law or its own governing documents.

• The “Flag Display Rule”: The HOA’s rules explicitly prohibit flying any flag other than those on an approved list, which includes:

◦ The American Flag

◦ Official flags of the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard

◦ A POW/MIA flag

◦ An Arizona Indian National flag

◦ The Arizona State flag

◦ The Gadsden Flag

• Authority to Regulate: The HOA asserted its authority to create this rule stemmed from Article V, Section 5.3 of its CC&Rs. This section grants the Board the power to adopt, amend, and repeal rules pertaining to “the health, safety or welfare of the owners… or restrictions on the use of Lots.” It also specifies that such rules are “enforceable in the same manner” as the CC&Rs themselves.

• Defense Arguments: The HOA contended that the petition should be dismissed because:

1. The Flag Display Rule was not inconsistent with the CC&Rs.

2. The rule was properly adopted under the authority granted in the CC&Rs.

3. The petitioner failed to allege that the HOA had actually violated a specific statute or provision of its governing documents.

V. Analysis of Governing Law: A.R.S. § 33-1808

This Arizona Revised Statute was central to the dispute. It places specific limitations on an HOA’s ability to regulate the display of certain flags and political signs.

Provision

Description of Regulation

Subsection A: Protected Flags

An HOA cannot prohibit the outdoor display of: The American flag (if displayed consistent with federal code), official U.S. military flags, the POW/MIA flag, the Arizona state flag, an Arizona Indian nations flag, or the Gadsden flag.

Subsection C: Political Signs

An HOA cannot prohibit the display of political signs on a member’s property, but may regulate them. Permissible regulations include:
• Time: Prohibiting display earlier than 71 days before an election and later than 3 days after an election.
• Size & Number: Regulations must be no more restrictive than applicable city/county ordinances. If no such ordinance exists, the HOA cannot limit the number of signs, but can cap the maximum aggregate dimensions at nine square feet.

• Definition of “Political Sign”: The statute defines a political sign as “a sign that attempts to influence the outcome of an election.”

VI. Administrative Law Judge’s Decision and Order

The ALJ concluded that the petitioner failed to meet the required burden of proof, which is to prove a violation by a preponderance of the evidence.

1. Rule Consistency: The ALJ concluded that the “Petitioner has not established that the Flag Display Rule was inconsistent with the CC&Rs.”

2. Rule Adoption: The ALJ found that the “Petitioner has not established that the Association improperly adopted the Flag Display Rule under its CC&Rs.”

3. Failure to Allege Violation: The judge noted that the “Petitioner has not alleged that Carter Ranch violated A.R.S. § 33-1808.” This indicates a failure in the petition’s framing to connect the HOA’s actions to a specific statutory prohibition.

4. Final Determination: Based on these conclusions, the judge determined that “Mr. Van Dan Elzen’s petition should be dismissed and the Respondent be deemed to be the prevailing party in this matter.”

• Dismissal: “IT IS ORDERED that Petitioner Thomas J. Van Dan Elzen’s petition is dismissed.”

• Binding Nature: The order is binding on the parties as it resulted from a rehearing.

• Appeal Rights: Any appeal must be filed with the superior court within 35 days from the date the order was served.