Case Summary
| Case ID | 08F-H089006-BFS |
|---|---|
| Agency | Department of Fire, Building and Life Safety |
| Tribunal | OAH |
| Decision Date | 2009-01-28 |
| Administrative Law Judge | Michael G. Wales |
| Outcome | none |
| Filing Fees Refunded | $500.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Douglas Dewar | Counsel | — |
|---|---|---|---|
| Respondent | Gainey Ranch Community Association | Counsel | Burton T. Cohen |
Alleged Violations
Section 2, Article 1(F) of the Gainey Ranch Architectural Rules
A.R.S. § 33-1804
A.R.S. § 33-1812
Outcome Summary
The ALJ dismissed the 8-count Petition against the Respondent in its entirety, finding that Respondent did not violate any of the alleged statutes or governing documents. The ALJ also denied Respondent's request for attorney's fees and Petitioner's request for filing fee reimbursement.
Why this result: Petitioner failed to establish by a preponderance of evidence that Respondent violated any provisions. Actions complained of were either committed by a non-party satellite association, were discretionary, or were legally permissible under statutes and governing documents.
Key Issues & Findings
Refusal to approve trash enclosure
Petitioner alleged Respondent refused his trash enclosure application. The ALJ found the master association (Respondent) actually approved it, while the non-party satellite association denied it.
Orders: Petition dismissed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Improper board meeting and ballot
Petitioner alleged open meeting violations and improper balloting due to lack of notice. The ALJ noted that under A.R.S. § 33-1804(C), failure of a member to receive actual notice does not invalidate board actions.
Orders: Petition dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
- A.R.S. § 33-1804(C)
Improper recording of amendment
Petitioner claimed an amendment was invalid because there was no physical meeting. The ALJ found that A.R.S. § 33-1812 permits voting by written ballot or other form of delivery.
Orders: Petition dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
- A.R.S. § 33-1812
Decision Documents
08F-H089006-BFS Decision – 206818.pdf
Administrative Law Judge Decision: Dewar v. Gainey Ranch Community Association
Executive Summary
This briefing document summarizes the administrative law judge (ALJ) decision in Case No. 08F-H089006-BFS, involving Douglas Dewar (Petitioner) and the Gainey Ranch Community Association (Respondent). The Petitioner filed an eight-count petition alleging that the Respondent violated various statutes and governing documents regarding the disapproval and enforcement of a trash container enclosure at his residence.
Following a formal hearing on January 22, 2009, the ALJ dismissed the petition in its entirety. The decision clarifies the distinct legal roles of master and satellite associations, the discretionary nature of advisory council referrals, and the validity of board actions despite notice failures. Additionally, the ruling establishes that administrative hearings do not constitute “actions” for the purposes of awarding attorney fees under specific Arizona statutes.
Parties and Governance Structure
The dispute involves complex relationships between multiple governing entities and their respective rules:
• Respondent (Master Association): Gainey Ranch Community Association is a master homeowners association in Scottsdale, Arizona, governed by Bylaws, Articles of Incorporation, and the Master Declaration (CC&Rs).
• Satellite Associations: Nineteen separate legal entities exist within the boundaries of the Master Association. These satellites have their own boards of directors and architectural committees.
• Respondent’s Dual Role: In addition to its role as the master association, the Respondent acts as the property management vendor for the satellite associations, charged with advising owners of violations and enforcing satellite-specific rules.
• Petitioner: Douglas Dewar is a member of both the Master Association and the “Golf Villas” satellite association.
Detailed Analysis of the Eight-Count Petition
The Petitioner’s claims were categorized into eight distinct counts, all of which were found to be without merit based on the evidence provided.
Architectural Approvals and Appeals (Counts 1, 2, and 4)
The core of the dispute originated from the disapproval of the Petitioner’s application to install a trash bin enclosure.
• Approval Authority: The Petitioner alleged the Respondent refused his application. However, evidence showed the Respondent (Master Association) actually approved it. The refusal came from the Golf Villas satellite association, which was not a party to the action.
• Deemed Approved Rule: Petitioner argued that a lack of written decision within three days meant the application was “deemed approved.” The ALJ ruled that since the Master Association did approve it, and the satellite association was not a party to the case, no violation could be found against the Respondent.
• Neighbor Complaints vs. Appeals: Petitioner claimed he was not notified of an “appeal” by a neighbor. The ALJ determined that an email from a neighbor’s attorney demanding enforcement did not constitute a formal “appeal” under the architectural rules, thus no notification or right to be present at the subsequent board meeting was required.
Enforcement and Managerial Duties (Counts 5 and 6)
The Petitioner challenged the Respondent’s authority to demand the removal of the enclosure and the storage of trash cans in his garage.
• Representation of Satellite Interests: The ALJ found that the Respondent was acting in its capacity as the property manager for Golf Villas. Because the satellite association had denied the application, the Respondent was properly exercising its duty to enforce the satellite’s rules on their behalf.
Procedural and Advisory Mandates (Count 3)
The Petitioner alleged the Board failed to refer a conflict to the “Council of Presidents.”
• Discretionary Referral: The ALJ noted that while the Council of Presidents exists to consider conflicts between the master and satellite associations, the Master Declaration makes such referrals discretionary. Furthermore, the meeting between boards was deemed a coordination of enforcement rather than a conflict requiring advisory intervention.
Meeting Validity and Voting Procedures (Counts 7 and 8)
The Petitioner challenged the validity of an amendment to the Master Declaration and the use of written ballots.
• Notice Failures: While a previous ruling found the Respondent failed to give notice for an emergency meeting on March 22, 2007, the ALJ cited A.R.S. § 33-1804(C), which states that the failure of a member to receive notice does not affect the validity of actions taken at that meeting.
• Written Ballots and Physical Presence: The Petitioner argued that amendments required physical meetings and in-person voting. The ALJ dismissed this, noting that neither the governing documents nor Arizona statutes (specifically A.R.S. § 33-1812) prohibit voting by written ballot or require physical presence for such elections.
Legal Conclusions and Statutory Interpretations
Statutory/Legal Point
Ruling/Interpretation
Jurisdiction
The Office of Administrative Hearings has statutory authority to hear disputes between members and planned communities per A.R.S. § 41-2198.02.
Burden of Proof
The Petitioner carries the burden of proof by a preponderance of the evidence (A.A.C. R2-19-119).
A.R.S. § 33-1804(C)
Failure to provide notice for a board meeting does not invalidate the decisions or actions resulting from that meeting.
A.R.S. § 33-1812
Associations are permitted to provide for voting by “some other form of delivery” (written ballot), and physical meetings for voting are not mandatory unless explicitly required by governing documents.
Attorney Fees
Administrative proceedings are not considered “actions” under A.R.S. §§ 33-1807(H) or 12-341.01; therefore, prevailing parties cannot recover attorney fees.
Final Order
Administrative Law Judge Michael G. Wales issued the following orders on January 28, 2009:
1. Dismissal: The petition against Gainey Ranch Community Association, Inc. was dismissed in its entirety.
2. Attorney Fees: The Respondent’s request for attorney fees was denied.
3. Filing Fees: The Petitioner, not being the prevailing party, was not entitled to reimbursement of filing fees.
4. Finality: This order constitutes the final administrative decision, with no provision for a rehearing, though it remains subject to judicial review within 35 days.
Study Guide: Douglas Dewar vs. Gainey Ranch Community Association
This study guide provides a comprehensive review of the administrative law case between Douglas Dewar and the Gainey Ranch Community Association (No. 08F-H089006-BFS). It examines the legal relationships between master and satellite homeowners associations, the interpretation of governing documents, and the application of Arizona statutes regarding community meetings and voting.
Section I: Short-Answer Quiz
Instructions: Answer the following questions in two to three sentences based on the provided administrative record.
1. Who are the primary parties in this case, and what is the central issue of the dispute?
2. What is the legal relationship between the Gainey Ranch Community Association and its satellite sub-associations?
3. Why did the Administrative Law Judge (ALJ) rule that the Respondent did not violate architectural rules regarding the denial of the Petitioner’s application in Count 1?
4. According to the findings in Count 2, why was the email from attorney Kent Berk not considered a violation of the notification rules?
5. What is the function of the “Council of Presidents,” and why was its non-use not considered a violation in Count 3?
6. How does A.R.S. § 33-1804(C) impact the validity of board meetings held without member notice?
7. In what capacity was the Gainey Ranch Community Association acting when it demanded the removal of the Petitioner’s trash enclosure?
8. What was the Petitioner’s argument regarding the physical presence of members during the amendment voting process, and how did the ALJ respond?
9. What is the “preponderance of evidence,” and how did it apply to this hearing?
10. Why was the Respondent denied an award for attorney’s fees despite prevailing in the case?
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Section II: Answer Key
1. Parties and Dispute: The Petitioner is Douglas Dewar, and the Respondent is the Gainey Ranch Community Association. The dispute arose over the Petitioner’s enclosure of his trash bins outside his residence and the subsequent enforcement actions taken by the association.
2. Organizational Relationship: Gainey Ranch is a master homeowners association containing 19 satellite sub-associations, such as the Golf Villas. These satellites are separate legal entities with their own boards of directors and architectural committees, though the master association acts as their property management vendor.
3. Count 1 Determination: The ALJ found that the Respondent (the master association) actually approved the Petitioner’s application. The denial came from the Golf Villas satellite association, which was not a party to the action, and the tribunal had no authority to order the satellite association to abide by architectural rules.
4. Count 2 (Email Notification): The architectural rules require immediate notification only if a decision is formally appealed by an aggrieved owner. The ALJ determined that the email sent by the neighbor’s attorney was a demand for enforcement, not a formal appeal of an Architectural Committee decision, rendering the notification rule inapplicable.
5. Council of Presidents: The Council of Presidents is an advisory group designed to consider and make recommendations on conflicts between the master and satellite associations. The ALJ ruled that referral to this group is discretionary rather than mandatory under the Master Declaration.
6. Meeting Validity: A.R.S. § 33-1804(C) states that the failure of any member to receive actual notice of a board meeting does not affect the validity of any action taken at that meeting. This meant the decisions made during the March 22, 2007, emergency meeting remained legally binding despite the lack of notice.
7. Enforcement Capacity: The Respondent was acting as the property management vendor for the Golf Villas satellite association. In this role, it was charged with advising owners of rule violations and enforcing the satellite association’s specific rules on its behalf.
8. Physical Presence and Voting: The Petitioner contended that amendments required an election where members were physically present. The ALJ dismissed this, noting that neither the governing documents nor Arizona law (A.R.S. § 33-1812) prohibit the use of written ballots or require physical presence for such votes.
9. Standard of Proof: The preponderance of evidence is the legal standard where the Petitioner must prove that their claims are more likely true than not. In this matter, the ALJ concluded that the Petitioner failed to meet this burden of proof for any of the eight counts alleged.
10. Attorney’s Fees: The request for fees was denied because an administrative proceeding is not considered an “action” under Arizona law (A.R.S. §§ 33-1807(H) or 12-341.01). Legal precedent (Semple v. Tri-City Drywall, Inc.) establishes that attorney’s fees are not awardable in these specific administrative hearings.
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Section III: Essay Questions
Instructions: Use the case details to formulate comprehensive responses to the following prompts.
1. The Interplay of Master and Satellite Associations: Discuss the complexities of enforcement and legal liability when a master association serves as the property manager for a satellite association. Use the ALJ’s findings regarding Counts 1, 5, and 6 to support your analysis.
2. Due Process in Planned Communities: Evaluate the Petitioner’s claims regarding the March 22, 2007, emergency meeting. Contrast the “Open Meeting law” requirements with the protections offered to the association by A.R.S. § 33-1804(C).
3. Interpretation of Governing Documents: Analyze how the ALJ distinguished between mandatory and discretionary actions within the Gainey Ranch Governing Documents, specifically focusing on the Council of Presidents and the architectural appeal process.
4. Modernizing Association Governance: Examine the Petitioner’s challenge to the amendment process. Discuss the legal and practical implications of allowing written ballots versus requiring physical meetings for association-wide decisions.
5. The Scope of Administrative Hearings: Based on the Conclusions of Law and the final Order, explain the limits of the Office of Administrative Hearings’ authority, particularly regarding non-parties and the awarding of legal costs.
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Section IV: Glossary of Key Terms
• A.R.S. § 33-1804: The Arizona Revised Statute governing open meetings for planned communities, including provisions for emergency meetings and notice requirements.
• A.R.S. § 33-1812: The Arizona Revised Statute that allows for association voting to be conducted via written ballot or other forms of delivery rather than strictly through physical meetings.
• Administrative Law Judge (ALJ): A judge who conducts hearings and issues decisions in disputes involving state agencies or specific statutory petitions; in this case, Judge Michael G. Wales.
• CC & Rs: An abbreviation for the “Amended and Restated Declaration of Covenants, Conditions, Restrictions Assessments, Charges, Servitudes, Liens, Reservations and Easements.”
• Council of Presidents: An advisory group within the Gainey Ranch Community Association tasked with recommending solutions for conflicts between the master association and satellite associations.
• Deemed Approved: A provision in the architectural rules stating that if committees do not provide a written decision within three working days of a written request for an immediate decision, the application is automatically approved.
• Governing Documents: The collective set of rules including Bylaws, Articles of Incorporation, and CC & Rs that contractually bind members of a homeowners association.
• Master Association: An umbrella homeowners association (Gainey Ranch) that encompasses several smaller, separate legal entities known as satellite associations.
• Preponderance of the Evidence: The standard of proof in civil and administrative cases, requiring that the Petitioner prove their case is more likely than not to be true.
• Satellite Sub-association: A separate legal entity (such as Golf Villas) located within the boundaries of a master association, having its own board and rules.
The HOA Trash Bin Battle: Navigating the Legal Minefield of Nested Associations
The Hook: A Homeowner’s Nightmare Few things are as visceral to a homeowner as the frustration of a property modification dispute. What begins as a simple request to improve one’s home can quickly spiral into a multi-year legal quagmire. For Douglas Dewar, a resident of the Gainey Ranch community in Scottsdale, the desire to enclose his trash bins outside his residence led to an exhaustive eight-count administrative petition before the Office of Administrative Hearings (OAH). The case of Douglas Dewar vs. Gainey Ranch Community Association is a masterclass in the complexities of modern homeowners association (HOA) hierarchies and a warning that winning a procedural point does not always mean winning the war.
Takeaway 1: The “Nested” Association Trap Strategic homeowners must understand that large planned communities are rarely monolithic. Gainey Ranch is a “master” association encompassing 19 separate satellite sub-associations, such as “Golf Villas.” While Dewar was a member of both, they are distinct legal entities. Dewar’s case faltered largely because he sued the Master Association for a denial issued by the Golf Villas satellite association.
Before filing a petition, homeowners must perform a title search or a rigorous review of their CC&Rs to identify every governing layer. Suing the Master Association for a sub-association’s decision creates an immediate legal “shield” for the respondent. As the court noted, the Petitioner was:
Takeaway 2: The Notice Paradox (When a Violation Isn’t a Veto) In a previous iteration of this dispute, an administrative law judge confirmed that the Master Association had indeed violated governing documents by holding an “emergency board meeting” in 2007 without notice. However, under A.R.S. § 33-1804(C), this victory was legally toothless. The statute specifies that the failure of a member to receive notice “does not affect the validity of any action taken at that meeting.”
This creates a significant hurdle: you can be “right” about the law being broken, but the board’s decision (in this case, to enforce the trash bin rules) remains valid. For the strategic homeowner, this means procedural errors are rarely a “get out of jail free” card.
Takeaway 3: The Master HOA as a “Double Agent” The case highlights a common but confusing administrative structure where the Master Association acts as the “property management vendor” for its own satellites. While this setup offers administrative efficiency—centralizing billing and vendor management—it creates a due process nightmare for residents.
In Dewar’s case, the Master Association was acting as an agent on behalf of the Golf Villas board. This dual role allows the Master Association to enforce rules it did not technically create. The court featured a crucial footnote clarifying that the Respondent was the:
Takeaway 4: The “Deemed Approved” Deadline is Fragile Dewar attempted to invoke the 3-day “deemed approved” rule in the Gainey Ranch Architectural Rules, arguing that the lack of a timely written decision should have granted him automatic approval. However, the architecture of the rule requires both the Master and Satellite committees to fail to respond.
In this instance, the Master Association actually did approve the application. The barrier was the Satellite (Golf Villas), which issued a denial. Because the Satellite was not a party to the lawsuit, the Master Association could not be held liable for the sub-association’s decision. This underscores the necessity of knowing exactly which committee’s clock is ticking and ensuring every relevant entity is named in a legal challenge.
Takeaway 5: The Modernization of Board Power Petitioner Dewar challenged an amendment to the master declaration because it was conducted via mailed ballots without a physical meeting. The court dismissed this, citing A.R.S. § 33-1812, which permits “voting by some other form of delivery.”
This modernization is a powerful tool for boards. In this case, the amendment was specifically designed to clarify that “satellite associations may enact their own separate and distinct rules” regarding trash bins. By securing the power to vote remotely, the board effectively cemented the “Nested Trap,” making it easier to pass rules that empower sub-associations without the logistical hurdle of a physical quorum.
Takeaway 6: The “Action” vs. “Hearing” Fee Gap In a surprising financial twist, the Master Association was denied recovery of its attorney’s fees despite winning on every count. The Administrative Law Judge (ALJ) distinguished between a court “action” and an “administrative proceeding.” Under Conclusion of Law #5 and A.R.S. § 33-1807(H), fees are often not awardable in these venues.
Specifically, the judge cited A.R.S. § 12-341.01 and case law (Semple v. Tri-City Drywall), noting that an OAH hearing is not an “action” in the judicial sense. This represents a double-edged sword: while it reduces the financial risk for a homeowner filing a petition, it also means that even a successful defense by an association becomes a “sunk cost” for the community.
Closing: The Price of Complexity The Administrative Law Judge ultimately dismissed Douglas Dewar’s petition in its entirety, leaving the trash bin enclosure prohibited. The case serves as a stark reminder that in a multi-tiered HOA system, the homeowner is often fighting a hydra; cutting off one head (the Master Association) does not stop the body (the Satellite Association) from enforcing its rules.
As communities continue to adopt these complex, “nested” management structures, we must ask: Is the administrative efficiency of centralized management worth the legal opacity and procedural frustration it creates for the individual homeowner?
Case Participants
Petitioner Side
- Douglas Dewar (Petitioner)
Golf Villas; Gainey Ranch Community Association
Member of both master and satellite associations
Respondent Side
- Burton T. Cohen (Attorney)
Burton T. Cohen, P.C.
Attorney for Respondent - Fed Thielen (Executive Director)
Gainey Ranch Community Association
Executive Director at the time of the dispute
Neutral Parties
- Michael G. Wales (ALJ)
Office of Administrative Hearings
Administrative Law Judge - Paul Carter (Board President)
Golf Villas Community Association
President of satellite association Golf Villas (non-party) - Brian Tulley (ALJ)
Office of Administrative Hearings
Presided over a previous hearing regarding the March 22, 2007 meeting - Kent Berk (Attorney)
Attorney representing one of Petitioner's neighbors - Robert Barger (Agency Official)
Department of Fire, Building and Life Safety
H/C listed on certificate of service - Debra Blake (Agency Official)
Department of Fire, Building and Life Safety
Listed on certificate of service
