Case Summary
| Case ID | 23F-H038-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2023-04-20 |
| Administrative Law Judge | Velva Moses-Thompson |
| Outcome | Petitioner prevailed on the allegation that Respondent failed to provide notice of the board meeting in violation of A.R.S. § 33-1804, resulting in a refund of $500.00. Respondent prevailed on the allegation that the board meeting was required to be open, as the meeting was properly closed to receive legal advice under a statutory exception. |
| Filing Fees Refunded | $1,000.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Clifford S. Burnes | Counsel | — |
|---|---|---|---|
| Respondent | Saguaro Crest Homeowners' Association | Counsel | John T. Crotty, Esq. |
Alleged Violations
A.R.S. § 33-1804
A.R.S. § 33-1804
Outcome Summary
Petitioner prevailed on the allegation that Respondent failed to provide notice of the board meeting in violation of A.R.S. § 33-1804, resulting in a refund of $500.00. Respondent prevailed on the allegation that the board meeting was required to be open, as the meeting was properly closed to receive legal advice under a statutory exception.
Why this result: Petitioner lost the open meeting claim because the meeting was protected by the legal advice exception under A.R.S. § 33-1804(A)(1).
Key Issues & Findings
Failure to provide notice of board meeting to members.
Petitioner alleged Respondent conducted an unnoticed board meeting regarding obtaining legal advice. Respondent conceded the meeting was unnoticed. The ALJ concluded Respondent was required to provide notice to members that it would be conducting a board meeting to consider legal advice from an attorney that would be closed to members, and failed to do so.
Orders: Respondent must pay Petitioner the filing fee of $500.00 within thirty (30) days. Respondent is directed to comply with the notice requirements of A.R.S. § 33-1804 going forward.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
- A.R.S. § 33-1804
- A.R.S. § 33-1804(D)
Board meeting was not open to all members of the association.
Petitioner alleged the meeting, attended by two board members and an attorney, should have been open. Respondent contended the meeting was a permitted closed session to consider legal advice from an attorney regarding reorganization/disbanding, pursuant to A.R.S. § 33-1804(A)(1). The ALJ concluded the meeting was not required to be open because the board members were solely receiving legal advice from an attorney.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
- A.R.S. § 33-1804
- A.R.S. § 33-1804(A)(1)
Analytics Highlights
- A.R.S. § 33-1804
- A.R.S. § 33-1804(A)(1)
- A.R.S. § 33-1804(C)
- A.R.S. § 33-1804(D)
- A.R.S. § 33-1804(F)
- A.R.S. § 32-2199(1)
Video Overview
Audio Overview
Decision Documents
23F-H038-REL Decision – 1036995.pdf
23F-H038-REL Decision – 1050950.pdf
23F-H038-REL Decision – 1036995.pdf
23F-H038-REL Decision – 1050950.pdf
The administrative hearing (Docket No. 23F-H038-REL) involved Petitioner Clifford S. Burnes and Respondent Saguaro Crest Homeowners' Association (HOA). The hearing was conducted virtually on March 31, 2023, before Administrative Law Judge Velva Moses-Thompson.
Key Facts and Main Issues
The core dispute concerned an HOA meeting held on or about May 31, 2022. The Petitioner alleged that the HOA violated Arizona Revised Statutes (A.R.S.) § 33-1804, which governs open meetings for planned communities, on two specific points: that the meeting was not noticed and that it was not open to association members.
The meeting involved two of the three HOA board members (Esmeralda Sarina-Ayala Martinez and Dave Madill) meeting with an attorney to obtain legal advice regarding the potential dissolution of the HOA and the disposition of the subdivision's 18-acre common area. Both parties stipulated during the hearing that the meeting was neither noticed nor open to the general membership.
Key Legal Arguments
- Respondent's Argument (HOA): The HOA contended that they had not violated the statute because the meeting's purpose fell under the exception allowing a closed session for receiving legal advice from an attorney pursuant to A.R.S. § 33-1804(A)(1). Counsel argued that the closed nature of the meeting exempted them from the typical notice requirements. Furthermore, the Respondent argued that because only two of the three board members were present, and no votes or formal actions were taken, it did not constitute an official "meeting of the board of directors" requiring statutory notice.
- Petitioner's Argument: The Petitioner argued that even if the meeting was closed for legal advice, the law still requires notice to be given. He asserted that the HOA failed to comply with requirements, such as identifying the statutory authority for closing the meeting before proceeding, as outlined in A.R.S. § 33-1804(C). Mr. Burns contended that because the meeting involved two board members (which could constitute a quorum depending on the definition) discussing critical HOA business (dissolution), it should have adhered to open meeting and notice provisions.
Outcome and Final Decision
The Administrative Law Judge (ALJ) issued a decision on April 20, 2023. The ALJ’s conclusion was split, with both parties deemed prevailing on one issue.
- Openness Issue (HOA Wins): The ALJ concluded that the HOA did not violate A.R.S. § 33-1804 by closing the meeting, as the only information discussed and obtained was legal advice from an attorney, which is an allowable exception.
- Notice Issue (Petitioner Wins): The ALJ concluded that the HOA violated A.R.S. § 33-1804 when it failed to provide notice to its members of the board meeting, even though the content was privileged. The ALJ concluded that the statute requires notice even for meetings held to consider legal advice.
Orders and Remedies:
- The Respondent HOA was ordered to pay the Petitioner his filing fee of $500.00.
- The Respondent was directed to comply with the notice requirements of A.R.S. § 33-1804 going forward.
- The Petitioner’s request for a civil penalty was denied.
Questions
Question
If the HOA board meets with their attorney, do they still have to notify homeowners about the meeting?
Short Answer
Yes. Even if the meeting will be closed for legal advice, the board is legally required to provide notice to the members that the meeting is occurring.
Detailed Answer
The ALJ ruled that while a board can close a meeting to receive legal advice, they cannot skip the notice requirement. The HOA in this case violated the law by failing to provide notice of a board meeting where they obtained legal advice.
Alj Quote
Therefore, the Administrative Law Judge concludes that Respondent violated A.R.S. § 33-1804 when it failed to provide notice to its members of the March 31, 2022 board meeting where it obtained legal advice from an attorney.
Legal Basis
A.R.S. § 33-1804
Topic Tags
- meetings
- notice
- legal advice
Question
Can the HOA board exclude homeowners from a meeting if they are discussing legal advice?
Short Answer
Yes. The board is permitted to close a portion of a meeting if it is limited to considering legal advice from an attorney.
Detailed Answer
The ALJ determined that the HOA did not violate the open meeting law by keeping the meeting closed, because the sole purpose was to receive legal advice. This is a specific exception to the open meeting requirement.
Alj Quote
The Administrative law Judge further concludes that Respondent did not violate A.R.S. § 33-1804 when it failed to make the March 31, 2022 board meeting open to members when the only information discussed and obtained was legal advice from an attorney.
Legal Basis
A.R.S. § 33-1804(A)(1)
Topic Tags
- meetings
- exclusions
- attorney-client privilege
Question
Does a gathering of board members count as a 'meeting' if they are just meeting informally or for a workshop?
Short Answer
Yes. If a quorum of the board meets to discuss association business, even informally, they must follow open meeting and notice laws.
Detailed Answer
The decision cites the statute stating that any quorum meeting informally to discuss business must comply with notice and open meeting provisions, regardless of whether a formal vote is taken.
Alj Quote
Any quorum of the board of directors that meets informally to discuss association business, including workshops, shall comply with the open meeting and notice provisions of this section without regard to whether the board votes or takes any action on any matter at that informal meeting.
Legal Basis
A.R.S. § 33-1804(E)(4)
Topic Tags
- meetings
- quorum
- workshops
Question
If I file a petition against my HOA and win, will the HOA have to reimburse my filing fees?
Short Answer
Yes, the judge can order the HOA to reimburse the filing fee if the homeowner prevails on the issue.
Detailed Answer
In this case, because the homeowner prevailed on the issue regarding the lack of notice, the ALJ ordered the HOA to pay back the $500 filing fee.
Alj Quote
IT IS FURTHER ORDERED that Respondent pay Petitioner his filing fee of $500.00, to be paid directly to Petitioner within thirty (30) days of this Order.
Legal Basis
Order of the ALJ
Topic Tags
- fees
- reimbursement
- penalties
Question
Does a violation of the open meeting law always result in a fine for the HOA?
Short Answer
No. The judge has discretion and may decide that no civil penalty is appropriate even if a violation occurred.
Detailed Answer
Although the HOA was found to have violated the notice statute, the ALJ explicitly stated that no civil penalty was appropriate in this specific matter.
Alj Quote
No Civil Penalty is found to be appropriate in this matter.
Legal Basis
Discretion of ALJ
Topic Tags
- civil penalty
- fines
- enforcement
Question
What legal standard do I have to meet to prove my HOA violated the rules?
Short Answer
The homeowner must prove the violation by a 'preponderance of the evidence,' meaning it is more probably true than not.
Detailed Answer
The decision defines the burden of proof as the greater weight of the evidence, sufficient to incline a fair and impartial mind to one side rather than the other.
Alj Quote
Petitioner bears the burden of proof to establish that Respondent violated the CC&Rs by a preponderance of the evidence.
Legal Basis
A.A.C. R2-19-119(A) and (B)(1)
Topic Tags
- legal standard
- burden of proof
- evidence
Case
- Docket No
- 23F-H038-REL
- Case Title
- Clifford S. Burnes v. Saguaro Crest Homeowners' Association
- Decision Date
- 2023-04-20
- Alj Name
- Velva Moses-Thompson
- Tribunal
- OAH
- Agency
- ADRE
Questions
Question
If the HOA board meets with their attorney, do they still have to notify homeowners about the meeting?
Short Answer
Yes. Even if the meeting will be closed for legal advice, the board is legally required to provide notice to the members that the meeting is occurring.
Detailed Answer
The ALJ ruled that while a board can close a meeting to receive legal advice, they cannot skip the notice requirement. The HOA in this case violated the law by failing to provide notice of a board meeting where they obtained legal advice.
Alj Quote
Therefore, the Administrative Law Judge concludes that Respondent violated A.R.S. § 33-1804 when it failed to provide notice to its members of the March 31, 2022 board meeting where it obtained legal advice from an attorney.
Legal Basis
A.R.S. § 33-1804
Topic Tags
- meetings
- notice
- legal advice
Question
Can the HOA board exclude homeowners from a meeting if they are discussing legal advice?
Short Answer
Yes. The board is permitted to close a portion of a meeting if it is limited to considering legal advice from an attorney.
Detailed Answer
The ALJ determined that the HOA did not violate the open meeting law by keeping the meeting closed, because the sole purpose was to receive legal advice. This is a specific exception to the open meeting requirement.
Alj Quote
The Administrative law Judge further concludes that Respondent did not violate A.R.S. § 33-1804 when it failed to make the March 31, 2022 board meeting open to members when the only information discussed and obtained was legal advice from an attorney.
Legal Basis
A.R.S. § 33-1804(A)(1)
Topic Tags
- meetings
- exclusions
- attorney-client privilege
Question
Does a gathering of board members count as a 'meeting' if they are just meeting informally or for a workshop?
Short Answer
Yes. If a quorum of the board meets to discuss association business, even informally, they must follow open meeting and notice laws.
Detailed Answer
The decision cites the statute stating that any quorum meeting informally to discuss business must comply with notice and open meeting provisions, regardless of whether a formal vote is taken.
Alj Quote
Any quorum of the board of directors that meets informally to discuss association business, including workshops, shall comply with the open meeting and notice provisions of this section without regard to whether the board votes or takes any action on any matter at that informal meeting.
Legal Basis
A.R.S. § 33-1804(E)(4)
Topic Tags
- meetings
- quorum
- workshops
Question
If I file a petition against my HOA and win, will the HOA have to reimburse my filing fees?
Short Answer
Yes, the judge can order the HOA to reimburse the filing fee if the homeowner prevails on the issue.
Detailed Answer
In this case, because the homeowner prevailed on the issue regarding the lack of notice, the ALJ ordered the HOA to pay back the $500 filing fee.
Alj Quote
IT IS FURTHER ORDERED that Respondent pay Petitioner his filing fee of $500.00, to be paid directly to Petitioner within thirty (30) days of this Order.
Legal Basis
Order of the ALJ
Topic Tags
- fees
- reimbursement
- penalties
Question
Does a violation of the open meeting law always result in a fine for the HOA?
Short Answer
No. The judge has discretion and may decide that no civil penalty is appropriate even if a violation occurred.
Detailed Answer
Although the HOA was found to have violated the notice statute, the ALJ explicitly stated that no civil penalty was appropriate in this specific matter.
Alj Quote
No Civil Penalty is found to be appropriate in this matter.
Legal Basis
Discretion of ALJ
Topic Tags
- civil penalty
- fines
- enforcement
Question
What legal standard do I have to meet to prove my HOA violated the rules?
Short Answer
The homeowner must prove the violation by a 'preponderance of the evidence,' meaning it is more probably true than not.
Detailed Answer
The decision defines the burden of proof as the greater weight of the evidence, sufficient to incline a fair and impartial mind to one side rather than the other.
Alj Quote
Petitioner bears the burden of proof to establish that Respondent violated the CC&Rs by a preponderance of the evidence.
Legal Basis
A.A.C. R2-19-119(A) and (B)(1)
Topic Tags
- legal standard
- burden of proof
- evidence
Case
- Docket No
- 23F-H038-REL
- Case Title
- Clifford S. Burnes v. Saguaro Crest Homeowners' Association
- Decision Date
- 2023-04-20
- Alj Name
- Velva Moses-Thompson
- Tribunal
- OAH
- Agency
- ADRE
Case Participants
Petitioner Side
- Clifford S. Burnes (petitioner; witness)
Saguaro Crest Homeowners' Association member
Also known as Clifford (Norm) S. Burnes,; appeared on behalf of himself,.
Respondent Side
- John T. Crotty (HOA attorney)
Saguaro Crest Homeowners' Association
Appeared on behalf of Respondent,. - Esmeralda Sarina Ayala-Martinez (board member; witness)
Saguaro Crest Homeowners' Association
Also referred to as Esmeralda Sarina-Ayala Martinez or Esmerita Martinez; testified on behalf of Respondent. - Dave Madill (board member)
Saguaro Crest Homeowners' Association
Vice President; also referred to as Dave Matt or Dave Medil; was one of the two board members who met with the attorney. - Joseph Martinez (board member)
Saguaro Crest Homeowners' Association
Husband of Esmeralda Sarina Ayala-Martinez; third board member. - David A. Melvoy (HOA attorney/legal counsel)
Saguaro Crest Homeowners' Association
Provided legal advice during the underlying May 31, 2022, closed meeting; also referred to as David Mackoy, Eoy, or Eway,,.
Neutral Parties
- Velva Moses-Thompson (ALJ)
Office of Administrative Hearings - Susan Nicolson (ADRE staff)
Arizona Department of Real Estate
Recipient of official transmission,. - AHansen (ADRE staff)
Arizona Department of Real Estate
Recipient of official transmission,. - vnunez (ADRE staff)
Arizona Department of Real Estate
Recipient of official transmission,. - djones (ADRE staff)
Arizona Department of Real Estate
Recipient of official transmission,. - labril (ADRE staff)
Arizona Department of Real Estate
Recipient of official transmission,.