Case Summary
| Case ID | 08F-H088007-BFS |
|---|---|
| Agency | — |
| Tribunal | — |
| Decision Date | 2008-05-13 |
| Administrative Law Judge | MGW |
| Outcome | complete |
| Filing Fees Refunded | — |
| Civil Penalties | — |
Parties & Counsel
| Petitioner | Stanton S. Sanders | Counsel | Self-represented |
|---|---|---|---|
| Respondent | Florence Gardens Mobile Home Association, Inc. | Counsel | Mark A. Holmgren, Esq. |
Alleged Violations
No violations listed
Video Overview
Audio Overview
Decision Documents
08F-H088007-BFS Decision – 190931.pdf
08F-H088007-BFS Decision – 190931.pdf
# Administrative Law Judge Decision: Stanton S. Sanders vs. Florence Gardens Mobile Home Association
## Executive Summary
This briefing document analyzes the administrative law decision in Case No. 08F-H088007-BFS, heard before the Arizona Office of Administrative Hearings. The dispute centers on the authority of the Florence Gardens Mobile Home Association ("the Association") to levy assessments on adjacent lots owned by a single member.
The Petitioner, Stanton S. Sanders, challenged the Association's 2007 policy change which terminated a long-standing practice of waiving assessments for vacant lots adjacent to improved lots under common ownership. The Administrative Law Judge (ALJ) ruled in favor of the Association, dismissing the Petitioner’s complaint. The decision clarifies that the Association's primary governing documents—specifically the Articles of Incorporation and Bylaws—provide the legal basis for assessments, and that internal policies or specific restrictive covenants regarding lot "combinations" for landscaping or deed restrictions do not override this fundamental taxing authority.
---
## Analysis of Key Themes
### 1. The Legal Authority to Assess
The primary theme of the decision is the source of the Association’s power to levy assessments. The Petitioner argued that certain governing documents implied that adjoining lots should be treated as a single entity. However, the ALJ distinguished between documents that restrict land use and documents that establish corporate power.
* **Articles of Incorporation:** Article V, Section F grants the Association the power to levy assessments against the owners of each lot.
* **Bylaws:** Article XIII, Section 2 reinforces this power. The Bylaws also define a "Lot" as "any separate parcel of real property shown upon the plat."
* **The Plat:** Because the official Plat sets forth lots 1164 and 1165 as "separate and distinct," and no amendments to the Plat were recorded, the Association maintained the right to assess them individually.
### 2. Interpretation of "Single Lot" Provisions
A central conflict involved how to interpret language in the Declaration of Restrictions and CC&Rs that appeared to "combine" lots. The ALJ concluded that these provisions have limited scopes and do not apply to assessments:
* **Paragraph 24 of the Declaration:** States that parts of two adjoining lots shall be "deemed to constitute a single lot." The ALJ ruled this language is strictly limited to the deed restrictions within that specific Declaration.
* **Section 4A of the CC&Rs:** States that "combined lots will be considered as one lot." The ALJ determined this language is strictly limited to landscaping requirements.
### 3. Board Discretion and Policy Rescission
The case highlights the Board's authority to rescind prior policies. From 1996 to 2006, the Association had policies (1-96 and 3-98) that waived assessments for vacant adjoining lots. The Association rescinded these policies on June 6, 2006, during an open meeting. The ALJ found that because the new assessments were not imposed until 2008—after the waiver policies were officially rescinded—the Association acted within its legal authority and did not violate its own rules.
### 4. Statutory Interpretation: A.R.S. § 33-1802
The Petitioner alleged a violation of A.R.S. § 33-1802. The ALJ clarified a significant legal distinction: this statute sets forth definitions for planned communities but "does not impose any duties, rights or obligations on any person or legal entity." Consequently, a party cannot "violate" this specific statute in the context of an assessment dispute.
---
## Important Quotes and Context
### On Assessment Authority vs. Deed Restrictions
> "The language [of Paragraph 24] is limited to those deed restrictions set forth in the Declaration and does not prohibit Respondent Association from levying assessments... because the power to levy assessments arises not from the Declaration, but from the Association’s Articles of Incorporation... and from Article XIII, Section 2 of the Bylaws."
**Context:** This quote explains why the ALJ rejected the Petitioner's argument that "single lot" language in the Declaration should prevent double assessments. It establishes a hierarchy where the Articles and Bylaws govern financial obligations.
### On the Definition of a Lot
> "Article II, Section 11... defines ‘Lot’ as ‘any separate parcel of real property shown upon the plat of real properties...’"
**Context:** This highlights the importance of the recorded Plat. Since the Plat still showed two distinct lots, they remained two distinct taxable units regardless of how the owner used them.
### On Attorney's Fees in Administrative Hearings
> "‘[W]e do not believe that an administrative agency can be characterized as a court so that a proceeding before it could be called an ‘action’ for purposes of A.R.S. section 12-341.01’ and that ‘there is no indication that the legislature intended section 12-341.01 to apply to attorney’s fees...’" (Quoting *Semple v. Tri-City Drywall, Inc.*)
**Context:** Despite the Association being the prevailing party, the ALJ denied their request for attorney's fees. This explains that administrative tribunals in Arizona do not have the same fee-shifting powers as courts under the cited statutes.
---
## Actionable Insights
### For Association Boards
* **Policy Audits:** Boards have the authority to rescind long-standing waivers, provided the rescission occurs in a public meeting and adheres to the hierarchy of the Association’s governing documents.
* **Clarity in CC&Rs:** Language regarding "combined lots" should be explicitly tied to the specific intent (e.g., landscaping or building setbacks) to avoid ambiguity regarding financial assessments.
* **Documentation Hierarchy:** Ensure that assessment powers are clearly rooted in the Articles of Incorporation and Bylaws, as these are viewed as the primary authority over restrictive declarations.
### For Property Owners
* **Burden of Proof:** In administrative hearings regarding HOA disputes, the Petitioner bears the burden of proof by a "preponderance of the evidence"—meaning they must prove their claim is "more likely true than not."
* **Plat Reliance:** If an owner wishes to treat two lots as one for financial purposes, they must likely seek a formal amendment to the recorded Plat, as the ALJ relies heavily on the Plat to define assessment units.
* **Limited Scope of Statutes:** Reliance on statutory definitions (such as A.R.S. § 33-1802) is insufficient to prove a violation of rights, as those sections may provide definitions without imposing actionable duties.
### For Legal and Administrative Strategy
* **Attorney's Fees:** Parties should be aware that prevailing in an Arizona administrative hearing does not automatically entitle them to an award of attorney's fees, as these proceedings are not classified as "actions" under general fee-shifting statutes.
---
## Final Order Summary
| Item | Ruling |
| :--- | :--- |
| **Petitioner's Complaint** | Dismissed |
| **$550 Filing Fee** | Not Awarded to Petitioner |
| **Respondent's Attorney's Fees** | Denied |
| **Finality** | Final administrative decision; not subject to rehearing |
# Study Guide: Sanders v. Florence Gardens Mobile Home Association This study guide provides a comprehensive analysis of the administrative law case *Stanton S. Sanders v. Florence Gardens Mobile Home Association* (Case No. 08F-H088007-BFS). It examines the legal dispute regarding assessment levies on adjacent lots, the interpretation of governing documents, and the standards of proof in administrative hearings. --- ## I. Case Overview and Core Themes The central issue in this case is whether a homeowners' association (HOA) has the legal authority to rescind a long-standing policy of waiving assessments for vacant lots adjacent to improved lots when both are owned by the same member. ### Key Entities * **Petitioner:** Stanton S. Sanders, owner of two adjacent lots (1164 and 1165) in the Florence Gardens Mobile Home Community. * **Respondent:** Florence Gardens Mobile Home Association, the governing body of the community. * **The Tribunal:** The Arizona Office of Administrative Hearings, presided over by Administrative Law Judge Michael G. Wales. ### Governing Documents and Statutes The case relies on the interpretation of several internal and state legal instruments: 1. **Articles of Incorporation (July 27, 1971):** Specifically Article V, Section F, granting assessment powers. 2. **Bylaws:** Specifically the Fourth Amended and Restated Bylaws (February 14, 2006). 3. **Declaration of Restrictions:** Paragraph 24 regarding the definition of a single lot. 4. **Covenants, Conditions, and Restrictions (CC&Rs):** Section 4A regarding landscaping requirements. 5. **Arizona Revised Statutes (A.R.S.):** Including § 33-1802 (definitions), § 41-2198.01(B) (petition filing), and § 12-341.01 (attorney's fees). --- ## II. Key Concepts and Legal Findings ### 1. The Source of Assessment Power A critical finding in the case is that the power to levy assessments is not universal across all governing documents. The Judge determined that the Association’s authority to charge assessments stems specifically from: * **Article V, Section F of the Articles of Incorporation.** * **Article XIII, Section 2 of the Bylaws.** Restrictions found in the Declaration of Restrictions or the CC&Rs (such as those regarding landscaping or general "single lot" status) do not supersede the assessment authority granted in the Articles of Incorporation and Bylaws. ### 2. Definition of a "Lot" Under Article II, Section 11 of the Bylaws, a "Lot" is defined as any separate parcel of real property shown on the plat. Because the recorded Plat for Florence Gardens, Unit D, listed lots 1164 and 1165 as separate and distinct, they are subject to individual assessments regardless of whether they are adjacent or owned by the same person. ### 3. Burden of Proof: Preponderance of the Evidence In administrative hearings, the Petitioner (Sanders) carries the burden of proof. The standard used is "preponderance of the evidence," which means: * The evidence must persuade the finder of fact that the claim is "more likely true than not." * The evidence must be of "greater weight" or "more convincing" than the evidence offered in opposition. ### 4. Interpretation of State Statutes (A.R.S. § 33-1802) The Petitioner argued that the Association violated A.R.S. § 33-1802. However, the ALJ ruled that this statute simply sets forth statutory definitions. It does not impose specific duties, rights, or obligations, and therefore cannot be "violated" in the context of the Petitioner's claims. ### 5. Attorney’s Fees in Administrative Proceedings The Respondent (the Association) requested an award of attorney's fees as the prevailing party. The tribunal denied this based on *Semple v. Tri-City Drywall, Inc.*, which established: * An administrative agency is not characterized as a "court." * Proceeding before an agency is not an "action" for the purposes of A.R.S. § 12-341.01. * The legislature did not intend for certain attorney fee statutes to apply to administrative proceedings. --- ## III. Short-Answer Practice Questions **Q1: Why did the Association end its practice of waiving assessments for vacant adjacent lots?** *Answer:* According to the Findings of Fact, the Board of Directors rescinded Policies 1-96 and 3-98 (which allowed the waiver) on June 6, 2006, and informed owners in April 2007 that assessments for both improved and vacant lots would begin in 2008. **Q2: How does Paragraph 24 of the Declaration of Restrictions define "single holdings" of adjoining lots?** *Answer:* It states that parts of two adjoining lots in single ownership shall be deemed a "single lot," but the ALJ ruled this definition is strictly limited to the deed restrictions within that Declaration and does not apply to assessment powers. **Q3: What was the significance of the "Plat of record" in this case?** *Answer:* The Plat recorded at Book 18 of Maps, Page 37, established lots 1164 and 1165 as separate and distinct parcels. Since no amendments to the Plat were presented, they remained individual lots for assessment purposes. **Q4: Under what conditions would the CC&Rs (Section 4A) consider combined lots as one?** *Answer:* Section 4A states combined lots are considered one lot specifically for landscaping requirements. It does not extend this "single lot" status to assessments. **Q5: What was the outcome regarding the Petitioner's $550.00 filing fee?** *Answer:* Because the Respondent was the prevailing party, the Petitioner was not entitled to an award of the filing fee under A.R.S. § 41-2198.02. --- ## IV. Essay Prompts for Deeper Exploration 1. **Hierarchy of Governing Documents:** Analyze how the Administrative Law Judge prioritized the Articles of Incorporation and Bylaws over the Declaration of Restrictions and CC&Rs. Discuss the legal implications of having conflicting definitions of a "lot" across different governing documents. 2. **The Rescission of Policy:** The Association maintained a "long standing practice" of waiving fees before changing its policy. Evaluate the Association's right to rescind prior policies (specifically Policies 1-96 and 3-98) and discuss whether the timeline of the rescission provided adequate notice to members. 3. **Administrative vs. Judicial Proceedings:** Using the denial of attorney's fees and the *Semple v. Tri-City Drywall, Inc.* precedent, compare the powers of an Administrative Law Judge with those of a traditional court judge. Why might the legislature limit the ability of an administrative agency to award attorney's fees? --- ## V. Glossary of Important Terms | Term | Definition | | :--- | :--- | | **A.R.S. § 33-1802** | A state statute providing definitions for planned communities; it does not establish specific legal duties or rights. | | **Articles of Incorporation** | The primary document filed with the State (Arizona Corporation Commission) that grants an association the power to exist and levy assessments. | | **Bylaws** | The rules adopted by an association to govern its internal management; in this case, they defined "Lot" and granted assessment power. | | **CC&Rs** | Covenants, Conditions, and Restrictions; recorded documents that limit or require certain actions by property owners (e.g., landscaping). | | **Declaration of Restrictions** | A recorded document setting forth specific limitations on property use within a community. | | **Plat** | A map, drawn to scale, showing the divisions of a piece of land; the legal record of lot boundaries. | | **Preponderance of the Evidence** | The standard of proof in civil and administrative cases requiring that a fact is more likely than not to be true. | | **Prevailing Party** | The party in a lawsuit or administrative hearing that wins the case. | | **Rescind** | To revoke, cancel, or repeal a law, order, or agreement. | | **Tribunal** | A body established to settle disputes; in this context, the Office of Administrative Hearings. |
# Understanding HOA Assessments: The "Two-Lot" Legal Dispute in Florence Gardens
For many homeowners in planned communities, purchasing an adjacent vacant lot is a common strategy to increase privacy or expand a residential footprint. Historically, some Homeowners Associations (HOAs) have accommodated these owners by waiving assessments on secondary, unimproved lots. However, as governance needs evolve, these associations may choose to end such practices. When they do, the resulting legal friction often centers on a single question: Are two lots truly one?
The case of *Stanton S. Sanders vs. Florence Gardens Mobile Home Association* provides a definitive look at this conflict. The dispute arose when the Association terminated a long-standing practice of waiving assessments on vacant adjacent lots, leading a homeowner to challenge the legality of being billed for two separate parcels.
## The Case Background: Facts of the Dispute
The conflict involved Stanton S. Sanders (the Petitioner), a resident of the Florence Gardens Mobile Home Community in Florence, Arizona. The administrative hearing established several foundational facts:
* **Property Ownership:** Mr. Sanders was the owner of record for two adjacent parcels: Lots 1164 and 1165.
* **The Policy Change:** On April 12, 2007, the Association’s Board of Directors issued a letter to members announcing that its practice of waiving assessments for vacant lots adjacent to improved lots owned by the same member would end. Starting in 2008, both lots would be assessed individually.
* **The Legal Challenge:** Mr. Sanders filed a petition alleging that the Association violated several governing documents and state statutes, specifically:
* **Paragraph 24 of the Declaration of Restrictions** (Recorded August 15, 1974).
* **Section 4A of the Covenants, Conditions and Restrictions (CC&Rs)** (Dated April 1998).
* **Rules 9(b) and 16(c)** of the Association's Rules and Regulations.
* **Arizona Revised Statute (A.R.S.) § 33-1802**.
## The Petitioner's Argument: When Two Lots Become One
The Petitioner’s primary defense rested on the theory that his two parcels had effectively merged into a single entity for all purposes, including financial obligations. He relied on specific language within the community's land-use documents:
* **Paragraph 24 of the Declaration of Restrictions:** This clause stated that any ownership comprising parts of two adjoining lots "shall for the purpose of this Declaration... be deemed to constitute a single lot."
* **Section 4A of the CC&Rs:** This section noted that "combined lots will be considered as one lot" and would be subject to the same landscaping requirements as a single lot.
To a homeowner, these clauses appear to create a universal "single lot" status. However, as the legal findings would show, definitions in community governance are often context-specific rather than absolute.
## The Association’s Authority: Where Assessment Power Truly Resides
The Administrative Law Judge (ALJ) looked past the landscaping and deed restrictions to identify the actual source of the Association’s financial authority. In the hierarchy of governing documents, the power to levy assessments is typically found in the Articles of Incorporation and the Bylaws, which carry different weight than specific deed restrictions.
| Document Type | Applicability/Power |
| :--- | :--- |
| **Declaration of Restrictions (Para. 24)** | Provides a "Single Lot" definition **only** for specific deed restrictions; it does not govern or limit assessment power. |
| **CC&Rs Section 4A** | Provides a "Single Lot" definition **only** for landscaping requirements; it does not extend to financial obligations. |
| **Articles of Incorporation (July 27, 1971) & Bylaws (Feb 14, 2006)** | Grants the Association broad, explicit power to levy assessments against the owners of each **"separate parcel"** as identified on the Plat. |
A critical piece of evidence was the **Plat of record for Florence Gardens, Unit D**, recorded in **Book 18 of Maps, Page 37**. This document identifies Lots 1164 and 1165 as "separate and distinct" parcels. Because the **Fourth Amended and Restated Bylaws** define a lot as any separate parcel shown upon the plat, and the **Articles of Incorporation** grant the power to assess each lot, the Association retained the legal right to charge for each parcel individually.
## Procedural Reality: Rescinding Policies and Statutory Limits
The Petitioner also contested the Association’s right to change its long-standing waiver policy. The ALJ, however, clarified the distinction between a permanent right and a discretionary policy:
* **Rescission of Voluntary Waivers:** The Association had previously operated under **Policies 1-96 and 3-98**, which granted the assessment waivers. These were not deeded rights, but rather voluntary, discretionary waivers of the Association's existing assessment power. The Board formally rescinded these policies during a public meeting on June 6, 2006—well before the 2008 assessments were levied.
* **Statutory Limits:** Regarding the alleged violation of **A.R.S. § 33-1802**, the ALJ ruled that this statute merely provides a set of definitions for planned communities. It is not a source of "duties, rights or obligations" and therefore cannot be "violated" by an association in the manner the Petitioner claimed.
## The Final Verdict and Costs
The Administrative Law Judge concluded that the Association acted within its legal authority, and the Petitioner failed to meet his burden of proof. The final Order included:
1. **Dismissal:** The Petitioner's complaint was dismissed in its entirety.
2. **Filing Fees:** The Petitioner was not entitled to a refund of the $550.00 filing fee, as he was not the prevailing party.
3. **Attorney’s Fees:** The Association’s request for attorney's fees was denied based on the precedent in ***Semple v. Tri-City Drywall, Inc.*** The judge explained that an administrative agency is not a "court"; therefore, the agency lacks the statutory authority to award attorney's fees in an administrative proceeding of this nature.
## Key Takeaways for Homeowners
The *Sanders vs. Florence Gardens* decision highlights essential principles of community governance that every resident and board member should understand:
1. **Know Your Document Hierarchy:** Articles of Incorporation and Bylaws generally dictate the Association's corporate powers (like assessments), while CC&Rs and Declarations typically govern land use and aesthetics. Financial authority is rarely limited by landscaping definitions.
2. **Definitions are Contextual:** Just because a property is treated as a "single lot" for the purpose of where you can park a trailer or plant a tree does not mean it is a "single lot" for the purpose of the annual budget. The recorded Plat is often the final authority on what constitutes a billable parcel.
3. **Waivers are Not Perpetual:** A board’s decision to waive a fee in the past is often a discretionary policy (like Policies 1-96/3-98). Unless a waiver is written into the CC&Rs as a permanent deed restriction, a board generally has the power to rescind that waiver through proper, public action.
Due diligence is vital when managing multiple properties in an HOA. Homeowners should verify how their lots are recorded on the official Plat and understand that historical "favors" or policies can be changed by a sitting Board of Directors.
Case Participants
Petitioner Side
- Stanton S. Sanders (Petitioner)
Appeared personally
Respondent Side
- Mark A. Holmgren (Attorney)
Carpenter, Hazlewood, Delgado & Wood PLC
Represented Respondent Florence Gardens Mobile Home Association
Neutral Parties
- Michael G. Wales (Administrative Law Judge)
Office of Administrative Hearings - Robert Barger (Director)
Department of Fire Building and Life Safety - Debra Blake (Contact)
Department of Fire Building and Life Safety
Listed as ATTN on order transmittal
