Lee & Kim Edwards v. Scottsdale Embassy Condominium Association

Case Summary

Case ID 21F-H2120028-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2021-07-28
Administrative Law Judge Velva Moses-Thompson
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Lee & Kim Edwards Counsel Terry Foster, Esq.
Respondent Scottsdale Embassy Condominium Association Counsel

Alleged Violations

A.R.S. § 33-1255

Outcome Summary

The Administrative Law Judge dismissed the petition, finding that the Petitioner failed to prove by a preponderance of the evidence that the Respondent violated its CC&Rs, Bylaws, or A.R.S. § 33-1255, ruling that the statute was inapplicable due to the specific provisions in the Declaration regarding the 1/26 assessment calculation.

Why this result: Petitioner failed to meet the burden of proof, and the ALJ determined A.R.S. § 33-1255 was superseded by the Declaration, which mandated assessments based on the undivided 1/26 interest in the common elements.

Key Issues & Findings

Assessment calculation based on undivided interest in common areas

Petitioner challenged the Association's decision to change assessments from a historical square footage basis to a 1/26 interest calculation, arguing that this method violates A.R.S. § 33-1255 by charging for limited common elements (patios/parking).

Orders: The petition of Lee & Kim Edwards is dismissed; Respondent is deemed the prevailing party.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1255
  • Declaration Article I, Section 5
  • Declaration Article II, Section 5
  • Declaration Article II, Section 7
  • Declaration Article IV, Section 4
  • Declaration Article VI, Section 9

Analytics Highlights

Topics: condominium, assessment, cc&r, statutory interpretation, common elements, limited common elements
Additional Citations:

  • A.R.S. § 32-2199(1)
  • A.R.S. § 33-1255
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • Vazanno v. Superior Court, 74 Ariz. 369
  • Powell v. Washburn, 211 Ariz. 553
  • Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs., 867 P.2d 70

Video Overview

Audio Overview

Decision Documents

21F-H2120028-REL Decision – 899379.pdf

Uploaded 2026-04-24T11:32:11 (123.6 KB)

21F-H2120028-REL Decision – 856603.pdf

Uploaded 2026-04-24T11:32:19 (98.1 KB)

Assessment Methodology Dispute: Edwards v. Scottsdale Embassy Condominium Association

Executive Summary

This document provides a comprehensive analysis of the legal dispute between homeowners Lee & Kim Edwards (Petitioners) and the Scottsdale Embassy Condominium Association (Respondent) concerning a change in the methodology for calculating homeowner assessments. The core of the conflict was the Association’s decision to shift from a historical practice of assessments based on unit square footage to a uniform rate where each of the 26 units pays an equal 1/26 share of the common expenses.

The dispute was adjudicated by an Administrative Law Judge (ALJ) in two separate hearings. In both instances, the ALJ ruled in favor of the Association, dismissing the petitions filed by the Edwards.

Key Takeaways:

Change in Methodology: The Association’s Board, acting on legal advice received in January 2020, concluded that its 40-year practice of using a square-footage-based assessment violated the community’s Covenants, Conditions, and Restrictions (CC&Rs). The Board subsequently implemented a 1/26 equal-share assessment method after a majority of homeowners selected this option.

Initial Ruling on “Uniform Rate”: In the first hearing in February 2021, the Petitioners argued that the historical square footage method was a “uniform rate” and that the Association had waived its right to change the long-standing practice. The ALJ rejected this, finding that the new 1/26 rate complied with the CC&Rs’ requirement for a “uniform rate” (Article VI, Section 9) and aligned with each unit’s specified 1/26 undivided interest in the common elements (Article VI, Section 4(d)).

Rehearing Ruling on State Statute: The Petitioners were granted a rehearing in July 2021, where they argued that the 1/26 method violated Arizona statute A.R.S. § 33-1255 by improperly charging all owners for “limited common elements” like patios and parking spaces. The ALJ again ruled against the Petitioners, concluding that the state statute did not apply. The ruling was based on a key provision in the statute: “Unless otherwise provided for in the declaration.” The judge found that the Association’s Declaration did provide otherwise by defining patios and parking as general common elements and explicitly mandating that costs be shared based on each unit’s 1/26 interest.

Final Outcome: The petition was definitively dismissed after the rehearing, making the ALJ’s order binding. The Association’s adoption of the 1/26 assessment rate was upheld as compliant with its governing documents.

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Background of the Dispute

The legal conflict originated from a single-issue petition filed on November 20, 2020, by Lee and Kim Edwards, owners of unit 6937 in the Scottsdale Embassy Condominium development. The petition, filed with the Arizona Department of Real Estate, alleged that the Scottsdale Embassy Condominium Association had violated its CC&Rs, specifically Article VI, Section 9, and Article IV, Section 1.

The central issue was the Association Board’s decision to change the long-standing method of calculating homeowner assessments. For over 40 years, assessments had been based on the square footage of each unit. In 2020, the Board implemented a new system where the Association’s annual budget was divided equally among the 26 units, with each owner paying a 1/26 share. The Petitioners sought to enforce the historical calculation method unless and until the CC&Rs were properly amended.

Chronology of the Assessment Change

Historical Practice: For more than four decades, the Association calculated and charged member assessments based on the square footage of each condominium unit.

Legal Consultation (January 2020): Two members of the Association’s Board consulted with an attorney regarding the legality of the historical assessment method.

Attorney Recommendation (January 24, 2020): The attorney advised the Association that, to ensure compliance with the CC&Rs, it should calculate assessments based on each homeowner’s 1/26 interest in the common areas. The attorney’s letter stated:

Homeowner Consultation: Following the legal advice, the Board informed homeowners that the prior square-footage method violated the CC&Rs. The Board sought input on three potential assessment methods: the 1/26 rate, a variable blended rate, or continuing with the square footage rate. A majority of homeowners selected the 1/26 rate. The Board noted that any method other than the 1/26 rate would require a formal amendment to the CC&Rs.

Implementation (September 26, 2020): The Board officially notified homeowners that it would begin charging assessments based on the 1/26 rate and that an amendment to the CC&Rs was not necessary to implement this change.

Initial Hearing and Decision (February 2021)

An evidentiary hearing was held on February 9, 2021, before Administrative Law Judge Velva Moses-Thompson.

Arguments Presented

Petitioners (Edwards)

1. The historical square footage rate qualified as a “uniform rate” and was compliant with the CC&Rs.
2. By using the square footage rate for over 40 years, the Association had waived its right to enforce a different method like the 1/26 rate.

Respondent (Association)

1. The plain language of the CC&Rs requires that each homeowner pay an assessment based on the 1/26 rate.
2. It is not legally possible to waive a mandatory CC&R requirement through past practice.

On February 19, 2021, the ALJ issued a decision dismissing the petition. The judge’s conclusions of law were based on a direct interpretation of the CC&Rs:

Uniform Rate Compliance: The ALJ determined that the “preponderance of the evidence” showed that the Association’s 1/26 rate was a uniform rate that complied with Article VI, Section 9 of the CC&Rs.

Burden of Proof: The Petitioners failed to meet their burden to prove that the Association had violated its governing documents.

Outcome: The Association was deemed the prevailing party, and the petition was dismissed.

Rehearing and Final Decision (July 2021)

The Petitioners filed a request for a rehearing on March 30, 2021, which was granted. The rehearing was held on July 8, 2021. The Respondent did not appear at this hearing, as its counsel had withdrawn from representation without formally notifying the tribunal.

In the rehearing, the Petitioners introduced a new argument, alleging that the 1/26 assessment method violated Arizona state law, specifically A.R.S. § 33-1255.

• The core of this argument was that the 1/26 rate improperly included charges for “limited common elements,” such as patios and assigned parking spaces.

• The Petitioners contended that this forced all homeowners to pay for the maintenance of elements that were assigned to and benefited fewer than all units, in direct violation of the statute.

On July 28, 2021, the ALJ issued a final decision, once again dismissing the petition. The ruling hinged on the precise wording of both the state statute and the Association’s Declaration.

Applicability of A.R.S. § 33-1255: The judge found that the statute did not apply to this matter. The relevant section of the law, A.R.S. § 33-1255(C), begins with the critical phrase: “Unless otherwise provided for in the declaration…”

Supremacy of the Declaration: The ALJ concluded that the Association’s Declaration did provide otherwise. The CC&Rs explicitly:

◦ Define “Common Elements” broadly to include patios and parking areas (Article I, Section 3).

◦ Establish that each unit has an “undivided interest in the general common areas” of 1/26 (Article I, Section 5).

◦ Mandate that each unit’s share of costs for repair and maintenance of common areas is the “same as its undivided interest in the common elements” (Article IV, Section 4(d)).

Final Outcome: Because the Declaration’s specific provisions overrode the general terms of the state statute, the Association was found to be in compliance. The petition was dismissed, and the order was deemed binding on the parties.

Key Legal Principles and Definitions

Concept

Definition / Application in Case

Burden of Proof

The Petitioners were required to establish their claim by a “preponderance of the evidence.”

Preponderance of the Evidence

Defined as “proof as convinces the trier of fact that the contention is more probably true than not.” The ALJ found the Petitioners failed to meet this standard in both hearings.

Restrictive Covenants

Arizona law requires that unambiguous restrictive covenants be enforced to give effect to the parties’ intent and be interpreted as a whole. The ALJ’s decisions were based on a direct interpretation of the CC&Rs’ language.

Common Elements (per CC&Rs)

A broad definition including multifamily structures, land, roofs, ceilings, foundations, storage spaces, patios, parking areas, recreational facilities, lawns, pipes, and conduits.

Unit (per CC&Rs)

A freehold estate consisting of the interior space of an apartment. The definition explicitly states that common elements are not part of the unit.

Undivided Interest (per CC&Rs)

Article I, Section 5 clearly establishes that “The undivided interest in the general common areas… which shall be conveyed with each respective units shall be 1/26.” This provision was central to the final ruling.

Study Guide: Edwards v. Scottsdale Embassy Condominium Association

This study guide provides a comprehensive review of the administrative case between Lee & Kim Edwards and the Scottsdale Embassy Condominium Association, based on the provided legal decisions. It includes a short-answer quiz, an answer key, suggested essay questions, and a detailed glossary of key terms.

Short-Answer Quiz

Answer the following questions in two to three sentences each, based on the information provided in the case documents.

1. What was the central conflict between the Petitioners (Lee & Kim Edwards) and the Respondent (Scottsdale Embassy Condominium Association)?

2. For over 40 years, how did the Association historically calculate assessments for homeowners?

3. What specific event in January 2020 prompted the Association’s Board to change the assessment method?

4. In the first hearing on February 9, 2021, what were the two main arguments presented by Mr. Edwards?

5. What was the Administrative Law Judge’s conclusion regarding the “uniform rate” requirement from CC&Rs Article VI, Section 9 in the initial decision?

6. Upon what new legal grounds did the Petitioners base their March 30, 2021, request for a re-hearing?

7. According to the CC&Rs, what is the defined undivided interest in the general common areas for each unit?

8. Why did the Administrative Law Judge ultimately conclude that Arizona Revised Statutes (A.R.S.) § 33-1255 did not apply in this case?

9. What legal standard of proof did the Petitioners need to meet to successfully prove their case?

10. What was the final, binding outcome of the re-hearing held on July 8, 2021?

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Answer Key

1. The central conflict concerned the method for calculating homeowner assessments. The Petitioners argued for the historical method based on unit square footage, while the Respondent implemented a new method where each of the 26 units paid an equal share (1/26 rate) of the Association’s costs.

2. For over 40 years, the Association historically calculated assessments based on the square footage of each condominium unit. This practice was changed by the Board in 2020.

3. In January 2020, two Board members met with an attorney who advised that to comply with the CC&Rs, the Association should charge assessments based on each homeowner’s 1/26 interest in the common areas, not on square footage.

4. Mr. Edwards argued that the historical square footage rate was a “uniform rate” that complied with the CC&Rs. He also contended that by using this method for 40 years, the Association had waived its right to enforce a different assessment method like the 1/26 rate.

5. The Judge concluded that the Respondent’s assessment method, based on a uniform rate of 1/26 of the Association’s costs for each unit, did comply with Article VI, Section 9. Therefore, the Petitioners failed to prove the Association had violated the CC&Rs.

6. The Petitioners based their request for a re-hearing on the new allegation that the Respondent had violated Arizona Revised Statutes (A.R.S.) § 33-1255. They argued the 1/26 rate improperly required members to pay for limited common elements, such as patios and parking spaces, not assigned to them.

7. According to Article I, Section 5 of the Declaration (CC&Rs), the undivided interest in the general common areas established and conveyed with each respective unit is 1/26.

8. The Judge concluded that A.R.S. § 33-1255 did not apply because the statute itself contains an exception: “Unless otherwise provided for in the declaration.” In this case, the Association’s Declaration explicitly required that each member be charged an assessment equivalent to their 1/26 interest in the total costs, which included patios and parking areas.

9. The Petitioners bore the burden of proof to establish their claims by a “preponderance of the evidence.” This standard requires proof that convinces the trier of fact that a contention is more probably true than not.

10. Following the re-hearing, the Administrative Law Judge again ordered that the petition of Lee & Kim Edwards be dismissed. The Respondent was deemed the prevailing party, and the order was declared binding on the parties.

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Essay Questions

The following questions are designed for longer, essay-style responses. Answers are not provided.

1. Trace the evolution of the Petitioners’ legal strategy from the initial petition filed on November 20, 2020, to the arguments made during the re-hearing on July 8, 2021. How did their core arguments change, and what new evidence or legal statutes were introduced?

2. Analyze the concept of a “uniform rate” as required by Article VI, Section 9 of the CC&Rs. Discuss how both the Petitioners and the Respondent interpreted this phrase to support their respective assessment methods (square footage vs. 1/26 rate).

3. Explain in detail the role of A.R.S. § 33-1255 in the re-hearing. Why did the Petitioners believe it supported their case, and what specific language in both the statute and the Association’s Declaration led the Administrative Law Judge to rule that it did not apply?

4. Evaluate the actions taken by the Association’s Board of Directors in 2020. Consider their consultation with an attorney, their communication with homeowners, and their final decision to implement the 1/26 rate. Discuss whether these actions were consistent with the powers and obligations outlined in the CC&Rs.

5. Discuss the legal argument of “waiver” raised by Mr. Edwards in the first hearing. Explain what he meant by this and why the Association’s 40-year history of using a square-footage-based assessment was central to this claim. Why did this argument ultimately fail?

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Glossary of Key Terms

Definition

1/26 Rate

The assessment method where the Association’s annual budget is divided 26 ways, with each unit responsible for paying an equal portion. This is based on each unit’s 1/26 undivided interest in the common areas as specified in the CC&Rs.

Administrative Law Judge (ALJ)

The independent judicial officer who presides over administrative hearings, hears evidence, and issues a decision. In this case, the ALJ was Velva Moses-Thompson.

A.R.S. § 32-2199(1)

The Arizona Revised Statute that permits a condominium unit owner to file a petition with the Department of Real Estate for a hearing regarding alleged violations of the Condominium Act.

A.R.S. § 33-1255

The Arizona Revised Statute concerning common expenses. It states that unless the declaration provides otherwise, expenses for a limited common element shall be assessed against the units to which it is assigned, and expenses benefitting fewer than all units shall be assessed exclusively against the units benefitted.

Arizona Department of Real Estate

The state agency authorized by statute to receive and decide Petitions for Hearings from members of condominium associations in Arizona.

Burden of Proof

The obligation on a party in a legal proceeding to establish its claims by a required standard of evidence. In this case, the Petitioners bore the burden of proof.

CC&Rs (Covenants, Conditions, and Restrictions)

The governing legal documents that set up the guidelines for a planned community or condominium. Also referred to as the “Declaration” in the provided documents.

Common Area / Common Elements

As defined in Article I, Section 3 of the CC&Rs, this includes the multifamily structure (except for the units), land, air space, bearing walls, roofs, storage spaces, patios, recreational facilities, lawns, pipes, and other premises designed for common use.

Declaration

Another term for the Covenants, Conditions, and Restrictions (CC&Rs).

Lee & Kim Edwards

The Petitioners in the case and owners of unit 6937 in the Scottsdale Embassy Condominium development.

Office of Administrative Hearings

An independent state agency to which the Department of Real Estate refers petitions for evidentiary hearings.

Petitioners

The party that initiates a legal action or petition. In this case, Lee & Kim Edwards.

Preponderance of the Evidence

The evidentiary standard required to be met by the Petitioners. It is defined as proof that convinces the trier of fact that a contention is “more probably true than not.”

Respondent

The party against whom a petition is filed. In this case, the Scottsdale Embassy Condominium Association.

Restricted Common Area

As defined in Article I, Section 3(b) of the CC&Rs, this refers to a separately designed and exclusive parking area for each unit as assigned by the Board of Directors.

Scottsdale Embassy Condominium Association

The Respondent in the case; the condominium unit owners’ association for the development.

Square Footage Rate

The historical method of calculating assessments for over 40 years, where each unit’s assessment was based on its square footage.

Uniform Rate

A requirement from Article VI, Section 9 of the CC&Rs that states both regular and special assessments must be fixed at a uniform rate for all units. The interpretation of this term was central to the dispute.

As defined in Article I, Section 4 of the CC&Rs, a separately designated freehold estate consisting of the space bounded by the interior surfaces of the perimeter walls, floors, ceilings, windows, and floors of each apartment. It does not include common elements.

Waiver

A legal argument made by the Petitioners that because the Association had charged assessments based on square footage for 40 years, it had relinquished or “waived” its right to enforce a different method.

4 Shocking Lessons from an HOA Lawsuit That Could Upend How You See Your Fees

Introduction: The 40-Year Mistake

If you live in a condominium or a community governed by a Homeowners Association (HOA), you likely operate under a simple assumption: the way things have always been done is the correct and legal way. Monthly fees, maintenance schedules, and community rules that have been in place for decades feel permanent and unassailable. But what if they aren’t?

This was the central question in the case of Lee & Kim Edwards versus the Scottsdale Embassy Condominium Association. For over 40 years, the Association calculated homeowner fees based on the square footage of each unit—a practice that seemed fair and logical, and one that was never questioned by residents.

Then came the twist. In January 2020, after consulting with an attorney, the HOA board announced a shocking revelation: their 40-year-old assessment method was a direct violation of the community’s own governing documents. The board presented the legal findings to the community and sought their input on how to proceed. After being given the choice between the old method, a blended rate, or a new flat-rate fee that complied with the rules, most homeowners voted for the compliant flat-rate system for every single unit, regardless of its size.

Homeowners sued to keep the old method, sparking a legal battle that went all the way to an administrative court. The resulting decisions offer surprising and crucial lessons for every homeowner paying HOA dues. Here are the four most impactful takeaways from the case that could change how you view your own community’s rules.

1. “Past Practice” Means Nothing if It Violates the Rules

The primary argument made by the petitioners, Mr. and Mrs. Edwards, was that the Association had “waived its right” to change the assessment method. After all, by using the square-footage calculation for four decades, hadn’t they established an unbreakable precedent? It seemed like a common-sense argument rooted in history and consistency.

The court, however, completely rejected this line of reasoning. The Administrative Law Judge’s decision was not based on historical practice but on the clear, written rules found in the community’s Covenants, Conditions, and Restrictions (CC&Rs). The Association argued that it’s “not possible to waive the CC&R requirement,” and the court agreed.

The Lesson: This case powerfully demonstrates that tradition or “how things have always been done” cannot override the explicit language of an HOA’s governing documents. The CC&Rs are a contract. The lesson is clear: if your HOA’s practice contradicts its documents, the practice is invalid. The board has a fiduciary duty to follow the written rules, not a 40-year-old mistake.

2. Your CC&Rs Are a Binding Contract—Read Them

Throughout the legal proceedings, the Administrative Law Judge consistently referred back to the specific text of the CC&Rs to make a final decision. The entire case ultimately hinged on the interpretation of a few key sentences written decades ago.

The most critical passage, which decided the outcome, was from Article VI, Section 4(d) of the community’s governing documents:

“Each unit’s share shall be the same as its undivided interest in the common elements of the total amount determined under the subparagraphs (a), (b), (c), and (d) above.” —Scottsdale Embassy Condominium Association CC&Rs, Article VI, Section 4(d)

This single sentence was the linchpin. It explicitly linked each unit’s assessment share to its “undivided interest in the common elements.” Another section of the document, Article I, Section 5, had already established that interest as an equal 1/26 for all 26 units.

The Lesson: This is a classic example of legal cross-referencing in a contract. Section 4(d) provided the instruction (base fees on “undivided interest”), while Article I, Section 5 provided the specific value (1/26). With both parts present and unambiguous, the court had no choice but to enforce them exactly as written, leaving no room for interpretations based on fairness or history. The contract was the contract.

3. A “Uniform Rate” Might Not Mean What You Think

One of the central points of contention was the term “uniform rate.” Article VI, Section 9 of the CC&Rs required that all assessments “must be fixed at a uniform rate for all units.”

The homeowners argued that the square footage rate was, in fact, a “uniform rate”—a consistent price per square foot applied to every unit. It’s an interpretation many of us might find reasonable.

However, the HOA Board and the court had a different interpretation. The judge found that the flat 1/26 rate was the correct interpretation of a “uniform rate” because it was uniformly applied to every unit’s established 1/26 interest in the common areas. In the court’s view, the “rate” being applied uniformly was the 1/26 fraction of the total budget. The fact that this resulted in different dollar amounts for square-footage fees was irrelevant; the legal share was what had to be uniform.

The Lesson: Common-sense terms like “uniform” can have very specific legal meanings within the context of your governing documents. The true definition is found not in a dictionary, but in how the term is defined and applied by the rest of the document’s provisions.

4. Your HOA’s Rules Can Sometimes Override State Law

In a final attempt to overturn the decision, the petitioners filed for a re-hearing. This time, they cited a specific Arizona state law, A.R.S. 33-1255. This statute says that expenses for “limited common elements”—things like assigned patios or parking spaces that only benefit specific units—should be assessed only against those units that benefit from them. The homeowners argued that the new 1/26 flat fee unfairly forced them to pay for their neighbors’ patios and parking spots, a direct violation of state law.

Surprisingly, this argument also failed. The reason is found in the crucial introductory clause of the state law itself: “Unless otherwise provided for in the declaration…”

Because the Scottsdale Embassy’s Declaration did provide otherwise—by explicitly rolling all general and restricted common area costs into the total budget before calculating each unit’s 1/26 share—the community’s own rules legally superseded the default state statute. The judge concluded that the state law “does not apply to this matter because the Declaration requires” a different method.

The Lesson: This is perhaps the most counter-intuitive lesson of all. This demonstrates a key principle of contract law and planned community governance: state statutes often provide a “default” rule for situations a community’s documents don’t address. However, they also grant communities the power to create their own specific rules, which, if legally permissible, will take precedence. Homeowners cannot assume that a state law automatically protects them if their community’s own governing documents have a more specific rule in place.

Conclusion: Are You Sure You Know What You Agreed To?

The central message from the Scottsdale Embassy case is undeniable: in an HOA, the written word is law. The CC&Rs and other governing documents are a binding contract that dictates the rules, regardless of 40 years of history, common-sense assumptions, or even some default state laws. What you believe is fair or standard practice is irrelevant if the document you agreed to upon purchase says otherwise.

This case was decided by a few sentences written decades ago. When was the last time you read your community’s governing documents from cover to cover?

Case Participants

Petitioner Side

  • Lee Edwards (petitioner, witness)
  • Kim Edwards (petitioner)
  • Teresa H. Foster (petitioner attorney)
    Ellis & Baker, P.C.
    Also referred to as Terri Foster and Terry Foster

Respondent Side

  • Lauren Vie (respondent attorney)
    Appeared for initial hearing; later noted as withdrawn
  • Caleb Koch (board president, witness)
    Scottsdale Embassy Condominium Association
  • Mary Edinburgh (board member, witness)
    Scottsdale Embassy Condominium Association
  • Beth Mulcahy (respondent attorney)
    Mulcahy Law Firm, PC
    Recipient of transmission; noted as withdrawn counsel prior to rehearing

Neutral Parties

  • Velva Moses-Thompson (ALJ)
    OAH
  • Judy Lowe (commissioner)
    Arizona Department of Real Estate
  • LDettorre (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient
  • AHansen (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient
  • ncano (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient

Other Participants

  • Miranda Alvarez (unknown)
    Associated with transmission for petitioner's attorney

Dina R. Galassini vs. Plaza Waterfront Condominiums Owners

Case Summary

Case ID 18F-H1818032-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2018-08-22
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Dina R. Galassini Counsel
Respondent Plaza Waterfront Condominium Owners Association, Inc. Counsel

Alleged Violations

ARIZ. REV. STAT. § 32-2199.01; ARIZ. REV. STAT. § 33-1202

Outcome Summary

The Administrative Law Judge dismissed Petitioner’s petition for rehearing, concluding that the OAH has the authority, pursuant to statute and precedent, to resolve disputes involving the interpretation of condominium documents and related regulating statutes, rejecting Petitioner's constitutional claims regarding separation of powers. Respondent's request for attorney's fees was denied.

Why this result: Petitioner's argument that the original ALJ decision was contrary to law due to separation of powers violation was dismissed, as the OAH confirmed its statutory authority (ARIZ. REV. STAT. § 32-2199.01) to interpret condominium documents and regulating statutes.

Key Issues & Findings

Whether the Respondent Association correctly posted owner assessments for the 2018 parking lot budget

Petitioner sought rehearing arguing the ALJ lacked constitutional authority (separation of powers) to interpret condominium documents (contracts) and statutory definitions of common/limited common elements (ARIZ. REV. STAT. § 33-1202) related to the posting of the 2018 parking lot budget assessment.

Orders: Petitioner’s petition is dismissed. Respondent’s request for attorney’s fees is denied.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 33-1202
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • Ariz. Cannabis Nurses Ass'n v. Ariz. Dep't of Health Servs., 242 Ariz. 62, 67, 392 P.3d 506, 511 (App. 2017)

Analytics Highlights

Topics: HOA Dispute, Assessment, Jurisdiction, ALJ Authority, Condominium Documents, Separation of Powers
Additional Citations:

  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 33-1202
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • Ariz. Cannabis Nurses Ass'n v. Ariz. Dep't of Health Servs., 242 Ariz. 62, 67, 392 P.3d 506, 511 (App. 2017)
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. REV. STAT. § 32-2199.02(B)
  • ARIZ. CONST. Art. 3

Video Overview

Audio Overview

Decision Documents

18F-H1818032-REL Decision – 655375.pdf

Uploaded 2026-04-26T09:46:00 (65.7 KB)

18F-H1818032-REL Decision – 636950.pdf

Uploaded 2026-04-26T09:46:08 (128.6 KB)

18F-H1818032-REL Decision – 655375.pdf

Uploaded 2026-04-24T11:11:36 (65.7 KB)

18F-H1818032-REL Decision – 636950.pdf

Uploaded 2026-04-24T11:11:39 (128.6 KB)

Briefing Document: Galassini v. Plaza Waterfront Condominium Owners Association, Inc. (Case No. 18F-H1818032-REL-RHG)

Executive Summary

This document analyzes the Administrative Law Judge (ALJ) Decision in case number 18F-H1818032-REL-RHG, which dismissed a petition filed by Dina R. Galassini against the Plaza Waterfront Condominium Owners Association, Inc. The central conflict revolved around the jurisdictional authority of the Office of Administrative Hearings (OAH). The Petitioner, Ms. Galassini, argued that the OAH, as part of the executive branch, violated the constitutional separation of powers by interpreting private condominium documents, a power she claimed was reserved exclusively for the judicial branch.

The ALJ, Thomas Shedden, rejected this argument and dismissed the petition as a matter of law. The decision affirms that the OAH is statutorily empowered by Arizona Revised Statutes to hear disputes concerning alleged violations of condominium documents. The ALJ’s rationale rests on established legal precedent, citing Tierra Ranchos Homeowners Ass’n v. Kitchukov to confirm that condominium documents are a contract and Ariz. Cannabis Nurses Ass’n v. Ariz. Dep’t of Health Servs. to support an agency’s authority to take actions reasonably implied by its governing statutes. Consequently, the Petitioner’s core constitutional challenge was deemed “unfounded,” leading to the dismissal of her petition. While the petition was dismissed, the Respondent’s request for attorney’s fees was denied.

1. Case Background and Procedural History

The case involves a dispute between a condominium owner and a condominium association, brought before the Arizona Office of Administrative Hearings.

Parties:

Petitioner: Dina R. Galassini

Respondent: Plaza Waterfront Condominium Owners Association, Inc.

Forum: Office of Administrative Hearings, Phoenix, Arizona

Presiding Judge: Thomas Shedden, Administrative Law Judge

Decision Date: August 22, 2018

The matter arrived before Judge Shedden following a series of procedural steps initiated after an original ALJ decision.

June 26, 2018: The Petitioner filed a Request for Rehearing with the Department of Real Estate.

July 20, 2018: The Department of Real Estate issued an Order Granting Rehearing, based on the reasons outlined in the Petitioner’s request.

August 15, 2018: The Respondent filed a Motion to Vacate Rehearing, arguing the case could be resolved as a matter of law.

August 21, 2018: The Petitioner filed an Opposition to the Respondent’s motion.

2. Core Dispute: Petitioner’s Jurisdictional Challenge

The Petitioner’s request for a rehearing was founded on a direct constitutional challenge to the authority of the Administrative Law Judge. The underlying substantive issue concerned the association’s handling of “owner assessments for the 2018 parking lot budget,” which turned on the interpretation of “common element” versus “limited common element.”

Petitioner’s Arguments

Violation of Separation of Powers: The Petitioner contended that the original ALJ decision was “contrary to law” because it involved the interpretation of private contracts (the condominium documents). She argued this function is reserved exclusively for the judicial branch under Arizona’s Constitution, Article 3 (Separation of Powers).

Due Process Violation: By interpreting the contract, the ALJ allegedly committed a “due process violation.” The Petitioner stated, “For the ALJ to definitively interpret actual contracts between two private parties is a due process violation (separation of powers).”

Improper Delegation of Power: The Petitioner claimed the ALJ’s action “redistributed interpreted power from the Judiciary to the Executive and this is a congressional encroachment on my rights.”

3. The Administrative Law Judge’s Legal Rationale and Decision

The ALJ agreed with the Respondent that the case could be resolved as a matter of law, focusing entirely on the jurisdictional question raised by the Petitioner. The decision systematically refutes the Petitioner’s separation of powers argument by outlining the OAH’s legal authority.

Statutory Authority

The decision establishes the OAH’s jurisdiction through Arizona state law:

ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11: This statute describes the administrative process for referring disputes between owners and condominium associations to the OAH.

ARIZ. REV. STAT. § 32-2199.01(A): This section specifically grants the OAH authority to conduct hearings for alleged “violations of condominium documents … or violations of the statutes that regulate condominiums….”

ARIZ. REV. STAT. § 33-1202: The decision notes that analyzing the Petitioner’s claim inherently requires interpreting definitions found in the statutes that regulate condominiums, such as this section defining “common element” and “limited common element.”

Precedent from Case Law

The ALJ grounded the OAH’s interpretive authority in two key Arizona appellate court decisions:

1. Tierra Ranchos Homeowners Ass’n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007): This case is cited to establish the legal principle that “the condominium documents are a contract between the parties.” By defining the documents as a contract, the decision links the dispute directly to the type of documents the OAH is empowered to review.

2. Ariz. Cannabis Nurses Ass’n v. Ariz. Dep’t of Health Servs., 242 Ariz. 62, 392 P.3d 506 (App. 2017): This case is cited to support the broader principle of administrative authority. The ruling states, “[I]t is the law of this state that an agency may” take such action “which may be reasonably implied from ‘a consideration of the statutory scheme as a whole.’” This supports the conclusion that the OAH’s authority to hear disputes over condominium documents implies the authority to interpret them.

Conclusion of the Court

Based on the cited statutes and case law, the ALJ concluded that the OAH possesses the necessary authority to interpret both the condominium documents and the relevant state statutes. Therefore, the Petitioner’s central argument that the original decision was “contrary to law” was declared “unfounded,” and dismissing the matter was deemed appropriate.

4. Final Orders and Directives

The Administrative Law Judge issued the following final orders on August 22, 2018:

Outcome

Petitioner’s Petition

Dismissed

Respondent’s Request for Attorney’s Fees

Denied

The decision also included the following legally mandated notices for the parties:

Binding Nature: The order is binding on the parties as a result of the rehearing, per ARIZ. REV. STAT. § 32-2199.02(B).

Appeal Rights: A party wishing to appeal the order must seek judicial review by filing with the superior court within thirty-five (35) days from the date the order was served. The appeal process is prescribed by ARIZ. REV. STAT. title 12, chapter 7, article 6 and § 12-904(A).

Study Guide: Galassini v. Plaza Waterfront Condominium Owners Association, Inc.

This study guide provides a detailed review of the Administrative Law Judge Decision in case number 18F-H1818032-REL-RHG, issued by the Arizona Office of Administrative Hearings. It is designed to assess comprehension of the case’s key arguments, legal precedents, and procedural history.

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Short-Answer Quiz

Instructions: Answer the following ten questions in two to three complete sentences, using only information provided in the source document.

1. Identify the Petitioner and the Respondent in this case and state the official case number.

2. What was the Petitioner’s core legal argument for requesting a rehearing, as detailed in her filing on June 26, 2018?

3. On what grounds did the Respondent file a Motion to Vacate Rehearing on August 15, 2018?

4. According to the Petitioner’s Response, what was the specific issue that the Department’s Commissioner had ordered the rehearing to address?

5. Which Arizona Revised Statute section is cited as describing the process for hearings on disputes between owners and condominium associations?

6. To resolve the Petitioner’s claim, the Administrative Law Judge (ALJ) needed to interpret the definitions of what two key terms from the Arizona Revised Statutes?

7. What legal precedent was cited in the decision to establish that condominium documents are considered a contract between the parties?

8. What was the final decision issued by Administrative Law Judge Thomas Shedden on August 22, 2018, regarding the Petitioner’s petition and the Respondent’s request for attorney’s fees?

9. According to ARIZ. REV. STAT. section 32-2199.02(B), what is the legal status of an administrative law judge order that has been issued as the result of a rehearing?

10. What specific steps must a party take to appeal this order, including the timeframe and the court where the appeal must be filed?

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Answer Key

1. The Petitioner is Dina R. Galassini, and the Respondent is Plaza Waterfront Condominium Owners Association, Inc. The official case number is 18F-H1818032-REL-RHG.

2. The Petitioner argued that the original Administrative Law Judge’s decision was contrary to law because it violated the principle of separation of powers. She claimed that by interpreting contracts between private parties, the ALJ, part of the Executive branch, encroached upon the power of the Judiciary, resulting in a due process violation.

3. The Respondent argued that the matter could be resolved as a matter of law. This argument was based on ARIZ. REV. STAT. section 32-2199.01, which governs administrative hearings for condominium disputes.

4. The Petitioner asserted in her Response that the Department’s Commissioner had ordered a rehearing specifically on the issue of whether the Respondent Association had correctly posted owner assessments for the 2018 parking lot budget.

5. ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11, specifically section 32-2199.01(A), is cited as governing the process. It states that hearings are conducted for alleged “violations of condominium documents … or violations of the statutes that regulate condominiums.”

6. To analyze the Petitioner’s claim, the ALJ needed to interpret the definitions of “common element” and “limited common element.” These definitions are found in ARIZ. REV. STAT. section 33-1202.

7. The case Tierra Ranchos Homeowners Ass’n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007) was cited to support the legal principle that condominium documents (like CC&Rs) constitute a contract between the parties involved.

8. Administrative Law Judge Thomas Shedden ordered that the Petitioner’s petition be dismissed. He further ordered that the Respondent’s request for attorney’s fees be denied.

9. According to the statute, an administrative law judge order issued as a result of a rehearing is binding on the parties.

10. A party wishing to appeal the order must seek judicial review as prescribed by ARIZ. REV. STAT. title 12, chapter 7, article 6. The appeal must be filed 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 for a more in-depth, essay-style response. Answers are not provided.

1. Analyze the Petitioner’s “separation of powers” argument. Explain why she believed the ALJ’s decision constituted a due process violation and a congressional encroachment on her rights, and discuss how the final decision legally refuted this claim.

2. Detail the legal basis and precedents cited by the Administrative Law Judge to establish the authority of the Office of Administrative Hearings (OAH). Explain how ARIZ. REV. STAT. section 32-2199.01(A) and the cases Tierra Ranchos Homeowners Ass’n v. Kitchukov and Ariz. Cannabis Nurses Ass’n v. Ariz. Dep’t of Health Servs. were used to justify the OAH’s jurisdiction in this matter.

3. Trace the procedural history of this case from the Petitioner’s Request for Rehearing to the final Administrative Law Judge Decision. Include key dates, motions filed by both parties, and the reasoning behind the Department of Real Estate’s initial decision to grant a rehearing.

4. Discuss the relationship between condominium documents and state statutes as presented in this decision. How does the ruling define condominium documents, and what authority does it grant the OAH in interpreting both these documents and the statutes that regulate condominiums?

5. Based on the final decision and the provided notice, explain the legal options available to the Petitioner following the dismissal of her petition. What specific steps must be taken to pursue an appeal, and what legal standard is established by ARIZ. REV. STAT. section 32-2199.02(B) regarding the finality of the ALJ’s order?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official who presides over administrative hearings. In this case, Thomas Shedden of the Office of Administrative Hearings.

Common Element

A term defined in ARIZ. REV. STAT. section 33-1202. The interpretation of this term was central to the Petitioner’s original dispute.

Condominium Documents

The governing documents of a condominium association (e.g., CC&Rs). The decision establishes these as a contract between the parties, citing Tierra Ranchos Homeowners Ass’n v. Kitchukov.

Department of Real Estate

The state agency that issued the Order Granting Rehearing in this matter on July 20, 2018.

Due Process Violation

An alleged infringement of legal rights. The Petitioner claimed this occurred when the ALJ interpreted a contract between private parties.

Judicial Review

The legal process by which a party can appeal an administrative order to a court. The decision specifies this must be done by filing with the superior court within 35 days.

Limited Common Element

A term defined in ARIZ. REV. STAT. section 33-1202. The interpretation of this term was central to the Petitioner’s original dispute.

Motion to Vacate Rehearing

A formal request filed by the Respondent on August 15, 2018, arguing that the case could be resolved as a matter of law.

Office of Administrative Hearings (OAH)

The state office where disputes between owners and condominium associations are referred for hearings, as per ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11.

Petitioner

The party initiating a legal petition. In this case, Dina R. Galassini.

Request for Rehearing

A formal request filed by the Petitioner on June 26, 2018, after an initial decision, which was granted by the Department of Real Estate.

Respondent

The party against whom a petition is filed. In this case, Plaza Waterfront Condominium Owners Association, Inc.

Separation of Powers

A constitutional principle cited by the Petitioner. She argued that only the judicial branch, not the executive branch (where the OAH resides), can make decisions that legally bind private parties.

4 Surprising Legal Lessons from a Condo Parking Lot Dispute

Introduction: The Anatomy of a Neighborhood Fight

Disputes with a Condominium or Homeowner’s Association are a common, and often frustrating, part of modern life. But what happens when a seemingly minor conflict over assessments for the 2018 parking lot budget escalates into a direct challenge to the power of the state?

The case of Dina R. Galassini vs. the Plaza Waterfront Condominium Owners Association, Inc. did just that. This neighborhood fight quickly grew to question fundamental legal principles, revealing some counter-intuitive truths about the power and jurisdiction of administrative agencies. The final court decision provides a masterclass in administrative law, a powerful, court-like system designed for efficiency that operates with more flexibility and authority than most people realize. Here are the top surprising takeaways from the final ruling.

Takeaway 1: Administrative Agencies Can Act Like Courts

At the heart of her appeal, Ms. Galassini made a powerful constitutional argument: she believed that only a judge in the judicial branch—not an administrator in the executive branch—had the authority to interpret a private contract like her condominium documents.

In her “Request for Rehearing,” she argued forcefully:

The decision by the administrative law judge (ALJ) is contrary to law, and the decision that was handed down to me only belongs in the judicial branch. Regarding what is a common element or a limited common element (see Exhibit C) should only be decided upon by a judge. For the ALJ to definitively interpret actual contracts between two private parties is a due process violation (separation of powers). In doing so the ALJ redistributed interpreted power from the Judiciary to the Executive and this is a congressional encroachment on my rights. According to Arizona’s Constitution Article 3, Separation of Powers—only the judicial branch can make decisions that make decisions that bind private parties as law.

The surprising outcome was that the Administrative Law Judge (ALJ) rejected this argument entirely. The judge found that the Office of Administrative Hearings was specifically empowered by Arizona statutes (ARIZ. REV. STAT. section 32-2199.01(A)) to handle disputes involving “violations of condominium documents.” Creating specialized administrative bodies like this is a common legislative strategy. It provides expert, efficient resolution for specific types of disputes, preventing the judicial courts from being overwhelmed.

Takeaway 2: Your Condo Agreement is a Legally Binding Contract

The ALJ’s authority to reject such a powerful constitutional claim hinged on a foundational question: what exactly are a condo’s governing documents in the eyes of the law? The answer is what gives administrative bodies their power in these disputes.

The decision affirms that these documents are not just community guidelines, but a formal, legally binding contract between the unit owner and the association. To support this, the judge referenced the legal precedent set in Tierra Ranchos Homeowners Ass’n v. Kitchukov, which established that “the condominium documents are a contract between the parties.”

This is a critical takeaway because by defining these governing documents as a contract, it provides the legal foundation for an administrative body, like the Office of Administrative Hearings, to step in and resolve disputes using principles of contract law.

Takeaway 3: An Agency’s Power Can Be “Reasonably Implied”

Another surprising lesson from the decision is that a government agency’s authority doesn’t always have to be spelled out word-for-word for every possible action it might take.

To make a broader point about administrative law, the judge cited a separate case, Ariz. Cannabis Nurses Ass’n v. Ariz. Dep’t of Health Servs. The principle from that case is that an agency can take actions that “may be reasonably implied from ‘a consideration of the statutory scheme as a whole.’”

This concept is crucial for government to function. Legislatures cannot possibly foresee and explicitly write laws for every conceivable scenario an agency might face. This doctrine of “implied power” allows agencies the flexibility to adapt and act effectively within the spirit of the law, fulfilling their duties based on the overall purpose of the statutes they enforce.

Takeaway 4: Winning a Rehearing Isn’t Winning the War

The case’s procedure offers a fascinating lesson in legal strategy. The Department of Real Estate initially granted the petitioner’s request for a rehearing, a decision made, crucially, “for the reasons outlined in Petitioner’s Request for Rehearing.” This shows the Department initially found her legal argument about separation of powers compelling enough to warrant a second look.

However, the outcome was deeply ironic. Instead of re-arguing the facts, the respondent (the Condo Association) “filed a Motion to Vacate Rehearing, arguing that… this matter can be resolved as a matter of law” (meaning no facts were in dispute, only the interpretation of the statutes and contracts).

The ALJ agreed. The petitioner, by winning the rehearing, had inadvertently given the respondent a perfect platform to argue the case on purely legal grounds—the respondent’s strength. The rehearing forced the core jurisdictional issue to the forefront, leading directly to the dismissal of the petitioner’s case. It’s a stark reminder that a procedural victory doesn’t guarantee a final win.

Conclusion: The Law in Your Daily Life

Born from a dispute over a parking lot, this single case reveals the hidden legal machinery designed to resolve specific conflicts efficiently, without overburdening the traditional court system. It demonstrates how everyday disagreements can touch upon complex principles of constitutional power, contract law, and implied statutory authority. From a simple assessment, we see a system where administrative bodies act with court-like power, a power built upon the contractual nature of community rules and the flexibility of implied authority. It’s a powerful reminder of the intricate legal frameworks operating just beneath the surface of our daily lives.

What hidden legal complexities might be shaping the rules and agreements in your own life?

Case Participants

Petitioner Side

  • Dina R. Galassini (petitioner)

Respondent Side

  • Jim Flood (board member)
  • Roger Isaacs (witness)
  • Gary Pedersen (witness, statutory agent)

Neutral Parties

  • Jenna Clark (ALJ)
  • Thomas Shedden (ALJ)
  • Judy Lowe (Commissioner)

Other Participants

  • Peter Saiia (observer)
  • Suzanne Isaacs (observer)
  • Paul Blessing (observer)
  • Felicia Del Sol (unknown)