Tag Archives: Assessments

Michael J Stoltenberg v. Rancho Del Oro Homeowners Association

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Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.

Case Summary

Case ID 20F-H2020049-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2021-03-08
Administrative Law Judge Jenna Clark
Outcome loss
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Michael J Stoltenberg Counsel —
Respondent Rancho Del Oro Homeowners Association Counsel Nicole Payne, Esq.

Alleged Violations

CC&Rs Section 14.8

Outcome Summary

The Administrative Law Judge denied the Petitioner's petition following a rehearing. The ALJ concluded that the Petitioner failed to sustain the burden of proof that the Association violated CC&Rs Section 14.8, as that section applies only to the Association's notice obligation to members and not to assessment payments sent by members to the Association.

Why this result: The Petitioner failed to meet the burden of proof because the CC&R provision cited was inapplicable to the dispute. Additionally, the Petitioner was found to have inadvertently caused delays in payment receipt by using restricted delivery, contrary to instructions.

Key Issues & Findings

Whether the Association violated CC&Rs 14.8.

Petitioner alleged the Association violated CC&Rs Section 14.8 by failing to handle his monthly assessment payments correctly, resulting in late fees and threats of foreclosure. The ALJ found that Section 14.8 governs the Association's notice obligations to members and is inapplicable to the Petitioner's delivery of assessment payments to the Association.

Orders: Petitioner's petition was denied on rehearing.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • ARIZ. REV. STAT. § 32-2102
  • ARIZ. REV. STAT. § 32-2199 et seq.
  • ARIZ. REV. STAT. § 32-2199.05
  • ARIZ. REV. STAT. § 32-2199(2)
  • ARIZ. REV. STAT. § 32-2199.01(A)
  • ARIZ. REV. STAT. § 32-2199.01(D)
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 41-1092 et seq.
  • ARIZ. REV. STAT. § 33-1243
  • ARIZ. ADMIN. CODE R2-19-119
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
  • BLACK’S LAW DICTIONARY 1220 (8th ed. 1999)

Analytics Highlights

Topics: CC&Rs, Assessments, Late Fees, Notice Provision, Burden of Proof, Rehearing
Additional Citations:

  • ARIZ. REV. STAT. § 32-2102
  • ARIZ. REV. STAT. § 32-2199 et seq.
  • ARIZ. REV. STAT. § 32-2199.05
  • ARIZ. REV. STAT. § 32-2199(2)
  • ARIZ. REV. STAT. § 32-2199.01(A)
  • ARIZ. REV. STAT. § 32-2199.01(D)
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 41-1092 et seq.
  • ARIZ. REV. STAT. § 33-1243
  • ARIZ. ADMIN. CODE R2-19-119
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
  • BLACK’S LAW DICTIONARY 1220 (8th ed. 1999)

Video Overview

Audio Overview

Decision Documents

20F-H2020049-REL-RHG Decision – 861466.pdf

Uploaded 2025-10-09T03:35:03 (145.6 KB)

20F-H2020049-REL-RHG Decision – ../20F-H2020049-REL/811290.pdf

Uploaded 2026-01-20T13:56:54 (131.7 KB)





Briefing Doc – 20F-H2020049-REL-RHG


Briefing Document: Stoltenberg v. Rancho Del Oro Homeowners Association

Executive Summary

This document synthesizes the findings and conclusions from two administrative law judge decisions concerning a dispute between homeowner Michael J. Stoltenberg (Petitioner) and the Rancho Del Oro Homeowners Association (Respondent). The Petitioner’s complaint, alleging the Association violated its governing documents and acted in bad faith regarding the handling of his monthly assessment payments, was comprehensively reviewed and ultimately denied. This denial was subsequently affirmed in a rehearing.

The core of the dispute centered on the Petitioner’s unilateral decision to send his monthly payments via restricted U.S. Postal Service delivery to a specific, unpaid volunteer board member. This action, taken despite clear instructions to mail payments to the Association’s P.O. Box, resulted in delayed receipt and returned mail, leading to the imposition of late fees and threats of foreclosure against the Petitioner.

The Administrative Law Judge’s central finding was that the Petitioner fundamentally misinterpreted Section 14.8 of the Association’s Covenants, Conditions, and Restrictions (CC&Rs). The judge concluded this section is unambiguously applicable only to notices sent from the Association to its members, and imposes no obligations on the Association regarding mail received from members. The payment delays and resulting penalties were determined to be the direct consequence of the Petitioner’s own “volitionally took” actions, for which the Association bore no responsibility. Furthermore, the Petitioner’s claims of “bad faith” under Arizona’s nonprofit corporation statutes were dismissed as falling outside the jurisdictional authority of the Arizona Department of Real Estate and the Office of Administrative Hearings.

I. Case Overview

The legal matter concerns a petition filed by a homeowner against his condominium association, alleging violations of the community’s governing documents and state law.

Case Number

20F-H2020049-REL / 20F-H2020049-REL-RHG

Petitioner

Michael J. Stoltenberg

Respondent

Rancho Del Oro Homeowners Association

Adjudicating Body

Arizona Office of Administrative Hearings (OAH)

Administrative Law Judge

Jenna Clark

The Petitioner’s initial complaint, filed on March 2, 2020, alleged that the Association “fail to do their job, and are acting in bad faith,” specifically citing violations of ARIZ. REV. STAT. §§ 10-3842 and 10-801, and Section 14.8 of the Association’s CC&Rs. He sought an order compelling the Association’s compliance and the issuance of a civil penalty.

II. Procedural History and Timeline

The dispute progressed through an initial hearing, a decision, a granted request for rehearing, and a final binding order.

• March 2, 2020: Petitioner files a single-issue petition with the Arizona Department of Real Estate (“Department”).

• March 24, 2020: Respondent files an ANSWER, denying all complaint items.

• April 1, 2020: The Department refers the matter to the Office of Administrative Hearings (OAH) for an evidentiary hearing.

• July 14, 2020: The initial evidentiary hearing is held.

• August 3, 2020: An AMENDED ADMINISTRATIVE LAW JUDGE DECISION is issued, denying the Petitioner’s petition.

• August 28, 2020: Petitioner submits a request for a rehearing.

• September 9, 2020: The Petitioner’s request for a rehearing is granted.

• February 16, 2021: A rehearing is held before the same Administrative Law Judge.

• March 8, 2021: A final ADMINISTRATIVE LAW JUDGE DECISION is issued, again denying the Petitioner’s petition.

III. Central Dispute: Assessment Payments and CC&R Section 14.8

The conflict originated from the Petitioner’s method of submitting monthly assessment payments and his interpretation of the Association’s obligations under its CC&Rs.

The Petitioner’s Actions and Their Consequences

• Instruction: On January 4, 2016, the Petitioner was advised that the Association’s “primary address for receiving all correspondence and all assessment payments from its members” was PO Box 4333, Yuma, Arizona 85366.

• Unilateral Change in Method: Beginning in November 2019, the Petitioner began sending his monthly payments via restricted delivery through the United States Postal Service (USPS), designated for “board member Rhea Carlisle’s pickup only.”

• Petitioner’s Rationale: He took this action based on a belief that an agent of the Association’s property management company had previously thrown away one of his mailed payments.

• Petitioner’s Acknowledged Awareness: The Petitioner was aware that the Association employed a property management company to collect mail and that Ms. Carlisle was an “unpaid volunteer board member,” not an employee of that company.

• Resulting Delays and Penalties: This restricted delivery method caused significant issues.

◦ One payment was returned by USPS on January 25, 2020.

◦ Another was returned by USPS on June 8, 2020.

◦ Other payments were picked up late on various dates.

◦ For each instance where the payment was received late, the Petitioner was assessed a late fee and his residence was placed in danger of foreclosure.

The Disputed Provision: CC&Rs Section 14.8

The legal basis for the Petitioner’s claim rested on his interpretation of Section 14.8 of the Association’s Bylaws.

• Full Text of Section 14.8, Notices:

• Respondent’s Argument: The Association argued that this section was “inapplicable to the facts as presented” because it governs the Association’s obligation when sending notices to homeowners, not the other way around.

IV. Administrative Law Judge’s Findings and Conclusions

Across two separate decisions, the Administrative Law Judge (ALJ) consistently found that the Petitioner failed to meet his burden of proof and that his interpretation of the governing documents was incorrect.

Initial Decision (August 3, 2020)

• Inapplicability of Section 14.8: The ALJ’s primary conclusion was a complete rejection of the Petitioner’s legal argument.

• Petitioner’s Culpability: The ALJ placed the responsibility for the late payments squarely on the Petitioner.

• Outcome: The petition was denied.

Rehearing Decision (March 8, 2021)

The rehearing was granted on the Petitioner’s grounds of an alleged “Error in the admission or rejection of evidence or other errors of law” and that the initial decision was “arbitrary, capricious, or an abuse of discretion.” The ALJ found no merit in these claims.

• Reaffirmation of Core Finding: The ALJ reiterated and strengthened the conclusion regarding Section 14.8.

• Jurisdictional Ruling: The ALJ explicitly addressed the Petitioner’s “bad faith” claim by citing ARIZ. REV. STAT. § 10-3842, which concerns standards of conduct for officers of nonprofit corporations.

• Failure to Support Rehearing Claims: The ALJ noted a complete lack of new evidence to justify the rehearing.

• Final Outcome: The petition was again denied. The order was made final and binding, with any further appeal requiring judicial review in superior court.






Study Guide – 20F-H2020049-REL-RHG


Study Guide: Stoltenberg v. Rancho Del Oro Homeowners Association

Short-Answer Quiz

Instructions: Answer the following questions in 2-3 complete sentences, based entirely on the provided legal documents.

1. Who are the two primary parties in case No. 20F-H2020049-REL, and what are their respective roles?

2. What was the specific allegation Michael Stoltenberg made against the Rancho Del Oro Homeowners Association in his petition?

3. Why did the Petitioner, beginning in November 2019, change the way he mailed his monthly assessment payments?

4. What is the specific subject of Section 14.8 of the Association’s Covenants, Conditions, and Restrictions (CC&Rs)?

5. What were the consequences for the Petitioner each time the Association received his monthly assessment payment late?

6. According to the Administrative Law Judge, why was Section 14.8 of the CC&Rs inapplicable to the facts of this case?

7. What was the legal standard of proof the Petitioner was required to meet, and what is its definition?

8. On what grounds did the Petitioner request and receive a rehearing after the initial decision was issued?

9. Why did the Administrative Law Judge dismiss the Petitioner’s argument regarding Arizona Revised Statutes § 10-3842 during the rehearing?

10. What was the final outcome of both the initial hearing on July 14, 2020, and the rehearing on February 16, 2021?

——————————————————————————–

Quiz Answer Key

1. The primary parties are Michael J Stoltenberg, the “Petitioner,” and the Rancho Del Oro Homeowners Association, the “Respondent.” The Petitioner is a condominium owner and member of the Association who filed a petition alleging violations, while the Respondent is the homeowners’ association that governs the development.

2. The Petitioner alleged that the Association was in violation of Arizona Revised Statutes §§ 10-3842 and 10-801, and section 14.8 of the Association’s CC&Rs. Specifically, he alleged that the Association “fail to do their job, and are acting in bad faith.”

3. The Petitioner changed his mailing method because he believed an agent of the Association’s property management company had thrown away one of his mailed payments. As a result, he began sending payments via restricted delivery by the USPS, for board member Rhea Carlisle’s pickup only.

4. Section 14.8, titled “Notices,” pertains to any notice permitted or required by the Declaration or Bylaws. It specifically addresses the Association’s notice obligation to its members when mailing them information, outlining when such notices are deemed delivered.

5. Each time the Petitioner’s monthly assessment was received late, he was assessed a late fee by the Association. Additionally, each late payment occurrence put his residence in danger of foreclosure by the Association.

6. The Judge concluded Section 14.8 was inapplicable because its language speaks specifically to the Association’s obligation to provide notice to its members. The section has no binding authority or control over homeowners sending mail to the Association.

7. The Petitioner was required to prove his case by a “preponderance of the evidence.” This standard is defined as “proof as convinces the trier of fact that the contention is more probably true than not,” or evidence with the most convincing force that inclines an impartial mind to one side of an issue.

8. The Petitioner’s rehearing request was granted on the grounds that there was an alleged “Error in the admission or rejection of evidence or other errors of law occurring during the proceeding.” He also claimed that the initial findings of fact or decision were “arbitrary, capricious, or an abuse of discretion.”

9. The argument regarding ARIZ. REV. STAT. § 10-3842, which concerns standards of conduct for officers, was dismissed because it falls outside of the Department of Real Estate’s jurisdiction. The Petitioner had been advised of the Department’s jurisdictional limitations when he first filed his petition.

10. In both the initial decision (dated August 03, 2020) and the final order after the rehearing (dated March 08, 2021), the Administrative Law Judge denied the Petitioner’s petition. The Judge concluded in both instances that the Petitioner failed to sustain his burden of proof.

——————————————————————————–

Essay Questions

Instructions: The following questions are designed to be answered in a detailed essay format, synthesizing information from across the provided documents. Answers are not provided.

1. Analyze the legal reasoning used by Administrative Law Judge Jenna Clark to deny the Petitioner’s claims in both the initial hearing and the rehearing. Discuss the interpretation of CC&R Section 14.8, the concept of burden of proof, and jurisdictional limitations.

2. Trace the complete procedural history of case No. 20F-H2020049-REL from the filing of the petition to the final order. Include all key dates, actions taken by the parties and the Department, and the specific reasons for each major step, such as the granting of the rehearing.

3. Evaluate the actions taken by the Petitioner, Michael Stoltenberg, regarding his assessment payments. Explain why his unilateral decision to use restricted mail delivery, despite being aware of the Association’s procedures, ultimately caused the negative outcomes he sought to avoid.

4. Explain the contractual relationship between a homeowners’ association and a property owner as described in the legal documents. How do the CC&Rs function as an enforceable contract, and how was this concept central to the dispute?

5. Discuss the roles and authorities of the Arizona Department of Real Estate and the Office of Administrative Hearings (OAH) in resolving HOA disputes, as demonstrated by this case. What are their powers, and what specific limitations on their jurisdiction are identified in the text?

——————————————————————————–

Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official who presides over the evidentiary hearing at the Office of Administrative Hearings and issues findings of fact, conclusions of law, and an order. In this case, the ALJ was Jenna Clark.

Arizona Department of Real Estate (Department)

The state agency authorized by statute to receive and decide petitions for hearings from members of homeowners’ associations in Arizona.

ARIZ. REV. STAT.

Abbreviation for Arizona Revised Statutes, which are the codified laws of the state of Arizona.

Association

The Rancho Del Oro Homeowners Association, a condominium association whose membership is comprised of the condominium owners in the Rancho Del Oro residential real estate development in Yuma, Arizona.

Board of Directors (the Board)

The body that oversees the Homeowners Association.

Burden of Proof

The obligation of a party in a legal proceeding to prove their contention. In this case, the Petitioner bore the burden of proving the Respondent violated the CC&Rs.

An abbreviation for the Declaration of Covenants, Conditions and Restrictions. These governing documents form an enforceable contract between the Association and each property owner, empowering the Association to control certain aspects of property use.

Office of Administrative Hearings (OAH)

An independent state agency to which the Department of Real Estate refers matters for an evidentiary hearing. The OAH has the authority to hear and decide contested cases and interpret the contract (CC&Rs) between parties.

Petitioner

The party who files a petition initiating a legal action. In this case, Michael J Stoltenberg, a homeowner and member of the Association.

Preponderance of the Evidence

The standard of proof required in this proceeding. It is defined as “proof as convinces the trier of fact that the contention is more probably true than not” and is considered the “greater weight of the evidence.”

Respondent

The party against whom a petition is filed. In this case, the Rancho Del Oro Homeowners Association.

Statutory Agent

An individual listed as an official agent for an entity. For the years 2019 and 2020, Diana Crites was listed as the Association’s Statutory Agent.

Abbreviation for the United States Postal Service.






Blog Post – 20F-H2020049-REL-RHG


Study Guide: Stoltenberg v. Rancho Del Oro Homeowners Association

Short-Answer Quiz

Instructions: Answer the following questions in 2-3 complete sentences, based entirely on the provided legal documents.

1. Who are the two primary parties in case No. 20F-H2020049-REL, and what are their respective roles?

2. What was the specific allegation Michael Stoltenberg made against the Rancho Del Oro Homeowners Association in his petition?

3. Why did the Petitioner, beginning in November 2019, change the way he mailed his monthly assessment payments?

4. What is the specific subject of Section 14.8 of the Association’s Covenants, Conditions, and Restrictions (CC&Rs)?

5. What were the consequences for the Petitioner each time the Association received his monthly assessment payment late?

6. According to the Administrative Law Judge, why was Section 14.8 of the CC&Rs inapplicable to the facts of this case?

7. What was the legal standard of proof the Petitioner was required to meet, and what is its definition?

8. On what grounds did the Petitioner request and receive a rehearing after the initial decision was issued?

9. Why did the Administrative Law Judge dismiss the Petitioner’s argument regarding Arizona Revised Statutes § 10-3842 during the rehearing?

10. What was the final outcome of both the initial hearing on July 14, 2020, and the rehearing on February 16, 2021?

——————————————————————————–

Quiz Answer Key

1. The primary parties are Michael J Stoltenberg, the “Petitioner,” and the Rancho Del Oro Homeowners Association, the “Respondent.” The Petitioner is a condominium owner and member of the Association who filed a petition alleging violations, while the Respondent is the homeowners’ association that governs the development.

2. The Petitioner alleged that the Association was in violation of Arizona Revised Statutes §§ 10-3842 and 10-801, and section 14.8 of the Association’s CC&Rs. Specifically, he alleged that the Association “fail to do their job, and are acting in bad faith.”

3. The Petitioner changed his mailing method because he believed an agent of the Association’s property management company had thrown away one of his mailed payments. As a result, he began sending payments via restricted delivery by the USPS, for board member Rhea Carlisle’s pickup only.

4. Section 14.8, titled “Notices,” pertains to any notice permitted or required by the Declaration or Bylaws. It specifically addresses the Association’s notice obligation to its members when mailing them information, outlining when such notices are deemed delivered.

5. Each time the Petitioner’s monthly assessment was received late, he was assessed a late fee by the Association. Additionally, each late payment occurrence put his residence in danger of foreclosure by the Association.

6. The Judge concluded Section 14.8 was inapplicable because its language speaks specifically to the Association’s obligation to provide notice to its members. The section has no binding authority or control over homeowners sending mail to the Association.

7. The Petitioner was required to prove his case by a “preponderance of the evidence.” This standard is defined as “proof as convinces the trier of fact that the contention is more probably true than not,” or evidence with the most convincing force that inclines an impartial mind to one side of an issue.

8. The Petitioner’s rehearing request was granted on the grounds that there was an alleged “Error in the admission or rejection of evidence or other errors of law occurring during the proceeding.” He also claimed that the initial findings of fact or decision were “arbitrary, capricious, or an abuse of discretion.”

9. The argument regarding ARIZ. REV. STAT. § 10-3842, which concerns standards of conduct for officers, was dismissed because it falls outside of the Department of Real Estate’s jurisdiction. The Petitioner had been advised of the Department’s jurisdictional limitations when he first filed his petition.

10. In both the initial decision (dated August 03, 2020) and the final order after the rehearing (dated March 08, 2021), the Administrative Law Judge denied the Petitioner’s petition. The Judge concluded in both instances that the Petitioner failed to sustain his burden of proof.

——————————————————————————–

Essay Questions

Instructions: The following questions are designed to be answered in a detailed essay format, synthesizing information from across the provided documents. Answers are not provided.

1. Analyze the legal reasoning used by Administrative Law Judge Jenna Clark to deny the Petitioner’s claims in both the initial hearing and the rehearing. Discuss the interpretation of CC&R Section 14.8, the concept of burden of proof, and jurisdictional limitations.

2. Trace the complete procedural history of case No. 20F-H2020049-REL from the filing of the petition to the final order. Include all key dates, actions taken by the parties and the Department, and the specific reasons for each major step, such as the granting of the rehearing.

3. Evaluate the actions taken by the Petitioner, Michael Stoltenberg, regarding his assessment payments. Explain why his unilateral decision to use restricted mail delivery, despite being aware of the Association’s procedures, ultimately caused the negative outcomes he sought to avoid.

4. Explain the contractual relationship between a homeowners’ association and a property owner as described in the legal documents. How do the CC&Rs function as an enforceable contract, and how was this concept central to the dispute?

5. Discuss the roles and authorities of the Arizona Department of Real Estate and the Office of Administrative Hearings (OAH) in resolving HOA disputes, as demonstrated by this case. What are their powers, and what specific limitations on their jurisdiction are identified in the text?

——————————————————————————–

Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official who presides over the evidentiary hearing at the Office of Administrative Hearings and issues findings of fact, conclusions of law, and an order. In this case, the ALJ was Jenna Clark.

Arizona Department of Real Estate (Department)

The state agency authorized by statute to receive and decide petitions for hearings from members of homeowners’ associations in Arizona.

ARIZ. REV. STAT.

Abbreviation for Arizona Revised Statutes, which are the codified laws of the state of Arizona.

Association

The Rancho Del Oro Homeowners Association, a condominium association whose membership is comprised of the condominium owners in the Rancho Del Oro residential real estate development in Yuma, Arizona.

Board of Directors (the Board)

The body that oversees the Homeowners Association.

Burden of Proof

The obligation of a party in a legal proceeding to prove their contention. In this case, the Petitioner bore the burden of proving the Respondent violated the CC&Rs.

An abbreviation for the Declaration of Covenants, Conditions and Restrictions. These governing documents form an enforceable contract between the Association and each property owner, empowering the Association to control certain aspects of property use.

Office of Administrative Hearings (OAH)

An independent state agency to which the Department of Real Estate refers matters for an evidentiary hearing. The OAH has the authority to hear and decide contested cases and interpret the contract (CC&Rs) between parties.

Petitioner

The party who files a petition initiating a legal action. In this case, Michael J Stoltenberg, a homeowner and member of the Association.

Preponderance of the Evidence

The standard of proof required in this proceeding. It is defined as “proof as convinces the trier of fact that the contention is more probably true than not” and is considered the “greater weight of the evidence.”

Respondent

The party against whom a petition is filed. In this case, the Rancho Del Oro Homeowners Association.

Statutory Agent

An individual listed as an official agent for an entity. For the years 2019 and 2020, Diana Crites was listed as the Association’s Statutory Agent.

Abbreviation for the United States Postal Service.


Case Participants

Petitioner Side

  • Michael J Stoltenberg (petitioner)
    Rancho Del Oro condominium owner
    Appeared on his own behalf,

Respondent Side

  • Nicole Payne (HOA attorney)
    Carpenter, Hazlewood, Delgado & Bolen, LLP
    Appeared on behalf of Rancho Del Oro Homeowners Association,,
  • Rhea Carlisle (board member)
    Rancho Del Oro Homeowners Association
    Unpaid volunteer board member; Petitioner directed mail specifically to her,,,
  • Diana Crites (statutory agent)
    Rancho Del Oro Homeowners Association
    Statutory Agent for 2019 and 2020,
  • Lydia Peirce (HOA attorney staff/contact)
    Linsmeier Carpenter, Hazlewood, Delgado & Bolen, LLP
    Listed as contact for Respondent in 2020 decision transmission

Neutral Parties

  • Jenna Clark (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (ADRE commissioner)
    Arizona Department of Real Estate
    Commissioner receiving the OAH order,
  • Dan Gardner (HOA coordinator)
    Arizona Department of Real Estate
    HOA Coordinator contact for the Commissioner

Jay Janicek vs. Sycamore Vista No. 8 HOA

Posted on by

Case Summary

Case ID 17F-H1716019-REL
Agency ADRE
Tribunal OAH
Decision Date 2017-03-14
Administrative Law Judge Suzanne Marwil
Outcome partial
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Jay Janicek Counsel —
Respondent Sycamore Vista No. 8 HOA Counsel Evan Thomson, Esq.

Alleged Violations

A.R.S. § 33-1817

Outcome Summary

The Petitioner's petition was granted. The HOA violated A.R.S. § 33-1817 by invalidly adopting the 'Declaration of Scrivener's Error' (Exhibit C) as an amendment without the required lot owner vote. However, the $10.00 annual increased assessment that Petitioner objected to was permitted to stand because the authority for differential assessments was established by the valid First Amendment to the Declaration, independent of the invalid Exhibit C. The HOA was ordered to refund the Petitioner's $500 filing fee.

Why this result: Petitioner objected to the increased assessment resulting from Exhibit C, but the Tribunal determined that Respondent had the right to impose the increased assessment pursuant to the language of Section 6.8 in the valid First Amendment to the Declaration, regardless of the invalidity of Exhibit C.

Key Issues & Findings

Improper Amendment of Declaration (Declaration of Scrivener's Error)

Petitioner claimed Respondent HOA improperly adopted a Declaration of Scrivener's Error (Exhibit C) to revise the definition of developed/undeveloped lots, arguing it was a substantive amendment requiring a 75% lot owner vote, which Respondent failed to obtain.

Orders: The Tribunal found that Exhibit C constituted an amendment and Respondent violated A.R.S. § 33-1817 by adopting it without a vote. Exhibit C was deemed invalid, but this invalidity did not nullify the subsequent assessment increase, which was authorized by a prior, valid declaration amendment. Respondent was ordered to refund the filing fee.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1817
  • A.R.S. § 32-2199 et seq.

Analytics Highlights

Topics: HOA Declaration Amendment, Scrivener's Error, Assessments, Statutory Violation
Additional Citations:

  • A.R.S. § 33-1817
  • A.R.S. § 32-2199.02
  • A.R.S. § 33-1811

Video Overview

Audio Overview

Decision Documents

17F-H1716019-REL Decision – 551057.pdf

Uploaded 2026-01-23T17:18:45 (83.7 KB)

17F-H1716019-REL Decision – 559875.pdf

Uploaded 2026-01-23T17:18:51 (794.0 KB)





Briefing Doc – 17F-H1716019-REL


Briefing Document: Janicek v. Sycamore Vista No. 8 HOA

Executive Summary

This briefing document analyzes the administrative legal dispute between petitioner Jay Janicek and respondent Sycamore Vista No. 8 Homeowners Association (HOA), culminating in the case No. 17F-H1716019-REL. The core of the conflict was the HOA Board’s attempt to amend its governing Declaration via a “Declaration of Scrivener’s Error” without the required 75% vote from lot owners. This action was intended to reinsert a definition of “Completed Lots” that had been omitted from a 2009 amendment and was followed by a $10 annual assessment increase on developed lots.

The Administrative Law Judge (ALJ) ultimately ruled in favor of the petitioner, granting his petition and invalidating the “Declaration of Scrivener’s Error.” The judge found that the change was a substantive amendment, not a correction of a clerical error, and the Board’s unilateral action violated Arizona state law (A.R.S. § 33-1817). However, in a critical distinction, the ALJ ruled that the $10 assessment increase on developed lots was permissible and should stand, as the authority to set different rates for completed and uncompleted lots was already established in the valid 2009 First Amendment to the Declaration.

The judge also rejected the petitioner’s conflict of interest claim against three Board members with financial ties to the developer, deeming the petitioner’s interpretation of the relevant statute (A.R.S. § 33-1811) to be overbroad. The final order, adopted by the Arizona Department of Real Estate Commissioner, required the HOA to pay the petitioner’s $500 filing fee and to comply with state statutes regarding amendments and conflicts of interest in the future.

Case Details

Details

Case Name

Jay Janicek, Petitioner, vs. Sycamore Vista No. 8 HOA, Respondent

Case Number

HO 17-16/019

Docket Number

17F-H1716019-REL

Jurisdiction

Office of Administrative Hearings / Arizona Department of Real Estate

Petitioner

Jay Janicek (appeared personally)

Respondent

Sycamore Vista No. 8 HOA (represented by Evan Thomson, Esq.)

Administrative Law Judge

Suzanne Marwil

Hearing Date

March 2, 2017

ALJ Decision Date

March 14, 2017

Final Order Date

March 16, 2017

Commissioner

Judy Lowe, Commissioner, Arizona Department of Real Estate

Background and Core Dispute

The conflict originated from changes to the Sycamore Vista No. 8 HOA’s Declaration of Covenants, Conditions, Restrictions and Easements (Declaration).

• 2005 Declaration: The original “2005 Amended and Restated Declaration” contained Section 6.8, which established a uniform assessment rate for all lots. Crucially, it exempted the Declarant and Developer from payments on any property except for “Completed Lots.” This section provided a specific definition for “Completed Lots,” describing them as any lot with a dwelling unit ready for occupancy.

• 2009 First Amendment: On December 4, 2008, after securing a vote from 75% of lot owners, the HOA adopted the “First Amendment to the 2005 Declaration.” This amendment deleted the original Section 6.8 in its entirety and replaced it with new language stating: “annual dues may be assessed at one uniform rate for Completed Lots and a different uniform rate for Uncompleted Lots.” This amendment, however, omitted the definition of a “Completed Lot” that was present in the 2005 version.

• Seven-Year Period: For seven years following the 2009 amendment, the revised Section 6.8 remained unchanged, without the specific definition.

The “Declaration of Scrivener’s Error”

In June or July 2016, the HOA Board proposed a “Declaration of Scrivener’s Error” to address the omitted definition.

• Board’s Position: The Respondent, represented by its president Steven Russo, argued that the purpose of the declaration was simply to correct a clerical error by reinserting the definition of a developed versus undeveloped lot, which was “inadvertently omitted” from the 2009 First Amendment. The Board stated it was acting on the advice of its legal counsel.

• Petitioner’s Position: Mr. Janicek contended that this declaration was not a correction of a minor error but was a substantive change to the Declaration. As such, he argued it required the approval of 75% of the lot owners, a process that was not followed.

• Adoption: On August 3, 2016, the Board adopted the Declaration of Scrivener’s Error by a 3-2 vote. Petitioner Janicek and another Board member representing developed lot owners voted against the measure.

• Immediate Consequence: Following the adoption, the Board voted to increase the annual assessment for developed lot owners by $10.00, while the assessment for undeveloped lots remained unchanged. This action prompted Mr. Janicek to file his petition.

Allegations of Fiduciary Duty and Conflict of Interest

Petitioner Janicek accused the Respondent of a violation of its fiduciary duty and a conflict of interest. He noted that three members of the Board had a financial interest in NT Properties, the company that owned the community’s undeveloped lots. These lots directly benefited from the assessment structure that placed a higher burden on developed lots.

Administrative Law Judge’s Decision and Rationale

The ALJ’s decision, issued on March 14, 2017, contained three central conclusions of law that addressed the distinct issues raised in the petition.

1. The “Scrivener’s Error” was an Invalid Amendment

The judge found decisively in favor of the petitioner on the core issue of the amendment process.

• Substantive Change, Not Clerical Error: The Tribunal found that the change constituted an amendment to the Declaration, not a correction of a simple clerical error.

• Violation of A.R.S. § 33-1817: The judge ruled that the procedure for amending the Declaration requires a vote by the lot owners, as specified in the Declaration and state law. The HOA violated this statute by attempting to amend the document via a simple Board vote.

• Key Judicial Reasoning: The judge noted that the same section had been properly amended by a homeowner vote in 2009. The ruling states, “after a period of seven years, it defies logic to suggest that a further change to section was simply a clerical error.”

• Conclusion: The Declaration of Scrivener’s Error (Exhibit C) was declared invalid and could not operate to amend the Declaration.

2. The Assessment Increase Was Valid

Despite invalidating the method used by the Board, the judge upheld the Board’s right to implement the assessment increase.

• Existing Authority: The ruling stated that the invalidity of Exhibit C “does not implicate Respondent’s right to impose an increased assessment on the developed lots.”

• Basis in 2009 Amendment: The judge found that the language of the valid 2009 First Amendment—which expressly states that “annual dues may be assessed at one uniform rate for Completed Lots and a different uniform rate for Uncompleted Lots”—provided the Board with sufficient authority to set differential rates.

• Conclusion: The raised assessment was allowed to stand.

3. Conflict of Interest Claim Rejected

The Tribunal rejected the petitioner’s argument that Board members with ties to NT Properties had a conflict of interest under A.R.S. § 33-1811.

• “Overbroad” Interpretation: The judge found the petitioner’s interpretation of the conflict-of-interest statute to be “overbroad.”

• Rationale: The ruling stated that this interpretation “ignores that make-up of the Board as outlined in the Declaration and disregards the express language permitting the Board to assess annual dues.”

• Conclusion: The Board members were not required to declare a conflict of interest and were permitted to vote on the issue.

Final Order

The petition filed by Jay Janicek was granted. The Administrative Law Judge’s decision was officially adopted by the Commissioner of the Arizona Department of Real Estate in a Final Order dated March 16, 2017. The final order mandated the following:

• The Sycamore Vista No. 8 HOA must pay the petitioner, Jay Janicek, the $500.00 filing fee.

• The HOA must comply with the applicable provisions of Arizona Revised Statutes § 33-1817 (regarding the proper procedure for amending a declaration) and § 33-1811 (regarding conflicts of interest) in the future.






Study Guide – 17F-H1716019-REL


Study Guide: Janicek v. Sycamore Vista No. 8 HOA

This study guide provides a review of the administrative law case Janicek v. Sycamore Vista No. 8 HOA (No. 17F-H1716019-REL). It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms to aid in understanding the facts, arguments, and legal conclusions of the case.

Short-Answer Quiz

Instructions: Answer the following questions in 2-3 complete sentences, based on the information provided in the source documents.

1. Who were the primary parties in this case, and what were their roles?

2. What was the central action taken by the Respondent’s Board that led to this legal dispute?

3. What was the Petitioner’s primary legal argument against the “Declaration of Scrivener’s Error”?

4. How did the Respondent justify its use of a “Declaration of Scrivener’s Error” instead of a full vote by lot owners?

5. Describe the conflict of interest alleged by the Petitioner against the Respondent’s Board.

6. How did the 2009 First Amendment alter Section 6.8 of the HOA’s 2005 Declaration?

7. What was the direct financial consequence for developed lot owners following the Board’s actions in 2016?

8. What was the Administrative Law Judge’s final ruling regarding the validity of the “Declaration of Scrivener’s Error”?

9. Despite invalidating the Board’s action, what did the Judge decide regarding the increased assessment on developed lots?

10. What was the final order issued in the case, and what was the Respondent required to do?

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Answer Key

1. The primary parties were Petitioner Jay Janicek and Respondent Sycamore Vista No. 8 HOA. Janicek, a lot owner, brought the petition against the Homeowner’s Association to challenge a decision made by its Board of Directors.

2. The Respondent’s Board, by a 3-2 vote, adopted a “Declaration of Scrivener’s Error” on August 3, 2016. This action was intended to reinsert a definition of “Completed Lots” that had been omitted from a 2009 amendment to the HOA’s governing documents.

3. The Petitioner argued that the “Declaration of Scrivener’s Error” was not a simple correction but a substantive change to the Declaration. As such, he contended it was an amendment that required approval by a vote of seventy-five percent of the lot owners, not just a Board vote.

4. The Respondent argued that the “Declaration of Scrivener’s Error” was merely intended to correct a clerical error by reinserting the definition of developed versus undeveloped lots, which was inadvertently deleted from the 2009 revision. The Board’s President, Steven Russo, testified that they acted on the recommendation of their legal counsel.

5. The Petitioner alleged a conflict of interest because three members of the Respondent’s Board had a financial interest in NT Properties, the company that owns the undeveloped lots. The Petitioner argued that these members stood to benefit from assessment changes that favored undeveloped lots.

6. The 2009 First Amendment deleted the original Section 6.8 and replaced it with new language. This new language explicitly allowed annual dues to be assessed at different uniform rates for “Completed Lots” and “Uncompleted Lots,” a distinction not present in the original uniform rate structure.

7. Following the adoption of the “Declaration of Scrivener’s Error,” the Board voted to increase the annual assessment for developed lot owners by $10.00. The assessment for undeveloped lots was left unchanged.

8. The Administrative Law Judge ruled that the “Declaration of Scrivener’s Error” was an invalid amendment to the Declaration. The Judge found that it was a substantive change that required a vote of the lot owners as specified in A.R.S. §33-1817, and that calling it a correction of a clerical error after seven years “defies logic.”

9. The Judge ruled that the increased assessment on developed lots could stand. The ruling was based on the language of the valid 2009 First Amendment, which expressly permitted the HOA to assess different rates for completed and uncompleted lots, independent of the invalidated “Declaration of Scrivener’s Error.”

10. The final order granted the Petitioner’s petition. The Respondent, Sycamore Vista No. 8 HOA, was ordered to pay the Petitioner the filing fee required by section 32-2199.01.

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Essay Questions

Instructions: Consider the following questions. Formulate a comprehensive response drawing upon the specific facts, legal arguments, and conclusions presented in the case documents.

1. Analyze the legal reasoning behind the Administrative Law Judge’s decision to invalidate the “Declaration of Scrivener’s Error” while simultaneously upholding the increased assessment on developed lots. Explain how both parts of this ruling were supported by different governing documents.

2. Discuss the conflict of interest allegation raised by Jay Janicek under A.R.S. § 33-1811. Why did the Tribunal ultimately reject this argument, and what does this rejection imply about the Board’s authority to set assessments under the Declaration?

3. Trace the evolution of Section 6.8 of the Declaration from the original 2005 version, through the 2009 First Amendment, to the attempted 2016 change. Explain the significance of the “Completed Lots” definition and how its omission and attempted reinsertion became the central point of the dispute.

4. Evaluate the Respondent’s argument that it was simply correcting an inadvertent clerical error. What evidence and reasoning did the Administrative Law Judge use to conclude that this was, in fact, an improper amendment?

5. Describe the legal requirements for amending an HOA declaration as outlined in A.R.S. § 33-1817. Explain precisely how the actions of the Sycamore Vista No. 8 HOA Board violated this statute.

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The presiding judge in the administrative hearing, in this case, Suzanne Marwil. The ALJ hears evidence and issues a decision based on the facts and applicable laws.

A.R.S. § 33-1811

An Arizona Revised Statute cited in the case that addresses conflicts of interest for members of an HOA board of directors. The Tribunal found the Petitioner’s interpretation of this statute to be overbroad.

A.R.S. § 33-1817

An Arizona Revised Statute cited in the case that outlines the legal requirements and procedures for amending an HOA’s declaration. The ALJ found the Respondent violated this statute.

Completed Lots

As defined in the original 2005 Declaration, this refers to any lot with a dwelling unit ready for occupancy, including installed carpets, cabinets, plumbing, etc. This definition was central to the dispute.

Declaration of Covenants, Conditions, Restrictions and Easements (Declaration)

The primary governing legal document of the Sycamore Vista No. 8 HOA, which outlines the rules, assessments, and rights of the property owners.

Declaration of Scrivener’s Error

The legal instrument adopted by the Respondent’s Board in a 3-2 vote on August 3, 2016. It was purported to correct a clerical error but was ruled to be an invalid substantive amendment to the Declaration.

First Amendment

The amendment to the 2005 Declaration adopted on December 4, 2008, after a vote of 75% of the lot owners. It changed Section 6.8 to allow for different assessment rates for completed and uncompleted lots but inadvertently omitted the definition of a “Completed Lot.”

NT Properties

A company with a financial interest in the undeveloped lots within the HOA. Three members of the Respondent’s Board also had a financial interest in this company, forming the basis of a conflict of interest allegation.

Petitioner

The party who filed the petition initiating the legal action. In this case, Jay Janicek.

Respondent

The party against whom the petition was filed. In this case, Sycamore Vista No. 8 HOA.

Tribunal

A term used within the decision to refer to the adjudicating body, specifically the Office of Administrative Hearings and the presiding Administrative Law Judge.

Uniform Rate of Assessment

A principle laid out in the 2005 Declaration requiring that annual and special assessments be fixed at a uniform rate for all lots. This was modified by the 2009 First Amendment.






Blog Post – 17F-H1716019-REL


He Sued His HOA and Won. Here’s Why He Still Had to Pay.

Introduction: The David vs. Goliath of Neighborhood Disputes

For many homeowners, the relationship with their Homeowners’ Association (HOA) can feel like a constant source of tension. It’s a world of rules, fees, and board decisions that can seem arbitrary or unfair. So when a single homeowner decides to take on their entire HOA in a legal battle, it feels like a classic David vs. Goliath story. This is one of those stories—about a homeowner who challenged an improper rule change and an unexpected fee increase. He took his HOA to court and, on paper, he won. But as he discovered, the outcome was far more surprising and nuanced than a simple victory.

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1. You Can’t Fix a Seven-Year-Old “Mistake” with a Simple Board Vote.

The core of the dispute began when the Sycamore Vista No. 8 HOA tried to amend its governing documents with a “Declaration of Scrivener’s Error.” Their goal was to reinsert definitions of “Completed Lots” versus “Undeveloped Lots” that they claimed had been “inadvertently deleted” from a revision seven years prior.

Instead of seeking approval from the homeowners, the Board of Directors passed this “correction” on August 3, 2016, with a simple 3-2 vote. This procedural shortcut triggered the legal challenge.

The Administrative Law Judge unequivocally rejected the HOA’s move. The judge’s reasoning was sharp and logical: the seven-year gap since the original amendment was a critical factor. The sheer passage of time had transformed what the HOA called a clerical correction into what the law considered a substantive change. As such, it required a vote by 75% of the lot owners, not a simple board action.

The judge’s decision underscored this point with a powerful rebuke:

…after a period of seven years, it defies logic to suggest that a further change to section was simply a clerical error.

This finding was a crucial victory for the homeowner. It affirmed that HOAs must follow the proper procedures outlined in their own governing documents and cannot use shortcuts to rewrite history, no matter how they frame their intentions.

——————————————————————————–

2. A Legal “Win” Doesn’t Always Mean You Get the Financial Outcome You Want.

Even though the judge invalidated the HOA’s “Declaration of Scrivener’s Error,” she made another, more surprising ruling: the $10.00 annual assessment increase on developed lots—the very fee that sparked the lawsuit—was valid and would stand.

The legal reasoning was buried in the fine print of the HOA’s own documents. A different amendment, one legally passed with a 75% homeowner vote on December 4, 2008, already gave the Board the explicit authority to set different assessment rates. The key language in that valid amendment stated, “annual dues may be assessed at one uniform rate for Completed Lots and a different uniform rate for Uncompleted Lots.”

This created the central irony of the case: the HOA took a legally improper path to arrive at a destination they already had a legal right to reach. Interestingly, the HOA board president testified they were acting on the advice of their counsel, suggesting this was less a malicious act and more of a costly legal misstep.

The petitioner, Jay Janicek, won his case on principle. The judge’s order granted his petition and even awarded him his $500.00 filing fee. But he lost on the practical financial issue that started the dispute. The $10 increase remained. It’s a stark illustration of how complex legal documents can be, where one legally sound clause can override a victory on another front.

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3. Proving a Conflict of Interest Is Harder Than It Looks.

The homeowner also accused the board of a conflict of interest. He pointed out that three members of the five-person board had a financial stake in NT Properties, the company that owned the community’s undeveloped lots. These were the very lots that benefited from the new assessment structure, as their fees remained unchanged while only the developed lots saw the $10 increase. On the surface, it appeared to be a clear-cut case of self-dealing.

However, the judge rejected this claim, ruling that the petitioner’s interpretation of the conflict of interest statute was “overbroad.” The judge’s analysis provided a crucial distinction: the board members were not inventing a new power for their own benefit; they were exercising a power explicitly granted to the Board by the homeowners themselves in the 2009 Declaration. The ruling noted that the petitioner’s argument “disregards the express language permitting the Board to assess annual dues.”

This takeaway is a sobering one for homeowners. It demonstrates that what might look like a glaring conflict of interest to a layperson may not meet the specific legal standard required to invalidate a board’s actions, especially when those actions fall within the powers already granted by the community’s governing documents.

——————————————————————————–

Conclusion: A Victory of Principle

In the end, the homeowner walked away with a strange and dual outcome. He successfully proved his HOA acted improperly by trying to amend its rules without a proper vote, yet he could not reverse the financial consequence that drove him to file the suit. The case stands as a powerful reminder for all homeowners: understanding both the procedural rules your HOA must follow and the precise wording hidden deep within its governing documents is absolutely critical. This ruling created a clear divide between procedural justice and financial reality.

This case was a victory of principle over practice—how much is a principle worth when the bottom line doesn’t change?


Case Participants

Petitioner Side

  • Jay Janicek (petitioner)

Respondent Side

  • Evan Thomson (attorney)
    Represented Respondent
  • Steven Russo (board member)
    Sycamore Vista No. 8 HOA
    President of Respondent; testified
  • Dane Dehler (attorney)
    Thompson Kron, P.L.C.
    Received copy of final order
  • Whitney Cunningham (HOA contact)
    Sycamore Vista No. 8 HOA
    Received copy of final order c/o

Neutral Parties

  • Suzanne Marwil (ALJ)
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
  • Abby Hansen (HOA Coordinator)
    Recipient for rehearing request

Jay Janicek vs. Sycamore Vista No. 8 HOA

Posted on by

Case Summary

Case ID 17F-H1716019-REL
Agency ADRE
Tribunal OAH
Decision Date 2017-03-14
Administrative Law Judge Suzanne Marwil
Outcome partial
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Jay Janicek Counsel —
Respondent Sycamore Vista No. 8 HOA Counsel Evan Thomson, Esq.

Alleged Violations

A.R.S. § 33-1817

Outcome Summary

The Petitioner's petition was granted. The HOA violated A.R.S. § 33-1817 by invalidly adopting the 'Declaration of Scrivener's Error' (Exhibit C) as an amendment without the required lot owner vote. However, the $10.00 annual increased assessment that Petitioner objected to was permitted to stand because the authority for differential assessments was established by the valid First Amendment to the Declaration, independent of the invalid Exhibit C. The HOA was ordered to refund the Petitioner's $500 filing fee.

Why this result: Petitioner objected to the increased assessment resulting from Exhibit C, but the Tribunal determined that Respondent had the right to impose the increased assessment pursuant to the language of Section 6.8 in the valid First Amendment to the Declaration, regardless of the invalidity of Exhibit C.

Key Issues & Findings

Improper Amendment of Declaration (Declaration of Scrivener's Error)

Petitioner claimed Respondent HOA improperly adopted a Declaration of Scrivener's Error (Exhibit C) to revise the definition of developed/undeveloped lots, arguing it was a substantive amendment requiring a 75% lot owner vote, which Respondent failed to obtain.

Orders: The Tribunal found that Exhibit C constituted an amendment and Respondent violated A.R.S. § 33-1817 by adopting it without a vote. Exhibit C was deemed invalid, but this invalidity did not nullify the subsequent assessment increase, which was authorized by a prior, valid declaration amendment. Respondent was ordered to refund the filing fee.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1817
  • A.R.S. § 32-2199 et seq.

Analytics Highlights

Topics: HOA Declaration Amendment, Scrivener's Error, Assessments, Statutory Violation
Additional Citations:

  • A.R.S. § 33-1817
  • A.R.S. § 32-2199.02
  • A.R.S. § 33-1811

Audio Overview

Decision Documents

17F-H1716019-REL Decision – 551057.pdf

Uploaded 2025-10-08T06:57:11 (83.7 KB)

17F-H1716019-REL Decision – 559875.pdf

Uploaded 2025-10-08T06:57:12 (794.0 KB)





Briefing Doc – 17F-H1716019-REL


Briefing Document: Janicek v. Sycamore Vista No. 8 HOA

Executive Summary

This briefing document analyzes the administrative legal dispute between petitioner Jay Janicek and respondent Sycamore Vista No. 8 Homeowners Association (HOA), culminating in the case No. 17F-H1716019-REL. The core of the conflict was the HOA Board’s attempt to amend its governing Declaration via a “Declaration of Scrivener’s Error” without the required 75% vote from lot owners. This action was intended to reinsert a definition of “Completed Lots” that had been omitted from a 2009 amendment and was followed by a $10 annual assessment increase on developed lots.

The Administrative Law Judge (ALJ) ultimately ruled in favor of the petitioner, granting his petition and invalidating the “Declaration of Scrivener’s Error.” The judge found that the change was a substantive amendment, not a correction of a clerical error, and the Board’s unilateral action violated Arizona state law (A.R.S. § 33-1817). However, in a critical distinction, the ALJ ruled that the $10 assessment increase on developed lots was permissible and should stand, as the authority to set different rates for completed and uncompleted lots was already established in the valid 2009 First Amendment to the Declaration.

The judge also rejected the petitioner’s conflict of interest claim against three Board members with financial ties to the developer, deeming the petitioner’s interpretation of the relevant statute (A.R.S. § 33-1811) to be overbroad. The final order, adopted by the Arizona Department of Real Estate Commissioner, required the HOA to pay the petitioner’s $500 filing fee and to comply with state statutes regarding amendments and conflicts of interest in the future.

Case Details

Details

Case Name

Jay Janicek, Petitioner, vs. Sycamore Vista No. 8 HOA, Respondent

Case Number

HO 17-16/019

Docket Number

17F-H1716019-REL

Jurisdiction

Office of Administrative Hearings / Arizona Department of Real Estate

Petitioner

Jay Janicek (appeared personally)

Respondent

Sycamore Vista No. 8 HOA (represented by Evan Thomson, Esq.)

Administrative Law Judge

Suzanne Marwil

Hearing Date

March 2, 2017

ALJ Decision Date

March 14, 2017

Final Order Date

March 16, 2017

Commissioner

Judy Lowe, Commissioner, Arizona Department of Real Estate

Background and Core Dispute

The conflict originated from changes to the Sycamore Vista No. 8 HOA’s Declaration of Covenants, Conditions, Restrictions and Easements (Declaration).

• 2005 Declaration: The original “2005 Amended and Restated Declaration” contained Section 6.8, which established a uniform assessment rate for all lots. Crucially, it exempted the Declarant and Developer from payments on any property except for “Completed Lots.” This section provided a specific definition for “Completed Lots,” describing them as any lot with a dwelling unit ready for occupancy.

• 2009 First Amendment: On December 4, 2008, after securing a vote from 75% of lot owners, the HOA adopted the “First Amendment to the 2005 Declaration.” This amendment deleted the original Section 6.8 in its entirety and replaced it with new language stating: “annual dues may be assessed at one uniform rate for Completed Lots and a different uniform rate for Uncompleted Lots.” This amendment, however, omitted the definition of a “Completed Lot” that was present in the 2005 version.

• Seven-Year Period: For seven years following the 2009 amendment, the revised Section 6.8 remained unchanged, without the specific definition.

The “Declaration of Scrivener’s Error”

In June or July 2016, the HOA Board proposed a “Declaration of Scrivener’s Error” to address the omitted definition.

• Board’s Position: The Respondent, represented by its president Steven Russo, argued that the purpose of the declaration was simply to correct a clerical error by reinserting the definition of a developed versus undeveloped lot, which was “inadvertently omitted” from the 2009 First Amendment. The Board stated it was acting on the advice of its legal counsel.

• Petitioner’s Position: Mr. Janicek contended that this declaration was not a correction of a minor error but was a substantive change to the Declaration. As such, he argued it required the approval of 75% of the lot owners, a process that was not followed.

• Adoption: On August 3, 2016, the Board adopted the Declaration of Scrivener’s Error by a 3-2 vote. Petitioner Janicek and another Board member representing developed lot owners voted against the measure.

• Immediate Consequence: Following the adoption, the Board voted to increase the annual assessment for developed lot owners by $10.00, while the assessment for undeveloped lots remained unchanged. This action prompted Mr. Janicek to file his petition.

Allegations of Fiduciary Duty and Conflict of Interest

Petitioner Janicek accused the Respondent of a violation of its fiduciary duty and a conflict of interest. He noted that three members of the Board had a financial interest in NT Properties, the company that owned the community’s undeveloped lots. These lots directly benefited from the assessment structure that placed a higher burden on developed lots.

Administrative Law Judge’s Decision and Rationale

The ALJ’s decision, issued on March 14, 2017, contained three central conclusions of law that addressed the distinct issues raised in the petition.

1. The “Scrivener’s Error” was an Invalid Amendment

The judge found decisively in favor of the petitioner on the core issue of the amendment process.

• Substantive Change, Not Clerical Error: The Tribunal found that the change constituted an amendment to the Declaration, not a correction of a simple clerical error.

• Violation of A.R.S. § 33-1817: The judge ruled that the procedure for amending the Declaration requires a vote by the lot owners, as specified in the Declaration and state law. The HOA violated this statute by attempting to amend the document via a simple Board vote.

• Key Judicial Reasoning: The judge noted that the same section had been properly amended by a homeowner vote in 2009. The ruling states, “after a period of seven years, it defies logic to suggest that a further change to section was simply a clerical error.”

• Conclusion: The Declaration of Scrivener’s Error (Exhibit C) was declared invalid and could not operate to amend the Declaration.

2. The Assessment Increase Was Valid

Despite invalidating the method used by the Board, the judge upheld the Board’s right to implement the assessment increase.

• Existing Authority: The ruling stated that the invalidity of Exhibit C “does not implicate Respondent’s right to impose an increased assessment on the developed lots.”

• Basis in 2009 Amendment: The judge found that the language of the valid 2009 First Amendment—which expressly states that “annual dues may be assessed at one uniform rate for Completed Lots and a different uniform rate for Uncompleted Lots”—provided the Board with sufficient authority to set differential rates.

• Conclusion: The raised assessment was allowed to stand.

3. Conflict of Interest Claim Rejected

The Tribunal rejected the petitioner’s argument that Board members with ties to NT Properties had a conflict of interest under A.R.S. § 33-1811.

• “Overbroad” Interpretation: The judge found the petitioner’s interpretation of the conflict-of-interest statute to be “overbroad.”

• Rationale: The ruling stated that this interpretation “ignores that make-up of the Board as outlined in the Declaration and disregards the express language permitting the Board to assess annual dues.”

• Conclusion: The Board members were not required to declare a conflict of interest and were permitted to vote on the issue.

Final Order

The petition filed by Jay Janicek was granted. The Administrative Law Judge’s decision was officially adopted by the Commissioner of the Arizona Department of Real Estate in a Final Order dated March 16, 2017. The final order mandated the following:

• The Sycamore Vista No. 8 HOA must pay the petitioner, Jay Janicek, the $500.00 filing fee.

• The HOA must comply with the applicable provisions of Arizona Revised Statutes § 33-1817 (regarding the proper procedure for amending a declaration) and § 33-1811 (regarding conflicts of interest) in the future.


Jay Janicek vs. Sycamore Vista No. 8 HOA

Posted on by

Case Summary

Case ID 17F-H1716019-REL
Agency ADRE
Tribunal OAH
Decision Date 2017-03-14
Administrative Law Judge Suzanne Marwil
Outcome partial
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Jay Janicek Counsel —
Respondent Sycamore Vista No. 8 HOA Counsel Evan Thomson, Esq.

Alleged Violations

A.R.S. § 33-1817

Outcome Summary

The Petitioner's petition was granted. The HOA violated A.R.S. § 33-1817 by invalidly adopting the 'Declaration of Scrivener's Error' (Exhibit C) as an amendment without the required lot owner vote. However, the $10.00 annual increased assessment that Petitioner objected to was permitted to stand because the authority for differential assessments was established by the valid First Amendment to the Declaration, independent of the invalid Exhibit C. The HOA was ordered to refund the Petitioner's $500 filing fee.

Why this result: Petitioner objected to the increased assessment resulting from Exhibit C, but the Tribunal determined that Respondent had the right to impose the increased assessment pursuant to the language of Section 6.8 in the valid First Amendment to the Declaration, regardless of the invalidity of Exhibit C.

Key Issues & Findings

Improper Amendment of Declaration (Declaration of Scrivener's Error)

Petitioner claimed Respondent HOA improperly adopted a Declaration of Scrivener's Error (Exhibit C) to revise the definition of developed/undeveloped lots, arguing it was a substantive amendment requiring a 75% lot owner vote, which Respondent failed to obtain.

Orders: The Tribunal found that Exhibit C constituted an amendment and Respondent violated A.R.S. § 33-1817 by adopting it without a vote. Exhibit C was deemed invalid, but this invalidity did not nullify the subsequent assessment increase, which was authorized by a prior, valid declaration amendment. Respondent was ordered to refund the filing fee.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1817
  • A.R.S. § 32-2199 et seq.

Analytics Highlights

Topics: HOA Declaration Amendment, Scrivener's Error, Assessments, Statutory Violation
Additional Citations:

  • A.R.S. § 33-1817
  • A.R.S. § 32-2199.02
  • A.R.S. § 33-1811

Audio Overview

Decision Documents

17F-H1716019-REL Decision – 551057.pdf

Uploaded 2025-10-08T07:01:23 (83.7 KB)

17F-H1716019-REL Decision – 559875.pdf

Uploaded 2025-10-08T07:01:24 (794.0 KB)





Briefing Doc – 17F-H1716019-REL


Briefing Document: Janicek v. Sycamore Vista No. 8 HOA

Executive Summary

This briefing document analyzes the administrative legal dispute between petitioner Jay Janicek and respondent Sycamore Vista No. 8 Homeowners Association (HOA), culminating in the case No. 17F-H1716019-REL. The core of the conflict was the HOA Board’s attempt to amend its governing Declaration via a “Declaration of Scrivener’s Error” without the required 75% vote from lot owners. This action was intended to reinsert a definition of “Completed Lots” that had been omitted from a 2009 amendment and was followed by a $10 annual assessment increase on developed lots.

The Administrative Law Judge (ALJ) ultimately ruled in favor of the petitioner, granting his petition and invalidating the “Declaration of Scrivener’s Error.” The judge found that the change was a substantive amendment, not a correction of a clerical error, and the Board’s unilateral action violated Arizona state law (A.R.S. § 33-1817). However, in a critical distinction, the ALJ ruled that the $10 assessment increase on developed lots was permissible and should stand, as the authority to set different rates for completed and uncompleted lots was already established in the valid 2009 First Amendment to the Declaration.

The judge also rejected the petitioner’s conflict of interest claim against three Board members with financial ties to the developer, deeming the petitioner’s interpretation of the relevant statute (A.R.S. § 33-1811) to be overbroad. The final order, adopted by the Arizona Department of Real Estate Commissioner, required the HOA to pay the petitioner’s $500 filing fee and to comply with state statutes regarding amendments and conflicts of interest in the future.

Case Details

Details

Case Name

Jay Janicek, Petitioner, vs. Sycamore Vista No. 8 HOA, Respondent

Case Number

HO 17-16/019

Docket Number

17F-H1716019-REL

Jurisdiction

Office of Administrative Hearings / Arizona Department of Real Estate

Petitioner

Jay Janicek (appeared personally)

Respondent

Sycamore Vista No. 8 HOA (represented by Evan Thomson, Esq.)

Administrative Law Judge

Suzanne Marwil

Hearing Date

March 2, 2017

ALJ Decision Date

March 14, 2017

Final Order Date

March 16, 2017

Commissioner

Judy Lowe, Commissioner, Arizona Department of Real Estate

Background and Core Dispute

The conflict originated from changes to the Sycamore Vista No. 8 HOA’s Declaration of Covenants, Conditions, Restrictions and Easements (Declaration).

• 2005 Declaration: The original “2005 Amended and Restated Declaration” contained Section 6.8, which established a uniform assessment rate for all lots. Crucially, it exempted the Declarant and Developer from payments on any property except for “Completed Lots.” This section provided a specific definition for “Completed Lots,” describing them as any lot with a dwelling unit ready for occupancy.

• 2009 First Amendment: On December 4, 2008, after securing a vote from 75% of lot owners, the HOA adopted the “First Amendment to the 2005 Declaration.” This amendment deleted the original Section 6.8 in its entirety and replaced it with new language stating: “annual dues may be assessed at one uniform rate for Completed Lots and a different uniform rate for Uncompleted Lots.” This amendment, however, omitted the definition of a “Completed Lot” that was present in the 2005 version.

• Seven-Year Period: For seven years following the 2009 amendment, the revised Section 6.8 remained unchanged, without the specific definition.

The “Declaration of Scrivener’s Error”

In June or July 2016, the HOA Board proposed a “Declaration of Scrivener’s Error” to address the omitted definition.

• Board’s Position: The Respondent, represented by its president Steven Russo, argued that the purpose of the declaration was simply to correct a clerical error by reinserting the definition of a developed versus undeveloped lot, which was “inadvertently omitted” from the 2009 First Amendment. The Board stated it was acting on the advice of its legal counsel.

• Petitioner’s Position: Mr. Janicek contended that this declaration was not a correction of a minor error but was a substantive change to the Declaration. As such, he argued it required the approval of 75% of the lot owners, a process that was not followed.

• Adoption: On August 3, 2016, the Board adopted the Declaration of Scrivener’s Error by a 3-2 vote. Petitioner Janicek and another Board member representing developed lot owners voted against the measure.

• Immediate Consequence: Following the adoption, the Board voted to increase the annual assessment for developed lot owners by $10.00, while the assessment for undeveloped lots remained unchanged. This action prompted Mr. Janicek to file his petition.

Allegations of Fiduciary Duty and Conflict of Interest

Petitioner Janicek accused the Respondent of a violation of its fiduciary duty and a conflict of interest. He noted that three members of the Board had a financial interest in NT Properties, the company that owned the community’s undeveloped lots. These lots directly benefited from the assessment structure that placed a higher burden on developed lots.

Administrative Law Judge’s Decision and Rationale

The ALJ’s decision, issued on March 14, 2017, contained three central conclusions of law that addressed the distinct issues raised in the petition.

1. The “Scrivener’s Error” was an Invalid Amendment

The judge found decisively in favor of the petitioner on the core issue of the amendment process.

• Substantive Change, Not Clerical Error: The Tribunal found that the change constituted an amendment to the Declaration, not a correction of a simple clerical error.

• Violation of A.R.S. § 33-1817: The judge ruled that the procedure for amending the Declaration requires a vote by the lot owners, as specified in the Declaration and state law. The HOA violated this statute by attempting to amend the document via a simple Board vote.

• Key Judicial Reasoning: The judge noted that the same section had been properly amended by a homeowner vote in 2009. The ruling states, “after a period of seven years, it defies logic to suggest that a further change to section was simply a clerical error.”

• Conclusion: The Declaration of Scrivener’s Error (Exhibit C) was declared invalid and could not operate to amend the Declaration.

2. The Assessment Increase Was Valid

Despite invalidating the method used by the Board, the judge upheld the Board’s right to implement the assessment increase.

• Existing Authority: The ruling stated that the invalidity of Exhibit C “does not implicate Respondent’s right to impose an increased assessment on the developed lots.”

• Basis in 2009 Amendment: The judge found that the language of the valid 2009 First Amendment—which expressly states that “annual dues may be assessed at one uniform rate for Completed Lots and a different uniform rate for Uncompleted Lots”—provided the Board with sufficient authority to set differential rates.

• Conclusion: The raised assessment was allowed to stand.

3. Conflict of Interest Claim Rejected

The Tribunal rejected the petitioner’s argument that Board members with ties to NT Properties had a conflict of interest under A.R.S. § 33-1811.

• “Overbroad” Interpretation: The judge found the petitioner’s interpretation of the conflict-of-interest statute to be “overbroad.”

• Rationale: The ruling stated that this interpretation “ignores that make-up of the Board as outlined in the Declaration and disregards the express language permitting the Board to assess annual dues.”

• Conclusion: The Board members were not required to declare a conflict of interest and were permitted to vote on the issue.

Final Order

The petition filed by Jay Janicek was granted. The Administrative Law Judge’s decision was officially adopted by the Commissioner of the Arizona Department of Real Estate in a Final Order dated March 16, 2017. The final order mandated the following:

• The Sycamore Vista No. 8 HOA must pay the petitioner, Jay Janicek, the $500.00 filing fee.

• The HOA must comply with the applicable provisions of Arizona Revised Statutes § 33-1817 (regarding the proper procedure for amending a declaration) and § 33-1811 (regarding conflicts of interest) in the future.


Jay Janicek vs. Sycamore Vista No. 8 HOA

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Case Summary

Case ID 17F-H1716019-REL
Agency ADRE
Tribunal OAH
Decision Date 2017-03-14
Administrative Law Judge Suzanne Marwil
Outcome partial
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Jay Janicek Counsel —
Respondent Sycamore Vista No. 8 HOA Counsel Evan Thomson, Esq.

Alleged Violations

A.R.S. § 33-1817

Outcome Summary

The Petitioner's petition was granted. The HOA violated A.R.S. § 33-1817 by invalidly adopting the 'Declaration of Scrivener's Error' (Exhibit C) as an amendment without the required lot owner vote. However, the $10.00 annual increased assessment that Petitioner objected to was permitted to stand because the authority for differential assessments was established by the valid First Amendment to the Declaration, independent of the invalid Exhibit C. The HOA was ordered to refund the Petitioner's $500 filing fee.

Why this result: Petitioner objected to the increased assessment resulting from Exhibit C, but the Tribunal determined that Respondent had the right to impose the increased assessment pursuant to the language of Section 6.8 in the valid First Amendment to the Declaration, regardless of the invalidity of Exhibit C.

Key Issues & Findings

Improper Amendment of Declaration (Declaration of Scrivener's Error)

Petitioner claimed Respondent HOA improperly adopted a Declaration of Scrivener's Error (Exhibit C) to revise the definition of developed/undeveloped lots, arguing it was a substantive amendment requiring a 75% lot owner vote, which Respondent failed to obtain.

Orders: The Tribunal found that Exhibit C constituted an amendment and Respondent violated A.R.S. § 33-1817 by adopting it without a vote. Exhibit C was deemed invalid, but this invalidity did not nullify the subsequent assessment increase, which was authorized by a prior, valid declaration amendment. Respondent was ordered to refund the filing fee.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1817
  • A.R.S. § 32-2199 et seq.

Analytics Highlights

Topics: HOA Declaration Amendment, Scrivener's Error, Assessments, Statutory Violation
Additional Citations:

  • A.R.S. § 33-1817
  • A.R.S. § 32-2199.02
  • A.R.S. § 33-1811

Video Overview

Audio Overview

Decision Documents

17F-H1716019-REL Decision – 551057.pdf

Uploaded 2025-10-09T03:31:13 (83.7 KB)

17F-H1716019-REL Decision – 559875.pdf

Uploaded 2025-10-09T03:31:13 (794.0 KB)





Briefing Doc – 17F-H1716019-REL


Briefing Document: Janicek v. Sycamore Vista No. 8 HOA

Executive Summary

This briefing document analyzes the administrative legal dispute between petitioner Jay Janicek and respondent Sycamore Vista No. 8 Homeowners Association (HOA), culminating in the case No. 17F-H1716019-REL. The core of the conflict was the HOA Board’s attempt to amend its governing Declaration via a “Declaration of Scrivener’s Error” without the required 75% vote from lot owners. This action was intended to reinsert a definition of “Completed Lots” that had been omitted from a 2009 amendment and was followed by a $10 annual assessment increase on developed lots.

The Administrative Law Judge (ALJ) ultimately ruled in favor of the petitioner, granting his petition and invalidating the “Declaration of Scrivener’s Error.” The judge found that the change was a substantive amendment, not a correction of a clerical error, and the Board’s unilateral action violated Arizona state law (A.R.S. § 33-1817). However, in a critical distinction, the ALJ ruled that the $10 assessment increase on developed lots was permissible and should stand, as the authority to set different rates for completed and uncompleted lots was already established in the valid 2009 First Amendment to the Declaration.

The judge also rejected the petitioner’s conflict of interest claim against three Board members with financial ties to the developer, deeming the petitioner’s interpretation of the relevant statute (A.R.S. § 33-1811) to be overbroad. The final order, adopted by the Arizona Department of Real Estate Commissioner, required the HOA to pay the petitioner’s $500 filing fee and to comply with state statutes regarding amendments and conflicts of interest in the future.

Case Details

Details

Case Name

Jay Janicek, Petitioner, vs. Sycamore Vista No. 8 HOA, Respondent

Case Number

HO 17-16/019

Docket Number

17F-H1716019-REL

Jurisdiction

Office of Administrative Hearings / Arizona Department of Real Estate

Petitioner

Jay Janicek (appeared personally)

Respondent

Sycamore Vista No. 8 HOA (represented by Evan Thomson, Esq.)

Administrative Law Judge

Suzanne Marwil

Hearing Date

March 2, 2017

ALJ Decision Date

March 14, 2017

Final Order Date

March 16, 2017

Commissioner

Judy Lowe, Commissioner, Arizona Department of Real Estate

Background and Core Dispute

The conflict originated from changes to the Sycamore Vista No. 8 HOA’s Declaration of Covenants, Conditions, Restrictions and Easements (Declaration).

• 2005 Declaration: The original “2005 Amended and Restated Declaration” contained Section 6.8, which established a uniform assessment rate for all lots. Crucially, it exempted the Declarant and Developer from payments on any property except for “Completed Lots.” This section provided a specific definition for “Completed Lots,” describing them as any lot with a dwelling unit ready for occupancy.

• 2009 First Amendment: On December 4, 2008, after securing a vote from 75% of lot owners, the HOA adopted the “First Amendment to the 2005 Declaration.” This amendment deleted the original Section 6.8 in its entirety and replaced it with new language stating: “annual dues may be assessed at one uniform rate for Completed Lots and a different uniform rate for Uncompleted Lots.” This amendment, however, omitted the definition of a “Completed Lot” that was present in the 2005 version.

• Seven-Year Period: For seven years following the 2009 amendment, the revised Section 6.8 remained unchanged, without the specific definition.

The “Declaration of Scrivener’s Error”

In June or July 2016, the HOA Board proposed a “Declaration of Scrivener’s Error” to address the omitted definition.

• Board’s Position: The Respondent, represented by its president Steven Russo, argued that the purpose of the declaration was simply to correct a clerical error by reinserting the definition of a developed versus undeveloped lot, which was “inadvertently omitted” from the 2009 First Amendment. The Board stated it was acting on the advice of its legal counsel.

• Petitioner’s Position: Mr. Janicek contended that this declaration was not a correction of a minor error but was a substantive change to the Declaration. As such, he argued it required the approval of 75% of the lot owners, a process that was not followed.

• Adoption: On August 3, 2016, the Board adopted the Declaration of Scrivener’s Error by a 3-2 vote. Petitioner Janicek and another Board member representing developed lot owners voted against the measure.

• Immediate Consequence: Following the adoption, the Board voted to increase the annual assessment for developed lot owners by $10.00, while the assessment for undeveloped lots remained unchanged. This action prompted Mr. Janicek to file his petition.

Allegations of Fiduciary Duty and Conflict of Interest

Petitioner Janicek accused the Respondent of a violation of its fiduciary duty and a conflict of interest. He noted that three members of the Board had a financial interest in NT Properties, the company that owned the community’s undeveloped lots. These lots directly benefited from the assessment structure that placed a higher burden on developed lots.

Administrative Law Judge’s Decision and Rationale

The ALJ’s decision, issued on March 14, 2017, contained three central conclusions of law that addressed the distinct issues raised in the petition.

1. The “Scrivener’s Error” was an Invalid Amendment

The judge found decisively in favor of the petitioner on the core issue of the amendment process.

• Substantive Change, Not Clerical Error: The Tribunal found that the change constituted an amendment to the Declaration, not a correction of a simple clerical error.

• Violation of A.R.S. § 33-1817: The judge ruled that the procedure for amending the Declaration requires a vote by the lot owners, as specified in the Declaration and state law. The HOA violated this statute by attempting to amend the document via a simple Board vote.

• Key Judicial Reasoning: The judge noted that the same section had been properly amended by a homeowner vote in 2009. The ruling states, “after a period of seven years, it defies logic to suggest that a further change to section was simply a clerical error.”

• Conclusion: The Declaration of Scrivener’s Error (Exhibit C) was declared invalid and could not operate to amend the Declaration.

2. The Assessment Increase Was Valid

Despite invalidating the method used by the Board, the judge upheld the Board’s right to implement the assessment increase.

• Existing Authority: The ruling stated that the invalidity of Exhibit C “does not implicate Respondent’s right to impose an increased assessment on the developed lots.”

• Basis in 2009 Amendment: The judge found that the language of the valid 2009 First Amendment—which expressly states that “annual dues may be assessed at one uniform rate for Completed Lots and a different uniform rate for Uncompleted Lots”—provided the Board with sufficient authority to set differential rates.

• Conclusion: The raised assessment was allowed to stand.

3. Conflict of Interest Claim Rejected

The Tribunal rejected the petitioner’s argument that Board members with ties to NT Properties had a conflict of interest under A.R.S. § 33-1811.

• “Overbroad” Interpretation: The judge found the petitioner’s interpretation of the conflict-of-interest statute to be “overbroad.”

• Rationale: The ruling stated that this interpretation “ignores that make-up of the Board as outlined in the Declaration and disregards the express language permitting the Board to assess annual dues.”

• Conclusion: The Board members were not required to declare a conflict of interest and were permitted to vote on the issue.

Final Order

The petition filed by Jay Janicek was granted. The Administrative Law Judge’s decision was officially adopted by the Commissioner of the Arizona Department of Real Estate in a Final Order dated March 16, 2017. The final order mandated the following:

• The Sycamore Vista No. 8 HOA must pay the petitioner, Jay Janicek, the $500.00 filing fee.

• The HOA must comply with the applicable provisions of Arizona Revised Statutes § 33-1817 (regarding the proper procedure for amending a declaration) and § 33-1811 (regarding conflicts of interest) in the future.






Study Guide – 17F-H1716019-REL


Study Guide: Janicek v. Sycamore Vista No. 8 HOA

This study guide provides a review of the administrative law case Janicek v. Sycamore Vista No. 8 HOA (No. 17F-H1716019-REL). It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms to aid in understanding the facts, arguments, and legal conclusions of the case.

Short-Answer Quiz

Instructions: Answer the following questions in 2-3 complete sentences, based on the information provided in the source documents.

1. Who were the primary parties in this case, and what were their roles?

2. What was the central action taken by the Respondent’s Board that led to this legal dispute?

3. What was the Petitioner’s primary legal argument against the “Declaration of Scrivener’s Error”?

4. How did the Respondent justify its use of a “Declaration of Scrivener’s Error” instead of a full vote by lot owners?

5. Describe the conflict of interest alleged by the Petitioner against the Respondent’s Board.

6. How did the 2009 First Amendment alter Section 6.8 of the HOA’s 2005 Declaration?

7. What was the direct financial consequence for developed lot owners following the Board’s actions in 2016?

8. What was the Administrative Law Judge’s final ruling regarding the validity of the “Declaration of Scrivener’s Error”?

9. Despite invalidating the Board’s action, what did the Judge decide regarding the increased assessment on developed lots?

10. What was the final order issued in the case, and what was the Respondent required to do?

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Answer Key

1. The primary parties were Petitioner Jay Janicek and Respondent Sycamore Vista No. 8 HOA. Janicek, a lot owner, brought the petition against the Homeowner’s Association to challenge a decision made by its Board of Directors.

2. The Respondent’s Board, by a 3-2 vote, adopted a “Declaration of Scrivener’s Error” on August 3, 2016. This action was intended to reinsert a definition of “Completed Lots” that had been omitted from a 2009 amendment to the HOA’s governing documents.

3. The Petitioner argued that the “Declaration of Scrivener’s Error” was not a simple correction but a substantive change to the Declaration. As such, he contended it was an amendment that required approval by a vote of seventy-five percent of the lot owners, not just a Board vote.

4. The Respondent argued that the “Declaration of Scrivener’s Error” was merely intended to correct a clerical error by reinserting the definition of developed versus undeveloped lots, which was inadvertently deleted from the 2009 revision. The Board’s President, Steven Russo, testified that they acted on the recommendation of their legal counsel.

5. The Petitioner alleged a conflict of interest because three members of the Respondent’s Board had a financial interest in NT Properties, the company that owns the undeveloped lots. The Petitioner argued that these members stood to benefit from assessment changes that favored undeveloped lots.

6. The 2009 First Amendment deleted the original Section 6.8 and replaced it with new language. This new language explicitly allowed annual dues to be assessed at different uniform rates for “Completed Lots” and “Uncompleted Lots,” a distinction not present in the original uniform rate structure.

7. Following the adoption of the “Declaration of Scrivener’s Error,” the Board voted to increase the annual assessment for developed lot owners by $10.00. The assessment for undeveloped lots was left unchanged.

8. The Administrative Law Judge ruled that the “Declaration of Scrivener’s Error” was an invalid amendment to the Declaration. The Judge found that it was a substantive change that required a vote of the lot owners as specified in A.R.S. §33-1817, and that calling it a correction of a clerical error after seven years “defies logic.”

9. The Judge ruled that the increased assessment on developed lots could stand. The ruling was based on the language of the valid 2009 First Amendment, which expressly permitted the HOA to assess different rates for completed and uncompleted lots, independent of the invalidated “Declaration of Scrivener’s Error.”

10. The final order granted the Petitioner’s petition. The Respondent, Sycamore Vista No. 8 HOA, was ordered to pay the Petitioner the filing fee required by section 32-2199.01.

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Essay Questions

Instructions: Consider the following questions. Formulate a comprehensive response drawing upon the specific facts, legal arguments, and conclusions presented in the case documents.

1. Analyze the legal reasoning behind the Administrative Law Judge’s decision to invalidate the “Declaration of Scrivener’s Error” while simultaneously upholding the increased assessment on developed lots. Explain how both parts of this ruling were supported by different governing documents.

2. Discuss the conflict of interest allegation raised by Jay Janicek under A.R.S. § 33-1811. Why did the Tribunal ultimately reject this argument, and what does this rejection imply about the Board’s authority to set assessments under the Declaration?

3. Trace the evolution of Section 6.8 of the Declaration from the original 2005 version, through the 2009 First Amendment, to the attempted 2016 change. Explain the significance of the “Completed Lots” definition and how its omission and attempted reinsertion became the central point of the dispute.

4. Evaluate the Respondent’s argument that it was simply correcting an inadvertent clerical error. What evidence and reasoning did the Administrative Law Judge use to conclude that this was, in fact, an improper amendment?

5. Describe the legal requirements for amending an HOA declaration as outlined in A.R.S. § 33-1817. Explain precisely how the actions of the Sycamore Vista No. 8 HOA Board violated this statute.

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The presiding judge in the administrative hearing, in this case, Suzanne Marwil. The ALJ hears evidence and issues a decision based on the facts and applicable laws.

A.R.S. § 33-1811

An Arizona Revised Statute cited in the case that addresses conflicts of interest for members of an HOA board of directors. The Tribunal found the Petitioner’s interpretation of this statute to be overbroad.

A.R.S. § 33-1817

An Arizona Revised Statute cited in the case that outlines the legal requirements and procedures for amending an HOA’s declaration. The ALJ found the Respondent violated this statute.

Completed Lots

As defined in the original 2005 Declaration, this refers to any lot with a dwelling unit ready for occupancy, including installed carpets, cabinets, plumbing, etc. This definition was central to the dispute.

Declaration of Covenants, Conditions, Restrictions and Easements (Declaration)

The primary governing legal document of the Sycamore Vista No. 8 HOA, which outlines the rules, assessments, and rights of the property owners.

Declaration of Scrivener’s Error

The legal instrument adopted by the Respondent’s Board in a 3-2 vote on August 3, 2016. It was purported to correct a clerical error but was ruled to be an invalid substantive amendment to the Declaration.

First Amendment

The amendment to the 2005 Declaration adopted on December 4, 2008, after a vote of 75% of the lot owners. It changed Section 6.8 to allow for different assessment rates for completed and uncompleted lots but inadvertently omitted the definition of a “Completed Lot.”

NT Properties

A company with a financial interest in the undeveloped lots within the HOA. Three members of the Respondent’s Board also had a financial interest in this company, forming the basis of a conflict of interest allegation.

Petitioner

The party who filed the petition initiating the legal action. In this case, Jay Janicek.

Respondent

The party against whom the petition was filed. In this case, Sycamore Vista No. 8 HOA.

Tribunal

A term used within the decision to refer to the adjudicating body, specifically the Office of Administrative Hearings and the presiding Administrative Law Judge.

Uniform Rate of Assessment

A principle laid out in the 2005 Declaration requiring that annual and special assessments be fixed at a uniform rate for all lots. This was modified by the 2009 First Amendment.






Blog Post – 17F-H1716019-REL


He Sued His HOA and Won. Here’s Why He Still Had to Pay.

Introduction: The David vs. Goliath of Neighborhood Disputes

For many homeowners, the relationship with their Homeowners’ Association (HOA) can feel like a constant source of tension. It’s a world of rules, fees, and board decisions that can seem arbitrary or unfair. So when a single homeowner decides to take on their entire HOA in a legal battle, it feels like a classic David vs. Goliath story. This is one of those stories—about a homeowner who challenged an improper rule change and an unexpected fee increase. He took his HOA to court and, on paper, he won. But as he discovered, the outcome was far more surprising and nuanced than a simple victory.

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1. You Can’t Fix a Seven-Year-Old “Mistake” with a Simple Board Vote.

The core of the dispute began when the Sycamore Vista No. 8 HOA tried to amend its governing documents with a “Declaration of Scrivener’s Error.” Their goal was to reinsert definitions of “Completed Lots” versus “Undeveloped Lots” that they claimed had been “inadvertently deleted” from a revision seven years prior.

Instead of seeking approval from the homeowners, the Board of Directors passed this “correction” on August 3, 2016, with a simple 3-2 vote. This procedural shortcut triggered the legal challenge.

The Administrative Law Judge unequivocally rejected the HOA’s move. The judge’s reasoning was sharp and logical: the seven-year gap since the original amendment was a critical factor. The sheer passage of time had transformed what the HOA called a clerical correction into what the law considered a substantive change. As such, it required a vote by 75% of the lot owners, not a simple board action.

The judge’s decision underscored this point with a powerful rebuke:

…after a period of seven years, it defies logic to suggest that a further change to section was simply a clerical error.

This finding was a crucial victory for the homeowner. It affirmed that HOAs must follow the proper procedures outlined in their own governing documents and cannot use shortcuts to rewrite history, no matter how they frame their intentions.

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2. A Legal “Win” Doesn’t Always Mean You Get the Financial Outcome You Want.

Even though the judge invalidated the HOA’s “Declaration of Scrivener’s Error,” she made another, more surprising ruling: the $10.00 annual assessment increase on developed lots—the very fee that sparked the lawsuit—was valid and would stand.

The legal reasoning was buried in the fine print of the HOA’s own documents. A different amendment, one legally passed with a 75% homeowner vote on December 4, 2008, already gave the Board the explicit authority to set different assessment rates. The key language in that valid amendment stated, “annual dues may be assessed at one uniform rate for Completed Lots and a different uniform rate for Uncompleted Lots.”

This created the central irony of the case: the HOA took a legally improper path to arrive at a destination they already had a legal right to reach. Interestingly, the HOA board president testified they were acting on the advice of their counsel, suggesting this was less a malicious act and more of a costly legal misstep.

The petitioner, Jay Janicek, won his case on principle. The judge’s order granted his petition and even awarded him his $500.00 filing fee. But he lost on the practical financial issue that started the dispute. The $10 increase remained. It’s a stark illustration of how complex legal documents can be, where one legally sound clause can override a victory on another front.

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3. Proving a Conflict of Interest Is Harder Than It Looks.

The homeowner also accused the board of a conflict of interest. He pointed out that three members of the five-person board had a financial stake in NT Properties, the company that owned the community’s undeveloped lots. These were the very lots that benefited from the new assessment structure, as their fees remained unchanged while only the developed lots saw the $10 increase. On the surface, it appeared to be a clear-cut case of self-dealing.

However, the judge rejected this claim, ruling that the petitioner’s interpretation of the conflict of interest statute was “overbroad.” The judge’s analysis provided a crucial distinction: the board members were not inventing a new power for their own benefit; they were exercising a power explicitly granted to the Board by the homeowners themselves in the 2009 Declaration. The ruling noted that the petitioner’s argument “disregards the express language permitting the Board to assess annual dues.”

This takeaway is a sobering one for homeowners. It demonstrates that what might look like a glaring conflict of interest to a layperson may not meet the specific legal standard required to invalidate a board’s actions, especially when those actions fall within the powers already granted by the community’s governing documents.

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Conclusion: A Victory of Principle

In the end, the homeowner walked away with a strange and dual outcome. He successfully proved his HOA acted improperly by trying to amend its rules without a proper vote, yet he could not reverse the financial consequence that drove him to file the suit. The case stands as a powerful reminder for all homeowners: understanding both the procedural rules your HOA must follow and the precise wording hidden deep within its governing documents is absolutely critical. This ruling created a clear divide between procedural justice and financial reality.

This case was a victory of principle over practice—how much is a principle worth when the bottom line doesn’t change?


Case Participants

Petitioner Side

  • Jay Janicek (petitioner)

Respondent Side

  • Evan Thomson (attorney)
    Represented Respondent
  • Steven Russo (board member)
    Sycamore Vista No. 8 HOA
    President of Respondent; testified
  • Dane Dehler (attorney)
    Thompson Kron, P.L.C.
    Received copy of final order
  • Whitney Cunningham (HOA contact)
    Sycamore Vista No. 8 HOA
    Received copy of final order c/o

Neutral Parties

  • Suzanne Marwil (ALJ)
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
  • Abby Hansen (HOA Coordinator)
    Recipient for rehearing request