Tag Archives: Condominium

John A Sellers vs. Rancho Madera Condominium Association

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Case Summary

Case ID 19F-H1918010-REL
Agency ADRE
Tribunal OAH
Decision Date 2019-05-10
Administrative Law Judge Tammy L. Eigenheer
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner John A Sellers Counsel —
Respondent Rancho Madera Condominium Association Counsel Edward D. O'Brien

Alleged Violations

CC&Rs § 3.10

Outcome Summary

The Administrative Law Judge dismissed the petition, finding that the HOA (Respondent) did not violate CC&R Section 3.10. The CC&Rs imposed the duty of keeping the drainage area clear primarily on the Unit Owners, and the HOA only retained the right to enforce this requirement, not an explicit obligation.

Why this result: Petitioner failed to establish by a preponderance of the evidence that Respondent violated the CC&Rs because the HOA did not have an obligation to enforce clearance requirements against unit owners under the cited covenant provisions.

Key Issues & Findings

Alleged violation of CC&Rs § 3.10 by failing to require unit owners to remove vegetation and fencing materials from the stormwater channel behind their homes.

Petitioner alleged the HOA violated CC&Rs § 3.10 by failing to compel unit owners to clear vegetation and debris (including chicken wire) from the stormwater drainage channel, asserting this failure created a flood risk to unit 12. The ALJ found that the CC&Rs placed the primary maintenance responsibility on Unit Owners, and the HOA only had the right, but not the obligation, to enforce clearance requirements.

Orders: The petition was denied and dismissed. No action was required of Respondent because Petitioner failed to establish that Respondent violated the CC&Rs regarding maintenance of the drainage easement.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 32-2199.01
  • Title 33, Chapter 9
  • A.A.C. R2-19-119(A) and (B)(1)
  • Vazanno v. Superior Court
  • A.A.C. R2-19-119(B)(2)
  • MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5
  • BLACK’S LAW DICTIONARY
  • Powell v. Washburn
  • Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs.

Analytics Highlights

Topics: HOA, CC&R, Drainage, Maintenance, Enforcement, Condominium
Additional Citations:

  • A.R.S. § 32-2199.01
  • Title 33, Chapter 9
  • A.A.C. R2-19-119(A) and (B)(1)
  • Vazanno v. Superior Court
  • A.A.C. R2-19-119(B)(2)
  • MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5
  • BLACK’S LAW DICTIONARY
  • Powell v. Washburn
  • Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs.

Video Overview

Audio Overview

Decision Documents

19F-H1918010-REL Decision – 706533.pdf

Uploaded 2026-04-24T11:15:56 (42.2 KB)

19F-H1918010-REL Decision – 707530.pdf

Uploaded 2026-04-24T11:16:00 (111.5 KB)

19F-H1918010-REL Decision – 667122.pdf

Uploaded 2026-04-24T11:16:05 (50.0 KB)

19F-H1918010-REL Decision – 678371.pdf

Uploaded 2026-04-24T11:16:09 (129.5 KB)

19F-H1918010-REL Decision – 667122.pdf

Uploaded 2026-01-23T17:26:17 (50.0 KB)

19F-H1918010-REL Decision – 678371.pdf

Uploaded 2026-01-23T17:26:21 (129.5 KB)

Briefing Document: Sellers vs. Rancho Madera Condominium Association

Executive Summary

This document synthesizes the legal proceedings and outcomes of the case John A Sellers, Petitioner, vs. Rancho Madera Condominium Association, Respondent (Case No. 19F-H1918010-REL), adjudicated by the Arizona Office of Administrative Hearings. The core of the dispute was a claim by Petitioner John Sellers that his homeowner’s association (HOA) violated its Covenants, Conditions, and Restrictions (CC&Rs) by failing to compel other homeowners to remove vegetation and fencing from a common stormwater drainage channel, which he alleged created a flood risk to his property, Unit 12.

The petitioner’s claim was ultimately unsuccessful. It was denied first in an initial evidentiary hearing and again in a subsequent rehearing. The central finding of the Administrative Law Judges (ALJs) in both decisions was a critical distinction between an HOA’s right to enforce rules and an obligation to do so. The ALJs determined that the CC&Rs placed the primary responsibility for maintaining the drainage easement on the individual unit owners. The HOA’s mandatory duty to intervene was found to be triggered only by actual damage resulting from an owner’s negligence, not by the mere potential for future damage. As no flooding or damage had ever occurred, the HOA was found to have acted within its authority and had not violated the CC&Rs. The petitioner’s personal circumstances, including a contentious divorce and court-ordered sale of the property, were noted but deemed legally irrelevant to the determination of a CC&R violation.

Case Chronology and Procedural History

The case progressed through an initial petition, a hearing, a decision, a request for rehearing, and a final decision on rehearing. A notable procedural anomaly occurred when a hearing scheduled for November 5, 2018, was officially vacated due to a withdrawal notice from the petitioner, yet the hearing proceeded on that date as originally planned.

Details

Aug 23, 2018

Petition Filed

John A. Sellers filed a single-issue petition with the Arizona Department of Real Estate alleging the Rancho Madera Condominium Association violated CC&R § 3.10.

Oct 23, 2018

Hearing Vacated

An order was issued by ALJ Diane Mihalsky vacating the November 5 hearing because the petitioner had notified the Department of his wish to withdraw the petition.

Nov 5 & Dec 12, 2018

Initial Hearing

Despite the prior vacating order, an evidentiary hearing was held before ALJ Mihalsky.

Dec 26, 2018

Initial Decision

ALJ Mihalsky issued a decision finding that the petitioner failed to prove his case. The petition was denied.

Feb 1, 2019

Rehearing Requested

The petitioner filed a request for a rehearing, alleging procedural irregularities and errors in the initial decision.

Feb 22, 2019

Rehearing Granted

The Commissioner of the Department of Real Estate granted the request for a rehearing.

Apr 15, 2019

Rehearing Held

A rehearing was held before a new judge, ALJ Tammy L. Eigenheer.

May 7, 2019

Post-Hearing Filing Stricken

The petitioner submitted an unauthorized supplemental argument after the rehearing. ALJ Eigenheer issued an order striking the filing from the record and closing the record.

May 10, 2019

Final Decision on Rehearing

ALJ Eigenheer issued a final decision, again finding for the respondent and dismissing the petition.

Core Dispute Analysis

Petitioner’s Position and Allegations

• Core Allegation: The petitioner alleged that the Rancho Madera Condominium Association (Respondent) violated CC&R § 3.10 by failing to enforce its rules. Specifically, the Association did not require owners of “Drainage Easement Units” to remove obstructions—such as large succulents, cacti, shrubs, and chicken wire fencing—from a 3′ x 3′ stormwater drainage canal located behind their homes.

• Perceived Risk: The petitioner testified that these items could catch storm debris, clog the channel, and cause flooding that would damage his property, Unit 12. He submitted videos of heavy rains to support his concern.

• Evolving Legal Argument: In the rehearing, the petitioner’s argument shifted. He acknowledged that the CC&Rs gave the Association the right to enforce maintenance standards but argued that “at a certain point exercising a right becomes an obligation,” particularly when matters of safety and property values are implicated.

• Claimed Financial Damages: The petitioner testified he was undergoing a contentious divorce and his condominium was being sold by order of the Maricopa County Superior Court. He asserted that due to the unresolved flood risk, which he was obligated to disclose, the sale price of Unit 12 was “$40,000 less than it would have been.”

Respondent’s Position and Actions

• Denial of Violation: The Association denied it had violated any CC&Rs by its handling of the drainage channel.

• Evidence and Testimony: The Association, represented by its President, Jeffrey Kaplan, presented several key points:

◦ No History of Flooding: Mr. Kaplan testified that Unit 12 had never sustained any flood damage since the development was built in 2012, including during a “100-year storm” in 2014. After a significant rainstorm in August 2018, he personally inspected the easement and saw no water in it.

◦ Origin of Plants: Mr. Kaplan stated that the builder had originally planted the vegetation in the drainage easement that the petitioner was concerned about.

◦ No Other Complaints: No other members of the 46-unit Association had expressed any concerns about drainage.

◦ Proactive Communication: To assuage the petitioner’s concerns, the Association’s management company sent letters to the relevant homeowners on April 18, 2018, and July 19, 2018, reminding them of their responsibility to keep the drainage area free of obstructions.

◦ Due Diligence: Mr. Kaplan contacted officials at the Maricopa County Flood Control District and the Town of Cave Creek, who confirmed the drainage area was not on any official floodplain maps and that the Association was solely responsible for its maintenance.

Key CC&R Provisions and Legal Interpretation

The ALJs’ decisions hinged on a close reading of the Rancho Madera CC&Rs. The analysis consistently differentiated between the duties of individual owners and the duties of the Association.

• CC&R § 3.10.2 — Unit Owner Responsibility: This section places the primary maintenance burden directly on the homeowners of the Drainage Easement Units.

◦ Interpretation: The legal conclusion was that this provision unambiguously makes individual owners responsible for keeping their portion of the easement clear.

• CC&R § 3.10.4 — Association Responsibility: This section defines the specific circumstance under which the Association is required to act.

◦ Interpretation: Both ALJs found that this clause creates a reactionary, not a proactive, duty for the Association. Its obligation to repair is triggered by actual damage occurring, not by a perceived risk of future damage.

• CC&R § 13.1.1 — Association Enforcement Power: This section, highlighted in the rehearing, grants the Association authority to act.

◦ Interpretation: The ALJ in the rehearing ruled that this language grants a discretionary right, not a mandatory obligation. The CC&Rs contain no provision that converts this right into a duty under the circumstances presented by the petitioner.

Judicial Findings and Rulings

Initial Decision (ALJ Diane Mihalsky, Dec 26, 2018)

• Burden of Proof: The petitioner failed to establish his claim by a preponderance of the evidence.

• Findings of Fact: The petitioner successfully established that plants and chicken wire existed in the stormwater canal. However, he failed to establish that these items actually impeded the flow of water.

• Conclusion: The respondent proved that the drainage canal had functioned as intended since 2012 and that Unit 12 had never flooded. The petitioner’s divorce was noted to have “cast a long shadow over his administrative complaint” but was irrelevant to the legal issue. The petition was denied.

Rehearing Decision (ALJ Tammy L. Eigenheer, May 10, 2019)

• Central Legal Finding: The CC&Rs clearly intend for unit owners to bear the primary responsibility for keeping the drainage area clear. The Association’s only specified obligation is to repair damage after it has occurred and bill the responsible owner.

• Right vs. Obligation: The decision explicitly states, “While Respondent has the right to enforce the requirements that the Unit Owners keep the Drainage Easement Area clear, nothing in the CC&Rs provides that Respondent has an obligation to do so.”

• Final Order: The petitioner failed to establish that the respondent violated Section 3.10 of the CC&Rs. The petition was dismissed.

Notable Evidence

A key piece of evidence submitted by the respondent was a June 22, 2018, email from the petitioner’s wife, Debborah Sellers, which directly refuted the petitioner’s claims. In the email, she stated:

“There has never been any issue with the storm drain behind our house and it is not a major disclosure item… Stop making something out of nothing. AND I HOPE YOU AREN[’]T FREAKING POTENTIAL BUYERS AND OTHER REALTORS WITH THIS NONSENSE.”

Study Guide for Case No. 19F-H1918010-REL: Sellers v. Rancho Madera Condominium Association

Short-Answer Quiz

Instructions: Answer the following questions in 2-3 sentences, drawing exclusively from the information provided in the case documents.

1. What was the specific allegation John A. Sellers made against the Rancho Madera Condominium Association in his petition filed on August 23, 2018?

2. Identify the key responsibilities assigned to individual unit owners of Drainage Easement Units according to Section 3.10.2 of the CC&Rs.

3. Who is Jeffrey Kaplan, and what key testimony did he provide on behalf of the Respondent?

4. What specific actions did the Respondent’s management company take in April and July of 2018 to address the Petitioner’s concerns?

5. According to the decision by Administrative Law Judge Diane Mihalsky, what did the Petitioner fail to establish regarding the plants and chicken wire in the drainage canal?

6. On what grounds did John A. Sellers file his Homeowner’s Association (HOA) Dispute Rehearing Request on February 1, 2019?

7. What was the Petitioner’s core argument regarding the Association’s “right to enforce” the CC&Rs versus an “obligation to enforce” them?

8. What was the final conclusion of Administrative Law Judge Tammy L. Eigenheer regarding the Association’s responsibilities under the CC&Rs?

9. What occurred after the April 15, 2019 rehearing when the Petitioner attempted to submit supplemental information to the Office of Administrative Hearings?

10. Describe the evidence presented in an email from Debborah Sellers and its relevance to the case.

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Answer Key

1. John A. Sellers alleged that the Rancho Madera Condominium Association violated Section 3.10 of its Covenants, Conditions, and Restrictions (CC&Rs). He claimed the Association failed to require condominium owners to remove vegetation and fencing materials from the stormwater channel, creating a flood risk for his unit.

2. Section 3.10.2 of the CC&Rs requires each Unit Owner of a Drainage Easement Unit to keep their respective Drainage Easement Area free of weeds and other debris. The purpose is to ensure that stormwater can flow freely and that no improvement, including plant materials, impedes this flow.

3. Jeffrey Kaplan is the President of the Rancho Madera Condominium Association. He testified that the drainage easement had never failed, even during a 100-year storm in 2014, that the original builder had planted the vegetation in question, and that he had consulted with county and town officials about the drainage area.

4. To address the Petitioner’s concerns, the Respondent’s management company sent letters to the owners of the Drainage Easement Units. Letters sent on April 18, 2018, and July 19, 2018, reminded owners of their responsibility to keep the drainage area free of obstructions, weeds, and debris.

5. Judge Mihalsky’s decision on December 26, 2018, concluded that the Petitioner established the presence of plants and chicken wire but failed to establish that these items actually impede the flow of water. The judge found that the drainage system functions as intended and there was no unreasonable risk of flooding.

6. The Petitioner filed for a rehearing based on several alleged issues with the original proceeding. These included an irregularity in the proceedings, the existence of newly discovered evidence, errors in the admission or rejection of evidence, and a belief that the findings of fact or decision were arbitrary, capricious, or not supported by evidence.

7. The Petitioner argued that while the CC&Rs grant the Association the “right to enforce” maintenance requirements, this right becomes an “obligation” when issues of property values and safety are at stake. He maintained that the potential for flooding created such an obligation for the Association to act.

8. Judge Eigenheer concluded that the CC&Rs intend for unit owners to bear the responsibility of keeping the Drainage Easement Area clear. She determined that while the Association has the right to enforce this, nothing in the CC&Rs creates an obligation for it to do so, and its only specified responsibility is to repair damage after it occurs, billing the responsible unit owner.

9. After the rehearing, the Petitioner submitted supplemental authority and argument without having requested leave to do so. The Respondent’s counsel argued this filing was untimely and introduced new arguments, requesting it be struck. On May 7, 2019, Judge Eigenheer ordered the filing struck from the record and closed the record.

10. The Respondent submitted a June 22, 2018 email from Debborah Sellers, the Petitioner’s wife. In the email, she stated there had never been an issue with the storm drain, called his concerns “nonsense,” and noted that the developer had done a good job, undermining the Petitioner’s claim of a significant and obvious flood risk.

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Suggested Essay Questions

1. Analyze the legal reasoning used by Administrative Law Judge Tammy L. Eigenheer to dismiss the petition after the rehearing. Contrast her interpretation of the Association’s duties under the CC&Rs with the findings presented by Judge Diane Mihalsky in the initial decision.

2. Discuss the concept of “preponderance of the evidence” as defined in the legal documents. Evaluate the evidence presented by both the Petitioner and the Respondent, explaining why the Petitioner ultimately failed to meet this burden of proof in both hearings.

3. Trace the complete procedural history of case No. 19F-H1918010-REL. Identify and explain the significance of key events, including the initial petition, the vacated hearing, the first Administrative Law Judge Decision, the request for rehearing, and the final order dismissing the case.

4. Examine the role and responsibilities of the Rancho Madera Condominium Association versus the individual unit owners as defined by Sections 3.10, 3.10.2, 3.10.4, and 13.1.1 of the CC&Rs. How did the interpretation of these sections form the basis of the final legal decision?

5. Evaluate the different types of evidence presented in the hearings, including witness testimony (Sellers, Kaplan), documentary evidence (CC&Rs, letters, emails), and physical evidence (photographs, videos). How did each type of evidence contribute to the final outcome of the case?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An independent judge who presides over administrative hearings, takes evidence, and makes legal decisions and orders. In this case, Diane Mihalsky and Tammy L. Eigenheer served as ALJs.

Covenants, Conditions, and Restrictions (CC&Rs)

The governing legal documents that set up the guidelines for a planned community or condominium association. In this case, the CC&Rs for Rancho Madera were the central document in the dispute.

Drainage Easement

A perpetual, non-exclusive legal right created over a specific portion of property (the eastern five feet of Units 9-18) for constructing and maintaining a stormwater drainage channel.

Drainage Easement Area

The specific portion of land encumbered by the Drainage Easement, defined as the eastern five feet of the designated units.

Drainage Improvements

The physical components of the drainage system, such as the channel, decomposed granite, rip rap (large stones), or concrete, as originally constructed by the developer.

Office of Administrative Hearings (OAH)

An independent state agency in Arizona responsible for conducting evidentiary hearings for other state agencies, such as the Department of Real Estate.

Petitioner

The party who initiates a legal action or files a petition seeking a legal remedy. In this case, John A. Sellers.

Preponderance of the Evidence

The standard of proof in this civil administrative case. It is defined as evidence that is sufficient to incline a fair and impartial mind to one side of an issue rather than the other, making a contention more probably true than not.

Rehearing

A second hearing of a case, granted by the Commissioner in this instance, to re-examine the issues based on claims such as procedural irregularities, newly discovered evidence, or errors in the original decision.

Respondent

The party against whom a petition is filed; the party who must respond to the petitioner’s claims. In this case, the Rancho Madera Condominium Association.

The Department

Refers to the Arizona Department of Real Estate, the state agency authorized to receive and decide on petitions for hearings from members of condominium unit owners’ associations.

I Read an Entire HOA Lawsuit. Here Are 4 Shocking Lessons About Power, Rules, and Reality.

The Anatomy of a Neighborhood War

Living under a Homeowner’s Association (HOA) often means navigating a complex world of rules, regulations, and neighborhood politics. For most, disagreements are minor annoyances. But sometimes, a seemingly small issue can escalate into a full-blown legal war.

This is the story of one homeowner’s single-minded crusade against his HOA over a stormwater drainage channel he believed was a serious flooding risk. After filing a formal petition, the dispute escalated into a multi-stage legal battle that spanned nearly a year. The official court documents reveal that even after a judge ruled decisively against him, the homeowner doubled down, demanding a rare rehearing.

A deep dive into this protracted case reveals a fascinating and cautionary tale. The legal reasoning that ultimately settled the matter highlights several surprising lessons that apply to anyone living in a planned community.

1. Proving a Rule Was Broken Isn’t the Same as Proving Harm

The initial hearing, held before Administrative Law Judge Diane Mihalsky in late 2018, centered on a seemingly straightforward argument from the petitioner, John Sellers. He pointed out that his neighbors had placed plants—including large succulents, shrubs, and cacti—as well as chicken wire in a stormwater drainage channel. This, he argued, was a clear violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs), which stated that no improvement “shall be constructed, installed or allowed to grow… that may… impede the flow of water.”

But in her December 26, 2018 decision, the judge ruled against him. While Sellers successfully proved the obstructions existed, he failed to meet the legal burden of proof that they actually “impede the flow of water.” His claim was defeated by testimony from the HOA President, Jeffrey Kaplan, who stated that the unit had never sustained any flood damage, not even during a “100-year storm in 2014.”

The lesson from this first round is stark: in this legal context, simply pointing out a technical rule break was not enough. The petitioner had to prove that the violation was causing a tangible, negative impact. Without evidence of actual harm or impeded water flow, the theoretical risk was insufficient to win the case.

2. An HOA’s “Right” to Enforce Is Not an “Obligation”

After losing the first round on a question of evidence, Sellers’ argument evolved. He requested a rehearing, which was granted, and the case landed before a new judge, Tammy L. Eigenheer, in the spring of 2019. This shifted the legal focus from physical proof of impeded water flow to a more fundamental question of the HOA’s duties.

Sellers argued that because safety and property values were at stake, the association had a duty to enforce the CC&Rs and compel his neighbors to clear the drainage channel. He contended that at a certain point, an organization’s “right” to act becomes an “obligation.”

The judge’s final decision on May 10, 2019, was clear, absolute, and is where the most powerful lesson of the entire case lies.

“While Respondent has the right to enforce the requirements that the Unit Owners keep the Drainage Easement Area clear, nothing in the CC&Rs provides that Respondent has an obligation to do so.”

This distinction is critical for any homeowner. An HOA can possess the legal power to act but may not be legally compelled to use it. According to the judge’s interpretation, the governing documents placed the responsibility for keeping the channel clear on the individual unit owners. The association’s only stated obligation was to repair damage after it happened, with the cost being billed back to the responsible party.

3. Outside Conflicts Can Cast a Long Shadow

Legal disputes are rarely just about the facts of the case. During the initial hearing, it was revealed that the petitioner was going through a “contentious divorce” and that the condo unit at the center of the dispute was a community asset being sold by the court.

The most dramatic evidence, however, came from an email written by the petitioner’s own wife, Debborah Sellers. The email, submitted as evidence by the HOA, directly undermined his claims about the severity of the drainage issue.

“There has never been any issue with the storm drain behind our house and it is not a major disclosure item… Stop making something out of nothing. AND I HOPE YOU AREN[’]T FREAKING POTENTIAL BUYERS AND OTHER REALTORS WITH THIS NONSENSE.”

In her decision, Judge Mihalsky officially stated that the divorce was “not relevant” to the technical question of whether the HOA violated the CC&Rs. However, she immediately added that the situation “cast a long shadow over his administrative complaint,” suggesting that the personal context, and especially the damaging email, severely harmed the petitioner’s credibility.

4. Writing Letters Isn’t the Same as Being Heard

Throughout the dispute, the petitioner made his concerns known by writing “many letters” to the HOA president. He was persistent in his written communications, attempting to force the issue onto the association’s radar.

Yet, this effort was contrasted with a notable lack of direct participation. According to the testimony of HOA President Kaplan during the first hearing, Sellers “never attended any of Respondent’s noticed Board meetings” where his concerns could have been discussed among the board members.

The HOA’s response to his letters was limited; it sent two general reminder letters to all residents in the affected area but did not take direct enforcement action against any specific homeowner. The practical takeaway is that to effect change or be taken seriously in an HOA dispute, visibility and participation are critical. Writing letters is a start, but attending official meetings to present a case in person can be a more effective strategy for ensuring an issue is formally addressed.

A Cautionary Tale for Any Homeowner

What began as a seemingly straightforward complaint about drainage and rule enforcement devolved into a legal battle that consumed nearly a year, involving two multi-day hearings before two different administrative law judges. The petitioner lost his case on the evidence, then lost it again on the law.

It serves as a potent cautionary tale, demonstrating that in the world of HOA disputes, the obvious path is not always the winning one. It leaves every homeowner with a final, thought-provoking question to ponder: When you see a problem in your community, how do you decide if a fight is worth the cost—not just in money, but in time, credibility, and peace?

Case Participants

Petitioner Side

  • John A Sellers (petitioner)

Respondent Side

  • Edward D. O’Brien (HOA attorney)
    Carpenter, Hazlewood, Delgado & Bolen, PLC/LLP
    Represented Respondent
  • Edith I. Rudder (HOA attorney)
    Carpenter, Hazlewood, Delgado & Bolen, PLC/LLP
    Represented Respondent
  • Jeffrey Kaplan (HOA President/witness)
    Rancho Madera Condominium Association
    Testified on behalf of Respondent

Neutral Parties

  • Diane Mihalsky (ALJ)
    OAH
    ALJ for initial proceedings
  • Tammy L. Eigenheer (ALJ)
    OAH
    ALJ for rehearing
  • Judy Lowe (Commissioner)
    ADRE
  • LDettorre (ADRE staff)
    ADRE
    Recipient of transmission
  • AHansen (ADRE staff)
    ADRE
    Recipient of transmission
  • djones (ADRE staff)
    ADRE
    Recipient of transmission
  • DGardner (ADRE staff)
    ADRE
    Recipient of transmission
  • ncano (ADRE staff)
    ADRE
    Recipient of transmission
  • c. serrano (Clerical staff)
    Transmitted document
  • F. Del Sol (Clerical staff)
    Transmitted document

Other Participants

  • Debborah Sellers (witness)
    Petitioner's wife, email submitted as evidence

George E Lord vs. The Boulders at La Reserve Condominium Association

Posted on by

Case Summary

Case ID 19F-H1918013-REL
Agency ADRE
Tribunal OAH
Decision Date 2018-12-17
Administrative Law Judge Tammy L. Eigenheer
Outcome The Administrative Law Judge dismissed the Petition in its entirety, concluding that the Petitioner failed to establish by a preponderance of the evidence that the Respondent Condominium Association violated A.R.S. § 33-1242, A.R.S. § 33-1260.01, or the association's CC&Rs.
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner George E Lord Counsel —
Respondent The Boulders at La Reserve Condominium Association Counsel Maria Kupillas

Alleged Violations

A.R.S. § 33-1242, A.R.S. § 33-1260.01, and CC&Rs

Outcome Summary

The Administrative Law Judge dismissed the Petition in its entirety, concluding that the Petitioner failed to establish by a preponderance of the evidence that the Respondent Condominium Association violated A.R.S. § 33-1242, A.R.S. § 33-1260.01, or the association's CC&Rs.

Why this result: Petitioner failed to establish a violation of any statute or covenant alleged. The core findings supported the HOA's position that the lessee was engaging in prohibited business activity and subletting, and that the charged attorney fees were permissible.

Key Issues & Findings

Alleged violations concerning notice procedures, leasing restrictions, prohibited business use, and excessive fees.

Petitioner alleged Respondent violated A.R.S. § 33-1242 by failing to include proper citations in violation notices, violated A.R.S. § 33-1260.01 and CC&Rs by imposing illegal restrictions on occupancy dates and prohibiting tenant guests, and violated fee limits under A.R.S. § 33-1260.01(E) by charging $250 in attorney fees.

Orders: The Petition was dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 33-1242
  • A.R.S. § 33-1260.01
  • A.R.S. § 33-1258
  • A.A.C. R2-19-119
  • CC&Rs Section 7.21
  • CC&Rs Section 7.3

Analytics Highlights

Topics: condominium, HOA dispute, leasing restrictions, short-term rental, business use, notice procedure, attorney fees
Additional Citations:

  • A.R.S. § 33-1242
  • A.R.S. § 33-1260.01
  • A.R.S. § 33-1258
  • A.A.C. R2-19-119
  • CC&Rs Section 7.21
  • CC&Rs Section 7.3

Video Overview

Audio Overview

Decision Documents

19F-H1918013-REL Decision – 677039.pdf

Uploaded 2026-04-26T09:47:51 (115.9 KB)

19F-H1918013-REL Decision – 677040.pdf

Uploaded 2026-04-26T09:47:54 (47.9 KB)

19F-H1918013-REL Decision – 677039.pdf

Uploaded 2026-01-23T17:26:46 (115.9 KB)

19F-H1918013-REL Decision – 677040.pdf

Uploaded 2026-01-23T17:26:49 (47.9 KB)

Briefing Document: Lord v. The Boulders at La Reserve Condominium Association

Executive Summary

This document synthesizes the findings and conclusions from the Administrative Law Judge Decision in case number 19F-H1918013-REL, involving Petitioner George E. Lord and Respondent The Boulders at La Reserve Condominium Association. The judge ultimately dismissed all claims brought by the Petitioner, ruling that the Association acted within the bounds of Arizona statutes and its governing documents.

The core of the dispute centered on Mr. Lord’s leasing of three condominium units to an individual, Barrie Shepley, who used the properties to house participants for his commercial fitness training camps. The Association contended this arrangement constituted a prohibited short-term sublease and an improper business use of the units, leading them to suspend amenity access for the occupants.

The judge’s decision affirmed the Association’s position on all counts. Key takeaways include:

• Substance Over Form: The judge concluded that despite the absence of a formal sublease agreement, the nature of the arrangement—specifically a camp pricing structure that varied based on the number of occupants per condo—was effectively a sublet designed to house an “itinerant population,” contrary to the “spirit and purpose” of the community’s rules.

• Business Use Violation: The operation was found to be a business activity that violated the CC&Rs by requiring persons (camp participants) to come to the residential units.

• Procedural Compliance: The Association’s violation notices were deemed compliant with Arizona law. The judge noted that the statute only requires a detailed citation of the violated rule after the owner responds to the initial notice, which the Petitioner failed to do.

• Legality of Fees: A $250 charge levied by the Association’s counsel was determined to be a permissible charge for attorney’s fees related to potential collection, not an illegal penalty for leasing information as the Petitioner alleged.

As a result of these findings, the Petitioner’s request for relief was denied, and the petition was dismissed in its entirety.

I. Case Overview

• Parties:

◦ Petitioner: George E. Lord (unit owner)

◦ Respondent: The Boulders at La Reserve Condominium Association

• Case Number: 19F-H1918013-REL

• Venue: Arizona Office of Administrative Hearings

• Presiding Judge: Tammy L. Eigenheer, Administrative Law Judge

• Hearing Date: November 26, 2018

• Decision Date: December 17, 2018

• Final Disposition: The petition filed by George E. Lord was dismissed.

II. Factual Background and Timeline of Events

1. Lease Agreements: On or about December 4, 2017, Petitioner George Lord, through his management company, leased two units at The Boulders to Barrie Shepley for a term from March 7, 2018, to April 30, 2018. A third unit was subsequently leased to Mr. Shepley on or about January 15, 2018.

2. Commercial Use: Mr. Shepley operated a Canadian fitness business, “Personal Best,” which offered training camps in Tucson. Accommodations at The Boulders were included in the camp packages. The price for a camp varied based on occupancy:

◦ $950.00 each for four campers in a condo

◦ $1075.00 each for three campers in a condo

◦ $1299.00 each for two campers in a condo

3. Occupancy Begins: On March 7, 2018, guests of Mr. Shepley (camp participants) began arriving to occupy the three leased units.

4. Association Intervention: On March 9, 2018, Community Manager Danielle Morris emailed Mr. Lord, stating the Association’s belief that he was in violation of the CC&Rs by allowing subleasing for periods less than the 30-day minimum. Ms. Morris informed him that amenity access cards for the three units were deactivated.

5. Dispute Escalation: Mr. Lord contended that the occupants were merely “guests” of Mr. Shepley, not subletters. Ms. Morris countered that the Association required the names of all occupants and the duration of their stays, and that each occupant must stay for a minimum of 30 days.

6. Information Provided: On March 13, 2018, Mr. Lord provided the names of the occupants and their dates of occupancy, requesting that amenities be restored.

7. Violation Reiterated: On March 16, 2018, Ms. Morris stated the violation was ongoing, as occupants staying from March 7 to March 31 did not meet the 30-day minimum stay requirement.

8. Formal Notice of Violation: On March 18, 2018, Mr. Lord received formal Notices of Violations for the three units. The notices stated that amenity access was suspended because the HOA was not provided with the names of adult occupants and their timeframes. The notice warned that a $300 fine could be applied. Mr. Lord did not respond to these notices.

9. Attorney Involvement: On March 22, 2018, Mr. Lord received a letter from the Association’s legal counsel outlining its legal position and noting an amount due of $250 for attorney’s fees already incurred.

10. Lease Cancellation & Financial Loss: On April 2, 2018, Mr. Shepley cancelled the remainder of the leases due to the lack of amenities for his guests. Mr. Lord asserted a resulting financial loss of $6,900 in rental fees for April 2018.

11. Petition Filing: On August 31, 2018, Mr. Lord filed a petition with the Arizona Department of Real Estate, alleging the Association violated state statutes and its own CC&Rs.

III. Petitioner’s Allegations and Arguments

Mr. Lord’s petition was based on three primary allegations against the Association:

• Allegation 1: Defective Violation Notice (A.R.S. § 33-1242): The Petitioner argued that the Notices of Violations were legally deficient because they failed to cite the specific statute or CC&R provision that had allegedly been violated.

• Allegation 2: Unlawful Occupancy Requirements (A.R.S. § 33-1260.01 & CC&Rs): The Petitioner asserted that the Association overstepped its authority by demanding that each occupant, whom he characterized as a “guest” of the primary lessee, must stay for a minimum of 30 days. He argued the 30-day minimum lease term applied only to the primary lease with Mr. Shepley, not to the occupants.

• Allegation 3: Improper Fees (A.R.S. § 33-1260.01(E)): The Petitioner claimed that the $250 charge from the Association’s attorney constituted an illegal fee, penalty, or charge related to providing leasing information, which he argued was prohibited by statute.

IV. Administrative Law Judge’s Findings and Conclusions

The Administrative Law Judge found that the Petitioner failed to meet the burden of proof for any of his allegations and dismissed the petition. The judge’s reasoning is detailed below.

Finding 1: No Violation of A.R.S. § 33-1242 (Violation Notice)

The judge determined that the Association’s initial Notices of Violations were legally sufficient.

• Legal Reasoning: A.R.S. § 33-1242(C) requires an association to cite the specific provision of the condominium documents that has been violated. However, this obligation is only triggered after the unit owner sends a written response to the initial notice by certified mail.

• Factual Basis: The Petitioner admitted that he did not respond to the formal Notices of Violations he received.

• Conclusion: Because the Petitioner did not take the legally required step to trigger the Association’s duty to provide a specific citation, the Association did not violate the statute.

Finding 2: No Violation of A.R.S. § 33-1260.01 or CC&Rs (Leasing Rules)

The judge concluded that the Association was justified in its actions regarding the occupancy of the units.

• The Arrangement was a “Form” of Subletting: The judge ruled against the Petitioner’s argument that the occupants were merely “guests.” The fact that the price of the fitness camp changed based on how many people shared a unit was seen as evidence that Mr. Shepley was, in effect, subletting the units for his business.

• Prohibited Business Activity: The judge found that Mr. Shepley was operating a business from the units in a manner prohibited by Section 7.3 of the CC&Rs, which disallows business activity that “involve[s] persons coming to the Unit.”

• Spirit of the Law: The decision acknowledged that the specific facts of the case “falls between the cracks of the specific language of the statutes and the regulations.” However, the judge emphasized that the Association’s actions were consistent with the broader intent of its rules, stating, “given the totality of the circumstances, the spirit and purpose of the applicable rules is to allow an association to know who is in the community and to prevent an itinerant population.”

• Conclusion: The Petitioner failed to establish that the Association violated leasing statutes or its own CC&Rs.

Finding 3: No Violation of A.R.S. § 33-1260.01(E) (Fees)

The judge found that the $250 charge was not an illegal penalty.

• Nature of the Charge: The evidence showed that no fines for the lease policy violation had actually been assessed. The $250 charge was explicitly for attorney’s fees related to the potential collection of assessments.

• Legal Reasoning: The judge stated, “Nothing in the cited statute or the CC&Rs prohibits such a charge being implemented.” The fee was not a penalty for “incomplete or late information” as covered by the statute, but a charge for legal costs incurred by the Association.

• Conclusion: The Petitioner failed to establish a violation regarding the assessed fees.

V. Referenced Statutes and Governing Documents

Reference

Provision Summary

Relevance to Case

A.R.S. § 33-1242(B)&(C)

Outlines the process for a unit owner to respond to a violation notice and the association’s subsequent duty to provide specific details of the violation.

The judge found no violation because the Petitioner did not follow the procedure to trigger the association’s duty.

A.R.S. § 33-1260.01(C)

Limits the information an association can require about a tenant to names, contact info for adults, lease period, and vehicle information.

The Petitioner’s case rested on interpreting this statute; the judge found the Association’s inquiries justified by the unique circumstances.

A.R.S. § 33-1260.01(E)

Prohibits an association from imposing fees greater than $15 for incomplete or late leasing information.

The Petitioner argued the $250 attorney fee violated this, but the judge found it was a permissible charge for legal costs, not a penalty.

CC&R Section 7.21

Requires leases to be in writing, for a term of not less than 30 days, and requires owners to provide lessee names and lease dates.

The Association argued the arrangement violated the 30-day minimum stay rule for occupants, which the judge upheld in spirit.

CC&R Section 7.3

Prohibits business activities within a unit that involve persons coming to the unit.

The judge found Mr. Shepley’s fitness camp, which housed participants in the units, was a clear violation of this provision.

Leasing Policy

States a $300 fine may be imposed for violations of the 30-day minimum lease policy.

The Notice of Violation referenced this potential fine, though it was never actually assessed.

VI. Final Order and Procedural Notes

• Order: Based on the above findings, the Administrative Law Judge ordered that the Petition be dismissed.

• Binding Nature: The decision is binding on the parties unless a rehearing is granted. A request for rehearing must be filed with the Commissioner of the Department of Real Estate within 30 days of the service of the Order.

• Related Filings: On the same day the decision was issued, December 17, 2018, the court also issued a separate “Order Vacating Hearing,” likely a procedural filing to cancel a future hearing that was rendered unnecessary by the dismissal of the case.

Study Guide: Lord v. The Boulders at La Reserve Condominium Association

This study guide provides a detailed review of the administrative case No. 19F-H1918013-REL, heard by the Arizona Office of Administrative Hearings. The case involves a dispute between a condominium unit owner, George E. Lord, and his condominium association, The Boulders at La Reserve, concerning leasing policies, occupant regulations, and alleged statutory violations.

Short-Answer Quiz

Instructions: Answer the following questions in two to three complete sentences, based on the information provided in the source documents.

1. Who were the primary parties involved in this administrative hearing, and what were their respective roles?

2. Describe the business arrangement that Barrie Shepley, the petitioner’s lessee, was operating from the leased condominium units.

3. What was the first official action the Condominium Association’s management took in response to the arrival of Barrie Shepley’s guests, and what was their stated reason?

4. According to the Association, what two specific provisions of the governing documents were being violated by the petitioner and his lessee?

5. What was the petitioner’s central argument for why the occupants of the units were not in violation of the Association’s 30-day minimum stay requirement?

6. On what procedural grounds did the petitioner, George Lord, claim that the Association’s “Notice of Violations” was itself a violation of Arizona law (A.R.S. § 33-1242)?

7. Why did the Administrative Law Judge ultimately rule that the Association did not violate A.R.S. § 33-1242?

8. How did the judge interpret the fact that the price for Barrie Shepley’s fitness camps varied based on the number of people sharing a condo?

9. What financial loss did the petitioner claim to have suffered, and what was the direct cause of this loss?

10. What was the final ruling, or “Order,” issued by the Administrative Law Judge in this case?

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Answer Key

1. The primary parties were George E. Lord, the petitioner and owner of multiple condominium units, and The Boulders at La Reserve Condominium Association, the respondent and governing body for the community. The case was adjudicated by Administrative Law Judge Tammy L. Eigenheer.

2. Barrie Shepley operated a fitness business called “Personal Best” that offered training camps in the Tucson area. The price for these camps included accommodations at The Boulders, with the cost per person varying based on how many campers shared a condominium unit.

3. The Association’s first action was to deactivate the amenity access cards for the three units leased by Shepley. Danielle Morris, the Community Manager, stated this was due to a belief that the petitioner’s lessee was subleasing the units for periods of less than the 30-day minimum in violation of the CC&Rs.

4. The Association alleged violations of the CC&Rs related to subleasing for less than the 30-day minimum timeframe. The formal Notices of Violations also cited the failure to provide the names of all adult occupants and the timeframes of their stays to the HOA.

5. The petitioner argued that because his lessee, Mr. Shepley, was not charging a specific rental fee to the occupants, they were merely “guests” and not sub-lessees. Therefore, the 30-day minimum stay requirement applicable to leases did not apply to them.

6. The petitioner alleged that the Association’s failure to include a citation to the specific statute or CC&R provision that had allegedly been violated in the initial Notice of Violations was a violation of A.R.S. § 33-1242.

7. The judge ruled against the petitioner because A.R.S. § 33-1242 only requires an association to provide the specific provision violated after the unit owner sends a written response to the initial notice by certified mail. The petitioner admitted that he did not respond to the Notices of Violations.

8. The judge found that the tiered pricing structure supported the conclusion that Mr. Shepley was, “in a form, subletting the units.” The fact that the camp price decreased as more people shared a unit indicated that the occupants were paying for their accommodations, not simply staying as guests.

9. The petitioner asserted a financial loss of $6,900 in rental fees for April 2018. This loss was directly caused by Barrie Shepley canceling the remainder of his leases due to the lack of amenities for his occupants.

10. The Administrative Law Judge’s final order was that the Petition filed by George E. Lord be dismissed. This decision was binding unless a rehearing was granted.

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Essay Questions

Instructions: The following questions are designed to test a deeper, more analytical understanding of the case. Formulate a comprehensive response to each prompt, citing specific facts, arguments, and legal interpretations from the case file.

1. Analyze the Administrative Law Judge’s reasoning for concluding that Barrie Shepley was “in a form, subletting” the units. Discuss the evidence cited and the concept of the “spirit and purpose” of the rules versus their literal interpretation.

2. Examine the procedural misstep made by the petitioner, George Lord, after receiving the Notices of Violations. How did this action directly impact the judge’s ruling on his claim regarding A.R.S. § 33-1242?

3. Discuss the conflict between a unit owner’s right to lease their property and a condominium association’s right to enforce its governing documents, using the specific provisions of the CC&Rs (Sections 7.21 and 7.3) and state law (A.R.S. § 33-1260.01) as examples from the case.

4. Explain the distinction the judge made between the $300 potential fine mentioned in the Notice of Violations and the $250 attorney’s fee charged to the petitioner. How did this distinction relate to A.R.S. § 33-1260.01(E), and why was the Association’s action deemed permissible?

5. Evaluate the concept of an “itinerant population” as mentioned by the judge. How did Barrie Shepley’s business model contribute to this concern for the Association, and how did it ultimately weigh into the judge’s decision to dismiss the petition?

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Glossary of Key Terms

Term / Name

Definition

Administrative Law Judge (ALJ)

An official who presides over administrative hearings, weighs evidence, and makes legal rulings on disputes involving government agencies. In this case, Tammy L. Eigenheer.

A.R.S. (Arizona Revised Statutes)

The codified body of laws for the state of Arizona. The petitioner alleged violations of specific statutes within this code, namely A.R.S. § 33-1242 and § 33-1260.01.

A.R.S. § 33-1242

A state law governing the process for notifying a unit owner of a violation of condominium documents and the procedures for the owner to respond and contest the notice.

A.R.S. § 33-1260.01

A state law that places limitations on what information an association can require from a unit owner regarding a tenant and caps certain fees or penalties for incomplete information at $15.

Amenity

A feature or facility of a property that provides comfort, convenience, or pleasure. In this case, access to amenities was controlled by key cards, which the Association deactivated.

Barrie Shepley

The individual who leased three condominium units from the petitioner. He operated a fitness business, “Personal Best,” and used the units to house clients attending his training camps.

Covenants, Conditions, and Restrictions. These are the governing legal documents that set out the rules for a planned community or condominium. The Association alleged Shepley’s use of the units violated Sections 7.21 (leasing limitations) and 7.3 (business use limitations).

George E. Lord

The Petitioner in the case. He was the owner of multiple condominium units at The Boulders at La Reserve and filed the petition against the Association.

Itinerant population

A term used by the judge to describe a population of short-term, transient occupants. The judge concluded that the purpose of the Association’s rules was, in part, to prevent this type of occupancy.

Notice of Violations

A formal written document sent by the Association to the petitioner informing him of alleged violations of the governing documents and outlining potential consequences, such as fines.

Petitioner

The party who files a petition initiating a legal or administrative action. In this case, George E. Lord.

Preponderance of the evidence

The standard of proof required in this administrative hearing. It means that the petitioner had the burden of showing that the facts they sought to prove were “more probable than not.”

Respondent

The party against whom a petition is filed. In this case, The Boulders at La Reserve Condominium Association.

Subletting

The practice of a tenant leasing a rented property to a third party. The Association contended Shepley was subletting the units to his campers, while the petitioner argued they were merely guests.

The Boulders at La Reserve Condominium Association

The Respondent in the case. The homeowners’ association (HOA) responsible for governing the condominium community in Oro Valley, Arizona.

The $6,900 ‘Guest’ Mistake: 3 Hard Lessons from an HOA Lawsuit

A $6,900 loss in rental income and a losing legal battle with his HOA—all because of a dispute over the definition of a “guest.” This case between owner George Lord and The Boulders at La Reserve Condominium Association is a masterclass in how quickly and completely an owner can lose when they misinterpret the rules and underestimate an association’s power.

For any homeowner or landlord, this dispute provides three crucial lessons distilled from the administrative court’s decision. Understanding these precedents is essential before you ever find yourself at odds with your own HOA.

Lesson 1: The “Spirit of the Rule” Can Outweigh Your Clever Workaround

The dispute began when the property owner, Mr. Lord, leased three condos to Barrie Shepley, who ran fitness training camps. Mr. Shepley then used the condos to house his camp attendees, often for periods shorter than the HOA’s 30-day minimum lease term.

The owner argued his arrangement complied with the rules. He claimed his tenant, Mr. Shepley, was not subleasing the units; the attendees were merely “guests,” and therefore not subject to the 30-day minimum. It was a clever workaround, but it fell apart under scrutiny for two distinct reasons.

First, the judge looked past the “guest” label to the financial substance of the arrangement. A key piece of evidence was the camp’s pricing: the cost changed based on how many campers shared a condo ($950 each for four campers vs. $1299 each for two). The judge saw this as clear proof that housing was being paid for, making it a form of subletting.

Second, the judge found that the arrangement constituted a prohibited business activity. The association’s CC&Rs (Section 7.3) explicitly forbade any business activity that “involve[s] persons coming to the Unit.” Since the fitness camp required attendees to come to the condos for lodging, it was a direct violation. The judge’s decision was therefore not just based on a subjective interpretation, but was also grounded in a concrete rule violation.

The court looked at the “totality of the circumstances” to make its ruling, a point powerfully summarized in the final decision:

However, given the totality of the circumstances, the spirit and purpose of the applicable rules is to allow an association to know who is in the community and to prevent an itinerant population.

Pro Tip: Before implementing a workaround, ask yourself: “Does this honor the community’s stated goal?” If the answer is no, you’re on thin ice, even if you think you’ve found a loophole.

Lesson 2: You Must Follow Procedure to the Letter, Or You Forfeit Your Rights

Confident in his “guest” interpretation, the homeowner made his next critical error by underestimating the importance of legal procedure. He argued that the HOA’s initial “Notice of Violations” was invalid because it failed to cite the specific CC&R provision that had allegedly been violated.

This argument was swiftly dismissed due to a simple but fatal mistake: the owner never sent a formal written response to the notice by certified mail.

Under Arizona law (A.R.S. § 33-1242), an owner’s formal written response via certified mail triggers the HOA’s obligation to provide the specific provision that was violated. Without that trigger, the HOA’s duty to explain further is never activated. The homeowner failed to pull the trigger. Because he did not follow this exact procedure, his claim was thrown out, and the HOA had no further legal obligation to detail its case.

Analyst’s Takeaway: In a legal dispute, communication that isn’t sent via the officially mandated channel (like certified mail) is legally equivalent to communication that never happened.

Lesson 3: The HOA’s Legal Fees Can Hit Your Wallet Sooner Than You Think

Early in the dispute, the owner received a letter from the HOA’s legal counsel. The letter outlined the association’s position and included a charge for $250.00. This was not a fine for the violation. It was a fee for the lawyer’s time, as explained in the letter:

“As you know, the Association is entitled to recover its costs and attorneys’ fees from you, including $250.00 already incurred for the preparation of this letter.”

Many governing documents contain clauses that allow an HOA to recover its “costs of enforcement.” This letter was an enforcement action, and the legal fee was the cost. The judge found that nothing in the law or CC&Rs prohibited the HOA from immediately passing this expense to the owner.

This initial charge was a precursor to a much larger financial blow. As an enforcement tool for the violations discussed in Lesson 1, the HOA suspended the tenants’ access to community amenities. This pressure tactic worked perfectly. The tenant, Mr. Shepley, cancelled his leases due to the lack of amenity access, leading to the owner’s stated loss of $6,900 in rental fees.

Pro Tip: Assume your HOA’s first legal letter starts a running tab. Budget for legal costs from day one of a formal dispute, not just for potential fines.

Conclusion: Knowledge is Your Best Defense

The case of Lord vs. The Boulders at La Reserve establishes three clear precedents for owners: a rule’s intent can supersede its literal interpretation, procedural shortcuts void your rights, and the financial clock starts ticking the moment an HOA retains counsel.

This case is a firm reminder of an HOA’s power to enforce its rules, but it also highlights the owner’s responsibility to understand them. It begs the question: In our own communities, are we fully aware of the rules we’ve agreed to live by?

Case Participants

Petitioner Side

  • George E. Lord (petitioner)

Respondent Side

  • Maria Kupillas (respondent attorney)
    Law offices of Farley, Choate & Bergin
  • Danielle Morris (community manager)
    The Boulders at La Reserve Condominium Association

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
  • Judy Lowe (ADRE Commissioner)
    Arizona Department of Real Estate
  • LDettorre (ADRE staff)
    Arizona Department of Real Estate
  • AHansen (ADRE staff)
    Arizona Department of Real Estate
  • djones (ADRE staff)
    Arizona Department of Real Estate
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
  • ncano (ADRE staff)
    Arizona Department of Real Estate

Other Participants

  • Barrie Shepley (renter/key individual)

Peter Biondi, Jr. vs. Lakeshore at Andersen Springs Homeowners

Posted on by

Case Summary

Case ID 18F-H1818048-REL
Agency ADRE
Tribunal OAH
Decision Date 2018-08-21
Administrative Law Judge Diane Mihalsky
Outcome The Administrative Law Judge denied the homeowner's petition, finding that the HOA's remaining Director acted permissibly and reasonably upon legal advice in refusing to defend a previous legal action, as the initial Board decision to remove fellow directors was contrary to mandatory statutory procedures outlined in A.R.S. § 33-1243, which requires removal by unit owners, not by the board.
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Peter Biondi, Jr. Counsel —
Respondent Lakeshore at Andersen Springs Homeowners Association Counsel Maria R. Kupillas

Alleged Violations

A.R.S. §§ 33-1242, 33-1243, Respondent’s Bylaw Article II, Section 3 and Article III, Sections 2 and 3, and Respondent’s CC&Rs Section 8.13

Outcome Summary

The Administrative Law Judge denied the homeowner's petition, finding that the HOA's remaining Director acted permissibly and reasonably upon legal advice in refusing to defend a previous legal action, as the initial Board decision to remove fellow directors was contrary to mandatory statutory procedures outlined in A.R.S. § 33-1243, which requires removal by unit owners, not by the board.

Why this result: The Board's previous action of removing directors was illegal under A.R.S. § 33-1243 because director removal must be performed by a member vote. Because the HOA lacked a legal defense to the directors' challenge, the current petition failed to prove a violation when the sole remaining Director chose not to incur unnecessary fees contesting an unwinnable case, which was permissive under A.R.S. § 33-1242.

Key Issues & Findings

Alleged failure of the sole remaining Director to defend a prior petition challenging the board's removal of two directors.

Petitioner alleged the HOA violated governing documents and statutes when the remaining Director chose not to contest a prior Department petition filed by two removed Directors, resulting in their reinstatement. The ALJ found that the initial removal of the Directors by fellow Directors was illegal under A.R.S. § 33-1243(B) and (H), which reserves removal power to members. Because the HOA lacked a good legal defense, the remaining Director's decision not to defend the prior petition, based on legal advice, was permissive under A.R.S. § 33-1242 and not a violation.

Orders: Petitioner’s petition is denied.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1243
  • A.R.S. § 33-1242
  • A.R.S. § 32-2199(1)
  • A.R.S. § 33-1803

Analytics Highlights

Topics: Condominium, HOA Director Removal, Board Authority, Condo Bylaws
Additional Citations:

  • A.R.S. § 33-1243
  • A.R.S. § 33-1242
  • A.R.S. § 32-2199
  • A.R.S. § 33-1248
  • A.R.S. § 33-1803
  • A.A.C. R2-19-119

Video Overview

Audio Overview

Decision Documents

18F-H1818048-REL Decision – 654904.pdf

Uploaded 2026-04-24T11:13:38 (155.5 KB)

18F-H1818048-REL Decision – 654904.pdf

Uploaded 2026-01-23T17:24:48 (155.5 KB)

Briefing Document: Analysis of Administrative Law Judge Decision in Biondi v. Lakeshore at Andersen Springs HOA

Executive Summary

This document synthesizes the findings of the Administrative Law Judge (ALJ) decision in Case No. 18F-H1818048-REL, where a petition filed by homeowner Peter Biondi, Jr. against the Lakeshore at Andersen Springs Homeowners Association (HOA) was denied. The central conflict revolved around the HOA Board’s removal of two directors, Jim Luzzis and Jerry Dubasquier, for alleged violations of the association’s leasing restrictions.

The ALJ’s decision rested on a critical point of law: the HOA Board acted improperly and in violation of Arizona state statute when it removed two of its own members. According to A.R.S. § 33-1243, the power to remove a board director is reserved exclusively for the association’s members (the unit owners) through a formal petition and vote, not for the Board of Directors itself.

Because the initial removal was legally invalid, the subsequent actions of the sole remaining director, Bonnie Henden, were deemed reasonable and permissible. Her decision not to defend the HOA against a petition from the improperly removed directors, a choice made upon the advice of three separate attorneys, was not a violation of her duties. The governing statute (A.R.S. § 33-1242) uses the permissive term “may” regarding the defense of litigation, and the ALJ concluded that no entity is required to mount a defense that is ill-advised and likely to fail. Consequently, Henden’s reinstatement of the directors was a logical correction of the Board’s unlawful action. The factual question of whether the directors had violated the leasing rules was considered secondary to this overriding procedural and statutory failure by the Board.

Case Background and Procedural History

The dispute originated from complaints by HOA members that two serving directors, Jim Luzzis and Jerry Dubasquier, were violating Section 8.13 of the Covenants, Conditions, and Restrictions (CC&Rs) by renting their units as short-term Vacation Rental By Owner (“VRBOs”).

1. Initial Board Action: The Board of Directors met to consider the complaints, concluded that Luzzis and Dubasquier had violated the CC&Rs, and gave them 14 days to remedy the violation by presenting compliant long-term rental agreements.

2. Removal of Directors: At a contentious executive session on January 4, 2018, the five other directors voted to remove or disqualify Luzzis and Dubasquier from the Board. Board member Bonnie Henden testified that she felt this action was a “vendetta” against the two directors for taking opposing positions on other issues.

3. Board Collapse: Following the removal, the Board structure disintegrated. The petitioner, Peter Biondi, Jr., and another director, Jeffrey Washburn, “decided to resign in order to restore calm in the community.” A third director was removed or resigned due to non-payment of assessments. By March or April 2018, this left Bonnie Henden as the sole remaining director.

4. Legal Challenge and Reinstatement: Luzzis and Dubasquier filed a petition with the Arizona Department of Real Estate to protest their removal. After consulting with three different attorneys, Henden chose not to file an answer on behalf of the HOA. The Department subsequently issued a decision in favor of Luzzis and Dubasquier. Following this outcome, Henden reinstated them to the Board to complete their elected terms and cancelled the planned election for their replacements.

5. Petitioner’s Complaint: On May 9, 2018, Peter Biondi, Jr. filed the current petition, alleging that Henden’s refusal to defend the HOA and her decision to reinstate the two directors constituted a violation of Arizona statutes (§§ 33-1242 and 33-1243), HOA Bylaws, and CC&Rs.

Central Legal Issues and Findings

The ALJ determined that the petitioner, Biondi, bore the burden of proof but that the operative facts of the case were not in dispute. The core of the case was not a factual determination but a legal one.

The Dispositive Question: Legality of Director Removal

The judge identified the central legal question as the primary determinant of the case’s outcome:

“…the dispositive issue is not the factual issue of whether Messrs. Luzzis and Dubasquier violated CC&R Section 8.13 by using their units as short-term VRBOs, but the legal issue of whether the other directors on Respondent’s Board properly removed them from the Board…”

The ruling established that the Board’s method of removal was the critical point of failure, rendering the underlying CC&R violation secondary.

Analysis of Arizona Revised Statutes (A.R.S.)

The decision was grounded in a de novo review of A.R.S. § 33-1243, which governs the powers and removal of a condominium association’s board of directors.

• A.R.S. § 33-1243(B): This subsection explicitly prohibits a board from acting on behalf of the association to “determine the qualifications, powers and duties or terms of office of board of directors members.” The ALJ found that the Board’s vote to disqualify Luzzis and Dubasquier was in direct violation of this provision.

• A.R.S. § 33-1243(H): This subsection establishes the exclusive procedure for removing a director, stating that its provisions apply “notwithstanding any provision of the declaration or bylaws to the contrary.” The statute mandates that removal can only be accomplished by:

1. A petition signed by a specified percentage or number of eligible unit owners (e.g., 25% or 100 votes, whichever is less, for an association of 1,000 or fewer members).

2. A majority vote of the unit owners at a special meeting called for this purpose within 30 days of receiving the petition.

The ALJ’s conclusion was unequivocal: “The referenced provisions of A.R.S. § 33-1243 specifically and unequivocally require that the members who elected a director must remove the director.” Because the Board failed to follow this statutory procedure, its removal of Luzzis and Dubasquier was legally invalid, and the HOA “lacked any good legal defense” to their subsequent petition.

The Legality of the Sole Director’s Actions

Based on the finding that the initial removal was unlawful, the ALJ assessed the actions taken by the sole remaining director, Bonnie Henden.

Decision Not to Defend the HOA

The petitioner argued Henden had a duty to defend the HOA against the petition from Luzzis and Dubasquier. The ALJ rejected this argument by citing A.R.S. § 33-1242(A)(4), which states an association “may… defend or intervene in litigation or administrative proceedings.”

The judge’s legal interpretation was that the word “may” indicates permissive intent, not a mandatory requirement. Henden was not statutorily obligated to contest the petition. Her decision was further supported by the legal advice she received from three attorneys, who advised that a defense would likely fail and result in unnecessary legal fees for the association. The ALJ affirmed this prudence, stating, “No statute requires a condominium association or a director to take an ill-advised act or to mount a defense of a previously taken ill-advised act that likely will fail on its merits.”

Reinstatement of Removed Directors

Henden’s decision to reinstate Luzzis and Dubasquier to the Board was found to be a direct and logical consequence of the legally improper removal. By reinstating them, she was correcting the Board’s previous unlawful action.

Relevant Governing Documents and Testimony

Document/Testimony

Key Provisions or Content

Relevance to Decision

A.R.S. § 33-1243

Prohibits boards from determining member qualifications and mandates that only unit owners can remove directors via a petition and vote.

This was the controlling statute that rendered the Board’s initial removal of Luzzis and Dubasquier unlawful.

A.R.S. § 33-1242

States an association “may” defend itself in litigation.

Provided the legal basis for Henden’s discretionary and permissible decision not to defend the HOA.

HOA CC&Rs Section 8.13

Prohibits leasing for “transient, hotel, club, timeshare or similar purposes” and requires all leases to be for a minimum of six months.

This section was the basis for the original complaint but was deemed not the dispositive issue in the case.

HOA Bylaws Article III

Governs director qualifications, number, and the filling of vacancies.

While relevant to Board governance, these bylaws were superseded by the conflicting and more specific state statute (A.R.S. § 33-1243).

Bonnie Henden Testimony

Stated the removal felt like a “vendetta” and that she consulted three attorneys before deciding not to defend the HOA.

Provided context for the internal Board conflict and established that her actions were taken after seeking extensive legal counsel.

Peter Biondi, Jr. Evidence

Submitted exhibits showing Luzzis and Dubasquier were continuing to advertise their units as VRBOs.

The evidence was acknowledged but deemed irrelevant to the central legal question of whether the Board had the authority to remove them.

Final Order and Conclusion

The Administrative Law Judge ordered that the petitioner’s petition be denied.

The final decision establishes a clear legal principle: a homeowners association’s Board of Directors does not have the authority to remove its own members in Arizona. That power is reserved for the unit owners through a specific statutory process. Any action taken by a board in contravention of this statute is legally invalid. Consequently, a director’s decision not to defend such an invalid action, especially when based on legal advice, is not a breach of duty but a prudent measure to avoid wasting association resources on a defense with no legal merit.

Study Guide: Biondi v. Lakeshore at Andersen Springs Homeowners Association

This guide provides a comprehensive review of the Administrative Law Judge Decision in case No. 18F-H1818048-REL, concerning a dispute between a condominium owner and a homeowners association. It includes a quiz with an answer key, essay questions for deeper analysis, and a glossary of key terms found within the legal document.

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Short-Answer Quiz

Answer the following questions in 2-3 sentences each, based on the information provided in the source document.

1. Who were the Petitioner and the Respondent in this case, and what was their relationship?

2. What specific event prompted the Petitioner, Peter Biondi, Jr., to file a petition with the Arizona Department of Real Estate?

3. According to the Respondent’s CC&Rs (Section 8.13), what were the rules regarding the leasing of condominium units?

4. Why were Board Directors Jim Luzzis and Jerry Dubasquier initially removed from their positions by the other directors?

5. How did Bonnie Henden become the sole remaining member of the Respondent’s Board of Directors?

6. What was the “dispositive issue” that the Administrative Law Judge identified as central to the case?

7. According to Arizona Revised Statute (A.R.S.) § 33-1243(H), what is the proper procedure for removing a member of a condominium association’s board of directors?

8. Why did Ms. Henden choose not to defend the association against the petition filed by Messrs. Luzzis and Dubasquier?

9. What does the legal standard “preponderance of the evidence” mean, as defined in the decision?

10. What was the final order issued by the Administrative Law Judge in this case?

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Answer Key

1. The Petitioner was Peter Biondi, Jr., who is a condominium owner and a member of the Lakeshore at Andersen Springs Homeowners Association. The Respondent was the Lakeshore at Andersen Springs Homeowners Association itself.

2. The Petitioner filed the petition because the Board’s sole remaining member, Bonnie Henden, refused to defend the association against a petition filed by two former directors. Instead of defending the board’s prior action, Ms. Henden reinstated the two directors who had been removed.

3. Section 8.13 of the CC&Rs stipulated that all leases must be for a minimum of six months and that units could not be leased for transient, hotel, or similar purposes. Owners were also limited to leasing their unit no more than two separate times in any 12-month period and had to provide a signed copy of the lease to the association.

4. Messrs. Luzzis and Dubasquier were removed after other Board members concluded they had violated CC&R Section 8.13 by renting their units as short-term Vacation Rentals By Owner (VRBOs). The removal occurred after they were given 14 days to remedy the violation and failed to do so to the Board’s satisfaction.

5. After the removal of Luzzis and Dubasquier, the Petitioner and another director resigned to “restore calm.” A third director was removed or resigned for failing to pay an assessment, which left Ms. Henden as the only director on the Board.

6. The dispositive issue was not the factual question of whether Luzzis and Dubasquier had violated the CC&Rs. Rather, it was the legal issue of whether the other directors had the authority to properly remove them from the Board in the first place.

7. A.R.S. § 33-1243(H) states that unit owners may remove a board member by a majority vote at a meeting. This process must be initiated by a petition signed by a specific percentage or number of the association’s members who are eligible to vote.

8. Ms. Henden consulted three different attorneys who advised her that the association would likely lose the case. Their legal advice was based on A.R.S. § 33-1243, which states that board members cannot remove other board members, and defending the improper removal would incur unnecessary legal fees.

9. “Preponderance of the evidence” is defined as proof that convinces the trier of fact that a contention is more probably true than not. It is described as the greater weight of evidence that is sufficient to incline a fair and impartial mind to one side of an issue over the other.

10. The Administrative Law Judge ordered that the Petitioner’s petition be denied. The judge concluded that the Board’s initial removal of the two directors was improper under state law and that Ms. Henden was not required to defend that ill-advised act.

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Essay Questions

The following questions are designed for longer-form analysis and synthesis of the case details. Answers are not provided.

1. Analyze the conflict between the authority granted to the Board in the Lakeshore at Andersen Springs Bylaws (Article III, Sections 2 & 3) and the limitations placed upon it by Arizona Revised Statute § 33-1243. Explain which document takes precedence in the matter of director removal and why, citing the reasoning used by the Administrative Law Judge.

2. Discuss the role and actions of Bonnie Henden after she became the sole remaining director. Evaluate her decision to reinstate Messrs. Luzzis and Dubasquier, considering the legal advice she received, her powers as the sole director, and the potential consequences for the homeowners association.

3. Trace the procedural history of this dispute, beginning with the initial complaints about VRBOs and culminating in the final Administrative Law Judge Decision. Identify the key actions, legal filings, and turning points for each party involved (Luzzis/Dubasquier, the Board, Peter Biondi, and Bonnie Henden).

4. The judge states that the case hinges on a legal issue, not a factual one. Explain the difference between the factual issue (the VRBO rentals) and the legal issue (the removal process) and detail how this distinction was fundamental to the case’s outcome.

5. Based on the statutes cited in the decision, outline the correct, legally compliant process that the members of the Lakeshore at Andersen Springs Homeowners Association should have followed if they wished to remove Messrs. Luzzis and Dubasquier from the Board of Directors. Contrast this with the actions the Board actually took.

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An independent judge who presides over administrative hearings, in this case Diane Mihalsky from the Office of Administrative Hearings.

A.R.S.

Abbreviation for Arizona Revised Statutes, which are the codified laws of the state of Arizona. The decision references several statutes from Title 33 concerning property and condominiums.

Bylaws

The rules and regulations adopted by an organization, such as a homeowners association, for its internal governance. In this case, they govern matters like annual meetings and the composition of the Board of Directors.

Abbreviation for Covenants, Conditions and Restrictions. These are legally binding rules recorded with the property deed that govern what homeowners can and cannot do with their property. Section 8.13 on leasing was a key CC&R in this case.

De Novo Review

A type of legal review where a court or administrative body decides the issues without reference to any legal conclusions or assumptions made by the previous party that heard the case. It is used for determining the construction and application of statutes.

Department

Refers to the Arizona Department of Real Estate, the state agency authorized to receive and decide on petitions for hearings from members of condominium associations.

Petitioner

The party who files a petition or brings an action in a legal proceeding. In this case, the Petitioner was Peter Biondi, Jr.

Preponderance of the Evidence

The standard of proof in most civil cases. It requires the party with the burden of proof (the Petitioner in this matter) to present evidence that is more convincing and more likely to be true than not.

Respondent

The party against whom a petition is filed or an appeal is brought. In this case, the Respondent was the Lakeshore at Andersen Springs Homeowners Association.

Abbreviation for Vacation Rental By Owner, referring to the practice of renting out properties on a short-term basis, similar to a hotel. This practice was alleged to be in violation of the association’s CC&Rs.

Study Guide: Biondi v. Lakeshore at Andersen Springs Homeowners Association

This guide provides a comprehensive review of the Administrative Law Judge Decision in case No. 18F-H1818048-REL, concerning a dispute between a condominium owner and a homeowners association. It includes a quiz with an answer key, essay questions for deeper analysis, and a glossary of key terms found within the legal document.

——————————————————————————–

Short-Answer Quiz

Answer the following questions in 2-3 sentences each, based on the information provided in the source document.

1. Who were the Petitioner and the Respondent in this case, and what was their relationship?

2. What specific event prompted the Petitioner, Peter Biondi, Jr., to file a petition with the Arizona Department of Real Estate?

3. According to the Respondent’s CC&Rs (Section 8.13), what were the rules regarding the leasing of condominium units?

4. Why were Board Directors Jim Luzzis and Jerry Dubasquier initially removed from their positions by the other directors?

5. How did Bonnie Henden become the sole remaining member of the Respondent’s Board of Directors?

6. What was the “dispositive issue” that the Administrative Law Judge identified as central to the case?

7. According to Arizona Revised Statute (A.R.S.) § 33-1243(H), what is the proper procedure for removing a member of a condominium association’s board of directors?

8. Why did Ms. Henden choose not to defend the association against the petition filed by Messrs. Luzzis and Dubasquier?

9. What does the legal standard “preponderance of the evidence” mean, as defined in the decision?

10. What was the final order issued by the Administrative Law Judge in this case?

——————————————————————————–

Answer Key

1. The Petitioner was Peter Biondi, Jr., who is a condominium owner and a member of the Lakeshore at Andersen Springs Homeowners Association. The Respondent was the Lakeshore at Andersen Springs Homeowners Association itself.

2. The Petitioner filed the petition because the Board’s sole remaining member, Bonnie Henden, refused to defend the association against a petition filed by two former directors. Instead of defending the board’s prior action, Ms. Henden reinstated the two directors who had been removed.

3. Section 8.13 of the CC&Rs stipulated that all leases must be for a minimum of six months and that units could not be leased for transient, hotel, or similar purposes. Owners were also limited to leasing their unit no more than two separate times in any 12-month period and had to provide a signed copy of the lease to the association.

4. Messrs. Luzzis and Dubasquier were removed after other Board members concluded they had violated CC&R Section 8.13 by renting their units as short-term Vacation Rentals By Owner (VRBOs). The removal occurred after they were given 14 days to remedy the violation and failed to do so to the Board’s satisfaction.

5. After the removal of Luzzis and Dubasquier, the Petitioner and another director resigned to “restore calm.” A third director was removed or resigned for failing to pay an assessment, which left Ms. Henden as the only director on the Board.

6. The dispositive issue was not the factual question of whether Luzzis and Dubasquier had violated the CC&Rs. Rather, it was the legal issue of whether the other directors had the authority to properly remove them from the Board in the first place.

7. A.R.S. § 33-1243(H) states that unit owners may remove a board member by a majority vote at a meeting. This process must be initiated by a petition signed by a specific percentage or number of the association’s members who are eligible to vote.

8. Ms. Henden consulted three different attorneys who advised her that the association would likely lose the case. Their legal advice was based on A.R.S. § 33-1243, which states that board members cannot remove other board members, and defending the improper removal would incur unnecessary legal fees.

9. “Preponderance of the evidence” is defined as proof that convinces the trier of fact that a contention is more probably true than not. It is described as the greater weight of evidence that is sufficient to incline a fair and impartial mind to one side of an issue over the other.

10. The Administrative Law Judge ordered that the Petitioner’s petition be denied. The judge concluded that the Board’s initial removal of the two directors was improper under state law and that Ms. Henden was not required to defend that ill-advised act.

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Essay Questions

The following questions are designed for longer-form analysis and synthesis of the case details. Answers are not provided.

1. Analyze the conflict between the authority granted to the Board in the Lakeshore at Andersen Springs Bylaws (Article III, Sections 2 & 3) and the limitations placed upon it by Arizona Revised Statute § 33-1243. Explain which document takes precedence in the matter of director removal and why, citing the reasoning used by the Administrative Law Judge.

2. Discuss the role and actions of Bonnie Henden after she became the sole remaining director. Evaluate her decision to reinstate Messrs. Luzzis and Dubasquier, considering the legal advice she received, her powers as the sole director, and the potential consequences for the homeowners association.

3. Trace the procedural history of this dispute, beginning with the initial complaints about VRBOs and culminating in the final Administrative Law Judge Decision. Identify the key actions, legal filings, and turning points for each party involved (Luzzis/Dubasquier, the Board, Peter Biondi, and Bonnie Henden).

4. The judge states that the case hinges on a legal issue, not a factual one. Explain the difference between the factual issue (the VRBO rentals) and the legal issue (the removal process) and detail how this distinction was fundamental to the case’s outcome.

5. Based on the statutes cited in the decision, outline the correct, legally compliant process that the members of the Lakeshore at Andersen Springs Homeowners Association should have followed if they wished to remove Messrs. Luzzis and Dubasquier from the Board of Directors. Contrast this with the actions the Board actually took.

——————————————————————————–

Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An independent judge who presides over administrative hearings, in this case Diane Mihalsky from the Office of Administrative Hearings.

A.R.S.

Abbreviation for Arizona Revised Statutes, which are the codified laws of the state of Arizona. The decision references several statutes from Title 33 concerning property and condominiums.

Bylaws

The rules and regulations adopted by an organization, such as a homeowners association, for its internal governance. In this case, they govern matters like annual meetings and the composition of the Board of Directors.

Abbreviation for Covenants, Conditions and Restrictions. These are legally binding rules recorded with the property deed that govern what homeowners can and cannot do with their property. Section 8.13 on leasing was a key CC&R in this case.

De Novo Review

A type of legal review where a court or administrative body decides the issues without reference to any legal conclusions or assumptions made by the previous party that heard the case. It is used for determining the construction and application of statutes.

Department

Refers to the Arizona Department of Real Estate, the state agency authorized to receive and decide on petitions for hearings from members of condominium associations.

Petitioner

The party who files a petition or brings an action in a legal proceeding. In this case, the Petitioner was Peter Biondi, Jr.

Preponderance of the Evidence

The standard of proof in most civil cases. It requires the party with the burden of proof (the Petitioner in this matter) to present evidence that is more convincing and more likely to be true than not.

Respondent

The party against whom a petition is filed or an appeal is brought. In this case, the Respondent was the Lakeshore at Andersen Springs Homeowners Association.

Abbreviation for Vacation Rental By Owner, referring to the practice of renting out properties on a short-term basis, similar to a hotel. This practice was alleged to be in violation of the association’s CC&Rs.

Case Participants

Petitioner Side

  • Peter Biondi, Jr. (petitioner)
    Appeared on his own behalf; also a unit owner and HOA member
  • Jeffrey Washburn (witness)
    Former Board member; presented testimony by Petitioner

Respondent Side

  • Maria R. Kupillas (HOA attorney)
    Law offices of Farley, Choate & Bergin
    Represented Respondent
  • Bonnie Henden (board member)
    Lakeshore at Andersen Springs Homeowners Association
    Sole remaining Director; presented testimony
  • Jim Luzzis (board member)
    Lakeshore at Andersen Springs Homeowners Association
    Director whose removal was overturned/reinstated
  • Jerry Dubasquier (board member)
    Lakeshore at Andersen Springs Homeowners Association
    Director whose removal was overturned/reinstated

Neutral Parties

  • Diane Mihalsky (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (ADRE Commissioner)
    Arizona Department of Real Estate
    Recipient of transmission
  • Felicia Del Sol (Clerk)
    Transmitting agent
  • LDettorre (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission
  • AHansen (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission
  • ncano (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission

Paul Gounder vs. Royal Riviera Condominium Association

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Case Summary

Case ID 17F-H1716002-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2017-06-12
Administrative Law Judge Suzanne Marwil
Outcome partial
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Paul Gounder Counsel —
Respondent Royal Riviera Condominium Association Counsel Mark Kristopher Sahl

Alleged Violations

A.R.S. § 33-1250(C)(2)

Outcome Summary

The Administrative Law Judge found Respondent violated A.R.S. § 33-1250(C)(2) by using two substantively different ballots during the 2016 board election,. Respondent was ordered to reimburse the Petitioner’s $500.00 filing fee,. The Administrative Law Judge concluded Respondent did not violate A.R.S. § 33-1250(C)(4),.

Why this result: Petitioner failed to prove violation of A.R.S. § 33-1250(C)(4), which specifies timing requirements for ballots; the ALJ noted that a meeting ballot did not need to contain a received-by date or be mailed seven days in advance if it had been substantively the same as the compliant absentee ballot,,,.

Key Issues & Findings

Ballot must provide an opportunity to vote for or against each proposed action.

The use of two substantively different ballots in the March 2016 election violated A.R.S. § 33-1250(C)(2) because members who did not attend the meeting were unaware of an additional candidate (Eric Thompson) listed on the meeting ballot, thereby denying those members the opportunity to vote for or against each proposed action contained in the meeting ballot,. This finding does not require ballots to be identical, but substantive changes must be presented to all members,,.

Orders: Petitioner's Petition was granted, and Respondent was ordered to reimburse Petitioner's filing fee of $500.00,. No other relief was available.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1250(C)(2)
  • A.R.S. § 32-2199.02
  • A.R.S. § 41-1092.08

Analytics Highlights

Topics: HOA, Condominium, Board Election, Absentee Ballot, Statutory Violation, Filing Fee Reimbursement
Additional Citations:

  • A.R.S. § 33-1250(C)(2)
  • A.R.S. § 33-1250(C)(4)
  • A.R.S. § 33-1250(C)
  • A.R.S. § 41-2198.01
  • Article VII CC&Rs

Video Overview

Audio Overview

Decision Documents

17F-H1716002-REL Decision – 564851.pdf

Uploaded 2026-04-24T10:59:29 (44.2 KB)

17F-H1716002-REL Decision – 567887.pdf

Uploaded 2026-04-24T10:59:37 (79.0 KB)

17F-H1716002-REL Decision – 575055.pdf

Uploaded 2026-04-24T10:59:43 (689.5 KB)

17F-H1716002-REL Decision – 523915.pdf

Uploaded 2026-04-24T10:59:47 (103.0 KB)

Briefing Document: Gounder v. Royal Riviera Condominium Association

Executive Summary

This briefing document synthesizes the key events, arguments, and legal conclusions from the administrative case of Paul Gounder versus the Royal Riviera Condominium Association (Case No. 17F-H1716002-REL-RHG). The central issue revolved around the Association’s use of two substantively different ballots for its March 14, 2016, board member election.

The Petitioner, Paul Gounder, alleged that the use of a separate mail-in ballot and an in-person meeting ballot, which contained different candidate lists, violated Arizona statute A.R.S. § 33-1250(C)(2). Specifically, the ballot distributed at the meeting included the name of a seventh candidate, Eric Thompson, who was not listed on the mail-in ballot, thereby denying absentee voters the opportunity to vote for all candidates.

After an initial hearing resulted in a recommended dismissal, a rehearing was granted. Administrative Law Judge (ALJ) Suzanne Marwil ultimately concluded that the Association’s actions constituted a statutory violation. The Judge found that because members voting by mail were not informed of Mr. Thompson’s candidacy, they were denied their right to vote “for or against each proposed action.” The Respondent’s argument that the matter was moot due to a subsequent election was rejected.

The Department of Real Estate adopted the ALJ’s decision, issuing a Final Order on June 12, 2017. The Order granted the petition and required the Royal Riviera Condominium Association to reimburse Mr. Gounder’s $500.00 filing fee. The ruling establishes that while election ballots are not required to be identical, any substantive changes must be presented to all members to ensure an equal opportunity to vote.

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I. Case Overview and Background

This matter was brought before the Arizona Department of Real Estate and the Office of Administrative Hearings.

• Petitioner: Paul Gounder, a condominium owner and member of the Association.

• Respondent: Royal Riviera Condominium Association, a homeowners’ association for a development of approximately 32 condominiums.

• Initial Petition: Filed on or about June 23, 2016.

• Core Allegation: The Association violated A.R.S. § 33-1250(C)(2) and its own CC&Rs by using two substantively different ballots to elect Board members at its March 14, 2016, annual meeting.

II. Procedural History

1. Initial Hearing (October 17, 2016): A hearing was held before Administrative Law Judge Diane Mihalsky.

2. Recommended Dismissal (October 18, 2016): Judge Mihalsky recommended the petition be dismissed, concluding:

3. Rehearing Granted (February 17, 2017): The Petitioner requested a rehearing, which the Department of Real Estate granted. The Department’s order specifically requested a review of A.R.S. § 33-1250, with a focus on subsection (C)(4).

4. Rehearing (May 17, 2017): A rehearing was held before Administrative Law Judge Suzanne Marwil. At this hearing, the Respondent raised a procedural question regarding the correct statutory subsection for review, leading to a temporary order holding the record open until May 24, 2017, for clarification.

5. ALJ Decision (June 2, 2017): Judge Marwil issued a decision finding that the Respondent had committed a statutory violation.

6. Final Order (June 12, 2017): The Commissioner of the Department of Real Estate, Judy Lowe, accepted the ALJ’s decision and issued a Final Order making the decision binding.

III. The Core Dispute: The Two-Ballot System

The parties stipulated that two different ballots were used for the March 14, 2016, board election, which had seven open positions. The key differences are outlined below.

Feature

Mail Ballot (Absentee)

Meeting Ballot (In-Person)

“Mail Ballot”

“Ballot”

Candidates Listed

Six names

Seven names (added Eric Thompson)

Write-in Option

Included a blank line for a write-in candidate

No space provided for write-in candidates

Distribution

Distributed at least seven days before the meeting

Handed out to members attending the meeting

Return Deadline

Specified the date by which it had to be returned

Did not specify when it needed to be returned

IV. Arguments of the Parties

A. Petitioner’s Position (Paul Gounder)

• Violation of A.R.S. § 33-1250(C)(2): The addition of Eric Thompson’s name to the meeting ballot deprived members who voted by mail of their right “to vote for or against each proposed action,” as they had no opportunity to vote for Mr. Thompson.

• Violation of A.R.S. § 33-1250(C)(4): The meeting ballot violated this subsection because it was not mailed to all members at least seven days in advance of the meeting and did not provide a date by which it had to be received to be counted.

B. Respondent’s Position (Royal Riviera Condominium Association)

• No Violation: The statutes do not explicitly require the use of identical ballots for an election.

• Common Practice: It is a common practice for homeowners’ associations to use a different absentee ballot and meeting ballot.

• Mootness: The issue is moot because the Association had already held another election in 2017 and seated a new board, which included the Petitioner’s wife as a member.

V. Administrative Law Judge’s Findings and Conclusions

In her June 2, 2017 decision, ALJ Suzanne Marwil made the following key legal conclusions:

The ALJ found that the Association’s use of two substantively different ballots did violate this statute.

• Reasoning: Members who did not attend the meeting in person were not notified of Mr. Thompson’s willingness to run for the board. As a result, “these members did not have the opportunity to vote for him and hence were denied their right to vote for or against each proposed action contained in the meeting ballot.”

• Clarification: The ruling explicitly states that this finding does not impose a requirement that all ballots must be identical; however, it establishes that “substantive changes to ballots must be presented to all members.”

The ALJ concluded that no violation of this subsection occurred.

• Reasoning: The Petitioner conceded that the absentee ballot itself complied with the statutory requirements (e.g., being mailed seven days in advance with a return-by date). The judge reasoned that a meeting ballot handed out in person would not need to contain this information if it were “substantively the same as the absentee ballot.” The legal problem arose not from a failure to mail the second ballot, but from the substantive difference between the two.

The ALJ determined that the matter was not rendered moot by the 2017 election and the seating of a new board. The Judge affirmed that the tribunal “can and does find that Respondent committed a statutory violation in the course of holding its 2016 election.”

VI. Final Order and Outcome

• ALJ Recommended Order (June 2, 2017):

◦ The Petitioner’s petition should be granted.

◦ The Respondent must reimburse the Petitioner’s filing fee.

◦ No other relief was available to the Petitioner.

• Department of Real Estate Final Order (June 12, 2017):

◦ The Commissioner of the Department of Real Estate accepted and adopted the ALJ’s decision.

◦ The Order is a final administrative action, effective immediately.

◦ The Royal Riviera Condominium Association was ordered to reimburse the Petitioner’s filing fee of $500.00 within thirty (30) days.

◦ The parties were notified that the Order could be appealed via a complaint for judicial review.

Study Guide: Gounder v. Royal Riviera Condominium Association

This study guide provides a comprehensive review of the administrative case Paul Gounder v. Royal Riviera Condominium Association, Case No. 17F-H1716002-REL-RHG. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms based on the provided legal documents.

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Short-Answer Quiz

Instructions: Answer the following ten questions in 2-3 sentences each, based on the information in the case documents.

1. What was the central allegation made by the Petitioner, Paul Gounder, in his initial petition?

2. Describe the two different ballots used by the Royal Riviera Condominium Association for its March 14, 2016, board election.

3. What were the two primary legal arguments made by the Respondent, Royal Riviera Condominium Association, to defend its actions?

4. What was the initial outcome of the hearing held on October 17, 2016, before Administrative Law Judge Diane Mihalsky?

5. What was Administrative Law Judge Suzanne Marwil’s final conclusion regarding the alleged violation of A.R.S. § 33-1250(C)(2)?

6. How did Judge Marwil explain her finding that A.R.S. § 33-1250(C)(4), which deals with ballot delivery timelines, was not violated?

7. How did the Respondent argue that the case was moot, and why did Judge Marwil reject this argument?

8. According to the Final Order issued by the Commissioner of the Department of Real Estate, what specific relief was granted to the Petitioner?

9. What is the standard of proof in this matter, and which party has the burden of proof?

10. What specific action did the Department of Real Estate request be reviewed when it granted the request for a rehearing?

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Answer Key

1. The Petitioner, Paul Gounder, alleged that the Respondent violated A.R.S. § 33-1250(C)(2) and its own CC&Rs. The violation occurred by using two substantively different ballots for the election of Board members at the annual meeting on March 14, 2016.

2. The first ballot was an absentee “Mail Ballot” with six candidate names and a blank line for a write-in. The second ballot, handed out at the meeting, was titled “Ballot” and included the names of seven candidates (adding Eric Thompson) but had no space for a write-in candidate.

3. The Respondent argued that it committed no violation because the statutes do not explicitly require the use of identical ballots and that using different absentee and meeting ballots is common practice. It also maintained that the matter was moot because a new election had already occurred in 2017.

4. Following the initial hearing, Judge Diane Mihalsky recommended the dismissal of the Petition on October 18, 2016. She concluded that no statute or bylaw prevented the Respondent from adding the names of willing members to the ballot used at the annual election.

5. Judge Suzanne Marwil found that the use of two substantively different ballots did violate A.R.S. § 33-1250(C)(2). Because members voting by mail were not informed of Eric Thompson’s candidacy, they were denied their right to vote for or against each proposed action.

6. Judge Marwil concluded A.R.S. § 33-1250(C)(4) was not violated because the absentee ballot itself complied with the statute’s requirements for delivery timelines. She reasoned that a meeting ballot would not need to meet these requirements if it were substantively the same as the compliant absentee ballot; the problem arose only because the ballots were different.

7. The Respondent argued the case was moot because a new board had been seated in a 2017 election. Judge Marwil rejected this, stating that the fact a new board is seated does not prevent an Administrative Law Judge from finding that a statutory violation occurred in a past election.

8. The Final Order, issued by Commissioner Judy Lowe on June 12, 2017, granted the Petitioner’s petition. It ordered the Respondent to reimburse the Petitioner’s filing fee of $500.00 within thirty (30) days.

9. The standard of proof is a “preponderance of the evidence,” as stated in A.A.C. R2-19-119(A). Pursuant to A.A.C. R2-19-119(B), the Petitioner has the burden of proof in the matter.

10. In its February 17, 2017, Order Granting Request for Rehearing, the Department of Real Estate specifically requested a review of A.R.S. § 33-1250, and in particular, A.R.S. § 33-1250(C)(4).

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Suggested Essay Questions

Instructions: The following questions are designed for longer, essay-style responses to test a deeper understanding of the case. Answers are not provided.

1. Analyze the legal distinction Judge Marwil makes between ballots being “identical” versus “substantively different.” How did this distinction become the central point upon which her decision on A.R.S. § 33-1250(C)(2) turned?

2. Trace the procedural history of this case, from the filing of the initial petition to the issuance of the Final Order. Discuss the role and decisions of each key actor, including Petitioner Gounder, Respondent Royal Riviera, ALJ Mihalsky, ALJ Marwil, and Commissioner Lowe.

3. Evaluate the legal arguments presented by the Respondent. Why was the argument about “common practice” for homeowners’ associations ultimately unpersuasive, and why did the “mootness” doctrine not apply?

4. Discuss the significance of the specific provisions within A.R.S. § 33-1250(C). How do subsections (C)(2) and (C)(4) work together to ensure fair voting rights for all members of a condominium association, including those who vote by absentee ballot?

5. Examine the relationship between the Arizona Department of Real Estate and the Office of Administrative Hearings as demonstrated in this case. How do they interact to adjudicate disputes between homeowners and their associations?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official who presides over administrative hearings, hears evidence, and makes legal findings and recommendations. In this case, Diane Mihalsky and Suzanne Marwil served as ALJs.

A.R.S. (Arizona Revised Statutes)

The codified collection of laws for the state of Arizona. This case centered on the interpretation of A.R.S. § 33-1250.

Arizona Department of Real Estate (the Department)

The state agency authorized by statute to receive and decide Petitions for Hearings from members of homeowners’ associations in Arizona. It granted the rehearing and accepted the final ALJ decision.

CC&Rs (Covenants, Conditions, and Restrictions)

The governing legal documents that set up the rules for a planned community or condominium. The Petitioner alleged the Respondent violated Article VII of its CC&Rs.

Final Order

The concluding and binding decision in an administrative case. In this matter, the Final Order was issued by the Commissioner of the Department of Real Estate on June 12, 2017, accepting the ALJ’s decision.

A legal term for a matter that is no longer in controversy or has become irrelevant. The Respondent unsuccessfully argued the case was moot because a subsequent election had been held.

Office of Administrative Hearings (OAH)

An independent state agency that conducts administrative hearings for other state agencies. The Department of Real Estate referred this case to the OAH for a hearing.

Petitioner

The party who files a petition initiating a legal or administrative action. In this case, the Petitioner was Paul Gounder.

Preponderance of the Evidence

The standard of proof required in this administrative hearing. It means the party with the burden of proof must convince the judge that there is a greater than 50% chance that their claim is true.

Rehearing

A second hearing of a case to review the decision made in the first hearing. The Petitioner requested and was granted a rehearing after the initial recommendation to dismiss his petition.

Respondent

The party against whom a petition is filed. In this case, the Respondent was the Royal Riviera Condominium Association.

Your HOA’s Election Rules Might Be Unfair. This Court Case Explains Why.

Introduction: The Devil in the Details

Living in a community governed by a Homeowners’ Association (HOA) often means navigating a complex web of rules, regulations, and procedures. While most are designed to maintain property values and community standards, the enforcement of these rules can sometimes feel arbitrary. But what happens when the very process for electing the board that enforces those rules is flawed?

A fascinating legal challenge demonstrates that even a single, seemingly minor discrepancy in an HOA election can have significant consequences. But the victory was anything but certain. In the case of Paul Gounder versus the Royal Riviera Condominium Association, the homeowner’s initial petition was actually recommended for dismissal by the first judge. It was only through persistence—requesting a rehearing—that the homeowner ultimately prevailed. This case serves as a powerful real-world example of why procedural fairness in community governance is not just important—it’s legally required—and reveals several surprising lessons for any homeowner who values a fair and transparent election process.

Takeaway 1: “Common Practice” Isn’t a Legal Defense

When challenged on its election procedures, the Royal Riviera Condominium Association’s defense was simple: it was merely following “common practice.” The board argued that many HOAs use a different absentee and in-person ballot, so they had done nothing wrong. However, the Administrative Law Judge disregarded this argument entirely, focusing instead on the explicit requirements of Arizona statute A.R.S. § 33-1250(C)(2). This decision provides a crucial lesson for all homeowners: an association’s internal habits or traditions do not override clear legal statutes. If a state law or the community’s own governing documents dictate a specific procedure, the HOA must follow it, regardless of what other associations might be doing. This empowers homeowners by showing that the law, not just internal tradition, is the ultimate authority governing their association’s actions.

Takeaway 2: A “Small” Change Can Invalidate an Election

The dispute in the March 14, 2016 election centered on two different ballots used for the same board election. The mail-in ballot, sent to members voting absentee, listed six names and included a blank line for a write-in candidate. The in-person ballot, distributed to members at the meeting, listed seven names—adding candidate Eric Thompson—and provided no space for write-ins. This difference was not seen as a minor error but as a “substantive” change that fundamentally altered the election. The judge reasoned that members who voted by mail “did not have the opportunity to vote for him and hence were denied their right to vote for or against each proposed action contained in the meeting ballot.”

The judge made a critical distinction about what constitutes a fair process, clarifying that the issue wasn’t about perfection, but equality of opportunity.

Finding this violation does not impose a requirement that ballots be identical; it simply states that substantive changes to ballots must be presented to all members.

This point is not about minor cosmetic differences like fonts or paper color. It’s about ensuring every single voting member has the exact same set of choices. Adding or removing a candidate on one version of a ballot creates two different elections, disenfranchising one group of voters. This ruling affirms that a fair election requires that all members have an equal opportunity to vote on all candidates and measures.

Takeaway 3: Accountability Matters, Even After the Fact

The association attempted to have the case dismissed by arguing that the issue was “moot.” Because a new election had already been held in 2017 and a new board was in place, the HOA claimed the flawed 2016 election no longer mattered. The Administrative Law Judge explicitly rejected this argument. The decision stated that “the fact that a new board is currently seated does not render the matter moot as the Administrative Law Judge can and does find that Respondent committed a statutory violation in the course of holding its 2016 election.” The final order granted the homeowner’s petition and required the Royal Riviera Condominium Association to reimburse his $500.00 filing fee. This is an impactful takeaway for any homeowner who feels it’s too late to act. It demonstrates that an HOA can be held legally accountable for past procedural violations, establishing an important precedent for the community and putting the board on notice for future conduct.

Conclusion: Knowledge is Power

The case of Gounder v. Royal Riviera Condominium Association is a powerful reminder that procedural fairness, strict adherence to legal statutes, and the vigilance of individual homeowners are essential checks on the power of an HOA board. The core lesson is clear: seemingly small details in an election process can have major legal consequences. Homeowners who take the time to understand the specific laws and bylaws governing their community can successfully challenge their associations. But this case also teaches a deeper lesson about perseverance. Faced with an initial recommendation for dismissal, the homeowner could have given up. Instead, he challenged the ruling and won on rehearing, proving that knowledge combined with conviction is a powerful force for ensuring the principles of fairness and equality are upheld.

Does your own community’s voting process ensure every member has an equal voice, and would it stand up to this kind of scrutiny?

Case Participants

Petitioner Side

  • Paul Gounder (petitioner)
  • Frederick C. Zehm (witness)
    Royal Riviera Condominium Association member
    Testified for Petitioner
  • Marlys Kleck (witness)
    Royal Riviera Condominium Association member
    Testified for Petitioner

Respondent Side

  • Mark Kristopher Sahl (HOA attorney)
    Carpenter Hazlewood Delgado & Bolen PLC
  • Dan Peterson (property manager)
    Owner of Respondent's management company

Neutral Parties

  • Diane Mihalsky (ALJ)
    Presided over initial hearing
  • Suzanne Marwil (ALJ)
    Presided over rehearing
  • Judy Lowe (ADRE Commissioner)
    Arizona Department of Real Estate
  • Abby Hansen (ADRE staff/HOA Coordinator)
    Arizona Department of Real Estate
    Also listed as AHansen
  • LDettorre (ADRE staff)
    Arizona Department of Real Estate
  • djones (ADRE staff)
    Arizona Department of Real Estate
  • jmarshall (ADRE staff)
    Arizona Department of Real Estate
  • ncano (ADRE staff)
    Arizona Department of Real Estate
  • M. Aguirre (staff)
    Transmitted order

Other Participants

  • Eric Thompson (member/candidate)
    Candidate added to meeting ballot
  • Al DeFalco (member/candidate)
    Nominated from the floor