Case Summary
| Case ID | 23F-H058-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2023-10-04 |
| Administrative Law Judge | Velva Moses-Thompson |
| Outcome | The Administrative Law Judge dismissed Petitioner John R. Ashley's petition against Rancho Reyes II Community Association, Inc. The ALJ found that the HOA did not violate the Bylaws regarding the minimum number of directors because compliance was impossible due to lack of member interest, and the issue was subsequently moot as the board currently met the minimum requirement. |
| Filing Fees Refunded | $500.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | John R. Ashley | Counsel | — |
|---|---|---|---|
| Respondent | Rancho Reyes II Community Association, INC | Counsel | James Brewer, Esq. |
Alleged Violations
Article IV, Section 1 of the Bylaws
Outcome Summary
The Administrative Law Judge dismissed Petitioner John R. Ashley's petition against Rancho Reyes II Community Association, Inc. The ALJ found that the HOA did not violate the Bylaws regarding the minimum number of directors because compliance was impossible due to lack of member interest, and the issue was subsequently moot as the board currently met the minimum requirement.
Why this result: Petitioner failed to provide sufficient evidence to rebut Respondent’s claim that it actively sought a third board member. The Respondent was exonerated under the legal doctrine of impossibility of performance, and the current compliance with the three-member minimum rendered the dispute moot.
Key Issues & Findings
Alleged violation regarding the minimum number of Board Directors
Petitioner alleged Respondent violated Article IV, Section 1 of the Bylaws by having only two Board Directors dismiss and order a redo of the 1/9/2023 Annual Membership Meeting for 3/7/2023, arguing that three directors were required to properly handle the Association’s affairs.
Orders: The petition is dismissed. Respondent was unable to comply with the Bylaws requiring three directors due to impossibility (lack of member interest) while actively seeking compliance, and the dispute is currently moot as the board now has three or more members.
Filing fee: $500.00, Fee refunded: No
Disposition: petitioner_loss
- A.R.S. §§ 33-1801 to 33-1818
- A.R.S. § 32-2199(B)
- A.R.S. § 33-1803
- Garner v. Ellingson, 18 Ariz. 181, 182 (App. 1972)
- Whelan v. Griffith Consumers Company, 170 A.2d 229, 230 (D.C. App., 1961)
- A.R.S. § 41-1092.07(G)(2)
- A.A.C. R2-19-119(A) and (B)(1)
- Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)
- A.A.C. R2-19-119(B)(2)
- MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
- BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999)
- Powell v. Washburn, 211 Ariz. 553, 556 ¶ 9, 125 P.3d 373, 376 (2006)
- Lookout Mountain Paradise Hills Homeowners’ Assân v. Viewpoint Assocs., 867 P.2d 70, 75 (Colo. App. 1993)
Analytics Highlights
- A.R.S. §§ 33-1801 to 33-1818
- A.R.S. § 32-2199(B)
- A.R.S. § 33-1803
- Garner v. Ellingson, 18 Ariz. 181, 182 (App. 1972)
- Whelan v. Griffith Consumers Company, 170 A.2d 229, 230 (D.C. App., 1961)
- A.R.S. § 41-1092.07(G)(2)
- A.A.C. R2-19-119(A) and (B)(1)
- Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)
- A.A.C. R2-19-119(B)(2)
- MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
- BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999)
- Powell v. Washburn, 211 Ariz. 553, 556 ¶ 9, 125 P.3d 373, 376 (2006)
- Lookout Mountain Paradise Hills Homeowners’ Assân v. Viewpoint Assocs., 867 P.2d 70, 75 (Colo. App. 1993)
Related election workflow tool
Many HOA election disputes start with preventable workflow problems: unclear ballot language, separate-vote issues, quorum tracking, paper/online reconciliation, proxy handling, or incomplete records. HOABallot is a separate platform built to document the voting workflow from notice through certification.
Video Overview
Audio Overview
Decision Documents
23F-H058-REL Decision – 1075520.pdf
23F-H058-REL Decision – 1078604.pdf
23F-H058-REL Decision – 1078608.pdf
23F-H058-REL Decision – 1099484.pdf
23F-H058-REL Decision – 1075520.pdf
23F-H058-REL Decision – 1078604.pdf
23F-H058-REL Decision – 1078608.pdf
23F-H058-REL Decision – 1099484.pdf
This summary addresses the administrative hearing held on September 14, 2023, in the matter of John R. Ashley v. Rancho Reyes II Community Association, INC (No. 23F-H058-REL).
Key Facts and Main Issues
Petitioner John R. Ashley challenged the actions of the Rancho Reyes II Community Association (Respondent). The sole issue of the hearing was whether the Respondent violated Article IV, Section 1 of the Community Bylaws. This bylaw requires the affairs of the Association to be managed by "not less than three (3) nor more than nine (9) directors".
The violation Petitioner alleged was that two sitting Board Directors (Sherry Ortega and Maria Ruelas) acted alone (on or about January 19, 2023) in dismissing the results of the January 2023 Annual Membership Meeting and ordering a redo election for March 7, 2023, when at least three directors were required to handle Association affairs. It was established that the Board operated with only two members from late 2021 until the March 2023 election.
The January 2023 election, in which five members were elected, was invalidated by the two existing board members after the community manager suspected fraud and irregularities (including stuffed ballots, improper envelopes, and an elected candidate whose husband stated she did not submit her name and was not fluent in English).
Key Arguments
Petitioner's Argument: Petitioner argued the decision to redo the election was invalid because it was made by fewer than three directors, thus violating the Bylaw. Petitioner also contended that the two directors (Ortega and Ruelas) were not duly elected in 2022, asserting that there were effectively zero legal board members when the re-election was ordered. Petitioner further argued that the Respondent's claims of fraud were "non-existent" under ARS title 33, Section 1812, because the board was responsible for approving returned ballots prior to the meeting.
Respondent's Legal Defense: Respondent asserted that operating with only two members was due to impossibility or impracticability of performance. Respondent argued that it actively sought a third board member, but homeowners were not interested in serving. Respondent relied on Arizona case law, stating that "when, due to circumstances beyond the control of the parties the performance of a contract is rendered impossible, the party failing to perform is exonerated" (*Garner v. Ellingson*). The Respondent maintained that the re-election was necessary due to the severe irregularities in the January vote.
Outcome and Legal Decision
On October 4, 2023, Administrative Law Judge Velva Moses-Thompson issued a decision dismissing the Petition.
The Administrative Law Judge (ALJ) concluded that Petitioner failed to meet the burden of proof to establish a violation by a preponderance of the evidence. The ALJ found that while the Bylaws required a minimum of three directors, the preponderance of the evidence showed that the Respondent actively sought a third member, and it was "unable to comply with Article IV, Section 1 of the Bylaws" due to lack of interest from members. The ALJ implicitly accepted the Respondent's defense that non-compliance was due to circumstances beyond the control of the parties.
Furthermore, the ALJ noted that the Association currently has at least three duly elected board members (elected in March 2023), meaning the issue of Bylaw compliance "is no longer in dispute". Based on the impossibility defense and the resolution of the current dispute regarding board size, the Petition was ordered dismissed.
Questions
Question
Can my HOA be penalized for having fewer than the required number of board members if no one volunteers to serve?
Short Answer
Likely not. If the HOA actively seeks candidates but no one steps up, they may be exonerated due to 'impossibility of performance.'
Detailed Answer
The decision establishes that if an HOA board is understaffed (e.g., 2 members when bylaws require 3) because homeowners refuse to volunteer despite recruitment efforts, the HOA is not held liable. The legal principle of 'impossibility' applies when circumstances beyond the parties' control prevent compliance with the bylaws.
Alj Quote
It is well settled that when, due to circumstances beyond the control of the parties the performance of a contract is rendered impossible, the party failing to perform is exonerated.
Legal Basis
Contract Law Principles (Garner v. Ellingson); Bylaws Article IV, Section 1
Topic Tags
- Board Composition
- Impossibility Defense
- Bylaws
Question
If my HOA has already fixed a violation by the time of the hearing, can I still get a ruling against them?
Short Answer
No. If the HOA comes into compliance before the decision is made, the dispute may be considered resolved and the petition dismissed.
Detailed Answer
In this case, the homeowner sued because the board had too few members. However, by the time of the hearing, a full board had been elected. The judge dismissed the petition because the violation was no longer active and compliance was not in dispute.
Alj Quote
Accordingly, because the preponderance of the evidence has shown that Respondent was unable to comply with Article IV, Section 1 of the Bylaws and compliance with Article IV, Section 1 of the Bylaws is no longer in dispute, the Petition must be dismissed.
Legal Basis
Mootness
Topic Tags
- Procedural
- Mootness
- Dismissal
Question
Who has the burden of proof in an administrative hearing against an HOA?
Short Answer
The homeowner (Petitioner) has the burden to prove the violation occurred.
Detailed Answer
The homeowner must prove their case by a 'preponderance of the evidence.' This means they must convince the judge that their claim is more likely true than not.
Alj Quote
Petitioners bear the burden of proof to establish that Respondent violated Article IV, Section 1 of its Bylaws, by a preponderance of the evidence.
Legal Basis
A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A)
Topic Tags
- Burden of Proof
- Legal Standards
- Hearing Procedures
Question
What counts as 'preponderance of the evidence' in an HOA dispute?
Short Answer
Evidence that makes a claim 'more probably true than not.'
Detailed Answer
It is not about the quantity of witnesses, but the convincing force of the evidence. It must be sufficient to incline a fair mind to one side over the other.
Alj Quote
A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.
Legal Basis
Arizona Law of Evidence
Topic Tags
- Evidence
- Legal Definitions
Question
How are HOA bylaws and restrictive covenants interpreted by the judge?
Short Answer
They are interpreted to support the intent of the parties and the underlying purpose of the document.
Detailed Answer
The judge will look at the documents as a whole rather than isolating a single sentence, ensuring that the interpretation gives effect to the intended purpose of the rules.
Alj Quote
Restrictive covenants must be construed as a whole and interpreted in view of their underlying purposes, giving effect to all provisions contained therein.
Legal Basis
Contract Interpretation Principles (Powell v. Washburn)
Topic Tags
- CC&R Interpretation
- Bylaws
Question
Can an HOA board order a new election if they suspect fraud in the previous one?
Short Answer
Yes, this action was accepted in the context of this decision.
Detailed Answer
The decision notes that the community manager and board members decided to hold a new election after consulting with an attorney regarding suspected fraudulent tactics and unfair processes in the initial election.
Alj Quote
Respondent’s community manager suspected that the election was not a fair process and that certain individuals used fraudulent tactics to influence the election. After consulting with Respondent’s attorney, the community manager along with Ms. Ortega decided to hold a new election in March of 2023.
Legal Basis
Board Authority
Topic Tags
- Elections
- Fraud
- Board Powers
Case
- Docket No
- 23F-H058-REL
- Case Title
- John R. Ashley v. Rancho Reyes II Community Association, Inc.
- Decision Date
- 2023-10-04
- Alj Name
- Velva Moses-Thompson
- Tribunal
- Office of Administrative Hearings
- Agency
- Arizona Department of Real Estate
Questions
Question
Can my HOA be penalized for having fewer than the required number of board members if no one volunteers to serve?
Short Answer
Likely not. If the HOA actively seeks candidates but no one steps up, they may be exonerated due to 'impossibility of performance.'
Detailed Answer
The decision establishes that if an HOA board is understaffed (e.g., 2 members when bylaws require 3) because homeowners refuse to volunteer despite recruitment efforts, the HOA is not held liable. The legal principle of 'impossibility' applies when circumstances beyond the parties' control prevent compliance with the bylaws.
Alj Quote
It is well settled that when, due to circumstances beyond the control of the parties the performance of a contract is rendered impossible, the party failing to perform is exonerated.
Legal Basis
Contract Law Principles (Garner v. Ellingson); Bylaws Article IV, Section 1
Topic Tags
- Board Composition
- Impossibility Defense
- Bylaws
Question
If my HOA has already fixed a violation by the time of the hearing, can I still get a ruling against them?
Short Answer
No. If the HOA comes into compliance before the decision is made, the dispute may be considered resolved and the petition dismissed.
Detailed Answer
In this case, the homeowner sued because the board had too few members. However, by the time of the hearing, a full board had been elected. The judge dismissed the petition because the violation was no longer active and compliance was not in dispute.
Alj Quote
Accordingly, because the preponderance of the evidence has shown that Respondent was unable to comply with Article IV, Section 1 of the Bylaws and compliance with Article IV, Section 1 of the Bylaws is no longer in dispute, the Petition must be dismissed.
Legal Basis
Mootness
Topic Tags
- Procedural
- Mootness
- Dismissal
Question
Who has the burden of proof in an administrative hearing against an HOA?
Short Answer
The homeowner (Petitioner) has the burden to prove the violation occurred.
Detailed Answer
The homeowner must prove their case by a 'preponderance of the evidence.' This means they must convince the judge that their claim is more likely true than not.
Alj Quote
Petitioners bear the burden of proof to establish that Respondent violated Article IV, Section 1 of its Bylaws, by a preponderance of the evidence.
Legal Basis
A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A)
Topic Tags
- Burden of Proof
- Legal Standards
- Hearing Procedures
Question
What counts as 'preponderance of the evidence' in an HOA dispute?
Short Answer
Evidence that makes a claim 'more probably true than not.'
Detailed Answer
It is not about the quantity of witnesses, but the convincing force of the evidence. It must be sufficient to incline a fair mind to one side over the other.
Alj Quote
A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.
Legal Basis
Arizona Law of Evidence
Topic Tags
- Evidence
- Legal Definitions
Question
How are HOA bylaws and restrictive covenants interpreted by the judge?
Short Answer
They are interpreted to support the intent of the parties and the underlying purpose of the document.
Detailed Answer
The judge will look at the documents as a whole rather than isolating a single sentence, ensuring that the interpretation gives effect to the intended purpose of the rules.
Alj Quote
Restrictive covenants must be construed as a whole and interpreted in view of their underlying purposes, giving effect to all provisions contained therein.
Legal Basis
Contract Interpretation Principles (Powell v. Washburn)
Topic Tags
- CC&R Interpretation
- Bylaws
Question
Can an HOA board order a new election if they suspect fraud in the previous one?
Short Answer
Yes, this action was accepted in the context of this decision.
Detailed Answer
The decision notes that the community manager and board members decided to hold a new election after consulting with an attorney regarding suspected fraudulent tactics and unfair processes in the initial election.
Alj Quote
Respondent’s community manager suspected that the election was not a fair process and that certain individuals used fraudulent tactics to influence the election. After consulting with Respondent’s attorney, the community manager along with Ms. Ortega decided to hold a new election in March of 2023.
Legal Basis
Board Authority
Topic Tags
- Elections
- Fraud
- Board Powers
Case
- Docket No
- 23F-H058-REL
- Case Title
- John R. Ashley v. Rancho Reyes II Community Association, Inc.
- Decision Date
- 2023-10-04
- Alj Name
- Velva Moses-Thompson
- Tribunal
- Office of Administrative Hearings
- Agency
- Arizona Department of Real Estate
Case Participants
Petitioner Side
- John R. Ashley (petitioner)
Represented himself - Rmulo Gonzalez (board member elect)
Elected in March 2023 election; contested re-election procedures - James Canella (board member elect)
Elected in January 2023 election; member of the community who desired to serve - Daniel Walker (board member elect)
Elected in January 2023 election - Richard Springer (witness reference)
Homeowner mentioned by Petitioner as willing to serve on the board - Charles Seers (witness reference)
Homeowner mentioned by Petitioner as willing to serve on the board; name variations include Charles Zippers
Respondent Side
- James Brewer (attorney)
Tyson & Mendes, LLP
Represented Respondent Rancho Reyes II Community Association - Leah M. McKeever (attorney)
Tyson & Mendes, LLP - Lynn M. Allen (attorney)
Tyson & Mendes, LLP - Sherry Ortega (board member)
Rancho Reyes II Community Association
Vice President since March 2023; President previously; testified for Respondent - Maria Ruelas (board member)
Rancho Reyes II Community Association
Director in 2022 until March 2023 - Kimberly Schone (COO/witness)
Mission Management (Community Manager)
Chief Operating Officer, testified for Respondent - Ronda Raal (CEO/property manager)
Mission Management (Community Manager)
CEO of the management company - Sammy (assistant)
Mission Management (Community Manager)
Assistant who helped count ballots for January 2023 election; name variations include Tammy, Cammy, Samantha - Joy (manager)
Mission Management (Community Manager)
Manager during January 2023 election period - Jennifer (manager)
Mission Management (Community Manager)
Current manager of the account - Vince (management staff)
Mission Management (Community Manager)
Saw ballot video footage
Neutral Parties
- Velva Moses-Thompson (ALJ)
Office of Administrative Hearings
Also referred to as Fala Moses Thompson - Susan Nicolson (Commissioner)
Arizona Department of Real Estate (ADRE) - AHansen (ADRE staff)
Arizona Department of Real Estate (ADRE)
Recipient of official documents - VNunez (ADRE staff)
Arizona Department of Real Estate (ADRE)
Recipient of official documents - DJones (ADRE staff)
Arizona Department of Real Estate (ADRE)
Recipient of official documents - Labril (ADRE staff)
Arizona Department of Real Estate (ADRE)
Recipient of official documents
Other Participants
- Cordova Sapola (board member elect)
Elected in March 2023 election; unresponsive and did not attend meetings - Eugenia Francisco (elected candidate)
Elected in January 2023 election but refuted candidacy; name variations include Eugene Silva - Yolanda Molina (former board member)
Former Treasurer; resigned December 2021 - Mario Martinez (witness reference)
Adam LMC - Diane (former property manager)
First manager for the HOA around 2017-2018