Tag Archives: Open Meeting Law

Clifford (Norm) Burnes v. Saguaro Crest Homeowners Association, Inc.

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Case Summary

Case ID 21F-H2121051-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2022-01-03
Administrative Law Judge Thomas Shedden
Outcome none
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Clifford (Norm) Burnes Counsel —
Respondent Saguaro Crest Homeowners Association, Inc. Counsel John Crotty

Alleged Violations

ARIZ. REV STAT. 33-1804

Outcome Summary

The ALJ dismissed the Petitioner's complaint, finding that the Respondent HOA did not violate the open meeting law (A.R.S. § 33-1804) because the action was taken without a meeting via unanimous written consent as authorized by A.R.S. § 10-3821.

Why this result: The Petitioner did not meet the burden of proof to show that the alleged violation occurred, as the board acted without holding a formal meeting.

Key Issues & Findings

Violation of open meeting law by taking action via unanimous written consent

Petitioner alleged that the Board of Directors violated the open meeting law (A.R.S. § 33-1804) on May 3, 2020, by taking two actions using unanimous written consent of the Board members, which the Respondent claimed was permissible under A.R.S. § 10-3821 as action without a meeting.

Orders: Petitioner's petition is dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV STAT. 33-1804
  • ARIZ. REV STAT. 10-3821

Analytics Highlights

Topics: HOA, Open Meeting Law, Unanimous Written Consent, Rehearing, Planned Community
Additional Citations:

  • ARIZ. REV STAT. 33-1804
  • ARIZ. REV STAT. 10-3821
  • ARIZ. REV. STAT. 32-2199
  • ARIZ. REV. STAT. 32-2199.02(A)
  • ARIZ. REV. STAT. 41-1092.08
  • ARIZ. ADMIN. CODE R2-19-119
  • ARIZ. REV. STAT. 10-3701(F)
  • ARIZ. REV. STAT. 10-3071

Video Overview

Audio Overview

Decision Documents

21F-H2121051-REL Decision – 899423.pdf

Uploaded 2025-12-09T10:06:54 (101.7 KB)

21F-H2121051-REL Decision – 930803.pdf

Uploaded 2025-10-09T03:37:15 (46.9 KB)

21F-H2121051-REL Decision – 935756.pdf

Uploaded 2025-10-09T03:37:15 (124.8 KB)





Briefing Doc – 21F-H2121051-REL


Briefing Document: Burnes v. Saguaro Crest Homeowners Association

Executive Summary

This briefing document synthesizes the legal proceedings and final decision in the case of Clifford (Norm) Burnes versus the Saguaro Crest Homeowners Association, Inc. (Case No. 21F-H2121051-REL). The core of the dispute was Petitioner Burnes’s allegation that the HOA Board of Directors violated Arizona’s open meeting law for planned communities by taking two official actions on May 3, 2020, without holding a public meeting. The HOA defended its actions, stating that it utilized a provision in the Arizona statutes for non-profit corporations (ARIZ. REV. STAT. § 10-3821) that allows a board to take action “without a meeting” through the unanimous written consent of all directors.

The Administrative Law Judge (ALJ), Thomas Shedden, ultimately ruled in favor of the HOA. The key finding was that no “meeting” as defined by the open meeting law actually occurred on May 3, 2020. Instead, the Board President individually visited other board members to obtain signatures on consent forms. The ALJ concluded that the two relevant statutes—the open meeting law (§ 33-1803/1804) and the action-by-consent statute (§ 10-3821)—are not in conflict. An HOA board can legally use the action-by-consent procedure, but if it chooses to hold a meeting, it must comply with the open meeting law.

Mr. Burnes’s request for a rehearing, which raised several legal and jurisdictional arguments, was granted but ultimately denied on its merits. The ALJ systematically rejected each of Burnes’s arguments, reaffirming the original decision. The final order dismissed Mr. Burnes’s petition, making the HOA the prevailing party.

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Case Overview

• Petitioner: Clifford (Norm) Burnes

• Respondent: Saguaro Crest Homeowners Association, Inc.

• Case Number: 21F-H2121051-REL (and 21F-H2121051-REL-RHG for rehearing)

• Adjudicating Body: Arizona Office of Administrative Hearings

• Administrative Law Judge: Thomas Shedden

• Core Allegation: The Petitioner alleged that on May 3, 2020, the Respondent’s Board of Directors violated Arizona’s open meeting law (cited as ARIZ. REV STAT. § 33-1803 in the initial decision and § 33-1804 in the rehearing decision) by taking two formal actions via unanimous written consent without allowing members to attend and speak.

• Respondent’s Defense: The Respondent acknowledged taking action by unanimous consent but asserted this was permissible under ARIZ. REV. STAT. § 10-3821, which allows for action without a meeting. Therefore, the open meeting law did not apply.

Factual Background and Timeline

1. April 2020: Mr. Burnes and his wife raised two issues with the HOA Board concerning “lot 7,” which is adjacent to their property. The issues were related to a construction bond waiver and the placement of a house on the lot.

2. April 2020 (Post-Complaint): Following the complaint, research was conducted by Jamie Argueta, and emails were exchanged between Mr. Burnes, the Board members, and Mr. Argueta.

3. April 19 & 21, 2020: The Board members met with Mr. and Ms. Burnes to discuss the issues. Minutes were kept for these meetings.

4. Undated Discussions: Board President Esmerelda Sarina Martinez and Board member Mr. Madill had informal discussions with other HOA members, which Ms. Martinez characterized as “neighbors talking and not a meeting.”

5. May 3, 2020: Ms. Martinez, acting alone, drafted two unanimous consent forms. She personally brought the forms and related documents to the homes of the other Board members, who each read the information and signed. The two actions taken by consent were:

◦ Honoring a waiver of the construction deposit for lot 7.

◦ A decision regarding the placement of the home on lot 7.

6. August 29, 2020: The first regularly scheduled Board meeting after the May 3rd actions was held. The meeting minutes did not include an entry showing that the written consent documents had been filed with the corporate records, a requirement of § 10-3281(A).

Procedural History

• May 7, 2021: Mr. Burnes filed his petition with the Arizona Department of Real Estate, initially asserting seven violations but being required to select only one for adjudication due to paying a single fee. He selected the violation of members not being permitted to attend and speak before the Board took formal action on May 3, 2020.

• July 16, 2021: An initial hearing was held before ALJ Thomas Shedden.

• July 28, 2021: The ALJ issued a decision dismissing Mr. Burnes’s petition, finding he had not proven a violation because no meeting occurred on May 3, 2020.

• September 2, 2021 (approx.): Mr. Burnes filed a Rehearing Request.

• September 22, 2021: The Department of Real Estate granted the request for a rehearing.

• December 9, 2021: The ALJ issued an order concluding the rehearing matter, noting that since only legal issues were raised, the decision would be based on the existing record and supplemental briefs (though neither party filed one).

• January 3, 2022: The ALJ issued the final decision on the rehearing, once again dismissing the petition and upholding the original ruling. This order was final and binding, subject to judicial review in the Superior Court.

Analysis of Legal Arguments from Rehearing

In his request for a rehearing, Mr. Burnes raised six primary legal arguments against the initial decision. The ALJ addressed and rejected each one.

Petitioner’s Argument

ALJ’s Analysis and Conclusion

1. Limited Jurisdiction: The ALJ’s jurisdiction is limited to Title 33, Chapter 16 and does not include ARIZ. REV. STAT. § 10-3821.

Rejected. Jurisdiction was proper because Mr. Burnes alleged a violation of § 33-1804 (which is in Title 33, Ch. 16). Nothing prohibits a Respondent from raising defenses from outside Title 33, or the ALJ from considering them.

2. Inapplicability of § 10-3821: The statute for action-by-consent only applies to actions found in Title 10, Chapters 24-40. The actions the HOA took are not found there.

Rejected. The ALJ noted that Mr. Burnes himself acknowledged that “voting” is an action found within those chapters of Title 10, and voting is precisely the action that was taken by unanimous consent.

3. Conflict of Law (§ 10-3701(F)): Statute § 10-3701(F) states that in cases of inconsistency, Title 33 (planned communities) controls over Title 10.

Rejected. This analysis is flawed because § 10-3701(F) applies specifically to membership meetings (Title 10, Ch. 30). The statute for action by consent, § 10-3821, deals with directors’ meetings and is in a different chapter (Title 10, Ch. 31), which has no similar provision. The legislature’s choice to include this provision for membership meetings but not for board meetings indicates an intent to allow boards more latitude to act by consent.

4. Specific vs. General Statute: § 33-1804 is specific to planned communities and should control over § 10-3821, which applies to all non-profits. The policy of the state favors open meetings.

Rejected. This principle of statutory construction only applies when statutes are in conflict and cannot both be given effect. Here, they are not in conflict. Both can be given full effect: an HOA may take action without a meeting per § 10-3821, but if a meeting is held, it must follow the open meeting requirements of § 33-1804.

5. Bylaws Are Irrelevant: The ALJ wrongly cited the HOA’s bylaws allowing action-by-consent, because § 33-1804 applies “notwithstanding any provision in the… bylaws.”

Rejected. Mr. Burnes was correct that bylaws do not trump the open meeting law. However, he overlooked that § 10-3821 itself contains an exception: it does not apply if the corporation’s bylaws prohibit action by consent. The finding regarding the bylaws was necessary only to show that this exception did not apply to the HOA, thus making § 10-3821 available to them.

6. A Meeting Did Occur: Mr. Burnes asserted a meeting did take place on May 3, 2020.

Rejected. The ALJ found this position had several flaws: Mr. Burnes cited no evidence from the record to prove discussion occurred on May 3rd; he conflated prior meetings with the events of May 3rd; and he provided no legal authority to show that drawing on past discussions to draft a consent form constitutes a “meeting.” The ALJ also dismissed his reliance on new dictionary definitions not presented at the original hearing.

Key Statutes and Legal Principles

• ARIZ. REV. STAT. § 33-1803 / § 33-1804 (Open Meetings Law):

◦ Mandates that “all meetings of the members’ association and the board of directors… are open to all members of the association.”

◦ Members “shall be permitted to attend and speak at an appropriate time during the deliberations and proceedings.”

◦ A “quorum of the board of directors that meets informally to discuss association business… shall comply with the open meeting and notice provisions.”

◦ Reflects a state policy that provisions should be construed “in favor of open meetings.”

• ARIZ. REV. STAT. § 10-3821 (Action Without Meeting):

◦ “Unless the articles of incorporation or bylaws provide otherwise, action… to be taken at a directors’ meeting may be taken without a meeting if the action is taken by all of the directors.”

◦ The action must be evidenced by one or more written consents, signed by each director, and included in the minutes filed with corporate records.

◦ A consent signed under this section has “the effect of a meeting vote.”

• Saguaro Crest HOA Bylaws (Section 3.5):

◦ The association’s bylaws explicitly provide directors with “the right to take any action in the absence of a meeting, which they could take at a meeting by obtaining the written consent of all the directors.”

Conclusion and Final Order

The Administrative Law Judge concluded that Mr. Burnes failed to meet his burden of proof to show that the Saguaro Crest HOA violated the open meeting law. The central finding was that the HOA’s actions on May 3, 2020, did not constitute a “meeting” but were a legally permissible “action without a meeting” under ARIZ. REV. STAT. § 10-3821. The subsequent rehearing confirmed this legal interpretation.

The final order, issued January 3, 2022, was:

“IT IS ORDERED that Petitioner Clifford (Norm) Burnes’s petition is dismissed.”

The order was final and binding, with any further appeal requiring judicial review by the Superior Court within 35 days.






Study Guide – 21F-H2121051-REL


Study Guide: Burnes v. Saguaro Crest Homeowners Association, Inc.

This study guide provides a review of the administrative law case involving Petitioner Clifford (Norm) Burnes and Respondent Saguaro Crest Homeowners Association, Inc. It includes a short-answer quiz, an answer key, essay questions, and a glossary of key terms based on the provided legal decisions.

Short-Answer Quiz

Answer each question in 2-3 sentences, based on the information in the case documents.

1. What was the single, specific violation that Clifford (Norm) Burnes alleged against the Saguaro Crest Homeowners Association’s Board of Directors?

2. What was the Respondent’s primary legal justification for the actions its Board of Directors took on May 3, 2020?

3. What two specific decisions did the Board make using the unanimous consent forms on May 3, 2020?

4. According to the Administrative Law Judge (ALJ), how can both the open meeting law (§ 33-1804) and the statute allowing action without a meeting (§ 10-3821) be given effect without being in conflict?

5. What was the purpose of the rehearing granted to Mr. Burnes, and what was the outcome?

6. How did the HOA’s bylaws, specifically section 3.5, support the Respondent’s case?

7. What argument did Mr. Burnes make regarding the ALJ’s jurisdiction to consider ARIZ. REV. STAT. section 10-3821?

8. What is the standard of proof required in this matter, and who bears the burden of meeting it?

9. Mr. Burnes asserted that a meeting did occur on May 3, 2020. What flaws did the ALJ identify in this assertion?

10. What specific requests did Mr. Burnes make in his petition as a remedy for the alleged violation?

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Quiz Answer Key

1. Mr. Burnes’s single alleged violation was that at the “meeting” on May 3, 2020, HOA members were not permitted to attend and speak after discussion but before the Board took formal action. This, he claimed, was a violation of Arizona’s open meeting law, cited as ARIZ. REV STAT. § 33-1803 and later § 33-1804.

2. The Respondent acknowledged taking two actions by consent but argued that no meeting actually occurred. Their defense was that they acted under the authority of ARIZ. REV. STAT. § 10-3821, which explicitly allows a board of directors to take action without a meeting if it is done via unanimous written consent of all directors.

3. The two decisions made via unanimous consent related to issues Mr. Burnes had raised about lot 7, which abuts his property. The first action was to honor a waiver of the construction deposit for lot 7, and the second action was regarding the placement of the home on lot 7.

4. The ALJ reasoned that the statutes are not in conflict because they apply to different situations. Respondent may take action without a meeting as allowed by § 10-3821, but if a meeting is held, Respondent must follow all the requirements of the open meeting law, § 33-1804.

5. Mr. Burnes requested a rehearing, alleging that the initial ALJ decision’s findings of fact were not supported by evidence or were contrary to law. The rehearing was granted to review these legal issues, but the outcome was the same: the ALJ once again concluded that no violation had occurred and dismissed Mr. Burnes’s petition.

6. Section 3.5 of the Association’s bylaws, titled “Action Without a Meeting,” explicitly provides the directors with “the right to take any action in the absence of a meeting, which they could take at a meeting by obtaining the written consent of all the directors.” This directly supported the Respondent’s claim that its actions were permissible under its own governing documents as well as state law.

7. Mr. Burnes argued that the ALJ’s jurisdiction is limited to Title 33, Chapter 16, and therefore the ALJ had no jurisdiction to consider section 10-3821 as a defense because it is not found in that title. The ALJ rejected this, stating that jurisdiction was proper because the complaint was about a violation of Title 33, and nothing prohibits a respondent from raising defenses from outside that title.

8. The standard of proof is a “preponderance of the evidence.” The Petitioner, Mr. Burnes, bore the burden of proof to show that the alleged violation occurred.

9. The ALJ found several flaws in this assertion: Mr. Burnes did not cite evidence from the record proving a discussion occurred on May 3rd, he conflated prior meetings with the events of May 3rd, and he provided no legal authority showing that prior discussions are pertinent to whether a meeting occurred on that specific day.

10. Mr. Burnes requested that the Respondent be ordered to rescind the consent actions, comply with the open meeting law, pay his filing fee, and be assessed a civil penalty.

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Essay Questions

1. Analyze the central conflict between ARIZ. REV. STAT. § 33-1804 (“Open meetings”) and ARIZ. REV. STAT. § 10-3821 (“Action without meeting”) as presented in this case. Explain the ALJ’s reasoning for concluding that the statutes do not conflict and can both be given effect.

2. Describe the timeline of events leading up to the May 3, 2020 unanimous written consent. How did the meetings and communications in April 2020 between Mr. Burnes and the Board influence the context of the dispute, even though they were not the subject of the final legal violation claim?

3. Evaluate the six specific legal arguments Mr. Burnes raised in his request for rehearing. For each, summarize his point and the ALJ’s counter-argument or legal conclusion.

4. Discuss the concept of “preponderance of the evidence” as defined in the case documents. Explain why the ALJ concluded that Mr. Burnes failed to meet this standard of proof in both the initial hearing and the rehearing.

5. Examine the relationship between state statutes and an association’s governing documents (like bylaws) in this case. How did the ALJ address Mr. Burnes’s argument that § 33-1804 should apply “notwithstanding any provision in the…bylaws”?

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Glossary of Key Terms

Term / Statute

Definition

Action without meeting

A procedure allowed by ARIZ. REV. STAT. § 10-3821 and the Association’s Bylaws (Section 3.5) where a board of directors may take action if it is evidenced by one or more written consents signed by all directors. The consent has the effect of a meeting vote.

Administrative Law Judge (ALJ)

The official, in this case Thomas Shedden, assigned to adjudicate complaints and ensure compliance with relevant statutes for the Office of Administrative Hearings.

ARIZ. REV. STAT. § 10-3821

The state statute titled “Action without meeting” that permits a board of directors to take action without a meeting if all directors provide written consent, unless the articles of incorporation or bylaws provide otherwise.

ARIZ. REV. STAT. § 33-1803 / § 33-1804

The state’s “Open meetings” law for planned communities. It requires that all meetings of an HOA board be open to all members, who shall be permitted to attend and speak at an appropriate time.

Burden of Proof

The obligation of a party in a trial to produce the evidence that will prove the claims they have made against the other party. In this case, the Petitioner (Mr. Burnes) bore the burden of proof.

Clifford (Norm) Burnes

The Petitioner in the case, a member of the Saguaro Crest Homeowners Association.

Petitioner

The party who files a petition or brings an action; in this case, Clifford (Norm) Burnes.

Preponderance of the evidence

The standard of proof in this case, defined as “The greater weight of the evidence…sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Respondent

The party against whom a petition is filed; in this case, Saguaro Crest Homeowners Association, Inc.

Saguaro Crest Homeowners Association, Inc.

The Respondent in the case; a planned community governed by a Board of Directors.

Unanimous Written Consent

The method used by the Respondent’s Board of Directors on May 3, 2020, to take action. It involved each board member signing written consent forms, as permitted by ARIZ. REV. STAT. § 10-3821.






Blog Post – 21F-H2121051-REL


Your HOA Board Can Legally Make Decisions in Secret—Here’s How One Homeowner’s Lawsuit Proved It

1.0 Introduction: The Expectation vs. The Reality

For most homeowners living in a planned community, the principle of transparency is paramount. The common expectation is that all significant decisions made by the Homeowners Association (HOA) board of directors will happen in open meetings. These are forums where members can attend, listen to the deliberations, and, at the appropriate time, make their voices heard before the board takes a formal vote. This commitment to openness is often seen as a cornerstone of fair governance.

But what if a board could make a decision without ever holding a meeting at all? This question was at the heart of a legal dispute in Arizona, where a homeowner named Clifford (Norm) Burnes took his HOA, Saguaro Crest, to court. Mr. Burnes alleged that his board violated the state’s open meeting law when it took action on two separate issues without convening a meeting. The case worked its way through an administrative law court, and the final decision sided with the HOA, establishing a critical legal precedent that boards can, under specific circumstances, bypass open meetings entirely.

2.0 Takeaway 1: Boards Can Legally Act “Without a Meeting”

The central facts of the case were not in dispute. On May 3, 2020, the Saguaro Crest HOA board made two formal decisions concerning a neighboring lot, specifically regarding a construction bond waiver and home placement—issues that Mr. Burnes himself had previously raised. Instead of calling a meeting, the board used a procedure known as “unanimous written consent.” The Board President, Ms. Martinez, drafted two consent forms, personally brought them to the homes of the other board members, and had each director sign them.

This action, while sidestepping an open meeting, was found to be perfectly legal. The board was operating under the authority of a specific Arizona state law, ARIZ. REV. STAT. section 10-3821, titled “Action without meeting.” This statute explicitly allows the board of a non-profit corporation to take action without a meeting, provided the action is taken by all directors and is documented by written consent.

Furthermore, this power was not just granted by state law; it was also written directly into the HOA’s own governing documents. Section 3.5 of the Saguaro Crest HOA’s bylaws, titled “Action Without a Meeting,” explicitly grants its directors “the right to take any action in the absence of a meeting, which they could take at a meeting by obtaining the written consent of all the directors.”

3.0 Takeaway 2: A Legal Puzzle—When Two State Laws Seem to Conflict

Mr. Burnes’s case created a compelling legal puzzle by highlighting two state laws that appeared to be in direct opposition. On one side was Arizona’s Planned Community law (ARIZ. REV. STAT. section 33-1804), which strongly mandates open meetings for HOA boards and includes a policy statement that any interpretation of the law should be construed “in favor of open meetings.”

On the other side was the state’s Nonprofit Corporation law (ARIZ. REV. STAT. section 10-3821), which, as noted, expressly permits a board to act without a meeting. Mr. Burnes argued that the open meeting law should take precedence.

The Administrative Law Judge, however, made a crucial distinction. Applying a standard legal principle that courts must try to give effect to both laws if possible, the judge determined the two statutes do not actually conflict. The judge’s reasoning clarifies how both can exist and be applied legally.

In this case, both sections 10-3821 and 33-1804 can be given effect in that Respondent may take action without a meeting as allowed by section 10-3821, but if a meeting is held, Respondent must follow the requirements of section 33-1804.

This interpretation is the core of the decision. The open meeting law, with all its requirements for notice and member participation, only applies if a meeting is held. By using the “action without meeting” statute, the Saguaro Crest board legally sidestepped the requirement to hold a meeting in the first place, thereby rendering the open meeting law inapplicable to their actions on that day.

4.0 Takeaway 3: Legislative Intent Can Be Read in a Law’s Silence

Mr. Burnes also advanced a more sophisticated legal argument: that in any conflict, the specific laws written for HOAs (found in Title 33 of the state code) should overrule the more general laws for non-profit corporations (found in Title 10).

The judge’s response to this provided a fascinating lesson in how courts interpret legislative intent, not just from what a law says, but from what it doesn’t say. The judge noted that the section of law governing general membership meetings does contain a specific clause stating that in the case of an inconsistency, the HOA laws control.

Crucially, the section of law governing board meetings, where the “action without meeting” statute is found, has no such clause. The judge interpreted this difference not as an oversight, but as a deliberate choice by lawmakers. This “silence” in the statute was read as a “legislative intent to allow boards latitude to act by consent.” In other words, if the legislature had intended for the open meeting law to always override the board’s ability to act by written consent, it would have explicitly said so, just as it did for membership meetings.

5.0 Conclusion: Efficiency vs. Transparency

While homeowners understandably value and expect open meetings as a tool for transparency and participation, the law also recognizes the need for boards to operate efficiently. The unanimous written consent procedure provides a legal mechanism for boards to make decisions, particularly on straightforward matters, without the time and expense of convening a formal meeting.

This case is more than a legal curiosity; it’s a practical lesson for every homeowner. The power wielded by the Saguaro Crest board is not unique to Arizona. If you want to understand the true scope of your own board’s authority, take these two steps:

1. Review your HOA’s bylaws. Look for a clause titled “Action Without a Meeting” or similar language that grants the board the right to act via written consent. This is the internal authorization.

2. Check your state’s Nonprofit Corporation Act. Search for a statute similar to Arizona’s § 10-3821. This is the ultimate source of the board’s power, and it likely exists in some form in your state, defining the boundary between efficiency and transparency for your community.


Case Participants

Petitioner Side

  • Clifford (Norm) Burnes (petitioner)
    Appeared on his own behalf at the original hearing

Respondent Side

  • John Crotty (HOA attorney)
    Law Offices of Farley, Choate & Wood
    Attorney for Saguaro Crest Homeowners Association, Inc.
  • Esmerelda Sarina Martinez (board president, witness)
    Saguaro Crest Homeowners Association, Inc.
    Testified as a witness for Respondent
  • Madill (board member)
    Saguaro Crest Homeowners Association, Inc.
    Referred to as Mr. Madill

Neutral Parties

  • Thomas Shedden (ALJ)
  • Judy Lowe (Commissioner)
    ADRE
    Commissioner during original decision transmittal
  • Louis Dettorre (Commissioner)
    ADRE
    Commissioner during rehearing transmittal
  • Miranda Alvarez (staff)
    Transmittal staff (also noted as Miranda A.)
  • c. serrano (staff)
    Transmittal staff

Other Participants

  • Jamie Argueta (staff)
    Conducted research; position and function apparently not in the record

Keith D Smith v. Sierra Foothills Condominium Association

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

Case Summary

Case ID 21F-H2120003-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-06-03
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Keith D Smith Counsel —
Respondent Sierra Foothills Condominium Association Counsel Stuart Rayburn

Alleged Violations

CC&R section 7.1(C)
ARIZ. REV. STAT. section 33-1248

Outcome Summary

The petition was dismissed as the Petitioner failed to prove by a preponderance of the evidence that the Association violated CC&R section 7.1(C) or ARIZ. REV. STAT. section 33-1248. The rule limiting sign use was deemed reasonable.

Why this result: Petitioner failed to meet the burden of proof on both issues.

Key Issues & Findings

Alleged unreasonable discrimination in adopting rules regarding common elements (monument sign)

Petitioner alleged the Association violated CC&R 7.1(C) by adopting a rule limiting the use of the common element monument sign to only owners in Building B, arguing this was unreasonable discrimination against Building A owners.

Orders: Petition dismissed for this issue.

Filing fee: $250.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • CC&R section 7.1(C)
  • CC&R section 6.26(a)
  • ARIZ. REV. STAT. section 33-1217

Alleged open meeting law violation at the June 10, 2020 Board meeting

Petitioner alleged the Board violated open meeting laws by communicating via email and reaching a decision prior to the June 10, 2020 meeting, claiming the President called for a vote without discussion.

Orders: Petition dismissed for this issue.

Filing fee: $250.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. section 33-1248

Analytics Highlights

Topics: Condominium, Commercial HOA, Signage rules, Open meeting law, Discrimination
Additional Citations:

  • ARIZ. REV. STAT. section 33-1248
  • CC&R section 7.1(C)
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 41-1092.07(F)(6)

Video Overview

Decision Documents

21F-H2120003-REL-RHG Decision – 885949.pdf

Uploaded 2026-01-23T17:34:33 (143.3 KB)

21F-H2120003-REL-RHG Decision – ../21F-H2120003-REL/837073.pdf

Uploaded 2026-01-23T17:34:35 (103.9 KB)





Briefing Doc – 21F-H2120003-REL-RHG


Administrative Hearing Briefing: Smith v. Sierra Foothills Condominium Association

Executive Summary

This briefing summarizes the administrative legal proceedings between Keith D. Smith (Petitioner) and the Sierra Foothills Condominium Association (Respondent) regarding Case No. 21F-H2120003-REL and its subsequent rehearing. The dispute centered on two primary allegations: that the Association’s Board of Directors established an unreasonable and discriminatory rule regarding a common-element monument sign, and that the Board violated Arizona’s open meeting laws during the adoption of said rule.

Following an initial hearing on October 26, 2020, and a subsequent rehearing considered on June 3, 2021, the Administrative Law Judge (ALJ) dismissed the petition in its entirety. The rulings established that the Association acted within its authority under the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) to create rules for common elements, provided those rules are reasonable. The ALJ found that limiting sign usage to specific buildings was a reasonable exercise of power based on the physical layout of the property. Furthermore, the Petitioner failed to provide substantial evidence to support claims of illegal pre-meeting communications by the Board.

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Core Dispute: Monument Sign Usage

The central conflict involved a monument sign located on the common elements of a commercial condominium consisting of two buildings, Building A and Building B.

The Challenged Rule

On June 10, 2020, the Association Board adopted a policy limiting the use of the monument sign exclusively to Unit owners in Building B. The monument sign contains only five advertising spaces.

Association Justification

The Association argued that the rule was necessary due to the physical limitations of the property:

• Space Scarcity: The sign has a finite capacity (five spaces) that cannot accommodate all owners.

• Building Frontage: Building A has direct street frontage, allowing its owners to hang signs directly on the building wall.

• Lack of Frontage: Building B does not have street frontage, significantly limiting the utility and visibility of any signs hung on its walls.

• Zoning Restrictions: Under the City of Phoenix Sign Code, businesses cannot post signs on buildings they do not occupy. Therefore, Building B owners are prohibited from hanging signs on Building A, making the monument sign their only viable external advertising option.

Petitioner’s Arguments

Mr. Smith, a Unit owner in Building A, challenged the rule based on the following:

• Common Interest: He asserted that his deed grants him an undivided interest in common elements, meaning no owner should have exclusive use of the sign.

• Disparate Treatment: He argued the rule violated CC&R section 6.26(a), which prohibits treating owners differently regarding occupancy and use restrictions.

• Alternative Solutions: Mr. Smith proposed altering the sign to increase capacity or reducing existing sign sizes by half (which he offered to fund).

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Legal Analysis of CC&R Provisions

The ALJ’s decision hinged on the interpretation of specific articles within the Association’s governing documents.

CC&R Section 7.1(C): Board Authority

This section grants the Board the power to adopt, amend, and repeal Rules and Regulations to restrict and govern the use of any area.

• Condition: Rules must not “unreasonably discriminate” and must be consistent with the Declaration and the Act.

• Ruling: The ALJ concluded that discriminating among owners is permitted under 7.1(c) as long as it is not unreasonable. Given the lack of street frontage for Building B, the restriction was deemed a reasonable management of limited resources.

CC&R Section 6.26(a): Use Restrictions

The Petitioner argued that this section required all limitations to be applicable to all occupants equally.

• Scope Limitation: The ALJ found that section 6.26(a) explicitly applies only to “occupancy and use restrictions contained in this Article 6.”

• Ruling: Because the sign rule was promulgated under Article 7, the restrictive language of Article 6.26(a) did not apply.

Common Element Status and Partition

During the proceedings, the Association initially argued the sign was not a common element but later waived this argument. The Petitioner argued that common elements cannot be partitioned under A.R.S. § 33-1217. However, the ALJ found no evidence that the monument sign had been “partitioned” in a legal sense, merely that its use was regulated.

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Open Meeting Law Allegations

Mr. Smith alleged that the Association violated A.R.S. § 33-1248 regarding the conduct of the June 10, 2020, meeting.

Claims of Pre-Meeting Deliberation

The Petitioner asserted that Board members had “obviously” communicated via email and reached a decision before the meeting. His evidence for this was:

• The Board President called for a vote immediately without initiating discussion.

• The Board members appeared to have their minds made up.

Evidence and Testimony

The ALJ rejected these claims based on the following:

• Lack of Proof: The Petitioner admitted he had no emails or physical evidence to support the claim of private deliberation.

• Conflicting Testimony: Association witnesses provided “credible testimony” that a protracted discussion took place, lasting approximately 90 minutes. Mr. Smith himself spoke for 20 minutes during this period.

• New Evidence Barred: During the rehearing, Mr. Smith claimed to possess an email supporting his position. The ALJ refused to consider it, citing Arizona Administrative Code § R2-19-115, which requires all evidence to be presented at the original hearing.

——————————————————————————–

Procedural Findings and Rehearing

The rehearing (Case No. 21F-H2120003-REL-RHG) addressed the Petitioner’s claims of administrative error and “arbitrary” findings.

ALJ Determination

Number of Issues

The hearing was limited to two issues because the Petitioner only paid the fee for a two-issue hearing. Claims of other meeting deficiencies were excluded.

Sufficiency of Evidence

The ALJ found that the original decision was supported by substantial, reliable, and probative evidence as required by A.R.S. § 41-1092.07.

Reasonableness of Rule

The ALJ reaffirmed that the unequal access to the monument sign was not “unreasonable discrimination” given the objective differences in building locations.

Sign Modification

The Association argued that modifying the sign would require rescinding previous approvals granted to other businesses, a position the ALJ did not find unreasonable.

Final Conclusion

The Administrative Law Judge dismissed the petition in both the original hearing and the rehearing. The final order, dated June 3, 2021, is binding. The Association’s rule limiting monument sign access to Building B was upheld as a reasonable exercise of Board authority, and the Petitioner failed to meet the burden of proof regarding violations of Arizona’s open meeting laws.






Study Guide – 21F-H2120003-REL-RHG


Study Guide: Keith D. Smith vs. Sierra Foothills Condominium Association

This study guide examines the administrative proceedings and legal conclusions regarding the dispute between Keith D. Smith and the Sierra Foothills Condominium Association. The guide covers the original hearing (October 26, 2020) and the subsequent rehearing (March 21, 2021), focusing on the interpretation of CC&Rs, open meeting laws, and the standards of evidence in administrative hearings.

——————————————————————————–

Part I: Short-Answer Quiz

Instructions: Answer the following questions in two to three sentences based on the provided source context.

1. What were the two primary issues the Petitioner was permitted to raise during the hearings?

2. Why did the Association Board decide to limit the use of the monument sign specifically to owners of units in Building B?

3. What was the Petitioner’s argument regarding his “undivided interest” in the common elements of the condominium?

4. How did the Administrative Law Judge (ALJ) interpret the scope of CC&R section 6.26(a)?

5. What specific evidence did the Petitioner provide to support his allegation that Board members had communicated via email prior to the June 10, 2020, meeting?

6. How did the testimony of Stuart Rayburn and Harold Bordelon contradict the Petitioner’s claim regarding the lack of discussion at the June 10 meeting?

7. What were the two physical alterations to the monument sign suggested by the Petitioner to allow for more advertising space?

8. Why did the ALJ refuse to consider certain City of Phoenix zoning ordinance arguments and new email evidence during the rehearing?

9. According to the “Conclusions of Law,” what is the definition of a “preponderance of the evidence”?

10. What is the final recourse for a party wishing to appeal the order issued following the rehearing?

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Part II: Answer Key

1. The Petitioner was limited to whether the Association violated CC&R section 7.1(C) regarding the Board’s authority to make rules for the monument sign and whether the Association violated open meeting laws under ARIZ. REV. STAT. section 33-1248. These limitations were enforced because the Petitioner only paid the required fees for a two-issue hearing.

2. The Board limited the sign to Building B because the monument sign has space for only five businesses, and unlike Building A, Building B does not have street frontage for advertising. Building A owners have the option to hang signs on their own building walls, a utility not available to Building B owners under city ordinances.

3. The Petitioner argued that his deed grants him an undivided interest in the common elements, which he interpreted to mean that no owner should have exclusive use of the monument sign. He contended that the Association’s common elements cannot be partitioned and that all owners should have access to the advertising space.

4. The ALJ ruled that section 6.26(a), which prohibits disparate treatment of owners, is expressly limited to the occupancy and use restrictions contained within Article 6. Because the rule in question was adopted under the authority of Article 7, the non-discrimination requirements of 6.26(a) did not apply.

5. The Petitioner admitted during the hearing that he had no emails or physical evidence to support his allegation of prior communication among Board members. He relied on the reasoning that because the President called for a vote immediately, they must have “obviously” reached a decision beforehand.

6. The Association’s witnesses provided credible testimony that a protracted discussion took place before the vote, lasting approximately 90 minutes. They noted that the Petitioner himself spoke for twenty minutes and that research on city ordinances and governing documents was presented before the board took action.

7. The Petitioner proposed either reducing the size of existing signs by one-half to create more slots—which he offered to pay for—or increasing the overall size of the monument sign. The Association resisted these plans, arguing they would require rescinding prior approvals and might not meet city codes.

8. The ALJ excluded this information because administrative findings must be based exclusively on evidence and issues raised in the original petition. New evidence or legal theories (such as ARIZ. REV. STAT. section 33-1217) not presented at the original hearing cannot be introduced during a rehearing.

9. A “preponderance of the evidence” is defined as the greater weight of the evidence that possesses the most convincing force. It is evidence sufficient to incline a fair and impartial mind toward one side of an issue rather than the other, even if it does not eliminate all reasonable doubt.

10. The order following a rehearing is binding; however, a party may seek judicial review as prescribed by ARIZ. REV. STAT. Title 12, Chapter 7, Article 6. This appeal must be filed with the superior court within thirty-five days from the date the order was served.

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Part III: Essay Questions

Instructions: Use the provided documents to develop comprehensive responses to the following prompts.

1. The Balance of Equity in Association Governance: Discuss how the Board justified a rule that seemingly treats Building A and Building B owners differently. In your answer, evaluate the ALJ’s conclusion that this “discrimination” was not unreasonable given the physical layout of the property.

2. Statutory Interpretation of CC&Rs: Analyze the conflict between reading the CC&Rs as a “continuous document” versus the ALJ’s strict adherence to the express terms of specific sections (Article 6 vs. Article 7). How does the wording “subject to the provisions of this Declaration” in section 7.1(c) impact this interpretation?

3. Procedural Rigidity in Administrative Hearings: Explain the impact of the Petitioner’s decision to only pay for two issues. How did this choice limit his ability to introduce alternative legal arguments, such as the non-partition of common elements or additional open meeting law violations?

4. The Role of Testimony vs. Allegation: Compare the Petitioner’s reliance on “rhetorical questions” and “obvious” conclusions with the Respondent’s use of witness testimony. How does this case demonstrate the burden of proof required to establish a violation of ARIZ. REV. STAT. section 33-1248?

5. Impact of Local Ordinances on Private Governance: Assess how the City of Phoenix Zoning Ordinance (Section 705) and Sign Code influenced the Board’s policy and the ALJ’s final decision. Why was the distinction between “contiguous” signage and “flexible” placement critical to the reasonableness of the Association’s rule?

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Part IV: Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

A presiding officer who conducts hearings and issues decisions on disputes involving state agency regulations or statutes.

ARIZ. REV. STAT. section 33-1248

The Arizona state statute governing open meeting laws for condominiums, requiring transparency in Board deliberations.

Covenants, Conditions, and Restrictions; the governing documents that dictate the rules and operations of a common interest development.

Common Elements

Portions of a condominium project other than the individual units, managed by the Association and intended for common use.

Monument Sign

A ground-level sign, typically located near a property entrance, used to identify the businesses or residents within a complex.

Partition

The act of dividing a property into separate parts or to sever the unity of possession; in this context, the Petitioner argued common elements cannot be partitioned.

Preponderance of the Evidence

The legal standard of proof in civil and administrative cases, meaning the evidence on one side is more convincing than the other.

Rehearing

A second consideration of a case, usually based on specific grounds such as an irregularity in the original proceeding or an error of law.

Respondent

The party against whom a petition is filed; in this case, the Sierra Foothills Condominium Association.

Substantial Evidence

Evidence that a reasonable mind might accept as adequate to support a conclusion; a requirement for the validity of an ALJ decision.

Undivided Interest

The legal right of each owner to use the whole of the common property, rather than a specific, physically divided portion.






Blog Post – 21F-H2120003-REL-RHG


The Monument Sign Mystery: 4 Surprising Lessons in HOA Power and “Reasonable” Fairness

1. Introduction: The Paradox of Undivided Interest

In the world of commercial real estate, few phrases carry as much weight—or cause as much confusion—as “undivided interest.” When Keith D. Smith purchased a unit in the Sierra Foothills Condominium Association, his deed granted him an interest in the common elements. To many owners, this implies a fundamental right to equal use of every square inch of the property, including high-visibility signage.

However, a recent dispute between Mr. Smith and his Association highlights a complex legal paradox: an owner can have an undivided interest in a common element while being legally barred from using it. The conflict arose when the Board restricted a five-space monument sign to a specific subset of owners, sparking a claim of “unreasonable discrimination.”

Does fairness require a Board to grant every owner a “slice of the pie,” or can they prioritize certain owners for the functional benefit of the whole? The ruling in this case provides a masterclass in how administrative courts define “reasonableness” and “fairness” within a shared property.

2. Takeaway 1: When Equality Isn’t “Reasonable”

At first glance, the Association’s rule seemed blatantly unfair. The Board enacted a policy that limited the use of the monument sign exclusively to owners in Building B, completely barring Building A owners like Mr. Smith.

However, the Administrative Law Judge (ALJ) looked beyond the surface-level exclusion to the “functional reality” of the property. Building A enjoys direct street frontage, allowing its owners to hang signs directly on their building. Building B, situated behind Building A, has no such visibility.

The “legal knot” that sealed the decision was a City of Phoenix Zoning Ordinance. While Building A owners had their own signage options, the ordinance prohibited Building B owners from hanging signs on Building A—the only building visible from the street. Because Building B owners were effectively invisible without the monument sign, the Board’s “discrimination” was deemed a logical, functional necessity rather than an arbitrary act.

CC&R section 7.1(c) grants the Board broad authority to manage common areas:

The Board … subject to the provisions of this Declaration, may adopt, amend and repeal Rules and Regulations. The Rules and Regulations may … restrict and govern the use of any area by any Owner or Occupant…; provided however that the Rules and Regulations shall not unreasonably discriminate among Owners and Occupants.

Because the rule addressed a specific geographical disadvantage, the court found the Board’s decision was reasonable and consistent with its governing authority.

3. Takeaway 2: The “Fine Print” Trap of Article Silos

Mr. Smith argued that the sign rule violated CC&R section 6.26(a), which requires that use restrictions be “applicable to all Occupants.” It is a compelling argument for any property owner: if the rules say everyone must be treated the same, how can the Board pick favorites?

The legal reality, however, comes down to the structural logic of the CC&Rs—what we might call “Article Silos.” The ALJ pointed out that the “equality clause” Mr. Smith cited was explicitly limited to the confines of Article 6 (Occupancy and Use). The Board, however, enacted the sign rule under the powers granted in Article 7 (Association Powers).

In legal interpretation, the specific placement of a rule dictates its reach. The decision emphasized this “smoking gun” phrasing:

…although CC&R section 6.26 does prohibit disparate treatment of Owners, by its express terms, CC&R section 6.26 applies only to CC&R Article 6, and not Article 7.

This serves as a critical warning for property professionals: a protection in one article of a governing document does not necessarily limit the powers granted in another.

4. Takeaway 3: The Burden of Proof and the “Pre-Meeting” Myth

Property owners often suspect that by the time a public meeting begins, the “real” decision has already been made in secret. Mr. Smith alleged that the Board violated Arizona’s Open Meeting Law (A.R.S. § 33-1248) by reaching a consensus via email before the official vote on June 10, 2020.

His evidence was purely circumstantial; he posed a rhetorical question asking how the Board could call for a vote so quickly if they hadn’t already decided. The court, however, requires “substantial evidence” to overturn a Board action.

Testimony revealed that the meeting was far from a “rubber stamp” event. It involved a “protracted” discussion lasting an hour and a half, during which Mr. Smith himself was allowed to speak for 20 minutes. The ALJ applied the standard of the “Preponderance of the Evidence,” which favors the side with the most convincing weight of facts:

The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.

5. Takeaway 4: The “Pay-to-Play” Reality of Administrative Hearings

The final lesson is a procedural one that every petitioner must understand: administrative law is a “one-shot” game governed by fees and strict paperwork.

When Mr. Smith filed his petition with the Department of Real Estate, he paid the fee for a two-issue hearing. Consequently, when he attempted to raise a new legal argument during his rehearing—citing A.R.S. § 33-1217 regarding the partition of common elements—the court flatly rejected it. Because the issue wasn’t in the original petition and he hadn’t paid for it to be heard, it simply didn’t exist in the eyes of the court.

The same “closed-door” policy applied to new evidence. During the rehearing, Mr. Smith claimed he finally had an email to prove the Board’s secret communications. The court refused to look at it, noting that because it wasn’t presented at the original hearing, it could not be considered later. In these proceedings, you must bring every issue and every piece of evidence to the table at the very beginning; there are no “add-ons” in the middle of the process.

6. Conclusion: A New Perspective on Common Ground

The dismissal of all claims against the Sierra Foothills Condominium Association clarifies that “common elements” are not always equally shared in practice. Instead, they are managed for the functional benefit of the whole community. In this instance, providing visibility to the “hidden” units in Building B was a reasonable use of limited space, even if it meant Building A owners had to rely on their own street frontage.

This case leaves property owners with a challenging question: If your “undivided interest” doesn’t guarantee you a spot on the sign, what exactly are you entitled to? The answer is rarely found in the spirit of “fairness,” but rather in the specific, siloed mechanics of your Association’s CC&Rs.


Case Participants

Petitioner Side

  • Keith D Smith (petitioner)

Respondent Side

  • Sierra Foothills Condominium Association (respondent)
  • Stuart Rayburn (president)
    Sierra Foothills Condominium Association
    Appeared for Respondent
  • Harold Bordelon (witness)
    Testified for the Association

Neutral Parties

  • Thomas Shedden (ALJ)
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate

Other Participants

  • LDettorre (staff)
    Arizona Department of Real Estate
  • AHansen (staff)
    Arizona Department of Real Estate
  • djones (staff)
    Arizona Department of Real Estate
  • DGardner (staff)
    Arizona Department of Real Estate
  • ncano (staff)
    Arizona Department of Real Estate

Debra K Morin v. Solera Chandler Homeowners’ Association, Inc.

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

Case Summary

Case ID 21F-H2120001-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2021-03-17
Administrative Law Judge Tammy L. Eigenheer
Outcome partial
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Debra K. Morin Counsel —
Respondent Solera Chandler Homeowners' Association, Inc. Counsel Lydia A. Peirce Linsmeier

Alleged Violations

A.R.S. § 33-1804
A.R.S. § 33-1804

Outcome Summary

Petitioner's petition was affirmed in part and denied in part. Petitioner prevailed on Complaint #1 (improper use of email/unanimous written consent for non-privileged business), but lost on Complaint #2 (alleged improper emergency executive session). Respondent was ordered to comply with A.R.S. § 33-1804 and reimburse the $500 filing fee.

Why this result: Petitioner failed to prove the violation related to the emergency executive session (Complaint #2).

Key Issues & Findings

Non-privileged Association Business Conducted in Closed Session (Complaint #1)

The HOA used unanimous written consents obtained via individual emails from board members to approve association business (such as approving repairs, replacement of equipment, and pruning) outside of open meetings, violating the requirement that all meetings of the board of directors must be open to members.

Orders: Respondent ordered to reimburse the $500.00 filing fee and comply with A.R.S. § 33-1804 going forward. No civil penalty assessed due to the COVID-19 pandemic circumstances.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1804
  • A.R.S. § 10-3821

Association Business Conducted in an Emergency Executive Session (Complaint #2)

Petitioner alleged misuse of emergency executive sessions. Respondent represented that the sessions only addressed issues under statutory exceptions. Petitioner failed to establish by a preponderance of the evidence that this violation occurred.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1804

Analytics Highlights

Topics: Open Meeting Law, Unanimous Written Consent, Executive Session, COVID-19
Additional Citations:

  • A.R.S. § 33-1804
  • A.R.S. § 10-3821
  • A.R.S. § 32-2199 et seq.

Video Overview

Audio Overview

Decision Documents

21F-H2120001-REL-RHG Decision – 864802.pdf

Uploaded 2026-01-23T17:34:10 (101.9 KB)

21F-H2120001-REL-RHG Decision – ../21F-H2120001-REL/838004.pdf

Uploaded 2026-01-23T17:34:13 (125.4 KB)





Briefing Doc – 21F-H2120001-REL-RHG


Administrative Hearing Brief: Morin vs. Solera Chandler Homeowners’ Association

Executive Summary

This briefing document synthesizes the findings and rulings from an administrative case (No. 21F-H2120001-REL) involving homeowner Debra K. Morin (Petitioner) and the Solera Chandler Homeowners’ Association, Inc. (Respondent). The core issue revolved around the association’s adherence to Arizona’s open meeting laws for planned communities, as stipulated in A.R.S. § 33-1804.

The Administrative Law Judge ultimately found that the Solera Chandler HOA violated this statute by conducting non-privileged association business without an open meeting. The Board of Directors made numerous decisions between March and July 2020—including approving contracts for repairs, appointing committee members, and changing design guidelines—through a process of “unanimous written consent” executed via individual emails. This method circumvented statutory requirements for 48-hour notice to members, published agendas, and the opportunity for homeowners to speak before a vote.

The HOA defended its actions by citing the challenges of the COVID-19 pandemic and a separate statute, A.R.S. § 10-3821, which permits non-profit corporations to act without a meeting. However, the Judge ruled that the specific requirements of the HOA open meeting law (A.R.S. § 33-1804) take precedence, emphasizing the state’s explicit policy in favor of transparency and open meetings for homeowners’ associations.

While the petitioner’s primary complaint was affirmed, a second allegation regarding the misuse of emergency executive sessions was denied due to insufficient evidence. The final order directed the HOA to comply with A.R.S. § 33-1804 in the future and to reimburse the petitioner’s $500 filing fee. No civil penalty was assessed, with the judge acknowledging the “unprecedented global pandemic” as a mitigating circumstance.

Case Overview

Case Number

21F-H2120001-REL

Petitioner

Debra K. Morin

Respondent

Solera Chandler Homeowners’ Association, Inc.

Presiding Judge

Administrative Law Judge Tammy L. Eigenheer

Jurisdiction

Arizona Office of Administrative Hearings

Timeline of Adjudication

• July 10, 2020: Debra Morin files a petition with the Arizona Department of Real Estate.

• October 29, 2020: The initial administrative hearing is held.

• November 18, 2020: The first Administrative Law Judge Decision is issued.

• February 25, 2021: A rehearing is held at the Respondent’s request to clarify a finding of fact.

• March 17, 2021: The final Administrative Law Judge Decision is issued, affirming the original conclusion with a factual correction.

Petitioner’s Allegations

The petitioner, Debra K. Morin, focused her case on two specific complaints alleging violations of Arizona’s open meeting law for HOAs (A.R.S. § 33-1804).

Complaint #1: Improper Use of Closed Sessions and Unanimous Written Consent

The petitioner alleged that the Solera HOA Board of Directors conducted non-privileged association business in closed sessions without proper procedure. Specifically, the Board was accused of:

• Failing to provide members with 48-hour notice of meetings.

• Failing to provide agendas for the business being conducted.

• Denying members the opportunity to speak prior to the Board taking action on key issues.

• Using “unanimous written consent” to bypass open meeting requirements.

Complaint #2: Misuse of “Emergency Executive Sessions”

The petitioner further alleged that the Board conducted privileged association business under the guise of “emergency executive sessions” improperly by:

• Failing to identify the specific statutory exception to the open meeting law that permitted the closed session.

• Failing to provide an agenda and 48-hour notice where possible.

• Failing to produce minutes stating the reason for the emergency and submitting them at the next board meeting.

Respondent’s Actions and Defense

The Solera Chandler HOA acknowledged using unanimous written consents but argued its actions were a necessary response to the COVID-19 pandemic, which prevented in-person meetings. The Board asserted its actions were legally authorized under A.R.S. § 10-3821, a statute governing non-profit corporations.

Use of Unanimous Written Consent

Evidence presented at the rehearing established the Board’s procedure. For each action, an individual from the community management company would email each Board member individually to solicit a “yes” or “no” vote. If all members voted “yes,” the action was considered passed by unanimous consent, and the Board President would sign the formal consent document. The HOA stated it had not used this method before the pandemic and did not intend to continue its use.

The following actions were taken by the Board using this method and were later ratified at the August 5, 2020, open Board meeting:

Action Taken via Unanimous Written Consent

March 30, 2020

Approve repair and replacement of sidewalk and community center entrance.

March 30, 2020

Approve repair and replacement of cool decking around both pools.

April 30, 2020

Approve Kirk Sandquist as a member of the Architectural Review Committee.

April 30, 2020

Approve Tom Dusbabek as a member of the Architectural Review Committee.

May 5, 2020

Approve Gilbert Road retention basin project, related irrigation replacement, and addition of 420 tons of granite.

May 8, 2020

Approve replacement of a Carrier 6-ton heat pump.

May 8, 2020

Approve replacement of two Carrier 5-ton heat pumps.

May 27, 2020

Approve hiring Ken Eller to draft architectural drawings.

June 4, 2020

Approve a change to the Design Guidelines at the request of the Architectural Review Committee.

July 1, 2020

Approve the 2020 summer hardwood pruning and removal of trees.

Chronology of Executive Sessions

In addition to the actions taken by written consent, the Board held numerous executive (closed) sessions between March and August 2020, citing specific exceptions in A.R.S. § 33-1804(A). Minutes for these meetings were approved at the August 5, 2020 executive session but were redacted to conceal the substance of the discussions.

Date of Session

Cited Statutory Exceptions for Closed Session (A.R.S. § 33-1804(A))

March 13, 2020

(1) Legal advice, (2) Pending litigation, (4) Employee matters

March 16, 2020

(1) Legal advice, (2) Pending litigation

March 19, 2020

(1) Legal advice

March 24, 2020

(4) Employee matters

April 6, 2020

(4) Employee matters

April 10, 2020

(4) Employee matters

May 4, 2020

(4) Employee matters

May 12, 2020*

(1) Legal advice, (2) Pending litigation, (4) Employee matters

May 15, 2020

(1) Legal advice, (2) Pending litigation

May 27, 2020

(2) Pending litigation, (4) Employee matters

June 24, 2020

(2) Pending litigation, (3) Personal/health/financial information

August 5, 2020

(1) Legal advice, (2) Pending litigation, (3) Personal/health/financial information

*Designated an “emergency executive session.”

Adjudication and Legal Rulings

The Administrative Law Judge’s decision rested on the interpretation and primacy of Arizona’s statutes governing homeowners’ associations.

Statutory Conflict and Interpretation

The central legal question was the conflict between two state laws:

• A.R.S. § 33-1804: Specifically requires all HOA Board meetings to be open to all members, with limited exceptions for closed executive sessions. It explicitly states a policy that statutes should be construed “in favor of open meetings.”

• A.R.S. § 10-3821: A general corporate law that allows boards of non-profit corporations to take action “without a meeting” if there is unanimous written consent from all directors.

The Judge concluded that while A.R.S. § 10-3821 may apply to non-profits generally, the more specific statute, A.R.S. § 33-1804, governs the conduct of HOA boards. The requirement for open meetings in the HOA statute overrides the provision allowing for action without a meeting in the general non-profit statute.

Ruling on Complaint #1 (Improper Closed Business)

Finding: In favor of the Petitioner.

• The Judge ruled that the Petitioner established by a preponderance of the evidence that the Respondent committed the violation.

• The decision states, “Respondent improperly conducted association business in closed sessions via email rather than in meetings open to the members.”

• An initial finding that the business was conducted via “conference calls” was corrected after the rehearing to specify the method was individual emails, but this did not change the outcome.

• The Judge gave “consideration to the fact that Respondent was faced with an unprecedented global pandemic” and found that no civil penalty was appropriate under the circumstances.

Ruling on Complaint #2 (Misuse of Executive Sessions)

Finding: In favor of the Respondent.

• The Judge found that the Petitioner failed to meet the burden of proof for this allegation.

• The decision notes, “Nothing in the record suggested the Board discussed other issues that did not fall under the exceptions listed and/or that the May 12, 2020 executive session was not an emergency.”

Final Order and Directives

The Administrative Law Judge’s final, binding order issued on March 17, 2021, included the following directives:

1. Petition Affirmed in Part: The petitioner’s petition was affirmed on the issue of Complaint #1 and denied on the issue of Complaint #2.

2. Reimbursement of Filing Fee: Respondent (Solera Chandler HOA) was ordered to reimburse the Petitioner (Debra Morin) her $500.00 filing fee for the issue on which she prevailed.

3. Compliance Mandate: Respondent was directed to comply with the requirements of A.R.S. § 33-1804 going forward.






Study Guide – 21F-H2120001-REL-RHG


Study Guide: Morin v. Solera Chandler Homeowners’ Association, Inc.

This study guide provides a review of the administrative law case involving Debra K. Morin and the Solera Chandler Homeowners’ Association, Inc. It includes short-answer questions with an answer key, essay questions for further analysis, and a comprehensive glossary of key terms based on the provided legal decisions.

Short-Answer Quiz

Instructions: Answer the following questions in 2-3 sentences, using only information from the source documents.

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

2. What were the two main complaints filed by the Petitioner against the Respondent’s Board of Directors?

3. Which specific Arizona Revised Statute (A.R.S.) did the Petitioner allege the Respondent violated, and what is the general policy purpose of this statute?

4. How did the Respondent justify its use of unanimous written consents and its decision to forgo open meetings from March to July 2020?

5. What was the Administrative Law Judge’s final ruling on Complaint #1, which concerned conducting non-privileged association business?

6. What was the ruling on Complaint #2, which concerned the use of emergency executive sessions, and what was the reason for this outcome?

7. A rehearing was granted after the initial decision. What specific factual conclusion from the first decision was the focus of this rehearing?

8. How did the evidence presented at the rehearing clarify the method used by the Board of Directors to pass unanimous written consents?

9. Despite finding the Respondent in violation of state law, why did the Administrative Law Judge decide not to impose a civil penalty?

10. What two actions was the Respondent ordered to take as a result of the final ruling?

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Answer Key

1. The primary parties were Debra K. Morin, the Petitioner, and Solera Chandler Homeowners’ Association, Inc., the Respondent. The Petitioner filed a petition with the Arizona Department of Real Estate alleging statutory violations by the Respondent homeowners’ association.

2. The Petitioner’s first complaint alleged that the Respondent conducted non-privileged business in closed sessions using unanimous written consent, without providing proper notice, agendas, or an opportunity for members to speak. The second complaint alleged the Respondent conducted privileged business under the guise of “emergency executive sessions” without proper justification or documentation.

3. The Petitioner alleged a violation of A.R.S. § 33-1804. The stated policy of this statute is that all meetings of a planned community should be conducted openly, with notices and agendas provided to reasonably inform members and ensure they have the ability to speak before a vote is taken.

4. The Respondent argued that due to the COVID-19 pandemic, its Board of Directors was unable to meet in person to protect the health of its members and directors. The Respondent asserted that taking action via unanimous written consents was authorized under a different statute, A.R.S. § 10-3821, which applies to non-profit corporations.

5. The Judge affirmed the Petitioner’s first complaint, finding that she had established by a preponderance of the evidence that the Respondent improperly conducted association business. The Judge ruled that while A.R.S. § 10-3821 allows for action without a meeting, A.R.S. § 33-1804 specifically requires that HOA board meetings be open to members.

6. The Judge denied the Petitioner’s second complaint. The ruling stated that the Petitioner failed to establish by a preponderance of the evidence that the executive sessions were improper, as nothing in the record suggested the Board discussed issues outside of the legally permitted exceptions or that the May 12, 2020 session was not a true emergency.

7. The rehearing focused on Conclusion of Law 8 from the initial decision, which stated that the “Respondent improperly conducted association business in closed sessions via conference calls.” The Respondent disputed that the business related to the unanimous written consents was conducted via conference call.

8. Evidence at the rehearing established that an individual from the community management company would email each Board member individually to request a “yes” or “no” vote on a proposal. If all members voted “yes,” the action was considered passed by unanimous consent, which the Judge still found to be a violation of the open meeting law.

9. The Judge gave consideration to the fact that the Respondent was “faced with an unprecedented global pandemic while balancing the need to comply with the applicable statutes.” Because of these unique circumstances, the Judge found that no civil penalty was appropriate.

10. The Respondent was ordered to reimburse the Petitioner her $500.00 filing fee for the complaint on which she prevailed. The Respondent was also directed to comply with the requirements of A.R.S. § 33-1804 going forward.

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Essay Questions

Instructions: The following questions are designed for deeper analysis and discussion. Answers are not provided.

1. Analyze the statutory conflict between A.R.S. § 33-1804 (HOA open meetings) and A.R.S. § 10-3821 (non-profit action without a meeting) as presented in this case. Explain the legal reasoning the Administrative Law Judge used to determine that the requirements of A.R.S. § 33-1804 took precedence for a homeowners’ association.

2. Discuss the legal standard of “preponderance of the evidence.” How did the Petitioner successfully meet this evidentiary burden for Complaint #1 but fail to meet it for Complaint #2?

3. Evaluate the impact of the COVID-19 pandemic on the actions of the Solera Chandler Homeowners’ Association and the final judgment of the Administrative Law Judge. How did this external event influence both the violation itself and the penalty phase of the ruling?

4. According to A.R.S. § 33-1804(F), what is the stated public policy of Arizona regarding meetings of planned communities? How did this explicit policy statement likely influence the judge’s interpretation of the law and the final decision regarding Complaint #1?

5. Describe the full procedural history of this case, from the initial petition through the rehearing and final order. What does the granting of a rehearing to correct a factual finding demonstrate about the legal process and the importance of accuracy in judicial decisions?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

A judge who presides over administrative hearings, in this case within the Office of Administrative Hearings. The ALJ hears evidence and issues a decision based on the applicable laws and facts.

A.R.S. § 10-3821

An Arizona Revised Statute pertaining to non-profit corporations. It allows a corporation’s board of directors to take action without a meeting if the action is approved by a unanimous written consent signed by every director.

A.R.S. § 33-1804

An Arizona Revised Statute specifically governing planned communities (homeowners’ associations). It mandates that all board of directors meetings be open to association members, requires 48-hour notice and an agenda, and allows members to speak.

Executive Session

A portion of a board meeting that is closed to association members. A.R.S. § 33-1804 strictly limits these sessions to specific topics, such as receiving legal advice, discussing pending litigation, or reviewing confidential personal, health, or financial information of an individual.

Hearing

A formal proceeding before an Administrative Law Judge where parties present evidence and arguments related to a legal dispute. In this case, hearings were held on October 29, 2020, and February 25, 2021.

Jurisdiction

The official power to make legal decisions and judgments. In this matter, the Arizona Department of Real Estate had jurisdiction to hear disputes between a property owner and a homeowners’ association.

Petitioner

The party who files a petition initiating a legal action. In this case, Debra K. Morin was the Petitioner.

Preponderance of the Evidence

The standard of proof required in this administrative case. It means the evidence presented must be more convincing and probable than the evidence offered in opposition, showing the fact sought to be proved is “more probable than not.”

Rehearing

A second hearing granted to re-examine an issue from an initial hearing. In this case, a rehearing was granted at the Respondent’s request to address the factual finding of how it conducted business (conference calls vs. email).

Respondent

The party against whom a petition is filed. In this case, Solera Chandler Homeowners’ Association, Inc., was the Respondent.

Statutory Construction

The process of interpreting and applying legislation. The primary goal is to ascertain the legislature’s intent, beginning with the plain text of the statute.

Unanimous Written Consent

A procedure, authorized by A.R.S. § 10-3821, where an action is approved in writing by all members of a board of directors without a formal meeting. The Respondent used this method for actions such as approving repairs, appointing committee members, and changing design guidelines.






Blog Post – 21F-H2120001-REL-RHG


4 Surprising Lessons from One Homeowner’s Legal Battle with Her HOA

Introduction: When Your HOA Goes Dark

In the chaos of early 2020, as the world shut down, many Homeowners’ Association boards faced a critical challenge: how to govern when gathering in person was impossible? For residents of the Solera Chandler community, the answer was alarming—their board went dark. Citing the global crisis, the board began making major community decisions in secret, bypassing open meetings entirely. This raised a crucial legal question for every homeowner in the state: can an HOA board use a pandemic as justification to govern by private email? The legal battle launched by one determined resident, Debra K. Morin, provides a fascinating and unexpected answer.

1. Your HOA Board Can’t Govern by Email—Even in a Pandemic

At first glance, the Solera Chandler HOA board’s actions seemed like a practical response to an unprecedented crisis. To keep community business moving, the board began approving actions through a series of votes conducted via email. Using this process, the board made several significant decisions, including:

• Approving repairs for sidewalks and the community center entrance.

• Approving the replacement of cool decking around both pools.

• Appointing two new members to the Architectural Review Committee.

• Approving a major retention basin project, including irrigation replacement and the addition of 420 tons of granite.

• Hiring an architect to draft drawings.

The board’s defense rested on a clever, but ultimately flawed, legal argument. They cited Arizona statute A.R.S. § 10-3821, which allows general non-profit corporations to take action via “unanimous written consent” without a formal meeting. It was a reasonable assumption. However, an Administrative Law Judge ruled their actions were a clear violation of state law.

The legal reasoning is a vital lesson in statutory interpretation. The judge affirmed that when two laws conflict, the more specific statute prevails. In this case, the highly specific HOA Open Meeting Law (A.R.S. § 33-1804), which explicitly requires board meetings to be open to all members, overrides the more general rule for non-profits. The ruling provided a clear interpretation of the law: even a global pandemic does not grant an HOA board the power to circumvent its duty of transparency. In fact, a rehearing in the case clarified the board was making decisions through a series of individual emails—a method that completely prevented any form of an open meeting.

2. The Law Prioritizes Transparency Above All Else

The judge’s decision was not a mere technicality. It was a firm defense of the core policy undergirding Arizona’s HOA laws. The statute itself contains a powerful mission statement that leaves no room for ambiguity. A.R.S. § 33-1804(F) declares:

It is the policy of this state as reflected in this section that all meetings of a planned community, whether meetings of the members’ association or meetings of the board of directors of the association, be conducted openly and that notices and agendas be provided for those meetings that contain the information that is reasonably necessary to inform the members of the matters to be discussed or decided and to ensure that members have the ability to speak after discussion of agenda items, but before a vote of the board of directors or members is taken.

This principle is the bedrock of community governance. It ensures that homeowners can observe deliberations and have their say before a final decision is made. This right to be heard is lost when a board approves a costly pool deck repair or appoints a new committee member through a series of private emails, with homeowners only finding out after the fact. The court affirmed that this right is not a suggestion; it is a non-negotiable legal requirement.

3. A Legal “Win” Doesn’t Always Mean Punishment

After proving a clear violation of state law, the homeowner won… but the HOA received no punishment. Here’s why that isn’t a contradiction. Although Debra K. Morin successfully demonstrated that the board had broken the law, the Administrative Law Judge decided against imposing any civil penalty.

The judge’s reasoning highlights the law’s capacity for context. “Consideration is given to the fact that Respondent was faced with an unprecedented global pandemic while balancing the need to comply with the applicable statutes and conduct association business,” the decision stated.

Instead of a punitive fine, the consequences were corrective. The board was formally ordered to comply with the open meeting law (A.R.S. § 33-1804) going forward, and the association was required to reimburse Ms. Morin for her $500 filing fee. This outcome reveals a surprising nuance in administrative law: a judgment can simultaneously vindicate a petitioner and uphold the law while acknowledging mitigating circumstances, focusing on future compliance rather than past punishment.

4. One Determined Homeowner Can Make a Difference

This entire legal challenge was initiated by a single resident: Debra K. Morin. Her story, however, is a realistic and therefore more empowering example of homeowner advocacy. Ms. Morin actually filed two separate complaints. While she won her landmark case regarding secret email voting, she did not prevail on a second, unrelated claim concerning the board’s use of “emergency executive sessions.”

This partial victory makes her success on the transparency issue even more significant. It shows that the legal system carefully parsed her arguments, affirming the one with the broadest implications for community governance. By filing her petition, she secured a formal order compelling her HOA to follow the law and was refunded the costs she incurred.

Morin’s petition demonstrates that community governance is not a spectator sport. It proves that one homeowner with a grasp of the rules and the determination to see them enforced can successfully realign a board with its fundamental duty of transparency.

Conclusion: Is Your HOA Playing by the Rules?

The case of Morin vs. Solera Chandler HOA delivers a sharp, unambiguous message: the legal requirement for transparency is absolute, even in the face of extraordinary circumstances. While the board’s pandemic-related pressures earned it leniency from fines, the foundational principle of open governance was decisively upheld. This case serves as a powerful reminder of the rights of homeowners and the duties of their elected boards. It sets a clear standard for openness—does your own HOA’s process for making decisions live up to it?


Case Participants

Petitioner Side

  • Debra K. Morin (petitioner)
    Appeared on her own behalf,

Respondent Side

  • Lydia A. Peirce Linsmeier (HOA attorney)
    CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
    Also cited as Lydia Linsmeier,,,
  • Joshua M. Bolen (HOA attorney)
    CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
  • Gail Ryan (board member (President))
    Solera Chandler Homeowners' Association, Inc.
    Resigned August 5, 2020

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
    OAH
  • Judy Lowe (ADRE Commissioner)
    Arizona Department of Real Estate
  • f. del sol (clerk/staff)
    Signed transmission notice,
  • LDettorre (ADRE staff)
    Arizona Department of Real Estate
    Transmission recipient
  • AHansen (ADRE staff)
    Arizona Department of Real Estate
    Transmission recipient
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Transmission recipient
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
    Transmission recipient
  • ncano (ADRE staff)
    Arizona Department of Real Estate
    Transmission recipient

Other Participants

  • Kirk Sandquist (committee member (ARC))
    Approved to Architectural Review Committee
  • Tom Dusbabek (committee member (ARC))
    Approved to Architectural Review Committee
  • Ken Eller (consultant)
    Approved to draft architectural drawings

Keith D Smith v. Sierra Foothills Condominium Association

Posted on by

Case Summary

Case ID 21F-H2120003-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-06-03
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Keith D Smith Counsel —
Respondent Sierra Foothills Condominium Association Counsel Stuart Rayburn

Alleged Violations

CC&R section 7.1(C)
ARIZ. REV. STAT. section 33-1248

Outcome Summary

The petition was dismissed as the Petitioner failed to prove by a preponderance of the evidence that the Association violated CC&R section 7.1(C) or ARIZ. REV. STAT. section 33-1248. The rule limiting sign use was deemed reasonable.

Why this result: Petitioner failed to meet the burden of proof on both issues.

Key Issues & Findings

Alleged unreasonable discrimination in adopting rules regarding common elements (monument sign)

Petitioner alleged the Association violated CC&R 7.1(C) by adopting a rule limiting the use of the common element monument sign to only owners in Building B, arguing this was unreasonable discrimination against Building A owners.

Orders: Petition dismissed for this issue.

Filing fee: $250.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • CC&R section 7.1(C)
  • CC&R section 6.26(a)
  • ARIZ. REV. STAT. section 33-1217

Alleged open meeting law violation at the June 10, 2020 Board meeting

Petitioner alleged the Board violated open meeting laws by communicating via email and reaching a decision prior to the June 10, 2020 meeting, claiming the President called for a vote without discussion.

Orders: Petition dismissed for this issue.

Filing fee: $250.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. section 33-1248

Analytics Highlights

Topics: Condominium, Commercial HOA, Signage rules, Open meeting law, Discrimination
Additional Citations:

  • ARIZ. REV. STAT. section 33-1248
  • CC&R section 7.1(C)
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 41-1092.07(F)(6)

Video Overview

Audio Overview

Decision Documents

21F-H2120003-REL Decision – 837073.pdf

Uploaded 2026-01-23T17:34:29 (103.9 KB)





Briefing Doc – 21F-H2120003-REL


Smith v. Sierra Foothills Condominium Association: A Briefing on the Monument Sign Dispute

Executive Summary

This briefing document synthesizes two Administrative Law Judge (ALJ) decisions concerning a dispute between Keith D. Smith, a commercial condominium unit owner, and the Sierra Foothills Condominium Association. The core of the dispute is a rule enacted by the Association on June 10, 2020, which restricts the use of a common element monument sign exclusively to unit owners in one of the property’s two buildings.

Mr. Smith filed a petition alleging two primary violations:

1. Unreasonable Discrimination: The sign rule violated the Association’s Covenants, Conditions, and Restrictions (CC&Rs) by unfairly discriminating against owners in his building.

2. Open Meeting Law Violation: The Association’s Board violated state open meeting laws by allegedly deciding on the rule via email before the public meeting and calling for a vote without discussion.

The Administrative Law Judge dismissed Mr. Smith’s petition in an initial decision on November 16, 2020, and again after a rehearing in a final decision on June 3, 2021. The judge concluded that Mr. Smith failed to meet his burden of proof on both claims. The sign rule was deemed a reasonable measure to address the differing visibility and street frontage of the two buildings. The allegation of an open meeting law violation was dismissed due to a lack of substantial evidence from the petitioner and credible contradictory testimony from the Association’s representatives.

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Case Overview

This matter was adjudicated by the Office of Administrative Hearings for the Arizona Department of Real Estate. The case involves a petition filed by a unit owner against his condominium association regarding rules governing common elements.

Detail

Description

Case Numbers

21F-H2120003-REL (Original)
21F-H2120003-REL-RHG (Rehearing)

Petitioner

Keith D. Smith (Owner in Building A)

Respondent

Sierra Foothills Condominium Association

Presiding Judge

Administrative Law Judge Thomas Shedden

Key Dates

July 24, 2020: Petition filed by Keith D. Smith.
October 26, 2020: Original hearing conducted.
November 16, 2020: Initial decision issued, dismissing the petition.
June 3, 2021: Rehearing decision issued, reaffirming dismissal.

Central Issues and Allegations

The dispute centered on a monument sign with space for only five businesses at a commercial condominium property consisting of two buildings, Building A and Building B.

1. The Monument Sign Rule (CC&R Violation)

At a meeting on June 10, 2020, the Association’s Board adopted a rule limiting the use of the monument sign to unit owners in Building B. Mr. Smith, an owner in Building A, alleged this violated the Association’s governing documents.

• Petitioner’s Allegations:

◦ The rule violates CC&R Section 7.1(C), which states that rules “shall not unreasonably discriminate among Owners and Occupants.”

◦ The rule violates the principle of CC&R Section 6.26(a), which requires use restrictions within Article 6 of the CC&Rs to be applicable to all occupants.

◦ As an owner, Mr. Smith holds an undivided interest in the common elements, meaning no owner should have exclusive use of the sign. He argued the rule amounted to an improper “partition” of a common element.

• Respondent’s Position:

◦ The rule is reasonable and non-discriminatory because it addresses a fundamental inequity in property layout: Building A has street frontage for signage, while Building B does not.

◦ The limited space on the monument sign (five slots) necessitates a managed approach to its use.

◦ While initially questioning if the sign was a common element, the Association waived this argument by acknowledging it as such in its official answer.

2. The June 10, 2020 Board Meeting (Open Meeting Law Violation)

Mr. Smith alleged that the Board’s conduct during the meeting at which the rule was passed violated Arizona’s open meeting law, specifically ARIZ. REV. STAT. section 33-1248.

• Petitioner’s Allegations:

◦ The Association’s president called for a vote on the new rule “without discussion,” implying a decision had already been made.

◦ Mr. Smith asserted that Board members must have “Obviously communicated with each other via email and reached their decision without ever hearing my argument.”

• Respondent’s Position:

◦ Association President Stuart Rayburn and witness Harold Bordelon provided “credible testimony” that a “protracted discussion lasting about an hour and a half” occurred before the vote.

◦ They testified that Mr. Smith himself spoke for approximately twenty minutes during this discussion.

Evidence and Proposed Solutions

• Petitioner’s Evidence: Mr. Smith testified on his own behalf and submitted an email from the City of Phoenix regarding signage rules. He also presented two estimates for altering the monument sign to accommodate more businesses—one by reducing the size of existing signs (which he offered to fund) and another by enlarging the monument itself.

• Respondent’s Evidence: The Association presented testimony from its president, Stuart Rayburn, and Harold Bordelon. They submitted Section 705 of the City of Phoenix’s Zoning Ordinance, which they argued showed flexibility in the sign code. Mr. Bordelon testified that some of Mr. Smith’s proposed alterations to the sign did not comply with the city code.

Administrative Law Judge’s Rulings and Rationale

The ALJ’s decisions in both the original hearing and the rehearing were consistent, leading to the dismissal of Mr. Smith’s petition. The core rationale rested on the petitioner’s failure to meet the required burden of proof.

Original Decision (November 16, 2020)

The initial ruling found decisively in favor of the Association.

• On the CC&R Violation: The ALJ concluded that Mr. Smith did not prove a violation of CC&R Section 7.1(C) for two primary reasons:

1. The rule was not unreasonable, as it rationally addressed the physical disadvantage of Building B, which “does not have street frontage,” compared to Building A, which does.

2. Mr. Smith’s reliance on CC&R Section 6.26(a) was misplaced, as “by its express terms, CC&R section 6.26 applies only to CC&R Article 6, and not Article 7,” where the Board’s authority to make rules resides.

• On the Open Meeting Law Violation: The ALJ found the allegation unsupported.

◦ Mr. Smith “offered no substantial evidence” for his claim of pre-meeting communication.

◦ His testimony that the Board called for a vote “without discussion is proven to be in error” based on credible opposing testimony.

Rehearing Decision (June 3, 2021)

Mr. Smith requested a rehearing on several grounds, including alleged irregularities, errors of law, and claims that the findings were arbitrary or not supported by evidence. The ALJ granted the rehearing but ultimately reaffirmed the original decision.

• Scope of the Rehearing: The judge clarified that the rehearing was limited to the two original issues and could not consider new evidence or allegations not raised in the initial petition.

◦ Evidence that Mr. Smith claimed to have (an email supporting the open meeting violation) was not considered because it was not offered at the original hearing.

◦ Arguments related to new statutes (e.g., ARIZ. REV. STAT. section 33-1217 on partitioning common elements) were dismissed as they were not part of the original petition.

• Reaffirmation of Rulings:

◦ The judge reiterated that CC&R Section 6.26(a) explicitly limits its effect to Article 6. He noted that Mr. Smith himself had argued the CC&Rs “should be read and applied as one continuous document unless the document clearly states otherwise,” which it did in this case.

◦ The conclusion that the sign rule was reasonable was upheld.

◦ The dismissal of the open meeting law claim was reaffirmed, as Mr. Smith still presented no substantial evidence, instead relying on a “rhetorical question” about how a vote could be called without prior communication.

Key Legal Standards Applied

The ALJ’s decisions were guided by specific legal principles and administrative codes.

Standard

Application in the Case

Burden of Proof

The Petitioner, Keith D. Smith, bore the burden to prove his allegations by a “preponderance of the evidence.” The ALJ concluded this standard was not met.

Preponderance of the Evidence

Defined as evidence with the “most convincing force” that is sufficient to “incline a fair and impartial mind to one side of the issue rather than the other.”

Substantial Evidence

The standard required for an ALJ’s decision, defined as evidence a “reasonable mind would use to reach a conclusion.”

Scope of Adjudication

The hearing and subsequent decisions were strictly limited to the issues formally raised and paid for in the original petition, pursuant to ARIZ. REV. STAT. § 41-1092.07(F)(6).

Admissibility of Evidence

Evidence not presented at the original hearing cannot be considered in a rehearing, as established by ARIZ. ADMIN. CODE § R2-19-115.






Study Guide – 21F-H2120003-REL


Study Guide: Smith v. Sierra Foothills Condominium Association

This guide provides a comprehensive review of the administrative case Keith D. Smith v. Sierra Foothills Condominium Association, based on the initial Administrative Law Judge Decision and the subsequent Decision on Rehearing. It is designed to test and deepen understanding of the facts, legal arguments, and outcomes of the proceedings.

Quiz: Short Answer Questions

Instructions: Answer the following questions in 2-3 sentences based on the provided case documents.

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

2. What were the two central allegations Keith D. Smith made against the Sierra Foothills Condominium Association in his petition?

3. What specific action did the Association’s Board take on June 10, 2020, that initiated this dispute?

4. What justification did the Association provide for creating a rule that exclusively benefited the owners of units in Building B?

5. On what grounds did the Administrative Law Judge (ALJ) reject Mr. Smith’s argument that the sign rule violated CC&R section 6.26(a)?

6. What was the “preponderance of the evidence” standard, and who bore the burden of meeting it in this case?

7. Why was Mr. Smith’s allegation of an open meeting law violation dismissed in the original hearing?

8. What were the primary grounds Mr. Smith cited when requesting a rehearing of the initial decision?

9. In the rehearing, Mr. Smith mentioned having an email that supported his open meeting law claim. Why did the ALJ refuse to consider this evidence?

10. What was the final outcome of both the original hearing on October 26, 2020, and the subsequent rehearing decision on June 3, 2021?

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Quiz Answer Key

1. The primary parties were Keith D. Smith, the Petitioner, and the Sierra Foothills Condominium Association, the Respondent. Mr. Smith, an owner of a unit in Building A, filed a petition alleging violations by the Association, which manages the common elements of the condominium complex.

2. Mr. Smith alleged that the Association had violated CC&R section 7.1(C) by creating an unreasonable and discriminatory rule. He also alleged a violation of the open meeting law, ARIZ. REV. STAT. section 33-1248, claiming the Board made its decision before the public meeting.

3. On June 10, 2020, the Association’s Board adopted a new rule regarding the monument sign, a common element. This rule limited the use of the sign, which had space for only five businesses, to the owners of units located in Building B.

4. The Association argued the rule was reasonable because Building A has street frontage where signs can be hung, providing visibility. In contrast, Building B lacks street frontage, making the monument sign a critical advertising tool for its occupants.

5. The ALJ rejected the argument because the text of CC&R section 6.26(a) explicitly states its applicability is limited to the restrictions “contained in this Article 6.” The disputed rule was created under the authority of Article 7, so the non-discrimination clause of Article 6 did not apply.

6. The “preponderance of the evidence” is the standard of proof requiring that the evidence be of greater weight and more convincing force, inclining a fair mind to one side of the issue. In this administrative hearing, the Petitioner, Keith D. Smith, bore the burden of proof to show the alleged violations occurred by this standard.

7. The allegation was dismissed due to a lack of substantial evidence. Mr. Smith acknowledged he had no emails to support his claim of prior communication, and the credible testimony of Stuart Rayburn and Harold Bordelon established that a lengthy discussion did occur at the meeting before the vote was taken.

8. Mr. Smith requested a rehearing on several grounds, including alleged irregularity in the proceedings, abuse of discretion by the ALJ, errors of law (such as in the admission or rejection of evidence), and that the decision was arbitrary, capricious, and not supported by the evidence.

9. The ALJ refused to consider the email because evidence must be presented during the original hearing. Since Mr. Smith did not offer the document at the October 26, 2020 hearing, it could not be introduced for the first time in a request for a rehearing.

10. In both the original hearing decision (November 16, 2020) and the rehearing decision (June 3, 2021), Keith D. Smith’s petition was dismissed. The ALJ consistently found that Mr. Smith had failed to meet his burden of proof for both the CC&R violation and the open meeting law violation.

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Essay Questions

Instructions: Formulate detailed responses to the following prompts, synthesizing evidence and arguments from both administrative decisions.

1. Analyze the legal reasoning employed by Administrative Law Judge Thomas Shedden to conclude that the monument sign rule was not an “unreasonable” discrimination among owners under CC&R section 7.1(c).

2. Trace the evolution of Keith D. Smith’s open meeting law allegation from his initial petition through his request for rehearing. Discuss the specific evidence presented (or lack thereof) and explain why the ALJ found his claims unconvincing at every stage.

3. Explain the concept of procedural limitations in administrative hearings, using Mr. Smith’s case as an example. Focus on why the ALJ could only consider two issues, why new evidence was rejected on rehearing, and why other “perceived deficiencies” were not addressed.

4. Discuss the significance of the “common elements” in this dispute. How did Mr. Smith’s claim of an “undivided interest” in the monument sign contrast with the Association’s right to regulate its use, and how was this conflict ultimately resolved by the ALJ?

5. Evaluate the arguments presented regarding CC&R section 6.26(a). Explain Mr. Smith’s interpretation of the clause and the ALJ’s contrary interpretation based on the explicit text of the document.

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions. In this case, the ALJ was Thomas Shedden.

ARIZ. REV. STAT.

Abbreviation for Arizona Revised Statutes, which are the codified laws of the state of Arizona. Sections 33-1248 (open meeting law) and 33-1217 (partition of common elements) were cited.

Burden of Proof

The obligation on a party in a legal case to prove their allegations. In this matter, the burden of proof was on the Petitioner, Keith D. Smith.

CC&Rs (Covenants, Conditions & Restrictions)

The governing legal documents that set up the guidelines for a planned community or condominium. The key sections in this case were 6.10, 6.24, 6.26(a), and 7.1(c).

Common Elements

Parts of a condominium property that are owned in common by all unit owners and managed by the association. The monument sign was acknowledged by the Association as a common element.

Monument Sign

A freestanding sign at the property entrance that was the central subject of the dispute. It had space for only five businesses to advertise.

Office of Administrative Hearings (OAH)

The state agency where the hearings for this case were conducted.

Open Meeting Law

A state statute (ARIZ. REV. STAT. section 33-1248) requiring that meetings of governing bodies, like an HOA board, be conducted in public with proper notice and opportunity for member input.

Petitioner

The party who files a petition initiating a legal or administrative action. In this case, Keith D. Smith.

Preponderance of the Evidence

The standard of proof in this case, defined as evidence that has the most convincing force and is sufficient to incline a fair and impartial mind to one side of an issue over the other.

Rehearing

A second hearing of a case to reconsider the initial decision, typically granted on specific grounds such as procedural error or a decision contrary to evidence. Mr. Smith’s request for rehearing was granted but the original decision was upheld.

Respondent

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

Substantial Evidence

Evidence that a reasonable mind would use to reach a conclusion. The ALJ found that Mr. Smith offered no substantial evidence for his open meeting law claim.

Waived

The voluntary relinquishment of a known right or argument. The Association waived its argument that the monument sign was not a common element by acknowledging that it was in its official Answer.






Blog Post – 21F-H2120003-REL


I Read a 17-Page HOA Lawsuit Over a Sign. Here Are 5 Surprising Lessons for Every Homeowner.

Introduction: The Signpost to a Bigger Story

For anyone living in a community with a Homeowner or Condominium Association, the rulebook can feel like a source of endless frustration. The rules often seem complex, arbitrary, and difficult to challenge. But what really happens when an owner decides to fight back?

I recently analyzed the initial ruling and final rehearing decision—17 pages in all—from just such a fight: a formal petition filed by Keith D. Smith against the Sierra Foothills Condominium Association. This wasn’t a residential dispute over lawn ornaments or paint colors; it was a commercial conflict over who was allowed to use a single monument sign. But within this seemingly small micro-drama are universal lessons that are shockingly relevant to any owner navigating a dispute with their association.

Here are five surprising lessons from Mr. Smith’s legal battle that every owner should understand.

1. Read the Fine Print. No,ReallyRead It.

Mr. Smith’s primary argument was one of unfair discrimination. He owned a unit in Building A and was prohibited from using the monument sign, a common element, while owners in Building B were allowed to use it. He pointed to a specific rule in the governing documents, CC&R section 6.26(a), which stated that use restrictions must be applicable to all owners. This seemed like a clear-cut case of the board violating its own rules.

He lost. The reason was a tiny but critical detail in the fine print. The judge found that the non-discrimination clause Mr. Smith cited explicitly stated it only applied to rules “contained in this Article 6.” The board’s authority to create the sign rule came from a different section entirely, “Article 7,” specifically section 7.1(c), which did not contain the same mandate for equal application.

The judge’s finding on the rehearing was conclusive:

“Section 6.26(a) provides that the use restrictions ‘contained in this Article 6’ are applicable to all owners. Consequently, section 6.26(a) cannot be read to require that rules promulgated under section 7.1(c) must apply to all owners.”

The specific structure and wording of your governing documents are paramount. An assumption about a rule’s general intent is not enough. A single phrase—like “in this Article 6″—can make or break an entire legal argument.

2. What Feels Unfair Isn’t Always Legally “Unreasonable”

From Mr. Smith’s perspective, the situation was fundamentally unfair. As a property owner, he had an undivided interest in all common elements, including the monument sign. To be completely excluded from using it felt like a violation of his ownership rights.

However, the Association and the judge saw it differently. The rule was deemed legally “reasonable” for two logical and practical reasons:

1. The sign had a very limited number of spaces—only five businesses could be advertised.

2. Building A, where Mr. Smith’s unit was located, had valuable street frontage where businesses could place their own signs. Building B, in contrast, had no street frontage, making the monument sign the primary and essential tool for visibility for those businesses.

This is where the fine print from the first lesson comes roaring back. The judge noted that the board’s authority under section 7.1(c) “on its face allows discrimination among owners” as long as it wasn’t unreasonable. The specific language of the documents gave the board the explicit power to treat owners differently, provided there was a rational basis—which, in this case, there was. In association disputes, the legal standard is often “reasonableness,” which is evaluated based on context and logic, not just an individual’s feeling of fairness.

3. Suspecting a “Secret Meeting” Isn’t Enough to Prove It

Mr. Smith also alleged that the board violated the open meeting law. He claimed that when the sign issue came up at the board meeting, the president immediately called for a vote without any discussion. This led him to believe the decision had already been made in secret via email.

In his petition, he stated his certainty in plain terms:

“Obviously, the board members communicated with each other via email and reached their decision without ever hearing my argument.”

This claim failed completely. At the hearing, Mr. Smith acknowledged that he had no emails or other documents to support his allegation. Furthermore, the Association’s president and another member presented “credible testimony” that, contrary to Mr. Smith’s recollection, a “protracted” discussion lasting about an hour and a half had, in fact, taken place before the vote was called.

An accusation, no matter how “obvious” it seems to you, is not evidence. To successfully challenge an association’s procedure, you must provide proof. Suspicion and personal interpretation of events are not enough to win a legal claim.

4. Your First Shot Is Often Your Only Shot

After the judge dismissed his initial petition, Mr. Smith filed for a rehearing. In this new request, he tried to introduce new arguments and evidence to bolster his case. Specifically, he raised:

• A brand-new claim that the sign rule violated a state statute (ARIZ. REV. STAT. section 33-1217) concerning the partitioning of common elements.

• A reference to an email he now claimed to possess that would support his open meeting law violation argument.

The judge flatly rejected these new points. The reason was purely procedural: the rules of the legal process require all claims and evidence to be presented in the initial petition and at the original hearing. You cannot hold arguments in reserve to see how the first ruling goes.

The judge’s decision was unequivocal:

“Consequently, evidence that Mr. Smith did not present at the original hearing cannot be considered in this rehearing.”

The legal process is not flexible. You must build your entire case and present all your evidence from the very beginning. Your first shot is often your only shot.

5. The Burden of Proof Is on the Accuser

This may be the most crucial lesson of all. In a dispute like this, the legal responsibility, or “burden of proof,” was on Mr. Smith to prove that the Association had acted improperly. It was not the Association’s job to prove its innocence.

The standard he had to meet was “a preponderance of the evidence.” The judge’s decision included a formal definition of this standard, which clearly explains the high bar an accuser must clear:

“The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Ultimately, the judge concluded that Mr. Smith “did not prove” that either of his claims met this standard. His feelings of unfairness and his suspicions of improper procedure were not supported by superior evidentiary weight, and his petition was dismissed. If you decide to formally challenge your association, you are the accuser, and you carry the burden of proof.

Conclusion: Know the Rules of the Game

A seemingly minor dispute over a commercial sign reveals fundamental truths about navigating any rule-based organization, especially an HOA or Condo Association. The outcome hinged on the precise language of the documents, the legal definition of “reasonable,” the high bar for proving misconduct, and the rigid procedures of the hearing process. Mr. Smith’s case serves as a powerful reminder that to successfully challenge the rules, you must first master the rules of the game.

This entire conflict hinged on the specific wording of a few sentences in a thick rulebook. When was the last time you truly read the documents that govern your own community, and what crucial details might be hiding in plain sight?


Case Participants

Petitioner Side

  • Keith D Smith (petitioner)
    Appeared on his own behalf; Unit Owner

Respondent Side

  • Stuart Rayburn (association president)
    Sierra Foothills Condominium Association
    Representative for Respondent
  • Harold Bordelon (witness)
    Sierra Foothills Condominium Association
    Testified for the Association

Neutral Parties

  • Thomas Shedden (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (commissioner)
    Arizona Department of Real Estate
    Recipient of transmission
  • LDettorre (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission (email handle)
  • AHansen (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission (email handle)
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission (email handle)
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission (email handle)
  • ncano (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission (email handle)

Jay A. Janicek v. Sycamore Vista No. 8 Homeowners

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

Case Summary

Case ID 19F-H1918001-REL
Agency ADRE
Tribunal OAH
Decision Date 2019-03-25
Administrative Law Judge Jenna Clark
Outcome total
Filing Fees Refunded $500.00
Civil Penalties $250.00

Parties & Counsel

Petitioner Jay A. Janicek Counsel Jake Kubert
Respondent Sycamore Vista No. 8 Homeowners Association Counsel Evan Thompson

Alleged Violations

ARIZ. REV. STAT. § 33-1804(B); Association Bylaws Article III, Sections 3 & 4; Association Bylaws Article VIII, Section 1

Outcome Summary

The ALJ granted the petition, concluding that the HOA Board’s unilateral amendment of the Bylaws on November 20, 2017, was an invalid action taken without the required vote of the Association members and without statutory notice, violating ARIZ. REV. STAT. § 33-1804(B) and the Association’s governing documents. The amendment was invalidated, and the Respondent was ordered to refund the Petitioner's filing fee and pay a $250.00 civil penalty.

Key Issues & Findings

Whether Sycamore Vista No. 8 Homeowners Association (Respondent) violated Association Bylaws Article III, Sections 3 & 4 and Article VIII, Section 1 in an action taken by the board on November 20, 2017.

The Board of Directors attempted a third amendment to the Bylaws on November 20, 2017, specifically changing the requirements for the Association's financial review (audit, review, or compilation). The ALJ concluded that this action was invalid because it was taken in the absence of a quorum of Association members voting in favor of the amendment, violating both the Bylaws and statutory notice requirements.

Orders: The petition was granted. The third amendment to the Association Bylaws taken on November 20, 2017, was invalidated. Respondent was ordered to pay the Petitioner the filing fee required by ARIZ. REV. STAT. § 32-2199.01 and pay a civil penalty of $250.00 to the Planned Community Hearing Office Fund.

Filing fee: $500.00, Fee refunded: Yes, Civil penalty: $250.00

Disposition: petitioner_win

Cited:

  • ARIZ. REV. STAT. § 33-1804(B)
  • Association Bylaws Article III

Analytics Highlights

Topics: HOA Governance, Bylaws Amendment, Open Meeting Law, ARS 33-1804, Membership Vote, Filing Fee Refund
Additional Citations:

  • ARIZ. REV. STAT. § 33-1804(B)
  • ARIZ. REV. STAT. § 32-2199.02(A)
  • ARIZ. REV. STAT. § 32-2199.05
  • Powell v. Washburn, 125 P.3d 373 (Ariz. 2006)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)

Video Overview

Decision Documents

19F-H1918001-REL-RHG Decision – 696205.pdf

Uploaded 2026-01-23T17:25:44 (169.8 KB)

19F-H1918001-REL-RHG Decision – ../19F-H1918001-REL/661797.pdf

Uploaded 2026-01-23T17:25:47 (143.2 KB)





Briefing Doc – 19F-H1918001-REL-RHG


Briefing Document: Janicek v. Sycamore Vista No. 8 Homeowners Association

Executive Summary

This document synthesizes the findings and legal conclusions from the administrative hearings regarding a dispute between Jay A. Janicek (“Petitioner”) and the Sycamore Vista No. 8 Homeowners Association (“Respondent” or “the Association”). The central issue was whether the Association’s Board of Directors acted outside its authority by unilaterally amending the Association’s Bylaws during a Board meeting on November 20, 2017, without a vote from the general membership.

The Administrative Law Judge (ALJ) determined that the Board’s action violated both the Association’s governing documents and Arizona Revised Statutes (A.R.S. § 33-1804). The ruling emphasized that the term “members” in the Bylaws refers specifically to the body of property owners, not the Board of Directors. Consequently, the third amendment to the Bylaws was invalidated, and the Association was ordered to pay a civil penalty and refund the Petitioner’s filing fees. A rehearing in March 2019 reconfirmed these findings, underscoring the necessity of transparency and membership participation in homeowners’ association governance.

Case Overview and Procedural History

Key Fact

Detail

Case Number

19F-H1918001-REL; 19F-H1918001-REL-RHG (Rehearing)

Petitioner

Jay A. Janicek (Sycamore Vista property owner)

Respondent

Sycamore Vista No. 8 Homeowners Association

Initial Hearing Date

September 05, 2018

Initial Decision Date

September 24, 2018

Rehearing Date

March 05, 2019

Final Order Date

March 25, 2019

The Department of Real Estate referred the matter to the Office of Administrative Hearings (OAH) following a petition filed by Mr. Janicek on July 25, 2018. The Respondent initially declined to present witnesses or exhibits, choosing to rely on a dispute over textual interpretation. Following an initial ruling in favor of the Petitioner, the Respondent requested a rehearing, which was granted but ultimately resulted in the same conclusion.

The Core Dispute: Bylaw Amendment Authority

The conflict arose from a Board meeting held on November 20, 2017. During this meeting, the Board voted to approve a third amendment to the Association’s Bylaws.

The Specific Amendment

The Board modified Article VIII, Section 6(d). The original text required the Board to:

• “…cause an annual audit of the Association books to be made by a public accountant at the completion of each fiscal year.”

The Board replaced this with language allowing for:

• “…an annual audit, review, or compilation of the Associations financial records to be made by a public accountant within 180 days after the end of the HOA’s fiscal year.”

Conflicting Interpretations of “Members”

The primary legal dispute centered on the interpretation of Bylaws Article XIII, Section 1, which states:

“These Bylaws may be amended at a regular or special meeting of the Board of Directors of the Association by a vote of a majority of a quorum of members present in person or by proxy.” (Emphasis added).

• Petitioner’s Position: “Members” refers to the general membership of the Association (property owners), as defined in Article II, Section 7 and the Declaration. Petitioner argued that the use of “proxy” in this section further proves it refers to members, as Board Directors are not permitted to vote by proxy.

• Respondent’s Position: “Members” refers to the members of the Board of Directors. The Association argued that because the word was not capitalized in Article XIII, it authorized the Board to amend Bylaws at their own meetings, provided a quorum of Directors was present.

Legal Analysis and Evidence

Governing Statutes and Case Law

The ALJ’s decision was informed by Arizona law and established legal principles:

• A.R.S. § 33-1804 (Open Meeting Law): This statute requires that notice of any meeting where a bylaw amendment is proposed must be sent to all members 10 to 50 days in advance. It also mandates that meetings of the board and association be open to all members.

• A.R.S. § 33-1804(F): The legislative intent of the Open Meeting Law is to promote transparency. Petitioner cited a message from Governor Ducey stating that such laws “provide residents the opportunity to resolve issues as a community rather than seek government intervention.”

• Powell v. Washburn (2006): The Arizona Supreme Court held that restrictive covenants (including Bylaws) must be interpreted to give effect to the intention of the parties based on the document in its entirety.

Findings of Fact regarding Authority

The ALJ identified several factors that invalidated the Board’s unilateral action:

1. Differentiated Terminology: The Bylaws consistently use “Directors” when referring to the Board and “Members” when referring to the homeowners. Article VI, Section 3 explicitly uses “Directors” to define a quorum for the Board, while Article XIII uses “members.”

2. Absence of Express Power: Article VII, which outlines the “Powers and Duties of the Board of Directors,” does not expressly grant the Board the authority to amend Bylaws. This power is reserved for the membership.

3. Lack of Notice: No Association members were present at the November 20, 2017, meeting, and no notice was provided to the general membership regarding a proposed amendment to the Bylaws as required by A.R.S. § 33-1804(B).

Conclusions of Law

The ALJ concluded that the Petitioner sustained the burden of proof by a preponderance of the evidence. The final legal determinations were:

• Avoidance of Absurdity: Bylaws must be construed to avoid an absurdity. The ALJ stated, “The voices of few cannot speak for all, unless all have bestowed those few with the power and authority to speak on their behalf.”

• Violation of Statute: The Board’s action violated A.R.S. § 33-1804(B) due to the lack of transparency and failure to provide notice of a bylaw amendment.

• Violation of Governing Documents: The Board acted outside the authority granted to it by the Bylaws, specifically Article III and Article XIII.

Final Order and Penalties

The Administrative Law Judge issued the following orders:

1. Invalidation: The third amendment to the Association Bylaws, enacted on November 20, 2017, is null and void.

2. Restitution of Fees: The Respondent must pay the Petitioner the cost of his filing fee.

3. Civil Penalty: The Respondent was ordered to pay a sum of $250.00 to the Planned Community Hearing Office Fund as a penalty for the violations.

4. Binding Nature: Following the rehearing, the order became binding, with the only further recourse being judicial review in the Superior Court within 35 days.






Study Guide – 19F-H1918001-REL-RHG


Study Guide: Janicek v. Sycamore Vista No. 8 Homeowners Association

This study guide provides a comprehensive review of the legal proceedings between Jay A. Janicek and the Sycamore Vista No. 8 Homeowners Association. It examines the interpretation of governing documents, the application of Arizona Revised Statutes regarding homeowners’ associations, and the limits of a Board of Directors’ authority to amend bylaws.

——————————————————————————–

Part I: Short-Answer Quiz

Instructions: Answer the following questions in two to three sentences based on the provided legal documents.

1. Who are the primary parties involved in this administrative hearing, and what is their relationship?

2. What specific action taken by the Board of Directors on November 20, 2017, triggered this dispute?

3. How did the Petitioner define the term “member” according to the Association’s governing documents?

4. What was the Respondent’s primary argument regarding the interpretation of Article XIII, Section 1 of the Bylaws?

5. According to ARIZ. REV. STAT. § 33-1804(B), what must a notice of a membership meeting include if a bylaw amendment is proposed?

6. Why did the Petitioner argue that the use of the word “proxy” in the Bylaws supported his interpretation that only general members could amend the Bylaws?

7. What is the legal significance of the Covenants, Conditions, and Restrictions (CC&Rs) in the context of the relationship between an HOA and a property owner?

8. What was the “preponderance of the evidence” standard used by the Administrative Law Judge to reach a decision?

9. What specific penalties and orders were issued against the Respondent in the final decision?

10. What reason did the Administrative Law Judge give for concluding that the Board’s interpretation of the Bylaws was incorrect?

——————————————————————————–

Part II: Answer Key

1. Who are the primary parties involved in this administrative hearing, and what is their relationship? The Petitioner is Jay A. Janicek, a property owner and member of the Sycamore Vista subdivision. The Respondent is the Sycamore Vista No. 8 Homeowners Association, the entity responsible for governing the residential development where the Petitioner’s property is located.

2. What specific action taken by the Board of Directors on November 20, 2017, triggered this dispute? The Board voted to approve a third amendment to the Association’s Bylaws during a regular meeting. This amendment replaced a requirement for a full annual audit by a public accountant with a choice of an audit, review, or compilation to be completed within 180 days of the fiscal year-end.

3. How did the Petitioner define the term “member” according to the Association’s governing documents? The Petitioner asserted that “Member” refers to those persons entitled to membership as defined in the Declaration, specifically every lot owner. He argued that this definition distinguishes general property owners from the “Directors” who serve on the Board.

4. What was the Respondent’s primary argument regarding the interpretation of Article XIII, Section 1 of the Bylaws? The Respondent argued that the term “members” in Article XIII referred specifically to members of the Board of Directors rather than the general membership. They contended that since the word was not capitalized, it authorized the Board to amend Bylaws at any meeting where a quorum of directors was present.

5. According to ARIZ. REV. STAT. § 33-1804(B), what must a notice of a membership meeting include if a bylaw amendment is proposed? The statute requires that notice be sent to every owner 10 to 50 days in advance of the meeting, stating the date, time, and place. Crucially, the notice must also state the purpose of the meeting, including the general nature of any proposed amendments to the declaration or bylaws.

6. Why did the Petitioner argue that the use of the word “proxy” in the Bylaws supported his interpretation that only general members could amend the Bylaws? The Petitioner noted that the Bylaws allow for voting by “proxy,” a mechanism defined in Article III as applying to votes of the general membership. He argued that because Board members are legally prohibited from voting by proxy, the inclusion of the term in the amendment section proved the section applied to general members.

7. What is the legal significance of the Covenants, Conditions, and Restrictions (CC&Rs) in the context of the relationship between an HOA and a property owner? The CC&Rs constitute an enforceable contract between the Association and each individual property owner. By purchasing a residential unit within the development, the buyer agrees to be bound by the terms, powers, and restrictions outlined in these recorded documents.

8. What was the “preponderance of the evidence” standard used by the Administrative Law Judge to reach a decision? This standard requires the Petitioner to prove that his contention is “more probably true than not.” It is defined as the greater weight of the evidence or evidence that possesses the most convincing force, rather than the absolute removal of all doubt.

9. What specific penalties and orders were issued against the Respondent in the final decision? The Administrative Law Judge invalidated the third amendment to the Bylaws and ordered the Respondent to pay a $250.00 civil penalty to the Planned Community Hearing Office Fund. Additionally, the Respondent was ordered to reimburse the Petitioner for his initial filing fee.

10. What reason did the Administrative Law Judge give for concluding that the Board’s interpretation of the Bylaws was incorrect? The Judge ruled that bylaws must be construed to avoid “absurdity” and that the “voices of few cannot speak for all” without express authority. The governing documents clearly differentiated between “members” (owners) and “directors,” and the Board lacked the power to act where authority was reserved for the membership.

——————————————————————————–

Part III: Essay Questions

Instructions: Use the provided source context to develop comprehensive responses to the following prompts.

1. The Distinction Between “Members” and “Directors”: Analyze how the specific terminology used in the Sycamore Vista No. 8 Bylaws (Articles II, III, VI, and XIII) influenced the Administrative Law Judge’s decision. How does the consistent use of these terms throughout the document prevent the Board from claiming the powers of the general membership?

2. Statutory Compliance and Transparency: Discuss the importance of ARIZ. REV. STAT. § 33-1804 (the Open Meeting Law) as it relates to this case. Use Governor Ducey’s message regarding H.B. 2411 to explain the legislative intent behind ensuring transparency and participation in HOA governance.

3. The Role of the Office of Administrative Hearings (OAH): Explain the procedural path of this dispute, from the initial petition to the Department of Real Estate to the final rehearing. What is the scope of the OAH’s authority in interpreting contracts between homeowners and associations?

4. Contractual Interpretation and the “Powell v. Washburn” Precedent: Discuss the significance of the Arizona Supreme Court’s holding in Powell v. Washburn regarding restrictive covenants. How does the requirement to give effect to the “intention of the parties” apply to the interpretation of HOA Bylaws?

5. Limits of Board Authority: Based on the Findings of Fact and Conclusions of Law, evaluate the boundaries of a Board of Directors’ power. Under what circumstances can a Board exercise “all powers, duties, and authority” of the Association, and what serves as the definitive limit to that power?

——————————————————————————–

Part IV: Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

A presiding officer who hears evidence and issues decisions in contested cases involving state agencies.

ARIZ. REV. STAT. § 33-1804

The Arizona statute governing open meetings, notice requirements, and transparency for planned community associations.

Bylaws

The internal rules and regulations that govern the administration and management of an association.

Covenants, Conditions, and Restrictions; the recorded legal documents that establish the rules for a planned community and create a contract between owners and the HOA.

Civil Penalty

A financial fine imposed by a government agency or tribunal as a punishment for a violation of statutes or regulations.

Declarant

The original developer or entity that established the residential subdivision and its governing documents.

Declaration

The primary governing document that defines membership and property rights within a homeowners’ association.

Member

Defined in the source context as a property owner within the Sycamore Vista subdivision who is entitled to membership in the Association.

The Office of Administrative Hearings; an independent state agency that conducts evidentiary hearings for contested cases.

Petitioner

The party who initiates a legal action or petition (in this case, Jay A. Janicek).

Preponderance of the Evidence

The legal standard of proof required in this case, meaning a contention is “more probably true than not.”

A written authorization allowing one person to act or vote on behalf of another, specifically used by Association members.

Quorum

The minimum number of members or directors required to be present at a meeting to legally transact business.

Respondent

The party against whom a legal action or petition is filed (in this case, Sycamore Vista No. 8 HOA).

Restrictive Covenants

Provisions in a deed or other recorded document that limit the use of property and are interpreted to give effect to the intention of the parties.






Blog Post – 19F-H1918001-REL-RHG


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]
}

{ “case”: { “agency”: “ADRE”, “tribunal”: “OAH”, “docket_no”: “19F-H1918001-REL”, “case_title”: “Jay A. Janicek vs. Sycamore Vista No. 8 Homeowners Association”, “decision_date”: “2019-03-25”, “alj_name”: “Jenna Clark” }, “parties”: [ { “party_id”: “P1”, “role”: “petitioner”, “name”: “Jay A. Janicek”, “party_type”: “homeowner”, “email”: null, “phone”: null, “attorney_name”: “Jake Kubert”, “attorney_firm”: “Dessaules Law Group”, “attorney_email”: null, “attorney_phone”: null }, { “party_id”: “R1”, “role”: “respondent”, “name”: “Sycamore Vista No. 8 Homeowners Association”, “party_type”: “HOA”, “email”: null, “phone”: null, “attorney_name”: “Evan Thompson”, “attorney_firm”: “Thompson Krone, P.L.C.”, “attorney_email”: null, “attorney_phone”: null } ], “issues”: [ { “issue_id”: “ISS-001”, “type”: “statute_and_bylaws”, “citation”: “ARIZ. REV. STAT. § 33-1804(B); Association Bylaws Article III, Sections 3 & 4; Association Bylaws Article VIII, Section 1”, “caption”: “Whether Sycamore Vista No. 8 Homeowners Association (Respondent) violated Association Bylaws Article III, Sections 3 & 4 and Article VIII, Section 1 in an action taken by the board on November 20, 2017.”, “violation(s)”: “Violation of ARIZ. REV. STAT. § 33-1804(B) and Association Bylaws Article III by amending the Bylaws on November 20, 2017, without proper notice and a vote of the Association membership.”, “summary”: “The Board of Directors attempted a third amendment to the Bylaws on November 20, 2017, specifically changing the requirements for the Association’s financial review (audit, review, or compilation)12. The ALJ concluded that this action was invalid because it was taken in the absence of a quorum of Association members voting in favor of the amendment, violating both the Bylaws and statutory notice requirements34.”, “outcome”: “petitioner_win”, “filing_fee_paid”: 500.0, “filing_fee_refunded”: true, “civil_penalty_amount”: 250.0, “orders_summary”: “The petition was granted. The third amendment to the Association Bylaws taken on November 20, 2017, was invalidated. Respondent was ordered to pay the Petitioner the filing fee required by ARIZ. REV. STAT. § 32-2199.01 and pay a civil penalty of $250.00 to the Planned Community Hearing Office Fund56.”, “why_the_loss”: null, “cited”: [ “ARIZ. REV. STAT. § 33-1804(B)”, “Association Bylaws Article III” ] } ], “money_summary”: { “issues_count”: 1, “total_filing_fees_paid”: 500.0, “total_filing_fees_refunded”: 500.0, “total_civil_penalties”: 250.0 }, “outcomes”: { “petitioner_is_hoa”: false, “petitioner_win”: “total”, “summarize_judgement”: “The ALJ granted the petition, concluding that the HOA Board’s unilateral amendment of the Bylaws on November 20, 2017, was an invalid action taken without the required vote of the Association members and without statutory notice, violating ARIZ. REV. STAT. § 33-1804(B) and the Association’s governing documents47. The amendment was invalidated, and the Respondent was ordered to refund the Petitioner’s filing fee and pay a $250.00 civil penalty56.”, “why_the_loss”: null }, “analytics”: { “cited”: [ “ARIZ. REV. STAT. § 33-1804(B)”, “ARIZ. REV. STAT. § 32-2199.02(A)”, “ARIZ. REV. STAT. § 32-2199.05”, “Powell v. Washburn, 125 P.3d 373 (Ariz. 2006)”, “Tierra Ranchos Homeowners Ass’n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)” ], “tags”: [ “HOA Governance”, “Bylaws Amendment”, “Open Meeting Law”, “ARS 33-1804”, “Membership Vote”, “Filing Fee Refund” ] } }

{ “rehearing”:{ “is_rehearing”:true, “base_case_id”:”19F-H1918001-REL”, “original_decision_status”:”affirmed”, “original_decision_summary”:”The original ALJ decision, issued on September 25, 2018, granted the Petitioner’s request, finding that the Sycamore Vista No. 8 Homeowners Association Board violated ARIZ. REV. STAT. § 33-1804(B) and Association Bylaws by unilaterally amending the Bylaws on November 20, 2017, without first calling for a vote by the Association members1,2,3. The order invalidated the amendment, required the Respondent to refund the Petitioner’s filing fee, and imposed a civil penalty of $250.004,5.”, “rehearing_decision_summary”:”The Department granted Respondent’s request for a rehearing, which was held on March 5, 20196,7. The ALJ affirmed the original decision, concluding that the Board’s action on November 20, 2017, violated ARIZ. REV. STAT. § 33-1804(B) and Article III of the Association Bylaws because the action was taken in the absence of a quorum of Association members voting in favor of the proposed amendment8. The rehearing order re-granted the petition, invalidated the third amendment, and reaffirmed the orders for the filing fee refund and the $250.00 civil penalty8,9.”, “issues_challenged”:[ { “issue_id”: “ISS-001”, “summary”: “Whether the HOA Board violated Association Bylaws Article III, Sections 3 & 4 and Article VIII, Section 1, and ARIZ. REV. STAT. § 33-1804(B) in an action taken to amend the Bylaws on November 20, 201710.”, “outcome”: “affirmed_petitioner_win” } ] } }

{
“case”: {
“docket_no”: “19F-H1918001-REL”,
“case_title”: “Jay A. Janicek, Petitioner, vs. Sycamore Vista No. 8 Homeowners Association (FKA New Tucson Unit No. 8 Homeowners Association, Inc.), Respondent.”,
“decision_date”: “2019-03-25”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Jay A. Janicek”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: “Appeared on own behalf at initial hearing; Observed at rehearing.”
},
{
“name”: “Jenna Clark”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “Office of Administrative Hearings”,
“notes”: null
},
{
“name”: “Evan Thompson”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “Thompson Krone, P.L.C.”,
“notes”: null
},
{
“name”: “Jake Kubert”,
“role”: “petitioner attorney”,
“side”: “petitioner”,
“affiliation”: “Dessaules Law Group”,
“notes”: null
},
{
“name”: “Maxwell T. Riddiough”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “Thompson Krone, P.L.C.”,
“notes”: null
},
{
“name”: “Andrew F. Vizcarra”,
“role”: “property manager”,
“side”: “respondent”,
“affiliation”: “Tucson Realty & Trust Co. Management”,
“notes”: “Listed as contact for Respondent HOA”
},
{
“name”: “Judy Lowe”,
“role”: “Commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: null
},
{
“name”: “Dennis Legere”,
“role”: “observer”,
“side”: “unknown”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Becky Nutt”,
“role”: “observer”,
“side”: “unknown”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Caleb Rhodes”,
“role”: “observer”,
“side”: “unknown”,
“affiliation”: null,
“notes”: null
}
]
}

The matter, Jay A. Janicek vs. Sycamore Vista No. 8 Homeowners Association (Case No. 19F-H1918001-REL-RHG), involves a dispute over the validity of a Bylaw amendment passed by the homeowners’ association (HOA) Board of Directors12. The inclusion of ‘RHG’ in the case number confirms that the final decision resulted from a rehearing requested by the Respondent Association23.

Procedural History: The initial evidentiary hearing was held on September 5, 201824. The Administrative Law Judge (ALJ) issued a decision on September 24, 2018, granting the Petitioner’s request35. The Respondent requested and was granted a rehearing by the Department of Real Estate on November 7, 201836. The rehearing was held on March 5, 2019, where no new evidence was introduced, and the parties presented legal briefs and closing arguments2….

Key Facts and Core Issue: The dispute centered on the validity of the Board’s third amendment to the Association Bylaws, approved on November 20, 2017910. This amendment changed the financial oversight requirement from an annual audit by a public accountant to an annual audit, review, or compilation of financial records1112.

The main legal issue was whether the Board had the authority to unilaterally amend the Bylaws without a vote of the general membership and whether the Board violated ARIZ. REV. STAT. § 33-1804(B), concerning notice requirements for member meetings3…. The determination hinged on the interpretation of Bylaws Article XIII, Section 1, which permits amendments “by a vote of a majority of a quorum of members present in person or by proxy”1617.

Key Arguments: Petitioner Jay Janicek argued that the term “members” in Article XIII referred exclusively to the Association owners, as supported by the Bylaws’ definition of “Member” and the use of the term “proxy” (which applies to owners, not directors)14…. Petitioner asserted that since the Board acted without calling for a member vote and without statutory notice of the proposed amendment, the action was invalid and violated A.R.S. § 33-1804(B)14….

The Association argued that, based on reading the Bylaws in their entirety, the term “members” in Article XIII referred to the Board of Directors, particularly since the amendment was to occur at a meeting of the Board of Directors24….

Rehearing Decision and Outcome: In both the original decision and the rehearing decision, the ALJ reached the same conclusion, finding that the Petitioner sustained the burden of proof2728. The ALJ determined that the Association’s governing documents clearly differentiate between “members” (the body of owners) and “directors” (the elected Board)28…. The Board lacked the power to amend the Bylaws when that authority was delegated to the membership2930.

The ALJ concluded that the Board’s action on November 20, 2017, violated ARIZ. REV. STAT. § 33-1804(B) and Article III of the Association Bylaws because the amendment was adopted in the absence of a quorum of Association members voting in favor3132.

The final outcome of the rehearing was that the Petitioner’s petition was granted32. The Board’s third amendment to the Bylaws was invalidated532. Additionally, the Respondent Association was ordered to pay the Petitioner’s filing fee and a civil penalty of $250.00 for the violation533.


Case Participants

Petitioner Side

  • Jay A. Janicek (petitioner)
    Appeared on own behalf at initial hearing; Observed at rehearing.
  • Jake Kubert (petitioner attorney)
    Dessaules Law Group

Respondent Side

  • Evan Thompson (HOA attorney)
    Thompson Krone, P.L.C.
  • Maxwell T. Riddiough (HOA attorney)
    Thompson Krone, P.L.C.
  • Andrew F. Vizcarra (property manager)
    Tucson Realty & Trust Co. Management
    Listed as contact for Respondent HOA

Neutral Parties

  • Jenna Clark (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate

Other Participants

  • Dennis Legere (observer)
  • Becky Nutt (observer)
  • Caleb Rhodes (observer)

Jay A. Janicek v. Sycamore Vista No. 8 Homeowners

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

Case Summary

Case ID 19F-H1918001-REL
Agency ADRE
Tribunal OAH
Decision Date 2019-03-25
Administrative Law Judge Jenna Clark
Outcome total
Filing Fees Refunded $500.00
Civil Penalties $250.00

Parties & Counsel

Petitioner Jay A. Janicek Counsel Jake Kubert
Respondent Sycamore Vista No. 8 Homeowners Association Counsel Evan Thompson

Alleged Violations

ARIZ. REV. STAT. § 33-1804(B); Association Bylaws Article III, Sections 3 & 4; Association Bylaws Article VIII, Section 1

Outcome Summary

The ALJ granted the petition, concluding that the HOA Board’s unilateral amendment of the Bylaws on November 20, 2017, was an invalid action taken without the required vote of the Association members and without statutory notice, violating ARIZ. REV. STAT. § 33-1804(B) and the Association’s governing documents. The amendment was invalidated, and the Respondent was ordered to refund the Petitioner's filing fee and pay a $250.00 civil penalty.

Key Issues & Findings

Whether Sycamore Vista No. 8 Homeowners Association (Respondent) violated Association Bylaws Article III, Sections 3 & 4 and Article VIII, Section 1 in an action taken by the board on November 20, 2017.

The Board of Directors attempted a third amendment to the Bylaws on November 20, 2017, specifically changing the requirements for the Association's financial review (audit, review, or compilation). The ALJ concluded that this action was invalid because it was taken in the absence of a quorum of Association members voting in favor of the amendment, violating both the Bylaws and statutory notice requirements.

Orders: The petition was granted. The third amendment to the Association Bylaws taken on November 20, 2017, was invalidated. Respondent was ordered to pay the Petitioner the filing fee required by ARIZ. REV. STAT. § 32-2199.01 and pay a civil penalty of $250.00 to the Planned Community Hearing Office Fund.

Filing fee: $500.00, Fee refunded: Yes, Civil penalty: $250.00

Disposition: petitioner_win

Cited:

  • ARIZ. REV. STAT. § 33-1804(B)
  • Association Bylaws Article III

Analytics Highlights

Topics: HOA Governance, Bylaws Amendment, Open Meeting Law, ARS 33-1804, Membership Vote, Filing Fee Refund
Additional Citations:

  • ARIZ. REV. STAT. § 33-1804(B)
  • ARIZ. REV. STAT. § 32-2199.02(A)
  • ARIZ. REV. STAT. § 32-2199.05
  • Powell v. Washburn, 125 P.3d 373 (Ariz. 2006)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)

Video Overview

Audio Overview

Decision Documents

19F-H1918001-REL-RHG Decision – 696205.pdf

Uploaded 2025-10-09T03:33:15 (169.8 KB)

19F-H1918001-REL-RHG Decision – ../19F-H1918001-REL/661797.pdf

Uploaded 2026-01-20T13:48:23 (143.2 KB)





Briefing Doc – 19F-H1918001-REL-RHG


Briefing Document: Janicek v. Sycamore Vista No. 8 Homeowners Association

Executive Summary

This document synthesizes the findings and legal conclusions from the administrative hearings regarding a dispute between Jay A. Janicek (“Petitioner”) and the Sycamore Vista No. 8 Homeowners Association (“Respondent” or “the Association”). The central issue was whether the Association’s Board of Directors acted outside its authority by unilaterally amending the Association’s Bylaws during a Board meeting on November 20, 2017, without a vote from the general membership.

The Administrative Law Judge (ALJ) determined that the Board’s action violated both the Association’s governing documents and Arizona Revised Statutes (A.R.S. § 33-1804). The ruling emphasized that the term “members” in the Bylaws refers specifically to the body of property owners, not the Board of Directors. Consequently, the third amendment to the Bylaws was invalidated, and the Association was ordered to pay a civil penalty and refund the Petitioner’s filing fees. A rehearing in March 2019 reconfirmed these findings, underscoring the necessity of transparency and membership participation in homeowners’ association governance.

Case Overview and Procedural History

Key Fact

Detail

Case Number

19F-H1918001-REL; 19F-H1918001-REL-RHG (Rehearing)

Petitioner

Jay A. Janicek (Sycamore Vista property owner)

Respondent

Sycamore Vista No. 8 Homeowners Association

Initial Hearing Date

September 05, 2018

Initial Decision Date

September 24, 2018

Rehearing Date

March 05, 2019

Final Order Date

March 25, 2019

The Department of Real Estate referred the matter to the Office of Administrative Hearings (OAH) following a petition filed by Mr. Janicek on July 25, 2018. The Respondent initially declined to present witnesses or exhibits, choosing to rely on a dispute over textual interpretation. Following an initial ruling in favor of the Petitioner, the Respondent requested a rehearing, which was granted but ultimately resulted in the same conclusion.

The Core Dispute: Bylaw Amendment Authority

The conflict arose from a Board meeting held on November 20, 2017. During this meeting, the Board voted to approve a third amendment to the Association’s Bylaws.

The Specific Amendment

The Board modified Article VIII, Section 6(d). The original text required the Board to:

• “…cause an annual audit of the Association books to be made by a public accountant at the completion of each fiscal year.”

The Board replaced this with language allowing for:

• “…an annual audit, review, or compilation of the Associations financial records to be made by a public accountant within 180 days after the end of the HOA’s fiscal year.”

Conflicting Interpretations of “Members”

The primary legal dispute centered on the interpretation of Bylaws Article XIII, Section 1, which states:

“These Bylaws may be amended at a regular or special meeting of the Board of Directors of the Association by a vote of a majority of a quorum of members present in person or by proxy.” (Emphasis added).

• Petitioner’s Position: “Members” refers to the general membership of the Association (property owners), as defined in Article II, Section 7 and the Declaration. Petitioner argued that the use of “proxy” in this section further proves it refers to members, as Board Directors are not permitted to vote by proxy.

• Respondent’s Position: “Members” refers to the members of the Board of Directors. The Association argued that because the word was not capitalized in Article XIII, it authorized the Board to amend Bylaws at their own meetings, provided a quorum of Directors was present.

Legal Analysis and Evidence

Governing Statutes and Case Law

The ALJ’s decision was informed by Arizona law and established legal principles:

• A.R.S. § 33-1804 (Open Meeting Law): This statute requires that notice of any meeting where a bylaw amendment is proposed must be sent to all members 10 to 50 days in advance. It also mandates that meetings of the board and association be open to all members.

• A.R.S. § 33-1804(F): The legislative intent of the Open Meeting Law is to promote transparency. Petitioner cited a message from Governor Ducey stating that such laws “provide residents the opportunity to resolve issues as a community rather than seek government intervention.”

• Powell v. Washburn (2006): The Arizona Supreme Court held that restrictive covenants (including Bylaws) must be interpreted to give effect to the intention of the parties based on the document in its entirety.

Findings of Fact regarding Authority

The ALJ identified several factors that invalidated the Board’s unilateral action:

1. Differentiated Terminology: The Bylaws consistently use “Directors” when referring to the Board and “Members” when referring to the homeowners. Article VI, Section 3 explicitly uses “Directors” to define a quorum for the Board, while Article XIII uses “members.”

2. Absence of Express Power: Article VII, which outlines the “Powers and Duties of the Board of Directors,” does not expressly grant the Board the authority to amend Bylaws. This power is reserved for the membership.

3. Lack of Notice: No Association members were present at the November 20, 2017, meeting, and no notice was provided to the general membership regarding a proposed amendment to the Bylaws as required by A.R.S. § 33-1804(B).

Conclusions of Law

The ALJ concluded that the Petitioner sustained the burden of proof by a preponderance of the evidence. The final legal determinations were:

• Avoidance of Absurdity: Bylaws must be construed to avoid an absurdity. The ALJ stated, “The voices of few cannot speak for all, unless all have bestowed those few with the power and authority to speak on their behalf.”

• Violation of Statute: The Board’s action violated A.R.S. § 33-1804(B) due to the lack of transparency and failure to provide notice of a bylaw amendment.

• Violation of Governing Documents: The Board acted outside the authority granted to it by the Bylaws, specifically Article III and Article XIII.

Final Order and Penalties

The Administrative Law Judge issued the following orders:

1. Invalidation: The third amendment to the Association Bylaws, enacted on November 20, 2017, is null and void.

2. Restitution of Fees: The Respondent must pay the Petitioner the cost of his filing fee.

3. Civil Penalty: The Respondent was ordered to pay a sum of $250.00 to the Planned Community Hearing Office Fund as a penalty for the violations.

4. Binding Nature: Following the rehearing, the order became binding, with the only further recourse being judicial review in the Superior Court within 35 days.






Study Guide – 19F-H1918001-REL-RHG


Study Guide: Janicek v. Sycamore Vista No. 8 Homeowners Association

This study guide provides a comprehensive review of the legal proceedings between Jay A. Janicek and the Sycamore Vista No. 8 Homeowners Association. It examines the interpretation of governing documents, the application of Arizona Revised Statutes regarding homeowners’ associations, and the limits of a Board of Directors’ authority to amend bylaws.

——————————————————————————–

Part I: Short-Answer Quiz

Instructions: Answer the following questions in two to three sentences based on the provided legal documents.

1. Who are the primary parties involved in this administrative hearing, and what is their relationship?

2. What specific action taken by the Board of Directors on November 20, 2017, triggered this dispute?

3. How did the Petitioner define the term “member” according to the Association’s governing documents?

4. What was the Respondent’s primary argument regarding the interpretation of Article XIII, Section 1 of the Bylaws?

5. According to ARIZ. REV. STAT. § 33-1804(B), what must a notice of a membership meeting include if a bylaw amendment is proposed?

6. Why did the Petitioner argue that the use of the word “proxy” in the Bylaws supported his interpretation that only general members could amend the Bylaws?

7. What is the legal significance of the Covenants, Conditions, and Restrictions (CC&Rs) in the context of the relationship between an HOA and a property owner?

8. What was the “preponderance of the evidence” standard used by the Administrative Law Judge to reach a decision?

9. What specific penalties and orders were issued against the Respondent in the final decision?

10. What reason did the Administrative Law Judge give for concluding that the Board’s interpretation of the Bylaws was incorrect?

——————————————————————————–

Part II: Answer Key

1. Who are the primary parties involved in this administrative hearing, and what is their relationship? The Petitioner is Jay A. Janicek, a property owner and member of the Sycamore Vista subdivision. The Respondent is the Sycamore Vista No. 8 Homeowners Association, the entity responsible for governing the residential development where the Petitioner’s property is located.

2. What specific action taken by the Board of Directors on November 20, 2017, triggered this dispute? The Board voted to approve a third amendment to the Association’s Bylaws during a regular meeting. This amendment replaced a requirement for a full annual audit by a public accountant with a choice of an audit, review, or compilation to be completed within 180 days of the fiscal year-end.

3. How did the Petitioner define the term “member” according to the Association’s governing documents? The Petitioner asserted that “Member” refers to those persons entitled to membership as defined in the Declaration, specifically every lot owner. He argued that this definition distinguishes general property owners from the “Directors” who serve on the Board.

4. What was the Respondent’s primary argument regarding the interpretation of Article XIII, Section 1 of the Bylaws? The Respondent argued that the term “members” in Article XIII referred specifically to members of the Board of Directors rather than the general membership. They contended that since the word was not capitalized, it authorized the Board to amend Bylaws at any meeting where a quorum of directors was present.

5. According to ARIZ. REV. STAT. § 33-1804(B), what must a notice of a membership meeting include if a bylaw amendment is proposed? The statute requires that notice be sent to every owner 10 to 50 days in advance of the meeting, stating the date, time, and place. Crucially, the notice must also state the purpose of the meeting, including the general nature of any proposed amendments to the declaration or bylaws.

6. Why did the Petitioner argue that the use of the word “proxy” in the Bylaws supported his interpretation that only general members could amend the Bylaws? The Petitioner noted that the Bylaws allow for voting by “proxy,” a mechanism defined in Article III as applying to votes of the general membership. He argued that because Board members are legally prohibited from voting by proxy, the inclusion of the term in the amendment section proved the section applied to general members.

7. What is the legal significance of the Covenants, Conditions, and Restrictions (CC&Rs) in the context of the relationship between an HOA and a property owner? The CC&Rs constitute an enforceable contract between the Association and each individual property owner. By purchasing a residential unit within the development, the buyer agrees to be bound by the terms, powers, and restrictions outlined in these recorded documents.

8. What was the “preponderance of the evidence” standard used by the Administrative Law Judge to reach a decision? This standard requires the Petitioner to prove that his contention is “more probably true than not.” It is defined as the greater weight of the evidence or evidence that possesses the most convincing force, rather than the absolute removal of all doubt.

9. What specific penalties and orders were issued against the Respondent in the final decision? The Administrative Law Judge invalidated the third amendment to the Bylaws and ordered the Respondent to pay a $250.00 civil penalty to the Planned Community Hearing Office Fund. Additionally, the Respondent was ordered to reimburse the Petitioner for his initial filing fee.

10. What reason did the Administrative Law Judge give for concluding that the Board’s interpretation of the Bylaws was incorrect? The Judge ruled that bylaws must be construed to avoid “absurdity” and that the “voices of few cannot speak for all” without express authority. The governing documents clearly differentiated between “members” (owners) and “directors,” and the Board lacked the power to act where authority was reserved for the membership.

——————————————————————————–

Part III: Essay Questions

Instructions: Use the provided source context to develop comprehensive responses to the following prompts.

1. The Distinction Between “Members” and “Directors”: Analyze how the specific terminology used in the Sycamore Vista No. 8 Bylaws (Articles II, III, VI, and XIII) influenced the Administrative Law Judge’s decision. How does the consistent use of these terms throughout the document prevent the Board from claiming the powers of the general membership?

2. Statutory Compliance and Transparency: Discuss the importance of ARIZ. REV. STAT. § 33-1804 (the Open Meeting Law) as it relates to this case. Use Governor Ducey’s message regarding H.B. 2411 to explain the legislative intent behind ensuring transparency and participation in HOA governance.

3. The Role of the Office of Administrative Hearings (OAH): Explain the procedural path of this dispute, from the initial petition to the Department of Real Estate to the final rehearing. What is the scope of the OAH’s authority in interpreting contracts between homeowners and associations?

4. Contractual Interpretation and the “Powell v. Washburn” Precedent: Discuss the significance of the Arizona Supreme Court’s holding in Powell v. Washburn regarding restrictive covenants. How does the requirement to give effect to the “intention of the parties” apply to the interpretation of HOA Bylaws?

5. Limits of Board Authority: Based on the Findings of Fact and Conclusions of Law, evaluate the boundaries of a Board of Directors’ power. Under what circumstances can a Board exercise “all powers, duties, and authority” of the Association, and what serves as the definitive limit to that power?

——————————————————————————–

Part IV: Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

A presiding officer who hears evidence and issues decisions in contested cases involving state agencies.

ARIZ. REV. STAT. § 33-1804

The Arizona statute governing open meetings, notice requirements, and transparency for planned community associations.

Bylaws

The internal rules and regulations that govern the administration and management of an association.

Covenants, Conditions, and Restrictions; the recorded legal documents that establish the rules for a planned community and create a contract between owners and the HOA.

Civil Penalty

A financial fine imposed by a government agency or tribunal as a punishment for a violation of statutes or regulations.

Declarant

The original developer or entity that established the residential subdivision and its governing documents.

Declaration

The primary governing document that defines membership and property rights within a homeowners’ association.

Member

Defined in the source context as a property owner within the Sycamore Vista subdivision who is entitled to membership in the Association.

The Office of Administrative Hearings; an independent state agency that conducts evidentiary hearings for contested cases.

Petitioner

The party who initiates a legal action or petition (in this case, Jay A. Janicek).

Preponderance of the Evidence

The legal standard of proof required in this case, meaning a contention is “more probably true than not.”

A written authorization allowing one person to act or vote on behalf of another, specifically used by Association members.

Quorum

The minimum number of members or directors required to be present at a meeting to legally transact business.

Respondent

The party against whom a legal action or petition is filed (in this case, Sycamore Vista No. 8 HOA).

Restrictive Covenants

Provisions in a deed or other recorded document that limit the use of property and are interpreted to give effect to the intention of the parties.






Blog Post – 19F-H1918001-REL-RHG


{ “case”: { “docket_no”: “19F-H1918001-REL”, “case_title”: “Jay A. Janicek vs. Sycamore Vista No. 8 Homeowners Association”, “decision_date”: “2019-03-25”, “tribunal”: “OAH”, “agency”: “ADRE” }, “individuals”: [ { “name”: “Jay A. Janicek”, “role”: “petitioner”, “side”: “petitioner”, “affiliation”: null, “notes”: “Appeared on his own behalf at initial hearing; Observed rehearing” }, { “name”: “Jake Kubert”, “role”: “petitioner attorney”, “side”: “petitioner”, “affiliation”: “Dessaules Law Group”, “notes”: “Appeared at rehearing” }, { “name”: “Evan Thompson”, “role”: “HOA attorney”, “side”: “respondent”, “affiliation”: “Thompson Krone, P.L.C.”, “notes”: null }, { “name”: “Maxwell T. Riddiough”, “role”: “HOA attorney”, “side”: “respondent”, “affiliation”: “Thompson Krone, P.L.C.”, “notes”: null }, { “name”: “Andrew F. Vizcarra”, “role”: “property manager”, “side”: “respondent”, “affiliation”: “Tucson Realty & Trust Co. Management”, “notes”: “Recipient of correspondence for Respondent HOA” }, { “name”: “Jenna Clark”, “role”: “ALJ”, “side”: “neutral”, “affiliation”: null, “notes”: null }, { “name”: “Judy Lowe”, “role”: “Commissioner”, “side”: “neutral”, “affiliation”: “Arizona Department of Real Estate”, “notes”: null }, { “name”: “Dennis Legere”, “role”: “observer”, “side”: “unknown”, “affiliation”: null, “notes”: “Present at initial hearing” }, { “name”: “Becky Nutt”, “role”: “observer”, “side”: “unknown”, “affiliation”: null, “notes”: “Present at initial hearing” }, { “name”: “Caleb Rhodes”, “role”: “observer”, “side”: “unknown”, “affiliation”: null, “notes”: “Present at initial hearing” } ] }

{
“case”: {
“docket_no”: “19F-H1918001-REL-RHG”,
“case_title”: “Jay A. Janicek, Petitioner, vs. Sycamore Vista No. 8 Homeowners Association (FKA New Tucson Unit No. 8 Homeowners Association, Inc.), Respondent.”,
“decision_date”: “March 25, 2019”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Jay A. Janicek”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: “Appeared on his own behalf at initial hearing; observed rehearing.”
},
{
“name”: “Jenna Clark”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “OAH”,
“notes”: null
},
{
“name”: “Evan Thompson”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “Thompson Krone, P.L.C.”,
“notes”: null
},
{
“name”: “Dennis Legere”,
“role”: “observer”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Observer present at initial hearing.”
},
{
“name”: “Becky Nutt”,
“role”: “observer”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Observer present at initial hearing.”
},
{
“name”: “Caleb Rhodes”,
“role”: “observer”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Observer present at initial hearing.”
},
{
“name”: “Jake Kubert”,
“role”: “petitioner attorney”,
“side”: “petitioner”,
“affiliation”: “Dessaules Law Group”,
“notes”: “Appeared on behalf of Petitioner at rehearing.”
},
{
“name”: “Judy Lowe”,
“role”: “Commissioner”,
“side”: “neutral”,
“affiliation”: “ADRE”,
“notes”: null
},
{
“name”: “Andrew F. Vizcarra”,
“role”: “property manager”,
“side”: “respondent”,
“affiliation”: “Tucson Realty & Trust Co. Management”,
“notes”: “Listed as representative for service of process for Respondent HOA.”
},
{
“name”: “Maxwell T. Riddiough”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “Thompson Krone, P.L.C.”,
“notes”: null
}
]
}

{ “case”: { “agency”: “ADRE”, “tribunal”: “OAH”, “docket_no”: “19F-H1918001-REL”, “case_title”: “Jay A. Janicek vs. Sycamore Vista No. 8 Homeowners Association”, “decision_date”: “2019-03-25”, “alj_name”: “Jenna Clark” }, “parties”: [ { “party_id”: “P1”, “role”: “petitioner”, “name”: “Jay A. Janicek”, “party_type”: “homeowner”, “email”: null, “phone”: null, “attorney_name”: “Jake Kubert”, “attorney_firm”: “Dessaules Law Group”, “attorney_email”: null, “attorney_phone”: null }, { “party_id”: “R1”, “role”: “respondent”, “name”: “Sycamore Vista No. 8 Homeowners Association”, “party_type”: “HOA”, “email”: null, “phone”: null, “attorney_name”: “Evan Thompson”, “attorney_firm”: “Thompson Krone, P.L.C.”, “attorney_email”: null, “attorney_phone”: null } ], “issues”: [ { “issue_id”: “ISS-001”, “type”: “statute_and_bylaws”, “citation”: “ARIZ. REV. STAT. § 33-1804(B); Association Bylaws Article III, Sections 3 & 4; Association Bylaws Article VIII, Section 1”, “caption”: “Whether Sycamore Vista No. 8 Homeowners Association (Respondent) violated Association Bylaws Article III, Sections 3 & 4 and Article VIII, Section 1 in an action taken by the board on November 20, 2017.”, “violation(s)”: “Violation of ARIZ. REV. STAT. § 33-1804(B) and Association Bylaws Article III by amending the Bylaws on November 20, 2017, without proper notice and a vote of the Association membership.”, “summary”: “The Board of Directors attempted a third amendment to the Bylaws on November 20, 2017, specifically changing the requirements for the Association’s financial review (audit, review, or compilation)12. The ALJ concluded that this action was invalid because it was taken in the absence of a quorum of Association members voting in favor of the amendment, violating both the Bylaws and statutory notice requirements34.”, “outcome”: “petitioner_win”, “filing_fee_paid”: 500.0, “filing_fee_refunded”: true, “civil_penalty_amount”: 250.0, “orders_summary”: “The petition was granted. The third amendment to the Association Bylaws taken on November 20, 2017, was invalidated. Respondent was ordered to pay the Petitioner the filing fee required by ARIZ. REV. STAT. § 32-2199.01 and pay a civil penalty of $250.00 to the Planned Community Hearing Office Fund56.”, “why_the_loss”: null, “cited”: [ “ARIZ. REV. STAT. § 33-1804(B)”, “Association Bylaws Article III” ] } ], “money_summary”: { “issues_count”: 1, “total_filing_fees_paid”: 500.0, “total_filing_fees_refunded”: 500.0, “total_civil_penalties”: 250.0 }, “outcomes”: { “petitioner_is_hoa”: false, “petitioner_win”: “total”, “summarize_judgement”: “The ALJ granted the petition, concluding that the HOA Board’s unilateral amendment of the Bylaws on November 20, 2017, was an invalid action taken without the required vote of the Association members and without statutory notice, violating ARIZ. REV. STAT. § 33-1804(B) and the Association’s governing documents47. The amendment was invalidated, and the Respondent was ordered to refund the Petitioner’s filing fee and pay a $250.00 civil penalty56.”, “why_the_loss”: null }, “analytics”: { “cited”: [ “ARIZ. REV. STAT. § 33-1804(B)”, “ARIZ. REV. STAT. § 32-2199.02(A)”, “ARIZ. REV. STAT. § 32-2199.05”, “Powell v. Washburn, 125 P.3d 373 (Ariz. 2006)”, “Tierra Ranchos Homeowners Ass’n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)” ], “tags”: [ “HOA Governance”, “Bylaws Amendment”, “Open Meeting Law”, “ARS 33-1804”, “Membership Vote”, “Filing Fee Refund” ] } }

{ “rehearing”:{ “is_rehearing”:true, “base_case_id”:”19F-H1918001-REL”, “original_decision_status”:”affirmed”, “original_decision_summary”:”The original ALJ decision, issued on September 25, 2018, granted the Petitioner’s request, finding that the Sycamore Vista No. 8 Homeowners Association Board violated ARIZ. REV. STAT. § 33-1804(B) and Association Bylaws by unilaterally amending the Bylaws on November 20, 2017, without first calling for a vote by the Association members1,2,3. The order invalidated the amendment, required the Respondent to refund the Petitioner’s filing fee, and imposed a civil penalty of $250.004,5.”, “rehearing_decision_summary”:”The Department granted Respondent’s request for a rehearing, which was held on March 5, 20196,7. The ALJ affirmed the original decision, concluding that the Board’s action on November 20, 2017, violated ARIZ. REV. STAT. § 33-1804(B) and Article III of the Association Bylaws because the action was taken in the absence of a quorum of Association members voting in favor of the proposed amendment8. The rehearing order re-granted the petition, invalidated the third amendment, and reaffirmed the orders for the filing fee refund and the $250.00 civil penalty8,9.”, “issues_challenged”:[ { “issue_id”: “ISS-001”, “summary”: “Whether the HOA Board violated Association Bylaws Article III, Sections 3 & 4 and Article VIII, Section 1, and ARIZ. REV. STAT. § 33-1804(B) in an action taken to amend the Bylaws on November 20, 201710.”, “outcome”: “affirmed_petitioner_win” } ] } }

{
“case”: {
“docket_no”: “19F-H1918001-REL”,
“case_title”: “Jay A. Janicek, Petitioner, vs. Sycamore Vista No. 8 Homeowners Association (FKA New Tucson Unit No. 8 Homeowners Association, Inc.), Respondent.”,
“decision_date”: “2019-03-25”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Jay A. Janicek”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: “Appeared on own behalf at initial hearing; Observed at rehearing.”
},
{
“name”: “Jenna Clark”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “Office of Administrative Hearings”,
“notes”: null
},
{
“name”: “Evan Thompson”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “Thompson Krone, P.L.C.”,
“notes”: null
},
{
“name”: “Jake Kubert”,
“role”: “petitioner attorney”,
“side”: “petitioner”,
“affiliation”: “Dessaules Law Group”,
“notes”: null
},
{
“name”: “Maxwell T. Riddiough”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “Thompson Krone, P.L.C.”,
“notes”: null
},
{
“name”: “Andrew F. Vizcarra”,
“role”: “property manager”,
“side”: “respondent”,
“affiliation”: “Tucson Realty & Trust Co. Management”,
“notes”: “Listed as contact for Respondent HOA”
},
{
“name”: “Judy Lowe”,
“role”: “Commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: null
},
{
“name”: “Dennis Legere”,
“role”: “observer”,
“side”: “unknown”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Becky Nutt”,
“role”: “observer”,
“side”: “unknown”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Caleb Rhodes”,
“role”: “observer”,
“side”: “unknown”,
“affiliation”: null,
“notes”: null
}
]
}

The matter, Jay A. Janicek vs. Sycamore Vista No. 8 Homeowners Association (Case No. 19F-H1918001-REL-RHG), involves a dispute over the validity of a Bylaw amendment passed by the homeowners’ association (HOA) Board of Directors12. The inclusion of ‘RHG’ in the case number confirms that the final decision resulted from a rehearing requested by the Respondent Association23.

Procedural History: The initial evidentiary hearing was held on September 5, 201824. The Administrative Law Judge (ALJ) issued a decision on September 24, 2018, granting the Petitioner’s request35. The Respondent requested and was granted a rehearing by the Department of Real Estate on November 7, 201836. The rehearing was held on March 5, 2019, where no new evidence was introduced, and the parties presented legal briefs and closing arguments2….

Key Facts and Core Issue: The dispute centered on the validity of the Board’s third amendment to the Association Bylaws, approved on November 20, 2017910. This amendment changed the financial oversight requirement from an annual audit by a public accountant to an annual audit, review, or compilation of financial records1112.

The main legal issue was whether the Board had the authority to unilaterally amend the Bylaws without a vote of the general membership and whether the Board violated ARIZ. REV. STAT. § 33-1804(B), concerning notice requirements for member meetings3…. The determination hinged on the interpretation of Bylaws Article XIII, Section 1, which permits amendments “by a vote of a majority of a quorum of members present in person or by proxy”1617.

Key Arguments: Petitioner Jay Janicek argued that the term “members” in Article XIII referred exclusively to the Association owners, as supported by the Bylaws’ definition of “Member” and the use of the term “proxy” (which applies to owners, not directors)14…. Petitioner asserted that since the Board acted without calling for a member vote and without statutory notice of the proposed amendment, the action was invalid and violated A.R.S. § 33-1804(B)14….

The Association argued that, based on reading the Bylaws in their entirety, the term “members” in Article XIII referred to the Board of Directors, particularly since the amendment was to occur at a meeting of the Board of Directors24….

Rehearing Decision and Outcome: In both the original decision and the rehearing decision, the ALJ reached the same conclusion, finding that the Petitioner sustained the burden of proof2728. The ALJ determined that the Association’s governing documents clearly differentiate between “members” (the body of owners) and “directors” (the elected Board)28…. The Board lacked the power to amend the Bylaws when that authority was delegated to the membership2930.

The ALJ concluded that the Board’s action on November 20, 2017, violated ARIZ. REV. STAT. § 33-1804(B) and Article III of the Association Bylaws because the amendment was adopted in the absence of a quorum of Association members voting in favor3132.

The final outcome of the rehearing was that the Petitioner’s petition was granted32. The Board’s third amendment to the Bylaws was invalidated532. Additionally, the Respondent Association was ordered to pay the Petitioner’s filing fee and a civil penalty of $250.00 for the violation533.


Case Participants

Petitioner Side

  • Jay A. Janicek (petitioner)
    Appeared on own behalf at initial hearing; Observed at rehearing.
  • Jake Kubert (petitioner attorney)
    Dessaules Law Group

Respondent Side

  • Evan Thompson (HOA attorney)
    Thompson Krone, P.L.C.
  • Maxwell T. Riddiough (HOA attorney)
    Thompson Krone, P.L.C.
  • Andrew F. Vizcarra (property manager)
    Tucson Realty & Trust Co. Management
    Listed as contact for Respondent HOA

Neutral Parties

  • Jenna Clark (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate

Other Participants

  • Dennis Legere (observer)
  • Becky Nutt (observer)
  • Caleb Rhodes (observer)

Jay A. Janicek vs. Sycamore Vista NO. 8 Homeowners Association

Posted on by

Case Summary

Case ID 19F-H1918001-REL
Agency ADRE
Tribunal OAH
Decision Date 2019-03-25
Administrative Law Judge Jenna Clark
Outcome total
Filing Fees Refunded $500.00
Civil Penalties $250.00

Parties & Counsel

Petitioner Jay A. Janicek Counsel Jake Kubert
Respondent Sycamore Vista No. 8 Homeowners Association Counsel Evan Thompson

Alleged Violations

ARIZ. REV. STAT. § 33-1804(B); Association Bylaws Article III, Sections 3 & 4; Association Bylaws Article VIII, Section 1

Outcome Summary

The ALJ granted the petition, concluding that the HOA Board’s unilateral amendment of the Bylaws on November 20, 2017, was an invalid action taken without the required vote of the Association members and without statutory notice, violating ARIZ. REV. STAT. § 33-1804(B) and the Association’s governing documents. The amendment was invalidated, and the Respondent was ordered to refund the Petitioner's filing fee and pay a $250.00 civil penalty.

Key Issues & Findings

Whether Sycamore Vista No. 8 Homeowners Association (Respondent) violated Association Bylaws Article III, Sections 3 & 4 and Article VIII, Section 1 in an action taken by the board on November 20, 2017.

The Board of Directors attempted a third amendment to the Bylaws on November 20, 2017, specifically changing the requirements for the Association's financial review (audit, review, or compilation). The ALJ concluded that this action was invalid because it was taken in the absence of a quorum of Association members voting in favor of the amendment, violating both the Bylaws and statutory notice requirements.

Orders: The petition was granted. The third amendment to the Association Bylaws taken on November 20, 2017, was invalidated. Respondent was ordered to pay the Petitioner the filing fee required by ARIZ. REV. STAT. § 32-2199.01 and pay a civil penalty of $250.00 to the Planned Community Hearing Office Fund.

Filing fee: $500.00, Fee refunded: Yes, Civil penalty: $250.00

Disposition: petitioner_win

Cited:

  • ARIZ. REV. STAT. § 33-1804(B)
  • Association Bylaws Article III

Analytics Highlights

Topics: HOA Governance, Bylaws Amendment, Open Meeting Law, ARS 33-1804, Membership Vote, Filing Fee Refund
Additional Citations:

  • ARIZ. REV. STAT. § 33-1804(B)
  • ARIZ. REV. STAT. § 32-2199.02(A)
  • ARIZ. REV. STAT. § 32-2199.05
  • Powell v. Washburn, 125 P.3d 373 (Ariz. 2006)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)

Video Overview

Audio Overview

Decision Documents

19F-H1918001-REL Decision – 661797.pdf

Uploaded 2026-01-23T17:25:37 (143.2 KB)

19F-H1918001-REL Decision – 696205.pdf

Uploaded 2026-01-23T17:25:40 (169.8 KB)





Briefing Doc – 19F-H1918001-REL


Briefing Document: Janicek v. Sycamore Vista No. 8 Homeowners Association

Executive Summary

This document provides a comprehensive analysis of the Administrative Law Judge (ALJ) Decision in the case of Jay A. Janicek v. Sycamore Vista No. 8 Homeowners Association (No. 19F-H1918001-REL-RHG). The central issue was the validity of a bylaw amendment enacted by the Association’s Board of Directors on November 20, 2017, without a vote of the general homeowner membership.

The ALJ ruled decisively in favor of the Petitioner, Jay Janicek, finding that the Board’s action was invalid. The decision hinged on a critical interpretation of the Association’s governing documents, concluding that the term “members” in the context of bylaw amendments unambiguously refers to the homeowner membership, not the Board of Directors. The ruling established that the Board does not have the authority to amend bylaws where that power is reserved for the membership.

Furthermore, the ALJ concluded that the Board’s action violated Arizona’s Open Meeting Law (A.R.S. § 33-1804) by failing to provide the required notice to homeowners for a meeting concerning a proposed bylaw amendment. As a result, the amendment was invalidated, and the Association was ordered to pay the Petitioner’s filing fee and a civil penalty of $250.

Case Background and Procedural History

Parties and Jurisdiction

• Petitioner: Jay A. Janicek, a property owner within the Sycamore Vista subdivision and a member of the Respondent Association.

• Respondent: Sycamore Vista No. 8 Homeowners Association (“the Association”), a homeowners’ association in Tucson, Arizona, governed by its Covenants, Conditions, and Restrictions (CC&Rs) and overseen by a Board of Directors.

• Adjudicating Body: The Arizona Office of Administrative Hearings (OAH), an independent state agency, which received the case on referral from the Arizona Department of Real Estate.

The Central Dispute

The core of the dispute was an action taken by the Association’s Board of Directors during a regular meeting on November 20, 2017. At this meeting, the Board, with three of five directors present, voted to approve a third amendment to the Association’s Bylaws. The amendment altered Article VIII Section 6(d), changing the requirement for an annual financial check from:

“cause an annual audit of the Association books to be made by a public accountant at the completion of each fiscal year”

“cause an annual audit, review, or compilation of the Associations financial records to be made by a public accountant within 180 days after the end of the HOA’s fiscal year.”

The Petitioner contended this action was invalid because it was undertaken without a vote of the general Association membership, as he believed the governing documents required.

Timeline of Adjudication

1. July 25, 2018: Petitioner files a petition with the Arizona Department of Real Estate.

2. September 05, 2018: An initial evidentiary hearing is held before the OAH.

3. September 25, 2018: The OAH issues an ALJ Decision in the Petitioner’s favor.

4. October 23, 2018: The Respondent submits a Request for Rehearing.

5. November 07, 2018: The Department grants the rehearing request and refers the matter back to the OAH.

6. March 05, 2019: A rehearing is conducted, based on legal briefs and closing arguments without new evidence.

7. March 25, 2019: The final ALJ Decision is issued, reaffirming the initial ruling in favor of the Petitioner.

Analysis of Governing Documents and Statutes

The case decision rested on the interpretation of specific articles within the Association’s Bylaws and relevant Arizona state statutes.

Key Bylaw Provisions

Article

Section

Description

Article IV

Section 1

States that the “affairs of this Association shall be managed by a Board of not less than three (3) nor more than five (5) directors.”

Article VI

Section 1

Establishes that regular meetings of the Board of Directors shall be held monthly without notice.

Article VI

Section 2

Governs special meetings of the Board, requiring not less than three days’ notice to each Director.

Article VI

Section 3

Defines a quorum for Board meetings as “a majority of the number of Directors.”

Article VII

Section 1

Outlines the Powers and Duties of the Board of Directors. This section does not explicitly grant the Board the power to amend the Bylaws.

Article XIII

Section 1

(The central provision in the dispute) States: “These Bylaws may be amended at a regular or special meeting of the Board of Directors of the Association by a vote of a majority of a quorum of members present in person or by proxy.”

Relevant Arizona Statutes

• A.R.S. § 33-1804 (Open Meeting Law): This statute was central to the Petitioner’s argument and the ALJ’s final decision.

◦ Subsection (A): Requires that all meetings of the members’ association and the board of directors be open to all members of the association.

◦ Subsection (B): Mandates specific notice requirements for any meeting of the members, stating that notice “shall also state the purpose for which the meeting is called, including the general nature of any proposed amendment to the declaration or bylaws.”

◦ Subsection (F): The ALJ noted that this section codifies the legislative intent of the statute, which, as cited from a Governor’s message, is to “promote transparency and participation for all residents in homeowners’ association governance.”

Arguments of the Parties

Petitioner’s Position (Jay Janicek)

The Petitioner’s case was built on a textual interpretation of the Bylaws and adherence to state law.

• Interpretation of “Members”: The Petitioner argued that the word “members” in Article XIII, Section 1 refers to the general homeowner membership of the Association, not the members of the Board of Directors.

• Textual Differentiation: The drafters of the Bylaws intentionally used the words “members” and “directors” distinctly throughout the document. Where the intent was to refer to the Board, the word “Director” was specifically used (e.g., Article VI).

• Proxy Voting: The inclusion of the term “proxy” in Article XIII supports the argument that the vote is for the general membership, as Board members are not permitted to vote by proxy.

• Lack of Explicit Power: Article VII, which details the Board’s powers, does not grant the authority to amend the Bylaws, implying such power is reserved for the membership.

• Statutory Violation: The Board’s action violated A.R.S. § 33-1804 because the required notice for a meeting concerning a bylaw amendment was not provided to the general membership.

• Legal Precedent: The Petitioner cited Powell v. Washburn, an Arizona Supreme Court case holding that restrictive covenants (which he argued include the Bylaws) should be interpreted to give effect to the intention of the parties as determined from the entire document.

Respondent’s Position (Sycamore Vista No. 8 HOA)

The Association argued that its actions were a valid exercise of the Board’s authority.

• Broad Authority: The Respondent cited Article IV, which states the “affairs of this Association shall be managed by a Board,” to assert its general authority.

• Valid Board Meeting: The amendment occurred at a regular monthly Board meeting as allowed by Article VI. The meeting had three directors present, which constituted a valid quorum for transacting business.

• Interpretation of Article XIII: The Respondent argued that the phrase “at a regular or special meeting of the Board of Directors” in Article XIII indicates that the Board is the body empowered to make the amendment, and the word “members” in that context refers to the members of the Board.

• No Open Meeting Law Violation: The Respondent contended its conduct was not a violation because the action occurred during a regular Board meeting with a proper quorum of directors.

Administrative Law Judge’s Decision and Rationale

The ALJ’s conclusions were unequivocal, fully adopting the Petitioner’s interpretation of the governing documents and state law.

Conclusions of Law

• Burden of Proof: The ALJ found that the Petitioner successfully sustained his burden of proving by a preponderance of the evidence that the Respondent violated A.R.S. § 33-1804.

• Interpretation of “Members” vs. “Directors”: The decision states that the governing documents are clear: “‘members’ refers to the body of owners who make up the membership of the Association, and ‘directors’ refers to the few who are elected to the membership’s Board.” The ALJ found the differentiation to be intentional by the drafters.

• Avoiding Absurdity: The decision holds that construing the Bylaws to allow the Board to amend them would create an absurdity. The ALJ wrote, “The voices of few cannot speak for all, unless all have bestowed those few with the power and authority to speak on their behalf.”

• Violation of Statute and Bylaws: The ALJ concluded that the Board’s action on November 20, 2017, violated both A.R.S. § 33-1804(B) due to a lack of notice and Article III of the Association Bylaws.

• Rejection of Respondent’s Argument: The decision explicitly states, “The Tribunal is not swayed by Respondent’s closing arguments.”

Final Order

Based on the findings and conclusions, the ALJ issued the following binding order:

1. Petition Granted: The Petitioner’s petition was officially granted.

2. Amendment Invalidated: The third amendment to the Association Bylaws, as enacted on November 20, 2017, was invalidated.

3. Fees and Penalties: The Respondent was ordered to pay the Petitioner’s filing fee and a civil penalty of $250.00 to the Planned Community Hearing Office Fund.






Study Guide – 19F-H1918001-REL


Study Guide: Janicek v. Sycamore Vista No. 8 Homeowners Association

Short-Answer Quiz

1. Who were the primary parties in the case No. 19F-H1918001-REL-RHG, and what were their respective roles?

2. What specific action taken by the Respondent on November 20, 2017, prompted the Petitioner to file a complaint?

3. According to the Petitioner, what was the crucial difference in meaning between the terms “members” and “directors” as used in the Association’s Bylaws?

4. What was the Respondent’s central argument for why the Board of Directors had the authority to amend the Bylaws at its regular meeting?

5. What is Arizona’s Open Meeting Law, and how did the Petitioner argue that the Respondent violated it?

6. What was the financial concern that the Petitioner argued could potentially impact him as a homeowner due to the Board’s amendment?

7. Describe the procedural history of this case after the initial Administrative Law Judge (ALJ) Decision on September 25, 2018.

8. What case did the Petitioner cite regarding the interpretation of restrictive covenants, and what principle did it establish?

9. What is the legal standard of proof required in this proceeding, and how is it defined in the document?

10. What was the final outcome of the case, including the specific orders issued by the Administrative Law Judge?

——————————————————————————–

Answer Key

1. The primary parties were Jay A. Janicek, the Petitioner, and the Sycamore Vista No. 8 Homeowners Association, the Respondent. The Petitioner is a property owner and member of the Association who brought the legal action, while the Respondent is the homeowners’ association governed by a Board of Directors.

2. On November 20, 2017, the Respondent’s Board of Directors held a regular meeting where they voted to approve a third amendment to the Association’s Bylaws. This amendment changed the requirement for an “annual audit…by a public accountant” to an “annual audit, review, or compilation” of financial records.

3. The Petitioner argued that the term “members” in Article XIII of the Bylaws refers to the entire body of property owners in the Association, not the Board of Directors. He contended that if the drafter had intended to give amendment power to the Board, the specific word “directors” would have been used, as it was in other sections of the Bylaws.

4. The Respondent argued that its actions were proper because the Bylaws empower the Board to manage the Association’s affairs at regular monthly meetings. They contended that since a quorum of three directors was present at the November 20, 2017 meeting, the Board was empowered to transact business, which they interpreted to include amending the bylaws as described in Article XIII.

5. Arizona’s Open Meeting Law is ARIZ. REV. STAT. § 33-1804, which requires meetings of a homeowners’ association’s board and members to be open to all members. The Petitioner argued the Respondent violated this by amending a bylaw without proper notice to the full membership, which is required for any proposed bylaw amendment, thus undermining the law’s legislative intent of transparency.

6. The Petitioner was concerned that the amendment weakened the financial oversight of the Association. It modified a requirement for a third-party audit to a less stringent “review, or compilation,” creating a risk that the Association could perform its own financial checks, and as a homeowner, he had an interest in ensuring the Association’s financials were correct.

7. After the initial decision in the Petitioner’s favor on September 25, 2018, the Respondent submitted a Request for Rehearing on October 23, 2018. The Department of Real Estate granted this request on November 7, 2018, and the matter was referred back to the Office of Administrative Hearings for a rehearing, which ultimately took place on March 5, 2019.

8. The Petitioner cited Powell v. Washburn. This case established the principle that restrictive covenants should be interpreted to give effect to the intention of the parties, as determined from the language of the entire document and the purpose for which the covenants were created.

9. The legal standard of proof was a “preponderance of the evidence.” The document defines this as “such proof as convinces the trier of fact that the contention is more probably true than not” and as evidence with the most “convincing force” that inclines an impartial mind to one side of an issue.

10. The final outcome was a ruling in favor of the Petitioner. The ALJ granted the petition, invalidated the third amendment to the Bylaws that was passed on November 20, 2017, and ordered the Respondent to pay the Petitioner’s filing fee and a civil penalty of $250.00.

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Essay Questions

1. Analyze the Administrative Law Judge’s reasoning in differentiating between the terms “members” and “directors.” How did the principle of avoiding absurdity and considering the drafter’s intent, as seen throughout the Bylaws, contribute to the final decision?

2. Discuss the interplay between the Association’s governing documents (CC&Rs and Bylaws) and state law (ARIZ. REV. STAT. § 33-1804). Explain which authority took precedence in this case and why the Board’s actions were found to violate both.

3. Evaluate the legal strategy employed by the Petitioner, Jay A. Janicek. Consider his use of specific Bylaw articles, the citation of Powell v. Washburn, and his argument regarding the legislative intent of the Open Meeting Law.

4. Examine the arguments presented by the Respondent, Sycamore Vista No. 8 Homeowners Association. Why did the Judge find their interpretation of the Bylaws unconvincing, despite their claims that the Board was empowered to transact business with a quorum present?

5. Based on the text, discuss the broader implications of this ruling for homeowners’ associations in Arizona. How does this decision reinforce the principles of transparency and the limitations of a Board’s power relative to the association’s general membership?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An independent judge, in this case Jenna Clark, who presides over administrative hearings at the Office of Administrative Hearings (OAH).

ARIZ. REV. STAT. § 33-1804

A section of the Arizona Revised Statutes, also known as Arizona’s Open Meeting Law, which mandates that meetings of an HOA’s members and board of directors must be open to all members and requires specific notice for meetings where bylaw amendments will be considered.

Bylaws

A set of rules that govern the internal operations of the homeowners’ association. In this case, key articles discussed include Article VI (Meeting of Directors), Article VII (Powers of the Board), and Article XIII (Amendments).

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

Member

As defined in the Association’s documents, a person entitled to membership by virtue of being a property owner within the Sycamore Vista subdivision. The Judge concluded this term refers to the body of owners, not the Board of Directors.

Office of Administrative Hearings (OAH)

An independent state agency in Arizona, unaffiliated with the parties, responsible for conducting evidentiary hearings and making legal decisions in disputes like this one.

Petitioner

The party who files a petition initiating a legal case. In this matter, the Petitioner was Jay A. Janicek, a homeowner in the Association.

Preponderance of the evidence

The burden of proof in this case. It is defined as evidence that is more likely true than not and has the most convincing force, sufficient to incline a fair and impartial mind to one side of an issue.

The authority to represent someone else, especially in voting. The document notes that the term “proxy” applies to votes of the members, as members of the Board are not permitted to vote by proxy.

Quorum

The minimum number of members of a deliberative assembly necessary to conduct the business of that group. For the Respondent’s Board of Directors, a quorum is defined as a majority of the number of Directors.

Respondent

The party against whom a petition is filed. In this matter, the Respondent was the Sycamore Vista No. 8 Homeowners Association.

Restrictive Covenants

Legal obligations imposed in a deed to real property to do or not do something. The Petitioner argued this term included the CC&Rs, Bylaws, and rules of the Association.

Tribunal

A body established to settle certain types of dispute. In this document, it refers to the Administrative Law Judge at the Office of Administrative Hearings.






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