Tag Archives: Records Access

This summary details the administrative hearing proceedings in the matter of *Thomas A & Jade Bossert vs. Silverbell West Association, Inc.*

Case Summary: Bossert v. Silverbell West Association, Inc.

Key Facts and Parties

The Petitioner, Thomas A. and Jade Bossert, are owners of a condominium unit and members of the Silverbell West Association, Inc. (Respondent). The dispute was heard by Administrative Law Judge Adam D. Stone in the Office of Administrative Hearings (OAH). The evidentiary hearing took place on March 18, 2021.

Main Issues

The Petitioner filed a two-issue petition alleging the Association committed statutory violations:

1. Failure to Disclose Records: Violating ARIZ. REV. STAT. § 33-1258(A) by failing to make financial and other records reasonably available for examination.
2. Failure to Complete Financials: Violating ARIZ. REV. STAT. § 33-1243(J) by failing to complete an annual financial audit, review, or compilation within 180 days after the end of the 2018 and 2019 fiscal years.

Hearing Proceedings and Key Arguments

Petitioner testified that initial documents received following a June 2020 request were disorganized and incomplete. A subsequent request in July 2020 for specific missing items, including bank statements and cash journals, was never fulfilled. A bookkeeping expert testified that the records presented were disorganized, likely missing documents, and insufficient for making accurate 2018 and 2019 reports.

The Board President testified that they believed the initial request was met based on records held by the former Treasurer, Mr. Molley, but admitted the follow-up request was likely ignored. The tribunal found that Mr. Molley was "largely the one to blame" for unacceptable record-keeping, but also criticized the current Board President for failing to take a more active role in obtaining easily available bank statements.

Legal Conclusions and Outcome

The Administrative Law Judge found that the Petitioner had sustained the burden of proving that the Association committed two specific violations:

1. Violation of ARIZ. REV. STAT. § 33-1258(A) (Records Disclosure): The Respondent violated the statute insofar as they failed to produce bank account statements and check copies. The fact that these records had still not been turned over was deemed "inexcusable".
2. Violation of ARIZ. REV. STAT. § 33-1243(J) (Financial Compilation): The Respondent violated the statute by failing to complete the 2019 financial compilation.

• *Note:* The tribunal found Petitioner did *not* meet the burden of proof regarding the 2018 financial report, as Petitioner (who was Board President at the time) could have taken more aggressive measures to secure the necessary documentation.

Final Decision

The Administrative Law Judge declined to impose a civil penalty, noting that the Board had subsequently taken steps to ensure better future record keeping.

The Petitioner was deemed the prevailing party and the Association (Respondent) was ordered to reimburse the Petitioner's filing fees of $1,000.00 within 30 days.

Administrative Hearing Briefing: Sellers vs. Grayhawk Community Association

Executive Summary

This document synthesizes the findings and rulings in the administrative case of John Sellers (Petitioner) versus the Grayhawk Community Association (Respondent), adjudicated by the Arizona Office of Administrative Hearings and finalized by the Department of Real Estate. The core of the dispute was the Petitioner’s claim that the Respondent unlawfully restricted his electronic, view-only access to a bank account in violation of Arizona Revised Statutes (A.R.S.) § 33-1805(A).

The Administrative Law Judge (ALJ) denied the petition, concluding that the Petitioner failed to meet his burden of proof. The evidence showed the Respondent initially provided the requested electronic access, which the Petitioner successfully used before changing the password. The Petitioner offered no evidence that the Respondent subsequently interfered with or restricted this access. Furthermore, the issue was rendered moot when the bank in question closed the account. The ALJ affirmed that the Respondent’s offer to provide paper records satisfied the statutory requirement to make records “reasonably available.” This decision was subsequently adopted as a Final Order by the Commissioner of the Department of Real Estate.

Case Overview

Details

Case Name

John Sellers, Petitioner, vs. Grayhawk Community Association, Respondent.

Case Numbers

Docket No. 17F-H1716016-REL; Case No. HO 17-16/016

Adjudicating Body

Arizona Office of Administrative Hearings

Administrative Law Judge

Suzanne Marwil

Hearing Date

February 16, 2017

ALJ Decision Date

February 21, 2017

Final Order Date

March 3, 2017

Final Order Issued By

Judy Lowe, Commissioner, Department of Real Estate

The Core Dispute

Petitioner’s Position

John Sellers alleged that after he requested and received view-only access to the Association’s Alliance Association Bank account, the Respondent unilaterally restricted that access. He claimed the Respondent’s failure to restore access by his deadline of the close of business on November 25, 2016, constituted a violation of A.R.S. § 33-1805(A), which governs a member’s right to examine association records. The petition, for which a $500 fee was paid, was specifically focused on this single issue.

Respondent’s Position

The Grayhawk Community Association argued that it had gone beyond its statutory obligations by arranging for the bank to create a new online password specifically for the Petitioner. They maintained that after providing this access, they did not interfere with or restrict it in any way. They contended that the Petitioner’s subsequent inability to access the account was due to unknown reasons. The Respondent noted that the bank closed the account on November 28, 2016, making any form of electronic access permanently unavailable and rendering the issue moot. They also offered to provide paper copies of the relevant bank records.

Chronology of Key Events

• October 18, 2016: Petitioner John Sellers requests, among other items, an electronic, read-only password for the Respondent’s Alliance Association Bank account.

• November 2, 2016: The Respondent notifies the Petitioner that such a password did not exist at the time of the request.

• November 16, 2016: After requesting the bank create a password, the Respondent forwards the new login information to the Petitioner.

• Post-November 16, 2016: The Petitioner successfully logs into the bank account using the provided information and changes the password.

• Thanksgiving Day (November 24, 2016): The Petitioner attempts to log in again but “could not see anything.” Based on the assumption that the Respondent had restricted his access, he emails community manager Michael Fee.

• Thanksgiving Day Demand: In his email, the Petitioner sets a deadline for the Respondent to restore his access by the end of the business day on Friday, November 25, 2016, threatening to file a petition if the deadline is not met. Mr. Fee replies that he will contact the bank.

• November 28, 2016: Having not heard further from the Respondent, the Petitioner files the petition in this matter.

• November 28, 2016: On the same day, the Respondent informs the Petitioner that they do not know the reason for the lack of access and denies that anyone affiliated with the association interfered. It is also on this date that Alliance Association Bank closes the account in question.

Analysis of the Administrative Law Judge’s Decision

The ALJ’s decision was based on a hearing held on February 16, 2017. The ruling systematically dismantled the Petitioner’s case based on the evidence presented.

Burden and Standard of Proof

• Pursuant to Arizona Administrative Code (A.A.C.) R2-19-119(B), the Petitioner held the burden of proof.

• The required standard of proof was a preponderance of the evidence, meaning the Petitioner had to show it was more likely than not that his claim was true.

Key Findings of Fact

1. Access Was Provided: It was undisputed that the Respondent provided the Petitioner with login information and that this information initially worked, enabling him to access the account.

2. Petitioner Changed Password: After gaining access, the Petitioner changed the password.

3. No Evidence of Interference: The Petitioner offered “no evidence that Respondent took any action to deny Petitioner online access.” His belief that access was restricted was a “unilateral assumption.” The record did not establish why the new password failed to work on Thanksgiving Day.

4. Issue Rendered Moot: The undisputed closure of the bank account by the bank on November 28, 2016, made the request for electronic access moot, as such access was no longer available to anyone.

Key Conclusions of Law

1. Failure to Meet Burden of Proof: The ALJ concluded that the “Petitioner has failed to meet his burden of proof.” The record was “devoid of any evidence” that the Respondent denied the requested information or took any action to restrict access.

2. Compliance with A.R.S. § 33-1805(A): The statute requires that association records “be made reasonably available for examination.” The ALJ found that the Respondent complied with the statute by initially providing electronic access and later offering to “furnish the Petitioner paper copies of documents it possessed related to that bank account.”

3. Electronic vs. Paper Access: The Petitioner’s argument that paper access is inferior to electronic access was dismissed as a “policy argument that should be addressed to the Legislature.” The plain language of the existing statute does not mandate a specific format for record examination.

Final Order and Outcome

On March 3, 2017, the Commissioner of the Department of Real Estate issued a Final Order, which fully adopted the ALJ’s decision.

• Petition Denied: The Commissioner accepted the ALJ’s decision that the petition be denied.

• Future Compliance Directive: The order stated, “The Commissioner accepts the Recommended Order that Respondent shall comply with the applicable provisions of Arizona Revised Statutes (‘A.R.S.’) § 33-1804 (A) in the future.”

• Binding Decision: The order became a final administrative action, effective immediately and binding on the parties.

• Rehearing and Appeal Process: Parties were notified that a motion for rehearing or review could be filed within 30 days. A request for rehearing should be addressed to Abby Hansen, 2910 N. 44th Street, Suite 100, Phoenix, Arizona, 85018. The order could also be appealed via a complaint for judicial review.