The ALJ granted the petitioner's request, finding that the HOA violated A.R.S. § 33-1813 by allowing the president to call a special meeting for board member recall without the required petition signed by homeowners. The HOA was ordered to reinstate the two removed board members and refund the petitioner's filing fee.
Key Issues & Findings
Removal of board member; special meeting
Petitioner alleged the HOA violated A.R.S. § 33-1813 when the president called a special meeting to recall three recently elected Board members, arguing that the statute requires a petition signed by homeowners. Respondent argued that A.R.S. § 33-1804 procedures could also be used. The ALJ ruled that A.R.S. § 33-1813, as the specific statute regarding removal, requires a petition.
Orders: Petitioner’s petition is granted. Respondent shall reinstate Board members Steve Brownell and Trish Brownell and reimburse the $500.00 single-issue filing fee.
Briefing Document: Van Dan Elzen v. Carter Ranch Homeowners Association (Case No. 18F-H1818042-REL)
Executive Summary
This document synthesizes the findings and decision in the case of Thomas J. Van Dan Elzen versus the Carter Ranch Homeowners Association (HOA), heard by the Arizona Office of Administrative Hearings. The central dispute concerned the legality of a special meeting called by the HOA Board President to recall three recently elected board members. The petitioner argued this action violated Arizona Revised Statute (A.R.S.) § 33-1813, which requires such a recall to be initiated by a petition from homeowners. The HOA contended that the president had the authority to call the meeting under the broader powers granted in A.R.S. § 33-1804.
The Administrative Law Judge concluded that when a specific statute and a general statute conflict, the specific statute controls. A.R.S. § 33-1813 specifically governs the removal of board members and mandates a homeowner petition process. Therefore, the president’s unilateral call for a recall election was improper. The judge granted the petitioner’s request, ordering the HOA to reinstate the two board members who were removed and to reimburse the petitioner’s $500.00 filing fee.
Background and Procedural History
The case involves a dispute within the Carter Ranch development, a 253-lot community in Coolidge, Arizona.
• Petitioner: Thomas J. Van Dan Elzen, a homeowner and member of the Carter Ranch HOA.
• Respondent: Carter Ranch Homeowners Association.
• Petition: On or about April 5, 2018, Van Dan Elzen filed a petition with the Arizona Department of Real Estate. He alleged the HOA violated A.R.S. § 33-1813 when its president, Lance Van Horne, called a special meeting to recall three newly elected board members.
• Hearing: The matter was referred to the Office of Administrative Hearings for an evidentiary hearing, which took place on June 20, 2018, before Administrative Law Judge Diane Mihalsky.
The Contested Elections
The dispute originated from a contentious board election process marked by accusations of misconduct, culminating in a recall election that was later found to be procedurally invalid.
March 20, 2018 Board Election
An initial annual meeting on February 20, 2018, failed to achieve the required quorum of 26 ballots. A second meeting was scheduled for March 20, 2018, for which eight candidates ran for five open board positions.
• Allegations of Misconduct: Prior to the meeting, Community Manager Mary Chaira received reports that three candidates—Roxanne Gould, Steve Brownell, and Trish Brownell—were going door-to-door “disseminating allegedly false information about Respondent’s finances, and harvesting ballots.”
• Meeting Conduct: At the March 20 meeting, a quorum of 47 homeowners was present. Board President Lance Van Horne addressed the allegations of false information. However, homeowners who may have filled out ballots based on this information were not permitted to withdraw them. The meeting was described by Ms. Chaira as “unruly and stressful.”
The election results for the top six candidates were as follows:
Candidate
Number of Votes
Outcome
Roxanne Gould
Elected
Steve Brownell
Elected
Trish Brownell
Elected
Lance Van Horne
Elected
Steve F.
Tie for 5th position
Tie for 5th position
April 24, 2018 Recall Election
Believing the March 20 election outcome was “compromised” by the alleged dissemination of false information and ballot harvesting, President Van Horne called a special meeting for April 24, 2018, to hold a recall election for the three newly elected members: Roxanne Gould, Steve Brownell, and Trish Brownell.
A quorum of 52 homeowners returned ballots for the recall. The results were:
Board Member
Votes for Recall
Votes against Recall
Outcome
Roxanne Gould
Remained on Board
Steve Brownell
Removed from Board
Trish Brownell
Removed from Board
Following the recall, other members were elected to fill the vacant board positions.
Central Legal Issue: Statutory Interpretation
The case presented a pure legal question of statutory interpretation, as the facts of what occurred were not in dispute. The core issue was which Arizona statute governs the process for recalling an HOA board member.
Competing Legal Positions
• Petitioner’s Argument: The recall election was invalid because it violated A.R.S. § 33-1813. This statute, titled “Removal of board member; special meeting,” explicitly states that a recall process is initiated upon the board’s receipt of a petition signed by a specified number or percentage of homeowners. The president’s unilateral action did not meet this requirement.
• Respondent’s Argument: The HOA argued that A.R.S. § 33-1813 was not the exclusive procedure. It claimed that the president could also call such a meeting under the authority of A.R.S. § 33-1804, a more general statute governing meetings, which states that “Special meetings of the members’ association may be called by the president.”
Statutory Analysis by the Court
The Administrative Law Judge highlighted the direct conflict between the two statutes on the subject of board member removal.
Feature
A.R.S. § 33-1813 (Specific Statute)
A.R.S. § 33-1804(B) (General Statute)
Meeting Initiation
By homeowner petition only.
By the president, a board majority, or homeowner petition.
Petition Requirement
For HOAs ≤ 1,000 members: petition signed by at least 100 members or 25% of votes, whichever is less.
Petition signed by at least 25% of votes (or lower if specified in bylaws).
Meeting Notice
Within 30 days after receipt of the petition.
Between 10 and 50 days in advance of the meeting.
The judge noted that A.R.S. § 33-1813 specifically overrides the petition requirements of A.R.S. § 33-1804(B), demonstrating legislative intent for it to be the controlling authority on this specific issue.
The Judge’s Legal Conclusion
The decision rested on the well-established legal principle that a specific statute governs over a general one when they are inconsistent. Citing case law, the judge reasoned:
“When provisions of a general statute are inconsistent with those of a special nature on the same subject, the special statute controls.”
Applying this canon of statutory construction, the judge concluded that A.R.S. § 33-1813 is the controlling authority for the removal of an HOA board member. Therefore, a valid recall process must be initiated by a homeowner petition as outlined in that statute. The president lacked the authority to call the April 24, 2018 recall meeting on his own initiative.
Final Order and Implications
Based on the legal conclusion that the Respondent violated A.R.S. § 33-1813, the Administrative Law Judge issued a recommended order with the following mandates:
1. Petition Granted: The petitioner’s petition is granted.
2. Board Member Reinstatement: The Carter Ranch HOA is required to reinstate Board members Steve Brownell and Trish Brownell.
3. Fee Reimbursement: The HOA must reimburse the petitioner, Thomas J. Van Dan Elzen, for his $500.00 single-issue filing fee.
This order is considered binding unless a party files a request for rehearing with the Commissioner of the Department of Real Estate within 30 days of the service of the order.
Study Guide – 18F-H1818042-REL
Study Guide: Van Dan Elzen v. Carter Ranch Homeowners Association
This study guide provides a detailed review of the Administrative Law Judge Decision in case number 18F-H1818042-REL, Thomas J. Van Dan Elzen v. Carter Ranch Homeowners Association. It covers the key facts, legal arguments, and final ruling of the case.
Short-Answer Quiz
Answer the following questions in 2-3 sentences each, based on the information provided in the case document.
1. Who were the primary parties involved in this case, and what were their respective roles?
2. What specific action by the Carter Ranch Homeowners Association (HOA) prompted the Petitioner to file a complaint with the Arizona Department of Real Estate?
3. What were the allegations made against candidates Roxanne Gould, Steve Brownell, and Trish Brownell prior to the March 20, 2018 election?
4. State the vote counts for the top three candidates who were elected to the Board of Directors on March 20, 2018.
5. What was the reason given by the Board’s president, Lance Van Horne, for calling a special recall election for April 24, 2018?
6. What were the specific outcomes for each of the three board members facing recall in the April 24, 2018 election?
7. Which two Arizona Revised Statutes (A.R.S.) were at the center of the legal dispute, and what general topics do they cover?
8. What was the HOA’s primary legal argument for why its president was permitted to call the special recall meeting?
9. What legal principle of statutory construction did the Administrative Law Judge use to resolve the conflict between the two statutes?
10. What two things was the Respondent, Carter Ranch HOA, ordered to do in the final ruling?
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Quiz Answer Key
1. The primary parties were Thomas J. Van Dan Elzen, the Petitioner, who is a homeowner and member of the association, and the Carter Ranch Homeowners Association, the Respondent. The Petitioner initiated the legal action against the HOA.
2. The Petitioner filed the complaint because the HOA’s president called a special meeting to hold a vote on recalling three recently elected members of the Board of Directors. The Petitioner alleged this action violated A.R.S. § 33-1813, which requires such a recall to be initiated by a petition signed by homeowners.
3. Prior to the March election, reports were made that Roxanne Gould, Steve Brownell, and Trish Brownell were going door-to-door disseminating allegedly false information about the HOA’s finances. They were also accused of “harvesting ballots” from members based on this information.
4. The top three candidates elected on March 20, 2018, were Roxanne Gould with 30 votes, Steve Brownell with 26 votes, and Trish Brownell with 25 votes.
5. Board president Lance Van Horne called the special recall election because he felt the election’s outcome was compromised. He believed the dissemination of allegedly false information and the harvesting of votes by the Brownells and Ms. Gould had tainted the results.
6. In the April 24 recall election, Roxanne Gould survived the recall with 27 votes against to 25 for. Steve Brownell and Trish Brownell were both removed from the board, with 27 votes for their recall and 25 against.
7. The statutes at the center of the dispute were A.R.S. § 33-1813 and A.R.S. § 33-1804. A.R.S. § 33-1813 specifically covers the “Removal of board member; special meeting,” while A.R.S. § 33-1804 is a more general statute concerning “Open meetings.”
8. The HOA argued that A.R.S. § 33-1813 was not the only procedure for calling a recall meeting. It contended that the procedures in the more general statute, A.R.S. § 33-1804, which allows the president to call a special meeting, could also be used.
9. The judge applied the well-established common law principle that when a general statute and a specific statute on the same subject are in conflict, the specific statute controls. Therefore, the specific procedures for recall in A.R.S. § 33-1813 took precedence over the general meeting rules in A.R.S. § 33-1804.
10. The Carter Ranch HOA was ordered to reinstate the removed board members, Steve Brownell and Trish Brownell. The HOA was also ordered to reimburse the Petitioner for his $500.00 single-issue filing fee.
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Essay Questions
1. Trace the complete timeline of events described in the decision, beginning with the failed meeting on February 20, 2018, and concluding with the judge’s final order. For each key date, describe the event that occurred, the people involved, and the outcome of the event.
2. Analyze the conflicting interpretations of Arizona state law presented by the Petitioner and the Respondent. Explain which specific clauses of A.R.S. § 33-1813 and A.R.S. § 33-1804 each party relied upon to justify their position regarding the legality of the April 24, 2018 recall meeting.
3. The decision states that the case presents a “pure legal issue of statutory interpretation.” Explain what this means and how it affects the burden of proof. Describe in detail the canons of statutory construction cited by the judge and how she applied them to rule in favor of the Petitioner.
4. Discuss the role of the allegations of misconduct (disseminating false information and harvesting ballots) against the newly elected board members. How did these allegations act as a catalyst for the recall election, and what was their ultimate relevance (or lack thereof) to the final legal conclusion reached by the Administrative Law Judge?
5. Based on the judge’s “Conclusions of Law,” explain the definitive legal procedure for an HOA in Arizona, with 1,000 or fewer members, to initiate the removal of a board member. Detail the petition requirements, signature thresholds, and meeting notice timelines as established by the controlling statute, A.R.S. § 33-1813.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An independent official who presides over administrative hearings, hears evidence, and makes legal decisions, in this case, Diane Mihalsky from the Office of Administrative Hearings.
A.R.S.
Abbreviation for Arizona Revised Statutes, which are the codified laws of the state of Arizona.
Board of Directors
The governing body of the homeowners’ association, elected by the members.
Burden of Proof
The obligation on a party in a legal case to prove their allegations. In this matter, the Petitioner bore the burden of proof to establish the violation.
De Novo Review
A type of review where a court or judge decides the issues without reference to any legal conclusion or assumption made by the previous party in the case. This was applied because the issue was a pure matter of statutory interpretation.
Department
Refers to the Arizona Department of Real Estate, the state agency authorized to receive and decide on petitions from HOA members.
Evidentiary Standard
The level of proof required to convince the trier of fact. In this case, the standard was a “preponderance of the evidence.”
Homeowners’ Association (HOA)
The organization that governs the Carter Ranch development, of which all lot owners are members.
Office of Administrative Hearings
An independent state agency in Arizona where evidentiary hearings, like the one in this case, are conducted.
Petitioner
The party who initiates a legal action by filing a petition. In this case, it was homeowner Thomas J. Van Dan Elzen.
Preponderance of the Evidence
The standard of proof in which the trier of fact is convinced that a contention is more probably true than not.
Quorum
The minimum number of members of an association that must be present at a meeting for the proceedings of that meeting to be valid. In the March 20 election, the quorum was 47 homeowners.
Recall Election
A special vote held to determine whether to remove an elected official (in this case, board members) from office before the end of their term.
Respondent
The party against whom a petition is filed. In this case, it was the Carter Ranch Homeowners Association.
Special Meeting
A meeting of an association’s members called for a specific purpose outside of the regularly scheduled annual meetings. The April 24 recall vote was a special meeting.
Statutory Construction
The process of interpreting and applying legislation. The judge used common-law canons of statutory construction to resolve the conflict between the two A.R.S. sections.
Blog Post – 18F-H1818042-REL
Majority Rules? Not in This HOA: How One Homeowner Overturned a Recall Election on a Technicality
The Unruly World of Neighborhood Politics
In the world of Homeowners Associations, a majority vote is typically the final word. But for the Carter Ranch HOA, a 27-to-25 recall vote meant to oust two board members became the start of a legal battle, not the end. This case reveals a crucial lesson in community governance: when a board president’s unilateral action clashes with statutory procedure, the will of the majority can be rendered completely irrelevant.
A Democratic Vote Can Be Completely Ignored
On April 24, 2018, the Carter Ranch HOA held a special recall election targeting three recently elected board members: Roxanne Gould, Steve Brownell, and Trish Brownell. A quorum of 52 homeowners participated, and the vote was a split decision. Roxanne Gould survived the recall attempt, with 27 votes against her removal and 25 for it. However, Steve and Trish Brownell were successfully voted off the board by a clear majority of 27 to 25.
The twist came later, in a judge’s chambers. Despite the democratic outcome, an Administrative Law Judge ordered the HOA to reinstate the Brownells. This counter-intuitive decision wasn’t the result of voter fraud or a miscount. The entire election was nullified because of a critical procedural error made by the HOA president before a single ballot was cast.
An HOA President Can’t Unilaterally Oust Board Members
The conflict began after a heated board election on March 20, 2018. The board president at the time, Lance Van Horne, felt the election’s outcome was “compromised.” He believed three newly elected members had won their seats by disseminating “allegedly false information” and “harvesting of votes.”
In response, Mr. Van Horne took decisive action. Believing he was correcting a wrong, he personally called for a special meeting to hold a recall election. This unilateral action became the sole basis for the legal challenge that followed. While the president’s concerns about election integrity were the catalyst for the drama, the court’s subsequent decision would demonstrate that his motives were entirely irrelevant. The only thing that mattered was the procedure he followed—or in this case, failed to follow.
The “Specific Beats General” Rule Is King
The HOA’s legal defense rested on a general statute, A.R.S. § 33-1804, which grants an association’s president the power to call special meetings for various purposes. They argued this general power included the authority to call a recall meeting.
However, the homeowner who challenged the recall pointed to a different, more specific law. A.R.S. § 33-1813 is a statute written exclusively for the purpose of removing board members. This specific law dictates that a recall process can only be initiated upon receipt of a petition signed by a required number of homeowners. The president cannot simply decide to do it alone.
The judge’s decision hinged on a foundational principle of legal interpretation. As cited in the final order:
“When provisions of a general statute are inconsistent with those of a special nature on the same subject, the special statute controls.”
Because the HOA president initiated the recall without first receiving the required petition from the homeowners, he failed to follow the specific procedure mandated by law. As a result, the entire recall election was declared invalid from the start.
One Homeowner Can Successfully Challenge an Entire HOA
This entire case was set in motion not by a group of disgruntled residents, but by a single individual. Homeowner Thomas J. Van Dan Elzen filed a “single-issue petition” with the state, challenging the validity of the president’s action. His understanding of the specific rules governing board member removal proved to be the key that unraveled the HOA’s actions.
The final court order was a complete victory for the petitioner:
• His petition was granted.
• The Carter Ranch HOA was ordered to reinstate the two removed board members, Steve and Trish Brownell.
• The HOA was also ordered to reimburse the petitioner for his $500.00 filing fee.
This outcome serves as an empowering example of how a single member, armed with knowledge of the governing documents and statutes, can hold an association’s leadership accountable and ensure that proper procedures are followed.
Conclusion: Rules, Not Rulers
The Carter Ranch case is a powerful illustration that in community governance, established process is not a technicality—it is the bedrock of legitimacy. The board’s failure to adhere to the specific statute for recalls (A.R.S. § 33-1813) created a fatal procedural flaw that no amount of good intention or majority support could cure. This serves as a stark reminder for all HOA boards: power is derived from the meticulous application of rules, not the perceived authority of rulers. Ignoring this principle doesn’t just invalidate an action; it exposes the association to legal challenges, financial penalties, and a loss of credibility with the community it governs. Do you know the specific rules that govern your own community?
Case Participants
Petitioner Side
Thomas J. Van Dan Elzen(petitioner) Appeared on his own behalf
Respondent Side
Chad M. Gallacher(attorney) Maxwell & Morgan, P.C. Represented Respondent
Mary Chaira(Community Manager) Witness for Respondent
Lance Van Horne(Board President) Called the special recall election which led to the petition,,
Neutral Parties
Diane Mihalsky(ALJ)
Judy Lowe(Commissioner) Arizona Department of Real Estate Received decision
Felicia Del Sol(staff) Transmitted decision
Other Participants
Roxanne Gould(board member) Elected board member; subject of recall attempt,,
Steve Brownell(board member) Elected board member; removed by recall, reinstated by recommended order,,,
Trish Brownell(board member) Elected board member; removed by recall, reinstated by recommended order,,,
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
18F-H1817005-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2018-05-10
Administrative Law Judge
Tammy L. Eigenheer
Outcome
loss
Filing Fees Refunded
$0.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Gary W. Moselle
Counsel
—
Respondent
Desert Mountain Master Association
Counsel
Curtis Ekmark
Alleged Violations
A.R.S. § 33-1804
Outcome Summary
The Administrative Law Judge denied the petition, ruling that the DMMA Communication Committee was not subject to the open meetings law (A.R.S. § 33-1804) because it did not hold 'regularly scheduled meetings',,,.
Why this result: The committee met too infrequently and without regular intervals to be deemed 'regularly scheduled' for the purposes of A.R.S. § 33-1804(A),,.
Key Issues & Findings
Whether a Communications Committee meeting must be open to members under the open meetings law.
Petitioner alleged that Respondent violated the open meetings statute by closing the September 6, 2017 meeting of the Communications Committee. The issue was whether this committee constituted a 'regularly scheduled committee meeting' subject to A.R.S. § 33-1804(A),,,,.
Orders: Petitioner's petition was denied. The Administrative Law Judge concluded that the DMMA Communication committee did not hold 'regularly scheduled' meetings, meaning it was not subject to the open meetings law under A.R.S. § 33-1804,,,.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
A.R.S. § 33-1804
A.R.S. Title 33, Chapter 16
A.R.S. § 32-2199 et seq.
A.A.C. R2-19-119
BLACK'S LAW DICTIONARY 1182 (6th ed. 1990)
State ex rel. Thomas v. Contes, 216 Ariz. 525, 527, 169 P.3d 115, 117 (App. 2007)
Marsoner v. Pima County, 166 Ariz. 486, 488, 803 P.2d 897, 899 (1991)
Analytics Highlights
Topics: HOA, Open Meetings Law, Committee Meetings, Statutory Interpretation, Planned Community
Additional Citations:
A.R.S. § 33-1804
A.R.S. Title 33, Chapter 16, Sections 33-1801 to 33-1818
A.R.S. § 32-2199 et seq.
A.A.C. R2-19-119
State ex rel. Thomas v. Contes, 216 Ariz. 525, 527, 169 P.3d 115, 117 (App. 2007)
Marsoner v. Pima County, 166 Ariz. 486, 488, 803 P.2d 897, 899 (1991)
Briefing on the Moselle v. Desert Mountain Master Association Case
Executive Summary
This document synthesizes two Administrative Law Judge Decisions regarding a dispute between homeowner Gary W. Moselle (Petitioner) and the Desert Mountain Master Association (DMMA or Respondent). The core of the case, No. 18F-H1817005-REL, is the legal interpretation of the phrase “regularly scheduled committee meetings” as it appears in Arizona’s open meeting statute for planned communities, A.R.S. § 33-1804.
The conflict arose when the DMMA Communications Committee held a closed meeting on September 6, 2017, which Mr. Moselle was barred from attending. He contended this violated the statute’s open meeting requirements. The DMMA argued the committee was exempt because its meetings were infrequent and not held at fixed intervals.
In two separate decisions—an initial ruling on December 7, 2017, and a second after a rehearing on May 10, 2018—Administrative Law Judge Tammy L. Eigenheer consistently ruled in favor of the DMMA. The judge concluded that “regularly scheduled” applies to meetings that occur at regular, predictable intervals (e.g., monthly, quarterly). Since the Communications Committee met only four times in two years without a set schedule, it was not subject to the open meeting law. The judge determined that the statute’s general policy favoring openness does not override its more specific provisions. Ultimately, the petitioner’s petition was denied.
Case Background and Timeline
The dispute proceeded through the Arizona Department of Real Estate and the Office of Administrative Hearings, culminating in a definitive ruling after a granted rehearing.
September 1, 2017
Gary W. Moselle files a petition with the Arizona Department of Real Estate, alleging DMMA violated open meeting laws.
September 6, 2017
The DMMA Communications Committee holds a closed meeting, which Mr. Moselle is not permitted to attend.
September 18, 2017
DMMA files an answer denying all allegations.
November 17, 2017
An initial hearing is conducted before Administrative Law Judge (ALJ) Tammy L. Eigenheer.
December 7, 2017
The ALJ issues a decision denying Mr. Moselle’s petition.
January 4, 2018
Mr. Moselle files a request for rehearing, citing “newly discovered material evidence” and arguing the decision was contrary to law.
January 26, 2018
The Department of Real Estate grants the request for a rehearing.
April 20, 2018
A rehearing is conducted before the ALJ.
May 10, 2018
The ALJ issues a final decision after rehearing, again denying Mr. Moselle’s petition.
Core Legal Issue: Interpretation of A.R.S. § 33-1804
The central legal question was whether the DMMA Communications Committee was subject to the open meeting requirements mandated by Arizona Revised Statute § 33-1804. The resolution of the case hinged on the interpretation of specific language within the statute.
Relevant Statutory Provisions
• A.R.S. § 33-1804(A): “Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the members’ association and the board of directors, and any regularly scheduled committee meetings, are open to all members of the association…”
• A.R.S. § 33-1804(F): “It is the policy of this state as reflected in this section that all meetings of a planned community… be conducted openly… Toward this end, any person or entity that is charged with the interpretation of these provisions… shall take into account this declaration of policy and shall construe any provision of this section in favor of open meetings.”
Arguments Presented by the Parties
The petitioner and respondent presented starkly different interpretations of the phrase “regularly scheduled.”
Petitioner’s Position (Gary W. Moselle)
• Definition of “Regularly Scheduled”: Mr. Moselle argued that “regularly scheduled” should be interpreted to mean a meeting scheduled in a “normal manner” or “ordinary fashion,” not necessarily one that recurs at fixed intervals.
• Primacy of Openness Policy: He emphasized the policy statement in A.R.S. § 33-1804(F), asserting that the statute’s clear preference for open meetings should guide the interpretation of any ambiguous terms.
• Arguments for Rehearing: In his request for a rehearing, Mr. Moselle cited newly discovered evidence (an email sent by the DMMA after the first hearing) and suggested the ALJ should evaluate whether the DMMA had misled the court regarding the Board’s actions on the committee’s recommendation.
Respondent’s Position (Desert Mountain Master Association)
• Definition of “Regularly Scheduled”: DMMA contended that the phrase “regularly scheduled” plainly refers to meetings that occur at regular, predictable intervals, “such as on the third Thursday of every month, quarterly, or even annually.”
• Evidence of Infrequent Meetings: As evidence, the DMMA testified that its Communications Committee met infrequently and without a fixed pattern, holding only four meetings in 2016 and 2017 (twice in April 2016, once in June 2017, and the contested meeting of September 6, 2017).
• Lack of Board Action: The DMMA further argued that a recommendation from the committee to the Board of Directors was not acted upon, which it presented as evidence that the committee was not “conducting any actual business of the Board.”
Administrative Law Judge’s Analysis and Rulings
Across both decisions, the Administrative Law Judge (ALJ) provided a consistent legal analysis that ultimately favored the respondent’s interpretation of the statute.
Initial Decision (December 7, 2017)
• The ALJ concluded that the DMMA Communications Committee does not hold “regularly scheduled meetings.”
• Based on this finding, the committee was deemed not subject to the open meetings law.
• The decision to hold a closed meeting on September 6, 2017, was therefore ruled not to be a violation of A.R.S. § 33-1804.
• The petitioner’s petition was denied.
Decision After Rehearing (May 10, 2018)
• Statutory Interpretation: The ALJ reaffirmed the conclusion that the “plain language” of A.R.S. § 33-1804(A) applies to meetings that “occur at regular intervals.” While acknowledging that “regularly scheduled” could have multiple meanings, the ALJ settled on this interpretation.
• Policy vs. Specifics: The decision explicitly states that the general policy favoring open meetings in subsection (F) “does not override the specific provisions of A.R.S. § 33-1804(A) that only ‘regularly scheduled’ committee meetings must be open to the members.”
• Petitioner’s Testimony: The ALJ noted that during the rehearing, Mr. Moselle’s own testimony on cross-examination appeared to support the court’s interpretation. When questioned about other DMMA committees, Mr. Moselle stated that five of them “meet at the request of the chair and they’re not regularly scheduled.”
• Final Ruling: The ALJ again concluded that the DMMA Communication Committee did not hold “regularly scheduled” meetings at the time of the incident and was therefore not in violation of the statute. The petition was denied for a final time.
Final Disposition
The petition filed by Gary W. Moselle against the Desert Mountain Master Association was denied. The Administrative Law Judge’s order of May 10, 2018, issued after the rehearing, was declared binding on the parties. As per the final notice, any further appeal would require a party to seek judicial review in superior court within thirty-five days of the order.
Study Guide – 18F-H1817005-REL-RHG
Study Guide: Moselle v. Desert Mountain Master Association
This guide provides a comprehensive review of the administrative case between Gary W. Moselle (Petitioner) and the Desert Mountain Master Association (Respondent) concerning Arizona’s open meetings law for planned communities. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms.
Short-Answer Quiz
Instructions: Answer the following questions in two to three sentences, based on the information provided in the case documents.
1. Who were the primary parties in this case, and what were their respective roles?
2. What specific event on September 6, 2017, prompted the Petitioner to file his complaint?
3. What specific Arizona statute did the Petitioner allege the Respondent had violated?
4. What was the Respondent’s primary argument for why its Communications Committee was not subject to the open meetings law?
5. How did the Petitioner, Gary W. Moselle, interpret the key statutory phrase “regularly scheduled committee meetings”?
6. What evidence did the Respondent present regarding the frequency of the Communications Committee’s meetings in 2016 and 2017?
7. What is the “preponderance of the evidence” standard, and which party had the responsibility to meet it?
8. What was the Administrative Law Judge’s final conclusion regarding the meaning of “regularly scheduled” in the context of the statute?
9. On what grounds did the Petitioner successfully request a rehearing after the initial decision was issued on December 7, 2017?
10. How did the judge weigh the general policy statement in A.R.S. § 33-1804(F) against the specific language in A.R.S. § 33-1804(A)?
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Answer Key
1. The primary parties were Gary W. Moselle, the Petitioner, and the Desert Mountain Master Association (DMMA), the Respondent. Mr. Moselle was a homeowner who filed a petition against the DMMA, which is the homeowners association for the community.
2. The Petitioner filed his complaint after he was not allowed to attend a “closed” meeting of the DMMA Communications Committee that was held on September 6, 2017. He alleged this violated Arizona’s open meeting statute.
3. The Petitioner alleged that the Respondent had violated Arizona Revised Statute (A.R.S.) § 33-1804. This statute governs open meetings for planned communities, such as homeowners associations.
4. The Respondent argued that the Communications Committee did not meet at regular, established intervals and therefore its meetings were not “regularly scheduled” as required by the statute to be open. They also asserted that the committee’s recommendation was not acted upon by the Board, suggesting it was not conducting official business.
5. The Petitioner argued that “regularly scheduled” should be interpreted to mean a meeting that was scheduled in a normal or ordinary fashion. He asserted this interpretation was supported by the statute’s general policy favoring open meetings.
6. The Respondent provided testimony that the Communications Committee met infrequently and without a set interval, having held only four meetings in 2016 and 2017. These meetings occurred twice in April 2016, once in June 2017, and on September 6, 2017.
7. “Preponderance of the evidence” is the standard of proof requiring evidence to show that a fact is more probable than not. In this proceeding, the Petitioner, Gary W. Moselle, bore the burden of proving the Respondent’s violation by a preponderance of the evidence.
8. The Administrative Law Judge concluded that the plain language of the statute meant “regularly scheduled” referred to meetings that occur at regular intervals, such as monthly, quarterly, or annually. The judge rejected the Petitioner’s alternate interpretation.
9. The Petitioner was granted a rehearing by citing newly discovered material evidence (an email sent after the first hearing) and arguing the need to evaluate whether the Respondent had misled the judge. He also contended that the initial decision was contrary to law.
10. The judge acknowledged the state’s policy favoring open meetings as stated in subsection (F). However, the judge ruled that this general policy statement did not override the specific provision in subsection (A) that only “regularly scheduled” committee meetings are required to be open.
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Essay Questions
Instructions: The following questions are designed for longer, more analytical responses. Formulate an essay-style answer for each, drawing upon the facts, arguments, and legal reasoning presented in the case documents.
1. Analyze the conflicting interpretations of the phrase “regularly scheduled” as presented by the Petitioner and the Respondent. Discuss the principles of statutory construction used by the Administrative Law Judge to resolve this dispute and explain why one interpretation was favored over the other.
2. Examine the procedural history of this case, from the initial petition filed with the Arizona Department of Real Estate to the final order issued after the rehearing. What were the key legal steps, decisions, and turning points in the process?
3. Discuss the evidence presented by the Desert Mountain Master Association to support its case. How did testimony regarding meeting frequency and the Board’s actions on committee recommendations contribute to the final outcome?
4. Explain the legal relationship between A.R.S. § 33-1804(A) and A.R.S. § 33-1804(F). Based on the judge’s decision, what is the hierarchy between a statute’s specific provisions and its general policy declarations?
5. During the rehearing, the Petitioner’s own testimony about other committees was noted by the Administrative Law Judge. Explain this apparent contradiction in the Petitioner’s argument and discuss its potential impact on the case.
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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 on behalf of a government agency.
A.R.S. § 33-1804
The specific Arizona Revised Statute at the center of the dispute, which governs open meetings for planned communities and their boards of directors and committees.
Burden of Proof
The obligation of a party in a legal case to provide sufficient evidence to prove their allegations. In this case, the burden was on the Petitioner.
Conclusions of Law
The judge’s application of legal principles to the facts of the case to reach a decision.
Department of Real Estate
The Arizona state agency with jurisdiction to hear disputes between property owners and homeowners associations under A.R.S. § 32-2199 et seq.
Desert Mountain Master Association (DMMA)
The Respondent in the case; a homeowners association located in Scottsdale, Arizona, classified as a Planned Unit Development.
Findings of Fact
The determination of factual events made by a judge from the evidence presented in a trial or hearing.
Gary W. Moselle
The Petitioner in the case; a homeowner within the DMMA who filed the complaint.
Jurisdiction
The official power of a court or agency to hear a case and make legal decisions and judgments.
Open Meetings Law
A law, in this case A.R.S. § 33-1804, that requires meetings of certain entities to be open to all members or the public.
Petition
The formal written request filed with an administrative body or court to initiate a case.
Petitioner
The party who files a petition and initiates a legal action.
Planned Unit Development (PUD)
A type of real estate development and community governed by specific state laws, such as those in A.R.S. Title 33, Chapter 16.
Preponderance of the Evidence
The standard of proof in most civil and administrative cases, defined as evidence that is more convincing and shows a fact is more probable than not.
Rehearing
A second hearing of a case to reconsider the previous decision, typically granted due to new evidence or an argument of legal error.
Regularly Scheduled
The key statutory phrase in dispute. The judge interpreted it to mean meetings that occur at regular, established intervals (e.g., monthly, quarterly).
Respondent
The party against whom a petition is filed; the party defending against the complaint.
Statutory Construction
The process by which judges interpret and apply legislation. The primary goal is to ascertain the legislature’s intent, starting with the plain text of the statute.
Blog Post – 18F-H1817005-REL-RHG
Your HOA Committee Might Be Meeting in Secret—And It Could Be Perfectly Legal
As a homeowner in a planned community, you likely know you have the right to attend your HOA’s board of directors meetings. But what about the committee meetings? The finance, architectural, or communications committees often lay the critical groundwork for decisions that ultimately affect your property and fees. Do you have a right to observe their deliberations?
A recent legal case in Scottsdale, Arizona, hinged on the interpretation of a single, seemingly straightforward phrase and exposed a surprising rule about HOA transparency. The case, Moselle v. Desert Mountain Master Association, reveals critical lessons for any homeowner about the letter of the law and how it can sometimes create legal loopholes that allow committee meetings to happen behind closed doors.
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1. The Crucial Loophole: “Regularly Scheduled” Doesn’t Mean What You Think
The entire dispute rested on how to interpret the phrase “regularly scheduled committee meetings” as written in Arizona statute A.R.S. § 33-1804, which governs open meetings for planned communities.
The Homeowner’s Argument The petitioner, homeowner Gary Moselle, argued that when the Communications Committee of the Desert Mountain Master Association (DMMA) scheduled a meeting for September 6, 2017, it should be open to all members. His logic was simple: a meeting that is formally scheduled and placed on the calendar is, by any common-sense definition, a “regularly scheduled” meeting.
The HOA’s Counter-Argument The DMMA countered with a different interpretation. They argued that the phrase “regularly scheduled” implies a recurring, predictable pattern, such as meetings held monthly, quarterly, or on the third Thursday of every month. The association presented evidence that its Communications Committee met infrequently and without a set pattern, having convened only four times in 2016 and 2017. Because the meetings were sporadic, the HOA contended they were not “regularly scheduled” and therefore not subject to the open meeting law.
To bolster its case, the HOA added a second point: the committee’s work wasn’t essential to board business anyway. They noted that a recommendation from the committee was never acted upon by the board, suggesting the committee was not conducting “any actual business of the Board” and thus did not require the same level of transparency.
The Surprising Verdict Administrative Law Judge Tammy L. Eigenheer sided with the HOA. The final decision concluded that “regularly scheduled” refers to meetings that occur at regular intervals. This created a legal distinction: HOA committees that meet on a fixed, recurring schedule must be open, but those that meet on an as-needed basis may not be.
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2. A Law’s “Spirit” Can Be Trumped by Its “Letter”
Adding another layer to the case was the law’s own powerful statement about its intent. The petitioner pointed to a specific section of the statute designed to ensure transparency.
The Policy Statement The Arizona law contains a strong policy statement declaring that all HOA meetings should be conducted openly. It explicitly directs anyone interpreting the law to favor open meetings.
It is the policy of this state as reflected in this section that all meetings of a planned community… be conducted openly… Toward this end, any person or entity that is charged with the interpretation of these provisions… shall take into account this declaration of policy and shall construe any provision of this section in favor of open meetings.
The Legal Reasoning Despite this clear declaration, Judge Eigenheer ruled that a general policy statement does not override the specific and explicit language of the law. The statute does not say all committee meetings must be open; it says “regularly scheduled committee meetings” must be open. The judge concluded that this specific wording created a clear exception, and the broad policy in favor of transparency could not erase it.
The Impact This is a critical takeaway for understanding how laws are interpreted. This outcome reflects a fundamental principle of statutory construction: while the “spirit” or stated policy of a law provides guidance, it cannot override the plain meaning of the specific words—the “letter”—that the legislature chose to write.
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3. A Cautionary Tale: How a Petitioner Undermined His Own Case
The petitioner was granted a rehearing, giving him another chance to argue his case. However, a statement he made during his own testimony dramatically weakened his position.
The Key Testimony During the rehearing on April 20, 2018, the petitioner was asked about other committees within the DMMA. In explaining how they operated, he unintentionally adopted the very definition of “regularly scheduled” that the HOA was using against him. The judge recorded his exact words in the final decision:
…five of the committees listed in the Volunteer Request page “meet at the request of the chair and they’re not regularly scheduled.”
The Consequence The judge seized on this admission in the final ruling. The decision notes that while “regularly scheduled” could have multiple meanings, the petitioner himself used the phrase to differentiate between committees that meet at fixed intervals and those that do not. By describing committees that “meet at the request of the chair” as being “not regularly scheduled,” he validated the very interpretation the court was now adopting.
The Lesson This moment serves as a dramatic lesson in the power and precision of language in legal proceedings. In an attempt to describe the function of other committees, the petitioner inadvertently validated his opponent’s core legal argument.
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Conclusion: A Question of Transparency
The ruling in Moselle v. Desert Mountain Master Association clarifies a significant point in HOA governance. Under this legal interpretation, committees that meet on an ad-hoc basis or “at the call of the chair” may not be subject to open meeting laws. Only those committees that meet on a fixed, recurring schedule are explicitly required to be open to homeowners.
This ruling draws a bright line between standing committees with fixed schedules and ad-hoc committees that meet “at the call of the chair.” Homeowners should now ask: Which of our committees fall into this second category, and are we comfortable with decisions being shaped behind closed doors?
Case Participants
Petitioner Side
Gary W. Moselle(petitioner) Appeared on his own behalf
Respondent Side
Desert Mountain Master Association(respondent) Organizational party (HOA)
Bylaws Article VIII Bylaws Article VIII; Bylaws Article IV, Section 1 ARIZ. REV. STAT. sections 33-1812(A), (A)(1), and (A)(2)
Outcome Summary
The Petitioner's petition, raising three issues concerning the HOA's election nominating process, was dismissed entirely. The Respondent was deemed the prevailing party.
Why this result: The Petitioner failed to meet the burden of proof on all issues. The ALJ found that the Nominating Committee acted within the authority granted by the Bylaws regarding deadlines and nominee selection discretion, and the relevant election statute (A.R.S. § 33-1812) was not applicable to the nomination process.
Key Issues & Findings
Nominating Committee disregarded a September 29, 2017 deadline by which parties were to submit applications to nominate themselves.
Petitioner alleged the Nominating Committee violated Article VIII by accepting applications after the September 29th administrative deadline, arguing the deadline was a 'term[], limitation[], or rule[] adopted by the Board of Directors'.
Orders: The claim was dismissed. The deadline was an administrative deadline set by management, not a rule adopted by the Board, and therefore the Committee did not violate Bylaws Article VIII by accepting applications late.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
Bylaws Article VIII
The Nominating Committee exceeded its authority by asking candidates questions that had the effect of imposing qualification requirements for the Board’s Directors that exceed those set out in the Bylaws.
Petitioner alleged that the Committee imposing questions (such as whether an applicant had filed a lawsuit against the Association) created unauthorized qualifications for the Board, violating the Bylaws.
Orders: The claim was dismissed. Bylaws Article IV Section 3 grants the Nominating Committee discretion to determine the number of nominations, and it was not unreasonable for the Committee to question applicants while exercising this explicit discretion.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
Bylaws Article VIII
Bylaws Article IV, Section 3
By failing to include on the election-ballot members who had submitted 'self-nominations,' the Committee violated election statutes.
Petitioner asserted that because members could not vote for the four applicants the Nominating Committee did not nominate, the Committee engaged in proxy voting, violating election requirements set forth in A.R.S. § 33-1812.
Orders: The claim was dismissed. Because Bylaws Article IV Section 3 requires nominations to be made by the Nominating Committee, nominations are not 'votes allocated to a unit' and ARIZ. REV. STAT. section 33-1812 is not applicable.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
ARIZ. REV. STAT. sections 33-1812(A)
ARIZ. REV. STAT. sections 33-1812(A)(1)
ARIZ. REV. STAT. sections 33-1812(A)(2)
Analytics Highlights
Topics: HOA Election, Nominating Committee, Bylaws Enforcement, Director Qualifications, Administrative Deadline, Statutory Interpretation, Self-Nomination
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
ARIZ. REV. STAT. section 33-1812
Video Overview
Audio Overview
Decision Documents
18F-H1817017-REL Decision – 615818.pdf
Uploaded 2025-10-09T03:32:12 (125.4 KB)
Briefing Doc – 18F-H1817017-REL
Administrative Hearing Briefing: Travis v. The Val Vista Lakes Community Association
Executive Summary
This document provides a comprehensive analysis of the Administrative Law Judge Decision in case number 18F-H1817017-REL, concerning a petition filed by William Travis against The Val Vista Lakes Community Association. The core of the dispute revolves around the actions of the Association’s Nominating Committee during the process for the November 16, 2017 Board of Directors election.
Mr. Travis raised three primary allegations: 1) the Committee violated Association Bylaws by accepting candidate applications after a stated September 29, 2017 deadline; 2) the Committee exceeded its authority by interviewing candidates, thereby imposing qualification requirements beyond those stipulated in the Bylaws; and 3) the failure to include all applicants on the ballot constituted a violation of Arizona state statutes related to proxy voting.
The Administrative Law Judge, Thomas Shedden, dismissed Mr. Travis’s petition in its entirety. The decision found that Travis failed to prove the application deadline was a formal rule adopted by the Board, concluding it was an administrative deadline set by the management company. The Judge determined that the Committee’s actions, including interviewing applicants, were a reasonable exercise of the discretion explicitly granted to it by the Bylaws. Finally, the Judge ruled that the state statute cited by Travis applies to the casting of votes, not the internal nomination process, and was therefore inapplicable to the Committee’s actions. The Val Vista Lakes Community Association was deemed the prevailing party.
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Case Overview
Case Number
18F-H1817017-REL
Petitioner
William Travis
Respondent
The Val Vista Lakes Community Association
Hearing Date
January 26, 2018
Decision Date
February 2, 2018
Presiding Judge
Thomas Shedden, Administrative Law Judge
Testifying Parties
William Travis (on his own behalf); Simone McGinnis (Association’s on-site manager)
Petitioner’s Allegations
William Travis’s petition, as amended, centered on three specific issues concerning the Nominating Committee’s conduct for the November 16, 2017 Board election:
1. Violation of Application Deadline: The Committee disregarded a September 29, 2017 deadline for candidate applications. Travis contended that this deadline was a “term, limitation, or rule adopted by the Board,” and by accepting applications after this date, the Committee violated Bylaws Article VIII.
2. Exceeding Authority and Imposing Qualifications: The Committee exceeded its authority by interviewing and questioning applicants. Travis argued that this process had the effect of creating new qualification requirements for Board Directors, beyond the sole requirement of Association membership outlined in Bylaws Article IV. He asserted the Committee had no authority to ask any questions.
3. Statutory Violation of Voting Rights: By failing to place all members who submitted “self-nominations” on the official election ballot, the Committee violated ARIZ. REV. STAT. § 33-1812(A). Travis claimed this action was tantamount to proxy voting because it prevented members from voting for or against certain candidates.
Key Factual Findings
Election and Nomination Timeline
• August 17, 2017: The Board of Directors appoints Cheryl Peterson-McCoy as the Nominating Committee Chairperson.
• September 12, 2017: The Association’s management company emails residents, announcing three open Board positions and an application deadline of September 29, 2017, at 5:00 p.m.
• By September 29, 2017: Four applications are received. At this point, the members of the Nominating Committee (other than the Chairperson) have not yet been selected.
• After September 29, 2017: The Association accepts four additional applications, including one from Mr. Travis. No revised notice is sent to the membership about an extended deadline.
• October 5, 2017: Mr. Travis, then a Board member, makes an email motion to extend the application deadline to October 16, which is denied.
• October 19, 2017: The Board formally approves six members for the Nominating Committee. Mr. Travis’s subsequent motion at this meeting to extend the deadline fails for lack of a second.
Nominating Committee Actions and Rationale
• The Committee considered all eight applications submitted, including the four received after the initial deadline.
• The Committee scheduled and conducted interviews with all eight applicants.
• During interviews, applicants were asked questions including whether they had ever filed a lawsuit against the Association, were considering filing a lawsuit, or had any compliance violations.
• The Committee ultimately nominated four candidates to be placed on the ballot for the election. Of these four, two had applied by the September 29 deadline and two had applied after.
Association’s Position and Testimony
• Simone McGinnis, the Association’s on-site manager, testified that the September 29 deadline was not imposed by the Board but was an administrative deadline set by the management company to allow time for the nomination and ballot-printing process.
• The Association’s position, articulated at the November 16, 2017 Board meeting, is that the only way to get on the ballot is to be nominated by the Nominating Committee, although write-in candidates are permitted during the election.
• The Board acknowledged that it had only strictly adhered to the Bylaw requirement of using a Nominating Committee for the past two years, after thirty years of non-adherence.
• The Board’s attorney stated that the Committee members have a duty to act reasonably and that any member who disagrees with the Committee’s discretionary choices should seek to amend the bylaws.
Analysis of Governing Documents and Statutes
The judge’s decision rested on the interpretation of specific articles within the Association’s Bylaws and relevant Arizona state law.
Document/Statute
Relevant Provision
Application in this Case
Bylaws Article IV, Section 3
“Nominations for election to the Board of Directors shall be made by a Nominating Committee… The Nominating Committee shall make as many nominations… as it shall in its discretion determine…”
This article grants the Committee explicit discretion to select nominees. It does not provide for “self-nomination” or require the Committee to nominate all applicants.
Bylaws Article VIII
“no committee may take action which exceeds its responsibilities. Each committee shall operate in accordance with any terms, limitations, or rules adopted by the Board.”
Mr. Travis argued the deadline was a “rule adopted by the Board.” The court found no evidence to support this, concluding it was an administrative deadline.
Bylaws Article IV, Section 1
States that Board Directors must be members of the Association. It lists no other qualifications.
Mr. Travis argued that questioning candidates imposed extra qualifications. The court found this was part of the Committee’s discretionary selection process, not the imposition of new formal requirements.
ARIZ. REV. STAT. § 33-1812
Prohibits proxy voting and requires that ballots set forth each proposed action and provide an opportunity to vote for or against it.
The court determined this statute applies to “votes allocated to a unit” (i.e., the member’s vote) and not the nomination process itself, which is governed by the Bylaws.
Conclusions of Law and Final Order
The Administrative Law Judge made the following conclusions based on a preponderance of the evidence:
1. Deadline was Administrative: There was no substantial evidence showing the September 29, 2017 deadline was a formal rule adopted by the Board. Therefore, the Nominating Committee did not violate Bylaws Article VIII by accepting applications after this date.
2. Committee Acted Within its Discretion: The plain language of Bylaws Article IV, Section 3 requires nominations to be made by the Committee and grants it discretion. The concept of “self-nomination” is not supported by the Bylaws. It was not unreasonable for the Committee to question applicants as part of exercising its explicit discretion to select nominees.
3. State Voting Statute Not Applicable: The nomination process, as dictated by the Bylaws, is separate from the act of voting. Since ARIZ. REV. STAT. § 33-1812 governs “votes allocated to a unit,” it is not applicable to the Committee’s function of selecting nominees.
IT IS ORDERED that Petitioner William Travis’s petition is dismissed.
The decision is binding on the parties unless a rehearing is requested from the Commissioner of the Department of Real Estate within 30 days of the service of the order.
Study Guide – 18F-H1817017-REL
Study Guide: Travis v. The Val Vista Lakes Community Association
Short-Answer Quiz
Instructions: Answer the following questions in 2-3 complete sentences based on the provided source context.
1. Who were the primary parties involved in case number 18F-H1817017-REL, and what were their roles?
2. What were the three central issues that petitioner William Travis raised regarding the Board election held on November 16, 2017?
3. What was the petitioner’s argument concerning the September 29, 2017, application deadline set by the Association?
4. According to the Association’s on-site manager, Simone McGinnis, what was the origin and purpose of the September 29th deadline?
5. How did the petitioner claim the Nominating Committee exceeded its authority by questioning candidates?
6. What was the Association’s defense for the Nominating Committee’s practice of interviewing and questioning applicants?
7. What is the sole qualification required to serve on the Board of Directors, according to the Val Vista Lakes Community Association Bylaws?
8. How did the petitioner link the Nominating Committee’s failure to place all applicants on the ballot to a violation of ARIZ. REV. STAT. section 33-1812?
9. According to testimony during the November 16, 2017, Board meeting, how long had the Association been strictly adhering to the Bylaw requirement of using a Nominating Committee?
10. What was the final Order issued by Administrative Law Judge Thomas Shedden in this case?
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Answer Key
1. The primary parties were the Petitioner, William Travis, who brought the complaint, and the Respondent, The Val Vista Lakes Community Association, which was defending its actions. Mr. Travis represented himself, while the Association was represented by attorneys Mark K. Sahl and Nicholas C. Nogami.
2. The three issues raised by Mr. Travis were: (1) the Nominating Committee improperly disregarded the September 29th application deadline; (2) the Committee exceeded its authority by asking questions that effectively added new qualification requirements for Board members; and (3) the Committee’s failure to include all “self-nominations” on the ballot constituted a violation of Arizona state statutes on proxy voting.
3. Mr. Travis argued that the September 29th deadline was a “term, limitation, or rule adopted by the Board of Directors” under Bylaws Article VIII. Therefore, by accepting applications after this date, the Nominating Committee violated the Association’s own rules.
4. Simone McGinnis testified that the Board did not impose the deadline. Instead, it was an administrative deadline set by the Association’s management company to allow sufficient time for the Nominating Committee to review applications and have ballots printed.
5. Mr. Travis argued that by asking applicants questions, the Nominating Committee was effectively imposing qualification requirements beyond the single one set out in the Bylaws (being a member of the Association). He asserted the committee had no authority to ask any questions at all as part of its process.
6. The Association contended that questioning applicants was a reasonable exercise of the Nominating Committee’s discretion. This discretion is granted by the Bylaws, which state the Committee shall make as many nominations as it determines is appropriate.
7. According to Bylaws Article IV, Section 1, the only qualification required for an individual to serve on the Board of Directors is that they must be a member of the Association. No other qualifications are specified in the Bylaws.
8. Mr. Travis asserted that because members were not allowed to vote for or against the four applicants who were not nominated, the Committee effectively engaged in proxy voting. He argued this violated ARIZ. REV. STAT. section 33-1812, which requires that ballots provide an opportunity to vote for or against each proposed action.
9. During the meeting, the Board acknowledged that it had only been following the Bylaw requirement to use a Nominating Committee for the last two years. Prior to that, for approximately thirty years, strict adherence to this Bylaw had not been observed.
10. The Administrative Law Judge ordered that Petitioner William Travis’s petition be dismissed. The Judge also deemed the Respondent, The Val Vista Lakes Community Association, to be the prevailing party in the matter.
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Essay Questions
Instructions: The following questions are designed to test a deeper understanding of the case. Formulate a comprehensive response to each prompt using only the information and arguments presented in the source document.
1. Analyze the conflicting interpretations of the Nominating Committee’s role and authority as presented by William Travis and the Association. How did the Administrative Law Judge use the plain language of Bylaws Article IV, Section 3 to resolve this dispute?
2. Discuss the significance of the September 29, 2017 deadline. Evaluate the evidence and arguments presented by both parties regarding its legitimacy and binding nature, and explain the Judge’s reasoning for concluding it was an administrative deadline.
3. Explain William Travis’s legal argument that the Nominating Committee’s selection process constituted a form of proxy voting in violation of ARIZ. REV. STAT. section 33-1812. Detail the Judge’s conclusion on this matter and the legal reasoning used to determine the statute’s applicability.
4. Examine the concept of “discretion” as it applies to the Nominating Committee’s actions. Based on the hearing testimony, including the Board attorney’s explanation, what are the implied powers and limitations of this discretion?
5. The Judge determined that Mr. Travis failed to meet the “preponderance of the evidence” standard. Identify the key claims made by Mr. Travis and detail why the evidence he presented (or failed to present) was insufficient to prove his case on each of the three issues.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official (Thomas Shedden in this case) who presides over administrative hearings, hears evidence, and makes legal findings and decisions.
Petitioner
The party who files a petition initiating a legal case. In this matter, the petitioner was William Travis.
Respondent
The party against whom a petition is filed and who must respond to the allegations. In this matter, the respondent was The Val Vista Lakes Community Association.
Bylaws
The formal rules and regulations governing the internal management of an organization, such as a homeowners’ association. They are considered a contract between the association and its members.
An acronym for Covenants, Conditions, and Restrictions, which are rules governing the use of real estate within a planned community. Mr. Travis initially alleged a violation of CC&R Article V, Section 3.
Nominating Committee
A committee, established by the Bylaws, responsible for nominating candidates for election to the Board of Directors. It consists of a Chairperson from the Board and two or more other persons.
Self-Nomination
The act of a member putting their own name forward for consideration for a Board position. The petitioner acknowledged that the Bylaws do not explicitly provide for self-nomination.
Burden of Proof
The legal obligation of a party in a trial to produce evidence that proves the claims they have made against the other party. In this case, the burden of proof was on Mr. Travis.
Preponderance of the Evidence
The standard of proof required in this case. It means the evidence presented is more convincing and has superior evidentiary weight than the evidence offered in opposition, inclining an impartial mind to one side over the other.
Proxy Voting
A form of voting where a member authorizes another person to vote on their behalf. ARIZ. REV. STAT. section 33-1812 prohibits this practice for community associations after the period of declarant control.
Prevailing Party
The party that wins the lawsuit. In this case, the Respondent Association was deemed the prevailing party upon the dismissal of the petition.
Blog Post – 18F-H1817017-REL
Your HOA Bylaws Might Not Mean What You Think: 3 Surprising Lessons from a Legal Showdown
Introduction: The Devil in the Details
Anyone who has ever sat through a contentious HOA annual meeting or received a violation notice for an overgrown flowerbed knows the feeling. You live in a community governed by rules, and you assume those rules operate on a shared understanding of common sense. But what happens when that common sense collides with the cold, hard text of your community’s governing documents?
A recent administrative law case in Arizona, Travis vs. The Val Vista Lakes Community Association, provides a fascinating and instructive look under the hood of HOA governance. The dispute reveals how the precise, technical wording of community bylaws can lead to surprising and counter-intuitive outcomes for residents. This case isn’t just about one community; it’s a masterclass for any homeowner. Here are the three most impactful lessons from the legal showdown.
1. A Deadline Isn’t Always a Deadline
The first major complaint from the petitioner, Mr. Travis, seemed straightforward. For an election with three open seats on the Board of Directors, the HOA’s Nominating Committee had accepted applications after a publicly announced deadline of 5:00 p.m. on September 29, 2017. Four applications arrived on time, but four more—including one from Mr. Travis himself—were accepted after the cutoff. In a delicious twist of irony, Mr. Travis was a sitting Board member who had twice attempted to have the Board formally extend the deadline, but both motions failed. A missed deadline is a missed deadline, right?
Not in this case. The judge dismissed the complaint entirely, drawing a critical distinction: the September 29th deadline was not a formal “term, limitation, or rule adopted by the Board.”
Testimony from the Association’s manager, Simone McGinnis, revealed the deadline’s true nature. It was merely an administrative deadline set by the management company for purely logistical reasons, such as allowing the Nominating Committee enough time to review applications and get the ballots printed.
The Lesson: In legal and governance contexts, the source of a rule is as important as the rule itself. An administrative guideline set by a third-party manager for convenience does not carry the same binding legal weight as a formal rule passed by the Board of Directors according to the procedures outlined in the bylaws.
2. “Nomination” Is a Process of Selection, Not Just Collection
Mr. Travis’s second argument centered on the Nominating Committee’s actions. The committee interviewed all eight applicants and asked them questions, including whether they had ever sued the Association or had any compliance violations. Mr. Travis contended that the committee had exceeded its authority. In fact, he argued that because four members had applied by the original deadline for the three open seats, the committee’s job was already done—it shouldn’t have even been formed, let alone vetted anyone. His position was that its role was simply to collect names, not to filter them.
This argument also failed. The judge found the committee acted squarely within its rights as defined by the Association’s Bylaws. Article IV, Section 3 explicitly grants the Nominating Committee the discretion to “make as many nominations for election to the Board of Directors as it shall in its discretion determine.” The judge concluded that questioning applicants was a reasonable part of exercising this discretion to select candidates.
Adding a fascinating historical twist, the Board admitted during a meeting that for thirty years prior, the Association had not strictly followed its own Bylaw requiring the use of a Nominating Committee, only beginning to do so in the last two years. A long-ignored rule had suddenly become the central mechanism for determining board candidacy.
While the committee must act reasonably—it couldn’t disqualify a candidate for having red hair, the Board’s attorney noted—it absolutely has the power to be selective. The core issue decided by the court was not how the committee used its discretion, but whether the Bylaws granted it discretion in the first place. The answer was a clear yes.
The Lesson: The term “Nominating Committee” can be misleading. Depending on your bylaws, it may not be a passive paper-pusher that forwards all names to the ballot. It can be an active gatekeeper empowered to interview, question, and ultimately select which members get a chance to be elected.
3. The ‘Right’ to Run for Your HOA Board Might Be a Myth
The final issue gets to the heart of homeowner assumptions. Mr. Travis argued for a right to “self-nominate”—his term for a system where any member could place themselves directly on the ballot. He claimed that by failing to include all applicants, the Association was engaging in a form of illegal proxy voting under Arizona state law.
The judge’s refutation of this idea was decisive. Mr. Travis himself acknowledged that the Bylaws contained no provision allowing a member to “self-nominate.” The court found that the only path to the ballot specified in the governing documents was via nomination by the Nominating Committee.
This created a critical procedural prerequisite. Because the Bylaws require nomination by the committee before a member can become a candidate, the state law governing voting (ARIZ. REV. STAT. § 33-1812) was legally inapplicable. The judge ruled that the act of nomination is not a “vote allocated to a unit.” In other words, if you don’t clear the prerequisite of being nominated, your right to be voted upon by the membership doesn’t even come into play.
The Lesson: This is a powerful and potentially shocking takeaway for many homeowners. Unless your community’s governing documents explicitly guarantee it, you may not have an inherent “right” to run for your HOA board simply by being a member in good standing. The power to decide who appears on the ballot can be exclusively vested in a small, appointed committee.
Conclusion: Read Your Bylaws. Really.
The case of Mr. Travis vs. Val Vista Lakes is a stark reminder that an HOA’s governing documents are a binding contract. In the courtroom of community governance, common-sense assumptions are legally irrelevant; only the written word matters. An administrative deadline may be toothless, a nominating committee may be a powerful gatekeeper, and the right to run for office may not be a right at all.
It all comes down to what is written in the documents. So, when was the last time you read your community’s governing documents from start to finish? The power structures they define might be very different from what you imagine.
Case Participants
Petitioner Side
William Travis(petitioner)
Respondent Side
Mark K. Sahl(respondent attorney) Carpenter, Hazelwood, Delgado & Bolen, PLC
Nicholas C. Nogami(respondent attorney) Carpenter, Hazelwood, Delgado & Bolen, PLC
Simone McGinnis(property manager) Testified as a witness
Bylaws Article VIII Bylaws Article VIII; Bylaws Article IV, Section 1 ARIZ. REV. STAT. sections 33-1812(A), (A)(1), and (A)(2)
Outcome Summary
The Petitioner's petition, raising three issues concerning the HOA's election nominating process, was dismissed entirely. The Respondent was deemed the prevailing party.
Why this result: The Petitioner failed to meet the burden of proof on all issues. The ALJ found that the Nominating Committee acted within the authority granted by the Bylaws regarding deadlines and nominee selection discretion, and the relevant election statute (A.R.S. § 33-1812) was not applicable to the nomination process.
Key Issues & Findings
Nominating Committee disregarded a September 29, 2017 deadline by which parties were to submit applications to nominate themselves.
Petitioner alleged the Nominating Committee violated Article VIII by accepting applications after the September 29th administrative deadline, arguing the deadline was a 'term[], limitation[], or rule[] adopted by the Board of Directors'.
Orders: The claim was dismissed. The deadline was an administrative deadline set by management, not a rule adopted by the Board, and therefore the Committee did not violate Bylaws Article VIII by accepting applications late.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
Bylaws Article VIII
The Nominating Committee exceeded its authority by asking candidates questions that had the effect of imposing qualification requirements for the Board’s Directors that exceed those set out in the Bylaws.
Petitioner alleged that the Committee imposing questions (such as whether an applicant had filed a lawsuit against the Association) created unauthorized qualifications for the Board, violating the Bylaws.
Orders: The claim was dismissed. Bylaws Article IV Section 3 grants the Nominating Committee discretion to determine the number of nominations, and it was not unreasonable for the Committee to question applicants while exercising this explicit discretion.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
Bylaws Article VIII
Bylaws Article IV, Section 3
By failing to include on the election-ballot members who had submitted 'self-nominations,' the Committee violated election statutes.
Petitioner asserted that because members could not vote for the four applicants the Nominating Committee did not nominate, the Committee engaged in proxy voting, violating election requirements set forth in A.R.S. § 33-1812.
Orders: The claim was dismissed. Because Bylaws Article IV Section 3 requires nominations to be made by the Nominating Committee, nominations are not 'votes allocated to a unit' and ARIZ. REV. STAT. section 33-1812 is not applicable.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
ARIZ. REV. STAT. sections 33-1812(A)
ARIZ. REV. STAT. sections 33-1812(A)(1)
ARIZ. REV. STAT. sections 33-1812(A)(2)
Analytics Highlights
Topics: HOA Election, Nominating Committee, Bylaws Enforcement, Director Qualifications, Administrative Deadline, Statutory Interpretation, Self-Nomination
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
ARIZ. REV. STAT. section 33-1812
Video Overview
Audio Overview
Decision Documents
18F-H1817017-REL Decision – 615818.pdf
Uploaded 2026-01-23T17:22:17 (125.4 KB)
Briefing Doc – 18F-H1817017-REL
Administrative Hearing Briefing: Travis v. The Val Vista Lakes Community Association
Executive Summary
This document provides a comprehensive analysis of the Administrative Law Judge Decision in case number 18F-H1817017-REL, concerning a petition filed by William Travis against The Val Vista Lakes Community Association. The core of the dispute revolves around the actions of the Association’s Nominating Committee during the process for the November 16, 2017 Board of Directors election.
Mr. Travis raised three primary allegations: 1) the Committee violated Association Bylaws by accepting candidate applications after a stated September 29, 2017 deadline; 2) the Committee exceeded its authority by interviewing candidates, thereby imposing qualification requirements beyond those stipulated in the Bylaws; and 3) the failure to include all applicants on the ballot constituted a violation of Arizona state statutes related to proxy voting.
The Administrative Law Judge, Thomas Shedden, dismissed Mr. Travis’s petition in its entirety. The decision found that Travis failed to prove the application deadline was a formal rule adopted by the Board, concluding it was an administrative deadline set by the management company. The Judge determined that the Committee’s actions, including interviewing applicants, were a reasonable exercise of the discretion explicitly granted to it by the Bylaws. Finally, the Judge ruled that the state statute cited by Travis applies to the casting of votes, not the internal nomination process, and was therefore inapplicable to the Committee’s actions. The Val Vista Lakes Community Association was deemed the prevailing party.
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Case Overview
Case Number
18F-H1817017-REL
Petitioner
William Travis
Respondent
The Val Vista Lakes Community Association
Hearing Date
January 26, 2018
Decision Date
February 2, 2018
Presiding Judge
Thomas Shedden, Administrative Law Judge
Testifying Parties
William Travis (on his own behalf); Simone McGinnis (Association’s on-site manager)
Petitioner’s Allegations
William Travis’s petition, as amended, centered on three specific issues concerning the Nominating Committee’s conduct for the November 16, 2017 Board election:
1. Violation of Application Deadline: The Committee disregarded a September 29, 2017 deadline for candidate applications. Travis contended that this deadline was a “term, limitation, or rule adopted by the Board,” and by accepting applications after this date, the Committee violated Bylaws Article VIII.
2. Exceeding Authority and Imposing Qualifications: The Committee exceeded its authority by interviewing and questioning applicants. Travis argued that this process had the effect of creating new qualification requirements for Board Directors, beyond the sole requirement of Association membership outlined in Bylaws Article IV. He asserted the Committee had no authority to ask any questions.
3. Statutory Violation of Voting Rights: By failing to place all members who submitted “self-nominations” on the official election ballot, the Committee violated ARIZ. REV. STAT. § 33-1812(A). Travis claimed this action was tantamount to proxy voting because it prevented members from voting for or against certain candidates.
Key Factual Findings
Election and Nomination Timeline
• August 17, 2017: The Board of Directors appoints Cheryl Peterson-McCoy as the Nominating Committee Chairperson.
• September 12, 2017: The Association’s management company emails residents, announcing three open Board positions and an application deadline of September 29, 2017, at 5:00 p.m.
• By September 29, 2017: Four applications are received. At this point, the members of the Nominating Committee (other than the Chairperson) have not yet been selected.
• After September 29, 2017: The Association accepts four additional applications, including one from Mr. Travis. No revised notice is sent to the membership about an extended deadline.
• October 5, 2017: Mr. Travis, then a Board member, makes an email motion to extend the application deadline to October 16, which is denied.
• October 19, 2017: The Board formally approves six members for the Nominating Committee. Mr. Travis’s subsequent motion at this meeting to extend the deadline fails for lack of a second.
Nominating Committee Actions and Rationale
• The Committee considered all eight applications submitted, including the four received after the initial deadline.
• The Committee scheduled and conducted interviews with all eight applicants.
• During interviews, applicants were asked questions including whether they had ever filed a lawsuit against the Association, were considering filing a lawsuit, or had any compliance violations.
• The Committee ultimately nominated four candidates to be placed on the ballot for the election. Of these four, two had applied by the September 29 deadline and two had applied after.
Association’s Position and Testimony
• Simone McGinnis, the Association’s on-site manager, testified that the September 29 deadline was not imposed by the Board but was an administrative deadline set by the management company to allow time for the nomination and ballot-printing process.
• The Association’s position, articulated at the November 16, 2017 Board meeting, is that the only way to get on the ballot is to be nominated by the Nominating Committee, although write-in candidates are permitted during the election.
• The Board acknowledged that it had only strictly adhered to the Bylaw requirement of using a Nominating Committee for the past two years, after thirty years of non-adherence.
• The Board’s attorney stated that the Committee members have a duty to act reasonably and that any member who disagrees with the Committee’s discretionary choices should seek to amend the bylaws.
Analysis of Governing Documents and Statutes
The judge’s decision rested on the interpretation of specific articles within the Association’s Bylaws and relevant Arizona state law.
Document/Statute
Relevant Provision
Application in this Case
Bylaws Article IV, Section 3
“Nominations for election to the Board of Directors shall be made by a Nominating Committee… The Nominating Committee shall make as many nominations… as it shall in its discretion determine…”
This article grants the Committee explicit discretion to select nominees. It does not provide for “self-nomination” or require the Committee to nominate all applicants.
Bylaws Article VIII
“no committee may take action which exceeds its responsibilities. Each committee shall operate in accordance with any terms, limitations, or rules adopted by the Board.”
Mr. Travis argued the deadline was a “rule adopted by the Board.” The court found no evidence to support this, concluding it was an administrative deadline.
Bylaws Article IV, Section 1
States that Board Directors must be members of the Association. It lists no other qualifications.
Mr. Travis argued that questioning candidates imposed extra qualifications. The court found this was part of the Committee’s discretionary selection process, not the imposition of new formal requirements.
ARIZ. REV. STAT. § 33-1812
Prohibits proxy voting and requires that ballots set forth each proposed action and provide an opportunity to vote for or against it.
The court determined this statute applies to “votes allocated to a unit” (i.e., the member’s vote) and not the nomination process itself, which is governed by the Bylaws.
Conclusions of Law and Final Order
The Administrative Law Judge made the following conclusions based on a preponderance of the evidence:
1. Deadline was Administrative: There was no substantial evidence showing the September 29, 2017 deadline was a formal rule adopted by the Board. Therefore, the Nominating Committee did not violate Bylaws Article VIII by accepting applications after this date.
2. Committee Acted Within its Discretion: The plain language of Bylaws Article IV, Section 3 requires nominations to be made by the Committee and grants it discretion. The concept of “self-nomination” is not supported by the Bylaws. It was not unreasonable for the Committee to question applicants as part of exercising its explicit discretion to select nominees.
3. State Voting Statute Not Applicable: The nomination process, as dictated by the Bylaws, is separate from the act of voting. Since ARIZ. REV. STAT. § 33-1812 governs “votes allocated to a unit,” it is not applicable to the Committee’s function of selecting nominees.
IT IS ORDERED that Petitioner William Travis’s petition is dismissed.
The decision is binding on the parties unless a rehearing is requested from the Commissioner of the Department of Real Estate within 30 days of the service of the order.
Study Guide – 18F-H1817017-REL
Study Guide: Travis v. The Val Vista Lakes Community Association
Short-Answer Quiz
Instructions: Answer the following questions in 2-3 complete sentences based on the provided source context.
1. Who were the primary parties involved in case number 18F-H1817017-REL, and what were their roles?
2. What were the three central issues that petitioner William Travis raised regarding the Board election held on November 16, 2017?
3. What was the petitioner’s argument concerning the September 29, 2017, application deadline set by the Association?
4. According to the Association’s on-site manager, Simone McGinnis, what was the origin and purpose of the September 29th deadline?
5. How did the petitioner claim the Nominating Committee exceeded its authority by questioning candidates?
6. What was the Association’s defense for the Nominating Committee’s practice of interviewing and questioning applicants?
7. What is the sole qualification required to serve on the Board of Directors, according to the Val Vista Lakes Community Association Bylaws?
8. How did the petitioner link the Nominating Committee’s failure to place all applicants on the ballot to a violation of ARIZ. REV. STAT. section 33-1812?
9. According to testimony during the November 16, 2017, Board meeting, how long had the Association been strictly adhering to the Bylaw requirement of using a Nominating Committee?
10. What was the final Order issued by Administrative Law Judge Thomas Shedden in this case?
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Answer Key
1. The primary parties were the Petitioner, William Travis, who brought the complaint, and the Respondent, The Val Vista Lakes Community Association, which was defending its actions. Mr. Travis represented himself, while the Association was represented by attorneys Mark K. Sahl and Nicholas C. Nogami.
2. The three issues raised by Mr. Travis were: (1) the Nominating Committee improperly disregarded the September 29th application deadline; (2) the Committee exceeded its authority by asking questions that effectively added new qualification requirements for Board members; and (3) the Committee’s failure to include all “self-nominations” on the ballot constituted a violation of Arizona state statutes on proxy voting.
3. Mr. Travis argued that the September 29th deadline was a “term, limitation, or rule adopted by the Board of Directors” under Bylaws Article VIII. Therefore, by accepting applications after this date, the Nominating Committee violated the Association’s own rules.
4. Simone McGinnis testified that the Board did not impose the deadline. Instead, it was an administrative deadline set by the Association’s management company to allow sufficient time for the Nominating Committee to review applications and have ballots printed.
5. Mr. Travis argued that by asking applicants questions, the Nominating Committee was effectively imposing qualification requirements beyond the single one set out in the Bylaws (being a member of the Association). He asserted the committee had no authority to ask any questions at all as part of its process.
6. The Association contended that questioning applicants was a reasonable exercise of the Nominating Committee’s discretion. This discretion is granted by the Bylaws, which state the Committee shall make as many nominations as it determines is appropriate.
7. According to Bylaws Article IV, Section 1, the only qualification required for an individual to serve on the Board of Directors is that they must be a member of the Association. No other qualifications are specified in the Bylaws.
8. Mr. Travis asserted that because members were not allowed to vote for or against the four applicants who were not nominated, the Committee effectively engaged in proxy voting. He argued this violated ARIZ. REV. STAT. section 33-1812, which requires that ballots provide an opportunity to vote for or against each proposed action.
9. During the meeting, the Board acknowledged that it had only been following the Bylaw requirement to use a Nominating Committee for the last two years. Prior to that, for approximately thirty years, strict adherence to this Bylaw had not been observed.
10. The Administrative Law Judge ordered that Petitioner William Travis’s petition be dismissed. The Judge also deemed the Respondent, The Val Vista Lakes Community Association, to be the prevailing party in the matter.
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Essay Questions
Instructions: The following questions are designed to test a deeper understanding of the case. Formulate a comprehensive response to each prompt using only the information and arguments presented in the source document.
1. Analyze the conflicting interpretations of the Nominating Committee’s role and authority as presented by William Travis and the Association. How did the Administrative Law Judge use the plain language of Bylaws Article IV, Section 3 to resolve this dispute?
2. Discuss the significance of the September 29, 2017 deadline. Evaluate the evidence and arguments presented by both parties regarding its legitimacy and binding nature, and explain the Judge’s reasoning for concluding it was an administrative deadline.
3. Explain William Travis’s legal argument that the Nominating Committee’s selection process constituted a form of proxy voting in violation of ARIZ. REV. STAT. section 33-1812. Detail the Judge’s conclusion on this matter and the legal reasoning used to determine the statute’s applicability.
4. Examine the concept of “discretion” as it applies to the Nominating Committee’s actions. Based on the hearing testimony, including the Board attorney’s explanation, what are the implied powers and limitations of this discretion?
5. The Judge determined that Mr. Travis failed to meet the “preponderance of the evidence” standard. Identify the key claims made by Mr. Travis and detail why the evidence he presented (or failed to present) was insufficient to prove his case on each of the three issues.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official (Thomas Shedden in this case) who presides over administrative hearings, hears evidence, and makes legal findings and decisions.
Petitioner
The party who files a petition initiating a legal case. In this matter, the petitioner was William Travis.
Respondent
The party against whom a petition is filed and who must respond to the allegations. In this matter, the respondent was The Val Vista Lakes Community Association.
Bylaws
The formal rules and regulations governing the internal management of an organization, such as a homeowners’ association. They are considered a contract between the association and its members.
An acronym for Covenants, Conditions, and Restrictions, which are rules governing the use of real estate within a planned community. Mr. Travis initially alleged a violation of CC&R Article V, Section 3.
Nominating Committee
A committee, established by the Bylaws, responsible for nominating candidates for election to the Board of Directors. It consists of a Chairperson from the Board and two or more other persons.
Self-Nomination
The act of a member putting their own name forward for consideration for a Board position. The petitioner acknowledged that the Bylaws do not explicitly provide for self-nomination.
Burden of Proof
The legal obligation of a party in a trial to produce evidence that proves the claims they have made against the other party. In this case, the burden of proof was on Mr. Travis.
Preponderance of the Evidence
The standard of proof required in this case. It means the evidence presented is more convincing and has superior evidentiary weight than the evidence offered in opposition, inclining an impartial mind to one side over the other.
Proxy Voting
A form of voting where a member authorizes another person to vote on their behalf. ARIZ. REV. STAT. section 33-1812 prohibits this practice for community associations after the period of declarant control.
Prevailing Party
The party that wins the lawsuit. In this case, the Respondent Association was deemed the prevailing party upon the dismissal of the petition.
Blog Post – 18F-H1817017-REL
Your HOA Bylaws Might Not Mean What You Think: 3 Surprising Lessons from a Legal Showdown
Introduction: The Devil in the Details
Anyone who has ever sat through a contentious HOA annual meeting or received a violation notice for an overgrown flowerbed knows the feeling. You live in a community governed by rules, and you assume those rules operate on a shared understanding of common sense. But what happens when that common sense collides with the cold, hard text of your community’s governing documents?
A recent administrative law case in Arizona, Travis vs. The Val Vista Lakes Community Association, provides a fascinating and instructive look under the hood of HOA governance. The dispute reveals how the precise, technical wording of community bylaws can lead to surprising and counter-intuitive outcomes for residents. This case isn’t just about one community; it’s a masterclass for any homeowner. Here are the three most impactful lessons from the legal showdown.
1. A Deadline Isn’t Always a Deadline
The first major complaint from the petitioner, Mr. Travis, seemed straightforward. For an election with three open seats on the Board of Directors, the HOA’s Nominating Committee had accepted applications after a publicly announced deadline of 5:00 p.m. on September 29, 2017. Four applications arrived on time, but four more—including one from Mr. Travis himself—were accepted after the cutoff. In a delicious twist of irony, Mr. Travis was a sitting Board member who had twice attempted to have the Board formally extend the deadline, but both motions failed. A missed deadline is a missed deadline, right?
Not in this case. The judge dismissed the complaint entirely, drawing a critical distinction: the September 29th deadline was not a formal “term, limitation, or rule adopted by the Board.”
Testimony from the Association’s manager, Simone McGinnis, revealed the deadline’s true nature. It was merely an administrative deadline set by the management company for purely logistical reasons, such as allowing the Nominating Committee enough time to review applications and get the ballots printed.
The Lesson: In legal and governance contexts, the source of a rule is as important as the rule itself. An administrative guideline set by a third-party manager for convenience does not carry the same binding legal weight as a formal rule passed by the Board of Directors according to the procedures outlined in the bylaws.
2. “Nomination” Is a Process of Selection, Not Just Collection
Mr. Travis’s second argument centered on the Nominating Committee’s actions. The committee interviewed all eight applicants and asked them questions, including whether they had ever sued the Association or had any compliance violations. Mr. Travis contended that the committee had exceeded its authority. In fact, he argued that because four members had applied by the original deadline for the three open seats, the committee’s job was already done—it shouldn’t have even been formed, let alone vetted anyone. His position was that its role was simply to collect names, not to filter them.
This argument also failed. The judge found the committee acted squarely within its rights as defined by the Association’s Bylaws. Article IV, Section 3 explicitly grants the Nominating Committee the discretion to “make as many nominations for election to the Board of Directors as it shall in its discretion determine.” The judge concluded that questioning applicants was a reasonable part of exercising this discretion to select candidates.
Adding a fascinating historical twist, the Board admitted during a meeting that for thirty years prior, the Association had not strictly followed its own Bylaw requiring the use of a Nominating Committee, only beginning to do so in the last two years. A long-ignored rule had suddenly become the central mechanism for determining board candidacy.
While the committee must act reasonably—it couldn’t disqualify a candidate for having red hair, the Board’s attorney noted—it absolutely has the power to be selective. The core issue decided by the court was not how the committee used its discretion, but whether the Bylaws granted it discretion in the first place. The answer was a clear yes.
The Lesson: The term “Nominating Committee” can be misleading. Depending on your bylaws, it may not be a passive paper-pusher that forwards all names to the ballot. It can be an active gatekeeper empowered to interview, question, and ultimately select which members get a chance to be elected.
3. The ‘Right’ to Run for Your HOA Board Might Be a Myth
The final issue gets to the heart of homeowner assumptions. Mr. Travis argued for a right to “self-nominate”—his term for a system where any member could place themselves directly on the ballot. He claimed that by failing to include all applicants, the Association was engaging in a form of illegal proxy voting under Arizona state law.
The judge’s refutation of this idea was decisive. Mr. Travis himself acknowledged that the Bylaws contained no provision allowing a member to “self-nominate.” The court found that the only path to the ballot specified in the governing documents was via nomination by the Nominating Committee.
This created a critical procedural prerequisite. Because the Bylaws require nomination by the committee before a member can become a candidate, the state law governing voting (ARIZ. REV. STAT. § 33-1812) was legally inapplicable. The judge ruled that the act of nomination is not a “vote allocated to a unit.” In other words, if you don’t clear the prerequisite of being nominated, your right to be voted upon by the membership doesn’t even come into play.
The Lesson: This is a powerful and potentially shocking takeaway for many homeowners. Unless your community’s governing documents explicitly guarantee it, you may not have an inherent “right” to run for your HOA board simply by being a member in good standing. The power to decide who appears on the ballot can be exclusively vested in a small, appointed committee.
Conclusion: Read Your Bylaws. Really.
The case of Mr. Travis vs. Val Vista Lakes is a stark reminder that an HOA’s governing documents are a binding contract. In the courtroom of community governance, common-sense assumptions are legally irrelevant; only the written word matters. An administrative deadline may be toothless, a nominating committee may be a powerful gatekeeper, and the right to run for office may not be a right at all.
It all comes down to what is written in the documents. So, when was the last time you read your community’s governing documents from start to finish? The power structures they define might be very different from what you imagine.
Case Participants
Petitioner Side
William Travis(petitioner)
Respondent Side
Mark K. Sahl(respondent attorney) Carpenter, Hazelwood, Delgado & Bolen, PLC
Nicholas C. Nogami(respondent attorney) Carpenter, Hazelwood, Delgado & Bolen, PLC
Simone McGinnis(property manager) Testified as a witness
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
17F-H1717038-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2017-12-11
Administrative Law Judge
Thomas Shedden
Outcome
loss
Filing Fees Refunded
$0.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
James and Shawna Larson
Counsel
Lisa M. Hanger
Respondent
Tempe Gardens Townhouse Corporation
Counsel
Nathan Tennyson
Alleged Violations
A.R.S. § 33-1255(C); CC&R sections 9 and 9(b)
Outcome Summary
The ALJ dismissed the petition, ruling that the HOA acted reasonably and had the authority under the CC&Rs to require the removal of the homeowner's patio cover for necessary painting and repairs. The ALJ determined that because the patio cover is a limited common element, the Petitioners must bear the cost of removal and reinstallation according to A.R.S. § 33-1255(C).
Why this result: Petitioners failed to prove the HOA violated CC&Rs or acted unreasonably, and statutory law assigned the expense burden for the limited common element to the homeowner.
Key Issues & Findings
Authority of HOA to mandate removal of homeowner's patio cover for maintenance and assignment of removal/reinstallation costs.
Petitioners challenged the Respondent HOA's authority and reasonableness in requiring them to remove their patio cover, a limited common element, for building painting and repair, and disputed the requirement that Petitioners bear the costs. The ALJ concluded that the HOA's plan was reasonable, the HOA had the authority under CC&R sections 9 and 9(b), and Petitioners must bear the cost of removal and reinstallation under A.R.S. § 33-1255(C).
Orders: Petitioners’ petition is dismissed. Respondent is deemed the prevailing party. Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
Analytics Highlights
Topics: HOA authority, limited common element, maintenance costs, patio cover, CC&Rs, statutory interpretation, dismissal, prevailing party
Briefing on Larson v. Tempe Gardens Townhouse Corporation
Executive Summary
This briefing document synthesizes the legal dispute between homeowners James and Shawna Larson (Petitioners) and the Tempe Gardens Townhouse Corporation (Respondent). The core conflict centered on the Respondent’s requirement that Petitioners remove their patio cover at their own expense to facilitate a community-wide building repair and painting project. The case initially faced a jurisdictional challenge, with an Administrative Law Judge (ALJ) recommending dismissal due to the speculative nature of the Respondent’s threat to remove the cover. This recommendation was rejected by the Commissioner of the Department of Real Estate, who found the matter ripe for adjudication and ordered a new hearing.
The final Administrative Law Judge Decision ultimately ruled in favor of the Respondent. The decision found the HOA’s plan to remove the patio covers was reasonable, necessary for the safe and proper completion of the project, and authorized under the community’s CC&Rs. Crucially, the ruling established that the patio cover is a “limited common element” under Arizona statute. Consequently, the financial responsibility for its removal and potential reinstallation rests solely with the Petitioners as the homeowners to whom the element is assigned. The Petitioners’ petition was dismissed, and the Respondent was deemed the prevailing party.
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Procedural History
The case progressed through several distinct legal phases, beginning with a petition and culminating in a final administrative decision after a rehearing.
Outcome/Significance
June 15-16, 2017
Petition Filed
James and Shawna Larson filed a petition with the Department of Real Estate alleging a violation of the Respondent’s CC&Rs.
August 25, 2017
Order Recommending Dismissal
Administrative Law Judge Suzanne Marwil recommended dismissing the petition, finding no “justiciable controversy” because the Respondent had not yet acted on its threat to remove the patio cover, rendering the issue speculative.
August 31, 2017
Order Rejecting Recommendation
Judy Lowe, Commissioner of the Department of Real Estate, rejected the ALJ’s recommendation. Citing a June 1, 2017 letter from the Respondent, the Commissioner determined the matter was “ripe for adjudication” and ordered the hearing to be rescheduled.
September 1, 2017
Notice of Re-Hearing Issued
The Arizona Department of Real Estate formally scheduled a new hearing in the matter.
November 20, 2017
Rehearing Conducted
A full hearing on the merits was conducted before Administrative Law Judge Thomas Shedden.
December 11, 2017
Final Administrative Law Judge Decision
ALJ Thomas Shedden issued a final decision, dismissing the Petitioners’ petition and finding in favor of the Respondent.
Core Dispute Analysis
The conflict arose from a maintenance project initiated by the Tempe Gardens Townhouse Corporation, which consists of 169 units. The project involved repairing and painting the exteriors of the community’s twenty-five two-story buildings.
Respondent’s (HOA’s) Mandate and Rationale
• Project Requirement: The HOA informed homeowners with patio covers that they were required to remove the covers at their own expense before repairs and painting could begin.
• Enforcement Threat: In a letter dated June 1, 2017, the HOA stated that if the Larsons’ patio cover was not removed within ten days, the HOA would remove it under the authority of CC&R section 10(a) and charge the homeowners for the cost.
• Legal Justification: The HOA asserted its authority based on:
◦ CC&R Section 9(b): Grants the Respondent responsibility for maintaining the building exteriors.
◦ CC&R Section 9: States, “Any cooperative action necessary or appropriate to the proper maintenance and upkeep of the … [building] exteriors … shall be taken by the [Respondent].”
• Practical Necessity: The HOA argued that removal was essential for the project’s proper and safe completion, a position supported by its project manager.
Petitioners’ (Larsons’) Objections and Counter-Arguments
• Initial Legal Position: In their brief, the Petitioners stated that “the true issues underlying this issue are not about whether Respondent’s current threatened actions are a violation of the CC&Rs. The true issues relate to Respondent Association’s actions and inactions that have lead up to the point where the Parties now find themselves addressing this administrative law panel.”
• Lack of Authority: In a May 19, 2017 letter, the Larsons’ counsel argued the HOA had no legal authority to support its request.
• Unreasonable Cost: The Petitioners asserted that the cost of removal and reinstallation would be “thousands of dollars” and provided bids ranging from $3,980 to $5,975.
• Historical Precedent: The patio cover was in place when the Larsons purchased their unit in 1999, and they argued the HOA did not disclose any violation at that time.
• Proposed Alternatives:
1. The Larsons offered to have the back of their unit painted at their own expense, which the HOA rejected over concerns about project warranty and management.
2. During the November 20 hearing, after hearing testimony, the Larsons offered not to reinstall their patio cover if the Respondent would pay for its removal.
Key Evidence and Testimony
The final decision heavily relied on the testimony of Wayne King, the project manager hired by the HOA, and an analysis of competing cost estimates.
Testimony of Wayne King (Project Manager)
• Project Scope: King testified that the project involved not only painting but also repairing damaged siding, much of which was caused by improperly flashed patio covers. To “do the job right,” the process required sanding, power washing, and patching before painting.
• Contractor Requirements: All five contractors who bid on the project required the patio covers to be removed.
• Safety and Logistics: King explained why working around the covers was not viable:
◦ Scaffolding: “Regular” scaffolding would not fit, and commercial scaffolding would not provide access to the entire building.
◦ Lifts: Using a “reach” or forklift was not an option due to overhead powerlines creating a safety hazard.
◦ Worker Safety: Allowing painters to walk on homeowners’ patio covers was not a safe option. He noted that changes in safety laws since the buildings were last painted necessitated different methods.
• Warranty: King testified that the paint company would not provide a warranty for the project if individual homeowners, like the Larsons, painted their own units.
Cost Estimates and Discrepancies
• Petitioners’ Estimates: The Larsons submitted two bids for their wooden patio cover:
◦ Bid 1: $1,250 to remove and dispose; $3,980 to remove and rebuild with new wood.
◦ Bid 2: $5,975 to remove and replace the structure.
• Respondent’s Estimates:
◦ The HOA’s initial letter offered a contractor who would remove aluminum covers for $150. The cost for the Larsons’ wood cover was stated as $225, though this was not a firm price.
◦ Wayne King testified that the Petitioners’ estimates were “very high” and opined that $1,000 should cover the cost of removing and rebuilding, assuming existing materials were reused. He acknowledged decking material would likely need replacement but estimated 80% of rafters could be reused.
Legal Findings and Final Decision
The Administrative Law Judge Decision of December 11, 2017, provided a comprehensive legal analysis that concluded in the Respondent’s favor.
Governing Authority and Reasonableness
• Deference to the HOA: Citing Tierra Ranchos Homeowners Ass’n v. Kitchukov, the decision established that the tribunal must accord the HOA deference in its decisions regarding maintenance and repair, provided it acts reasonably.
• Finding of Reasonableness: Based on the credible testimony of Wayne King, the judge found that the Respondent’s proposed plan for repairing and painting was reasonable, as the buildings could not be “properly and safely painted without the patio covers being removed.”
• Authorization under CC&Rs: The judge concluded that CC&R sections 9 and 9(b) were “sufficient to show that Respondent has the authority to remove Petitioners’ patio to complete the painting work.”
“Limited Common Element” Doctrine and Cost Allocation
The central legal issue of financial responsibility was resolved by applying Arizona state statutes.
1. Classification: The Petitioners’ patio cover was classified as a limited common element within the meaning of ARIZ. REV. STAT. section 33-1212(4).
2. Statutory Rule: The judge then applied ARIZ. REV. STAT. section 33-1255(C), which states:
3. Conclusion on Cost: Based on a “reasonable reading” of this statute, the decision concluded that the Petitioners must bear the cost of removing the patio cover and, should they choose to do so, the cost of reinstalling it.
Final Ruling
• The evidence supported the conclusion that the Respondent had the authority to require the removal of the patio cover at the Petitioners’ expense.
• IT IS ORDERED that the petition filed by James and Shawna Larson is dismissed.
• The Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party.
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Key Parties and Representatives
Name(s)
Representation
Petitioners
James and Shawna Larson
Lisa M. Hanger, Esq.
Respondent
Tempe Gardens Townhouse Corporation
Nathan Tennyson, Esq. (Brown Alcott PLLC)
ALJ (Initial)
Suzanne Marwil
Office of Administrative Hearings
ALJ (Final)
Thomas Shedden
Office of Administrative Hearings
Commissioner
Judy Lowe
Arizona Department of Real Estate
Study Guide – 17F-H1717038-REL-RHG
Study Guide for Larson v. Tempe Gardens Townhouse Corporation
This study guide provides a comprehensive review of the administrative case between James and Shawna Larson and the Tempe Gardens Townhouse Corporation, culminating in the Administrative Law Judge Decision of December 11, 2017. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms to facilitate a thorough understanding of the case’s facts, legal arguments, and procedural history.
Short-Answer Quiz
Instructions: Answer the following ten questions based on the provided source documents. Each answer should be two to three sentences long.
1. Who were the primary parties in this case, and what was their relationship?
2. What was the initial reason given by Administrative Law Judge (ALJ) Suzanne Marwil for recommending the dismissal of the Larsons’ petition?
3. Why did Commissioner of the Department of Real Estate Judy Lowe reject the initial recommendation for dismissal?
4. What was the central issue adjudicated at the November 20, 2017 hearing before ALJ Thomas Shedden?
5. According to the Respondent, Tempe Gardens Townhouse Corporation, which specific sections of the CC&Rs granted it the authority to require the removal of patio covers?
6. Who was Wayne King, and what was the substance of his testimony during the hearing?
7. How did the Arizona Revised Statutes (A.R.S.) classify the Petitioners’ patio cover, and why was this classification legally significant for the case’s outcome?
8. What safety and logistical reasons were provided to justify the necessity of removing the patio covers for the painting project?
9. What was the final decision issued by ALJ Thomas Shedden on December 11, 2017?
10. According to the final ruling, who is financially responsible for the removal and potential reinstallation of the Petitioners’ patio cover, and what was the legal basis for this conclusion?
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Answer Key
1. The primary parties were the Petitioners, homeowners James and Shawna Larson, and the Respondent, their homeowner’s association, Tempe Gardens Townhouse Corporation. The dispute arose from the Respondent’s requirement that the Petitioners remove a patio cover at their unit.
2. ALJ Suzanne Marwil recommended dismissal on August 25, 2017, for a lack of a “justiciable controversy.” She reasoned that the Respondent’s threat to take down the patio cover had not yet been undertaken, making the issue speculative and more appropriate for a declaratory judgment action in superior court.
3. Commissioner Judy Lowe rejected the recommendation on August 31, 2017, stating the matter was “ripe for adjudication.” Her decision was based on a letter from June 1, 2017, in which the Respondent alleged a violation of the governing documents, thus creating a tangible controversy for the administrative tribunal to rule upon.
4. The central issue was whether the Respondent had the authority to mandate the removal of the Petitioners’ patio cover to facilitate a large-scale building repair and painting project. A secondary issue was determining who was financially responsible for the cost of removal and reinstallation.
5. The Respondent cited CC&R sections 9 and 9(b) as the source of its authority. Section 9(b) makes the Respondent responsible for maintaining building exteriors, and section 9 grants it the power to take “any cooperative action necessary or appropriate” for that maintenance.
6. Wayne King was the project manager hired by the Respondent for the painting project. He provided expert testimony that removing the patio covers was necessary to properly and safely repair and paint the buildings, noting that all five bidding contractors required their removal and that alternative methods were not viable or safe.
7. The patio cover was classified as a “limited common element” under A.R.S. § 33-1212(4). This was significant because A.R.S. § 33-1255(C) states that common expenses associated with the maintenance or repair of a limited common element shall be assessed against the units to which it is assigned, placing the financial burden on the Petitioners.
8. Project manager Wayne King testified that removal was necessary to accommodate the 14-foot by 8-foot area required for scaffolding. He explained that using a forklift was unsafe due to overhead powerlines, and allowing painters to walk on the covers was also a safety hazard, especially given changes in safety laws since the last painting project.
9. ALJ Thomas Shedden dismissed the Petitioners’ petition and deemed the Respondent, Tempe Gardens Townhouse Corporation, to be the prevailing party. The order found that the Respondent’s plan was reasonable and that it had the authority to require the patio cover’s removal.
10. The final ruling concluded that the Petitioners, James and Shawna Larson, were responsible for the cost to remove the patio cover and the cost to reinstall it if they chose to do so. The legal basis was A.R.S. § 33-1255(C), which assigns expenses related to a “limited common element” (the patio cover) exclusively to the unit owner it benefits.
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Essay Questions
Instructions: The following questions are designed to test a deeper, more analytical understanding of the case. Formulate a comprehensive response for each, drawing evidence from the provided source documents.
1. Trace the procedural history of case No. 17F-H1717038-REL from the initial petition to the final decision. Explain the reasoning behind each major procedural step, including the initial recommendation for dismissal, its rejection by the Commissioner, and the final order.
2. Analyze the legal arguments presented by both the Petitioners (James and Shawna Larson) and the Respondent (Tempe Gardens Townhouse Corporation) at the November 20, 2017 hearing. Discuss the key pieces of evidence, including witness testimony, cost estimates, and CC&R provisions, that each side used to support its position.
3. Explain the concept of “justiciable controversy” as it was applied by ALJ Suzanne Marwil in her recommendation for dismissal. Contrast her interpretation with Commissioner Judy Lowe’s reasoning for why the matter was “ripe for adjudication.”
4. Discuss the legal significance of classifying the patio cover as a “limited common element.” How did this classification, in conjunction with Arizona Revised Statutes and the community’s CC&Rs, ultimately determine the outcome of the case regarding financial responsibility?
5. Evaluate the role of expert testimony in the final administrative hearing. How did the testimony of Wayne King influence ALJ Thomas Shedden’s findings of fact and conclusions of law regarding the reasonableness and necessity of the Respondent’s actions?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
The judge who presides over administrative hearings at a government agency, such as the Office of Administrative Hearings. In this case, Suzanne Marwil and Thomas Shedden served as ALJs.
A.R.S. (Arizona Revised Statutes)
The official compilation of the laws of the state of Arizona. Key statutes cited include A.R.S. § 32-2199, § 33-1212(4), and § 33-1255(C).
CC&Rs (Covenants, Conditions & Restrictions)
The governing documents for a planned community or condominium association that outline the rights and obligations of the homeowners and the association. In this case, sections 9, 9(b), and 10(a) were specifically mentioned.
Declaratory Judgment Action
A legal action filed in superior court where a party asks the court to provide a binding ruling on the rights and obligations of the parties before an actual injury has occurred.
Justiciable Controversy
A real, substantial legal dispute that is appropriate for a court or tribunal to resolve. It cannot be a hypothetical, speculative, or advisory matter.
Limited Common Element
As defined in A.R.S. § 33-1212(4), a common element of a condominium assigned for the exclusive use of one or more units, but fewer than all of them. The Larsons’ patio cover was classified as such.
Petition
The formal written request filed by a party to initiate a case with an administrative body. The Larsons filed their petition with the Department of Real Estate on June 15/16, 2017.
Petitioner
The party who initiates a legal action by filing a petition. In this case, James and Shawna Larson were the Petitioners.
Preponderance of the Evidence
The standard of proof required in this administrative hearing. It means the greater weight of the evidence is sufficient to incline a fair and impartial mind to one side of an issue over the other.
Respondent
The party against whom a petition is filed. In this case, Tempe Gardens Townhouse Corporation was the Respondent.
Tribunal
A body, such as the Office of Administrative Hearings, with the authority to judge, adjudicate on, or determine claims or disputes.
Blog Post – 17F-H1717038-REL-RHG
They Fought the HOA Over a Patio and Lost: 3 Shocking Legal Lessons for Every HOA Member
It’s the letter every homeowner dreads. An official-looking envelope from the Homeowner’s Association (HOA) lands in your mailbox, and the message inside is not a friendly neighborhood greeting. It’s a demand.
This is exactly what happened to Arizona couple James and Shawna Larson. Their HOA, Tempe Gardens Townhouse Corporation, was planning a large-scale project to repair and paint the building exteriors. To do the job properly, the HOA demanded that the Larsons remove their wooden patio cover—at their own expense. The Larsons, believing this was an unreasonable overreach, refused. That refusal kicked off a legal battle that serves as a masterclass in the often-shocking realities of HOA power.
This post distills the most important lessons from their fight. These are the legal realities that every homeowner should understand before they find themselves on the receiving end of a similar notice.
You Can Win the First Round and Still Lose the Case
In the first stage of the dispute, the Administrative Law Judge actually recommended that the Larsons’ petition be dismissed. The judge’s reasoning was based on a crucial legal doctrine: ripeness. Because the HOA had only threatened to remove the patio cover and hadn’t physically done it yet, the judge found the issue “speculative.” In the court’s view, there was no “justiciable controversy” to rule on yet.
The initial ruling contained a powerful statement highlighting the confusion:
Both parties fundamentally misunderstand the limits of this Tribunal’s jurisdiction.
But this initial victory was short-lived. In a surprising twist, the Commissioner of the Department of Real Estate rejected the judge’s recommendation. The Commissioner found that the core question—whether the patio cover violated the association’s rules—was “ripe for adjudication” and ordered the case back to court for a full hearing. This highlights a key principle: administrative bodies often prefer to rule on the substance of a dispute rather than dismiss it on procedural grounds, ensuring that core community conflicts are actually resolved.
A case isn’t over until it’s over. An initial procedural win (or loss) can be overturned, shifting the entire battlefield. With the case now officially back on, the court turned to the central question of the dispute: who was financially responsible for the patio cover?
It’s Your Patio, So It’s Your Bill—Even When the HOA Forces the Work
The central conflict boiled down to one question: who should pay? The Larsons believed that since the HOA required the patio cover to be removed for its maintenance project, the HOA should bear the associated costs. This seems like common sense, but HOA law operates on a different logic.
The case was decided by a key legal concept: the patio cover was legally classified as a “limited common element.” For most homeowners, this is where their jaw hits the floor. A limited common element is part of the common area (like exterior walls or roofs) but is assigned for the exclusive use of a single unit owner. The logic behind this law is that while the HOA maintains general common areas, elements that provide an exclusive benefit to one owner—like their personal patio, balcony, or assigned parking spot—carry an exclusive financial responsibility, even for HOA-mandated work.
This classification has a devastating financial consequence spelled out in Arizona statute A.R.S. § 33-1255(C). The law states that common expenses associated with a limited common element are assessed against the unit it’s assigned to. The judge’s final conclusion was direct and absolute:
Because the patio cover is a limited common element, under a reasonable reading of ARIZ. REV. STAT. section 33-1255(C), Petitioners must bear the cost of removing the patio cover and, if they choose to do so, the cost of reinstalling it.
Under the law, because the patio exclusively benefitted the Larsons, they were solely responsible for all costs associated with it, even when the work was demanded by the HOA for its own project.
Deference is Given to a Well-Prepared HOA
The HOA didn’t win just because of a legal statute; it won because it built a sound, well-documented case for its demand. They didn’t just issue an order; they presented extensive evidence that their plan was “reasonable.”
The testimony of their project manager, Wayne King, was particularly compelling. He laid out a series of facts that were difficult to dispute:
• The project involved necessary repairs to siding and flashing, not just cosmetic painting.
• All five painting contractors who bid on the project required the patio covers to be removed.
• Removal was essential to comply with modern safety laws for scaffolding and to allow for proper work, including sanding and power washing.
• Safety laws had changed since the buildings were last painted, making old methods unsafe and illegal.
• Allowing individual homeowners to paint their own sections would void the painter’s warranty for the entire project.
Faced with this mountain of meticulously documented evidence, the judge ruled that the HOA’s plan was “reasonable.” Because of this, the court was legally bound to “accord Respondent deference in decisions regarding maintenance and repair of the common areas.” In other words, when an HOA acts logically, documents its process, and prioritizes safety and proper procedure, courts will give it significant authority to enforce its decisions.
Conclusion: Knowledge is Power in an HOA
The Larsons’ case is a stark reminder that in an HOA, what feels fair is irrelevant. The only things that matter are procedural correctness (even a ‘win’ can be temporary), the fine print of legal definitions (you can be forced to pay to remove your own property), and an HOA’s documented reasonableness (a well-prepared board is nearly unbeatable). These principles are found not in a sense of fairness, but in the specific, often surprising language of state law and a community’s own CC&Rs.
This case was about a patio cover, but the principles apply to fences, doors, and windows—do you truly know what you own and what you’re responsible for?
Case Participants
Petitioner Side
James Larson(petitioner)
Shawna Larson(petitioner)
Lisa M. Hanger(petitioner attorney)
Respondent Side
Nathan Tennyson(respondent attorney) Brown Alcott PLLC
Wayne King(witness) Project Manager for painting project hired by Respondent
Neutral Parties
Suzanne Marwil(ALJ) Issued initial Recommended Order of Dismissal (August 25, 2017)
Thomas Shedden(ALJ) Issued Administrative Law Judge Decision (December 11, 2017)
Judy Lowe(Commissioner) Arizona Department of Real Estate Rejected initial recommendation of dismissal
Dan Gardner(HOA Coordinator) Transmitted Commissioner's order
The ALJ dismissed the petition, ruling that the HOA acted reasonably and had the authority under the CC&Rs to require the removal of the homeowner's patio cover for necessary painting and repairs. The ALJ determined that because the patio cover is a limited common element, the Petitioners must bear the cost of removal and reinstallation according to A.R.S. § 33-1255(C).
Why this result: Petitioners failed to prove the HOA violated CC&Rs or acted unreasonably, and statutory law assigned the expense burden for the limited common element to the homeowner.
Key Issues & Findings
Authority of HOA to mandate removal of homeowner's patio cover for maintenance and assignment of removal/reinstallation costs.
Petitioners challenged the Respondent HOA's authority and reasonableness in requiring them to remove their patio cover, a limited common element, for building painting and repair, and disputed the requirement that Petitioners bear the costs. The ALJ concluded that the HOA's plan was reasonable, the HOA had the authority under CC&R sections 9 and 9(b), and Petitioners must bear the cost of removal and reinstallation under A.R.S. § 33-1255(C).
Orders: Petitioners’ petition is dismissed. Respondent is deemed the prevailing party. Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
Analytics Highlights
Topics: HOA authority, limited common element, maintenance costs, patio cover, CC&Rs, statutory interpretation, dismissal, prevailing party
Additional Citations:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
A.R.S. § 32-2199
A.R.S. § 32-2199.02
A.R.S. § 41-1092.09
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona
Video Overview
Audio Overview
Decision Documents
17F-H1717038-REL Decision – 583987.pdf
Uploaded 2025-10-09T03:31:46 (53.0 KB)
17F-H1717038-REL Decision – 585505.pdf
Uploaded 2025-10-09T03:31:46 (385.9 KB)
Briefing Doc – 17F-H1717038-REL
Briefing on Larson v. Tempe Gardens Townhouse Corporation
Executive Summary
This briefing synthesizes the legal dispute between homeowners James and Shawna Larson and the Tempe Gardens Townhouse Corporation (the “Respondent” or “HOA”). The core conflict centered on the HOA’s directive that the Larsons remove their wooden patio cover at their own expense to facilitate a community-wide building repair and painting project.
The case progressed through two distinct phases. Initially, an Administrative Law Judge (ALJ) recommended dismissing the Larsons’ petition for a lack of a “justiciable controversy,” reasoning that the HOA had not yet acted on its threat to remove the patio cover, rendering the dispute speculative. However, the Commissioner of the Department of Real Estate rejected this recommendation, finding the matter was “ripe for adjudication,” and ordered a full hearing on the merits.
In the final decision, a second ALJ dismissed the Larsons’ petition and ruled in favor of the HOA. The judge found the HOA’s plan to be reasonable and necessary for the proper and safe completion of the project, based on credible testimony from the project manager. The decision affirmed the HOA’s authority under its CC&Rs to require the removal of the structure. Crucially, the ruling established that the patio cover is a “limited common element” under Arizona law. Consequently, pursuant to Arizona Revised Statutes, the homeowners (the Larsons) are exclusively responsible for all costs associated with it, including its removal and potential reinstallation.
Procedural History and Jurisdictional Rulings
Initial Petition and Dismissal Recommendation
On June 16, 2017, James and Shawna Larson filed a petition with the Department of Real Estate against their HOA, alleging a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs). However, the initial filing did not specify which provisions had been violated.
Upon inquiry, the Petitioners’ counsel admitted via email that no specific provision of the CC&Rs had yet been violated. Instead, their concern was that section 10(a) would be violated if the HOA acted on its threat to forcibly remove their patio cover and charge them for the cost.
This led to the “ORDER RECOMMENDING DISMISSAL FOR LACK OF JUSTICIABLE CONTROVERSY,” issued on August 25, 2017, by Administrative Law Judge Suzanne Marwil. The key findings of this order were:
• Speculative Harm: The Judge found that the HOA’s actions “have not yet been undertaken and our [are] speculative at this juncture.”
• Lack of Jurisdiction: The order stated that the Office of Administrative Hearings’ jurisdiction, per A.R.S. § 32-2199, is limited to adjudicating existing violations of community documents, not potential future ones.
• Misunderstanding by Both Parties: The order noted, “Both parties fundamentally misunderstand the limits of this Tribunal’s jurisdiction.” The Petitioners were seeking a ruling on a future action, while the Respondent was urging the Tribunal to find the Petitioners had violated the CC&Rs, which was not the subject of the petition.
• Recommended Forum: The Judge suggested that the appropriate forum for the Petitioners would be a declaratory judgment action in superior court.
Rejection of Dismissal and Re-Hearing
On August 31, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued an “ORDER REJECTING RECOMMENDATION OF DISMISSAL.”
• The Commissioner rejected the ALJ’s finding that the matter lacked a justiciable controversy.
• The order cited a letter from the Respondent dated June 1, 2017, which posed the question: “Is the presence of the awning a violation of the Association’s governing documents?”
• This question was deemed sufficient to make the matter “ripe for adjudication.”
• The Commissioner requested that the hearing be rescheduled for a ruling on the matter. A re-hearing was subsequently conducted on November 20, 2017, before Administrative Law Judge Thomas Shedden.
Analysis of the Merits of the Dispute
The re-hearing focused on the substantive conflict: whether the HOA had the authority to compel the Larsons to remove their patio cover at their own expense for the maintenance project.
Respondent’s (HOA) Case
The HOA, consisting of 169 units, initiated a project to make necessary repairs to its twenty-five buildings and then have them painted. The HOA’s position was based on the following points:
• Legal Authority: The HOA asserted its authority under sections 9 and 9(b) of its CC&Rs, which state that the HOA is responsible for maintaining building exteriors and that “Any cooperative action necessary or appropriate to the proper maintenance and upkeep of the… [building] exteriors… shall be taken by the [Respondent].”
• Project Necessity: The project manager, Wayne King, provided testimony that the HOA’s board deemed credible and reasonable.
◦ Safety: King stated that all five bidding contractors required the patio covers to be removed to ensure a safe work environment as mandated by the Arizona Department of Occupational Safety and Health (OSHA).
◦ Logistics: Standard scaffolding would not fit without removing the covers, commercial scaffolding would not provide full access, a forklift was not viable due to overhead power lines, and allowing painters to walk on homeowner patio covers was unsafe.
◦ Quality of Work: The project involved sanding, power washing, and patching before painting to “do the job right.” Many covers had been improperly flashed, causing damage to the buildings that needed repair.
◦ Warranty: The paint company would not provide a warranty for the project if individual homeowners, such as the Larsons, were permitted to paint their own units.
Petitioners’ (Larsons’) Case
The Larsons, who purchased their unit in 1999 with the wooden patio cover already in place, contested the HOA’s demands.
• Challenge to Authority: The Petitioners argued that the HOA had no legal authority to demand the removal of their patio cover.
• Unreasonable Cost: They asserted that the cost of removal and reinstallation was unreasonable, submitting two bids:
◦ One bid quoted $1,250 to remove and dispose of the cover and $3,980 to remove and rebuild it with new wood.
◦ A second bid quoted $5,975 to remove and then replace the structure.
• Proposed Alternative: In a letter dated May 19, 2017, the Larsons offered to have the back of their unit painted at their own expense.
• Compromise Offer: During the November 20, 2017 hearing, after hearing the project manager’s testimony, Ms. Larson offered that they would agree not to reinstall the patio cover if the HOA would pay for its removal.
Final Administrative Law Judge Decision
On December 11, 2017, ALJ Thomas Shedden issued a final decision dismissing the Larsons’ petition and finding in favor of the Respondent, Tempe Gardens Townhouse Corporation.
Key Findings and Conclusions of Law
Finding/Conclusion
Details
Standard of Review
The HOA’s decisions regarding maintenance and repair are given deference, provided they act reasonably.
Reasonableness of HOA Action
Based on the “credible testimony” of Wayne King, the Judge found that the HOA’s proposed plan for repairing and painting the buildings, which required the removal of patio covers, was reasonable.
HOA Authority
CC&R sections 9 and 9(b) were found to be “sufficient to show that Respondent has the authority to remove Petitioners’ patio to complete the painting work.”
Patio Cover Classification
The Petitioners’ patio cover was legally classified as a “limited common element” within the meaning of ARIZ. REV. STAT. section 33-1212(4).
Cost Responsibility
The central issue of payment was decided by statute. The Judge concluded that under a “reasonable reading of ARIZ. REV. STAT. section 33-1255(C),” any common expense associated with a limited common element “shall be assessed exclusively against the units benefitted.”
Final Order
Based on these findings, the Administrative Law Judge ordered the following:
“The evidence of record supports a conclusion that Respondent has authority to require Petitioners to remove their patio cover to allow the building to be properly and safely painted, and that Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.”
The final order was that the Petitioners’ petition be dismissed, and the Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party.
Study Guide – 17F-H1717038-REL
Study Guide: Larson v. Tempe Gardens Townhouse Corporation
This study guide provides a comprehensive review of the administrative case between homeowners James and Shawna Larson and the Tempe Gardens Townhouse Corporation. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms based on the provided legal documents.
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Short-Answer Quiz
Answer the following questions in 2-3 sentences each, based on the information in the provided source documents.
1. Who were the primary parties involved in this case, and what was their relationship?
2. What was the initial reason given by Administrative Law Judge (ALJ) Suzanne Marwil for recommending the dismissal of the Larsons’ petition?
3. Why did the Commissioner of the Department of Real Estate, Judy Lowe, reject the initial recommendation for dismissal?
4. What was the central dispute that was ultimately decided in the November 20, 2017, hearing?
5. According to the final Administrative Law Judge Decision, what is the legal classification of the petitioners’ patio cover?
6. Which specific sections of the CC&Rs did the Respondent, Tempe Gardens Townhouse Corporation, cite as the basis for its authority?
7. What key reasons did project manager Wayne King provide to justify the necessity of removing the patio covers for the painting project?
8. Describe the significant difference in the cost estimates for removing and replacing the patio cover as presented by the Petitioners versus the Respondent’s project manager.
9. What was the final ruling regarding who was financially responsible for the removal and potential reinstallation of the patio cover?
10. What was the ultimate outcome of the Larsons’ petition following the final hearing, and which party was deemed the “prevailing party”?
——————————————————————————–
Answer Key
1. The primary parties were the Petitioners, homeowners James and Shawna Larson, and the Respondent, the Tempe Gardens Townhouse Corporation, which is their homeowner’s association (HOA). The dispute arose from the HOA’s plan to repair and paint the building exteriors.
2. ALJ Marwil initially recommended dismissal due to a “lack of justiciable controversy.” She found that the Petitioners had failed to cite any provision of the CC&Rs that the Respondent had currently violated, as the threatened action to remove the patio cover was speculative and had not yet occurred.
3. Commissioner Lowe rejected the dismissal because she found the matter was “ripe for adjudication.” Her decision was based on a June 1, 2017 letter from the Respondent that questioned whether “the presence of the awning [is] a violation of the Association’s governing documents,” which she interpreted as the Respondent alleging a violation.
4. The central dispute was whether the Tempe Gardens Townhouse Corporation had the authority to mandate that homeowners, specifically the Larsons, remove their patio covers at their own expense to facilitate a building repair and painting project.
5. The final decision classifies the Petitioners’ patio cover as a “limited common element” within the meaning of ARIZ. REV. STAT. section 33-1212(4). This classification was crucial to determining financial responsibility.
6. The Respondent cited sections 9 and 9(b) of the CC&Rs. Section 9(b) makes the Respondent responsible for maintaining building exteriors, and section 9 grants it the authority to take “Any cooperative action necessary or appropriate to the proper maintenance and upkeep” of those exteriors.
7. Wayne King testified that removal was necessary to properly and safely complete the work using scaffolding, as required by modern safety laws. He also stated that removal was needed to repair improperly flashed areas behind the covers and to ensure the painting contractor would provide a warranty for the project.
8. The Petitioners presented bids showing the cost to remove and rebuild the cover would be between $3,980 and $5,975. In contrast, Mr. King opined these estimates were very high and that the cost should be closer to $1,000 if existing materials were reused.
9. The final ruling, based on ARIZ. REV. STAT. section 33-1255(C), was that the Petitioners must bear the cost of removing the patio cover and, if they choose, the cost of reinstalling it. This is because the patio cover is a limited common element assigned specifically to their unit.
10. The final outcome was the dismissal of the Larsons’ petition. The Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party in the matter.
——————————————————————————–
Essay Questions
The following questions are designed for a more in-depth analysis. Use the provided documents to construct a detailed, evidence-based response.
1. Trace the procedural history of this case from the initial filing to the final decision. Discuss the key turning points, including the initial recommendation for dismissal, its rejection by the Commissioner, and the reasoning behind the final judgment.
2. Analyze the legal arguments presented by both the Petitioners and the Respondent in the November 2017 hearing. On what specific statutes and CC&R provisions did each side rely, and how did the Administrative Law Judge ultimately interpret these documents?
3. Evaluate the role of expert testimony in this case, specifically focusing on the evidence provided by project manager Wayne King. How did his testimony regarding safety, project requirements, and cost estimates influence the Administrative Law Judge’s findings on the reasonableness of the Respondent’s actions?
4. Discuss the legal concept of a “limited common element” as defined and applied in the source documents. Explain how this classification was central to the final decision regarding financial responsibility for the patio cover’s removal and reinstallation.
5. The initial Administrative Law Judge found no “justiciable controversy,” while the Commissioner later found the matter “ripe for adjudication.” Based on the details in all three documents, explain the arguments for both positions and analyze why the case ultimately proceeded to a full hearing.
——————————————————————————–
Glossary of Key Terms
Definition from Source Context
Administrative Law Judge (ALJ)
An official in the Office of Administrative Hearings who adjudicates complaints regarding condominium and planned community documents and ensures compliance with relevant statutes.
Covenants, Conditions, and Restrictions. The documents that govern the community and are described as a contract between the homeowner’s association and the homeowners.
Justiciable Controversy
A real dispute that a tribunal has the authority to resolve. The initial petition was recommended for dismissal for a lack of a justiciable controversy because the Respondent’s threatened actions were deemed speculative.
Limited Common Element
A legal classification for property defined under ARIZ. REV. STAT. section 33-1212(4). In this case, the Petitioners’ patio cover was classified as such, meaning any common expense associated with its maintenance, repair, or replacement is assessed against the unit to which it is assigned.
Petition
The formal document filed with the Department of Real Estate to initiate a complaint against a homeowner’s association.
Petitioner
The party that files a petition initiating a legal action. In this case, the homeowners James and Shawna Larson.
Preponderance of the Evidence
The standard of proof required in this matter, 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.”
Prevailing Party
The party that is successful in a legal dispute. In the final order, the Respondent was deemed the prevailing party.
Respondent
The party against whom a petition is filed. In this case, the Tempe Gardens Townhouse Corporation.
Ripe for Adjudication
A term used by the Commissioner of the Department of Real Estate to indicate that a dispute is ready to be formally heard and decided by the Administrative Law Judge.
Blog Post – 17F-H1717038-REL
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These documents chronicle the legal dispute between James and Shawna Larson (Petitioners) and the Tempe Gardens Townhouse Corporation (Respondent) concerning the removal of the Larsons’ patio cover for building maintenance. Initially, an Administrative Law Judge (ALJ) recommended dismissal because the Petitioners did not allege a current violation of the governing documents, thus lacking a justiciable controversy since the association had only threatened action. However, the Department of Real Estate Commissioner rejected this recommendation, asserting that a violation of the governing documents was alleged by the Respondent, making the matter ripe for adjudication. Following a rehearing, a different ALJ issued a final decision finding that the Respondent acted reasonably in requiring the patio cover removal for safe and proper painting and repairs, concluding that the Petitioners must bear the cost of removal and reinstallation as the cover is a limited common element.
Based on 3 sources
Case Participants
Petitioner Side
James Larson(petitioner)
Shawna Larson(petitioner)
Lisa M. Hanger(attorney) Counsel for Petitioners
Respondent Side
Nathan Tennyson(attorney) Brown Alcott PLLC Counsel for Respondent Tempe Gardens Townhouse Corporation
Wayne King(witness) Project manager hired by Respondent for the painting project; provided testimony
Neutral Parties
Suzanne Marwil(ALJ) Office of Administrative Hearings Authored Recommended Order Dismissal dated August 25, 2017
Thomas Shedden(ALJ) Office of Administrative Hearings Authored Administrative Law Judge Decision dated December 11, 2017
Judy Lowe(Commissioner) Arizona Department of Real Estate Rejected Recommendation of Dismissal
Dan Gardner(HOA coordinator) Transmitted documents (Order Rejecting Recommendation of Dismissal)
Other Participants
Chris Morga(contractor) Jacob and Co. Mentioned as a vendor who could remove patio covers
The ALJ dismissed the petition, ruling that the HOA acted reasonably and had the authority under the CC&Rs to require the removal of the homeowner's patio cover for necessary painting and repairs. The ALJ determined that because the patio cover is a limited common element, the Petitioners must bear the cost of removal and reinstallation according to A.R.S. § 33-1255(C).
Why this result: Petitioners failed to prove the HOA violated CC&Rs or acted unreasonably, and statutory law assigned the expense burden for the limited common element to the homeowner.
Key Issues & Findings
Authority of HOA to mandate removal of homeowner's patio cover for maintenance and assignment of removal/reinstallation costs.
Petitioners challenged the Respondent HOA's authority and reasonableness in requiring them to remove their patio cover, a limited common element, for building painting and repair, and disputed the requirement that Petitioners bear the costs. The ALJ concluded that the HOA's plan was reasonable, the HOA had the authority under CC&R sections 9 and 9(b), and Petitioners must bear the cost of removal and reinstallation under A.R.S. § 33-1255(C).
Orders: Petitioners’ petition is dismissed. Respondent is deemed the prevailing party. Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
Analytics Highlights
Topics: HOA authority, limited common element, maintenance costs, patio cover, CC&Rs, statutory interpretation, dismissal, prevailing party
Additional Citations:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
A.R.S. § 32-2199
A.R.S. § 32-2199.02
A.R.S. § 41-1092.09
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona
Audio Overview
Decision Documents
17F-H1717038-REL Decision – 583987.pdf
Uploaded 2025-10-08T06:51:36 (53.0 KB)
17F-H1717038-REL Decision – 585505.pdf
Uploaded 2025-10-08T06:51:37 (385.9 KB)
Briefing Doc – 17F-H1717038-REL
Briefing on Larson v. Tempe Gardens Townhouse Corporation
Executive Summary
This briefing synthesizes the legal dispute between homeowners James and Shawna Larson and the Tempe Gardens Townhouse Corporation (the “Respondent” or “HOA”). The core conflict centered on the HOA’s directive that the Larsons remove their wooden patio cover at their own expense to facilitate a community-wide building repair and painting project.
The case progressed through two distinct phases. Initially, an Administrative Law Judge (ALJ) recommended dismissing the Larsons’ petition for a lack of a “justiciable controversy,” reasoning that the HOA had not yet acted on its threat to remove the patio cover, rendering the dispute speculative. However, the Commissioner of the Department of Real Estate rejected this recommendation, finding the matter was “ripe for adjudication,” and ordered a full hearing on the merits.
In the final decision, a second ALJ dismissed the Larsons’ petition and ruled in favor of the HOA. The judge found the HOA’s plan to be reasonable and necessary for the proper and safe completion of the project, based on credible testimony from the project manager. The decision affirmed the HOA’s authority under its CC&Rs to require the removal of the structure. Crucially, the ruling established that the patio cover is a “limited common element” under Arizona law. Consequently, pursuant to Arizona Revised Statutes, the homeowners (the Larsons) are exclusively responsible for all costs associated with it, including its removal and potential reinstallation.
Procedural History and Jurisdictional Rulings
Initial Petition and Dismissal Recommendation
On June 16, 2017, James and Shawna Larson filed a petition with the Department of Real Estate against their HOA, alleging a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs). However, the initial filing did not specify which provisions had been violated.
Upon inquiry, the Petitioners’ counsel admitted via email that no specific provision of the CC&Rs had yet been violated. Instead, their concern was that section 10(a) would be violated if the HOA acted on its threat to forcibly remove their patio cover and charge them for the cost.
This led to the “ORDER RECOMMENDING DISMISSAL FOR LACK OF JUSTICIABLE CONTROVERSY,” issued on August 25, 2017, by Administrative Law Judge Suzanne Marwil. The key findings of this order were:
• Speculative Harm: The Judge found that the HOA’s actions “have not yet been undertaken and our [are] speculative at this juncture.”
• Lack of Jurisdiction: The order stated that the Office of Administrative Hearings’ jurisdiction, per A.R.S. § 32-2199, is limited to adjudicating existing violations of community documents, not potential future ones.
• Misunderstanding by Both Parties: The order noted, “Both parties fundamentally misunderstand the limits of this Tribunal’s jurisdiction.” The Petitioners were seeking a ruling on a future action, while the Respondent was urging the Tribunal to find the Petitioners had violated the CC&Rs, which was not the subject of the petition.
• Recommended Forum: The Judge suggested that the appropriate forum for the Petitioners would be a declaratory judgment action in superior court.
Rejection of Dismissal and Re-Hearing
On August 31, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued an “ORDER REJECTING RECOMMENDATION OF DISMISSAL.”
• The Commissioner rejected the ALJ’s finding that the matter lacked a justiciable controversy.
• The order cited a letter from the Respondent dated June 1, 2017, which posed the question: “Is the presence of the awning a violation of the Association’s governing documents?”
• This question was deemed sufficient to make the matter “ripe for adjudication.”
• The Commissioner requested that the hearing be rescheduled for a ruling on the matter. A re-hearing was subsequently conducted on November 20, 2017, before Administrative Law Judge Thomas Shedden.
Analysis of the Merits of the Dispute
The re-hearing focused on the substantive conflict: whether the HOA had the authority to compel the Larsons to remove their patio cover at their own expense for the maintenance project.
Respondent’s (HOA) Case
The HOA, consisting of 169 units, initiated a project to make necessary repairs to its twenty-five buildings and then have them painted. The HOA’s position was based on the following points:
• Legal Authority: The HOA asserted its authority under sections 9 and 9(b) of its CC&Rs, which state that the HOA is responsible for maintaining building exteriors and that “Any cooperative action necessary or appropriate to the proper maintenance and upkeep of the… [building] exteriors… shall be taken by the [Respondent].”
• Project Necessity: The project manager, Wayne King, provided testimony that the HOA’s board deemed credible and reasonable.
◦ Safety: King stated that all five bidding contractors required the patio covers to be removed to ensure a safe work environment as mandated by the Arizona Department of Occupational Safety and Health (OSHA).
◦ Logistics: Standard scaffolding would not fit without removing the covers, commercial scaffolding would not provide full access, a forklift was not viable due to overhead power lines, and allowing painters to walk on homeowner patio covers was unsafe.
◦ Quality of Work: The project involved sanding, power washing, and patching before painting to “do the job right.” Many covers had been improperly flashed, causing damage to the buildings that needed repair.
◦ Warranty: The paint company would not provide a warranty for the project if individual homeowners, such as the Larsons, were permitted to paint their own units.
Petitioners’ (Larsons’) Case
The Larsons, who purchased their unit in 1999 with the wooden patio cover already in place, contested the HOA’s demands.
• Challenge to Authority: The Petitioners argued that the HOA had no legal authority to demand the removal of their patio cover.
• Unreasonable Cost: They asserted that the cost of removal and reinstallation was unreasonable, submitting two bids:
◦ One bid quoted $1,250 to remove and dispose of the cover and $3,980 to remove and rebuild it with new wood.
◦ A second bid quoted $5,975 to remove and then replace the structure.
• Proposed Alternative: In a letter dated May 19, 2017, the Larsons offered to have the back of their unit painted at their own expense.
• Compromise Offer: During the November 20, 2017 hearing, after hearing the project manager’s testimony, Ms. Larson offered that they would agree not to reinstall the patio cover if the HOA would pay for its removal.
Final Administrative Law Judge Decision
On December 11, 2017, ALJ Thomas Shedden issued a final decision dismissing the Larsons’ petition and finding in favor of the Respondent, Tempe Gardens Townhouse Corporation.
Key Findings and Conclusions of Law
Finding/Conclusion
Details
Standard of Review
The HOA’s decisions regarding maintenance and repair are given deference, provided they act reasonably.
Reasonableness of HOA Action
Based on the “credible testimony” of Wayne King, the Judge found that the HOA’s proposed plan for repairing and painting the buildings, which required the removal of patio covers, was reasonable.
HOA Authority
CC&R sections 9 and 9(b) were found to be “sufficient to show that Respondent has the authority to remove Petitioners’ patio to complete the painting work.”
Patio Cover Classification
The Petitioners’ patio cover was legally classified as a “limited common element” within the meaning of ARIZ. REV. STAT. section 33-1212(4).
Cost Responsibility
The central issue of payment was decided by statute. The Judge concluded that under a “reasonable reading of ARIZ. REV. STAT. section 33-1255(C),” any common expense associated with a limited common element “shall be assessed exclusively against the units benefitted.”
Final Order
Based on these findings, the Administrative Law Judge ordered the following:
“The evidence of record supports a conclusion that Respondent has authority to require Petitioners to remove their patio cover to allow the building to be properly and safely painted, and that Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.”
The final order was that the Petitioners’ petition be dismissed, and the Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party.
The ALJ dismissed the petition, ruling that the HOA acted reasonably and had the authority under the CC&Rs to require the removal of the homeowner's patio cover for necessary painting and repairs. The ALJ determined that because the patio cover is a limited common element, the Petitioners must bear the cost of removal and reinstallation according to A.R.S. § 33-1255(C).
Why this result: Petitioners failed to prove the HOA violated CC&Rs or acted unreasonably, and statutory law assigned the expense burden for the limited common element to the homeowner.
Key Issues & Findings
Authority of HOA to mandate removal of homeowner's patio cover for maintenance and assignment of removal/reinstallation costs.
Petitioners challenged the Respondent HOA's authority and reasonableness in requiring them to remove their patio cover, a limited common element, for building painting and repair, and disputed the requirement that Petitioners bear the costs. The ALJ concluded that the HOA's plan was reasonable, the HOA had the authority under CC&R sections 9 and 9(b), and Petitioners must bear the cost of removal and reinstallation under A.R.S. § 33-1255(C).
Orders: Petitioners’ petition is dismissed. Respondent is deemed the prevailing party. Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
Analytics Highlights
Topics: HOA authority, limited common element, maintenance costs, patio cover, CC&Rs, statutory interpretation, dismissal, prevailing party
Additional Citations:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
A.R.S. § 32-2199
A.R.S. § 32-2199.02
A.R.S. § 41-1092.09
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona
Audio Overview
Decision Documents
17F-H1717038-REL Decision – 583987.pdf
Uploaded 2025-10-08T06:58:14 (53.0 KB)
17F-H1717038-REL Decision – 585505.pdf
Uploaded 2025-10-08T06:58:15 (385.9 KB)
Briefing Doc – 17F-H1717038-REL
Briefing on Larson v. Tempe Gardens Townhouse Corporation
Executive Summary
This briefing synthesizes the legal dispute between homeowners James and Shawna Larson and the Tempe Gardens Townhouse Corporation (the “Respondent” or “HOA”). The core conflict centered on the HOA’s directive that the Larsons remove their wooden patio cover at their own expense to facilitate a community-wide building repair and painting project.
The case progressed through two distinct phases. Initially, an Administrative Law Judge (ALJ) recommended dismissing the Larsons’ petition for a lack of a “justiciable controversy,” reasoning that the HOA had not yet acted on its threat to remove the patio cover, rendering the dispute speculative. However, the Commissioner of the Department of Real Estate rejected this recommendation, finding the matter was “ripe for adjudication,” and ordered a full hearing on the merits.
In the final decision, a second ALJ dismissed the Larsons’ petition and ruled in favor of the HOA. The judge found the HOA’s plan to be reasonable and necessary for the proper and safe completion of the project, based on credible testimony from the project manager. The decision affirmed the HOA’s authority under its CC&Rs to require the removal of the structure. Crucially, the ruling established that the patio cover is a “limited common element” under Arizona law. Consequently, pursuant to Arizona Revised Statutes, the homeowners (the Larsons) are exclusively responsible for all costs associated with it, including its removal and potential reinstallation.
Procedural History and Jurisdictional Rulings
Initial Petition and Dismissal Recommendation
On June 16, 2017, James and Shawna Larson filed a petition with the Department of Real Estate against their HOA, alleging a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs). However, the initial filing did not specify which provisions had been violated.
Upon inquiry, the Petitioners’ counsel admitted via email that no specific provision of the CC&Rs had yet been violated. Instead, their concern was that section 10(a) would be violated if the HOA acted on its threat to forcibly remove their patio cover and charge them for the cost.
This led to the “ORDER RECOMMENDING DISMISSAL FOR LACK OF JUSTICIABLE CONTROVERSY,” issued on August 25, 2017, by Administrative Law Judge Suzanne Marwil. The key findings of this order were:
• Speculative Harm: The Judge found that the HOA’s actions “have not yet been undertaken and our [are] speculative at this juncture.”
• Lack of Jurisdiction: The order stated that the Office of Administrative Hearings’ jurisdiction, per A.R.S. § 32-2199, is limited to adjudicating existing violations of community documents, not potential future ones.
• Misunderstanding by Both Parties: The order noted, “Both parties fundamentally misunderstand the limits of this Tribunal’s jurisdiction.” The Petitioners were seeking a ruling on a future action, while the Respondent was urging the Tribunal to find the Petitioners had violated the CC&Rs, which was not the subject of the petition.
• Recommended Forum: The Judge suggested that the appropriate forum for the Petitioners would be a declaratory judgment action in superior court.
Rejection of Dismissal and Re-Hearing
On August 31, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued an “ORDER REJECTING RECOMMENDATION OF DISMISSAL.”
• The Commissioner rejected the ALJ’s finding that the matter lacked a justiciable controversy.
• The order cited a letter from the Respondent dated June 1, 2017, which posed the question: “Is the presence of the awning a violation of the Association’s governing documents?”
• This question was deemed sufficient to make the matter “ripe for adjudication.”
• The Commissioner requested that the hearing be rescheduled for a ruling on the matter. A re-hearing was subsequently conducted on November 20, 2017, before Administrative Law Judge Thomas Shedden.
Analysis of the Merits of the Dispute
The re-hearing focused on the substantive conflict: whether the HOA had the authority to compel the Larsons to remove their patio cover at their own expense for the maintenance project.
Respondent’s (HOA) Case
The HOA, consisting of 169 units, initiated a project to make necessary repairs to its twenty-five buildings and then have them painted. The HOA’s position was based on the following points:
• Legal Authority: The HOA asserted its authority under sections 9 and 9(b) of its CC&Rs, which state that the HOA is responsible for maintaining building exteriors and that “Any cooperative action necessary or appropriate to the proper maintenance and upkeep of the… [building] exteriors… shall be taken by the [Respondent].”
• Project Necessity: The project manager, Wayne King, provided testimony that the HOA’s board deemed credible and reasonable.
◦ Safety: King stated that all five bidding contractors required the patio covers to be removed to ensure a safe work environment as mandated by the Arizona Department of Occupational Safety and Health (OSHA).
◦ Logistics: Standard scaffolding would not fit without removing the covers, commercial scaffolding would not provide full access, a forklift was not viable due to overhead power lines, and allowing painters to walk on homeowner patio covers was unsafe.
◦ Quality of Work: The project involved sanding, power washing, and patching before painting to “do the job right.” Many covers had been improperly flashed, causing damage to the buildings that needed repair.
◦ Warranty: The paint company would not provide a warranty for the project if individual homeowners, such as the Larsons, were permitted to paint their own units.
Petitioners’ (Larsons’) Case
The Larsons, who purchased their unit in 1999 with the wooden patio cover already in place, contested the HOA’s demands.
• Challenge to Authority: The Petitioners argued that the HOA had no legal authority to demand the removal of their patio cover.
• Unreasonable Cost: They asserted that the cost of removal and reinstallation was unreasonable, submitting two bids:
◦ One bid quoted $1,250 to remove and dispose of the cover and $3,980 to remove and rebuild it with new wood.
◦ A second bid quoted $5,975 to remove and then replace the structure.
• Proposed Alternative: In a letter dated May 19, 2017, the Larsons offered to have the back of their unit painted at their own expense.
• Compromise Offer: During the November 20, 2017 hearing, after hearing the project manager’s testimony, Ms. Larson offered that they would agree not to reinstall the patio cover if the HOA would pay for its removal.
Final Administrative Law Judge Decision
On December 11, 2017, ALJ Thomas Shedden issued a final decision dismissing the Larsons’ petition and finding in favor of the Respondent, Tempe Gardens Townhouse Corporation.
Key Findings and Conclusions of Law
Finding/Conclusion
Details
Standard of Review
The HOA’s decisions regarding maintenance and repair are given deference, provided they act reasonably.
Reasonableness of HOA Action
Based on the “credible testimony” of Wayne King, the Judge found that the HOA’s proposed plan for repairing and painting the buildings, which required the removal of patio covers, was reasonable.
HOA Authority
CC&R sections 9 and 9(b) were found to be “sufficient to show that Respondent has the authority to remove Petitioners’ patio to complete the painting work.”
Patio Cover Classification
The Petitioners’ patio cover was legally classified as a “limited common element” within the meaning of ARIZ. REV. STAT. section 33-1212(4).
Cost Responsibility
The central issue of payment was decided by statute. The Judge concluded that under a “reasonable reading of ARIZ. REV. STAT. section 33-1255(C),” any common expense associated with a limited common element “shall be assessed exclusively against the units benefitted.”
Final Order
Based on these findings, the Administrative Law Judge ordered the following:
“The evidence of record supports a conclusion that Respondent has authority to require Petitioners to remove their patio cover to allow the building to be properly and safely painted, and that Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.”
The final order was that the Petitioners’ petition be dismissed, and the Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party.
The ALJ dismissed the petition, ruling that the HOA acted reasonably and had the authority under the CC&Rs to require the removal of the homeowner's patio cover for necessary painting and repairs. The ALJ determined that because the patio cover is a limited common element, the Petitioners must bear the cost of removal and reinstallation according to A.R.S. § 33-1255(C).
Why this result: Petitioners failed to prove the HOA violated CC&Rs or acted unreasonably, and statutory law assigned the expense burden for the limited common element to the homeowner.
Key Issues & Findings
Authority of HOA to mandate removal of homeowner's patio cover for maintenance and assignment of removal/reinstallation costs.
Petitioners challenged the Respondent HOA's authority and reasonableness in requiring them to remove their patio cover, a limited common element, for building painting and repair, and disputed the requirement that Petitioners bear the costs. The ALJ concluded that the HOA's plan was reasonable, the HOA had the authority under CC&R sections 9 and 9(b), and Petitioners must bear the cost of removal and reinstallation under A.R.S. § 33-1255(C).
Orders: Petitioners’ petition is dismissed. Respondent is deemed the prevailing party. Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
Analytics Highlights
Topics: HOA authority, limited common element, maintenance costs, patio cover, CC&Rs, statutory interpretation, dismissal, prevailing party
Additional Citations:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
A.R.S. § 32-2199
A.R.S. § 32-2199.02
A.R.S. § 41-1092.09
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona
Audio Overview
Decision Documents
17F-H1717038-REL Decision – 583987.pdf
Uploaded 2025-10-08T07:02:29 (53.0 KB)
17F-H1717038-REL Decision – 585505.pdf
Uploaded 2025-10-08T07:02:30 (385.9 KB)
Briefing Doc – 17F-H1717038-REL
Briefing on Larson v. Tempe Gardens Townhouse Corporation
Executive Summary
This briefing synthesizes the legal dispute between homeowners James and Shawna Larson and the Tempe Gardens Townhouse Corporation (the “Respondent” or “HOA”). The core conflict centered on the HOA’s directive that the Larsons remove their wooden patio cover at their own expense to facilitate a community-wide building repair and painting project.
The case progressed through two distinct phases. Initially, an Administrative Law Judge (ALJ) recommended dismissing the Larsons’ petition for a lack of a “justiciable controversy,” reasoning that the HOA had not yet acted on its threat to remove the patio cover, rendering the dispute speculative. However, the Commissioner of the Department of Real Estate rejected this recommendation, finding the matter was “ripe for adjudication,” and ordered a full hearing on the merits.
In the final decision, a second ALJ dismissed the Larsons’ petition and ruled in favor of the HOA. The judge found the HOA’s plan to be reasonable and necessary for the proper and safe completion of the project, based on credible testimony from the project manager. The decision affirmed the HOA’s authority under its CC&Rs to require the removal of the structure. Crucially, the ruling established that the patio cover is a “limited common element” under Arizona law. Consequently, pursuant to Arizona Revised Statutes, the homeowners (the Larsons) are exclusively responsible for all costs associated with it, including its removal and potential reinstallation.
Procedural History and Jurisdictional Rulings
Initial Petition and Dismissal Recommendation
On June 16, 2017, James and Shawna Larson filed a petition with the Department of Real Estate against their HOA, alleging a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs). However, the initial filing did not specify which provisions had been violated.
Upon inquiry, the Petitioners’ counsel admitted via email that no specific provision of the CC&Rs had yet been violated. Instead, their concern was that section 10(a) would be violated if the HOA acted on its threat to forcibly remove their patio cover and charge them for the cost.
This led to the “ORDER RECOMMENDING DISMISSAL FOR LACK OF JUSTICIABLE CONTROVERSY,” issued on August 25, 2017, by Administrative Law Judge Suzanne Marwil. The key findings of this order were:
• Speculative Harm: The Judge found that the HOA’s actions “have not yet been undertaken and our [are] speculative at this juncture.”
• Lack of Jurisdiction: The order stated that the Office of Administrative Hearings’ jurisdiction, per A.R.S. § 32-2199, is limited to adjudicating existing violations of community documents, not potential future ones.
• Misunderstanding by Both Parties: The order noted, “Both parties fundamentally misunderstand the limits of this Tribunal’s jurisdiction.” The Petitioners were seeking a ruling on a future action, while the Respondent was urging the Tribunal to find the Petitioners had violated the CC&Rs, which was not the subject of the petition.
• Recommended Forum: The Judge suggested that the appropriate forum for the Petitioners would be a declaratory judgment action in superior court.
Rejection of Dismissal and Re-Hearing
On August 31, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued an “ORDER REJECTING RECOMMENDATION OF DISMISSAL.”
• The Commissioner rejected the ALJ’s finding that the matter lacked a justiciable controversy.
• The order cited a letter from the Respondent dated June 1, 2017, which posed the question: “Is the presence of the awning a violation of the Association’s governing documents?”
• This question was deemed sufficient to make the matter “ripe for adjudication.”
• The Commissioner requested that the hearing be rescheduled for a ruling on the matter. A re-hearing was subsequently conducted on November 20, 2017, before Administrative Law Judge Thomas Shedden.
Analysis of the Merits of the Dispute
The re-hearing focused on the substantive conflict: whether the HOA had the authority to compel the Larsons to remove their patio cover at their own expense for the maintenance project.
Respondent’s (HOA) Case
The HOA, consisting of 169 units, initiated a project to make necessary repairs to its twenty-five buildings and then have them painted. The HOA’s position was based on the following points:
• Legal Authority: The HOA asserted its authority under sections 9 and 9(b) of its CC&Rs, which state that the HOA is responsible for maintaining building exteriors and that “Any cooperative action necessary or appropriate to the proper maintenance and upkeep of the… [building] exteriors… shall be taken by the [Respondent].”
• Project Necessity: The project manager, Wayne King, provided testimony that the HOA’s board deemed credible and reasonable.
◦ Safety: King stated that all five bidding contractors required the patio covers to be removed to ensure a safe work environment as mandated by the Arizona Department of Occupational Safety and Health (OSHA).
◦ Logistics: Standard scaffolding would not fit without removing the covers, commercial scaffolding would not provide full access, a forklift was not viable due to overhead power lines, and allowing painters to walk on homeowner patio covers was unsafe.
◦ Quality of Work: The project involved sanding, power washing, and patching before painting to “do the job right.” Many covers had been improperly flashed, causing damage to the buildings that needed repair.
◦ Warranty: The paint company would not provide a warranty for the project if individual homeowners, such as the Larsons, were permitted to paint their own units.
Petitioners’ (Larsons’) Case
The Larsons, who purchased their unit in 1999 with the wooden patio cover already in place, contested the HOA’s demands.
• Challenge to Authority: The Petitioners argued that the HOA had no legal authority to demand the removal of their patio cover.
• Unreasonable Cost: They asserted that the cost of removal and reinstallation was unreasonable, submitting two bids:
◦ One bid quoted $1,250 to remove and dispose of the cover and $3,980 to remove and rebuild it with new wood.
◦ A second bid quoted $5,975 to remove and then replace the structure.
• Proposed Alternative: In a letter dated May 19, 2017, the Larsons offered to have the back of their unit painted at their own expense.
• Compromise Offer: During the November 20, 2017 hearing, after hearing the project manager’s testimony, Ms. Larson offered that they would agree not to reinstall the patio cover if the HOA would pay for its removal.
Final Administrative Law Judge Decision
On December 11, 2017, ALJ Thomas Shedden issued a final decision dismissing the Larsons’ petition and finding in favor of the Respondent, Tempe Gardens Townhouse Corporation.
Key Findings and Conclusions of Law
Finding/Conclusion
Details
Standard of Review
The HOA’s decisions regarding maintenance and repair are given deference, provided they act reasonably.
Reasonableness of HOA Action
Based on the “credible testimony” of Wayne King, the Judge found that the HOA’s proposed plan for repairing and painting the buildings, which required the removal of patio covers, was reasonable.
HOA Authority
CC&R sections 9 and 9(b) were found to be “sufficient to show that Respondent has the authority to remove Petitioners’ patio to complete the painting work.”
Patio Cover Classification
The Petitioners’ patio cover was legally classified as a “limited common element” within the meaning of ARIZ. REV. STAT. section 33-1212(4).
Cost Responsibility
The central issue of payment was decided by statute. The Judge concluded that under a “reasonable reading of ARIZ. REV. STAT. section 33-1255(C),” any common expense associated with a limited common element “shall be assessed exclusively against the units benefitted.”
Final Order
Based on these findings, the Administrative Law Judge ordered the following:
“The evidence of record supports a conclusion that Respondent has authority to require Petitioners to remove their patio cover to allow the building to be properly and safely painted, and that Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.”
The final order was that the Petitioners’ petition be dismissed, and the Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party.
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
17F-H1716004-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2017-08-10
Administrative Law Judge
Thomas Shedden
Outcome
loss
Filing Fees Refunded
$0.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Brian Sopatyk
Counsel
Nathan Andrews
Respondent
The Lakeshore Village Condo. Association, Inc.
Counsel
Bradley R. Jardine
Alleged Violations
ARIZ. REV. STAT. section 33-1260
Outcome Summary
The ALJ decision, certified as the final administrative decision, dismissed the Petitioner's claim after rehearing, finding that the Petitioner failed to prove the Association violated A.R.S. § 33-1260. The challenged $660 fee was determined to be a permissible working capital contribution under the CC&Rs, not a fee restricted by the statutory cap on resale disclosure services.
Why this result: Petitioner failed to meet the burden of proof; the fee in question was determined to be a working capital fee/assessment governed by the CC&Rs and ARS § 33-1242(A)(2), and not subject to the limitation set forth in ARS § 33-1260.
Key Issues & Findings
Alleged excessive fee collection for resale disclosure/transfer services
Petitioner alleged the Association violated A.R.S. § 33-1260 by charging a $660 fee, which he argued exceeded the statutory maximum of $400 for resale disclosure/transfer services. The Association argued the $660 fee was a working capital contribution mandated by CC&R section 8.13 and was mislabeled, and therefore not subject to the statutory limitations of § 33-1260.
Orders: Brian D. Sopatyk’s petition is dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
ARIZ. REV. STAT. section 33-1260
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
ARIZ. REV. STAT. § 32-2199.01
ARIZ. REV. STAT. § 32-2199.02
ARIZ. REV. STAT. § 33-1242(A)(2)
Analytics Highlights
Topics: HOA fee dispute, Working capital fee, Transfer fee, Resale disclosure, Statutory interpretation
Additional Citations:
ARIZ. REV. STAT. § 33-1260
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
ARIZ. REV. STAT. § 32-2199.01
ARIZ. REV. STAT. § 32-2199.02
ARIZ. REV. STAT. § 33-1242(A)(2)
Video Overview
Audio Overview
Decision Documents
17F-H1716004-REL-RHG Decision – 531040.pdf
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17F-H1716004-REL-RHG Decision – 540004.pdf
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17F-H1716004-REL-RHG Decision – 571793.pdf
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17F-H1716004-REL-RHG Decision – 580965.pdf
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17F-H1716004-REL-RHG Decision – 593042.pdf
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17F-H1716004-REL-RHG Decision – 593045.pdf
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Briefing Doc – 17F-H1716004-REL-RHG
Briefing: Sopatyk v. Lakeshore Village Condominium Association, Inc.
Executive Summary
This document synthesizes the findings and outcomes of an administrative legal case brought by petitioner Brian Sopatyk against The Lakeshore Village Condominium Association, Inc. The core of the dispute was Mr. Sopatyk’s allegation that the Association charged a “transfer fee” of $660 upon the sale of a condominium unit, in violation of Arizona Revised Statute (A.R.S.) § 33-1260, which caps fees for resale disclosure services at an aggregate of $400.
Following an initial hearing and a subsequent rehearing, the Administrative Law Judge (ALJ) consistently ruled in favor of the Association, dismissing Mr. Sopatyk’s petition on both occasions. The central finding was that the petitioner failed to prove a statutory violation by a preponderance of the evidence. The Association successfully argued that the disputed $660 charge was not a resale disclosure fee governed by A.R.S. § 33-1260, but rather a “working capital fee” authorized by its Covenants, Conditions, and Restrictions (CC&Rs). The Association admitted that this fee had been historically mislabeled as a “transfer fee,” an error it had since identified and corrected. The actual fee charged for resale disclosure documents was a separate, compliant $30 “statement fee.” The ALJ’s decision from the rehearing was certified as the final administrative decision in the matter on August 10, 2017.
State of Arizona, Office of Administrative Hearings
Petitioner
Brian Sopatyk
Respondent
The Lakeshore Village Condominium Association, Inc.
Core Allegation
Violation of A.R.S. § 33-1260, which limits fees for resale disclosure services to a maximum of $400.
Final Outcome
Petition Dismissed. The Respondent was deemed the prevailing party.
Chronology of Legal Proceedings
March 2, 2015
The Association issues a disclosure statement for Mr. Sopatyk’s purchase, showing a $660 “transfer fee” and a $30 “statement fee.”
May 18, 2016
Prompted by Mr. Sopatyk, the Association’s Board discusses the fee structure. It concludes the $660 fee is a mislabeled “working capital fee” and not a statutory violation.
August 9, 2016
Mr. Sopatyk files a petition with the Arizona Department of Real Estate alleging the violation.
November 14, 2016
The initial administrative hearing is conducted before ALJ Thomas Shedden.
November 29, 2016
ALJ Shedden issues a decision dismissing Mr. Sopatyk’s petition.
December 13, 2016
The Commissioner of the Department of Real Estate adopts the ALJ’s recommendation, issuing a Final Order to dismiss the petition.
Post-Dec. 2016
Mr. Sopatyk requests a rehearing of the matter.
June 9, 2017
The rehearing is conducted, again before ALJ Thomas Shedden.
June 26, 2017
ALJ Shedden issues a new decision, once again dismissing Mr. Sopatyk’s petition.
August 10, 2017
With no modifying action from the Department of Real Estate, the ALJ’s June 26 decision is certified as the final administrative decision.
Core Dispute Analysis
The case centered on the interpretation and classification of two fees charged by the Association during the sale of Mr. Sopatyk’s condominium unit.
Petitioner’s Position (Brian Sopatyk)
• Allegation of Violation: Mr. Sopatyk alleged that the Association charged a “transfer fee” of $660, which directly contravened the $400 statutory maximum established by A.R.S. § 33-1260 for services related to resale disclosure.
• Evidence Presented: The petitioner submitted a March 2, 2015 disclosure form from the Association listing both a “660transferfee”anda”30 statement fee.” A HUD-1 disclosure statement for the purchase was also entered, showing the $660 “Transfer Fee” was split, with $330 paid from the buyer’s (Sopatyk’s) funds and $330 from the seller’s funds.
• Contradictory Testimony: The ALJ noted a discrepancy in the petitioner’s statements. The sworn petition stated the $660 fee was split between him and the seller, while his testimony at the rehearing claimed he “had in fact paid the entire $660 as part of the negotiated price.” The ALJ decision stated, “either Mr. Sopatyk’s sworn statement or his testimony must be false.”
• Requested Remedies: Mr. Sopatyk requested that the Association be ordered to comply with the statute, that refunds be paid to those who paid fees in excess of the statutory maximum, and that a civil penalty be imposed against the Association.
Respondent’s Position (The Lakeshore Village Condo. Assoc.)
• Distinction Between Fees: The Association’s central argument was that two separate and legally distinct fees were assessed:
1. A $30 Resale Statement Fee: This was the charge for preparing documents pursuant to A.R.S. § 33-1260 and was well within the $400 limit.
2. A $660 Working Capital Fee: This fee was authorized under a separate provision, Section 8.13 of the Association’s CC&Rs, which mandates an assessment from each new owner equal to two monthly installments to fund the Association’s working capital (reserve) fund.
• “Mislabeled” Fee: The Association acknowledged that the $660 working capital fee was incorrectly labeled as a “transfer fee.” Association Manager Amy Telnes testified that she received erroneous information from the prior manager and had been using the wrong label.
• Board Action and Corrective Measures: The minutes from the May 18, 2016 Board meeting show that the Board, after reviewing a legal opinion, concluded the issue was one of “labeling, not violating the statute.” The Board directed Ms. Telnes to perform an accounting and transfer all such fees collected into the Reserve Account. To prevent future confusion, the Board also voted to assess a single $400 transfer fee on all future transactions, with no other fees.
• Fund Allocation: Ms. Telnes testified that the $660 fee was deposited into the Association’s reserve fund, consistent with its purpose as a working capital contribution, while the $30 fee was the charge pursuant to A.R.S. § 33-1260(C).
Administrative Law Judge’s Findings and Rulings
ALJ Thomas Shedden presided over both the initial hearing and the rehearing, reaching the same conclusion in both instances.
Key Rulings and Legal Reasoning
• Burden of Proof: The ALJ established that Mr. Sopatyk, as the petitioner, bore the burden of proving the alleged violation by a “preponderance of the evidence.”
• Core Finding: The evidence demonstrated that the Association charged two distinct fees. The $30 fee was for document preparation under A.R.S. § 33-1260, while the $660 fee was a working capital assessment authorized by CC&R Section 8.13. The ALJ concluded that A.R.S. § 33-1260 was not applicable to the $660 fee.
• Conclusion on Violation: Based on the evidence, including the testimony of the Association manager and the board meeting minutes, the ALJ found that the $660 fee was mislabeled but was not collected for services related to resale disclosure. Therefore, Mr. Sopatyk did not meet his burden to show that the Association violated the statute.
• Rejection of Harm-Based Argument: The ALJ did not accept the Association’s argument that the claim should fail because Mr. Sopatyk did not personally pay over $400. The judge clarified that A.R.S. § 33-2199.01 “does not require this type of particularized harm, but rather applies to all statutory violations.”
• Dismissal of Petition: In both the November 29, 2016 decision and the June 26, 2017 decision, the order was to dismiss Mr. Sopatyk’s petition and deem the Association the prevailing party.
Final Disposition and Legal Status
The decision issued by ALJ Shedden on June 26, 2017, was transmitted to the Arizona Department of Real Estate. The Department had until August 1, 2017, to accept, reject, or modify the decision. As no action was taken by the deadline, the Office of Administrative Hearings issued a Certification of Decision of Administrative Law Judge on August 10, 2017. This certification established the ALJ’s decision as the final administrative decision of the Department of Real Estate in the matter.
Key Legal Citations and Definitions
• A.R.S. § 33-1260 (Resale of Units; Information Required): This Arizona statute governs the information a condominium association must provide to a prospective purchaser. It explicitly limits the fees an association can charge for these services:
• CC&R Section 8.13 (Transfer Fee and Working Capital Fund): This section of The Lakeshore Village Condominium Association’s governing documents provides the authority to collect a fee from new owners for a different purpose:
• Preponderance of the Evidence: The standard of proof required for the petitioner to prevail, defined in the legal decisions as:
Study Guide – 17F-H1716004-REL-RHG
Study Guide: Sopatyk v. The Lakeshore Village Condo. Association, Inc.
Short Answer Quiz
Instructions: Answer the following questions in 2-3 complete sentences, drawing exclusively from the information provided in the case documents.
1. Identify the petitioner and the respondent in this case, and state the core legal violation the petitioner alleged.
2. What specific fees were charged during the petitioner’s condominium purchase that became the central point of the dispute?
3. According to the Association, what was the true nature of the $660 fee, and how did it explain the “transfer fee” label on the disclosure documents?
4. What role did Amy Telnes, the Association manager, play in explaining the history of the disputed fee?
5. What actions did the Association’s Board take during its meeting on May 18, 2016, to address the petitioner’s concerns and correct its internal procedures?
6. Who held the burden of proof in this matter, and what was the legal standard required to meet that burden?
7. What was the official outcome of the initial administrative hearing held on November 14, 2016?
8. Why was a re-hearing conducted, and what was the final outcome of that hearing on June 9, 2017?
9. According to the re-hearing decision, there was a significant contradiction between the petitioner’s sworn petition and his later testimony. What was this contradiction?
10. What was the legal basis, according to the Association’s CC&Rs, for collecting the $660 working capital fee?
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Answer Key
1. The petitioner was Brian Sopatyk, and the respondent was The Lakeshore Village Condominium Association, Inc. Mr. Sopatyk alleged that the Association violated ARIZ. REV. STAT. section 33-1260 by charging a transfer fee in excess of the statutory maximum of $400.
2. The disputed fees were a $660 “transfer fee,” which was split between the buyer (Mr. Sopatyk) and the seller, and a separate $30 “statement fee” or “Resale Statement Fee.” The petitioner’s claim focused on the $660 fee being above the legal limit for resale disclosure services.
3. The Association argued the $660 fee was not a transfer fee for disclosure services but was a “working capital fee” authorized by its CC&Rs. It explained that the fee had been mislabeled as a “transfer fee” due to an error passed down from a previous property manager.
4. Amy Telnes testified that when she became the Association manager, she was incorrectly told the working capital fee was the transfer fee. She further testified that the $660 was deposited into the Association’s reserve fund, and the actual fee charged for disclosure under the statute was the separate $30 statement fee.
5. At the May 18, 2016, meeting, the Board concluded it was not in violation of the law but that its fee labeling was confusing. The Board directed Amy Telnes to perform an accounting and transfer all mislabeled fees into the Reserve Account and voted to assess a single, correctly labeled $400 transfer fee on all future transactions.
6. The petitioner, Brian Sopatyk, bore the burden of proof. The standard of proof required was a “preponderance of the evidence,” defined as evidence with the most convincing force that inclines an impartial mind to one side of an issue over the other.
7. Following the initial hearing, Administrative Law Judge Thomas Shedden found that Mr. Sopatyk had not shown by a preponderance of the evidence that the Association violated the statute. The judge ordered that Mr. Sopatyk’s petition be dismissed.
8. A re-hearing was conducted after Mr. Sopatyk requested one following the initial decision. The final outcome of the June 9, 2017, re-hearing was the same as the first: the Administrative Law Judge found the petitioner did not meet his burden of proof and ordered the petition to be dismissed.
9. In his sworn petition, Mr. Sopatyk stated that the $660 transfer fee was split between him and the seller. However, during his testimony at the re-hearing, he stated that he had in fact paid the entire $660 as part of the negotiated price of the unit.
10. The legal basis was Section 8.13 of the Association’s Declaration of Covenants, Conditions and Restrictions (CC&Rs). This section, titled “Transfer Fee and Working Capital Fund,” called for an assessment from each new owner of two monthly installments of the annual fee to be deposited into the working capital fund.
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Essay Questions
Instructions: The following questions are designed to test a deeper, more synthesized understanding of the case. Formulate a comprehensive response to each prompt, incorporating specific facts, legal arguments, and procedural details from the source documents.
1. Trace the complete timeline of the case, beginning with the filing of the petition. Include key dates of filings, hearings, decisions, and final certifications, and describe the significance of each event in the legal process.
2. Analyze the central legal argument of the Respondent, The Lakeshore Village Condominium Association. Explain how the distinction between a “transfer fee” under ARIZ. REV. STAT. section 33-1260 and a “working capital fee” under the Association’s CC&Rs was crucial to the Administrative Law Judge’s final decision.
3. Discuss the concept of “preponderance of the evidence” as it is defined and applied in this case. Explain why the petitioner, Brian Sopatyk, failed to meet this standard of proof in both the initial hearing and the re-hearing, citing specific evidence presented by the Association.
4. Evaluate the importance of the Association’s Board Meeting Minutes from May 18, 2016, as a piece of evidence. Detail the specific findings and resolutions from that meeting and explain how they were used to build the Association’s defense.
5. Examine the roles of the key individuals and entities in this administrative action. Describe the functions and contributions of Brian Sopatyk (Petitioner), Amy Telnes (Association Manager), Michael Cibellis (Association President), Thomas Shedden (Administrative Law Judge), and the Arizona Department of Real Estate.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
The official, in this case Thomas Shedden, who presides over hearings at the Office of Administrative Hearings, makes findings of fact and conclusions of law, and issues a decision.
ARIZ. REV. STAT. section 33-1260
The Arizona statute that requires a condominium association to provide certain disclosure documents to a prospective purchaser. It also limits the fee an association can charge for the preparation of these documents to an aggregate of four hundred dollars.
Burden of Proof
The obligation of a party in a legal case to prove their allegations. In this matter, the petitioner, Brian Sopatyk, bore the burden of proof.
An abbreviation for the Declaration of Covenants, Conditions and Restrictions. In this case, section 8.13 of the Association’s CC&Rs authorized the collection of a fee from new owners for a working capital fund.
Final Administrative Decision
The ultimate, legally binding decision in the administrative matter. In this case, the Administrative Law Judge’s decision became the final administrative decision after the Department of Real Estate did not act to accept, reject, or modify it within the statutory time limit.
HUD-1 Disclosure Statement
A document used in the petitioner’s property purchase that itemized all charges imposed upon a borrower and seller for a real estate transaction. It was used as evidence to show how the $660 “Transfer Fee” and $30 “Resale Statement Fee” were assessed and paid.
Petitioner
The party who files a petition initiating a legal action. In this case, Brian Sopatyk was the petitioner.
Preponderance of the Evidence
The standard of proof required in this administrative hearing. It is defined as “The greater weight of the 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.”
Reserve Fund
An account maintained by the Condominium Association. The Association referred to its “working capital fund” as the Reserve Fund, into which the disputed $660 fees were deposited.
Respondent
The party against whom a petition is filed. In this case, The Lakeshore Village Condominium Association, Inc. was the respondent.
Statement Fee / Resale Statement Fee
A $30 fee charged by the Association for the preparation of disclosure documents. The Association argued this was the fee governed by ARIZ. REV. STAT. section 33-1260, which was compliant with the $400 statutory cap.
Transfer Fee
In the context of the petitioner’s allegation, a fee charged for resale disclosure services, limited to $400 by statute. In the context of the Association’s defense, this was the erroneous label applied to the working capital fee.
Working Capital Fee
A fee authorized by section 8.13 of the Association’s CC&Rs, assessed to each new owner to be deposited into the working capital fund (or Reserve Fund). The Association successfully argued that the disputed $660 fee was this type of fee, not one for resale disclosure.
Blog Post – 17F-H1716004-REL-RHG
How a $660 Fee Sparked a Legal Showdown: 5 Surprising Lessons from a Homeowner vs. HOA Dispute
We sign, we initial, we pay—assuming every line item on our closing documents is gospel. When buying a home in a condominium association, the stack of paperwork and list of fees can feel overwhelming. But what if one of those “standard” fees wasn’t standard at all?
For homeowner Brian Sopatyk, a single $660 charge from The Lakeshore Village Condominium Association wasn’t just a number; it was a thread he pulled that unraveled a surprising story of HOA governance, legal strategy, and the power of asking “why?” This post breaks down the five most impactful takeaways from a seemingly minor dispute that went all the way through a formal hearing and re-hearing.
1. A Simple Label Can Ignite a Legal Firestorm
A clerical error triggers a full-blown legal dispute.
The entire case hinged on a single, crucial mistake: the HOA mislabeled a “working capital fee” as a “transfer fee” on its disclosure forms.
Why was this one word so important? Because Mr. Sopatyk’s formal petition alleged that by charging a “$660 transfer fee,” the HOA violated Arizona statute 33-1260, which caps fees for resale disclosure services at a maximum of $400. On its face, the $660 charge looked like a clear violation of state law.
The Association’s manager, Amy Telnes, testified that when she took over her position, she was given erroneous information that the working capital fee was the transfer fee. As a result, the charge had been incorrectly labeled ever since. This simple administrative error was enough to trigger a formal petition to the Arizona Department of Real Estate, a full administrative hearing, and eventually, a re-hearing, proving how a small clerical mistake can escalate into a significant legal conflict.
2. In the Eyes of the Law, Substance Can Trump Form
Why the fee’s purpose mattered more than its name.
The Association’s core defense was that while the name of the fee was wrong, its purpose and authority were legitimate. The $660 charge, they argued, wasn’t for resale documents (the service capped by state law), but was a “working capital fee” authorized by an entirely different rule: the Association’s own Covenants, Conditions, and Restrictions (CC&Rs).
Specifically, Section 8.13 of the CC&Rs allowed for this assessment, with the funds designated for the Association’s reserve fund. This working capital fee, in contrast, was an assessment on the new owner as mandated by the CC&Rs to ensure the association’s financial health. The actual fee for the statutory disclosure documents was a separate, compliant $30 “Resale Statement Fee,” which was paid by the seller.
The Administrative Law Judge ultimately agreed. The fee’s underlying purpose and the HOA’s authority to collect it (its substance) were deemed more important than its incorrect name on the form (its form). This is a crucial lesson for any homeowner challenging an HOA: it’s not enough to find a mistake on a form. You must be prepared to argue against the underlying authority and purpose of the action itself.
3. You Can Lose the Battle but Win the War
How a dismissed case led to a major policy victory.
Perhaps the most counter-intuitive outcome is that although Mr. Sopatyk’s petition was dismissed, his actions were the direct catalyst for a significant and positive policy change by the HOA.
In a summary of the Association’s May 18, 2016, Board Meeting, which was entered as evidence, the judge noted that the Board reviewed the very issue Mr. Sopatyk had raised. Under the pressure of his legal challenge, they came to a powerful conclusion about their own system, determining it was “confusing and unfair.”
As a direct result of this internal review prompted by the dispute, the Board voted to simplify its process. It resolved to assess a single, clear transfer fee of $400 on all future transactions, eliminating the other confusing fees. This proves that even an unsuccessful legal challenge can be a powerful tool, forcing an organization to confront and correct its own problematic practices for the benefit of all future members.
4. The ‘Burden of Proof’ Is More Than Just a Phrase
What it really means to have to prove your case.
In both the original decision and the re-hearing, the judge repeatedly stated that Mr. Sopatyk, as the petitioner, bore the “burden of proof.” This legal standard was critical to the outcome. It meant he had to prove his claim by a “preponderance of the evidence,” which the court documents defined as:
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.
In this case, it meant Mr. Sopatyk’s job was to prove that the $660 fee was, more likely than not, an illegal charge for resale documents. The HOA’s defense—that it was a legally separate “working capital fee” that was simply mislabeled—created enough doubt that he couldn’t clear this hurdle.
5. A Small Contradiction Can Damage Credibility
When every word you say (and write) is on the record.
A fascinating detail appeared in the re-hearing decision, highlighting how every word matters in a legal proceeding.
There was a discrepancy in Mr. Sopatyk’s statements. His sworn petition, filed on August 9, 2016, stated the $660 fee was “split between the seller and the buyer.” However, during the hearing, he testified that he had “in fact paid the entire $660.”
The judge noted this contradiction directly in footnote 3 of the re-hearing decision, stating: “either Mr. Sopatyk’s sworn statement or his testimony must be false.” While not the deciding factor, this kind of inconsistency can subtly erode a petitioner’s standing. Remember the “burden of proof” from Takeaway 4? It requires convincing a judge to “incline a fair and impartial mind” to your side. Contradictions, even small ones, make that inclination much harder to achieve.
Conclusion: The Devil Is in the Details
This case is the perfect microcosm of community association disputes. It began with a clerical error (form), was adjudicated on intent (substance), was lost on a technicality (the burden of proof), yet resulted in a victory for transparency. Mr. Sopatyk may not have won his case, but he won a better system for his neighbors.
The ultimate lesson? In an HOA, the most powerful tool isn’t always a lawsuit—sometimes, it’s a magnifying glass. It leaves us with a thought-provoking question: When is it worth challenging the system for clarity and fairness, even if the outcome isn’t a clear ‘win’ on paper?
Case Participants
Petitioner Side
Brian Sopatyk(petitioner) Represented himself at the initial hearing; sought rehearing
Nathan Andrews(petitioner attorney) ASU Alumni Law Group
Jill M. Kennedy(petitioner attorney) ASU Alumni Law Group
Judy Sopatyk(petitioner's wife) Co-purchaser of the condominium unit,
Chance Peterson(petitioner attorney) ASU Alumni Law Group
Respondent Side
Bradley R. Jardine(HOA attorney) Jardine Baker Hickman & Houston
Amy Telnes(property manager/witness) The Lakeshore Village Condo. Association, Inc. Association manager who testified,
Michael Cibellis(Association president/witness) The Lakeshore Village Condo. Association, Inc. Testified at the rehearing
Neutral Parties
Thomas Shedden(ALJ)
Judy Lowe(Commissioner) Arizona Department of Real Estate
Abby Hansen(HOA Coordinator) Contact for requests for rehearing
Greg Hanchett(Interim Director) OAH Signed the Certification of Decision,
Other Participants
Rosella J. Rodriguez(administrative staff) Administrative staff for transmission/mailing,
