Samantha and Millard C. Finch v. Mountain Gate Community aka Copper

Posted on July 4, 2025 by [email protected]

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

Case Summary

Case ID	25F-H017-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2025-07-03
Administrative Law Judge	Kay A. Abramsohn
Outcome	none
Filing Fees Refunded	$2,000.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Millard C. and Samantha Finch	Counsel	—
Respondent	Mountain Gate Community aka Copper Canyon Ranch	Counsel	B. Austin Baillio

Alleged Violations

A.R.S. § 33-1803(B); Association Rules and Design Guidelines, Article 5.2, Article 6.10.5, and Article 6.9
A.R.S. § 33-1803(A); CC&R Article 6, Section 6.10.1
A.R.S. §§ 33-1803(B), 33-1242(A)(11); Association Rules and Design Guidelines
A.R.S. § 33-1807(A); CC&Rs Article 6, Section 6.10.5(ii), 6.10.5(i), and 6.10.2

Outcome Summary

The Administrative Law Judge Decision in the underlying matter (25F-H017-REL), which found Respondent the prevailing party on all four petition issues, stands, as Petitioners’ Dispute Petition for Rehearing was dismissed. Petitioners failed to meet the burden of proof that there was error in the administration or rejection of evidence or other errors occurring during the initial proceeding.

Why this result: Petitioners failed to establish by a preponderance of the evidence that Respondent violated applicable statutes, CC&Rs, and/or Bylaws in the underlying dispute. Subsequently, Petitioners failed to meet the burden during rehearing to demonstrate error in the initial administrative proceeding.

Key Issues & Findings

Charging a $45.00 fee ($15.00 late charge + $30.00 'late notice fee') when assessment is paid before or on the due date.

Petitioners argued that payments were charged as late despite being timely, but the ALJ found payments were correctly applied to previous delinquent balances per A.R.S. § 33-1807(K).

Orders: Respondent deemed the prevailing party on this issue.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

The $45.00 charge exceeds the statutory limit of $15.00 for delinquent assessments.

Petitioners argued the total fee exceeded the statutory late charge limit, but the ALJ found the additional fees ($30 'late notice fee') were permissible collection costs, distinct from late fees.

Orders: Respondent deemed the prevailing party on this issue.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

$30.00/$20.00 “late notice fees” levied against the account without providing notice, violating statutes regarding monetary penalties.

Petitioners alleged collection fees were impermissible penalties imposed without notice and hearing, but the ALJ determined they were collection costs, distinct from monetary penalties per A.R.S. § 33-1807(K).

Orders: Respondent deemed the prevailing party on this issue.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

Pre-legal team threatening foreclosure and legal action when Petitioners are not delinquent.

Petitioners challenged Respondent's authority to threaten legal action without proven delinquency. The ALJ found no evidence of foreclosure threats and deemed the complaint unclear or not ripe.

Orders: Respondent deemed the prevailing party in this matter regarding Petition Issue 4.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

Analytics Highlights

Topics: HOA dispute, late fees, collection costs, assessment payment application, rehearing dismissal, A.R.S. Title 33 Chapter 16

Additional Citations:

A.R.S. § 33-1803(A)
A.R.S. § 33-1803(B)
A.R.S. § 33-1242(A)(11)
A.R.S. § 33-1807(A)
A.R.S. § 33-1807(K)
A.R.S. § 32-2199.02(B)
A.R.S. § 32-2199.04

Audio Overview

Decision Documents

25F-H017-REL-RHG Decision – 1316094.pdf

Uploaded 2026-01-23T18:14:00 (51.5 KB)

25F-H017-REL-RHG Decision – 1325522.pdf

Uploaded 2026-01-23T18:14:05 (120.7 KB)

25F-H017-REL-RHG Decision – ../25F-H017-REL/1277396.pdf

Uploaded 2026-01-23T18:14:09 (207.4 KB)

Briefing Doc – 25F-H017-REL-RHG

Briefing Document: Finch v. Mountain Gate Community Administrative Proceedings

Executive Summary

This document synthesizes the key events, arguments, and legal conclusions from the administrative proceedings involving homeowners Millard and Samantha Finch (Petitioners) and the Mountain Gate Community Homeowners Association (Respondent). The core of the dispute was a series of fees levied against the Petitioners’ account, which they contested as improper, excessive, and illegal.

The initial Administrative Law Judge (ALJ) decision, issued on February 26, 2025, found in favor of the Respondent on all four of the Petitioners’ claims. The ruling established that the fees resulted from a rolling delinquency caused by a payment misunderstanding, not from improper charges on timely payments. A critical distinction was made between the statutorily limited $15 late fee and separate, permissible collection costs passed on to the homeowners from the association’s management company.

The Petitioners were granted a rehearing, but on the narrow procedural ground of “Error in the administration or rejection of evidence.” During the rehearing on June 13, 2025, the Petitioners attempted to re-argue the factual basis of the original decision rather than prove a procedural error. The final ALJ decision on the rehearing, issued July 3, 2025, concluded that the Petitioners failed to meet their burden of proof. It found no evidence of procedural error, confirmed all exhibits were properly admitted in the first hearing, and dismissed the Petitioners’ arguments as an improper attempt to appeal the original decision’s substance. Consequently, the initial ruling in favor of the Respondent was upheld.

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1.0 Initial Petition and Core Dispute

On October 15, 2024, Millard and Samantha Finch filed a petition with the Arizona Department of Real Estate, alleging four violations by the Mountain Gate Community HOA. The dispute centered on a recurring $45 charge applied to their account.

1.1 Parties Involved

Name/Entity

Representation

Petitioners

Millard C. and Samantha Finch

Represented themselves

Respondent

Mountain Gate Community (aka Copper Canyon Ranch)

Attorney B. Austin Baillio

Respondent’s Agent

First Service Residential (FSR)

Management Company

Initial Adjudicator

Administrative Law Judge Samuel Fox

Office of Administrative Hearings

Rehearing Adjudicator

Administrative Law Judge Kay A. Abramsohn

Office of Administrative Hearings

1.2 Summary of Allegations

The Petitioners’ case was built on four primary claims:

1. Improper Late Fees: The HOA levied a 45charge(15 late charge plus a $30 “late notice fee”) even when the Petitioners believed their assessments were paid on or before the due date.

2. Excessive Fee Amount: The total $45 charge exceeded the maximum late fee of $15 permitted under Arizona Revised Statutes (A.R.S.) § 33-1803(A) and the community’s CC&Rs.

3. Lack of Notice for Penalties: The $30 “late notice fee” was alleged to be a monetary penalty imposed without the legally required “notice and an opportunity to be heard” under A.R.S. § 33-1803(B) and § 33-1242(A)(11).

4. Improper Threats of Legal Action: The HOA’s pre-legal team allegedly threatened foreclosure and other legal action when the Petitioners’ account was not delinquent, in violation of A.R.S. § 33-1807(A).

2.0 Initial Administrative Law Judge Decision (February 26, 2025)

Following a hearing on February 7, 2025, ALJ Samuel Fox ruled that the Respondent was the prevailing party on all four issues, concluding the Petitioners failed to meet their burden of proof.

2.1 Hearing Evidence and Root Cause

The evidence showed the dispute originated from a misunderstanding of payment application rules.

• Payment Application Mandate: Per A.R.S. § 33-1807(K) and FSR’s policy, all payments received are applied first to any unpaid assessments and associated fees before being applied to the current month’s assessment.

• The Triggering Event: In November 2022, the Petitioners attempted to prepay their December 2022 assessment. However, because an outstanding balance already existed, the payment was applied to that past-due amount. This left the December 2022 assessment unpaid.

• Rolling Delinquency: From January 2023 through February 2025, every payment the Petitioners made was applied to the previous month’s outstanding balance. Consequently, each month’s assessment was deemed late, triggering a new set of late charges and collection fees.

2.2 Detailed Analysis of Conclusions by Issue

Issue 1: Propriety of Late Fees

• Conclusion: The fees were properly levied because the payments were, in fact, late.

• Rationale: The ALJ found that the Respondent and FSR correctly followed the statutory mandate of A.R.S. § 33-1807(K) by applying payments to delinquent assessments first. The Petitioners’ argument that they made timely payments each month was overcome by the fact that those payments were appropriately applied to the prior month’s balance, rendering the current month’s payment delinquent.

Issue 2: Legality of Fee Amount

• Conclusion: The total charge was not an excessive late fee.

• Rationale: The $45 charge was comprised of two distinct fees:

◦ $15.00 Late Charge: This was identified as the late fee, which is limited by statute and the CC&Rs.

◦ $30.00 Late Notice Fee / $20.00 Rebill Fee: These were determined to be collection costs. Testimony established that FSR charged the HOA for the service of processing and sending overdue notices, and this cost was passed directly to the homeowner. The community’s CC&Rs (Sections 6.1.1 and 6.10.5) and state law (A.R.S. § 33-1807(K)) explicitly allow for the collection of such costs from the member. Since the collection cost is not a “late fee,” the total charge did not violate the $15 limit.

Issue 3: Notice Requirements

• Conclusion: The “Late Notice Fee” did not require a formal notice and hearing.

• Rationale: The ALJ determined that collection fees are distinct from “monetary penalties.” The statutes requiring notice and an opportunity to be heard apply to penalties for violations of community rules, not to administrative costs incurred in collecting a debt. A.R.S. § 33-1807(K) itself lists “unpaid reasonable collection fees” separately from “monetary penalties.”

Issue 4: Alleged Threats of Foreclosure

• Conclusion: The Petitioners failed to provide any evidence to support this claim.

• Rationale: No evidence was submitted showing that the Respondent had threatened foreclosure or taken any legal action. A witness for the Respondent testified that no foreclosure efforts had ever been made against the Petitioners. The ALJ found the complaint item was either unsubstantiated or “not yet ripe for resolution.”

3.0 Rehearing Proceedings

The Petitioners filed for a rehearing on March 28, 2025. On April 29, 2025, the Department of Real Estate granted the request on a single, limited basis.

3.1 Grounds for Rehearing

The Department granted the rehearing solely on the following ground:

• “Error in the administration or rejection of evidence or other errors occurring during the proceeding.”

Notably, the Department did not grant a rehearing on the Petitioners’ other claims, such as the finding of fact being arbitrary, an abuse of discretion, or not supported by the evidence. This strictly limited the scope of the new hearing to procedural errors from the first proceeding, not the substantive outcome.

3.2 Key Arguments during the Rehearing (June 13, 2025)

The rehearing was characterized by ALJ Kay Abramsohn repeatedly guiding the Petitioners back to the hearing’s limited procedural scope.

• Petitioners’ Arguments: Samantha Finch primarily attempted to re-argue the facts of the initial case. Her claims of procedural error were:

1. Evidence Was Rejected: She argued her evidence was not considered because when she requested copies of exhibits from the Office of Administrative Hearings (OAH) after the first hearing, she did not receive copies of her own submissions.

2. Questioning Was Improperly Halted: She claimed she was prevented from presenting evidence when the initial ALJ stopped a line of questioning to a witness about the need for a “court order,” telling her the question sought a “legal conclusion.”

3. Incorrect Statute Was Used: She questioned the authenticity of the version of A.R.S. § 33-1807 submitted by the Respondent.

• Respondent’s Counter-Arguments:

◦ Attorney Austin Baillio clarified that the version of A.R.S. § 33-1807 they submitted was the one in effect during the period of the dispute (pre-2024 amendments).

◦ He noted that the Petitioners submitted their own version of the statute, so the judge had both available.

◦ He argued that even if the wrong version was used, the error was harmless as the outcome would have been the same under either version.

4.0 Final Decision on Rehearing (July 3, 2025)

ALJ Abramsohn issued a decision dismissing the Petitioners’ Dispute Petition, finding they failed to prove any procedural error occurred during the initial hearing.

4.1 Rationale for Dismissal

The decision systematically refuted each of the Petitioners’ claims of procedural error:

• On Rejected Evidence: The ALJ concluded that the record from the first hearing clearly showed the Petitioners’ Exhibits 1 through 10 were admitted into evidence. The post-hearing administrative issue of which copies were sent by OAH staff did not constitute a judicial rejection of evidence.

• On Improperly Halted Questioning: The ALJ found that the initial judge’s instruction was proper judicial management. Directing a party to save a legal theory for their argument, rather than asking a witness to provide a legal conclusion, is not a rejection of evidence.

• On Use of Incorrect Statute: The decision affirmed that the Respondent had used the appropriate version of the statute for the time period in question. Furthermore, with both parties having submitted a version, there was no error in what was admitted to the record for the judge’s consideration.

• On Arguments Outside the Scope: The ALJ formally concluded that the bulk of the Petitioners’ arguments—regarding the prepayment, the fairness of the hearing, and the correctness of the initial findings—were disagreements with the substance of the first decision. As the rehearing was not granted on those grounds, these arguments were improperly raised and were dismissed.

4.2 Final Order

IT IS ORDERED that Petitioners’ Dispute Petition is Dismissed. The decision from the initial hearing on February 26, 2025, finding the Respondent to be the prevailing party, stands as the final binding order in the matter.

Study Guide – 25F-H017-REL-RHG

Finch v. Mountain Gate Community: A Case Study Guide

Short-Answer Quiz

Instructions: Answer the following questions in two to three complete sentences, drawing exclusively from the information provided in the case documents.

1. Identify the four primary issues raised by Millard and Samantha Finch in their initial petition to the Arizona Department of Real Estate.

2. What was the Respondent’s central argument for why the Finches’ account was consistently marked as delinquent, even when they made monthly payments?

3. Explain the legal distinction made by the Administrative Law Judge (ALJ) between the “15.00LateCharge”andthe”30.00 Late Notice Fee.”

4. According to the hearing evidence, what was the specific function of the “20.00RebillFee”andthe”30.00 Late Notice Fee,” and who ultimately bore the cost?

5. What specific event in November 2022 exacerbated the delinquency issue on the Petitioners’ account, and what was the result from January 2023 to February 2025?

6. On what grounds did the ALJ in the initial decision dismiss the Petitioners’ fourth complaint regarding threats of foreclosure and legal action?

7. What was the sole, limited ground on which the Department of Real Estate granted the Petitioners a rehearing?

8. During the rehearing, what was the Respondent’s explanation for why the version of A.R.S. § 33-1807 they submitted differed from the current version of the statute?

9. According to the second ALJ’s decision, why were the Petitioners’ arguments about disagreeing with the first decision’s findings of fact improperly raised at the rehearing?

10. What was the final outcome of the rehearing, and what does the final order state about the binding nature of the decision?

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Answer Key

1. The four issues were: (1) levying a $45.00 charge on an account that was paid on time; (2) the $45.00 charge exceeding the statutory limit of $15.00 for a late fee; (3) the 20/30 “late notice fees” being monetary penalties imposed without proper notice; and (4) improper threats of foreclosure and legal action when the account was not delinquent.

2. The Respondent argued that the Finches had fallen behind on their April 2020 assessment. Pursuant to A.R.S. § 33-1807(K), all subsequent payments were correctly applied first to the oldest unpaid assessments. This created a rolling delinquency where each new payment covered the previous month’s balance, causing the current month’s assessment to become late.

3. The ALJ determined that the “15.00LateCharge”wasafeeforthelatepaymentofanassessment,limitedbyA.R.S.§33−1803.The”30.00 Late Notice Fee,” however, was found to be a collection cost incurred by the Association for services provided by its managing agent (FSR) and was not subject to the statutory limit for late fees.

4. The “20.00RebillFee”and”30.00 Late Notice Fee” were charges for collection services provided by the managing agent, First Service Residential (FSR). An FSR employee would review overdue accounts and send collection notices, and FSR charged the Association for this service, a cost which was then directly passed on to the homeowner.

5. In November 2022, the Petitioners attempted to prepay their December assessment, but because the charge had not yet been posted and they did not communicate their intent, the payment was applied to past due amounts. This led them to believe they were current, resulting in their payments from January 2023 through February 2025 being consistently late and incurring a Late Charge and Late Notice Fee every month.

6. The ALJ dismissed the fourth complaint because it was unclear, did not allege actionable conduct, and was not supported by evidence. The Respondent’s witnesses testified that no legal action was ever taken, and the Petitioners submitted no evidence to support the allegation that threats were made.

7. The Department of Real Estate granted the rehearing on the single, specific ground of “Error in the administration or rejection of evidence or other errors occurring during the proceeding.” It did not grant a rehearing based on the Petitioners’ claims that the decision was arbitrary, capricious, or not supported by evidence.

8. The Respondent’s attorney explained that the version of A.R.S. § 33-1807 they submitted was the version in effect at the time the payment actions in question occurred. The statute had been amended in 2024, and those changes were prospective, not applicable to past events.

9. The second ALJ found these arguments were improperly raised because the Department had explicitly not granted a rehearing on the basis of disagreeing with the first decision. The scope of the rehearing was strictly limited to procedural errors, such as the wrongful admission or rejection of evidence during the hearing itself, not a re-evaluation of the facts or the judge’s conclusions.

10. The final outcome was that the Petitioners’ Dispute Petition was dismissed, and the original decision deeming the Respondent the prevailing party was upheld. The final order states that the decision is binding on the parties and any appeal must be filed with the superior court within thirty-five days.

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Essay Questions

Instructions: The following questions are designed for deeper analysis of the case. Formulate a comprehensive response based solely on the facts, legal arguments, and procedural history presented in the source documents.

1. Analyze the legal distinction between a “late fee,” a “monetary penalty,” and a “collection cost” as presented in this case. How did the classification of the “$30.00 Late Notice Fee” as a collection cost become the pivotal factor in the dismissal of Petitioners’ Issues 2 and 3?

2. Trace the procedural journey of the Finches’ complaint from the initial petition to the final decision after the rehearing. What does this process reveal about the specific and limited grounds for a rehearing in this administrative context, and how did the Petitioners’ misunderstanding of this scope affect their arguments?

3. Examine the role and application of A.R.S. § 33-1807(K) regarding the allocation of payments. Explain how the Respondent’s adherence to this statute created a “domino effect” of delinquency that the Petitioners failed to understand, leading to the core conflict.

4. Discuss the concept of “burden of proof” in this case. For each of the four initial complaints, explain why the Administrative Law Judge concluded that the Petitioners “failed to demonstrate by a preponderance of the evidence” that a violation occurred.

5. Based on the transcript of the rehearing and the final ALJ decision, describe the fundamental disagreement between Samantha Finch’s perception of the legal process and ALJ Kay Abramsohn’s explanation of it. What specific examples illustrate the difference between disagreeing with a decision’s outcome versus identifying a procedural error during a hearing?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An independent judge who presides over administrative hearings. In this case, Samuel Fox presided over the initial hearing and Kay A. Abramsohn presided over the rehearing.

A.R.S. § 33-1242(A)(11)

Arizona Revised Statute cited by Petitioners, which allows an association board to impose reasonable monetary penalties on members for violations, but only after providing notice and an opportunity to be heard.

A.R.S. § 33-1803(A) & (B)

Arizona Revised Statutes governing charges for late payment of assessments. It limits late charges to the greater of $15 or 10% of the unpaid assessment and requires notice before imposition. It distinguishes these charges from monetary penalties.

A.R.S. § 33-1807(A) & (K)

Arizona Revised Statutes governing assessment liens. Subsection (A) specifies conditions for foreclosing a lien, requiring delinquency of one year or $1,200. Subsection (K) dictates the order for applying payments, requiring they first be applied to unpaid assessments and related costs before other fees or penalties.

Burden of Proof

The obligation of a party in a trial to produce evidence that proves the claims they have made. In this case, the Petitioners bore the burden of proof to establish their claims by a preponderance of the evidence.

Covenants, Conditions, and Restrictions. These are the governing legal documents that set up the rules for a planned community. Several sections, including 6.1.1, 6.9, 6.10.1, and 6.10.5, were cited in the case.

ClickPay

The online portal used by Petitioners to make assessment payments. The portal included a notice that payments should be scheduled on or after the 1st of each billing cycle.

Collection Fees / Costs

Charges incurred by the Association in the process of collecting delinquent assessments. In this case, the “20.00RebillFee”and”30.00 Late Notice Fee” were identified as collection costs passed on from FSR to the homeowner.

First Service Residential (FSR)

The managing agent employed by the Respondent to perform duties such as collecting assessments and providing collection services for overdue accounts.

Late Charge

A specific charge, limited by statute to $15.00, for the late payment of an assessment. This was deemed distinct from a collection fee or monetary penalty.

Late Notice Fee

A $30.00 fee charged to the Finches’ account. The ALJ determined this was a collection cost charged by FSR for sending overdue-payment paperwork, not a late fee subject to the $15 statutory limit.

Office of Administrative Hearings (OAH)

An independent state agency in Arizona where administrative hearings are conducted.

Petitioners

Millard C. and Samantha Finch, who owned a home in the Mountain Gate Community and filed the petition against the association.

Preponderance of the Evidence

The evidentiary standard required for the Petitioners to win their case. It is defined as proof that convinces the trier of fact that a contention is “more probably true than not.”

Rebill Fee

A $20.00 fee charged to the Finches’ account. Like the Late Notice Fee, this was identified as a charge for collection services provided by FSR.

Respondent

Mountain Gate Community aka Copper Canyon Ranch, the planned community association (HOA) of which the Finches were members.

Tribunal

A term used in the final decision to refer to the Office of Administrative Hearings (OAH).

Blog Post – 25F-H017-REL-RHG

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oss”:”Petitionersfailedtodemonstratebyapreponderanceoftheevidencethatthefeesinquestion(30 Late Notice Fee / Rebill Fee) were late fees subject to the $15 limit under A.R.S. \u00a7 33-1803(A), as opposed to permissible collection costs under A.R.S. \u00a7 33-1807(K)34.”, “cited”: [ “A.R.S. \u00a7 33-1803(A)”, “A.R.S. \u00a7 33-1807(K)”, “CC\u0026R Section 6.10.1” ] } ], “money_summary”: { “issues_count”: 4, “total_filing_fees_paid”: 2000.0, “total_filing_fees_refunded”: 0.0, “total_civil_penalties”: 0.0 }, “outcomes”: { “petitioner_is_hoa”: false, “petitioner_win”: “none”, “summarize_judgement”: “The initial ALJ Decision found Respondent the prevailing party on all four petition issues5. Petitioners requested a rehearing, but the rehearing was limited to alleged errors in the admission or rejection of evidence during the initial proceeding7. The ALJ in the rehearing concluded that Petitioners failed to meet their burden of proof regarding the alleged errors, and the Dispute Petition was dismissed68.”, “why_the_loss”: “Petitioners failed to meet the burden of proof for the underlying violations in the initial hearing4…, and failed to meet the burden of proof for the limited grounds granted for the rehearing (error in the administration or rejection of evidence)811.” }, “analytics”: { “cited”: [ “A.R.S. \u00a7 33-1803(A)”, “A.R.S. \u00a7 33-1803(B)”, “A.R.S. \u00a7 33-1807(A)”, “A.R.S. \u00a7 33-1807(K)”, “A.R.S. \u00a7 33-1242(A)(11)”, “CC\u0026R Section 6.10.1”, “CC\u0026R Section 6.10.5” ], “tags”: [ “HOA Dispute”, “Late Fees”, “Collection Costs”, “Statutory Interpretation”, “Rehearing” ] } }

The case involves Millard C. and Samantha Finch (Petitioners), members of the Mountain Gate Community aka Copper Canyon Ranch (Respondent), disputing alleged violations of Planned Community Statutes and community documents regarding assessment charges and collection practices1…. The matter proceeded through the Arizona Office of Administrative Hearings (OAH)45.

Key Facts and Main Issues (Initial Hearing – February 7, 2025)

Petitioners raised four main issues, focusing primarily on the imposition of a $45.00 charge for delinquent assessments, which consisted of a $15.00 late charge and a $30.00 “late notice fee” or “Rebill Fee”3…. Petitioners argued that this $45.00 sum exceeded the statutory limit for late charges—the greater of $15.00 or 10% of the unpaid assessment, as stipulated in A.R.S. § 33-1803(A) and the CC&Rs6…. They also challenged the imposition of fees when they believed their payments were timely, resulting from the HOA applying payments to previously delinquent balances in accordance with A.R.S. § 33-1807(K)1112. Finally, they challenged the legitimacy of the “late notice fees” as impermissible penalties imposed without proper notice and alleged inappropriate threats of foreclosure1314.

Legal Points and Initial Outcome

The Administrative Law Judge (ALJ) Samuel Fox found that Petitioners failed to meet their burden of proof on all four issues12…. The crucial legal distinction was that the $30.00 “Late Notice Fee” and “Rebill Fee” were determined to be collection fees, which are legally separate from, and permissible in addition to, the $15.00 statutory late charge15…. Collection fees and costs are contemplated under A.R.S. § 33-1807(K) and the CC&Rs1719. The ALJ determined that the Respondent (HOA) and its manager correctly applied payments first to delinquent assessments, causing subsequent monthly fees, as mandated by A.R.S. § 33-1807(K)1112. Regarding foreclosure threats, no evidence was entered to support the allegation, and Respondent’s witness testified that no foreclosure efforts had been made2021. The Respondent was deemed the prevailing party in the initial matter16.

Rehearing Proceedings (June 13, 2025)

Petitioners filed a request for rehearing, which the Department of Real Estate granted on the limited issue of “Error in the administration or rejection of evidence or other errors occurring during the proceeding”2223. The Department explicitly denied rehearing based on disagreement with the factual findings or the underlying decision2425.

At the rehearing, conducted by ALJ Kay A. Abramsohn, Petitioners primarily argued that the previous ALJ had relied on an unsubstantiated or incorrect version of A.R.S. § 33-1807 and that their evidence was not properly considered2627. The Respondent noted that the statute version used was the one legally in effect at the time of the actions (prior to a 2024 amendment), and its application was harmless to the outcome28…. Petitioners repeatedly sought to re-argue their disagreement with the initial factual findings and decision, but were reminded by the ALJ that the scope was restricted to procedural errors during the original hearing31….

Final Decision (Rehearing)

The ALJ concluded that Petitioners failed to meet their burden of proof that any error occurred in the administration or rejection of evidence, or any error of law, during the initial February 7, 2025 hearing34. The rehearing evidence confirmed that Petitioners’ exhibits were, in fact, admitted to the record and that the statutes relied upon were contained within the record34. Arguments concerning disagreement with the initial ALJ’s Findings of Fact and Conclusions of Law were dismissed as improperly raised under the limited scope of the granted rehearing33. The ALJ Dismissed Petitioners’ Dispute Petition35.

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“violation(s)”: “ARS 33-1803(A); CC&R Article 6, Section 6.10.1”,
“summary”: “Petitioners argued the total fee exceeded the statutory late charge limit, but the ALJ found the additional fees ($30 ‘late notice fee’) were permissible collection costs, distinct from late fees78.”, “outcome”: “respondent_win”, “filing_fee_paid”: 500.0, “filing_fee_refunded”: false, “civil_penalty_amount”: 0.0, “orders_summary”: “Respondent deemed the prevailing party on this issue5.”, “why_the_loss”: “Petitioners failed to demonstrate that the Late Notice Fee or Rebill Fee were late fees limited under A.R.S. § 33-1803(A)8.”, “cited”: [“4”, “12”, “37”, “42”] }, { “issue_id”: “ISS-003”, “type”: “statute”, “citation”: “A.R.S. §§ 33-1803(B), 33-1242(A)(11); Association Rules and Design Guidelines”, “caption”: “30.00/20.00 “late notice fees” levied against the account without providing notice, violating statutes regarding monetary penalties9.”, “violation(s)”: “ARS §33-1803(B), ARS §33-1242(A)(11), Association Rules and Design Guidelines”, “summary”: “Petitioners alleged collection fees were impermissible penalties imposed without notice and hearing, but the ALJ determined they were collection costs, distinct from monetary penalties per A.R.S. § 33-1807(K)1011.”, “outcome”: “respondent_win”, “filing_fee_paid”: 500.0, “filing_fee_refunded”: false, “civil_penalty_amount”: 0.0, “orders_summary”: “Respondent deemed the prevailing party on this issue5.”, “why_the_loss”: “Petitioners failed to meet their burden that Respondent impermissibly applied monetary penalties, as the fees were collection fees1011.”, “cited”: [“5”, “13”, “16”, “44”] }, { “issue_id”: “ISS-004”, “type”: “statute”, “citation”: “A.R.S. § 33-1807(A); CC&Rs Article 6, Section 6.10.5(ii), 6.10.5(i), and 6.10.2”, “caption”: “Pre-legal team threatening foreclosure and legal action when Petitioners are not delinquent12.”, “violation(s)”: “ARS 33-1807(A); CC&Rs Article 6, Section 6.10.5(ii), 6.10.5(i), and 6.10.2”, “summary”: “Petitioners challenged Respondent’s authority to threaten legal action without proven delinquency. The ALJ found no evidence of foreclosure threats and deemed the complaint unclear or not ripe5….”, “outcome”: “respondent_win”, “filing_fee_paid”: 500.0, “filing_fee_refunded”: false, “civil_penalty_amount”: 0.0, “orders_summary”: “Respondent deemed the prevailing party in this matter regarding Petition Issue 45.”, “why_the_loss”: “The complaint either did not allege actionable conduct or was not yet ripe for resolution, and Petitioners failed to submit evidence of threats or meet their burden5….”, “cited”: [“6”, “14”, “47”] } ], “money_summary”: { “issues_count”: 4, “total_filing_fees_paid”: 2000.0, “total_filing_fees_refunded”: 0.0, “total_civil_penalties”: 0.0 }, “outcomes”: { “petitioner_is_hoa”: false, “petitioner_win”: “none”, “summarize_judgement”: “The Administrative Law Judge Decision in the underlying matter (25F-H017-REL), which found Respondent the prevailing party on all four petition issues, stands, as Petitioners’ Dispute Petition for Rehearing was dismissed5…. Petitioners failed to meet the burden of proof that there was error in the administration or rejection of evidence or other errors occurring during the initial proceeding1718.”, “why_the_loss”: “Petitioners failed to establish by a preponderance of the evidence that Respondent violated applicable statutes, CC&Rs, and/or Bylaws in the underlying dispute4…. Subsequently, Petitioners failed to meet the burden during rehearing to demonstrate error in the initial administrative proceeding17.” }, “analytics”: { “cited”: [ “A.R.S. § 33-1803(A)”, “A.R.S. § 33-1803(B)”, “A.R.S. § 33-1242(A)(11)”, “A.R.S. § 33-1807(A)”, “A.R.S. § 33-1807(K)”, “A.R.S. § 32-2199.02(B)”, “A.R.S. § 32-2199.04” ], “tags”: [ “HOA dispute”, “late fees”, “collection costs”, “assessment payment application”, “rehearing dismissal”, “A.R.S. Title 33 Chapter 16” ] } }

{
“rehearing”: {
“is_rehearing”: true,
“base_case_id”: “25F-H017-REL”,
“original_decision_status”: “affirmed”,
“original_decision_summary”: “The original decision (25F-H017-REL) found the Respondent (Mountain Gate Community) to be the prevailing party on all four petition issues related to late fees, collection costs, the proper application of assessment payments under A.R.S. § 33-1807(K), and threats of legal action [1], [2]. The ALJ found Petitioners failed to meet their burden of proof on all claims [3], [4], [5], [1].”,
“rehearing_decision_summary”: “The Department granted the rehearing on the limited ground of: ‘Error in the administration or rejection of evidence or other errors occurring during the proceeding’ [6], [7]. The rehearing ALJ found that Petitioners failed to meet their burden of proof to show such errors occurred during the original hearing [8], [9]. The Petitioners’ Dispute Petition was dismissed, affirming the underlying findings and conclusions of the original decision [10], [11].”,
“issues_challenged”: [
{
“issue”: “Issue 1: Charging a $45.00 fee ($15.00 late charge + $30.00 ‘late notice fee’) when assessment is paid before or on the due date.”,
“challenge_status”: “Affirmed (Petitioner failed to prove procedural/evidentiary error)”
},
{
“issue”: “Issue 2: The $45.00 charge exceeds the statutory limit of $15.00 for delinquent assessments.”,
“challenge_status”: “Affirmed (Petitioner failed to prove procedural/evidentiary error)”
},
{
“issue”: “Issue 3: $30.00/$20.00 “late notice fees” levied against the account without providing notice, violating statutes regarding monetary penalties.”,
“challenge_status”: “Affirmed (Petitioner failed to prove procedural/evidentiary error)”
},
{
“issue”: “Issue 4: Pre-legal team threatening foreclosure and legal action when Petitioners are not delinquent.”,
“challenge_status”: “Affirmed (Petitioner failed to prove procedural/evidentiary error)”
}
]
}
}

{
“case”: {
“docket_no”: “25F-H017-REL-RHG”,
“case_title”: “Samantha and Millard C. Finch, Petitioners, v. Mountain Gate Community aka Copper Canyon Ranch, Respondent.”,
“decision_date”: “2025-07-03”,
“tribunal”: “OAH”,
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},
“individuals”: [
{
“name”: “Samantha Finch”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Millard C. Finch”,
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“affiliation”: null,
“notes”: null
},
{
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“affiliation”: “Maxwell & Morgan, P.C.”,
“notes”: null
},
{
“name”: “Samuel Fox”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “OAH”,
“notes”: “Presided over initial hearing (25F-H017-REL)”
},
{
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“role”: “ALJ”,
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“affiliation”: “OAH”,
“notes”: “Presided over rehearing (25F-H017-REL-RHG)”
},
{
“name”: “Jonathan Sweat”,
“role”: “witness (former community manager)”,
“side”: “respondent”,
“affiliation”: “First Service Residential”,
“notes”: “Testified for Respondent”
},
{
“name”: “Melinda Montoya”,
“role”: “witness (accounts receivable manager)”,
“side”: “respondent”,
“affiliation”: “First Service Residential”,
“notes”: “Testified for Respondent”
},
{
“name”: “Susan Nicolson”,
“role”: “ADRE Commissioner”,
“side”: “neutral”,
“affiliation”: “ADRE”,
“notes”: null
},
{
“name”: “vnunez”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “ADRE”,
“notes”: “Listed as recipient of decisions”
},
{
“name”: “djones”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “ADRE”,
“notes”: “Listed as recipient of decisions”
},
{
“name”: “labril”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “ADRE”,
“notes”: “Listed as recipient of decisions”
},
{
“name”: “mneat”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “ADRE”,
“notes”: “Listed as recipient of decisions”
},
{
“name”: “lrecchia”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “ADRE”,
“notes”: “Listed as recipient of decisions”
},
{
“name”: “gosborn”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “ADRE”,
“notes”: “Listed as recipient of decisions”
}
]
}

This summary details the proceedings and decisions of the underlying legal dispute and the subsequent administrative rehearing concerning alleged violations of planned community statutes and governing documents.

——————————————————————————–

Case Title: 25F-H017-REL (Original Decision)

Parties: Millard C. and Samantha Finch (Petitioners) versus Mountain Gate Community aka Copper Canyon Ranch (Respondent)1. Hearing Date: February 7, 20251. Key Facts: The Petitioners, homeowners in the community, became involved in a dispute over late assessment payments2. The core issue stemmed from payments applied according to A.R.S. § 33-1807(K), which dictates that payments received must be applied first to delinquent assessments, then to collection fees, and then to other amounts3,4. An attempt by Petitioners to pre-pay the December 2022 assessment was unsuccessful and the payment was applied to past due amounts, leading to a continuous cycle of late charges and collection fees through February 20255,6.

Main Issues (Original Case): Petitioners raised four complaints, primarily alleging that Respondent violated law and community documents by:

1. Levying a **45.00charge∗∗(15.00 late charge plus $30.00 “late notice fee”) when assessments were allegedly paid on time7.

2. Levying a total charge ($45.00) that exceeded the statutory $15.00 limit for late payment charges set by A.R.S. § 33-1803(A) and CC&R 6.10.18,9.

3. Imposing 30.00/20.00 “late notice fees” (Rebill Fees) without proper notice, treating them as penalties10,11.

4. Threatening foreclosure and legal action without proper cause12,13.

Outcome and Key Legal Points (Original Case): The Administrative Law Judge (ALJ Samuel Fox) ordered that the Respondent was the prevailing party regarding all four Petition Issues14,15.

• The ALJ found that Respondent correctly applied payments to delinquent assessments first, pursuant to A.R.S. § 33-1807(K), and that Petitioners failed to prove the charges were levied against timely payments4,16.

• Crucially, the ALJ determined that the $30.00 “Late Notice Fee” or “Rebill Fee” was a collection cost, not a “late charge” restricted by the $15.00 limit in A.R.S. § 33-1803(A)17,11. A.R.S. § 33-1807(K) differentiates between collection fees/costs and monetary penalties/late charges, allowing for the application of collection costs incurred by the association3,18.

——————————————————————————–

Case Title: 25F-H017-REL-RHG (Rehearing)

Procedural History: This matter constitutes a rehearing (RHG), granted by the Arizona Department of Real Estate (DRE) following Petitioners’ timely request19,20. Rehearing Date: June 13, 202521. Scope of Rehearing: The DRE limited the sole issue for rehearing to: “Error in the administration or rejection of evidence or other errors occurring during the proceeding” of the original hearing22,23,24. The DRE explicitly denied rehearing requests based on disagreement with the original findings of fact or the overall decision (e.g., that the decision was arbitrary or unsupported by evidence)25,26.

Key Arguments (Rehearing): Petitioners (represented by Samantha Finch) argued that:

• The original ALJ erred by using an “unsubstantiated” version of A.R.S. § 33-1807, suggesting that their version, which they believed was the proper law, would have changed the outcome27,28.

• The original ALJ rejected or failed to consider their evidence, evidenced partially by the fact they did not receive copies of their own exhibits after the decision29.

• The original ALJ improperly prevented them from questioning a witness about the need for a “court order” regarding payment application, ruling the question sought a legal conclusion30,31.

Outcome and Key Legal Points (Rehearing): The Administrative Law Judge (ALJ Kay A. Abramsohn) concluded that Petitioners failed to meet their burden of proof regarding any alleged error within the limited scope of the rehearing32,33.

• The rehearing evidence confirmed that Petitioners’ documents were admitted to the record of the original hearing33.

• The ALJ found no evidence that Petitioners were prevented from presenting any evidence during the February 7, 2025 hearing34.

• The ALJ dismissed Petitioners’ repeated arguments concerning their disagreement with the original findings of fact and conclusions of law because those issues were improperly raised and outside the limited scope of the granted rehearing26.

Final Decision: The Tribunal Dismissed Petitioners’ Dispute Petition35. This order is binding, and any subsequent appeal must be filed with the superior court35.

Case Participants

Petitioner Side

Samantha Finch (petitioner)
Millard C. Finch (petitioner)

Respondent Side

B. Austin Baillio (HOA attorney)
Maxwell & Morgan, P.C.
Jonathan Sweat (witness (former community manager))
First Service Residential
Testified for Respondent
Melinda Montoya (witness (accounts receivable manager))
First Service Residential
Testified for Respondent

Neutral Parties

Samuel Fox (ALJ)
OAH
Presided over initial hearing (25F-H017-REL)
Kay A. Abramsohn (ALJ)
OAH
Presided over rehearing (25F-H017-REL-RHG)
Susan Nicolson (ADRE Commissioner)
ADRE

Other Participants

vnunez (ADRE staff)
ADRE
Listed as recipient of decisions
djones (ADRE staff)
ADRE
Listed as recipient of decisions
labril (ADRE staff)
ADRE
Listed as recipient of decisions
mneat (ADRE staff)
ADRE
Listed as recipient of decisions
lrecchia (ADRE staff)
ADRE
Listed as recipient of decisions
gosborn (ADRE staff)
ADRE
Listed as recipient of decisions

Millard C. and Samantha Finch v. Mountain Gate Community aka Copper Canyon Ranch

Posted on February 26, 2025 by [email protected]

Case Summary

Case ID	25F-H017-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2025-07-03
Administrative Law Judge	Kay A. Abramsohn
Outcome	none
Filing Fees Refunded	$2,000.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Millard C. and Samantha Finch	Counsel	—
Respondent	Mountain Gate Community aka Copper Canyon Ranch	Counsel	B. Austin Baillio

Alleged Violations

Outcome Summary

Key Issues & Findings

Charging a $45.00 fee ($15.00 late charge + $30.00 'late notice fee') when assessment is paid before or on the due date.

Petitioners argued that payments were charged as late despite being timely, but the ALJ found payments were correctly applied to previous delinquent balances per A.R.S. § 33-1807(K).

Orders: Respondent deemed the prevailing party on this issue.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

The $45.00 charge exceeds the statutory limit of $15.00 for delinquent assessments.

Petitioners argued the total fee exceeded the statutory late charge limit, but the ALJ found the additional fees ($30 'late notice fee') were permissible collection costs, distinct from late fees.

Orders: Respondent deemed the prevailing party on this issue.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

$30.00/$20.00 “late notice fees” levied against the account without providing notice, violating statutes regarding monetary penalties.

Orders: Respondent deemed the prevailing party on this issue.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

Pre-legal team threatening foreclosure and legal action when Petitioners are not delinquent.

Petitioners challenged Respondent's authority to threaten legal action without proven delinquency. The ALJ found no evidence of foreclosure threats and deemed the complaint unclear or not ripe.

Orders: Respondent deemed the prevailing party in this matter regarding Petition Issue 4.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

Analytics Highlights

Topics: HOA dispute, late fees, collection costs, assessment payment application, rehearing dismissal, A.R.S. Title 33 Chapter 16

Additional Citations:

A.R.S. § 33-1803(A)
A.R.S. § 33-1803(B)
A.R.S. § 33-1242(A)(11)
A.R.S. § 33-1807(A)
A.R.S. § 33-1807(K)
A.R.S. § 32-2199.02(B)
A.R.S. § 32-2199.04

Briefing Doc – 25F-H017-REL

Briefing Document: Analysis of Finch v. Mountain Gate Community Re-hearing

Executive Summary

This document provides a comprehensive analysis of the administrative re-hearing in the matter of Samantha and Millard C. Finch v. Mountain Gate Community, Case No. 25F-H017-REL-RHG. The re-hearing, held on June 13, 2025, resulted in a definitive dismissal of the Petitioners’ Dispute Petition, as formalized in the Administrative Law Judge (ALJ) Decision issued on July 3, 2025.

The core of the proceeding was a fundamental misunderstanding by the Petitioners regarding the re-hearing’s legally restricted scope. The Arizona Department of Real Estate granted the re-hearing solely on the narrow grounds of potential procedural errors—specifically, “error in the administration or rejection of evidence or other errors of law occurring during the proceeding.” However, the Petitioners consistently attempted to re-litigate the merits of the original case, arguing against the initial ALJ’s findings of fact and legal conclusions.

The presiding ALJ, Kay A. Abramsohn, repeatedly clarified that disagreement with the outcome of the original decision was not a permissible basis for this re-hearing. The Petitioners’ specific claims of procedural error were systematically addressed and found to be without merit:

• Rejected Evidence: The claim that evidence was rejected was unsubstantiated. The official record showed the Petitioners’ exhibits were admitted in the original hearing, and a challenged line of questioning was identified as judicial guidance on argumentation, not a rejection of evidence.

• Improper Statute: The allegation that the Respondent used a “counterfeit” statute (A.R.S. § 33-1807) was refuted. The Respondent’s counsel explained that the version submitted was the one legally in effect during the period of the dispute, prior to a 2024 legislative amendment.

• Procedural Unfairness: The Petitioners’ concerns about insufficient time to prepare were directed at the Arizona Department of Real Estate, a separate agency from the Office of Administrative Hearings, which has no jurisdiction over the Department’s timelines.

Ultimately, the Petitioners failed to meet their burden of proof to demonstrate any procedural or legal errors occurred during the initial hearing. The re-hearing confirmed the integrity of the original proceeding, and the initial decision stands.

Case Overview

Detail

Case Name

Samantha and Millard C. Finch, Petitioners, v. Mountain Gate Community aka Copper Canyon Ranch, Respondent.

Original Case No.

25F-H017-REL

Re-hearing Case No.

25F-H017-REL-RHG

Presiding ALJ (Re-hearing)

Kay A. Abramsohn

Petitioner Representative

Samantha Finch (representing herself and Millard C. Finch)

Respondent Representative

Attorney B. Austin Baillio (Maxwell & Morgan, P.C.)

Timeline of Key Events

• February 7, 2025: The original administrative hearing is held.

• February 26, 2025: The initial ALJ Decision is issued, finding the Respondent to be the prevailing party.

• March 28, 2025: The Petitioners file a timely Dispute Rehearing Petition.

• April 29, 2025: The Arizona Department of Real Estate (ADRE) issues an Order Granting Re-Hearing on limited grounds.

• June 13, 2025: The re-hearing is conducted before the Office of Administrative Hearings (OAH).

• July 3, 2025: The final ALJ Decision on the re-hearing is issued, dismissing the Petitioners’ petition.

The Central Issue: Limited Scope of the Re-hearing

The defining characteristic of the June 13, 2025, re-hearing was the persistent disconnect between its mandated legal scope and the arguments advanced by Petitioner Samantha Finch.

Granted vs. Denied Grounds for Re-hearing

The ADRE’s Order on April 29, 2025, granted the re-hearing on one specific ground:

• Granted: “Error in the administration or rejection of evidence or other errors of law occurring during the proceeding.”

Crucially, the ADRE did not grant a re-hearing on other grounds requested by the Petitioners, including:

• Denied: “That the findings of fact or decision was arbitrary, capricious, or an abuse of discretion.”

• Denied: “That the findings of fact or decision was not supported by the evidence or was contrary to law.”

Petitioner’s Misinterpretation of Scope

Throughout the hearing, Ms. Finch repeatedly attempted to argue the substance of the original case, focusing on her disagreement with the initial ALJ’s factual findings and conclusions. Her arguments centered on topics such as the classification of a December payment as a “prepayment” and the application of funds to late fees, which she believed were contrary to the evidence she presented.

ALJ Abramsohn was compelled to repeatedly intervene to clarify the proceeding’s purpose:

“If you disagree with the way in which the judge came to conclusion based on the evidence that was admitted to the record, that is number seven and eight and that is not what the reharing was granted.”

“This hearing is not to appeal your disagreement with the decision. And Mr. Balio would agree with me on that. That would be I mean take a look at your petition number seven and eight.”

This fundamental misapprehension shaped the entire course of the re-hearing, with the Petitioners’ arguments consistently falling outside the established jurisdiction.

Analysis of Petitioners’ Key Arguments

The Petitioners’ attempts to demonstrate procedural error focused on three primary claims, none of which were substantiated by the record.

1. Argument: Improper Rejection of Evidence

The Petitioners contended that the original ALJ either rejected or failed to consider their evidence.

• Claim: Missing Exhibit Copies: Ms. Finch argued that her evidence must have been rejected because when she requested copies of all hearing exhibits from the OAH, she received only the Respondent’s exhibits. She believed this implied her own evidence was not part of the record used for the decision.

◦ Finding: This claim was incorrect. The ALJ noted that the initial decision explicitly stated that Petitioners’ exhibits had been admitted into evidence. Furthermore, the act of a staff member not returning copies of a party’s own documents is an administrative process issue, not a judicial act of rejecting evidence during a hearing.

• Claim: Blocked Line of Questioning: Ms. Finch asserted that the original ALJ prevented her from presenting evidence when he stopped her from questioning a witness about whether the Respondent had a “court order” to apply payments in a certain way.

◦ Finding: Examination of the self-prepared transcript provided by Ms. Finch revealed that the original judge did not reject evidence. Instead, he guided the pro se litigant by stating the question was “sort of asking for a legal conclusion” and advised her, “If you’d like to make that argument, you are welcome to do that.” This constitutes judicial management of a hearing, not the rejection of evidence. The Respondent’s counsel confirmed that Ms. Finch did, in fact, make this argument during her closing statement in the original hearing.

2. Argument: Use of an Improper Statute (A.R.S. § 33-1807)

In their Dispute Petition, the Petitioners alleged that the version of Arizona Revised Statute § 33-1807 used by the original ALJ was “unsubstantiated,” not authentic, and different from the version they had submitted.

• Claim: The ALJ based his decision on a “counterfeit” or incorrect version of the law provided by the Respondent.

◦ Finding: Respondent’s attorney, B. Austin Baillio, provided a clear explanation. The statute in question was amended by the legislature in 2024. The version his client submitted was the version that was legally in effect at the time the disputed payment actions occurred (beginning in 2019). He stated: “The version that my client admitted was the version of that statute that was in effect at the time payments were being applied to the ledger, which was a previous version than what exists today.” He further argued that even if it were an error, it was harmless, as the outcome would have been the same under either version of the law. The ALJ had both versions in the record and could apply the law accordingly.

3. Argument: Procedural Unfairness and Lack of Time

Ms. Finch repeatedly stated that she was not given enough time by the ADRE to prepare her “statement in response to the decision” and that her request for an extension was improperly handled.

• Claim: The ADRE did not provide an adequate extension, hindering her ability to fully articulate her case for a re-hearing.

◦ Finding: ALJ Abramsohn explained the jurisdictional separation between the agencies: “I can’t do anything about [that] because I’m not real estate. We’re a separate state agency.” The OAH is responsible only for conducting the hearing as scheduled by the ADRE. Any grievance regarding timelines or extensions granted by the Department must be addressed with that department, as it falls outside the OAH’s authority. The final decision noted that the Petitioners contacted the Department on May 9, 2025, but the case had already been forwarded to the OAH on April 25, 2025.

Final Disposition and Legal Conclusions

The ALJ Decision issued on July 3, 2025, formally dismissed the Petitioners’ case, finding that they failed to meet their legal burden.

Final Order: “IT IS ORDERED that Petitioners’ Dispute Petition is Dismissed.”

Conclusions of Law

The decision was based on the following legal conclusions:

1. Burden of Proof: The Petitioners bore the burden to prove by a “preponderance of the evidence” that a procedural or legal error occurred during the February 7, 2025, proceeding. They failed to meet this burden.

2. No Evidence of Rejection: The re-hearing evidence demonstrated that the Petitioners’ submitted documents were, in fact, admitted to the original administrative hearing record.

3. No Evidence of Error: The Petitioners failed to present any credible evidence that they were prevented from presenting evidence or that any errors of law occurred during the original hearing.

4. Improper Arguments: The Petitioners’ arguments disagreeing with the original ALJ’s Findings of Fact and Decision were improperly raised in the re-hearing, as the ADRE had not granted a re-hearing on those grounds. These arguments were consequently dismissed.

Study Guide – 25F-H017-REL