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 Administrative Law Judge dismissed the petition and deemed the Respondent HOA the prevailing party, concluding that the HOA acted reasonably and had the authority under CC&R sections 9 and 9(b) to require the removal of the Petitioners' patio cover for building maintenance and painting. Furthermore, pursuant to A.R.S. § 33-1255(C), Petitioners are responsible for the cost of removing and reinstalling their limited common element patio cover.
Why this result: The ALJ concluded that the Respondent's plan for repairing and painting the buildings was reasonable and the Petitioners failed to cite any provision of the CC&Rs that Respondent had currently violated. The cost allocation was determined by A.R.S. § 33-1255(C) based on the patio cover being a limited common element.
Key Issues & Findings
HOA authority to mandate removal of patio cover (limited common element) for maintenance and allocation of associated costs.
Petitioners filed a petition alleging the HOA violated CC&Rs 10(a) by threatening to remove their patio cover during a painting project. The basic issue was Petitioners' assertion that the Respondent lacked authority to mandate the removal of their limited common element patio cover. The ALJ determined the HOA had authority under CC&R sections 9 and 9(b) and A.R.S. § 33-1255(C), and Petitioners must pay the costs of removal and reinstallation.
Orders: Petitioners' petition was dismissed. Respondent was deemed the prevailing party. Respondent has the authority to require Petitioners to remove their patio cover, and Petitioners are responsible for the cost to remove and reinstall it.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
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Analytics Highlights
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Video Overview
Audio Overview
Decision Documents
17F-H1717038-REL-RHG Decision – 605540.pdf
17F-H1717038-REL-RHG Decision – ../17F-H1717038-REL/583987.pdf
17F-H1717038-REL-RHG Decision – ../17F-H1717038-REL/585505.pdf
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 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.
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
