Brad W. Stevens vs. Mogollon Airpark, Inc.

Posted on March 1, 2019 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	18F-H1818029-REL-RHG, 18F-H1818045-REL, 18F-H1818054-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2018-10-18
Administrative Law Judge	Thomas Shedden
Outcome	The Administrative Law Judge ruled partially in favor of Petitioner Warren R. Brown, finding that Mogollon Airpark, Inc. violated ARIZ. REV. STAT. section 33-1803(A) by imposing a $25 late payment fee, and ordered the fee rescinded and the $500 filing fee refunded,,,. The ALJ ruled against both Petitioners (Brown and Stevens) regarding the challenge to the $325 assessment increase, dismissing those petitions because they failed to prove the HOA violated A.R.S. § 33-1803(A),,,.
Filing Fees Refunded	$1,500.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Warren R. Brown	Counsel	—
Respondent	Mogollon Airpark, Inc.	Counsel	Gregory A. Stein, Esq.; Mark K. Sahl, Esq.

Alleged Violations

ARIZ. REV. STAT. section 33-1803(A)
ARIZ. REV. STAT. section 33-1803(A)
ARIZ. REV. STAT. section 33-1803(A)

Outcome Summary

The Administrative Law Judge ruled partially in favor of Petitioner Warren R. Brown, finding that Mogollon Airpark, Inc. violated ARIZ. REV. STAT. section 33-1803(A) by imposing a $25 late payment fee, and ordered the fee rescinded and the $500 filing fee refunded,,,. The ALJ ruled against both Petitioners (Brown and Stevens) regarding the challenge to the $325 assessment increase, dismissing those petitions because they failed to prove the HOA violated A.R.S. § 33-1803(A),,,.

Why this result: Petitioners Warren R. Brown and Brad W. Stevens failed to prove by a preponderance of the evidence that the combined $325 assessment increase violated ARIZ. REV. STAT. section 33-1803(A) because their definition of 'regular assessment' as encompassing all assessments enacted through proper procedures was not supported by statutory construction principles,.

Key Issues & Findings

Challenge to assessment increase exceeding 20% limit (Brown Docket 18F-H1818029-REL-RHG)

Petitioner Brown alleged the combined $325 increase, consisting of a $116 regular increase and a $209 special assessment, violated A.R.S. § 33-1803(A) because 'regular assessment' refers to the creation process, making the total increase subject to the 20% cap,,,,.

Orders: Petition dismissed. Respondent Mogollon Airpark, Inc. deemed the prevailing party in the 029 matter,,,.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

Challenge to assessment increase exceeding 20% limit (Stevens Docket 18F-H1818054-REL)

Petitioner Stevens alleged the total $325 assessment increase violated A.R.S. § 33-1803(A) and raised accompanying allegations of deceptive accounting and lack of authority to impose special assessments,,.

Orders: Petition dismissed. Respondent deemed the prevailing party in the 054 matter,,,,.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

Challenge to late payment charges (Brown Docket 18F-H1818045-REL)

Petitioner Brown alleged that the $25 late fee and 18% interest charged by Mogollon violated the statutory limits set forth in A.R.S. § 33-1803(A),,. The ALJ found the $25 late charge violated the statute because the limit applies to all 'assessments',.

Orders: Petitioner Warren R. Brown deemed the prevailing party. Mogollon Airpark Inc. must rescind the $25 late fee and pay Mr. Brown his filing fee of $500.00 within thirty days,.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

Analytics Highlights

Topics: HOA assessment cap, Late fee violation, Statutory construction, Regular assessment definition, Special assessment, Filing fee refund

Additional Citations:

ARIZ. REV. STAT. section 33-1803(A)
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Deer Valley, v. Houser, 214 Ariz. 293, 296, 152 P.3d 490, 493 (2007)
U.S. Parking Sys v. City of Phoenix, 160 Ariz. 210, 211, 772 P.2d 33, 34 (App. 1989)

Video Overview

Audio Overview

Decision Documents

18F-H1818054-REL-RHG Decision – 692388.pdf

Uploaded 2026-04-24T11:14:31 (102.8 KB)

18F-H1818054-REL-RHG Decision – 666285.pdf

Uploaded 2026-04-24T11:14:35 (151.9 KB)

18F-H1818054-REL-RHG Decision – 672623.pdf

Uploaded 2026-04-24T11:14:39 (144.6 KB)

Briefing Document: Brown and Stevens vs. Mogollon Airpark, Inc.

Executive Summary

This document synthesizes the findings and conclusions from a consolidated administrative law case involving petitioners Warren R. Brown and Brad W. Stevens against their homeowners’ association (HOA), Mogollon Airpark, Inc. The central dispute concerned a 2018 assessment increase of $325, which represented a 39.4% increase over the previous year, and the imposition of a new $25 late fee.

The petitioners argued that the entire assessment increase violated Arizona Revised Statute § 33-1803(A), which limits annual regular assessment increases to 20%. They contended that the term “regular” describes the procedural enactment of an assessment, making the entire 325increaseasingleregularassessment.Conversely,theHOAassertedthatithadbifurcatedtheincreaseintoacompliant14.1116) regular assessment increase and a separate $209 special assessment, which is not subject to the 20% statutory cap.

The Administrative Law Judge (ALJ) ultimately sided with Mogollon Airpark on the assessment increase, dismissing the petitions of both Mr. Brown and Mr. Stevens. The ALJ’s rationale, based on principles of statutory construction, was that “regular assessment” refers to a type of assessment, distinct from a “special assessment,” and that to rule otherwise would render the word “regular” meaningless in the statute. A subsequent rehearing requested by Mr. Stevens was also denied on the same grounds.

However, the ALJ ruled in favor of Mr. Brown on the matter of the late fee. The decision found that the statutory limit on late fees applies to all “assessments,” not just regular ones, making the HOA’s $25 fee a clear violation. Underlying the legal challenges were substantial allegations by the petitioners of deceptive accounting and financial mismanagement by the HOA to create a “fabricated shortfall,” though the ALJ noted these issues were outside the narrow scope of the administrative hearing and better suited for civil court.

Case Overview and Parties Involved

This matter consolidates three separate petitions filed with the Arizona Department of Real Estate, which were heard by the Office of Administrative Hearings.

• Petitioners:

◦ Warren R. Brown (Docket Nos. 18F-H1818029-REL-RHG & 18F-H1818045-REL)

◦ Brad W. Stevens (Docket No. 18F-H1818054-REL)

• Respondent:

◦ Mogollon Airpark, Inc.

• Venue and Adjudication:

◦ Tribunal: Office of Administrative Hearings, Phoenix, Arizona

◦ Administrative Law Judge: Thomas Shedden

◦ Hearing Date (Consolidated Matters): September 28, 2018

◦ Rehearing Date (Stevens Matter): February 11, 2019

Key Financial Figures

Amount/Rate

Calculation/Note

Previous Year’s Assessment (2017)

The baseline for calculating the increase percentage.

Total 2018 Assessment Increase

The total amount disputed by the petitioners.

Total Increase Percentage

($325 / $825)

“Regular Assessment” Increase

As classified by Mogollon Airpark, Inc. (14.1% increase).

“Special Assessment”

As classified by Mogollon Airpark, Inc.

New Late Fee

Challenged as exceeding statutory limits.

New Interest Rate

For past-due accounts.

Statutory Late Fee Limit

Greater of $15 or 10%

Per ARIZ. REV. STAT. § 33-1803(A).

Statutory Assessment Increase Limit

20% over prior year

Per ARIZ. REV. STAT. § 33-1803(A), applies to regular assessments.

Analysis of Core Legal Disputes

The hearings focused on two primary violations of Arizona statute alleged by the petitioners.

The 2018 Assessment Increase (39.4%)

The crux of the case in dockets 029 and 054 was the interpretation of the term “regular assessment” within ARIZ. REV. STAT. § 33-1803(A).

• Petitioners’ Position (Brown & Stevens):

◦ The total $325 increase, constituting a 39.4% hike, is a clear violation of the 20% statutory cap.

◦ The term “regular assessment” as used in the statute refers to the process by which an assessment is created (i.e., by motion, second, and vote). As the entire $325 was passed via this standard procedure, it constitutes a single regular assessment.

◦ They further argued that Mogollon Airpark, Inc.’s governing documents (Bylaws and CC&Rs) do not provide any explicit authority to impose “special assessments,” meaning any assessment levied must be a regular one.

• Respondent’s Position (Mogollon Airpark, Inc.):

◦ The assessment was properly bifurcated into two distinct parts: a $116 increase to the regular assessment (a 14.1% increase, well within the 20% limit) and a $209 special assessment.

◦ “Regular assessment” and “special assessment” are established terms of art in the HOA industry, denoting different types of assessments, not the process of their creation.

◦ The existence of both terms in other parts of Arizona law, such as § 33-1806, demonstrates the legislature’s intent to treat them as separate categories.

Late Fees and Interest Charges

In docket 045, Mr. Brown challenged the legality of the newly instituted penalties for late payments.

• Petitioner’s Position (Brown):

◦ The statute explicitly limits late fees to “the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.”

◦ The HOA’s imposition of a flat $25 late fee is a direct violation of this provision. An invoice provided as evidence showed Mr. Brown was charged this $25 fee plus $1.57 in interest.

• Respondent’s Position (Mogollon Airpark, Inc.):

◦ The HOA argued that the statutory limitation on late fees applied only to regular assessments, not to special assessments. This argument was explicitly rejected by the ALJ.

Underlying Allegations of Financial Misconduct

While the administrative hearings were limited to the specific statutory violations, the petitions were motivated by deep-seated concerns over the HOA’s financial management. These allegations were not adjudicated but were noted by the ALJ.

• Core Allegation: The petitioners claimed the HOA treasurer and others engaged in “deceptive and nonstandard accounting methods” to manufacture a financial crisis and justify the assessment increase.

• Specific Claims:

◦ Mr. Brown alleged that the accounting was “deliberately misleading” to obscure the fact that the 2016 board left the treasury approximately “$200,000 better off.”

◦ Mr. Stevens submitted a 45-page petition with over 600 pages of exhibits detailing the alleged improprieties, including “keeping two sets of books,” to create a “fabricated shortfall.” He testified that he believed the HOA possessed over $1 million and did not need an increase.

• Judicial Comment: The ALJ noted that these complex financial allegations were not addressed in the hearing and suggested that “the civil courts may be better suited than an administrative tribunal to address the issues they raise.”

Judicial Decisions and Rationale

The ALJ issued separate findings and orders for each docket, culminating in a split decision. The rulings on the assessment increase were further solidified in a subsequent rehearing.

Summary of Outcomes

Docket No.

Petitioner

Core Issue

Ruling

Prevailing Party

18F-H1818029-REL-RHG

Warren R. Brown

Assessment Increase

Petition Dismissed

Mogollon Airpark, Inc.

18F-H1818054-REL

Brad W. Stevens

Assessment Increase

Petition Dismissed

Mogollon Airpark, Inc.

18F-H1818045-REL

Warren R. Brown

$25 Late Fee

Violation Found

Warren R. Brown

Rationale for Initial Decision (October 18, 2018)

• On the Assessment Increase: The ALJ found that the petitioners failed to prove by a preponderance of the evidence that a violation occurred. The ruling rested on statutory interpretation:

◦ The petitioners’ definition of “regular assessment” as a process was rejected because it would render the word “regular” in the statute “trivial or void,” as all assessments are presumed to follow a regular process.

◦ The only “fair and sensible result” that gives meaning to every word in the statute is to interpret “regular” and “special” as distinct types of assessments.

• On the Late Fees: The ALJ found that Mr. Brown successfully proved a violation.

◦ The statutory text on late fees applies to “assessments” generally, without the qualifier “regular.”

◦ Mogollon’s argument required adding the word “regular” where the legislature did not use it, which violates principles of statutory construction.

◦ Order: Mogollon was ordered to rescind the $25 fee assessed against Mr. Brown and reimburse his $500 filing fee.

Rationale for Rehearing Decision (March 1, 2019)

Mr. Stevens’s request for a rehearing on his dismissed petition was granted but ultimately denied again.

• Mr. Stevens’s Rehearing Arguments: He argued the ALJ erred by not applying a definition of “special assessment” from the case Northwest Fire District v. U.S. Home of Arizona and reasserted that an assessment unauthorized by the HOA’s documents must logically be a regular one.

• ALJ’s Rejection:

◦ The reliance on Northwest Fire District was “misplaced” because that case applies to special taxing districts created under a different state title, not private HOAs.

◦ The argument that an unauthorized special assessment becomes a regular one was deemed “nonsensical.” The ALJ noted, “More reasonably, if Mogollon has no authority to issue a special assessment, any such assessment would be void.”

◦ The core statutory interpretation from the initial hearing was affirmed. The petition was dismissed a final time.

Study Guide: Brown and Stevens v. Mogollon Airpark, Inc.

Short Answer Quiz

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

1. Identify the petitioners and the respondent in this consolidated legal matter and describe their relationship.

2. What specific financial changes did Mogollon Airpark, Inc. implement in 2018 that led to the legal dispute?

3. What was the central legal argument presented by petitioners Warren R. Brown and Brad W. Stevens regarding the assessment increase?

4. How did Mogollon Airpark, Inc. justify its total assessment increase of $325 in the face of the legal challenge?

5. Explain the Administrative Law Judge’s primary reason for dismissing the petitions concerning the assessment increase (the 029 and 054 matters).

6. What was the specific subject of the petition in the 045 matter, and what was the final ruling in that case?

7. What was the judge’s legal reasoning for finding Mogollon’s $25 late fee to be in violation of the statute?

8. Why did the hearing not address the petitioners’ underlying allegations of deceptive accounting and financial impropriety?

9. What is the standard of proof required in this matter, and which parties were responsible for meeting it?

10. In the rehearing for the 054 matter, what was Brad Stevens’s argument regarding the definition of “special assessment,” and why did the judge find his reliance on the Northwest Fire District case to be misplaced?

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Quiz Answer Key

1. The petitioners were Warren R. Brown and Brad W. Stevens, who were members of the homeowners’ association (HOA). The respondent was Mogollon Airpark, Inc., the HOA itself. The dispute arose from actions taken by the HOA board that the petitioners, as members, believed to be unlawful.

2. In 2018, Mogollon Airpark, Inc. raised its total annual assessment by $325 over the previous year’s $825. Additionally, the HOA instituted a new late payment fee of $25 and began charging 18% interest on past-due accounts.

3. The petitioners’ central argument was that the total $325 assessment increase, representing a 39.4% hike over the prior year, violated ARIZ. REV. STAT. section 33-1803(A). This statute prohibits an HOA from imposing a “regular assessment” that is more than 20% greater than the previous year’s assessment without member approval.

4. Mogollon Airpark, Inc. argued that the $325 increase was composed of two separate parts: a $116 increase to the “regular assessment” (14.1%) and a $209 “special assessment.” They contended that the 20% statutory limit in section 33-1803(A) applies only to regular assessments, not special assessments, and therefore their actions were lawful.

5. The judge dismissed the petitions based on principles of statutory construction. He concluded that “regular assessment” is a specific type of assessment, distinct from a “special assessment,” and that if “regular” merely referred to the process of passing an assessment (motion, second, vote), the word would be redundant and meaningless in the statute. Since the regular assessment portion of the increase was below the 20% threshold, no violation occurred.

6. The 045 matter, filed by Warren R. Brown, specifically challenged Mogollon’s new $25 late fee and 18% interest charge. The judge ruled in favor of Mr. Brown, deeming him the prevailing party, and ordered Mogollon to rescind the $25 late fee and refund his $500 filing fee.

7. The judge found the $25 late fee violated the statute because the section of ARIZ. REV. STAT. section 33-1803(A) limiting late charges applies to “assessments” generally, not just “regular assessments.” Unlike the clause on assessment increases, the legislature did not use the limiting word “regular,” so applying that limitation would violate principles of statutory construction.

8. The hearing did not address the allegations of deceptive accounting because the petitions filed by Mr. Brown (029) and Mr. Stevens (054) were “single-issue petitions.” This limited the scope of the hearing strictly to the question of whether Mogollon violated the specific statute, section 33-1803(A). The judge noted that civil courts may be a more suitable venue for the financial allegations.

9. The standard of proof required was a “preponderance of the evidence.” The burden of proof was on the petitioners, Messrs. Brown and Stevens, to prove their respective allegations against the respondent, Mogollon Airpark, Inc.

10. Mr. Stevens argued that the definition of “special assessment” from the case Northwest Fire District v. U.S. Home of Arizona should be applied, which it failed to meet. The judge found this reliance misplaced because that case applies to special taxing districts created under ARIZ. REV. STAT. Title 48, and Mogollon Airpark, Inc. is an HOA, not such a taxing district.

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Essay Questions

Instructions: The following questions are designed for a more in-depth, essay-format response. Do not provide answers.

1. Analyze the competing interpretations of the term “regular assessment” as presented by the petitioners and the respondent. Discuss the Administrative Law Judge’s final interpretation and the principles of statutory construction used to arrive at that conclusion.

2. The Administrative Law Judge’s decision distinguishes between the legality of the assessment increase and the legality of the late fee. Explain the legal reasoning behind this split decision, focusing on the specific wording of ARIZ. REV. STAT. section 33-1803(A) and the different statutory construction applied to each clause.

3. Discuss the procedural limitations of the hearings as described in the legal decision, specifically referencing the concept of a “single-issue petition.” How did this limitation affect the scope of the case and prevent the judge from ruling on certain serious allegations made by Brown and Stevens?

4. Based on the “Findings of Fact,” describe the background allegations of financial misconduct made by the petitioners against Mogollon’s treasurer and board. Although not ruled upon, explain how these allegations served as the primary motivation for their legal challenges regarding the assessment and fee increases.

5. Trace the procedural history of the “029 matter,” from its original petition and dismissal to the eventual rehearing and final order. What does this process reveal about the requirements for filing a successful petition with the Office of Administrative Hearings?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official who presides over administrative hearings, weighs evidence, and makes legal rulings and decisions, in this case, Judge Thomas Shedden.

ARIZ. REV. STAT. section 33-1803(A)

The specific Arizona statute at the heart of the dispute. It limits HOA regular assessment increases to 20% over the prior year and caps late payment charges to the greater of $15 or 10% of the unpaid assessment.

Assessment

A fee or charge levied by a homeowners’ association on its members to cover operating expenses, reserve funds, and other costs.

Bylaws

A set of rules adopted by an organization, like an HOA, to govern its internal management and operations. Part of the governing documents.

Covenants, Conditions & Restrictions. These are legal obligations recorded in the deed of a property, governing its use and maintenance. Part of the governing documents.

Consolidated Matter

A legal procedure where multiple separate cases or petitions involving common questions of law or fact are combined into a single hearing to promote efficiency.

Docket Number

A unique number assigned by a court or administrative office to identify a specific case. The matters in this case were identified as 029, 045, and 054.

Governing Documents

The collection of legal documents, including CC&Rs and Bylaws, that establish the rules and authority of a homeowners’ association.

Petitioner

The party who files a petition initiating a legal action in an administrative or court proceeding. In this case, Warren R. Brown and Brad W. Stevens.

Preponderance of the Evidence

The standard of proof in this case. It means the greater weight of the evidence shows that a fact is more likely than not to be true.

Regular Assessment

As interpreted by the ALJ, a specific type of recurring annual assessment for an HOA’s general operating budget, subject to the 20% increase limit in section 33-1803(A).

Respondent

The party against whom a petition is filed. In this case, Mogollon Airpark, Inc.

Single-Issue Petition

A petition that limits the scope of the administrative hearing to a single, specific legal question or alleged violation, as was the case for the 029 and 054 matters.

Special Assessment

As interpreted by the ALJ, a one-time or non-recurring assessment levied for a specific purpose (e.g., replenishing a reserve fund). The ALJ found it is not subject to the 20% annual increase cap that applies to regular assessments.

Statutory Construction

The process and principles used by judges to interpret and apply legislation. The judge used these principles to determine the meaning of “regular” and “assessment” in the statute.

How One Word Let an HOA Raise Dues by 40%—And 4 Surprising Lessons for Every Homeowner

Imagine opening your annual bill from your Homeowner’s Association (HOA) and discovering your dues have skyrocketed by nearly 40% overnight. This isn’t a hypothetical scenario. It’s precisely what happened to homeowners in the Mogollon Airpark community in Arizona when their HOA board raised the annual assessment by $325, from $825 to $1,150—a staggering 39.4% increase.

But the homeowners weren’t just angry about the amount; they alleged the increase was justified by a “fabricated shortfall” created through “deceptive and nonstandard accounting methods.” At first glance, the hike also seemed legally impossible. Arizona state law, specifically ARIZ. REV. STAT. section 33-1803(A), clearly states that an HOA cannot impose a regular assessment that is more than 20% greater than the previous year’s. So how did the Mogollon Airpark board legally circumvent this cap? The answer, found in the fine print of an administrative law judge’s decision, reveals critical lessons for every homeowner about the power of language, legal strategy, and reading the fine print.

1. The Power of a Name: The “Special Assessment” Loophole

The HOA’s strategy was deceptively simple. Instead of raising the annual assessment by the full $325, the Mogollon Airpark board split the increase into two distinct parts. First, it raised the “regular assessment” by $116. This amounted to a 14.1% increase over the previous year’s $825, keeping it well within the 20% legal limit. The remaining $209 was then levied as a separate fee, which the board classified as a “special assessment.”

When homeowners challenged this, the Administrative Law Judge sided with the HOA. The judge’s ruling was based on a strict reading of the statute: the 20% cap applies only to “regular assessments,” not “special assessments.” By simply calling a portion of the increase a “special assessment,” the HOA legally circumvented the very law designed to protect homeowners from massive, sudden fee hikes.

Lesson 1 for Homeowners: The name of a fee is everything. State-mandated caps on “regular” assessments offer zero protection if your HOA can simply reclassify an increase as a “special” assessment.

2. Every Word Is a Battlefield: “Regular” Doesn’t Mean What You Think

The homeowners, petitioners Warren Brown and Brad Stevens, built their case on a common-sense interpretation of the law. They argued that the term “regular assessment” in the statute referred to the process by which an assessment is created—that is, any fee approved through a regular motion, second, and vote by the board. By this logic, the entire $325 increase was a single “regular assessment” and therefore violated the 20% cap. They also argued that the HOA had no authority under its own governing documents to impose a special assessment in the first place.

The judge, however, rejected this definition. The judge reasoned that lawmakers don’t add words to statutes for no reason. If “regular” simply meant “voted on normally,” the word would be redundant, as all assessments are assumed to be passed this way. To give the word meaning, it must refer to a specific type of assessment. To support this interpretation, the judge pointed to another Arizona statute, 33-1806, which explicitly uses the distinct terms “regular assessments” and “special assessment[s].” This proved that the state legislature intended for them to be entirely different categories of fees, cementing the HOA’s victory on the main issue.

Lesson 2 for Homeowners: Every word in a statute has a purpose. Courts assume lawmakers don’t use words accidentally, and a layperson’s “common-sense” definition of a term can be easily defeated by established principles of legal interpretation.

3. A Small Victory on a Technicality: Why You Should Still Read the Fine Print

While the homeowners lost the battle over the 39.4% dues increase, one petitioner, Mr. Brown, secured a small but significant win on a separate issue: late fees. The Mogollon Airpark board had instituted a new $25 late fee, which Mr. Brown challenged.

Arizona law limits late fees to “the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.” The HOA argued that this limit, like the 20% cap, only applied to regular assessments. This time, the judge disagreed. The judge’s logic was a textbook example of statutory interpretation: when lawmakers include a specific word in one part of a law but omit it from another, courts assume the omission was deliberate. In the section of the law governing late fees, the limit applies to “assessments” in general; the word “regular” is conspicuously absent.

Because the HOA’s $25 fee exceeded the legal limit, the judge ruled in favor of Mr. Brown. The court ordered the HOA to rescind the illegal late fee and, importantly, to reimburse Mr. Brown for his $500 filing fee.

Lesson 3 for Homeowners: The fine print cuts both ways. While one word can create a loophole for an HOA, the absence of that same word elsewhere can be your most powerful weapon.

4. Fighting the Right Battle in the Right Place: The Allegations a Judge Couldn’t Hear

Underlying the dispute over the 20% cap were much more serious allegations. The homeowners’ petitions claimed the HOA board used “deceptive and nonstandard accounting methods,” including keeping “two sets of books,” to create a “fabricated shortfall” and justify the massive fee increase.

Yet, none of these explosive claims were ever addressed during the hearing. The reason was a crucial matter of legal procedure. The homeowners had filed what are known as “single-issue petitions,” which focused narrowly and exclusively on the violation of the 20% assessment cap in statute 33-1803(A). This strategic choice legally prevented the judge from considering the broader allegations of financial mismanagement, regardless of their merit.

In a pointed footnote, the judge highlighted the procedural constraints and suggested the homeowners had chosen the wrong legal venue for their most serious claims:

Considering the nature of Messrs. Brown and Stevens’s allegations, the civil courts may be better suited than an administrative tribunal to address the issues they raise.

Lesson 4 for Homeowners: Your legal strategy is as important as your evidence. Choosing the right claims to file and the right venue to file them in can determine whether a judge is even allowed to hear your most compelling arguments.

Conclusion: Your Most Powerful Tool

The case of Mogollon Airpark is a powerful illustration of how legal battles are won and lost not on broad principles of fairness, but on the precise definitions of individual words. The presence of the word “regular” in one clause of the law cost the homeowners their central fight, allowing the HOA to circumvent the 20% cap. In a stunning contrast, the absence of that very same word in another clause handed them a clear victory on late fees.

This case is a stark reminder of the power hidden in legal definitions and fine print. It leaves every homeowner with a critical question: Do you really know what your governing documents—and the state laws that bind them—truly allow?

Case Participants

Petitioner Side

Warren R. Brown (petitioner)
Appeared pro se
Brad W. Stevens (petitioner)
Appeared pro se; presented testimony/evidence

Respondent Side

Gregory A. Stein (respondent attorney)
CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Mark K. Sahl (respondent attorney)
CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Spelled Mark K. Saul in some transmissions

Neutral Parties

Thomas Shedden (ALJ)
OAH
Judy Lowe (Commissioner)
Arizona Department of Real Estate
Felicia Del Sol (clerk/staff)
Transmitting staff

Rex E. Duffett vs. Suntech Patio Homes Homeowners Association (ROOT)

Posted on April 27, 2018 by [email protected]

Case Summary

Case ID	18F-H1818025-REL / 18F-H1818027-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2018-04-24
Administrative Law Judge	Tammy L. Eigenheer
Outcome	Petitioner won the statutory claim regarding access to association documents (A.R.S. § 33-1805(A)) and was refunded the $500 filing fee. Petitioner lost the claim regarding the failure to maintain exterior walls (CC&Rs) due to insufficient evidence.
Filing Fees Refunded	$500.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Rex E. Duffett	Counsel	—
Respondent	Suntech Patio Homes Homeowners Association	Counsel	Nathan Tennyson

Alleged Violations

CC&Rs
A.R.S. § 33-1805(A)

Outcome Summary

Petitioner won the statutory claim regarding access to association documents (A.R.S. § 33-1805(A)) and was refunded the $500 filing fee. Petitioner lost the claim regarding the failure to maintain exterior walls (CC&Rs) due to insufficient evidence.

Why this result: Petitioner failed to prove the maintenance issue by a preponderance of the evidence (for case 18F-H1818025-REL).

Key Issues & Findings

Failure to repair and maintain exterior walls

Petitioner alleged the HOA failed to repair damage (crack) to the exterior wall of his unit as required by the CC&Rs. The ALJ found that Petitioner failed to present sufficient evidence (black and white photographs did not clearly show the damage) to establish a violation.

Orders: Petitioner's petition in Case Number 18F-H1818025-REL is denied.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

CC&Rs
5
17

Failure to provide requested association records

Petitioner requested meeting notices and minutes in December 2017. Respondent's former management company failed to respond in a timely fashion. Petitioner established by a preponderance of the evidence that Respondent violated the statute.

Orders: Petitioner deemed the prevailing party in Case Number 18F-H1818027-REL. Respondent ordered to comply with A.R.S. § 33-1805(A) in the future and pay Petitioner the filing fee of $500.00.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

A.R.S. § 33-1805(A)
19
20
21
22

Analytics Highlights

Topics: HOA, Document Request, Records Disclosure, Maintenance, CC&Rs, Filing Fee Refund

Additional Citations:

A.R.S. § 32-2199 et seq.
A.A.C. R2-19-119
A.R.S. § 33-1805(A)
CC&Rs

Video Overview

Audio Overview

Decision Documents

18F-H1818025-REL Decision – 630610.pdf

Uploaded 2026-04-24T11:10:12 (114.0 KB)

Administrative Hearing Brief: Duffett vs. Suntech Patio Homes HOA

Executive Summary

This briefing document analyzes the Administrative Law Judge Decision in two consolidated cases filed by homeowner Rex E. Duffett against the Suntech Patio Homes Homeowners Association (HOA). The ruling presents a split decision, with the petitioner prevailing on one claim while failing to provide sufficient evidence for the other.

The first petition, concerning the HOA’s alleged failure to repair exterior walls, was denied. The petitioner failed to meet the burden of proof, as the submitted photographic evidence was unclear and did not sufficiently establish the existence or severity of the damage requiring immediate repair.

The second petition, concerning the HOA’s failure to provide association records upon request, was upheld. The judge found that the HOA, through its former management company, violated state law (A.R.S. § 33-1805(A)) by not responding to a formal document request within the mandated ten-business-day window.

As a result, Mr. Duffett was deemed the prevailing party in the records-request case. The HOA was ordered to pay his $500 filing fee and to ensure future compliance with the relevant statutes. The case highlights critical issues of evidence quality in homeowner disputes and demonstrates the legal liability an HOA retains for the failures of its management agents, particularly during periods of transition.

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Case Overview

Case Numbers

18F-H1818025-REL and 18F-H1818027-REL (Consolidated)

Petitioner

Rex E. Duffett

Respondent

Suntech Patio Homes Homeowners Association

Hearing Date

April 4, 2018

Decision Date

April 24, 2018

Presiding Judge

Administrative Law Judge Tammy L. Eigenheer

The hearing addressed two separate petitions filed by Rex E. Duffett with the Arizona Department of Real Estate:

1. Petition 1 (18F-H1818025-REL): Alleged the HOA violated community CC&Rs by failing to repair exterior walls of the petitioner’s unit.

2. Petition 2 (18F-H1818027-REL): Alleged the HOA violated A.R.S. § 33-1805(A) by failing to provide requested documents.

Petition 1: Failure to Repair Exterior Walls (Denied)

Petitioner’s Allegations and Evidence

• Core Claim: The petitioner alleged the HOA failed its duty, as defined by a March 1993 amendment to the CC&Rs, to maintain the exterior walls of his unit. The CC&Rs state, “The Suntech Patio Homeowners Association shall be responsible for the painting and maintenance of the following: A) Exterior walls of all units . . . .”

• Initial Request (July 14, 2017): Mr. Duffett faxed the HOA’s management company, The Management Trust, stating, “While inspecting the outside of my property I noticed a crack in the exterior wall. Please inspect, repair and paint the wall as soon as possible to prevent any damage which could result from rain water in the interior of the wall.”

• Follow-Up Request (August 21, 2017): In a certified letter, Mr. Duffett provided more detail, identifying a crack in the entryway wall allowing “rain water to seep into the interior wall,” a “bare concrete” area on the garage, and a previously cracked garage wall that had been repaired by a roofing company but not painted.

• Hearing Testimony: Mr. Duffett testified that a roofing company he hired to find a leak in his garage ceiling determined the source was not the roof but a crack in the exterior wall.

• Submitted Evidence: The petitioner submitted five black-and-white photographs of his home’s exterior across his two communications.

Respondent’s Position and Evidence

• Management Transition: Pride Community Management took over from The Management Trust on February 1, 2018. The new manager, Rebecca Stowers, and owner, Frank Peake, testified to a difficult transition where The Management Trust initially provided only one box of records, later discovering seven or eight more boxes in storage. Mr. Peake stated that Pride had not seen the petitioner’s communications regarding the damage until the hearing.

• Inspection: Ms. Stowers testified that she inspected the petitioner’s home on March 27, 2018. While she noted “a missing area of stucco on the front of the garage that needed to be repaired,” she “denied being able to identify a crack in the stucco anywhere else on the front of the house.”

• Community-Wide Repair Plan: Ms. Stowers stated that the HOA intended to repair the stucco and paint all exterior walls in the community during the 2018 calendar year at a projected cost of $46,000, to be funded potentially through a special assessment due to the HOA being underfunded.

Conclusion of Law and Ruling

• Burden of Proof: The Administrative Law Judge (ALJ) determined that the petitioner bore the burden of proving his claim by a preponderance of the evidence.

• Evidence Failure: The ALJ found the submitted evidence insufficient. The decision states: “The black and white photographs submitted at hearing did not clearly show the crack Petitioner alleged existed on the exterior wall of his unit… The Administrative Law Judge was unable to identify the location or severity of the alleged crack, and therefore, cannot conclude that such a crack exists and/or that it is necessary to be repaired immediately.”

• Final Ruling: The petitioner failed to meet his burden of proof. The petition in Case Number 18F-H1818025-REL was denied.

Petition 2: Failure to Provide Association Records (Upheld)

Petitioner’s Allegations and Evidence

• Core Claim: The petitioner alleged that the HOA violated A.R.S. § 33-1805(A), which requires an association to fulfill a request for records within ten business days.

• The Request (December 22, 2017): Mr. Duffett faxed The Management Trust a request for specific documents, citing a statement made by the HOA in a separate case. He requested copies of:

◦ Meeting notices and minutes for all meetings where “rules and regulations were discussed” in August/September 2017.

◦ Meeting notices and minutes for meetings where the last HOA dues increase was discussed.

◦ A copy of the notice for the last association rate increase.

Respondent’s Position and Evidence

• Lack of Awareness: The HOA’s initial response on January 29, 2018, indicated it had only become aware of the request upon receiving notice of the petition. The current management company, Pride, testified they had not seen the original communication from the petitioner.

• Vagueness of Request: Frank Peake of Pride testified that the request for minutes of meetings “where the rules and regulations were discussed” was unclear “because rules and regulations are discussed in some form at virtually every meeting of the association.”

• Claim of Privilege: The initial response from The Management Trust on January 29, 2018, claimed that the requested minutes were for “closed executive meetings and were only available to Board members.”

Conclusion of Law and Ruling

• Statutory Violation: The ALJ concluded that the petitioner clearly made a request for documents and that the HOA, via its former management company, failed to act as required by law.

• Failure of Former Management: The decision explicitly faults the prior management company: “The Management Trust should have responded or requested additional clarification of what documents Petitioner was requesting as it was the management company during the ten day window Respondent had to respond pursuant to the statute.”

• Final Ruling: The petitioner successfully established by a preponderance of the evidence that the HOA violated A.R.S. § 33-1805(A). Mr. Duffett was deemed the prevailing party in Case Number 18F-H1818027-REL.

Final Order and Implications

The Administrative Law Judge issued the following orders based on the conclusions of law:

Case Number

Subject

Ruling

18F-H1818025-REL

Exterior Wall Repairs

Petition Denied

18F-H1818027-REL

Document Request

Petitioner Deemed Prevailing Party

Directives to the Respondent (Suntech Patio Homes HOA):

1. Future Compliance: The HOA must comply with the provisions of A.R.S. § 33-1805(A) going forward.

2. Payment of Filing Fee: The HOA must pay the petitioner his filing fee of $500.00 within thirty (30) days of the order.

This order is considered binding on the parties unless a rehearing is granted.

Study Guide: Duffett v. Suntech Patio Homes HOA

This guide provides a comprehensive review of the Administrative Law Judge Decision in the consolidated cases of Rex E. Duffett v. Suntech Patio Homes Homeowners Association, Case Numbers 18F-H1818025-REL and 18F-H1818027-REL. The decision, issued by the Arizona Office of Administrative Hearings, addresses two separate petitions filed by a homeowner against his Homeowners Association (HOA), one concerning property maintenance and the other concerning access to association records.

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Quiz: Short-Answer Questions

Instructions: Answer the following questions in 2-3 complete sentences, drawing all information directly from the case decision.

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

2. What were the two distinct allegations made by the Petitioner in the petitions that were consolidated for this hearing?

3. According to the community’s governing documents (CC&Rs), what specific responsibility did the HOA have regarding the exterior of residential units?

4. On what grounds did the Administrative Law Judge rule against the Petitioner in his claim for wall repairs (Case No. 18F-H1818025-REL)?

5. What specific Arizona statute did the Petitioner claim the HOA violated in his second petition regarding access to records (Case No. 18F-H1818027-REL)?

6. Describe the roles and performance of the two management companies, The Management Trust and Pride Community Management, as detailed in the hearing evidence.

7. What was the final outcome of the petition concerning the HOA’s failure to provide documents, and who was named the prevailing party?

8. What specific types of documents did the Petitioner request from the HOA in his fax dated December 22, 2017?

9. What was the legal standard of proof the Petitioner was required to meet, and for which petition did he successfully meet it?

10. What financial penalty was imposed upon the Respondent as part of the final Order?

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Answer Key

1. The Petitioner was Rex E. Duffett, a homeowner who filed the petitions. The Respondent was the Suntech Patio Homes Homeowners Association, the entity Mr. Duffett alleged had violated community rules and state law.

2. The first petition alleged that the HOA violated the CC&Rs by failing to respond to repeated requests for repairs to the exterior walls of his unit. The second petition alleged the HOA violated A.R.S. § 33-1805(A) by failing to provide requested association documents.

3. A March 1993 amendment to the CC&Rs states that the Suntech Patio Homeowners Association “shall be responsible for the painting and maintenance of the… Exterior walls of all units.”

4. The judge ruled against the Petitioner because he failed to establish his claim by a preponderance of the evidence. The black and white photographs submitted did not clearly show the alleged crack’s location or severity, so the judge could not conclude that a repair was immediately necessary.

5. The Petitioner claimed the HOA violated A.R.S. § 33-1805(A). This statute requires an association to make records reasonably available for examination and to provide copies of requested records within ten business days.

6. The Management Trust was the HOA’s management company when the incidents occurred and failed to properly respond to the Petitioner’s requests. Pride Community Management took over on February 1, 2018, and testified that the transition was difficult due to the sparse documentation initially provided by The Management Trust.

7. The judge ruled in favor of the Petitioner, deeming him the prevailing party in Case Number 18F-H1818027-REL. The judge ordered the HOA to comply with the applicable statute in the future.

8. The Petitioner requested copies of meeting notices and minutes for meetings where rules and regulations were discussed and where the last HOA dues increase was discussed. He also requested a copy of the notice of the last rate increase and any associated signed written consents.

9. The legal standard was “preponderance of the evidence,” defined as evidence with the most convincing force. The Petitioner failed to meet this standard for the wall repair petition but successfully met it for the document request petition.

10. The Respondent (HOA) was ordered to pay the Petitioner his filing fee of $500.00. The payment was to be made directly to the Petitioner within thirty days of the Order.

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official who presides over administrative hearings, weighs evidence, and issues a legally binding decision. In this case, the ALJ was Tammy L. Eigenheer.

A.R.S. § 33-1805(A)

An Arizona Revised Statute that legally requires homeowners associations to make financial and other records available for member examination and to provide copies upon request within ten business days.

A.R.S. § 32-2199 et seq.

The section of the Arizona Revised Statutes that grants jurisdiction to the Arizona Department of Real Estate to hear disputes between homeowners and their associations.

Conditions, Covenants and Restrictions (CC&Rs)

The governing legal documents that establish the rules, obligations, and restrictions for a planned community and its homeowners association.

Consolidated for Hearing

A procedural step where two or more separate legal cases involving the same parties are combined into a single hearing for efficiency.

Department

Within the context of this case, refers to the Arizona Department of Real Estate, the state agency where the Petitioner initially filed his petitions.

The final, legally binding ruling issued by the Administrative Law Judge at the conclusion of the hearing.

Petitioner

The party who initiates a legal action by filing a petition. In this case, homeowner Rex E. Duffett.

Preponderance of the Evidence

The standard of proof required in this proceeding. It is met when the evidence presented has “the most convincing force” and is more likely true than not.

Prevailing Party

The party who is found to have won the legal dispute. The Petitioner was deemed the prevailing party in the document request case.

Respondent

The party against whom a petition is filed and who must respond to the allegations. In this case, the Suntech Patio Homes Homeowners Association.

A Homeowner Sued His HOA Over a Cracked Wall. He Lost Because of Bad Photocopies.

Introduction: The David vs. Goliath Battle Against Your HOA

For many homeowners, a dispute with their Homeowners Association (HOA) can feel like an uphill battle. It’s a common story of frustration, complex rules, and feeling unheard. The legal case of Rex E. Duffett versus the Suntech Patio Homes HOA is a perfect example, but with a twist. This isn’t just a story about winning or losing; it’s a fascinating cautionary tale filled with surprising lessons for any homeowner navigating a conflict with their association. This breakdown of the real-life administrative court decision reveals the unexpected details that can make or break a case.

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1. Takeaway #1: The Quality of Your Proof Matters More Than the Truth

The dispute began when Rex Duffett filed a petition alleging his HOA had failed to repair a crack in his exterior wall that he claimed was causing a water leak. According to the association’s own CC&Rs, maintaining exterior walls was the HOA’s responsibility. To document the problem, he diligently sent faxes and certified mail to the management company, including photographs of the damage.

Despite his efforts, the Administrative Law Judge denied his petition for repairs.

The reason was as surprising as it was simple: the evidence he submitted was not clear enough. The black and white copies of the photographs he provided at the hearing “did not clearly show any damage.” The judge’s finding was blunt and highlights a critical point for any legal dispute:

The Administrative Law Judge was unable to identify the location or severity of the alleged crack, and therefore, cannot conclude that such a crack exists and/or that it is necessary to be repaired immediately.

The lesson here is critical. In a legal dispute, having proof is not enough; the proof must be clear, convincing, and well-presented. Mr. Duffett’s primary case failed not because he was necessarily wrong, but because his evidence failed to persuade the judge. In an administrative hearing, a handful of high-resolution color photographs, or even a short video, would have provided irrefutable evidence and could have changed the entire outcome of his primary petition.

2. Takeaway #2: Your HOA is on the Hook for Its Management Company’s Failures

Mr. Duffett also filed a second petition against the HOA for failing to provide records he requested, such as meeting minutes. Under Arizona law (A.R.S. § 33-1805(A)), an association must fulfill such a request within ten business days. The HOA failed to do so.

The root of the problem was the HOA’s previous management company, “The Management Trust.” This company not only failed to respond to the homeowner’s request but also failed to notify the new management company about it. The relationship between the HOA and this vendor was so poor that the HOA had previously tried to terminate the contract, but the management company “refused to acknowledge the termination and held Respondent to the full two year contract.” The transition was chaotic; the old company initially provided only one box of information before later discovering “seven or eight more boxes” in storage.

Even though the management company was clearly at fault, the Judge ruled that the HOA violated the law. This provides a powerful insight for both boards and homeowners: an HOA cannot blame its vendors. Legally, the association is the responsible party. Hiring an incompetent or unresponsive management company creates significant legal and financial liability for the association and, by extension, every homeowner. This is not an abstract risk; in this case, the management company’s failure to forward a simple request directly led to a legal violation that cost the association—and thus, its members—the $500 filing fee ordered by the judge.

3. Takeaway #3: A “Win” Can Be More Complicated Than It Looks

When you look at the final outcome, Mr. Duffett’s case presents a nuanced picture of what a “win” really means in an HOA dispute. The judge issued a split decision:

• Petition for Repairs: Denied. The homeowner lost.

• Petition for Documents: The homeowner was deemed the “prevailing party.” He won.

As the prevailing party in the second petition, the homeowner received a clear victory. The judge ordered the HOA to comply with the document access law in the future and, crucially, to pay the homeowner back his $500 filing fee.

This highlights a common reality in legal disputes: a homeowner can secure a clear procedural victory (enforcing the right to documents and recovering fees) while simultaneously failing to achieve their core substantive goal (getting the wall repaired). The outcome shows that legal victories can be partial and may not address the real-world problem that initiated the dispute in the first place.

4. Takeaway #4: Vague Requests and Messy Records Create Chaos

This case is a masterclass in how poor communication from both sides can create a perfect storm of dysfunction.

First, the homeowner’s request for documents was “somewhat vague.” The new management company testified it was “unclear because rules and regulations are discussed in some form at virtually every meeting.” While the HOA still violated the law by failing to respond at all, this highlights a crucial lesson for homeowners: be as specific and clear as possible in all written communication to avoid ambiguity.

This vague request then ran headlong into the second problem: the HOA’s institutional chaos. The new Community Manager testified that the only relevant document they possessed was the minutes from a single meeting, and that “seven or eight more boxes” of records were missing after a disastrous transition between management companies. The homeowner’s ambiguous request met an organization that likely couldn’t have responded effectively even if it wanted to.

For both sides, meticulous documentation is a shield. For homeowners, a clear, specific, and undeniable paper trail strengthens their position. For HOA boards, organized records are essential for smooth operations, seamless transitions between management companies, and, most importantly, avoiding legal liability.

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Conclusion: The Devil is in the Details

The case of Duffett v. Suntech Patio Homes HOA is a powerful reminder that in legal disputes, the outcome often hinges on the small stuff. Small details—the quality of a photocopy, the precise wording of a request, the competence of a vendor, the location of a box of files—can have massive consequences. They can mean the difference between winning and losing, between getting a problem solved and walking away with only a partial victory.

This case shows how easily things can go wrong. The next time you’re in a dispute, what’s the one small detail you might be overlooking that could change everything?

Case Participants

Petitioner Side

Rex E. Duffett (petitioner)

Respondent Side

Nathan Tennyson (attorney)
BROWN/OLCOTT, PLLC
Rebecca Stowers (property manager)
Pride Community Management
Community Manager
Frank Peake (property manager)
Pride Community Management
Owner of Pride
Shawn Mason (property manager)
The Management Trust
Former management company staff

Neutral Parties

Tammy L. Eigenheer (ALJ)
Office of Administrative Hearings
Judy Lowe (Commissioner)
Arizona Department of Real Estate
LDettorre (ADRE staff)
Arizona Department of Real Estate
AHansen (ADRE staff)
Arizona Department of Real Estate
djones (ADRE staff)
Arizona Department of Real Estate
DGardner (ADRE staff)
Arizona Department of Real Estate
ncano (ADRE staff)
Arizona Department of Real Estate
F. Del Sol (staff)
Signed transmission document

Robert A. White vs. Aspen Shadows Condominium Association

Posted on April 2, 2016 by [email protected]

Case Summary

Case ID	16F-H1616001-BFS
Agency	DFBLS
Tribunal	OAH
Decision Date	2016-04-01
Administrative Law Judge	Diane Mihalsky
Outcome	The ALJ dismissed all claims. The HOA was found to be in compliance with insurance and records statutes. The maintenance issue involved a Limited Common Element for which the owner was responsible. The noise issue was barred by CC&R waivers and timing.
Filing Fees Refunded	$2,000.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Robert A. White	Counsel	—
Respondent	Aspen Shadows Condominium Association	Counsel	Maria R. Kupillas

Alleged Violations

A.R.S. § 33-1253
A.R.S. § 33-1247
CC&Rs 4.23
A.R.S. § 33-1260

Outcome Summary

The ALJ dismissed all claims. The HOA was found to be in compliance with insurance and records statutes. The maintenance issue involved a Limited Common Element for which the owner was responsible. The noise issue was barred by CC&R waivers and timing.

Why this result: Petitioner failed to meet the burden of proof on all counts. The HOA demonstrated compliance with statutes (electronic records, reasonably available insurance) and the CC&Rs (Limited Common Element responsibility, noise waivers).

Key Issues & Findings

Failure to Maintain All-Risk Insurance

Petitioner alleged the HOA failed to maintain required insurance coverage because the insurer denied a claim for a slow leak/construction defect.

Orders: Dismissed. Respondent maintained a policy; exclusions for slow leaks/defects are common and reasonably available.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

Failure to Maintain Common Elements (Grinder Pump)

Petitioner alleged the HOA failed to repair a grinder pump damaged by storm runoff and improper installation.

Orders: Dismissed. Petitioner failed to prove the pump was defective. As a Limited Common Element, costs were assessable to Petitioner anyway.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

Failure to Enforce Floor Covering Restrictions

Petitioner alleged the HOA failed to enforce prohibitions against hard floor coverings in the unit above him, causing noise.

Orders: Dismissed. The flooring was installed years prior to Petitioner's purchase. Petitioner assumed risk of noise under CC&Rs.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

Failure to Provide Records (Resale Disclosure)

Petitioner alleged the HOA failed to provide paper copies of governing documents upon purchase, offering electronic versions instead.

Orders: Dismissed. The statute permits electronic delivery.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

Video Overview

Audio Overview

Decision Documents

16F-H1616001-BFS Decision – 488610.pdf

Uploaded 2026-04-24T10:56:58 (203.0 KB)

16F-H1616001-BFS Decision – 495160.pdf

Uploaded 2026-04-24T10:57:07 (59.8 KB)

16F-H1616001-BFS Decision – 488610.pdf

Uploaded 2026-01-27T21:12:47 (203.0 KB)

16F-H1616001-BFS Decision – 495160.pdf

Uploaded 2026-01-27T21:12:47 (59.8 KB)

Briefing Document: Robert A. White v. Aspen Shadows Condominium Association

Executive Summary

This briefing document summarizes the administrative hearing and subsequent decision regarding the dispute between Robert A. White (Petitioner) and the Aspen Shadows Condominium Association (Respondent). The case (No. 16F-H1616001-BFS) was heard by Administrative Law Judge (ALJ) Diane Mihalsky on March 24, 2016.

The Petitioner, a homeowner in the Aspen Shadows development, alleged that the Association violated Arizona Revised Statutes (A.R.S.) and the community's Covenants, Conditions, and Restrictions (CC&Rs) across four primary areas: insurance coverage, maintenance of common elements (grinder pump), enforcement of flooring restrictions, and the provision of resale disclosure documents.

On April 1, 2016, the ALJ recommended the dismissal of the petition, finding that the Respondent had acted within its legal and contractual authority and that the Petitioner failed to meet the burden of proof for his claims. This decision was certified as final by the Department of Fire, Building and Life Safety on May 9, 2016.

Analysis of Key Themes

1. Insurance Obligations and Coverage Exclusions

A central theme of the dispute was whether the Association maintained adequate property insurance as required by A.R.S. § 33-1253 and Article 8.1.1 of the CC&Rs.

Petitioner's Claim: He argued that the Association's insurance should have covered water damage in his unit (Unit 41) caused by a leak in the unit above (Unit 42). He contended that the Association "withdrew" the claim or held an inadequate policy that did not cover "all risks."
Respondent's Defense: The Association demonstrated it submitted the claim to Farmers Insurance. The insurer denied the claim based on policy exclusions for "wear and tear," "faulty installation," and damage occurring over a long period (more than 14 days).
ALJ Finding: The Respondent established that its policy was consistent with those "reasonably available" to condominium associations. The ALJ concluded the Association did not violate its duties simply because a specific claim was denied under standard exclusions.

2. Maintenance and Repair of Limited Common Elements

The dispute addressed the responsibility for repairing a "grinder pump" serving the Petitioner's unit.

The Issue: The Petitioner replaced a failing grinder pump at his own expense ($2,556.84 total) and sought reimbursement, blaming improper installation and a poorly designed diversion wall for the failure.
Respondent's Defense: The Association’s facilities engineer, Ty Hart, inspected the site and found the pump lid was partially off, allowing debris in. He further stated the drainage was subsequently addressed and repaired.
Legal Interpretation: Under CC&R Section 5.1, while the Association is generally responsible for common elements, it has the right to assess the cost of repairing "Limited Common Elements" (those serving fewer than all units) back to the benefiting owner. Because the pump served only Unit 41, the ALJ found the reimbursement claim moot.

3. CC&R Enforcement and Sound Liability

The Petitioner sought enforcement of CC&R Section 4.23, which prohibits hard floor coverings in certain unit types, alleging noise from Unit 42's hardwood floors impacted his unit's sale price.

Evidence of Violation: The Respondent admitted the owner of Unit 42 had hardwood floors but indicated it was investigating whether a variance had been granted in 2008.
Liability Release: The ALJ highlighted CC&R Section 13.20 ("Sound issues; Release of Claims"), which explicitly states that unit owners assume the risk of noise and vibrations in attached residential units and release the Association from liability regarding such claims.
Outcome: The ALJ determined the Petitioner did not establish the Association was responsible for the potential violation, particularly as the floors were installed years before he purchased the unit.

4. Statutory Requirements for Resale Disclosure

The final theme involved the delivery of governing documents during the property purchase process under A.R.S. § 33-1260.

Petitioner's Claim: He argued he never received the Bylaws and CC&Rs in the "required written" (paper) format before closing.
Statutory Reality: A.R.S. § 33-1260 allows associations to provide documents in "either paper or electronic format."
Evidence: The Respondent provided evidence that electronic access was offered and that hard copies were eventually mailed to the Petitioner eight days before closing. The ALJ ruled that the Petitioner’s refusal to accept electronic delivery did not constitute a violation by the Association.

Important Quotes with Context

Quote	Source/Context	Significance
"The insurance policies purchased by the Association shall… contain… A 'severability of interest' endorsement which shall preclude the insurer from denying the claim of a Unit Owner because of the negligent acts of [Respondent] or other Unit Owners."	CC&R Article 8.1.1(vii)(e); quoted in the ALJ's Findings of Fact.	This defines the standard for Association insurance and was the basis for the Petitioner's claim of coverage violation.
"Unfortunately, wear and tear, faulty or improper installation, mold, damages caused by mold and water damages that occur over a long period of time are all excluded from coverage under your policy."	Farmers Insurance Denial Letter (Dec 7, 2015); addressed to the Community Manager.	This established that the claim was denied by the carrier's independent investigation, not "withdrawn" by the Association.
"Neither the Declarant Parties, the Association nor any director, officer, agent or employee of the Association shall be liable to any Unit Owner… for any claims or damages resulting… from any noise or vibrations emanating from one unit to another."	CC&R Section 13.20; quoted in the ALJ's Findings of Fact.	This provided a legal shield for the Association against the Petitioner's noise-related complaints.
"A unit owner shall mail or deliver to a purchaser… all of the following in either paper or electronic format: 1. A copy of the bylaws… 2. A copy of the declaration."	A.R.S. § 33-1260(A); cited in Conclusions of Law.	This statute confirmed the Association's right to provide documents electronically, negating the Petitioner's demand for paper-only delivery.

Actionable Insights

For Homeowners' Associations

Maintain Clear Records of Variances: The Association's difficulty in immediately producing a 2008 variance for a flooring violation highlights the need for organized, long-term archives of Board meeting minutes and granted exceptions.
Document Distribution Standards: Associations are legally permitted to use electronic delivery for resale disclosures. Standardizing this process and keeping delivery receipts (as the Association did with "HomeWiseDocs") provides a strong defense against claims of non-disclosure.
Insurance Policy Education: Associations should ensure members understand that "All Risk" property insurance still contains standard exclusions (e.g., slow leaks, wear and tear), and that the Association's policy is not a substitute for individual unit owner insurance.

For Property Owners

Due Diligence on Sound Exposure: Owners purchasing units in attached developments should be aware that CC&Rs often contain "assumption of risk" clauses regarding noise. Investigating the unit above for hard flooring prior to purchase is a critical step.
Burden of Proof in Administrative Hearings: To succeed in a petition against an HOA, the owner must provide a "preponderance of the evidence." In this case, the Petitioner failed to prove that his specific grinder pump was defective or that the Association had a duty to cover a denied insurance claim.
Limited Common Element Costs: Owners should verify which elements of their unit are classified as "Limited Common Elements," as the Association often has the right to bill the repair costs for these items back to the individual owner.

Study Guide: White v. Aspen Shadows Condominium Association (No. 16F-H1616001-BFS)

This study guide provides a comprehensive overview of the administrative law case Robert A. White v. Aspen Shadows Condominium Association. It explores the legal disputes between a condominium owner and a homeowners' association (HOA) regarding insurance coverage, maintenance responsibilities, flooring restrictions, and statutory disclosure requirements.

I. Case Overview and Key Entities

Core Parties

Petitioner: Robert A. White, owner of Unit 41 in the Aspen Shadows Condominium development.
Respondent: Aspen Shadows Condominium Association, the homeowners' association (HOA) responsible for the development located in Flagstaff, Arizona.
Administrative Law Judge (ALJ): Diane Mihalsky, who presided over the hearing on March 24, 2016.

Primary Legal Frameworks

Arizona Revised Statutes (A.R.S.) Title 33 (Condominiums): Specifically sections 33-1247 (Maintenance and Repair), 33-1253 (Insurance), and 33-1260 (Resale Disclosure).
Covenants, Conditions, and Restrictions (CC&Rs): The governing documents of the Aspen Shadows Condominium Association.

II. Summary of Disputes and Legal Findings

1. Insurance Coverage (A.R.S. § 33-1253 & CC&R Article 8)

The Petitioner alleged that the Respondent failed to provide adequate insurance coverage after a water leak from Unit 42 caused damage to his unit (Unit 41). The HOA's insurer, Farmers Insurance, denied the claim.

Evidence: The insurer determined the leak was a "repeated, slow drip" over at least 14 days, caused by faulty installation or wear and tear.
ALJ Finding: The Respondent maintained an "All Risk" policy as required. However, exclusions for slow leaks, mold, and faulty construction are common in policies "reasonably available" to HOAs. Therefore, the Respondent did not violate the statute or CC&Rs.

2. Maintenance of the Grinder Pump (A.R.S. § 33-1247 & CC&R Article 5)

The Petitioner claimed a grinder pump serving his unit was damaged by storm water runoff due to an improperly installed diversion wall. He sought reimbursement for replacement costs ($1,697.50 for the pump and $859.34 for installation).

Evidence: A facilities engineer inspected the site and found the pump lid was unsecured, allowing debris to enter. The engineer also confirmed the pump was in working order after cleaning.
Legal Distinction: The grinder pump was classified as a Limited Common Element because it served only Unit 41.
ALJ Finding: Under CC&R Section 5.1, the HOA has the right to assess the cost of maintenance or repair of a Limited Common Element back to the specific unit owner it serves. Thus, the HOA was not liable for the costs.

3. Hard Floor Restrictions (CC&R Section 4)

The Petitioner alleged the unit above him (Unit 42) violated CC&R Section 4.23, which prohibits hard floor coverings in certain areas to prevent noise disturbances.

Evidence: The owner of Unit 42 claimed to have obtained a variance in 2008. Furthermore, CC&R Section 13.20 contains a "Release of Claims" where owners assume the risk of noise and vibration in attached units.
ALJ Finding: Because the floor was installed six years before the Petitioner purchased his unit, and because of the explicit noise release in the CC&Rs, the Respondent was not held responsible for the alleged violation.

4. Resale Disclosure (A.R.S. § 33-1260)

The Petitioner argued that the Respondent failed to provide required governing documents (Bylaws, CC&Rs) in a written format during his purchase in 2014.

Evidence: The Respondent provided the documents electronically via a third-party website (HomeWiseDocs). When the Petitioner objected to the electronic format, hard copies were mailed eight days before closing.
ALJ Finding: Arizona statute allows for delivery in "either paper or electronic format." The Petitioner’s refusal to accept electronic delivery did not constitute a statutory violation by the HOA.

III. Short-Answer Practice Questions

What is the "burden of proof" in this administrative hearing, and which party carries it?

Answer: The Petitioner bears the burden of proof to establish violations by a "preponderance of the evidence."

How does A.R.S. § 33-1253 define the HOA's obligation regarding property insurance?

Answer: The association must maintain, to the extent reasonably available, property insurance on common elements against all risks of direct physical loss.

Why was the insurer's denial of the water damage claim upheld by the ALJ?

Answer: The damage was caused by a slow leak over time, which is a standard exclusion in insurance policies reasonably available to HOAs.

What defines a "Limited Common Element" according to the Aspen Shadows CC&Rs?

Answer: A portion of the common elements allocated for the exclusive use of one or more, but fewer than all, of the units.

Under A.R.S. § 33-1260, in what formats is an HOA permitted to provide resale disclosure documents?

Answer: In either paper or electronic format.

What was the outcome regarding the Petitioner's claim for the cost of the grinder pump replacement?

Answer: The claim was dismissed because the pump is a Limited Common Element for which the HOA can assess repair costs to the benefiting owner.

IV. Essay Prompts for Deeper Exploration

The Interplay of Statute and Contract: Analyze how the Arizona Revised Statutes (A.R.S.) and the Aspen Shadows CC&Rs work together to define the responsibilities of the HOA. Use the grinder pump dispute to illustrate how a specific CC&R provision (Article 5.1) can impact the application of general maintenance statutes (A.R.S. § 33-1247).

"Reasonably Available" Insurance: Discuss the legal significance of the phrase "to the extent reasonably available" in the context of HOA insurance requirements. How did this phrasing protect the Aspen Shadows Condominium Association from liability when their insurer denied coverage for a slow plumbing leak?

Electronic Disclosure and Modern Governance: Evaluate the ALJ’s ruling on the delivery of governing documents. Should a homeowner have the right to demand paper copies over electronic ones, or does the statutory allowance for "electronic format" reflect a necessary evolution in association management? Support your argument with details from the case.

V. Glossary of Important Terms

Term	Definition
A.R.S.	Arizona Revised Statutes; the codified laws of the state of Arizona.
CC&Rs	Covenants, Conditions, and Restrictions; the governing legal documents that dictate the rules for a common-interest development.
Common Elements	Portions of the condominium development other than the units (e.g., roofs, grounds, structural walls).
Limited Common Element	A common element reserved for the exclusive use of a specific unit or units (e.g., a specific unit's grinder pump or patio).
PEX Piping	A type of flexible plastic piping used in plumbing systems; cited in this case as the source of a slow leak.
Preponderance of the Evidence	The standard of proof in civil cases, meaning the evidence shows that a contention is "more probably true than not."
Resale Disclosure	The process and documents required by law to be provided to a buyer when a property within an HOA is sold.
Variance	An official permit to depart from the requirements of the CC&Rs (e.g., being allowed to install hard flooring where it is usually prohibited).
Grinder Pump	A device used to process sewage waste from a unit into the main sewer or septic system.

The Limits of Association Liability: Key Takeaways from White v. Aspen Shadows Condominium Association

The administrative case of Robert A. White vs. Aspen Shadows Condominium Association (No. 16F-H1616001-BFS) serves as a stark reminder of the financial and legal risks inherent in condominium ownership. The Petitioner, who purchased his unit for $427,000 in 2014, found himself under contract to sell it just two years later for only $315,000—a loss of $112,000. Attributing this loss in part to Association mismanagement, he filed a petition alleging four distinct violations of Arizona statutes and the community’s CC&Rs.

The subsequent dismissal of all claims by the Administrative Law Judge (ALJ) provides a vital blueprint for property owners and community managers. This case highlights a common point of friction: the gap between a homeowner’s expectations of "Association responsibility" and the actual legal boundaries established by governing documents and state law.

The Insurance Gap: "All Risk" vs. The Slow Drip

This dispute highlights a critical misunderstanding of "All Risk" insurance. Following a water leak from Unit 42 into the Petitioner’s unit, the Association’s carrier, Farmers Insurance, ultimately denied the claim.

A key lesson in administrative paper trails emerged here: the Community Manager (Ms. Lashlee) initially suggested she did not wish to pursue the claim due to a $5,000 deductible, leading to a "Withdrawal of Claim" letter. However, the adjuster’s formal investigation continued, resulting in a final "Denial." The ALJ found that under A.R.S. § 33-1253, an Association is only required to maintain insurance that is "reasonably available." According to Conclusion of Law #4, the exclusions applied in this case are common industry standards, meaning the Association fulfilled its duty by providing a policy that met the "reasonably available" market standard.

Covered Loss vs. Policy Exclusion

The following table contrasts standard industry inclusions with the specific exclusions identified by the Farmers Insurance adjuster in this case:

Covered Events (Standard Inclusions)	Excluded Events (Case Facts)
Sudden and accidental discharge of water	Slow drips occurring over 14+ days
Bursting of frozen pipes	Wear and tear (e.g., aged PEX piping)
Fire sprinkler malfunctions	Faulty, inadequate, or defective installation
Accidental cracking of a system	Mold and damages caused by mold

The Grinder Pump Dilemma: Navigating Limited Common Elements

The Petitioner sought nearly $2,500 in reimbursement for a failed grinder pump, alleging that an improperly installed diversion wall caused debris-laden runoff to destroy the equipment. This claim failed because of the intersection between A.R.S. § 33-1247 and the CC&Rs.

While A.R.S. § 33-1247 generally holds an association responsible for common element maintenance, it yields to specific provisions in a community’s Declaration. Here, CC&R Section 1.2.26 defines "Limited Common Elements" (LCE) as portions of the common elements reserved for the exclusive use of specific units. Because the pump served only Unit 41, it was an LCE. Under CC&R Section 5.1, the Association has the right to assess the cost of repairing an LCE back to the benefiting unit owner.

The Association’s defense was bolstered by the testimony of Ty Hart, a Grade 4 wastewater operator with 14 years of experience. Expert testimony outweighed the homeowner’s anecdotal claims; Mr. Hart noted that the pump well was designed to be debris-proof, but his inspection found the lid "half off." Despite a minor scrivener’s error in the engineer's documentation (dating the repair to 2014 instead of 2015), his expert credibility regarding owner-maintenance failure remained the deciding factor.

The Noise Factor: Hard Floors and Assumption of Risk

The Petitioner alleged the Association failed to enforce CC&R Section 4.23, which prohibits hard floor coverings, leading to noise disturbances from Unit 42. However, Section 13.20 ("Sound issues; Release of Claims") provided a robust defense for the Association.

The ALJ’s ruling against the Petitioner rested on three pillars:

Pre-existing Conditions: The hard floor was installed in 2008, six years before the Petitioner’s purchase. This is a primary defense against failure-to-enforce claims; the Association is not required to retroactively litigate long-standing modifications.
Contractual Assumption of Risk: By purchasing an attached unit, owners acknowledge that noise and vibrations are inherent to the property type.
Liability Waivers: The CC&R language explicitly releases the Association and its directors from any claims or damages resulting from noise emanating from one unit to another.

Digital vs. Paper: Navigating Resale Disclosures

Finally, the Petitioner alleged the HOA failed to provide required disclosures during his 2014 purchase. He had refused to use an electronic portal (HomeWiseDocs.com) and insisted on paper copies.

The legal reality, per A.R.S. § 33-1260, is that associations may provide documents in "either paper or electronic format." The evidence showed the Association provided access via a digital portal for a nominal $21.00 fee. The ALJ ruled that a buyer’s personal refusal to accept digital copies does not constitute a statutory violation by the HOA. Furthermore, evidence showed the Association’s escrow officer had mailed hard copies as a courtesy eight days prior to closing regardless.

Conclusion: Strategy Checklist for the Informed Homeowner

The March 24, 2016, hearing resulted in a total dismissal of the petition, confirming that the Association acted within its authority and statutory obligations. For property owners, the $112,000 loss suffered by the Petitioner serves as a final warning: the "price" of not understanding your CC&Rs before closing escrow can be devastating.

Homeowner's Strategy Checklist

To protect your investment and avoid fruitless litigation, homeowners should:

Audit Insurance Specifics: Do not assume "All Risk" means "Any Damage." Verify exclusions for "slow leaks" (14+ days) and "wear and tear," which are standard in reasonably available HOA policies.
Identify Limited Common Elements (LCE): Don't just read the definition; ask for a specific list of elements (e.g., grinder pumps, AC pads, balconies) that have historically been assessed to individual units.
Investigate Pre-existing Conditions: If you are sensitive to noise, verify the flooring types in units above you before closing. Per Section 13.20, you assume the risk of noise the moment you sign the purchase contract.
Accept Electronic Disclosures: Under A.R.S. § 33-1260, electronic delivery is a legal standard. Refusing digital access only creates unnecessary friction and does not exempt you from being bound by the documents.

Ultimately, the most effective protection for any buyer is a proactive, expert-led review of the CC&Rs and insurance binders before the expiration of the inspection period.

Case Participants

Petitioner Side

Robert A. White (Petitioner)
Owner of Unit 41

Respondent Side

Maria R. Kupillas (attorney)
Choate & Seletos
Represented Respondent
Melanie Lashlee (community manager)
Testified for Respondent
Ty Hart (engineer)
Flagstaff Ranch
Facilities Engineer
Faith Johnson (escrow officer)
Respondent's escrow officer, initials 'f.j.'

Neutral Parties

Diane Mihalsky (ALJ)
Office of Administrative Hearings
Administrative Law Judge
Kenji Cassady (witness)
Royal Plumbing, Inc.
Plumber who repaired leak in Unit 42
Nicolas Boley (claims representative)
Farmers Insurance
Senior Field Claims Representative
Tyler (contractor)
DC Restoration
Mitigation contractor
Jacqueline Martinez (contractor)
Damage Control AZ
Sent email confirming leak duration
Dave Taylor (unit owner)
Owner of Unit 42
Debra Blake (Interim Director)
Department of Fire Building and Life Safety
Agency head
Greg Hanchett (Interim Director)
Office of Administrative Hearings
Signed Certification of Decision
Joni Cage (staff)
Department of Fire Building and Life Safety
Recipient of decision copy
Rosella J. Rodriguez (clerk)
Office of Administrative Hearings
Mailed/transmitted decision

Saxton, Nancy vs. The Lakes Community Association

Posted on June 2, 2014 by [email protected]

Case Summary

Case ID	13F-H1314007-BFS
Agency	ADRE
Tribunal	OAH
Decision Date	2014-06-02
Administrative Law Judge	M. Douglas
Outcome	The Administrative Law Judge ruled in favor of the Respondent and dismissed the case. The Judge found that the Petitioner was contractually obligated to arbitrate disputes under the Association's bylaws, that the petition was filed after the one-year statute of limitations had expired, and that the Respondent had lawfully complied with A.R.S. § 33-1805 by offering inspection of unredacted records.
Filing Fees Refunded	$500.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Nancy Saxton	Counsel	Steven W. Cheifetz
Respondent	The Lakes Community Association	Counsel	Charles E. Maxwell

Alleged Violations

A.R.S. § 33-1805

Outcome Summary

The Administrative Law Judge ruled in favor of the Respondent and dismissed the case. The Judge found that the Petitioner was contractually obligated to arbitrate disputes under the Association's bylaws, that the petition was filed after the one-year statute of limitations had expired, and that the Respondent had lawfully complied with A.R.S. § 33-1805 by offering inspection of unredacted records.

Why this result: Jurisdictional bar due to mandatory arbitration clause; statute of limitations expiration; finding of compliance by Respondent.

Key Issues & Findings

Request to Review Association Records

Petitioner alleged the Respondent violated statutes by providing heavily redacted financial records and failing to provide unredacted copies for review upon demand.

Orders: The matter was dismissed. The Tribunal found the Petitioner was required to arbitrate, the claim was barred by the statute of limitations, and the Respondent had complied with the statute by making records reasonably available.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

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Briefing Document: Nancy Saxton vs. The Lakes Community Association

Executive Summary

This briefing document summarizes the administrative hearing and subsequent final decision in the matter of Nancy Saxton vs. The Lakes Community Association (No. 13F-H1314007-BFS). The case originated from a petition filed by Nancy Saxton, a homeowner at The Lakes Community Association in Tempe, Arizona, alleging that the Association violated state statutes regarding the inspection of financial records (A.R.S. § 33-1805).

Following a hearing held on April 29, 2014, Administrative Law Judge (ALJ) M. Douglas recommended the dismissal of the petition. The decision was based on three primary factors: a binding arbitration requirement in the Association's bylaws, the expiration of the one-year statute of limitations, and the finding that the Association had fulfilled its legal obligation to make records "reasonably available." On July 10, 2014, the decision was certified as the final agency action.

Case Overview and Participants

Role	Name	Representation
Petitioner	Nancy Saxton (Homeowner)	Steven W. Cheifetz, Esq.
Respondent	The Lakes Community Association	Charles E. Maxwell, Esq.
Administrative Law Judge	M. Douglas	Office of Administrative Hearings
Final Certifying Official	Cliff J. Vanell, Director	Office of Administrative Hearings

Analysis of Key Themes

1. Mandatory Alternative Dispute Resolution (ADR)

A central issue in the case was whether the Association’s bylaws precluded the Petitioner from filing an administrative action. The Lakes Community Association had amended its bylaws (Article XV) to include an "Agreement to Avoid Litigation."

The Provision: The amendment requires parties to submit claims regarding corporate governance to binding arbitration rather than filing suit in court or with an administrative agency.
Legal Conclusion: The Tribunal found that arbitration clauses should be construed liberally. It concluded that under the Association's bylaws and Arizona common law, the Petitioner was required to submit her claims to arbitration before seeking administrative relief.

2. Statute of Limitations (A.R.S. § 12-541(5))

The Respondent moved for dismissal on the grounds that the Petitioner failed to act within the statutory timeframe.

Timeline of Accrual: The Petitioner filed her initial demand to inspect records on November 5, 2012. Under A.R.S. § 33-1805(A), the Association had ten business days to fulfill the request. Therefore, the claim accrued no later than mid-November 2012.
The Filing: The petition was not filed until November 25, 2013, exceeding the one-year limit for liabilities created by statute.
Ruling: The ALJ determined that no evidence existed to toll or extend the one-year statute of limitations, rendering the petition untimely.

3. Records Inspection and Reasonable Availability

The Petitioner alleged that the records provided were heavily redacted and incomplete, preventing a proper evaluation of expenditures.

Volume of Production: The Association provided approximately 3,700 pages of documentation and charged the Petitioner 10¢ per page (below the 15¢ statutory maximum).
Redaction Justification: The Community Manager, Christine Green Baldanza, testified that redactions were made by the Association’s attorney to protect private homeowner information, payroll data, and personnel records, as permitted by A.R.S. § 33-1805(B).
The "Impasse": The Association offered to let the Petitioner review un-redacted documents at their attorney’s office. The Petitioner declined, citing potential intimidation and a belief that the visit would be "futile."
Legal Conclusion: The Tribunal ruled that by providing the pages and offering an in-person inspection of un-redacted records, the Association made the records "reasonably available" in accordance with the law.

Important Quotes with Context

"The HOA has refused to produce the documents without the improper redactions."

Context: Found in the Petitioner's original allegation, this quote highlights the core grievance: the belief that the Association used redactions to shield financial transparency.

"Arbitration clauses should be construed liberally and any doubts as to whether or not the matter in question is subject to arbitration should be resolved in favor of arbitration."

Context: From the Conclusions of Law, explaining why the Association's ADR amendment was enforceable against the Petitioner.

"Ms. Saxton testified that she did not want to go to the Lakes’ attorney’s office because she felt the records would be the same documents that she already had. Ms. Saxton stated that she did not want to be intimidated."

Context: This testimony explains the Petitioner's refusal of the Association's compromise offer, which the ALJ ultimately used to determine the Association had met its burden of "reasonable availability."

"The credible evidence of record failed to support a finding that would toll or extend the applicable one-year statute of limitations."

Context: Part of the ALJ’s legal reasoning for dismissing the case due to the delay in filing the petition.

Actionable Insights for Planned Communities

Bylaw Enforcement of ADR: Associations can effectively use ADR amendments to manage disputes internally and avoid the costs of administrative hearings or litigation. However, these amendments must be "duly enacted" and clearly define what constitutes a "claim."
Redaction Protocols: Under A.R.S. § 33-1805(B), Associations are entitled to withhold or redact specific sensitive information, including:

Privileged attorney-client communications.
Pending litigation files.
Personal, health, or financial records of individual members or employees.
Job performance and compensation records.

Defining "Reasonably Available": Providing a large volume of records and offering an in-person inspection of un-redacted versions (where the member can verify the necessity of redactions) likely satisfies the statutory requirement for "reasonable availability."
Strict Adherence to Timelines: Statutory claims against an Association in Arizona are generally subject to a strict one-year statute of limitations starting from the moment the alleged violation occurs (e.g., ten business days after a records request is made). Failure to file within this window is grounds for dismissal.

Nancy Saxton vs. The Lakes Community Association: Case Study Guide

This study guide provides a comprehensive overview of the administrative law case Nancy Saxton vs. The Lakes Community Association (No. 13F-H1314007-BFS). It explores the legal disputes between a homeowner and a homeowners' association (HOA) regarding record inspections, statutes of limitations, and the enforcement of arbitration clauses.

Core Case Overview

Background and Dispute

The Petitioner, Nancy Saxton, a member of The Lakes Community Association (the HOA), filed a petition with the Department of Fire, Building and Life Safety. She alleged that the HOA violated A.R.S. § 33-1805 by failing to provide complete, un-redacted financial records after she made three separate demands.

The HOA moved to dismiss the case based on four primary arguments:

Lack of Jurisdiction: The HOA's bylaws required binding arbitration for such disputes.
Statute of Limitations: The claim was filed more than one year after the cause of action accrued.
Prior Compliance: The HOA had already complied with the records request.
Statutory Compliance: The redactions made were permitted by law.

Statutory Framework

The case centers on several Arizona Revised Statutes (A.R.S.):

A.R.S. § 33-1805: Governs the inspection of HOA records. It requires associations to make records available within 10 business days and allows for redaction of specific sensitive information (e.g., personal financial info, attorney-client privileged communications).
A.R.S. § 12-541(5): Establishes a one-year statute of limitations for liabilities created by statute.
A.R.S. § 12-501: Validates written agreements to submit controversies to arbitration.
A.R.S. § 41-2198.01: Authorizes the Department to hear petitions concerning violations of planned community documents or statutes.

Key Legal Findings

1. The Statute of Limitations

The Tribunal determined that Saxton’s claim was barred by the one-year statute of limitations under A.R.S. § 12-541(5).

Accrual Date: Saxton filed her demand on November 5, 2012. Under A.R.S. § 33-1805(A), the HOA was required to provide records within 10 business days. Therefore, the claim accrued no later than mid-November 2012.
Filing Date: Saxton did not file her petition until November 25, 2013, exceeding the one-year allowance.

2. Alternative Dispute Resolution (ADR) and Jurisdiction

The HOA amended its bylaws in 2013 (Article XV) to require that disputes relating to corporate governance be submitted to binding arbitration rather than administrative agencies or courts. The Administrative Law Judge (ALJ) concluded that arbitration clauses should be construed liberally and that Saxton was required to submit her claims to arbitration per the bylaws and Arizona common law.

3. Record Accessibility and Redactions

The HOA provided Saxton with approximately 3,700 pages of documents. While Saxton argued the redactions were excessive, the HOA testified that:

Redactions were limited to private and personnel information allowed by statute.
The HOA offered to let Saxton review un-redacted documents at their attorney's office.
Saxton declined this offer, fearing intimidation and believing it would be futile.

The Tribunal concluded the HOA had made the records "reasonably available" in accordance with the law.

Short-Answer Practice Questions

According to A.R.S. § 33-1805, how many business days does an association have to fulfill a request for the examination of records?

Answer: Ten business days.

What is the maximum fee per page an HOA may charge for making copies of records under the statute?

Answer: Fifteen cents per page.

What was the specific statute of limitations applied to dismiss Saxton’s petition?

Answer: A.R.S. § 12-541(5), which requires actions upon a liability created by statute to be commenced within one year.

Under what circumstances does A.R.S. § 33-1805(B) allow an HOA to withhold or redact information?

Answer: Information can be withheld if it relates to privileged attorney-client communication, pending litigation, certain board meeting minutes, personal/health/financial records of individual members or employees, or records relating to employee job performance/complaints.

Why did the ALJ conclude that the HOA had fulfilled its duty to make records available even though the provided documents were redacted?

Answer: Because the HOA offered the petitioner the opportunity to review un-redacted documents at the office of the HOA's attorney.

What is the "standard of proof" used in these administrative hearings, and what does it mean?

Answer: The standard is "preponderance of the evidence," meaning the fact-finder must be persuaded that the proposition is "more likely true than not."

Essay Prompts for Deeper Exploration

The Balance of Transparency and Privacy: Analyze the conflict between a homeowner's right to inspect financial records and an HOA’s duty to protect the privacy of its employees and other members. Use the categories of redactable information in A.R.S. § 33-1805(B) to support your argument.
The Enforceability of Bylaw Amendments: Discuss the implications of an HOA amending its bylaws to include mandatory binding arbitration (ADR). Should such amendments apply to disputes that began before the amendment was passed? Evaluate the ALJ's decision to uphold the arbitration clause in this case.
The "Reasonably Available" Standard: In this case, the HOA provided 3,700 pages of redacted documents and offered an in-person review of un-redacted documents. Evaluate whether this constitutes making records "reasonably available." Does the location of the review (e.g., a lawyer's office) impact the reasonableness of the availability?

Glossary of Important Terms

Term	Definition
Accrual	The point in time when a cause of action or legal claim begins, triggering the start of the statute of limitations.
ADR (Alternative Dispute Resolution)	Procedures for settling disputes by means other than litigation, such as arbitration or mediation.
A.R.S.	Arizona Revised Statutes; the codified laws of the state of Arizona.
Binding Arbitration	A process in which a dispute is submitted to a neutral third party (arbitrator) who makes a final, legally enforceable decision.
General Ledger	A complete record of all the financial transactions of an association, often central to disputes regarding expenditures.
Preponderance of the Evidence	The standard of proof in most civil and administrative cases; requires that a claim be more likely true than not true.
Redaction	The process of editing a document to obscure or remove sensitive or legally protected information before disclosure.
Statute of Limitations	A law that sets the maximum time after an event within which legal proceedings may be initiated.
Tolling	A legal doctrine that allows for the pausing or delaying of the running of the period of time set forth by a statute of limitations.

Transparency vs. Red Tape: Key Lessons from the Saxton v. The Lakes HOA Dispute

Introduction: The Battle Over the Books

For many homeowners, the financial health of their Community Association is a "black box," and the demand for transparency is the primary catalyst for internal conflict. This tension was the driving force in Saxton v. The Lakes Community Association, a case that saw homeowner Nancy Saxton take her Board to the Arizona Office of Administrative Hearings (OAH). Concerned about expenditures and a perceived lack of openness, Ms. Saxton sought an exhaustive review of the Association’s records. However, what began as a quest for financial clarity ended as a masterclass in the procedural and statutory complexities that govern HOA records requests. For community leaders and residents alike, this case underscores that the right to know is not an absolute right to see everything, exactly how and when one chooses.

The Request: 3,700 Pages and a "Plastic Tub" of Records

The dispute originated on November 5, 2012, when Ms. Saxton delivered a formal demand to inspect the Association’s financial records. The Association responded by producing a massive volume of data. On December 6, 2012, she received the initial batch of reserve studies and audits. By January 8, 2013, the production reached its peak when the Community Manager delivered the general ledgers in a large plastic tub along with several manila envelopes.

While the production totaled approximately 3,700 pages, the homeowner did not pay the associated copying fees—charged at a discounted rate of 10¢ per page—until February 19, 2013. This distinction between the date of delivery (January 8) and the date of payment (February 19) is legally significant, as the "reasonable availability" of records is measured from the time they are provided for inspection, not when the homeowner decides to finalize the transaction. Despite the volume, Ms. Saxton alleged the records were "useless" due to heavy redactions and missing pages, claiming she could not properly evaluate the HOA's spending.

The HOA’s Defense: Privacy and Procedure

During the hearing, Community Manager Christine Green Baldanza testified that the Association’s redaction process was meticulous. Contrary to the homeowner's claims of a "cover-up," the Manager noted that every single financial transaction was included in the ledgers; only specific identities and sensitive details were obscured to comply with the law.

As a Legal Analyst, it is important to note that the HOA relied on A.R.S. § 33-1805(B) to justify withholding information. Specifically, the Association redacted:

Payroll Information and Compensation: Protected under A.R.S. § 33-1805(B)(5).
Private Homeowner Information: Including names and addresses of individual members, protected under A.R.S. § 33-1805(B)(4).
Personnel Records: Specific complaints or job performance data of employees.

To bridge the gap, the HOA offered a compromise: Ms. Saxton could review the un-redacted documents in person at their attorney's office and obtain copies at the statutory rate of 15¢ per page. Ms. Saxton declined, testifying she found the law office "intimidating" and the trip "futile."

The Three Legal Hurdles That Dismissed the Case

The Administrative Law Judge (ALJ) dismissed the petition, not necessarily on the quality of the 3,700 pages, but on three critical legal barriers.

Hurdle 1: The Arbitration Clause

The Lakes Community Association had amended its Bylaws to include Article XV, titled "Agreement to Avoid Litigation." This ADR provision required that disputes regarding corporate governance be handled through binding arbitration rather than administrative hearings.

Analyst’s Perspective: Boards should take note that this is a powerful jurisdictional defense. However, the clause included four specific exceptions where litigation is still permitted:

Collection of assessments and fines.
Interpretation or enforcement of CC&Rs and Architectural Rules.
Cases involving indispensable third parties.
Claims that would otherwise be barred by a statute of limitations.

Because Ms. Saxton’s records request involved "governance," the ALJ ruled she had signed away her right to an administrative hearing by virtue of her membership in the Association.

Hurdle 2: The Statute of Limitations

The ALJ applied A.R.S. § 12-541(5), which requires actions based on a "liability created by statute" to be filed within one year of accrual.

The Trigger: Ms. Saxton made her demand on November 5, 2012.
The Accrual: Under A.R.S. § 33-1805(A), an HOA has ten business days to fulfill a request. Therefore, the "cause of action" accrued in mid-November 2012.
The Filing: Ms. Saxton did not file her petition until November 25, 2013.

The ALJ’s ruling underscores the primacy of the one-year limitations period; even if the records were deficient, the homeowner waited too long to seek legal redress.

Hurdle 3: The Standard of "Reasonable Availability"

The final hurdle was the definition of "reasonably available" under A.R.S. § 33-1805. The ALJ concluded that providing 3,700 pages—and offering an in-person review of un-redacted files at a professional office—satisfied the Association's legal duty. The court clarified an essential objective standard: subjective discomfort does not override statutory compliance. The fact that the homeowner felt "intimidated" by the lawyer's office did not mean the records were unavailable.

The Final Verdict and Homeowner Rights

The Lakes Community Association was deemed the prevailing party. In June 2014, the ALJ recommended a total dismissal of the matter. This was officially certified as the final administrative decision by the Department of Fire, Building and Life Safety in July 2014 after the Department took no action to modify or reject the ruling.

Essential Takeaways for Arizona Homeowners

Watch the Clock: A records dispute is a statutory claim. In Arizona, the one-year window to file starts ten business days after your request. Delays for "health reasons" or "community unrest" rarely toll this limit.
Bylaws are Contracts: If your Association has an "Agreement to Avoid Litigation" or ADR amendment, you may be barred from state hearings and forced into private arbitration.
Access Over Location: "Reasonable availability" is an objective legal standard. An HOA is generally not required to mail un-redacted copies if they offer a professional location for inspection.
Privacy is Protected: A.R.S. § 33-1805(B) provides explicit grounds for redaction. You have a right to see what was spent, but not necessarily who (in a personnel or private member context) received it.

Conclusion

The Saxton case highlights the delicate balance between a homeowner’s right to oversight and an Association’s duty to protect member privacy. When a records dispute reaches an impasse, "reasonableness" is the yardstick the court will use. Homeowners must understand that while transparency is required, it is bounded by privacy statutes and procedural timelines. To avoid the fate of this litigation, both parties should seek legal counsel the moment communication breaks down, ensuring that procedural deadlines do not permanently close the door on substantive rights.

Case Participants

Petitioner Side

Nancy Saxton (petitioner)
The Lakes Community Association (Member)
Homeowner
Steven W. Cheifetz (attorney)
Cheifetz, Iannitelli Marcolini, P.C.
Listed as 'Heifetz' in mailing list

Respondent Side

Charles E. Maxwell (attorney)
Maxwell & Morgan, P.C.
Christine Green Baldanza (community manager)
The Lakes Community Association
Community Manager in 2012 and early 2013

Neutral Parties

M. Douglas (ALJ)
Office of Administrative Hearings
Cliff J. Vanell (director)
Office of Administrative Hearings
Signed Certification of Decision
Gene Palma (director)
Department of Fire, Building and Life Safety
Agency Director
Joni Cage (agency staff)
Department of Fire, Building and Life Safety
c/o for Gene Palma
Rosella J. Rodriguez (clerk)
Office of Administrative Hearings
Mailed/transmitted decision

Other Participants

Marsha Hill (witness)
The Lakes Community Association
CPA; Former chairman of budget and finance committee
Maureen Harrison (witness)
The Lakes Community Association
Former Board Member (1993-2000, 2011-2012)

Knight, Edmund R. vs. Springfield Community Association

Posted on January 31, 2013 by [email protected]

Case Summary

Case ID	12F-H1213008-BFS
Agency	Department of Fire, Building and Life Safety
Tribunal	OAH
Decision Date	2013-01-31
Administrative Law Judge	Tammy L. Eigenheer
Outcome	The Administrative Law Judge ruled that the Respondent did not violate A.R.S. § 33-1805 because the statute permits the redaction of individual employee compensation from association records.
Filing Fees Refunded	$550.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Edmund R. Knight	Counsel	—
Respondent	Springfield Community Association	Counsel	Chad Miesen

Alleged Violations

A.R.S. § 33-1805

Outcome Summary

The Administrative Law Judge ruled that the Respondent did not violate A.R.S. § 33-1805 because the statute permits the redaction of individual employee compensation from association records.

Why this result: The requested record fell under a statutory exception (A.R.S. § 33-1805(B)(5)) protecting employee compensation data.

Key Issues & Findings

Failure to provide complete employment contract

Petitioner requested a copy of the manager's employment contract. Respondent provided a redacted copy with compensation details removed. Petitioner argued he was entitled to full financial records.

Orders: Petition dismissed; no action required of Respondent.

Filing fee: $550.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

Video Overview

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Decision Documents

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Administrative Law Judge Decision: Knight v. Springfield Community Association

Executive Summary

This document summarizes the administrative legal proceedings and final decision in the matter of Edmund R. Knight v. Springfield Community Association (No. 12F-H1213008-BFS). The dispute centered on a homeowner’s request for the complete employment contract of a community manager and the subsequent redaction of compensation details by the homeowners' association (HOA).

The Administrative Law Judge (ALJ) ruled that under Arizona Revised Statutes (A.R.S.) § 33-1805, associations are legally permitted to withhold specific portions of records relating to the compensation of individual employees. Consequently, the Petitioner failed to prove a statutory violation, and the petition was dismissed. This decision was certified as the final administrative action on March 13, 2013.

Case Background

The Springfield Community Association is a planned community of homeowners located in Chandler, Arizona. The conflict began in May 2012 when Petitioner Edmund R. Knight sought access to the employment contract of the association’s manager.

Timeline of Document Requests

Date	Action	Result
May 14, 2012	Petitioner submits written request for the manager’s contract.	Respondent provides a word processing document with compensation deleted.
June 8, 2012	Petitioner's counsel (J. Roger Wood, Esq.) requests a complete, unredacted copy.	Counsel argues A.R.S. § 33-1805(B)(4) does not justify withholding data.
June 26, 2012	Respondent's counsel (Chad Miesen, Esq.) replies.	Respondent provides the original signed contract with compensation redacted.
October 4, 2012	Petitioner files a formal Petition.	Petitioner pays a $550.00 filing fee to the Department of Fire, Building and Life Safety.

Analysis of Key Themes

Statutory Transparency vs. Privacy Exemptions

The core of the dispute involved the interpretation of A.R.S. § 33-1805, which governs the records of planned communities.

The Right to Access: Subsection A generally requires that all financial and other records of an association be made "reasonably available for examination by any member."
The Right to Withhold: Subsection B provides specific exemptions where records may be withheld from disclosure.

The Petitioner argued that as a homeowner, he was entitled to "all financial" records to ensure a full understanding of the association's financial standing. However, the Respondent relied on A.R.S. § 33-1805(B)(5), which explicitly allows an association to withhold records relating to the "compensation of… an individual employee of the association."

Burden of Proof in Administrative Hearings

As the Petitioner, Edmund Knight bore the burden of proving by a preponderance of the evidence that the Springfield Community Association violated the law. Under the legal definition used in this case, "preponderance of the evidence" refers to evidence that is of greater weight or more convincing than the opposition's, making the sought-after fact "more probable than not."

The ALJ determined that because the manager was an employee of the association, the association acted within its legal rights to redact the compensation information. Therefore, the Petitioner could not meet the burden of proof required to establish a violation.

Important Quotes and Context

Regarding the Right to Withhold Records

"Books and records kept by or on behalf of the association and the board may be withheld from disclosure to the extent that the portion withheld relates to any of the following: . . . 5. Records relating to the . . . compensation of . . . an individual employee of the association…"

— A.R.S. § 33-1805(B)(5), as cited in the Conclusions of Law.

Context: This statutory excerpt was the primary legal basis for the ALJ's decision. It serves as a specific exception to the general rule that association records must be open to members.

Regarding the Petitioner’s Argument

"Petitioner alleged that as a homeowner, he was entitled to the information he requested so he would have a full understanding of the financial standing of the association."

— Conclusion of Law No. 5.

Context: This highlights the Petitioner's motivation. He viewed the manager's salary not as private employee data, but as a critical component of the association's overall financial transparency.

The Final Ruling

"As the manager is an employee of the association, Respondent was entitled to redact compensation information from the records provided. Petitioner failed to establish by a preponderance of the evidence that Respondent violated A.R.S. § 33-1805."

— Conclusions of Law No. 7 and 8.

Context: This represents the ALJ's application of the law to the facts, concluding that the association's actions were legally protected.

Actionable Insights

Employee Privacy Protections: Planned community associations in Arizona are not required to disclose individual employee compensation to members. While general financial records must be transparent, the specific pay of individuals (whether employees of the HOA or employees of a contractor) is protected under A.R.S. § 33-1805(B)(5).
Redaction Practice: When responding to records requests that contain protected information, associations may provide the requested document with the sensitive portions (such as salary figures) redacted, rather than withholding the entire document.
Filing Consequences: Petitioners should be aware that filing a dispute involves a significant fee (in this case, $550.00). If the Petitioner fails to establish a violation by a preponderance of the evidence, the petition will be dismissed without any required action from the Respondent.
Finality of ALJ Decisions: If the Department of Fire, Building and Life Safety does not accept, reject, or modify an ALJ decision within a specific timeframe (pursuant to A.R.S. § 41-1092.08), the ALJ’s decision is automatically certified as the final administrative decision.

Final Administrative Action

The ALJ decision was transmitted on February 4, 2013. The Department of Fire, Building and Life Safety had until March 11, 2013, to take action. As no action was received by that date, the Office of Administrative Hearings certified the decision as final on March 13, 2013. Parties retain the right to request a rehearing or seek review by the Superior Court, subject to specific statutory timelines.

Case Study: Edmund R. Knight vs. Springfield Community Association

This study guide examines the administrative law case of Edmund R. Knight v. Springfield Community Association (No. 12F-H1213008-BFS). The case centers on the interpretation of Arizona Revised Statutes (A.R.S.) regarding a homeowner's right to access association records versus the association's right to protect employee compensation information.

I. Key Concepts and Case Overview

Core Dispute

The primary issue in this case was whether the Springfield Community Association (Respondent) violated A.R.S. § 33-1805 by providing a redacted copy of a property manager's employment contract to Edmund R. Knight (Petitioner). The Respondent withheld specific portions of the contract pertaining to the manager's compensation.

Legal Framework

The ruling was dictated by specific Arizona Revised Statutes and Administrative Codes:

A.R.S. § 33-1805(A): General mandate that all financial and other records of an association must be made reasonably available for examination by any member.
A.R.S. § 33-1805(B)(5): A specific exception that allows an association to withhold records relating to the compensation of an individual employee or a contractor's employee working under the association's direction.
A.R.S. § 41-2198.01(B): Grants the Department of Fire, Building and Life Safety jurisdiction to hear disputes between property owners and planned community associations.
A.A.C. R2-19-119: Establishes that the Petitioner bears the burden of proof by a preponderance of the evidence.

Procedural History and Timeline

Date	Event
May 14, 2012	Petitioner submits a written request for the association manager’s contract.
May 17, 2012	Respondent provides a word processing document with compensation details deleted.
June 8, 2012	Petitioner’s counsel requests a complete copy, arguing A.R.S. § 33-1805(B)(4) does not justify withholding.
June 26, 2012	Respondent provides the original signed contract with compensation information redacted.
Oct 4, 2012	Petitioner files a formal Petition with the Department of Fire, Building and Life Safety.
Jan 15, 2013	Administrative hearing held before Administrative Law Judge (ALJ) Tammy L. Eigenheer.
Jan 31, 2013	ALJ issues decision recommending dismissal of the Petition.
Mar 11, 2013	Deadline for the Department to accept, reject, or modify the ALJ decision.
Mar 13, 2013	ALJ decision certified as the final administrative decision due to Department inaction.

II. Glossary of Important Terms

Administrative Law Judge (ALJ): An official who presides over hearings and adjudicates disputes involving government agencies.
A.R.S. (Arizona Revised Statutes): The codified statutory laws of the state of Arizona.
Burden of Proof: The obligation of a party (in this case, the Petitioner) to provide enough evidence to support their claim.
Certification of Decision: The process by which an ALJ's decision becomes final, often occurring if the supervising agency takes no action within a statutory timeframe.
Preponderance of the Evidence: A standard of proof meaning the evidence shows that the fact sought to be proved is "more probable than not."
Redaction: The process of censoring or obscuring part of a text for legal or confidentiality reasons.
Respondent: The party against whom a petition is filed (here, the Springfield Community Association).

III. Short-Answer Practice Questions

What was the specific filing fee paid by Edmund R. Knight to initiate his petition?
Under A.R.S. § 41-2198.01(B), which state department has the jurisdiction to hear disputes between property owners and planned community associations?
Why did the Respondent argue they were legally permitted to redact the manager's contract?
What definition did the Administrative Law Judge use for "Preponderance of the Evidence"?
What happened when the Department of Fire, Building and Life Safety failed to act on the ALJ decision by March 11, 2013?
Who represented the Springfield Community Association during the proceedings?
What was the Petitioner’s primary argument for wanting the full, unredacted financial information of the manager's contract?

IV. Essay Prompts for Deeper Exploration

Statutory Interpretation: Compare the general disclosure requirements of A.R.S. § 33-1805(A) with the exceptions listed in A.R.S. § 33-1805(B). Discuss how the Administrative Law Judge balanced the member's right to "all financial records" against the association's right to withhold "compensation" information.
The Administrative Process: Analyze the timeline of this case from the initial record request in May 2012 to the final certification in March 2013. Discuss the role of the Office of Administrative Hearings and the Department of Fire, Building and Life Safety in resolving homeowner association disputes.
The Burden of Proof in Administrative Hearings: Explain the significance of the "preponderance of the evidence" standard in this case. Why did the ALJ conclude that the Petitioner failed to meet this burden despite the Respondent admitting to redacting the document?
Rights of Appeal: Based on the Certification of Decision, what are the subsequent legal options for a party who disagrees with the final administrative decision? Include references to the role of the Superior Court and requests for rehearing.

V. Answer Key (Short-Answer)

$550.00.
The Department of Fire, Building and Life Safety.
They cited A.R.S. § 33-1805(B)(5), which allows associations to withhold records relating to the compensation of an individual employee.
"Evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not." (Source: Black’s Law Dictionary).
Pursuant to A.R.S. § 41-1092.08(D), the ALJ decision was certified as the final administrative decision of the Department.
Chad Miesen, Esq.
He argued that as a homeowner, he was entitled to the information to have a full understanding of the financial standing of the association.

Transparency vs. Privacy: A Deep Dive into HOA Records Disputes

For many homeowners, the internal finances of their Homeowners Association (HOA) are a black box they feel entitled to open. But as one Arizona homeowner learned the hard way, that curiosity can come with a $550 "sticker shock" and a sobering lesson in the limits of statutory transparency. The case of Edmund R. Knight vs. Springfield Community Association highlights the high-stakes friction between a member’s right to oversee association management and the privacy rights of the people running the community. At the heart of the battle was a singular, contested question: Can an HOA legally withhold or redact specific compensation figures from an employment contract requested by a member?

The Timeline of the Dispute

The road from a simple document request to a formal administrative hearing was paved with repeated attempts at disclosure and escalating legal demands. The following timeline outlines the transition from a neighborly inquiry to a litigated dispute:

May 14, 2012: Petitioner Edmund Knight submits a written request to the Springfield Community Association for a copy of the property manager’s employment contract.
May 17, 2012: The Association provides a word-processing version of the contract, but compensation details are deleted prior to printing.
June 8, 2012: Petitioner’s counsel, J. Roger Wood, Esq., demands a complete, unredacted copy, arguing that the statutes do not justify withholding the information.
June 26, 2012: The Association provides the original signed contract but redacts all portions relating to the manager's compensation.
October 4, 2012: Seeking a definitive win, Mr. Knight files a formal Petition with the Department of Fire, Building and Life Safety, paying a $550.00 filing fee to initiate the process.
January 15, 2013: A formal hearing is convened before an Administrative Law Judge (ALJ) to determine if the Association’s redactions violated state law.

The Legal Tug-of-War: A.R.S. § 33-1805 Explained

The dispute centered on the interpretation of Arizona Revised Statute § 33-1805. This statute serves as the "open books" law for HOAs, but it contains specific carve-outs designed to protect sensitive data. The "tug-of-war" in this case involved a strategic legal maneuver: Petitioner’s counsel argued that A.R.S. § 33-1805(B)(4)—which typically protects privileged communications between the board and its attorney—did not justify the Association's secrecy. However, the Association countered by pointing to a different, more specific shield: Section (B)(5).

The Legal Framework of A.R.S. § 33-1805

Right to Disclosure (Section A)	Right to Withhold (Section B, Item 5)
The General Rule: Mandates that all financial and other records of the association shall be made reasonably available for examination by any member.	The Privacy Exception: Permits an association to withhold books and records to the extent they relate to the compensation of an individual employee.

Mr. Knight argued that "all financial records" must include the exact cost of the manager's salary so that homeowners can fulfill their duty to monitor the association’s financial health. He posited that the broad mandate for transparency in Section A should override any privacy concerns regarding the contract.

The Administrative Law Judge’s Verdict

Administrative Law Judge Tammy L. Eigenheer presided over the hearing. To prevail, Mr. Knight had to meet a specific legal threshold, a standard he ultimately failed to reach.

"Preponderance of the Evidence is '[e]vidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.'" — Black's Law Dictionary

Judge Eigenheer’s reasoning was anchored in the manager’s status as an "individual employee" of the Association. Because the manager held this specific status, the Association was legally entitled to redact compensation figures. The Judge found that the Association had acted within its rights by providing the signed contract while withholding the protected financial data, leading to a recommendation that the petition be dismissed.

Final Certification and Procedural Outcomes

In the Arizona administrative system, an ALJ issues a Recommended Order. This recommendation is then reviewed by a state agency—in this case, the Department of Fire, Building and Life Safety—which acts as the final decision-making body. The Department has the authority to accept, reject, or modify the ALJ’s findings.

Pursuant to A.R.S. § 41-1092.08, the Department had until March 11, 2013, to take action on Judge Eigenheer's recommendation. When the deadline passed in silence, the ALJ’s decision was automatically certified as final. On March 13, 2013, the Office of Administrative Hearings issued the final certification, formally dismissing Mr. Knight's claims and concluding the litigation.

Key Takeaways for Homeowners and Associations

The Knight vs. Springfield case offers essential insights for anyone navigating the complex world of community governance:

The Limits of Transparency: While the phrase "all financial records" sounds absolute, it is subject to statutory exceptions. Transparency in an HOA is a qualified right, not a blank check for all information.
The Right to Redact Includes Contractors: The privacy protection under A.R.S. § 33-1805(B)(5) is broad. It covers not only direct employees of the association but also employees of a contractor (such as a management company) who work under the association's direction.
The Burden of Proof: The homeowner (Petitioner) always carries the burden of proving a violation. If an association can point to a specific statutory exception, the homeowner must provide "more convincing" evidence to the contrary—a high bar in the face of clear privacy laws.

Conclusion

The dismissal of the petition in Edmund R. Knight vs. Springfield Community Association stands as a firm reminder that employee privacy is a primary concern under Arizona law. While homeowners have a legitimate interest in the fiscal management of their communities, that interest stops at the individual’s paycheck. Before spending hundreds of dollars in filing fees and engaging in a formal legal battle, homeowners should carefully review state statutes like A.R.S. § 33-1805 to ensure the "missing" information they seek isn't actually protected by law.

Case Participants

Petitioner Side

Edmund R. Knight (Petitioner)
Homeowner
Appeared on his own behalf
J. Roger Wood (attorney)
Sent a request on behalf of Petitioner on June 8, 2012

Respondent Side

Chad Miesen (attorney)
Carpenter, Hazlewood, Delgado & Bolen, PLC
Represented Springfield Community Association

Neutral Parties

Tammy L. Eigenheer (ALJ)
Office of Administrative Hearings
Presided over the hearing and issued the decision
Gene Palma (Director)
Department of Fire, Building and Life Safety
Agency Director to whom the decision was transmitted
Cliff J. Vanell (Director)
Office of Administrative Hearings
Certified the ALJ decision as final
Joni Cage (staff)
Department of Fire, Building and Life Safety
Listed in mailing address for Gene Palma

Monahan, John F. and Patricia E. -v- Sycamore Hills Homeowners Association, Inc.

Posted on May 21, 2008 by [email protected]

Case Summary

Case ID	08F-H088008-BFS
Agency	DFBLS
Tribunal	OAH
Decision Date	2008-05-22
Administrative Law Judge	Michael G. Wales
Outcome	The Petition was dismissed in its entirety. Claims regarding harassment, barking dogs, and committees were found to be moot, outside jurisdiction, or lacking standing. The Open Meeting Law claim was dismissed because the Board was entitled to meet in executive session to discuss threatened litigation.
Filing Fees Refunded	$500.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	John F. and Patricia E. Monahan	Counsel	—
Respondent	Sycamore Hills Homeowners Association, Inc.	Counsel	Carolyn Goldschmidt

Alleged Violations

Design Guidelines Section II.I, II.M, II.N, II.B.2
CC&Rs Article IX, Section 5; Article III, Section 8a
CC&Rs Article IX, Section 6, Section 26; Design Guidelines II.C
Bylaws Articles V and IX
A.R.S. § 33-1804

Outcome Summary

The Petition was dismissed in its entirety. Claims regarding harassment, barking dogs, and committees were found to be moot, outside jurisdiction, or lacking standing. The Open Meeting Law claim was dismissed because the Board was entitled to meet in executive session to discuss threatened litigation.

Why this result: Petitioners' claims were either moot (compliance achieved/events passed), outside the tribunal's jurisdiction (harassment), lacked standing (enforcement against others), or unfounded (executive session was legal).

Key Issues & Findings

Count 1: Harassment regarding pool pump and utility trailer

Petitioners alleged the HOA harassed them by requiring screening of pool equipment and moving a trailer while not enforcing these rules against others.

Orders: Dismissed as moot because Petitioners complied prior to filing, and dismissed for lack of jurisdiction regarding harassment/selective enforcement claims.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

Count 2: Barking Dogs

Petitioners alleged the HOA failed to enforce animal noise restrictions against a specific neighbor.

Orders: Dismissed as moot.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

Count 3: RV Parking

Petitioners alleged the HOA was not imposing sufficient fines or action against two lot owners keeping RVs on their lots.

Orders: Dismissed for lack of standing.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

Count 4: Nominating and Architectural Committees

Petitioners alleged the Board failed to appoint required committees prior to the annual meeting.

Orders: Dismissed as moot.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

Count 5: Open Meeting Law

Petitioners alleged the Board violated open meeting laws by discussing and voting on construction requests in a closed session.

Orders: Dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

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Administrative Law Judge Decision: Monahan v. Sycamore Hills Homeowners Association, Inc.

Executive Summary

This briefing document analyzes the administrative law decision in Case No. 08F-H088008-BFS, involving John and Patricia Monahan (Petitioners) and the Sycamore Hills Homeowners Association, Inc. (Respondent). The Petitioners alleged multiple violations of the Association’s governing documents and Arizona state statutes, specifically concerning harassment, nuisance control, parking enforcement, committee formation, and open meeting laws.

Administrative Law Judge (ALJ) Michael G. Wales dismissed the petition in its entirety. The ruling was primarily based on three factors:

1. Lack of Jurisdiction and Standing: The tribunal lacks authority to adjudicate claims of “harassment” or “selective enforcement” and cannot hear disputes between neighbors where the Association is not a primary party.

2. Mootness: Several issues were resolved or corrected prior to the hearing, leaving no active controversy for the court to remedy.

3. Legal Justification for Executive Sessions: The Association demonstrated that its closed-door meetings were legally permissible under Arizona law to discuss pending or contemplated litigation.

——————————————————————————–

Detailed Analysis of Claims and Evidence

Count 1: Harassment and Selective Enforcement

The Petitioners alleged that the Association targeted them regarding pool pump screening and a utility trailer while failing to enforce the same rules against other residents.

• Evidence and Testimony: The Petitioners received notices to screen pool equipment and move a utility trailer. They complied with these requests. However, Petitioner John Monahan testified that other homes continued to have exposed trash receptacles and mechanical equipment.

• Respondent Defense: Property manager Sandy Sandoval testified to conducting regular monthly inspections. Board President Paul Swan noted that some minor issues, like trash can placement, were left to the “honor system” as they were deemed trivial.

• Legal Conclusion: The ALJ dismissed this count on two grounds:

◦ Jurisdiction: The Office of Administrative Hearings (OAH) is limited to Title 33, Chapter 16 of the Arizona Revised Statutes. It does not have the authority to hear claims of harassment or selective enforcement; such matters belong in Superior Court.

◦ Mootness: Because the Petitioners complied with the Association’s requests before filing the complaint, no active dispute remained.

Count 2: Barking Dogs (Nuisance Control)

Petitioners alleged the Association failed to take appropriate action against the owner of Lot 37 regarding constant barking dogs, in violation of the CC&Rs.

• Evidence and Testimony: Patricia Monahan testified that the Board failed to investigate her complaints. Board President Paul Swan testified that he personally monitored the location on six occasions and did not hear barking. A warning letter was drafted but withheld because the meeting where it was authorized had not been properly noticed.

• Resolution: Mrs. Monahan attended a Pima County Animal Noise Control hearing where the owners of Lot 37 were fined. She testified the barking had since stopped.

• Legal Conclusion: The issue was dismissed as moot. The nuisance had ceased, and the Petitioners found an alternative forum (Pima County) for resolution.

Count 3: RV Parking Enforcement

Petitioners argued that the Association was not imposing sufficient fines ($50 per month) against two lot owners who kept Recreational Vehicles (RVs) on their properties.

• Evidence and Testimony: A 2007 resolution prohibited RV parking for more than 48 hours. The Board had begun fining two owners $50 monthly. John Monahan argued this amount was lower than local storage fees, rendering the fine ineffective.

• Legal Conclusion: The ALJ ruled that Petitioners lacked standing. Under A.R.S. §41-2198.01(B), the department does not have jurisdiction over disputes between owners to which the Association is not a party. A claim regarding “lax enforcement” against a third party is legally considered a dispute between owners, not a direct dispute with the Association that the OAH can adjudicate.

Count 4: Committee Formation

Petitioners claimed the Association violated its Bylaws by failing to appoint a Nominating Committee and an Architectural Control Committee (ACC).

• Evidence and Testimony:

◦ ACC: The Board temporarily acted as the ACC after previous members resigned due to “upheaval” and “difficult personalities” in the community. By the time of the hearing, a new ACC had been appointed.

◦ Nominating Committee: The property manager testified that she sought volunteers via mail and email, but no one volunteered due to the toxic environment created by certain residents.

• Legal Conclusion: The ACC claim was dismissed as moot because a committee was currently in place. The Nominating Committee claim was dismissed because the election had already occurred, and evidence showed the Association made a good-faith effort to form the committee despite a lack of volunteers.

Count 5: Violation of Open Meeting Law

Petitioners alleged the Board held a private meeting to override an ACC decision regarding detached garages on Lots 36 and 56.

• Legal Standard (A.R.S. §33-1804): Board meetings must be open to members, but they may be closed (executive session) for specific reasons, including legal advice from an attorney or matters regarding pending/contemplated litigation.

• Evidence and Testimony: Paul Swan testified that the Board met in executive session because they had received letters from an attorney threatening litigation if the garage requests were not approved. He further testified that the final decision to approve was made by the ACC, not the Board in executive session.

• Legal Conclusion: The ALJ found the executive session was legal under A.R.S. §33-1804 as it pertained to contemplated litigation. No violation of the Open Meeting Law occurred.

——————————————————————————–

Final Legal Findings and Orders

Jurisdictional Limitations

The decision emphasizes the narrow scope of the Office of Administrative Hearings. The tribunal is only authorized to ensure compliance with specific statutes and the planned community’s documents as they apply to the Petitioner. It cannot:

• Rule on the reasonableness of an Association’s decisions regarding other owners.

• Share concurrent jurisdiction with the Superior Court on matters of harassment or arbitrary enforcement.

Attorney’s Fees and Filing Costs

• Attorney’s Fees: Although the Association prevailed, the ALJ denied their request for attorney’s fees. Under Arizona law (Semple v. Tri-City Drywall, Inc.), an administrative proceeding is not considered an “action” that triggers fee-shifting statutes like A.R.S. §12-341.01.

• Filing Fees: As the Petitioners were not the prevailing party, they were not entitled to reimbursement for filing fees.

Final Order

The Administrative Law Judge ordered the dismissal of the petition in its entirety and denied the Respondent’s request for attorney’s fees. This order constitutes the final administrative decision.

Study Guide: Monahan v. Sycamore Hills Homeowners Association, Inc.

This study guide provides a comprehensive review of the administrative law case John F. and Patricia E. Monahan v. Sycamore Hills Homeowners Association, Inc. (No. 08F-H088008-BFS). It examines the legal disputes regarding planned community governance, jurisdictional boundaries of administrative hearings, and the application of Arizona Revised Statutes.

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Part I: Quiz

Instructions: Answer the following questions in 2–3 sentences based on the source context.

1. What were the specific allegations made by the Petitioners in Count 1 of their petition?

2. Why did the Administrative Law Judge (ALJ) conclude that the tribunal lacked the authority to hear claims of “selective enforcement”?

3. According to the Findings of Fact, how did the Association address the Petitioners’ violation regarding their utility trailer?

4. What was the Petitioners’ primary grievance in Count 3 regarding the Association’s handling of RV parking violations?

5. How did the Board of Directors justify its decision to temporarily act as the Architectural Control Committee (ACC)?

6. What was the outcome of the Pima County Animal Noise Control hearing mentioned in Count 2?

7. What evidence did the Association provide to explain why a nominating committee had not been formed prior to the 2007 annual meeting?

8. Under A.R.S. § 33-1804, what is the “Open Meeting Law” requirement for board deliberations?

9. Why did the ALJ determine that the October 30, 2007, executive session did not violate the Open Meeting Law?

10. On what legal basis did the ALJ deny the Respondent Association’s request for attorney’s fees?

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Part II: Answer Key

1. Count 1 Allegations: The Petitioners alleged harassment and selective enforcement, specifically that the Association required them to enclose their pool pump and move a utility trailer while failing to hold other lot owners to the same Design Guidelines. They argued the Association violated Section II.I, II.M/N, and II.B.2 of the Community’s governing documents.

2. Jurisdiction over Selective Enforcement: The ALJ ruled that the Office of Administrative Hearings is limited by A.R.S. § 41-2198 to adjudicating specific violations of Title 33 and community documents. Claims of selective enforcement or “disputes between owners” where the association is not a direct party are outside this jurisdiction and are reserved for the Superior Court.

3. Resolution of Utility Trailer Issue: The Petitioners received a written notice on August 3, 2007, to store their trailer in a garage or behind the home so it was not visible from the street. They complied with the request and faxed proof of compliance to the Association by August 12, 2007, which later rendered the claim moot.

4. RV Parking Fines: The Petitioners argued that the $50 monthly fine imposed on owners of lots 35 and 60 was insufficient to change behavior. They claimed the fine was lower than external RV storage fees, effectively allowing owners to ignore the Association’s 2007 resolution against long-term RV parking.

5. Board Acting as ACC: Board President Paul Swan testified that the Board was forced to step in as the ACC after all members except John Monahan resigned in September 2007. The ALJ found that no governing document prohibited the Board from temporarily fulfilling these duties until new members were appointed.

6. Animal Noise Control Outcome: Patricia Monahan attended a hearing on April 21, 2008, where Pima County Animal Noise Control fined the owners of Lot 37 and warned them of additional penalties for future violations. Following this hearing, she testified that the dogs had stopped barking.

7. Lack of Nominating Committee: The Property Manager testified that obtaining volunteers for committees was “difficult, if not impossible” due to “difficult personalities” creating upheaval within the community. The ALJ accepted that these challenges rendered the creation of a nominating committee implausible at that time.

8. Open Meeting Law Requirements: A.R.S. § 33-1804(A) mandates that all meetings of the association and board of directors must be open to all members or their designated representatives. Members must be allowed to attend and speak before the board takes formal action on an issue.

9. Legality of Executive Session: The ALJ found the closed session was legal because it was held to discuss “pending or contemplated litigation” after receiving threat letters from an attorney representing the owners of lots 36 and 56. Under A.R.S. § 33-1804(A)(1) and (2), legal advice and litigation strategy are valid reasons to close a meeting.

10. Denial of Attorney’s Fees: The ALJ cited Semple v. Tri-City Drywall, Inc., stating that an administrative proceeding is not considered an “action” under A.R.S. §§ 33-1807(H) or 12-341.01. Therefore, even though the Association prevailed, attorney’s fees could not be awarded in this forum.

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Part III: Essay Questions

1. The Limits of Administrative Jurisdiction: Analyze the distinction between the jurisdiction of the Office of Administrative Hearings and the Arizona Superior Court as outlined in the decision. Why is the distinction between a “dispute between owners” and a “dispute with the Association” critical for standing?

2. Mootness in Administrative Adjudication: Evaluate how the concept of “mootness” applied to the various counts in this case (specifically Counts 1, 2, and 4). How does voluntary compliance by either party affect the ALJ’s ability to provide a remedy?

3. Governance Challenges in Planned Communities: Using the testimony regarding the Nominating and Architectural Committees, discuss the practical difficulties an HOA faces when community conflict discourages volunteerism. How should the law balance strict adherence to bylaws with the reality of limited community participation?

4. Transparency vs. Confidentiality: Discuss the balance of the Open Meeting Law (A.R.S. § 33-1804). Under what circumstances does the need for a Board to seek legal counsel or discuss litigation outweigh the members’ right to observe deliberations?

5. The Preponderance of the Evidence: Explain the burden of proof required in this administrative hearing. How did the ALJ define “preponderance of the evidence,” and how did the Petitioners’ evidence fail to meet this standard in Count 5?

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Part IV: Glossary of Key Terms

• A.R.S. § 33-1804 (Open Meeting Law): An Arizona statute requiring that meetings of a homeowners association board be open to all members, with specific, narrow exceptions for closed “executive” sessions.

• A.R.S. § 41-2198: The statute granting the Office of Administrative Hearings the authority to adjudicate disputes regarding planned community documents and Title 33, Chapter 16 of the Arizona Revised Statutes.

• Architectural Control Committee (ACC): A committee appointed by the Association to oversee and approve or deny requests for exterior improvements or structures on lots within the community.

• CC&Rs (Covenants, Conditions, Restrictions, and Easements): The recorded legal documents that establish the rules and regulations for a planned community and are binding on all property owners.

• Executive Session: A portion of a board meeting that is closed to the general membership to discuss sensitive matters such as legal advice, litigation, or personal member information.

• Jurisdiction: The legal authority of a court or administrative tribunal to hear and decide a specific type of case or dispute.

• Moot: A legal status where a dispute is no longer active or relevant because the issues have been resolved or the circumstances have changed, leaving no remedy for the court to provide.

• Planned Community: A real estate development where individual lot owners are mandatory members of an association and are subject to specific governing documents and dues.

• Preponderance of the Evidence: The standard of proof in civil and administrative cases, meaning the evidence shows that a claim is “more probably true than not.”

• Standing: The legal right of a party to bring a claim, requiring that the party is directly affected by the issue and that the tribunal has the authority to hear that specific person’s grievance.