Richard Long vs. Pebble Creek Resort Community

Posted on September 6, 2017 by [email protected]

Case Summary

Case ID	17F-H1717037-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2017-09-06
Administrative Law Judge	Diane Mihalsky
Outcome	loss
Filing Fees Refunded	$0.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Richard Long	Counsel	—
Respondent	Pebble Creek Resort Community	Counsel	—

Alleged Violations

A.R.S. § 41-2198.01; CC&Rs § 1(Hh), 2(P)(i); ALC Guideline SS(4)(a)

Outcome Summary

The ALJ denied the petition, concluding that the homeowner failed to meet the burden of proof demonstrating the HOA violated community documents by refusing the requested block wall. The wall was prohibited by CC&Rs and ALC Guidelines because it was planned for just inside the property line and excluded the adjacent owner from use, potentially leading to prohibited parallel walls.

Why this result: Petitioner failed to meet the burden of proof to establish that Respondent violated the CC&Rs and ALC Guidelines.

Key Issues & Findings

Refusal to approve construction of a 10’ long, 6’ high block wall for privacy

Petitioner sought approval for a 10’ long, 6’ high block wall for privacy, built a foot or so inside his property line, designed to prevent adjacent neighbors (the Rohlmans) from using it. Respondent denied the wall based on community documents restricting such constructions to avoid parallel walls and requiring party walls to be on or immediately adjacent to the property line, granting contiguous owners the right to use them.

Orders: Petitioner's petition is denied.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

A.R.S. § 41-2198.01
CC&R § 1(Hh)
CC&R § 2(P)(i)
ALC Guideline SS(4)(a)
A.R.S. § 41-1092.07(G)(2)
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)
A.A.C. R2-19-119(B)(2)

Analytics Highlights

Topics: HOA, Block Wall, Privacy Wall, CC&Rs, ALC Guidelines, Party Wall

Additional Citations:

A.R.S. § 41-2198.01
A.R.S. § 32-2199.02(B)
A.R.S. § 41-1092.07(G)(2)
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)
A.A.C. R2-19-119(B)(2)
CC&R § 1(Hh)
CC&R § 2(P)(i)
ALC Guideline SS(4)(a)

Audio Overview

Decision Documents

17F-H1717037-REL Decision – 586501.pdf

Uploaded 2025-10-08T06:58:09 (117.9 KB)

17F-H1717037-REL Decision – 588547.pdf

Uploaded 2025-10-08T06:58:10 (1013.5 KB)

Briefing Doc – 17F-H1717037-REL

Briefing: Case No. 17F-H1717037-REL, Long v. Pebble Creek Resort Community

Executive Summary

This document provides a comprehensive analysis of the administrative hearing and final decision concerning a dispute between homeowner Richard Long (“Petitioner”) and the Pebble Creek Resort Community homeowners’ association (“Respondent”). The core of the dispute was the Petitioner’s request to build a 10-foot long, 6-foot high block privacy wall approximately one foot inside his property line, which the Respondent’s Architectural Landscape Committee (ALC) denied.

The Administrative Law Judge (ALJ) ultimately denied the petition, a decision that was subsequently adopted as a Final Order by the Arizona Department of Real Estate. The central finding was that the Respondent’s governing documents—specifically the Covenants, Conditions, and Restrictions (CC&Rs) and ALC Guidelines—unequivocally prohibit the proposed wall. The ALJ concluded that a wall built so close to a property line is defined as a “Party Wall,” which must be constructed “on or immediately adjacent to” the boundary and be usable by both property owners. The Petitioner’s proposal violated these foundational rules by being set back from the property line with the explicit intent of preventing neighbor access and use.

The Respondent had offered a conditional variance for a wall to be built directly on the property line, but this required a mutual “Party Wall/Fence Agreement” with the adjacent neighbor, who refused to sign, citing concerns over property value and the legal complexity of a perpetual easement. The final ruling affirmed the Respondent’s authority to enforce its governing documents as written.

Case Overview

The matter was adjudicated by the Arizona Office of Administrative Hearings following a petition filed by the Petitioner with the Arizona Department of Real Estate. The Petitioner alleged that the Respondent HOA had violated its own governing documents by refusing to approve his proposed wall.

Case Detail

Information

Case Name

Richard Long, Petitioner, v. Pebble Creek Resort Community, Respondent

Case Number

No. 17F-H1717037-REL / HO 17-17/037

Office of Administrative Hearings (Phoenix, Arizona)

Petitioner

Richard Long (Appeared on his own behalf)

Respondent

Pebble Creek Resort Community (Represented by Jack Sarsam, SVP for Robson Communities)

Administrative Law Judge

Diane Mihalsky

Real Estate Commissioner

Judy Lowe

Hearing Date

August 30, 2017

ALJ Decision Date

September 6, 2017

Final Order Date

September 14, 2017

Core Dispute and Party Positions

Petitioner’s Proposal and Argument (Richard Long)

• Project: A 10-foot long, 6-foot high block wall intended to provide privacy between his patio and the patio of his adjacent neighbors, the Rohlmans.

• Proposed Location: “A foot or so inside his side of the property line.”

• Stated Intent: To construct a wall to which his neighbors could not attach or otherwise use. The Petitioner testified that if the Rohlmans later wanted their own wall (e.g., for a pool or pet), they could build a separate, parallel wall on their property.

• Rejection of Alternatives: The Petitioner acknowledged that the ALC would approve a “privacy panel wall” made of alumawood or lattice, but he rejected this option, deeming it “unsightly and flimsy.”

• Core Claim: The Petitioner argued that the Respondent’s CC&Rs and ALC Guidelines did not explicitly prohibit the construction of his proposed block wall at its intended location inside his property line.

Respondent’s Position and Actions (Pebble Creek HOA)

• Initial Action: The ALC denied the Petitioner’s request.

• Rationale for Denial: The Respondent explained that walls near lot lines can become problematic, particularly if they result in “two parallel walls.” This situation can create a narrow, inaccessible space between the walls that is difficult to maintain and “becomes filled with refuse, leaves, insects, nests and rodents.”

• Conditional Variance: On May 1, 2017, the Respondent offered to approve a variance with several key conditions:

1. The wall must be constructed directly on the property line.

2. Both the Petitioner and the Rohlmans must sign a written “Party Wall/Fence Agreement” (Form ALC 48).

3. This agreement must grant current and future owners permission to “extend/complete the wall” and must be disclosed upon the sale of either home.

4. The signed agreement would be kept in the ALC files for both properties.

Neighbor’s Position (The Rohlmans)

• The Rohlmans declined to sign the Party Wall/Fence Agreement proposed by the Respondent.

• In an email submitted as evidence, they outlined their reasons for refusal:

◦ Property Value: They believed a wall on the property line would negatively affect the “current and future value” of both properties.

◦ Legal Complexity: The agreement would require granting a perpetual easement, which they identified as a legal document entailing legal expenses.

◦ Disclosure upon Sale: The easement would have to be disclosed to future buyers, which they argued “lowers the value of the property.”

◦ Future Construction: A wall on the property line could be extended by either party or future owners “without the agreement of the other party.”

◦ They concluded that “All of these requirements are onerous.”

Analysis of Governing Documents

The ALJ’s decision rested on a direct interpretation of four key sections of the community’s CC&Rs and ALC Guidelines.

• CC&R § 1(Hh) – Definition of “Party Walls”

◦ This section defines a party wall as: “a wall constructed on or immediately adjacent to the common boundary of Lots, Parcels, Common Areas or other areas in PebbleCreek Golf Resort.”

◦ The ALJ found that the Petitioner’s proposal for a wall “a foot or so inside” the property line did not meet this definition.

• CC&R § 2(P)(i) – Use of Party Walls

◦ This rule states: “Each Owner shall have the right to use the Party Wall, provided that such use does not interfere with the other Owner’s use and enjoyment thereof.”

◦ This directly contradicted the Petitioner’s goal of building a wall that his neighbors would be prohibited from using.

• ALC Guideline SS(4)(a) – Parallel Walls

◦ This guideline explicitly states: “An existing party wall along a joint property line precludes any adjacent parallel party wall, i.e. Two walls cannot be built side by side.”

◦ The Petitioner’s own testimony acknowledged the possibility of his neighbor building a parallel wall in the future, a scenario the guidelines are designed to prevent.

• ALC Guideline JJ – “Privacy Panel Wall”

◦ This section details the pre-approved alternative for privacy screening. Such a wall must be:

▪ Free-standing alumawood.

▪ Six feet in height and no more than sixteen feet in length.

▪ Located “at least three (3) feet from the property line.”

◦ This demonstrates a clear distinction in the rules between a shared “Party Wall” near the boundary and a private “Privacy Panel” set significantly back from it.

Administrative Law Judge’s Decision and Rationale

The ALJ, Diane Mihalsky, concluded that the Petitioner failed to meet his burden of proof to establish that the Respondent had violated its governing documents.

• Key Findings of Law:

1. A block wall built “a foot inside the property line” does not conform to CC&R § 1(Hh), which requires a party wall to be “on or immediately adjacent to” the boundary.

2. The Petitioner’s intent to deny his neighbor the use of the wall violates CC&R § 2(P)(i), which grants both owners rights to use a party wall.

3. The Petitioner’s proposal creates the potential for prohibited parallel walls, violating ALC Guideline SS(4)(a).

• Conclusion: The ALJ stated that the community’s documents “unequivocally prohibit Respondent from building a 6’ high, 10’ long block wall a foot from his property line that the Rohlmans are not permitted to use.”

• Recommended Order: On September 6, 2017, the ALJ issued a recommended order that the Petitioner’s petition be denied.

Final Order and Subsequent Actions

• Adoption of Decision: On September 14, 2017, Judy Lowe, Commissioner of the Arizona Department of Real Estate, issued a Final Order adopting the ALJ’s decision in its entirety.

• Effect of Order: The denial of the petition became final, binding, and effective immediately.

• Conditions for Rehearing: The Final Order stipulated that a rehearing could be granted pursuant to A.R.S. § 32-2199.04, but only for one of the following reasons:

1. Irregularity in proceedings or abuse of discretion by the ALJ.

2. Misconduct by the Department, ALJ, or prevailing party.

3. Accident or surprise that could not have been prevented.

4. Newly discovered material evidence.

5. Excessive or insufficient penalties.

6. Error in the admission or rejection of evidence.

7. The decision is arbitrary, capricious, or an abuse of discretion.

8. The findings of fact are not supported by the evidence or are contrary to law.

• Judicial Review: The order is subject to judicial review through the filing of a complaint pursuant to state law.

Jerry Wheeler vs. Beaver Dam Estates Homeowners Association

Posted on September 6, 2017 by [email protected]

Case Summary

Case ID	18F-H1717036-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2017-09-06
Administrative Law Judge	Suzanne Marwil
Outcome	full
Filing Fees Refunded	$500.00
Civil Penalties	$250.00

Parties & Counsel

Petitioner	Jerry Wheeler	Counsel	—
Respondent	Beaver Dam Estates Homeowners Association	Counsel	—

Alleged Violations

A.R.S. § 33-1804(B)

Outcome Summary

The Petitioner's petition was granted. The Administrative Law Judge found that the Respondent HOA violated A.R.S. § 33-1804(B) by failing to hold the required annual meeting for several years. The Respondent was ordered to hold a meeting, refund the filing fee to the Petitioner, and pay a $250.00 civil penalty.

Key Issues & Findings

Failure to hold required annual meeting

Petitioner, a homeowner, alleged the HOA had not held an annual meeting since April 1, 2014, violating A.R.S. § 33-1804(B). The unconverted evidence established that Respondent violated A.R.S. § 33-1804(B) by failing to hold the statutorily required annual meeting for several years.

Orders: Petitioner's petition was granted. Respondent was ordered to hold a meeting in accordance with the planned community statutes as currently scheduled on December 28, 2017. Respondent was ordered to pay the filing fee to the Petitioner pursuant to A.R.S. § 32-2199.02(A), and pay a $250.00 civil penalty to the planned community hearing office fund.

Filing fee: $500.00, Fee refunded: Yes, Civil penalty: $250.00

Disposition: petitioner_win

Cited:

A.R.S. § 33-1804(B)
A.R.S. § 32-2199.02(A)
A.R.S. § 32-2199.01
A.R.S. § 32-2199.05

Analytics Highlights

Topics: HOA annual meeting violation, statutory requirement, default judgment

Additional Citations:

A.R.S. § 33-1804
A.R.S. § 32-2199 et seq.
A.R.S. § 32-2199.01
A.R.S. § 32-2199.02
A.R.S. § 32-2199.05
A.A.C. R2-19-119(B)
A.A.C. R2-19-119(A)

Audio Overview

Decision Documents

18F-H1717036-REL Decision – 586602.pdf

Uploaded 2025-10-08T06:58:28 (65.3 KB)

18F-H1717036-REL Decision – 588549.pdf

Uploaded 2025-10-08T06:58:28 (592.6 KB)

Briefing Doc – 18F-H1717036-REL

Administrative Hearing Briefing: Wheeler v. Beaver Dam Estates Homeowners Association

Executive Summary

This briefing document synthesizes the findings and orders from the case of Jerry Wheeler versus the Beaver Dam Estates Homeowners Association (HOA). The central issue was the HOA’s failure to conduct annual meetings as legally required by Arizona state law. The petitioner, Jerry Wheeler, provided uncontested evidence that the HOA had not held a meeting for several years, specifically since his tenure began on April 1, 2014.

The case was complicated by the death of the HOA’s president prior to the hearing and the association’s subsequent failure to appoint a new representative or appear at the proceedings. The Administrative Law Judge (ALJ) conducted the hearing in the respondent’s absence and ruled decisively in favor of the petitioner.

The final judgment, adopted by the Arizona Department of Real Estate, found the Beaver Dam Estates HOA in violation of A.R.S. § 33-1804(B). The HOA was ordered to hold a meeting on a specified date, reimburse the petitioner’s filing fee, and pay a civil penalty of $250.00 for the violation.

Case Overview

The matter was initiated by a petition filed with the Arizona Department of Real Estate and was subsequently referred to the Office of Administrative Hearings for a formal hearing and decision.

Case Detail

Information

Petitioner

Jerry Wheeler

Respondent

Beaver Dam Estates Homeowners Association

Case Number (OAH)

18F-H1717036-REL

Case Number (Dept. of Real Estate)

HO 17-17/036

Petition Filed

June 8, 2017

Hearing Date

September 5, 2017

ALJ Decision Date

September 6, 2017

Final Order Date

September 13, 2017

Presiding Judge

Suzanne Marwil, Administrative Law Judge (ALJ)

Adopting Authority

Judy Lowe, Commissioner, Arizona Department of Real Estate

Petitioner’s Allegations and Evidence

The petitioner’s case was built on the central allegation that the Beaver Dam Estates HOA had failed to comply with its statutory duty to hold annual meetings.

• Core Allegation: The HOA was in violation of Arizona Revised Statutes (A.R.S.) § 33-1804(B), which mandates that a members’ association meeting “shall be held at least once each year.”

• Petitioner Testimony: Jerry Wheeler testified that since moving into the community on April 1, 2014, the HOA had not held a single meeting. He also testified regarding his numerous efforts to compel the HOA president, Randy Hawk, to convene a meeting for the purpose of reviewing the association’s financial statements with homeowners.

• Supporting Evidence: The petitioner submitted numerous written statements from other homeowners within the Beaver Dam Estates community. These statements corroborated his testimony, confirming that no HOA meeting had been held for several years. This evidence was referred to as “Exhibit B” in the proceedings.

Respondent’s Actions and Procedural Failures

The respondent’s engagement with the legal process was minimal and ultimately ceased, leading to a judgment in its absence.

• Initial Response: The HOA’s then-president, Randy Hawk, initially responded to the petition by agreeing to hold a meeting.

• First Meeting Attempt: A meeting was scheduled for July 18, 2017. However, only about ten people attended, prompting Hawk to reschedule for December 28, 2017. A letter was sent to all members notifying them of the new date and the intent to hold an election for a new president and vice president.

• Death of Representative: The petitioner subsequently informed the Tribunal that Randy Hawk had passed away, leaving the HOA without a clear representative for the legal matter.

• Failure to Appoint New Representative: On August 16, 2017, the Tribunal issued an order, mailed to the respondent’s address of record, requesting that the HOA name a new representative. The HOA failed to do so.

• Failure to Appear: The respondent did not appear for the scheduled hearing on September 5, 2017, nor did it request to appear telephonically. After a 20-minute grace period, the ALJ proceeded with the hearing in the respondent’s absence.

Legal Framework and Conclusions of Law

The ALJ’s decision was based on a clear statutory requirement and the uncontested evidence presented by the petitioner. The burden of proof was on the petitioner, with the standard of proof being a preponderance of the evidence.

• Statutory Violation: The central finding was that the respondent violated A.R.S. § 33-1804(B). The pertinent text of the statute states:

• Key Conclusion: The ALJ determined that “The unconverted evidence established that Respondent violated A.R.S. § 33-1804(B) by failing to hold the statutorily required annual meeting of Respondent for several years prior to the filing of the petition.”

• Recommended Action: Based on this conclusion, the ALJ stated that the respondent “should hold an annual meeting in accordance with the planned community statutes.”

Final Order and Penalties

The ALJ’s decision was formally adopted by the Commissioner of the Department of Real Estate, making it a binding Final Order. The order mandated several actions by the respondent.

IT IS ORDERED that:

1. The petitioner’s petition is granted.

2. The respondent must hold a meeting in accordance with planned community statutes as scheduled on December 28, 2017.

3. Pursuant to A.R.S. § 32-2199.02(A), the respondent shall pay the petitioner the filing fee required by section 32-2199.01.

4. The respondent shall pay to the planned community hearing office fund a civil penalty of $250.00 for the violation.

This Final Order was declared a final administrative action, effective immediately upon service on September 13, 2017. The parties were notified of their right to apply for a rehearing within thirty days or to appeal the decision by filing a complaint for judicial review.

Jason West vs. Desert Sage Two Homeowners Association

Posted on June 27, 2017 by [email protected]

Case Summary

Case ID	17F-H1716031-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2017-06-28
Administrative Law Judge	Diane Mihalsky
Outcome	loss
Filing Fees Refunded	$0.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Jason West	Counsel	—
Respondent	Desert Sage Two Homeowners Association	Counsel	Stewart F. Salwin, Esq.

Alleged Violations

Bylaw § 3.6

Outcome Summary

The Administrative Law Judge denied the homeowner’s petition alleging the HOA failed to fill board vacancies (Bylaw § 3.6 violation), finding that the HOA had made reasonable efforts, but vacancies could not be filled because no eligible members were willing to serve, partly due to the Petitioner's actions.

Why this result: Respondent established that the Board performed all reasonable actions to fill vacancies, but no eligible members were willing to serve, in part due to Petitioner's obstructionist tactics, rendering enforcement of the Bylaw impossible as it would lead to an absurdity.

Key Issues & Findings

Refusing to fill vacancies on Respondent’s Board of Directors

Petitioner alleged Respondent violated Bylaw § 3.6 by refusing to fill vacancies on the Board of Directors. The Administrative Law Judge determined that the Board had done all it could to fill vacancies, but no eligible members were willing to serve, and Bylaw § 3.6 does not empower the Board to conscript unwilling members.

Orders: Petitioner's petition is denied.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

A.R.S. § 41-2198.01
A.R.S. § 41-1092.07(G)(2)
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)
Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)
A.A.C. R2-19-119(B)(2)
MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999)
Mail Boxes v. Industrial Comm’n of Arizona, 181 Ariz. 119, 122, 888 P.2d 777, 780 (1995)
A.R.S. § 32-2199.02(B)
A.R.S. § 32-2199.04

Analytics Highlights

Topics: HOA Board Vacancies, Bylaw 3.6, Obstructionist Tactics, Refusal to Serve

Additional Citations:

A.R.S. § 41-2198.01
A.R.S. § 41-1092.07(G)(2)
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)
Vazanno v. Superior Court
A.A.C. R2-19-119(B)(2)
MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
BLACK’S LAW DICTIONARY
Mail Boxes v. Industrial Comm’n of Arizona
A.R.S. § 32-2199.02(B)
A.R.S. § 32-2199.04

Video Overview

Audio Overview

Decision Documents

17F-H1716031-REL Decision – 572314.pdf

Uploaded 2026-01-23T17:19:29 (137.9 KB)

17F-H1716031-REL Decision – 576049.pdf

Uploaded 2026-01-23T17:19:32 (1160.4 KB)

Briefing Doc – 17F-H1716031-REL

Briefing Document: West v. Desert Sage Two Homeowners Association (Case No. 17F-H1716031-REL)

Executive Summary

This briefing document analyzes the administrative hearing and final order concerning a petition filed by homeowner Jason West (“Petitioner”) against the Desert Sage Two Homeowners Association (“Respondent”). The Petitioner alleged that the HOA’s Board of Directors violated its own Bylaw § 3.6 by failing to fill vacant board positions.

The Administrative Law Judge (ALJ) denied the petition, a decision that was subsequently adopted as a Final Order by the Commissioner of the Arizona Department of Real Estate. The central finding was that the Respondent had made repeated and reasonable efforts to fill the vacancies but was unsuccessful due to a lack of willing and eligible candidates. The ALJ concluded that the governing bylaw mandates the appointment of willing members but does not grant the power to conscript individuals to serve against their will. Furthermore, the decision determined that the shortage of volunteers was attributable, in part, to the Petitioner’s own “obstructionist tactics,” which created a hostile and dysfunctional environment, leading to a series of board member resignations and deterring potential candidates.

Case Overview

• Case Number: 17F-H1716031-REL

• Petitioner: Jason West, a homeowner and member of the Desert Sage Two Homeowners Association.

• Respondent: Desert Sage Two Homeowners Association, representing a small community of approximately 40 homes.

• Core Allegation: On April 10, 2017, the Petitioner filed a single-issue petition alleging the Respondent violated Bylaw § 3.6 by refusing to fill vacancies on its Board of Directors.

• Hearing Date: June 21, 2017, before Administrative Law Judge Diane Mihalsky.

• Final Disposition: The Petitioner’s petition was denied in a decision dated June 28, 2017. This decision was adopted as a Final Order by the Arizona Department of Real Estate on July 12, 2017, making it binding on the parties.

Governing Bylaw in Dispute

The central issue revolved around the interpretation of Section 3.6 of the HOA’s Bylaws, which states:

Vacancies. Vacancies on the Board caused by any reason other than the removal of a director in accordance with the provisions of Section 3.3 of these Bylaws shall be filled by a majority vote of the remaining directors at the first regular or special meeting of the Board held after the occurrence of such vacancy, even though the directors present at such meeting may constitute less than a quorum. Each person so elected shall serve the unexpired portion of the prior director’s term.

Key Parties and Witnesses

Role / Affiliation

Key Testimony / Actions

Jason West

Petitioner, Homeowner, Former Board President

Filed the petition alleging bylaw violation. Previously filed recall petitions against other board members, resigned from the board himself, and proposed a bylaw amendment that disqualified newly elected members.

Eugenia (“Gina”) Murray

Respondent’s Board President

Testified that the board made repeated efforts to find volunteers, but no one was willing to serve, citing the Petitioner’s behavior as a major cause for resignations and lack of interest.

Edward (“Eddie”) Padilla

Community Manager, National Property Service (NPS)

Testified about sending multiple email requests for board candidates on behalf of the board, which yielded no interested parties other than those who would later be disqualified.

Christina Van Soest

Former Board Member

Resigned on Feb. 8, 2017, stating, “I have found the direction of some of the board does not appear to be in the best interest of the community as a whole.” Testified she was uncomfortable with the Petitioner.

Elizabeth Mayhew

Former Board Member

Resigned on Apr. 4, 2017, citing stress directly related to the Petitioner: “I have enough stress daily with my job and cannot handle this or him. It is making me physically ill and he is not worth that.”

Myron (“Ray”) Elmer

Former Board Member

Resigned on Apr. 5, 2017, with the stated reason: “[d]ue to continued problems Jason etc.”

Korey Hjelmeir & Debra Epstein

Former Board Members

Testified for the Petitioner’s rebuttal. Both had previously resigned in June 2016 in response to the Petitioner’s recall petitions and were later disqualified from serving by a bylaw amendment he proposed.

Chronology of Board Destabilization and Resignations

The hearing evidence established a pattern of significant board turnover and dysfunction between June 2016 and June 2017.

• June 23, 2016: Board members Adrian Justiniano, Debra Epstein, and Korey Hjelmeir resigned after the Petitioner filed recall petitions against them.

• August 3, 2016: The Petitioner, June Thompson, and Christina Van Soest were elected to the Board. The Petitioner served as president.

• August 18, 2016: The Board expanded from 3 to 5 members, appointing Gina Murray and Ray Elmer.

• August 29, 2016: June Thompson resigned.

• February 8, 2017: Christina Van Soest resigned, citing the board’s direction and her discomfort with the Petitioner’s “research into members’ backgrounds and history, and the way he was making Board decisions.”

• February 18, 2017: The Petitioner resigned from the Board because he had “more important things to worry about than the management of this dysfunctional community.”

• April 4, 2017: Elizabeth Mayhew resigned, stating she could not handle the stress caused by the Petitioner and his “verbal assaults, constant lashing out, and personal attacks.”

• April 5, 2017: Ray Elmer resigned, attributing his departure to “continued problems Jason etc.” This left Gina Murray as the sole remaining board member.

Respondent’s Efforts to Fill Vacancies

The Respondent provided evidence of multiple, documented attempts to recruit new board members.

• February 23, 2017: Following the resignations of Ms. Van Soest and the Petitioner, Community Manager Eddie Padilla sent an email requesting “motivated and dedicated individuals” to serve on the Board. No one responded.

• March 31, 2017: At an open Board Meeting with “Board appointments” on the agenda, Gina Murray asked for volunteers and nominations from the floor. No one responded.

• April 4 & 18, 2017: Mr. Padilla sent two further emails requesting members interested in serving on the board to submit biographies for an upcoming annual meeting. The only individuals to respond and submit biographies were Mr. Justiniano and Ms. Hjelmeir.

• May 15, 2017: At the annual meeting, Ms. Murray again accepted nominations from the floor. Debra Epstein was nominated.

• June 5, 2017: After the newly elected board was disqualified, Mr. Padilla sent another email asking for volunteers.

Petitioner’s Actions and Their Consequences

The Administrative Law Judge’s decision identified the Petitioner’s own actions as a primary cause for the board’s inability to fill vacancies.

• Instigation of Resignations: The Petitioner’s recall petitions in June 2016 and behavior cited in the 2017 resignation letters from Van Soest, Mayhew, and Elmer directly contributed to the board vacancies.

• Contradictory Claims: The Petitioner testified that four individuals (Linda Siedler, Teresa Price, Bret Morse, and Bryan Brunatti) were interested in serving. However, the sign-in sheet for the March 31, 2017 meeting, where appointments were to be made, showed none of these individuals were present.

• Disqualifying Bylaw Amendment: The Petitioner proposed a new bylaw, § 3.12, which was passed at the May 15, 2017 meeting. It stated:

• Attempted Removal of Remaining Director: On June 12, 2017, the Petitioner submitted a petition to remove Gina Murray, the last remaining original board member, which would have left the board entirely vacant.

Administrative Law Judge’s Findings and Decision

The ALJ’s conclusions of law were decisive in denying the petition.

1. Burden of Proof: The Petitioner bore the burden of proving by a preponderance of the evidence that the Respondent had violated its bylaws.

2. Interpretation of Bylaw § 3.6: The Judge ruled that while the bylaw requires the Board to appoint members to fill vacancies, “it does not empower the Board to conscript members who are not willing to serve on the Board.”

3. Principle of Absurdity: Citing legal precedent, the decision stated that bylaws must be construed to avoid an absurd result. Forcing an HOA to operate without a board because no eligible members are willing to serve, especially when the situation is exacerbated by the Petitioner, would be such an absurdity.

4. Respondent’s Due Diligence: The Judge found that “Respondent established that the Board has done all it could to fill vacancies.”

5. Petitioner’s Culpability: The final conclusion explicitly states that “at this time, no eligible members are willing to serve, in part due to Petitioner’s obstructionist tactics, including Petitioner and his claimed supporters.”

Based on these findings, the ALJ ordered that the Petitioner’s petition be denied. The order became final and binding upon adoption by the Arizona Department of Real Estate on July 12, 2017.

Study Guide – 17F-H1716031-REL

Study Guide: West v. Desert Sage Two Homeowners Association

This study guide provides a review of the administrative hearing case No. 17F-H1716031-REL, Jason West v. Desert Sage Two Homeowners Association. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms based on the provided legal documents.

Short-Answer Quiz

Answer the following questions in 2-3 sentences each, based on the information in the case documents.

1. What was the specific allegation made by the Petitioner, Jason West, in his April 10, 2017 petition?

2. According to the text of Bylaw § 3.6, how are vacancies on the Board of Directors supposed to be filled?

3. Who was the sole remaining member of the Board of Directors at the time of the mass resignations in April 2017, and what was her stated reason for not resigning?

4. Describe the circumstances that led to the resignations of board members Christina Van Soest and Jason West in February 2017.

5. What was the immediate and paradoxical outcome of the May 15, 2017 annual meeting election?

6. Explain the purpose and effect of the proposed Bylaw § 3.12, which was sponsored by the Petitioner.

7. What efforts did the Respondent’s management company, National Property Service (NPS), make to recruit new board members?

8. On what grounds did Administrative Law Judge Diane Mihalsky deny the Petitioner’s petition?

9. According to the Petitioner’s testimony, why were certain individuals he named hesitant to volunteer for the Board?

10. What action did the Commissioner of the Arizona Department of Real Estate take regarding the Administrative Law Judge’s decision?

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Answer Key

1. Jason West’s single-issue petition alleged that the Desert Sage Two Homeowners Association (the Respondent) had violated Bylaw § 3.6 by refusing to fill vacancies on its Board of Directors.

2. Bylaw § 3.6 states that vacancies on the Board (for reasons other than removal) shall be filled by a majority vote of the remaining directors at the next meeting. The person elected serves the unexpired portion of the prior director’s term.

3. Eugenia (“Gina”) Murray was the sole remaining board member. She stated she had no intention of resigning because it was important for someone to serve the community’s interests, such as negotiating the insurance contract and handling other community affairs.

4. Christina Van Soest resigned on February 8, 2017, stating the board’s direction was not in the community’s best interest and she was uncomfortable with the Petitioner’s methods. On February 18, 2017, Jason West resigned, citing his belief that he had “more important things to worry about than the management of this dysfunctional community.”

5. At the May 15, 2017 meeting, Eugenia Murray, Debra Epstein, Adrian Justiniano, and Korey Hjelmeir were elected to the Board. However, a bylaw amendment proposed by the Petitioner also passed at the same meeting, which made Epstein, Justiniano, and Hjelmeir ineligible to serve because they had resigned within the previous year.

6. The proposed Bylaw § 3.12 was designed to ban any director who resigns or is removed from serving on the board again for one year. Its passage at the May 15, 2017 meeting had the immediate effect of disqualifying three of the four newly elected board members.

7. NPS, through Community Manager Edward Padilla, sent out multiple emails requesting that interested individuals submit biographies to be considered for board positions. These requests were sent on February 23, April 4, April 18, and June 5, 2017.

8. Judge Mihalsky denied the petition because the Respondent had established that the Board did all it could to fill the vacancies. The judge concluded that the Bylaws cannot be construed to empower the Board to conscript unwilling members and that the lack of volunteers was due in part to the Petitioner’s own “obstructionist tactics.”

9. The Petitioner testified that Linda Siedler, Teresa Price, Bret Morse, and Bryan Brunatti were interested but had two conditions. They were concerned about serving with certain other members (Murray, Hjelmeir, Justiniano, or the Epsteins) and wanted assurance that the directors’ insurance policy would be renewed, which was questionable due to petitions filed by West himself.

10. On July 12, 2017, the Commissioner of the Department of Real Estate, Judy Lowe, issued a Final Order adopting the Administrative Law Judge’s decision. This order made the denial of the Petitioner’s petition binding on the parties.

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Glossary of Key Terms

Term / Entity

Definition

Administrative Law Judge (ALJ)

The official, in this case Diane Mihalsky, who presides over an administrative hearing at the Office of Administrative Hearings and issues a decision.

Arizona Department of Real Estate (“the Department”)

The state agency authorized by statute to receive and decide Petitions for Hearings from members of homeowners’ associations.

Bylaw § 3.12 (Proposed)

An amendment proposed by the Petitioner that would ban any director who resigns or is removed from the board from serving again for a period of one year. This amendment was passed at the May 15, 2017 annual meeting.

Bylaw § 3.6

The section of the Respondent’s bylaws that was the central issue of the petition. It requires the remaining directors to fill board vacancies by a majority vote at the next regular or special meeting.

Desert Sage Two Homeowners Association

The Respondent in the case; a small homeowners’ association for a development of approximately 40 condominium homes.

Final Order

The binding decision issued by the Commissioner of the Department of Real Estate, which formally adopts the ALJ’s decision. This order makes the ruling effective and outlines the process for requesting a rehearing.

Jason West

The Petitioner in the case. He is a homeowner and member of the Respondent association who filed a petition alleging the Board violated Bylaw § 3.6.

National Property Service (NPS)

The management company employed by the Respondent, represented in the hearing by Community Manager Edward (“Eddie”) Padilla.

Office of Administrative Hearings

An independent state agency that conducts evidentiary hearings for cases referred by other state agencies, such as the Department of Real Estate.

Petitioner

The party who files a petition initiating a legal action. In this case, Jason West.

Preponderance of the evidence

The standard of proof required for the Petitioner to win the case. It is defined as evidence that is more convincing and has the greater weight, inclining an impartial mind to one side of the issue rather than the other.

Respondent

The party against whom a petition is filed. In this case, the Desert Sage Two Homeowners Association.

Blog Post – 17F-H1716031-REL