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.
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.
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.
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)
Video Overview
Audio Overview
Decision Documents
18F-H1717036-REL Decision – 586602.pdf
Uploaded 2025-10-09T03:31:53 (65.3 KB)
18F-H1717036-REL Decision – 588549.pdf
Uploaded 2025-10-09T03:31:53 (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.
Study Guide – 18F-H1717036-REL
Study Guide for Wheeler v. Beaver Dam Estates HOA
Short Answer Quiz
Instructions: Answer the following ten questions based on the provided legal documents. Each answer should be approximately 2-3 sentences.
1. Who were the primary parties in the case Wheeler v. Beaver Dam Estates Homeowners Association, and what were their roles?
2. What was the central allegation made by the Petitioner against the Respondent?
3. According to the Findings of Fact, how long had the Petitioner lived in the community, and why is this duration significant?
4. What specific Arizona Revised Statute (A.R.S.) did the Respondent violate, and what does this statute require?
5. What event involving the Respondent’s president, Randy Hawk, complicated the case proceedings?
6. What was the outcome of the hearing held on September 5, 2017, regarding the Respondent’s attendance?
7. What standard of proof was required in this matter, and which party had the burden of proof?
8. Describe the key components of the Order issued by the Administrative Law Judge.
9. What two monetary penalties were imposed on the Beaver Dam Estates Homeowners Association?
10. According to the Final Order, what steps could an aggrieved party take after the decision was issued?
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Answer Key
1. The primary parties were Jerry Wheeler, the Petitioner, and the Beaver Dam Estates Homeowners Association, the Respondent. As the Petitioner, Mr. Wheeler initiated the legal action by filing a petition, while the Homeowners Association was the entity required to respond to the allegations.
2. The central allegation was that the Respondent had violated state law by failing to hold a meeting of the members’ association for several years. The Petitioner specifically sought to have the association convene a meeting to review financial statements.
3. The Petitioner, Jerry Wheeler, testified that he had moved into the community on April 1, 2014. This duration is significant because he stated that no meeting of the association had been held during his entire tenure, providing a multi-year timeframe for the alleged violation.
4. The Respondent violated A.R.S. § 33-1804(B). This statute mandates that, notwithstanding any provisions in community documents, a meeting of the members’ association must be held at least once each year within the state of Arizona.
5. After responding to the petition and scheduling a future meeting, the Respondent’s president, Randy Hawk, passed away. The Petitioner informed the Tribunal of this event, which created uncertainty about who could serve as the Respondent’s representative in the matter.
6. The Respondent, Beaver Dam Estates Homeowners Association, failed to appear for the hearing on September 5, 2017. After a 20-minute grace period, the Administrative Law Judge proceeded with the hearing in the Respondent’s absence.
7. The standard of proof was a “preponderance of the evidence,” as stated in A.A.C. R2-19-119(A). Pursuant to A.A.C. R2-19-119(B), the Petitioner, Jerry Wheeler, had the burden of proving his case.
8. The Order granted the Petitioner’s petition and mandated that the Respondent hold a meeting on the currently scheduled date of December 28, 2017. It also imposed financial penalties on the Respondent and affirmed that the order was binding on the parties unless a rehearing was granted.
9. The Respondent was ordered to pay the Petitioner’s filing fee required by section 32-2199.01. Additionally, the Respondent was ordered to pay a civil penalty of $250.00 to the planned community hearing office fund.
10. A person aggrieved by the decision could apply for a rehearing by filing a petition with the Commissioner within thirty (30) days. The Final Order is also considered a final administrative action, which a party may appeal by filing a complaint for judicial review.
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Essay Questions
Instructions: The following questions are designed to test a deeper, more comprehensive understanding of the case. Formulate a detailed essay-style response for each.
1. Trace the procedural history of case No. 18F-H1717036-REL from the initial petition filing to the issuance of the Final Order. Discuss the key dates, actions taken by the parties and the Tribunal, and the legal significance of each step.
2. Analyze the legal reasoning behind the Administrative Law Judge’s decision. Explain how the “Findings of Fact” supported the “Conclusions of Law,” with a specific focus on the violation of A.R.S. § 33-1804(B) and the application of the “preponderance of the evidence” standard.
3. Discuss the role and authority of the Office of Administrative Hearings and the Department of Real Estate in this dispute. How do the statutes cited (e.g., A.R.S. § 32-2199 et seq.) empower these bodies to adjudicate disputes and enforce compliance among homeowners associations?
4. Evaluate the impact of the Respondent’s failure to appear at the September 5, 2017 hearing. How did this absence affect the proceedings and the evidence presented, and in what way did it likely influence the final outcome?
5. Examine the remedies and enforcement mechanisms outlined in the Final Order. Discuss the specific purpose of ordering a meeting, reimbursing the filing fee, and imposing a civil penalty, and explain the legal process for appealing the decision.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions. In this case, Suzanne Marwil served as the ALJ.
A.R.S. (Arizona Revised Statutes)
The codified collection of laws for the state of Arizona. The case frequently cites statutes within Title 32 and Title 33, such as A.R.S. § 33-1804(B), which governs HOA meetings.
A.A.C. (Arizona Administrative Code)
The official compilation of rules and regulations of Arizona state agencies. A.A.C. R2-19-119 established the burden and standard of proof for the hearing.
Burden of Proof
The legal obligation of a party in a dispute to provide sufficient evidence to prove their claim. In this matter, the burden of proof was on the Petitioner.
Civil Penalty
A monetary fine imposed by a government agency for a violation of a law or regulation. The Respondent was ordered to pay a $250.00 civil penalty.
Conclusions of Law
The section of a legal decision that applies the relevant laws and legal principles to the established facts of the case to reach a judgment.
Final Administrative Action
A final decision by an administrative agency that is legally binding and can be appealed to a court through a process of judicial review.
Findings of Fact
The section of a legal decision that details the factual circumstances of the case as determined by the judge based on the evidence presented.
A formal directive from a judge or administrative body that requires a party to perform a specific act or refrain from doing so. The final decision in this case included an Order for the Respondent to hold a meeting and pay penalties.
Petitioner
The party who initiates a legal proceeding by filing a petition. In this case, the Petitioner was Jerry Wheeler.
Preponderance of the Evidence
The standard of proof in most civil cases, which requires that the evidence presented by one side is more convincing and likely to be true than the evidence of the opposing side.
Rehearing
A request to have a case heard again by the same administrative body or court, typically based on new evidence or an error in the original proceeding. A party had 30 days to petition for a rehearing.
Respondent
The party against whom a petition is filed and who is required to respond to the allegations. In this case, the Respondent was the Beaver Dam Estates Homeowners Association.
Tribunal
A general term for a body, including a court or administrative hearing office, that has the authority to judge or determine claims and disputes.
Blog Post – 18F-H1717036-REL
4 Key Lessons from One Homeowner’s Winning Fight Against His HOA
Introduction: When Your HOA Becomes Dysfunctional
For many homeowners, a Homeowners Association (HOA) is a background presence, collecting dues and ensuring community standards. But what happens when the HOA itself fails in its duties? When legally required meetings stop, financial transparency disappears, and the leadership becomes unresponsive, residents can feel powerless. It’s a common frustration that leaves homeowners wondering what recourse they have when the very organization meant to maintain order violates its own governing laws.
This was the exact situation faced by Jerry Wheeler, a resident of Beaver Dam Estates in Arizona. After years of his HOA failing to hold its legally required annual meeting, he decided he had enough. Instead of letting his frustration simmer, he took formal action, setting in motion a legal process that offers powerful lessons for any homeowner living in a planned community. His story is a clear example of how one determined individual can hold an association accountable.
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1. One Determined Homeowner Can Hold an Entire HOA Accountable
It can feel daunting to challenge an organization, but Jerry Wheeler’s case proves that a single person can be the catalyst for change. The core of his dispute extended beyond procedure into a fundamental issue of financial transparency. On June 8, 2017, Wheeler filed a petition because since moving in on April 1, 2014, no annual meeting had been held. His stated goal was clear: he wanted the HOA to convene a meeting to “review Respondent’s financial statements with the homeowners.”
Initially, the HOA president, Randy Hawk, responded to the petition by agreeing to hold a meeting. However, the execution faltered. A meeting scheduled for July 18, 2017, failed when only about ten people attended. Hawk then rescheduled for December 28, 2017. While Wheeler initiated the petition alone, he strengthened his case by presenting numerous written statements from other homeowners confirming no annual meetings had been held for several years. This demonstrates that one person’s courageous action, aimed at securing accountability and supported by the community, can successfully trigger the legal mechanisms designed to protect homeowners’ rights.
2. Annual Meetings Aren’t Just a Suggestion—They’re the Law
The core of Jerry Wheeler’s complaint wasn’t based on a simple grievance; it was rooted in a specific violation of Arizona state law. The Administrative Law Judge’s decision found that the Beaver Dam Estates HOA was in direct violation of a statute requiring annual meetings. This law is not a guideline or a best practice—it is a legal mandate.
For any homeowner in Arizona, the relevant section of the law is crystal clear:
A.R.S. § 33-1804(B)
Notwithstanding any provision in the community documents, all meetings of the members’ association and the board shall be held in this state. A meeting of the members’ association shall be held at least once each year…
This statute is a cornerstone of transparency and accountability for planned communities. It ensures that residents have a regular, guaranteed opportunity to hear from the board, review financials, elect new leadership, and have their voices heard. Understanding that this is a legal requirement—not just a courtesy—is critical knowledge for any homeowner.
3. Ignoring the Process Has Financial Consequences
The Beaver Dam Estates HOA’s strategy of inaction ultimately backfired, resulting in financial penalties. The association’s failure to appear at its own hearing on September 5, 2017, meant that Wheeler’s evidence was uncontested, leading directly to a default judgment and the resulting financial penalties. The judge’s final order wasn’t just a request to do better; it was a binding decision with specific consequences.
Because the judge granted the petitioner’s petition, the HOA was ordered to take three specific actions:
• Hold the legally required meeting as scheduled on December 28, 2017.
• Pay the Petitioner (Jerry Wheeler) back for his filing fee.
• Pay a civil penalty of $250.00 to the planned community hearing office fund.
This outcome makes it clear that avoiding legal and administrative responsibilities is not a viable strategy. The process is designed to proceed with or without the respondent’s participation, and ignoring it leads directly to mandated actions and financial penalties.
4. The System Can Work, Even Under Strange Circumstances
The proceedings in this case were complicated by unusual and unfortunate events, yet the legal framework proved resilient. After attempting to schedule the required meetings, the HOA’s president, Randy Hawk, passed away. The tribunal ordered the association to name a new representative, but it failed to do so. Compounding the issue, no one from the HOA showed up for the scheduled hearing.
Despite these significant obstacles—the death of the board’s president and the association’s complete failure to participate—the process did not grind to a halt. The Administrative Law Judge was able to conduct the hearing, review the uncontested evidence presented by Jerry Wheeler, make official Findings of Fact, and issue a final, binding order. This remarkable persistence shows that the administrative system is robust and designed to deliver a resolution, ensuring that a petitioner’s rights are upheld even when a respondent organization is in disarray.
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Conclusion: Know Your Rights
The case of Jerry Wheeler vs. Beaver Dam Estates is a powerful reminder that community living is governed by rules that apply to everyone—including the association itself. An HOA cannot simply cease to function or ignore its legal obligations without consequence. The systems in place, from state statutes to administrative hearings, are designed to provide a path for homeowners to seek and achieve recourse.
This case serves as an empowering example of how knowledge and determination can lead to accountability. It underscores the importance of understanding the specific laws that govern your community association. This case was in Arizona, but it raises a universal question: Do you know the specific laws that govern your own HOA, and is your board in compliance?
Case Participants
Petitioner Side
Jerry Wheeler(petitioner)
Respondent Side
Randy Hawk(president) Beaver Dam Estates Homeowners Association
Neutral Parties
Suzanne Marwil(ALJ) Office of Administrative Hearings
Judy Lowe(Commissioner) Arizona Department of Real Estate
The ALJ dismissed the petition, ruling that the HOA acted reasonably and had the authority under the CC&Rs to require the removal of the homeowner's patio cover for necessary painting and repairs. The ALJ determined that because the patio cover is a limited common element, the Petitioners must bear the cost of removal and reinstallation according to A.R.S. § 33-1255(C).
Why this result: Petitioners failed to prove the HOA violated CC&Rs or acted unreasonably, and statutory law assigned the expense burden for the limited common element to the homeowner.
Key Issues & Findings
Authority of HOA to mandate removal of homeowner's patio cover for maintenance and assignment of removal/reinstallation costs.
Petitioners challenged the Respondent HOA's authority and reasonableness in requiring them to remove their patio cover, a limited common element, for building painting and repair, and disputed the requirement that Petitioners bear the costs. The ALJ concluded that the HOA's plan was reasonable, the HOA had the authority under CC&R sections 9 and 9(b), and Petitioners must bear the cost of removal and reinstallation under A.R.S. § 33-1255(C).
Orders: Petitioners’ petition is dismissed. Respondent is deemed the prevailing party. Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
Analytics Highlights
Topics: HOA authority, limited common element, maintenance costs, patio cover, CC&Rs, statutory interpretation, dismissal, prevailing party
Additional Citations:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
A.R.S. § 32-2199
A.R.S. § 32-2199.02
A.R.S. § 41-1092.09
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona
Audio Overview
Decision Documents
17F-H1717038-REL Decision – 583987.pdf
Uploaded 2025-10-08T07:02:29 (53.0 KB)
17F-H1717038-REL Decision – 585505.pdf
Uploaded 2025-10-08T07:02:30 (385.9 KB)
Briefing Doc – 17F-H1717038-REL
Briefing on Larson v. Tempe Gardens Townhouse Corporation
Executive Summary
This briefing synthesizes the legal dispute between homeowners James and Shawna Larson and the Tempe Gardens Townhouse Corporation (the “Respondent” or “HOA”). The core conflict centered on the HOA’s directive that the Larsons remove their wooden patio cover at their own expense to facilitate a community-wide building repair and painting project.
The case progressed through two distinct phases. Initially, an Administrative Law Judge (ALJ) recommended dismissing the Larsons’ petition for a lack of a “justiciable controversy,” reasoning that the HOA had not yet acted on its threat to remove the patio cover, rendering the dispute speculative. However, the Commissioner of the Department of Real Estate rejected this recommendation, finding the matter was “ripe for adjudication,” and ordered a full hearing on the merits.
In the final decision, a second ALJ dismissed the Larsons’ petition and ruled in favor of the HOA. The judge found the HOA’s plan to be reasonable and necessary for the proper and safe completion of the project, based on credible testimony from the project manager. The decision affirmed the HOA’s authority under its CC&Rs to require the removal of the structure. Crucially, the ruling established that the patio cover is a “limited common element” under Arizona law. Consequently, pursuant to Arizona Revised Statutes, the homeowners (the Larsons) are exclusively responsible for all costs associated with it, including its removal and potential reinstallation.
Procedural History and Jurisdictional Rulings
Initial Petition and Dismissal Recommendation
On June 16, 2017, James and Shawna Larson filed a petition with the Department of Real Estate against their HOA, alleging a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs). However, the initial filing did not specify which provisions had been violated.
Upon inquiry, the Petitioners’ counsel admitted via email that no specific provision of the CC&Rs had yet been violated. Instead, their concern was that section 10(a) would be violated if the HOA acted on its threat to forcibly remove their patio cover and charge them for the cost.
This led to the “ORDER RECOMMENDING DISMISSAL FOR LACK OF JUSTICIABLE CONTROVERSY,” issued on August 25, 2017, by Administrative Law Judge Suzanne Marwil. The key findings of this order were:
• Speculative Harm: The Judge found that the HOA’s actions “have not yet been undertaken and our [are] speculative at this juncture.”
• Lack of Jurisdiction: The order stated that the Office of Administrative Hearings’ jurisdiction, per A.R.S. § 32-2199, is limited to adjudicating existing violations of community documents, not potential future ones.
• Misunderstanding by Both Parties: The order noted, “Both parties fundamentally misunderstand the limits of this Tribunal’s jurisdiction.” The Petitioners were seeking a ruling on a future action, while the Respondent was urging the Tribunal to find the Petitioners had violated the CC&Rs, which was not the subject of the petition.
• Recommended Forum: The Judge suggested that the appropriate forum for the Petitioners would be a declaratory judgment action in superior court.
Rejection of Dismissal and Re-Hearing
On August 31, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued an “ORDER REJECTING RECOMMENDATION OF DISMISSAL.”
• The Commissioner rejected the ALJ’s finding that the matter lacked a justiciable controversy.
• The order cited a letter from the Respondent dated June 1, 2017, which posed the question: “Is the presence of the awning a violation of the Association’s governing documents?”
• This question was deemed sufficient to make the matter “ripe for adjudication.”
• The Commissioner requested that the hearing be rescheduled for a ruling on the matter. A re-hearing was subsequently conducted on November 20, 2017, before Administrative Law Judge Thomas Shedden.
Analysis of the Merits of the Dispute
The re-hearing focused on the substantive conflict: whether the HOA had the authority to compel the Larsons to remove their patio cover at their own expense for the maintenance project.
Respondent’s (HOA) Case
The HOA, consisting of 169 units, initiated a project to make necessary repairs to its twenty-five buildings and then have them painted. The HOA’s position was based on the following points:
• Legal Authority: The HOA asserted its authority under sections 9 and 9(b) of its CC&Rs, which state that the HOA is responsible for maintaining building exteriors and that “Any cooperative action necessary or appropriate to the proper maintenance and upkeep of the… [building] exteriors… shall be taken by the [Respondent].”
• Project Necessity: The project manager, Wayne King, provided testimony that the HOA’s board deemed credible and reasonable.
◦ Safety: King stated that all five bidding contractors required the patio covers to be removed to ensure a safe work environment as mandated by the Arizona Department of Occupational Safety and Health (OSHA).
◦ Logistics: Standard scaffolding would not fit without removing the covers, commercial scaffolding would not provide full access, a forklift was not viable due to overhead power lines, and allowing painters to walk on homeowner patio covers was unsafe.
◦ Quality of Work: The project involved sanding, power washing, and patching before painting to “do the job right.” Many covers had been improperly flashed, causing damage to the buildings that needed repair.
◦ Warranty: The paint company would not provide a warranty for the project if individual homeowners, such as the Larsons, were permitted to paint their own units.
Petitioners’ (Larsons’) Case
The Larsons, who purchased their unit in 1999 with the wooden patio cover already in place, contested the HOA’s demands.
• Challenge to Authority: The Petitioners argued that the HOA had no legal authority to demand the removal of their patio cover.
• Unreasonable Cost: They asserted that the cost of removal and reinstallation was unreasonable, submitting two bids:
◦ One bid quoted $1,250 to remove and dispose of the cover and $3,980 to remove and rebuild it with new wood.
◦ A second bid quoted $5,975 to remove and then replace the structure.
• Proposed Alternative: In a letter dated May 19, 2017, the Larsons offered to have the back of their unit painted at their own expense.
• Compromise Offer: During the November 20, 2017 hearing, after hearing the project manager’s testimony, Ms. Larson offered that they would agree not to reinstall the patio cover if the HOA would pay for its removal.
Final Administrative Law Judge Decision
On December 11, 2017, ALJ Thomas Shedden issued a final decision dismissing the Larsons’ petition and finding in favor of the Respondent, Tempe Gardens Townhouse Corporation.
Key Findings and Conclusions of Law
Finding/Conclusion
Details
Standard of Review
The HOA’s decisions regarding maintenance and repair are given deference, provided they act reasonably.
Reasonableness of HOA Action
Based on the “credible testimony” of Wayne King, the Judge found that the HOA’s proposed plan for repairing and painting the buildings, which required the removal of patio covers, was reasonable.
HOA Authority
CC&R sections 9 and 9(b) were found to be “sufficient to show that Respondent has the authority to remove Petitioners’ patio to complete the painting work.”
Patio Cover Classification
The Petitioners’ patio cover was legally classified as a “limited common element” within the meaning of ARIZ. REV. STAT. section 33-1212(4).
Cost Responsibility
The central issue of payment was decided by statute. The Judge concluded that under a “reasonable reading of ARIZ. REV. STAT. section 33-1255(C),” any common expense associated with a limited common element “shall be assessed exclusively against the units benefitted.”
Final Order
Based on these findings, the Administrative Law Judge ordered the following:
“The evidence of record supports a conclusion that Respondent has authority to require Petitioners to remove their patio cover to allow the building to be properly and safely painted, and that Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.”
The final order was that the Petitioners’ petition be dismissed, and the Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party.
The ALJ dismissed the petition, ruling that the HOA acted reasonably and had the authority under the CC&Rs to require the removal of the homeowner's patio cover for necessary painting and repairs. The ALJ determined that because the patio cover is a limited common element, the Petitioners must bear the cost of removal and reinstallation according to A.R.S. § 33-1255(C).
Why this result: Petitioners failed to prove the HOA violated CC&Rs or acted unreasonably, and statutory law assigned the expense burden for the limited common element to the homeowner.
Key Issues & Findings
Authority of HOA to mandate removal of homeowner's patio cover for maintenance and assignment of removal/reinstallation costs.
Petitioners challenged the Respondent HOA's authority and reasonableness in requiring them to remove their patio cover, a limited common element, for building painting and repair, and disputed the requirement that Petitioners bear the costs. The ALJ concluded that the HOA's plan was reasonable, the HOA had the authority under CC&R sections 9 and 9(b), and Petitioners must bear the cost of removal and reinstallation under A.R.S. § 33-1255(C).
Orders: Petitioners’ petition is dismissed. Respondent is deemed the prevailing party. Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
Analytics Highlights
Topics: HOA authority, limited common element, maintenance costs, patio cover, CC&Rs, statutory interpretation, dismissal, prevailing party
Additional Citations:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
A.R.S. § 32-2199
A.R.S. § 32-2199.02
A.R.S. § 41-1092.09
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona
Audio Overview
Decision Documents
17F-H1717038-REL Decision – 583987.pdf
Uploaded 2025-10-08T06:51:36 (53.0 KB)
17F-H1717038-REL Decision – 585505.pdf
Uploaded 2025-10-08T06:51:37 (385.9 KB)
Briefing Doc – 17F-H1717038-REL
Briefing on Larson v. Tempe Gardens Townhouse Corporation
Executive Summary
This briefing synthesizes the legal dispute between homeowners James and Shawna Larson and the Tempe Gardens Townhouse Corporation (the “Respondent” or “HOA”). The core conflict centered on the HOA’s directive that the Larsons remove their wooden patio cover at their own expense to facilitate a community-wide building repair and painting project.
The case progressed through two distinct phases. Initially, an Administrative Law Judge (ALJ) recommended dismissing the Larsons’ petition for a lack of a “justiciable controversy,” reasoning that the HOA had not yet acted on its threat to remove the patio cover, rendering the dispute speculative. However, the Commissioner of the Department of Real Estate rejected this recommendation, finding the matter was “ripe for adjudication,” and ordered a full hearing on the merits.
In the final decision, a second ALJ dismissed the Larsons’ petition and ruled in favor of the HOA. The judge found the HOA’s plan to be reasonable and necessary for the proper and safe completion of the project, based on credible testimony from the project manager. The decision affirmed the HOA’s authority under its CC&Rs to require the removal of the structure. Crucially, the ruling established that the patio cover is a “limited common element” under Arizona law. Consequently, pursuant to Arizona Revised Statutes, the homeowners (the Larsons) are exclusively responsible for all costs associated with it, including its removal and potential reinstallation.
Procedural History and Jurisdictional Rulings
Initial Petition and Dismissal Recommendation
On June 16, 2017, James and Shawna Larson filed a petition with the Department of Real Estate against their HOA, alleging a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs). However, the initial filing did not specify which provisions had been violated.
Upon inquiry, the Petitioners’ counsel admitted via email that no specific provision of the CC&Rs had yet been violated. Instead, their concern was that section 10(a) would be violated if the HOA acted on its threat to forcibly remove their patio cover and charge them for the cost.
This led to the “ORDER RECOMMENDING DISMISSAL FOR LACK OF JUSTICIABLE CONTROVERSY,” issued on August 25, 2017, by Administrative Law Judge Suzanne Marwil. The key findings of this order were:
• Speculative Harm: The Judge found that the HOA’s actions “have not yet been undertaken and our [are] speculative at this juncture.”
• Lack of Jurisdiction: The order stated that the Office of Administrative Hearings’ jurisdiction, per A.R.S. § 32-2199, is limited to adjudicating existing violations of community documents, not potential future ones.
• Misunderstanding by Both Parties: The order noted, “Both parties fundamentally misunderstand the limits of this Tribunal’s jurisdiction.” The Petitioners were seeking a ruling on a future action, while the Respondent was urging the Tribunal to find the Petitioners had violated the CC&Rs, which was not the subject of the petition.
• Recommended Forum: The Judge suggested that the appropriate forum for the Petitioners would be a declaratory judgment action in superior court.
Rejection of Dismissal and Re-Hearing
On August 31, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued an “ORDER REJECTING RECOMMENDATION OF DISMISSAL.”
• The Commissioner rejected the ALJ’s finding that the matter lacked a justiciable controversy.
• The order cited a letter from the Respondent dated June 1, 2017, which posed the question: “Is the presence of the awning a violation of the Association’s governing documents?”
• This question was deemed sufficient to make the matter “ripe for adjudication.”
• The Commissioner requested that the hearing be rescheduled for a ruling on the matter. A re-hearing was subsequently conducted on November 20, 2017, before Administrative Law Judge Thomas Shedden.
Analysis of the Merits of the Dispute
The re-hearing focused on the substantive conflict: whether the HOA had the authority to compel the Larsons to remove their patio cover at their own expense for the maintenance project.
Respondent’s (HOA) Case
The HOA, consisting of 169 units, initiated a project to make necessary repairs to its twenty-five buildings and then have them painted. The HOA’s position was based on the following points:
• Legal Authority: The HOA asserted its authority under sections 9 and 9(b) of its CC&Rs, which state that the HOA is responsible for maintaining building exteriors and that “Any cooperative action necessary or appropriate to the proper maintenance and upkeep of the… [building] exteriors… shall be taken by the [Respondent].”
• Project Necessity: The project manager, Wayne King, provided testimony that the HOA’s board deemed credible and reasonable.
◦ Safety: King stated that all five bidding contractors required the patio covers to be removed to ensure a safe work environment as mandated by the Arizona Department of Occupational Safety and Health (OSHA).
◦ Logistics: Standard scaffolding would not fit without removing the covers, commercial scaffolding would not provide full access, a forklift was not viable due to overhead power lines, and allowing painters to walk on homeowner patio covers was unsafe.
◦ Quality of Work: The project involved sanding, power washing, and patching before painting to “do the job right.” Many covers had been improperly flashed, causing damage to the buildings that needed repair.
◦ Warranty: The paint company would not provide a warranty for the project if individual homeowners, such as the Larsons, were permitted to paint their own units.
Petitioners’ (Larsons’) Case
The Larsons, who purchased their unit in 1999 with the wooden patio cover already in place, contested the HOA’s demands.
• Challenge to Authority: The Petitioners argued that the HOA had no legal authority to demand the removal of their patio cover.
• Unreasonable Cost: They asserted that the cost of removal and reinstallation was unreasonable, submitting two bids:
◦ One bid quoted $1,250 to remove and dispose of the cover and $3,980 to remove and rebuild it with new wood.
◦ A second bid quoted $5,975 to remove and then replace the structure.
• Proposed Alternative: In a letter dated May 19, 2017, the Larsons offered to have the back of their unit painted at their own expense.
• Compromise Offer: During the November 20, 2017 hearing, after hearing the project manager’s testimony, Ms. Larson offered that they would agree not to reinstall the patio cover if the HOA would pay for its removal.
Final Administrative Law Judge Decision
On December 11, 2017, ALJ Thomas Shedden issued a final decision dismissing the Larsons’ petition and finding in favor of the Respondent, Tempe Gardens Townhouse Corporation.
Key Findings and Conclusions of Law
Finding/Conclusion
Details
Standard of Review
The HOA’s decisions regarding maintenance and repair are given deference, provided they act reasonably.
Reasonableness of HOA Action
Based on the “credible testimony” of Wayne King, the Judge found that the HOA’s proposed plan for repairing and painting the buildings, which required the removal of patio covers, was reasonable.
HOA Authority
CC&R sections 9 and 9(b) were found to be “sufficient to show that Respondent has the authority to remove Petitioners’ patio to complete the painting work.”
Patio Cover Classification
The Petitioners’ patio cover was legally classified as a “limited common element” within the meaning of ARIZ. REV. STAT. section 33-1212(4).
Cost Responsibility
The central issue of payment was decided by statute. The Judge concluded that under a “reasonable reading of ARIZ. REV. STAT. section 33-1255(C),” any common expense associated with a limited common element “shall be assessed exclusively against the units benefitted.”
Final Order
Based on these findings, the Administrative Law Judge ordered the following:
“The evidence of record supports a conclusion that Respondent has authority to require Petitioners to remove their patio cover to allow the building to be properly and safely painted, and that Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.”
The final order was that the Petitioners’ petition be dismissed, and the Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party.
The ALJ dismissed the petition, ruling that the HOA acted reasonably and had the authority under the CC&Rs to require the removal of the homeowner's patio cover for necessary painting and repairs. The ALJ determined that because the patio cover is a limited common element, the Petitioners must bear the cost of removal and reinstallation according to A.R.S. § 33-1255(C).
Why this result: Petitioners failed to prove the HOA violated CC&Rs or acted unreasonably, and statutory law assigned the expense burden for the limited common element to the homeowner.
Key Issues & Findings
Authority of HOA to mandate removal of homeowner's patio cover for maintenance and assignment of removal/reinstallation costs.
Petitioners challenged the Respondent HOA's authority and reasonableness in requiring them to remove their patio cover, a limited common element, for building painting and repair, and disputed the requirement that Petitioners bear the costs. The ALJ concluded that the HOA's plan was reasonable, the HOA had the authority under CC&R sections 9 and 9(b), and Petitioners must bear the cost of removal and reinstallation under A.R.S. § 33-1255(C).
Orders: Petitioners’ petition is dismissed. Respondent is deemed the prevailing party. Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
Analytics Highlights
Topics: HOA authority, limited common element, maintenance costs, patio cover, CC&Rs, statutory interpretation, dismissal, prevailing party
Additional Citations:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
A.R.S. § 32-2199
A.R.S. § 32-2199.02
A.R.S. § 41-1092.09
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona
Audio Overview
Decision Documents
17F-H1717038-REL Decision – 583987.pdf
Uploaded 2025-10-08T06:58:14 (53.0 KB)
17F-H1717038-REL Decision – 585505.pdf
Uploaded 2025-10-08T06:58:15 (385.9 KB)
Briefing Doc – 17F-H1717038-REL
Briefing on Larson v. Tempe Gardens Townhouse Corporation
Executive Summary
This briefing synthesizes the legal dispute between homeowners James and Shawna Larson and the Tempe Gardens Townhouse Corporation (the “Respondent” or “HOA”). The core conflict centered on the HOA’s directive that the Larsons remove their wooden patio cover at their own expense to facilitate a community-wide building repair and painting project.
The case progressed through two distinct phases. Initially, an Administrative Law Judge (ALJ) recommended dismissing the Larsons’ petition for a lack of a “justiciable controversy,” reasoning that the HOA had not yet acted on its threat to remove the patio cover, rendering the dispute speculative. However, the Commissioner of the Department of Real Estate rejected this recommendation, finding the matter was “ripe for adjudication,” and ordered a full hearing on the merits.
In the final decision, a second ALJ dismissed the Larsons’ petition and ruled in favor of the HOA. The judge found the HOA’s plan to be reasonable and necessary for the proper and safe completion of the project, based on credible testimony from the project manager. The decision affirmed the HOA’s authority under its CC&Rs to require the removal of the structure. Crucially, the ruling established that the patio cover is a “limited common element” under Arizona law. Consequently, pursuant to Arizona Revised Statutes, the homeowners (the Larsons) are exclusively responsible for all costs associated with it, including its removal and potential reinstallation.
Procedural History and Jurisdictional Rulings
Initial Petition and Dismissal Recommendation
On June 16, 2017, James and Shawna Larson filed a petition with the Department of Real Estate against their HOA, alleging a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs). However, the initial filing did not specify which provisions had been violated.
Upon inquiry, the Petitioners’ counsel admitted via email that no specific provision of the CC&Rs had yet been violated. Instead, their concern was that section 10(a) would be violated if the HOA acted on its threat to forcibly remove their patio cover and charge them for the cost.
This led to the “ORDER RECOMMENDING DISMISSAL FOR LACK OF JUSTICIABLE CONTROVERSY,” issued on August 25, 2017, by Administrative Law Judge Suzanne Marwil. The key findings of this order were:
• Speculative Harm: The Judge found that the HOA’s actions “have not yet been undertaken and our [are] speculative at this juncture.”
• Lack of Jurisdiction: The order stated that the Office of Administrative Hearings’ jurisdiction, per A.R.S. § 32-2199, is limited to adjudicating existing violations of community documents, not potential future ones.
• Misunderstanding by Both Parties: The order noted, “Both parties fundamentally misunderstand the limits of this Tribunal’s jurisdiction.” The Petitioners were seeking a ruling on a future action, while the Respondent was urging the Tribunal to find the Petitioners had violated the CC&Rs, which was not the subject of the petition.
• Recommended Forum: The Judge suggested that the appropriate forum for the Petitioners would be a declaratory judgment action in superior court.
Rejection of Dismissal and Re-Hearing
On August 31, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued an “ORDER REJECTING RECOMMENDATION OF DISMISSAL.”
• The Commissioner rejected the ALJ’s finding that the matter lacked a justiciable controversy.
• The order cited a letter from the Respondent dated June 1, 2017, which posed the question: “Is the presence of the awning a violation of the Association’s governing documents?”
• This question was deemed sufficient to make the matter “ripe for adjudication.”
• The Commissioner requested that the hearing be rescheduled for a ruling on the matter. A re-hearing was subsequently conducted on November 20, 2017, before Administrative Law Judge Thomas Shedden.
Analysis of the Merits of the Dispute
The re-hearing focused on the substantive conflict: whether the HOA had the authority to compel the Larsons to remove their patio cover at their own expense for the maintenance project.
Respondent’s (HOA) Case
The HOA, consisting of 169 units, initiated a project to make necessary repairs to its twenty-five buildings and then have them painted. The HOA’s position was based on the following points:
• Legal Authority: The HOA asserted its authority under sections 9 and 9(b) of its CC&Rs, which state that the HOA is responsible for maintaining building exteriors and that “Any cooperative action necessary or appropriate to the proper maintenance and upkeep of the… [building] exteriors… shall be taken by the [Respondent].”
• Project Necessity: The project manager, Wayne King, provided testimony that the HOA’s board deemed credible and reasonable.
◦ Safety: King stated that all five bidding contractors required the patio covers to be removed to ensure a safe work environment as mandated by the Arizona Department of Occupational Safety and Health (OSHA).
◦ Logistics: Standard scaffolding would not fit without removing the covers, commercial scaffolding would not provide full access, a forklift was not viable due to overhead power lines, and allowing painters to walk on homeowner patio covers was unsafe.
◦ Quality of Work: The project involved sanding, power washing, and patching before painting to “do the job right.” Many covers had been improperly flashed, causing damage to the buildings that needed repair.
◦ Warranty: The paint company would not provide a warranty for the project if individual homeowners, such as the Larsons, were permitted to paint their own units.
Petitioners’ (Larsons’) Case
The Larsons, who purchased their unit in 1999 with the wooden patio cover already in place, contested the HOA’s demands.
• Challenge to Authority: The Petitioners argued that the HOA had no legal authority to demand the removal of their patio cover.
• Unreasonable Cost: They asserted that the cost of removal and reinstallation was unreasonable, submitting two bids:
◦ One bid quoted $1,250 to remove and dispose of the cover and $3,980 to remove and rebuild it with new wood.
◦ A second bid quoted $5,975 to remove and then replace the structure.
• Proposed Alternative: In a letter dated May 19, 2017, the Larsons offered to have the back of their unit painted at their own expense.
• Compromise Offer: During the November 20, 2017 hearing, after hearing the project manager’s testimony, Ms. Larson offered that they would agree not to reinstall the patio cover if the HOA would pay for its removal.
Final Administrative Law Judge Decision
On December 11, 2017, ALJ Thomas Shedden issued a final decision dismissing the Larsons’ petition and finding in favor of the Respondent, Tempe Gardens Townhouse Corporation.
Key Findings and Conclusions of Law
Finding/Conclusion
Details
Standard of Review
The HOA’s decisions regarding maintenance and repair are given deference, provided they act reasonably.
Reasonableness of HOA Action
Based on the “credible testimony” of Wayne King, the Judge found that the HOA’s proposed plan for repairing and painting the buildings, which required the removal of patio covers, was reasonable.
HOA Authority
CC&R sections 9 and 9(b) were found to be “sufficient to show that Respondent has the authority to remove Petitioners’ patio to complete the painting work.”
Patio Cover Classification
The Petitioners’ patio cover was legally classified as a “limited common element” within the meaning of ARIZ. REV. STAT. section 33-1212(4).
Cost Responsibility
The central issue of payment was decided by statute. The Judge concluded that under a “reasonable reading of ARIZ. REV. STAT. section 33-1255(C),” any common expense associated with a limited common element “shall be assessed exclusively against the units benefitted.”
Final Order
Based on these findings, the Administrative Law Judge ordered the following:
“The evidence of record supports a conclusion that Respondent has authority to require Petitioners to remove their patio cover to allow the building to be properly and safely painted, and that Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.”
The final order was that the Petitioners’ petition be dismissed, and the Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party.
The ALJ dismissed the petition, ruling that the HOA acted reasonably and had the authority under the CC&Rs to require the removal of the homeowner's patio cover for necessary painting and repairs. The ALJ determined that because the patio cover is a limited common element, the Petitioners must bear the cost of removal and reinstallation according to A.R.S. § 33-1255(C).
Why this result: Petitioners failed to prove the HOA violated CC&Rs or acted unreasonably, and statutory law assigned the expense burden for the limited common element to the homeowner.
Key Issues & Findings
Authority of HOA to mandate removal of homeowner's patio cover for maintenance and assignment of removal/reinstallation costs.
Petitioners challenged the Respondent HOA's authority and reasonableness in requiring them to remove their patio cover, a limited common element, for building painting and repair, and disputed the requirement that Petitioners bear the costs. The ALJ concluded that the HOA's plan was reasonable, the HOA had the authority under CC&R sections 9 and 9(b), and Petitioners must bear the cost of removal and reinstallation under A.R.S. § 33-1255(C).
Orders: Petitioners’ petition is dismissed. Respondent is deemed the prevailing party. Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
Analytics Highlights
Topics: HOA authority, limited common element, maintenance costs, patio cover, CC&Rs, statutory interpretation, dismissal, prevailing party
Additional Citations:
A.R.S. § 33-1255(C)
CC&R section 9
CC&R section 9(b)
A.R.S. § 33-1212(4)
Tierra Ranchos Homeowners Ass'n v. Kitchukov
A.R.S. § 32-2199
A.R.S. § 32-2199.02
A.R.S. § 41-1092.09
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona
Video Overview
Audio Overview
Decision Documents
17F-H1717038-REL Decision – 583987.pdf
Uploaded 2025-10-09T03:31:46 (53.0 KB)
17F-H1717038-REL Decision – 585505.pdf
Uploaded 2025-10-09T03:31:46 (385.9 KB)
Briefing Doc – 17F-H1717038-REL
Briefing on Larson v. Tempe Gardens Townhouse Corporation
Executive Summary
This briefing synthesizes the legal dispute between homeowners James and Shawna Larson and the Tempe Gardens Townhouse Corporation (the “Respondent” or “HOA”). The core conflict centered on the HOA’s directive that the Larsons remove their wooden patio cover at their own expense to facilitate a community-wide building repair and painting project.
The case progressed through two distinct phases. Initially, an Administrative Law Judge (ALJ) recommended dismissing the Larsons’ petition for a lack of a “justiciable controversy,” reasoning that the HOA had not yet acted on its threat to remove the patio cover, rendering the dispute speculative. However, the Commissioner of the Department of Real Estate rejected this recommendation, finding the matter was “ripe for adjudication,” and ordered a full hearing on the merits.
In the final decision, a second ALJ dismissed the Larsons’ petition and ruled in favor of the HOA. The judge found the HOA’s plan to be reasonable and necessary for the proper and safe completion of the project, based on credible testimony from the project manager. The decision affirmed the HOA’s authority under its CC&Rs to require the removal of the structure. Crucially, the ruling established that the patio cover is a “limited common element” under Arizona law. Consequently, pursuant to Arizona Revised Statutes, the homeowners (the Larsons) are exclusively responsible for all costs associated with it, including its removal and potential reinstallation.
Procedural History and Jurisdictional Rulings
Initial Petition and Dismissal Recommendation
On June 16, 2017, James and Shawna Larson filed a petition with the Department of Real Estate against their HOA, alleging a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs). However, the initial filing did not specify which provisions had been violated.
Upon inquiry, the Petitioners’ counsel admitted via email that no specific provision of the CC&Rs had yet been violated. Instead, their concern was that section 10(a) would be violated if the HOA acted on its threat to forcibly remove their patio cover and charge them for the cost.
This led to the “ORDER RECOMMENDING DISMISSAL FOR LACK OF JUSTICIABLE CONTROVERSY,” issued on August 25, 2017, by Administrative Law Judge Suzanne Marwil. The key findings of this order were:
• Speculative Harm: The Judge found that the HOA’s actions “have not yet been undertaken and our [are] speculative at this juncture.”
• Lack of Jurisdiction: The order stated that the Office of Administrative Hearings’ jurisdiction, per A.R.S. § 32-2199, is limited to adjudicating existing violations of community documents, not potential future ones.
• Misunderstanding by Both Parties: The order noted, “Both parties fundamentally misunderstand the limits of this Tribunal’s jurisdiction.” The Petitioners were seeking a ruling on a future action, while the Respondent was urging the Tribunal to find the Petitioners had violated the CC&Rs, which was not the subject of the petition.
• Recommended Forum: The Judge suggested that the appropriate forum for the Petitioners would be a declaratory judgment action in superior court.
Rejection of Dismissal and Re-Hearing
On August 31, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued an “ORDER REJECTING RECOMMENDATION OF DISMISSAL.”
• The Commissioner rejected the ALJ’s finding that the matter lacked a justiciable controversy.
• The order cited a letter from the Respondent dated June 1, 2017, which posed the question: “Is the presence of the awning a violation of the Association’s governing documents?”
• This question was deemed sufficient to make the matter “ripe for adjudication.”
• The Commissioner requested that the hearing be rescheduled for a ruling on the matter. A re-hearing was subsequently conducted on November 20, 2017, before Administrative Law Judge Thomas Shedden.
Analysis of the Merits of the Dispute
The re-hearing focused on the substantive conflict: whether the HOA had the authority to compel the Larsons to remove their patio cover at their own expense for the maintenance project.
Respondent’s (HOA) Case
The HOA, consisting of 169 units, initiated a project to make necessary repairs to its twenty-five buildings and then have them painted. The HOA’s position was based on the following points:
• Legal Authority: The HOA asserted its authority under sections 9 and 9(b) of its CC&Rs, which state that the HOA is responsible for maintaining building exteriors and that “Any cooperative action necessary or appropriate to the proper maintenance and upkeep of the… [building] exteriors… shall be taken by the [Respondent].”
• Project Necessity: The project manager, Wayne King, provided testimony that the HOA’s board deemed credible and reasonable.
◦ Safety: King stated that all five bidding contractors required the patio covers to be removed to ensure a safe work environment as mandated by the Arizona Department of Occupational Safety and Health (OSHA).
◦ Logistics: Standard scaffolding would not fit without removing the covers, commercial scaffolding would not provide full access, a forklift was not viable due to overhead power lines, and allowing painters to walk on homeowner patio covers was unsafe.
◦ Quality of Work: The project involved sanding, power washing, and patching before painting to “do the job right.” Many covers had been improperly flashed, causing damage to the buildings that needed repair.
◦ Warranty: The paint company would not provide a warranty for the project if individual homeowners, such as the Larsons, were permitted to paint their own units.
Petitioners’ (Larsons’) Case
The Larsons, who purchased their unit in 1999 with the wooden patio cover already in place, contested the HOA’s demands.
• Challenge to Authority: The Petitioners argued that the HOA had no legal authority to demand the removal of their patio cover.
• Unreasonable Cost: They asserted that the cost of removal and reinstallation was unreasonable, submitting two bids:
◦ One bid quoted $1,250 to remove and dispose of the cover and $3,980 to remove and rebuild it with new wood.
◦ A second bid quoted $5,975 to remove and then replace the structure.
• Proposed Alternative: In a letter dated May 19, 2017, the Larsons offered to have the back of their unit painted at their own expense.
• Compromise Offer: During the November 20, 2017 hearing, after hearing the project manager’s testimony, Ms. Larson offered that they would agree not to reinstall the patio cover if the HOA would pay for its removal.
Final Administrative Law Judge Decision
On December 11, 2017, ALJ Thomas Shedden issued a final decision dismissing the Larsons’ petition and finding in favor of the Respondent, Tempe Gardens Townhouse Corporation.
Key Findings and Conclusions of Law
Finding/Conclusion
Details
Standard of Review
The HOA’s decisions regarding maintenance and repair are given deference, provided they act reasonably.
Reasonableness of HOA Action
Based on the “credible testimony” of Wayne King, the Judge found that the HOA’s proposed plan for repairing and painting the buildings, which required the removal of patio covers, was reasonable.
HOA Authority
CC&R sections 9 and 9(b) were found to be “sufficient to show that Respondent has the authority to remove Petitioners’ patio to complete the painting work.”
Patio Cover Classification
The Petitioners’ patio cover was legally classified as a “limited common element” within the meaning of ARIZ. REV. STAT. section 33-1212(4).
Cost Responsibility
The central issue of payment was decided by statute. The Judge concluded that under a “reasonable reading of ARIZ. REV. STAT. section 33-1255(C),” any common expense associated with a limited common element “shall be assessed exclusively against the units benefitted.”
Final Order
Based on these findings, the Administrative Law Judge ordered the following:
“The evidence of record supports a conclusion that Respondent has authority to require Petitioners to remove their patio cover to allow the building to be properly and safely painted, and that Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.”
The final order was that the Petitioners’ petition be dismissed, and the Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party.
Study Guide – 17F-H1717038-REL
Study Guide: Larson v. Tempe Gardens Townhouse Corporation
This study guide provides a comprehensive review of the administrative case between homeowners James and Shawna Larson and the Tempe Gardens Townhouse Corporation. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms based on the provided legal documents.
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Short-Answer Quiz
Answer the following questions in 2-3 sentences each, based on the information in the provided source documents.
1. Who were the primary parties involved in this case, and what was their relationship?
2. What was the initial reason given by Administrative Law Judge (ALJ) Suzanne Marwil for recommending the dismissal of the Larsons’ petition?
3. Why did the Commissioner of the Department of Real Estate, Judy Lowe, reject the initial recommendation for dismissal?
4. What was the central dispute that was ultimately decided in the November 20, 2017, hearing?
5. According to the final Administrative Law Judge Decision, what is the legal classification of the petitioners’ patio cover?
6. Which specific sections of the CC&Rs did the Respondent, Tempe Gardens Townhouse Corporation, cite as the basis for its authority?
7. What key reasons did project manager Wayne King provide to justify the necessity of removing the patio covers for the painting project?
8. Describe the significant difference in the cost estimates for removing and replacing the patio cover as presented by the Petitioners versus the Respondent’s project manager.
9. What was the final ruling regarding who was financially responsible for the removal and potential reinstallation of the patio cover?
10. What was the ultimate outcome of the Larsons’ petition following the final hearing, and which party was deemed the “prevailing party”?
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Answer Key
1. The primary parties were the Petitioners, homeowners James and Shawna Larson, and the Respondent, the Tempe Gardens Townhouse Corporation, which is their homeowner’s association (HOA). The dispute arose from the HOA’s plan to repair and paint the building exteriors.
2. ALJ Marwil initially recommended dismissal due to a “lack of justiciable controversy.” She found that the Petitioners had failed to cite any provision of the CC&Rs that the Respondent had currently violated, as the threatened action to remove the patio cover was speculative and had not yet occurred.
3. Commissioner Lowe rejected the dismissal because she found the matter was “ripe for adjudication.” Her decision was based on a June 1, 2017 letter from the Respondent that questioned whether “the presence of the awning [is] a violation of the Association’s governing documents,” which she interpreted as the Respondent alleging a violation.
4. The central dispute was whether the Tempe Gardens Townhouse Corporation had the authority to mandate that homeowners, specifically the Larsons, remove their patio covers at their own expense to facilitate a building repair and painting project.
5. The final decision classifies the Petitioners’ patio cover as a “limited common element” within the meaning of ARIZ. REV. STAT. section 33-1212(4). This classification was crucial to determining financial responsibility.
6. The Respondent cited sections 9 and 9(b) of the CC&Rs. Section 9(b) makes the Respondent responsible for maintaining building exteriors, and section 9 grants it the authority to take “Any cooperative action necessary or appropriate to the proper maintenance and upkeep” of those exteriors.
7. Wayne King testified that removal was necessary to properly and safely complete the work using scaffolding, as required by modern safety laws. He also stated that removal was needed to repair improperly flashed areas behind the covers and to ensure the painting contractor would provide a warranty for the project.
8. The Petitioners presented bids showing the cost to remove and rebuild the cover would be between $3,980 and $5,975. In contrast, Mr. King opined these estimates were very high and that the cost should be closer to $1,000 if existing materials were reused.
9. The final ruling, based on ARIZ. REV. STAT. section 33-1255(C), was that the Petitioners must bear the cost of removing the patio cover and, if they choose, the cost of reinstalling it. This is because the patio cover is a limited common element assigned specifically to their unit.
10. The final outcome was the dismissal of the Larsons’ petition. The Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party in the matter.
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Essay Questions
The following questions are designed for a more in-depth analysis. Use the provided documents to construct a detailed, evidence-based response.
1. Trace the procedural history of this case from the initial filing to the final decision. Discuss the key turning points, including the initial recommendation for dismissal, its rejection by the Commissioner, and the reasoning behind the final judgment.
2. Analyze the legal arguments presented by both the Petitioners and the Respondent in the November 2017 hearing. On what specific statutes and CC&R provisions did each side rely, and how did the Administrative Law Judge ultimately interpret these documents?
3. Evaluate the role of expert testimony in this case, specifically focusing on the evidence provided by project manager Wayne King. How did his testimony regarding safety, project requirements, and cost estimates influence the Administrative Law Judge’s findings on the reasonableness of the Respondent’s actions?
4. Discuss the legal concept of a “limited common element” as defined and applied in the source documents. Explain how this classification was central to the final decision regarding financial responsibility for the patio cover’s removal and reinstallation.
5. The initial Administrative Law Judge found no “justiciable controversy,” while the Commissioner later found the matter “ripe for adjudication.” Based on the details in all three documents, explain the arguments for both positions and analyze why the case ultimately proceeded to a full hearing.
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Glossary of Key Terms
Definition from Source Context
Administrative Law Judge (ALJ)
An official in the Office of Administrative Hearings who adjudicates complaints regarding condominium and planned community documents and ensures compliance with relevant statutes.
Covenants, Conditions, and Restrictions. The documents that govern the community and are described as a contract between the homeowner’s association and the homeowners.
Justiciable Controversy
A real dispute that a tribunal has the authority to resolve. The initial petition was recommended for dismissal for a lack of a justiciable controversy because the Respondent’s threatened actions were deemed speculative.
Limited Common Element
A legal classification for property defined under ARIZ. REV. STAT. section 33-1212(4). In this case, the Petitioners’ patio cover was classified as such, meaning any common expense associated with its maintenance, repair, or replacement is assessed against the unit to which it is assigned.
Petition
The formal document filed with the Department of Real Estate to initiate a complaint against a homeowner’s association.
Petitioner
The party that files a petition initiating a legal action. In this case, the homeowners James and Shawna Larson.
Preponderance of the Evidence
The standard of proof required in this matter, defined as “The greater weight of the evidence… sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”
Prevailing Party
The party that is successful in a legal dispute. In the final order, the Respondent was deemed the prevailing party.
Respondent
The party against whom a petition is filed. In this case, the Tempe Gardens Townhouse Corporation.
Ripe for Adjudication
A term used by the Commissioner of the Department of Real Estate to indicate that a dispute is ready to be formally heard and decided by the Administrative Law Judge.
Blog Post – 17F-H1717038-REL
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3 sources
These documents chronicle the legal dispute between James and Shawna Larson (Petitioners) and the Tempe Gardens Townhouse Corporation (Respondent) concerning the removal of the Larsons’ patio cover for building maintenance. Initially, an Administrative Law Judge (ALJ) recommended dismissal because the Petitioners did not allege a current violation of the governing documents, thus lacking a justiciable controversy since the association had only threatened action. However, the Department of Real Estate Commissioner rejected this recommendation, asserting that a violation of the governing documents was alleged by the Respondent, making the matter ripe for adjudication. Following a rehearing, a different ALJ issued a final decision finding that the Respondent acted reasonably in requiring the patio cover removal for safe and proper painting and repairs, concluding that the Petitioners must bear the cost of removal and reinstallation as the cover is a limited common element.
Based on 3 sources
Case Participants
Petitioner Side
James Larson(petitioner)
Shawna Larson(petitioner)
Lisa M. Hanger(attorney) Counsel for Petitioners
Respondent Side
Nathan Tennyson(attorney) Brown Alcott PLLC Counsel for Respondent Tempe Gardens Townhouse Corporation
Wayne King(witness) Project manager hired by Respondent for the painting project; provided testimony
Neutral Parties
Suzanne Marwil(ALJ) Office of Administrative Hearings Authored Recommended Order Dismissal dated August 25, 2017
Thomas Shedden(ALJ) Office of Administrative Hearings Authored Administrative Law Judge Decision dated December 11, 2017
Judy Lowe(Commissioner) Arizona Department of Real Estate Rejected Recommendation of Dismissal
Dan Gardner(HOA coordinator) Transmitted documents (Order Rejecting Recommendation of Dismissal)
Other Participants
Chris Morga(contractor) Jacob and Co. Mentioned as a vendor who could remove patio covers
The ALJ found that the Petitioner did not establish a violation of the Respondent's CC&Rs and recommended the petition be denied. The ALJ specifically noted the lack of proof that fees were inappropriate and that Petitioner failed to provide legal authority requiring equal benefit. The petition was denied, and the Respondent was not ordered to pay the Petitioner's filing fee.
Why this result: The Petitioner failed to meet the burden of proof required to establish a violation of the CC&Rs.
Key Issues & Findings
Alleged violation of CC&Rs regarding disproportionate assessment fees
Petitioner alleged Respondent was in violation of its CC&Rs because Master HOA fees were disproportionately borne by existing homeowners and did not benefit the whole development equally. Petitioner failed to establish a violation because required evidentiary documents (plat attached as 'Exhibit B') were missing, and Petitioner offered no legal authority requiring fees to be equally beneficial or even-handed.
Orders: Petitioner's petition is denied. Respondent shall not pay the filing fee required by section 32-2199.01 to the Petitioner.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 32-2199 et seq.
A.R.S. § 32-2199.01(D)
A.R.S. § 32-2199.02
A.A.C. R2-19-119(B)
Analytics Highlights
Topics: CC&Rs, Master HOA, Assessment Fees, Common Areas, Burden of Proof, Rule Against Perpetuities
Additional Citations:
A.R.S. § 32-2199
A.R.S. § 32-2199.01
A.R.S. § 32-2199.02
A.A.C. R2-19-119
Video Overview
Audio Overview
Decision Documents
17F-H1717033-REL Decision – 575166.pdf
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17F-H1717033-REL Decision – 582189.pdf
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17F-H1717033-REL Decision – 584918.pdf
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Briefing Doc – 17F-H1717033-REL
Administrative Hearing Briefing: Janicek v. Sycamore Vista No. 8 HOA
Executive Summary
This briefing document synthesizes the key findings and legal proceedings in case number 17F-H1717033-REL, wherein Petitioner Jay Janicek filed a complaint against Respondent Sycamore Vista No. 8 HOA. The petition was ultimately denied by an Administrative Law Judge (ALJ), a decision formally adopted and finalized by the Commissioner of the Arizona Department of Real Estate.
The core of the dispute centered on the Petitioner’s allegation that the HOA’s fee structure violated its Covenants, Conditions, and Restrictions (CC&Rs). Specifically, Janicek argued that payments made by his first-level association to a master association for common area expenses—most egregiously for a roadway loan—were improper because the benefits were not distributed equally among all homeowners.
The denial of the petition hinged on a critical failure of proof by the Petitioner. The CC&Rs define “Common Areas” by referencing a plat map (“Exhibit B”) that was not submitted into evidence by the Petitioner. Without this crucial document, it was impossible to prove that the fees collected by the HOA were for purposes outside the scope of the CC&Rs. Furthermore, the Petitioner failed to provide any legal authority or provision within the governing documents requiring that association fees be “even-handed or equally beneficial to all homeowners.” A secondary argument regarding the “rule against perpetuities,” introduced post-hearing, was also addressed and dismissed by the ALJ as legally inapplicable to the matter.
Case Overview
The following table outlines the principal parties and details of the administrative hearing.
Case Detail
Information
Petitioner
Jay Janicek
Respondent
Sycamore Vista No. 8 HOA
Respondent’s Counsel
Evan Thompson, Thompson Krone PLC
Respondent’s Representative
Steve Russo
Case Number
17F-H1717033-REL
Docket Number
17F-H1717033-REL
Hearing Date
July 12, 2017
Presiding Judge
Dorinda M. Lang, Administrative Law Judge
Hearing Observers
John Shields, Margery and Mathew Janicek
Petitioner’s Allegations
The petition filed by Jay Janicek alleged that Sycamore Vista No. 8 HOA was in violation of its governing CC&Rs. The central arguments presented were:
• Unequal Distribution of Costs and Benefits: The Petitioner contended that expenses paid by the Respondent association to the Sycamore Vista Master Home Owner’s Association (“Master HOA”) did not benefit all homeowners equally. The most “egregious” example cited was the payment toward a loan for a roadway within the master development.
• Violation of CC&Rs: The Petitioner argued that this unequal cost burden was a direct violation of Article 11, Section 11.5 of the Respondent’s CC&Rs. This section stipulates:
• Discrepancy Among Associations: The Petitioner asserted that another first-level association within the master development receives more benefit from the common areas but does not pay into the Master HOA.
• Rule Against Perpetuities: In a post-hearing submission, the Petitioner introduced a new argument that a “rule against perpetuities” was at stake in the matter.
Adjudication and Findings of Fact
The Administrative Law Judge’s decision was based on the Petitioner’s failure to meet the required burden of proof through a preponderance of the evidence.
Evidentiary Failure
The Petitioner’s case failed primarily due to a lack of sufficient evidence to prove a violation of the CC&Rs.
• Missing ‘Exhibit B’: The definition of “Common Areas” was essential to the case. According to Article 1, Section 1.6 of the CC&Rs, these areas are delineated on a plat that was supposed to be attached as “Exhibit B.”
• Critical Finding: The ALJ noted, “Unfortunately, there was no plat attached to the document that was offered into evidence and it was not to be found among the other exhibits. Therefore, Petitioner was unable to establish that Respondent’s fees pay for anything that is not provided for in the CC&Rs.”
• Petitioner’s Concession: The Petitioner did not dispute the Respondent’s argument that the Master HOA fees, including those for roads, were for Common Areas.
Lack of Legal Authority
The Petitioner’s core premise—that fees must be proportional to benefits received—was not substantiated by legal or documentary support.
• The ALJ found that the “Petitioner offered no legal authority that requires that all first level associations must pay the same into a master association or that all homeowners must receive the same benefit from or contribute the same amount (or even a proportionate share) to the common areas.”
• The argument that association fees were “disproportionately heavy” was not established to be a violation of any provision in the CC&Rs.
Post-Hearing Submissions
The record was held open until August 1, 2017, allowing for additional documentation from both parties.
• Petitioner (Exhibit 6): Submitted financial documentation, emails, and the argument concerning the rule against perpetuities.
• Respondent (Exhibit H): Submitted a Notice of Lien and attachments. This exhibit demonstrated that, regarding a lien for water services on properties not part of the Respondent HOA, the “Respondent’s homeowners are not responsible for it.”
Conclusions of Law and Final Decision
Based on the evidence and arguments presented, the ALJ denied the petition, a decision later finalized by the Arizona Department of Real Estate.
Denial of Petition
• The primary conclusion of law was that the “Petitioner has not established that Respondent is in violation of its CC&Rs.”
• The payment for Common Areas was found to be in comportment with the CC&Rs.
Rejection of Key Arguments
• Equal Benefit: The ALJ explicitly concluded: “Petitioner has offered no legal authority or provision of the CC&Rs that requires the association fees to be even-handed or equally beneficial to all homeowners.”
• Rule Against Perpetuities: While this argument was not part of the original petition, the ALJ addressed it to “lay a concern to rest.” The judge explained that the rule, which states that property ownership must vest within a lifetime plus 21 years, evolved from estate law and does not apply to HOA property sales where ownership vests immediately in the developer or a new owner. The judge concluded, “the rule against perpetuities does not apply to a homeowner’s association and it clearly does not apply in this matter.”
Timeline of Orders
1. July 12, 2017: An “Order Holding Record Open” was issued by ALJ Dorinda M. Lang.
2. August 14, 2017: The “Administrative Law Judge Decision” was issued, ordering that the Petitioner’s petition be denied.
3. August 21, 2017: A “Final Order” was issued by Judy Lowe, Commissioner of the Department of Real Estate, adopting the ALJ’s decision and officially denying the petition.
Post-Decision Procedures
The Final Order, effective August 21, 2017, concluded the administrative action and outlined the subsequent options available to the parties.
• The order is binding unless a rehearing is granted. A request for rehearing must be filed within 30 days of the service of the final order.
• A rehearing may be granted for the following causes:
1. Irregularity in the proceedings or any order or abuse of discretion that deprived a party of a fair hearing.
2. Misconduct by the Department, ALJ, or the prevailing party.
3. Accident or surprise that could not have been prevented by ordinary prudence.
4. Newly discovered material evidence that could not with reasonable diligence have been discovered and produced at the original hearing.
5. Excessive or insufficient penalties.
6. Error in the admission or rejection of evidence or other errors of law occurring during the proceeding.
7. The findings of fact or decision is arbitrary, capricious, or an abuse of discretion.
8. The findings of fact or decision is not supported by the evidence or is contrary to law.
• Parties may appeal the final administrative action by filing a complaint for judicial review.
Study Guide – 17F-H1717033-REL
Study Guide: Janicek v. Sycamore Vista No. 8 HOA
This guide provides a comprehensive review of the administrative hearing case No. 17F-H1717033-REL, Jay Janicek v. Sycamore Vista No. 8 HOA. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms to facilitate a thorough understanding of the case’s facts, arguments, and legal conclusions.
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Short-Answer Quiz
Instructions: Answer the following questions in two to three complete sentences, based on the information provided in the case documents.
1. Who were the primary parties in this legal matter, and what were their designated roles?
2. What was the central allegation made by the Petitioner against the Respondent?
3. Which specific article and section of the Covenants, Conditions, and Restrictions (CC&Rs) did the Petitioner claim the Respondent had violated?
4. Explain the key piece of evidence that was missing and why its absence was critical to the case’s outcome.
5. What was the Respondent’s main argument regarding the fees paid to the Master HOA?
6. According to the case documents, who held the burden of proof, and what was the required standard of proof?
7. What was the “rule against perpetuities,” and what reason did the Administrative Law Judge give for its inapplicability to this case?
8. What was the ultimate decision of the Administrative Law Judge, and on what date was it issued?
9. After the hearing, the record was held open. What was the purpose of this, and what types of materials were submitted by the parties during this period?
10. What action did the Commissioner of the Department of Real Estate take after receiving the Administrative Law Judge’s decision?
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Answer Key
1. The primary parties were Jay Janicek, designated as the Petitioner, and Sycamore Vista No. 8 HOA, designated as the Respondent. The Petitioner is the party who filed the complaint, and the Respondent is the party against whom the complaint was filed.
2. The Petitioner alleged that the Respondent HOA was in violation of its CC&Rs. He argued that the fees his association paid to the Master HOA for a roadway loan did not benefit the whole development equally and were therefore inappropriate expenses for all homeowners to pay.
3. The Petitioner cited Article 11, Section 11.5 of the Respondent’s CC&Rs. This section, titled “Costs of Improvements,” details how the costs for improving Unimproved Lots and Common Areas in Phase 3 and Phase 4 are to be borne by the owners of lots within those specific phases.
4. The key missing evidence was a plat, referred to as “Exhibit B” in the CC&Rs. This plat was supposed to define the “Common Areas,” and without it, the Petitioner was unable to establish that the fees paid by the Respondent were for anything not provided for in the governing documents.
5. The Respondent argued that the Master HOA fees were used to pay for the development’s common areas. They maintained that the CC&Rs permit these payments and that there is no legal authority requiring all homeowners to receive the same benefit or for all first-level associations to contribute equally.
6. Pursuant to A.A.C. R2-19-119(B), the Petitioner, Jay Janicek, had the burden of proof in this matter. The standard of proof was a preponderance of the evidence, as established by A.A.C. R2-19-119(A).
7. The rule against perpetuities states that property ownership must vest within a time frame of an existing lifetime plus 21 years. The Judge ruled it did not apply because it evolved to handle estates bequeathed to a series of heirs and is not generally applicable to property sales where rights transfer at once; in the HOA’s case, ownership of undeveloped lots had already vested in the developer.
8. The Administrative Law Judge ordered that the Petitioner’s petition be denied. This decision was made on August 14, 2017.
9. The record was held open until August 1, 2017, to allow the Respondent to submit additional documentation and for the Petitioner to submit written objections. During this time, the Petitioner submitted financial documentation, emails, and a new argument about the rule against perpetuities (admitted as Exhibit 6), while the Respondent submitted a Notice of Lien (admitted as Exhibit H).
10. The Commissioner of the Department of Real Estate, Judy Lowe, adopted the Administrative Law Judge’s decision. This was formalized in a Final Order dated August 21, 2017, which accepted the ALJ’s recommendation and denied the Petitioner’s petition.
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Essay Questions
Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a detailed essay-style response for each.
1. Analyze the critical evidentiary failure that led to the denial of Jay Janicek’s petition. How did the absence of the plat referred to as “Exhibit B” directly impact his ability to meet the “preponderance of the evidence” standard of proof?
2. Discuss the legal reasoning behind the Administrative Law Judge’s conclusion that there is no requirement for HOA fees to be “even-handed or equally beneficial to all homeowners.” How does this principle relate to the hierarchical structure of Master and first-level associations described in the case?
3. Explain the concept of the “rule against perpetuities” as described in the legal decision. Detail why the Administrative Law Judge, despite noting the argument was outside the original petition, addressed it and ultimately found it inapplicable to the case of a homeowner’s association.
4. Trace the procedural path of this case from the initial hearing to the final binding order. Identify the key dates, decisions, and entities involved at each stage, including the Office of Administrative Hearings and the Department of Real Estate.
5. Based on the Final Order, outline the process and potential grounds for requesting a rehearing. What were the eight specific causes listed in the order that could materially affect a moving party’s rights and justify a rehearing or review?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An independent judge who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions. In this case, Dorinda M. Lang served as the ALJ.
A.A.C.
Abbreviation for Arizona Administrative Code, a compilation of rules and regulations of Arizona state agencies.
A.R.S.
Abbreviation for Arizona Revised Statutes, the collection of all the laws of the state of Arizona.
Areas of Association Responsibility
Locations that the Homeowner’s Association is responsible for maintaining, as defined within its governing documents.
Burden of Proof
The legal obligation of a party in a dispute to provide sufficient evidence to prove their claim. In this case, the burden of proof was on the Petitioner.
Covenants, Conditions, and Restrictions. These are the governing legal documents that set up the rules for a planned community or subdivision.
Common Areas
Areas within a housing development that are owned by the association for the use and benefit of all homeowners. The definition of these areas was a central issue in the case.
Commissioner
The head of a government department. In this context, Judy Lowe, the Commissioner of the Arizona Department of Real Estate, who adopted the ALJ’s decision.
First Level Association
An individual homeowner’s association within a larger development that also has a master association. The Respondent, Sycamore Vista No. 8 HOA, is a first level association.
Master HOA
The Sycamore Vista Master Home Owner’s Association. An overarching organization that governs expenses and common areas concerning an entire development composed of multiple first-level associations.
Office of Administrative Hearings (OAH)
The state agency that conducts administrative hearings for other state agencies. This case was referred to the OAH by the Department of Real Estate.
Petitioner
The party who files a petition or brings an action in a legal proceeding. In this case, Jay Janicek.
A map, drawn to scale, showing the divisions of a piece of land. The missing plat in this case was intended to show the “Common Areas.”
Preponderance of the Evidence
The standard of proof in most civil cases. It requires that the evidence shows a claim is more likely to be true than not true.
Respondent
The party against whom a petition is filed or who is responding to a legal action. In this case, Sycamore Vista No. 8 HOA.
Rule Against Perpetuities
A legal rule that prevents a property owner from controlling the disposition of their property for an indefinite period after their death. The ALJ found it did not apply in this HOA context.
Unimproved Lot Assessments
Fees imposed on the owners of undeveloped lots to pay for the costs of improving certain areas, as described in Section 6.13 of the CC&Rs.
Unimproved Lots
Parcels of land within the development that have not yet been built upon.
Blog Post – 17F-H1717033-REL
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These documents chronicle the legal proceedings of a dispute between Jay Janicek, the Petitioner, and Sycamore Vista No. 8 HOA, the Respondent, before the Office of Administrative Hearings. The first source is an “Order Holding Record Open,” dated July 12, 2017, which temporarily extends the deadline for submitting additional evidence. The subsequent sources contain the “Administrative Law Judge Decision” issued on August 14, 2017, which outlines the hearing details and the judge’s recommendation to deny the petition because Janicek failed to establish a violation of the HOA’s Covenants, Conditions, and Restrictions. Finally, the third document presents the “Final Order” from the Department of Real Estate Commissioner on August 21, 2017, which accepts and affirms the Administrative Law Judge’s decision to deny the petition. Janicek’s core claim argued that certain master association fees were disproportionately applied and did not benefit all homeowners equally, which the judge ultimately dismissed due to a lack of supporting legal authority or CC&R provisions.
Based on 3 sources
Case Participants
Petitioner Side
Jay Janicek(petitioner)
Respondent Side
Evan Thompson(HOA attorney) Thompson Krone PLC Attorney for Respondent
Steve Russo(respondent representative)
Neutral Parties
Dorinda M. Lang(ALJ)
Judy Lowe(Commissioner) Arizona Department of Real Estate
Dan Gardner(HOA Coordinator) Office of Administrative Hearings Addressee for rehearing request
Other Participants
John Shields(observer)
Margery Janicek(observer)
Mathew Janicek(observer)
M. Aguirre(unknown) Thompson Krone PLC Listed on transmittal documents
The ALJ found that the Petitioner did not establish a violation of the Respondent's CC&Rs and recommended the petition be denied. The ALJ specifically noted the lack of proof that fees were inappropriate and that Petitioner failed to provide legal authority requiring equal benefit. The petition was denied, and the Respondent was not ordered to pay the Petitioner's filing fee.
Why this result: The Petitioner failed to meet the burden of proof required to establish a violation of the CC&Rs.
Key Issues & Findings
Alleged violation of CC&Rs regarding disproportionate assessment fees
Petitioner alleged Respondent was in violation of its CC&Rs because Master HOA fees were disproportionately borne by existing homeowners and did not benefit the whole development equally. Petitioner failed to establish a violation because required evidentiary documents (plat attached as 'Exhibit B') were missing, and Petitioner offered no legal authority requiring fees to be equally beneficial or even-handed.
Orders: Petitioner's petition is denied. Respondent shall not pay the filing fee required by section 32-2199.01 to the Petitioner.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 32-2199 et seq.
A.R.S. § 32-2199.01(D)
A.R.S. § 32-2199.02
A.A.C. R2-19-119(B)
Analytics Highlights
Topics: CC&Rs, Master HOA, Assessment Fees, Common Areas, Burden of Proof, Rule Against Perpetuities
Additional Citations:
A.R.S. § 32-2199
A.R.S. § 32-2199.01
A.R.S. § 32-2199.02
A.A.C. R2-19-119
Audio Overview
Decision Documents
17F-H1717033-REL Decision – 575166.pdf
Uploaded 2025-10-08T06:57:56 (39.1 KB)
17F-H1717033-REL Decision – 582189.pdf
Uploaded 2025-10-08T06:57:57 (69.4 KB)
17F-H1717033-REL Decision – 584918.pdf
Uploaded 2025-10-08T06:57:58 (674.1 KB)
Briefing Doc – 17F-H1717033-REL
Administrative Hearing Briefing: Janicek v. Sycamore Vista No. 8 HOA
Executive Summary
This briefing document synthesizes the key findings and legal proceedings in case number 17F-H1717033-REL, wherein Petitioner Jay Janicek filed a complaint against Respondent Sycamore Vista No. 8 HOA. The petition was ultimately denied by an Administrative Law Judge (ALJ), a decision formally adopted and finalized by the Commissioner of the Arizona Department of Real Estate.
The core of the dispute centered on the Petitioner’s allegation that the HOA’s fee structure violated its Covenants, Conditions, and Restrictions (CC&Rs). Specifically, Janicek argued that payments made by his first-level association to a master association for common area expenses—most egregiously for a roadway loan—were improper because the benefits were not distributed equally among all homeowners.
The denial of the petition hinged on a critical failure of proof by the Petitioner. The CC&Rs define “Common Areas” by referencing a plat map (“Exhibit B”) that was not submitted into evidence by the Petitioner. Without this crucial document, it was impossible to prove that the fees collected by the HOA were for purposes outside the scope of the CC&Rs. Furthermore, the Petitioner failed to provide any legal authority or provision within the governing documents requiring that association fees be “even-handed or equally beneficial to all homeowners.” A secondary argument regarding the “rule against perpetuities,” introduced post-hearing, was also addressed and dismissed by the ALJ as legally inapplicable to the matter.
Case Overview
The following table outlines the principal parties and details of the administrative hearing.
Case Detail
Information
Petitioner
Jay Janicek
Respondent
Sycamore Vista No. 8 HOA
Respondent’s Counsel
Evan Thompson, Thompson Krone PLC
Respondent’s Representative
Steve Russo
Case Number
17F-H1717033-REL
Docket Number
17F-H1717033-REL
Hearing Date
July 12, 2017
Presiding Judge
Dorinda M. Lang, Administrative Law Judge
Hearing Observers
John Shields, Margery and Mathew Janicek
Petitioner’s Allegations
The petition filed by Jay Janicek alleged that Sycamore Vista No. 8 HOA was in violation of its governing CC&Rs. The central arguments presented were:
• Unequal Distribution of Costs and Benefits: The Petitioner contended that expenses paid by the Respondent association to the Sycamore Vista Master Home Owner’s Association (“Master HOA”) did not benefit all homeowners equally. The most “egregious” example cited was the payment toward a loan for a roadway within the master development.
• Violation of CC&Rs: The Petitioner argued that this unequal cost burden was a direct violation of Article 11, Section 11.5 of the Respondent’s CC&Rs. This section stipulates:
• Discrepancy Among Associations: The Petitioner asserted that another first-level association within the master development receives more benefit from the common areas but does not pay into the Master HOA.
• Rule Against Perpetuities: In a post-hearing submission, the Petitioner introduced a new argument that a “rule against perpetuities” was at stake in the matter.
Adjudication and Findings of Fact
The Administrative Law Judge’s decision was based on the Petitioner’s failure to meet the required burden of proof through a preponderance of the evidence.
Evidentiary Failure
The Petitioner’s case failed primarily due to a lack of sufficient evidence to prove a violation of the CC&Rs.
• Missing ‘Exhibit B’: The definition of “Common Areas” was essential to the case. According to Article 1, Section 1.6 of the CC&Rs, these areas are delineated on a plat that was supposed to be attached as “Exhibit B.”
• Critical Finding: The ALJ noted, “Unfortunately, there was no plat attached to the document that was offered into evidence and it was not to be found among the other exhibits. Therefore, Petitioner was unable to establish that Respondent’s fees pay for anything that is not provided for in the CC&Rs.”
• Petitioner’s Concession: The Petitioner did not dispute the Respondent’s argument that the Master HOA fees, including those for roads, were for Common Areas.
Lack of Legal Authority
The Petitioner’s core premise—that fees must be proportional to benefits received—was not substantiated by legal or documentary support.
• The ALJ found that the “Petitioner offered no legal authority that requires that all first level associations must pay the same into a master association or that all homeowners must receive the same benefit from or contribute the same amount (or even a proportionate share) to the common areas.”
• The argument that association fees were “disproportionately heavy” was not established to be a violation of any provision in the CC&Rs.
Post-Hearing Submissions
The record was held open until August 1, 2017, allowing for additional documentation from both parties.
• Petitioner (Exhibit 6): Submitted financial documentation, emails, and the argument concerning the rule against perpetuities.
• Respondent (Exhibit H): Submitted a Notice of Lien and attachments. This exhibit demonstrated that, regarding a lien for water services on properties not part of the Respondent HOA, the “Respondent’s homeowners are not responsible for it.”
Conclusions of Law and Final Decision
Based on the evidence and arguments presented, the ALJ denied the petition, a decision later finalized by the Arizona Department of Real Estate.
Denial of Petition
• The primary conclusion of law was that the “Petitioner has not established that Respondent is in violation of its CC&Rs.”
• The payment for Common Areas was found to be in comportment with the CC&Rs.
Rejection of Key Arguments
• Equal Benefit: The ALJ explicitly concluded: “Petitioner has offered no legal authority or provision of the CC&Rs that requires the association fees to be even-handed or equally beneficial to all homeowners.”
• Rule Against Perpetuities: While this argument was not part of the original petition, the ALJ addressed it to “lay a concern to rest.” The judge explained that the rule, which states that property ownership must vest within a lifetime plus 21 years, evolved from estate law and does not apply to HOA property sales where ownership vests immediately in the developer or a new owner. The judge concluded, “the rule against perpetuities does not apply to a homeowner’s association and it clearly does not apply in this matter.”
Timeline of Orders
1. July 12, 2017: An “Order Holding Record Open” was issued by ALJ Dorinda M. Lang.
2. August 14, 2017: The “Administrative Law Judge Decision” was issued, ordering that the Petitioner’s petition be denied.
3. August 21, 2017: A “Final Order” was issued by Judy Lowe, Commissioner of the Department of Real Estate, adopting the ALJ’s decision and officially denying the petition.
Post-Decision Procedures
The Final Order, effective August 21, 2017, concluded the administrative action and outlined the subsequent options available to the parties.
• The order is binding unless a rehearing is granted. A request for rehearing must be filed within 30 days of the service of the final order.
• A rehearing may be granted for the following causes:
1. Irregularity in the proceedings or any order or abuse of discretion that deprived a party of a fair hearing.
2. Misconduct by the Department, ALJ, or the prevailing party.
3. Accident or surprise that could not have been prevented by ordinary prudence.
4. Newly discovered material evidence that could not with reasonable diligence have been discovered and produced at the original hearing.
5. Excessive or insufficient penalties.
6. Error in the admission or rejection of evidence or other errors of law occurring during the proceeding.
7. The findings of fact or decision is arbitrary, capricious, or an abuse of discretion.
8. The findings of fact or decision is not supported by the evidence or is contrary to law.
• Parties may appeal the final administrative action by filing a complaint for judicial review.
The ALJ found that the Petitioner did not establish a violation of the Respondent's CC&Rs and recommended the petition be denied. The ALJ specifically noted the lack of proof that fees were inappropriate and that Petitioner failed to provide legal authority requiring equal benefit. The petition was denied, and the Respondent was not ordered to pay the Petitioner's filing fee.
Why this result: The Petitioner failed to meet the burden of proof required to establish a violation of the CC&Rs.
Key Issues & Findings
Alleged violation of CC&Rs regarding disproportionate assessment fees
Petitioner alleged Respondent was in violation of its CC&Rs because Master HOA fees were disproportionately borne by existing homeowners and did not benefit the whole development equally. Petitioner failed to establish a violation because required evidentiary documents (plat attached as 'Exhibit B') were missing, and Petitioner offered no legal authority requiring fees to be equally beneficial or even-handed.
Orders: Petitioner's petition is denied. Respondent shall not pay the filing fee required by section 32-2199.01 to the Petitioner.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 32-2199 et seq.
A.R.S. § 32-2199.01(D)
A.R.S. § 32-2199.02
A.A.C. R2-19-119(B)
Analytics Highlights
Topics: CC&Rs, Master HOA, Assessment Fees, Common Areas, Burden of Proof, Rule Against Perpetuities
Additional Citations:
A.R.S. § 32-2199
A.R.S. § 32-2199.01
A.R.S. § 32-2199.02
A.A.C. R2-19-119
Video Overview
Audio Overview
Decision Documents
17F-H1717033-REL Decision – 575166.pdf
Uploaded 2025-10-09T03:31:37 (39.1 KB)
17F-H1717033-REL Decision – 582189.pdf
Uploaded 2025-10-09T03:31:37 (69.4 KB)
17F-H1717033-REL Decision – 584918.pdf
Uploaded 2025-10-09T03:31:37 (674.1 KB)
Briefing Doc – 17F-H1717033-REL
Administrative Hearing Briefing: Janicek v. Sycamore Vista No. 8 HOA
Executive Summary
This briefing document synthesizes the key findings and legal proceedings in case number 17F-H1717033-REL, wherein Petitioner Jay Janicek filed a complaint against Respondent Sycamore Vista No. 8 HOA. The petition was ultimately denied by an Administrative Law Judge (ALJ), a decision formally adopted and finalized by the Commissioner of the Arizona Department of Real Estate.
The core of the dispute centered on the Petitioner’s allegation that the HOA’s fee structure violated its Covenants, Conditions, and Restrictions (CC&Rs). Specifically, Janicek argued that payments made by his first-level association to a master association for common area expenses—most egregiously for a roadway loan—were improper because the benefits were not distributed equally among all homeowners.
The denial of the petition hinged on a critical failure of proof by the Petitioner. The CC&Rs define “Common Areas” by referencing a plat map (“Exhibit B”) that was not submitted into evidence by the Petitioner. Without this crucial document, it was impossible to prove that the fees collected by the HOA were for purposes outside the scope of the CC&Rs. Furthermore, the Petitioner failed to provide any legal authority or provision within the governing documents requiring that association fees be “even-handed or equally beneficial to all homeowners.” A secondary argument regarding the “rule against perpetuities,” introduced post-hearing, was also addressed and dismissed by the ALJ as legally inapplicable to the matter.
Case Overview
The following table outlines the principal parties and details of the administrative hearing.
Case Detail
Information
Petitioner
Jay Janicek
Respondent
Sycamore Vista No. 8 HOA
Respondent’s Counsel
Evan Thompson, Thompson Krone PLC
Respondent’s Representative
Steve Russo
Case Number
17F-H1717033-REL
Docket Number
17F-H1717033-REL
Hearing Date
July 12, 2017
Presiding Judge
Dorinda M. Lang, Administrative Law Judge
Hearing Observers
John Shields, Margery and Mathew Janicek
Petitioner’s Allegations
The petition filed by Jay Janicek alleged that Sycamore Vista No. 8 HOA was in violation of its governing CC&Rs. The central arguments presented were:
• Unequal Distribution of Costs and Benefits: The Petitioner contended that expenses paid by the Respondent association to the Sycamore Vista Master Home Owner’s Association (“Master HOA”) did not benefit all homeowners equally. The most “egregious” example cited was the payment toward a loan for a roadway within the master development.
• Violation of CC&Rs: The Petitioner argued that this unequal cost burden was a direct violation of Article 11, Section 11.5 of the Respondent’s CC&Rs. This section stipulates:
• Discrepancy Among Associations: The Petitioner asserted that another first-level association within the master development receives more benefit from the common areas but does not pay into the Master HOA.
• Rule Against Perpetuities: In a post-hearing submission, the Petitioner introduced a new argument that a “rule against perpetuities” was at stake in the matter.
Adjudication and Findings of Fact
The Administrative Law Judge’s decision was based on the Petitioner’s failure to meet the required burden of proof through a preponderance of the evidence.
Evidentiary Failure
The Petitioner’s case failed primarily due to a lack of sufficient evidence to prove a violation of the CC&Rs.
• Missing ‘Exhibit B’: The definition of “Common Areas” was essential to the case. According to Article 1, Section 1.6 of the CC&Rs, these areas are delineated on a plat that was supposed to be attached as “Exhibit B.”
• Critical Finding: The ALJ noted, “Unfortunately, there was no plat attached to the document that was offered into evidence and it was not to be found among the other exhibits. Therefore, Petitioner was unable to establish that Respondent’s fees pay for anything that is not provided for in the CC&Rs.”
• Petitioner’s Concession: The Petitioner did not dispute the Respondent’s argument that the Master HOA fees, including those for roads, were for Common Areas.
Lack of Legal Authority
The Petitioner’s core premise—that fees must be proportional to benefits received—was not substantiated by legal or documentary support.
• The ALJ found that the “Petitioner offered no legal authority that requires that all first level associations must pay the same into a master association or that all homeowners must receive the same benefit from or contribute the same amount (or even a proportionate share) to the common areas.”
• The argument that association fees were “disproportionately heavy” was not established to be a violation of any provision in the CC&Rs.
Post-Hearing Submissions
The record was held open until August 1, 2017, allowing for additional documentation from both parties.
• Petitioner (Exhibit 6): Submitted financial documentation, emails, and the argument concerning the rule against perpetuities.
• Respondent (Exhibit H): Submitted a Notice of Lien and attachments. This exhibit demonstrated that, regarding a lien for water services on properties not part of the Respondent HOA, the “Respondent’s homeowners are not responsible for it.”
Conclusions of Law and Final Decision
Based on the evidence and arguments presented, the ALJ denied the petition, a decision later finalized by the Arizona Department of Real Estate.
Denial of Petition
• The primary conclusion of law was that the “Petitioner has not established that Respondent is in violation of its CC&Rs.”
• The payment for Common Areas was found to be in comportment with the CC&Rs.
Rejection of Key Arguments
• Equal Benefit: The ALJ explicitly concluded: “Petitioner has offered no legal authority or provision of the CC&Rs that requires the association fees to be even-handed or equally beneficial to all homeowners.”
• Rule Against Perpetuities: While this argument was not part of the original petition, the ALJ addressed it to “lay a concern to rest.” The judge explained that the rule, which states that property ownership must vest within a lifetime plus 21 years, evolved from estate law and does not apply to HOA property sales where ownership vests immediately in the developer or a new owner. The judge concluded, “the rule against perpetuities does not apply to a homeowner’s association and it clearly does not apply in this matter.”
Timeline of Orders
1. July 12, 2017: An “Order Holding Record Open” was issued by ALJ Dorinda M. Lang.
2. August 14, 2017: The “Administrative Law Judge Decision” was issued, ordering that the Petitioner’s petition be denied.
3. August 21, 2017: A “Final Order” was issued by Judy Lowe, Commissioner of the Department of Real Estate, adopting the ALJ’s decision and officially denying the petition.
Post-Decision Procedures
The Final Order, effective August 21, 2017, concluded the administrative action and outlined the subsequent options available to the parties.
• The order is binding unless a rehearing is granted. A request for rehearing must be filed within 30 days of the service of the final order.
• A rehearing may be granted for the following causes:
1. Irregularity in the proceedings or any order or abuse of discretion that deprived a party of a fair hearing.
2. Misconduct by the Department, ALJ, or the prevailing party.
3. Accident or surprise that could not have been prevented by ordinary prudence.
4. Newly discovered material evidence that could not with reasonable diligence have been discovered and produced at the original hearing.
5. Excessive or insufficient penalties.
6. Error in the admission or rejection of evidence or other errors of law occurring during the proceeding.
7. The findings of fact or decision is arbitrary, capricious, or an abuse of discretion.
8. The findings of fact or decision is not supported by the evidence or is contrary to law.
• Parties may appeal the final administrative action by filing a complaint for judicial review.
Study Guide – 17F-H1717033-REL
Study Guide: Janicek v. Sycamore Vista No. 8 HOA
This guide provides a comprehensive review of the administrative hearing case No. 17F-H1717033-REL, Jay Janicek v. Sycamore Vista No. 8 HOA. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms to facilitate a thorough understanding of the case’s facts, arguments, and legal conclusions.
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Short-Answer Quiz
Instructions: Answer the following questions in two to three complete sentences, based on the information provided in the case documents.
1. Who were the primary parties in this legal matter, and what were their designated roles?
2. What was the central allegation made by the Petitioner against the Respondent?
3. Which specific article and section of the Covenants, Conditions, and Restrictions (CC&Rs) did the Petitioner claim the Respondent had violated?
4. Explain the key piece of evidence that was missing and why its absence was critical to the case’s outcome.
5. What was the Respondent’s main argument regarding the fees paid to the Master HOA?
6. According to the case documents, who held the burden of proof, and what was the required standard of proof?
7. What was the “rule against perpetuities,” and what reason did the Administrative Law Judge give for its inapplicability to this case?
8. What was the ultimate decision of the Administrative Law Judge, and on what date was it issued?
9. After the hearing, the record was held open. What was the purpose of this, and what types of materials were submitted by the parties during this period?
10. What action did the Commissioner of the Department of Real Estate take after receiving the Administrative Law Judge’s decision?
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Answer Key
1. The primary parties were Jay Janicek, designated as the Petitioner, and Sycamore Vista No. 8 HOA, designated as the Respondent. The Petitioner is the party who filed the complaint, and the Respondent is the party against whom the complaint was filed.
2. The Petitioner alleged that the Respondent HOA was in violation of its CC&Rs. He argued that the fees his association paid to the Master HOA for a roadway loan did not benefit the whole development equally and were therefore inappropriate expenses for all homeowners to pay.
3. The Petitioner cited Article 11, Section 11.5 of the Respondent’s CC&Rs. This section, titled “Costs of Improvements,” details how the costs for improving Unimproved Lots and Common Areas in Phase 3 and Phase 4 are to be borne by the owners of lots within those specific phases.
4. The key missing evidence was a plat, referred to as “Exhibit B” in the CC&Rs. This plat was supposed to define the “Common Areas,” and without it, the Petitioner was unable to establish that the fees paid by the Respondent were for anything not provided for in the governing documents.
5. The Respondent argued that the Master HOA fees were used to pay for the development’s common areas. They maintained that the CC&Rs permit these payments and that there is no legal authority requiring all homeowners to receive the same benefit or for all first-level associations to contribute equally.
6. Pursuant to A.A.C. R2-19-119(B), the Petitioner, Jay Janicek, had the burden of proof in this matter. The standard of proof was a preponderance of the evidence, as established by A.A.C. R2-19-119(A).
7. The rule against perpetuities states that property ownership must vest within a time frame of an existing lifetime plus 21 years. The Judge ruled it did not apply because it evolved to handle estates bequeathed to a series of heirs and is not generally applicable to property sales where rights transfer at once; in the HOA’s case, ownership of undeveloped lots had already vested in the developer.
8. The Administrative Law Judge ordered that the Petitioner’s petition be denied. This decision was made on August 14, 2017.
9. The record was held open until August 1, 2017, to allow the Respondent to submit additional documentation and for the Petitioner to submit written objections. During this time, the Petitioner submitted financial documentation, emails, and a new argument about the rule against perpetuities (admitted as Exhibit 6), while the Respondent submitted a Notice of Lien (admitted as Exhibit H).
10. The Commissioner of the Department of Real Estate, Judy Lowe, adopted the Administrative Law Judge’s decision. This was formalized in a Final Order dated August 21, 2017, which accepted the ALJ’s recommendation and denied the Petitioner’s petition.
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Essay Questions
Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a detailed essay-style response for each.
1. Analyze the critical evidentiary failure that led to the denial of Jay Janicek’s petition. How did the absence of the plat referred to as “Exhibit B” directly impact his ability to meet the “preponderance of the evidence” standard of proof?
2. Discuss the legal reasoning behind the Administrative Law Judge’s conclusion that there is no requirement for HOA fees to be “even-handed or equally beneficial to all homeowners.” How does this principle relate to the hierarchical structure of Master and first-level associations described in the case?
3. Explain the concept of the “rule against perpetuities” as described in the legal decision. Detail why the Administrative Law Judge, despite noting the argument was outside the original petition, addressed it and ultimately found it inapplicable to the case of a homeowner’s association.
4. Trace the procedural path of this case from the initial hearing to the final binding order. Identify the key dates, decisions, and entities involved at each stage, including the Office of Administrative Hearings and the Department of Real Estate.
5. Based on the Final Order, outline the process and potential grounds for requesting a rehearing. What were the eight specific causes listed in the order that could materially affect a moving party’s rights and justify a rehearing or review?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An independent judge who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions. In this case, Dorinda M. Lang served as the ALJ.
A.A.C.
Abbreviation for Arizona Administrative Code, a compilation of rules and regulations of Arizona state agencies.
A.R.S.
Abbreviation for Arizona Revised Statutes, the collection of all the laws of the state of Arizona.
Areas of Association Responsibility
Locations that the Homeowner’s Association is responsible for maintaining, as defined within its governing documents.
Burden of Proof
The legal obligation of a party in a dispute to provide sufficient evidence to prove their claim. In this case, the burden of proof was on the Petitioner.
Covenants, Conditions, and Restrictions. These are the governing legal documents that set up the rules for a planned community or subdivision.
Common Areas
Areas within a housing development that are owned by the association for the use and benefit of all homeowners. The definition of these areas was a central issue in the case.
Commissioner
The head of a government department. In this context, Judy Lowe, the Commissioner of the Arizona Department of Real Estate, who adopted the ALJ’s decision.
First Level Association
An individual homeowner’s association within a larger development that also has a master association. The Respondent, Sycamore Vista No. 8 HOA, is a first level association.
Master HOA
The Sycamore Vista Master Home Owner’s Association. An overarching organization that governs expenses and common areas concerning an entire development composed of multiple first-level associations.
Office of Administrative Hearings (OAH)
The state agency that conducts administrative hearings for other state agencies. This case was referred to the OAH by the Department of Real Estate.
Petitioner
The party who files a petition or brings an action in a legal proceeding. In this case, Jay Janicek.
A map, drawn to scale, showing the divisions of a piece of land. The missing plat in this case was intended to show the “Common Areas.”
Preponderance of the Evidence
The standard of proof in most civil cases. It requires that the evidence shows a claim is more likely to be true than not true.
Respondent
The party against whom a petition is filed or who is responding to a legal action. In this case, Sycamore Vista No. 8 HOA.
Rule Against Perpetuities
A legal rule that prevents a property owner from controlling the disposition of their property for an indefinite period after their death. The ALJ found it did not apply in this HOA context.
Unimproved Lot Assessments
Fees imposed on the owners of undeveloped lots to pay for the costs of improving certain areas, as described in Section 6.13 of the CC&Rs.
Unimproved Lots
Parcels of land within the development that have not yet been built upon.
Blog Post – 17F-H1717033-REL
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17F-H1717033-REL
3 sources
These documents chronicle the legal proceedings of a dispute between Jay Janicek, the Petitioner, and Sycamore Vista No. 8 HOA, the Respondent, before the Office of Administrative Hearings. The first source is an “Order Holding Record Open,” dated July 12, 2017, which temporarily extends the deadline for submitting additional evidence. The subsequent sources contain the “Administrative Law Judge Decision” issued on August 14, 2017, which outlines the hearing details and the judge’s recommendation to deny the petition because Janicek failed to establish a violation of the HOA’s Covenants, Conditions, and Restrictions. Finally, the third document presents the “Final Order” from the Department of Real Estate Commissioner on August 21, 2017, which accepts and affirms the Administrative Law Judge’s decision to deny the petition. Janicek’s core claim argued that certain master association fees were disproportionately applied and did not benefit all homeowners equally, which the judge ultimately dismissed due to a lack of supporting legal authority or CC&R provisions.
Based on 3 sources
Case Participants
Petitioner Side
Jay Janicek(petitioner)
Respondent Side
Evan Thompson(HOA attorney) Thompson Krone PLC Attorney for Respondent
Steve Russo(respondent representative)
Neutral Parties
Dorinda M. Lang(ALJ)
Judy Lowe(Commissioner) Arizona Department of Real Estate
Dan Gardner(HOA Coordinator) Office of Administrative Hearings Addressee for rehearing request
Other Participants
John Shields(observer)
Margery Janicek(observer)
Mathew Janicek(observer)
M. Aguirre(unknown) Thompson Krone PLC Listed on transmittal documents
The ALJ found that the Petitioner did not establish a violation of the Respondent's CC&Rs and recommended the petition be denied. The ALJ specifically noted the lack of proof that fees were inappropriate and that Petitioner failed to provide legal authority requiring equal benefit. The petition was denied, and the Respondent was not ordered to pay the Petitioner's filing fee.
Why this result: The Petitioner failed to meet the burden of proof required to establish a violation of the CC&Rs.
Key Issues & Findings
Alleged violation of CC&Rs regarding disproportionate assessment fees
Petitioner alleged Respondent was in violation of its CC&Rs because Master HOA fees were disproportionately borne by existing homeowners and did not benefit the whole development equally. Petitioner failed to establish a violation because required evidentiary documents (plat attached as 'Exhibit B') were missing, and Petitioner offered no legal authority requiring fees to be equally beneficial or even-handed.
Orders: Petitioner's petition is denied. Respondent shall not pay the filing fee required by section 32-2199.01 to the Petitioner.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 32-2199 et seq.
A.R.S. § 32-2199.01(D)
A.R.S. § 32-2199.02
A.A.C. R2-19-119(B)
Analytics Highlights
Topics: CC&Rs, Master HOA, Assessment Fees, Common Areas, Burden of Proof, Rule Against Perpetuities
Additional Citations:
A.R.S. § 32-2199
A.R.S. § 32-2199.01
A.R.S. § 32-2199.02
A.A.C. R2-19-119
Audio Overview
Decision Documents
17F-H1717033-REL Decision – 575166.pdf
Uploaded 2025-10-08T07:02:10 (39.1 KB)
17F-H1717033-REL Decision – 582189.pdf
Uploaded 2025-10-08T07:02:11 (69.4 KB)
17F-H1717033-REL Decision – 584918.pdf
Uploaded 2025-10-08T07:02:11 (674.1 KB)
Briefing Doc – 17F-H1717033-REL
Administrative Hearing Briefing: Janicek v. Sycamore Vista No. 8 HOA
Executive Summary
This briefing document synthesizes the key findings and legal proceedings in case number 17F-H1717033-REL, wherein Petitioner Jay Janicek filed a complaint against Respondent Sycamore Vista No. 8 HOA. The petition was ultimately denied by an Administrative Law Judge (ALJ), a decision formally adopted and finalized by the Commissioner of the Arizona Department of Real Estate.
The core of the dispute centered on the Petitioner’s allegation that the HOA’s fee structure violated its Covenants, Conditions, and Restrictions (CC&Rs). Specifically, Janicek argued that payments made by his first-level association to a master association for common area expenses—most egregiously for a roadway loan—were improper because the benefits were not distributed equally among all homeowners.
The denial of the petition hinged on a critical failure of proof by the Petitioner. The CC&Rs define “Common Areas” by referencing a plat map (“Exhibit B”) that was not submitted into evidence by the Petitioner. Without this crucial document, it was impossible to prove that the fees collected by the HOA were for purposes outside the scope of the CC&Rs. Furthermore, the Petitioner failed to provide any legal authority or provision within the governing documents requiring that association fees be “even-handed or equally beneficial to all homeowners.” A secondary argument regarding the “rule against perpetuities,” introduced post-hearing, was also addressed and dismissed by the ALJ as legally inapplicable to the matter.
Case Overview
The following table outlines the principal parties and details of the administrative hearing.
Case Detail
Information
Petitioner
Jay Janicek
Respondent
Sycamore Vista No. 8 HOA
Respondent’s Counsel
Evan Thompson, Thompson Krone PLC
Respondent’s Representative
Steve Russo
Case Number
17F-H1717033-REL
Docket Number
17F-H1717033-REL
Hearing Date
July 12, 2017
Presiding Judge
Dorinda M. Lang, Administrative Law Judge
Hearing Observers
John Shields, Margery and Mathew Janicek
Petitioner’s Allegations
The petition filed by Jay Janicek alleged that Sycamore Vista No. 8 HOA was in violation of its governing CC&Rs. The central arguments presented were:
• Unequal Distribution of Costs and Benefits: The Petitioner contended that expenses paid by the Respondent association to the Sycamore Vista Master Home Owner’s Association (“Master HOA”) did not benefit all homeowners equally. The most “egregious” example cited was the payment toward a loan for a roadway within the master development.
• Violation of CC&Rs: The Petitioner argued that this unequal cost burden was a direct violation of Article 11, Section 11.5 of the Respondent’s CC&Rs. This section stipulates:
• Discrepancy Among Associations: The Petitioner asserted that another first-level association within the master development receives more benefit from the common areas but does not pay into the Master HOA.
• Rule Against Perpetuities: In a post-hearing submission, the Petitioner introduced a new argument that a “rule against perpetuities” was at stake in the matter.
Adjudication and Findings of Fact
The Administrative Law Judge’s decision was based on the Petitioner’s failure to meet the required burden of proof through a preponderance of the evidence.
Evidentiary Failure
The Petitioner’s case failed primarily due to a lack of sufficient evidence to prove a violation of the CC&Rs.
• Missing ‘Exhibit B’: The definition of “Common Areas” was essential to the case. According to Article 1, Section 1.6 of the CC&Rs, these areas are delineated on a plat that was supposed to be attached as “Exhibit B.”
• Critical Finding: The ALJ noted, “Unfortunately, there was no plat attached to the document that was offered into evidence and it was not to be found among the other exhibits. Therefore, Petitioner was unable to establish that Respondent’s fees pay for anything that is not provided for in the CC&Rs.”
• Petitioner’s Concession: The Petitioner did not dispute the Respondent’s argument that the Master HOA fees, including those for roads, were for Common Areas.
Lack of Legal Authority
The Petitioner’s core premise—that fees must be proportional to benefits received—was not substantiated by legal or documentary support.
• The ALJ found that the “Petitioner offered no legal authority that requires that all first level associations must pay the same into a master association or that all homeowners must receive the same benefit from or contribute the same amount (or even a proportionate share) to the common areas.”
• The argument that association fees were “disproportionately heavy” was not established to be a violation of any provision in the CC&Rs.
Post-Hearing Submissions
The record was held open until August 1, 2017, allowing for additional documentation from both parties.
• Petitioner (Exhibit 6): Submitted financial documentation, emails, and the argument concerning the rule against perpetuities.
• Respondent (Exhibit H): Submitted a Notice of Lien and attachments. This exhibit demonstrated that, regarding a lien for water services on properties not part of the Respondent HOA, the “Respondent’s homeowners are not responsible for it.”
Conclusions of Law and Final Decision
Based on the evidence and arguments presented, the ALJ denied the petition, a decision later finalized by the Arizona Department of Real Estate.
Denial of Petition
• The primary conclusion of law was that the “Petitioner has not established that Respondent is in violation of its CC&Rs.”
• The payment for Common Areas was found to be in comportment with the CC&Rs.
Rejection of Key Arguments
• Equal Benefit: The ALJ explicitly concluded: “Petitioner has offered no legal authority or provision of the CC&Rs that requires the association fees to be even-handed or equally beneficial to all homeowners.”
• Rule Against Perpetuities: While this argument was not part of the original petition, the ALJ addressed it to “lay a concern to rest.” The judge explained that the rule, which states that property ownership must vest within a lifetime plus 21 years, evolved from estate law and does not apply to HOA property sales where ownership vests immediately in the developer or a new owner. The judge concluded, “the rule against perpetuities does not apply to a homeowner’s association and it clearly does not apply in this matter.”
Timeline of Orders
1. July 12, 2017: An “Order Holding Record Open” was issued by ALJ Dorinda M. Lang.
2. August 14, 2017: The “Administrative Law Judge Decision” was issued, ordering that the Petitioner’s petition be denied.
3. August 21, 2017: A “Final Order” was issued by Judy Lowe, Commissioner of the Department of Real Estate, adopting the ALJ’s decision and officially denying the petition.
Post-Decision Procedures
The Final Order, effective August 21, 2017, concluded the administrative action and outlined the subsequent options available to the parties.
• The order is binding unless a rehearing is granted. A request for rehearing must be filed within 30 days of the service of the final order.
• A rehearing may be granted for the following causes:
1. Irregularity in the proceedings or any order or abuse of discretion that deprived a party of a fair hearing.
2. Misconduct by the Department, ALJ, or the prevailing party.
3. Accident or surprise that could not have been prevented by ordinary prudence.
4. Newly discovered material evidence that could not with reasonable diligence have been discovered and produced at the original hearing.
5. Excessive or insufficient penalties.
6. Error in the admission or rejection of evidence or other errors of law occurring during the proceeding.
7. The findings of fact or decision is arbitrary, capricious, or an abuse of discretion.
8. The findings of fact or decision is not supported by the evidence or is contrary to law.
• Parties may appeal the final administrative action by filing a complaint for judicial review.
