Jerry and Patricia Gravelle vs. Village Parc Homeowners Assoc. of

Posted on December 22, 2016 by [email protected]

Case Summary

Case ID	17F-H1716008-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2017-01-03
Administrative Law Judge	Diane Mihalsky
Outcome	The Department adopted the ALJ's recommendation to dismiss the petition. The ALJ found that the HOA's insurance policy and CC&Rs did not require coverage for damage to the Petitioners' individual unit (finished surfaces and personal property) resulting from a sewer backup. The HOA was only responsible for common elements.
Filing Fees Refunded	$0.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Jerry and Patricia Gravelle	Counsel	—
Respondent	Village Parc Homeowners Assoc. of Havasu	Counsel	Kenneth E. Moyer

Alleged Violations

CC&Rs Article 11, Section 11.7.3 and 11.7.6

Outcome Summary

The Department adopted the ALJ's recommendation to dismiss the petition. The ALJ found that the HOA's insurance policy and CC&Rs did not require coverage for damage to the Petitioners' individual unit (finished surfaces and personal property) resulting from a sewer backup. The HOA was only responsible for common elements.

Why this result: The CC&Rs explicitly state that the Association is not required to insure personal property within an individual unit and that owners are responsible for their own unit coverage. The ALJ found that past minor payments by the Board for similar damages did not amend the governing documents.

Key Issues & Findings

Failure to provide insurance coverage for unit damages

Petitioners alleged the HOA violated CC&Rs by failing to provide insurance coverage for damages to their unit (interior/personal property) caused by a sewer backup, requesting $6,697.70 reimbursement.

Orders: The petition is dismissed; no action is required of Respondent.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

A.R.S. § 33-1212(1)
A.R.S. § 33-1247(A)
CC&Rs Article 11 Section 11.7.3
CC&Rs Article 11 Section 11.7.6

Video Overview

Audio Overview

Decision Documents

17F-H1716008-REL Decision – 528194.pdf

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17F-H1716008-REL Decision – 528432.pdf

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17F-H1716008-REL Decision – 535933.pdf

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17F-H1716008-REL Decision – 539997.pdf

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17F-H1716008-REL Decision – 528194.pdf

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17F-H1716008-REL Decision – 528432.pdf

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17F-H1716008-REL Decision – 535933.pdf

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17F-H1716008-REL Decision – 539997.pdf

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Briefing: Gravelle v. Village Parc Homeowners Association

Executive Summary

This briefing synthesizes the key findings and legal determinations from an administrative case between homeowners Jerry and Patricia Gravelle and the Village Parc Homeowners Association of Havasu (HOA). The dispute centered on liability for damages within the Gravelles’ condominium unit caused by a sewer backup.

The petition, filed with the Arizona Department of Real Estate, was ultimately dismissed. The Administrative Law Judge (ALJ) concluded, and the Department Commissioner affirmed, that the HOA’s governing documents—the Covenants, Conditions, and Restrictions (CC&Rs)—unambiguously place the responsibility for insuring the interior of an individual unit on the unit owner, not the HOA.

The ruling established that the HOA’s master insurance policy, provided by Travelers, was only obligated to cover what the CC&Rs required. Arguments based on the HOA’s past payments for minor damages in other units, an erroneous initial statement by an insurance adjuster on a prior claim, and the HOA Board’s own mistaken interpretation of its duties were all found to be insufficient to override the plain written language of the governing documents. The final decision reinforces the principle that unit owners are responsible for understanding their CC&Rs and securing adequate personal insurance for their property.

I. Case Overview and Final Disposition

• Case Identification: No. 17F-H1716008-REL

• Parties:

◦ Petitioners: Jerry and Patricia Gravelle, owners of Unit 14 in the Village Parc development.

◦ Respondent: Village Parc Homeowners Assoc. of Havasu (“the Association”).

• Adjudicating Body: The case was heard in the Arizona Office of Administrative Hearings before Administrative Law Judge (ALJ) Diane Mihalsky. The final order was issued by the Commissioner of the Arizona Department of Real Estate.

• Key Dates:

◦ Hearing Date: November 10, 2016

◦ ALJ Decision: December 22, 2016

◦ Final Order: January 3, 2017

• Final Disposition: The Commissioner of the Department of Real Estate, Judy Lowe, accepted the ALJ’s recommendation and ordered that the petition be dismissed. This constituted a final administrative action, effective immediately. Parties were advised of their right to file for rehearing or appeal for judicial review.

II. The Core Dispute: Insurance for Sewer Backup Damage

On or about October 23, 2015, the Petitioners’ condominium (Unit 14), along with two other units, suffered damage from a sewer backup. The central conflict arose from determining which party was financially responsible for the repairs inside the Petitioners’ unit.

• Petitioners’ Claim: The Gravelles filed a petition on August 31, 2016, alleging the Association violated Articles 11.7.3 and 11.7.6 of the CC&Rs by failing to provide insurance coverage for the full extent of the damages. Their personal insurance policy did not cover sewer backups. They requested the Association pay $6,697.70 to reimburse them for the loss that the Association’s insurer, Travelers, declined to cover.

• Insurance Claim Outcome:

◦ The Association submitted a claim for the sewer backup damages to its insurer, Travelers.

◦ Travelers determined that its policy covered damages to the common elements associated with the unit and issued a check to the Petitioners for $338.64.

◦ Travelers concluded there was no coverage under the policy for damage to the interior of the Petitioners’ unit. This denial was based on the CC&Rs, which establish that the unit owner is responsible for the finished surfaces and personal property within their unit.

III. Analysis of Governing Documents and Legal Framework

The ALJ’s decision was grounded in a strict interpretation of the Association’s CC&Rs, its insurance contract, and the Arizona Condominium Act.

Document / Statute

Key Provisions and Implications

Village Parc CC&Rs

Unit Definition (Sec. 2.2.1): A unit is defined as the space “bounded by and contained within the interior finished surfaces of the perimeter walls, floors and ceilings.”

Insurance Responsibility (Sec. 11.7.3): The Association’s master policy is explicitly “not be required to insure the personal property within any individual Unit, which insurance shall be the responsibility and risk of the Unit Owners.”

Liability Limitation (Sec. 11.7.5): The Association is not liable to any owner “if any risk or hazard is not covered by insurance or the amount is inadequate.” It places the burden on each owner to ascertain the Association’s coverage and procure their own additional insurance.

Travelers Insurance Policy

Conditional Coverage Endorsement: The policy covers certain property (fixtures, alterations, appliances) contained within a unit, but only “if your Condominium Association Agreement requires you to insure it.” Since the CC&Rs do not require the Association to insure unit interiors, this coverage was not triggered.

Primary Insurance: The policy states it is “intended to be primary, and not to contribute with such other insurance” a unit-owner may have.

Arizona Condominium Act

Unit Definition (A.R.S. § 33-1212(1)): Reinforces the CC&Rs by defining finished surfaces—”lath, furring, wallboard… tiles, wallpaper, paint, finished flooring”—as part of the unit. All other portions of walls, floors, or ceilings are common elements.

Maintenance Responsibility (A.R.S. § 33-1247(A)): The law specifies that “the association is responsible for maintenance, repair and replacement of the common elements and each unit owner is responsible for maintenance, repair and replacement of the unit.”

IV. Petitioners’ Arguments and the ALJ’s Rejection

The Petitioners presented evidence of past practices by both the Association and Travelers, arguing these created an expectation of coverage. The ALJ systematically rejected these arguments.

• Argument 1: The Association’s Past Payments for Unit Repairs

◦ Petitioners’ Evidence: The Association had authorized payments for repairs inside other units on prior occasions:

▪ June 2011: $153.74, $75.00, and $296.11 for damage to Units 3 and 5 from a broken shower drain.

▪ January 2012: $449.45 to repair kitchen cabinets in Unit 6 damaged by a broken roof vent.

◦ ALJ’s Conclusion: The fact that the Association’s Board made “actual payments of small amounts for damages to individually owned units” does not legally amend the plain language of the CC&Rs. Notably, the Association did not submit these prior incidents to its insurer.

• Argument 2: Travelers’ Prior Actions

◦ Petitioners’ Evidence: In a 2014 claim, a Travelers adjuster initially determined that the policy did provide coverage for damage done to a unit, not just limited common elements.

◦ ALJ’s Conclusion: Travelers later stated the adjuster had erred and confirmed no claim for unit damage was ultimately paid. The ALJ found that the “adjuster’s initial error in the 2014 claim does not estop Travelers from denying the claim for damages to Petitioners’ unit” in 2015.

• Argument 3: The Association Board’s Own Interpretation

◦ Petitioners’ Evidence: At a November 2015 board meeting, where Mr. Gravelle served as secretary/treasurer, the Board itself determined that the CC&Rs did require the Association to provide insurance coverage for all damages to Unit 14.

◦ ALJ’s Conclusion: The Board’s “erroneous opinion” does not have the legal power to amend the CC&Rs or the binding terms of the Travelers insurance policy.

V. Core Legal Principles and Final Decision

The dismissal of the petition was based on several foundational legal principles.

• Primacy of Written Documents: The decision gave superior weight to the “plain language” of the CC&Rs and the insurance contract over inconsistent past practices or mistaken interpretations.

• Burden of Proof: As the filing party, the Petitioners had the burden to prove by a “preponderance of the evidence” that the Association violated the CC&Rs. The ALJ determined they failed to meet this standard.

• Clear Delineation of Responsibility: Both the CC&Rs and Arizona state law create a clear separation of financial and maintenance responsibilities: the Association is responsible for common elements, while individual owners are responsible for their units.

• Presumption of Knowledge: The decision cited the legal principle that “Everyone is presumed to know the law.” The CC&Rs put the Petitioners on constructive notice that they were responsible for insuring their individual unit against risks like a sewer backup. Their failure to procure such coverage was their own responsibility.

Study Guide: Gravelle v. Village Parc Homeowners Association

This guide provides a detailed review of the administrative case No. 17F-H1716008-REL, involving Jerry and Patricia Gravelle and the Village Parc Homeowners Association of Havasu. It is designed to test and deepen understanding of the facts, legal arguments, and final decision presented in the case documents.

Short Answer Quiz

Instructions: Answer the following questions in 2-3 complete sentences, drawing exclusively from the information provided in the case documents.

1. Who were the primary parties in case No. 17F-H1716008-REL, and what were their official roles?

2. What specific event on October 23, 2015, initiated the dispute between the parties?

3. What was the total monetary amount the Petitioners requested, and for what purpose?

4. According to the Travelers insurance policy held by the Association, what property inside a unit could be covered, and under what specific condition?

5. How did the Arizona Condominium Act (A.R.S. § 33-1212(1)) and the CC&Rs define the boundaries and components of an individual “Unit”?

6. What was the key reasoning provided by Travelers for denying coverage for the interior damage to the Petitioners’ unit?

7. The Petitioners cited past instances where the Respondent paid for repairs in other units. Why did the Administrative Law Judge rule that these “past practices” did not legally bind the Respondent in this case?

8. What is the definition of “preponderance of the evidence” as cited in the legal decision?

9. What was the final, official outcome of the case as determined by the Administrative Law Judge and adopted by the Commissioner of the Department of Real Estate?

10. According to Section 11.7.5 of the CC&Rs, who is ultimately responsible for procuring additional insurance coverage if the Association’s policy is deemed inadequate?

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Quiz Answer Key

1. The primary parties were Jerry and Patricia Gravelle, who were designated as the “Petitioners,” and the Village Parc Homeowners Assoc. of Havasu, which was the “Respondent.” The Petitioners owned a condominium unit and were members of the Respondent homeowners’ association.

2. On or about October 23, 2015, the Petitioners’ Unit 14, as well as Units 15 and 16, suffered damage from a sewer backup. The Petitioners discovered that their personal insurance policy did not provide coverage for this type of damage, leading them to seek coverage under the Respondent’s policy.

3. The Petitioners requested that the Respondent pay $6,697.70. This amount was to reimburse them for the loss that the insurance company, Travelers, refused to cover for the damages inside their unit caused by the sewer backup.

4. The Travelers policy endorsement stated it could cover property contained within a unit, regardless of ownership, under one specific condition: if the “Condominium Association Agreement requires you to insure it.” This included fixtures, improvements, alterations, and certain appliances.

5. The CC&Rs (Section 2.2.1) and the Arizona Condominium Act defined a unit as being bounded by the interior finished surfaces of its perimeter walls, floors, and ceilings. The Act specifies that materials like tiles, paint, finished flooring, and wallpaper are part of the unit, while other portions of the walls, floors, or ceilings are part of the common elements.

6. Travelers concluded there was no coverage for the interior damage because the CC&Rs make the unit owner responsible for damages within a unit. The policy was intended to cover common elements and structural damage, not the finished surfaces and personal property that constitute the interior of the unit.

7. The judge ruled that the Board’s past payments for small damages and its erroneous opinion that the policy should cover the damage did not amend the plain language of the CC&Rs. The legally binding CC&Rs put Petitioners on notice about insurance requirements, and these past actions were not sufficient to override the written documents.

8. “A preponderance of the evidence” is defined as “such proof as convinces the trier of fact that the contention is more probably true than not.” It is also described 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.”

9. The Administrative Law Judge issued a Recommended Order that the petition be dismissed and that no action was required of the Respondent. This recommendation was accepted and adopted by the Commissioner of the Department of Real Estate in a Final Order dated January 3, 2017.

10. Section 11.7.5 of the CC&Rs explicitly states that “Each Owner is responsible for ascertaining the Association’s coverage and for procuring such additional coverage as such owner deems necessary.” It also shields the Association from liability if a risk is not covered or the insurance amount is inadequate.

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Essay Questions

Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive response for each question based on the provided source materials.

1. Analyze the role of the Covenants, Conditions, and Restrictions (CC&Rs) in this case. How did specific sections of the CC&Rs support the Respondent’s position and ultimately lead to the dismissal of the petition?

2. The Petitioners argued that the Respondent’s “past practices” and an initial, erroneous determination by a Travelers adjuster should have set a precedent. Explain what the legal concept of “estoppel” means in this context and detail the judge’s reasoning for why it did not apply to the Gravelles’ situation.

3. Discuss the division of responsibility for maintenance and insurance as defined by the Arizona Condominium Act and the Village Parc CC&Rs. How does this case illustrate the critical distinction between “Common Elements,” “Limited Common Elements,” and the “Unit” itself?

4. Trace the procedural path of this dispute, from the initial petition filing to the Final Order. Identify the key government bodies involved (e.g., Department of Real Estate, Office of Administrative Hearings) and the roles they played in adjudicating the case.

5. Imagine you are advising a new condominium owner at Village Parc. Based on the outcome and reasoning of this case, what advice would you give them regarding insurance policies and understanding their responsibilities versus those of the Homeowners Association?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official (Diane Mihalsky) from the Office of Administrative Hearings who conducted the hearing, analyzed the evidence and legal arguments, and issued a recommended decision in the case.

Arizona Condominium Act

A set of Arizona state statutes that define legal terms and responsibilities related to condominiums. In this case, it was used to define the boundaries of a “unit” versus “common elements” (A.R.S. § 33-1212(1)) and to assign responsibility for their maintenance (A.R.S. § 33-1247(A)).

CC&Rs (Covenants, Conditions, and Restrictions)

The governing legal documents for the Village Parc development. These documents define the rights and obligations of the unit owners and the homeowners’ association, including insurance requirements.

Common Elements

Portions of the condominium project designated for common ownership by all unit owners. Under the Arizona Condominium Act, portions of walls, floors, or ceilings that are not part of the finished surfaces of a unit are considered common elements.

Estoppel

A legal principle defined in the case as meaning “that a party is prevented by his own acts from claiming a right to detriment of other party who was entitled to rely on such conduct and has acted accordingly.” The judge ruled it did not apply because the plain language of the CC&Rs prevented the Petitioners from claiming they reasonably relied on the Board’s or Travelers’ past practices.

Limited Common Elements

A portion of the Common Elements allocated for the exclusive use of one or more, but fewer than all, of the Units. An example given is a “chute, flue, duct, wire, conduit… [that] serve only that Unit.”

Petitioner

The party that filed the petition initiating the legal action. In this case, Jerry and Patricia Gravelle, owners of Unit 14.

Preponderance of the Evidence

The standard of proof required for the Petitioners to win their case. It is defined as “such proof as convinces the trier of fact that the contention is more probably true than not” and as evidence with the “most convincing force.”

Project

As defined in Section 1.27 of the CC&Rs, this refers to “the entire Property… portions of which are designated for separate ownership and the remainder of which are designated for common ownership solely by the owners of the Units therein.”

Respondent

The party against whom the petition was filed. In this case, the Village Parc Homeowners Assoc. of Havasu (“the Association”).

As defined in the CC&Rs, “the elements of an individual unit… which are not owned in common with the Owners of other Condominium Units.” Its physical boundaries are defined as the interior finished surfaces of the perimeter walls, floors, and ceilings.

Case

Docket No: 17F-H1716008-REL
Case Title: Jerry and Patricia Gravelle v. Village Parc Homeowners Assoc. of Havasu
Decision Date: 2017-01-03
Tribunal: OAH
Agency: ADRE

Individuals

Name: Jerry Gravelle
Role: petitioner
Side: petitioner
Affiliation: Village Parc Homeowners Assoc. of Havasu
Notes: Homeowner; also served as Secretary/Treasurer on the Board in Nov 2015

Name: Patricia Gravelle
Role: petitioner
Side: petitioner
Affiliation: Village Parc Homeowners Assoc. of Havasu
Notes: Homeowner

Name: Kenneth E. Moyer
Role: attorney
Side: respondent
Affiliation: Law Offices of Kenneth E. Moyer, PLLC
Notes: Attorney for Respondent

Name: Gary Himango
Role: affiant
Side: respondent
Affiliation: Village Parc Homeowners Assoc. of Havasu
Notes: Submitted affidavit for Respondent

Name: Diane Mihalsky
Role: ALJ
Side: neutral
Affiliation: Office of Administrative Hearings
Notes: Administrative Law Judge

Name: Judy Lowe
Role: Commissioner
Side: neutral
Affiliation: Arizona Department of Real Estate

Name: Abby Hansen
Role: HOA Coordinator
Side: neutral
Affiliation: Arizona Department of Real Estate

Name: M. Aguirre
Role: clerk
Side: neutral
Affiliation: Office of Administrative Hearings
Notes: Transmitted documents

Name: L. Dettorre
Role: ADRE staff
Side: neutral
Affiliation: Arizona Department of Real Estate
Notes: Email recipient ([email protected])

Name: D. Jones
Role: ADRE staff
Side: neutral
Affiliation: Arizona Department of Real Estate
Notes: Email recipient ([email protected])

Name: J. Marshall
Role: ADRE staff
Side: neutral
Affiliation: Arizona Department of Real Estate
Notes: Email recipient ([email protected])

Name: N. Cano
Role: ADRE staff
Side: neutral
Affiliation: Arizona Department of Real Estate
Notes: Email recipient ([email protected])

Case Participants

Petitioner Side

Jerry Gravelle (petitioner)
Village Parc Homeowners Assoc. of Havasu
Homeowner; also served as Secretary/Treasurer on the Board in Nov 2015
Patricia Gravelle (petitioner)
Village Parc Homeowners Assoc. of Havasu
Homeowner

Respondent Side

Kenneth E. Moyer (attorney)
Law Offices of Kenneth E. Moyer, PLLC
Attorney for Respondent
Gary Himango (affiant)
Village Parc Homeowners Assoc. of Havasu
Submitted affidavit for Respondent

Neutral Parties

Diane Mihalsky (ALJ)
Office of Administrative Hearings
Administrative Law Judge
Judy Lowe (Commissioner)
Arizona Department of Real Estate
Abby Hansen (HOA Coordinator)
Arizona Department of Real Estate
M. Aguirre (clerk)
Office of Administrative Hearings
Transmitted documents
L. Dettorre (ADRE staff)
Arizona Department of Real Estate
Email recipient ([email protected])
D. Jones (ADRE staff)
Arizona Department of Real Estate
Email recipient ([email protected])
J. Marshall (ADRE staff)
Arizona Department of Real Estate
Email recipient ([email protected])
N. Cano (ADRE staff)
Arizona Department of Real Estate
Email recipient ([email protected])

John Klemmer vs. Caribbean Gardens Association

Posted on August 19, 2016 by [email protected]

Case Summary

Case ID	16F-H1616006-BFS
Agency	ADRE
Tribunal	OAH
Decision Date	2016-08-19
Administrative Law Judge	Dorinda M. Lang
Outcome	The ALJ dismissed the petition in its entirety. While the HOA admitted responsibility for common areas, the Petitioner failed to establish that the water staining on the subfloor or the condition of the pipes constituted damage requiring repair or replacement. The ALJ relied on the Respondent's expert testimony that the subfloor was structurally sound.
Filing Fees Refunded	$500.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	John Klemmer	Counsel	—
Respondent	Caribbean Gardens Association	Counsel	Alexis Firehawk

Alleged Violations

A.R.S. §§ 33-1212(1), 33-1212(2), 33-1247(B), 33-1251(C), 33-1221(1), 33-1253(A)(1), 33-1253(A)(2), 33-1253(H)

Outcome Summary

The ALJ dismissed the petition in its entirety. While the HOA admitted responsibility for common areas, the Petitioner failed to establish that the water staining on the subfloor or the condition of the pipes constituted damage requiring repair or replacement. The ALJ relied on the Respondent's expert testimony that the subfloor was structurally sound.

Why this result: Insufficient evidence to prove that the staining constituted structural damage or that mold/bacteria levels required remediation; Respondent provided expert testimony that the area was structurally sound.

Key Issues & Findings

Maintenance and Repair of Common Elements

Petitioner alleged the HOA was responsible for repairing water damage/staining to the subfloor and pipes in the common area ceiling/floor space caused by flooding from the unit above. Petitioner sought replacement of stained wood and remediation.

Orders: Petition dismissed in its entirety.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

A.R.S. § 33-1212(1)
A.R.S. § 33-1212(2)
A.R.S. § 33-1247(B)
A.R.S. § 33-1251(C)
A.R.S. § 33-1221(1)
A.R.S. § 33-1253(A)(1)
A.R.S. § 33-1253(A)(2)
A.R.S. § 33-1253(H)

Video Overview

Audio Overview

Decision Documents

16F-H1616006-BFS Decision – 513174.pdf

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16F-H1616006-BFS Decision – 521856.pdf

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16F-H1616006-BFS Decision – 513174.pdf

Uploaded 2026-02-11T06:02:57 (72.6 KB)

16F-H1616006-BFS Decision – 521856.pdf

Uploaded 2026-02-11T06:02:57 (62.9 KB)

Administrative Law Judge Decision: Klemmer v. Caribbean Gardens Association

Executive Summary

This briefing document summarizes the administrative hearing and subsequent final decision in the matter of John Klemmer vs. Caribbean Gardens Association (No. 16F-H1616006-BFS). The dispute centered on whether the Caribbean Gardens Association (the Respondent) was legally obligated to repair or replace materials in a common area located between the Petitioner’s unit and the unit above.

The Petitioner alleged that water damage, staining, and potential contamination necessitated the replacement of subflooring and cleaning of a sewer pipe. While the Respondent acknowledged responsibility for the common area in question, they argued that no structural damage existed. Following a hearing on August 2, 2016, Administrative Law Judge (ALJ) Dorinda M. Lang determined that the Petitioner failed to meet the required burden of proof. The petition was dismissed in its entirety, and the decision was certified as final on October 6, 2016.

Detailed Analysis of Key Themes

1. Responsibility for Common Areas

A central component of the case was the definition and responsibility of "common areas" within the association. The Petitioner cited several Arizona Revised Statutes (A.R.S.) and the association’s Covenants, Conditions, and Restrictions (CC&Rs) to argue that the Respondent was responsible for the space above his ceiling and below the upstairs unit’s flooring.

Undisputed Jurisdiction: The Respondent did not dispute its responsibility for the areas defined as common areas under the CC&Rs.
Legal Basis: The allegations involved violations of A.R.S. §§ 33-1212, 33-1247(B), 33-1251(C), 33-1221(1), and 33-1253, as well as specific articles of the association’s third amendment.

2. The Burden of Proof and Evidentiary Standards

The case turned significantly on the legal standard of "preponderance of the evidence." As the Petitioner, John Klemmer held the burden to prove that the damage was sufficient to mandate specific repairs.

Standard Applied: The ALJ defined preponderance of the evidence as proof that convinces the trier of fact that a contention is "more probably true than not."
Failure to Establish Fact: Although the Petitioner provided photographs of staining and discoloration, the ALJ found this evidence insufficient to prove that the wood required replacement or that the sewer pipe was malfunctioning.

3. Structural vs. Cosmetic Damage

A primary conflict in the testimony was the distinction between aesthetic staining and structural integrity.

Expert Testimony: Michael Busby, a licensed contractor and witness for the Respondent, testified that the discoloration did not constitute structural damage. He noted that water staining near a toilet is "not uncommon" and that any potential structural issues could be resolved through bracing rather than replacement.
Lack of Specialized Testing: The Petitioner expressed concerns regarding mold and bacteria; however, because no formal testing was conducted or presented, the court could not find a requirement for remediation.

4. Administrative Oversight and Finalization

The case reflects a transition in state oversight and the strict timelines of administrative law.

Agency Transition: Effective July 1, 2016, jurisdiction over such matters shifted from the Department of Fire, Building and Life Safety to the Arizona Department of Real Estate.
Final Certification: Because the Department of Fire, Building and Life Safety did not accept, reject, or modify the ALJ's decision by the September 26, 2016 deadline, the decision was automatically certified as final per A.R.S. § 41-1092.08(D).

Important Quotes with Context

Quote	Context
"Petitioner failed to establish his factual allegation that the area was damaged to the extent that repairs were necessary."	The ALJ’s primary conclusion regarding why the case was dismissed despite the HOA’s admitted responsibility for the area.
"Proof by preponderance of the evidence 'is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it…'"	The legal definition used by the court to evaluate the strength of the Petitioner's claims against the Respondent's defenses.
"[Michael Busby] testified that the water staining to that area (below a toilet) is not uncommon… [and] it was not structurally damaged."	Testimony from the Respondent's witness which successfully argued that the visible damage did not necessitate the extensive repairs requested.
"Petitioner offered no legal authority that Respondent is responsible for cleaning the area or any evidence that the pipe must be perfectly straight to function properly."	The court's response to the Petitioner's secondary complaints regarding the cleanliness and alignment of a sewer pipe.

Actionable Insights

For Homeowners and Petitioners

Necessity of Professional Testing: When alleging health hazards such as mold or bacteria, visual evidence (photographs) is often insufficient. Homeowners should provide professional lab results or expert environmental reports to establish a need for remediation.
Establishing Structural Impact: To compel an association to perform replacements rather than simple repairs (like bracing), a petitioner must provide evidence from a structural expert or licensed contractor proving that the material's integrity is compromised.

For Homeowners Associations (HOAs)

Proactive Mitigation Offers: In this case, the Respondent offered to "brace" the area even though they denied structural damage. Making a reasonable offer of repair can demonstrate a good-faith effort to maintain common areas, which may be viewed favorably if the petitioner declines and insists on more expensive, unnecessary replacements.
Expert Witness Reliability: Utilizing licensed contractors who have personal history with the property (e.g., a former handyman) can provide persuasive testimony regarding the "commonality" of certain types of wear and tear, such as staining under plumbing fixtures.

Procedural Compliance

Monitoring Statutory Deadlines: Parties must be aware that administrative decisions become final if the governing agency does not act within a specific timeframe (in this case, approximately 35 days). Once certified, the window for requesting a rehearing or judicial review is limited and governed by A.R.S. § 41-1092.09.

Case Study and Legal Review: Klemmer v. Caribbean Gardens Association

This study guide provides a comprehensive overview of the administrative hearing between John Klemmer (Petitioner) and the Caribbean Gardens Association (Respondent). It explores the legal standards, factual disputes, and administrative procedures involved in Arizona Department of Real Estate matters.

Key Concepts and Case Overview

1. Jurisdictional Transition

The matter was initially filed with the Department of Fire, Building and Life Safety. However, as of July 1, 2016, that department ceased to exist, and jurisdiction over such matters was transferred to the Arizona Department of Real Estate. The Office of Administrative Hearings (OAH) maintains jurisdiction to hear these petitions pursuant to A.R.S. § 41-1092.02.

2. The Burden of Proof: Preponderance of the Evidence

In administrative hearings of this nature, the Petitioner bears the burden of proof. The standard used is "preponderance of the evidence," defined as:

A.A.C. R2-19-119: The standard of proof on all issues.
Legal Definition: Evidence that is of greater weight or more convincing than the evidence offered in opposition. It must convince the trier of fact that the contention is "more probably true than not."

3. Defining Common Areas and Responsibility

The dispute centered on the definition of "common areas" within a homeowner association. Per the Respondent’s Covenants, Conditions, and Restrictions (CC&Rs) and the third amendment thereto:

The area between a unit’s ceiling and the floor of the unit above is classified as a common area.
While the Respondent did not dispute its responsibility for common areas, the legal conflict arose over whether specific conditions (staining and discoloration) constituted "damage" requiring remediation.

4. Administrative Finality

An Administrative Law Judge (ALJ) issues a decision that must be transmitted to the relevant state agency. Under A.R.S. § 41-1092.08:

The agency has a specific timeframe (in this case, until September 26, 2016) to accept, reject, or modify the ALJ decision.
If the agency takes no action within this period, the ALJ decision is automatically certified as the final administrative decision.

Short-Answer Practice Questions

1. Who were the primary parties involved in case No. 16F-H1616006-BFS? Answer: The Petitioner was John Klemmer, and the Respondent was the Caribbean Gardens Association.

2. What specific physical conditions did the Petitioner cite as evidence of damage? Answer: The Petitioner provided photographs showing discoloration of the upper unit’s subfloor, staining on a sewer pipe, and a "crooked" sewer pipe.

3. Why did the Administrative Law Judge dismiss the petition despite the Respondent admitting responsibility for common areas? Answer: The Petitioner failed to establish that the area was damaged to the extent that repairs were legally necessary. He did not provide evidence that the staining required remediation or that the sewer pipe was malfunctioning.

4. What was the testimony of the Respondent's expert, Michael Busby, regarding the subfloor? Answer: Busby, a licensed contractor, testified that the discoloration was not structural damage. He noted that water staining below a toilet is common and suggested that even if damage were present, it would only require bracing rather than replacement.

5. What is the consequence if a party fails to take timely action after an administrative decision is certified? Answer: Rights for rehearing or judicial review (via the Superior Court) may be lost.

Essay Prompts for Deeper Exploration

1. Analysis of Evidentiary Standards

The ALJ's decision rested heavily on the "preponderance of the evidence" standard. Write an essay discussing why the Petitioner’s evidence (photographs of staining and concerns about mold/bacteria) failed to meet this threshold in the face of the Respondent’s expert testimony. In your analysis, address the distinction between aesthetic concerns (staining/dirt) and compensable structural damage under the law.

2. The Role of Expertise in Property Disputes

Examine the impact of Michael Busby’s testimony on the outcome of the case. How does the testimony of a licensed contractor influence the "trier of fact" compared to the testimony of a homeowner? Discuss how the Petitioner might have strengthened his case regarding the alleged presence of mold or the functionality of the sewer pipe.

3. Administrative Procedure and Finality

Explain the process by which an ALJ decision becomes a "Final Agency Action" within the Arizona administrative system. Use the timeline from the Caribbean Gardens Association case (from the August 2 hearing to the October 6 certification) to illustrate the roles of the ALJ, the Department of Real Estate, and the Office of Administrative Hearings.

Glossary of Important Terms

Term	Definition
A.R.S.	Arizona Revised Statutes; the codified laws of the state of Arizona.
Administrative Law Judge (ALJ)	A judge who serves as the trier of fact in hearings involving state agency actions.
CC&Rs	Covenants, Conditions, and Restrictions; the governing documents that dictate the rules and responsibilities of a homeowners association and its members.
Common Area	Areas within a development or association that are not owned by an individual unit holder and are typically the responsibility of the association to maintain.
Petitioner	The party who files a petition or initiates a legal action (in this case, John Klemmer).
Preponderance of the Evidence	The standard of proof in civil and administrative cases; evidence that makes a fact more likely than not.
Respondent	The party against whom a petition is filed (in this case, Caribbean Gardens Association).
Subfloor	The foundational wood or material located beneath the finished flooring of a unit.
Certification	The process by which an ALJ decision is officially recognized as the final decision of an agency.

When Stains Aren't Enough: Lessons from an HOA Common Area Dispute

1. Introduction: The Reality of Condo Living and Common Area Conflicts

Condominium living is defined by a shared environment where individual property rights intersect with collective maintenance obligations. One of the most common flashpoints in these communities occurs when a homeowner identifies a perceived defect in a common area and demands a specific, often high-cost, remediation from the Homeowners Association (HOA). These disputes frequently hinge on a single question: what legally constitutes "damage" that requires repair?

The case of John Klemmer vs. Caribbean Gardens Association serves as a textbook example of this tension. It illustrates that simply identifying a visual abnormality—such as a stain—is not enough to compel an Association to act. To prevail in such a dispute, a homeowner must meet a specific legal burden of proof, moving beyond subjective concerns to provide objective evidence of structural or functional failure.

2. The Dispute: A Ceiling, a Pipe, and a Disagreement

The conflict involved Petitioner John Klemmer and the Respondent, Caribbean Gardens Association. Mr. Klemmer alleged that the Association had violated its duties under the Arizona Revised Statutes (including A.R.S. §§ 33-1212, 33-1247, 33-1251, 33-1221, and 33-1253) and its own governing documents, specifically the CC&Rs (Third Amendment, Article 3, Section 3.8 and Article 7, Section 7.1) and the recorded plat specifications.

The dispute was triggered by a leak from the unit above Mr. Klemmer’s. Upon inspection of the space between his ceiling and the floor of the upstairs unit, the Petitioner observed:

Discoloration and water staining on the upper unit’s subfloor.
Staining and "dirt" on the common sewer pipe.
A sewer pipe that appeared "crooked" in its alignment.

While the Association conceded that the space in question was a "common area" under its maintenance jurisdiction, it refused the Petitioner's demand to fully replace the wood and plumbing.

3. The Legal Framework: Defining the "Preponderance of Evidence"

This matter was adjudicated by the Office of Administrative Hearings. Notably, the case occurred during a jurisdictional transition; as of July 1, 2016, oversight of such HOA disputes shifted from the Department of Fire, Building and Life Safety to the Arizona Department of Real Estate.

Regardless of the agency, the Administrative Law Judge (ALJ) applied the "preponderance of the evidence" standard. For a homeowner to win, they must provide:

Proof that convinces the judge that a claim is "more probably true than not."
Evidence that carries greater weight or is more convincing than the evidence offered by the Association in opposition.

In this instance, the Petitioner bore the entire burden of proving that the Association was legally obligated to perform the specific replacement he requested rather than the more conservative repairs the Association proposed.

4. Expert Testimony vs. Owner Concerns

The hearing highlighted a significant gap between a homeowner’s subjective fears and a professional’s technical assessment. While the Petitioner relied on visual evidence, the Respondent produced expert testimony from Michael Busby, a licensed contractor.

Petitioner’s Concerns	Respondent’s Expert Testimony (Michael Busby)
Aesthetic Staining: Argued that stained wood on the subfloor must be replaced to ensure safety.	Structural Integrity: Testified that discoloration did not amount to structural damage; the wood remained sound even after a subsequent "catastrophic" flood.
Contamination Fears: Expressed concerns regarding the presence of mold and bacteria.	Commonality & Data: Stated that water staining below a toilet is common and noted that the Petitioner provided no actual testing/data to support claims of mold.
Plumbing Alignment: Argued the sewer pipe was "dirty" and "crooked," suggesting poor maintenance.	Necessity of Repair: Asserted that if the floor required any support, "bracing" would be the appropriate fix, not a total replacement of the subfloor.

The conflict reached an impasse when the Petitioner refused the Association's offer to "brace" the subfloor, insisting that nothing short of a full replacement of the wood was acceptable.

5. The Decision: Why the Petition was Dismissed

The Administrative Law Judge dismissed the petition in its entirety, finding that the Petitioner failed to bridge the gap between "visible staining" and "legal damage." The ruling was based on several key findings:

Stains are Not Structural Failures: The ALJ noted that photos of staining do not, on their own, support a finding that wood is compromised or requires replacement.
Subjective Fear vs. Objective Data: While the Petitioner was concerned about mold and bacteria, the court found he failed to provide any professional testing or lab data to establish that levels required remediation.
Functionality is the Standard: Regarding the "crooked" and "dirty" pipe, the ALJ pointed out that the Petitioner provided no legal authority or evidence suggesting a pipe must be "perfectly straight" or "clean" to function properly. Without proof of a leak or failure, the pipe met the maintenance standard.

6. Timeline of Finality: The Certification Process

Administrative decisions follow a specific procedural path to reach finality. In this case, the timeline was as follows:

August 19, 2016: The Administrative Law Judge issued the initial decision to dismiss the petition.
September 26, 2016: The statutory deadline for the Department to accept, reject, or modify the ALJ’s decision.
October 6, 2016: With no action taken by the Department to alter the ruling, the decision was officially certified as the final administrative action.

7. Key Takeaways for Homeowners and Associations

This case provides a roadmap for how administrative courts view the balance of power between owners and HOAs:

Responsibility vs. Repair Necessity: Proving an HOA is responsible for a common area is only the first step. The Association maintains the discretion to choose the method of repair (e.g., bracing vs. replacement). The burden is on the homeowner to prove that the Association’s chosen method is a violation of the CC&Rs or statutes.
The Need for Expert Evidence: Visual assumptions are insufficient in a legal setting. If a homeowner alleges mold, bacteria, or structural instability, they must produce professional data, such as engineering reports or lab results, to meet the preponderance of evidence standard.
Functionality Over Aesthetics: Administrative courts prioritize the functional and structural integrity of common elements. Cosmetic concerns—such as stained wood or pipes that are not perfectly aligned—rarely meet the legal threshold for mandated replacement if the systems are still performing their intended functions.

8. Conclusion: Navigating Future Disputes

The Klemmer decision reinforces the principle that "perfect" is not the legal standard for HOA maintenance; "functional and sound" is. Before escalating a dispute to a formal petition, homeowners should evaluate whether they have the objective evidence necessary to overcome the Association’s discretionary authority.

Under A.R.S. § 41-1092.09(A) and § 41-1092.08(H), parties who disagree with a final administrative decision may have the right to request a rehearing or seek judicial review. This next step typically involves the Superior Court, provided the request is filed within strict statutory timeframes. For both boards and owners, the lesson is clear: in the eyes of the law, data and expert testimony will always outweigh visual aesthetic concerns.

Case Participants

Petitioner Side

John Klemmer (petitioner)
Caribbean Gardens Association (Owner)
Listed as John D. Klemmer in appearances
John A. Klemmer (witness)

Respondent Side

Alexis Firehawk (attorney)
Carpenter, Hazlewood, Delgado & Bolen, PLC
Michael Busby (witness)
Caribbean Gardens Association
Licensed contractor and former handyman
Alex Gonzalez (witness)

Neutral Parties

Dorinda M. Lang (ALJ)
Office of Administrative Hearings
Kathryn Bergamon (observer)
Judy Lowe (Commissioner)
Arizona Department of Real Estate
Greg Hanchett (Interim Director)
Office of Administrative Hearings
Certified the decision
Louis Dettorre (agency staff)
Arizona Department of Real Estate
CC'd on certification
Rosella J. Rodriguez (clerk)
Office of Administrative Hearings
Mailed certification