Tag Archives: A.R.S. § 33-1805

Sellers, John & Debborah vs. Crossings at Willow Creek Property Owners Association

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Case Summary

Case ID 12F-H1212002-BFS; 12F-H1212009-BFS
Agency Department of Fire, Building and Life Safety
Tribunal Office of Administrative Hearings
Decision Date 2013-01-17
Administrative Law Judge M. Douglas
Outcome The ALJ dismissed both petitions. Regarding the ARC meetings, the judge ruled they were not regularly scheduled and thus notice was not required. Regarding the records request, the judge ruled the withheld documents were protected by attorney-client privilege.
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner John and Debborah Sellers Counsel —
Respondent Crossings at Willow Creek Property Owners Association Counsel Joshua M. Bolen

Alleged Violations

A.R.S. § 33-1804
A.R.S. § 33-1805

Outcome Summary

The ALJ dismissed both petitions. Regarding the ARC meetings, the judge ruled they were not regularly scheduled and thus notice was not required. Regarding the records request, the judge ruled the withheld documents were protected by attorney-client privilege.

Why this result: Petitioners failed to prove by a preponderance of the evidence that the HOA violated statutes or CC&Rs; applicable laws provide exceptions for irregular meetings and privileged records.

Key Issues & Findings

Failure to notice and conduct publicly ARC Meetings

Petitioners alleged the HOA failed to notice and conduct publicly Architectural Review Committee (ARC) meetings. The ALJ found that ARC meetings were held 'as necessary' and were not 'regularly scheduled,' and therefore did not require notice under the statute or Bylaws.

Orders: Petition dismissed; no action required.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1804

Failure to provide requested HOA records

Petitioners requested attorney invoices and communications. The HOA refused based on attorney-client privilege. The ALJ found the refusal was justified under statutory exceptions for privileged communication.

Orders: Petition dismissed; no action required.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1805
  • A.R.S. § 12-2234

Video Overview

Audio Overview

Decision Documents

12F-H1212009-BFS Decision – 321619.pdf

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12F-H1212009-BFS Decision – 327760.pdf

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12F-H1212009-BFS Decision – 321619.pdf

Uploaded 2026-01-25T15:27:15 (129.8 KB)

12F-H1212009-BFS Decision – 327760.pdf

Uploaded 2026-01-25T15:27:15 (58.9 KB)

Briefing Document: Administrative Law Decision Regarding Sellers v. Crossings at Willow Creek Property Owners Association

Executive Summary

This briefing document summarizes the administrative legal proceedings and final decision in the consolidated cases of John and Debborah Sellers (Petitioners) vs. Crossings at Willow Creek Property Owners Association (Respondent), docket numbers 12F-H1212002-BFS and 12F-H1212009-BFS.

The disputes originated from two primary grievances filed by the homeowners: first, that the Association’s Architectural Review Committee (ARC) failed to notice and conduct public meetings; and second, that the Association improperly withheld specific records, including attorney invoices and third-party communications.

Following hearings held on September 26, 2012, and January 4, 2013, Administrative Law Judge (ALJ) M. Douglas ruled in favor of the Association on all counts. The ALJ found that the Petitioners failed to meet the burden of proof required to show that the Association violated Arizona Revised Statutes (A.R.S.) or its own governing documents. This decision was certified as the final administrative action by the Department of Fire, Building and Life Safety on February 28, 2013.

Detailed Analysis of Key Themes

1. Architectural Review Committee (ARC) Transparency and Notice

A central theme of the first petition was the requirement for public notice and open attendance at ARC meetings. The Petitioners alleged that the Association violated A.R.S. § 33-1804 and Community Documents by not noticing these meetings.

  • Statutory Interpretation: Under A.R.S. § 33-1804(A), meetings of the board of directors and "any regularly scheduled committee meetings" must be open to all members.
  • "Regularly Scheduled" vs. "As Necessary": The Association’s defense rested on the distinction between "regularly scheduled" and "as necessary." Testimony from Board members and the former manager established that the ARC met only when applications were submitted.
  • Bylaw Compliance: The Association’s Bylaws (Article XI, Section 3) explicitly state that the ARC shall meet "from time to time as necessary."
  • Outcome: Because the meetings were determined to be "on demand" rather than "regularly scheduled," the ALJ concluded that formal public notice was not statutory required. Furthermore, testimony indicated that while meetings weren't noticed, they were never closed to members who requested to attend.
2. Access to Association Records and Attorney-Client Privilege

The second petition focused on the Association’s refusal to provide certain documents, specifically attorney invoices and communications with third parties.

  • Records Request Scope: Petitioners sought invoices from the Association’s legal counsel (Carpenter Hazlewood) and correspondence with third parties, arguing these should not be protected by privilege.
  • Statutory Exceptions: A.R.S. § 33-1805(B) allows an association to withhold records relating to privileged communications between an attorney and the association, as well as records concerning pending litigation.
  • Legal Basis for Refusal: The ALJ found that the Association’s refusal was grounded in protected legal exceptions. A.R.S. § 12-2234 protects communications made by a client to an attorney for the purpose of obtaining legal advice.
  • Outcome: The ALJ determined that the Petitioners failed to prove that the withheld documents were outside the scope of legally protected privileged material or pending litigation exceptions.
3. Evidentiary Standards and Burden of Proof

The case underscores the high bar for Petitioners in administrative hearings regarding planned communities.

  • Preponderance of the Evidence: The standard of proof required the Petitioners to show that their claims were "more likely true than not."
  • Failure of Proof: In both petitions, the ALJ found the Petitioners' evidence insufficient to demonstrate a violation of the law or the Association’s CC&Rs (Covenants, Conditions, and Restrictions).

Important Quotes with Context

Quote Source/Context Significance
"The Architectural Review Committee shall meet from time to time as necessary to perform its duties hereunder." Association Bylaws, Article XI, Section 3 This provided the legal basis for the Association to conduct ARC meetings without a fixed, regular schedule.
"ARC meetings are not noticed but are open to all members… the committee has never denied access to any member to attend an ARC meeting." Brenda Doziar (Board/ARC Member) Established that although notice was absent, the committee was not operating in a "closed" manner that violated the spirit of open meetings.
"The committee meetings take place at one of the committee member’s residence." Brenda Doziar (Board/ARC Member) Clarified the informal and variable nature of the "as necessary" meetings.
"Credible testimony and evidence established that Crossings’ refusal to release the requested documents was based upon the exceptions provided by applicable statute for attorney/client privileged material." ALJ Conclusions of Law Validated the Association's right to protect sensitive legal information under A.R.S. § 33-1805.
"Petitioners failed to prove by a preponderance of the evidence that Crossings violated the provisions of A.R.S. § 33-1804 and/or Crossings’ CC&Rs." ALJ Findings The core justification for the dismissal of the petitions.

Actionable Insights

For Association Governance
  • Define Meeting Schedules Clearly: Associations should distinguish between "regularly scheduled" committee meetings and "as needed" meetings in their governing documents. If a committee meets on a fixed schedule (e.g., the first Monday of every month), it must follow formal notice procedures under Arizona law.
  • Maintain Records of Inquiries: The Association’s defense was bolstered by testimony that they had never denied a request to attend a meeting. Keeping logs of member requests to attend meetings or view records can provide a defense against claims of non-transparency.
  • Consistency in Bylaws: Ensure that internal practices (like ARC meetings) align exactly with the language in the Bylaws (e.g., meeting "as necessary").
For Records Management
  • Understand Privilege Boundaries: Associations are entitled to withhold documents related to legal advice and pending litigation. However, they must be prepared to justify these withholdings based on A.R.S. § 33-1805 and § 12-2234.
  • Transparency of Non-Privileged Records: To avoid litigation, associations should ensure that all non-exempt records (general financial records, minutes of open meetings) are made available within the statutory ten-business-day window.
For Dispute Resolution
  • Burden of Proof: Parties initiating a petition must recognize that the "preponderance of the evidence" standard requires more than just allegations; it requires concrete proof that a specific statute or community document was violated.
  • Administrative Finality: Decisions by an ALJ become final if no action is taken by the Director of the Department of Fire, Building and Life Safety within the statutory timeframe (in this case, approximately 30 days post-decision). Overturning such a decision requires a timely request for rehearing or a petition to the Superior Court.

Study Guide: Sellers v. Crossings at Willow Creek Property Owners Association

This study guide provides a comprehensive overview of the consolidated administrative cases John and Debborah Sellers vs. Crossings at Willow Creek Property Owners Association (Nos. 12F-H1212002-BFS and 12F-H1212009-BFS). It covers the legal standards for Arizona homeowners' associations, requirements for open meetings, and the limits of record disclosure.

I. Case Overview and Core Themes

Central Dispute

The cases involve disputes between homeowners (the Sellers) and their homeowners' association (Crossings at Willow Creek). The primary issues centered on whether the association’s Architectural Review Committee (ARC) was required to provide public notice for its meetings and whether the association was legally obligated to produce specific attorney-related financial records and communications.

Key Entities
  • Petitioners: John and Debborah Sellers, members of the Crossings at Willow Creek Property Owners Association.
  • Respondent: Crossings at Willow Creek Property Owners Association ("Crossings").
  • Adjudicating Body: The Office of Administrative Hearings, acting on behalf of the Department of Fire, Building and Life Safety.
  • Architectural Review Committee (ARC): A committee within the association responsible for reviewing and making determinations on property applications based on architectural guidelines.

II. Key Concepts and Legal Principles

1. Open Meeting Requirements (A.R.S. § 33-1804)

Under Arizona law, all meetings of a members' association and the board of directors must be open to all members. However, the law distinguishes between different types of committee meetings:

  • Regularly Scheduled Committee Meetings: These are required to be open to all members or their designated representatives.
  • On-Demand/Irregular Meetings: Meetings that occur "as necessary" or "on-demand" (based on submissions) do not carry the same statutory requirement for formal notice if they are not "regularly scheduled."
2. Record Examination and Disclosure (A.R.S. § 33-1805)

While associations are generally required to make financial and other records reasonably available for examination, there are five specific statutory exceptions where records may be withheld:

  1. Privileged communication between the association and its attorney.
  2. Pending litigation.
  3. Meeting minutes from executive sessions (closed meetings).
  4. Personal, health, or financial records of an individual member or employee.
  5. Records relating to job performance or specific complaints against employees.
3. Attorney-Client Privilege (A.R.S. § 12-2234)

In civil actions, an attorney cannot be examined regarding communications made by the client or advice given during professional employment without the client’s consent. This privilege extends to communications between an attorney and the agents or members of an entity (like an HOA) if the purpose is to provide or obtain legal advice.

4. Administrative Burden of Proof

In these proceedings, the burden of proof rests with the party asserting the claim (the Petitioners). The standard used is a preponderance of the evidence, meaning the finder of fact must be persuaded that the claim is "more likely true than not."

III. Short-Answer Practice Questions

  1. Who is authorized by statute to receive Petitions for Hearings from Arizona homeowners' association members?
  2. What were the two specific categories of records the Sellers claimed Crossings refused to provide?
  3. According to the testimony of Brenda Doziar, where do the ARC meetings typically take place?
  4. What determines when an ARC meeting is scheduled at Crossings?
  5. How much can an association charge per page for making copies of records requested by a member?
  6. How many business days does an association have to fulfill a request for the examination of records?
  7. Why did the Administrative Law Judge (ALJ) determine that Crossings did not violate notice requirements for ARC meetings?
  8. What happened when the Department of Fire, Building and Life Safety failed to take action on the ALJ’s decision by February 26, 2013?
  9. According to A.R.S. § 33-1804(A), what are the five circumstances under which a portion of an HOA meeting may be closed?
  10. Does the failure of a member to receive actual notice of a meeting affect the validity of action taken at that meeting, according to A.R.S. § 33-1804(B)?

IV. Essay Prompts for Deeper Exploration

  1. The Intersection of Transparency and Efficiency: Analyze the conflict between a homeowner's right to attend committee meetings and an HOA's right to hold meetings "as necessary." Based on the evidence in this case, evaluate whether the "on-demand" nature of the ARC meetings successfully circumvented or complied with the intent of A.R.S. § 33-1804.
  2. Statutory Protection of Legal Counsel: Discuss the importance of attorney-client privilege within the context of HOA management as outlined in A.R.S. § 12-2234 and A.R.S. § 33-1805. How does the law balance a member's right to view financial records (such as attorney invoices) with the association’s need for confidential legal strategy?
  3. The Role of the Administrative Law Judge (ALJ): Examine the ALJ’s findings regarding the "preponderance of the evidence." Why did the Petitioners fail to meet this burden in both consolidated cases, and what specific testimony or lack of evidence led to the dismissal of their petitions?

V. Glossary of Important Terms

  • A.R.S. (Arizona Revised Statutes): The codified laws of the state of Arizona.
  • ARC (Architectural Review Committee): A committee appointed to review property changes and ensure they comply with community architectural guidelines.
  • Attorney-Client Privilege: A legal principle that protects communications between an attorney and their client from being disclosed to third parties.
  • Bylaws: The internal rules and regulations that govern the administration of an association.
  • Community Documents: The collective term for an association’s declaration, bylaws, and other governing papers.
  • Executive Session: A portion of a meeting that is closed to the general membership to discuss sensitive matters like legal advice or personnel issues.
  • Preponderance of the Evidence: A legal standard of proof where a claim is proven if it is shown to be more probable than not.
  • Prevailing Party: The party in a lawsuit that wins on the main issues and is often entitled to specific relief or the dismissal of the opponent's claims.
  • Statutory Agent: An individual or entity designated to receive legal service of process and official documents on behalf of a corporation or association.
  • Subpoena: A legal document ordering a person to attend a court proceeding or produce specific documents.

HOA Transparency vs. Legal Reality: Lessons from the Sellers Case

1. Introduction: The Conflict at Willow Creek

For many homeowners, the relationship with their Property Owners Association (POA) is a delicate equilibrium between individual property rights and the necessity of community governance. Tensions frequently escalate when residents perceive themselves as being excluded from the decision-making process or find their access to association records blocked by administrative gatekeeping.

This friction was the catalyst for a significant administrative hearing: John and Debborah Sellers vs. Crossings at Willow Creek Property Owners Association. The Petitioners, John and Debborah Sellers, filed two separate petitions against the Association, alleging a lack of transparency in committee meetings and the improper withholding of financial and legal records. Through an analysis of these proceedings, we can examine how Arizona law navigates the boundary between a member's right to know and an association's right to functional, private governance.

2. The "Open Meeting" Debate: When is Notice Required?

The threshold question in the first matter (No. 12F-H1212002-BFS) was whether the Architectural Review Committee (ARC) had violated state law by failing to provide public notice of its meetings. The Petitioners contended that the ARC conducted association business "behind closed doors," circumventing the open meeting requirements established by statute.

The defense centered on the distinction between "regularly scheduled" and "as needed" meetings. Testimony from Brenda Doziar, a Board and ARC member, and Robert Balzano, the Association’s former manager and Statutory Agent, revealed a highly informal process. The ARC did not follow a fixed calendar; rather, meetings were triggered solely by the volume of architectural submissions. These sessions often took place at a committee member’s private residence, a detail that—while contributing to homeowner suspicion—underscored the irregular nature of the gatherings.

Arizona law is specific regarding which committee meetings must be open to the membership:

A.R.S. § 33-1804(A): "Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the members' association and the board of directors, and any regularly scheduled committee meetings, are open to all members of the association…"

The Administrative Law Judge (ALJ) concluded that because the ARC met only "on demand" to review specific plans with the Association’s architect, the meetings did not constitute "regularly scheduled" sessions. Consequently, the Association was under no statutory or contractual obligation to post public notices for these irregular meetings.

3. The Battle for Records: Transparency vs. Privilege

The gravamen of the second petition (No. 12F-H1212009-BFS) was the Association’s refusal to produce attorney invoices and communications with third parties. This was not a mere fishing expedition; the Sellers were specifically concerned about a Declaratory Action involving the City of Prescott. In that litigation, the City was the plaintiff and all HOA members were named as defendants. The Sellers sought the records to ensure the Association was not "tipping its hand" during negotiations or compromising the members' positions.

The Association, supported by testimony from interim City Attorney G. Eugene Neil, argued that the requested documents were protected from disclosure. Under A.R.S. § 33-1805(B), an HOA is legally permitted to withhold records that relate to:

  • Privileged communications between an attorney for the association and the association.
  • Pending litigation.
  • Meeting minutes or records of a board session that is not required to be open (executive sessions).
  • Personal, health, or financial records of an individual member, employee of the association, or employee of a contractor.
  • Records relating to job performance, compensation, health records, or specific complaints regarding an individual employee of the association or a contractor.

The ALJ found that the Association’s refusal was properly grounded in Categories 1 and 2: privileged communications and pending litigation. Because the invoices and third-party correspondence related to active legal matters, they were exempt from member inspection.

4. The Verdict: Why the Petitions Were Dismissed

The ALJ ultimately dismissed both petitions, ruling that the Crossings at Willow Creek Property Owners Association was not required to take any corrective action. A primary factor in this outcome was the "Preponderance of the Evidence" standard.

In administrative proceedings, the burden of proof rests with the party asserting the claim. According to A.A.C. R2-19-119, the Petitioners were required to prove that their allegations were "more likely true than not." As established in In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994), this requires persuading the finder of fact of the proposition's probability.

The ALJ determined the Sellers were not the "prevailing party," as they failed to prove a violation of either the Arizona Revised Statutes or the community’s governing documents. The decision was subsequently certified as final, affirming the Association's right to maintain its current meeting and record-keeping protocols.

5. Key Takeaways for Homeowners and Boards

The Sellers case serves as a vital case study for community leaders and residents alike. We can distill the following insights:

  1. Understand the "Regularly Scheduled" Clause: Statutory notice requirements are not universal. If a committee’s meeting frequency is dictated by workload (such as architecture submissions) rather than a set calendar, the legal obligation for public notice may not apply.
  2. The Limits of Record Requests: Transparency is a fundamental principle, but attorney-client privilege is a robust and necessary protection. When an Association is involved in active litigation, it has a duty to protect strategic communications from disclosure, even to its own members.
  3. The Burden of Proof: Asserting a grievance is not the same as proving a violation. Petitioners must provide a preponderance of evidence to prevail in an administrative hearing. Without specific proof of a statutory breach, the ALJ will defer to the Association’s established practices.
  4. Review Your Bylaws: Internal documents are the first line of defense. In this case, Article XI Section 3 of the Crossings’ Bylaws explicitly stated the ARC should "meet from time to time as necessary," a phrase that provided the legal flexibility needed to withstand the Petitioners' challenge.
6. Compelling Conclusion

The dispute at Willow Creek underscores the necessity of a deep familiarity with A.R.S. §§ 33-1804 and 33-1805. These statutes are the bedrock of HOA governance in Arizona, designed to balance the membership's right to information with the Association's need for executive privacy and legal protection. While the impulse for total transparency is a hallmark of an engaged membership, the law recognizes that effective governance requires boundaries. For Boards, the lesson is clear: ensure your Bylaws are precisely worded. For homeowners, the takeaway is equally sharp: a legal challenge requires more than a sense of unfairness—it requires a preponderance of proof.

Case Participants

Petitioner Side

  • John Sellers (petitioner)
    Appeared at hearing
  • Debborah Sellers (petitioner)
    Testified regarding ARC service

Respondent Side

  • Joshua M. Bolen (respondent attorney)
    Carpenter, Hazlewood, Delgado & Bolen, PLC
  • Brenda Doziar (witness)
    Crossings at Willow Creek Property Owners Association
    Board member and ARC member
  • Robert Balzano (witness)
    Crossings at Willow Creek Property Owners Association
    Former statutory agent and manager
  • Kenneth Burnett (witness)
    Crossings at Willow Creek Property Owners Association
    Board member

Neutral Parties

  • M. Douglas (ALJ)
    Office of Administrative Hearings
  • G. Eugene Neil (witness)
    City of Prescott
    Interim City Attorney; provided public records
  • Larry Harding (witness)
    Crossings at Willow Creek Property Owners Association
    Commercial insurance agent for Respondent
  • Gene Palma (Director)
    Department of Fire Building and Life Safety
    Named as Director for transmittal
  • Cliff J. Vanell (Director)
    Office of Administrative Hearings
    Certified the decision
  • Joni Cage (agency staff)
    Department of Fire Building and Life Safety
    Copy recipient

Kayser, William W. -v- Barclay Place Homeowners Association

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Case Summary

Case ID 08F-H088006-BFS
Agency DFBLS
Tribunal OAH
Decision Date 2008-05-30
Administrative Law Judge Lewis D. Kowal
Outcome Petitioner prevailed on claims regarding failure to conduct outside audits, failure to provide records timely, and failure to provide proper meeting notice. Petitioner lost on claims regarding assessment notices and meeting quorums. Respondent ordered to provide records and refund full filing fee.
Filing Fees Refunded $2,000.00
Civil Penalties $0.00

Parties & Counsel

Petitioner William W. Kayser Counsel —
Respondent Barclay Place Homeowners Association Counsel Heather A. Fazio

Alleged Violations

Bylaws Article VII, Section 8(d)
A.R.S. § 33-1805
A.R.S. § 33-1805
Bylaws Article III, Section 3

Outcome Summary

Petitioner prevailed on claims regarding failure to conduct outside audits, failure to provide records timely, and failure to provide proper meeting notice. Petitioner lost on claims regarding assessment notices and meeting quorums. Respondent ordered to provide records and refund full filing fee.

Key Issues & Findings

Failure to accomplish annual audit of 2006

Petitioner alleged the Association failed to conduct annual audits. The ALJ found the Association violated the Bylaws requiring an annual audit by an outside firm, although it complied with statutory monthly compilation requirements.

Orders: Association ordered to comply with Bylaws regarding audits.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1810
  • Bylaws Article VII, Section 8(d)

Failure to retain and provide Association records

Petitioner requested various financial records and minutes. The Association failed to provide them within the statutory 10-day timeframe and failed to maintain complete records as required by Bylaws.

Orders: Association ordered to provide all existing requested documents at no expense to Petitioner.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1805
  • Bylaws Article VII, Section 2(a)
  • Bylaws Article X

Failure to give 30 day notice of assessment

Petitioner alleged failure to receive notice of assessment increases. Respondent provided evidence that notices were sent.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_lose

Cited:

  • CC&Rs Article IV, Section 3
  • CC&Rs Article IV, Section 6

Failure to provide proper notice for special meeting

Petitioner challenged the notice for the Nov 23, 2007 meeting. ALJ found posting at mailboxes did not satisfy Bylaw notice requirements for a special meeting of members.

Orders: Association ordered to comply with notice provisions.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • Bylaws Article III, Section 3

Video Overview

Audio Overview

Decision Documents

08F-H088006-BFS Decision – 191832.pdf

Uploaded 2026-04-24T10:33:20 (113.1 KB)

08F-H088006-BFS Decision – 191832.pdf

Uploaded 2026-02-11T05:32:19 (113.1 KB)

Briefing Document: Kayser v. Barclay Place Homeowners Association (No. 08F-H088006-BFS)

Executive Summary

This briefing document summarizes the administrative law decision regarding a dispute between William W. Kayser (Petitioner) and the Barclay Place Homeowners Association (Respondent). The case centered on allegations of financial mismanagement, failure to provide corporate records, and violations of meeting notice and quorum procedures.

The Administrative Law Judge (ALJ) concluded that while the Petitioner did not prevail on every specific count, he succeeded on the “most substantial issues.” Specifically, the Association was found in violation of its Bylaws for failing to conduct an annual audit by an outside public accounting firm and failing to maintain and provide complete corporate records within the statutory timeframe. Consequently, the Petitioner was deemed the prevailing party and awarded a reimbursement of his $2,000.00 filing fee. The Association was ordered to provide all requested documents and comply with governing documents and state statutes moving forward.

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Procedural Context and Scope

The hearing was conducted on May 12, 2008, under the jurisdiction of the Arizona Office of Administrative Hearings. The scope of the hearing was limited by the effective date of A.R.S. § 41-2198.01 et seq., the enabling legislation for this administrative process.

• Excluded Items: Claims regarding real estate conveyances prior to the statute’s effective date and bank statements lacking specific dates were ruled outside the scope of the hearing.

• Timeframe of Focus: The analysis was limited to acts occurring on or after September 21, 2006, as well as specific events in 2007 and 2008.

• Burden of Proof: The Petitioner bore the burden of proving violations by a “preponderance of the evidence,” defined as evidence showing the fact is more probable than not.

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Analysis of Key Themes and Findings

1. Financial Accountability and Auditing Requirements

The dispute involved a distinction between internal financial management and formal auditing requirements mandated by the Association’s governing documents.

• Current Practice: R & R Management Company, which manages the Association’s records, performs monthly financial compilations. Testimony indicated that a certified public accountant reviews these records monthly.

• The Violation: The ALJ found that while the Association complied with A.R.S. § 33-1810 regarding monthly financial compilations, it violated Bylaws, Article VII, Section 8 (d). This provision requires an annual audit to be performed by an outside public accounting firm.

• Admission: The management company admitted that while they follow internal processes, they do not have annual audits performed by an independent public accounting firm.

2. Record Retention and Member Access

A central theme of the petition was the Association’s failure to provide documents requested by the Petitioner in a timely and complete manner.

Legal Requirement

Finding

Response Time

A.R.S. § 33-1805 requires records be provided within 10 business days.

Violation: Evidence established documents were not provided within the 10-day window.

Record Maintenance

Bylaws Article VII & X require a complete record of Association acts and corporate affairs.

Violation: The Association failed to maintain complete records. A Board member testified that previous documents were boxed up and could not be located.

Annual Statements

Bylaws Article VII, Section 2(a) requires a statement at annual meetings.

No Violation: Testimony established that statements were provided at the 2006 and 2007 annual meetings.

3. Governance: Meetings, Notices, and Assessments

The Petitioner challenged the validity of assessment increases and the legality of a specific meeting held on November 23, 2007.

• Assessment Increases: The Association’s Board has the authority to increase annual assessments by up to 5% without a vote from the membership. The ALJ found the 2007 and 2008 increases were within this 5% limit; therefore, no membership vote was required.

• The November 23, 2007 Meeting: This meeting was a “rescheduled” meeting due to a lack of quorum at a November 12 meeting.

◦ Nature of the Meeting: The ALJ determined this was a “special meeting of members.”

◦ Notice Violation: The Association posted notice at mailboxes. The ALJ ruled that mailbox postings do not satisfy the notice requirements for a special meeting of members as defined in Bylaws, Article III, Section 3.

◦ Quorum: Despite the notice issue, the action taken (the assessment increase) was valid because it was accomplished by a quorum of the Board of Directors, which did not require a member vote for a sub-5% increase.

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Conclusion of Law and Final Order

The ALJ reached the following conclusions regarding the prevailing party and required remedies:

Determination of Prevailing Party

Although the Association prevailed on several individual counts (such as the 30-day notice of assessment and the 5% cap on increases), the Petitioner was designated the prevailing party. The ALJ cited the Petitioner’s success on “substantial issues,” specifically:

1. The failure to perform mandatory independent annual audits.

2. The failure to provide access to records within the statutory 10-day timeframe.

3. The failure to maintain complete corporate records.

Mandatory Relief

Under A.R.S. § 41-2198.02, the Association was ordered to:

• Document Production: Provide, at no expense to the Petitioner, copies of all previously requested documents within 10 days of the order.

• Reimbursement: Pay the Petitioner $2,000.00 to reimburse his filing fee within 40 days.

• Statutory Compliance: Comply with all provisions of the CC&Rs, Bylaws, and state statutes previously found to be in violation.

Civil Penalties and Administrative Limits

The ALJ declined to impose civil penalties, stating they were not warranted by the particular facts of the case. Furthermore, the ALJ noted that specific directives requested by the Petitioner regarding how the Association should act in the future were outside the scope of the ALJ’s authority.

Study Guide: Administrative Law Case No. 08F-H088006-BFS

This study guide examines the administrative law proceedings and ultimate decision regarding the dispute between William W. Kayser and the Barclay Place Homeowners Association. The document focuses on the legal standards, findings of fact, and conclusions of law presented during the May 2008 hearing.

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Part 1: Short-Answer Quiz

Instructions: Answer the following questions using 2-3 sentences based on the information provided in the source text.

1. What was the primary conflict regarding the Association’s 2006 annual audit?

2. Why were Items 1 and 2 of the original Petition ruled to be outside the scope of the hearing?

3. What did the Administrative Law Judge (ALJ) conclude regarding the HOA’s obligation to provide documents within a specific timeframe?

4. How did the management company, R & R Management, define its responsibility toward non-financial Association records?

5. What was the finding regarding the 30-day notice of annual assessments for 2006 and 2007?

6. Explain the dispute regarding the meeting held on November 23, 2007, at Robb & Stucky.

7. Under what conditions can the Association’s Board of Directors increase annual assessments without a vote from the general membership?

8. Why did the ALJ determine that the posting of meeting notices at mailboxes was legally insufficient for the November 23 meeting?

9. What was the legal definition of “preponderance of the evidence” used to decide this case?

10. Despite not prevailing on every item in his petition, why was William Kayser designated the “prevailing party”?

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Part 2: Answer Key

1. While the Association conducted monthly financial reviews, the Petitioner argued that the By-Laws required an audit by an outside public accounting firm. The ALJ found that the Association violated Article VII, Section 8(d) of the By-Laws by failing to secure this external audit.

2. These items pertained to a real estate conveyance that took place before the effective date of the enabling legislation (A.R.S. § 41-2198.01 et seq.). Consequently, the ALJ did not have the statutory authority to address those specific historical claims.

3. The ALJ ruled that the Association violated A.R.S. § 33-1805 by failing to provide certain requested financial documents within ten business days. It was established that unapproved copies were eventually provided, but the delay exceeded the legal requirement.

4. R & R Management stated it was contractually obligated to maintain financial records but was not required to keep a complete set of records for all other Association activities. They provided other documents to homeowners only as a “courtesy” rather than a contractual duty.

5. The ALJ found that the Petitioner failed to prove a violation of the notice requirements. Evidence from R & R Management’s records indicated that notice was sent, and the ALJ concluded the Association had indeed provided the required 30-day notice for those years.

6. The Petitioner claimed he saw a meeting notice that later disappeared and that there was no record of a meeting at the venue; however, a Board member testified the meeting did occur with a quorum present. The ALJ eventually concluded it was a “special meeting of members” rather than an annual or regular meeting.

7. The Board of Directors has the authority to set an assessment increase as long as the amount does not exceed 5% of the previous assessment. If the increase is within this 5% threshold, no vote of the Association members is required.

8. The ALJ found that while mailboxes were used for posting, this method did not satisfy the specific notice requirements for a “special meeting of members” as dictated by Article III, Section 3 of the By-Laws. The judge noted that special meetings have stricter procedural notice standards.

9. According to Black’s Law Dictionary, as cited in the case, it is evidence that is of “greater weight or more convincing” than the opposing evidence. It effectively means the facts sought to be proved are “more probable than not.”

10. The ALJ determined that Kayser prevailed on the “most substantial issues,” including the requirement for an annual audit and the failure of the Association to maintain and provide complete records. Because these issues were central to the dispute, he was entitled to a reimbursement of his $2,000 filing fee.

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Part 3: Essay Questions

Instructions: Use the case details to develop comprehensive responses to the following prompts.

1. Statutory vs. Internal Governance: Analyze the differences between the Association’s violations of Arizona Revised Statutes (A.R.S.) and violations of its own By-Laws and CC&Rs. How did the ALJ distinguish between these different legal authorities in his decision?

2. The Role of Management Companies: Discuss the complexities of Association record-keeping as evidenced by the testimony of R & R Management and the “lost boxes” mentioned by the Board of Directors. What are the potential legal risks when an HOA delegates record-keeping to a third party?

3. Quorum and Notice Procedures: Evaluate the procedural confusion surrounding the November 2007 meetings. Contrast the requirements for a “regular meeting,” a “special meeting,” and a “Board of Directors meeting” as they apply to member rights and Association authority.

4. Burden of Proof in Administrative Hearings: Examine the Petitioner’s burden to prove allegations by a “preponderance of the evidence.” Which claims did the Petitioner fail to prove, and what specific evidence (or lack thereof) led to those failures?

5. Administrative Remedies and Limitations: Discuss the limits of the ALJ’s authority regarding the relief requested by the Petitioner. Why were specific directions and civil penalties denied despite the findings of certain violations?

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Part 4: Glossary of Key Terms

Definition

A.A.C.

Arizona Administrative Code; the rules governing administrative proceedings.

A.R.S.

Arizona Revised Statutes; the state laws cited as the basis for many of the legal obligations in the case.

Administrative Law Judge; the official presiding over the hearing and issuing the decision.

Annual Audit

A formal examination of the Association’s financial records, required by the By-Laws to be performed by an outside public accounting firm.

Declaration of Covenants, Conditions and Restrictions; the primary governing documents that define the rights and obligations of Community members and the Association.

Enabling Legislation

The specific statutes (A.R.S. § 41-2198.01 et seq.) that grant the Office of Administrative Hearings the power to hear HOA disputes.

Financial Compilation

The monthly process of organizing financial records, performed by R & R Management, which the ALJ distinguished from a formal annual audit.

Petitioner

The party who files the petition or complaint; in this case, William W. Kayser.

Preponderance of the Evidence

The legal standard of proof in civil and administrative cases, meaning the evidence is more convincing than the opposition’s.

Prevailing Party

The participant in a legal proceeding who “wins” on the most substantial issues and may be entitled to fee reimbursements.

Quorum

The minimum number of members or directors required to be present at a meeting to make the proceedings and decisions valid.

Respondent

The party against whom a petition or complaint is filed; in this case, Barclay Place Homeowners Association.

Special Meeting

A meeting called for a specific purpose that is not part of the regular meeting schedule, often requiring more formal notice to members.

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End of Study Guide

The $2,000 Paper Trail: 5 Surprising Lessons from One Homeowner’s Fight Against His HOA

Living in a Homeowners Association (HOA) often feels like navigating a shadow government where transparency is treated as a nuisance rather than a mandate. For many, the governing documents are a dense thicket of “shalls” and “musts” that only seem to apply to the residents, while the Board operates behind a veil of opacity.

The case of William Kayser vs. Barclay Place Homeowners Association serves as a definitive David-vs-Goliath narrative, proving that a single homeowner armed with the law can force an association into compliance. When Mr. Kayser challenged his HOA before the Arizona Office of Administrative Hearings, Administrative Law Judge (ALJ) Lewis D. Kowal issued a decision that pulled back the curtain on the hidden legal obligations of these organizations. Here are five surprising lessons from that $2,000 legal victory—lessons that every homeowner should memorize.

1. “Lost in Boxes” is Not a Legal Defense

One of the most persistent excuses used to dodge transparency is the claim that records have simply vanished during leadership transitions. In this case, Board member Jack Van Royen testified that a previous Association president had “boxed up documents” and the current leadership was unable to locate them.

As a matter of corporate governance, this is an unacceptable breach of fiduciary continuity. An HOA is a legal entity with a statutory mandate to maintain a historical record of its operations, regardless of who occupies the Board seats. Leadership changes do not reset the clock on these obligations. It was only after the legal pressure of a hearing that the Association suddenly promised to make a “concerted effort” to find the missing files—a clear admission that accountability only arrives when a judge is watching.

2. When an “Audit” Isn’t Actually an Audit

There is a massive distinction between internal financial “compilations” and a true independent audit. Kevin Young of R&R Management testified that his firm prepared monthly financial records and that a CPA, Andrew Carr, reviewed them. However, Young’s testimony was riddled with contradictions regarding whether Carr was an “in-house” accountant or a truly independent third party.

ALJ Kowal’s ruling sharpened the focus on Bylaws, Article VII, Section 8(d), which requires an annual audit to be performed by an “outside public accounting firm.” The Association’s attempt to blur the lines by presenting management-led compilations as a substitute for professional oversight was a failure of transparency. For homeowners, the lesson is clear: internal reviews by the very people managing the money are not a substitute for the procedural safeguards of an external audit.

3. The 10-Day Clock for Transparency

Under A.R.S. § 33-1805, Arizona associations have a strict 10-business-day window to provide requested documents to members. In this case, Mr. Kayser’s requests for bank statements and corporate records were met with delays and excuses.

Perhaps the most common stall tactic used by HOAs is the claim that financial records cannot be shared because they are “unapproved” by the Board. ALJ Kowal effectively dismantled this defense. The statutory right to inspect records is not contingent upon the Board’s final “stamp of approval.” Transparency laws are designed to grant members access to the raw data of their community’s operations, not just the sanitized versions the Board chooses to release.

4. Mailbox Postings Don’t Equal Legal Notice

A central dispute in this case involved a November 23, 2007 meeting where the Board acted to increase assessments. The Association claimed they satisfied notice requirements by posting announcements at the community mailboxes 48 hours in advance.

ALJ Kowal ruled this was legally insufficient. Because a previous meeting lacked a quorum, the November 23 gathering was classified as a “special meeting of members” under Bylaws, Article III, Section 3. This classification carries specific notice requirements that a mere mailbox posting cannot satisfy. Furthermore, the “scavenger hunt” nature of this meeting was highlighted by the fact that it was held at a Robb & Stucky conference room in Scottsdale, yet Mr. Kayser testified that the store had no record of the meeting and he saw no evidence of it occurring when he arrived. Strict adherence to notice procedures is a protection for the members, not a suggestion for the Board.

5. You Don’t Have to Win Every Count to Win the Case

The most significant takeaway for any homeowner considering legal action is the definition of a “prevailing party.” Numerically, Mr. Kayser lost a majority of his claims. For instance, the ALJ found the Association did not violate CC&R Article IV, Section 3 because the assessment increase remained under the 5% threshold that would have required a member vote.

However, ALJ Kowal ruled that winning on “substantial issues”—specifically the failure to conduct an outside audit and the failure to provide record access—outweighed the losses on minor technicalities. This is a critical distinction: you don’t need a perfect scorecard to hold your HOA accountable.

The court ordered the Association to reimburse that $2,000 fee within 40 days. This serves as a powerful deterrent against HOA non-compliance, proving that a Board’s refusal to follow its own Bylaws can be an expensive mistake.

Conclusion: The Power of Accountability

The Kayser vs. Barclay Place case proves that Bylaws and State Statutes are the bedrock of community governance, not mere “best practices” to be ignored when convenient. When a Board fails in its fiduciary duty to maintain records or follow notice procedures, it isn’t just a clerical error—it is a violation of the law.

Real accountability begins when homeowners demand the transparency they are legally owed. Your governing documents are your greatest weapon in ensuring your Association serves its members rather than its own interests.

Final Ponder Point: If you asked for your community’s last external audit tomorrow, would your board provide a report or an excuse?

Case Participants

Petitioner Side

  • William W. Kayser (Petitioner)
    Barclay Place Community
    Appeared on his own behalf

Respondent Side

  • Heather A. Fazio (Respondent Attorney)
    Doyle, Berman, Murdy, P.C.
  • Kevin Young (Property Manager/Witness)
    R & R Management Company
    Testified regarding financial records and association management
  • Denise Lehn (Accountant)
    R & R Management Company
    Oversees financials for the Association
  • Andrew Carr (CPA)
    Reviews and audits financial records monthly
  • Jack Van Royen (Board Member/Witness)
    Barclay Place Homeowners Association Board
  • Bonnie Braun (Board Member)
    Barclay Place Homeowners Association Board
    Present at Nov 23, 2007 meeting
  • Pamela Nicita (Board Member)
    Barclay Place Homeowners Association Board
    Present at Nov 23, 2007 meeting

Neutral Parties

  • Lewis D. Kowal (ALJ)
    Office of Administrative Hearings
  • Robert Barger (Agency Director)
    Department of Fire, Building and Life Safety
    Listed on mailing distribution
  • Debra Blake (Agency Staff)
    Department of Fire, Building and Life Safety
    Listed on mailing distribution

Waugaman, Nancy -v- Troon Village Master Associaton

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Case Summary

Case ID 07F-H067029-BFS
Agency Department of Fire, Building and Life Safety
Tribunal Office of Administrative Hearings
Decision Date 2007-08-13
Administrative Law Judge Michael K. Carroll
Outcome The ALJ vacated the Board's Resolution which interpreted the Declaration's amendment provision (Section 11.02) to require only 80% of voting members present rather than 80% of total membership. Consequently, amendments passed under this new interpretation were vacated. Claims regarding open meeting notice and records formats were denied, but Petitioner was awarded full reimbursement of filing fees.
Filing Fees Refunded $2,000.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Nancy Waugaman Counsel —
Respondent Troon Village Master Association Counsel Carrie Smith and Jason Smith

Alleged Violations

A.R.S. §33-1804(C)
A.R.S. §33-1804(A)
Declaration Section 11.02; Section 14.01
A.R.S. §33-1805

Outcome Summary

The ALJ vacated the Board's Resolution which interpreted the Declaration's amendment provision (Section 11.02) to require only 80% of voting members present rather than 80% of total membership. Consequently, amendments passed under this new interpretation were vacated. Claims regarding open meeting notice and records formats were denied, but Petitioner was awarded full reimbursement of filing fees.

Key Issues & Findings

Failure to provide notice of executive session

Petitioner argued the Board failed to notice an executive session held prior to a regular meeting.

Orders: ALJ found no statutory or governing document requirement to notice executive sessions.

Filing fee: $500.00, Fee refunded: Yes

Disposition: respondent_win

Improper subject matter for executive session

Petitioner alleged the Resolution regarding voting interpretation should have been discussed in an open meeting.

Orders: ALJ found the discussion involved legal advice regarding pending litigation, which is permitted in closed session.

Filing fee: $500.00, Fee refunded: Yes

Disposition: respondent_win

Invalid interpretation of voting requirements

Board passed a resolution interpreting '80% of total voting power' to mean 80% of votes cast at a meeting, then passed amendments under this lower threshold.

Orders: The Board's Resolution and all subsequent Declaration amendments were vacated.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Denial of records in workable format

Petitioner requested mailing list in label format; Respondent initially provided spreadsheet.

Orders: ALJ found no violation as records were made available.

Filing fee: $500.00, Fee refunded: Yes

Disposition: respondent_win

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Decision Documents

07F-H067029-BFS Decision – 173903.pdf

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Administrative Law Judge Decision: Waugaman v. Troon Village Master Association

Executive Summary

This briefing document summarizes the findings and legal conclusions from the Office of Administrative Hearings (Case No. 07F-H067029-BFS) regarding a dispute between Nancy Waugaman (Petitioner) and the Troon Village Master Association (Respondent).

The core of the dispute involved a Board resolution passed in October 2006 that fundamentally altered the voting requirements for amending the Association’s Declaration of Covenants, Conditions and Restrictions (CC&Rs). By “interpreting” the Declaration’s requirement for an 80% affirmative vote of the total voting power to mean 80% of those voting at a meeting where a quorum is present, the Board lowered the threshold for amendments from 1,058 votes to as few as 106 votes.

The Administrative Law Judge (ALJ) ultimately ruled that the Board exceeded its authority. The decision concluded that the Declaration was not ambiguous and that the Board’s “interpretation” was an invalid attempt to circumvent clear contractual language. Consequently, the Board’s resolution and all subsequent amendments passed under the new interpretation were vacated.

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Case Overview and Factual Background

Parties and Governance

• Petitioner: Nancy Waugaman, a member of the Association.

• Respondent: Troon Village Master Association, a planned community consisting of 1,322 members.

• Governing Documents: The Association is governed by a Declaration of Covenants, Conditions and Restrictions (Declaration), Articles of Incorporation, and Bylaws.

The Disputed Board Resolution

On October 16, 2006, the Board met in an executive session with legal counsel. During this session, the Board passed a resolution to “interpret” Section 11.02 of the Declaration.

Provision

Original Requirement (Section 11.02)

Board’s New Interpretation

Voting Threshold

80% of the total voting power in the Association.

80% of the members voting (in person or by absentee ballot) at a meeting.

Practical Impact

Required a minimum of 1,058 affirmative votes (80% of 1,322).

Required as few as 106 affirmative votes (80% of a 10% quorum).

Post-Resolution Actions

Following this resolution, the Board held a Special Meeting and passed several amendments to the Declaration, including:

• Elimination of “tract” voting.

• Elimination of fee assessments for “tracts.”

• Creation of staggered terms for Board members.

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Legal Analysis of Key Issues

1. Validity of the Executive Session

The Petitioner challenged the Board’s decision to pass the resolution during a closed executive session, alleging improper notice and an improper subject for a closed meeting.

• Notice Requirements: The ALJ found that neither A.R.S. § 33-1804(C) nor the Association’s Bylaws specifically require notice of an executive session held in conjunction with a properly noticed regular meeting. Furthermore, failure to provide notice does not inherently invalidate Board actions.

• Subject Matter: A.R.S. § 33-1804(A)(1) allows executive sessions for “legal advice from an attorney.” The Board argued the session was intended to discuss pending litigation and future legal strategies. The ALJ ruled there was insufficient evidence to prove the Board acted outside its authority by discussing the resolution in this context, as it was reasonably related to avoiding future legal entanglements.

2. Authority to Interpret the Declaration

The Board relied on Section 14.01 of the Declaration, which grants it the “exclusive right to construe and interpret” the provisions of the Declaration.

• The “Interpretation” vs. “Nullification” Standard: The ALJ determined that the authority to “interpret” (to clarify meaning) or “construe” (to analyze grammatical structure) implies that the text is not already self-explanatory.

• Implicit Limits: The ALJ ruled that if the Board could assign any meaning to any provision, they could essentially nullify any part of the Declaration. This was deemed contrary to the intent of the drafters. The decision noted that the Board cannot use Section 14.01 to “ascribe a different meaning” to clear, self-evident provisions.

3. Ambiguity of Section 11.02

The Association argued that Section 11.02 was ambiguous because it included the phrase “at a meeting,” suggesting the 80% threshold applied only to those present.

• The “Cardinal Rule” of Construction: The ALJ applied the principle that every part of a contract must be given effect.

• The Phrase “In the Association”: The ALJ found that the Association’s interpretation rendered the phrase “in the Association” superfluous. If the 80% requirement only applied to those at a meeting, there would have been no need for the qualifying language “in the Association.”

• Conclusion on Clarity: The ALJ found Section 11.02 to be “not ambiguous on its face.” Its meaning was clear to all parties, including the Board, prior to the 2006 resolution.

4. Practical Necessity vs. Contractual Reliance

The Association argued that the high voting threshold (80% of all members) made it virtually impossible to update the Declaration to reflect modern laws and circumstances, citing four failed attempts since 2005.

• ALJ Finding: While acknowledging that associations should be wary of overly strenuous amendment requirements, the ALJ emphasized that the Declaration is a contract upon which all 1,322 members have a right to rely. The Board’s interpretation was a “dramatic change” that allowed a tiny fraction of the membership (8.01%) to alter the contract governing the entire community.

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Secondary Issue: Mailing List Formats

The Petitioner also alleged a violation of A.R.S. § 33-1805 because the Association initially provided the membership mailing list in a “spreadsheet” format rather than the “label” format requested.

• Ruling: The ALJ found no violation. Neither state law nor community documents require the Association to provide records in a specific format, only that they be made “reasonably available.”

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Final Order and Conclusions

The Administrative Law Judge issued the following orders:

1. Vacation of Resolution: The Board’s Resolution of October 16, 2006, interpreting Section 11.02, is vacated.

2. Vacation of Amendments: All amendments to the Declaration passed after the October 2006 resolution that were based on the 80%-of-voters threshold (rather than 80% of total membership) are vacated.

3. Financial Restitution: The Respondent is ordered to reimburse the Petitioner for the filing fee in the amount of $2,000.00.

Decision Status: This order is the final administrative decision and is not subject to a request for rehearing under A.R.S. § 41-2198.04(A).

Study Guide: Nancy Waugaman v. Troon Village Master Association

This study guide provides a comprehensive review of the administrative hearing between Nancy Waugaman and the Troon Village Master Association (No. 07F-H067029-BFS). It examines the legal disputes regarding community governance, the interpretation of association declarations, and the limits of a Board of Directors’ authority under Arizona law.

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Short-Answer Quiz

Instructions: Answer the following ten questions in two to three sentences based on the source context provided.

1. What was the central dispute regarding the amendment of the Troon Village Declaration?

2. How did the Board’s Resolution on October 16, 2006, change the voting threshold for amendments?

3. What was the numerical impact of the Board’s new interpretation of the voting requirements?

4. Under what legal justification did the Board claim they could meet in an executive session?

5. What was the Petitioner’s argument regarding the notice of the executive session?

6. How did the Administrative Law Judge (ALJ) rule on the legality of the Board’s executive session?

7. What authority did Article 14, Section 14.01 of the Declaration grant to the Board?

8. How did the ALJ use the principle from Aldous v. Intermountain Building and Loan Association of Arizona to evaluate Section 11.02?

9. What was the Petitioner’s complaint regarding the Association’s mailing list, and how did the ALJ respond?

10. What were the three primary components of the ALJ’s final Order?

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Answer Key

1. What was the central dispute regarding the amendment of the Troon Village Declaration? The dispute centered on whether the Board of Directors had the legal authority to unilaterally reinterpret the Declaration’s voting requirements. The Board attempted to lower the threshold for passing amendments, which Nancy Waugaman challenged as a violation of state statutes and community documents.

2. How did the Board’s Resolution on October 16, 2006, change the voting threshold for amendments? The Resolution interpreted Section 11.02 to mean that amendments only required an affirmative vote of 80% of members voting at a meeting, rather than 80% of the entire membership. This interpretation allowed amendments to pass based on a much smaller pool of participating members.

3. What was the numerical impact of the Board’s new interpretation of the voting requirements? The interpretation effectively reduced the number of affirmative votes required to change the Declaration from a minimum of 1,058 votes (80% of all 1,322 members) to a minimum of 106 votes. This lower number represented 80% of the 132 members needed to constitute a 10% quorum.

4. Under what legal justification did the Board claim they could meet in an executive session? The Board claimed the executive session was convened to discuss pending litigation with its attorneys and to obtain legal advice on how to avoid future legal problems. A.R.S. §33-1804A(1) allows for closed sessions specifically for “legal advice from an attorney for the board or the association.”

5. What was the Petitioner’s argument regarding the notice of the executive session? Petitioner Nancy Waugaman argued that the meeting was not properly noticed under A.R.S. §33-1804(C) because the public notice for the regular meeting failed to mention the executive session occurring immediately prior. She contended that the lack of notice and opportunity for membership discussion invalidated the Resolution passed during that session.

6. How did the Administrative Law Judge (ALJ) rule on the legality of the Board’s executive session? The ALJ ruled that there was no specific requirement in the governing documents or A.R.S. Title 33 to provide notice of an executive session. Furthermore, the judge found that the discussion was reasonably related to pending litigation and legal advice, falling within the scope of authority granted by A.R.S. §33-1804A(1).

7. What authority did Article 14, Section 14.01 of the Declaration grant to the Board? This section granted the Board the “exclusive right to construe and interpret the provisions of this Declaration.” It specified that, absent a court adjudication to the contrary, the Board’s interpretation would be final, conclusive, and binding on all persons and property bound by the Declaration.

8. How did the ALJ use the principle from Aldous v. Intermountain Building and Loan Association of Arizona to evaluate Section 11.02? The ALJ applied the “cardinal rule” that every part of a contract must be given effect, noting that the phrase “in the Association” would be rendered superfluous under the Board’s interpretation. To give the phrase meaning, the judge concluded the drafters intended that 80% of the entire membership must vote affirmatively for an amendment.

9. What was the Petitioner’s complaint regarding the Association’s mailing list, and how did the ALJ respond? The Petitioner alleged the Association violated A.R.S. §33-1805 by providing the mailing list in a spreadsheet format rather than a “label” format. The ALJ dismissed this, stating that the law only requires records to be “reasonably available” for examination and does not mandate that the Association provide information in a specific format requested by a member.

10. What were the three primary components of the ALJ’s final Order? The ALJ ordered the vacation of the Board’s October 16, 2006, Resolution and any subsequent amendments to the Declaration based on that Resolution. Additionally, the Respondent was ordered to reimburse the Petitioner for her $2,000.00 filing fee.

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Essay Questions

Instructions: These questions are designed for in-depth analysis. Use the facts and legal reasoning provided in the case to develop your arguments.

1. The Limits of Interpretation: Analyze the ALJ’s reasoning regarding the definitions of “construe” and “interpret.” How does the judge distinguish between a legitimate interpretation of an ambiguous provision and an unauthorized “nullification” of a clear provision?

2. Contractual Reliance vs. Community Efficiency: The Board argued that without their Resolution, amending the Declaration was “virtually impossible,” hindering the community’s ability to adapt. Contrast this argument with the ALJ’s focus on the Declaration as a contract upon which “each of those individual owners had a right to rely.”

3. Statutory Compliance in Executive Sessions: Discuss the tension between A.R.S. §33-1804A (which allows for private legal advice) and the general requirement for open meetings in planned communities. At what point does a board’s use of an executive session become an invalid “guise” to shield business from membership scrutiny?

4. Grammatical Construction in Legal Documents: Detail the linguistic analysis the ALJ used to determine that Section 11.02 was not ambiguous. Specifically, explain why the inclusion of the phrase “in the Association” was the deciding factor against the Board’s interpretation of “total voting power.”

5. The Role of the Administrative Law Judge: Based on this decision, evaluate the extent of an ALJ’s power to intervene in the internal governance of a homeowners association. What specific actions was the ALJ able to take, and what legal standards (such as “preponderance of the evidence”) guided these decisions?

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Glossary of Key Terms

Definition

A.R.S. §33-1804

The Arizona Revised Statute governing board meetings in planned communities, including notice requirements and the criteria for executive sessions.

A.R.S. §33-1805

The Arizona Revised Statute requiring that financial and other records of an association be made reasonably available for examination by members.

Articles of Incorporation

One of the primary governing documents of the Association, establishing it as a legal entity.

Bylaws

The rules adopted by an association to govern its internal administration and management.

Construe

To analyze the grammatical structure of a clause or sentence to determine the use and function of each word; to explain or interpret meaning.

Declaration (CC&Rs)

The Declaration of Covenants, Conditions, and Restrictions; the foundational contract governing a planned community.

Executive Session

A closed-door meeting of a Board of Directors, permitted under specific circumstances such as discussing legal advice or pending litigation.

Interpret

To give or make clear the meaning of something that is not self-explanatory or self-evident.

Petitioner

The party who initiates a petition or legal action; in this case, Nancy Waugaman.

Quorum

The minimum number of members (in this case, 10% of total voting power) required to be present at a meeting to legally conduct business.

Respondent

The party against whom a legal action is brought; in this case, Troon Village Master Association.

Tract Voting

A voting system (later challenged) where votes and fees were allotted to associations based on specific tracts of land rather than individual improved lots.

Vacate

To cancel or render a previous legal action, resolution, or amendment null and void.

When “Interpretation” Becomes Rewriting: 5 Crucial Lessons from the Troon Village Legal Battle

For most homeowners, the governing documents of a Homeowners Association (HOA) are the “fine print” of neighborhood life—a thick stack of papers signed at closing and rarely revisited. However, these documents are the legal bedrock of the community, acting as a binding contract between the association and its members.

A recent masterclass in board overreach involving the Troon Village Master Association and homeowner Nancy Waugaman serves as a stark cautionary tale. When the Troon Village Board attempted to “interpret” its way around strict voting requirements, the resulting legal battle exposed a critical tension: the Board’s desire for administrative efficiency versus the homeowners’ vested contractual rights. As an HOA governance specialist, I see this frequently—boards treating their Declarations as living documents they can mold at will. The Administrative Law Judge (ALJ), however, recently dismantled that logic in a ruling that every homeowner should keep in their back pocket.

Here are five crucial lessons from this landmark dispute.

1. The 90% Math Trick: How 1,058 Votes Became 106

The core of this dispute centered on a bold piece of mathematical sleight of hand. Section 11.02 of the Troon Village Declaration required an affirmative vote of “at least eighty percent (80%) of the total voting power in the Association” to pass an amendment. In a community of 1,322 members, that threshold is high: 1,058 homeowners must agree to any change.

Claiming this was too difficult to achieve, the Board passed a resolution to “interpret” the math differently. They argued that the 80% threshold should apply only to those who actually cast a ballot at a meeting, provided a quorum was met. Since the bylaws defined a quorum as just 10% of the membership (132 people), the Board’s new math meant that as few as 106 people could change the rules for everyone. As the Board’s resolution stated:

This interpretation effectively stripped away 90% of the required voting power, allowing a tiny fraction of the community—approximately 8%—to alter the governing documents for the other 92%.

2. The “Ambiguity” Trap and the Dictionary Shield

To justify this move, the Board invoked Article 14, Section 14.01 of the Declaration, which gave them the “exclusive right to construe and interpret” the provisions of the document. They argued the phrase “at a meeting” made the voting requirement ambiguous.

The Court was not impressed. The Judge utilized a dictionary-based analysis to remind the Board what “interpret” actually means. Relying on Webster’s Collegiate Dictionary, the Judge noted that to “construe” is “to analyze the grammatical structure of a clause,” and to “interpret” is to “give the meaning” or “make clear.”

The logic is simple: you cannot “clarify” something that is already self-evident. By looking at the plain language, the Judge found that “total voting power in the Association” clearly meant the entire membership. The ruling established a vital safeguard: if a Board can simply “interpret” clear language out of existence, the entire Declaration becomes a meaningless piece of paper. As the Judge reasoned:

3. The Executive Session Shield: A Legal Blind Spot

Perhaps most concerning was how this resolution was passed. The Board met in a closed “executive session” with attorneys, ostensibly to discuss a separate, pending lawsuit. Under the guise of receiving “legal advice” regarding that litigation, they passed the voting resolution behind closed doors.

This highlights a significant “blind spot” for homeowners in state statutes. While A.R.S. §33-1804A allows boards to meet privately for legal advice, the Judge noted that these exceptions should not be used to shield important business from membership scrutiny.

However, there is a catch: under A.R.S. §33-1804C, the failure to provide specific notice of an executive session does not, by itself, invalidate the Board’s action. This means that while the Board’s logic was eventually overturned on its merits, the act of passing major policy shifts in private is often technically shielded from procedural invalidation. It is a reminder that transparency is rarely volunteered; it must be demanded.

4. Governing Documents are Contracts, Not Suggestions

The Board’s primary defense was one of “efficiency.” They argued that the high voting threshold made it “virtually impossible” to update the Declaration, citing four failed attempts to pass amendments despite what they called “overwhelming community support.”

In the world of HOA governance, “efficiency” is often just shorthand for “avoiding accountability.” The Judge’s ruling was a victory for the law of contracts, asserting that the 1,322 members have a “right to rely” on the terms of the Declaration. Because the language of the voting requirement was clear, it created a vested contractual right.

This takeaway is essential: an HOA is not a laboratory for a Board’s social or administrative experiments. When a homeowner buys into a community, they are signing a contract. A board’s preference for a more “workable” format cannot override the bargained-for rights of the individual owners.

5. “Workable Format” Does Not Mean Your Preferred Format

While Petitioner Waugaman won the war, she lost a minor skirmish regarding transparency that serves as a reality check for community activists. She complained that when she requested the Association’s mailing list, she was provided a spreadsheet rather than the “label format” she preferred for her own mailings.

The Judge clarified that under A.R.S. §33-1805, associations must make records “reasonably available” and provide photocopies. However, they are generally not required to perform extra administrative labor to format data for a petitioner’s specific needs. The takeaway? If the Board gives you the data in a standard digital format like a spreadsheet, they have likely met their legal obligation, even if it adds extra steps to your advocacy efforts.

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A Final Thought for the Modern Homeowner

The Troon Village battle ended with a decisive series of “hard wins” for the homeowners. The Judge ordered the Board’s resolution vacated, invalidated every amendment passed under the illegal “106-vote” rule, and ordered the Association to reimburse Waugaman’s $2,000 filing fee.

This case serves as a powerful reminder that while Board members may hold the keys to the meeting room, they do not hold the power to rewrite your contract in the dark.

If your Board claims the “exclusive right to interpret” your community’s laws, how much of your contract is actually set in stone, and how much is merely waiting for the Board’s next “interpretation”?

Case Participants

Petitioner Side

  • Nancy Waugaman (Petitioner)
    Also listed as Nancy J. Waugaman

Respondent Side

  • Carrie Smith (attorney)
    Carpenter, Hazelwood, Delgado & Wood, PLC
    Also listed as Carrie H. Smith
  • Jason Smith (attorney)
    Carpenter, Hazelwood, Delgado & Wood, PLC

Neutral Parties

  • Michael K. Carroll (ALJ)
    Office of Administrative Hearings
  • Robert Barger (Agency Official)
    Department of Fire Building and Life Safety
    Listed as H/C
  • Joyce Kesterman (Agency Contact)
    Department of Fire Building and Life Safety

Deboer, Richard A. -v- Turtle Rock III Homeowners Association

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Case Summary

Case ID 07F-H067007-BFS
Agency DFBLS
Tribunal OAH
Decision Date 2007-01-23
Administrative Law Judge Daniel G. Martin
Outcome The ALJ determined the Association properly adopted the amended Declaration with the requisite 75% vote, denying the Petitioner's challenge to the amendments. However, the ALJ ruled the Association violated A.R.S. § 33-1805 by withholding ballots and surveys, ordering their production. The Petitioner was not deemed the prevailing party for fee reimbursement purposes because he lost the more significant issue regarding the Declaration.
Filing Fees Refunded $550.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Richard A. DeBoer Counsel —
Respondent Turtle Rock III Homeowners Association Counsel —

Alleged Violations

Declaration, Article X, Section 3
A.R.S. § 33-1805

Outcome Summary

The ALJ determined the Association properly adopted the amended Declaration with the requisite 75% vote, denying the Petitioner's challenge to the amendments. However, the ALJ ruled the Association violated A.R.S. § 33-1805 by withholding ballots and surveys, ordering their production. The Petitioner was not deemed the prevailing party for fee reimbursement purposes because he lost the more significant issue regarding the Declaration.

Why this result: Petitioner failed to prove the Association violated the Declaration or acted in bad faith regarding the amendments; the fee refund was denied because Petitioner did not prevail on the significant issue.

Key Issues & Findings

validity of amended Declaration

Petitioner alleged the Board improperly adopted amendments to the Declaration that fundamentally changed governance and operating structure.

Orders: Petition denied regarding the validity of the Declaration amendments.

Filing fee: $550.00, Fee refunded: No

Disposition: petitioner_loss

records request (ballots and surveys)

Association refused to produce ballots and surveys claiming confidentiality under A.R.S. § 16-624(A).

Orders: Association ordered to make ballots and surveys available for inspection and copying within thirty days.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_win

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Decision Documents

07F-H067007-BFS Decision – 160289.pdf

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07F-H067007-BFS Decision – 160289.pdf

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Administrative Law Judge Decision: DeBoer v. Turtle Rock III Homeowners Association

Executive Summary

This briefing document analyzes the administrative law decision in the matter of Richard A. DeBoer v. Turtle Rock III Homeowners Association (Case No. 07F-H067007-BFS). The case centers on a dispute regarding the amendment of a residential development’s governing documents and a member’s right to access association records.

The Administrative Law Judge (ALJ) addressed two primary allegations:

1. That the Association’s Board of Directors exceeded its authority and acted in bad faith during the adoption of a new Declaration of Covenants, Conditions, and Restrictions (the “Declaration”).

2. That the Association violated Arizona law (A.R.S. § 33-1805) by refusing to provide the petitioner with copies of ballots and survey forms related to the amendment process.

The ALJ concluded that the Association did not violate the Declaration or exceed its authority in the amendment process, as it followed the prescribed voting thresholds. However, the Association did violate state law by withholding records based on a misapplication of state election statutes. Consequently, the Association was ordered to produce the requested ballots and surveys, though the Petitioner was not deemed the prevailing party for the purpose of recovering filing fees.

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Background and Context

The Turtle Rock III subdivision, located in Phoenix, Arizona, consists of 76 lots and associated common areas. Responsibility for its maintenance is vested in the Turtle Rock III Homeowners Association (the “Association”).

In 2005, the Association’s Board formed an ad hoc committee to revise the Declaration, which was considered outdated. A primary driver for these revisions was a provision that required road repair assessments to be spent in the same year they were levied—a requirement that created financial hardship for the Association.

Timeline of Document Revision and Approval

• July–September 2005: Ad hoc committee reviews the Declaration and Association Bylaws.

• October 2005: Draft revisions are distributed to lot owners for comment via a one-page survey.

• November 2005: The Board receives 54 responses, which it characterizes as “disappointing” but sufficient to proceed with legal review.

• February–April 2006: The law firm Ekmark & Ekmark reviews and substantively modifies the drafts.

• June 9, 2006: Final documents and ballots are distributed to lot owners.

• July 2006: Voting concludes.

• August 31, 2006: The Association records the amended Declaration.

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Detailed Analysis of Core Themes

1. Validity of the Amendment Process

The Petitioner, Richard DeBoer, argued that the Board acted in bad faith and fundamentally changed the governance of the Association in its own favor. The ALJ rejected this argument, focusing on procedural compliance rather than the Petitioner’s substantive disagreements with the document’s content.

Legal Threshold for Amendment According to Article X, Section 3 of the original Declaration, amendments after the initial twenty-year period require an instrument signed by “not less than 75 percent of the lot owners.”

Voting Results The Association received 62 ballots out of a possible 76. The results were as follows:

Vote Type

Favoring Adoption

58 (one filed under protest)

Opposed

Total Ballots Received

Total Possible Lots

The ALJ determined that even after discounting the protest ballot, the 57 favoring votes met the 75% threshold required for passage. The Board was found to have kept owners apprised of activities and provided a full and fair opportunity for document review.

2. Access to Association Records

A significant portion of the dispute involved the Association’s refusal to provide the Petitioner with the actual ballots and surveys from the vote.

The Association’s Defense The Association withheld the documents on the grounds of confidentiality, specifically citing A.R.S. § 16-624(A). This statute requires that ballots from state and federal elections be kept unopened in a secure facility and eventually destroyed.

The ALJ’s Finding The ALJ ruled that the Association’s reliance on A.R.S. § 16-624(A) was misplaced. That statute applies only to elections conducted by the state or its political subdivisions, not to private balloting by a homeowners association. Instead, the Association was bound by A.R.S. § 33-1805, which states:

The ALJ found no legal authority supporting the Association’s decision to withhold the ballots and surveys.

3. Petitioner’s Substantive Concerns

While the ALJ ultimately ruled that the Petitioner’s concerns with the substance of the amendments were irrelevant to the legality of their adoption, the document records specific areas of disagreement. Mr. DeBoer “vehemently” disagreed with provisions including, but not limited to:

• The definitions of “common area,” “front landscape,” and “multiuse easement.”

• The Board’s authority to adopt rules, right of entry, and enforcement powers.

• Third-party rights to ingress and egress.

• Assessments for road repairs and architectural control.

• Restrictions on motorized vehicles, noise, and ownership.

The ALJ noted that while enforcement of these provisions might present future challenges, those challenges do not render the adoption process invalid.

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Conclusions of Law and Order

Legal Conclusions

1. Burden of Proof: The Petitioner bore the burden of proving violations by a preponderance of the evidence.

2. No Violation of Declaration: The Board followed Article X, Section 3 by obtaining the necessary 75% approval. The ALJ found no evidence of bad faith or exceeded authority.

3. Violation of A.R.S. § 33-1805: The Association unlawfully withheld records. Private HOA ballots are not exempt from member inspection under state election laws.

4. Prevailing Party Status: Under A.R.S. § 41-2198.02, a prevailing petitioner is entitled to a refund of the filing fee ($550.00). However, the ALJ determined that because the Petitioner lost on the “more significant” issue (the validity of the Declaration itself), he was not the prevailing party.

Final Order

The Administrative Law Judge issued the following orders:

• The Petitioner’s challenge to the validity of the amended Declaration was denied.

• The Petitioner’s challenge regarding the production of records was granted.

• Mandate: The Association was ordered to make the ballots and surveys from the vote available to the Petitioner for inspection and copying within thirty days of the order’s effective date (January 23, 2007).

Study Guide: DeBoer v. Turtle Rock III Homeowners Association

This study guide provides a comprehensive overview of the administrative hearing between Richard A. DeBoer and the Turtle Rock III Homeowners Association. It explores the legal disputes surrounding the amendment of community governing documents and the transparency requirements for association records.

Part I: Short-Answer Quiz

Instructions: Answer the following questions in 2–3 sentences, based strictly on the provided case text.

1. What primary issue led the Association’s Board of Directors to form an ad hoc committee to revise the Declaration in 2005? The Board formed the committee because the existing Declaration was outdated, specifically regarding road repair assessments. Under the original terms, assessments for road repairs had to be spent in the same year they were levied, which created a financial hardship due to the high cost of such repairs.

2. According to Article X, Section 3 of the Declaration, what is the specific requirement for amending the document after the first twenty-year period? After the initial twenty-year period, the Declaration may be amended by an instrument signed by no less than 75 percent of the lot owners. Additionally, any such amendment must be recorded with the county to be effective.

3. What were the three specific types of documents Mr. DeBoer requested from the Association in his October 19, 2006, letter? Mr. DeBoer requested copies of all ballots and retractions submitted for the approval of the Amended and Restated Declaration. He also requested all survey sheets submitted by members in response to the October 2005 Board letter and a copy of the current, approved Association Bylaws.

4. On what legal grounds did the Association initially refuse to produce the ballots and surveys to Mr. DeBoer? The Association argued that the ballots and surveys were confidential, relying on A.R.S. § 16-624(A), a state election statute. This statute requires election officers to keep ballot packages secure and unopened for a set period before destroying them.

5. Why did the Administrative Law Judge (ALJ) determine that A.R.S. § 16-624(A) was not applicable to this case? The ALJ found that the statute applies only to elections conducted by the state or its political subdivisions. It has no legal application to private balloting processes conducted by a homeowners association.

6. How did the ALJ address Mr. DeBoer’s concerns regarding the substance of the new amendments to the Declaration? The ALJ ruled that Mr. DeBoer’s disagreements with the content of the amendments were irrelevant to the legal determination of the case. The hearing’s purpose was to evaluate the validity of the adoption process, not the merits of the specific rules or definitions established by the amendments.

7. What was the role of the law firm Ekmark & Ekmark in the amendment process? The firm was hired to review the draft revisions to the Declaration, Bylaws, and Articles of Incorporation between February and April 2006. They recommended substantive modifications based on changes in law and phrasing, and later provided a legal opinion that the Association had acted lawfully during the voting process.

8. How did the Association inadvertently waive its attorney-client privilege regarding the August 17, 2006, letter from its legal counsel? Although the letter was marked “Attorney-Client Privileged,” the Association offered the document into evidence during the hearing. By voluntarily introducing the letter as evidence, the Association was deemed to have waived the privilege.

9. Why was Mr. DeBoer denied the reimbursement of his $550.00 filing fee despite winning one of the issues in his petition? The ALJ concluded that Mr. DeBoer was not the “prevailing party” because he did not succeed on the most significant issue: the challenge to the validity of the Declaration’s adoption. Because the Board’s authority and the amendment process were upheld, the Petitioner did not meet the statutory requirement for fee recovery.

10. What was the final order regarding the production of documents? The ALJ ordered the Association to make the ballots and surveys from the Declaration vote available to Mr. DeBoer for inspection and copying. The Association was given thirty days from the effective date of the Order to comply.

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Part II: Answer Key

1. Committee Formation: The Board addressed outdated provisions, specifically a hardship caused by the requirement that road repair assessments be spent in the same year they were collected.

2. Amendment Requirement: Amendments require signatures from at least 75 percent of the lot owners after the first 20 years and must be recorded.

3. Requested Documents: 1) Ballots/retractions for the 2006 Declaration; 2) Survey sheets from October 2005; 3) Current Association Bylaws.

4. Refusal Grounds: The Board claimed confidentiality under A.R.S. § 16-624(A), which governs the handling of state and local election ballots.

5. Statute Inapplicability: The ALJ found that the cited election statute is restricted to public political subdivisions and does not apply to private entities like an HOA.

6. Substance vs. Process: The ALJ determined that personal disagreement with the rules is irrelevant as long as the process of adoption followed the Declaration’s legal requirements.

7. Ekmark & Ekmark’s Role: They provided legal review, recommended changes based on current law, and later issued an opinion affirming the legality of the Board’s actions.

8. Waiver of Privilege: The Association waived the privilege by choosing to offer the confidential legal letter as evidence during the hearing.

9. Filing Fee: Fee reimbursement is reserved for the prevailing party; the ALJ ruled that losing the challenge to the Declaration’s adoption meant DeBoer did not prevail on the primary issue.

10. Final Order: The Association must allow Mr. DeBoer to inspect and copy the requested ballots and surveys within thirty days.

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Part III: Essay Questions

1. The Ethics of Transparency: Analyze the conflict between the Board’s claim of confidentiality and the requirements of A.R.S. § 33-1805. Discuss why the law prioritizes member access to records like ballots and surveys in the context of a self-governing community.

2. The Amendment Process: Detail the steps taken by the Turtle Rock III Board from 2005 to 2006 to amend the Declaration. Evaluate whether the Board’s efforts to solicit feedback and provide drafts met the standards of “good faith” as discussed in the ALJ’s findings.

3. Legal Interpretation of Statutes: Compare the Association’s interpretation of A.R.S. § 16-624(A) with the ALJ’s interpretation. Explain the importance of statutory context and how misapplying a public election law to a private association can impact member rights.

4. The Burden of Proof: In administrative hearings, the petitioner bears the burden of proof by a “preponderance of the evidence.” Using the DeBoer case as an example, explain what this standard means and why the Petitioner failed to meet it regarding the validity of the Declaration.

5. Authority and Governance: Discuss the ALJ’s assertion that “disagreement… does not render invalid the manner in which [amendments] were adopted.” How does this distinguish between the legislative power of an HOA Board and the judicial review of their procedures?

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Part IV: Glossary of Key Terms

Definition

A.R.S. § 33-1805

The Arizona statute requiring homeowners associations to make financial and other records reasonably available for examination by members.

Ad Hoc Committee

A temporary committee formed for a specific purpose; in this case, to study and suggest revisions to the subdivision’s Declaration.

Administrative Law Judge (ALJ)

An official who presides over hearings and renders decisions for independent state agencies, such as the Office of Administrative Hearings.

Articles of Incorporation

The legal document that establishes the existence of a corporation—in this case, the Homeowners Association.

Bylaws

The internal rules and regulations that govern the administration and management of the Homeowners Association.

Declaration (CC&Rs)

The Declaration of Covenants, Conditions and Restrictions; the primary governing document that outlines the rights and obligations of property owners within a subdivision.

Gravamen

The essence or most serious part of a legal complaint or accusation.

Instrument

A formal legal document, such as a signed ballot or a recorded amendment.

Preponderance of the Evidence

A legal standard of proof meaning that a contention is “more probably true than not.”

Prevailing Party

The party in a lawsuit that wins on the main issues, often entitling them to certain legal remedies or fee reimbursements.

Subdivision

A tract of land divided into individual lots; here referring to the seventy-six lots of Turtle Rock III.

Study Guide: DeBoer v. Turtle Rock III Homeowners Association

This study guide provides a comprehensive overview of the administrative hearing between Richard A. DeBoer and the Turtle Rock III Homeowners Association. It explores the legal disputes surrounding the amendment of community governing documents and the transparency requirements for association records.

Part I: Short-Answer Quiz

Instructions: Answer the following questions in 2–3 sentences, based strictly on the provided case text.

1. What primary issue led the Association’s Board of Directors to form an ad hoc committee to revise the Declaration in 2005? The Board formed the committee because the existing Declaration was outdated, specifically regarding road repair assessments. Under the original terms, assessments for road repairs had to be spent in the same year they were levied, which created a financial hardship due to the high cost of such repairs.

2. According to Article X, Section 3 of the Declaration, what is the specific requirement for amending the document after the first twenty-year period? After the initial twenty-year period, the Declaration may be amended by an instrument signed by no less than 75 percent of the lot owners. Additionally, any such amendment must be recorded with the county to be effective.

3. What were the three specific types of documents Mr. DeBoer requested from the Association in his October 19, 2006, letter? Mr. DeBoer requested copies of all ballots and retractions submitted for the approval of the Amended and Restated Declaration. He also requested all survey sheets submitted by members in response to the October 2005 Board letter and a copy of the current, approved Association Bylaws.

4. On what legal grounds did the Association initially refuse to produce the ballots and surveys to Mr. DeBoer? The Association argued that the ballots and surveys were confidential, relying on A.R.S. § 16-624(A), a state election statute. This statute requires election officers to keep ballot packages secure and unopened for a set period before destroying them.

5. Why did the Administrative Law Judge (ALJ) determine that A.R.S. § 16-624(A) was not applicable to this case? The ALJ found that the statute applies only to elections conducted by the state or its political subdivisions. It has no legal application to private balloting processes conducted by a homeowners association.

6. How did the ALJ address Mr. DeBoer’s concerns regarding the substance of the new amendments to the Declaration? The ALJ ruled that Mr. DeBoer’s disagreements with the content of the amendments were irrelevant to the legal determination of the case. The hearing’s purpose was to evaluate the validity of the adoption process, not the merits of the specific rules or definitions established by the amendments.

7. What was the role of the law firm Ekmark & Ekmark in the amendment process? The firm was hired to review the draft revisions to the Declaration, Bylaws, and Articles of Incorporation between February and April 2006. They recommended substantive modifications based on changes in law and phrasing, and later provided a legal opinion that the Association had acted lawfully during the voting process.

8. How did the Association inadvertently waive its attorney-client privilege regarding the August 17, 2006, letter from its legal counsel? Although the letter was marked “Attorney-Client Privileged,” the Association offered the document into evidence during the hearing. By voluntarily introducing the letter as evidence, the Association was deemed to have waived the privilege.

9. Why was Mr. DeBoer denied the reimbursement of his $550.00 filing fee despite winning one of the issues in his petition? The ALJ concluded that Mr. DeBoer was not the “prevailing party” because he did not succeed on the most significant issue: the challenge to the validity of the Declaration’s adoption. Because the Board’s authority and the amendment process were upheld, the Petitioner did not meet the statutory requirement for fee recovery.

10. What was the final order regarding the production of documents? The ALJ ordered the Association to make the ballots and surveys from the Declaration vote available to Mr. DeBoer for inspection and copying. The Association was given thirty days from the effective date of the Order to comply.

——————————————————————————–

Part II: Answer Key

1. Committee Formation: The Board addressed outdated provisions, specifically a hardship caused by the requirement that road repair assessments be spent in the same year they were collected.

2. Amendment Requirement: Amendments require signatures from at least 75 percent of the lot owners after the first 20 years and must be recorded.

3. Requested Documents: 1) Ballots/retractions for the 2006 Declaration; 2) Survey sheets from October 2005; 3) Current Association Bylaws.

4. Refusal Grounds: The Board claimed confidentiality under A.R.S. § 16-624(A), which governs the handling of state and local election ballots.

5. Statute Inapplicability: The ALJ found that the cited election statute is restricted to public political subdivisions and does not apply to private entities like an HOA.

6. Substance vs. Process: The ALJ determined that personal disagreement with the rules is irrelevant as long as the process of adoption followed the Declaration’s legal requirements.

7. Ekmark & Ekmark’s Role: They provided legal review, recommended changes based on current law, and later issued an opinion affirming the legality of the Board’s actions.

8. Waiver of Privilege: The Association waived the privilege by choosing to offer the confidential legal letter as evidence during the hearing.

9. Filing Fee: Fee reimbursement is reserved for the prevailing party; the ALJ ruled that losing the challenge to the Declaration’s adoption meant DeBoer did not prevail on the primary issue.

10. Final Order: The Association must allow Mr. DeBoer to inspect and copy the requested ballots and surveys within thirty days.

——————————————————————————–

Part III: Essay Questions

1. The Ethics of Transparency: Analyze the conflict between the Board’s claim of confidentiality and the requirements of A.R.S. § 33-1805. Discuss why the law prioritizes member access to records like ballots and surveys in the context of a self-governing community.

2. The Amendment Process: Detail the steps taken by the Turtle Rock III Board from 2005 to 2006 to amend the Declaration. Evaluate whether the Board’s efforts to solicit feedback and provide drafts met the standards of “good faith” as discussed in the ALJ’s findings.

3. Legal Interpretation of Statutes: Compare the Association’s interpretation of A.R.S. § 16-624(A) with the ALJ’s interpretation. Explain the importance of statutory context and how misapplying a public election law to a private association can impact member rights.

4. The Burden of Proof: In administrative hearings, the petitioner bears the burden of proof by a “preponderance of the evidence.” Using the DeBoer case as an example, explain what this standard means and why the Petitioner failed to meet it regarding the validity of the Declaration.

5. Authority and Governance: Discuss the ALJ’s assertion that “disagreement… does not render invalid the manner in which [amendments] were adopted.” How does this distinguish between the legislative power of an HOA Board and the judicial review of their procedures?

——————————————————————————–

Part IV: Glossary of Key Terms

Definition

A.R.S. § 33-1805

The Arizona statute requiring homeowners associations to make financial and other records reasonably available for examination by members.

Ad Hoc Committee

A temporary committee formed for a specific purpose; in this case, to study and suggest revisions to the subdivision’s Declaration.

Administrative Law Judge (ALJ)

An official who presides over hearings and renders decisions for independent state agencies, such as the Office of Administrative Hearings.

Articles of Incorporation

The legal document that establishes the existence of a corporation—in this case, the Homeowners Association.

Bylaws

The internal rules and regulations that govern the administration and management of the Homeowners Association.

Declaration (CC&Rs)

The Declaration of Covenants, Conditions and Restrictions; the primary governing document that outlines the rights and obligations of property owners within a subdivision.

Gravamen

The essence or most serious part of a legal complaint or accusation.

Instrument

A formal legal document, such as a signed ballot or a recorded amendment.

Preponderance of the Evidence

A legal standard of proof meaning that a contention is “more probably true than not.”

Prevailing Party

The party in a lawsuit that wins on the main issues, often entitling them to certain legal remedies or fee reimbursements.

Subdivision

A tract of land divided into individual lots; here referring to the seventy-six lots of Turtle Rock III.

Case Participants

Petitioner Side

  • Richard A. DeBoer (Petitioner)
    Lot 31 Owner
    Appeared on his own behalf

Respondent Side

  • Lynne Gustafson (Board member)
    Turtle Rock III Homeowners Association
    Corporate Secretary; appeared on behalf of Respondent; ad hoc committee member
  • Jim Scott (Board member)
    Turtle Rock III Homeowners Association
    Association President; ad hoc committee member
  • Ida Rouget (Board member)
    Turtle Rock III Homeowners Association
    Member At-Large; ad hoc committee member
  • Mert Force (Committee member)
    Turtle Rock III Homeowners Association
    Resident; ad hoc committee member
  • Herman Krehbiel (Committee member)
    Turtle Rock III Homeowners Association
    Resident; ad hoc committee member
  • Rose Magnifico (Committee member)
    Turtle Rock III Homeowners Association
    Resident; ad hoc committee member

Neutral Parties

  • Daniel G. Martin (ALJ)
    Office of Administrative Hearings
    Administrative Law Judge
  • Robert Barger (Agency official)
    Department of Fire, Building and Life Safety
    Recipient of original decision transmission
  • Joyce Kesterman (Agency official)
    Department of Fire, Building and Life Safety
    Recipient of original decision transmission