Petitioner MacLeod's challenge to the HOA's Amendment (Petition #19) was dismissed. The HOA's cross-petition (Petition #34) was partially affirmed, finding MacLeod in violation of the Amendment by living full-time in his hangar/home. The HOA (Mogollon Airpark, Inc.) was deemed the prevailing party in the cross-petitions, and each party was ordered to bear its own filing fee.
Why this result: Petitioner MacLeod failed to prove the Amendment was improperly adopted, and the HOA successfully proved MacLeod was in violation of the Amendment regarding full-time residency.
Key Issues & Findings
Challenge to the proper adoption of the October 18, 2018 Amendment to the Declaration (Petition #19)
Petitioner MacLeod alleged that the Amendment substantially altering residential usage in Tract Hangar/Homes was improperly adopted because it applied to fewer than all lots and thus required unanimous approval under A.R.S. § 33-1817(A)(2).
Orders: Petition #19 was dismissed because the Amendment was found to be properly adopted requiring 75% approval pursuant to the Declaration and A.R.S. § 33-1817(A)(1) [40, 44a].
Petitioner MacLeod's challenge to the HOA's Amendment (Petition #19) was dismissed. The HOA's cross-petition (Petition #34) was partially affirmed, finding MacLeod in violation of the Amendment by living full-time in his hangar/home. The HOA (Mogollon Airpark, Inc.) was deemed the prevailing party in the cross-petitions, and each party was ordered to bear its own filing fee.
Why this result: Petitioner MacLeod failed to prove the Amendment was improperly adopted, and the HOA successfully proved MacLeod was in violation of the Amendment regarding full-time residency.
Key Issues & Findings
Challenge to the proper adoption of the October 18, 2018 Amendment to the Declaration (Petition #19)
Petitioner MacLeod alleged that the Amendment substantially altering residential usage in Tract Hangar/Homes was improperly adopted because it applied to fewer than all lots and thus required unanimous approval under A.R.S. § 33-1817(A)(2).
Orders: Petition #19 was dismissed because the Amendment was found to be properly adopted requiring 75% approval pursuant to the Declaration and A.R.S. § 33-1817(A)(1) [40, 44a].
Administrative Law Judge Decision: MacLeod v. Mogollon Airpark, Inc.
Executive Summary
This briefing document outlines the findings and decision of an Administrative Law Judge (ALJ) in the cross-petitions between Magnus L.D. MacLeod and Mogollon Airpark, Inc. (MAP). The central dispute revolves around the validity of a 2018 Amendment to the community’s Declaration and MacLeod’s alleged violation of this Amendment by residing full-time in an aircraft hangar.
MacLeod (Petition #19) contended that the Amendment was invalid because it was not unanimously approved by all lot owners, as he argued was required by Arizona statute A.R.S. § 33-1817(A)(2) since it applied to fewer than all properties. MAP (Petition #34) argued the Amendment was properly adopted with the required 75% approval and that MacLeod was in violation by living in his Tract G hangar, which also allegedly failed to meet the minimum living space requirement.
The ALJ ruled decisively in favor of Mogollon Airpark, Inc., deeming it the prevailing party. The judge concluded that the Amendment was properly adopted under the 75% approval threshold outlined in the community’s Declaration and A.R.S. § 33-1817(A)(1), thereby dismissing MacLeod’s petition. On MAP’s petition, the ALJ found that MacLeod had indeed violated the Amendment by living full-time in the hangar, affirming that part of the petition. However, the ALJ dismissed MAP’s claim regarding the hangar’s living space size due to insufficient evidence. The final order dismisses Petition #19, partially affirms and partially dismisses Petition #34, and orders each party to bear their own filing fees.
Case Overview
Case Numbers
No. 20F-H2019019-REL (Root), No. 20F-H2019034-REL
Parties
Petitioner: Magnus L.D. MacLeod Respondent: Mogollon Airpark, Inc. (MAP)
Jurisdiction
Arizona Department of Real Estate, Office of Administrative Hearings
Administrative Law Judge
Kay Abramsohn
Hearing Date
June 19, 2020
Decision Date
July 28, 2020
The Cross-Petitions
The legal conflict originated from two separate petitions filed with the Arizona Department of Real Estate.
Petition #19: Filed by Magnus L.D. MacLeod
• Filing Date: On or about October 15, 2019.
• Core Allegation: MAP violated Arizona statute A.R.S. § 33-1817(A)(1), (A)(2)(a), and (A)(2)(b) in its adoption of the October 18, 2018 “Amendment to Declaration of Establishment of Conditions, Reservations and Restrictions…”
• MacLeod’s Argument: The Amendment could not be enforced because it lacked the affirmative vote or written consent of all owners of the property to which it applied. He specifically noted that three of the nine Real Property Tracts (Tract G, Tract H, and Tract M) did not provide an affirmative vote and that he personally did not sign it. He argued the amendment required unanimous approval.
Petition #34: Filed by Mogollon Airpark, Inc. (MAP)
• Filing Date: On or about December 16, 2019.
• Core Allegations:
1. Violation of the Amendment: MacLeod was in continued violation of the properly adopted Amendment by living full-time in his Tract G aircraft storage hangar.
2. Violation of Square Footage Requirement: MAP alleged, upon information and belief, that the living space in the hangar was “only 549 square feet,” which violated the Declaration’s requirement that structures for living purposes contain no less than 1,200 square feet.
• Requested Relief: MAP sought enforcement of the Declaration and Amendment, including injunctive relief to compel MacLeod’s compliance, and an award of its attorney’s fees and costs.
Analysis of the Disputed Amendment
The conflict centers on an amendment recorded on October 18, 2018. This amendment introduced several significant changes to the community’s governing documents.
Key Provisions of the Amendment
• Creates Two Lot Categories: The Amendment establishes “Residential lots” (lots #178 through #213) and “Hangar Tracts” (Tracts E through M).
• Regulates Hangar Use: It designates Tracts E through M for the purpose of “aircraft storage only.”
• Restricts Occupancy: While guest quarters may be constructed within a hangar, they are for “temporary living only.” “Temporary” is explicitly defined as “not longer than four months per calendar year.” An owner can request an extension in special circumstances.
• Maintains Living Space Requirement: It affirms that any single-family structure or combination hangar/house must have a living area of “not less than 1,200 square feet.”
• Adds Taxiway Access: The Amendment adds Lot 213 to the list of properties authorized to use the aircraft taxiway. This change was necessitated by a fence MacLeod had erected that blocked the Lot 213 owner’s access.
MacLeod’s Objections to the Amendment
In his petition, MacLeod argued the Amendment fundamentally and unreasonably altered the original covenants:
• It “substantially alters” the covenants for Tract Hangar/Homes by imposing the new four-month temporary living limit where unrestricted usage was previously allowed.
• It replaced the allowance for “Guest Homes with Kitchens” with “Guest Quarters without Kitchens,” impacting Tract G.
• It created a “large burden upon me to buy or build an additional home that I do not want and do not need.”
Background and History of the Dispute
• Property Acquisition: MacLeod purchased Tract G from his brother, Pat MacLeod, in February 2017 with the stated expectation of living in the hangar/home full-time.
• Occupancy: After acquiring the property, MacLeod made interior improvements and began living full-time in the aircraft hangar.
• Conflict Origin: The issue of MacLeod’s full-time residency first arose in May 2017 when he requested to build a group home for disabled veterans, a request that drew opposition from other lot owners.
• Initial Violation Notice: On September 18, 2017, MAP’s Architectural Committee sent MacLeod a letter notifying him that living full-time in a hangar intended for aircraft storage was a violation and requested he vacate within 60 days.
• Formal Non-Compliance Notices & Fines:
◦ December 29, 2018: MAP issued a “First Notice of Non-Compliance,” imposing a $100 fine.
◦ April 29, 2019: MAP issued a “Second Notice: Non-Compliance,” imposing an additional $200 fine if the violation was not remedied.
Legal Framework and Adjudicated Issues
The central legal question was the standard of approval required to pass the Amendment. The parties stipulated that the core dispute was whether a 75% approval or a unanimous approval was necessary.
Stipulated Fact #11
The parties agreed to the following crucial point, which narrowed the scope of the legal argument:
“The AMENDMENT contains at least the required minimum signatures and authorizations from the Lot Owners in Unit IVB to adopt the AMENDMENT, provided that unanimous approval of all affected property owners was not required.”
Conflicting Legal Standards
• Declaration Requirement (75% Rule): The original Declaration states it can be amended “by an instrument in writing, executed and acknowledged by the owners of not less than three-fourths of the lots in said subdivision…”
• Arizona Statute (Unanimous Rule): A.R.S. § 33-1817(A)(2) requires unanimous “affirmative vote or written consent of all of the owners of the lots or property to which the amendment applies” if the amendment “apply to fewer than all of the lots or less than all of the property that is bound by the Declaration.”
Parties’ Core Arguments
• MacLeod’s Position: The Amendment required unanimous approval under A.R.S. § 33-1817(A)(2) because it applied to “fewer than all the lots,” specifically pointing out that Tract B (a common area) was not included.
• MAP’s Position: The 75% rule under A.R.S. § 33-1817(A)(1) was the applicable standard. MAP argued that Tract B was a common area not subject to the Declaration’s conditions, so its exclusion from an amendment concerning residential use was irrelevant and did not trigger the unanimity requirement.
Administrative Law Judge’s Decision and Rationale
The ALJ’s conclusions systematically addressed each petition.
Ruling on Petition #19 (Amendment Validity)
• Conclusion: The Amendment was properly adopted.
• Rationale: The ALJ concluded that the 75% approval threshold, as specified in the Declaration and permitted by A.R.S. § 33-1817(A)(1), was the correct standard. Because the parties stipulated that the 75% threshold had been met, MAP was not in violation of the statute.
• Outcome: Petition #19 was dismissed.
Ruling on Petition #34 (MacLeod’s Violations)
• Conclusion on Full-Time Occupancy: MacLeod was in violation of the Amendment by living full-time in the Tract G Hangar/Home.
• Rationale: MacLeod acknowledged living there full-time. His testimony regarding when he ceased this practice was found to be “widely inconsistent,” and the ALJ could not conclude that the violation had stopped by the time MAP filed its petition.
• Outcome: This allegation in Petition #34 was affirmed.
• Conclusion on Living Space Requirement: MAP failed to prove its allegation that the living space was less than the required 1,200 square feet.
• Rationale: MAP did not clearly document or otherwise prove its claim that the living space was only 549 square feet. MacLeod, in contrast, cited a 2007 architectural committee sign-off indicating 1,656 square feet.
• Outcome: This allegation in Petition #34 was dismissed.
• Conclusion on Injunctive Relief: The Tribunal lacked the authority to grant the requested relief.
• Rationale: MAP “cited no statutory authority of this Tribunal with regard to ‘enforcement’ of a homeowner’s association governing documents or with regard to any injunctive relief.”
Final Order
1. Prevailing Party: Mogollon Airpark, Inc. (MAP) is deemed the prevailing party in the cross-petitions.
2. Petition #19 (MacLeod v. MAP): Dismissed.
3. Petition #34 (MAP v. MacLeod):
◦ Partially affirmed as to the allegation of MacLeod living full-time in the Tract G Hangar/Home in violation of the Amendment.
◦ Partially dismissed as to the allegation regarding the amount of living space within the hangar.
4. Filing Fees: Each party shall bear their own filing fee.
Study Guide – 20F-H2019019-REL
Study Guide: MacLeod v. Mogollon Airpark, Inc.
Short-Answer Quiz
1. What were the two primary allegations made by Mogollon Airpark, Inc. (MAP) in its petition (Petition #34) against Magnus L.D. MacLeod?
2. What was the core argument presented by Magnus L.D. MacLeod in his petition (Petition #19) regarding the October 18, 2018 Amendment?
3. According to the original Declaration, what was the minimum approval threshold required to amend it?
4. How did the Amendment of October 18, 2018 change the rules regarding residency in Hangar Tracts like Tract G?
5. What was the central legal question that the parties stipulated to regarding the adoption of the Amendment?
6. Describe the two notices that MAP issued to MacLeod prior to filing its petition.
7. What argument did MacLeod make regarding A.R.S. § 33-1817(A)(2) and why he believed the Amendment required unanimous approval?
8. Why was MAP’s allegation regarding the living space in MacLeod’s Tract G hangar (that it was only 549 sq. ft.) dismissed by the Administrative Law Judge?
9. What was MacLeod’s testimony regarding his occupancy of the Tract G hangar, and how did the Administrative Law Judge view this testimony?
10. What was the final order of the Administrative Law Judge regarding Petition #19 and Petition #34, and which party was deemed the prevailing party?
Answer Key
1. In Petition #34, MAP first alleged that MacLeod was in continued violation of the Amendment by living full-time in his Tract G aircraft storage hangar. Second, MAP requested enforcement of the Declaration and Amendment, seeking injunctive relief and an award of its attorney’s fees and costs.
2. MacLeod’s petition alleged that the Amendment was unenforceable because it was not properly adopted pursuant to A.R.S. § 33-1817. He argued it did not receive the affirmative vote or written consent of all owners of the property to which the amendment applied, specifically noting that owners of three of the nine affected tracts (G, H, and M) did not consent.
3. The original Declaration stipulated that it could be amended by “an instrument in writing, executed and acknowledged by the owners of not less than three-fourths of the lots in said subdivision.” This represents a 75% approval threshold.
4. The Amendment established that guest quarters in aircraft storage hangars (Tracts E through M) were for “temporary living only,” which was defined as “not longer than four months per calendar year.” It also specified that such quarters could not be used as a permanent residence.
5. The parties stipulated that the central dispute was whether the Amendment required 75% approval from lot owners as specified in the Declaration, or if it required unanimous approval from all affected property owners pursuant to A.R.S. § 33-1817(A)(2).
6. On December 29, 2018, MAP issued a “First Notice of Non-Compliance” with a $100 fine for living full-time in the hangar. On April 29, 2019, MAP issued a “Second Notice: Non-Compliance,” imposing an additional $200 fine if the violation was not remedied.
7. MacLeod argued that pursuant to A.R.S. § 33-1817(A)(2), unanimous approval was required because the Amendment applied to fewer than all the lots bound by the Declaration. He specifically pointed out that Tract B, a common area, was not included in the Amendment.
8. The Administrative Law Judge dismissed this part of MAP’s petition because MAP failed to clearly document or prove its allegation. The judge concluded that MAP did not sufficiently demonstrate that the living space within the Tract G Hangar/Home was less than the required 1,200 square feet.
9. MacLeod gave widely inconsistent dates for his full-time occupancy of the hangar and testified that he had moved to Concho in January 2019. The Administrative Law Judge found his testimony inconsistent and could not conclude that MacLeod had stopped living in the hangar at the time Petition #34 was filed.
10. The judge ordered that MacLeod’s Petition #19 be dismissed entirely. The judge partially dismissed MAP’s Petition #34 regarding the living space allegation but affirmed the allegation that MacLeod was living in the hangar in violation of the Amendment. MAP was deemed the prevailing party in the cross-petitions.
Essay Questions
1. Analyze the conflicting interpretations of A.R.S. § 33-1817 presented by Magnus L.D. MacLeod and Mogollon Airpark, Inc. Explain why the Administrative Law Judge ultimately sided with MAP’s interpretation that A.R.S. § 33-1817(A)(1) was the applicable statute.
2. Trace the timeline of the dispute, starting with MacLeod’s purchase of Tract G and his proposal for a group home. Discuss how the actions and reactions of both parties escalated the conflict, leading to the filing of cross-petitions with the Department of Real Estate.
3. Evaluate the evidence presented by both parties. How did the parties’ joint stipulation of facts narrow the central legal issue? Discuss the impact of MacLeod’s inconsistent testimony on the judge’s final decision regarding his residency.
4. MacLeod argued that MAP had waived its right to enforce the Amendment due to “longstanding and widespread utilization of Tract Hanger/Homes as full-time residences.” Although the Judge did not address this argument due to jurisdictional limits, construct an argument for or against this claim based on the facts available in the decision.
5. Discuss the scope and limitations of the Administrative Law Judge’s authority in this case. Why was the Judge able to rule on the validity of the Amendment’s adoption and MacLeod’s violation, but not grant MAP’s request for injunctive relief and enforcement?
Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
The judicial authority, Kay Abramsohn, who presided over the hearing and issued the decision in this case.
A.R.S. § 33-1817
Arizona Revised Statute governing the amendment of a planned community’s Declaration. Subsection (A)(1) allows amendment by the vote specified in the Declaration, while (A)(2) requires unanimous consent of affected owners if the amendment applies to fewer than all lots.
Amendment
The “Amendment to Declaration of Establishment of Conditions, Reservations and Restrictions…” recorded on October 18, 2018. It created categories for Residential and Hangar lots and restricted hangar occupancy to temporary living of no more than four months per year.
A colloquial acronym used by the Petitioner to refer to the original “Declaration of Establishment of Conditions, Reservations and Restrictions and Mutual and Reciprocal Covenants and Liens Running with the Land.”
Declaration
The original governing document for Mogollon Airpark, Inc., establishing conditions, reservations, and restrictions for the properties. It required a three-fourths (75%) vote of lot owners to be amended.
Hangar Tracts
Tracts E through M, inclusive, as designated by the Amendment for the primary purpose of aircraft storage, though guest quarters for temporary living are permitted.
Magnus L.D. MacLeod
The Petitioner in Petition #19 and Respondent in Petition #34. He is the owner of Tract G and resided in the hangar on that property.
Mogollon Airpark, Inc. (MAP)
The Respondent in Petition #19 and Petitioner in Petition #34. It is the planned community association responsible for administering the Declaration.
Petition #19
The petition filed by Magnus L.D. MacLeod on October 15, 2019, alleging MAP improperly adopted the Amendment in violation of Arizona statute.
Petition #34
The petition filed by Mogollon Airpark, Inc. on December 16, 2019, alleging MacLeod was violating the Amendment by living full-time in his hangar.
Preponderance of the evidence
The standard of proof required in the hearing, defined as evidence that is sufficient to “incline a fair and impartial mind to one side of the issue rather than the other.”
Residential Lots
Lots numbered 178 through 213, inclusive, as categorized by the Amendment.
Tract G
An aircraft storage hangar lot in Unit 4B owned by Magnus L.D. MacLeod, which was the central property in the dispute.
Unit 4B
The specific subdivision within Mogollon Airpark subject to the Declaration and Amendment. It includes Lots 178-213 and Tracts B, E, F, G, H, I, J, K, L, and M.
Blog Post – 20F-H2019019-REL
Select all sources
810246.pdf
No emoji found
Loading
20F-H2019019-REL
1 source
This administrative law judge decision concerns cross-petitions filed by Magnus L.D. MacLeod and Mogollon Airpark, Inc. (MAP) regarding disputes within a planned community association in Arizona. MacLeod’s petition challenged the validity of an amendment to the community’s governing documents (CC&Rs), arguing it was improperly adopted and unreasonably altered prior usage rights for hangar/homes, specifically his Tract G property. MAP’s petition alleged that MacLeod was in continued violation of the amendment by living full-time in his aircraft storage hangar and requested injunctive relief to compel compliance. The judge ruled to dismiss MacLeod’s petition, finding the amendment was properly adopted, and partially affirmed MAP’s petition, concluding that MacLeod had violated the amendment by residing full-time in the hangar. Ultimately, MAP was deemed the prevailing party in the proceedings.
What were the central legal issues and findings in this property dispute case?
How did the contested amendment change the community’s declaration and rules?
What were the core arguments and outcomes for each party involved in this hearing?
Based on 1 source
Case Participants
Petitioner Side
Jeffrey M. Proper(attorney) JEFFREY M. PROPER, PLLC Counsel for Magnus L.D. MacLeod
Respondent Side
Gregory A. Stein(attorney) Carpenter, Hazlewood, Delgado & Bolen LLP Counsel for Mogollon Airpark, Inc.
Craig Albright(board member) MAP Board of Directors Then President of the MAP Board of Directors
Neutral Parties
Kay Abramsohn(ALJ)
Judy Lowe(commissioner) Arizona Department of Real Estate
Other Participants
Magnus L.D. MacLeod(party) Petitioner in 20F-H2019019-REL and Respondent in 20F-H2019034-REL
Pat MacLeod(HOA president) HOA Brother of Petitioner; previous owner of Tract G; appeared to be HOA President around 2017
A.R.S. § 33-1817(A)(1); CC&Rs Part 10, Section 10.4
Outcome Summary
Petitioner was deemed the prevailing party after establishing that the Respondent HOA violated A.R.S. § 33-1817(A)(1) and the community documents by improperly recording Amended CC&Rs without proper owner consent. The Respondent was ordered to refund the $500.00 filing fee. However, the ALJ could not grant the requested relief (rescission of the Amended CC&Rs) due to a lack of statutory authority.
Key Issues & Findings
Violation regarding the validity of Amended CC&Rs due to lack of required owner approval.
The Petitioner alleged that the Amended CC&Rs recorded by the Board were invalid because they were not approved by two-thirds (2/3) of the lot owners as required by the CC&Rs and statute. The ALJ agreed, finding the Board acted improperly and violated the documents and statute.
Orders: Respondent was ordered to pay Petitioner the filing fee of $500.00. No civil penalty was assessed. The ALJ determined she lacked the statutory authority to order the rescission of the Amended CC&Rs requested by the Petitioner.
Briefing Document: Karolak vs. VVE – Casa Grande Homeowners Association
Executive Summary
This briefing analyzes the Administrative Law Judge (ALJ) Decision in the case of Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association (No. 20F-H2020041-REL). The central issue was whether the HOA Board had the authority to unilaterally amend and record changes to the community’s Covenants, Conditions, and Restrictions (CC&Rs) without the required homeowner vote.
The petitioner, Douglas J. Karolak, successfully argued that the HOA violated its own governing documents and Arizona state law by filing “Amended CC&Rs” on October 5, 2018, without securing the approval of two-thirds of the lot owners. The HOA contended its actions were a valid exercise of its authority to create “Association Rules.”
ALJ Tammy L. Eigenheer ruled decisively in favor of the petitioner. The decision established a clear legal distinction between the Board’s power to adopt rules and the separate, more stringent process required to formally amend the CC&Rs. The judge found the Board acted improperly, declaring Karolak the prevailing party and ordering the HOA to reimburse his $500 filing fee. Notably, while the judge found the amended document was improperly recorded, she concluded she lacked the statutory authority to order its rescission, which was the remedy the petitioner had requested.
Case Overview
Case Name
Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association
Case Number
20F-H2020041-REL
Arizona Office of Administrative Hearings
Administrative Law Judge
Tammy L. Eigenheer
Hearing Date
May 1, 2020
Decision Date
May 21, 2020
The Central Dispute
The core of the dispute revolved around the legitimacy of a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates” (Amended CC&Rs), which the HOA Board recorded with the Pinal County Recorder on October 5, 2018.
• Petitioner’s Position (Douglas J. Karolak): The Amended CC&Rs are invalid because they were not approved by “owners of at least two-thirds (2/3) of the Lots,” a requirement explicitly stated in Section 10.4 of the original CC&Rs and supported by Arizona statute A.R.S. § 33-1817(A)(1). Karolak argued that the Board’s action of recording an amendment is fundamentally different from its power to adopt internal “Association Rules.”
• Respondent’s Position (VVE – Casa Grande HOA): The Board argued that its actions were a valid exercise of the authority granted to it under the CC&Rs. It claimed that because the only changes were to Part 7 (Use Restrictions), they fell under the Board’s power to “adopt, amend, or repeal such rules and regulations as it deems reasonable and appropriate” (Section 3.4) and to “modify or waive the foregoing restrictions… by reasonable rules and regulations” (Section 7.43). The Respondent’s counsel did, however, concede that “perhaps the Amended CC&Rs should not have been recorded.”
Factual Background and Chronology
• The VVE – Casa Grande Homeowners Association is a 56-lot community in Casa Grande, Arizona, with 19 lots remaining vacant at the time of the hearing.
• April 30, 1999: The original “Restated Declaration of Covenants, Conditions and Restrictions for VVE” (CC&Rs) was recorded.
• 2014 and 2015: The HOA Board made unsuccessful attempts to amend the CC&Rs through membership votes.
• 2018: Following the failed votes, the Board determined it would make changes to the “rules section” of the CC&Rs under the authority it believed was granted by Section 3.4.
• October 5, 2018: The Board recorded the Amended CC&Rs with the Pinal County Recorder. The HOA acknowledged that these amendments had not been approved by the required two-thirds of lot owners.
Legal Analysis and Key Provisions
The decision rested on the interpretation of specific sections of the community’s CC&Rs and Arizona state law. The judge concluded that the document’s structure clearly separates the process of rulemaking from the process of formal amendment.
Provision
Source
Summary of Stipulation
Amendment Process
CC&Rs Section 10.4
Requires an instrument “executed by the Owners of at least two-thirds (2/3) of the Lots” and recorded to become effective.
Rulemaking Authority
CC&Rs Section 3.4
Empowers the Board to adopt, amend, or repeal “Association Rules” governing the use of the property. States rules have the “same force and effect as if they were set forth in” the CC&Rs.
Statutory Requirement
A.R.S. § 33-1817(A)(1)
Provides that a declaration may be amended by the association via an affirmative vote or written consent of the number of owners specified in the declaration.
The judge’s rationale emphasized that the distinct sections for rulemaking (3.4) and amendments (10.4) demonstrate that the original drafters did not intend for the Board to have the power to unilaterally amend the CC&Rs. The judge stated, “The fact that the two topics are covered as separate topics in the CC&Rs leads to the conclusion that the original drafters of the CC&Rs did not contemplate that the Board had the authority to, on its own, amend the CC&Rs.”
The Court’s Decision and Final Order
The Administrative Law Judge ruled that the petitioner, Douglas J. Karolak, had successfully proven by a preponderance of the evidence that the respondent HOA had acted improperly.
Key Findings:
• The HOA Board did not have the authority to amend the CC&Rs without the approval of two-thirds of the lot owners.
• The Board’s action of recording the Amended CC&Rs on October 5, 2018, was a violation of the community’s governing documents (Section 10.4) and Arizona state law (A.R.S. § 33-1817(A)(1)).
• The Board’s ability to create “Association Rules” is a separate and distinct process from the formal procedure required to amend the Declaration.
Final Order:
• The petitioner, Douglas J. Karolak, was deemed the prevailing party.
• The respondent HOA was ordered to pay the petitioner his $500.00 filing fee within thirty days of the order.
• No civil penalty was found to be appropriate in the matter.
• Critically, the judge determined that under the applicable statute (A.R.S. § 32-2199.02), the Administrative Law Judge does not have the authority to order the Amended CC&Rs rescinded, despite this being the remedy requested by the petitioner.
The order is binding on both parties unless a request for rehearing is filed with the Commissioner of the Department of Real Estate within 30 days of the decision.
Study Guide – 20F-H2020041-REL
Study Guide: Karolak v. VVE – Casa Grande Homeowners Association
This guide is designed to review the key facts, legal arguments, and outcomes of the Administrative Law Judge Decision in the case of Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association (No. 20F-H2020041-REL).
Short-Answer Quiz
Instructions: Answer the following questions in two to three complete sentences, drawing all information directly from the provided legal decision.
1. Who were the petitioner and the respondent in this case, and what was the petitioner’s core allegation?
2. What specific statute and section of the community documents did the petitioner claim the respondent violated?
3. According to Section 10.4 of the original CC&Rs, what was the required procedure for amending the Declaration?
4. Under what authority did the VVE – Casa Grande HOA Board claim it could make changes to the community documents without a membership vote?
5. What key event occurred on or about October 5, 2018, that became the central point of the dispute?
6. What was the respondent’s primary argument for why their actions were valid?
7. What is the “preponderance of the evidence,” and which party bears the burden of proof to establish a violation?
8. Why did the Administrative Law Judge conclude that the Board’s authority to create “Association Rules” was a separate process from amending the CC&Rs?
9. What remedy did the petitioner request, and why was it not granted by the Administrative Law Judge?
10. What was the final order issued by the Judge in this case?
——————————————————————————–
Answer Key
1. The petitioner was Douglas J. Karolak, a homeowner. The respondent was the VVE – Casa Grande Homeowners Association. Karolak’s core allegation was that the HOA had improperly amended the community’s governing documents.
2. The petitioner alleged a violation of Arizona Revised Statute (A.R.S.) § 33-1817(A)(1). He also claimed a violation of Part 10, Section 10.4 of the community’s Covenants, Conditions, and Restrictions (CC&Rs).
3. Section 10.4 of the CC&Rs stipulated that the Declaration could be amended by an instrument executed by the owners of at least two-thirds (2/3) of the lots. The amendment would not be effective until that instrument was officially recorded.
4. The HOA Board claimed it had the authority to make the changes under Section 3.4 of the CC&Rs. This section empowered the Board to adopt, amend, or repeal “Association Rules” as it deemed reasonable and appropriate.
5. On or about October 5, 2018, the Board recorded a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates” (Amended CC&Rs) with the Pinal County Recorder. This was done without the required two-thirds vote from the lot owners.
6. The respondent argued that because the only changes made were to Part 7 (Use Restrictions), which fell under the type of rules the Board was authorized to adopt, the Amended CC&Rs were a valid exercise of the Board’s authority. Their counsel did acknowledge, however, that perhaps the document should not have been recorded.
7. A “preponderance of the evidence” is proof that convinces the trier of fact that a contention is more probably true than not. The petitioner bears the burden of proof to establish that the respondent committed the alleged violations by this standard.
8. The Judge concluded they were separate processes because the CC&Rs cover the topics in different sections. This separation led the Judge to believe the original drafters did not intend for the Board to have the authority to amend the CC&Rs on its own.
9. The petitioner requested that the improperly recorded Amended CC&Rs be rescinded. This remedy was not granted because the applicable statute, A.R.S. § 32-2199.02, does not give the Administrative Law Judge the specific authority to order a document rescinded.
10. The final order deemed the petitioner the prevailing party. It further ordered the respondent to repay the petitioner his $500.00 filing fee within thirty days, but found that no civil penalty was appropriate.
——————————————————————————–
Essay Questions
Instructions: The following questions are designed to promote deeper analysis of the case. Formulate a comprehensive response to each, using only the information presented in the legal decision.
1. Analyze the distinction made by the Administrative Law Judge between the Board’s authority to create “Association Rules” under Section 3.4 and the process for amending the Declaration under Section 10.4. Why was this distinction critical to the case’s outcome?
2. Discuss the legal standard of “preponderance of the evidence” as defined in the decision. How did the petitioner successfully meet this burden of proof to establish the respondent’s violation, and what specific facts supported this conclusion?
3. Examine the respondent’s (HOA’s) argument regarding its authority to amend the CC&Rs. What were the fundamental flaws in this argument, and how did their counsel’s acknowledgment about the recording of the Amended CC&Rs potentially weaken their position?
4. Explain the legal framework governing this dispute, citing the specific Arizona Revised Statutes (A.R.S.) mentioned in the decision. Detail the roles of the Arizona Department of Real Estate, the Office of Administrative Hearings, and the Administrative Law Judge in resolving this type of HOA conflict.
5. Evaluate the final Order of the Administrative Law Judge. While the petitioner was deemed the prevailing party, why was their requested remedy (rescission of the Amended CC&Rs) denied? What does this reveal about the specific limits of the Administrative Law Judge’s authority in such cases under A.R.S. § 32-2199.02?
——————————————————————————–
Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings. In this case, Tammy L. Eigenheer of the Office of Administrative Hearings made the findings of fact, conclusions of law, and issued the final order.
A.R.S. § 33-1817(A)(1)
The specific Arizona Revised Statute cited by the petitioner. It states that a declaration may be amended by the association with an affirmative vote or written consent of the number of owners specified in the declaration.
Amended CC&Rs
The document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates,” which the HOA Board recorded on October 5, 2018, without the required two-thirds owner approval.
Association Rules
Rules and regulations that the HOA Board is empowered to adopt, amend, or repeal under Section 3.4 of the CC&Rs to govern the use of Common Areas and other parts of the Project. The Board argued their changes fell under this authority.
Burden of Proof
The obligation to prove one’s assertion. In this case, the petitioner bore the burden of proof to establish the respondent’s violations by a preponderance of the evidence.
An acronym for Covenants, Conditions, and Restrictions. These are the governing legal documents for a planned community. The original “Restated Declaration of Covenants, Conditions and Restrictions for VVE” was recorded on April 30, 1999.
Department
Refers to the Arizona Department of Real Estate, the agency with which the petitioner filed his Homeowners Association (HOA) Dispute Process Petition.
An acronym for Homeowners Association. In this case, the VVE – Casa Grande Homeowners Association, an association of 56 lot owners in Casa Grande, Arizona.
Office of Administrative Hearings
The office responsible for conducting hearings for disputes filed with state agencies like the Department of Real Estate.
Petitioner
The party who initiates a legal action or petition. In this case, homeowner Douglas J. Karolak.
Preponderance of the Evidence
The evidentiary standard required to win the case, defined as “such proof as convinces the trier of fact that the contention is more probably true than not.”
Respondent
The party against whom a petition is filed. In this case, the VVE – Casa Grande Homeowners Association.
Blog Post – 20F-H2020041-REL
Your HOA Just Changed the Rules? Why This Homeowner’s $500 Victory is a Warning to Everyone
For millions of Americans, living in a planned community means living under the authority of a Homeowners Association (HOA). While intended to protect property values, these relationships can often feel one-sided, with boards issuing mandates and homeowners feeling powerless to push back. It’s a common frustration, but it’s rare to see a single homeowner challenge their board and force a legal reckoning.
A recent case from Arizona, Douglas J. Karolak versus the VVE – Casa Grande Homeowners Association, provides a critical case study in board overreach and the surprising limits of legal victory. Karolak alleged his HOA board violated its own governing documents and state law by improperly changing the community’s core rules.
He took his case to an administrative law judge and, in a significant ruling, he won. But the outcome of this seemingly straightforward dispute was far from simple. The final decision reveals a shocking twist that holds critical lessons for every homeowner about the difference between being right on paper and getting the remedy you actually want.
There’s a Huge Difference Between a ‘Rule Change’ and a ‘Declaration Amendment’
The first lesson from this case is a critical one for every homeowner: understand the constitutional hierarchy of your community’s documents. The core of the dispute was the HOA Board’s attempt to amend its foundational document, the CC&Rs (Covenants, Conditions, and Restrictions), without getting the required approval from the homeowners.
Here are the key facts of the case:
• The Original Rule: The community’s CC&Rs explicitly stated in Section 10.4 that any amendment required a vote and execution by “at least two-thirds (2/3) of the Lots.” This is the highest level of authority in a planned community, akin to a constitution.
• The Failed Attempts: The Board had tried to get this two-thirds vote in both 2014 and 2015, but was unsuccessful.
• The Workaround: In 2018, the Board decided to bypass the homeowners. It used a separate power granted in Section 3.4 of the CC&Rs—the authority to create day-to-day “Association Rules”—to make what it called changes to the “‘rules section’ of the CC&Rs, specifically targeting the Use Restrictions in Part 7.”
The judge’s conclusion was crystal clear: The CC&Rs were drafted to treat the power to create “rules” and the power to “amend” the declaration as two entirely separate processes. This separation acts as a crucial check on the board’s power, preventing a small group from unilaterally changing the fundamental property rights of all owners. As the judge noted, “the original drafters of the CC&Rs did not contemplate that the Board had the authority to, on its own, amend the CC&Rs.”
Recording a Document Doesn’t Magically Make It Valid
To make their changes appear official, the HOA Board took a significant step. On October 5, 2018, they filed a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates (Amended CC&Rs)” with the Pinal County Recorder.
For the average homeowner, a formally recorded document filed with the county looks final, official, and legally binding. It’s an intimidating piece of paper that suggests any challenge would be futile.
However, the judge’s ruling highlights a critical legal truth: procedural legitimacy is paramount. An official-looking document, even one filed with the county, is invalid if the legal process required to create it was ignored. The judge found that because the Board did not follow the correct internal procedure—securing the two-thirds vote from homeowners—the very act of recording the document was improper. Even the HOA’s own lawyer seemed to concede this point during the hearing, acknowledging that “perhaps the Amended CC&Rs should not have been recorded.”
The Winner’s Paradox: You Can Be Right and Still Not Get Your Desired Fix
The final order from the Administrative Law Judge was unambiguous: Douglas Karolak, the petitioner, was officially deemed the “prevailing party.” The judge concluded that the HOA had acted in violation of its own community documents and Arizona state law. This was a clear-cut victory for the homeowner.
But here is the shocking twist. Karolak’s requested remedy was for the illegally filed “Amended CC&Rs” to be rescinded—in other words, to have them officially nullified and removed. This seems like the logical and necessary fix to the problem.
The judge, however, was bound by the limits of her authority. The final decision states plainly: “The Administrative Law Judge does not have the authority under the applicable statute to order the Amended CC&Rs rescinded.” This highlights a critical jurisdictional gap. The Administrative Law Judge’s role in this venue is to determine if a violation occurred and assign limited penalties, not to perform the function of a higher court, which might have the power to void a recorded document.
So, what was the actual remedy for this clear violation? The judge ordered the HOA to repay Karolak his $500 filing fee. No other civil penalty was issued. The homeowner won the argument but did not get the one thing he asked for to correct the board’s improper action.
A Victory on Paper, A Question in Practice
The case of Douglas J. Karolak is a powerful real-world lesson. It proves that a single homeowner, armed with a thorough understanding of their community’s governing documents, can successfully challenge an overreaching HOA board and win. It confirms that procedural shortcuts, even when filed and recorded, do not make an illegal action legal.
But it also reveals the frustrating limitations that can exist within the legal process. The homeowner was proven right, but the improperly filed document remains on the books, unable to be rescinded in this specific venue. It raises a crucial question for homeowners everywhere: How do you ensure your victory has real teeth?
Case Participants
Petitioner Side
Douglas J. Karolak(petitioner)
Respondent Side
David A. Fitzgibbons III(HOA attorney) Fitzgibbons Law Offices PLC Represented VVE – Casa Grande Homeowners Association
CV Mathai(witness) VVE – Casa Grande Homeowners Association
John Kelsey(witness) VVE – Casa Grande Homeowners Association
Kristi Kelsey(witness) VVE – Casa Grande Homeowners Association
William Findley(witness) VVE – Casa Grande Homeowners Association
Kay Niemi(witness) VVE – Casa Grande Homeowners Association
Mark Korte(witness) VVE – Casa Grande Homeowners Association
Felicia Del Sol(property manager rep) Norris Management
Neutral Parties
Tammy L. Eigenheer(ALJ) Office of Administrative Hearings
Judy Lowe(Commissioner) Arizona Department of Real Estate
A.R.S. § 33-1817(A)(1); CC&Rs Part 10, Section 10.4
Outcome Summary
Petitioner was deemed the prevailing party after establishing that the Respondent HOA violated A.R.S. § 33-1817(A)(1) and the community documents by improperly recording Amended CC&Rs without proper owner consent. The Respondent was ordered to refund the $500.00 filing fee. However, the ALJ could not grant the requested relief (rescission of the Amended CC&Rs) due to a lack of statutory authority.
Key Issues & Findings
Violation regarding the validity of Amended CC&Rs due to lack of required owner approval.
The Petitioner alleged that the Amended CC&Rs recorded by the Board were invalid because they were not approved by two-thirds (2/3) of the lot owners as required by the CC&Rs and statute. The ALJ agreed, finding the Board acted improperly and violated the documents and statute.
Orders: Respondent was ordered to pay Petitioner the filing fee of $500.00. No civil penalty was assessed. The ALJ determined she lacked the statutory authority to order the rescission of the Amended CC&Rs requested by the Petitioner.
Briefing Document: Karolak vs. VVE – Casa Grande Homeowners Association
Executive Summary
This briefing analyzes the Administrative Law Judge (ALJ) Decision in the case of Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association (No. 20F-H2020041-REL). The central issue was whether the HOA Board had the authority to unilaterally amend and record changes to the community’s Covenants, Conditions, and Restrictions (CC&Rs) without the required homeowner vote.
The petitioner, Douglas J. Karolak, successfully argued that the HOA violated its own governing documents and Arizona state law by filing “Amended CC&Rs” on October 5, 2018, without securing the approval of two-thirds of the lot owners. The HOA contended its actions were a valid exercise of its authority to create “Association Rules.”
ALJ Tammy L. Eigenheer ruled decisively in favor of the petitioner. The decision established a clear legal distinction between the Board’s power to adopt rules and the separate, more stringent process required to formally amend the CC&Rs. The judge found the Board acted improperly, declaring Karolak the prevailing party and ordering the HOA to reimburse his $500 filing fee. Notably, while the judge found the amended document was improperly recorded, she concluded she lacked the statutory authority to order its rescission, which was the remedy the petitioner had requested.
Case Overview
Case Name
Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association
Case Number
20F-H2020041-REL
Arizona Office of Administrative Hearings
Administrative Law Judge
Tammy L. Eigenheer
Hearing Date
May 1, 2020
Decision Date
May 21, 2020
The Central Dispute
The core of the dispute revolved around the legitimacy of a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates” (Amended CC&Rs), which the HOA Board recorded with the Pinal County Recorder on October 5, 2018.
• Petitioner’s Position (Douglas J. Karolak): The Amended CC&Rs are invalid because they were not approved by “owners of at least two-thirds (2/3) of the Lots,” a requirement explicitly stated in Section 10.4 of the original CC&Rs and supported by Arizona statute A.R.S. § 33-1817(A)(1). Karolak argued that the Board’s action of recording an amendment is fundamentally different from its power to adopt internal “Association Rules.”
• Respondent’s Position (VVE – Casa Grande HOA): The Board argued that its actions were a valid exercise of the authority granted to it under the CC&Rs. It claimed that because the only changes were to Part 7 (Use Restrictions), they fell under the Board’s power to “adopt, amend, or repeal such rules and regulations as it deems reasonable and appropriate” (Section 3.4) and to “modify or waive the foregoing restrictions… by reasonable rules and regulations” (Section 7.43). The Respondent’s counsel did, however, concede that “perhaps the Amended CC&Rs should not have been recorded.”
Factual Background and Chronology
• The VVE – Casa Grande Homeowners Association is a 56-lot community in Casa Grande, Arizona, with 19 lots remaining vacant at the time of the hearing.
• April 30, 1999: The original “Restated Declaration of Covenants, Conditions and Restrictions for VVE” (CC&Rs) was recorded.
• 2014 and 2015: The HOA Board made unsuccessful attempts to amend the CC&Rs through membership votes.
• 2018: Following the failed votes, the Board determined it would make changes to the “rules section” of the CC&Rs under the authority it believed was granted by Section 3.4.
• October 5, 2018: The Board recorded the Amended CC&Rs with the Pinal County Recorder. The HOA acknowledged that these amendments had not been approved by the required two-thirds of lot owners.
Legal Analysis and Key Provisions
The decision rested on the interpretation of specific sections of the community’s CC&Rs and Arizona state law. The judge concluded that the document’s structure clearly separates the process of rulemaking from the process of formal amendment.
Provision
Source
Summary of Stipulation
Amendment Process
CC&Rs Section 10.4
Requires an instrument “executed by the Owners of at least two-thirds (2/3) of the Lots” and recorded to become effective.
Rulemaking Authority
CC&Rs Section 3.4
Empowers the Board to adopt, amend, or repeal “Association Rules” governing the use of the property. States rules have the “same force and effect as if they were set forth in” the CC&Rs.
Statutory Requirement
A.R.S. § 33-1817(A)(1)
Provides that a declaration may be amended by the association via an affirmative vote or written consent of the number of owners specified in the declaration.
The judge’s rationale emphasized that the distinct sections for rulemaking (3.4) and amendments (10.4) demonstrate that the original drafters did not intend for the Board to have the power to unilaterally amend the CC&Rs. The judge stated, “The fact that the two topics are covered as separate topics in the CC&Rs leads to the conclusion that the original drafters of the CC&Rs did not contemplate that the Board had the authority to, on its own, amend the CC&Rs.”
The Court’s Decision and Final Order
The Administrative Law Judge ruled that the petitioner, Douglas J. Karolak, had successfully proven by a preponderance of the evidence that the respondent HOA had acted improperly.
Key Findings:
• The HOA Board did not have the authority to amend the CC&Rs without the approval of two-thirds of the lot owners.
• The Board’s action of recording the Amended CC&Rs on October 5, 2018, was a violation of the community’s governing documents (Section 10.4) and Arizona state law (A.R.S. § 33-1817(A)(1)).
• The Board’s ability to create “Association Rules” is a separate and distinct process from the formal procedure required to amend the Declaration.
Final Order:
• The petitioner, Douglas J. Karolak, was deemed the prevailing party.
• The respondent HOA was ordered to pay the petitioner his $500.00 filing fee within thirty days of the order.
• No civil penalty was found to be appropriate in the matter.
• Critically, the judge determined that under the applicable statute (A.R.S. § 32-2199.02), the Administrative Law Judge does not have the authority to order the Amended CC&Rs rescinded, despite this being the remedy requested by the petitioner.
The order is binding on both parties unless a request for rehearing is filed with the Commissioner of the Department of Real Estate within 30 days of the decision.
Study Guide – 20F-H2020041-REL
Study Guide: Karolak v. VVE – Casa Grande Homeowners Association
This guide is designed to review the key facts, legal arguments, and outcomes of the Administrative Law Judge Decision in the case of Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association (No. 20F-H2020041-REL).
Short-Answer Quiz
Instructions: Answer the following questions in two to three complete sentences, drawing all information directly from the provided legal decision.
1. Who were the petitioner and the respondent in this case, and what was the petitioner’s core allegation?
2. What specific statute and section of the community documents did the petitioner claim the respondent violated?
3. According to Section 10.4 of the original CC&Rs, what was the required procedure for amending the Declaration?
4. Under what authority did the VVE – Casa Grande HOA Board claim it could make changes to the community documents without a membership vote?
5. What key event occurred on or about October 5, 2018, that became the central point of the dispute?
6. What was the respondent’s primary argument for why their actions were valid?
7. What is the “preponderance of the evidence,” and which party bears the burden of proof to establish a violation?
8. Why did the Administrative Law Judge conclude that the Board’s authority to create “Association Rules” was a separate process from amending the CC&Rs?
9. What remedy did the petitioner request, and why was it not granted by the Administrative Law Judge?
10. What was the final order issued by the Judge in this case?
——————————————————————————–
Answer Key
1. The petitioner was Douglas J. Karolak, a homeowner. The respondent was the VVE – Casa Grande Homeowners Association. Karolak’s core allegation was that the HOA had improperly amended the community’s governing documents.
2. The petitioner alleged a violation of Arizona Revised Statute (A.R.S.) § 33-1817(A)(1). He also claimed a violation of Part 10, Section 10.4 of the community’s Covenants, Conditions, and Restrictions (CC&Rs).
3. Section 10.4 of the CC&Rs stipulated that the Declaration could be amended by an instrument executed by the owners of at least two-thirds (2/3) of the lots. The amendment would not be effective until that instrument was officially recorded.
4. The HOA Board claimed it had the authority to make the changes under Section 3.4 of the CC&Rs. This section empowered the Board to adopt, amend, or repeal “Association Rules” as it deemed reasonable and appropriate.
5. On or about October 5, 2018, the Board recorded a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates” (Amended CC&Rs) with the Pinal County Recorder. This was done without the required two-thirds vote from the lot owners.
6. The respondent argued that because the only changes made were to Part 7 (Use Restrictions), which fell under the type of rules the Board was authorized to adopt, the Amended CC&Rs were a valid exercise of the Board’s authority. Their counsel did acknowledge, however, that perhaps the document should not have been recorded.
7. A “preponderance of the evidence” is proof that convinces the trier of fact that a contention is more probably true than not. The petitioner bears the burden of proof to establish that the respondent committed the alleged violations by this standard.
8. The Judge concluded they were separate processes because the CC&Rs cover the topics in different sections. This separation led the Judge to believe the original drafters did not intend for the Board to have the authority to amend the CC&Rs on its own.
9. The petitioner requested that the improperly recorded Amended CC&Rs be rescinded. This remedy was not granted because the applicable statute, A.R.S. § 32-2199.02, does not give the Administrative Law Judge the specific authority to order a document rescinded.
10. The final order deemed the petitioner the prevailing party. It further ordered the respondent to repay the petitioner his $500.00 filing fee within thirty days, but found that no civil penalty was appropriate.
——————————————————————————–
Essay Questions
Instructions: The following questions are designed to promote deeper analysis of the case. Formulate a comprehensive response to each, using only the information presented in the legal decision.
1. Analyze the distinction made by the Administrative Law Judge between the Board’s authority to create “Association Rules” under Section 3.4 and the process for amending the Declaration under Section 10.4. Why was this distinction critical to the case’s outcome?
2. Discuss the legal standard of “preponderance of the evidence” as defined in the decision. How did the petitioner successfully meet this burden of proof to establish the respondent’s violation, and what specific facts supported this conclusion?
3. Examine the respondent’s (HOA’s) argument regarding its authority to amend the CC&Rs. What were the fundamental flaws in this argument, and how did their counsel’s acknowledgment about the recording of the Amended CC&Rs potentially weaken their position?
4. Explain the legal framework governing this dispute, citing the specific Arizona Revised Statutes (A.R.S.) mentioned in the decision. Detail the roles of the Arizona Department of Real Estate, the Office of Administrative Hearings, and the Administrative Law Judge in resolving this type of HOA conflict.
5. Evaluate the final Order of the Administrative Law Judge. While the petitioner was deemed the prevailing party, why was their requested remedy (rescission of the Amended CC&Rs) denied? What does this reveal about the specific limits of the Administrative Law Judge’s authority in such cases under A.R.S. § 32-2199.02?
——————————————————————————–
Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings. In this case, Tammy L. Eigenheer of the Office of Administrative Hearings made the findings of fact, conclusions of law, and issued the final order.
A.R.S. § 33-1817(A)(1)
The specific Arizona Revised Statute cited by the petitioner. It states that a declaration may be amended by the association with an affirmative vote or written consent of the number of owners specified in the declaration.
Amended CC&Rs
The document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates,” which the HOA Board recorded on October 5, 2018, without the required two-thirds owner approval.
Association Rules
Rules and regulations that the HOA Board is empowered to adopt, amend, or repeal under Section 3.4 of the CC&Rs to govern the use of Common Areas and other parts of the Project. The Board argued their changes fell under this authority.
Burden of Proof
The obligation to prove one’s assertion. In this case, the petitioner bore the burden of proof to establish the respondent’s violations by a preponderance of the evidence.
An acronym for Covenants, Conditions, and Restrictions. These are the governing legal documents for a planned community. The original “Restated Declaration of Covenants, Conditions and Restrictions for VVE” was recorded on April 30, 1999.
Department
Refers to the Arizona Department of Real Estate, the agency with which the petitioner filed his Homeowners Association (HOA) Dispute Process Petition.
An acronym for Homeowners Association. In this case, the VVE – Casa Grande Homeowners Association, an association of 56 lot owners in Casa Grande, Arizona.
Office of Administrative Hearings
The office responsible for conducting hearings for disputes filed with state agencies like the Department of Real Estate.
Petitioner
The party who initiates a legal action or petition. In this case, homeowner Douglas J. Karolak.
Preponderance of the Evidence
The evidentiary standard required to win the case, defined as “such proof as convinces the trier of fact that the contention is more probably true than not.”
Respondent
The party against whom a petition is filed. In this case, the VVE – Casa Grande Homeowners Association.
Blog Post – 20F-H2020041-REL
Your HOA Just Changed the Rules? Why This Homeowner’s $500 Victory is a Warning to Everyone
For millions of Americans, living in a planned community means living under the authority of a Homeowners Association (HOA). While intended to protect property values, these relationships can often feel one-sided, with boards issuing mandates and homeowners feeling powerless to push back. It’s a common frustration, but it’s rare to see a single homeowner challenge their board and force a legal reckoning.
A recent case from Arizona, Douglas J. Karolak versus the VVE – Casa Grande Homeowners Association, provides a critical case study in board overreach and the surprising limits of legal victory. Karolak alleged his HOA board violated its own governing documents and state law by improperly changing the community’s core rules.
He took his case to an administrative law judge and, in a significant ruling, he won. But the outcome of this seemingly straightforward dispute was far from simple. The final decision reveals a shocking twist that holds critical lessons for every homeowner about the difference between being right on paper and getting the remedy you actually want.
There’s a Huge Difference Between a ‘Rule Change’ and a ‘Declaration Amendment’
The first lesson from this case is a critical one for every homeowner: understand the constitutional hierarchy of your community’s documents. The core of the dispute was the HOA Board’s attempt to amend its foundational document, the CC&Rs (Covenants, Conditions, and Restrictions), without getting the required approval from the homeowners.
Here are the key facts of the case:
• The Original Rule: The community’s CC&Rs explicitly stated in Section 10.4 that any amendment required a vote and execution by “at least two-thirds (2/3) of the Lots.” This is the highest level of authority in a planned community, akin to a constitution.
• The Failed Attempts: The Board had tried to get this two-thirds vote in both 2014 and 2015, but was unsuccessful.
• The Workaround: In 2018, the Board decided to bypass the homeowners. It used a separate power granted in Section 3.4 of the CC&Rs—the authority to create day-to-day “Association Rules”—to make what it called changes to the “‘rules section’ of the CC&Rs, specifically targeting the Use Restrictions in Part 7.”
The judge’s conclusion was crystal clear: The CC&Rs were drafted to treat the power to create “rules” and the power to “amend” the declaration as two entirely separate processes. This separation acts as a crucial check on the board’s power, preventing a small group from unilaterally changing the fundamental property rights of all owners. As the judge noted, “the original drafters of the CC&Rs did not contemplate that the Board had the authority to, on its own, amend the CC&Rs.”
Recording a Document Doesn’t Magically Make It Valid
To make their changes appear official, the HOA Board took a significant step. On October 5, 2018, they filed a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates (Amended CC&Rs)” with the Pinal County Recorder.
For the average homeowner, a formally recorded document filed with the county looks final, official, and legally binding. It’s an intimidating piece of paper that suggests any challenge would be futile.
However, the judge’s ruling highlights a critical legal truth: procedural legitimacy is paramount. An official-looking document, even one filed with the county, is invalid if the legal process required to create it was ignored. The judge found that because the Board did not follow the correct internal procedure—securing the two-thirds vote from homeowners—the very act of recording the document was improper. Even the HOA’s own lawyer seemed to concede this point during the hearing, acknowledging that “perhaps the Amended CC&Rs should not have been recorded.”
The Winner’s Paradox: You Can Be Right and Still Not Get Your Desired Fix
The final order from the Administrative Law Judge was unambiguous: Douglas Karolak, the petitioner, was officially deemed the “prevailing party.” The judge concluded that the HOA had acted in violation of its own community documents and Arizona state law. This was a clear-cut victory for the homeowner.
But here is the shocking twist. Karolak’s requested remedy was for the illegally filed “Amended CC&Rs” to be rescinded—in other words, to have them officially nullified and removed. This seems like the logical and necessary fix to the problem.
The judge, however, was bound by the limits of her authority. The final decision states plainly: “The Administrative Law Judge does not have the authority under the applicable statute to order the Amended CC&Rs rescinded.” This highlights a critical jurisdictional gap. The Administrative Law Judge’s role in this venue is to determine if a violation occurred and assign limited penalties, not to perform the function of a higher court, which might have the power to void a recorded document.
So, what was the actual remedy for this clear violation? The judge ordered the HOA to repay Karolak his $500 filing fee. No other civil penalty was issued. The homeowner won the argument but did not get the one thing he asked for to correct the board’s improper action.
A Victory on Paper, A Question in Practice
The case of Douglas J. Karolak is a powerful real-world lesson. It proves that a single homeowner, armed with a thorough understanding of their community’s governing documents, can successfully challenge an overreaching HOA board and win. It confirms that procedural shortcuts, even when filed and recorded, do not make an illegal action legal.
But it also reveals the frustrating limitations that can exist within the legal process. The homeowner was proven right, but the improperly filed document remains on the books, unable to be rescinded in this specific venue. It raises a crucial question for homeowners everywhere: How do you ensure your victory has real teeth?
Case Participants
Petitioner Side
Douglas J. Karolak(petitioner)
Respondent Side
David A. Fitzgibbons III(HOA attorney) Fitzgibbons Law Offices PLC Represented VVE – Casa Grande Homeowners Association
CV Mathai(witness) VVE – Casa Grande Homeowners Association
John Kelsey(witness) VVE – Casa Grande Homeowners Association
Kristi Kelsey(witness) VVE – Casa Grande Homeowners Association
William Findley(witness) VVE – Casa Grande Homeowners Association
Kay Niemi(witness) VVE – Casa Grande Homeowners Association
Mark Korte(witness) VVE – Casa Grande Homeowners Association
Felicia Del Sol(property manager rep) Norris Management
Neutral Parties
Tammy L. Eigenheer(ALJ) Office of Administrative Hearings
Judy Lowe(Commissioner) Arizona Department of Real Estate
The Administrative Law Judge denied the entire petition. Although the Respondent used a faulty ballot (Issue 2), the Petitioner waived the right to object by failing to raise a complaint prior to the vote. Petitioner also failed to prove his claims for issues 1 and 3.
Why this result: Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection, and failed to prove the claims for Issues 1 and 3.
Key Issues & Findings
Vote count required to amend declaration
Petitioner requested an order declaring the amendment invalid due to insufficient vote count.
Orders: Claim failed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Absence of separate voting opportunity for proposed actions
Petitioner sought an order declaring the amendment invalid because the ballot improperly required a single vote on two separate actions.
Orders: Claim denied on rehearing. Petition denied.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1812(A)
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Allen v. State, 14 Ariz. 458, 130 P. 1114
Unauthorized fines in excess of $50
Petitioner requested an order that the Association cannot levy fines in excess of $50 per violation.
Orders: Claim failed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Analytics Highlights
Topics: HOA elections, absentee ballots, waiver doctrine, amendment procedure, fines
Additional Citations:
A.R.S. § 33-1817(A)(1)
A.R.S. § 33-1812(A)
A.R.S. § 33-1812(B)(2)
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Allen v. State, 14 Ariz. 458, 130 P. 1114
Video Overview
Audio Overview
Decision Documents
18F-H1817018-REL-RHG Decision – 673729.pdf
Uploaded 2026-01-23T17:22:28 (40.8 KB)
18F-H1817018-REL-RHG Decision – 673828.pdf
Uploaded 2026-01-23T17:22:31 (48.5 KB)
18F-H1817018-REL-RHG Decision – 680738.pdf
Uploaded 2026-01-23T17:22:34 (103.5 KB)
Briefing Doc – 18F-H1817018-REL-RHG
Briefing Document: Servilla v. Village of Oakcreek Association (Case No. 18F-H1817018-REL-RHG)
Executive Summary
This briefing document analyzes the Administrative Law Judge (ALJ) Decision in the case of Scott S. Servilla versus the Village of Oakcreek Association. The final order, issued on January 9, 2019, following a rehearing, denied the petitioner’s claims. The central issue revolved around a homeowners association vote held on November 10, 2016, where two distinct amendments—one concerning property leasing and another a schedule of fines—were combined into a single item on the ballot.
The petitioner argued this ballot format violated Arizona statute A.R.S. § 33-1812(A), which requires a separate opportunity to vote for or against each proposed action. However, the ALJ’s decision did not rule on the merits of this statutory violation. Instead, the petition was denied based on the legal doctrine of waiver. The ALJ concluded that the petitioner, having received the allegedly defective ballot more than a month before the vote, had forfeited his right to challenge the procedure by failing to raise any objection until after the vote was completed and the unfavorable outcome was known. The decision heavily relies on the precedent set by the Arizona Supreme Court in Zajac v. City of Casa Grande, which established that a party cannot knowingly allow a flawed election to proceed and then protest only after receiving an undesirable result. The ALJ’s decision is binding, with any appeal required to be filed in superior court.
——————————————————————————–
I. Case Overview
This matter was a dispute brought before the Arizona Office of Administrative Hearings between a homeowner and a homeowners association regarding the validity of an amendment to the association’s governing documents.
Case Detail
Information
Case Number
18F-H1817018-REL-RHG
Petitioner
Scott Servilla & Heidi H Servilla
Respondent
Village of Oakcreek Association
Administrative Law Judge
Tammy L. Eigenheer
Hearing Date
November 29, 2018
Record Held Open Until
December 20, 2018
Decision Issued
January 9, 2019
II. Procedural History
1. Initial Petition: On or about November 13, 2017, Scott S. Servilla filed a petition with the Arizona Department of Real Estate against the Village of Oakcreek Association, an HOA with 2436 homeowners.
2. Expansion of Claims: The petitioner initially filed a single-issue petition with a $500 fee but was ordered by the ALJ to either specify the single issue or pay for a multi-issue hearing. The petitioner paid an additional $1,000 and proceeded with three distinct claims.
3. First ALJ Decision: Following an initial hearing, the ALJ found that the petitioner failed to prove two of his three claims. On the second claim—the improper ballot format—the judge found a statutory violation had occurred but concluded that “because the statute did not provide an enforcement mechanism to the Administrative Law Judge, no remedy could be ordered.”
4. Request for Rehearing: The petitioner filed a Request for Reconsideration, arguing that the conclusion of “no remedy” was contrary to law.
5. Rehearing Granted: On or about September 21, 2018, the Commissioner for the Arizona Department of Real Estate granted the request for a rehearing, which was held on November 29, 2018.
III. The Central Dispute: The November 10, 2016 Vote
The core of the dispute was the validity of a vote taken during a Special Meeting of Members on November 10, 2016.
• Bundled Amendments: The vote’s stated purpose was to approve the “Leasing and Schedule of Fines Assessment.” This single proposal combined two separate and substantive changes to the Master Declaration:
1. Addition of Section 4.23:Leasing of Lots and Units; Restrictions and Limitations, which established a minimum lease term of 30 days and prohibited leasing less than an entire unit.
2. Replacement of Section 5.08:Schedule of Fines, which permitted the association’s committee to adopt a new schedule specifying fines for violations.
• Ballot Format: The absentee ballot provided members with only a single voting choice: “FOR THE LEASING AND SCHEDULE OF FINES AMENDMENT” or “AGAINST THE LEASING AND SCHEDULE OF FINES AMENDMENT.”
• Statutory Violation Alleged: The petitioner contended this format violated A.R.S. § 33-1812(A), which requires that a ballot “shall set forth each proposed action” and “shall provide an opportunity to vote for or against each proposed action.”
• Vote Outcome: A total of 1,067 ballots were received (approximately 44% of members). Of those, 564 voted in favor of the amendment, constituting approximately 53% of the votes cast.
IV. Key Arguments at Rehearing
• Statutory Violation: The ballot was legally defective because it combined two distinct proposed actions into one vote, denying members the right to vote on each separately as required by statute.
• Evidence of Dissent: The petitioner argued that a subsequent vote in April 2017, in which members rejected a proposal to eliminate the By-Laws’ $50 fine limit, demonstrated that “had the proposed amendment been broken into two parts, the part of the proposed amendment dealing with the fines most likely would have failed.”
• Requested Remedy: The petitioner argued that based on case law, the ALJ was authorized to declare the entire amendment void and unenforceable.
• Waiver of Objection: The respondent’s primary argument was that the petitioner had waived any right to object to the ballot format. The petitioner received the absentee ballot on or about October 4, 2016, but did not raise an objection until April 2017, long after the November 10, 2016 vote was completed.
• Lack of Enforcement Provision: The respondent also maintained its earlier position that even if a violation of A.R.S. § 33-1812(A)(2) occurred, the statute itself provides no enforcement mechanism or remedy.
V. Administrative Law Judge’s Decision and Rationale
The ALJ’s final decision denied the petitioner’s petition in its entirety, based solely on the legal principle of waiver.
The ALJ found that the petitioner’s failure to object to the ballot’s format in a timely manner was fatal to his claim.
• Awareness of Defect: The petitioner received the absentee ballot on October 4, 2016, over a month before the November 10, 2016 vote. This provided sufficient time to identify the procedural issue and raise an objection.
• Failure to Act: By not objecting before the vote, the petitioner allowed the flawed process to proceed. He only lodged a complaint after the results were not in his favor.
• Forfeiture of Rights: The ALJ concluded, “As Petitioner was or should have been aware of the alleged issues with the ballot, he waived his right to bring forth a complaint about the ballot when he allowed the vote to proceed on November 10, 2016.”
The decision rested on the Arizona Supreme Court case Zajac v. City of Casa Grande (2004), which itself relied on Allen v. State (1913). This precedent establishes that a party cannot remain silent about a known procedural defect in an election process and then challenge the process only after an unfavorable outcome.
• Key Principle: The ALJ articulated the principle from Zajac: “one cannot knowingly let a defective vote proceed only to complain and seek redress if the results are not to the individual’s liking.”
• Direct Quotation: The decision directly quotes the ruling in Zajac to finalize its point: “He cannot have it both ways; that is, he cannot allow the [vote] to proceed without objection, and then be permitted thereafter to assert his protest.”
• Petition Denied: “IT IS ORDERED that Petitioner’s petition is denied.”
• Binding Decision: As the decision was issued as a result of a rehearing, it is legally binding on the parties.
• Appeal Process: Any party wishing to appeal the order must file for judicial review with the superior court within thirty-five days from the date the order was served (January 9, 2019).
Study Guide – 18F-H1817018-REL-RHG
Study Guide: Servilla v. Village of Oakcreek Association (Case No. 18F-H1817018-REL-RHG)
This guide provides a comprehensive review of the administrative legal case involving Petitioner Scott Servilla and Respondent Village of Oakcreek Association, as detailed in the Administrative Law Judge Decision of January 9, 2019. It includes a short-answer quiz to test factual recall, a corresponding answer key, suggested essay questions for deeper analysis, and a glossary of key terms.
——————————————————————————–
Short Answer Quiz
Instructions: Answer the following ten questions in 2-3 sentences each, based entirely on the information provided in the source documents.
1. Who were the primary parties in this case, and what roles did they play?
2. What were the two distinct proposed changes that were combined into a single voting item on the November 10, 2016 absentee ballot?
3. Which specific Arizona Revised Statute did the Petitioner allege was violated by the format of the ballot, and what does that statute require?
4. What was the numerical outcome of the November 10, 2016 vote on the proposed amendment?
5. What was the Respondent’s primary legal argument for why the Petitioner’s complaint about the faulty ballot should be dismissed?
6. What key legal precedent, specifically the case of Zajac v. City of Casa Grande, did the Administrative Law Judge (ALJ) rely upon in the final decision?
7. According to the decision, when did the Petitioner receive the ballot, and why was this date critical to the ALJ’s final ruling?
8. What was the finding in the initial Administrative Law Judge Decision regarding the ballot issue, and why did it lead to a request for a rehearing?
9. Describe the separate vote that occurred in April 2017 and explain how the Petitioner used it to support his argument regarding the 2016 vote.
10. What was the final order issued by Administrative Law Judge Tammy L. Eigenheer on January 9, 2019, and what was the legal basis for this order?
——————————————————————————–
Answer Key
1. The primary parties were the Petitioner, Scott S. Servilla (who appeared on his own behalf), and the Respondent, the Village of Oakcreek Association (a homeowners association represented by Mark Sahl). The Petitioner filed a complaint against the Respondent with the Arizona Department of Real Estate.
2. The two proposed changes were the addition of a new section, 4.23, concerning “Leasing of Lots and Units; Restrictions and Limitations,” and the complete replacement of an existing section, 5.08, titled “Schedule of Fines.” The ballot presented these as a single item called the “LEASING AND SCHEDULE OF FINES AMENDMENT.”
3. The Petitioner alleged a violation of A.R.S. § 33-1812(A)(2) and A.R.S. § 33-1812(B)(2). The statute requires that an absentee ballot “shall set forth each proposed action” and “shall provide an opportunity to vote for or against each proposed action.”
4. A total of 1067 ballots were received, representing approximately 44 percent of the members. Of those who voted, 564 (approximately 53 percent) voted in favor of the proposed amendment.
5. The Respondent’s primary argument was that the Petitioner had waived any right to object to the ballot’s format. The Respondent contended that the Petitioner should have raised his objection before the vote occurred, rather than waiting until after the results were known.
6. The ALJ relied on the precedent set in Zajac v. City of Casa Grande. This Arizona Supreme Court case established the principle that an individual aware of a procedural issue with an election cannot wait to see the results before lodging a complaint.
7. The Petitioner acknowledged receiving the absentee ballot on or about October 4, 2016, more than a month before the November 10, 2016 vote. This date was critical because it demonstrated that the Petitioner had ample time to object to the ballot’s format before the vote took place, supporting the ALJ’s waiver finding.
8. In the initial decision, the ALJ found that a violation of the statute had occurred regarding the ballot but concluded that no remedy could be ordered because the statute lacked an enforcement mechanism. The Petitioner requested a rehearing, alleging that this conclusion was contrary to the law and that the ALJ did have the authority to declare the amendment void.
9. In April 2017, a separate proposed amendment to eliminate the By-Laws’ $50 fine limitation was voted down by the members. The Petitioner argued this subsequent vote demonstrated that the fines portion of the November 2016 amendment would likely have failed if members had been given a separate opportunity to vote on it.
10. The final order, issued January 9, 2019, denied the Petitioner’s petition. The legal basis was the doctrine of waiver; the ALJ ruled that because the Petitioner was aware of the alleged issues with the ballot before the vote and failed to object, he waived his right to complain about it after the results were announced.
——————————————————————————–
Essay Questions
Instructions: The following questions are designed to encourage deeper analysis of the case. Formulate comprehensive essay responses based on the details and legal reasoning presented in the source documents.
1. Explain the legal doctrine of waiver as applied in this case. How did the timeline of events, from the receipt of the ballot to the filing of the petition, support the Administrative Law Judge’s application of the principles from Zajac v. City of Casa Grande?
2. Analyze the conflicting interpretations of “proposed action” under A.R.S. § 33-1812(A) as presented by the Petitioner and the Respondent. Although the Judge ultimately ruled on procedural grounds, which party’s interpretation of the statute appears more consistent with the law’s text and intent?
3. Discuss the procedural history of this case, from the initial filing with the Arizona Department of Real Estate through the first decision, the request for reconsideration, and the final ruling on rehearing. What does this progression reveal about the administrative hearing process and the remedies available to petitioners?
4. The Petitioner attempted to use the results of an April 2017 vote to argue that the fines portion of the November 2016 amendment would likely have failed if voted on separately. Evaluate the strength and relevance of this argument within the legal context of the case.
5. Imagine the Petitioner had raised his objection to the ballot format before the November 10, 2016 vote. Based on the information in the decision, how might the proceedings and the ultimate outcome have been different?
——————————————————————————–
Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, hears evidence, and issues decisions and orders. In this case, Tammy L. Eigenheer.
A.R.S. (Arizona Revised Statutes)
The collection of laws enacted by the Arizona state legislature. The Petitioner alleged violations of A.R.S. § 33-1817 and § 33-1812.
Absentee Ballot
A ballot that allows a member to vote without being physically present at a meeting. The format of this ballot was the central issue of the rehearing.
By-Laws
The rules that govern the internal operations of an association. The Petitioner cited a violation of By-Laws Section 8, Article VIII concerning a $50 fine limit.
Department (The Department)
The Arizona Department of Real Estate, the state agency where the Petitioner first filed his petition against the homeowners association.
Master Declaration
A core governing document for a homeowners association that establishes rules, restrictions, and obligations for homeowners. The November 10, 2016 vote was to amend this document.
A formal, binding decision issued by a judge. The final document in this case was an order denying the Petitioner’s petition.
Petitioner
The party who initiates a legal action by filing a petition. In this case, Scott Servilla & Heidi H. Servilla.
Preponderance of the Evidence
The standard of proof required in this proceeding. It means the evidence presented is more convincing and likely to be true than the evidence offered in opposition.
Rehearing
A second hearing of a case granted to reconsider the initial decision. A rehearing was granted after the Petitioner argued that the initial finding of “no remedy” was contrary to law.
Respondent
The party against whom a petition is filed and who must respond to the allegations. In this case, the Village of Oakcreek Association.
Waiver
A legal doctrine where a party intentionally or through inaction gives up a known right or claim. The ALJ ruled the Petitioner waived his right to object to the ballot by not raising the issue before the vote.
Zajac v. City of Casa Grande
An Arizona Supreme Court case that established a key legal precedent used in this decision. It holds that a party cannot knowingly allow a defective vote to proceed and then complain only if the results are unfavorable.
Blog Post – 18F-H1817018-REL-RHG
{
“case”: {
“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla, vs. Village of Oakcreek Association”,
“decision_date”: “2019-01-09”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Scott Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: “Also listed as Scott S. Servilla; appeared on his own behalf”
},
{
“name”: “Heidi H Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Tammy L. Eigenheer”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “Office of Administrative Hearings”,
“notes”: null
},
{
“name”: “Mark K. Sahl”,
“role”: “respondent attorney”,
“side”: “respondent”,
“affiliation”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”,
“notes”: “Represented Village of Oakcreek Association”
},
{
“name”: “Judy Lowe”,
“role”: “ADRE Commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: null
},
{
“name”: “L. Dettorre”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “A. Hansen”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “D. Jones”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “D. Gardner”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “N. Cano”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “c. serrano”,
“role”: “transmission clerk”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Signed document transmission for November 29, 2018 order”
},
{
“name”: “Felicia Del Sol”,
“role”: “transmission clerk”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Signed document transmission for January 9, 2019 order”
}
]
}
{ “case”: { “agency”: “ADRE”, “tribunal”: “OAH”, “docket_no”: “18F-H1817018-REL-RHG”, “case_title”: “Scott Servilla & Heidi H Servilla vs. Village of Oakcreek Association”, “decision_date”: “2019-01-09”, “alj_name”: “Tammy L. Eigenheer” }, “parties”: [ { “party_id”: “P1”, “role”: “petitioner”, “name”: “Scott Servilla & Heidi H Servilla”, “party_type”: “homeowner”, “email”: null, “phone”: null, “attorney_name”: null, “attorney_firm”: null, “attorney_email”: null, “attorney_phone”: null }, { “party_id”: “R1”, “role”: “respondent”, “name”: “Village of Oakcreek Association”, “party_type”: “HOA”, “email”: null, “phone”: null, “attorney_name”: “Mark K. Sahl”, “attorney_firm”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”, “attorney_email”: null, “attorney_phone”: null } ], “issues”: [ { “issue_id”: “ISS-001”, “type”: “statute”, “citation”: “A.R.S. § 33-1812(A)”, “caption”: “Failure to provide separate voting opportunity for each proposed action in absentee ballot”, “violation(s)”: “Written ballot used did not provide a separate opportunity to vote for or against each proposed action, violating A.R.S. § 33-1812(B)(2) and the Declaration12.”, “summary”: “Petitioner alleged the November 10, 2016 vote was invalid because the absentee ballot combined two distinct proposed amendments (Leasing restrictions and Schedule of Fines) into a single vote, contravening the requirement that ballots set forth and provide an opportunity to vote for or against each proposed action1….”, “outcome”: “respondent_win”, “filing_fee_paid”: 500.0, “filing_fee_refunded”: false, “civil_penalty_amount”: 0.0, “orders_summary”: “Claim failed because Petitioner waived the right to object to the faulty ballot by allowing the vote to proceed without objection45.”, “why_the_loss”: “Petitioner was aware of the alleged issue with the ballot prior to the November 10, 2016 vote but failed to raise an objection, thus waiving the right to complain thereafter46.”, “cited”: [ “Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297” ] } ], “money_summary”: { “issues_count”: 3, “total_filing_fees_paid”: 1500.0, “total_filing_fees_refunded”: 0.0, “total_civil_penalties”: 0.0 }, “outcomes”: { “petitioner_is_hoa”: false, “petitioner_win”: “loss”, “summarize_judgement”: “The Administrative Law Judge denied the entire petition, finding that the Petitioner waived the right to challenge the outcome of the November 10, 2016 vote concerning the faulty ballot (Issue 2) because he failed to object before the vote proceeded. Petitioner also failed to prove his claims regarding the required vote count (Issue 1) and unauthorized fines (Issue 3)4….”, “why_the_loss”: “Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection after receiving the ballot, and failed to prove the claims for issues 1 and 34….” }, “analytics”: { “cited”: [ “A.R.S. § 33-1817(A)(1)”, “A.R.S. § 33-1812(B)(2)”, “A.R.S. § 33-1812(A)”, “Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”, “Allen v. State, 14 Ariz. 458, 130 P. 1114” ], “tags”: [ “HOA elections”, “absentee ballots”, “waiver doctrine”, “amendment procedure”, “fines” ] } }
{ “rehearing”: { “is_rehearing”: true, “base_case_id”: “18F-H1817018-REL”, “original_decision_status”: “affirmed”, “original_decision_summary”: “In the original decision, the Administrative Law Judge found that the Petitioner failed to prove claims regarding issues one and three1. For issue two (faulty ballot), the ALJ established a statutory violation of A.R.S. § 33-1812(B)(2), but concluded that no remedy could be ordered because the statute did not provide an enforcement mechanism1.”, “rehearing_decision_summary”: “The Commissioner granted the rehearing to address the legal conclusion that no remedy could be ordered for the violation found in Issue 22. Following the rehearing, the Administrative Law Judge denied the entire petition3, concluding that Petitioner waived the right to complain about the faulty ballot because he was aware of the alleged issues but allowed the November 10, 2016 vote to proceed without objection4….”, “issues_challenged”: [ { “issue_number”: 2, “description”: “Violation of A.R.S. § 33-1812(B)(2) because the written ballot used did not provide a separate opportunity to vote for or against each proposed action7.”, “challenge”: “Petitioner challenged the original conclusion that no remedy could be ordered, alleging this was contrary to the law and arguing that the Administrative Law Judge was authorized to declare the amendment void and unenforceable28.”, “rehearing_outcome”: “Denied/Failed. The claim failed because the ALJ ruled that Petitioner waived his right to bring forth a complaint about the ballot by allowing the vote to proceed without objection36.” } ] } }
{
“case”: {
“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla, Petitioner, vs. Village of Oakcreek Association, Respondent.”,
“decision_date”: “January 9, 2019”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Scott Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: “Also referred to as Scott S. Servilla”
},
{
“name”: “Heidi H Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Tammy L. Eigenheer”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “Office of Administrative Hearings”,
“notes”: null
},
{
“name”: “Mark K. Sahl”,
“role”: “attorney”,
“side”: “respondent”,
“affiliation”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”,
“notes”: null
},
{
“name”: “Judy Lowe”,
“role”: “commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: null
},
{
“name”: “c. serrano”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents”
},
{
“name”: “Felicia Del Sol”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents”
}
]
}
This document summarizes the administrative law judge decision in the rehearing case of Scott Servilla & Heidi H Servilla v. Village of Oakcreek Association, Case No. 18F-H1817018-REL-RHG1. This matter was heard by Administrative Law Judge Tammy L. Eigenheer on November 29, 2018, with the record held open until December 20, 20181.
Procedural History (Original Decision vs. Rehearing)
Petitioner Scott Servilla filed a petition with the Arizona Department of Real Estate (ADRE) against the Village of Oakcreek Association (Respondent) alleging multiple violations of statute and the community’s Master Declaration2,3.
Original Decision: The Administrative Law Judge initially ruled on three issues4. The ALJ found that Petitioner failed to prove two claims5. However, the ALJ found that the Respondent violated A.R.S. § 33-1812(B)(2) regarding the written ballot, but concluded that because the statute did not provide an enforcement mechanism, no remedy could be ordered5.
Rehearing Grant: Following this initial decision, Petitioner filed a Request for Reconsideration, arguing the conclusion that no remedy existed was contrary to law6. The ADRE Commissioner granted the request for rehearing6.
Key Facts and Issue for Rehearing
The central issue during the rehearing concerned the statutory violation found in the original decision: whether the November 10, 2016 vote to amend the Master Declaration was invalid because the absentee ballot failed to comply with A.R.S. § 33-1812(A)4,7.
The Ballot Violation: A.R.S. § 33-1812(A) requires that absentee ballots set forth “each proposed action” and provide an opportunity to vote for or against “each proposed action”7. The Respondent’s proposed amendment bundled two distinct actions: the addition of leasing restrictions and the complete replacement of the Schedule of Fines8,9,10. The ballot only allowed members to vote “FOR” or “AGAINST THE LEASING AND SCHEDULE OF FINES AMENDMENT” as a single package9.
Key Legal Argument and Decision
At the rehearing, the core legal debate shifted from whether a violation occurred to whether the Petitioner was entitled to relief, specifically whether the ALJ could declare the amendment void and unenforceable6,11.
Respondent’s Defense and the Doctrine of Waiver: Respondent argued that Petitioner had waived the right to object because he did not raise any complaint about the defective ballot prior to the vote12. Petitioner received the ballot more than one month before the November 10, 2016 vote13.
ALJ Legal Conclusion: Drawing on Arizona Supreme Court precedent (Zajac v. City of Casa Grande)10,14, the Administrative Law Judge concluded that an individual cannot allow a known defective vote to proceed and only complain afterward if dissatisfied with the results15,16. Because Petitioner failed to raise an objection to the faulty ballot prior to the scheduled vote, he waived his right to bring a subsequent complaint about the ballot16.
Based on the application of the waiver doctrine, the ALJ found that Petitioner’s claim as to the ballot must fail16. The Administrative Law Judge ordered that Petitioner’s petition is denied17. This order, resulting from the rehearing, is binding on the parties17.
{
“case”: {
“agency”: “ADRE”,
“tribunal”: “OAH”,
“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla vs. Village of Oakcreek Association”,
“decision_date”: “2019-01-09”,
“alj_name”: “Tammy L. Eigenheer”
},
“parties”: [
{
“party_id”: “P1”,
“role”: “petitioner”,
“name”: “Scott Servilla & Heidi H Servilla”,
“party_type”: “homeowner”,
“email”: null,
“phone”: null,
“attorney_name”: null,
“attorney_firm”: null,
“attorney_email”: null,
“attorney_phone”: null
},
{
“party_id”: “R1”,
“role”: “respondent”,
“name”: “Village of Oakcreek Association”,
“party_type”: “HOA”,
“email”: null,
“phone”: null,
“attorney_name”: “Mark K. Sahl”,
“attorney_firm”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”,
“attorney_email”: null,
“attorney_phone”: null
}
],
“issues”: [
{
“issue_id”: “ISS-001”,
“type”: “statute”,
“citation”: “A.R.S. § 33-1817(A)(1)”,
“caption”: “Vote count required to amend declaration”,
“violation(s)”: “Alleged violation of A.R.S. § 33-1817(A)(1) and Declaration regarding the required majority vote (1173 votes) for the November 10, 2016 amendment.”,
“summary”: “Petitioner requested an order declaring the amendment invalid due to insufficient vote count.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim failed.”,
“why_the_loss”: “Petitioner failed to prove the claim.”,
“cited”: []
},
{
“issue_id”: “ISS-002”,
“type”: “statute”,
“citation”: “A.R.S. § 33-1812(A)”,
“caption”: “Absence of separate voting opportunity for proposed actions”,
“violation(s)”: “The written ballot used for the November 10, 2016 amendment violated A.R.S. § 33-1812(A) and (B)(2) because it bundled two distinct proposed actions (Leasing Restrictions and Schedule of Fines) into a single vote.”,
“summary”: “Petitioner sought an order declaring the amendment invalid because the ballot improperly required a single vote on two separate actions.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim denied on rehearing. Petition denied.”,
“why_the_loss”: “Petitioner waived the right to object to the faulty ballot by receiving it over a month prior and allowing the vote to proceed on November 10, 2016, without raising a complaint.”,
“cited”: [
“A.R.S. § 33-1812(A)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”,
“Allen v. State, 14 Ariz. 458, 130 P. 1114”
]
},
{
“issue_id”: “ISS-003”,
“type”: “governing_document”,
“citation”: “By-Laws Section 8, Article VIII”,
“caption”: “Unauthorized fines in excess of $50”,
“violation(s)”: “Respondent allegedly violated By-Laws by imposing fines in excess of $50 per violation, especially after a proposed amendment to raise the fines was voted down.”,
“summary”: “Petitioner requested an order that the Association cannot levy fines in excess of $50 per violation.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim failed.”,
“why_the_loss”: “Petitioner failed to prove the claim.”,
“cited”: []
}
],
“money_summary”: {
“issues_count”: 3,
“total_filing_fees_paid”: 1500.0,
“total_filing_fees_refunded”: 0.0,
“total_civil_penalties”: 0.0
},
“outcomes”: {
“petitioner_is_hoa”: false,
“petitioner_win”: “loss”,
“summarize_judgement”: “The Administrative Law Judge denied the entire petition. Although the Respondent used a faulty ballot (Issue 2), the Petitioner waived the right to object by failing to raise a complaint prior to the vote. Petitioner also failed to prove his claims for issues 1 and 3.”,
“why_the_loss”: “Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection, and failed to prove the claims for Issues 1 and 3.”,
“cited”: [
“A.R.S. § 33-1812(A)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”
]
},
“analytics”: {
“cited”: [
“A.R.S. § 33-1817(A)(1)”,
“A.R.S. § 33-1812(A)”,
“A.R.S. § 33-1812(B)(2)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”,
“Allen v. State, 14 Ariz. 458, 130 P. 1114”
],
“tags”: [
“HOA elections”,
“absentee ballots”,
“waiver doctrine”,
“amendment procedure”,
“fines”
]
}
}
{
“case”: {
“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla, vs. Village of Oakcreek Association”,
“decision_date”: “2019-01-09”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Scott Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: “Appeared on his own behalf at the hearing; also listed as Scott S. Servilla [1], [2]”
},
{
“name”: “Heidi H Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Tammy L. Eigenheer”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “Office of Administrative Hearings”,
“notes”: “Administrative Law Judge [3], [4], [1], [2]”
},
{
“name”: “Mark K. Sahl”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”,
“notes”: “Represented Village of Oakcreek Association [2]”
},
{
“name”: “Judy Lowe”,
“role”: “commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Granted the request for rehearing [5]”
},
{
“name”: “c. serrano”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents on November 29, 2018 [6], [7]”
},
{
“name”: “Felicia Del Sol”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents on January 9, 2019 [8]”
},
{
“name”: “LDettorre”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “AHansen”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “djones”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “DGardner”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “ncano”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
}
]
}
Case Participants
Petitioner Side
Scott Servilla(petitioner) Also referred to as Scott S. Servilla
Heidi H Servilla(petitioner)
Respondent Side
Mark K. Sahl(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Neutral Parties
Tammy L. Eigenheer(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
18F-H1817018-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2019-01-09
Administrative Law Judge
Tammy L. Eigenheer
Outcome
loss
Filing Fees Refunded
$1,500.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Scott Servilla & Heidi H Servilla
Counsel
—
Respondent
Village of Oakcreek Association
Counsel
Mark K. Sahl
Alleged Violations
A.R.S. § 33-1812(A)
Outcome Summary
The Administrative Law Judge denied the entire petition, finding that the Petitioner waived the right to challenge the outcome of the November 10, 2016 vote concerning the faulty ballot (Issue 2) because he failed to object before the vote proceeded. Petitioner also failed to prove his claims regarding the required vote count (Issue 1) and unauthorized fines (Issue 3).
Why this result: Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection after receiving the ballot, and failed to prove the claims for issues 1 and 3.
Key Issues & Findings
Failure to provide separate voting opportunity for each proposed action in absentee ballot
Petitioner alleged the November 10, 2016 vote was invalid because the absentee ballot combined two distinct proposed amendments (Leasing restrictions and Schedule of Fines) into a single vote, contravening the requirement that ballots set forth and provide an opportunity to vote for or against each proposed action.
Orders: Claim failed because Petitioner waived the right to object to the faulty ballot by allowing the vote to proceed without objection.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Analytics Highlights
Topics: HOA elections, absentee ballots, waiver doctrine, amendment procedure, fines
Additional Citations:
A.R.S. § 33-1817(A)(1)
A.R.S. § 33-1812(B)(2)
A.R.S. § 33-1812(A)
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Allen v. State, 14 Ariz. 458, 130 P. 1114
Video Overview
Audio Overview
Decision Documents
18F-H1817018-REL-RHG Decision – 673729.pdf
Uploaded 2025-10-09T03:32:15 (40.8 KB)
18F-H1817018-REL-RHG Decision – 673828.pdf
Uploaded 2025-10-09T03:32:15 (48.5 KB)
18F-H1817018-REL-RHG Decision – 680738.pdf
Uploaded 2025-10-09T03:32:15 (103.5 KB)
Briefing Doc – 18F-H1817018-REL-RHG
Briefing Document: Servilla v. Village of Oakcreek Association (Case No. 18F-H1817018-REL-RHG)
Executive Summary
This briefing document analyzes the Administrative Law Judge (ALJ) Decision in the case of Scott S. Servilla versus the Village of Oakcreek Association. The final order, issued on January 9, 2019, following a rehearing, denied the petitioner’s claims. The central issue revolved around a homeowners association vote held on November 10, 2016, where two distinct amendments—one concerning property leasing and another a schedule of fines—were combined into a single item on the ballot.
The petitioner argued this ballot format violated Arizona statute A.R.S. § 33-1812(A), which requires a separate opportunity to vote for or against each proposed action. However, the ALJ’s decision did not rule on the merits of this statutory violation. Instead, the petition was denied based on the legal doctrine of waiver. The ALJ concluded that the petitioner, having received the allegedly defective ballot more than a month before the vote, had forfeited his right to challenge the procedure by failing to raise any objection until after the vote was completed and the unfavorable outcome was known. The decision heavily relies on the precedent set by the Arizona Supreme Court in Zajac v. City of Casa Grande, which established that a party cannot knowingly allow a flawed election to proceed and then protest only after receiving an undesirable result. The ALJ’s decision is binding, with any appeal required to be filed in superior court.
——————————————————————————–
I. Case Overview
This matter was a dispute brought before the Arizona Office of Administrative Hearings between a homeowner and a homeowners association regarding the validity of an amendment to the association’s governing documents.
Case Detail
Information
Case Number
18F-H1817018-REL-RHG
Petitioner
Scott Servilla & Heidi H Servilla
Respondent
Village of Oakcreek Association
Administrative Law Judge
Tammy L. Eigenheer
Hearing Date
November 29, 2018
Record Held Open Until
December 20, 2018
Decision Issued
January 9, 2019
II. Procedural History
1. Initial Petition: On or about November 13, 2017, Scott S. Servilla filed a petition with the Arizona Department of Real Estate against the Village of Oakcreek Association, an HOA with 2436 homeowners.
2. Expansion of Claims: The petitioner initially filed a single-issue petition with a $500 fee but was ordered by the ALJ to either specify the single issue or pay for a multi-issue hearing. The petitioner paid an additional $1,000 and proceeded with three distinct claims.
3. First ALJ Decision: Following an initial hearing, the ALJ found that the petitioner failed to prove two of his three claims. On the second claim—the improper ballot format—the judge found a statutory violation had occurred but concluded that “because the statute did not provide an enforcement mechanism to the Administrative Law Judge, no remedy could be ordered.”
4. Request for Rehearing: The petitioner filed a Request for Reconsideration, arguing that the conclusion of “no remedy” was contrary to law.
5. Rehearing Granted: On or about September 21, 2018, the Commissioner for the Arizona Department of Real Estate granted the request for a rehearing, which was held on November 29, 2018.
III. The Central Dispute: The November 10, 2016 Vote
The core of the dispute was the validity of a vote taken during a Special Meeting of Members on November 10, 2016.
• Bundled Amendments: The vote’s stated purpose was to approve the “Leasing and Schedule of Fines Assessment.” This single proposal combined two separate and substantive changes to the Master Declaration:
1. Addition of Section 4.23:Leasing of Lots and Units; Restrictions and Limitations, which established a minimum lease term of 30 days and prohibited leasing less than an entire unit.
2. Replacement of Section 5.08:Schedule of Fines, which permitted the association’s committee to adopt a new schedule specifying fines for violations.
• Ballot Format: The absentee ballot provided members with only a single voting choice: “FOR THE LEASING AND SCHEDULE OF FINES AMENDMENT” or “AGAINST THE LEASING AND SCHEDULE OF FINES AMENDMENT.”
• Statutory Violation Alleged: The petitioner contended this format violated A.R.S. § 33-1812(A), which requires that a ballot “shall set forth each proposed action” and “shall provide an opportunity to vote for or against each proposed action.”
• Vote Outcome: A total of 1,067 ballots were received (approximately 44% of members). Of those, 564 voted in favor of the amendment, constituting approximately 53% of the votes cast.
IV. Key Arguments at Rehearing
• Statutory Violation: The ballot was legally defective because it combined two distinct proposed actions into one vote, denying members the right to vote on each separately as required by statute.
• Evidence of Dissent: The petitioner argued that a subsequent vote in April 2017, in which members rejected a proposal to eliminate the By-Laws’ $50 fine limit, demonstrated that “had the proposed amendment been broken into two parts, the part of the proposed amendment dealing with the fines most likely would have failed.”
• Requested Remedy: The petitioner argued that based on case law, the ALJ was authorized to declare the entire amendment void and unenforceable.
• Waiver of Objection: The respondent’s primary argument was that the petitioner had waived any right to object to the ballot format. The petitioner received the absentee ballot on or about October 4, 2016, but did not raise an objection until April 2017, long after the November 10, 2016 vote was completed.
• Lack of Enforcement Provision: The respondent also maintained its earlier position that even if a violation of A.R.S. § 33-1812(A)(2) occurred, the statute itself provides no enforcement mechanism or remedy.
V. Administrative Law Judge’s Decision and Rationale
The ALJ’s final decision denied the petitioner’s petition in its entirety, based solely on the legal principle of waiver.
The ALJ found that the petitioner’s failure to object to the ballot’s format in a timely manner was fatal to his claim.
• Awareness of Defect: The petitioner received the absentee ballot on October 4, 2016, over a month before the November 10, 2016 vote. This provided sufficient time to identify the procedural issue and raise an objection.
• Failure to Act: By not objecting before the vote, the petitioner allowed the flawed process to proceed. He only lodged a complaint after the results were not in his favor.
• Forfeiture of Rights: The ALJ concluded, “As Petitioner was or should have been aware of the alleged issues with the ballot, he waived his right to bring forth a complaint about the ballot when he allowed the vote to proceed on November 10, 2016.”
The decision rested on the Arizona Supreme Court case Zajac v. City of Casa Grande (2004), which itself relied on Allen v. State (1913). This precedent establishes that a party cannot remain silent about a known procedural defect in an election process and then challenge the process only after an unfavorable outcome.
• Key Principle: The ALJ articulated the principle from Zajac: “one cannot knowingly let a defective vote proceed only to complain and seek redress if the results are not to the individual’s liking.”
• Direct Quotation: The decision directly quotes the ruling in Zajac to finalize its point: “He cannot have it both ways; that is, he cannot allow the [vote] to proceed without objection, and then be permitted thereafter to assert his protest.”
• Petition Denied: “IT IS ORDERED that Petitioner’s petition is denied.”
• Binding Decision: As the decision was issued as a result of a rehearing, it is legally binding on the parties.
• Appeal Process: Any party wishing to appeal the order must file for judicial review with the superior court within thirty-five days from the date the order was served (January 9, 2019).
Study Guide – 18F-H1817018-REL-RHG
Study Guide: Servilla v. Village of Oakcreek Association (Case No. 18F-H1817018-REL-RHG)
This guide provides a comprehensive review of the administrative legal case involving Petitioner Scott Servilla and Respondent Village of Oakcreek Association, as detailed in the Administrative Law Judge Decision of January 9, 2019. It includes a short-answer quiz to test factual recall, a corresponding answer key, suggested essay questions for deeper analysis, and a glossary of key terms.
——————————————————————————–
Short Answer Quiz
Instructions: Answer the following ten questions in 2-3 sentences each, based entirely on the information provided in the source documents.
1. Who were the primary parties in this case, and what roles did they play?
2. What were the two distinct proposed changes that were combined into a single voting item on the November 10, 2016 absentee ballot?
3. Which specific Arizona Revised Statute did the Petitioner allege was violated by the format of the ballot, and what does that statute require?
4. What was the numerical outcome of the November 10, 2016 vote on the proposed amendment?
5. What was the Respondent’s primary legal argument for why the Petitioner’s complaint about the faulty ballot should be dismissed?
6. What key legal precedent, specifically the case of Zajac v. City of Casa Grande, did the Administrative Law Judge (ALJ) rely upon in the final decision?
7. According to the decision, when did the Petitioner receive the ballot, and why was this date critical to the ALJ’s final ruling?
8. What was the finding in the initial Administrative Law Judge Decision regarding the ballot issue, and why did it lead to a request for a rehearing?
9. Describe the separate vote that occurred in April 2017 and explain how the Petitioner used it to support his argument regarding the 2016 vote.
10. What was the final order issued by Administrative Law Judge Tammy L. Eigenheer on January 9, 2019, and what was the legal basis for this order?
——————————————————————————–
Answer Key
1. The primary parties were the Petitioner, Scott S. Servilla (who appeared on his own behalf), and the Respondent, the Village of Oakcreek Association (a homeowners association represented by Mark Sahl). The Petitioner filed a complaint against the Respondent with the Arizona Department of Real Estate.
2. The two proposed changes were the addition of a new section, 4.23, concerning “Leasing of Lots and Units; Restrictions and Limitations,” and the complete replacement of an existing section, 5.08, titled “Schedule of Fines.” The ballot presented these as a single item called the “LEASING AND SCHEDULE OF FINES AMENDMENT.”
3. The Petitioner alleged a violation of A.R.S. § 33-1812(A)(2) and A.R.S. § 33-1812(B)(2). The statute requires that an absentee ballot “shall set forth each proposed action” and “shall provide an opportunity to vote for or against each proposed action.”
4. A total of 1067 ballots were received, representing approximately 44 percent of the members. Of those who voted, 564 (approximately 53 percent) voted in favor of the proposed amendment.
5. The Respondent’s primary argument was that the Petitioner had waived any right to object to the ballot’s format. The Respondent contended that the Petitioner should have raised his objection before the vote occurred, rather than waiting until after the results were known.
6. The ALJ relied on the precedent set in Zajac v. City of Casa Grande. This Arizona Supreme Court case established the principle that an individual aware of a procedural issue with an election cannot wait to see the results before lodging a complaint.
7. The Petitioner acknowledged receiving the absentee ballot on or about October 4, 2016, more than a month before the November 10, 2016 vote. This date was critical because it demonstrated that the Petitioner had ample time to object to the ballot’s format before the vote took place, supporting the ALJ’s waiver finding.
8. In the initial decision, the ALJ found that a violation of the statute had occurred regarding the ballot but concluded that no remedy could be ordered because the statute lacked an enforcement mechanism. The Petitioner requested a rehearing, alleging that this conclusion was contrary to the law and that the ALJ did have the authority to declare the amendment void.
9. In April 2017, a separate proposed amendment to eliminate the By-Laws’ $50 fine limitation was voted down by the members. The Petitioner argued this subsequent vote demonstrated that the fines portion of the November 2016 amendment would likely have failed if members had been given a separate opportunity to vote on it.
10. The final order, issued January 9, 2019, denied the Petitioner’s petition. The legal basis was the doctrine of waiver; the ALJ ruled that because the Petitioner was aware of the alleged issues with the ballot before the vote and failed to object, he waived his right to complain about it after the results were announced.
——————————————————————————–
Essay Questions
Instructions: The following questions are designed to encourage deeper analysis of the case. Formulate comprehensive essay responses based on the details and legal reasoning presented in the source documents.
1. Explain the legal doctrine of waiver as applied in this case. How did the timeline of events, from the receipt of the ballot to the filing of the petition, support the Administrative Law Judge’s application of the principles from Zajac v. City of Casa Grande?
2. Analyze the conflicting interpretations of “proposed action” under A.R.S. § 33-1812(A) as presented by the Petitioner and the Respondent. Although the Judge ultimately ruled on procedural grounds, which party’s interpretation of the statute appears more consistent with the law’s text and intent?
3. Discuss the procedural history of this case, from the initial filing with the Arizona Department of Real Estate through the first decision, the request for reconsideration, and the final ruling on rehearing. What does this progression reveal about the administrative hearing process and the remedies available to petitioners?
4. The Petitioner attempted to use the results of an April 2017 vote to argue that the fines portion of the November 2016 amendment would likely have failed if voted on separately. Evaluate the strength and relevance of this argument within the legal context of the case.
5. Imagine the Petitioner had raised his objection to the ballot format before the November 10, 2016 vote. Based on the information in the decision, how might the proceedings and the ultimate outcome have been different?
——————————————————————————–
Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, hears evidence, and issues decisions and orders. In this case, Tammy L. Eigenheer.
A.R.S. (Arizona Revised Statutes)
The collection of laws enacted by the Arizona state legislature. The Petitioner alleged violations of A.R.S. § 33-1817 and § 33-1812.
Absentee Ballot
A ballot that allows a member to vote without being physically present at a meeting. The format of this ballot was the central issue of the rehearing.
By-Laws
The rules that govern the internal operations of an association. The Petitioner cited a violation of By-Laws Section 8, Article VIII concerning a $50 fine limit.
Department (The Department)
The Arizona Department of Real Estate, the state agency where the Petitioner first filed his petition against the homeowners association.
Master Declaration
A core governing document for a homeowners association that establishes rules, restrictions, and obligations for homeowners. The November 10, 2016 vote was to amend this document.
A formal, binding decision issued by a judge. The final document in this case was an order denying the Petitioner’s petition.
Petitioner
The party who initiates a legal action by filing a petition. In this case, Scott Servilla & Heidi H. Servilla.
Preponderance of the Evidence
The standard of proof required in this proceeding. It means the evidence presented is more convincing and likely to be true than the evidence offered in opposition.
Rehearing
A second hearing of a case granted to reconsider the initial decision. A rehearing was granted after the Petitioner argued that the initial finding of “no remedy” was contrary to law.
Respondent
The party against whom a petition is filed and who must respond to the allegations. In this case, the Village of Oakcreek Association.
Waiver
A legal doctrine where a party intentionally or through inaction gives up a known right or claim. The ALJ ruled the Petitioner waived his right to object to the ballot by not raising the issue before the vote.
Zajac v. City of Casa Grande
An Arizona Supreme Court case that established a key legal precedent used in this decision. It holds that a party cannot knowingly allow a defective vote to proceed and then complain only if the results are unfavorable.
Blog Post – 18F-H1817018-REL-RHG
{
“case”: {
“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla, vs. Village of Oakcreek Association”,
“decision_date”: “2019-01-09”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Scott Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: “Also listed as Scott S. Servilla; appeared on his own behalf”
},
{
“name”: “Heidi H Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Tammy L. Eigenheer”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “Office of Administrative Hearings”,
“notes”: null
},
{
“name”: “Mark K. Sahl”,
“role”: “respondent attorney”,
“side”: “respondent”,
“affiliation”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”,
“notes”: “Represented Village of Oakcreek Association”
},
{
“name”: “Judy Lowe”,
“role”: “ADRE Commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: null
},
{
“name”: “L. Dettorre”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “A. Hansen”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “D. Jones”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “D. Gardner”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “N. Cano”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Name derived from email address [email protected]”
},
{
“name”: “c. serrano”,
“role”: “transmission clerk”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Signed document transmission for November 29, 2018 order”
},
{
“name”: “Felicia Del Sol”,
“role”: “transmission clerk”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Signed document transmission for January 9, 2019 order”
}
]
}
{ “case”: { “agency”: “ADRE”, “tribunal”: “OAH”, “docket_no”: “18F-H1817018-REL-RHG”, “case_title”: “Scott Servilla & Heidi H Servilla vs. Village of Oakcreek Association”, “decision_date”: “2019-01-09”, “alj_name”: “Tammy L. Eigenheer” }, “parties”: [ { “party_id”: “P1”, “role”: “petitioner”, “name”: “Scott Servilla & Heidi H Servilla”, “party_type”: “homeowner”, “email”: null, “phone”: null, “attorney_name”: null, “attorney_firm”: null, “attorney_email”: null, “attorney_phone”: null }, { “party_id”: “R1”, “role”: “respondent”, “name”: “Village of Oakcreek Association”, “party_type”: “HOA”, “email”: null, “phone”: null, “attorney_name”: “Mark K. Sahl”, “attorney_firm”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”, “attorney_email”: null, “attorney_phone”: null } ], “issues”: [ { “issue_id”: “ISS-001”, “type”: “statute”, “citation”: “A.R.S. § 33-1812(A)”, “caption”: “Failure to provide separate voting opportunity for each proposed action in absentee ballot”, “violation(s)”: “Written ballot used did not provide a separate opportunity to vote for or against each proposed action, violating A.R.S. § 33-1812(B)(2) and the Declaration12.”, “summary”: “Petitioner alleged the November 10, 2016 vote was invalid because the absentee ballot combined two distinct proposed amendments (Leasing restrictions and Schedule of Fines) into a single vote, contravening the requirement that ballots set forth and provide an opportunity to vote for or against each proposed action1….”, “outcome”: “respondent_win”, “filing_fee_paid”: 500.0, “filing_fee_refunded”: false, “civil_penalty_amount”: 0.0, “orders_summary”: “Claim failed because Petitioner waived the right to object to the faulty ballot by allowing the vote to proceed without objection45.”, “why_the_loss”: “Petitioner was aware of the alleged issue with the ballot prior to the November 10, 2016 vote but failed to raise an objection, thus waiving the right to complain thereafter46.”, “cited”: [ “Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297” ] } ], “money_summary”: { “issues_count”: 3, “total_filing_fees_paid”: 1500.0, “total_filing_fees_refunded”: 0.0, “total_civil_penalties”: 0.0 }, “outcomes”: { “petitioner_is_hoa”: false, “petitioner_win”: “loss”, “summarize_judgement”: “The Administrative Law Judge denied the entire petition, finding that the Petitioner waived the right to challenge the outcome of the November 10, 2016 vote concerning the faulty ballot (Issue 2) because he failed to object before the vote proceeded. Petitioner also failed to prove his claims regarding the required vote count (Issue 1) and unauthorized fines (Issue 3)4….”, “why_the_loss”: “Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection after receiving the ballot, and failed to prove the claims for issues 1 and 34….” }, “analytics”: { “cited”: [ “A.R.S. § 33-1817(A)(1)”, “A.R.S. § 33-1812(B)(2)”, “A.R.S. § 33-1812(A)”, “Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”, “Allen v. State, 14 Ariz. 458, 130 P. 1114” ], “tags”: [ “HOA elections”, “absentee ballots”, “waiver doctrine”, “amendment procedure”, “fines” ] } }
{ “rehearing”: { “is_rehearing”: true, “base_case_id”: “18F-H1817018-REL”, “original_decision_status”: “affirmed”, “original_decision_summary”: “In the original decision, the Administrative Law Judge found that the Petitioner failed to prove claims regarding issues one and three1. For issue two (faulty ballot), the ALJ established a statutory violation of A.R.S. § 33-1812(B)(2), but concluded that no remedy could be ordered because the statute did not provide an enforcement mechanism1.”, “rehearing_decision_summary”: “The Commissioner granted the rehearing to address the legal conclusion that no remedy could be ordered for the violation found in Issue 22. Following the rehearing, the Administrative Law Judge denied the entire petition3, concluding that Petitioner waived the right to complain about the faulty ballot because he was aware of the alleged issues but allowed the November 10, 2016 vote to proceed without objection4….”, “issues_challenged”: [ { “issue_number”: 2, “description”: “Violation of A.R.S. § 33-1812(B)(2) because the written ballot used did not provide a separate opportunity to vote for or against each proposed action7.”, “challenge”: “Petitioner challenged the original conclusion that no remedy could be ordered, alleging this was contrary to the law and arguing that the Administrative Law Judge was authorized to declare the amendment void and unenforceable28.”, “rehearing_outcome”: “Denied/Failed. The claim failed because the ALJ ruled that Petitioner waived his right to bring forth a complaint about the ballot by allowing the vote to proceed without objection36.” } ] } }
{
“case”: {
“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla, Petitioner, vs. Village of Oakcreek Association, Respondent.”,
“decision_date”: “January 9, 2019”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Scott Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: “Also referred to as Scott S. Servilla”
},
{
“name”: “Heidi H Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Tammy L. Eigenheer”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “Office of Administrative Hearings”,
“notes”: null
},
{
“name”: “Mark K. Sahl”,
“role”: “attorney”,
“side”: “respondent”,
“affiliation”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”,
“notes”: null
},
{
“name”: “Judy Lowe”,
“role”: “commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: null
},
{
“name”: “c. serrano”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents”
},
{
“name”: “Felicia Del Sol”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents”
}
]
}
This document summarizes the administrative law judge decision in the rehearing case of Scott Servilla & Heidi H Servilla v. Village of Oakcreek Association, Case No. 18F-H1817018-REL-RHG1. This matter was heard by Administrative Law Judge Tammy L. Eigenheer on November 29, 2018, with the record held open until December 20, 20181.
Procedural History (Original Decision vs. Rehearing)
Petitioner Scott Servilla filed a petition with the Arizona Department of Real Estate (ADRE) against the Village of Oakcreek Association (Respondent) alleging multiple violations of statute and the community’s Master Declaration2,3.
Original Decision: The Administrative Law Judge initially ruled on three issues4. The ALJ found that Petitioner failed to prove two claims5. However, the ALJ found that the Respondent violated A.R.S. § 33-1812(B)(2) regarding the written ballot, but concluded that because the statute did not provide an enforcement mechanism, no remedy could be ordered5.
Rehearing Grant: Following this initial decision, Petitioner filed a Request for Reconsideration, arguing the conclusion that no remedy existed was contrary to law6. The ADRE Commissioner granted the request for rehearing6.
Key Facts and Issue for Rehearing
The central issue during the rehearing concerned the statutory violation found in the original decision: whether the November 10, 2016 vote to amend the Master Declaration was invalid because the absentee ballot failed to comply with A.R.S. § 33-1812(A)4,7.
The Ballot Violation: A.R.S. § 33-1812(A) requires that absentee ballots set forth “each proposed action” and provide an opportunity to vote for or against “each proposed action”7. The Respondent’s proposed amendment bundled two distinct actions: the addition of leasing restrictions and the complete replacement of the Schedule of Fines8,9,10. The ballot only allowed members to vote “FOR” or “AGAINST THE LEASING AND SCHEDULE OF FINES AMENDMENT” as a single package9.
Key Legal Argument and Decision
At the rehearing, the core legal debate shifted from whether a violation occurred to whether the Petitioner was entitled to relief, specifically whether the ALJ could declare the amendment void and unenforceable6,11.
Respondent’s Defense and the Doctrine of Waiver: Respondent argued that Petitioner had waived the right to object because he did not raise any complaint about the defective ballot prior to the vote12. Petitioner received the ballot more than one month before the November 10, 2016 vote13.
ALJ Legal Conclusion: Drawing on Arizona Supreme Court precedent (Zajac v. City of Casa Grande)10,14, the Administrative Law Judge concluded that an individual cannot allow a known defective vote to proceed and only complain afterward if dissatisfied with the results15,16. Because Petitioner failed to raise an objection to the faulty ballot prior to the scheduled vote, he waived his right to bring a subsequent complaint about the ballot16.
Based on the application of the waiver doctrine, the ALJ found that Petitioner’s claim as to the ballot must fail16. The Administrative Law Judge ordered that Petitioner’s petition is denied17. This order, resulting from the rehearing, is binding on the parties17.
{
“case”: {
“agency”: “ADRE”,
“tribunal”: “OAH”,
“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla vs. Village of Oakcreek Association”,
“decision_date”: “2019-01-09”,
“alj_name”: “Tammy L. Eigenheer”
},
“parties”: [
{
“party_id”: “P1”,
“role”: “petitioner”,
“name”: “Scott Servilla & Heidi H Servilla”,
“party_type”: “homeowner”,
“email”: null,
“phone”: null,
“attorney_name”: null,
“attorney_firm”: null,
“attorney_email”: null,
“attorney_phone”: null
},
{
“party_id”: “R1”,
“role”: “respondent”,
“name”: “Village of Oakcreek Association”,
“party_type”: “HOA”,
“email”: null,
“phone”: null,
“attorney_name”: “Mark K. Sahl”,
“attorney_firm”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”,
“attorney_email”: null,
“attorney_phone”: null
}
],
“issues”: [
{
“issue_id”: “ISS-001”,
“type”: “statute”,
“citation”: “A.R.S. § 33-1817(A)(1)”,
“caption”: “Vote count required to amend declaration”,
“violation(s)”: “Alleged violation of A.R.S. § 33-1817(A)(1) and Declaration regarding the required majority vote (1173 votes) for the November 10, 2016 amendment.”,
“summary”: “Petitioner requested an order declaring the amendment invalid due to insufficient vote count.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim failed.”,
“why_the_loss”: “Petitioner failed to prove the claim.”,
“cited”: []
},
{
“issue_id”: “ISS-002”,
“type”: “statute”,
“citation”: “A.R.S. § 33-1812(A)”,
“caption”: “Absence of separate voting opportunity for proposed actions”,
“violation(s)”: “The written ballot used for the November 10, 2016 amendment violated A.R.S. § 33-1812(A) and (B)(2) because it bundled two distinct proposed actions (Leasing Restrictions and Schedule of Fines) into a single vote.”,
“summary”: “Petitioner sought an order declaring the amendment invalid because the ballot improperly required a single vote on two separate actions.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim denied on rehearing. Petition denied.”,
“why_the_loss”: “Petitioner waived the right to object to the faulty ballot by receiving it over a month prior and allowing the vote to proceed on November 10, 2016, without raising a complaint.”,
“cited”: [
“A.R.S. § 33-1812(A)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”,
“Allen v. State, 14 Ariz. 458, 130 P. 1114”
]
},
{
“issue_id”: “ISS-003”,
“type”: “governing_document”,
“citation”: “By-Laws Section 8, Article VIII”,
“caption”: “Unauthorized fines in excess of $50”,
“violation(s)”: “Respondent allegedly violated By-Laws by imposing fines in excess of $50 per violation, especially after a proposed amendment to raise the fines was voted down.”,
“summary”: “Petitioner requested an order that the Association cannot levy fines in excess of $50 per violation.”,
“outcome”: “respondent_win”,
“filing_fee_paid”: 500.0,
“filing_fee_refunded”: false,
“civil_penalty_amount”: 0.0,
“orders_summary”: “Claim failed.”,
“why_the_loss”: “Petitioner failed to prove the claim.”,
“cited”: []
}
],
“money_summary”: {
“issues_count”: 3,
“total_filing_fees_paid”: 1500.0,
“total_filing_fees_refunded”: 0.0,
“total_civil_penalties”: 0.0
},
“outcomes”: {
“petitioner_is_hoa”: false,
“petitioner_win”: “loss”,
“summarize_judgement”: “The Administrative Law Judge denied the entire petition. Although the Respondent used a faulty ballot (Issue 2), the Petitioner waived the right to object by failing to raise a complaint prior to the vote. Petitioner also failed to prove his claims for issues 1 and 3.”,
“why_the_loss”: “Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection, and failed to prove the claims for Issues 1 and 3.”,
“cited”: [
“A.R.S. § 33-1812(A)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”
]
},
“analytics”: {
“cited”: [
“A.R.S. § 33-1817(A)(1)”,
“A.R.S. § 33-1812(A)”,
“A.R.S. § 33-1812(B)(2)”,
“Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297”,
“Allen v. State, 14 Ariz. 458, 130 P. 1114”
],
“tags”: [
“HOA elections”,
“absentee ballots”,
“waiver doctrine”,
“amendment procedure”,
“fines”
]
}
}
{
“case”: {
“docket_no”: “18F-H1817018-REL-RHG”,
“case_title”: “Scott Servilla & Heidi H Servilla, vs. Village of Oakcreek Association”,
“decision_date”: “2019-01-09”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Scott Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: “Appeared on his own behalf at the hearing; also listed as Scott S. Servilla [1], [2]”
},
{
“name”: “Heidi H Servilla”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Tammy L. Eigenheer”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “Office of Administrative Hearings”,
“notes”: “Administrative Law Judge [3], [4], [1], [2]”
},
{
“name”: “Mark K. Sahl”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP”,
“notes”: “Represented Village of Oakcreek Association [2]”
},
{
“name”: “Judy Lowe”,
“role”: “commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Granted the request for rehearing [5]”
},
{
“name”: “c. serrano”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents on November 29, 2018 [6], [7]”
},
{
“name”: “Felicia Del Sol”,
“role”: “staff”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Transmitted documents on January 9, 2019 [8]”
},
{
“name”: “LDettorre”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “AHansen”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “djones”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “DGardner”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
},
{
“name”: “ncano”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmittal [3], [4]”
}
]
}
Case Participants
Petitioner Side
Scott Servilla(petitioner) Also referred to as Scott S. Servilla
Heidi H Servilla(petitioner)
Respondent Side
Mark K. Sahl(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Neutral Parties
Tammy L. Eigenheer(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate
The Administrative Law Judge denied the entire petition. Although the Respondent used a faulty ballot (Issue 2), the Petitioner waived the right to object by failing to raise a complaint prior to the vote. Petitioner also failed to prove his claims for issues 1 and 3.
Why this result: Petitioner waived the right to object to the ballot defect (Issue 2) by allowing the vote to proceed without objection, and failed to prove the claims for Issues 1 and 3.
Key Issues & Findings
Vote count required to amend declaration
Petitioner requested an order declaring the amendment invalid due to insufficient vote count.
Orders: Claim failed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Absence of separate voting opportunity for proposed actions
Petitioner sought an order declaring the amendment invalid because the ballot improperly required a single vote on two separate actions.
Orders: Claim denied on rehearing. Petition denied.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1812(A)
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Allen v. State, 14 Ariz. 458, 130 P. 1114
Unauthorized fines in excess of $50
Petitioner requested an order that the Association cannot levy fines in excess of $50 per violation.
Orders: Claim failed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Analytics Highlights
Topics: HOA elections, absentee ballots, waiver doctrine, amendment procedure, fines
Additional Citations:
A.R.S. § 33-1817(A)(1)
A.R.S. § 33-1812(A)
A.R.S. § 33-1812(B)(2)
Zajac v. City of Casa Grande, 209 Ariz. 357, 102 P.3d 297
Allen v. State, 14 Ariz. 458, 130 P. 1114
Decision Documents
18F-H1817018-REL Decision – 673729.pdf
Uploaded 2025-12-17T18:16:08 (40.8 KB)
18F-H1817018-REL Decision – 673828.pdf
Uploaded 2025-12-17T18:16:08 (48.5 KB)
18F-H1817018-REL Decision – 680738.pdf
Uploaded 2025-12-17T18:16:08 (103.5 KB)
Case Participants
Petitioner Side
Scott Servilla(petitioner) Appeared on his own behalf at the hearing; also listed as Scott S. Servilla,
Heidi H Servilla(petitioner)
Respondent Side
Mark K. Sahl(HOA attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Village of Oakcreek Association
Neutral Parties
Tammy L. Eigenheer(ALJ) Office of Administrative Hearings Administrative Law Judge,,,
Judy Lowe(commissioner) Arizona Department of Real Estate Granted the request for rehearing
LDettorre(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
AHansen(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
djones(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
DGardner(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
ncano(ADRE staff) Arizona Department of Real Estate Recipient of transmittal,
Other Participants
c. serrano(staff) Transmitted documents on November 29, 2018,
Felicia Del Sol(staff) Transmitted documents on January 9, 2019
