Nathan Brown v. Val Vista Lakes Community Association

Posted on February 4, 2019 by [email protected]

Case Summary

Case ID	19F-H1918029-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2019-02-04
Administrative Law Judge	Thomas Shedden
Outcome	loss
Filing Fees Refunded	$0.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Nathan Brown	Counsel	—
Respondent	Val Vista Lakes Community Association	Counsel	Clint Goodman, Esq.

Alleged Violations

ARIZ. REV. STAT. section 33-1803(E)

Outcome Summary

The Petitioner's claim that the Respondent HOA violated A.R.S. § 33-1803(E) was dismissed, as the notice issued was determined to be a Notice of Non-Compliance (courtesy letter) and not a Notice of Violation required to carry the specific disclosure.

Why this result: The Petitioner failed to meet the burden of proof to show that the Respondent violated A.R.S. § 33-1803(E).

Key Issues & Findings

Whether the HOA violated A.R.S. § 33-1803(E) by failing to include notice of the option to petition for an administrative hearing in a Notice of Non-Compliance.

Petitioner alleged that the Respondent's Notice of Non-Compliance regarding dead vegetation was actually a Notice of Violation and lacked the statutory disclosure required by A.R.S. § 33-1803(E). The ALJ found the document was a courtesy letter and not a Notice of Violation, and even if it were, the statute did not require the disclosure in this context because the Petitioner filed the petition before Respondent took enforcement action or completed the statutory response exchange.

Orders: Petitioner Nathan Brown's petition is dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

ARIZ. REV. STAT. section 33-1803(E)
ARIZ. REV. STAT. section 32-2199.01
ARIZ. REV. STAT. section 33-1803(C)
ARIZ. REV. STAT. section 33-1803(D)
ARIZ. ADMIN. CODE § R2-19-119
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11

Analytics Highlights

Topics: statutory interpretation, violation notice, non-compliance, courtesy letter, right to petition

Additional Citations:

33-1803(E)
32-2199.01
33-1803(C)
33-1803(D)
R2-19-119

Video Overview

Audio Overview

Decision Documents

19F-H1918029-REL Decision – 686796.pdf

Uploaded 2025-10-09T03:33:49 (88.4 KB)

Briefing Doc – 19F-H1918029-REL

Brown v. Val Vista Lakes Community Association: Case Briefing

Executive Summary

This document provides a detailed analysis of the Administrative Law Judge (ALJ) Decision in case No. 19F-H1918029-REL, wherein Petitioner Nathan Brown’s petition against the Val Vista Lakes Community Association was dismissed. The central issue was whether an initial “Notice of Non-Compliance” sent by the Association constituted a formal “Notice of Violation” under Arizona Revised Statutes (A.R.S.) section 33-1803(E), thereby requiring immediate disclosure of the member’s right to an administrative hearing.

The ALJ ruled decisively in favor of the Respondent Association. The decision rested on two primary conclusions: First, a reasonable reading of the document in question showed it to be a preliminary “courtesy letter” and not a formal Notice of Violation, as it explicitly warned that a Notice of Violation would be issued later if the issue was not remedied. Second, the ALJ determined that even if the document were considered a Notice of Violation, a plain reading of the statute does not require the disclosure of hearing rights to be included in the initial notice itself. The statute allows for this information to be provided at a later stage in the process, specifically after the member has submitted a formal response. The Petitioner’s failure to follow the statutory response procedure was a key factor in the ruling that the Association had not yet been required to provide the disclosure. Ultimately, the Petitioner failed to meet the burden of proof, and his petition was dismissed.

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Case Overview

Case Number

19F-H1918029-REL

Parties

Petitioner: Nathan Brown
Respondent: Val Vista Lakes Community Association

Adjudicator

Administrative Law Judge Thomas Shedden

Office of Administrative Hearings, Phoenix, Arizona

Hearing Date

January 16, 2019

Decision Date

February 4, 2019

Final Outcome

Petition Dismissed; Respondent deemed the prevailing party.

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Background and Timeline of Events

• October 18, 2018: The Val Vista Lakes Community Association mailed a “Notice of Non-Compliance” to Nathan Brown regarding dead vegetation in his yard. The notice requested that the situation be remedied by November 1, 2018, and warned that failure to do so would result in the issuance of a “Notice of Violation that may involve fines.”

• October 24, 2018 (approx.): Mr. Brown filed a petition with the Arizona Department of Real Estate, initiating the legal matter.

• November 11, 2018: The Association issued a formal “Notice of Violation” to Mr. Brown concerning the same issue raised in the initial notice.

• November 27, 2018: The Arizona Department of Real Estate issued a Notice of Hearing.

• January 16, 2019: An administrative hearing was held, with Mr. Brown representing himself and Clint Goodman, Esq. representing the Association. Testimony was heard from Mr. Brown and Simone McGinnis, the Association’s general manager.

• February 4, 2019: ALJ Thomas Shedden issued a decision dismissing Mr. Brown’s petition.

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Core Legal Dispute and Arguments

The dispute centered on the interpretation and application of A.R.S. § 33-1803, which governs the process for notifying homeowners of violations of community documents.

Petitioner’s Position (Nathan Brown)

• Central Claim: The “Notice of Non-Compliance” received on October 18, 2018, was functionally and legally a “Notice of Violation.”

• Alleged Violation: The notice violated A.R.S. § 33-1803(E) because it failed to include “written notice of the member’s option to petition for an administrative hearing on the matter in the state real estate department.”

Respondent’s Position (Val Vista Lakes Community Association)

• Central Claim: The “Notice of Non-Compliance” was not a formal “Notice of Violation” but rather a “courtesy letter,” which is a common industry practice permitted by the Association’s governing documents.

• Defense: Because the initial letter was not a statutory Notice of Violation, the requirements of A.R.S. § 33-1803 were not applicable to that specific communication.

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Administrative Law Judge’s Analysis and Decision

The ALJ concluded that the Petitioner, Mr. Brown, bore the burden of proof by a preponderance of the evidence and failed to meet that standard. The decision was based on a series of factual findings and legal conclusions drawn from a “fair and sensible” interpretation of the statute.

Key Findings of Fact

• The Association mailed Mr. Brown a Notice of Non-Compliance on October 18, 2018.

• This notice informed Mr. Brown of a CC&R violation (dead vegetation) and stated that a failure to remedy the issue would result in a subsequent “Notice of Violation” with potential fines.

• Mr. Brown did not send a written response to the Association regarding the Notice of Non-Compliance, a step outlined in A.R.S. § 33-1803(C).

• Mr. Brown was later issued a formal Notice of Violation on November 11, 2018.

Conclusions of Law (Legal Rationale)

The ALJ’s decision to dismiss the petition was founded on three distinct legal interpretations:

1. Distinction Between Notices: The judge ruled that the initial communication was not a statutory Notice of Violation.

◦ The ruling states, “a reasonable reading of the Notice of Non-Compliance shows that it is not a Notice of Violation, because it informs Mr. Brown that a Notice of Violation would be issued if he did not appropriately address the ‘situation.'”

◦ This established the letter as a preliminary courtesy notice, distinct from the formal enforcement action that triggers statutory requirements.

2. Statutory Interpretation of A.R.S. § 33-1803: The judge concluded that even if the initial notice was a Notice of Violation, the Association still did not violate the statute.

◦ The decision notes, “a plain reading of ARIZ. REV. STAT. section 33-1803 shows that a Notice of Violation is not required to include notice of the right to petition the Department of Real Estate because subsections D and E both show that any required notice can be given at other times.”

◦ The statute outlines a process where the member can respond via certified mail, and the Association’s duty to provide information about contesting the notice (including the right to a hearing) arises from that exchange.

3. Petitioner’s Procedural Failure: The judge found that the Association’s obligations under the statute were never triggered because Mr. Brown bypassed the prescribed process.

◦ The decision highlights that Mr. Brown did not file a written response with the Association but instead filed his petition with the Department just a few days after receiving the initial notice.

◦ The ruling concludes, “a sensible reading of the statute shows that the Respondent was not required to provide Mr. Brown with notice of a right to petition the Department at any time pertinent to this matter.”

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Final Order and Implications

• Order: The ALJ ordered that “Petitioner Nathan Brown’s petition is dismissed.”

• Prevailing Party: The Respondent, Val Vista Lakes Community Association, was deemed the prevailing party in the matter.

• Further Action: The decision is binding unless a party files for a rehearing with the Commissioner of the Department of Real Estate within 30 days of the service of the order, as stipulated by A.R.S. §§ 32-2199.02(B), 32-2199.04, and 41-1092.09.

Study Guide – 19F-H1918029-REL

Study Guide: Brown v. Val Vista Lakes Community Association (No. 19F-H1918029-REL)

Short Answer Quiz

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

1. Who were the primary parties involved in case No. 19F-H1918029-REL, and what were their roles?

2. What specific statute did the Petitioner, Nathan Brown, allege that the Respondent violated?

3. What was the initial issue that prompted the Respondent to contact Mr. Brown on October 18, 2018?

4. What was Nathan Brown’s central legal argument concerning the “Notice of Non-Compliance”?

5. How did the Val Vista Lakes Community Association characterize the “Notice of Non-Compliance,” and why was this distinction critical to its defense?

6. According to the Findings of Fact, what procedural step did Mr. Brown fail to take after receiving the initial notice from the association?

7. What is the standard of proof required in this matter, and which party was responsible for meeting it?

8. What were the Administrative Law Judge’s two primary legal conclusions that led to the dismissal of the petition?

9. What was the final Order issued by the Administrative Law Judge on February 4, 2019?

10. What recourse was available to the parties following the judge’s Order, and what was the specified time limit for that action?

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Answer Key

1. The primary parties were Nathan Brown, who served as the Petitioner, and the Val Vista Lakes Community Association, which was the Respondent. Mr. Brown brought the complaint against the association, which was defending its actions.

2. Nathan Brown alleged that the Respondent violated ARIZ. REV. STAT. section 33-1803(E). This section concerns an association’s obligation to provide a member with written notice of their option to petition for an administrative hearing.

3. The Respondent contacted Mr. Brown regarding dead vegetation in his yard, which was considered a violation of the community’s CC&Rs. The “Notice of Non-Compliance” requested that he remedy the situation by November 1, 2018.

4. Mr. Brown’s central argument was that the “Notice of Non-Compliance” was, in fact, a “Notice of Violation.” Therefore, he contended it should have included written notice of his option to petition for an administrative hearing with the state real estate department, as required by statute.

5. The Association characterized the notice as a “courtesy letter,” which is a common practice for providing an initial warning before formal action. This distinction was critical because the Association argued that as a mere courtesy letter and not a formal “Notice of Violation,” it was not subject to the statutory disclosure requirements of ARIZ. REV. STAT. section 33-1803.

6. Mr. Brown did not send a written response to the Respondent via certified mail within 21 calendar days of the notice. This response is an option provided to members under ARIZ. REV. STAT. section 33-1803(C).

7. The standard of proof was a “preponderance of the evidence.” The burden of proof was on the Petitioner, Nathan Brown, to show that the Respondent had violated the statute.

8. First, the judge concluded that a reasonable reading of the document shows it was not a “Notice of Violation” because it explicitly threatened that one would be issued later. Second, the judge concluded that even if it were a “Notice of Violation,” the statute does not require the hearing disclosure to be in the initial notice, and since Mr. Brown did not follow the response procedure, the Respondent’s obligation to provide that disclosure had not yet been triggered.

9. The final Order was that Petitioner Nathan Brown’s petition be dismissed. The judge also deemed the Respondent to be the prevailing party in the matter.

10. A party could file a request for a rehearing with the Commissioner of the Department of Real Estate. Pursuant to ARIZ. REV. STAT. section 41-1092.09, this request had to be filed within 30 days of the service of the Order.

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Essay Questions

Instructions: Consider the following questions. Formulate comprehensive, evidence-based answers using only the information and legal reasoning presented in the case decision.

1. Analyze the distinction between a “Notice of Non-Compliance” (or “courtesy letter”) and a “Notice of Violation” as presented in this case. Discuss why this distinction was the central point of contention and how the Administrative Law Judge’s interpretation of the document’s plain language resolved the issue.

2. Explain the legal standard of “preponderance of the evidence” as defined in the decision. Discuss how Nathan Brown’s failure to meet this standard, as the party with the burden of proof, was fundamental to the dismissal of his petition.

3. Examine the Administrative Law Judge’s interpretation of the procedural requirements outlined in ARIZ. REV. STAT. section 33-1803(C), (D), and (E). How does the judge’s “sensible reading” of the statute’s timeline and reciprocal obligations undermine the Petitioner’s claim, even setting aside the debate over the notice’s title?

4. Describe the complete procedural timeline of this case, from the initial notice sent by the association to the final order from the Administrative Law Judge. Identify the key dates and actions taken by each party and by the Office of Administrative Hearings.

5. Discuss the role of statutory interpretation in this legal decision. How did the judge apply established legal principles, such as aiming for a “fair and sensible result” and avoiding “absurd and unreasonable construction,” to support the final ruling against the Petitioner?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official, in this case Thomas Shedden, who presides over administrative hearings and makes legal decisions.

ARIZ. REV. STAT.

Abbreviation for Arizona Revised Statutes, which are the codified laws of the state of Arizona. The specific statute at the center of this case is section 33-1803.

Burden of Proof

The obligation of a party in a legal case to prove their allegations. In this matter, the burden of proof was on the Petitioner, Nathan Brown.

An acronym for Covenants, Conditions, and Restrictions. The decision implies these are the governing community documents that Mr. Brown was accused of violating due to dead vegetation.

Courtesy Letter

A term used by the Respondent to describe the “Notice of Non-Compliance.” It is characterized as a common industry practice to inform a resident of an issue before issuing a formal Notice of Violation.

Notice of Non-Compliance

The specific document dated October 18, 2018, sent to Mr. Brown. It informed him of dead vegetation, requested a remedy, and warned that a “Notice of Violation” could follow.

Notice of Violation

A formal notification that a violation has occurred. The decision establishes this as a distinct and more serious step than a “Notice of Non-Compliance,” and one was issued to Mr. Brown on November 11, 2018.

Petitioner

The party who files a petition initiating a legal action. In this case, Nathan Brown was the Petitioner.

Preponderance of the Evidence

The standard of proof required in this hearing. It is defined as “The greater weight of the evidence… sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Prevailing Party

The party who wins the legal case. The Administrative Law Judge deemed the Respondent to be the prevailing party.

Rehearing

A legal process to have a case heard again. The parties were notified of their right to request a rehearing with the Commissioner of the Department of Real Estate within 30 days.

Respondent

The party against whom a petition is filed. In this case, the Val Vista Lakes Community Association was the Respondent.

Blog Post – 19F-H1918029-REL

📔

19F-H1918029-REL

1 source

This source is the Administrative Law Judge Decision for a case titled Nathan Brown vs. Val Vista Lakes Community Association, heard by the Arizona Office of Administrative Hearings. The dispute centers on whether a Notice of Non-Compliance sent to Mr. Brown regarding dead vegetation in his yard constitutes a Notice of Violation under ARIZ. REV. STAT. section 33-1803(E). Mr. Brown argued that the Association violated this statute by failing to include written notice of his option to petition for an administrative hearing in the initial notice. However, the Administrative Law Judge found that the initial document was merely a courtesy letter and not a formal Notice of Violation, and further concluded that the statute does not require the disclosure of the right to petition the Department of Real Estate within the initial violation notice. Ultimately, the judge determined that the Association was not required to provide Mr. Brown with the notice of his right to petition at any relevant time and dismissed Mr. Brown’s petition.

Case Participants

Petitioner Side

Nathan Brown (petitioner)
Appeared on his own behalf

Respondent Side

Clint Goodman (HOA attorney)
Goodman Law Group
Appeared for the Respondent
Simone McGinnis (general manager)
Val Vista Lakes Community Association
Presented testimony
Ashley N. Moscarello (HOA attorney)
Goodman Law Group
Recipient of transmission
Clint Brown (HOA attorney)
Goodman Law Group
Recipient of transmission (listed separately from Clint Goodman)

Neutral Parties

Thomas Shedden (ALJ)
Office of Administrative Hearings
Judy Lowe (Commissioner)
Arizona Department of Real Estate
F Del Sol (admin staff)
Transmitted document

Lawrence Stewart v. Canyon Gate Condominium Association, Inc.

Posted on January 17, 2019 by [email protected]

Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.

Case Summary

Case ID	18F-H1818052-REL-RHG
Agency	ADRE
Tribunal	OAH
Decision Date	2019-01-17
Administrative Law Judge	Thomas Shedden
Outcome	none
Filing Fees Refunded	$0.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Lawrence M. Stewart	Counsel	—
Respondent	Canyon Gate Condominium Association, Inc.	Counsel	Nicolas C. S. Nogami, Esq.

Alleged Violations

Bylaws section 5.4

Outcome Summary

The Administrative Law Judge dismissed the petition filed by homeowner Lawrence M. Stewart against Canyon Gate Condominium Association, Inc., finding that the Petitioner failed to prove the Association violated its Bylaws concerning good faith in denying his request for a variance.

Why this result: The Petitioner failed to meet the burden of proof, as Bylaws Section 5.4 was determined to be a shield protecting the Board from liability rather than a provision imposing a duty of good faith that could be violated by denying a variance.

Key Issues & Findings

Alleged failure of the HOA Board to act in good faith when denying a variance request

Petitioner alleged the Board failed to act in good faith when denying his request for a variance to changes he made, and asserted bias and unfair treatment. The ALJ concluded that Section 5.4 acts as a shield from liability for Board members, not a duty imposed upon them, and Petitioner failed to meet the burden of proof.

Orders: Petitioner Lawrence M. Stewart's petition is dismissed. Respondent is deemed to be the prevailing party in this matter.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
ARIZ. REV. STAT. section 32-2199.02(B)

Analytics Highlights

Topics: HOA governance, bylaw violation, good faith, variance denial, board liability

Additional Citations:

ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)

Video Overview

Audio Overview

Decision Documents

18F-H1818052-REL-RHG Decision – 683622.pdf

Uploaded 2025-10-09T03:33:04 (95.5 KB)

18F-H1818052-REL-RHG Decision – 694095.pdf

Uploaded 2025-10-09T03:33:04 (90.8 KB)

18F-H1818052-REL-RHG Decision – ../18F-H1818052-REL/660026.pdf

Uploaded 2026-01-20T13:47:49 (91.5 KB)

18F-H1818052-REL-RHG Decision – ../18F-H1818052-REL/720468.pdf

Uploaded 2026-01-20T13:47:51 (103.5 KB)

Briefing Doc – 18F-H1818052-REL-RHG

Briefing Document: Stewart v. Canyon Gate Condominium Association, Inc.

Executive Summary

This document synthesizes the findings and conclusions from an administrative legal case involving Petitioner Lawrence M. Stewart and Respondent Canyon Gate Condominium Association, Inc. The core of the dispute revolves around Mr. Stewart’s unauthorized modifications to a common area, for which the Association’s Board of Directors denied a retroactive variance. Mr. Stewart alleged the Board violated its bylaws by acting in bad faith, that a specific Board member was biased against him, and that he was subjected to unfair treatment compared to other homeowners.

The Administrative Law Judge, in both an initial hearing and a subsequent rehearing, consistently ruled against Mr. Stewart. The judge determined that the specific bylaw cited (Section 5.4) was an indemnification clause that shields the Board from liability and does not impose a duty of action. Crucially, Mr. Stewart failed to meet the legal burden of proving his claims by a “preponderance of the evidence.” The Board’s rationale for the denial—to avoid setting a precedent, or “opening a Pandora’s Box”—was deemed a reasonable position for a condominium association. Evidence presented to support claims of bias and unequal treatment was found to be insufficient or not probative. Ultimately, Mr. Stewart’s petition was dismissed in its entirety.

Case Overview

This matter, designated as No. 18F-H1818052-REL, was adjudicated by the Office of Administrative Hearings under the authority of the Arizona Department of Real Estate. The case centered on a petition filed by Mr. Stewart on May 21, 2018, alleging a violation of the Association’s Bylaws by the Board of Directors.

Parties Involved

Name / Entity

Representation

Petitioner

Lawrence M. Stewart

On his own behalf

Respondent

Canyon Gate Condominium Association, Inc.

Mark K. Sahl, Esq. & Nichols C. S. Nogami, Esq.

Administrative Law Judge Thomas Shedden

Case Chronology

• November 15, 2017: The Association’s counsel informs Mr. Stewart in a letter that he is in violation of section 5.1 of the CC&Rs for making unapproved changes to a common/limited common area.

• Post-November 15, 2017: Mr. Stewart, then a member of the Board, requests a variance for the changes.

• December 27, 2017: The Association’s attorney sends a letter stating an understanding that Mr. Stewart had recused himself and that the other two Board members (Sandra Fernandez and David Larson) had required the area to be restored.

• January 4, 2018: Mr. Stewart writes to the other Board members, refuting that he had agreed to recuse himself and requesting a formal meeting to consider his variance request.

• February 18, 2018: At a Board meeting, Mr. Stewart resigns from the Board. The remaining two members vote to deny his variance request and require him to restore the area to its original condition.

• May 21, 2018: Mr. Stewart files his petition with the Arizona Department of Real Estate.

• September 6, 2018: The initial administrative hearing is conducted.

• September 14, 2018: The Administrative Law Judge (ALJ) issues a decision dismissing Mr. Stewart’s petition.

• January 2, 2019: A rehearing is conducted.

• January 17, 2019: The ALJ issues a final decision following the rehearing, again dismissing the petition.

Petitioner’s Central Allegations

Mr. Stewart’s case rested on four primary claims against the Association’s Board.

1. Violation of Bylaws Section 5.4

The formal petition alleged a violation of Association Bylaws Article V, Section 5.4 (Liability), which states in part:

“So long as he/she has acted in good faith on the basis of information actually possessed, neither the Board nor any member of the Board nor any officer of the ASSOCIATION shall be liable to the ASSOCIATION, any OWNER, or to any other party for any damage, loss, or prejudice suffered or claimed on account of: (i) the approval or disapproval of any plans, drawings, or specifications, whether or not defective…or (v) any act or failure to act by the ASSOCIATION, or Board.”

Mr. Stewart cited this section because it was the only part of the governing documents he could find that included a “good faith” requirement.

2. Lack of Good Faith by the Board

Mr. Stewart asserted that the Board did not act in good faith when it denied his variance request. He based this claim on several points:

• He resigned from the Board during the February 18, 2018 meeting because he “got the sense ‘right away’ that the other Board members’ minds were made up and that they would not approve his request.”

• He presented unrebutted testimony that the Board members were unwilling to physically look at the changes he had made and only gave a “cursory look” at photographs he provided.

• The Board’s decision appeared to have been made prior to the meeting, as evidenced by the attorney’s December 27, 2017 letter which erroneously stated he had recused himself.

3. Bias of Board Member David Larson

A significant portion of Mr. Stewart’s argument was that Board member David Larson was personally biased against him. The evidence presented to support this included:

• Initial Hearing Evidence:

◦ A biography of Mr. Larson prepared by the property manager. When questioned, Mr. Stewart could not identify specific information showing bias but stated the “entire document coupled with the other statements shows a bias.”

◦ Notes from a November 28, 2017 Board meeting where Mr. Larson informed members that enforcement actions (towing, violation notices) would begin immediately and that he was “too busy to talk to people about Board business in driveways.”

• Rehearing Evidence:

◦ A letter dated October 3, 2018, from Mr. Larson to Association members urging them not to vote for Mr. Stewart in an upcoming election.

4. Unfair and Unequal Treatment

Mr. Stewart claimed he was treated unfairly because other units in the condominium were also not in conformity with the CC&Rs.

• He presented photos of units he believed were out of compliance.

• He testified that he had verified with the Association that none of these units had received a variance in the last two years.

• However, he acknowledged he did not know if variances had been granted more than two years prior or if the changes had received pre-approval, which would not require a variance.

Respondent’s Position and Legal Arguments

The Canyon Gate Condominium Association, represented by counsel, did not present witnesses but argued on legal grounds.

• Inapplicability of Bylaws Section 5.4: The Association’s core argument was that Section 5.4 was not applicable to Mr. Stewart’s complaint. They contended the section is an indemnification clause designed to act as a “shield” to protect Board members from liability when they act in good faith, not a “sword” that imposes an affirmative duty on them that can be violated.

• Reasonableness of Board Decision: The Association maintained that the Board’s decision was reasonable. According to Mr. Stewart’s own testimony, the Board’s basis for denial was the fear that granting his variance would “open a Pandora’s Box where other unit owners would request variances.”

Administrative Law Judge’s Rulings and Conclusions

The ALJ’s decisions in both the initial hearing and the rehearing were consistent, ultimately finding in favor of the Respondent.

Legal Framework

• Burden of Proof: The ALJ established that Mr. Stewart, as the petitioner, bore the burden of proof. The standard of proof was a “preponderance of the evidence,” defined as evidence with “the most convincing force” that is sufficient “to incline a fair and impartial mind to one side of the issue rather than the other.”

• Board’s Duty: The judge noted that while the Bylaws are a contract, the Association, in exercising its authority, must “act reasonably.”

Analysis of Bylaws Section 5.4

• The judge agreed entirely with the Association’s interpretation, concluding that Section 5.4 “does not impose any duty on the Board members, but rather merely shields them from liability if they act in good faith.”

• In the initial hearing, the judge noted Mr. Stewart “appeared to acknowledge that section 5.4 acts as a ‘shield’ and not a ‘sword.'”

• By the rehearing, this was solidified, with the finding that “Mr. Stewart acknowledges that the Association has not violated Bylaws Section 5.4.”

Assessment of ‘Good Faith’ and Bias Claims

• The ALJ concluded that even if Section 5.4 were applicable, Mr. Stewart “has not shown by a preponderance of the evidence that the Board did not act in good faith, that it had a bias against him, or that it treated him unfairly.”

• The judge found the Board’s reasoning for the denial—the “Pandora’s Box” concern—was “not an unreasonable position for the Board of a condominium association.”

• Given this reasoning, the judge stated that “the specifics of the changes Mr. Stewart made would not be germane to the decision,” thereby neutralizing the claim that the Board failed to properly inspect the modifications.

Evaluation of Unfair Treatment Claim

• The evidence of other non-compliant units was deemed “not probative of the issue at hand.”

• The judge reasoned that there was “no evidence to show that they had requested that the Board grant variances,” meaning their situations were not comparable to Mr. Stewart’s, who had made unapproved changes and was subsequently denied a variance.

Final Disposition

• Initial Decision (September 14, 2018): IT IS ORDERED that Petitioner Lawrence M. Stewart’s petition is dismissed. This order was subject to a request for rehearing within 30 days.

• Rehearing Decision (January 17, 2019): IT IS ORDERED that Petitioner Lawrence M. Stewart’s petition is dismissed. This final order was noted as binding on the parties, with any further appeal requiring judicial review filed with the superior court within 35 days.

Study Guide – 18F-H1818052-REL-RHG

Study Guide: Stewart v. Canyon Gate Condominium Association, Inc.

This guide provides a review of the administrative case Lawrence M. Stewart, Petitioner, vs. Canyon Gate Condominium Association, Inc., Respondent (No. 18F-H1818052-REL), including the initial hearing and a subsequent rehearing.

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Short-Answer Quiz

Instructions: Answer the following questions in two to three sentences, based on the provided case documents.

1. What action by Petitioner Lawrence M. Stewart initiated the dispute with the Canyon Gate Condominium Association?

2. What specific provision of the Association Bylaws did Mr. Stewart allege was violated in his petition?

3. Why did Mr. Stewart resign from the Association’s Board during the February 18, 2018 meeting?

4. What was the Board’s stated reason for denying Mr. Stewart’s request for a variance?

5. Explain the legal interpretation of Bylaws Section 5.4 as a “shield” and not a “sword.”

6. List two pieces of evidence Mr. Stewart presented at the initial hearing to support his claim that Board member David Larson was biased against him.

7. What was the legal standard of proof in this case, and which party was required to meet it?

8. How did Mr. Stewart attempt to prove he was being treated unfairly in comparison to other unit owners, and why did the judge find this evidence unconvincing?

9. At the rehearing, what new evidence did Mr. Stewart present regarding Mr. Larson’s alleged bias?

10. What was the final outcome of both the initial administrative hearing and the subsequent rehearing?

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Answer Key

1. Mr. Stewart initiated the dispute by making changes to the common area and/or limited common area around his unit without first receiving permission from the Association. The Association informed him in a letter dated November 15, 2017, that this was a violation of section 5.1 of the CC&Rs.

2. Mr. Stewart alleged in his petition that the Association violated Bylaws Section 5.4. He later acknowledged this section was not technically violated but cited it because it was the only provision in the governing documents he could find that included a “good faith” requirement.

3. Mr. Stewart resigned from the Board because he “got the sense ‘right away’ that the other Board members’ minds were made up” and that they would not approve his request for a variance, regardless of the details.

4. The Board denied Mr. Stewart’s request on the basis that approving it would “open a Pandora’s Box” where other unit owners would then also request variances. The Administrative Law Judge found this was not an unreasonable position for a condominium association board to take.

5. The interpretation of Section 5.4 is that it acts as a “shield” to protect, or indemnify, Board members from liability for damages, loss, or prejudice, provided they have acted in good faith. It is not a “sword” that imposes an affirmative duty on the Board that Mr. Stewart could use to compel a certain action or claim a violation.

6. At the initial hearing, Mr. Stewart presented two of the following: (1) a biography of Mr. Larson; (2) notes from a November 28, 2017 meeting where Mr. Larson stated that enforcement actions would begin immediately; and (3) a letter from the Association’s attorney that erroneously stated Mr. Stewart had recused himself, suggesting the matter was decided without him.

7. The standard of proof was a “preponderance of the evidence.” The burden of proof rested entirely on the petitioner, Mr. Stewart, to show that the Association had acted improperly.

8. Mr. Stewart presented testimony and photos of other units that he believed were not in conformity with the CC&Rs. The judge found this evidence was not probative because Mr. Stewart provided no evidence that those owners had requested and been denied variances, and he acknowledged he did not know if they had received variances more than two years prior or had received preapproval.

9. At the rehearing, Mr. Stewart entered into evidence an October 3, 2018 letter from Mr. Larson to the Association’s members. In this letter, Mr. Larson urged the members not to vote for Mr. Stewart in an upcoming election.

10. In both the initial decision (September 14, 2018) and the decision following the rehearing (January 17, 2019), the Administrative Law Judge ordered that Mr. Stewart’s petition be dismissed. The Respondent, Canyon Gate Condominium Association, Inc., was deemed the prevailing party in the matter.

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Essay Questions

Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive response for each prompt, citing specific facts and legal conclusions from the case documents.

1. Analyze the Administrative Law Judge’s reasoning for concluding that Bylaws Section 5.4 was not applicable to Mr. Stewart’s petition. How did Mr. Stewart’s own testimony during the legal proceedings support this conclusion?

2. Discuss the concept of “preponderance of the evidence” as defined in the case documents. Evaluate the evidence Mr. Stewart presented across both hearings and explain why the judge found it insufficient to meet this standard regarding his claims of bias, bad faith, and unfair treatment.

3. Examine the Canyon Gate Board’s justification for denying the variance request (the “Pandora’s Box” argument). Based on the legal principles cited in the decisions, why was this considered a reasonable position for a condominium association board to take, and why did it render the specifics of Mr. Stewart’s changes non-germane?

4. Trace the procedural timeline of this case from the Association’s initial notice of violation on November 15, 2017, to the final binding order issued on January 17, 2019. Identify the key events, arguments, and decisions at each stage of the administrative process.

5. Mr. Stewart argued that he was treated unfairly because other units were also out of compliance with the CC&Rs. Deconstruct this argument and explain why the judge dismissed this line of reasoning as not being probative to the issue at hand in both the initial hearing and the rehearing.

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official (Thomas Shedden) who presides over hearings at the Office of Administrative Hearings and issues a decision on the matter.

Association

The Canyon Gate Condominium Association, Inc., the entity responsible for enforcing the Bylaws and CC&Rs. In this case, it is the Respondent.

The governing body of the Association, which at the time of the variance request included Lawrence M. Stewart, Sandra Fernandez, and David Larson.

Burden of Proof

The obligation to prove one’s assertion. In this case, the burden of proof was on the Petitioner, Mr. Stewart.

Bylaws

A contract between the Association and its members. The parties are required to comply with its terms, and the Association must act reasonably in exercising its authority under them.

Covenants, Conditions, and Restrictions. Mr. Stewart was found to be in violation of section 5.1 of the CC&Rs for making unapproved changes.

Common Area / Limited Common Area

The property around a condominium unit that is shared or has restricted use. Mr. Stewart made unauthorized changes to this area.

Good Faith

A standard of conduct mentioned in Bylaws Section 5.4. It protects Board members from liability so long as they act in good faith based on information they possess. Mr. Stewart claimed the Board failed to meet this standard.

Indemnification

The act of compensating for loss or damage. Bylaws Article V, which contains Section 5.4, pertains to indemnification.

Petitioner

The party who files a petition initiating a legal case. In this matter, the petitioner was Lawrence M. Stewart.

Preponderance of the Evidence

The standard of proof required in this case, defined as “The greater weight of the evidence… sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Rehearing

A second hearing granted in a legal matter. A rehearing was conducted on January 2, 2019, after which the judge issued a final, binding order.

Respondent

The party against whom a petition is filed. In this matter, the respondent was Canyon Gate Condominium Association, Inc.

Variance

An official exception or deviation from a rule. Mr. Stewart requested a variance to allow the unapproved changes he had made, which the Board denied.

Blog Post – 18F-H1818052-REL-RHG

A Homeowner Sued His HOA and Lost—The Surprising Reasons Why Might Save You Thousands

Introduction: The Perennial Battle Between Homeowner and HOA

For many homeowners, the relationship with their Homeowners’ Association (HOA) can feel like a constant source of friction. From landscaping rules to paint colors, the potential for disputes is endless. But what happens when a homeowner feels so strongly wronged that they take the ultimate step of suing their association? More importantly, what happens when they lose?

This is the story of a homeowner who was also a board member. After making unauthorized changes to his property, he was denied his request for a variance to approve the changes he had already made. Believing the Board had acted in bad faith, he sued the association. His case failed, not on a minor technicality, but due to fundamental misunderstandings of how HOA law and governing documents function.

This outcome highlights a common, and costly, misconception about HOA governance. We will explore the surprising legal realities revealed in the case of Lawrence M. Stewart vs. Canyon Gate Condominium Association, Inc., offering several crucial takeaways for any homeowner before they decide to challenge their HOA.

1. A “Good Faith” Clause Can Be a Shield, Not a Sword

Mr. Stewart based his entire case on the claim that the Board violated Section 5.4 of the bylaws by not acting in “good faith,” as this was the only section in the governing documents he could find that mentioned the phrase.

This is where the case pivots on a crucial legal distinction. The court found that this clause was not intended to impose a duty on the board that a homeowner could sue over (a “sword”). Instead, its function was to protect board members from liability if they acted in good faith (a “shield”). Legally, this is an indemnification clause. Think of it as a form of insurance, designed to protect volunteer board members from being personally sued for making reasonable decisions, not a weapon for homeowners to attack those decisions.

In his testimony, Mr. Stewart even acknowledged this “shield” versus “sword” distinction but proceeded with the argument anyway. The lesson for homeowners is unequivocal: you must understand the precise legal function of a clause within your governing documents, not just its keywords.

2. The “Pandora’s Box” Defense Is a Powerful Argument

The Board’s primary reason for denying Mr. Stewart’s variance request was its fear that approval “would open a Pandora’s Box where other unit owners would request variances.” While a homeowner might hear “Pandora’s Box” and think it’s a lazy excuse, the court viewed it as the board performing its fundamental duty.

The judge stated this reasoning “was not an unreasonable position for the Board of a condominium association.” This validation is incredibly impactful because it shifts the focus from the merits of one homeowner’s request to the Board’s overarching fiduciary duty to uphold the rules consistently for the entire community. It shows that an HOA’s duty to maintain consistent enforcement and avoid setting a messy precedent is a legally sound basis for a decision, making the specific details of one homeowner’s changes irrelevant.

3. Being on the Board Won’t Give You a Pass

In a surprising twist, Mr. Stewart was a member of the HOA Board at the very time he made the unauthorized changes and requested the variance. This created a clear conflict of interest and ultimately did not help his case.

The situation culminated in Mr. Stewart resigning from the Board during the meeting where his request was considered. He stated he resigned because he felt “the other Board members’ minds were made up” and they would not approve his request. This incident serves as a stark reminder: holding a position on the board does not grant special privileges or exceptions to the rules. In fact, it can complicate personal matters and highlight a direct conflict between a board member’s duties to the association and their personal interests.

4. “Whataboutism” Is Not a Legal Strategy

Like many homeowners in a dispute, Mr. Stewart argued that he was being treated unfairly because other units in the community were also out of compliance with the CC&Rs. This is a common defense, but its legal failure in this case is a masterclass in what courts actually require for proof.

Mr. Stewart’s effort was commendable but legally insufficient. He presented photos of other non-conforming units and even “verified with the Association that none of these units had received a variance in the last two years.” However, his evidence collapsed under cross-examination when he “acknowledged… he did not know if any of these units had received variances more than two years ago or whether preapproval for the changes had been granted.”

The judge dismissed his evidence entirely. This transforms the lesson from a simple “don’t point fingers” to a much more sophisticated legal principle: to prove selective enforcement, you must prove others in the identical procedural situation were treated differently, and incomplete evidence is no evidence at all.

5. The Burden of Proof Is Everything

Perhaps the most stunning fact from the case is that the Association “presented no witnesses” at either the initial hearing or the subsequent rehearing. They won the case without putting a single person on the stand to testify.

They could do this because the legal system placed the “burden of proof” squarely on Mr. Stewart. As the petitioner, it was his job to prove his claims of bad faith, bias, and unfair treatment by a “preponderance of the evidence.” The Association didn’t have to prove it acted in good faith; Mr. Stewart had to prove it acted in bad faith. He failed to meet this standard. In other words, he had to prove that his claims were more likely to be true than not—even if only by a 51% to 49% margin.

The court document formally defines this legal standard as:

The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.

In a legal dispute with your HOA, the case is not about who is morally right or wrong. It’s about who can meet their required burden of proof with convincing, relevant evidence.

Conclusion: Know the Rules Before You Fight the Rulers

The case of Lawrence M. Stewart is a cautionary tale that every homeowner should internalize. His failed lawsuit, which likely became a five-figure mistake when factoring in legal fees for both sides, underscores that HOA governing documents are a binding contract. Challenging the Board requires more than a sense of unfairness. It demands a precise, evidence-backed legal argument that aligns with the specific terms of that contract and the applicable legal standards.

Before you declare war on your HOA, ask yourself: are you prepared to prove your case with irrefutable evidence, or are you just banking on a feeling of being wronged?

Case Participants

Petitioner Side

Lawrence M. Stewart (petitioner)
Also served as a Board member for Respondent until resigning during the variance request consideration.

Respondent Side

Mark K. Sahl (attorney)
CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Represented Respondent in the initial hearing.
Nicolas C. S. Nogami (attorney)
CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Represented Respondent in both the initial hearing (listed as 'Nichols C. S. Nogami') and the rehearing.
Sandra Fernandez (board member)
Canyon Gate Condominium Association, Inc.
Voted to deny Petitioner's variance request.
David Larson (board member)
Canyon Gate Condominium Association, Inc.
Voted to deny Petitioner's variance request; Petitioner alleged he was biased.

Neutral Parties

Thomas Shedden (ALJ)
Office of Administrative Hearings
Judy Lowe (commissioner)
Arizona Department of Real Estate
Recipient of the decision copies.
F. Del Sol (administrative staff)
Office of Administrative Hearings
Signed the transmission of the decision copies.

Lawrence Stewart v. Canyon Gate Condominium Association, Inc.

Posted on January 17, 2019 by [email protected]

Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.

Case Summary

Case ID	18F-H1818052-REL-RHG
Agency	ADRE
Tribunal	OAH
Decision Date	2019-01-17
Administrative Law Judge	Thomas Shedden
Outcome	loss
Filing Fees Refunded	$0.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Lawrence M. Stewart	Counsel	—
Respondent	Canyon Gate Condominium Association, Inc.	Counsel	Nicolas C. S. Nogami

Alleged Violations

Association Bylaws section 5.4

Outcome Summary

The Administrative Law Judge dismissed Petitioner Lawrence M. Stewart's petition and deemed the Respondent, Canyon Gate Condominium Association, Inc., to be the prevailing party.

Why this result: Petitioner failed to prove the Association violated Bylaws Section 5.4 or acted unreasonably or in bad faith when denying his request for a variance. The Bylaw section cited was determined to be a liability shield for the Board, not a source of duty owed to the homeowner.

Key Issues & Findings

Alleged failure of HOA Board to act in good faith when denying Petitioner's request for a variance for unauthorized common area changes

Petitioner made changes to the common area without permission and the Board denied his subsequent request for a variance. Petitioner alleged the Board violated Bylaws Section 5.4 by failing to act in good faith and showing bias. The ALJ found that Section 5.4 is a liability shield for the Board, not a duty imposed upon them, and Petitioner failed to meet the burden of proof to show bad faith or unreasonableness.

Orders: Petitioner Lawrence M. Stewart’s petition is dismissed. Respondent is deemed to be the prevailing party in this matter.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)

Analytics Highlights

Topics: HOA governance, variance denial, common area modifications, good faith requirement, board liability shield, prevailing party

Additional Citations:

ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)

Video Overview

Audio Overview

Decision Documents

18F-H1818052-REL-RHG Decision – 683622.pdf

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18F-H1818052-REL-RHG Decision – 694095.pdf

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18F-H1818052-REL-RHG Decision – ../18F-H1818052-REL/660026.pdf

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18F-H1818052-REL-RHG Decision – ../18F-H1818052-REL/720468.pdf

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