Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
| Case ID |
20F-H2020049-REL-RHG |
| Agency |
ADRE |
| Tribunal |
OAH |
| Decision Date |
2021-03-08 |
| Administrative Law Judge |
Jenna Clark |
| Outcome |
loss |
| Filing Fees Refunded |
$500.00 |
| Civil Penalties |
$0.00 |
Parties & Counsel
| Petitioner |
Michael J Stoltenberg |
Counsel |
— |
| Respondent |
Rancho Del Oro Homeowners Association |
Counsel |
Nicole Payne, Esq. |
Alleged Violations
CC&Rs Section 14.8
Outcome Summary
The Administrative Law Judge denied the Petitioner's petition following a rehearing. The ALJ concluded that the Petitioner failed to sustain the burden of proof that the Association violated CC&Rs Section 14.8, as that section applies only to the Association's notice obligation to members and not to assessment payments sent by members to the Association.
Why this result: The Petitioner failed to meet the burden of proof because the CC&R provision cited was inapplicable to the dispute. Additionally, the Petitioner was found to have inadvertently caused delays in payment receipt by using restricted delivery, contrary to instructions.
Key Issues & Findings
Whether the Association violated CC&Rs 14.8.
Petitioner alleged the Association violated CC&Rs Section 14.8 by failing to handle his monthly assessment payments correctly, resulting in late fees and threats of foreclosure. The ALJ found that Section 14.8 governs the Association's notice obligations to members and is inapplicable to the Petitioner's delivery of assessment payments to the Association.
Orders: Petitioner's petition was denied on rehearing.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
- ARIZ. REV. STAT. § 32-2102
- ARIZ. REV. STAT. § 32-2199 et seq.
- ARIZ. REV. STAT. § 32-2199.05
- ARIZ. REV. STAT. § 32-2199(2)
- ARIZ. REV. STAT. § 32-2199.01(A)
- ARIZ. REV. STAT. § 32-2199.01(D)
- ARIZ. REV. STAT. § 32-2199.02
- ARIZ. REV. STAT. § 41-1092 et seq.
- ARIZ. REV. STAT. § 33-1243
- ARIZ. ADMIN. CODE R2-19-119
- Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
- MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
- BLACK’S LAW DICTIONARY 1220 (8th ed. 1999)
Analytics Highlights
Topics: CC&Rs, Assessments, Late Fees, Notice Provision, Burden of Proof, Rehearing
Additional Citations:
- ARIZ. REV. STAT. § 32-2102
- ARIZ. REV. STAT. § 32-2199 et seq.
- ARIZ. REV. STAT. § 32-2199.05
- ARIZ. REV. STAT. § 32-2199(2)
- ARIZ. REV. STAT. § 32-2199.01(A)
- ARIZ. REV. STAT. § 32-2199.01(D)
- ARIZ. REV. STAT. § 32-2199.02
- ARIZ. REV. STAT. § 41-1092 et seq.
- ARIZ. REV. STAT. § 33-1243
- ARIZ. ADMIN. CODE R2-19-119
- Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
- MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
- BLACK’S LAW DICTIONARY 1220 (8th ed. 1999)
Decision Documents
20F-H2020049-REL-RHG Decision – 861466.pdf
Uploaded 2025-10-09T03:35:03 (145.6 KB)
20F-H2020049-REL-RHG Decision – ../20F-H2020049-REL/811290.pdf
Uploaded 2026-01-20T13:56:54 (131.7 KB)
Briefing Doc – 20F-H2020049-REL-RHG
Briefing Document: Stoltenberg v. Rancho Del Oro Homeowners Association
Executive Summary
This document synthesizes the findings and conclusions from two administrative law judge decisions concerning a dispute between homeowner Michael J. Stoltenberg (Petitioner) and the Rancho Del Oro Homeowners Association (Respondent). The Petitioner’s complaint, alleging the Association violated its governing documents and acted in bad faith regarding the handling of his monthly assessment payments, was comprehensively reviewed and ultimately denied. This denial was subsequently affirmed in a rehearing.
The core of the dispute centered on the Petitioner’s unilateral decision to send his monthly payments via restricted U.S. Postal Service delivery to a specific, unpaid volunteer board member. This action, taken despite clear instructions to mail payments to the Association’s P.O. Box, resulted in delayed receipt and returned mail, leading to the imposition of late fees and threats of foreclosure against the Petitioner.
The Administrative Law Judge’s central finding was that the Petitioner fundamentally misinterpreted Section 14.8 of the Association’s Covenants, Conditions, and Restrictions (CC&Rs). The judge concluded this section is unambiguously applicable only to notices sent from the Association to its members, and imposes no obligations on the Association regarding mail received from members. The payment delays and resulting penalties were determined to be the direct consequence of the Petitioner’s own “volitionally took” actions, for which the Association bore no responsibility. Furthermore, the Petitioner’s claims of “bad faith” under Arizona’s nonprofit corporation statutes were dismissed as falling outside the jurisdictional authority of the Arizona Department of Real Estate and the Office of Administrative Hearings.
I. Case Overview
The legal matter concerns a petition filed by a homeowner against his condominium association, alleging violations of the community’s governing documents and state law.
Case Number
20F-H2020049-REL / 20F-H2020049-REL-RHG
Petitioner
Michael J. Stoltenberg
Respondent
Rancho Del Oro Homeowners Association
Adjudicating Body
Arizona Office of Administrative Hearings (OAH)
Administrative Law Judge
Jenna Clark
The Petitioner’s initial complaint, filed on March 2, 2020, alleged that the Association “fail to do their job, and are acting in bad faith,” specifically citing violations of ARIZ. REV. STAT. §§ 10-3842 and 10-801, and Section 14.8 of the Association’s CC&Rs. He sought an order compelling the Association’s compliance and the issuance of a civil penalty.
II. Procedural History and Timeline
The dispute progressed through an initial hearing, a decision, a granted request for rehearing, and a final binding order.
• March 2, 2020: Petitioner files a single-issue petition with the Arizona Department of Real Estate (“Department”).
• March 24, 2020: Respondent files an ANSWER, denying all complaint items.
• April 1, 2020: The Department refers the matter to the Office of Administrative Hearings (OAH) for an evidentiary hearing.
• July 14, 2020: The initial evidentiary hearing is held.
• August 3, 2020: An AMENDED ADMINISTRATIVE LAW JUDGE DECISION is issued, denying the Petitioner’s petition.
• August 28, 2020: Petitioner submits a request for a rehearing.
• September 9, 2020: The Petitioner’s request for a rehearing is granted.
• February 16, 2021: A rehearing is held before the same Administrative Law Judge.
• March 8, 2021: A final ADMINISTRATIVE LAW JUDGE DECISION is issued, again denying the Petitioner’s petition.
III. Central Dispute: Assessment Payments and CC&R Section 14.8
The conflict originated from the Petitioner’s method of submitting monthly assessment payments and his interpretation of the Association’s obligations under its CC&Rs.
The Petitioner’s Actions and Their Consequences
• Instruction: On January 4, 2016, the Petitioner was advised that the Association’s “primary address for receiving all correspondence and all assessment payments from its members” was PO Box 4333, Yuma, Arizona 85366.
• Unilateral Change in Method: Beginning in November 2019, the Petitioner began sending his monthly payments via restricted delivery through the United States Postal Service (USPS), designated for “board member Rhea Carlisle’s pickup only.”
• Petitioner’s Rationale: He took this action based on a belief that an agent of the Association’s property management company had previously thrown away one of his mailed payments.
• Petitioner’s Acknowledged Awareness: The Petitioner was aware that the Association employed a property management company to collect mail and that Ms. Carlisle was an “unpaid volunteer board member,” not an employee of that company.
• Resulting Delays and Penalties: This restricted delivery method caused significant issues.
◦ One payment was returned by USPS on January 25, 2020.
◦ Another was returned by USPS on June 8, 2020.
◦ Other payments were picked up late on various dates.
◦ For each instance where the payment was received late, the Petitioner was assessed a late fee and his residence was placed in danger of foreclosure.
The Disputed Provision: CC&Rs Section 14.8
The legal basis for the Petitioner’s claim rested on his interpretation of Section 14.8 of the Association’s Bylaws.
• Full Text of Section 14.8, Notices:
• Respondent’s Argument: The Association argued that this section was “inapplicable to the facts as presented” because it governs the Association’s obligation when sending notices to homeowners, not the other way around.
IV. Administrative Law Judge’s Findings and Conclusions
Across two separate decisions, the Administrative Law Judge (ALJ) consistently found that the Petitioner failed to meet his burden of proof and that his interpretation of the governing documents was incorrect.
Initial Decision (August 3, 2020)
• Inapplicability of Section 14.8: The ALJ’s primary conclusion was a complete rejection of the Petitioner’s legal argument.
• Petitioner’s Culpability: The ALJ placed the responsibility for the late payments squarely on the Petitioner.
• Outcome: The petition was denied.
Rehearing Decision (March 8, 2021)
The rehearing was granted on the Petitioner’s grounds of an alleged “Error in the admission or rejection of evidence or other errors of law” and that the initial decision was “arbitrary, capricious, or an abuse of discretion.” The ALJ found no merit in these claims.
• Reaffirmation of Core Finding: The ALJ reiterated and strengthened the conclusion regarding Section 14.8.
• Jurisdictional Ruling: The ALJ explicitly addressed the Petitioner’s “bad faith” claim by citing ARIZ. REV. STAT. § 10-3842, which concerns standards of conduct for officers of nonprofit corporations.
• Failure to Support Rehearing Claims: The ALJ noted a complete lack of new evidence to justify the rehearing.
• Final Outcome: The petition was again denied. The order was made final and binding, with any further appeal requiring judicial review in superior court.
Study Guide – 20F-H2020049-REL-RHG
Study Guide: Stoltenberg v. Rancho Del Oro Homeowners Association
Short-Answer Quiz
Instructions: Answer the following questions in 2-3 complete sentences, based entirely on the provided legal documents.
1. Who are the two primary parties in case No. 20F-H2020049-REL, and what are their respective roles?
2. What was the specific allegation Michael Stoltenberg made against the Rancho Del Oro Homeowners Association in his petition?
3. Why did the Petitioner, beginning in November 2019, change the way he mailed his monthly assessment payments?
4. What is the specific subject of Section 14.8 of the Association’s Covenants, Conditions, and Restrictions (CC&Rs)?
5. What were the consequences for the Petitioner each time the Association received his monthly assessment payment late?
6. According to the Administrative Law Judge, why was Section 14.8 of the CC&Rs inapplicable to the facts of this case?
7. What was the legal standard of proof the Petitioner was required to meet, and what is its definition?
8. On what grounds did the Petitioner request and receive a rehearing after the initial decision was issued?
9. Why did the Administrative Law Judge dismiss the Petitioner’s argument regarding Arizona Revised Statutes § 10-3842 during the rehearing?
10. What was the final outcome of both the initial hearing on July 14, 2020, and the rehearing on February 16, 2021?
——————————————————————————–
Quiz Answer Key
1. The primary parties are Michael J Stoltenberg, the “Petitioner,” and the Rancho Del Oro Homeowners Association, the “Respondent.” The Petitioner is a condominium owner and member of the Association who filed a petition alleging violations, while the Respondent is the homeowners’ association that governs the development.
2. The Petitioner alleged that the Association was in violation of Arizona Revised Statutes §§ 10-3842 and 10-801, and section 14.8 of the Association’s CC&Rs. Specifically, he alleged that the Association “fail to do their job, and are acting in bad faith.”
3. The Petitioner changed his mailing method because he believed an agent of the Association’s property management company had thrown away one of his mailed payments. As a result, he began sending payments via restricted delivery by the USPS, for board member Rhea Carlisle’s pickup only.
4. Section 14.8, titled “Notices,” pertains to any notice permitted or required by the Declaration or Bylaws. It specifically addresses the Association’s notice obligation to its members when mailing them information, outlining when such notices are deemed delivered.
5. Each time the Petitioner’s monthly assessment was received late, he was assessed a late fee by the Association. Additionally, each late payment occurrence put his residence in danger of foreclosure by the Association.
6. The Judge concluded Section 14.8 was inapplicable because its language speaks specifically to the Association’s obligation to provide notice to its members. The section has no binding authority or control over homeowners sending mail to the Association.
7. The Petitioner was required to prove his case by a “preponderance of the evidence.” This standard is defined as “proof as convinces the trier of fact that the contention is more probably true than not,” or evidence with the most convincing force that inclines an impartial mind to one side of an issue.
8. The Petitioner’s rehearing request was granted on the grounds that there was an alleged “Error in the admission or rejection of evidence or other errors of law occurring during the proceeding.” He also claimed that the initial findings of fact or decision were “arbitrary, capricious, or an abuse of discretion.”
9. The argument regarding ARIZ. REV. STAT. § 10-3842, which concerns standards of conduct for officers, was dismissed because it falls outside of the Department of Real Estate’s jurisdiction. The Petitioner had been advised of the Department’s jurisdictional limitations when he first filed his petition.
10. In both the initial decision (dated August 03, 2020) and the final order after the rehearing (dated March 08, 2021), the Administrative Law Judge denied the Petitioner’s petition. The Judge concluded in both instances that the Petitioner failed to sustain his burden of proof.
——————————————————————————–
Essay Questions
Instructions: The following questions are designed to be answered in a detailed essay format, synthesizing information from across the provided documents. Answers are not provided.
1. Analyze the legal reasoning used by Administrative Law Judge Jenna Clark to deny the Petitioner’s claims in both the initial hearing and the rehearing. Discuss the interpretation of CC&R Section 14.8, the concept of burden of proof, and jurisdictional limitations.
2. Trace the complete procedural history of case No. 20F-H2020049-REL from the filing of the petition to the final order. Include all key dates, actions taken by the parties and the Department, and the specific reasons for each major step, such as the granting of the rehearing.
3. Evaluate the actions taken by the Petitioner, Michael Stoltenberg, regarding his assessment payments. Explain why his unilateral decision to use restricted mail delivery, despite being aware of the Association’s procedures, ultimately caused the negative outcomes he sought to avoid.
4. Explain the contractual relationship between a homeowners’ association and a property owner as described in the legal documents. How do the CC&Rs function as an enforceable contract, and how was this concept central to the dispute?
5. Discuss the roles and authorities of the Arizona Department of Real Estate and the Office of Administrative Hearings (OAH) in resolving HOA disputes, as demonstrated by this case. What are their powers, and what specific limitations on their jurisdiction are identified in the text?
——————————————————————————–
Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
The official who presides over the evidentiary hearing at the Office of Administrative Hearings and issues findings of fact, conclusions of law, and an order. In this case, the ALJ was Jenna Clark.
Arizona Department of Real Estate (Department)
The state agency authorized by statute to receive and decide petitions for hearings from members of homeowners’ associations in Arizona.
ARIZ. REV. STAT.
Abbreviation for Arizona Revised Statutes, which are the codified laws of the state of Arizona.
Association
The Rancho Del Oro Homeowners Association, a condominium association whose membership is comprised of the condominium owners in the Rancho Del Oro residential real estate development in Yuma, Arizona.
Board of Directors (the Board)
The body that oversees the Homeowners Association.
Burden of Proof
The obligation of a party in a legal proceeding to prove their contention. In this case, the Petitioner bore the burden of proving the Respondent violated the CC&Rs.
An abbreviation for the Declaration of Covenants, Conditions and Restrictions. These governing documents form an enforceable contract between the Association and each property owner, empowering the Association to control certain aspects of property use.
Office of Administrative Hearings (OAH)
An independent state agency to which the Department of Real Estate refers matters for an evidentiary hearing. The OAH has the authority to hear and decide contested cases and interpret the contract (CC&Rs) between parties.
Petitioner
The party who files a petition initiating a legal action. In this case, Michael J Stoltenberg, a homeowner and member of the Association.
Preponderance of the Evidence
The standard of proof required in this proceeding. It is defined as “proof as convinces the trier of fact that the contention is more probably true than not” and is considered the “greater weight of the evidence.”
Respondent
The party against whom a petition is filed. In this case, the Rancho Del Oro Homeowners Association.
Statutory Agent
An individual listed as an official agent for an entity. For the years 2019 and 2020, Diana Crites was listed as the Association’s Statutory Agent.
Abbreviation for the United States Postal Service.
Blog Post – 20F-H2020049-REL-RHG
Study Guide: Stoltenberg v. Rancho Del Oro Homeowners Association
Short-Answer Quiz
Instructions: Answer the following questions in 2-3 complete sentences, based entirely on the provided legal documents.
1. Who are the two primary parties in case No. 20F-H2020049-REL, and what are their respective roles?
2. What was the specific allegation Michael Stoltenberg made against the Rancho Del Oro Homeowners Association in his petition?
3. Why did the Petitioner, beginning in November 2019, change the way he mailed his monthly assessment payments?
4. What is the specific subject of Section 14.8 of the Association’s Covenants, Conditions, and Restrictions (CC&Rs)?
5. What were the consequences for the Petitioner each time the Association received his monthly assessment payment late?
6. According to the Administrative Law Judge, why was Section 14.8 of the CC&Rs inapplicable to the facts of this case?
7. What was the legal standard of proof the Petitioner was required to meet, and what is its definition?
8. On what grounds did the Petitioner request and receive a rehearing after the initial decision was issued?
9. Why did the Administrative Law Judge dismiss the Petitioner’s argument regarding Arizona Revised Statutes § 10-3842 during the rehearing?
10. What was the final outcome of both the initial hearing on July 14, 2020, and the rehearing on February 16, 2021?
——————————————————————————–
Quiz Answer Key
1. The primary parties are Michael J Stoltenberg, the “Petitioner,” and the Rancho Del Oro Homeowners Association, the “Respondent.” The Petitioner is a condominium owner and member of the Association who filed a petition alleging violations, while the Respondent is the homeowners’ association that governs the development.
2. The Petitioner alleged that the Association was in violation of Arizona Revised Statutes §§ 10-3842 and 10-801, and section 14.8 of the Association’s CC&Rs. Specifically, he alleged that the Association “fail to do their job, and are acting in bad faith.”
3. The Petitioner changed his mailing method because he believed an agent of the Association’s property management company had thrown away one of his mailed payments. As a result, he began sending payments via restricted delivery by the USPS, for board member Rhea Carlisle’s pickup only.
4. Section 14.8, titled “Notices,” pertains to any notice permitted or required by the Declaration or Bylaws. It specifically addresses the Association’s notice obligation to its members when mailing them information, outlining when such notices are deemed delivered.
5. Each time the Petitioner’s monthly assessment was received late, he was assessed a late fee by the Association. Additionally, each late payment occurrence put his residence in danger of foreclosure by the Association.
6. The Judge concluded Section 14.8 was inapplicable because its language speaks specifically to the Association’s obligation to provide notice to its members. The section has no binding authority or control over homeowners sending mail to the Association.
7. The Petitioner was required to prove his case by a “preponderance of the evidence.” This standard is defined as “proof as convinces the trier of fact that the contention is more probably true than not,” or evidence with the most convincing force that inclines an impartial mind to one side of an issue.
8. The Petitioner’s rehearing request was granted on the grounds that there was an alleged “Error in the admission or rejection of evidence or other errors of law occurring during the proceeding.” He also claimed that the initial findings of fact or decision were “arbitrary, capricious, or an abuse of discretion.”
9. The argument regarding ARIZ. REV. STAT. § 10-3842, which concerns standards of conduct for officers, was dismissed because it falls outside of the Department of Real Estate’s jurisdiction. The Petitioner had been advised of the Department’s jurisdictional limitations when he first filed his petition.
10. In both the initial decision (dated August 03, 2020) and the final order after the rehearing (dated March 08, 2021), the Administrative Law Judge denied the Petitioner’s petition. The Judge concluded in both instances that the Petitioner failed to sustain his burden of proof.
——————————————————————————–
Essay Questions
Instructions: The following questions are designed to be answered in a detailed essay format, synthesizing information from across the provided documents. Answers are not provided.
1. Analyze the legal reasoning used by Administrative Law Judge Jenna Clark to deny the Petitioner’s claims in both the initial hearing and the rehearing. Discuss the interpretation of CC&R Section 14.8, the concept of burden of proof, and jurisdictional limitations.
2. Trace the complete procedural history of case No. 20F-H2020049-REL from the filing of the petition to the final order. Include all key dates, actions taken by the parties and the Department, and the specific reasons for each major step, such as the granting of the rehearing.
3. Evaluate the actions taken by the Petitioner, Michael Stoltenberg, regarding his assessment payments. Explain why his unilateral decision to use restricted mail delivery, despite being aware of the Association’s procedures, ultimately caused the negative outcomes he sought to avoid.
4. Explain the contractual relationship between a homeowners’ association and a property owner as described in the legal documents. How do the CC&Rs function as an enforceable contract, and how was this concept central to the dispute?
5. Discuss the roles and authorities of the Arizona Department of Real Estate and the Office of Administrative Hearings (OAH) in resolving HOA disputes, as demonstrated by this case. What are their powers, and what specific limitations on their jurisdiction are identified in the text?
——————————————————————————–
Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
The official who presides over the evidentiary hearing at the Office of Administrative Hearings and issues findings of fact, conclusions of law, and an order. In this case, the ALJ was Jenna Clark.
Arizona Department of Real Estate (Department)
The state agency authorized by statute to receive and decide petitions for hearings from members of homeowners’ associations in Arizona.
ARIZ. REV. STAT.
Abbreviation for Arizona Revised Statutes, which are the codified laws of the state of Arizona.
Association
The Rancho Del Oro Homeowners Association, a condominium association whose membership is comprised of the condominium owners in the Rancho Del Oro residential real estate development in Yuma, Arizona.
Board of Directors (the Board)
The body that oversees the Homeowners Association.
Burden of Proof
The obligation of a party in a legal proceeding to prove their contention. In this case, the Petitioner bore the burden of proving the Respondent violated the CC&Rs.
An abbreviation for the Declaration of Covenants, Conditions and Restrictions. These governing documents form an enforceable contract between the Association and each property owner, empowering the Association to control certain aspects of property use.
Office of Administrative Hearings (OAH)
An independent state agency to which the Department of Real Estate refers matters for an evidentiary hearing. The OAH has the authority to hear and decide contested cases and interpret the contract (CC&Rs) between parties.
Petitioner
The party who files a petition initiating a legal action. In this case, Michael J Stoltenberg, a homeowner and member of the Association.
Preponderance of the Evidence
The standard of proof required in this proceeding. It is defined as “proof as convinces the trier of fact that the contention is more probably true than not” and is considered the “greater weight of the evidence.”
Respondent
The party against whom a petition is filed. In this case, the Rancho Del Oro Homeowners Association.
Statutory Agent
An individual listed as an official agent for an entity. For the years 2019 and 2020, Diana Crites was listed as the Association’s Statutory Agent.
Abbreviation for the United States Postal Service.
Case Participants
Petitioner Side
- Michael J Stoltenberg (petitioner)
Rancho Del Oro condominium owner
Appeared on his own behalf,
Respondent Side
- Nicole Payne (HOA attorney)
Carpenter, Hazlewood, Delgado & Bolen, LLP
Appeared on behalf of Rancho Del Oro Homeowners Association,,
- Rhea Carlisle (board member)
Rancho Del Oro Homeowners Association
Unpaid volunteer board member; Petitioner directed mail specifically to her,,,
- Diana Crites (statutory agent)
Rancho Del Oro Homeowners Association
Statutory Agent for 2019 and 2020,
- Lydia Peirce (HOA attorney staff/contact)
Linsmeier Carpenter, Hazlewood, Delgado & Bolen, LLP
Listed as contact for Respondent in 2020 decision transmission
Neutral Parties
- Jenna Clark (ALJ)
Office of Administrative Hearings
- Judy Lowe (ADRE commissioner)
Arizona Department of Real Estate
Commissioner receiving the OAH order,
- Dan Gardner (HOA coordinator)
Arizona Department of Real Estate
HOA Coordinator contact for the Commissioner
