Dina R. Galassini v. Plaza Waterfront Condo Owners Association, Inc.

Case Summary

Case ID 18F-H1818032-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2018-08-22
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Dina R. Galassini Counsel
Respondent Plaza Waterfront Condominium Owners Association, Inc. Counsel

Alleged Violations

ARIZ. REV. STAT. § 32-2199.01; ARIZ. REV. STAT. § 33-1202

Outcome Summary

The Administrative Law Judge dismissed Petitioner’s petition for rehearing, concluding that the OAH has the authority, pursuant to statute and precedent, to resolve disputes involving the interpretation of condominium documents and related regulating statutes, rejecting Petitioner's constitutional claims regarding separation of powers. Respondent's request for attorney's fees was denied.

Why this result: Petitioner's argument that the original ALJ decision was contrary to law due to separation of powers violation was dismissed, as the OAH confirmed its statutory authority (ARIZ. REV. STAT. § 32-2199.01) to interpret condominium documents and regulating statutes.

Key Issues & Findings

Whether the Respondent Association correctly posted owner assessments for the 2018 parking lot budget

Petitioner sought rehearing arguing the ALJ lacked constitutional authority (separation of powers) to interpret condominium documents (contracts) and statutory definitions of common/limited common elements (ARIZ. REV. STAT. § 33-1202) related to the posting of the 2018 parking lot budget assessment.

Orders: Petitioner’s petition is dismissed. Respondent’s request for attorney’s fees is denied.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 33-1202
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • Ariz. Cannabis Nurses Ass'n v. Ariz. Dep't of Health Servs., 242 Ariz. 62, 67, 392 P.3d 506, 511 (App. 2017)

Analytics Highlights

Topics: HOA Dispute, Assessment, Jurisdiction, ALJ Authority, Condominium Documents, Separation of Powers
Additional Citations:

  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 33-1202
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • Ariz. Cannabis Nurses Ass'n v. Ariz. Dep't of Health Servs., 242 Ariz. 62, 67, 392 P.3d 506, 511 (App. 2017)
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. REV. STAT. § 32-2199.02(B)
  • ARIZ. CONST. Art. 3

Dina R. Galassini vs. Plaza Waterfront Condominiums Owners

Case Summary

Case ID 18F-H1818032-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2018-08-22
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Dina R. Galassini Counsel
Respondent Plaza Waterfront Condominium Owners Association, Inc. Counsel

Alleged Violations

ARIZ. REV. STAT. § 32-2199.01; ARIZ. REV. STAT. § 33-1202

Outcome Summary

The Administrative Law Judge dismissed Petitioner’s petition for rehearing, concluding that the OAH has the authority, pursuant to statute and precedent, to resolve disputes involving the interpretation of condominium documents and related regulating statutes, rejecting Petitioner's constitutional claims regarding separation of powers. Respondent's request for attorney's fees was denied.

Why this result: Petitioner's argument that the original ALJ decision was contrary to law due to separation of powers violation was dismissed, as the OAH confirmed its statutory authority (ARIZ. REV. STAT. § 32-2199.01) to interpret condominium documents and regulating statutes.

Key Issues & Findings

Whether the Respondent Association correctly posted owner assessments for the 2018 parking lot budget

Petitioner sought rehearing arguing the ALJ lacked constitutional authority (separation of powers) to interpret condominium documents (contracts) and statutory definitions of common/limited common elements (ARIZ. REV. STAT. § 33-1202) related to the posting of the 2018 parking lot budget assessment.

Orders: Petitioner’s petition is dismissed. Respondent’s request for attorney’s fees is denied.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 33-1202
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • Ariz. Cannabis Nurses Ass'n v. Ariz. Dep't of Health Servs., 242 Ariz. 62, 67, 392 P.3d 506, 511 (App. 2017)

Analytics Highlights

Topics: HOA Dispute, Assessment, Jurisdiction, ALJ Authority, Condominium Documents, Separation of Powers
Additional Citations:

  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 33-1202
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • Ariz. Cannabis Nurses Ass'n v. Ariz. Dep't of Health Servs., 242 Ariz. 62, 67, 392 P.3d 506, 511 (App. 2017)
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. REV. STAT. § 32-2199.02(B)
  • ARIZ. CONST. Art. 3

Video Overview

Audio Overview

Decision Documents

18F-H1818032-REL Decision – 636950.pdf

Uploaded 2025-12-09T10:04:20 (128.6 KB)

18F-H1818032-REL Decision – 655375.pdf

Uploaded 2025-10-09T03:32:39 (65.7 KB)





Briefing Doc – 18F-H1818032-REL


Briefing Document: Galassini v. Plaza Waterfront Condominium Owners Association, Inc. (Case No. 18F-H1818032-REL-RHG)

Executive Summary

This document analyzes the Administrative Law Judge (ALJ) Decision in case number 18F-H1818032-REL-RHG, which dismissed a petition filed by Dina R. Galassini against the Plaza Waterfront Condominium Owners Association, Inc. The central conflict revolved around the jurisdictional authority of the Office of Administrative Hearings (OAH). The Petitioner, Ms. Galassini, argued that the OAH, as part of the executive branch, violated the constitutional separation of powers by interpreting private condominium documents, a power she claimed was reserved exclusively for the judicial branch.

The ALJ, Thomas Shedden, rejected this argument and dismissed the petition as a matter of law. The decision affirms that the OAH is statutorily empowered by Arizona Revised Statutes to hear disputes concerning alleged violations of condominium documents. The ALJ’s rationale rests on established legal precedent, citing Tierra Ranchos Homeowners Ass’n v. Kitchukov to confirm that condominium documents are a contract and Ariz. Cannabis Nurses Ass’n v. Ariz. Dep’t of Health Servs. to support an agency’s authority to take actions reasonably implied by its governing statutes. Consequently, the Petitioner’s core constitutional challenge was deemed “unfounded,” leading to the dismissal of her petition. While the petition was dismissed, the Respondent’s request for attorney’s fees was denied.

1. Case Background and Procedural History

The case involves a dispute between a condominium owner and a condominium association, brought before the Arizona Office of Administrative Hearings.

Parties:

Petitioner: Dina R. Galassini

Respondent: Plaza Waterfront Condominium Owners Association, Inc.

Forum: Office of Administrative Hearings, Phoenix, Arizona

Presiding Judge: Thomas Shedden, Administrative Law Judge

Decision Date: August 22, 2018

The matter arrived before Judge Shedden following a series of procedural steps initiated after an original ALJ decision.

June 26, 2018: The Petitioner filed a Request for Rehearing with the Department of Real Estate.

July 20, 2018: The Department of Real Estate issued an Order Granting Rehearing, based on the reasons outlined in the Petitioner’s request.

August 15, 2018: The Respondent filed a Motion to Vacate Rehearing, arguing the case could be resolved as a matter of law.

August 21, 2018: The Petitioner filed an Opposition to the Respondent’s motion.

2. Core Dispute: Petitioner’s Jurisdictional Challenge

The Petitioner’s request for a rehearing was founded on a direct constitutional challenge to the authority of the Administrative Law Judge. The underlying substantive issue concerned the association’s handling of “owner assessments for the 2018 parking lot budget,” which turned on the interpretation of “common element” versus “limited common element.”

Petitioner’s Arguments

Violation of Separation of Powers: The Petitioner contended that the original ALJ decision was “contrary to law” because it involved the interpretation of private contracts (the condominium documents). She argued this function is reserved exclusively for the judicial branch under Arizona’s Constitution, Article 3 (Separation of Powers).

Due Process Violation: By interpreting the contract, the ALJ allegedly committed a “due process violation.” The Petitioner stated, “For the ALJ to definitively interpret actual contracts between two private parties is a due process violation (separation of powers).”

Improper Delegation of Power: The Petitioner claimed the ALJ’s action “redistributed interpreted power from the Judiciary to the Executive and this is a congressional encroachment on my rights.”

3. The Administrative Law Judge’s Legal Rationale and Decision

The ALJ agreed with the Respondent that the case could be resolved as a matter of law, focusing entirely on the jurisdictional question raised by the Petitioner. The decision systematically refutes the Petitioner’s separation of powers argument by outlining the OAH’s legal authority.

Statutory Authority

The decision establishes the OAH’s jurisdiction through Arizona state law:

ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11: This statute describes the administrative process for referring disputes between owners and condominium associations to the OAH.

ARIZ. REV. STAT. § 32-2199.01(A): This section specifically grants the OAH authority to conduct hearings for alleged “violations of condominium documents … or violations of the statutes that regulate condominiums….”

ARIZ. REV. STAT. § 33-1202: The decision notes that analyzing the Petitioner’s claim inherently requires interpreting definitions found in the statutes that regulate condominiums, such as this section defining “common element” and “limited common element.”

Precedent from Case Law

The ALJ grounded the OAH’s interpretive authority in two key Arizona appellate court decisions:

1. Tierra Ranchos Homeowners Ass’n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007): This case is cited to establish the legal principle that “the condominium documents are a contract between the parties.” By defining the documents as a contract, the decision links the dispute directly to the type of documents the OAH is empowered to review.

2. Ariz. Cannabis Nurses Ass’n v. Ariz. Dep’t of Health Servs., 242 Ariz. 62, 392 P.3d 506 (App. 2017): This case is cited to support the broader principle of administrative authority. The ruling states, “[I]t is the law of this state that an agency may” take such action “which may be reasonably implied from ‘a consideration of the statutory scheme as a whole.’” This supports the conclusion that the OAH’s authority to hear disputes over condominium documents implies the authority to interpret them.

Conclusion of the Court

Based on the cited statutes and case law, the ALJ concluded that the OAH possesses the necessary authority to interpret both the condominium documents and the relevant state statutes. Therefore, the Petitioner’s central argument that the original decision was “contrary to law” was declared “unfounded,” and dismissing the matter was deemed appropriate.

4. Final Orders and Directives

The Administrative Law Judge issued the following final orders on August 22, 2018:

Outcome

Petitioner’s Petition

Dismissed

Respondent’s Request for Attorney’s Fees

Denied

The decision also included the following legally mandated notices for the parties:

Binding Nature: The order is binding on the parties as a result of the rehearing, per ARIZ. REV. STAT. § 32-2199.02(B).

Appeal Rights: A party wishing to appeal the order must seek judicial review by filing with the superior court within thirty-five (35) days from the date the order was served. The appeal process is prescribed by ARIZ. REV. STAT. title 12, chapter 7, article 6 and § 12-904(A).






Study Guide – 18F-H1818032-REL


Study Guide: Galassini v. Plaza Waterfront Condominium Owners Association, Inc.

This study guide provides a detailed review of the Administrative Law Judge Decision in case number 18F-H1818032-REL-RHG, issued by the Arizona Office of Administrative Hearings. It is designed to assess comprehension of the case’s key arguments, legal precedents, and procedural history.

——————————————————————————–

Short-Answer Quiz

Instructions: Answer the following ten questions in two to three complete sentences, using only information provided in the source document.

1. Identify the Petitioner and the Respondent in this case and state the official case number.

2. What was the Petitioner’s core legal argument for requesting a rehearing, as detailed in her filing on June 26, 2018?

3. On what grounds did the Respondent file a Motion to Vacate Rehearing on August 15, 2018?

4. According to the Petitioner’s Response, what was the specific issue that the Department’s Commissioner had ordered the rehearing to address?

5. Which Arizona Revised Statute section is cited as describing the process for hearings on disputes between owners and condominium associations?

6. To resolve the Petitioner’s claim, the Administrative Law Judge (ALJ) needed to interpret the definitions of what two key terms from the Arizona Revised Statutes?

7. What legal precedent was cited in the decision to establish that condominium documents are considered a contract between the parties?

8. What was the final decision issued by Administrative Law Judge Thomas Shedden on August 22, 2018, regarding the Petitioner’s petition and the Respondent’s request for attorney’s fees?

9. According to ARIZ. REV. STAT. section 32-2199.02(B), what is the legal status of an administrative law judge order that has been issued as the result of a rehearing?

10. What specific steps must a party take to appeal this order, including the timeframe and the court where the appeal must be filed?

——————————————————————————–

Answer Key

1. The Petitioner is Dina R. Galassini, and the Respondent is Plaza Waterfront Condominium Owners Association, Inc. The official case number is 18F-H1818032-REL-RHG.

2. The Petitioner argued that the original Administrative Law Judge’s decision was contrary to law because it violated the principle of separation of powers. She claimed that by interpreting contracts between private parties, the ALJ, part of the Executive branch, encroached upon the power of the Judiciary, resulting in a due process violation.

3. The Respondent argued that the matter could be resolved as a matter of law. This argument was based on ARIZ. REV. STAT. section 32-2199.01, which governs administrative hearings for condominium disputes.

4. The Petitioner asserted in her Response that the Department’s Commissioner had ordered a rehearing specifically on the issue of whether the Respondent Association had correctly posted owner assessments for the 2018 parking lot budget.

5. ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11, specifically section 32-2199.01(A), is cited as governing the process. It states that hearings are conducted for alleged “violations of condominium documents … or violations of the statutes that regulate condominiums.”

6. To analyze the Petitioner’s claim, the ALJ needed to interpret the definitions of “common element” and “limited common element.” These definitions are found in ARIZ. REV. STAT. section 33-1202.

7. The case Tierra Ranchos Homeowners Ass’n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007) was cited to support the legal principle that condominium documents (like CC&Rs) constitute a contract between the parties involved.

8. Administrative Law Judge Thomas Shedden ordered that the Petitioner’s petition be dismissed. He further ordered that the Respondent’s request for attorney’s fees be denied.

9. According to the statute, an administrative law judge order issued as a result of a rehearing is binding on the parties.

10. A party wishing to appeal the order must seek judicial review as prescribed by ARIZ. REV. STAT. title 12, chapter 7, article 6. The appeal must be filed with the superior court within thirty-five days from the date the order was served.

——————————————————————————–

Essay Questions

Instructions: The following questions are designed for a more in-depth, essay-style response. Answers are not provided.

1. Analyze the Petitioner’s “separation of powers” argument. Explain why she believed the ALJ’s decision constituted a due process violation and a congressional encroachment on her rights, and discuss how the final decision legally refuted this claim.

2. Detail the legal basis and precedents cited by the Administrative Law Judge to establish the authority of the Office of Administrative Hearings (OAH). Explain how ARIZ. REV. STAT. section 32-2199.01(A) and the cases Tierra Ranchos Homeowners Ass’n v. Kitchukov and Ariz. Cannabis Nurses Ass’n v. Ariz. Dep’t of Health Servs. were used to justify the OAH’s jurisdiction in this matter.

3. Trace the procedural history of this case from the Petitioner’s Request for Rehearing to the final Administrative Law Judge Decision. Include key dates, motions filed by both parties, and the reasoning behind the Department of Real Estate’s initial decision to grant a rehearing.

4. Discuss the relationship between condominium documents and state statutes as presented in this decision. How does the ruling define condominium documents, and what authority does it grant the OAH in interpreting both these documents and the statutes that regulate condominiums?

5. Based on the final decision and the provided notice, explain the legal options available to the Petitioner following the dismissal of her petition. What specific steps must be taken to pursue an appeal, and what legal standard is established by ARIZ. REV. STAT. section 32-2199.02(B) regarding the finality of the ALJ’s order?

——————————————————————————–

Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official who presides over administrative hearings. In this case, Thomas Shedden of the Office of Administrative Hearings.

Common Element

A term defined in ARIZ. REV. STAT. section 33-1202. The interpretation of this term was central to the Petitioner’s original dispute.

Condominium Documents

The governing documents of a condominium association (e.g., CC&Rs). The decision establishes these as a contract between the parties, citing Tierra Ranchos Homeowners Ass’n v. Kitchukov.

Department of Real Estate

The state agency that issued the Order Granting Rehearing in this matter on July 20, 2018.

Due Process Violation

An alleged infringement of legal rights. The Petitioner claimed this occurred when the ALJ interpreted a contract between private parties.

Judicial Review

The legal process by which a party can appeal an administrative order to a court. The decision specifies this must be done by filing with the superior court within 35 days.

Limited Common Element

A term defined in ARIZ. REV. STAT. section 33-1202. The interpretation of this term was central to the Petitioner’s original dispute.

Motion to Vacate Rehearing

A formal request filed by the Respondent on August 15, 2018, arguing that the case could be resolved as a matter of law.

Office of Administrative Hearings (OAH)

The state office where disputes between owners and condominium associations are referred for hearings, as per ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11.

Petitioner

The party initiating a legal petition. In this case, Dina R. Galassini.

Request for Rehearing

A formal request filed by the Petitioner on June 26, 2018, after an initial decision, which was granted by the Department of Real Estate.

Respondent

The party against whom a petition is filed. In this case, Plaza Waterfront Condominium Owners Association, Inc.

Separation of Powers

A constitutional principle cited by the Petitioner. She argued that only the judicial branch, not the executive branch (where the OAH resides), can make decisions that legally bind private parties.






Blog Post – 18F-H1818032-REL


4 Surprising Legal Lessons from a Condo Parking Lot Dispute

Introduction: The Anatomy of a Neighborhood Fight

Disputes with a Condominium or Homeowner’s Association are a common, and often frustrating, part of modern life. But what happens when a seemingly minor conflict over assessments for the 2018 parking lot budget escalates into a direct challenge to the power of the state?

The case of Dina R. Galassini vs. the Plaza Waterfront Condominium Owners Association, Inc. did just that. This neighborhood fight quickly grew to question fundamental legal principles, revealing some counter-intuitive truths about the power and jurisdiction of administrative agencies. The final court decision provides a masterclass in administrative law, a powerful, court-like system designed for efficiency that operates with more flexibility and authority than most people realize. Here are the top surprising takeaways from the final ruling.

Takeaway 1: Administrative Agencies Can Act Like Courts

At the heart of her appeal, Ms. Galassini made a powerful constitutional argument: she believed that only a judge in the judicial branch—not an administrator in the executive branch—had the authority to interpret a private contract like her condominium documents.

In her “Request for Rehearing,” she argued forcefully:

The decision by the administrative law judge (ALJ) is contrary to law, and the decision that was handed down to me only belongs in the judicial branch. Regarding what is a common element or a limited common element (see Exhibit C) should only be decided upon by a judge. For the ALJ to definitively interpret actual contracts between two private parties is a due process violation (separation of powers). In doing so the ALJ redistributed interpreted power from the Judiciary to the Executive and this is a congressional encroachment on my rights. According to Arizona’s Constitution Article 3, Separation of Powers—only the judicial branch can make decisions that make decisions that bind private parties as law.

The surprising outcome was that the Administrative Law Judge (ALJ) rejected this argument entirely. The judge found that the Office of Administrative Hearings was specifically empowered by Arizona statutes (ARIZ. REV. STAT. section 32-2199.01(A)) to handle disputes involving “violations of condominium documents.” Creating specialized administrative bodies like this is a common legislative strategy. It provides expert, efficient resolution for specific types of disputes, preventing the judicial courts from being overwhelmed.

Takeaway 2: Your Condo Agreement is a Legally Binding Contract

The ALJ’s authority to reject such a powerful constitutional claim hinged on a foundational question: what exactly are a condo’s governing documents in the eyes of the law? The answer is what gives administrative bodies their power in these disputes.

The decision affirms that these documents are not just community guidelines, but a formal, legally binding contract between the unit owner and the association. To support this, the judge referenced the legal precedent set in Tierra Ranchos Homeowners Ass’n v. Kitchukov, which established that “the condominium documents are a contract between the parties.”

This is a critical takeaway because by defining these governing documents as a contract, it provides the legal foundation for an administrative body, like the Office of Administrative Hearings, to step in and resolve disputes using principles of contract law.

Takeaway 3: An Agency’s Power Can Be “Reasonably Implied”

Another surprising lesson from the decision is that a government agency’s authority doesn’t always have to be spelled out word-for-word for every possible action it might take.

To make a broader point about administrative law, the judge cited a separate case, Ariz. Cannabis Nurses Ass’n v. Ariz. Dep’t of Health Servs. The principle from that case is that an agency can take actions that “may be reasonably implied from ‘a consideration of the statutory scheme as a whole.’”

This concept is crucial for government to function. Legislatures cannot possibly foresee and explicitly write laws for every conceivable scenario an agency might face. This doctrine of “implied power” allows agencies the flexibility to adapt and act effectively within the spirit of the law, fulfilling their duties based on the overall purpose of the statutes they enforce.

Takeaway 4: Winning a Rehearing Isn’t Winning the War

The case’s procedure offers a fascinating lesson in legal strategy. The Department of Real Estate initially granted the petitioner’s request for a rehearing, a decision made, crucially, “for the reasons outlined in Petitioner’s Request for Rehearing.” This shows the Department initially found her legal argument about separation of powers compelling enough to warrant a second look.

However, the outcome was deeply ironic. Instead of re-arguing the facts, the respondent (the Condo Association) “filed a Motion to Vacate Rehearing, arguing that… this matter can be resolved as a matter of law” (meaning no facts were in dispute, only the interpretation of the statutes and contracts).

The ALJ agreed. The petitioner, by winning the rehearing, had inadvertently given the respondent a perfect platform to argue the case on purely legal grounds—the respondent’s strength. The rehearing forced the core jurisdictional issue to the forefront, leading directly to the dismissal of the petitioner’s case. It’s a stark reminder that a procedural victory doesn’t guarantee a final win.

Conclusion: The Law in Your Daily Life

Born from a dispute over a parking lot, this single case reveals the hidden legal machinery designed to resolve specific conflicts efficiently, without overburdening the traditional court system. It demonstrates how everyday disagreements can touch upon complex principles of constitutional power, contract law, and implied statutory authority. From a simple assessment, we see a system where administrative bodies act with court-like power, a power built upon the contractual nature of community rules and the flexibility of implied authority. It’s a powerful reminder of the intricate legal frameworks operating just beneath the surface of our daily lives.

What hidden legal complexities might be shaping the rules and agreements in your own life?


Case Participants

Petitioner Side

  • Dina R. Galassini (petitioner)

Respondent Side

  • Jim Flood (board member)
  • Roger Isaacs (witness)
  • Gary Pedersen (witness, statutory agent)

Neutral Parties

  • Jenna Clark (ALJ)
  • Thomas Shedden (ALJ)
  • Judy Lowe (Commissioner)

Other Participants

  • Peter Saiia (observer)
  • Suzanne Isaacs (observer)
  • Paul Blessing (observer)
  • Felicia Del Sol (unknown)

Dina R. Galassini vs. Plaza Waterfront Condominiums Owners

Case Summary

Case ID 18F-H1818032-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2018-08-22
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Dina R. Galassini Counsel
Respondent Plaza Waterfront Condominium Owners Association, Inc. Counsel

Alleged Violations

ARIZ. REV. STAT. § 32-2199.01; ARIZ. REV. STAT. § 33-1202

Outcome Summary

The Administrative Law Judge dismissed Petitioner’s petition for rehearing, concluding that the OAH has the authority, pursuant to statute and precedent, to resolve disputes involving the interpretation of condominium documents and related regulating statutes, rejecting Petitioner's constitutional claims regarding separation of powers. Respondent's request for attorney's fees was denied.

Why this result: Petitioner's argument that the original ALJ decision was contrary to law due to separation of powers violation was dismissed, as the OAH confirmed its statutory authority (ARIZ. REV. STAT. § 32-2199.01) to interpret condominium documents and regulating statutes.

Key Issues & Findings

Whether the Respondent Association correctly posted owner assessments for the 2018 parking lot budget

Petitioner sought rehearing arguing the ALJ lacked constitutional authority (separation of powers) to interpret condominium documents (contracts) and statutory definitions of common/limited common elements (ARIZ. REV. STAT. § 33-1202) related to the posting of the 2018 parking lot budget assessment.

Orders: Petitioner’s petition is dismissed. Respondent’s request for attorney’s fees is denied.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 33-1202
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • Ariz. Cannabis Nurses Ass'n v. Ariz. Dep't of Health Servs., 242 Ariz. 62, 67, 392 P.3d 506, 511 (App. 2017)

Analytics Highlights

Topics: HOA Dispute, Assessment, Jurisdiction, ALJ Authority, Condominium Documents, Separation of Powers
Additional Citations:

  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 33-1202
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • Ariz. Cannabis Nurses Ass'n v. Ariz. Dep't of Health Servs., 242 Ariz. 62, 67, 392 P.3d 506, 511 (App. 2017)
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. REV. STAT. § 32-2199.02(B)
  • ARIZ. CONST. Art. 3

Audio Overview

Decision Documents

18F-H1818032-REL Decision – 655375.pdf

Uploaded 2025-10-08T07:05:06 (65.7 KB)





Briefing Doc – 18F-H1818032-REL


Briefing Document: Galassini v. Plaza Waterfront Condominium Owners Association, Inc. (Case No. 18F-H1818032-REL-RHG)

Executive Summary

This document analyzes the Administrative Law Judge (ALJ) Decision in case number 18F-H1818032-REL-RHG, which dismissed a petition filed by Dina R. Galassini against the Plaza Waterfront Condominium Owners Association, Inc. The central conflict revolved around the jurisdictional authority of the Office of Administrative Hearings (OAH). The Petitioner, Ms. Galassini, argued that the OAH, as part of the executive branch, violated the constitutional separation of powers by interpreting private condominium documents, a power she claimed was reserved exclusively for the judicial branch.

The ALJ, Thomas Shedden, rejected this argument and dismissed the petition as a matter of law. The decision affirms that the OAH is statutorily empowered by Arizona Revised Statutes to hear disputes concerning alleged violations of condominium documents. The ALJ’s rationale rests on established legal precedent, citing Tierra Ranchos Homeowners Ass’n v. Kitchukov to confirm that condominium documents are a contract and Ariz. Cannabis Nurses Ass’n v. Ariz. Dep’t of Health Servs. to support an agency’s authority to take actions reasonably implied by its governing statutes. Consequently, the Petitioner’s core constitutional challenge was deemed “unfounded,” leading to the dismissal of her petition. While the petition was dismissed, the Respondent’s request for attorney’s fees was denied.

1. Case Background and Procedural History

The case involves a dispute between a condominium owner and a condominium association, brought before the Arizona Office of Administrative Hearings.

Parties:

Petitioner: Dina R. Galassini

Respondent: Plaza Waterfront Condominium Owners Association, Inc.

Forum: Office of Administrative Hearings, Phoenix, Arizona

Presiding Judge: Thomas Shedden, Administrative Law Judge

Decision Date: August 22, 2018

The matter arrived before Judge Shedden following a series of procedural steps initiated after an original ALJ decision.

June 26, 2018: The Petitioner filed a Request for Rehearing with the Department of Real Estate.

July 20, 2018: The Department of Real Estate issued an Order Granting Rehearing, based on the reasons outlined in the Petitioner’s request.

August 15, 2018: The Respondent filed a Motion to Vacate Rehearing, arguing the case could be resolved as a matter of law.

August 21, 2018: The Petitioner filed an Opposition to the Respondent’s motion.

2. Core Dispute: Petitioner’s Jurisdictional Challenge

The Petitioner’s request for a rehearing was founded on a direct constitutional challenge to the authority of the Administrative Law Judge. The underlying substantive issue concerned the association’s handling of “owner assessments for the 2018 parking lot budget,” which turned on the interpretation of “common element” versus “limited common element.”

Petitioner’s Arguments

Violation of Separation of Powers: The Petitioner contended that the original ALJ decision was “contrary to law” because it involved the interpretation of private contracts (the condominium documents). She argued this function is reserved exclusively for the judicial branch under Arizona’s Constitution, Article 3 (Separation of Powers).

Due Process Violation: By interpreting the contract, the ALJ allegedly committed a “due process violation.” The Petitioner stated, “For the ALJ to definitively interpret actual contracts between two private parties is a due process violation (separation of powers).”

Improper Delegation of Power: The Petitioner claimed the ALJ’s action “redistributed interpreted power from the Judiciary to the Executive and this is a congressional encroachment on my rights.”

3. The Administrative Law Judge’s Legal Rationale and Decision

The ALJ agreed with the Respondent that the case could be resolved as a matter of law, focusing entirely on the jurisdictional question raised by the Petitioner. The decision systematically refutes the Petitioner’s separation of powers argument by outlining the OAH’s legal authority.

Statutory Authority

The decision establishes the OAH’s jurisdiction through Arizona state law:

ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11: This statute describes the administrative process for referring disputes between owners and condominium associations to the OAH.

ARIZ. REV. STAT. § 32-2199.01(A): This section specifically grants the OAH authority to conduct hearings for alleged “violations of condominium documents … or violations of the statutes that regulate condominiums….”

ARIZ. REV. STAT. § 33-1202: The decision notes that analyzing the Petitioner’s claim inherently requires interpreting definitions found in the statutes that regulate condominiums, such as this section defining “common element” and “limited common element.”

Precedent from Case Law

The ALJ grounded the OAH’s interpretive authority in two key Arizona appellate court decisions:

1. Tierra Ranchos Homeowners Ass’n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007): This case is cited to establish the legal principle that “the condominium documents are a contract between the parties.” By defining the documents as a contract, the decision links the dispute directly to the type of documents the OAH is empowered to review.

2. Ariz. Cannabis Nurses Ass’n v. Ariz. Dep’t of Health Servs., 242 Ariz. 62, 392 P.3d 506 (App. 2017): This case is cited to support the broader principle of administrative authority. The ruling states, “[I]t is the law of this state that an agency may” take such action “which may be reasonably implied from ‘a consideration of the statutory scheme as a whole.’” This supports the conclusion that the OAH’s authority to hear disputes over condominium documents implies the authority to interpret them.

Conclusion of the Court

Based on the cited statutes and case law, the ALJ concluded that the OAH possesses the necessary authority to interpret both the condominium documents and the relevant state statutes. Therefore, the Petitioner’s central argument that the original decision was “contrary to law” was declared “unfounded,” and dismissing the matter was deemed appropriate.

4. Final Orders and Directives

The Administrative Law Judge issued the following final orders on August 22, 2018:

Outcome

Petitioner’s Petition

Dismissed

Respondent’s Request for Attorney’s Fees

Denied

The decision also included the following legally mandated notices for the parties:

Binding Nature: The order is binding on the parties as a result of the rehearing, per ARIZ. REV. STAT. § 32-2199.02(B).

Appeal Rights: A party wishing to appeal the order must seek judicial review by filing with the superior court within thirty-five (35) days from the date the order was served. The appeal process is prescribed by ARIZ. REV. STAT. title 12, chapter 7, article 6 and § 12-904(A).


Michael J. Stoltenberg vs. Rancho Del Oro Homeowners Association

Case Summary

Case ID 18F-H1818023-REL
Agency ADRE
Tribunal OAH
Decision Date 2018-04-17
Administrative Law Judge Velva Moses-Thompson
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 Lydia Linsmeier, Esq.

Alleged Violations

CC&R section 2.5

Outcome Summary

The Administrative Law Judge dismissed the petition because the Petitioner failed to prove the alleged CC&R violation, and the claim was barred by the four-year statute of limitations.

Why this result: Petitioner failed to establish a violation of CC&R section 2.5, and the petition was filed after the four-year statute of limitations (A.R.S. § 12-550) expired.

Key Issues & Findings

Alleged violation of Community Governing Document regarding pipe installation

Petitioner alleged the HOA violated CC&R section 2.5 by installing pipes for a well. Respondent argued that CC&R section 2.5 was inapplicable as it governs additional easements conveyed to a third party, and that the claim was barred by the four-year statute of limitations (A.R.S. § 12-550).

Orders: Petitioner's petition is dismissed. Respondent deemed the prevailing party.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. § 12-550
  • CC&R section 2.5
  • ARIZ. REV. STAT. § 32-2199.02

Analytics Highlights

Topics: Statute of Limitations, Easement, CC&R Violation, Well Installation
Additional Citations:

  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 12-550
  • CC&R section 2.5

Video Overview

Audio Overview

Decision Documents

18F-H1818023-REL Decision – 629162.pdf

Uploaded 2025-10-09T03:32:26 (77.0 KB)





Briefing Doc – 18F-H1818023-REL


Administrative Law Judge Decision Briefing: Stoltenberg vs. Rancho Del Oro HOA

Executive Summary

This briefing analyzes the Administrative Law Judge (ALJ) Decision in case number 18F-H1818023-REL, concerning a dispute between homeowner Michael J. Stoltenberg and the Rancho Del Oro Homeowners Association (HOA). Mr. Stoltenberg alleged that the HOA violated community governing documents (CC&Rs) by installing pipes related to a well through his lot.

The ALJ, Velva Moses-Thompson, dismissed the petitioner’s case in its entirety. The decision was based on two independent and definitive grounds. First, Mr. Stoltenberg failed to meet his burden of proof on the merits of the case; the evidence demonstrated that the pipes were installed within a pre-existing easement and not improperly on his lot, and the specific CC&R section cited was inapplicable. Second, the petition was procedurally barred by Arizona’s four-year statute of limitations, as the installation occurred in the summer of 2013, and the action was filed after this period had expired. Consequently, the Rancho Del Oro HOA was deemed the prevailing party.

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I. Case Overview

This matter was brought before the Arizona Office of Administrative Hearings following a petition filed by Michael J. Stoltenberg against his HOA.

Case Detail

Information

Case Name

Michael J. Stoltenberg, Petitioner, vs. Rancho Del Oro Homeowners Association, Respondent

Case Number

18F-H1818023-REL

Hearing Body

Arizona Office of Administrative Hearings

Administrative Law Judge

Velva Moses-Thompson

Hearing Date

March 28, 2018

Decision Date

April 17, 2018

II. Core Dispute and Allegations

A. Petitioner’s Claim

The central allegation from the petitioner, Mr. Stoltenberg, was that the Rancho Del Oro HOA violated the Community Governing Document CC&Rs.

Specific Allegation: The HOA improperly installed pipes through his lot as part of a well installation project.

Cited CC&R Violations: The petition focused on violations of CC&R sections 1.13, 1.19, and 2.5. The decision notes that sections 1.13 and 1.19 are definition sections, making section 2.5 the substantive focus of the dispute.

B. Respondent’s Defense Strategy

The Rancho Del Oro HOA presented a multi-faceted defense against the petitioner’s claims, combining a procedural dismissal argument with a substantive rebuttal.

1. Statute of Limitations: The HOA contended the claim was barred by the four-year statute of limitations established in ARIZ. REV. STAT. § 12-550. They asserted that since the well and pipes were installed in the summer of 2013, the time frame for filing a petition had expired.

2. Inapplicability of CC&R Section 2.5: The HOA argued that this section was not relevant to the situation. They maintained that CC&R section 2.5 pertains specifically to instances where the HOA grants or conveys an additional easement to a third party, which had not occurred.

3. Factual Rebuttal: The HOA asserted that the pipes were installed within an easement that already existed at the time of installation, not on Mr. Stoltenberg’s lot outside of an easement.

III. Adjudicated Findings and Conclusions

The Administrative Law Judge made several key findings of fact and conclusions of law that formed the basis of the final order. The petitioner, Mr. Stoltenberg, bore the burden of proving the alleged violations by a “preponderance of the evidence.”

A. Findings of Fact

The ALJ’s decision was based on the testimony and evidence presented at the hearing. The key findings were:

Witnesses: The court heard testimony from petitioner Michael J. Stoltenberg, HOA community manager Diana Crites, and HOA Board Chairman James Van Sickle.

Location of Installation: Evidence showed the pipes were installed in an easement that was already in existence at the time of the 2013 installation.

Failure of Evidentiary Support: The judge explicitly noted, “There was no evidence presented at hearing that the well or the well pipe were installed on Mr. Stoltenberg’s lot.”

B. Conclusions of Law

Based on the evidence and statutes, the ALJ reached the following legal conclusions:

Statute of Limitations is Applicable: The judge affirmed that ARIZ. REV. STAT. § 12-550 establishes a four-year statute of limitations for such actions. The installation occurred in 2013, and Mr. Stoltenberg filed his petition after this four-year period had expired, rendering the claim time-barred.

Interpretation of CC&R 2.5: The judge agreed with the HOA’s interpretation, concluding that CC&R section 2.5 applies to easements granted to a third party by the HOA.

No Violation Occurred: The “weight of the evidence” demonstrated that the pipes were in an existing easement and the HOA did not grant or convey a new easement to a third party. Therefore, Mr. Stoltenberg failed to establish a violation of CC&R section 2.5.

Failure to Meet Burden of Proof: Due to the lack of evidence and the inapplicability of the cited CC&R section, the petitioner failed to prove the alleged violation by a preponderance of the evidence.

IV. Final Order and Implications

Based on the dual findings that the claim was both time-barred and without merit, the Administrative Law Judge issued a decisive order.

Order: “IT IS ORDERED that Mr. Stoltenberg’s petition is dismissed.”

Prevailing Party: The Respondent, Rancho Del Oro Homeowners Association, was deemed the prevailing party in the matter.

Next Steps: The decision is binding on the parties unless a rehearing is requested with the Commissioner of the Department of Real Estate within 30 days of the order’s service, pursuant to A.R.S. § 32-2199.04 and § 41-1092.09.






Study Guide – 18F-H1818023-REL


Study Guide: Stoltenberg v. Rancho Del Oro Homeowners Association (Case No. 18F-H1818023-REL)

This study guide provides a comprehensive review of the Administrative Law Judge Decision in the matter of Michael J. Stoltenberg versus the Rancho Del Oro Homeowners Association, heard by the Office of Administrative Hearings in Arizona.

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Short-Answer Quiz

Instructions: Answer the following ten questions in two to three complete sentences each, based on the information provided in the case document.

1. Who were the primary parties in case number 18F-H1818023-REL, and what were their respective roles?

2. What was the core allegation made by the Petitioner, Michael J. Stoltenberg, against the Respondent?

3. What two primary legal arguments did the Rancho Del Oro Homeowners Association present in its defense?

4. According to the judge’s findings, what crucial piece of evidence was not presented at the hearing regarding the location of the well and pipes?

5. What is the statute of limitations cited in this case, and why was it a critical factor in the judge’s decision?

6. How did the Administrative Law Judge interpret Community Governing Document CC&R section 2.5 in relation to the Respondent’s actions?

7. Who has the burden of proof in this type of hearing, and what is the specific standard of proof required to win the case?

8. What was the ultimate Order issued by the Administrative Law Judge, and who was named the prevailing party?

9. Aside from the statute of limitations, what was the other fundamental reason the Petitioner failed to prove his case?

10. After the judge’s Order was issued on April 17, 2018, what recourse was available to the parties involved?

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Answer Key

1. The primary parties were Petitioner Michael J. Stoltenberg, who brought the complaint, and Respondent Rancho Del Oro Homeowners Association, who was defending against the complaint. Mr. Stoltenberg represented himself, while the Homeowners Association was represented by its attorney, Lydia Linsmeier, Esq.

2. Mr. Stoltenberg alleged that the Homeowners Association violated sections 1.13, 1.19, and 2.5 of the Community Governing Document (CC&Rs). The basis of his petition was that the HOA had improperly installed pipes through his lot in connection with a new well.

3. The HOA argued that the claim was barred by the statute of limitations under ARIZ. REV. STAT. section 12-550, as the installation occurred in 2013, more than four years prior. The HOA also contended that CC&R section 2.5 did not apply because it refers to granting additional easements to a third party, which the HOA did not do.

4. The judge’s “Findings of Fact” state that “There was no evidence presented at hearing that the well or the well pipe were installed on Mr. Stoltenberg’s lot.” This lack of evidence was a key failure in the Petitioner’s case.

5. The statute of limitations cited is ARIZ. REV. STAT. section 12-550, which requires actions to be brought within four years. This was critical because the well and pipes were installed in the summer of 2013, and Mr. Stoltenberg filed his petition after this four-year period had expired, making his claim untimely.

6. The judge concluded that CC&R section 2.5 specifically applies to easements that are granted or conveyed to a third party by the Respondent. Since the evidence showed the pipes were installed in an existing easement and the HOA did not grant a new one to a third party, the judge found that this section was not violated.

7. The Petitioner, Mr. Stoltenberg, bears the burden of proof. The standard of proof required is a “preponderance of the evidence,” which means the evidence must have the most convincing force and be sufficient to incline a fair and impartial mind to one side of the issue over the other.

8. The Administrative Law Judge ordered that Mr. Stoltenberg’s petition be dismissed. As a result of the dismissal, the Respondent (Rancho Del Oro Homeowners Association) was deemed the prevailing party in the matter.

9. The Petitioner failed to prove his case because the weight of the evidence showed the HOA did not violate CC&R section 2.5. The evidence indicated the pipes were installed in a pre-existing easement, and the HOA did not grant or convey a new easement to a third party as described in that section.

10. Pursuant to A.R.S. §32-2199.02(B) and A.R.S. § 41-1092.09, the parties had the right to request a rehearing. This request had to be filed with the Commissioner of the Department of Real Estate within 30 days of the service of the Order.

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Essay Questions

Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive essay-style response for each.

1. Analyze the concept of “burden of proof” as it applied in this case. How did the Petitioner’s failure to meet the “preponderance of the evidence” standard, particularly regarding the location of the pipes, contribute to the dismissal of his petition?

2. Discuss the significance of the statute of limitations (ARIZ. REV. STAT. section 12-550) in the judge’s decision. Why are such statutes important in legal proceedings, and how did it provide a separate and independent basis for dismissing the case?

3. Explain the legal reasoning behind the judge’s interpretation of CC&R section 2.5. Why was the distinction between an “existing easement” and granting a “new easement to a third party” a critical factor in the outcome?

4. Imagine you were legal counsel for the Petitioner. Based on the information in the decision, what kind of evidence would have been necessary to successfully prove a violation of the Community Governing Documents and overcome the Respondent’s defenses?

5. Examine the roles of the different entities involved in this dispute: the Petitioner, the Homeowners Association, the Office of Administrative Hearings, and the Arizona Department of Real Estate. How does the structure of this administrative hearing process provide a mechanism for resolving disputes between homeowners and HOAs?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official (in this case, Velva Moses-Thompson) who presides over administrative hearings, weighs evidence, and makes legal rulings and decisions.

ARIZ. ADMIN. CODE

The Arizona Administrative Code, a set of state regulations. Section R2-19-119 is cited as establishing the standard of proof for the hearing.

ARIZ. REV. STAT.

Arizona Revised Statutes, the collection of laws passed by the Arizona state legislature. Several statutes are cited, including those governing real estate, HOA disputes, and the statute of limitations.

Burden of Proof

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

An abbreviation for Covenants, Conditions, and Restrictions, which are rules set forth in a Community Governing Document that property owners in a planned community or condominium must follow.

Easement

A legal right to use another person’s land for a specific, limited purpose. In this case, it refers to the area where pipes were installed, which the judge found was an “existing easement.”

Findings of Fact

The section of a legal decision that details the factual determinations made by the judge based on the evidence and testimony presented at a hearing.

Homeowners Association (HOA)

An organization in a planned community (like Rancho Del Oro) that creates and enforces rules for the properties and residents within its jurisdiction.

Notice of Hearing

A formal document issued to inform the parties of the date, time, location, and subject matter of a scheduled legal hearing.

Petitioner

The party who initiates a lawsuit or petition, seeking a legal remedy. In this case, Michael J. Stoltenberg.

Preponderance of the Evidence

The standard of proof in this case. Defined in the document 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.”

Respondent

The party against whom a petition is filed; the party who must respond to the allegations. In this case, the Rancho Del Oro Homeowners Association.

Statute of Limitations

A law that sets the maximum amount of time that parties involved in a dispute have to initiate legal proceedings. In this case, ARIZ. REV. STAT. section 12-550 established a four-year limit.






Blog Post – 18F-H1818023-REL


4 Harsh Lessons from a Homeowner’s Failed Lawsuit Against Their HOA

For many homeowners, a dispute with their Homeowners Association (HOA) can feel like a classic David vs. Goliath story. We’re drawn to tales of the little guy winning against a powerful board, but the reality is that these battles are governed by unforgiving rules, and victory is never guaranteed. While stories of homeowner triumphs are inspiring, it is just as crucial—if not more so—to understand the anatomy of a failure.

This article serves as a cautionary tale, exploring the surprising and impactful lessons from a legal case where a homeowner’s petition against their HOA was decisively dismissed. By understanding the series of avoidable missteps that led to this loss, every homeowner can be better prepared to protect their rights and their property.

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1. Time is Not on Your Side: The Statute of Limitations

In the legal world, a “statute of limitations” is a strict deadline for filing a lawsuit. Think of it as a countdown clock that starts the moment a potential legal issue occurs. If you let that clock run out, you forfeit your right to take legal action, no matter how valid your complaint might be.

The first domino to fall in this case was the calendar. The homeowner’s complaint centered on pipes installed in the summer of 2013. The petition, however, wasn’t filed until early 2018, just a few months after the four-year deadline had expired. This wasn’t a case of extreme neglect; it was a critical error of a few months that proved instantly fatal. The lesson here is harsh and urgent: if you believe your HOA has wronged you, you must act promptly. Waiting too long can render your claim legally void before it ever gets a fair hearing.

The specific rule that was applied is a stark reminder of this unforgiving principle:

Actions other than for recovery of real property for which no limitation is otherwise prescribed shall be brought within four years after the cause of action accrues, and not afterward.

2. You Have to Prove It: The Burden of Proof

In any legal dispute, the person bringing the complaint—the petitioner—has the “burden of proof.” This means it is entirely your responsibility to present convincing evidence to support your claims. Simply believing something to be true is not enough; you must prove it with cold, hard facts. Here’s where every homeowner should pay close attention.

The case’s foundation crumbled under the simple question: “Where is the proof?” The core of the homeowner’s case was the allegation that the HOA had installed pipes through his lot. This was the central pillar of the entire petition. But when the time came to present evidence, the pillar collapsed. The judge’s decision contained this stunning finding:

There was no evidence presented at hearing that the well or the well pipe were installed on […] lot.

An entire lawsuit can be dismissed if a fundamental claim, no matter how strongly you believe it, cannot be factually proven. Your conviction that you are right means nothing in a hearing without evidence to back it up.

3. Read the Fine Print: The Rules Might Not Mean What You Think They Mean

The homeowner built his argument on a specific part of the Community Governing Documents (CC&Rs), section 2.5, believing it proved the HOA had acted improperly. But the devil is always in the details, and a misinterpretation of those details can be fatal to a case.

The HOA successfully argued that the rule the homeowner cited only applied to situations where the HOA granted a new easement to a third party. In reality, the HOA had simply used an existing easement and had not granted anything to an outside entity. This is a critical distinction. Think of it this way: the homeowner argued the HOA violated the rules for building a new road, but the HOA proved they were simply driving a car on a road that already existed. The homeowner’s argument, while possibly correct about new roads, was irrelevant to the actual situation.

Compounding the error, the homeowner’s initial petition also cited sections of the CC&Rs that were simply definitions, not enforceable rules—a fundamental misunderstanding of the legal documents at the heart of the case.

4. A Double Dismissal: Why the Case Failed on Two Fronts

This case didn’t just lose once; the court effectively ruled the homeowner would have lost twice, on two completely different grounds. This reveals a devastating legal reality: winning requires clearing multiple hurdles, while losing only requires failing at one.

The petition was dismissed for two independent and powerful reasons:

1. The Procedural Knockout: The case was filed too late, violating the four-year statute of limitations. This is a procedural bar, meaning the court couldn’t even consider the facts of the case. It was dead on arrival.

2. The Substantive Failure: The judge made it clear that even if the case had been filed on time, it would have failed on its merits. The homeowner failed to prove his central claim (the pipe location) and fundamentally misinterpreted the CC&Rs.

This “double loss” demonstrates that a successful case against an HOA must be both timely and legally sound. One without the other is a recipe for failure.

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Conclusion: Are You Ready for a Fight?

Being frustrated with your HOA is understandable, but that feeling is not enough to win a legal battle. As this case demonstrates, a successful challenge demands timely action, solid evidence, and a precise interpretation of your community’s governing documents. And a loss isn’t just a disappointment; it means your filing fees are lost, and you’ve spent significant time and energy for nothing, with the HOA’s position only becoming more entrenched. This is a financial and emotional trap you must avoid.

Before you decide to take on your HOA, ask yourself: Have you checked the calendar, your property survey, and the fine print?


Case Participants

Petitioner Side

  • Michael J. Stoltenberg (petitioner)

Respondent Side

  • Lydia Peirce Linsmeier (HOA attorney)
    Carpenter, Hazlewood, Delgado & Bolen, LLP
  • Nicole Payne (HOA attorney)
    Carpenter, Hazlewood, Delgado & Bolen, LLP
  • Diana Crites (community manager)
    Rancho Del Oro Homeowners Association
    Testified for Respondent
  • James Van Sickle (board member)
    Rancho Del Oro Homeowners Association
    Chairman of the Board; testified for Respondent

Neutral Parties

  • Velva Moses-Thompson (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate

Michael J. Stoltenberg vs. Rancho Del Oro Homeowners Association

Case Summary

Case ID 18F-H1818023-REL
Agency ADRE
Tribunal OAH
Decision Date 2018-04-17
Administrative Law Judge Velva Moses-Thompson
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 Lydia Linsmeier, Esq.

Alleged Violations

CC&R section 2.5

Outcome Summary

The Administrative Law Judge dismissed the petition because the Petitioner failed to prove the alleged CC&R violation, and the claim was barred by the four-year statute of limitations.

Why this result: Petitioner failed to establish a violation of CC&R section 2.5, and the petition was filed after the four-year statute of limitations (A.R.S. § 12-550) expired.

Key Issues & Findings

Alleged violation of Community Governing Document regarding pipe installation

Petitioner alleged the HOA violated CC&R section 2.5 by installing pipes for a well. Respondent argued that CC&R section 2.5 was inapplicable as it governs additional easements conveyed to a third party, and that the claim was barred by the four-year statute of limitations (A.R.S. § 12-550).

Orders: Petitioner's petition is dismissed. Respondent deemed the prevailing party.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. § 12-550
  • CC&R section 2.5
  • ARIZ. REV. STAT. § 32-2199.02

Analytics Highlights

Topics: Statute of Limitations, Easement, CC&R Violation, Well Installation
Additional Citations:

  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 12-550
  • CC&R section 2.5

Video Overview

Audio Overview

Decision Documents

18F-H1818023-REL Decision – 629162.pdf

Uploaded 2026-01-23T17:23:08 (77.0 KB)





Briefing Doc – 18F-H1818023-REL


Administrative Law Judge Decision Briefing: Stoltenberg vs. Rancho Del Oro HOA

Executive Summary

This briefing analyzes the Administrative Law Judge (ALJ) Decision in case number 18F-H1818023-REL, concerning a dispute between homeowner Michael J. Stoltenberg and the Rancho Del Oro Homeowners Association (HOA). Mr. Stoltenberg alleged that the HOA violated community governing documents (CC&Rs) by installing pipes related to a well through his lot.

The ALJ, Velva Moses-Thompson, dismissed the petitioner’s case in its entirety. The decision was based on two independent and definitive grounds. First, Mr. Stoltenberg failed to meet his burden of proof on the merits of the case; the evidence demonstrated that the pipes were installed within a pre-existing easement and not improperly on his lot, and the specific CC&R section cited was inapplicable. Second, the petition was procedurally barred by Arizona’s four-year statute of limitations, as the installation occurred in the summer of 2013, and the action was filed after this period had expired. Consequently, the Rancho Del Oro HOA was deemed the prevailing party.

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I. Case Overview

This matter was brought before the Arizona Office of Administrative Hearings following a petition filed by Michael J. Stoltenberg against his HOA.

Case Detail

Information

Case Name

Michael J. Stoltenberg, Petitioner, vs. Rancho Del Oro Homeowners Association, Respondent

Case Number

18F-H1818023-REL

Hearing Body

Arizona Office of Administrative Hearings

Administrative Law Judge

Velva Moses-Thompson

Hearing Date

March 28, 2018

Decision Date

April 17, 2018

II. Core Dispute and Allegations

A. Petitioner’s Claim

The central allegation from the petitioner, Mr. Stoltenberg, was that the Rancho Del Oro HOA violated the Community Governing Document CC&Rs.

Specific Allegation: The HOA improperly installed pipes through his lot as part of a well installation project.

Cited CC&R Violations: The petition focused on violations of CC&R sections 1.13, 1.19, and 2.5. The decision notes that sections 1.13 and 1.19 are definition sections, making section 2.5 the substantive focus of the dispute.

B. Respondent’s Defense Strategy

The Rancho Del Oro HOA presented a multi-faceted defense against the petitioner’s claims, combining a procedural dismissal argument with a substantive rebuttal.

1. Statute of Limitations: The HOA contended the claim was barred by the four-year statute of limitations established in ARIZ. REV. STAT. § 12-550. They asserted that since the well and pipes were installed in the summer of 2013, the time frame for filing a petition had expired.

2. Inapplicability of CC&R Section 2.5: The HOA argued that this section was not relevant to the situation. They maintained that CC&R section 2.5 pertains specifically to instances where the HOA grants or conveys an additional easement to a third party, which had not occurred.

3. Factual Rebuttal: The HOA asserted that the pipes were installed within an easement that already existed at the time of installation, not on Mr. Stoltenberg’s lot outside of an easement.

III. Adjudicated Findings and Conclusions

The Administrative Law Judge made several key findings of fact and conclusions of law that formed the basis of the final order. The petitioner, Mr. Stoltenberg, bore the burden of proving the alleged violations by a “preponderance of the evidence.”

A. Findings of Fact

The ALJ’s decision was based on the testimony and evidence presented at the hearing. The key findings were:

Witnesses: The court heard testimony from petitioner Michael J. Stoltenberg, HOA community manager Diana Crites, and HOA Board Chairman James Van Sickle.

Location of Installation: Evidence showed the pipes were installed in an easement that was already in existence at the time of the 2013 installation.

Failure of Evidentiary Support: The judge explicitly noted, “There was no evidence presented at hearing that the well or the well pipe were installed on Mr. Stoltenberg’s lot.”

B. Conclusions of Law

Based on the evidence and statutes, the ALJ reached the following legal conclusions:

Statute of Limitations is Applicable: The judge affirmed that ARIZ. REV. STAT. § 12-550 establishes a four-year statute of limitations for such actions. The installation occurred in 2013, and Mr. Stoltenberg filed his petition after this four-year period had expired, rendering the claim time-barred.

Interpretation of CC&R 2.5: The judge agreed with the HOA’s interpretation, concluding that CC&R section 2.5 applies to easements granted to a third party by the HOA.

No Violation Occurred: The “weight of the evidence” demonstrated that the pipes were in an existing easement and the HOA did not grant or convey a new easement to a third party. Therefore, Mr. Stoltenberg failed to establish a violation of CC&R section 2.5.

Failure to Meet Burden of Proof: Due to the lack of evidence and the inapplicability of the cited CC&R section, the petitioner failed to prove the alleged violation by a preponderance of the evidence.

IV. Final Order and Implications

Based on the dual findings that the claim was both time-barred and without merit, the Administrative Law Judge issued a decisive order.

Order: “IT IS ORDERED that Mr. Stoltenberg’s petition is dismissed.”

Prevailing Party: The Respondent, Rancho Del Oro Homeowners Association, was deemed the prevailing party in the matter.

Next Steps: The decision is binding on the parties unless a rehearing is requested with the Commissioner of the Department of Real Estate within 30 days of the order’s service, pursuant to A.R.S. § 32-2199.04 and § 41-1092.09.






Study Guide – 18F-H1818023-REL


Study Guide: Stoltenberg v. Rancho Del Oro Homeowners Association (Case No. 18F-H1818023-REL)

This study guide provides a comprehensive review of the Administrative Law Judge Decision in the matter of Michael J. Stoltenberg versus the Rancho Del Oro Homeowners Association, heard by the Office of Administrative Hearings in Arizona.

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Short-Answer Quiz

Instructions: Answer the following ten questions in two to three complete sentences each, based on the information provided in the case document.

1. Who were the primary parties in case number 18F-H1818023-REL, and what were their respective roles?

2. What was the core allegation made by the Petitioner, Michael J. Stoltenberg, against the Respondent?

3. What two primary legal arguments did the Rancho Del Oro Homeowners Association present in its defense?

4. According to the judge’s findings, what crucial piece of evidence was not presented at the hearing regarding the location of the well and pipes?

5. What is the statute of limitations cited in this case, and why was it a critical factor in the judge’s decision?

6. How did the Administrative Law Judge interpret Community Governing Document CC&R section 2.5 in relation to the Respondent’s actions?

7. Who has the burden of proof in this type of hearing, and what is the specific standard of proof required to win the case?

8. What was the ultimate Order issued by the Administrative Law Judge, and who was named the prevailing party?

9. Aside from the statute of limitations, what was the other fundamental reason the Petitioner failed to prove his case?

10. After the judge’s Order was issued on April 17, 2018, what recourse was available to the parties involved?

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Answer Key

1. The primary parties were Petitioner Michael J. Stoltenberg, who brought the complaint, and Respondent Rancho Del Oro Homeowners Association, who was defending against the complaint. Mr. Stoltenberg represented himself, while the Homeowners Association was represented by its attorney, Lydia Linsmeier, Esq.

2. Mr. Stoltenberg alleged that the Homeowners Association violated sections 1.13, 1.19, and 2.5 of the Community Governing Document (CC&Rs). The basis of his petition was that the HOA had improperly installed pipes through his lot in connection with a new well.

3. The HOA argued that the claim was barred by the statute of limitations under ARIZ. REV. STAT. section 12-550, as the installation occurred in 2013, more than four years prior. The HOA also contended that CC&R section 2.5 did not apply because it refers to granting additional easements to a third party, which the HOA did not do.

4. The judge’s “Findings of Fact” state that “There was no evidence presented at hearing that the well or the well pipe were installed on Mr. Stoltenberg’s lot.” This lack of evidence was a key failure in the Petitioner’s case.

5. The statute of limitations cited is ARIZ. REV. STAT. section 12-550, which requires actions to be brought within four years. This was critical because the well and pipes were installed in the summer of 2013, and Mr. Stoltenberg filed his petition after this four-year period had expired, making his claim untimely.

6. The judge concluded that CC&R section 2.5 specifically applies to easements that are granted or conveyed to a third party by the Respondent. Since the evidence showed the pipes were installed in an existing easement and the HOA did not grant a new one to a third party, the judge found that this section was not violated.

7. The Petitioner, Mr. Stoltenberg, bears the burden of proof. The standard of proof required is a “preponderance of the evidence,” which means the evidence must have the most convincing force and be sufficient to incline a fair and impartial mind to one side of the issue over the other.

8. The Administrative Law Judge ordered that Mr. Stoltenberg’s petition be dismissed. As a result of the dismissal, the Respondent (Rancho Del Oro Homeowners Association) was deemed the prevailing party in the matter.

9. The Petitioner failed to prove his case because the weight of the evidence showed the HOA did not violate CC&R section 2.5. The evidence indicated the pipes were installed in a pre-existing easement, and the HOA did not grant or convey a new easement to a third party as described in that section.

10. Pursuant to A.R.S. §32-2199.02(B) and A.R.S. § 41-1092.09, the parties had the right to request a rehearing. This request had to be filed with the Commissioner of the Department of Real Estate within 30 days of the service of the Order.

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Essay Questions

Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive essay-style response for each.

1. Analyze the concept of “burden of proof” as it applied in this case. How did the Petitioner’s failure to meet the “preponderance of the evidence” standard, particularly regarding the location of the pipes, contribute to the dismissal of his petition?

2. Discuss the significance of the statute of limitations (ARIZ. REV. STAT. section 12-550) in the judge’s decision. Why are such statutes important in legal proceedings, and how did it provide a separate and independent basis for dismissing the case?

3. Explain the legal reasoning behind the judge’s interpretation of CC&R section 2.5. Why was the distinction between an “existing easement” and granting a “new easement to a third party” a critical factor in the outcome?

4. Imagine you were legal counsel for the Petitioner. Based on the information in the decision, what kind of evidence would have been necessary to successfully prove a violation of the Community Governing Documents and overcome the Respondent’s defenses?

5. Examine the roles of the different entities involved in this dispute: the Petitioner, the Homeowners Association, the Office of Administrative Hearings, and the Arizona Department of Real Estate. How does the structure of this administrative hearing process provide a mechanism for resolving disputes between homeowners and HOAs?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official (in this case, Velva Moses-Thompson) who presides over administrative hearings, weighs evidence, and makes legal rulings and decisions.

ARIZ. ADMIN. CODE

The Arizona Administrative Code, a set of state regulations. Section R2-19-119 is cited as establishing the standard of proof for the hearing.

ARIZ. REV. STAT.

Arizona Revised Statutes, the collection of laws passed by the Arizona state legislature. Several statutes are cited, including those governing real estate, HOA disputes, and the statute of limitations.

Burden of Proof

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

An abbreviation for Covenants, Conditions, and Restrictions, which are rules set forth in a Community Governing Document that property owners in a planned community or condominium must follow.

Easement

A legal right to use another person’s land for a specific, limited purpose. In this case, it refers to the area where pipes were installed, which the judge found was an “existing easement.”

Findings of Fact

The section of a legal decision that details the factual determinations made by the judge based on the evidence and testimony presented at a hearing.

Homeowners Association (HOA)

An organization in a planned community (like Rancho Del Oro) that creates and enforces rules for the properties and residents within its jurisdiction.

Notice of Hearing

A formal document issued to inform the parties of the date, time, location, and subject matter of a scheduled legal hearing.

Petitioner

The party who initiates a lawsuit or petition, seeking a legal remedy. In this case, Michael J. Stoltenberg.

Preponderance of the Evidence

The standard of proof in this case. Defined in the document 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.”

Respondent

The party against whom a petition is filed; the party who must respond to the allegations. In this case, the Rancho Del Oro Homeowners Association.

Statute of Limitations

A law that sets the maximum amount of time that parties involved in a dispute have to initiate legal proceedings. In this case, ARIZ. REV. STAT. section 12-550 established a four-year limit.


Ellipsis

Case Participants

Petitioner Side

  • Michael J. Stoltenberg (petitioner)

Respondent Side

  • Lydia Peirce Linsmeier (HOA attorney)
    Carpenter, Hazlewood, Delgado & Bolen, LLP
  • Nicole Payne (HOA attorney)
    Carpenter, Hazlewood, Delgado & Bolen, LLP
  • Diana Crites (community manager)
    Rancho Del Oro Homeowners Association
    Testified for Respondent
  • James Van Sickle (board member)
    Rancho Del Oro Homeowners Association
    Chairman of the Board; testified for Respondent

Neutral Parties

  • Velva Moses-Thompson (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate

Brian Sopatyk vs. The Lakeshore Village Condo. Association, Inc.

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

Case Summary

Case ID 17F-H1716004-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2017-08-10
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Brian Sopatyk Counsel Nathan Andrews
Respondent The Lakeshore Village Condo. Association, Inc. Counsel Bradley R. Jardine

Alleged Violations

ARIZ. REV. STAT. section 33-1260

Outcome Summary

The ALJ decision, certified as the final administrative decision, dismissed the Petitioner's claim after rehearing, finding that the Petitioner failed to prove the Association violated A.R.S. § 33-1260. The challenged $660 fee was determined to be a permissible working capital contribution under the CC&Rs, not a fee restricted by the statutory cap on resale disclosure services.

Why this result: Petitioner failed to meet the burden of proof; the fee in question was determined to be a working capital fee/assessment governed by the CC&Rs and ARS § 33-1242(A)(2), and not subject to the limitation set forth in ARS § 33-1260.

Key Issues & Findings

Alleged excessive fee collection for resale disclosure/transfer services

Petitioner alleged the Association violated A.R.S. § 33-1260 by charging a $660 fee, which he argued exceeded the statutory maximum of $400 for resale disclosure/transfer services. The Association argued the $660 fee was a working capital contribution mandated by CC&R section 8.13 and was mislabeled, and therefore not subject to the statutory limitations of § 33-1260.

Orders: Brian D. Sopatyk’s petition is dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. section 33-1260
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 33-1242(A)(2)

Analytics Highlights

Topics: HOA fee dispute, Working capital fee, Transfer fee, Resale disclosure, Statutory interpretation
Additional Citations:

  • ARIZ. REV. STAT. § 33-1260
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 33-1242(A)(2)

Video Overview

Audio Overview

Decision Documents

17F-H1716004-REL-RHG Decision – 531040.pdf

Uploaded 2026-01-20T13:41:29 (67.9 KB)

17F-H1716004-REL-RHG Decision – 540004.pdf

Uploaded 2026-01-20T13:41:30 (154.0 KB)

17F-H1716004-REL-RHG Decision – 571793.pdf

Uploaded 2025-10-09T03:30:59 (96.8 KB)

17F-H1716004-REL-RHG Decision – 580965.pdf

Uploaded 2025-10-09T03:30:59 (61.2 KB)

17F-H1716004-REL-RHG Decision – 593042.pdf

Uploaded 2025-10-09T03:30:59 (100.9 KB)

17F-H1716004-REL-RHG Decision – 593045.pdf

Uploaded 2025-10-09T03:31:00 (59.2 KB)





Briefing Doc – 17F-H1716004-REL-RHG


Briefing: Sopatyk v. Lakeshore Village Condominium Association, Inc.

Executive Summary

This document synthesizes the findings and outcomes of an administrative legal case brought by petitioner Brian Sopatyk against The Lakeshore Village Condominium Association, Inc. The core of the dispute was Mr. Sopatyk’s allegation that the Association charged a “transfer fee” of $660 upon the sale of a condominium unit, in violation of Arizona Revised Statute (A.R.S.) § 33-1260, which caps fees for resale disclosure services at an aggregate of $400.

Following an initial hearing and a subsequent rehearing, the Administrative Law Judge (ALJ) consistently ruled in favor of the Association, dismissing Mr. Sopatyk’s petition on both occasions. The central finding was that the petitioner failed to prove a statutory violation by a preponderance of the evidence. The Association successfully argued that the disputed $660 charge was not a resale disclosure fee governed by A.R.S. § 33-1260, but rather a “working capital fee” authorized by its Covenants, Conditions, and Restrictions (CC&Rs). The Association admitted that this fee had been historically mislabeled as a “transfer fee,” an error it had since identified and corrected. The actual fee charged for resale disclosure documents was a separate, compliant $30 “statement fee.” The ALJ’s decision from the rehearing was certified as the final administrative decision in the matter on August 10, 2017.

Case Overview

Case Number

17F-H1716004-REL (Initial Hearing)
17F-H1716004-REL-RHG (Rehearing)

Jurisdiction

State of Arizona, Office of Administrative Hearings

Petitioner

Brian Sopatyk

Respondent

The Lakeshore Village Condominium Association, Inc.

Core Allegation

Violation of A.R.S. § 33-1260, which limits fees for resale disclosure services to a maximum of $400.

Final Outcome

Petition Dismissed. The Respondent was deemed the prevailing party.

Chronology of Legal Proceedings

March 2, 2015

The Association issues a disclosure statement for Mr. Sopatyk’s purchase, showing a $660 “transfer fee” and a $30 “statement fee.”

May 18, 2016

Prompted by Mr. Sopatyk, the Association’s Board discusses the fee structure. It concludes the $660 fee is a mislabeled “working capital fee” and not a statutory violation.

August 9, 2016

Mr. Sopatyk files a petition with the Arizona Department of Real Estate alleging the violation.

November 14, 2016

The initial administrative hearing is conducted before ALJ Thomas Shedden.

November 29, 2016

ALJ Shedden issues a decision dismissing Mr. Sopatyk’s petition.

December 13, 2016

The Commissioner of the Department of Real Estate adopts the ALJ’s recommendation, issuing a Final Order to dismiss the petition.

Post-Dec. 2016

Mr. Sopatyk requests a rehearing of the matter.

June 9, 2017

The rehearing is conducted, again before ALJ Thomas Shedden.

June 26, 2017

ALJ Shedden issues a new decision, once again dismissing Mr. Sopatyk’s petition.

August 10, 2017

With no modifying action from the Department of Real Estate, the ALJ’s June 26 decision is certified as the final administrative decision.

Core Dispute Analysis

The case centered on the interpretation and classification of two fees charged by the Association during the sale of Mr. Sopatyk’s condominium unit.

Petitioner’s Position (Brian Sopatyk)

Allegation of Violation: Mr. Sopatyk alleged that the Association charged a “transfer fee” of $660, which directly contravened the $400 statutory maximum established by A.R.S. § 33-1260 for services related to resale disclosure.

Evidence Presented: The petitioner submitted a March 2, 2015 disclosure form from the Association listing both a “660transferfee”anda”30 statement fee.” A HUD-1 disclosure statement for the purchase was also entered, showing the $660 “Transfer Fee” was split, with $330 paid from the buyer’s (Sopatyk’s) funds and $330 from the seller’s funds.

Contradictory Testimony: The ALJ noted a discrepancy in the petitioner’s statements. The sworn petition stated the $660 fee was split between him and the seller, while his testimony at the rehearing claimed he “had in fact paid the entire $660 as part of the negotiated price.” The ALJ decision stated, “either Mr. Sopatyk’s sworn statement or his testimony must be false.”

Requested Remedies: Mr. Sopatyk requested that the Association be ordered to comply with the statute, that refunds be paid to those who paid fees in excess of the statutory maximum, and that a civil penalty be imposed against the Association.

Respondent’s Position (The Lakeshore Village Condo. Assoc.)

Distinction Between Fees: The Association’s central argument was that two separate and legally distinct fees were assessed:

1. A $30 Resale Statement Fee: This was the charge for preparing documents pursuant to A.R.S. § 33-1260 and was well within the $400 limit.

2. A $660 Working Capital Fee: This fee was authorized under a separate provision, Section 8.13 of the Association’s CC&Rs, which mandates an assessment from each new owner equal to two monthly installments to fund the Association’s working capital (reserve) fund.

“Mislabeled” Fee: The Association acknowledged that the $660 working capital fee was incorrectly labeled as a “transfer fee.” Association Manager Amy Telnes testified that she received erroneous information from the prior manager and had been using the wrong label.

Board Action and Corrective Measures: The minutes from the May 18, 2016 Board meeting show that the Board, after reviewing a legal opinion, concluded the issue was one of “labeling, not violating the statute.” The Board directed Ms. Telnes to perform an accounting and transfer all such fees collected into the Reserve Account. To prevent future confusion, the Board also voted to assess a single $400 transfer fee on all future transactions, with no other fees.

Fund Allocation: Ms. Telnes testified that the $660 fee was deposited into the Association’s reserve fund, consistent with its purpose as a working capital contribution, while the $30 fee was the charge pursuant to A.R.S. § 33-1260(C).

Administrative Law Judge’s Findings and Rulings

ALJ Thomas Shedden presided over both the initial hearing and the rehearing, reaching the same conclusion in both instances.

Key Rulings and Legal Reasoning

Burden of Proof: The ALJ established that Mr. Sopatyk, as the petitioner, bore the burden of proving the alleged violation by a “preponderance of the evidence.”

Core Finding: The evidence demonstrated that the Association charged two distinct fees. The $30 fee was for document preparation under A.R.S. § 33-1260, while the $660 fee was a working capital assessment authorized by CC&R Section 8.13. The ALJ concluded that A.R.S. § 33-1260 was not applicable to the $660 fee.

Conclusion on Violation: Based on the evidence, including the testimony of the Association manager and the board meeting minutes, the ALJ found that the $660 fee was mislabeled but was not collected for services related to resale disclosure. Therefore, Mr. Sopatyk did not meet his burden to show that the Association violated the statute.

Rejection of Harm-Based Argument: The ALJ did not accept the Association’s argument that the claim should fail because Mr. Sopatyk did not personally pay over $400. The judge clarified that A.R.S. § 33-2199.01 “does not require this type of particularized harm, but rather applies to all statutory violations.”

Dismissal of Petition: In both the November 29, 2016 decision and the June 26, 2017 decision, the order was to dismiss Mr. Sopatyk’s petition and deem the Association the prevailing party.

Final Disposition and Legal Status

The decision issued by ALJ Shedden on June 26, 2017, was transmitted to the Arizona Department of Real Estate. The Department had until August 1, 2017, to accept, reject, or modify the decision. As no action was taken by the deadline, the Office of Administrative Hearings issued a Certification of Decision of Administrative Law Judge on August 10, 2017. This certification established the ALJ’s decision as the final administrative decision of the Department of Real Estate in the matter.

Key Legal Citations and Definitions

A.R.S. § 33-1260 (Resale of Units; Information Required): This Arizona statute governs the information a condominium association must provide to a prospective purchaser. It explicitly limits the fees an association can charge for these services:

CC&R Section 8.13 (Transfer Fee and Working Capital Fund): This section of The Lakeshore Village Condominium Association’s governing documents provides the authority to collect a fee from new owners for a different purpose:

Preponderance of the Evidence: The standard of proof required for the petitioner to prevail, defined in the legal decisions as:






Study Guide – 17F-H1716004-REL-RHG


Study Guide: Sopatyk v. The Lakeshore Village Condo. Association, Inc.

Short Answer Quiz

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

1. Identify the petitioner and the respondent in this case, and state the core legal violation the petitioner alleged.

2. What specific fees were charged during the petitioner’s condominium purchase that became the central point of the dispute?

3. According to the Association, what was the true nature of the $660 fee, and how did it explain the “transfer fee” label on the disclosure documents?

4. What role did Amy Telnes, the Association manager, play in explaining the history of the disputed fee?

5. What actions did the Association’s Board take during its meeting on May 18, 2016, to address the petitioner’s concerns and correct its internal procedures?

6. Who held the burden of proof in this matter, and what was the legal standard required to meet that burden?

7. What was the official outcome of the initial administrative hearing held on November 14, 2016?

8. Why was a re-hearing conducted, and what was the final outcome of that hearing on June 9, 2017?

9. According to the re-hearing decision, there was a significant contradiction between the petitioner’s sworn petition and his later testimony. What was this contradiction?

10. What was the legal basis, according to the Association’s CC&Rs, for collecting the $660 working capital fee?

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Answer Key

1. The petitioner was Brian Sopatyk, and the respondent was The Lakeshore Village Condominium Association, Inc. Mr. Sopatyk alleged that the Association violated ARIZ. REV. STAT. section 33-1260 by charging a transfer fee in excess of the statutory maximum of $400.

2. The disputed fees were a $660 “transfer fee,” which was split between the buyer (Mr. Sopatyk) and the seller, and a separate $30 “statement fee” or “Resale Statement Fee.” The petitioner’s claim focused on the $660 fee being above the legal limit for resale disclosure services.

3. The Association argued the $660 fee was not a transfer fee for disclosure services but was a “working capital fee” authorized by its CC&Rs. It explained that the fee had been mislabeled as a “transfer fee” due to an error passed down from a previous property manager.

4. Amy Telnes testified that when she became the Association manager, she was incorrectly told the working capital fee was the transfer fee. She further testified that the $660 was deposited into the Association’s reserve fund, and the actual fee charged for disclosure under the statute was the separate $30 statement fee.

5. At the May 18, 2016, meeting, the Board concluded it was not in violation of the law but that its fee labeling was confusing. The Board directed Amy Telnes to perform an accounting and transfer all mislabeled fees into the Reserve Account and voted to assess a single, correctly labeled $400 transfer fee on all future transactions.

6. The petitioner, Brian Sopatyk, bore the burden of proof. The standard of proof required was a “preponderance of the evidence,” defined as evidence with the most convincing force that inclines an impartial mind to one side of an issue over the other.

7. Following the initial hearing, Administrative Law Judge Thomas Shedden found that Mr. Sopatyk had not shown by a preponderance of the evidence that the Association violated the statute. The judge ordered that Mr. Sopatyk’s petition be dismissed.

8. A re-hearing was conducted after Mr. Sopatyk requested one following the initial decision. The final outcome of the June 9, 2017, re-hearing was the same as the first: the Administrative Law Judge found the petitioner did not meet his burden of proof and ordered the petition to be dismissed.

9. In his sworn petition, Mr. Sopatyk stated that the $660 transfer fee was split between him and the seller. However, during his testimony at the re-hearing, he stated that he had in fact paid the entire $660 as part of the negotiated price of the unit.

10. The legal basis was Section 8.13 of the Association’s Declaration of Covenants, Conditions and Restrictions (CC&Rs). This section, titled “Transfer Fee and Working Capital Fund,” called for an assessment from each new owner of two monthly installments of the annual fee to be deposited into the working capital fund.

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Essay Questions

Instructions: The following questions are designed to test a deeper, more synthesized understanding of the case. Formulate a comprehensive response to each prompt, incorporating specific facts, legal arguments, and procedural details from the source documents.

1. Trace the complete timeline of the case, beginning with the filing of the petition. Include key dates of filings, hearings, decisions, and final certifications, and describe the significance of each event in the legal process.

2. Analyze the central legal argument of the Respondent, The Lakeshore Village Condominium Association. Explain how the distinction between a “transfer fee” under ARIZ. REV. STAT. section 33-1260 and a “working capital fee” under the Association’s CC&Rs was crucial to the Administrative Law Judge’s final decision.

3. Discuss the concept of “preponderance of the evidence” as it is defined and applied in this case. Explain why the petitioner, Brian Sopatyk, failed to meet this standard of proof in both the initial hearing and the re-hearing, citing specific evidence presented by the Association.

4. Evaluate the importance of the Association’s Board Meeting Minutes from May 18, 2016, as a piece of evidence. Detail the specific findings and resolutions from that meeting and explain how they were used to build the Association’s defense.

5. Examine the roles of the key individuals and entities in this administrative action. Describe the functions and contributions of Brian Sopatyk (Petitioner), Amy Telnes (Association Manager), Michael Cibellis (Association President), Thomas Shedden (Administrative Law Judge), and the Arizona Department of Real Estate.

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official, in this case Thomas Shedden, who presides over hearings at the Office of Administrative Hearings, makes findings of fact and conclusions of law, and issues a decision.

ARIZ. REV. STAT. section 33-1260

The Arizona statute that requires a condominium association to provide certain disclosure documents to a prospective purchaser. It also limits the fee an association can charge for the preparation of these documents to an aggregate of four hundred dollars.

Burden of Proof

The obligation of a party in a legal case to prove their allegations. In this matter, the petitioner, Brian Sopatyk, bore the burden of proof.

An abbreviation for the Declaration of Covenants, Conditions and Restrictions. In this case, section 8.13 of the Association’s CC&Rs authorized the collection of a fee from new owners for a working capital fund.

Final Administrative Decision

The ultimate, legally binding decision in the administrative matter. In this case, the Administrative Law Judge’s decision became the final administrative decision after the Department of Real Estate did not act to accept, reject, or modify it within the statutory time limit.

HUD-1 Disclosure Statement

A document used in the petitioner’s property purchase that itemized all charges imposed upon a borrower and seller for a real estate transaction. It was used as evidence to show how the $660 “Transfer Fee” and $30 “Resale Statement Fee” were assessed and paid.

Petitioner

The party who files a petition initiating a legal action. In this case, Brian Sopatyk was the petitioner.

Preponderance of the Evidence

The standard of proof required in this administrative hearing. It is defined as “The greater weight of the 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.”

Reserve Fund

An account maintained by the Condominium Association. The Association referred to its “working capital fund” as the Reserve Fund, into which the disputed $660 fees were deposited.

Respondent

The party against whom a petition is filed. In this case, The Lakeshore Village Condominium Association, Inc. was the respondent.

Statement Fee / Resale Statement Fee

A $30 fee charged by the Association for the preparation of disclosure documents. The Association argued this was the fee governed by ARIZ. REV. STAT. section 33-1260, which was compliant with the $400 statutory cap.

Transfer Fee

In the context of the petitioner’s allegation, a fee charged for resale disclosure services, limited to $400 by statute. In the context of the Association’s defense, this was the erroneous label applied to the working capital fee.

Working Capital Fee

A fee authorized by section 8.13 of the Association’s CC&Rs, assessed to each new owner to be deposited into the working capital fund (or Reserve Fund). The Association successfully argued that the disputed $660 fee was this type of fee, not one for resale disclosure.






Blog Post – 17F-H1716004-REL-RHG


How a $660 Fee Sparked a Legal Showdown: 5 Surprising Lessons from a Homeowner vs. HOA Dispute

We sign, we initial, we pay—assuming every line item on our closing documents is gospel. When buying a home in a condominium association, the stack of paperwork and list of fees can feel overwhelming. But what if one of those “standard” fees wasn’t standard at all?

For homeowner Brian Sopatyk, a single $660 charge from The Lakeshore Village Condominium Association wasn’t just a number; it was a thread he pulled that unraveled a surprising story of HOA governance, legal strategy, and the power of asking “why?” This post breaks down the five most impactful takeaways from a seemingly minor dispute that went all the way through a formal hearing and re-hearing.

1. A Simple Label Can Ignite a Legal Firestorm

A clerical error triggers a full-blown legal dispute.

The entire case hinged on a single, crucial mistake: the HOA mislabeled a “working capital fee” as a “transfer fee” on its disclosure forms.

Why was this one word so important? Because Mr. Sopatyk’s formal petition alleged that by charging a “$660 transfer fee,” the HOA violated Arizona statute 33-1260, which caps fees for resale disclosure services at a maximum of $400. On its face, the $660 charge looked like a clear violation of state law.

The Association’s manager, Amy Telnes, testified that when she took over her position, she was given erroneous information that the working capital fee was the transfer fee. As a result, the charge had been incorrectly labeled ever since. This simple administrative error was enough to trigger a formal petition to the Arizona Department of Real Estate, a full administrative hearing, and eventually, a re-hearing, proving how a small clerical mistake can escalate into a significant legal conflict.

2. In the Eyes of the Law, Substance Can Trump Form

Why the fee’s purpose mattered more than its name.

The Association’s core defense was that while the name of the fee was wrong, its purpose and authority were legitimate. The $660 charge, they argued, wasn’t for resale documents (the service capped by state law), but was a “working capital fee” authorized by an entirely different rule: the Association’s own Covenants, Conditions, and Restrictions (CC&Rs).

Specifically, Section 8.13 of the CC&Rs allowed for this assessment, with the funds designated for the Association’s reserve fund. This working capital fee, in contrast, was an assessment on the new owner as mandated by the CC&Rs to ensure the association’s financial health. The actual fee for the statutory disclosure documents was a separate, compliant $30 “Resale Statement Fee,” which was paid by the seller.

The Administrative Law Judge ultimately agreed. The fee’s underlying purpose and the HOA’s authority to collect it (its substance) were deemed more important than its incorrect name on the form (its form). This is a crucial lesson for any homeowner challenging an HOA: it’s not enough to find a mistake on a form. You must be prepared to argue against the underlying authority and purpose of the action itself.

3. You Can Lose the Battle but Win the War

How a dismissed case led to a major policy victory.

Perhaps the most counter-intuitive outcome is that although Mr. Sopatyk’s petition was dismissed, his actions were the direct catalyst for a significant and positive policy change by the HOA.

In a summary of the Association’s May 18, 2016, Board Meeting, which was entered as evidence, the judge noted that the Board reviewed the very issue Mr. Sopatyk had raised. Under the pressure of his legal challenge, they came to a powerful conclusion about their own system, determining it was “confusing and unfair.”

As a direct result of this internal review prompted by the dispute, the Board voted to simplify its process. It resolved to assess a single, clear transfer fee of $400 on all future transactions, eliminating the other confusing fees. This proves that even an unsuccessful legal challenge can be a powerful tool, forcing an organization to confront and correct its own problematic practices for the benefit of all future members.

4. The ‘Burden of Proof’ Is More Than Just a Phrase

What it really means to have to prove your case.

In both the original decision and the re-hearing, the judge repeatedly stated that Mr. Sopatyk, as the petitioner, bore the “burden of proof.” This legal standard was critical to the outcome. It meant he had to prove his claim by a “preponderance of the evidence,” which the court documents defined 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 this case, it meant Mr. Sopatyk’s job was to prove that the $660 fee was, more likely than not, an illegal charge for resale documents. The HOA’s defense—that it was a legally separate “working capital fee” that was simply mislabeled—created enough doubt that he couldn’t clear this hurdle.

5. A Small Contradiction Can Damage Credibility

When every word you say (and write) is on the record.

A fascinating detail appeared in the re-hearing decision, highlighting how every word matters in a legal proceeding.

There was a discrepancy in Mr. Sopatyk’s statements. His sworn petition, filed on August 9, 2016, stated the $660 fee was “split between the seller and the buyer.” However, during the hearing, he testified that he had “in fact paid the entire $660.”

The judge noted this contradiction directly in footnote 3 of the re-hearing decision, stating: “either Mr. Sopatyk’s sworn statement or his testimony must be false.” While not the deciding factor, this kind of inconsistency can subtly erode a petitioner’s standing. Remember the “burden of proof” from Takeaway 4? It requires convincing a judge to “incline a fair and impartial mind” to your side. Contradictions, even small ones, make that inclination much harder to achieve.

Conclusion: The Devil Is in the Details

This case is the perfect microcosm of community association disputes. It began with a clerical error (form), was adjudicated on intent (substance), was lost on a technicality (the burden of proof), yet resulted in a victory for transparency. Mr. Sopatyk may not have won his case, but he won a better system for his neighbors.

The ultimate lesson? In an HOA, the most powerful tool isn’t always a lawsuit—sometimes, it’s a magnifying glass. It leaves us with a thought-provoking question: When is it worth challenging the system for clarity and fairness, even if the outcome isn’t a clear ‘win’ on paper?


Case Participants

Petitioner Side

  • Brian Sopatyk (petitioner)
    Represented himself at the initial hearing; sought rehearing
  • Nathan Andrews (petitioner attorney)
    ASU Alumni Law Group
  • Jill M. Kennedy (petitioner attorney)
    ASU Alumni Law Group
  • Judy Sopatyk (petitioner's wife)
    Co-purchaser of the condominium unit,
  • Chance Peterson (petitioner attorney)
    ASU Alumni Law Group

Respondent Side

  • Bradley R. Jardine (HOA attorney)
    Jardine Baker Hickman & Houston
  • Amy Telnes (property manager/witness)
    The Lakeshore Village Condo. Association, Inc.
    Association manager who testified,
  • Michael Cibellis (Association president/witness)
    The Lakeshore Village Condo. Association, Inc.
    Testified at the rehearing

Neutral Parties

  • Thomas Shedden (ALJ)
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
  • Abby Hansen (HOA Coordinator)
    Contact for requests for rehearing
  • Greg Hanchett (Interim Director)
    OAH
    Signed the Certification of Decision,

Other Participants

  • Rosella J. Rodriguez (administrative staff)
    Administrative staff for transmission/mailing,

Brian Sopatyk vs. The Lakeshore Village Condo. Association, Inc.

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

Case Summary

Case ID 17F-H1716004-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2017-08-10
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Brian Sopatyk Counsel Nathan Andrews
Respondent The Lakeshore Village Condo. Association, Inc. Counsel Bradley R. Jardine

Alleged Violations

ARIZ. REV. STAT. section 33-1260

Outcome Summary

The ALJ decision, certified as the final administrative decision, dismissed the Petitioner's claim after rehearing, finding that the Petitioner failed to prove the Association violated A.R.S. § 33-1260. The challenged $660 fee was determined to be a permissible working capital contribution under the CC&Rs, not a fee restricted by the statutory cap on resale disclosure services.

Why this result: Petitioner failed to meet the burden of proof; the fee in question was determined to be a working capital fee/assessment governed by the CC&Rs and ARS § 33-1242(A)(2), and not subject to the limitation set forth in ARS § 33-1260.

Key Issues & Findings

Alleged excessive fee collection for resale disclosure/transfer services

Petitioner alleged the Association violated A.R.S. § 33-1260 by charging a $660 fee, which he argued exceeded the statutory maximum of $400 for resale disclosure/transfer services. The Association argued the $660 fee was a working capital contribution mandated by CC&R section 8.13 and was mislabeled, and therefore not subject to the statutory limitations of § 33-1260.

Orders: Brian D. Sopatyk’s petition is dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. section 33-1260
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 33-1242(A)(2)

Analytics Highlights

Topics: HOA fee dispute, Working capital fee, Transfer fee, Resale disclosure, Statutory interpretation
Additional Citations:

  • ARIZ. REV. STAT. § 33-1260
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 33-1242(A)(2)

Video Overview

Audio Overview

Decision Documents

17F-H1716004-REL-RHG Decision – 531040.pdf

Uploaded 2026-01-23T17:17:41 (67.9 KB)

17F-H1716004-REL-RHG Decision – 540004.pdf

Uploaded 2026-01-23T17:17:44 (154.0 KB)





Briefing Doc – 17F-H1716004-REL-RHG


Briefing: Sopatyk v. Lakeshore Village Condominium Association, Inc.

Executive Summary

This document synthesizes the findings and outcomes of an administrative legal case brought by petitioner Brian Sopatyk against The Lakeshore Village Condominium Association, Inc. The core of the dispute was Mr. Sopatyk’s allegation that the Association charged a “transfer fee” of $660 upon the sale of a condominium unit, in violation of Arizona Revised Statute (A.R.S.) § 33-1260, which caps fees for resale disclosure services at an aggregate of $400.

Following an initial hearing and a subsequent rehearing, the Administrative Law Judge (ALJ) consistently ruled in favor of the Association, dismissing Mr. Sopatyk’s petition on both occasions. The central finding was that the petitioner failed to prove a statutory violation by a preponderance of the evidence. The Association successfully argued that the disputed $660 charge was not a resale disclosure fee governed by A.R.S. § 33-1260, but rather a “working capital fee” authorized by its Covenants, Conditions, and Restrictions (CC&Rs). The Association admitted that this fee had been historically mislabeled as a “transfer fee,” an error it had since identified and corrected. The actual fee charged for resale disclosure documents was a separate, compliant $30 “statement fee.” The ALJ’s decision from the rehearing was certified as the final administrative decision in the matter on August 10, 2017.

Case Overview

Case Number

17F-H1716004-REL (Initial Hearing)
17F-H1716004-REL-RHG (Rehearing)

Jurisdiction

State of Arizona, Office of Administrative Hearings

Petitioner

Brian Sopatyk

Respondent

The Lakeshore Village Condominium Association, Inc.

Core Allegation

Violation of A.R.S. § 33-1260, which limits fees for resale disclosure services to a maximum of $400.

Final Outcome

Petition Dismissed. The Respondent was deemed the prevailing party.

Chronology of Legal Proceedings

March 2, 2015

The Association issues a disclosure statement for Mr. Sopatyk’s purchase, showing a $660 “transfer fee” and a $30 “statement fee.”

May 18, 2016

Prompted by Mr. Sopatyk, the Association’s Board discusses the fee structure. It concludes the $660 fee is a mislabeled “working capital fee” and not a statutory violation.

August 9, 2016

Mr. Sopatyk files a petition with the Arizona Department of Real Estate alleging the violation.

November 14, 2016

The initial administrative hearing is conducted before ALJ Thomas Shedden.

November 29, 2016

ALJ Shedden issues a decision dismissing Mr. Sopatyk’s petition.

December 13, 2016

The Commissioner of the Department of Real Estate adopts the ALJ’s recommendation, issuing a Final Order to dismiss the petition.

Post-Dec. 2016

Mr. Sopatyk requests a rehearing of the matter.

June 9, 2017

The rehearing is conducted, again before ALJ Thomas Shedden.

June 26, 2017

ALJ Shedden issues a new decision, once again dismissing Mr. Sopatyk’s petition.

August 10, 2017

With no modifying action from the Department of Real Estate, the ALJ’s June 26 decision is certified as the final administrative decision.

Core Dispute Analysis

The case centered on the interpretation and classification of two fees charged by the Association during the sale of Mr. Sopatyk’s condominium unit.

Petitioner’s Position (Brian Sopatyk)

Allegation of Violation: Mr. Sopatyk alleged that the Association charged a “transfer fee” of $660, which directly contravened the $400 statutory maximum established by A.R.S. § 33-1260 for services related to resale disclosure.

Evidence Presented: The petitioner submitted a March 2, 2015 disclosure form from the Association listing both a “660transferfee”anda”30 statement fee.” A HUD-1 disclosure statement for the purchase was also entered, showing the $660 “Transfer Fee” was split, with $330 paid from the buyer’s (Sopatyk’s) funds and $330 from the seller’s funds.

Contradictory Testimony: The ALJ noted a discrepancy in the petitioner’s statements. The sworn petition stated the $660 fee was split between him and the seller, while his testimony at the rehearing claimed he “had in fact paid the entire $660 as part of the negotiated price.” The ALJ decision stated, “either Mr. Sopatyk’s sworn statement or his testimony must be false.”

Requested Remedies: Mr. Sopatyk requested that the Association be ordered to comply with the statute, that refunds be paid to those who paid fees in excess of the statutory maximum, and that a civil penalty be imposed against the Association.

Respondent’s Position (The Lakeshore Village Condo. Assoc.)

Distinction Between Fees: The Association’s central argument was that two separate and legally distinct fees were assessed:

1. A $30 Resale Statement Fee: This was the charge for preparing documents pursuant to A.R.S. § 33-1260 and was well within the $400 limit.

2. A $660 Working Capital Fee: This fee was authorized under a separate provision, Section 8.13 of the Association’s CC&Rs, which mandates an assessment from each new owner equal to two monthly installments to fund the Association’s working capital (reserve) fund.

“Mislabeled” Fee: The Association acknowledged that the $660 working capital fee was incorrectly labeled as a “transfer fee.” Association Manager Amy Telnes testified that she received erroneous information from the prior manager and had been using the wrong label.

Board Action and Corrective Measures: The minutes from the May 18, 2016 Board meeting show that the Board, after reviewing a legal opinion, concluded the issue was one of “labeling, not violating the statute.” The Board directed Ms. Telnes to perform an accounting and transfer all such fees collected into the Reserve Account. To prevent future confusion, the Board also voted to assess a single $400 transfer fee on all future transactions, with no other fees.

Fund Allocation: Ms. Telnes testified that the $660 fee was deposited into the Association’s reserve fund, consistent with its purpose as a working capital contribution, while the $30 fee was the charge pursuant to A.R.S. § 33-1260(C).

Administrative Law Judge’s Findings and Rulings

ALJ Thomas Shedden presided over both the initial hearing and the rehearing, reaching the same conclusion in both instances.

Key Rulings and Legal Reasoning

Burden of Proof: The ALJ established that Mr. Sopatyk, as the petitioner, bore the burden of proving the alleged violation by a “preponderance of the evidence.”

Core Finding: The evidence demonstrated that the Association charged two distinct fees. The $30 fee was for document preparation under A.R.S. § 33-1260, while the $660 fee was a working capital assessment authorized by CC&R Section 8.13. The ALJ concluded that A.R.S. § 33-1260 was not applicable to the $660 fee.

Conclusion on Violation: Based on the evidence, including the testimony of the Association manager and the board meeting minutes, the ALJ found that the $660 fee was mislabeled but was not collected for services related to resale disclosure. Therefore, Mr. Sopatyk did not meet his burden to show that the Association violated the statute.

Rejection of Harm-Based Argument: The ALJ did not accept the Association’s argument that the claim should fail because Mr. Sopatyk did not personally pay over $400. The judge clarified that A.R.S. § 33-2199.01 “does not require this type of particularized harm, but rather applies to all statutory violations.”

Dismissal of Petition: In both the November 29, 2016 decision and the June 26, 2017 decision, the order was to dismiss Mr. Sopatyk’s petition and deem the Association the prevailing party.

Final Disposition and Legal Status

The decision issued by ALJ Shedden on June 26, 2017, was transmitted to the Arizona Department of Real Estate. The Department had until August 1, 2017, to accept, reject, or modify the decision. As no action was taken by the deadline, the Office of Administrative Hearings issued a Certification of Decision of Administrative Law Judge on August 10, 2017. This certification established the ALJ’s decision as the final administrative decision of the Department of Real Estate in the matter.

Key Legal Citations and Definitions

A.R.S. § 33-1260 (Resale of Units; Information Required): This Arizona statute governs the information a condominium association must provide to a prospective purchaser. It explicitly limits the fees an association can charge for these services:

CC&R Section 8.13 (Transfer Fee and Working Capital Fund): This section of The Lakeshore Village Condominium Association’s governing documents provides the authority to collect a fee from new owners for a different purpose:

Preponderance of the Evidence: The standard of proof required for the petitioner to prevail, defined in the legal decisions as:






Study Guide – 17F-H1716004-REL-RHG


Study Guide: Sopatyk v. The Lakeshore Village Condo. Association, Inc.

Short Answer Quiz

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

1. Identify the petitioner and the respondent in this case, and state the core legal violation the petitioner alleged.

2. What specific fees were charged during the petitioner’s condominium purchase that became the central point of the dispute?

3. According to the Association, what was the true nature of the $660 fee, and how did it explain the “transfer fee” label on the disclosure documents?

4. What role did Amy Telnes, the Association manager, play in explaining the history of the disputed fee?

5. What actions did the Association’s Board take during its meeting on May 18, 2016, to address the petitioner’s concerns and correct its internal procedures?

6. Who held the burden of proof in this matter, and what was the legal standard required to meet that burden?

7. What was the official outcome of the initial administrative hearing held on November 14, 2016?

8. Why was a re-hearing conducted, and what was the final outcome of that hearing on June 9, 2017?

9. According to the re-hearing decision, there was a significant contradiction between the petitioner’s sworn petition and his later testimony. What was this contradiction?

10. What was the legal basis, according to the Association’s CC&Rs, for collecting the $660 working capital fee?

——————————————————————————–

Answer Key

1. The petitioner was Brian Sopatyk, and the respondent was The Lakeshore Village Condominium Association, Inc. Mr. Sopatyk alleged that the Association violated ARIZ. REV. STAT. section 33-1260 by charging a transfer fee in excess of the statutory maximum of $400.

2. The disputed fees were a $660 “transfer fee,” which was split between the buyer (Mr. Sopatyk) and the seller, and a separate $30 “statement fee” or “Resale Statement Fee.” The petitioner’s claim focused on the $660 fee being above the legal limit for resale disclosure services.

3. The Association argued the $660 fee was not a transfer fee for disclosure services but was a “working capital fee” authorized by its CC&Rs. It explained that the fee had been mislabeled as a “transfer fee” due to an error passed down from a previous property manager.

4. Amy Telnes testified that when she became the Association manager, she was incorrectly told the working capital fee was the transfer fee. She further testified that the $660 was deposited into the Association’s reserve fund, and the actual fee charged for disclosure under the statute was the separate $30 statement fee.

5. At the May 18, 2016, meeting, the Board concluded it was not in violation of the law but that its fee labeling was confusing. The Board directed Amy Telnes to perform an accounting and transfer all mislabeled fees into the Reserve Account and voted to assess a single, correctly labeled $400 transfer fee on all future transactions.

6. The petitioner, Brian Sopatyk, bore the burden of proof. The standard of proof required was a “preponderance of the evidence,” defined as evidence with the most convincing force that inclines an impartial mind to one side of an issue over the other.

7. Following the initial hearing, Administrative Law Judge Thomas Shedden found that Mr. Sopatyk had not shown by a preponderance of the evidence that the Association violated the statute. The judge ordered that Mr. Sopatyk’s petition be dismissed.

8. A re-hearing was conducted after Mr. Sopatyk requested one following the initial decision. The final outcome of the June 9, 2017, re-hearing was the same as the first: the Administrative Law Judge found the petitioner did not meet his burden of proof and ordered the petition to be dismissed.

9. In his sworn petition, Mr. Sopatyk stated that the $660 transfer fee was split between him and the seller. However, during his testimony at the re-hearing, he stated that he had in fact paid the entire $660 as part of the negotiated price of the unit.

10. The legal basis was Section 8.13 of the Association’s Declaration of Covenants, Conditions and Restrictions (CC&Rs). This section, titled “Transfer Fee and Working Capital Fund,” called for an assessment from each new owner of two monthly installments of the annual fee to be deposited into the working capital fund.

——————————————————————————–

Essay Questions

Instructions: The following questions are designed to test a deeper, more synthesized understanding of the case. Formulate a comprehensive response to each prompt, incorporating specific facts, legal arguments, and procedural details from the source documents.

1. Trace the complete timeline of the case, beginning with the filing of the petition. Include key dates of filings, hearings, decisions, and final certifications, and describe the significance of each event in the legal process.

2. Analyze the central legal argument of the Respondent, The Lakeshore Village Condominium Association. Explain how the distinction between a “transfer fee” under ARIZ. REV. STAT. section 33-1260 and a “working capital fee” under the Association’s CC&Rs was crucial to the Administrative Law Judge’s final decision.

3. Discuss the concept of “preponderance of the evidence” as it is defined and applied in this case. Explain why the petitioner, Brian Sopatyk, failed to meet this standard of proof in both the initial hearing and the re-hearing, citing specific evidence presented by the Association.

4. Evaluate the importance of the Association’s Board Meeting Minutes from May 18, 2016, as a piece of evidence. Detail the specific findings and resolutions from that meeting and explain how they were used to build the Association’s defense.

5. Examine the roles of the key individuals and entities in this administrative action. Describe the functions and contributions of Brian Sopatyk (Petitioner), Amy Telnes (Association Manager), Michael Cibellis (Association President), Thomas Shedden (Administrative Law Judge), and the Arizona Department of Real Estate.

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official, in this case Thomas Shedden, who presides over hearings at the Office of Administrative Hearings, makes findings of fact and conclusions of law, and issues a decision.

ARIZ. REV. STAT. section 33-1260

The Arizona statute that requires a condominium association to provide certain disclosure documents to a prospective purchaser. It also limits the fee an association can charge for the preparation of these documents to an aggregate of four hundred dollars.

Burden of Proof

The obligation of a party in a legal case to prove their allegations. In this matter, the petitioner, Brian Sopatyk, bore the burden of proof.

An abbreviation for the Declaration of Covenants, Conditions and Restrictions. In this case, section 8.13 of the Association’s CC&Rs authorized the collection of a fee from new owners for a working capital fund.

Final Administrative Decision

The ultimate, legally binding decision in the administrative matter. In this case, the Administrative Law Judge’s decision became the final administrative decision after the Department of Real Estate did not act to accept, reject, or modify it within the statutory time limit.

HUD-1 Disclosure Statement

A document used in the petitioner’s property purchase that itemized all charges imposed upon a borrower and seller for a real estate transaction. It was used as evidence to show how the $660 “Transfer Fee” and $30 “Resale Statement Fee” were assessed and paid.

Petitioner

The party who files a petition initiating a legal action. In this case, Brian Sopatyk was the petitioner.

Preponderance of the Evidence

The standard of proof required in this administrative hearing. It is defined as “The greater weight of the 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.”

Reserve Fund

An account maintained by the Condominium Association. The Association referred to its “working capital fund” as the Reserve Fund, into which the disputed $660 fees were deposited.

Respondent

The party against whom a petition is filed. In this case, The Lakeshore Village Condominium Association, Inc. was the respondent.

Statement Fee / Resale Statement Fee

A $30 fee charged by the Association for the preparation of disclosure documents. The Association argued this was the fee governed by ARIZ. REV. STAT. section 33-1260, which was compliant with the $400 statutory cap.

Transfer Fee

In the context of the petitioner’s allegation, a fee charged for resale disclosure services, limited to $400 by statute. In the context of the Association’s defense, this was the erroneous label applied to the working capital fee.

Working Capital Fee

A fee authorized by section 8.13 of the Association’s CC&Rs, assessed to each new owner to be deposited into the working capital fund (or Reserve Fund). The Association successfully argued that the disputed $660 fee was this type of fee, not one for resale disclosure.






Blog Post – 17F-H1716004-REL-RHG


How a $660 Fee Sparked a Legal Showdown: 5 Surprising Lessons from a Homeowner vs. HOA Dispute

We sign, we initial, we pay—assuming every line item on our closing documents is gospel. When buying a home in a condominium association, the stack of paperwork and list of fees can feel overwhelming. But what if one of those “standard” fees wasn’t standard at all?

For homeowner Brian Sopatyk, a single $660 charge from The Lakeshore Village Condominium Association wasn’t just a number; it was a thread he pulled that unraveled a surprising story of HOA governance, legal strategy, and the power of asking “why?” This post breaks down the five most impactful takeaways from a seemingly minor dispute that went all the way through a formal hearing and re-hearing.

1. A Simple Label Can Ignite a Legal Firestorm

A clerical error triggers a full-blown legal dispute.

The entire case hinged on a single, crucial mistake: the HOA mislabeled a “working capital fee” as a “transfer fee” on its disclosure forms.

Why was this one word so important? Because Mr. Sopatyk’s formal petition alleged that by charging a “$660 transfer fee,” the HOA violated Arizona statute 33-1260, which caps fees for resale disclosure services at a maximum of $400. On its face, the $660 charge looked like a clear violation of state law.

The Association’s manager, Amy Telnes, testified that when she took over her position, she was given erroneous information that the working capital fee was the transfer fee. As a result, the charge had been incorrectly labeled ever since. This simple administrative error was enough to trigger a formal petition to the Arizona Department of Real Estate, a full administrative hearing, and eventually, a re-hearing, proving how a small clerical mistake can escalate into a significant legal conflict.

2. In the Eyes of the Law, Substance Can Trump Form

Why the fee’s purpose mattered more than its name.

The Association’s core defense was that while the name of the fee was wrong, its purpose and authority were legitimate. The $660 charge, they argued, wasn’t for resale documents (the service capped by state law), but was a “working capital fee” authorized by an entirely different rule: the Association’s own Covenants, Conditions, and Restrictions (CC&Rs).

Specifically, Section 8.13 of the CC&Rs allowed for this assessment, with the funds designated for the Association’s reserve fund. This working capital fee, in contrast, was an assessment on the new owner as mandated by the CC&Rs to ensure the association’s financial health. The actual fee for the statutory disclosure documents was a separate, compliant $30 “Resale Statement Fee,” which was paid by the seller.

The Administrative Law Judge ultimately agreed. The fee’s underlying purpose and the HOA’s authority to collect it (its substance) were deemed more important than its incorrect name on the form (its form). This is a crucial lesson for any homeowner challenging an HOA: it’s not enough to find a mistake on a form. You must be prepared to argue against the underlying authority and purpose of the action itself.

3. You Can Lose the Battle but Win the War

How a dismissed case led to a major policy victory.

Perhaps the most counter-intuitive outcome is that although Mr. Sopatyk’s petition was dismissed, his actions were the direct catalyst for a significant and positive policy change by the HOA.

In a summary of the Association’s May 18, 2016, Board Meeting, which was entered as evidence, the judge noted that the Board reviewed the very issue Mr. Sopatyk had raised. Under the pressure of his legal challenge, they came to a powerful conclusion about their own system, determining it was “confusing and unfair.”

As a direct result of this internal review prompted by the dispute, the Board voted to simplify its process. It resolved to assess a single, clear transfer fee of $400 on all future transactions, eliminating the other confusing fees. This proves that even an unsuccessful legal challenge can be a powerful tool, forcing an organization to confront and correct its own problematic practices for the benefit of all future members.

4. The ‘Burden of Proof’ Is More Than Just a Phrase

What it really means to have to prove your case.

In both the original decision and the re-hearing, the judge repeatedly stated that Mr. Sopatyk, as the petitioner, bore the “burden of proof.” This legal standard was critical to the outcome. It meant he had to prove his claim by a “preponderance of the evidence,” which the court documents defined 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 this case, it meant Mr. Sopatyk’s job was to prove that the $660 fee was, more likely than not, an illegal charge for resale documents. The HOA’s defense—that it was a legally separate “working capital fee” that was simply mislabeled—created enough doubt that he couldn’t clear this hurdle.

5. A Small Contradiction Can Damage Credibility

When every word you say (and write) is on the record.

A fascinating detail appeared in the re-hearing decision, highlighting how every word matters in a legal proceeding.

There was a discrepancy in Mr. Sopatyk’s statements. His sworn petition, filed on August 9, 2016, stated the $660 fee was “split between the seller and the buyer.” However, during the hearing, he testified that he had “in fact paid the entire $660.”

The judge noted this contradiction directly in footnote 3 of the re-hearing decision, stating: “either Mr. Sopatyk’s sworn statement or his testimony must be false.” While not the deciding factor, this kind of inconsistency can subtly erode a petitioner’s standing. Remember the “burden of proof” from Takeaway 4? It requires convincing a judge to “incline a fair and impartial mind” to your side. Contradictions, even small ones, make that inclination much harder to achieve.

Conclusion: The Devil Is in the Details

This case is the perfect microcosm of community association disputes. It began with a clerical error (form), was adjudicated on intent (substance), was lost on a technicality (the burden of proof), yet resulted in a victory for transparency. Mr. Sopatyk may not have won his case, but he won a better system for his neighbors.

The ultimate lesson? In an HOA, the most powerful tool isn’t always a lawsuit—sometimes, it’s a magnifying glass. It leaves us with a thought-provoking question: When is it worth challenging the system for clarity and fairness, even if the outcome isn’t a clear ‘win’ on paper?


Case Participants

Petitioner Side

  • Brian Sopatyk (petitioner)
    Represented himself at the initial hearing; sought rehearing
  • Nathan Andrews (petitioner attorney)
    ASU Alumni Law Group
  • Jill M. Kennedy (petitioner attorney)
    ASU Alumni Law Group
  • Judy Sopatyk (petitioner's wife)
    Co-purchaser of the condominium unit,
  • Chance Peterson (petitioner attorney)
    ASU Alumni Law Group

Respondent Side

  • Bradley R. Jardine (HOA attorney)
    Jardine Baker Hickman & Houston
  • Amy Telnes (property manager/witness)
    The Lakeshore Village Condo. Association, Inc.
    Association manager who testified,
  • Michael Cibellis (Association president/witness)
    The Lakeshore Village Condo. Association, Inc.
    Testified at the rehearing

Neutral Parties

  • Thomas Shedden (ALJ)
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
  • Abby Hansen (HOA Coordinator)
    Contact for requests for rehearing
  • Greg Hanchett (Interim Director)
    OAH
    Signed the Certification of Decision,

Other Participants

  • Rosella J. Rodriguez (administrative staff)
    Administrative staff for transmission/mailing,

Brian Sopatyk vs. The Lakeshore Village Condo. Association, Inc.

Case Summary

Case ID 17F-H1716004-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2017-08-10
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Brian Sopatyk Counsel Nathan Andrews
Respondent The Lakeshore Village Condo. Association, Inc. Counsel Bradley R. Jardine

Alleged Violations

ARIZ. REV. STAT. section 33-1260

Outcome Summary

The ALJ dismissed the petition because the Petitioner failed to prove that the Association violated A.R.S. § 33-1260. The ALJ found that the $660 charge was a working capital fee authorized by the CC&Rs and was not subject to the statutory fee cap for disclosure documents.

Why this result: Petitioner failed to meet the burden of proof; the fee in dispute was deemed a working capital fee authorized by CC&R section 8.13, not a resale disclosure fee capped by A.R.S. § 33-1260.

Key Issues & Findings

Alleged violation of statutory maximum transfer/disclosure fee

Petitioner alleged the Association violated A.R.S. § 33-1260 by charging a $660 transfer fee, exceeding the $400 statutory maximum for disclosure documents. The Association argued the $660 was a working capital fee authorized by CC&R section 8.13, which had been mislabeled.

Orders: The petition was dismissed. Petitioner's request for orders requiring compliance, refunds, and civil penalties was denied. The Association was deemed the prevailing party.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. section 33-1260
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 33-1242(A)(2)

Analytics Highlights

Topics: HOA fees, transfer fee, working capital fund, statutory limit, mislabeled fee, ARS 33-1260
Additional Citations:

  • ARIZ. REV. STAT. section 33-1260
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 33-1242

Audio Overview

Decision Documents

17F-H1716004-REL-RHG Decision – 571793.pdf

Uploaded 2025-10-08T06:56:43 (96.8 KB)

17F-H1716004-REL-RHG Decision – 580965.pdf

Uploaded 2025-10-08T06:56:43 (61.2 KB)

17F-H1716004-REL-RHG Decision – 593042.pdf

Uploaded 2025-10-08T06:56:44 (100.9 KB)

17F-H1716004-REL-RHG Decision – 593045.pdf

Uploaded 2025-10-08T06:56:44 (59.2 KB)





Briefing Doc – 17F-H1716004-REL-RHG


Briefing Document: Sopatyk v. The Lakeshore Village Condominium Association, Inc.

Executive Summary

This document synthesizes the legal proceedings and outcomes of the case Brian Sopatyk v. The Lakeshore Village Condominium Association, Inc. (Case No. 17F-H1716004-REL), adjudicated by the Arizona Office of Administrative Hearings. The core of the dispute was Petitioner Brian Sopatyk’s allegation that the Respondent Condominium Association violated Arizona Revised Statute (A.R.S.) § 33-1260 by charging a $660 “transfer fee” upon the sale of a condominium unit, which exceeded the statutory maximum of $400 for resale disclosure services.

The Association’s defense centered on the argument that the $660 charge was not a disclosure fee but a separate “working capital fee” authorized by its Covenants, Conditions, and Restrictions (CC&Rs). The Association contended that this fee had been erroneously mislabeled as a “transfer fee” due to a clerical error inherited by its current manager. The actual statutory fee for disclosure documents, the Association argued, was a separate $30 charge paid by the seller.

After an initial hearing in November 2016 and a subsequent re-hearing in June 2017, the Administrative Law Judge consistently found that Mr. Sopatyk failed to prove the alleged violation by a preponderance of the evidence. The court concluded that the evidence supported the Association’s claim of a mislabeled working capital fee. Consequently, Mr. Sopatyk’s petition was dismissed on both occasions, and the Association was deemed the prevailing party.

——————————————————————————–

Case Overview

Parties and Jurisdiction

Representation

Petitioner

Brian Sopatyk

On his own behalf (Initial Hearing); Nathan Andrews, Esq. & Jill Kennedy, Esq. (Re-Hearing)

Respondent

The Lakeshore Village Condominium Association, Inc.

Bradley R. Jardine, Esq. (Both Hearings)

Jurisdiction

Arizona Department of Real Estate (ADRE)

Authority under A.R.S. Title 32, Ch. 20, Art. 11.

Adjudicator

Administrative Law Judge (ALJ) Thomas Shedden

Office of Administrative Hearings, Phoenix, AZ

Core Allegation and Governing Statute

Allegation: Brian Sopatyk alleged that The Lakeshore Village Condominium Association violated A.R.S. § 33-1260 by charging fees exceeding the statutory maximum for resale disclosure services. Specifically, a $660 fee labeled as a “transfer fee” was charged when he purchased his unit.

Petitioner’s Request: Mr. Sopatyk sought an order for the Association to comply with the statute, issue refunds to all who paid fees in excess of the maximum, and for a civil penalty to be imposed.

Governing Statute: A.R.S. § 33-1260 stipulates that a condominium association “may charge the unit owner a fee of no more than an aggregate of four hundred dollars to compensate the association for the costs incurred in the preparation of a statement or other documents furnished… for purposes of resale disclosure, lien estoppel and any other services related to the transfer or use of the property.” The statute explicitly forbids charging any other fees for these services except as authorized.

——————————————————————————–

Chronology of Legal Proceedings

March 2, 2015

The Association issues a “Disclosure Form” for Mr. Sopatyk’s purchase, listing a $660 transfer fee and a $30 statement fee.

May 18, 2016

The Association’s Board of Directors meets to address Mr. Sopatyk’s claim. They conclude the $660 fee was a mislabeled working capital fee and direct corrective accounting.

August 9, 2016

Mr. Sopatyk files a petition with the Arizona Department of Real Estate.

November 14, 2016

The initial hearing is conducted before ALJ Thomas Shedden.

November 29, 2016

ALJ Shedden issues a decision dismissing Mr. Sopatyk’s petition.

December 13, 2016

The ADRE Commissioner, Judy Lowe, adopts the ALJ’s decision, issuing a Final Order dismissing the case.

February 7, 2017

A Notice of Re-Hearing is issued after Mr. Sopatyk requests one.

June 9, 2017

A re-hearing is conducted before ALJ Thomas Shedden.

June 26, 2017

ALJ Shedden issues a new decision, again dismissing Mr. Sopatyk’s petition.

August 1, 2017

The deadline passes for the ADRE to accept, reject, or modify the ALJ’s re-hearing decision. No action is taken.

August 10, 2017

The Office of Administrative Hearings certifies the ALJ’s decision from the re-hearing as the final administrative decision in the matter.

——————————————————————————–

Analysis of Arguments and Evidence

Petitioner’s Position (Brian Sopatyk)

Primary Argument: The Association’s own documents, specifically the Disclosure Form and the HUD-1 settlement statement, explicitly labeled the $660 charge as a “Transfer Fee.” This amount is a prima facie violation of the $400 statutory cap in A.R.S. § 33-1260.

Evidence Presented:

March 2, 2015 Disclosure Form: Showed a required payment of a $660 “transfer fee” and a $30 “statement fee.”

HUD-1 Settlement Statement: Documented that the $660 Transfer Fee was paid to the Association, with $330 paid from the Borrower’s (Sopatyk’s) funds and $330 from the Seller’s funds. It also showed the Seller paid a separate $30 Resale Statement Fee.

Contradictory Testimony: In his sworn petition, Mr. Sopatyk stated the $660 fee was “split between the seller and the buyer.” However, during the re-hearing, he testified that he had “in fact paid the entire $660 as part of the negotiated price of the unit.” The ALJ noted this discrepancy, stating “either Mr. Sopatyk’s sworn statement or his testimony must be false.”

Respondent’s Position (The Lakeshore Village Condo. Association)

Primary Argument: The $660 fee was not for resale disclosure services but was a working capital fee authorized by the Association’s CC&Rs. The “transfer fee” label was a historical clerical error that the Board had since identified and corrected.

Evidence and Testimony:

CC&R Section 8.13 (“Transfer Fee and Working Capital Fund”): This provision authorizes the Association to assess each new owner a fee of “at least twice the average monthly assessment” to be deposited into the working capital fund (referred to as the Reserve Fund). The monthly assessment was $328.83, making the $660 fee consistent with this rule.

Testimony of Amy Telnes (Association Manager): Ms. Telnes testified that when she became manager, she was incorrectly informed that the working capital fee was the transfer fee. She affirmed that the $660 fee was deposited into the Association’s reserve fund and that the separate $30 fee was the one charged pursuant to A.R.S. § 33-1260.

May 18, 2016 Board Meeting Minutes: These minutes, entered into evidence, documented the Board’s conclusion that it was collecting a working capital contribution but “erroneously calling it a transfer fee.” The Board directed Ms. Telnes to perform an accounting and transfer all such fees collected after October 1, 2013, to the Reserve Account. The minutes also show the Board voted to change its fee structure moving forward to a single $400 fee to avoid future confusion.

——————————————————————————–

Judicial Findings and Final Disposition

Standard and Burden of Proof

Across both hearings, the ALJ established that 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.” The burden of proof rested entirely on the petitioner, Mr. Sopatyk, to demonstrate that a violation had occurred.

Initial Hearing Decision (November 29, 2016)

Findings of Fact: The ALJ found that the Association was charging a $660 working capital fee in accordance with its CC&Rs but had been mislabeling it. It was also charging a separate $30 document preparation fee.

Conclusion of Law: Mr. Sopatyk did not show by a preponderance of the evidence that the Association violated A.R.S. § 33-1260.

Order: The petition was dismissed, and the decision was adopted as final by the ADRE Commissioner on December 13, 2016.

Re-Hearing Decision (June 26, 2017)

Findings of Fact: The re-hearing produced more detailed findings but led to the same conclusion. The ALJ found that the Association had authority under its CC&Rs to collect the $660 working capital fee and that the statutory disclosure statute did not apply to this charge. The fee applicable to the statute was the $30 charge paid by the seller.

Conclusion of Law: The ALJ reiterated that Mr. Sopatyk failed to meet his burden of proof. The Association’s argument that the claim should fail because Sopatyk did not personally pay over $400 was deemed “not persuasive,” as the statute applies to all violations regardless of particularized harm.

Order: The petition was again ordered to be dismissed.

Final Administrative Disposition

The ADRE took no action to modify or reject the ALJ’s re-hearing decision by the statutory deadline of August 1, 2017. As a result, the Office of Administrative Hearings certified the June 26, 2017 decision as the final administrative decision on August 10, 2017, concluding the matter in favor of the Respondent Association.


Brian Sopatyk vs. The Lakeshore Village Condo. Association, Inc.

Case Summary

Case ID 17F-H1716004-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2017-08-10
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Brian Sopatyk Counsel Nathan Andrews
Respondent The Lakeshore Village Condo. Association, Inc. Counsel Bradley R. Jardine

Alleged Violations

ARIZ. REV. STAT. section 33-1260

Outcome Summary

The ALJ dismissed the petition because the Petitioner failed to prove that the Association violated A.R.S. § 33-1260. The ALJ found that the $660 charge was a working capital fee authorized by the CC&Rs and was not subject to the statutory fee cap for disclosure documents.

Why this result: Petitioner failed to meet the burden of proof; the fee in dispute was deemed a working capital fee authorized by CC&R section 8.13, not a resale disclosure fee capped by A.R.S. § 33-1260.

Key Issues & Findings

Alleged violation of statutory maximum transfer/disclosure fee

Petitioner alleged the Association violated A.R.S. § 33-1260 by charging a $660 transfer fee, exceeding the $400 statutory maximum for disclosure documents. The Association argued the $660 was a working capital fee authorized by CC&R section 8.13, which had been mislabeled.

Orders: The petition was dismissed. Petitioner's request for orders requiring compliance, refunds, and civil penalties was denied. The Association was deemed the prevailing party.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. section 33-1260
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 33-1242(A)(2)

Analytics Highlights

Topics: HOA fees, transfer fee, working capital fund, statutory limit, mislabeled fee, ARS 33-1260
Additional Citations:

  • ARIZ. REV. STAT. section 33-1260
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 33-1242

Audio Overview

Decision Documents

17F-H1716004-REL-RHG Decision – 571793.pdf

Uploaded 2025-10-08T07:00:50 (96.8 KB)

17F-H1716004-REL-RHG Decision – 580965.pdf

Uploaded 2025-10-08T07:00:51 (61.2 KB)

17F-H1716004-REL-RHG Decision – 593042.pdf

Uploaded 2025-10-08T07:00:51 (100.9 KB)

17F-H1716004-REL-RHG Decision – 593045.pdf

Uploaded 2025-10-08T07:00:52 (59.2 KB)





Briefing Doc – 17F-H1716004-REL-RHG


Briefing Document: Sopatyk v. The Lakeshore Village Condominium Association, Inc.

Executive Summary

This document synthesizes the legal proceedings and outcomes of the case Brian Sopatyk v. The Lakeshore Village Condominium Association, Inc. (Case No. 17F-H1716004-REL), adjudicated by the Arizona Office of Administrative Hearings. The core of the dispute was Petitioner Brian Sopatyk’s allegation that the Respondent Condominium Association violated Arizona Revised Statute (A.R.S.) § 33-1260 by charging a $660 “transfer fee” upon the sale of a condominium unit, which exceeded the statutory maximum of $400 for resale disclosure services.

The Association’s defense centered on the argument that the $660 charge was not a disclosure fee but a separate “working capital fee” authorized by its Covenants, Conditions, and Restrictions (CC&Rs). The Association contended that this fee had been erroneously mislabeled as a “transfer fee” due to a clerical error inherited by its current manager. The actual statutory fee for disclosure documents, the Association argued, was a separate $30 charge paid by the seller.

After an initial hearing in November 2016 and a subsequent re-hearing in June 2017, the Administrative Law Judge consistently found that Mr. Sopatyk failed to prove the alleged violation by a preponderance of the evidence. The court concluded that the evidence supported the Association’s claim of a mislabeled working capital fee. Consequently, Mr. Sopatyk’s petition was dismissed on both occasions, and the Association was deemed the prevailing party.

——————————————————————————–

Case Overview

Parties and Jurisdiction

Representation

Petitioner

Brian Sopatyk

On his own behalf (Initial Hearing); Nathan Andrews, Esq. & Jill Kennedy, Esq. (Re-Hearing)

Respondent

The Lakeshore Village Condominium Association, Inc.

Bradley R. Jardine, Esq. (Both Hearings)

Jurisdiction

Arizona Department of Real Estate (ADRE)

Authority under A.R.S. Title 32, Ch. 20, Art. 11.

Adjudicator

Administrative Law Judge (ALJ) Thomas Shedden

Office of Administrative Hearings, Phoenix, AZ

Core Allegation and Governing Statute

Allegation: Brian Sopatyk alleged that The Lakeshore Village Condominium Association violated A.R.S. § 33-1260 by charging fees exceeding the statutory maximum for resale disclosure services. Specifically, a $660 fee labeled as a “transfer fee” was charged when he purchased his unit.

Petitioner’s Request: Mr. Sopatyk sought an order for the Association to comply with the statute, issue refunds to all who paid fees in excess of the maximum, and for a civil penalty to be imposed.

Governing Statute: A.R.S. § 33-1260 stipulates that a condominium association “may charge the unit owner a fee of no more than an aggregate of four hundred dollars to compensate the association for the costs incurred in the preparation of a statement or other documents furnished… for purposes of resale disclosure, lien estoppel and any other services related to the transfer or use of the property.” The statute explicitly forbids charging any other fees for these services except as authorized.

——————————————————————————–

Chronology of Legal Proceedings

March 2, 2015

The Association issues a “Disclosure Form” for Mr. Sopatyk’s purchase, listing a $660 transfer fee and a $30 statement fee.

May 18, 2016

The Association’s Board of Directors meets to address Mr. Sopatyk’s claim. They conclude the $660 fee was a mislabeled working capital fee and direct corrective accounting.

August 9, 2016

Mr. Sopatyk files a petition with the Arizona Department of Real Estate.

November 14, 2016

The initial hearing is conducted before ALJ Thomas Shedden.

November 29, 2016

ALJ Shedden issues a decision dismissing Mr. Sopatyk’s petition.

December 13, 2016

The ADRE Commissioner, Judy Lowe, adopts the ALJ’s decision, issuing a Final Order dismissing the case.

February 7, 2017

A Notice of Re-Hearing is issued after Mr. Sopatyk requests one.

June 9, 2017

A re-hearing is conducted before ALJ Thomas Shedden.

June 26, 2017

ALJ Shedden issues a new decision, again dismissing Mr. Sopatyk’s petition.

August 1, 2017

The deadline passes for the ADRE to accept, reject, or modify the ALJ’s re-hearing decision. No action is taken.

August 10, 2017

The Office of Administrative Hearings certifies the ALJ’s decision from the re-hearing as the final administrative decision in the matter.

——————————————————————————–

Analysis of Arguments and Evidence

Petitioner’s Position (Brian Sopatyk)

Primary Argument: The Association’s own documents, specifically the Disclosure Form and the HUD-1 settlement statement, explicitly labeled the $660 charge as a “Transfer Fee.” This amount is a prima facie violation of the $400 statutory cap in A.R.S. § 33-1260.

Evidence Presented:

March 2, 2015 Disclosure Form: Showed a required payment of a $660 “transfer fee” and a $30 “statement fee.”

HUD-1 Settlement Statement: Documented that the $660 Transfer Fee was paid to the Association, with $330 paid from the Borrower’s (Sopatyk’s) funds and $330 from the Seller’s funds. It also showed the Seller paid a separate $30 Resale Statement Fee.

Contradictory Testimony: In his sworn petition, Mr. Sopatyk stated the $660 fee was “split between the seller and the buyer.” However, during the re-hearing, he testified that he had “in fact paid the entire $660 as part of the negotiated price of the unit.” The ALJ noted this discrepancy, stating “either Mr. Sopatyk’s sworn statement or his testimony must be false.”

Respondent’s Position (The Lakeshore Village Condo. Association)

Primary Argument: The $660 fee was not for resale disclosure services but was a working capital fee authorized by the Association’s CC&Rs. The “transfer fee” label was a historical clerical error that the Board had since identified and corrected.

Evidence and Testimony:

CC&R Section 8.13 (“Transfer Fee and Working Capital Fund”): This provision authorizes the Association to assess each new owner a fee of “at least twice the average monthly assessment” to be deposited into the working capital fund (referred to as the Reserve Fund). The monthly assessment was $328.83, making the $660 fee consistent with this rule.

Testimony of Amy Telnes (Association Manager): Ms. Telnes testified that when she became manager, she was incorrectly informed that the working capital fee was the transfer fee. She affirmed that the $660 fee was deposited into the Association’s reserve fund and that the separate $30 fee was the one charged pursuant to A.R.S. § 33-1260.

May 18, 2016 Board Meeting Minutes: These minutes, entered into evidence, documented the Board’s conclusion that it was collecting a working capital contribution but “erroneously calling it a transfer fee.” The Board directed Ms. Telnes to perform an accounting and transfer all such fees collected after October 1, 2013, to the Reserve Account. The minutes also show the Board voted to change its fee structure moving forward to a single $400 fee to avoid future confusion.

——————————————————————————–

Judicial Findings and Final Disposition

Standard and Burden of Proof

Across both hearings, the ALJ established that 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.” The burden of proof rested entirely on the petitioner, Mr. Sopatyk, to demonstrate that a violation had occurred.

Initial Hearing Decision (November 29, 2016)

Findings of Fact: The ALJ found that the Association was charging a $660 working capital fee in accordance with its CC&Rs but had been mislabeling it. It was also charging a separate $30 document preparation fee.

Conclusion of Law: Mr. Sopatyk did not show by a preponderance of the evidence that the Association violated A.R.S. § 33-1260.

Order: The petition was dismissed, and the decision was adopted as final by the ADRE Commissioner on December 13, 2016.

Re-Hearing Decision (June 26, 2017)

Findings of Fact: The re-hearing produced more detailed findings but led to the same conclusion. The ALJ found that the Association had authority under its CC&Rs to collect the $660 working capital fee and that the statutory disclosure statute did not apply to this charge. The fee applicable to the statute was the $30 charge paid by the seller.

Conclusion of Law: The ALJ reiterated that Mr. Sopatyk failed to meet his burden of proof. The Association’s argument that the claim should fail because Sopatyk did not personally pay over $400 was deemed “not persuasive,” as the statute applies to all violations regardless of particularized harm.

Order: The petition was again ordered to be dismissed.

Final Administrative Disposition

The ADRE took no action to modify or reject the ALJ’s re-hearing decision by the statutory deadline of August 1, 2017. As a result, the Office of Administrative Hearings certified the June 26, 2017 decision as the final administrative decision on August 10, 2017, concluding the matter in favor of the Respondent Association.


Brian Sopatk vs. The Lakeshore Village Condo. Assoc., Inc.

Case Summary

Case ID 17F-H1716004-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2017-08-10
Administrative Law Judge Thomas Shedden
Outcome none
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Brian Sopatyk Counsel Nathan Andrews, Esq. and Jill Kennedy, Esq.
Respondent The Lakeshore Village Condo. Association, Inc. Counsel Bradley R. Jardine, Esq.

Alleged Violations

ARIZ. REV. STAT. section 33-1260

Outcome Summary

The Administrative Law Judge dismissed the petition because the Petitioner failed to prove the HOA violated A.R.S. § 33-1260. The contested $660 fee was determined to be a working capital contribution authorized by the Association's CC&Rs (section 8.13), which is distinct from the resale disclosure fees limited by statute.

Why this result: The Petitioner did not meet the burden of proof to show a statutory violation because the fee in question was a valid working capital fee collected under the CC&Rs, not an illegal transfer fee under A.R.S. § 33-1260.

Key Issues & Findings

Alleged violation of statutory maximum fee for resale disclosure/transfer documents.

Petitioner alleged the Association charged a $660 transfer fee, plus a $30 statement fee, violating A.R.S. § 33-1260, which limits aggregate fees for resale disclosure and transfer services to $400. The ALJ found the $660 fee was a working capital fee authorized by CC&R section 8.13, not a statutory disclosure fee, despite being mislabeled by the Association.

Orders: Petitioner Brian D. Sopatyk's petition is dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • ARIZ. REV. STAT. section 33-1260
  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 33-1242(A)(2)
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119

Analytics Highlights

Topics: HOA fees, transfer fee, working capital fund, statutory compliance, burden of proof, condominium association, resale disclosure
Additional Citations:

  • ARIZ. REV. STAT. section 33-1260
  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 33-1242(A)(2)
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • A.R.S. § 41-1092.08
  • A.R.S. § 41-1092.09
  • A.R.S. § 1-243

Video Overview

Audio Overview

Decision Documents

17f-H1716004-REL Decision – 531040.pdf

Uploaded 2025-10-09T03:31:50 (67.9 KB)

17f-H1716004-REL Decision – 540004.pdf

Uploaded 2025-10-09T03:31:51 (154.0 KB)





Briefing Doc – 17f-H1716004-REL


Briefing Document: Sopatyk v. The Lakeshore Village Condominium Association, Inc.

Executive Summary

This document synthesizes the legal proceedings and outcomes of the case Brian Sopatyk v. The Lakeshore Village Condominium Association, Inc. (Case No. 17F-H1716004-REL), adjudicated by the Arizona Office of Administrative Hearings. The core of the dispute was Petitioner Brian Sopatyk’s allegation that the Respondent Condominium Association violated Arizona Revised Statute (A.R.S.) § 33-1260 by charging a $660 “transfer fee” upon the sale of a condominium unit, which exceeded the statutory maximum of $400 for resale disclosure services.

The Association’s defense centered on the argument that the $660 charge was not a disclosure fee but a separate “working capital fee” authorized by its Covenants, Conditions, and Restrictions (CC&Rs). The Association contended that this fee had been erroneously mislabeled as a “transfer fee” due to a clerical error inherited by its current manager. The actual statutory fee for disclosure documents, the Association argued, was a separate $30 charge paid by the seller.

After an initial hearing in November 2016 and a subsequent re-hearing in June 2017, the Administrative Law Judge consistently found that Mr. Sopatyk failed to prove the alleged violation by a preponderance of the evidence. The court concluded that the evidence supported the Association’s claim of a mislabeled working capital fee. Consequently, Mr. Sopatyk’s petition was dismissed on both occasions, and the Association was deemed the prevailing party.

——————————————————————————–

Case Overview

Parties and Jurisdiction

Representation

Petitioner

Brian Sopatyk

On his own behalf (Initial Hearing); Nathan Andrews, Esq. & Jill Kennedy, Esq. (Re-Hearing)

Respondent

The Lakeshore Village Condominium Association, Inc.

Bradley R. Jardine, Esq. (Both Hearings)

Jurisdiction

Arizona Department of Real Estate (ADRE)

Authority under A.R.S. Title 32, Ch. 20, Art. 11.

Adjudicator

Administrative Law Judge (ALJ) Thomas Shedden

Office of Administrative Hearings, Phoenix, AZ

Core Allegation and Governing Statute

Allegation: Brian Sopatyk alleged that The Lakeshore Village Condominium Association violated A.R.S. § 33-1260 by charging fees exceeding the statutory maximum for resale disclosure services. Specifically, a $660 fee labeled as a “transfer fee” was charged when he purchased his unit.

Petitioner’s Request: Mr. Sopatyk sought an order for the Association to comply with the statute, issue refunds to all who paid fees in excess of the maximum, and for a civil penalty to be imposed.

Governing Statute: A.R.S. § 33-1260 stipulates that a condominium association “may charge the unit owner a fee of no more than an aggregate of four hundred dollars to compensate the association for the costs incurred in the preparation of a statement or other documents furnished… for purposes of resale disclosure, lien estoppel and any other services related to the transfer or use of the property.” The statute explicitly forbids charging any other fees for these services except as authorized.

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Chronology of Legal Proceedings

March 2, 2015

The Association issues a “Disclosure Form” for Mr. Sopatyk’s purchase, listing a $660 transfer fee and a $30 statement fee.

May 18, 2016

The Association’s Board of Directors meets to address Mr. Sopatyk’s claim. They conclude the $660 fee was a mislabeled working capital fee and direct corrective accounting.

August 9, 2016

Mr. Sopatyk files a petition with the Arizona Department of Real Estate.

November 14, 2016

The initial hearing is conducted before ALJ Thomas Shedden.

November 29, 2016

ALJ Shedden issues a decision dismissing Mr. Sopatyk’s petition.

December 13, 2016

The ADRE Commissioner, Judy Lowe, adopts the ALJ’s decision, issuing a Final Order dismissing the case.

February 7, 2017

A Notice of Re-Hearing is issued after Mr. Sopatyk requests one.

June 9, 2017

A re-hearing is conducted before ALJ Thomas Shedden.

June 26, 2017

ALJ Shedden issues a new decision, again dismissing Mr. Sopatyk’s petition.

August 1, 2017

The deadline passes for the ADRE to accept, reject, or modify the ALJ’s re-hearing decision. No action is taken.

August 10, 2017

The Office of Administrative Hearings certifies the ALJ’s decision from the re-hearing as the final administrative decision in the matter.

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Analysis of Arguments and Evidence

Petitioner’s Position (Brian Sopatyk)

Primary Argument: The Association’s own documents, specifically the Disclosure Form and the HUD-1 settlement statement, explicitly labeled the $660 charge as a “Transfer Fee.” This amount is a prima facie violation of the $400 statutory cap in A.R.S. § 33-1260.

Evidence Presented:

March 2, 2015 Disclosure Form: Showed a required payment of a $660 “transfer fee” and a $30 “statement fee.”

HUD-1 Settlement Statement: Documented that the $660 Transfer Fee was paid to the Association, with $330 paid from the Borrower’s (Sopatyk’s) funds and $330 from the Seller’s funds. It also showed the Seller paid a separate $30 Resale Statement Fee.

Contradictory Testimony: In his sworn petition, Mr. Sopatyk stated the $660 fee was “split between the seller and the buyer.” However, during the re-hearing, he testified that he had “in fact paid the entire $660 as part of the negotiated price of the unit.” The ALJ noted this discrepancy, stating “either Mr. Sopatyk’s sworn statement or his testimony must be false.”

Respondent’s Position (The Lakeshore Village Condo. Association)

Primary Argument: The $660 fee was not for resale disclosure services but was a working capital fee authorized by the Association’s CC&Rs. The “transfer fee” label was a historical clerical error that the Board had since identified and corrected.

Evidence and Testimony:

CC&R Section 8.13 (“Transfer Fee and Working Capital Fund”): This provision authorizes the Association to assess each new owner a fee of “at least twice the average monthly assessment” to be deposited into the working capital fund (referred to as the Reserve Fund). The monthly assessment was $328.83, making the $660 fee consistent with this rule.

Testimony of Amy Telnes (Association Manager): Ms. Telnes testified that when she became manager, she was incorrectly informed that the working capital fee was the transfer fee. She affirmed that the $660 fee was deposited into the Association’s reserve fund and that the separate $30 fee was the one charged pursuant to A.R.S. § 33-1260.

May 18, 2016 Board Meeting Minutes: These minutes, entered into evidence, documented the Board’s conclusion that it was collecting a working capital contribution but “erroneously calling it a transfer fee.” The Board directed Ms. Telnes to perform an accounting and transfer all such fees collected after October 1, 2013, to the Reserve Account. The minutes also show the Board voted to change its fee structure moving forward to a single $400 fee to avoid future confusion.

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Judicial Findings and Final Disposition

Standard and Burden of Proof

Across both hearings, the ALJ established that 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.” The burden of proof rested entirely on the petitioner, Mr. Sopatyk, to demonstrate that a violation had occurred.

Initial Hearing Decision (November 29, 2016)

Findings of Fact: The ALJ found that the Association was charging a $660 working capital fee in accordance with its CC&Rs but had been mislabeling it. It was also charging a separate $30 document preparation fee.

Conclusion of Law: Mr. Sopatyk did not show by a preponderance of the evidence that the Association violated A.R.S. § 33-1260.

Order: The petition was dismissed, and the decision was adopted as final by the ADRE Commissioner on December 13, 2016.

Re-Hearing Decision (June 26, 2017)

Findings of Fact: The re-hearing produced more detailed findings but led to the same conclusion. The ALJ found that the Association had authority under its CC&Rs to collect the $660 working capital fee and that the statutory disclosure statute did not apply to this charge. The fee applicable to the statute was the $30 charge paid by the seller.

Conclusion of Law: The ALJ reiterated that Mr. Sopatyk failed to meet his burden of proof. The Association’s argument that the claim should fail because Sopatyk did not personally pay over $400 was deemed “not persuasive,” as the statute applies to all violations regardless of particularized harm.

Order: The petition was again ordered to be dismissed.

Final Administrative Disposition

The ADRE took no action to modify or reject the ALJ’s re-hearing decision by the statutory deadline of August 1, 2017. As a result, the Office of Administrative Hearings certified the June 26, 2017 decision as the final administrative decision on August 10, 2017, concluding the matter in favor of the Respondent Association.






Study Guide – 17f-H1716004-REL


Study Guide: Sopatyk v. The Lakeshore Village Condo. Association, Inc.

Quiz: Short-Answer Questions

Instructions: Answer the following ten questions based on the provided case documents. Each answer should be two to three sentences in length.

1. What specific Arizona Revised Statute did petitioner Brian Sopatyk allege that The Lakeshore Village Condominium Association violated, and what is the core requirement of that statute?

2. Identify the two fees charged in connection with Mr. Sopatyk’s unit purchase, the amount of each fee, and how they were documented on the HUD-1 disclosure statement.

3. What was the Association’s central argument for why the $660 fee did not violate the statute in question?

4. Who was the Association’s manager, and what explanation did she provide for the labeling of the $660 fee?

5. According to the Association’s Declaration of Covenants, Conditions and Restrictions (CC&Rs), what is the purpose of the fee outlined in section 8.13?

6. What was the outcome of the initial administrative hearing held on November 14, 2016?

7. During the rehearing, a discrepancy was noted between Mr. Sopatyk’s sworn petition and his testimony regarding the payment of the $660 fee. What was this discrepancy?

8. What corrective actions did the Association’s Board vote to take during its meeting on May 18, 2016, after Mr. Sopatyk raised the issue?

9. What is the standard of proof the petitioner was required to meet in this case, and did the Administrative Law Judge find that he met it?

10. What was the final, certified administrative decision in this matter after the rehearing on June 9, 2017?

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Answer Key

1. Brian Sopatyk alleged a violation of ARIZ. REV. STAT. section 33-1260. This statute requires a condominium association to provide specific disclosure documents to a prospective purchaser and limits the aggregate fee for preparing these documents and other related services to no more than four hundred dollars.

2. The two fees were a $660 “Transfer Fee” and a $30 “Resale Statement Fee.” The HUD-1 disclosure statement shows the $660 fee was split, with $330 paid by the borrower (Sopatyk) and $330 paid by the seller, while the seller alone paid the $30 fee.

3. The Association’s central argument was that the $660 fee was not a transfer fee for disclosure services but was actually a “working capital fee” collected pursuant to section 8.13 of its CC&Rs. They contended that the fee had been incorrectly labeled as a “transfer fee” due to a clerical error.

4. The Association’s manager was Amy Telnes. She testified that when she became manager, she was incorrectly told the working capital fee was the transfer fee, and these fees had been mislabeled since that time.

5. According to CC&R section 8.13 (“Transfer Fee and Working Capital Fund”), each new unit owner is to be assessed a fee of at least twice the average monthly assessment. These fees are to be deposited into the working capital fund, which the Association refers to as its Reserve Fund.

6. Following the initial hearing, Administrative Law Judge Thomas Shedden found that Mr. Sopatyk had not shown by a preponderance of the evidence that the Association violated the statute. The Judge’s decision was to dismiss Mr. Sopatyk’s petition, and this decision was adopted by the Commissioner of the Department of Real Estate.

7. In his sworn petition, Mr. Sopatyk stated that the $660 fee was split between him and the seller. However, at the hearing, he testified that he had in fact paid the entire $660 as part of the negotiated price of the unit, meaning one of his statements had to be false.

8. The Board directed Ms. Telnes to account for all working capital fees and transfer them to the Reserve Account to correct the error. The Board also determined its system was confusing and voted to assess a single transfer fee of $400 (and no other fees) on all future transactions.

9. The petitioner, Mr. Sopatyk, bore the burden of proof and was required to meet the standard of a “preponderance of the evidence.” The Administrative Law Judge concluded in both hearings that Mr. Sopatyk did not meet this burden.

10. The final decision was that Mr. Sopatyk’s petition was dismissed again. On August 10, 2017, the Administrative Law Judge’s decision from the rehearing was certified as the final administrative decision of the Department of Real Estate because the Department took no action to reject or modify it.

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Suggested Essay Questions

1. Analyze the legal concept of “preponderance of the evidence” as it is defined and applied in this case. Explain in detail why the evidence presented by the Association was deemed to have greater convincing force than the evidence presented by the Petitioner, leading to the dismissal of his petition.

2. Discuss the critical role of the Association’s governing documents, specifically CC&R section 8.13, in its successful defense. How did the language of this section allow the Association to re-characterize the disputed $660 fee and differentiate it from the fees regulated by ARIZ. REV. STAT. § 33-1260?

3. Trace the procedural history of case No. 17F-H1716004-REL, from the filing of the petition to the final certified order. Identify the key dates, participants (judges, legal counsel, witnesses), and the function of the Office of Administrative Hearings and the Department of Real Estate in the process.

4. Examine the actions taken by the Association’s Board during its May 18, 2016, meeting. Evaluate whether these actions demonstrated good-faith governance and a proactive attempt to correct a procedural error, and discuss how the minutes from this meeting were used as evidence in the hearing.

5. Despite losing the case, Mr. Sopatyk’s petition prompted significant changes in the Association’s fee structure. Argue whether the petitioner’s actions ultimately served the public interest for future condominium purchasers in the Lakeshore Village community, even though he did not prevail in his specific legal claim.

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official, in this case Thomas Shedden, who presides over hearings at the Office of Administrative Hearings and issues a decision based on the evidence presented.

ARIZ. REV. STAT. § 33-1260

The Arizona statute that requires a condominium association to furnish a prospective purchaser with disclosure documents and other information. It explicitly limits the fee an association can charge for these services to “no more than an aggregate of four hundred dollars.”

Burden of Proof

The responsibility of a party in a legal case to prove their claims. In this matter, the burden of proof was on the petitioner, Brian Sopatyk.

The Declaration of Covenants, Conditions and Restrictions, which are the governing documents for the condominium association. Section 8.13 of the Lakeshore Village CC&Rs authorizes the collection of a fee for a working capital fund.

Petitioner

The party who initiates a legal action by filing a petition. In this case, Brian Sopatyk.

Preponderance of the Evidence

The standard of proof required in this case, defined as “The greater weight of the evidence… 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.”

Respondent

The party defending against a petition. In this case, The Lakeshore Village Condominium Association, Inc.

Reserve Fund

The account into which the Association deposits its working capital fees. It is also referred to as the Working Capital Fund.

Statement Fee / Resale Statement Fee

A $30 fee, separate from the disputed $660, that was paid by the seller to the Association for the preparation of the resale statement. This fee was considered part of the allowable charges under ARIZ. REV. STAT. § 33-1260.

Transfer Fee

The label erroneously applied to the $660 fee on the disclosure statement and HUD-1 form. The central dispute of the case was whether this was a true transfer fee subject to the statutory cap or a mislabeled working capital fee.

Working Capital Fee

A fee authorized by CC&R section 8.13 to be assessed from each new unit owner for the purpose of funding the Association’s working capital fund (Reserve Fund). The Association successfully argued the $660 charge was this type of fee.






Blog Post – 17f-H1716004-REL


How a $660 Fee Sparked a Legal Showdown: 5 Surprising Lessons from a Homeowner vs. HOA Dispute

We sign, we initial, we pay—assuming every line item on our closing documents is gospel. When buying a home in a condominium association, the stack of paperwork and list of fees can feel overwhelming. But what if one of those “standard” fees wasn’t standard at all?

For homeowner Brian Sopatyk, a single $660 charge from The Lakeshore Village Condominium Association wasn’t just a number; it was a thread he pulled that unraveled a surprising story of HOA governance, legal strategy, and the power of asking “why?” This post breaks down the five most impactful takeaways from a seemingly minor dispute that went all the way through a formal hearing and re-hearing.

1. A Simple Label Can Ignite a Legal Firestorm

A clerical error triggers a full-blown legal dispute.

The entire case hinged on a single, crucial mistake: the HOA mislabeled a “working capital fee” as a “transfer fee” on its disclosure forms.

Why was this one word so important? Because Mr. Sopatyk’s formal petition alleged that by charging a “$660 transfer fee,” the HOA violated Arizona statute 33-1260, which caps fees for resale disclosure services at a maximum of $400. On its face, the $660 charge looked like a clear violation of state law.

The Association’s manager, Amy Telnes, testified that when she took over her position, she was given erroneous information that the working capital fee was the transfer fee. As a result, the charge had been incorrectly labeled ever since. This simple administrative error was enough to trigger a formal petition to the Arizona Department of Real Estate, a full administrative hearing, and eventually, a re-hearing, proving how a small clerical mistake can escalate into a significant legal conflict.

2. In the Eyes of the Law, Substance Can Trump Form

Why the fee’s purpose mattered more than its name.

The Association’s core defense was that while the name of the fee was wrong, its purpose and authority were legitimate. The $660 charge, they argued, wasn’t for resale documents (the service capped by state law), but was a “working capital fee” authorized by an entirely different rule: the Association’s own Covenants, Conditions, and Restrictions (CC&Rs).

Specifically, Section 8.13 of the CC&Rs allowed for this assessment, with the funds designated for the Association’s reserve fund. This working capital fee, in contrast, was an assessment on the new owner as mandated by the CC&Rs to ensure the association’s financial health. The actual fee for the statutory disclosure documents was a separate, compliant $30 “Resale Statement Fee,” which was paid by the seller.

The Administrative Law Judge ultimately agreed. The fee’s underlying purpose and the HOA’s authority to collect it (its substance) were deemed more important than its incorrect name on the form (its form). This is a crucial lesson for any homeowner challenging an HOA: it’s not enough to find a mistake on a form. You must be prepared to argue against the underlying authority and purpose of the action itself.

3. You Can Lose the Battle but Win the War

How a dismissed case led to a major policy victory.

Perhaps the most counter-intuitive outcome is that although Mr. Sopatyk’s petition was dismissed, his actions were the direct catalyst for a significant and positive policy change by the HOA.

In a summary of the Association’s May 18, 2016, Board Meeting, which was entered as evidence, the judge noted that the Board reviewed the very issue Mr. Sopatyk had raised. Under the pressure of his legal challenge, they came to a powerful conclusion about their own system, determining it was “confusing and unfair.”

As a direct result of this internal review prompted by the dispute, the Board voted to simplify its process. It resolved to assess a single, clear transfer fee of $400 on all future transactions, eliminating the other confusing fees. This proves that even an unsuccessful legal challenge can be a powerful tool, forcing an organization to confront and correct its own problematic practices for the benefit of all future members.

4. The ‘Burden of Proof’ Is More Than Just a Phrase

What it really means to have to prove your case.

In both the original decision and the re-hearing, the judge repeatedly stated that Mr. Sopatyk, as the petitioner, bore the “burden of proof.” This legal standard was critical to the outcome. It meant he had to prove his claim by a “preponderance of the evidence,” which the court documents defined 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 this case, it meant Mr. Sopatyk’s job was to prove that the $660 fee was, more likely than not, an illegal charge for resale documents. The HOA’s defense—that it was a legally separate “working capital fee” that was simply mislabeled—created enough doubt that he couldn’t clear this hurdle.

5. A Small Contradiction Can Damage Credibility

When every word you say (and write) is on the record.

A fascinating detail appeared in the re-hearing decision, highlighting how every word matters in a legal proceeding.

There was a discrepancy in Mr. Sopatyk’s statements. His sworn petition, filed on August 9, 2016, stated the $660 fee was “split between the seller and the buyer.” However, during the hearing, he testified that he had “in fact paid the entire $660.”

The judge noted this contradiction directly in footnote 3 of the re-hearing decision, stating: “either Mr. Sopatyk’s sworn statement or his testimony must be false.” While not the deciding factor, this kind of inconsistency can subtly erode a petitioner’s standing. Remember the “burden of proof” from Takeaway 4? It requires convincing a judge to “incline a fair and impartial mind” to your side. Contradictions, even small ones, make that inclination much harder to achieve.

Conclusion: The Devil Is in the Details

This case is the perfect microcosm of community association disputes. It began with a clerical error (form), was adjudicated on intent (substance), was lost on a technicality (the burden of proof), yet resulted in a victory for transparency. Mr. Sopatyk may not have won his case, but he won a better system for his neighbors.

The ultimate lesson? In an HOA, the most powerful tool isn’t always a lawsuit—sometimes, it’s a magnifying glass. It leaves us with a thought-provoking question: When is it worth challenging the system for clarity and fairness, even if the outcome isn’t a clear ‘win’ on paper?


Case Participants

Petitioner Side

  • Brian Sopatyk (petitioner)
  • Nathan Andrews (petitioner attorney)
    ASU Alumni Law Group
  • Jill M. Kennedy (petitioner attorney)
    ASU Alumni Law Group
  • Chance Peterson (petitioner attorney)
    ASU Alumni Law Group
  • Judy Sopatyk (party)
    Wife of petitioner and co-purchaser of the unit

Respondent Side

  • Bradley R. Jardine (HOA attorney)
    Jardine Baker Hickman & Houston
    Attorney for Respondent
  • Amy Telnes (property manager/witness)
    The Lakeshore Village Condo. Association, Inc.
    Association manager who testified
  • Michael Cibellis (association president/witness)
    The Lakeshore Village Condo. Association, Inc.
    Association president who testified at rehearing

Neutral Parties

  • Thomas Shedden (ALJ)
  • Judy Lowe (Commissioner)
    ADRE
    Arizona Department of Real Estate Commissioner
  • Greg Hanchett (Interim Director)
    OAH
    Signed Certification of Decision
  • Abby Hansen (HOA Coordinator)
    ADRE
    Administrative contact for rehearing requests
  • Rosella J. Rodriguez (administrative staff)
    Involved in copy mailing/distribution