Administrative Hearing Briefing: Garcia vs. Villagio at Tempe HOA

Executive Summary

This briefing document synthesizes the findings, arguments, and conclusions from two administrative law judge decisions concerning a dispute between homeowner Rogelio A. Garcia and the Villagio at Tempe Homeowners Association (“Villagio”). The core of the dispute was Mr. Garcia’s allegation that Villagio violated Arizona Revised Statute (A.R.S.) § 33-1242 in its handling of violation notices related to an alleged breach of short-term rental policies.

The Administrative Law Judge ultimately dismissed Mr. Garcia’s petition in both an initial hearing and a subsequent rehearing, finding that he failed to meet the burden of proof. The decisions consistently hinged on a critical point: Mr. Garcia did not respond to Villagio’s violation notices by certified mail within the 21-day period prescribed by the statute. This failure meant that the HOA’s subsequent obligations under the statute—specifically, to provide the name of the violation’s observer and to give notice of the right to a state administrative hearing—were never triggered. Villagio successfully argued that by including its own internal appeal process in the violation notices, it had fulfilled its legal requirements under the circumstances. The final ruling deemed Villagio the prevailing party, with the decision after rehearing being binding on both parties.

Background of the Dispute

The case, No. 19F-H1918009-REL, was adjudicated by Administrative Law Judge Velva Moses-Thompson within the Arizona Office of Administrative Hearings, following a petition filed by Mr. Garcia with the Arizona Department of Real Estate.

Timeline of Notices and Fines

Villagio issued a series of notices to Mr. Garcia alleging that his unit was being rented in violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs) regarding short-term leases.

Date of Notice

Allegation / Action Taken

Instructions Provided to Homeowner

March 8, 2018

Alleged violation of short-term lease provisions.

“If you wish to contest this notice… file an appeal with the Board of Directors… Requests for an appeal must be received within 10 days of receipt of this notice.”

March 22, 2018

A fine of $1,000 posted to Mr. Garcia’s account for the ongoing violation.

Same instructions to appeal within 10 days. The notice also included the phrase, “Please bring this issue into compliance within 10 days of this notice.”

April 5, 2018

A fine of $2,000 posted to Mr. Garcia’s account for the ongoing violation.

Same instructions to appeal within 10 days.

Procedural History

1. Violation Notices: Villagio sent the three notices in March and April 2018.

2. Homeowner Inaction (Statutory): Mr. Garcia did not respond to any of the notices by sending a certified letter within the 21-day period allowed by A.R.S. § 33-1242(B).

3. Homeowner Action (Internal): Mr. Garcia did eventually file an appeal with Villagio regarding the violation and fines, but the HOA did not change its position.

4. Petition Filed: On or about August 17, 2018, Mr. Garcia filed a petition with the Arizona Department of Real Estate, alleging Villagio violated state statutes.

5. Initial Hearing: An evidentiary hearing was held on October 30, 2018.

6. First Decision: On November 19, 2018, the Administrative Law Judge (ALJ) issued a decision dismissing Mr. Garcia’s petition.

7. Rehearing Granted: Mr. Garcia requested a rehearing, which was granted and scheduled.

8. Rehearing: The rehearing was held on February 12, 2019, with testimony from Mr. Garcia and Tom Gordon, Villagio’s Community Manager.

9. Final Decision: On March 4, 2019, the ALJ issued a final decision again dismissing Mr. Garcia’s petition. This order was declared binding and appealable only to the superior court.

Core Legal Arguments and Statutory Interpretation

The case centered on the interpretation and application of A.R.S. § 33-1242, which governs the process for notifying and responding to violations of condominium documents.

Statutory Framework: A.R.S. § 33-1242

• Section (B): A unit owner receiving a violation notice may provide the association with a written response via certified mail within 21 calendar days of the notice date.

• Section (C): If the owner sends a response as described in Section (B), the association must then respond within 10 business days with specific information, including the name of the person who observed the violation and the process to contest the notice.

• Section (D): An association must give a unit owner written notice of their option to petition for a state administrative hearing unless the information regarding the contest process (required in Section C, paragraph 4) is already provided in the initial violation notice.

Petitioner’s Position (Rogelio A. Garcia)

Mr. Garcia argued that Villagio violated A.R.S. § 33-1242 on several grounds:

• The violation letters did not allow him to respond by certified mail within 21 days.

• The notices failed to include the first and last name of the person(s) who observed the violation.

• The notices failed to inform him of his right to petition for an administrative hearing with the state real estate department.

• During the rehearing, he contended that Villagio effectively prevented him from using the 21-day statutory response period. He claimed the rapid succession of notices (14 days apart) and the language demanding compliance “within 10 days” led him to believe he “would only be 10 days before he would acquire another violation.”

Respondent’s Position (Villagio at Tempe HOA)

Villagio disputed all of Mr. Garcia’s allegations, arguing that its actions were fully compliant with the statute:

• The obligation to provide the observer’s name under Section (C) is only triggered after the homeowner first submits a timely certified mail response, which Mr. Garcia failed to do.

• The obligation to provide notice of the right to a state administrative hearing under Section (D) was not applicable because Villagio did provide its internal process for contesting the notice in every letter sent.

• They did not prevent Mr. Garcia from responding. At the rehearing, Mr. Garcia admitted under cross-examination that he was not prohibited by any court order from sending a response.

• Villagio’s Community Manager, Tom Gordon, testified that while the HOA’s policy gives homeowners 10 days to contest internally, the association does not restrict them from also using the 21-day statutory response period.

• As a further defense in the rehearing, Villagio argued that A.R.S. § 33-1242 was not applicable at all, asserting the statute addresses violations concerning the “condition of the property,” whereas Mr. Garcia’s violation concerned the “use of his property.”

Administrative Law Judge’s Findings and Decision

The Administrative Law Judge’s decisions in both the initial hearing and the rehearing were consistent, ruling decisively in favor of the Respondent, Villagio.

Burden of Proof

In both decisions, the Judge established that Mr. Garcia, as the petitioner, bore the burden of proof to show that a violation occurred. The standard of proof required was a “preponderance of the evidence,” defined as evidence with the “most convincing force.”

Key Conclusions of Law

1. Homeowner’s Failure to Respond Was Decisive: The Judge found it was “undisputed” that Mr. Garcia did not respond to any of the three notices within the 21-day period via certified mail. This failure was the central reason his petition was dismissed.

2. HOA Obligations Were Not Triggered: Because Mr. Garcia did not initiate the process described in A.R.S. § 33-1242(B), Villagio’s corresponding obligation under Section (C) to provide the observer’s name was never activated.

3. Internal Appeal Process Satisfied Statutory Requirement: The Judge concluded that because Villagio included instructions on how to contest the notice (i.e., appeal to the Board of Directors) in its letters, it was not required under Section (D) to provide separate notice of the right to a state administrative hearing.

4. No Evidence of Prevention: The Judge found that Mr. Garcia “provided no evidence to establish that Villagio prevented him from responding.” The issuance of subsequent notices and fines before the 21-day period had lapsed was not found to constitute a legal barrier that prevented Mr. Garcia from exercising his statutory right to respond.

5. Final Order: Mr. Garcia failed to establish that Villagio violated A.R.S. § 33-1242. His petition was ordered to be dismissed, and Villagio was deemed the prevailing party. The order issued after the rehearing on March 4, 2019, is binding on the parties and can only be appealed by seeking judicial review in the superior court within 35 days of service.

Briefing Document: Garcia v. Villagio at Tempe Homeowners Association

Executive Summary

This document synthesizes two Administrative Law Judge Decisions concerning a dispute between homeowner Rogelio A. Garcia (Petitioner) and the Villagio at Tempe Homeowners Association (Respondent). The core of the case is Mr. Garcia’s allegation that the HOA violated Arizona Revised Statute (A.R.S.) § 33-1242 by failing to follow specific procedures after issuing notices for a violation of its short-term rental policy.

The Administrative Law Judge ultimately dismissed Mr. Garcia’s petition in both an initial hearing and a subsequent rehearing. The central finding was that Mr. Garcia failed to meet a critical prerequisite outlined in the statute: he did not respond to the violation notices by certified mail within the 21-day period. This failure meant that the HOA’s corresponding statutory obligations—such as providing the name of the person who observed the violation—were never triggered.

Furthermore, the judge determined that the HOA was not required to inform Mr. Garcia of his right to an administrative hearing because the violation notices themselves included instructions on the HOA’s internal process for contesting the matter. Mr. Garcia’s argument that the HOA’s rapid issuance of fines and subsequent notices prevented him from responding was found to be unsubstantiated by evidence. The decisions underscore a strict interpretation of the statute, placing the initial burden of response on the unit owner.

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I. Case Overview

This matter was adjudicated by the Arizona Office of Administrative Hearings after a petition was filed with the Arizona Department of Real Estate. The case involved an initial hearing and a rehearing requested by the Petitioner.

Entity / Individual

Petitioner

Rogelio A. Garcia

Respondent

Villagio at Tempe Homeowners Association (“Villagio”)

Respondent’s Counsel

Nathan Tennyson, Esq.

Adjudicating Body

Office of Administrative Hearings

Administrative Law Judge

Velva Moses-Thompson

Case Number (Initial)

19F-H1918009-REL

Case Number (Rehearing)

19F-H1918009-REL-RHG

Core Allegation

Violation of A.R.S. § 33-1242 by the Respondent.

II. Chronology of Events

• March 8, 2018: Villagio mails the first letter to Mr. Garcia, alleging a violation of short-term lease provisions in the community’s Covenants, Conditions, and Restrictions (CC&Rs). The letter instructs him to file an appeal with the Board of Directors within 10 days of receipt.

• March 22, 2018: Villagio mails a second notice for the same violation, informing Mr. Garcia that a $1,000 fine has been posted to his account. This notice also contains instructions for contesting the violation.

• April 5, 2018: Villagio mails a third notice, informing Mr. Garcia that a $2,000 fine has been posted to his account for the continuing violation.

• Response from Garcia: Mr. Garcia did not respond to any of the three notices within the 21-calendar-day period specified by statute. He did, at some point, file an appeal directly with Villagio, which held a hearing but did not change its position.

• August 17, 2018 (approx.): Mr. Garcia files a petition with the Arizona Department of Real Estate, formally initiating the administrative hearing process.

• October 30, 2018: The first evidentiary hearing is held before Administrative Law Judge Velva Moses-Thompson.

• November 19, 2018: The initial Administrative Law Judge Decision is issued, dismissing Mr. Garcia’s petition.

• January 3, 2019 (approx.): The Arizona Department of Real Estate issues an order setting a rehearing for the matter, following a request from Mr. Garcia.

• February 12, 2019: The rehearing is held. Mr. Garcia testifies on his own behalf, and Villagio presents testimony from Community Manager Tom Gordon.

• March 4, 2019: The final Administrative Law Judge Decision is issued, again dismissing Mr. Garcia’s petition.

III. Central Legal Issue: Interpretation of A.R.S. § 33-1242

The entire dispute centered on the procedural requirements laid out in A.R.S. § 33-1242, which governs how an HOA must handle notices of violation to a unit owner. The key provisions are:

• Unit Owner’s Responsibility (Subsection B): A unit owner who receives a written notice of violation may provide the association with a written response. This response must be sent by certified mail within twenty-one calendar days after the date of the notice.

• Association’s Obligations upon Response (Subsection C): Within ten business days after receiving the certified mail response, the association must provide a written explanation that includes:

1. The specific provision of the condominium documents allegedly violated.

2. The date the violation occurred or was observed.

3. The first and last name of the person(s) who observed the violation.

4. The process the unit owner must follow to contest the notice.

• Association’s Obligation Regarding Administrative Hearings (Subsection D): An association must provide written notice of the owner’s option to petition for an administrative hearing with the state real estate department unless the information required in Subsection C, paragraph 4 (the contest process) is provided in the initial notice of violation.

IV. Analysis of Arguments and Evidence

Petitioner’s Position (Rogelio A. Garcia)

Mr. Garcia’s arguments, presented across both hearings, focused on three primary claims of statutory violation by Villagio:

1. Failure to Provide Required Information: Villagio violated the statute by not providing him with the first and last name of the person who observed the violation.

2. Failure to Notify of Hearing Rights: Villagio did not inform him of his right to petition for an administrative hearing with the state real estate department.

3. Prevention of Response: Mr. Garcia contended that Villagio effectively prevented him from responding via certified mail within the 21-day statutory period. He argued that the notices’ demand for compliance within 10 days, combined with the issuance of a second notice and a fine just 14 days after the first, led him to believe he only had 10 days to act before incurring another violation.

Respondent’s Position (Villagio at Tempe HOA)

Villagio presented a defense based on a direct reading of the statute and Mr. Garcia’s inaction:

1. Statutory Obligations Not Triggered: Villagio’s central argument was that its obligations under A.R.S. § 33-1242(C)—including the duty to name the observer—are only triggered after a unit owner submits a written response by certified mail within 21 days. Since Mr. Garcia never sent such a response, these obligations never came into effect.

2. Internal Contest Process Satisfied Statute: Per A.R.S. § 33-1242(D), the duty to notify an owner of their right to an administrative hearing only applies if the HOA fails to provide its own contest process. Villagio argued that because all three notices explicitly stated the process for appealing to the Board of Directors, it had fulfilled its statutory duty.

3. No Prevention of Response: Mr. Garcia was never legally or physically prevented from sending a certified letter. During cross-examination, he admitted he was not under any court order prohibiting him from responding.

4. Statute Inapplicability (Argument from Rehearing): Villagio further contended that A.R.S. § 33-1242 applies specifically to violations concerning the “condition of the property,” not the “use” of the property. Since short-term renting is a use, Villagio argued the statute did not apply to this situation at all.

Key Testimony from Rehearing

During the February 12, 2019 rehearing, Villagio’s Community Manager, Tom Gordon, testified.

• On direct examination, Mr. Gordon stated that Villagio does not restrict homeowners from responding to violation notices within the 21-day period.

• On cross-examination, when asked by Mr. Garcia if Villagio would have abided by “this statute” had he responded in 21 days, Mr. Gordon replied, “No.” He explained this by stating that homeowners are given 10 days to contest a notice with Villagio pursuant to its own short-term rental policy.

V. Administrative Law Judge’s Decisions and Rationale

The judge’s findings were consistent across both the initial decision and the rehearing decision, leading to the same conclusion in each instance.

Initial Decision (November 19, 2018)

• Finding of Fact: It was undisputed that Mr. Garcia did not respond to the March 8, March 22, or April 5, 2018 notices within 21 calendar days.

• Conclusion 1: Because Mr. Garcia did not respond within the 21-day period, Villagio was not required to provide him with the first and last name of the person(s) who observed the violation.

• Conclusion 2: Because Villagio notified Mr. Garcia of the process for contesting the notice, it was not required under A.R.S. § 33-1242(D) to provide him with notice of the right to petition for an administrative hearing.

• Outcome: Mr. Garcia failed to establish by a preponderance of the evidence that a violation occurred. The petition was dismissed.

Rehearing Decision (March 4, 2019)

The judge reaffirmed the initial findings and addressed Mr. Garcia’s argument that he was prevented from responding.

• Finding on “Prevention”: The judge found no evidence that Villagio informed Mr. Garcia he could not respond within 21 days or otherwise prevented him from doing so. The issuance of a second notice 14 days after the first was not deemed a preventative act that nullified Mr. Garcia’s statutory window to respond to the first notice.

• Statutory Construction: The decision invoked the legal principle that “what the Legislature means, it will say,” indicating a strict, literal interpretation of the statute’s requirements.

• Reaffirmed Conclusions: The judge again concluded that because Mr. Garcia failed to submit a written response by certified mail, Villagio’s obligations under A.R.S. § 33-1242(C) were not triggered, and its inclusion of an internal appeal process satisfied the requirements of A.R.S. § 33-1242(D).

• Outcome: Mr. Garcia’s petition was dismissed for a second time, with Villagio deemed the prevailing party.

VI. Final Disposition

The Administrative Law Judge ordered that Mr. Garcia’s petition be dismissed. The decision issued after the rehearing on March 4, 2019, is binding on the parties. Any party wishing to appeal the order must seek judicial review with the superior court within thirty-five days from the date the order was served.