Case Summary
| Case ID | 24F-H012-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2023-11-20 |
| Administrative Law Judge | Jenna Clark |
| Outcome | The ALJ denied the petition, concluding that the Association's voting system constituted permissible delegate voting, which is not prohibited by the Planned Community Act. The prohibition in ARS § 33-1812 against proxy voting applies only when votes are “allocated to a unit,” which is not the case for Director elections where votes are allocated to the Neighborhood Voting Members as delegates. |
| Filing Fees Refunded | $500.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Robert J. Garing | Counsel | — |
|---|---|---|---|
| Respondent | Prescott Lakes Community Association, Inc. | Counsel | Adrianne A. Speas, Esq. |
Alleged Violations
ARIZ. REV. STAT. § 33-1812
Outcome Summary
The ALJ denied the petition, concluding that the Association's voting system constituted permissible delegate voting, which is not prohibited by the Planned Community Act. The prohibition in ARS § 33-1812 against proxy voting applies only when votes are “allocated to a unit,” which is not the case for Director elections where votes are allocated to the Neighborhood Voting Members as delegates.
Why this result: Petitioner did not sustain the burden of proving a violation of ARIZ. REV. STAT. § 33-1812.
Key Issues & Findings
Whether Respondent is in violation of ARIZ. REV. STAT. § 33-1812
Petitioner alleged that the Association's use of a voting delegate system, where Voting Members cast votes for unit owners who did not respond to neighborhood polls, constitutes proxy voting prohibited under ARS § 33-1812.
Orders: Petitioner's petition is denied.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
- ARIZ. REV. STAT. § 33-1812
- ARIZ. REV. STAT. § 10-3708
- ARIZ. ADMIN. CODE R2-19-119(B)(2)
Analytics Highlights
- ARIZ. REV. STAT. § 33-1812
- ARIZ. REV. STAT. § 32-2199.05
- ARIZ. REV. STAT. § 32-2199.02
- ARIZ. REV. STAT. § 41-1092 et seq.
- ARIZ. REV. STAT. § 10-3708
- ARIZ. REV. STAT. § 1-211(B)
- ARIZ. ADMIN. CODE R2-19-119(B)(2)
- Tierra Ranchos Homeowners Ass'n v. Kitchukov
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Decision Documents
24F-H012-REL Decision – 1115010.pdf
This legal case summary details the hearing regarding the alleged violation of Arizona law concerning proxy voting within a planned community association.
Key Facts and Parties
The hearing was held on November 9, 2023, before Administrative Law Judge (ALJ) Jenna Clark. The matter involved Robert J. Garing (Petitioner), appearing on his own behalf, against Prescott Lakes Community Association, Inc. (Respondent), a nonprofit homeowners' association.
The Association utilizes a neighborhood delegate voting system. Unit owners elect a Voting Member (and an alternate) for their respective neighborhoods. The Voting Members then cast all votes for the election of the Association's Board of Directors. Prior to the election, unit owners are polled. The governing documents stipulate that the Voting Member "shall cast the votes attributable to any Units not responding to the poll in his or her discretion".
Main Issue
The underlying issue was whether the Respondent was in violation of Arizona Revised Statute (ARS) § 33-1812 of the Planned Communities Act. Petitioner alleged that when Voting Members vote on behalf of units whose owners did not return a poll, this practice is a form of proxy voting, which ARS § 33-1812 prohibits.
Key Arguments
- Petitioner's Argument: Petitioner argued that the delegate voting system is fundamentally a proxy system. He asserted that ARS § 33-1812 contains "clear, unambiguous" language prohibiting all proxies after the period of declarant control, and this special statute supersedes the general Nonprofit Corporations Act. Petitioner presented evidence showing that Voting Members exercised their discretion to cast zero votes for candidates who had received votes from polled unit owners, demonstrating a lack of correlation between member preference and the delegate’s vote.
- Respondent's Argument: Respondent argued that its system constitutes permissible delegate voting, which is distinct from the prohibited proxy voting. Testimony established that Voting Members are elected by the unit owners, not appointed like proxies, and cast votes by ballot, not proxy. Counsel for Respondent argued that the legislature chose only to prohibit proxy voting in the Planned Communities Act, and did not bar the use of delegate voting, which is allowed under the Nonprofit Corporation Act.
Legal Focus and Outcome
The ALJ focused on the language of ARS § 33-1812(A)(7), which prohibits casting "votes allocated to a unit… pursuant to a proxy".
The ALJ issued a decision denying the petition. The conclusion was that Petitioner failed to sustain the burden of proof. The key legal determination was that the legislature "made no such bar regarding delegate voting as a form of HOA governance" within the Planned Community Act.
The ALJ reasoned that for the election of Board Directors, there are no votes "allocated to a unit"; instead, "all votes are allocated to Neighborhood Voting Members as delegates" under the Association's governing documents. Since the statute prohibits proxy voting only when votes are allocated to a unit, the Association's delegate system for director elections did not violate ARS § 33-1812.
{ “case”: { “docket_no”: “24F-H012-REL”, “case_title”: “Robert J. Garing v. Prescott Lakes Community Association, Inc.”, “decision_date”: “2023-11-20”, “alj_name”: “Jenna Clark”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “Is a delegate voting system considered the same as illegal proxy voting in Arizona HOAs?”, “short_answer”: “No. The ALJ determined that a delegate voting system is distinct from proxy voting and is not prohibited by the Planned Communities Act.”, “detailed_answer”: “While Arizona law (A.R.S. § 33-1812) explicitly prohibits proxy voting in planned communities after the period of declarant control, the Administrative Law Judge found that the legislature did not prohibit ‘delegate voting.’ In a delegate system, votes are allocated to the elected Voting Member (delegate) rather than directly to the individual unit for that specific election, meaning the prohibition on casting unit votes via proxy does not apply.”, “alj_quote”: “Here, the relevant and credible evidence of record establishes that while proxy voting is explicitly prohibited under the Planned Community Act, the legislature made no such bar regarding delegate voting as a form of HOA governance.”, “legal_basis”: “A.R.S. § 33-1812”, “topic_tags”: [ “voting”, “proxies”, “delegates”, “elections” ] }, { “question”: “Can my HOA allow neighborhood representatives to vote on behalf of owners?”, “short_answer”: “Yes, if the governing documents establish a delegate system where votes are allocated to the representative rather than the unit.”, “detailed_answer”: “The decision upholds a system where neighborhoods elect ‘Voting Members’ who then cast votes for the Board of Directors. The ALJ reasoned that the Planned Communities Act prohibits proxy voting only when votes are ‘allocated to a unit.’ Under the delegate system described, the votes for directors were allocated to the Voting Members, not the individual units.”, “alj_quote”: “The Planned Community Act does not regulate who is authorized to vote in planned community elections. Instead, it prohibits proxy voting when votes have been ‘allocated to a unit.’ Regarding the election of Board Directors, there are no votes ‘allocated to a unit.’ Instead, all votes are allocated to Neighborhood Voting Members as delegates…”, “legal_basis”: “A.R.S. § 33-1812”, “topic_tags”: [ “voting”, “board of directors”, “governing documents” ] }, { “question”: “Can neighborhood delegates cast votes for homeowners who did not participate in the poll?”, “short_answer”: “Yes, provided the governing documents allow the delegate to cast unreceived votes at their discretion.”, “detailed_answer”: “The ALJ noted that Voting Members in this case had the discretion to cast votes for units that did not respond to the neighborhood poll. This practice was found not to violate the statutory prohibition on proxies because it was part of a valid delegate voting structure.”, “alj_quote”: “Voting Members do not have complete discretion when casting votes. They only have discretion to cast unreceived votes.”, “legal_basis”: “A.R.S. § 33-1812”, “topic_tags”: [ “voting”, “discretionary voting”, “absentee ballots” ] }, { “question”: “What is the burden of proof for a homeowner challenging their HOA in an administrative hearing?”, “short_answer”: “The homeowner must prove their case by a ‘preponderance of the evidence’.”, “detailed_answer”: “The homeowner (Petitioner) is responsible for proving that the HOA violated the statute. The standard used is ‘preponderance of the evidence,’ which means the homeowner must show that their contention is more likely true than not.”, “alj_quote”: “In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated ARIZ. REV. STAT. § 33-1812.”, “legal_basis”: “A.A.C. R2-19-119(B)(2)”, “topic_tags”: [ “burden of proof”, “administrative hearing”, “legal procedure” ] }, { “question”: “Does the Nonprofit Corporation Act apply to HOAs in Arizona?”, “short_answer”: “Yes, unless the Planned Communities Act specifically exempts the HOA from a provision.”, “detailed_answer”: “The ALJ reasoned that because the legislature specifically exempted planned communities from some parts of the Nonprofit Act but was silent on delegate voting, the Nonprofit Act’s allowance of such systems remains relevant context for HOA governance.”, “alj_quote”: “In fact, the legislature specifically exempted planned communities from certain enumerated provisions of the Nonprofit Act, but did not address delegate voting within the Planned Community Act in any capacity.”, “legal_basis”: “A.R.S. § 10-3101 et seq.”, “topic_tags”: [ “corporate law”, “statutory interpretation”, “nonprofit act” ] }, { “question”: “If I disagree with the Administrative Law Judge’s decision, what can I do?”, “short_answer”: “You can appeal to the Superior Court within 35 days of being served the order.”, “detailed_answer”: “The decision is binding, but parties have the right to seek judicial review. This appeal must be filed with the Superior Court within a strict 35-day window following the service of the order.”, “alj_quote”: “A party wishing to appeal this order must seek judicial review as prescribed by ARIZ. REV. STAT. § 41-1092.08(H) and title 12, chapter 7, article 6. Any such appeal must be filed with the superior court within thirty-five days from the date when a copy of this order was served upon the parties.”, “legal_basis”: “A.R.S. § 41-1092.08(H); A.R.S. § 12-904(A)”, “topic_tags”: [ “appeals”, “judicial review”, “superior court” ] } ] }
{ “case”: { “docket_no”: “24F-H012-REL”, “case_title”: “Robert J. Garing v. Prescott Lakes Community Association, Inc.”, “decision_date”: “2023-11-20”, “alj_name”: “Jenna Clark”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “Is a delegate voting system considered the same as illegal proxy voting in Arizona HOAs?”, “short_answer”: “No. The ALJ determined that a delegate voting system is distinct from proxy voting and is not prohibited by the Planned Communities Act.”, “detailed_answer”: “While Arizona law (A.R.S. § 33-1812) explicitly prohibits proxy voting in planned communities after the period of declarant control, the Administrative Law Judge found that the legislature did not prohibit ‘delegate voting.’ In a delegate system, votes are allocated to the elected Voting Member (delegate) rather than directly to the individual unit for that specific election, meaning the prohibition on casting unit votes via proxy does not apply.”, “alj_quote”: “Here, the relevant and credible evidence of record establishes that while proxy voting is explicitly prohibited under the Planned Community Act, the legislature made no such bar regarding delegate voting as a form of HOA governance.”, “legal_basis”: “A.R.S. § 33-1812”, “topic_tags”: [ “voting”, “proxies”, “delegates”, “elections” ] }, { “question”: “Can my HOA allow neighborhood representatives to vote on behalf of owners?”, “short_answer”: “Yes, if the governing documents establish a delegate system where votes are allocated to the representative rather than the unit.”, “detailed_answer”: “The decision upholds a system where neighborhoods elect ‘Voting Members’ who then cast votes for the Board of Directors. The ALJ reasoned that the Planned Communities Act prohibits proxy voting only when votes are ‘allocated to a unit.’ Under the delegate system described, the votes for directors were allocated to the Voting Members, not the individual units.”, “alj_quote”: “The Planned Community Act does not regulate who is authorized to vote in planned community elections. Instead, it prohibits proxy voting when votes have been ‘allocated to a unit.’ Regarding the election of Board Directors, there are no votes ‘allocated to a unit.’ Instead, all votes are allocated to Neighborhood Voting Members as delegates…”, “legal_basis”: “A.R.S. § 33-1812”, “topic_tags”: [ “voting”, “board of directors”, “governing documents” ] }, { “question”: “Can neighborhood delegates cast votes for homeowners who did not participate in the poll?”, “short_answer”: “Yes, provided the governing documents allow the delegate to cast unreceived votes at their discretion.”, “detailed_answer”: “The ALJ noted that Voting Members in this case had the discretion to cast votes for units that did not respond to the neighborhood poll. This practice was found not to violate the statutory prohibition on proxies because it was part of a valid delegate voting structure.”, “alj_quote”: “Voting Members do not have complete discretion when casting votes. They only have discretion to cast unreceived votes.”, “legal_basis”: “A.R.S. § 33-1812”, “topic_tags”: [ “voting”, “discretionary voting”, “absentee ballots” ] }, { “question”: “What is the burden of proof for a homeowner challenging their HOA in an administrative hearing?”, “short_answer”: “The homeowner must prove their case by a ‘preponderance of the evidence’.”, “detailed_answer”: “The homeowner (Petitioner) is responsible for proving that the HOA violated the statute. The standard used is ‘preponderance of the evidence,’ which means the homeowner must show that their contention is more likely true than not.”, “alj_quote”: “In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated ARIZ. REV. STAT. § 33-1812.”, “legal_basis”: “A.A.C. R2-19-119(B)(2)”, “topic_tags”: [ “burden of proof”, “administrative hearing”, “legal procedure” ] }, { “question”: “Does the Nonprofit Corporation Act apply to HOAs in Arizona?”, “short_answer”: “Yes, unless the Planned Communities Act specifically exempts the HOA from a provision.”, “detailed_answer”: “The ALJ reasoned that because the legislature specifically exempted planned communities from some parts of the Nonprofit Act but was silent on delegate voting, the Nonprofit Act’s allowance of such systems remains relevant context for HOA governance.”, “alj_quote”: “In fact, the legislature specifically exempted planned communities from certain enumerated provisions of the Nonprofit Act, but did not address delegate voting within the Planned Community Act in any capacity.”, “legal_basis”: “A.R.S. § 10-3101 et seq.”, “topic_tags”: [ “corporate law”, “statutory interpretation”, “nonprofit act” ] }, { “question”: “If I disagree with the Administrative Law Judge’s decision, what can I do?”, “short_answer”: “You can appeal to the Superior Court within 35 days of being served the order.”, “detailed_answer”: “The decision is binding, but parties have the right to seek judicial review. This appeal must be filed with the Superior Court within a strict 35-day window following the service of the order.”, “alj_quote”: “A party wishing to appeal this order must seek judicial review as prescribed by ARIZ. REV. STAT. § 41-1092.08(H) and title 12, chapter 7, article 6. Any such appeal must be filed with the superior court within thirty-five days from the date when a copy of this order was served upon the parties.”, “legal_basis”: “A.R.S. § 41-1092.08(H); A.R.S. § 12-904(A)”, “topic_tags”: [ “appeals”, “judicial review”, “superior court” ] } ] }
Case Participants
Petitioner Side
- Robert J. Garing (petitioner)
Prescott Lakes Community Association, Inc. member
Also served as alternate Voting Member for 2 years - James Thomas Joan (witness)
Also listed as Jimmy Yiannis
Respondent Side
- Adrianne A. Speas (HOA attorney)
Krupnik & Speas, LLC
Appeared as counsel for Respondent - Robert Sisley (board president; witness)
Prescott Lakes Community Association, Inc.
Also Alternate Voting Member for Parkside; served as the association representative - Catherine Black (assistant community manager; witness)
Homeco
Homeco is the HOA management company for Respondent - Lynn M. Krupnik (HOA attorney)
Krupnik & Speas, LLC
Counsel listed for Respondent in distribution
Neutral Parties
- Jenna Clark (ALJ)
OAH - Susan Nicolson (ADRE Commissioner)
Arizona Department of Real Estate
Final decision authority/recipient of ALJ Decision