Case Summary
| Case ID | 22F-H2221008-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2021-11-19 |
| Administrative Law Judge | Thomas Shedden |
| Outcome | loss |
| Filing Fees Refunded | $500.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Susan L Jarzabek | Counsel | — |
|---|---|---|---|
| Respondent | Hillcrest Improvement Association #2 | Counsel | Haidyn DiLorenzo, Esq. |
Alleged Violations
CC&R Article 1, Section 10; Enforcement, Fines and Appeals Policy ("Policy")
Outcome Summary
Petitioner's complaint regarding the wrongful assessment of attorney's fees was dismissed because she failed to prove, by a preponderance of the evidence, that the HOA violated its Policy regarding pre-attorney notification requirements.
Why this result: Petitioner failed to meet her burden of proof; the ALJ found the Policy does not require the two notices prior to attorney escalation, as Petitioner had alleged.
Key Issues & Findings
Alleged violation of Policy concerning attorney's fees assessment and required pre-litigation notices.
Petitioner alleged the Association wrongfully assessed attorney's fees, arguing the Policy required providing the owner two warning notices and a certified letter before escalating a matter to attorney involvement.
Orders: Petitioner's petition is dismissed.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
- ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
- ARIZ. ADMIN. CODE § R2-19-119
- ARIZ. REV. STAT. § 32-2199.02(A)
- Johnson v. The Pointe Community Association, 205 Ariz. 485, 73 P.3d 616 (App. 2003)
- ARIZ. REV. STAT. section 32-2199.02(B)
- ARIZ. REV. STAT. section 32-2199.04
- ARIZ. REV. STAT. § 41-1092.07(F)(6)
Analytics Highlights
- ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
- ARIZ. ADMIN. CODE § R2-19-119
- ARIZ. REV. STAT. § 32-2199.02(A)
- Johnson v. The Pointe Community Association, 205 Ariz. 485, 73 P.3d 616 (App. 2003)
- ARIZ. REV. STAT. section 32-2199.02(B)
- ARIZ. REV. STAT. section 32-2199.04
- ARIZ. REV. STAT. § 41-1092.07(F)(6)
Video Overview
Audio Overview
Decision Documents
22F-H2221008-REL Decision – 926455.pdf
{
“case”: {
“docket_no”: “22F-H2221008-REL”,
“case_title”: “Susan L Jarzabek, Petitioner, vs. Hillcrest Improvement Association #2, Respondent”,
“decision_date”: “November 19, 2021”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Susan L Jarzabek”,
“role”: “petitioner, witness”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Haidyn DiLorenzo”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: null,
“notes”: “Counsel for Respondent”
},
{
“name”: “Thomas Shedden”,
“role”: “ALJ”,
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“affiliation”: null,
“notes”: null
},
{
“name”: “Robert Cody”,
“role”: “board president, witness”,
“side”: “respondent”,
“affiliation”: “Hillcrest Improvement Association #2”,
“notes”: null
},
{
“name”: “John Jarzabek”,
“role”: “spouse”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Petitioner’s husband, named on certified letter sent by Association”
},
{
“name”: “Louis Dettorre”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmission”
},
{
“name”: “AHansen”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmission (via email)”
},
{
“name”: “djones”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmission (via email)”
},
{
“name”: “DGardner”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmission (via email)”
},
{
“name”: “vnunez”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmission (via email)”
},
{
“name”: “Beth Mulcahy”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “Mulcahy Law Firm, PC”,
“notes”: “Recipient of transmission; firm engaged by Association”
},
{
“name”: “Miranda Alvarez”,
“role”: “OAH staff”,
“side”: “neutral”,
“affiliation”: null,
“notes”: “Transmitter of Decision”
}
]
}
{ “case”: { “docket_no”: “22F-H2221008-REL”, “case_title”: “Susan L Jarzabek vs. Hillcrest Improvement Association #2”, “decision_date”: “2021-11-19”, “alj_name”: “Thomas Shedden”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “Can my HOA send a violation directly to their attorney without sending me warning letters first?”, “short_answer”: “Yes, if the community’s enforcement policy allows for immediate escalation to legal counsel.”, “detailed_answer”: “In this case, the ALJ ruled that the HOA did not violate its policy by involving a lawyer without prior notices, because the policy contained a provision stating that the standard notice procedure ceases to apply once a matter is escalated to an attorney.”, “alj_quote”: “The Policy also provides in pertinent part that the Association may escalate a matter to its attorney for further action, if a matter is escalated to the attorney, the notice-procedure will no longer apply”, “legal_basis”: “HOA Enforcement Policy / Contract Law”, “topic_tags”: [ “enforcement process”, “attorney referral”, “notice requirements” ] }, { “question”: “If the HOA sends my violation to a lawyer, do I have to pay the attorney’s fees?”, “short_answer”: “Yes, generally, if the CC&Rs and enforcement policy state that the owner is responsible for enforcement costs.”, “detailed_answer”: “The decision notes that the governing documents (CC&Rs) specifically allow the Association to recover enforcement costs, including attorney’s fees, from the owner. Additionally, the specific policy noted that upon escalation, the owner becomes responsible for these costs.”, “alj_quote”: “CC&R Art. VIII, Section 1, Enforcement, provides that the Association may recover from an owner its enforcement costs, including attorney’s fees.”, “legal_basis”: “CC&Rs Article VIII, Section 1”, “topic_tags”: [ “attorney fees”, “fines and penalties”, “collection costs” ] }, { “question”: “Who has to prove that the HOA did something wrong in a hearing?”, “short_answer”: “The homeowner (petitioner) filing the complaint bears the burden of proof.”, “detailed_answer”: “When a homeowner petitions the Department of Real Estate alleging a violation by the HOA, it is up to the homeowner to provide sufficient evidence to prove that the violation occurred.”, “alj_quote”: “Ms. Jarzabek bears the burden of proof to show that the alleged violation occurred.”, “legal_basis”: “ARIZ. ADMIN. CODE § R2-19-119”, “topic_tags”: [ “burden of proof”, “legal procedure”, “hearing standards” ] }, { “question”: “Is an HOA’s enforcement policy legally considered a binding contract?”, “short_answer”: “Yes, the policy is treated as part of the contract between the HOA and the homeowners.”, “detailed_answer”: “The Administrative Law Judge affirmed that community policies are part of the contractual agreement between the parties, meaning both the homeowner and the HOA are legally required to follow the terms written in that policy.”, “alj_quote”: “The Policy is part of contract between the parties and the parties are required to comply with its terms.”, “legal_basis”: “Contract Law; Johnson v. The Pointe Community Association”, “topic_tags”: [ “contract law”, “governing documents”, “policy enforcement” ] }, { “question”: “Can the Administrative Law Judge cancel the specific debt or fees I owe the HOA?”, “short_answer”: “Not necessarily; the tribunal’s jurisdiction may be limited to determining if a violation of documents occurred, not the validity of the debt itself.”, “detailed_answer”: “The ALJ explicitly noted in a footnote that while they can determine if the HOA violated its policy, they did not have the jurisdiction to decide if the specific attorney’s fees charged constituted a valid debt.”, “alj_quote”: “it is not within this tribunal’s jurisdiction to determine whether the attorney’s fees levied against Ms. Jarzabek are a valid debt, and the tribunal offers no opinion on that issue.”, “legal_basis”: “ARIZ. REV. STAT. § 41-1092.07(F)(6)”, “topic_tags”: [ “jurisdiction”, “debt validity”, “tribunal limitations” ] }, { “question”: “What standard of evidence is used to make a decision in an HOA dispute?”, “short_answer”: “Preponderance of the evidence.”, “detailed_answer”: “The standard is ‘preponderance of the evidence,’ which means the evidence must show it is more likely than not that the claim is true. It is described as the greater weight of the evidence.”, “alj_quote”: “The standard of proof on all issues in this matter is that of a preponderance of the evidence.”, “legal_basis”: “ARIZ. ADMIN. CODE § R2-19-119”, “topic_tags”: [ “legal standards”, “evidence”, “administrative hearing” ] } ] }
{
“case”: {
“docket_no”: “22F-H2221008-REL”,
“case_title”: “Susan L Jarzabek, Petitioner, vs. Hillcrest Improvement Association #2, Respondent”,
“decision_date”: “November 19, 2021”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Susan L Jarzabek”,
“role”: “petitioner, witness”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Haidyn DiLorenzo”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: null,
“notes”: “Counsel for Respondent”
},
{
“name”: “Thomas Shedden”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Robert Cody”,
“role”: “board president, witness”,
“side”: “respondent”,
“affiliation”: “Hillcrest Improvement Association #2”,
“notes”: null
},
{
“name”: “John Jarzabek”,
“role”: “spouse”,
“side”: “unknown”,
“affiliation”: null,
“notes”: “Petitioner’s husband, named on certified letter sent by Association”
},
{
“name”: “Louis Dettorre”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmission”
},
{
“name”: “AHansen”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmission (via email)”
},
{
“name”: “djones”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmission (via email)”
},
{
“name”: “DGardner”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmission (via email)”
},
{
“name”: “vnunez”,
“role”: “ADRE staff”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Recipient of transmission (via email)”
},
{
“name”: “Beth Mulcahy”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “Mulcahy Law Firm, PC”,
“notes”: “Recipient of transmission; firm engaged by Association”
},
{
“name”: “Miranda Alvarez”,
“role”: “OAH staff”,
“side”: “neutral”,
“affiliation”: null,
“notes”: “Transmitter of Decision”
}
]
}
{ “case”: { “docket_no”: “22F-H2221008-REL”, “case_title”: “Susan L Jarzabek vs. Hillcrest Improvement Association #2”, “decision_date”: “2021-11-19”, “alj_name”: “Thomas Shedden”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “Can my HOA send a violation directly to their attorney without sending me warning letters first?”, “short_answer”: “Yes, if the community’s enforcement policy allows for immediate escalation to legal counsel.”, “detailed_answer”: “In this case, the ALJ ruled that the HOA did not violate its policy by involving a lawyer without prior notices, because the policy contained a provision stating that the standard notice procedure ceases to apply once a matter is escalated to an attorney.”, “alj_quote”: “The Policy also provides in pertinent part that the Association may escalate a matter to its attorney for further action, if a matter is escalated to the attorney, the notice-procedure will no longer apply”, “legal_basis”: “HOA Enforcement Policy / Contract Law”, “topic_tags”: [ “enforcement process”, “attorney referral”, “notice requirements” ] }, { “question”: “If the HOA sends my violation to a lawyer, do I have to pay the attorney’s fees?”, “short_answer”: “Yes, generally, if the CC&Rs and enforcement policy state that the owner is responsible for enforcement costs.”, “detailed_answer”: “The decision notes that the governing documents (CC&Rs) specifically allow the Association to recover enforcement costs, including attorney’s fees, from the owner. Additionally, the specific policy noted that upon escalation, the owner becomes responsible for these costs.”, “alj_quote”: “CC&R Art. VIII, Section 1, Enforcement, provides that the Association may recover from an owner its enforcement costs, including attorney’s fees.”, “legal_basis”: “CC&Rs Article VIII, Section 1”, “topic_tags”: [ “attorney fees”, “fines and penalties”, “collection costs” ] }, { “question”: “Who has to prove that the HOA did something wrong in a hearing?”, “short_answer”: “The homeowner (petitioner) filing the complaint bears the burden of proof.”, “detailed_answer”: “When a homeowner petitions the Department of Real Estate alleging a violation by the HOA, it is up to the homeowner to provide sufficient evidence to prove that the violation occurred.”, “alj_quote”: “Ms. Jarzabek bears the burden of proof to show that the alleged violation occurred.”, “legal_basis”: “ARIZ. ADMIN. CODE § R2-19-119”, “topic_tags”: [ “burden of proof”, “legal procedure”, “hearing standards” ] }, { “question”: “Is an HOA’s enforcement policy legally considered a binding contract?”, “short_answer”: “Yes, the policy is treated as part of the contract between the HOA and the homeowners.”, “detailed_answer”: “The Administrative Law Judge affirmed that community policies are part of the contractual agreement between the parties, meaning both the homeowner and the HOA are legally required to follow the terms written in that policy.”, “alj_quote”: “The Policy is part of contract between the parties and the parties are required to comply with its terms.”, “legal_basis”: “Contract Law; Johnson v. The Pointe Community Association”, “topic_tags”: [ “contract law”, “governing documents”, “policy enforcement” ] }, { “question”: “Can the Administrative Law Judge cancel the specific debt or fees I owe the HOA?”, “short_answer”: “Not necessarily; the tribunal’s jurisdiction may be limited to determining if a violation of documents occurred, not the validity of the debt itself.”, “detailed_answer”: “The ALJ explicitly noted in a footnote that while they can determine if the HOA violated its policy, they did not have the jurisdiction to decide if the specific attorney’s fees charged constituted a valid debt.”, “alj_quote”: “it is not within this tribunal’s jurisdiction to determine whether the attorney’s fees levied against Ms. Jarzabek are a valid debt, and the tribunal offers no opinion on that issue.”, “legal_basis”: “ARIZ. REV. STAT. § 41-1092.07(F)(6)”, “topic_tags”: [ “jurisdiction”, “debt validity”, “tribunal limitations” ] }, { “question”: “What standard of evidence is used to make a decision in an HOA dispute?”, “short_answer”: “Preponderance of the evidence.”, “detailed_answer”: “The standard is ‘preponderance of the evidence,’ which means the evidence must show it is more likely than not that the claim is true. It is described as the greater weight of the evidence.”, “alj_quote”: “The standard of proof on all issues in this matter is that of a preponderance of the evidence.”, “legal_basis”: “ARIZ. ADMIN. CODE § R2-19-119”, “topic_tags”: [ “legal standards”, “evidence”, “administrative hearing” ] } ] }
Case Participants
Petitioner Side
- Susan L Jarzabek (petitioner, witness)
Respondent Side
- Haidyn DiLorenzo (HOA attorney)
Counsel for Respondent - Robert Cody (board president, witness)
Hillcrest Improvement Association #2 - Beth Mulcahy (HOA attorney)
Mulcahy Law Firm, PC
Recipient of transmission; firm engaged by Association
Neutral Parties
- Thomas Shedden (ALJ)
- Louis Dettorre (ADRE staff)
Arizona Department of Real Estate
Recipient of transmission - AHansen (ADRE staff)
Arizona Department of Real Estate
Recipient of transmission (via email) - djones (ADRE staff)
Arizona Department of Real Estate
Recipient of transmission (via email) - DGardner (ADRE staff)
Arizona Department of Real Estate
Recipient of transmission (via email) - vnunez (ADRE staff)
Arizona Department of Real Estate
Recipient of transmission (via email) - Miranda Alvarez (OAH staff)
Transmitter of Decision
Other Participants
- John Jarzabek (spouse)
Petitioner's husband, named on certified letter sent by Association
