Tag Archives: Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)

This summary pertains to the Administrative Law Judge Decision in the case of *Richard E Jewell, Petitioner, vs. Casa Fiesta Townhouses Corp., Respondent* (No. 22F-H2221005-REL), heard on October 7, 2021.

Concise Legal Summary

Key Facts and Issues

Petitioner Richard E. Jewell, a homeowner and member of the Respondent, Casa Fiesta Townhouses Corp. (an Arizona homeowners association or HOA), alleged that the HOA board violated Arizona Revised Statutes (A.R.S.) § 33-1811. The central issue was whether the Board of Directors improperly handled a conflict of interest when voting to hire the sitting Board President, George Pavia, as a salaried office assistant.

The Board voted on July 15, 2021, to employ Mr. Pavia for 40 hours a week at a wage of $15.00 per hour. Petitioner asserted that his only issue was that the Board President failed to personally disclose the conflict of interest prior to the action being taken.

Key Legal Points and Arguments

The relevant statute, A.R.S. § 33-1811, stipulates that if a contract or action for compensation benefits a board member, that member "shall declare a conflict of interest" in an open meeting before discussion or action. A contract entered in violation of this section is void and unenforceable.

During the hearing, the Administrative Law Judge reviewed evidence, including a recording of the July meeting. The evidence showed:

1. At the outset of the virtual meeting, Mr. Pavia indicated he would recuse himself from the discussion.
2. An individual attending the meeting raised the possibility of a conflict of interest.
3. The conflict was discussed at length during the board meeting prior to any vote.
4. Mr. Pavia refrained from participating in the vote.

The Administrative Law Judge concluded that the purpose of A.R.S. § 33-1811 is to ensure HOA members are aware of conflicts prior to discussion. Interpreting the statute to achieve a "fair and sensible result", the Judge determined that the conflict was, in fact, made known and discussed prior to action. The statute's requirement was satisfied, as the fact that Mr. Pavia was not the individual who disclosed the conflict did not negate that the conflict was discussed at length and known to those voting.

Outcome

At the conclusion of the Petitioner’s presentation of evidence, Respondent moved for a directed verdict, arguing the Petitioner failed to sustain his burden of proof. The motion was granted.

The Administrative Law Judge ruled that the Petitioner failed to establish, by a preponderance of the evidence, that Respondent acted in violation of A.R.S. § 33-1811. The Petitioner’s petition was dismissed.

This summary details the Administrative Law Judge (ALJ) Decision in the case of Ronald Borruso, Petitioner, vs. Sunland Village East Association, Respondent (No. 21F-H2121062-REL), heard on September 3, 2021. The Petitioner, Ronald Borruso, alleged that the Association violated its Bylaws and specific provisions of ARIZ. REV. STAT. section 33-1804.

Key Facts and Legal Standard

The Department of Real Estate had jurisdiction over the matter. The Petitioner bore the burden of proving the alleged violations occurred by a preponderance of the evidence. Borruso refined his allegations to two main issues, both centering on the violation of association meeting requirements under ARIZ. REV. STAT. § 33-1804(A) and (C).

Main Issues and Arguments

Issue 1: Member Participation at the May 27, 2021 Special Meeting

• Petitioner's Claim: Borruso alleged that during a special meeting concerning a recall petition, the Board denied members the right to speak at an appropriate time during proceedings, violating § 33-1804(A). He argued the meeting was improperly divided into a "closed" session where members could not offer substantive comments, followed by an "Open Session Q & A" after adjournment.
• Association's Argument: The Association maintained there was only one meeting, and it was not a violation to restrict members’ comments until after the Board provided its statements. They argued they used the term "closed" inartfully, noting that members were allowed to attend the entire 3-hour meeting, and ample opportunity was provided for comments during the Q & A session (lasting about 90 minutes).
• Legal Point: ARIZ. REV. STAT. section 33-1804(A) permits members to attend and speak at an appropriate time during deliberations, and mandates they speak once after the Board discusses an agenda item but before formal action. The ALJ noted that legally, a "closed" meeting refers to an executive session, which the Board did not conduct.

Issue 2: Unnoticed Meeting to Approve Operations Manager Qualifications

• Petitioner's Claim: Borruso alleged the Board held un-noticed meetings to write and approve job qualifications for an Operations Manager, violating sections 33-1804(A) and (C). His primary evidence was a former Board President, Ms. Haynie, confirming in a May 6, 2021 meeting that the Board had written and approved the job description.
• Association's Argument: Current Board members testified credibly that Ms. Haynie was wrong and that the Board had never met or voted on the job description. The description posted was similar to a previous one, and Ms. Haynie had allegedly prepared and posted it without Board approval.

Outcome and Final Decision

The Administrative Law Judge concluded that Mr. Borruso failed to meet the required standard of proof (preponderance of the evidence) on both issues.

1. Regarding the May 27th Meeting: The Petitioner did not prove a violation of § 33-1804(A). Although the Board was not precise in its terminology, members were allowed to attend the entire meeting, and the evidence showed it was a single meeting where members spoke after the Board's presentation.
2. Regarding the Job Qualifications: The Petitioner failed to prove that an un-noticed meeting occurred, as the credible testimony indicated that the former President had been mistaken about the Board’s approval. Therefore, there was no violation of sections 33-1804(A) and (C).

The petition was dismissed.

Administrative Hearing Briefing: Travis v. The Val Vista Lakes Community Association

Executive Summary

This document provides a comprehensive analysis of the Administrative Law Judge Decision in case number 18F-H1817017-REL, concerning a petition filed by William Travis against The Val Vista Lakes Community Association. The core of the dispute revolves around the actions of the Association’s Nominating Committee during the process for the November 16, 2017 Board of Directors election.

Mr. Travis raised three primary allegations: 1) the Committee violated Association Bylaws by accepting candidate applications after a stated September 29, 2017 deadline; 2) the Committee exceeded its authority by interviewing candidates, thereby imposing qualification requirements beyond those stipulated in the Bylaws; and 3) the failure to include all applicants on the ballot constituted a violation of Arizona state statutes related to proxy voting.

The Administrative Law Judge, Thomas Shedden, dismissed Mr. Travis’s petition in its entirety. The decision found that Travis failed to prove the application deadline was a formal rule adopted by the Board, concluding it was an administrative deadline set by the management company. The Judge determined that the Committee’s actions, including interviewing applicants, were a reasonable exercise of the discretion explicitly granted to it by the Bylaws. Finally, the Judge ruled that the state statute cited by Travis applies to the casting of votes, not the internal nomination process, and was therefore inapplicable to the Committee’s actions. The Val Vista Lakes Community Association was deemed the prevailing party.

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Case Overview

Case Number

18F-H1817017-REL

Petitioner

William Travis

Respondent

The Val Vista Lakes Community Association

Hearing Date

January 26, 2018

Decision Date

February 2, 2018

Presiding Judge

Thomas Shedden, Administrative Law Judge

Testifying Parties

William Travis (on his own behalf); Simone McGinnis (Association’s on-site manager)

Petitioner’s Allegations

William Travis’s petition, as amended, centered on three specific issues concerning the Nominating Committee’s conduct for the November 16, 2017 Board election:

1. Violation of Application Deadline: The Committee disregarded a September 29, 2017 deadline for candidate applications. Travis contended that this deadline was a “term, limitation, or rule adopted by the Board,” and by accepting applications after this date, the Committee violated Bylaws Article VIII.

2. Exceeding Authority and Imposing Qualifications: The Committee exceeded its authority by interviewing and questioning applicants. Travis argued that this process had the effect of creating new qualification requirements for Board Directors, beyond the sole requirement of Association membership outlined in Bylaws Article IV. He asserted the Committee had no authority to ask any questions.

3. Statutory Violation of Voting Rights: By failing to place all members who submitted “self-nominations” on the official election ballot, the Committee violated ARIZ. REV. STAT. § 33-1812(A). Travis claimed this action was tantamount to proxy voting because it prevented members from voting for or against certain candidates.

Key Factual Findings

Election and Nomination Timeline

• August 17, 2017: The Board of Directors appoints Cheryl Peterson-McCoy as the Nominating Committee Chairperson.

• September 12, 2017: The Association’s management company emails residents, announcing three open Board positions and an application deadline of September 29, 2017, at 5:00 p.m.

• By September 29, 2017: Four applications are received. At this point, the members of the Nominating Committee (other than the Chairperson) have not yet been selected.

• After September 29, 2017: The Association accepts four additional applications, including one from Mr. Travis. No revised notice is sent to the membership about an extended deadline.

• October 5, 2017: Mr. Travis, then a Board member, makes an email motion to extend the application deadline to October 16, which is denied.

• October 19, 2017: The Board formally approves six members for the Nominating Committee. Mr. Travis’s subsequent motion at this meeting to extend the deadline fails for lack of a second.

Nominating Committee Actions and Rationale

• The Committee considered all eight applications submitted, including the four received after the initial deadline.

• The Committee scheduled and conducted interviews with all eight applicants.

• During interviews, applicants were asked questions including whether they had ever filed a lawsuit against the Association, were considering filing a lawsuit, or had any compliance violations.

• The Committee ultimately nominated four candidates to be placed on the ballot for the election. Of these four, two had applied by the September 29 deadline and two had applied after.

Association’s Position and Testimony

• Simone McGinnis, the Association’s on-site manager, testified that the September 29 deadline was not imposed by the Board but was an administrative deadline set by the management company to allow time for the nomination and ballot-printing process.

• The Association’s position, articulated at the November 16, 2017 Board meeting, is that the only way to get on the ballot is to be nominated by the Nominating Committee, although write-in candidates are permitted during the election.

• The Board acknowledged that it had only strictly adhered to the Bylaw requirement of using a Nominating Committee for the past two years, after thirty years of non-adherence.

• The Board’s attorney stated that the Committee members have a duty to act reasonably and that any member who disagrees with the Committee’s discretionary choices should seek to amend the bylaws.

Analysis of Governing Documents and Statutes

The judge’s decision rested on the interpretation of specific articles within the Association’s Bylaws and relevant Arizona state law.

Document/Statute

Relevant Provision

Application in this Case

Bylaws Article IV, Section 3

“Nominations for election to the Board of Directors shall be made by a Nominating Committee… The Nominating Committee shall make as many nominations… as it shall in its discretion determine…”

This article grants the Committee explicit discretion to select nominees. It does not provide for “self-nomination” or require the Committee to nominate all applicants.

Bylaws Article VIII

“no committee may take action which exceeds its responsibilities. Each committee shall operate in accordance with any terms, limitations, or rules adopted by the Board.”

Mr. Travis argued the deadline was a “rule adopted by the Board.” The court found no evidence to support this, concluding it was an administrative deadline.

Bylaws Article IV, Section 1

States that Board Directors must be members of the Association. It lists no other qualifications.

Mr. Travis argued that questioning candidates imposed extra qualifications. The court found this was part of the Committee’s discretionary selection process, not the imposition of new formal requirements.

ARIZ. REV. STAT. § 33-1812

Prohibits proxy voting and requires that ballots set forth each proposed action and provide an opportunity to vote for or against it.

The court determined this statute applies to “votes allocated to a unit” (i.e., the member’s vote) and not the nomination process itself, which is governed by the Bylaws.

Conclusions of Law and Final Order

The Administrative Law Judge made the following conclusions based on a preponderance of the evidence:

1. Deadline was Administrative: There was no substantial evidence showing the September 29, 2017 deadline was a formal rule adopted by the Board. Therefore, the Nominating Committee did not violate Bylaws Article VIII by accepting applications after this date.

2. Committee Acted Within its Discretion: The plain language of Bylaws Article IV, Section 3 requires nominations to be made by the Committee and grants it discretion. The concept of “self-nomination” is not supported by the Bylaws. It was not unreasonable for the Committee to question applicants as part of exercising its explicit discretion to select nominees.

3. State Voting Statute Not Applicable: The nomination process, as dictated by the Bylaws, is separate from the act of voting. Since ARIZ. REV. STAT. § 33-1812 governs “votes allocated to a unit,” it is not applicable to the Committee’s function of selecting nominees.

IT IS ORDERED that Petitioner William Travis’s petition is dismissed.

The decision is binding on the parties unless a rehearing is requested from the Commissioner of the Department of Real Estate within 30 days of the service of the order.

Briefing Document: Administrative Law Judge Decision in Barrs v. Desert Ranch Homeowners Association

Executive Summary

This document synthesizes the findings and conclusions of the Administrative Law Judge (ALJ) in case number 18F-H1817008-REL, involving Petitioner Thomas Barrs and Respondent Desert Ranch Homeowners Association (HOA). The central outcome of the December 1, 2017 hearing was the complete dismissal of Mr. Barrs’ petition. The ALJ determined that Mr. Barrs failed to prove by a preponderance of the evidence that the HOA violated Arizona Revised Statutes § 33-1805 regarding member access to association records.

The decision hinged on a key statutory interpretation: ARIZ. REV. STAT. § 33-1805 requires an HOA to make records “reasonably available for examination” and to provide copies upon request, but it does not obligate the association to email documents to members. The Judge found that the HOA’s offers to allow Mr. Barrs to inspect records in person were legally sufficient. The failure to access records was ultimately attributed to the petitioner’s own actions, including a self-initiated communication breakdown with a key Board member and a subsequent refusal of the HOA’s offers for in-person inspection. The Judge concluded that for each of the contested allegations, the HOA had either fulfilled its statutory duty, the requested records did not exist, or its attempts to provide access were declined by the petitioner.

Case Overview

Case Name

Thomas Barrs (Petitioner) v. Desert Ranch Homeowners Association (Respondent)

Case Number

18F-H1817008-REL

Arizona Office of Administrative Hearings

Administrative Law Judge

Thomas Shedden

Hearing Date

December 1, 2017

Decision Date

December 27, 2017

Central Allegation

The Petitioner alleged nine instances where the Respondent violated ARIZ. REV. STAT. § 33-1805 by failing to accommodate requests to inspect or receive via email various HOA records.

Final Disposition

The Petitioner’s petition was dismissed. The Respondent was deemed the prevailing party.

Analysis of Petitioner’s Allegations and Findings

The petition, filed on September 4, 2017, contained nine specific allegations of statutory violations by the HOA. These issues and the ALJ’s findings are detailed below.

Summary of Allegations

Request

Date of Request

Finding of Fact

View April 29, 2017 Board election documents

May 19, 2017

No violation; request fulfilled within statutory time limit.

View March 18, 2017 Board election documents

June 17, 2017

No violation; HOA cured any potential breach with offers to inspect, which were declined.

Email copies of insurance policies

July 11, 2017

No violation; HOA offered inspection, which fulfills statutory duty.

Insurance company phone number & policy number

Aug 26, 2017

No violation; Petitioner acknowledged receipt of information.

Email Secretary’s shorthand notes from March 18 meeting

July 11, 2017

No violation; the requested notes do not exist.

Email the annual budget

July 11, 2017

No violation; HOA offered inspection, which fulfills statutory duty.

Email written record of EDC actions after July 2016

July 11, 2017

No violation; HOA offered inspection, which fulfills statutory duty.

Email name of EDC chairperson

July 11, 2017

Withdrawn by Petitioner at the hearing.

Email list of Board meeting dates

July 11, 2017

Withdrawn by Petitioner at the hearing.

Detailed Findings by Issue

At the hearing, the Petitioner withdrew his allegations concerning the name of the EDC chairperson (Issue 8) and the list of past Board meeting dates (Issue 9).

• Issue 4 (Insurance Information): The Judge noted that Mr. Barrs “effectively acknowledged that he has received the insurance company’s phone number and the policy number.” No violation was found.

• Issue 5 (Shorthand Meeting Notes): The evidence demonstrated that no shorthand notes from the March 18, 2017 meeting exist. The Board had previously informed Mr. Barrs of this fact. Consequently, the Judge found no violation.

The petitioner requested to view documents related to the April 29, 2017, election via an email sent at 8:59 p.m. on Friday, May 19, 2017. The Judge determined that this request was effectively received on the next business day, Monday, May 22, 2017. Under the statute, the HOA had ten business days, until June 5, 2017, to fulfill the request. The HOA made the documents available for Mr. Barrs’ inspection on June 3, 2017, which was within the required timeframe. The decision also dismissed related claims by Mr. Barrs regarding a “late ballot” (which was actually a nomination petition) and “undeliverable ballots” (which did not exist as mailing envelopes had no return address). The Judge concluded the HOA did not violate the statute.

These issues center on a series of requests made in June and July 2017 and a significant communication failure initiated by the Petitioner.

Background: In March 2017, after HOA Board member Brian Schoeffler asked to be removed from a resident email thread, Mr. Barrs ceased all email communication with Mr. Schoeffler and blocked his email address, preventing him from receiving any emails sent by Mr. Schoeffler.

Timeline of Events:

• June 17, 2017: Mr. Barrs requested to view the March 18 election ballots (Issue 2). On June 19, Board President Catherine Overby informed him the materials were with Mr. Schoeffler and that he should contact him.

• July 11, 2017: Mr. Barrs emailed the Board (excluding Mr. Schoeffler) requesting that the insurance policies (Issue 3), annual budget (Issue 6), and EDC records (Issue 7) be emailed to him.

• July 12, 2017: Ms. Overby responded that she would forward the request to Mr. Schoeffler and later stated that Mr. Barrs should go to Mr. Schoeffler’s house to view the records. On the same day, Mr. Schoeffler emailed Mr. Barrs—an email Mr. Barrs did not receive—offering to meet and provide copies.

• July 25, 2017: Mr. Barrs informed the Board for the first time that he had blocked Mr. Schoeffler’s emails.

• July 28, 2017: Mr. Schoeffler sent another email, offering dates to meet and explaining that the statute required only that documents be made “reasonably available.”

• July 29, 2017: Mr. Barrs responded to the Board, stating he “will not stipulate to the preconditions” set by Mr. Schoeffler and concluding that the documents were “apparently” not available.

Finding: The Judge found that the Board responded to the July 11 requests in a timely manner (on July 12) and continued to try and accommodate them. However, Mr. Barrs “initially delayed matters by refusing to contact Mr. Schoeffler and he then declined Respondent’s offers.” For Issue 2, the Judge concluded that even if the HOA had initially failed to provide access within ten days, it had “cured its breach” with the subsequent offers of inspection on July 12 and July 28, which Mr. Barrs declined.

Central Legal Conclusions

The ALJ’s decision rested on several key conclusions of law regarding statutory interpretation and the burden of proof.

• Burden of Proof: Mr. Barrs, as the petitioner, bore the burden of proving the alleged violations by a preponderance of the evidence. The Judge concluded that he failed to meet this standard on all counts.

• Interpretation of ARIZ. REV. STAT. § 33-1805(A): This was the pivotal legal finding. The statute reads, in part:

• The ALJ concluded that this language does not obligate an HOA to email records to a member. The statutory requirement is satisfied when the association makes the records “reasonably available” for in-person inspection and allows the member to purchase copies (for a fee of not more than fifteen cents per page).

• Application to the Case: The HOA’s offer for Mr. Barrs to examine the requested documents at Mr. Schoeffler’s residence and to have copies made fulfilled its legal duty. Mr. Barrs’ insistence on receiving documents via email and his ultimate refusal of the in-person inspection offer were the reasons he did not gain access to the records.

Final Order

Based on the findings of fact and conclusions of law, the Administrative Law Judge issued the following order:

“IT IS ORDERED that Thomas Barrs’ petition is dismissed.”

The decision is binding on the parties unless a rehearing is filed with the Commissioner of the Department of Real Estate within 30 days of the service of the order.