The Administrative Law Judge ruled partially in favor of Petitioner Warren R. Brown, finding that Mogollon Airpark, Inc. violated ARIZ. REV. STAT. section 33-1803(A) by imposing a $25 late payment fee, and ordered the fee rescinded and the $500 filing fee refunded,,,. The ALJ ruled against both Petitioners (Brown and Stevens) regarding the challenge to the $325 assessment increase, dismissing those petitions because they failed to prove the HOA violated A.R.S. § 33-1803(A),,,.
Why this result: Petitioners Warren R. Brown and Brad W. Stevens failed to prove by a preponderance of the evidence that the combined $325 assessment increase violated ARIZ. REV. STAT. section 33-1803(A) because their definition of 'regular assessment' as encompassing all assessments enacted through proper procedures was not supported by statutory construction principles,.
Key Issues & Findings
Challenge to assessment increase exceeding 20% limit (Brown Docket 18F-H1818029-REL-RHG)
Petitioner Brown alleged the combined $325 increase, consisting of a $116 regular increase and a $209 special assessment, violated A.R.S. § 33-1803(A) because 'regular assessment' refers to the creation process, making the total increase subject to the 20% cap,,,,.
Orders: Petition dismissed. Respondent Mogollon Airpark, Inc. deemed the prevailing party in the 029 matter,,,.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
4
6
32
33
35
36
73
74
76
77
Challenge to assessment increase exceeding 20% limit (Stevens Docket 18F-H1818054-REL)
Petitioner Stevens alleged the total $325 assessment increase violated A.R.S. § 33-1803(A) and raised accompanying allegations of deceptive accounting and lack of authority to impose special assessments,,.
Orders: Petition dismissed. Respondent deemed the prevailing party in the 054 matter,,,,.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
7
20
32
33
35
36
38
61
73
74
76
77
79
94
99
101
Challenge to late payment charges (Brown Docket 18F-H1818045-REL)
Petitioner Brown alleged that the $25 late fee and 18% interest charged by Mogollon violated the statutory limits set forth in A.R.S. § 33-1803(A),,. The ALJ found the $25 late charge violated the statute because the limit applies to all 'assessments',.
Orders: Petitioner Warren R. Brown deemed the prevailing party. Mogollon Airpark Inc. must rescind the $25 late fee and pay Mr. Brown his filing fee of $500.00 within thirty days,.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
Cited:
5
7
32
34
37
46
47
59
73
75
78
Analytics Highlights
Topics: HOA assessment cap, Late fee violation, Statutory construction, Regular assessment definition, Special assessment, Filing fee refund
Additional Citations:
ARIZ. REV. STAT. section 33-1803(A)
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Deer Valley, v. Houser, 214 Ariz. 293, 296, 152 P.3d 490, 493 (2007)
U.S. Parking Sys v. City of Phoenix, 160 Ariz. 210, 211, 772 P.2d 33, 34 (App. 1989)
Briefing Document: Brown and Stevens vs. Mogollon Airpark, Inc.
Executive Summary
This document synthesizes the findings and conclusions from a consolidated administrative law case involving petitioners Warren R. Brown and Brad W. Stevens against their homeowners’ association (HOA), Mogollon Airpark, Inc. The central dispute concerned a 2018 assessment increase of $325, which represented a 39.4% increase over the previous year, and the imposition of a new $25 late fee.
The petitioners argued that the entire assessment increase violated Arizona Revised Statute § 33-1803(A), which limits annual regular assessment increases to 20%. They contended that the term “regular” describes the procedural enactment of an assessment, making the entire 325increaseasingleregularassessment.Conversely,theHOAassertedthatithadbifurcatedtheincreaseintoacompliant14.1116) regular assessment increase and a separate $209 special assessment, which is not subject to the 20% statutory cap.
The Administrative Law Judge (ALJ) ultimately sided with Mogollon Airpark on the assessment increase, dismissing the petitions of both Mr. Brown and Mr. Stevens. The ALJ’s rationale, based on principles of statutory construction, was that “regular assessment” refers to a type of assessment, distinct from a “special assessment,” and that to rule otherwise would render the word “regular” meaningless in the statute. A subsequent rehearing requested by Mr. Stevens was also denied on the same grounds.
However, the ALJ ruled in favor of Mr. Brown on the matter of the late fee. The decision found that the statutory limit on late fees applies to all “assessments,” not just regular ones, making the HOA’s $25 fee a clear violation. Underlying the legal challenges were substantial allegations by the petitioners of deceptive accounting and financial mismanagement by the HOA to create a “fabricated shortfall,” though the ALJ noted these issues were outside the narrow scope of the administrative hearing and better suited for civil court.
Case Overview and Parties Involved
This matter consolidates three separate petitions filed with the Arizona Department of Real Estate, which were heard by the Office of Administrative Hearings.
• Petitioners:
◦ Warren R. Brown (Docket Nos. 18F-H1818029-REL-RHG & 18F-H1818045-REL)
◦ Brad W. Stevens (Docket No. 18F-H1818054-REL)
• Respondent:
◦ Mogollon Airpark, Inc.
• Venue and Adjudication:
◦ Tribunal: Office of Administrative Hearings, Phoenix, Arizona
◦ Administrative Law Judge: Thomas Shedden
◦ Hearing Date (Consolidated Matters): September 28, 2018
◦ Rehearing Date (Stevens Matter): February 11, 2019
Key Financial Figures
Amount/Rate
Calculation/Note
Previous Year’s Assessment (2017)
The baseline for calculating the increase percentage.
Total 2018 Assessment Increase
The total amount disputed by the petitioners.
Total Increase Percentage
($325 / $825)
“Regular Assessment” Increase
As classified by Mogollon Airpark, Inc. (14.1% increase).
“Special Assessment”
As classified by Mogollon Airpark, Inc.
New Late Fee
Challenged as exceeding statutory limits.
New Interest Rate
For past-due accounts.
Statutory Late Fee Limit
Greater of $15 or 10%
Per ARIZ. REV. STAT. § 33-1803(A).
Statutory Assessment Increase Limit
20% over prior year
Per ARIZ. REV. STAT. § 33-1803(A), applies to regular assessments.
Analysis of Core Legal Disputes
The hearings focused on two primary violations of Arizona statute alleged by the petitioners.
The 2018 Assessment Increase (39.4%)
The crux of the case in dockets 029 and 054 was the interpretation of the term “regular assessment” within ARIZ. REV. STAT. § 33-1803(A).
• Petitioners’ Position (Brown & Stevens):
◦ The total $325 increase, constituting a 39.4% hike, is a clear violation of the 20% statutory cap.
◦ The term “regular assessment” as used in the statute refers to the process by which an assessment is created (i.e., by motion, second, and vote). As the entire $325 was passed via this standard procedure, it constitutes a single regular assessment.
◦ They further argued that Mogollon Airpark, Inc.’s governing documents (Bylaws and CC&Rs) do not provide any explicit authority to impose “special assessments,” meaning any assessment levied must be a regular one.
• Respondent’s Position (Mogollon Airpark, Inc.):
◦ The assessment was properly bifurcated into two distinct parts: a $116 increase to the regular assessment (a 14.1% increase, well within the 20% limit) and a $209 special assessment.
◦ “Regular assessment” and “special assessment” are established terms of art in the HOA industry, denoting different types of assessments, not the process of their creation.
◦ The existence of both terms in other parts of Arizona law, such as § 33-1806, demonstrates the legislature’s intent to treat them as separate categories.
Late Fees and Interest Charges
In docket 045, Mr. Brown challenged the legality of the newly instituted penalties for late payments.
• Petitioner’s Position (Brown):
◦ The statute explicitly limits late fees to “the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.”
◦ The HOA’s imposition of a flat $25 late fee is a direct violation of this provision. An invoice provided as evidence showed Mr. Brown was charged this $25 fee plus $1.57 in interest.
• Respondent’s Position (Mogollon Airpark, Inc.):
◦ The HOA argued that the statutory limitation on late fees applied only to regular assessments, not to special assessments. This argument was explicitly rejected by the ALJ.
Underlying Allegations of Financial Misconduct
While the administrative hearings were limited to the specific statutory violations, the petitions were motivated by deep-seated concerns over the HOA’s financial management. These allegations were not adjudicated but were noted by the ALJ.
• Core Allegation: The petitioners claimed the HOA treasurer and others engaged in “deceptive and nonstandard accounting methods” to manufacture a financial crisis and justify the assessment increase.
• Specific Claims:
◦ Mr. Brown alleged that the accounting was “deliberately misleading” to obscure the fact that the 2016 board left the treasury approximately “$200,000 better off.”
◦ Mr. Stevens submitted a 45-page petition with over 600 pages of exhibits detailing the alleged improprieties, including “keeping two sets of books,” to create a “fabricated shortfall.” He testified that he believed the HOA possessed over $1 million and did not need an increase.
• Judicial Comment: The ALJ noted that these complex financial allegations were not addressed in the hearing and suggested that “the civil courts may be better suited than an administrative tribunal to address the issues they raise.”
Judicial Decisions and Rationale
The ALJ issued separate findings and orders for each docket, culminating in a split decision. The rulings on the assessment increase were further solidified in a subsequent rehearing.
Summary of Outcomes
Docket No.
Petitioner
Core Issue
Ruling
Prevailing Party
18F-H1818029-REL-RHG
Warren R. Brown
Assessment Increase
Petition Dismissed
Mogollon Airpark, Inc.
18F-H1818054-REL
Brad W. Stevens
Assessment Increase
Petition Dismissed
Mogollon Airpark, Inc.
18F-H1818045-REL
Warren R. Brown
$25 Late Fee
Violation Found
Warren R. Brown
Rationale for Initial Decision (October 18, 2018)
• On the Assessment Increase: The ALJ found that the petitioners failed to prove by a preponderance of the evidence that a violation occurred. The ruling rested on statutory interpretation:
◦ The petitioners’ definition of “regular assessment” as a process was rejected because it would render the word “regular” in the statute “trivial or void,” as all assessments are presumed to follow a regular process.
◦ The only “fair and sensible result” that gives meaning to every word in the statute is to interpret “regular” and “special” as distinct types of assessments.
• On the Late Fees: The ALJ found that Mr. Brown successfully proved a violation.
◦ The statutory text on late fees applies to “assessments” generally, without the qualifier “regular.”
◦ Mogollon’s argument required adding the word “regular” where the legislature did not use it, which violates principles of statutory construction.
◦ Order: Mogollon was ordered to rescind the $25 fee assessed against Mr. Brown and reimburse his $500 filing fee.
Rationale for Rehearing Decision (March 1, 2019)
Mr. Stevens’s request for a rehearing on his dismissed petition was granted but ultimately denied again.
• Mr. Stevens’s Rehearing Arguments: He argued the ALJ erred by not applying a definition of “special assessment” from the case Northwest Fire District v. U.S. Home of Arizona and reasserted that an assessment unauthorized by the HOA’s documents must logically be a regular one.
• ALJ’s Rejection:
◦ The reliance on Northwest Fire District was “misplaced” because that case applies to special taxing districts created under a different state title, not private HOAs.
◦ The argument that an unauthorized special assessment becomes a regular one was deemed “nonsensical.” The ALJ noted, “More reasonably, if Mogollon has no authority to issue a special assessment, any such assessment would be void.”
◦ The core statutory interpretation from the initial hearing was affirmed. The petition was dismissed a final time.
Study Guide – 18F-H1818054-REL-RHG
Study Guide: Brown and Stevens v. Mogollon Airpark, Inc.
Short Answer Quiz
Instructions: Answer the following questions in 2-3 sentences each, based on the provided legal documents.
1. Identify the petitioners and the respondent in this consolidated legal matter and describe their relationship.
2. What specific financial changes did Mogollon Airpark, Inc. implement in 2018 that led to the legal dispute?
3. What was the central legal argument presented by petitioners Warren R. Brown and Brad W. Stevens regarding the assessment increase?
4. How did Mogollon Airpark, Inc. justify its total assessment increase of $325 in the face of the legal challenge?
5. Explain the Administrative Law Judge’s primary reason for dismissing the petitions concerning the assessment increase (the 029 and 054 matters).
6. What was the specific subject of the petition in the 045 matter, and what was the final ruling in that case?
7. What was the judge’s legal reasoning for finding Mogollon’s $25 late fee to be in violation of the statute?
8. Why did the hearing not address the petitioners’ underlying allegations of deceptive accounting and financial impropriety?
9. What is the standard of proof required in this matter, and which parties were responsible for meeting it?
10. In the rehearing for the 054 matter, what was Brad Stevens’s argument regarding the definition of “special assessment,” and why did the judge find his reliance on the Northwest Fire District case to be misplaced?
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Quiz Answer Key
1. The petitioners were Warren R. Brown and Brad W. Stevens, who were members of the homeowners’ association (HOA). The respondent was Mogollon Airpark, Inc., the HOA itself. The dispute arose from actions taken by the HOA board that the petitioners, as members, believed to be unlawful.
2. In 2018, Mogollon Airpark, Inc. raised its total annual assessment by $325 over the previous year’s $825. Additionally, the HOA instituted a new late payment fee of $25 and began charging 18% interest on past-due accounts.
3. The petitioners’ central argument was that the total $325 assessment increase, representing a 39.4% hike over the prior year, violated ARIZ. REV. STAT. section 33-1803(A). This statute prohibits an HOA from imposing a “regular assessment” that is more than 20% greater than the previous year’s assessment without member approval.
4. Mogollon Airpark, Inc. argued that the $325 increase was composed of two separate parts: a $116 increase to the “regular assessment” (14.1%) and a $209 “special assessment.” They contended that the 20% statutory limit in section 33-1803(A) applies only to regular assessments, not special assessments, and therefore their actions were lawful.
5. The judge dismissed the petitions based on principles of statutory construction. He concluded that “regular assessment” is a specific type of assessment, distinct from a “special assessment,” and that if “regular” merely referred to the process of passing an assessment (motion, second, vote), the word would be redundant and meaningless in the statute. Since the regular assessment portion of the increase was below the 20% threshold, no violation occurred.
6. The 045 matter, filed by Warren R. Brown, specifically challenged Mogollon’s new $25 late fee and 18% interest charge. The judge ruled in favor of Mr. Brown, deeming him the prevailing party, and ordered Mogollon to rescind the $25 late fee and refund his $500 filing fee.
7. The judge found the $25 late fee violated the statute because the section of ARIZ. REV. STAT. section 33-1803(A) limiting late charges applies to “assessments” generally, not just “regular assessments.” Unlike the clause on assessment increases, the legislature did not use the limiting word “regular,” so applying that limitation would violate principles of statutory construction.
8. The hearing did not address the allegations of deceptive accounting because the petitions filed by Mr. Brown (029) and Mr. Stevens (054) were “single-issue petitions.” This limited the scope of the hearing strictly to the question of whether Mogollon violated the specific statute, section 33-1803(A). The judge noted that civil courts may be a more suitable venue for the financial allegations.
9. The standard of proof required was a “preponderance of the evidence.” The burden of proof was on the petitioners, Messrs. Brown and Stevens, to prove their respective allegations against the respondent, Mogollon Airpark, Inc.
10. Mr. Stevens argued that the definition of “special assessment” from the case Northwest Fire District v. U.S. Home of Arizona should be applied, which it failed to meet. The judge found this reliance misplaced because that case applies to special taxing districts created under ARIZ. REV. STAT. Title 48, and Mogollon Airpark, Inc. is an HOA, not such a taxing district.
——————————————————————————–
Essay Questions
Instructions: The following questions are designed for a more in-depth, essay-format response. Do not provide answers.
1. Analyze the competing interpretations of the term “regular assessment” as presented by the petitioners and the respondent. Discuss the Administrative Law Judge’s final interpretation and the principles of statutory construction used to arrive at that conclusion.
2. The Administrative Law Judge’s decision distinguishes between the legality of the assessment increase and the legality of the late fee. Explain the legal reasoning behind this split decision, focusing on the specific wording of ARIZ. REV. STAT. section 33-1803(A) and the different statutory construction applied to each clause.
3. Discuss the procedural limitations of the hearings as described in the legal decision, specifically referencing the concept of a “single-issue petition.” How did this limitation affect the scope of the case and prevent the judge from ruling on certain serious allegations made by Brown and Stevens?
4. Based on the “Findings of Fact,” describe the background allegations of financial misconduct made by the petitioners against Mogollon’s treasurer and board. Although not ruled upon, explain how these allegations served as the primary motivation for their legal challenges regarding the assessment and fee increases.
5. Trace the procedural history of the “029 matter,” from its original petition and dismissal to the eventual rehearing and final order. What does this process reveal about the requirements for filing a successful petition with the Office of Administrative Hearings?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, weighs evidence, and makes legal rulings and decisions, in this case, Judge Thomas Shedden.
ARIZ. REV. STAT. section 33-1803(A)
The specific Arizona statute at the heart of the dispute. It limits HOA regular assessment increases to 20% over the prior year and caps late payment charges to the greater of $15 or 10% of the unpaid assessment.
Assessment
A fee or charge levied by a homeowners’ association on its members to cover operating expenses, reserve funds, and other costs.
Bylaws
A set of rules adopted by an organization, like an HOA, to govern its internal management and operations. Part of the governing documents.
Covenants, Conditions & Restrictions. These are legal obligations recorded in the deed of a property, governing its use and maintenance. Part of the governing documents.
Consolidated Matter
A legal procedure where multiple separate cases or petitions involving common questions of law or fact are combined into a single hearing to promote efficiency.
Docket Number
A unique number assigned by a court or administrative office to identify a specific case. The matters in this case were identified as 029, 045, and 054.
Governing Documents
The collection of legal documents, including CC&Rs and Bylaws, that establish the rules and authority of a homeowners’ association.
Petitioner
The party who files a petition initiating a legal action in an administrative or court proceeding. In this case, Warren R. Brown and Brad W. Stevens.
Preponderance of the Evidence
The standard of proof in this case. It means the greater weight of the evidence shows that a fact is more likely than not to be true.
Regular Assessment
As interpreted by the ALJ, a specific type of recurring annual assessment for an HOA’s general operating budget, subject to the 20% increase limit in section 33-1803(A).
Respondent
The party against whom a petition is filed. In this case, Mogollon Airpark, Inc.
Single-Issue Petition
A petition that limits the scope of the administrative hearing to a single, specific legal question or alleged violation, as was the case for the 029 and 054 matters.
Special Assessment
As interpreted by the ALJ, a one-time or non-recurring assessment levied for a specific purpose (e.g., replenishing a reserve fund). The ALJ found it is not subject to the 20% annual increase cap that applies to regular assessments.
Statutory Construction
The process and principles used by judges to interpret and apply legislation. The judge used these principles to determine the meaning of “regular” and “assessment” in the statute.
Blog Post – 18F-H1818054-REL-RHG
How One Word Let an HOA Raise Dues by 40%—And 4 Surprising Lessons for Every Homeowner
Imagine opening your annual bill from your Homeowner’s Association (HOA) and discovering your dues have skyrocketed by nearly 40% overnight. This isn’t a hypothetical scenario. It’s precisely what happened to homeowners in the Mogollon Airpark community in Arizona when their HOA board raised the annual assessment by $325, from $825 to $1,150—a staggering 39.4% increase.
But the homeowners weren’t just angry about the amount; they alleged the increase was justified by a “fabricated shortfall” created through “deceptive and nonstandard accounting methods.” At first glance, the hike also seemed legally impossible. Arizona state law, specifically ARIZ. REV. STAT. section 33-1803(A), clearly states that an HOA cannot impose a regular assessment that is more than 20% greater than the previous year’s. So how did the Mogollon Airpark board legally circumvent this cap? The answer, found in the fine print of an administrative law judge’s decision, reveals critical lessons for every homeowner about the power of language, legal strategy, and reading the fine print.
1. The Power of a Name: The “Special Assessment” Loophole
The HOA’s strategy was deceptively simple. Instead of raising the annual assessment by the full $325, the Mogollon Airpark board split the increase into two distinct parts. First, it raised the “regular assessment” by $116. This amounted to a 14.1% increase over the previous year’s $825, keeping it well within the 20% legal limit. The remaining $209 was then levied as a separate fee, which the board classified as a “special assessment.”
When homeowners challenged this, the Administrative Law Judge sided with the HOA. The judge’s ruling was based on a strict reading of the statute: the 20% cap applies only to “regular assessments,” not “special assessments.” By simply calling a portion of the increase a “special assessment,” the HOA legally circumvented the very law designed to protect homeowners from massive, sudden fee hikes.
Lesson 1 for Homeowners: The name of a fee is everything. State-mandated caps on “regular” assessments offer zero protection if your HOA can simply reclassify an increase as a “special” assessment.
2. Every Word Is a Battlefield: “Regular” Doesn’t Mean What You Think
The homeowners, petitioners Warren Brown and Brad Stevens, built their case on a common-sense interpretation of the law. They argued that the term “regular assessment” in the statute referred to the process by which an assessment is created—that is, any fee approved through a regular motion, second, and vote by the board. By this logic, the entire $325 increase was a single “regular assessment” and therefore violated the 20% cap. They also argued that the HOA had no authority under its own governing documents to impose a special assessment in the first place.
The judge, however, rejected this definition. The judge reasoned that lawmakers don’t add words to statutes for no reason. If “regular” simply meant “voted on normally,” the word would be redundant, as all assessments are assumed to be passed this way. To give the word meaning, it must refer to a specific type of assessment. To support this interpretation, the judge pointed to another Arizona statute, 33-1806, which explicitly uses the distinct terms “regular assessments” and “special assessment[s].” This proved that the state legislature intended for them to be entirely different categories of fees, cementing the HOA’s victory on the main issue.
Lesson 2 for Homeowners: Every word in a statute has a purpose. Courts assume lawmakers don’t use words accidentally, and a layperson’s “common-sense” definition of a term can be easily defeated by established principles of legal interpretation.
3. A Small Victory on a Technicality: Why You Should Still Read the Fine Print
While the homeowners lost the battle over the 39.4% dues increase, one petitioner, Mr. Brown, secured a small but significant win on a separate issue: late fees. The Mogollon Airpark board had instituted a new $25 late fee, which Mr. Brown challenged.
Arizona law limits late fees to “the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.” The HOA argued that this limit, like the 20% cap, only applied to regular assessments. This time, the judge disagreed. The judge’s logic was a textbook example of statutory interpretation: when lawmakers include a specific word in one part of a law but omit it from another, courts assume the omission was deliberate. In the section of the law governing late fees, the limit applies to “assessments” in general; the word “regular” is conspicuously absent.
Because the HOA’s $25 fee exceeded the legal limit, the judge ruled in favor of Mr. Brown. The court ordered the HOA to rescind the illegal late fee and, importantly, to reimburse Mr. Brown for his $500 filing fee.
Lesson 3 for Homeowners: The fine print cuts both ways. While one word can create a loophole for an HOA, the absence of that same word elsewhere can be your most powerful weapon.
4. Fighting the Right Battle in the Right Place: The Allegations a Judge Couldn’t Hear
Underlying the dispute over the 20% cap were much more serious allegations. The homeowners’ petitions claimed the HOA board used “deceptive and nonstandard accounting methods,” including keeping “two sets of books,” to create a “fabricated shortfall” and justify the massive fee increase.
Yet, none of these explosive claims were ever addressed during the hearing. The reason was a crucial matter of legal procedure. The homeowners had filed what are known as “single-issue petitions,” which focused narrowly and exclusively on the violation of the 20% assessment cap in statute 33-1803(A). This strategic choice legally prevented the judge from considering the broader allegations of financial mismanagement, regardless of their merit.
In a pointed footnote, the judge highlighted the procedural constraints and suggested the homeowners had chosen the wrong legal venue for their most serious claims:
Considering the nature of Messrs. Brown and Stevens’s allegations, the civil courts may be better suited than an administrative tribunal to address the issues they raise.
Lesson 4 for Homeowners: Your legal strategy is as important as your evidence. Choosing the right claims to file and the right venue to file them in can determine whether a judge is even allowed to hear your most compelling arguments.
Conclusion: Your Most Powerful Tool
The case of Mogollon Airpark is a powerful illustration of how legal battles are won and lost not on broad principles of fairness, but on the precise definitions of individual words. The presence of the word “regular” in one clause of the law cost the homeowners their central fight, allowing the HOA to circumvent the 20% cap. In a stunning contrast, the absence of that very same word in another clause handed them a clear victory on late fees.
This case is a stark reminder of the power hidden in legal definitions and fine print. It leaves every homeowner with a critical question: Do you really know what your governing documents—and the state laws that bind them—truly allow?
Case Participants
Petitioner Side
Warren R. Brown(petitioner) Appeared pro se
Brad W. Stevens(petitioner) Appeared pro se; presented testimony/evidence
Respondent Side
Gregory A. Stein(respondent attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Mark K. Sahl(respondent attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Spelled Mark K. Saul in some transmissions
Neutral Parties
Thomas Shedden(ALJ) OAH
Judy Lowe(Commissioner) Arizona Department of Real Estate
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
18F-H1818052-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2019-01-17
Administrative Law Judge
Thomas Shedden
Outcome
loss
Filing Fees Refunded
$0.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Lawrence M. Stewart
Counsel
—
Respondent
Canyon Gate Condominium Association, Inc.
Counsel
Nicolas C. S. Nogami
Alleged Violations
Association Bylaws section 5.4
Outcome Summary
The Administrative Law Judge dismissed Petitioner Lawrence M. Stewart's petition and deemed the Respondent, Canyon Gate Condominium Association, Inc., to be the prevailing party.
Why this result: Petitioner failed to prove the Association violated Bylaws Section 5.4 or acted unreasonably or in bad faith when denying his request for a variance. The Bylaw section cited was determined to be a liability shield for the Board, not a source of duty owed to the homeowner.
Key Issues & Findings
Alleged failure of HOA Board to act in good faith when denying Petitioner's request for a variance for unauthorized common area changes
Petitioner made changes to the common area without permission and the Board denied his subsequent request for a variance. Petitioner alleged the Board violated Bylaws Section 5.4 by failing to act in good faith and showing bias. The ALJ found that Section 5.4 is a liability shield for the Board, not a duty imposed upon them, and Petitioner failed to meet the burden of proof to show bad faith or unreasonableness.
Orders: Petitioner Lawrence M. Stewart’s petition is dismissed. Respondent is deemed to be the prevailing party in this matter.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Analytics Highlights
Topics: HOA governance, variance denial, common area modifications, good faith requirement, board liability shield, prevailing party
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Briefing Document: Stewart v. Canyon Gate Condominium Association, Inc.
Executive Summary
This document synthesizes the findings and conclusions from an administrative legal case involving Petitioner Lawrence M. Stewart and Respondent Canyon Gate Condominium Association, Inc. The core of the dispute revolves around Mr. Stewart’s unauthorized modifications to a common area, for which the Association’s Board of Directors denied a retroactive variance. Mr. Stewart alleged the Board violated its bylaws by acting in bad faith, that a specific Board member was biased against him, and that he was subjected to unfair treatment compared to other homeowners.
The Administrative Law Judge, in both an initial hearing and a subsequent rehearing, consistently ruled against Mr. Stewart. The judge determined that the specific bylaw cited (Section 5.4) was an indemnification clause that shields the Board from liability and does not impose a duty of action. Crucially, Mr. Stewart failed to meet the legal burden of proving his claims by a “preponderance of the evidence.” The Board’s rationale for the denial—to avoid setting a precedent, or “opening a Pandora’s Box”—was deemed a reasonable position for a condominium association. Evidence presented to support claims of bias and unequal treatment was found to be insufficient or not probative. Ultimately, Mr. Stewart’s petition was dismissed in its entirety.
Case Overview
This matter, designated as No. 18F-H1818052-REL, was adjudicated by the Office of Administrative Hearings under the authority of the Arizona Department of Real Estate. The case centered on a petition filed by Mr. Stewart on May 21, 2018, alleging a violation of the Association’s Bylaws by the Board of Directors.
Parties Involved
Name / Entity
Representation
Petitioner
Lawrence M. Stewart
On his own behalf
Respondent
Canyon Gate Condominium Association, Inc.
Mark K. Sahl, Esq. & Nichols C. S. Nogami, Esq.
Administrative Law Judge Thomas Shedden
Case Chronology
• November 15, 2017: The Association’s counsel informs Mr. Stewart in a letter that he is in violation of section 5.1 of the CC&Rs for making unapproved changes to a common/limited common area.
• Post-November 15, 2017: Mr. Stewart, then a member of the Board, requests a variance for the changes.
• December 27, 2017: The Association’s attorney sends a letter stating an understanding that Mr. Stewart had recused himself and that the other two Board members (Sandra Fernandez and David Larson) had required the area to be restored.
• January 4, 2018: Mr. Stewart writes to the other Board members, refuting that he had agreed to recuse himself and requesting a formal meeting to consider his variance request.
• February 18, 2018: At a Board meeting, Mr. Stewart resigns from the Board. The remaining two members vote to deny his variance request and require him to restore the area to its original condition.
• May 21, 2018: Mr. Stewart files his petition with the Arizona Department of Real Estate.
• September 6, 2018: The initial administrative hearing is conducted.
• September 14, 2018: The Administrative Law Judge (ALJ) issues a decision dismissing Mr. Stewart’s petition.
• January 2, 2019: A rehearing is conducted.
• January 17, 2019: The ALJ issues a final decision following the rehearing, again dismissing the petition.
Petitioner’s Central Allegations
Mr. Stewart’s case rested on four primary claims against the Association’s Board.
1. Violation of Bylaws Section 5.4
The formal petition alleged a violation of Association Bylaws Article V, Section 5.4 (Liability), which states in part:
“So long as he/she has acted in good faith on the basis of information actually possessed, neither the Board nor any member of the Board nor any officer of the ASSOCIATION shall be liable to the ASSOCIATION, any OWNER, or to any other party for any damage, loss, or prejudice suffered or claimed on account of: (i) the approval or disapproval of any plans, drawings, or specifications, whether or not defective…or (v) any act or failure to act by the ASSOCIATION, or Board.”
Mr. Stewart cited this section because it was the only part of the governing documents he could find that included a “good faith” requirement.
2. Lack of Good Faith by the Board
Mr. Stewart asserted that the Board did not act in good faith when it denied his variance request. He based this claim on several points:
• He resigned from the Board during the February 18, 2018 meeting because he “got the sense ‘right away’ that the other Board members’ minds were made up and that they would not approve his request.”
• He presented unrebutted testimony that the Board members were unwilling to physically look at the changes he had made and only gave a “cursory look” at photographs he provided.
• The Board’s decision appeared to have been made prior to the meeting, as evidenced by the attorney’s December 27, 2017 letter which erroneously stated he had recused himself.
3. Bias of Board Member David Larson
A significant portion of Mr. Stewart’s argument was that Board member David Larson was personally biased against him. The evidence presented to support this included:
• Initial Hearing Evidence:
◦ A biography of Mr. Larson prepared by the property manager. When questioned, Mr. Stewart could not identify specific information showing bias but stated the “entire document coupled with the other statements shows a bias.”
◦ Notes from a November 28, 2017 Board meeting where Mr. Larson informed members that enforcement actions (towing, violation notices) would begin immediately and that he was “too busy to talk to people about Board business in driveways.”
• Rehearing Evidence:
◦ A letter dated October 3, 2018, from Mr. Larson to Association members urging them not to vote for Mr. Stewart in an upcoming election.
4. Unfair and Unequal Treatment
Mr. Stewart claimed he was treated unfairly because other units in the condominium were also not in conformity with the CC&Rs.
• He presented photos of units he believed were out of compliance.
• He testified that he had verified with the Association that none of these units had received a variance in the last two years.
• However, he acknowledged he did not know if variances had been granted more than two years prior or if the changes had received pre-approval, which would not require a variance.
Respondent’s Position and Legal Arguments
The Canyon Gate Condominium Association, represented by counsel, did not present witnesses but argued on legal grounds.
• Inapplicability of Bylaws Section 5.4: The Association’s core argument was that Section 5.4 was not applicable to Mr. Stewart’s complaint. They contended the section is an indemnification clause designed to act as a “shield” to protect Board members from liability when they act in good faith, not a “sword” that imposes an affirmative duty on them that can be violated.
• Reasonableness of Board Decision: The Association maintained that the Board’s decision was reasonable. According to Mr. Stewart’s own testimony, the Board’s basis for denial was the fear that granting his variance would “open a Pandora’s Box where other unit owners would request variances.”
Administrative Law Judge’s Rulings and Conclusions
The ALJ’s decisions in both the initial hearing and the rehearing were consistent, ultimately finding in favor of the Respondent.
Legal Framework
• Burden of Proof: The ALJ established that Mr. Stewart, as the petitioner, bore the burden of proof. 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.”
• Board’s Duty: The judge noted that while the Bylaws are a contract, the Association, in exercising its authority, must “act reasonably.”
Analysis of Bylaws Section 5.4
• The judge agreed entirely with the Association’s interpretation, concluding that Section 5.4 “does not impose any duty on the Board members, but rather merely shields them from liability if they act in good faith.”
• In the initial hearing, the judge noted Mr. Stewart “appeared to acknowledge that section 5.4 acts as a ‘shield’ and not a ‘sword.'”
• By the rehearing, this was solidified, with the finding that “Mr. Stewart acknowledges that the Association has not violated Bylaws Section 5.4.”
Assessment of ‘Good Faith’ and Bias Claims
• The ALJ concluded that even if Section 5.4 were applicable, Mr. Stewart “has not shown by a preponderance of the evidence that the Board did not act in good faith, that it had a bias against him, or that it treated him unfairly.”
• The judge found the Board’s reasoning for the denial—the “Pandora’s Box” concern—was “not an unreasonable position for the Board of a condominium association.”
• Given this reasoning, the judge stated that “the specifics of the changes Mr. Stewart made would not be germane to the decision,” thereby neutralizing the claim that the Board failed to properly inspect the modifications.
Evaluation of Unfair Treatment Claim
• The evidence of other non-compliant units was deemed “not probative of the issue at hand.”
• The judge reasoned that there was “no evidence to show that they had requested that the Board grant variances,” meaning their situations were not comparable to Mr. Stewart’s, who had made unapproved changes and was subsequently denied a variance.
Final Disposition
• Initial Decision (September 14, 2018): IT IS ORDERED that Petitioner Lawrence M. Stewart’s petition is dismissed. This order was subject to a request for rehearing within 30 days.
• Rehearing Decision (January 17, 2019): IT IS ORDERED that Petitioner Lawrence M. Stewart’s petition is dismissed. This final order was noted as binding on the parties, with any further appeal requiring judicial review filed with the superior court within 35 days.
Study Guide – 18F-H1818052-REL-RHG
Study Guide: Stewart v. Canyon Gate Condominium Association, Inc.
This guide provides a review of the administrative case Lawrence M. Stewart, Petitioner, vs. Canyon Gate Condominium Association, Inc., Respondent (No. 18F-H1818052-REL), including the initial hearing and a subsequent rehearing.
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Short-Answer Quiz
Instructions: Answer the following questions in two to three sentences, based on the provided case documents.
1. What action by Petitioner Lawrence M. Stewart initiated the dispute with the Canyon Gate Condominium Association?
2. What specific provision of the Association Bylaws did Mr. Stewart allege was violated in his petition?
3. Why did Mr. Stewart resign from the Association’s Board during the February 18, 2018 meeting?
4. What was the Board’s stated reason for denying Mr. Stewart’s request for a variance?
5. Explain the legal interpretation of Bylaws Section 5.4 as a “shield” and not a “sword.”
6. List two pieces of evidence Mr. Stewart presented at the initial hearing to support his claim that Board member David Larson was biased against him.
7. What was the legal standard of proof in this case, and which party was required to meet it?
8. How did Mr. Stewart attempt to prove he was being treated unfairly in comparison to other unit owners, and why did the judge find this evidence unconvincing?
9. At the rehearing, what new evidence did Mr. Stewart present regarding Mr. Larson’s alleged bias?
10. What was the final outcome of both the initial administrative hearing and the subsequent rehearing?
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Answer Key
1. Mr. Stewart initiated the dispute by making changes to the common area and/or limited common area around his unit without first receiving permission from the Association. The Association informed him in a letter dated November 15, 2017, that this was a violation of section 5.1 of the CC&Rs.
2. Mr. Stewart alleged in his petition that the Association violated Bylaws Section 5.4. He later acknowledged this section was not technically violated but cited it because it was the only provision in the governing documents he could find that included a “good faith” requirement.
3. Mr. Stewart resigned from the Board because he “got the sense ‘right away’ that the other Board members’ minds were made up” and that they would not approve his request for a variance, regardless of the details.
4. The Board denied Mr. Stewart’s request on the basis that approving it would “open a Pandora’s Box” where other unit owners would then also request variances. The Administrative Law Judge found this was not an unreasonable position for a condominium association board to take.
5. The interpretation of Section 5.4 is that it acts as a “shield” to protect, or indemnify, Board members from liability for damages, loss, or prejudice, provided they have acted in good faith. It is not a “sword” that imposes an affirmative duty on the Board that Mr. Stewart could use to compel a certain action or claim a violation.
6. At the initial hearing, Mr. Stewart presented two of the following: (1) a biography of Mr. Larson; (2) notes from a November 28, 2017 meeting where Mr. Larson stated that enforcement actions would begin immediately; and (3) a letter from the Association’s attorney that erroneously stated Mr. Stewart had recused himself, suggesting the matter was decided without him.
7. The standard of proof was a “preponderance of the evidence.” The burden of proof rested entirely on the petitioner, Mr. Stewart, to show that the Association had acted improperly.
8. Mr. Stewart presented testimony and photos of other units that he believed were not in conformity with the CC&Rs. The judge found this evidence was not probative because Mr. Stewart provided no evidence that those owners had requested and been denied variances, and he acknowledged he did not know if they had received variances more than two years prior or had received preapproval.
9. At the rehearing, Mr. Stewart entered into evidence an October 3, 2018 letter from Mr. Larson to the Association’s members. In this letter, Mr. Larson urged the members not to vote for Mr. Stewart in an upcoming election.
10. In both the initial decision (September 14, 2018) and the decision following the rehearing (January 17, 2019), the Administrative Law Judge ordered that Mr. Stewart’s petition be dismissed. The Respondent, Canyon Gate Condominium Association, Inc., was deemed the prevailing party in the matter.
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Essay Questions
Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive response for each prompt, citing specific facts and legal conclusions from the case documents.
1. Analyze the Administrative Law Judge’s reasoning for concluding that Bylaws Section 5.4 was not applicable to Mr. Stewart’s petition. How did Mr. Stewart’s own testimony during the legal proceedings support this conclusion?
2. Discuss the concept of “preponderance of the evidence” as defined in the case documents. Evaluate the evidence Mr. Stewart presented across both hearings and explain why the judge found it insufficient to meet this standard regarding his claims of bias, bad faith, and unfair treatment.
3. Examine the Canyon Gate Board’s justification for denying the variance request (the “Pandora’s Box” argument). Based on the legal principles cited in the decisions, why was this considered a reasonable position for a condominium association board to take, and why did it render the specifics of Mr. Stewart’s changes non-germane?
4. Trace the procedural timeline of this case from the Association’s initial notice of violation on November 15, 2017, to the final binding order issued on January 17, 2019. Identify the key events, arguments, and decisions at each stage of the administrative process.
5. Mr. Stewart argued that he was treated unfairly because other units were also out of compliance with the CC&Rs. Deconstruct this argument and explain why the judge dismissed this line of reasoning as not being probative to the issue at hand in both the initial hearing and the rehearing.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
The official (Thomas Shedden) who presides over hearings at the Office of Administrative Hearings and issues a decision on the matter.
Association
The Canyon Gate Condominium Association, Inc., the entity responsible for enforcing the Bylaws and CC&Rs. In this case, it is the Respondent.
The governing body of the Association, which at the time of the variance request included Lawrence M. Stewart, Sandra Fernandez, and David Larson.
Burden of Proof
The obligation to prove one’s assertion. In this case, the burden of proof was on the Petitioner, Mr. Stewart.
Bylaws
A contract between the Association and its members. The parties are required to comply with its terms, and the Association must act reasonably in exercising its authority under them.
Covenants, Conditions, and Restrictions. Mr. Stewart was found to be in violation of section 5.1 of the CC&Rs for making unapproved changes.
Common Area / Limited Common Area
The property around a condominium unit that is shared or has restricted use. Mr. Stewart made unauthorized changes to this area.
Good Faith
A standard of conduct mentioned in Bylaws Section 5.4. It protects Board members from liability so long as they act in good faith based on information they possess. Mr. Stewart claimed the Board failed to meet this standard.
Indemnification
The act of compensating for loss or damage. Bylaws Article V, which contains Section 5.4, pertains to indemnification.
Petitioner
The party who files a petition initiating a legal case. In this matter, the petitioner was Lawrence M. Stewart.
Preponderance of the Evidence
The standard of proof required in this case, defined 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.”
Rehearing
A second hearing granted in a legal matter. A rehearing was conducted on January 2, 2019, after which the judge issued a final, binding order.
Respondent
The party against whom a petition is filed. In this matter, the respondent was Canyon Gate Condominium Association, Inc.
Variance
An official exception or deviation from a rule. Mr. Stewart requested a variance to allow the unapproved changes he had made, which the Board denied.
Blog Post – 18F-H1818052-REL-RHG
A Homeowner Sued His HOA and Lost—The Surprising Reasons Why Might Save You Thousands
Introduction: The Perennial Battle Between Homeowner and HOA
For many homeowners, the relationship with their Homeowners’ Association (HOA) can feel like a constant source of friction. From landscaping rules to paint colors, the potential for disputes is endless. But what happens when a homeowner feels so strongly wronged that they take the ultimate step of suing their association? More importantly, what happens when they lose?
This is the story of a homeowner who was also a board member. After making unauthorized changes to his property, he was denied his request for a variance to approve the changes he had already made. Believing the Board had acted in bad faith, he sued the association. His case failed, not on a minor technicality, but due to fundamental misunderstandings of how HOA law and governing documents function.
This outcome highlights a common, and costly, misconception about HOA governance. We will explore the surprising legal realities revealed in the case of Lawrence M. Stewart vs. Canyon Gate Condominium Association, Inc., offering several crucial takeaways for any homeowner before they decide to challenge their HOA.
1. A “Good Faith” Clause Can Be a Shield, Not a Sword
Mr. Stewart based his entire case on the claim that the Board violated Section 5.4 of the bylaws by not acting in “good faith,” as this was the only section in the governing documents he could find that mentioned the phrase.
This is where the case pivots on a crucial legal distinction. The court found that this clause was not intended to impose a duty on the board that a homeowner could sue over (a “sword”). Instead, its function was to protect board members from liability if they acted in good faith (a “shield”). Legally, this is an indemnification clause. Think of it as a form of insurance, designed to protect volunteer board members from being personally sued for making reasonable decisions, not a weapon for homeowners to attack those decisions.
In his testimony, Mr. Stewart even acknowledged this “shield” versus “sword” distinction but proceeded with the argument anyway. The lesson for homeowners is unequivocal: you must understand the precise legal function of a clause within your governing documents, not just its keywords.
2. The “Pandora’s Box” Defense Is a Powerful Argument
The Board’s primary reason for denying Mr. Stewart’s variance request was its fear that approval “would open a Pandora’s Box where other unit owners would request variances.” While a homeowner might hear “Pandora’s Box” and think it’s a lazy excuse, the court viewed it as the board performing its fundamental duty.
The judge stated this reasoning “was not an unreasonable position for the Board of a condominium association.” This validation is incredibly impactful because it shifts the focus from the merits of one homeowner’s request to the Board’s overarching fiduciary duty to uphold the rules consistently for the entire community. It shows that an HOA’s duty to maintain consistent enforcement and avoid setting a messy precedent is a legally sound basis for a decision, making the specific details of one homeowner’s changes irrelevant.
3. Being on the Board Won’t Give You a Pass
In a surprising twist, Mr. Stewart was a member of the HOA Board at the very time he made the unauthorized changes and requested the variance. This created a clear conflict of interest and ultimately did not help his case.
The situation culminated in Mr. Stewart resigning from the Board during the meeting where his request was considered. He stated he resigned because he felt “the other Board members’ minds were made up” and they would not approve his request. This incident serves as a stark reminder: holding a position on the board does not grant special privileges or exceptions to the rules. In fact, it can complicate personal matters and highlight a direct conflict between a board member’s duties to the association and their personal interests.
4. “Whataboutism” Is Not a Legal Strategy
Like many homeowners in a dispute, Mr. Stewart argued that he was being treated unfairly because other units in the community were also out of compliance with the CC&Rs. This is a common defense, but its legal failure in this case is a masterclass in what courts actually require for proof.
Mr. Stewart’s effort was commendable but legally insufficient. He presented photos of other non-conforming units and even “verified with the Association that none of these units had received a variance in the last two years.” However, his evidence collapsed under cross-examination when he “acknowledged… he did not know if any of these units had received variances more than two years ago or whether preapproval for the changes had been granted.”
The judge dismissed his evidence entirely. This transforms the lesson from a simple “don’t point fingers” to a much more sophisticated legal principle: to prove selective enforcement, you must prove others in the identical procedural situation were treated differently, and incomplete evidence is no evidence at all.
5. The Burden of Proof Is Everything
Perhaps the most stunning fact from the case is that the Association “presented no witnesses” at either the initial hearing or the subsequent rehearing. They won the case without putting a single person on the stand to testify.
They could do this because the legal system placed the “burden of proof” squarely on Mr. Stewart. As the petitioner, it was his job to prove his claims of bad faith, bias, and unfair treatment by a “preponderance of the evidence.” The Association didn’t have to prove it acted in good faith; Mr. Stewart had to prove it acted in bad faith. He failed to meet this standard. In other words, he had to prove that his claims were more likely to be true than not—even if only by a 51% to 49% margin.
The court document formally defines this legal standard 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 a legal dispute with your HOA, the case is not about who is morally right or wrong. It’s about who can meet their required burden of proof with convincing, relevant evidence.
Conclusion: Know the Rules Before You Fight the Rulers
The case of Lawrence M. Stewart is a cautionary tale that every homeowner should internalize. His failed lawsuit, which likely became a five-figure mistake when factoring in legal fees for both sides, underscores that HOA governing documents are a binding contract. Challenging the Board requires more than a sense of unfairness. It demands a precise, evidence-backed legal argument that aligns with the specific terms of that contract and the applicable legal standards.
Before you declare war on your HOA, ask yourself: are you prepared to prove your case with irrefutable evidence, or are you just banking on a feeling of being wronged?
Case Participants
Petitioner Side
Lawrence M. Stewart(petitioner) Also served as a Board member for Respondent until resigning during the variance request consideration.
Respondent Side
Mark K. Sahl(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent in the initial hearing.
Nicolas C. S. Nogami(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent in both the initial hearing (listed as 'Nichols C. S. Nogami') and the rehearing.
Sandra Fernandez(board member) Canyon Gate Condominium Association, Inc. Voted to deny Petitioner's variance request.
David Larson(board member) Canyon Gate Condominium Association, Inc. Voted to deny Petitioner's variance request; Petitioner alleged he was biased.
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate Recipient of the decision copies.
F. Del Sol(administrative staff) Office of Administrative Hearings Signed the transmission of the decision copies.
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
Case Summary
Case ID
18F-H1818052-REL-RHG
Agency
ADRE
Tribunal
OAH
Decision Date
2019-01-17
Administrative Law Judge
Thomas Shedden
Outcome
none
Filing Fees Refunded
$0.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Lawrence M. Stewart
Counsel
—
Respondent
Canyon Gate Condominium Association, Inc.
Counsel
Nicolas C. S. Nogami, Esq.
Alleged Violations
Bylaws section 5.4
Outcome Summary
The Administrative Law Judge dismissed the petition filed by homeowner Lawrence M. Stewart against Canyon Gate Condominium Association, Inc., finding that the Petitioner failed to prove the Association violated its Bylaws concerning good faith in denying his request for a variance.
Why this result: The Petitioner failed to meet the burden of proof, as Bylaws Section 5.4 was determined to be a shield protecting the Board from liability rather than a provision imposing a duty of good faith that could be violated by denying a variance.
Key Issues & Findings
Alleged failure of the HOA Board to act in good faith when denying a variance request
Petitioner alleged the Board failed to act in good faith when denying his request for a variance to changes he made, and asserted bias and unfair treatment. The ALJ concluded that Section 5.4 acts as a shield from liability for Board members, not a duty imposed upon them, and Petitioner failed to meet the burden of proof.
Orders: Petitioner Lawrence M. Stewart's petition is dismissed. Respondent is deemed to be the prevailing party in this matter.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
ARIZ. REV. STAT. section 32-2199.02(B)
Analytics Highlights
Topics: HOA governance, bylaw violation, good faith, variance denial, board liability
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Briefing Document: Stewart v. Canyon Gate Condominium Association, Inc.
Executive Summary
This document synthesizes the findings and conclusions from an administrative legal case involving Petitioner Lawrence M. Stewart and Respondent Canyon Gate Condominium Association, Inc. The core of the dispute revolves around Mr. Stewart’s unauthorized modifications to a common area, for which the Association’s Board of Directors denied a retroactive variance. Mr. Stewart alleged the Board violated its bylaws by acting in bad faith, that a specific Board member was biased against him, and that he was subjected to unfair treatment compared to other homeowners.
The Administrative Law Judge, in both an initial hearing and a subsequent rehearing, consistently ruled against Mr. Stewart. The judge determined that the specific bylaw cited (Section 5.4) was an indemnification clause that shields the Board from liability and does not impose a duty of action. Crucially, Mr. Stewart failed to meet the legal burden of proving his claims by a “preponderance of the evidence.” The Board’s rationale for the denial—to avoid setting a precedent, or “opening a Pandora’s Box”—was deemed a reasonable position for a condominium association. Evidence presented to support claims of bias and unequal treatment was found to be insufficient or not probative. Ultimately, Mr. Stewart’s petition was dismissed in its entirety.
Case Overview
This matter, designated as No. 18F-H1818052-REL, was adjudicated by the Office of Administrative Hearings under the authority of the Arizona Department of Real Estate. The case centered on a petition filed by Mr. Stewart on May 21, 2018, alleging a violation of the Association’s Bylaws by the Board of Directors.
Parties Involved
Name / Entity
Representation
Petitioner
Lawrence M. Stewart
On his own behalf
Respondent
Canyon Gate Condominium Association, Inc.
Mark K. Sahl, Esq. & Nichols C. S. Nogami, Esq.
Administrative Law Judge Thomas Shedden
Case Chronology
• November 15, 2017: The Association’s counsel informs Mr. Stewart in a letter that he is in violation of section 5.1 of the CC&Rs for making unapproved changes to a common/limited common area.
• Post-November 15, 2017: Mr. Stewart, then a member of the Board, requests a variance for the changes.
• December 27, 2017: The Association’s attorney sends a letter stating an understanding that Mr. Stewart had recused himself and that the other two Board members (Sandra Fernandez and David Larson) had required the area to be restored.
• January 4, 2018: Mr. Stewart writes to the other Board members, refuting that he had agreed to recuse himself and requesting a formal meeting to consider his variance request.
• February 18, 2018: At a Board meeting, Mr. Stewart resigns from the Board. The remaining two members vote to deny his variance request and require him to restore the area to its original condition.
• May 21, 2018: Mr. Stewart files his petition with the Arizona Department of Real Estate.
• September 6, 2018: The initial administrative hearing is conducted.
• September 14, 2018: The Administrative Law Judge (ALJ) issues a decision dismissing Mr. Stewart’s petition.
• January 2, 2019: A rehearing is conducted.
• January 17, 2019: The ALJ issues a final decision following the rehearing, again dismissing the petition.
Petitioner’s Central Allegations
Mr. Stewart’s case rested on four primary claims against the Association’s Board.
1. Violation of Bylaws Section 5.4
The formal petition alleged a violation of Association Bylaws Article V, Section 5.4 (Liability), which states in part:
“So long as he/she has acted in good faith on the basis of information actually possessed, neither the Board nor any member of the Board nor any officer of the ASSOCIATION shall be liable to the ASSOCIATION, any OWNER, or to any other party for any damage, loss, or prejudice suffered or claimed on account of: (i) the approval or disapproval of any plans, drawings, or specifications, whether or not defective…or (v) any act or failure to act by the ASSOCIATION, or Board.”
Mr. Stewart cited this section because it was the only part of the governing documents he could find that included a “good faith” requirement.
2. Lack of Good Faith by the Board
Mr. Stewart asserted that the Board did not act in good faith when it denied his variance request. He based this claim on several points:
• He resigned from the Board during the February 18, 2018 meeting because he “got the sense ‘right away’ that the other Board members’ minds were made up and that they would not approve his request.”
• He presented unrebutted testimony that the Board members were unwilling to physically look at the changes he had made and only gave a “cursory look” at photographs he provided.
• The Board’s decision appeared to have been made prior to the meeting, as evidenced by the attorney’s December 27, 2017 letter which erroneously stated he had recused himself.
3. Bias of Board Member David Larson
A significant portion of Mr. Stewart’s argument was that Board member David Larson was personally biased against him. The evidence presented to support this included:
• Initial Hearing Evidence:
◦ A biography of Mr. Larson prepared by the property manager. When questioned, Mr. Stewart could not identify specific information showing bias but stated the “entire document coupled with the other statements shows a bias.”
◦ Notes from a November 28, 2017 Board meeting where Mr. Larson informed members that enforcement actions (towing, violation notices) would begin immediately and that he was “too busy to talk to people about Board business in driveways.”
• Rehearing Evidence:
◦ A letter dated October 3, 2018, from Mr. Larson to Association members urging them not to vote for Mr. Stewart in an upcoming election.
4. Unfair and Unequal Treatment
Mr. Stewart claimed he was treated unfairly because other units in the condominium were also not in conformity with the CC&Rs.
• He presented photos of units he believed were out of compliance.
• He testified that he had verified with the Association that none of these units had received a variance in the last two years.
• However, he acknowledged he did not know if variances had been granted more than two years prior or if the changes had received pre-approval, which would not require a variance.
Respondent’s Position and Legal Arguments
The Canyon Gate Condominium Association, represented by counsel, did not present witnesses but argued on legal grounds.
• Inapplicability of Bylaws Section 5.4: The Association’s core argument was that Section 5.4 was not applicable to Mr. Stewart’s complaint. They contended the section is an indemnification clause designed to act as a “shield” to protect Board members from liability when they act in good faith, not a “sword” that imposes an affirmative duty on them that can be violated.
• Reasonableness of Board Decision: The Association maintained that the Board’s decision was reasonable. According to Mr. Stewart’s own testimony, the Board’s basis for denial was the fear that granting his variance would “open a Pandora’s Box where other unit owners would request variances.”
Administrative Law Judge’s Rulings and Conclusions
The ALJ’s decisions in both the initial hearing and the rehearing were consistent, ultimately finding in favor of the Respondent.
Legal Framework
• Burden of Proof: The ALJ established that Mr. Stewart, as the petitioner, bore the burden of proof. 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.”
• Board’s Duty: The judge noted that while the Bylaws are a contract, the Association, in exercising its authority, must “act reasonably.”
Analysis of Bylaws Section 5.4
• The judge agreed entirely with the Association’s interpretation, concluding that Section 5.4 “does not impose any duty on the Board members, but rather merely shields them from liability if they act in good faith.”
• In the initial hearing, the judge noted Mr. Stewart “appeared to acknowledge that section 5.4 acts as a ‘shield’ and not a ‘sword.'”
• By the rehearing, this was solidified, with the finding that “Mr. Stewart acknowledges that the Association has not violated Bylaws Section 5.4.”
Assessment of ‘Good Faith’ and Bias Claims
• The ALJ concluded that even if Section 5.4 were applicable, Mr. Stewart “has not shown by a preponderance of the evidence that the Board did not act in good faith, that it had a bias against him, or that it treated him unfairly.”
• The judge found the Board’s reasoning for the denial—the “Pandora’s Box” concern—was “not an unreasonable position for the Board of a condominium association.”
• Given this reasoning, the judge stated that “the specifics of the changes Mr. Stewart made would not be germane to the decision,” thereby neutralizing the claim that the Board failed to properly inspect the modifications.
Evaluation of Unfair Treatment Claim
• The evidence of other non-compliant units was deemed “not probative of the issue at hand.”
• The judge reasoned that there was “no evidence to show that they had requested that the Board grant variances,” meaning their situations were not comparable to Mr. Stewart’s, who had made unapproved changes and was subsequently denied a variance.
Final Disposition
• Initial Decision (September 14, 2018): IT IS ORDERED that Petitioner Lawrence M. Stewart’s petition is dismissed. This order was subject to a request for rehearing within 30 days.
• Rehearing Decision (January 17, 2019): IT IS ORDERED that Petitioner Lawrence M. Stewart’s petition is dismissed. This final order was noted as binding on the parties, with any further appeal requiring judicial review filed with the superior court within 35 days.
Study Guide – 18F-H1818052-REL-RHG
Study Guide: Stewart v. Canyon Gate Condominium Association, Inc.
This guide provides a review of the administrative case Lawrence M. Stewart, Petitioner, vs. Canyon Gate Condominium Association, Inc., Respondent (No. 18F-H1818052-REL), including the initial hearing and a subsequent rehearing.
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Short-Answer Quiz
Instructions: Answer the following questions in two to three sentences, based on the provided case documents.
1. What action by Petitioner Lawrence M. Stewart initiated the dispute with the Canyon Gate Condominium Association?
2. What specific provision of the Association Bylaws did Mr. Stewart allege was violated in his petition?
3. Why did Mr. Stewart resign from the Association’s Board during the February 18, 2018 meeting?
4. What was the Board’s stated reason for denying Mr. Stewart’s request for a variance?
5. Explain the legal interpretation of Bylaws Section 5.4 as a “shield” and not a “sword.”
6. List two pieces of evidence Mr. Stewart presented at the initial hearing to support his claim that Board member David Larson was biased against him.
7. What was the legal standard of proof in this case, and which party was required to meet it?
8. How did Mr. Stewart attempt to prove he was being treated unfairly in comparison to other unit owners, and why did the judge find this evidence unconvincing?
9. At the rehearing, what new evidence did Mr. Stewart present regarding Mr. Larson’s alleged bias?
10. What was the final outcome of both the initial administrative hearing and the subsequent rehearing?
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Answer Key
1. Mr. Stewart initiated the dispute by making changes to the common area and/or limited common area around his unit without first receiving permission from the Association. The Association informed him in a letter dated November 15, 2017, that this was a violation of section 5.1 of the CC&Rs.
2. Mr. Stewart alleged in his petition that the Association violated Bylaws Section 5.4. He later acknowledged this section was not technically violated but cited it because it was the only provision in the governing documents he could find that included a “good faith” requirement.
3. Mr. Stewart resigned from the Board because he “got the sense ‘right away’ that the other Board members’ minds were made up” and that they would not approve his request for a variance, regardless of the details.
4. The Board denied Mr. Stewart’s request on the basis that approving it would “open a Pandora’s Box” where other unit owners would then also request variances. The Administrative Law Judge found this was not an unreasonable position for a condominium association board to take.
5. The interpretation of Section 5.4 is that it acts as a “shield” to protect, or indemnify, Board members from liability for damages, loss, or prejudice, provided they have acted in good faith. It is not a “sword” that imposes an affirmative duty on the Board that Mr. Stewart could use to compel a certain action or claim a violation.
6. At the initial hearing, Mr. Stewart presented two of the following: (1) a biography of Mr. Larson; (2) notes from a November 28, 2017 meeting where Mr. Larson stated that enforcement actions would begin immediately; and (3) a letter from the Association’s attorney that erroneously stated Mr. Stewart had recused himself, suggesting the matter was decided without him.
7. The standard of proof was a “preponderance of the evidence.” The burden of proof rested entirely on the petitioner, Mr. Stewart, to show that the Association had acted improperly.
8. Mr. Stewart presented testimony and photos of other units that he believed were not in conformity with the CC&Rs. The judge found this evidence was not probative because Mr. Stewart provided no evidence that those owners had requested and been denied variances, and he acknowledged he did not know if they had received variances more than two years prior or had received preapproval.
9. At the rehearing, Mr. Stewart entered into evidence an October 3, 2018 letter from Mr. Larson to the Association’s members. In this letter, Mr. Larson urged the members not to vote for Mr. Stewart in an upcoming election.
10. In both the initial decision (September 14, 2018) and the decision following the rehearing (January 17, 2019), the Administrative Law Judge ordered that Mr. Stewart’s petition be dismissed. The Respondent, Canyon Gate Condominium Association, Inc., was deemed the prevailing party in the matter.
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Essay Questions
Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive response for each prompt, citing specific facts and legal conclusions from the case documents.
1. Analyze the Administrative Law Judge’s reasoning for concluding that Bylaws Section 5.4 was not applicable to Mr. Stewart’s petition. How did Mr. Stewart’s own testimony during the legal proceedings support this conclusion?
2. Discuss the concept of “preponderance of the evidence” as defined in the case documents. Evaluate the evidence Mr. Stewart presented across both hearings and explain why the judge found it insufficient to meet this standard regarding his claims of bias, bad faith, and unfair treatment.
3. Examine the Canyon Gate Board’s justification for denying the variance request (the “Pandora’s Box” argument). Based on the legal principles cited in the decisions, why was this considered a reasonable position for a condominium association board to take, and why did it render the specifics of Mr. Stewart’s changes non-germane?
4. Trace the procedural timeline of this case from the Association’s initial notice of violation on November 15, 2017, to the final binding order issued on January 17, 2019. Identify the key events, arguments, and decisions at each stage of the administrative process.
5. Mr. Stewart argued that he was treated unfairly because other units were also out of compliance with the CC&Rs. Deconstruct this argument and explain why the judge dismissed this line of reasoning as not being probative to the issue at hand in both the initial hearing and the rehearing.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
The official (Thomas Shedden) who presides over hearings at the Office of Administrative Hearings and issues a decision on the matter.
Association
The Canyon Gate Condominium Association, Inc., the entity responsible for enforcing the Bylaws and CC&Rs. In this case, it is the Respondent.
The governing body of the Association, which at the time of the variance request included Lawrence M. Stewart, Sandra Fernandez, and David Larson.
Burden of Proof
The obligation to prove one’s assertion. In this case, the burden of proof was on the Petitioner, Mr. Stewart.
Bylaws
A contract between the Association and its members. The parties are required to comply with its terms, and the Association must act reasonably in exercising its authority under them.
Covenants, Conditions, and Restrictions. Mr. Stewart was found to be in violation of section 5.1 of the CC&Rs for making unapproved changes.
Common Area / Limited Common Area
The property around a condominium unit that is shared or has restricted use. Mr. Stewart made unauthorized changes to this area.
Good Faith
A standard of conduct mentioned in Bylaws Section 5.4. It protects Board members from liability so long as they act in good faith based on information they possess. Mr. Stewart claimed the Board failed to meet this standard.
Indemnification
The act of compensating for loss or damage. Bylaws Article V, which contains Section 5.4, pertains to indemnification.
Petitioner
The party who files a petition initiating a legal case. In this matter, the petitioner was Lawrence M. Stewart.
Preponderance of the Evidence
The standard of proof required in this case, defined 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.”
Rehearing
A second hearing granted in a legal matter. A rehearing was conducted on January 2, 2019, after which the judge issued a final, binding order.
Respondent
The party against whom a petition is filed. In this matter, the respondent was Canyon Gate Condominium Association, Inc.
Variance
An official exception or deviation from a rule. Mr. Stewart requested a variance to allow the unapproved changes he had made, which the Board denied.
Blog Post – 18F-H1818052-REL-RHG
A Homeowner Sued His HOA and Lost—The Surprising Reasons Why Might Save You Thousands
Introduction: The Perennial Battle Between Homeowner and HOA
For many homeowners, the relationship with their Homeowners’ Association (HOA) can feel like a constant source of friction. From landscaping rules to paint colors, the potential for disputes is endless. But what happens when a homeowner feels so strongly wronged that they take the ultimate step of suing their association? More importantly, what happens when they lose?
This is the story of a homeowner who was also a board member. After making unauthorized changes to his property, he was denied his request for a variance to approve the changes he had already made. Believing the Board had acted in bad faith, he sued the association. His case failed, not on a minor technicality, but due to fundamental misunderstandings of how HOA law and governing documents function.
This outcome highlights a common, and costly, misconception about HOA governance. We will explore the surprising legal realities revealed in the case of Lawrence M. Stewart vs. Canyon Gate Condominium Association, Inc., offering several crucial takeaways for any homeowner before they decide to challenge their HOA.
1. A “Good Faith” Clause Can Be a Shield, Not a Sword
Mr. Stewart based his entire case on the claim that the Board violated Section 5.4 of the bylaws by not acting in “good faith,” as this was the only section in the governing documents he could find that mentioned the phrase.
This is where the case pivots on a crucial legal distinction. The court found that this clause was not intended to impose a duty on the board that a homeowner could sue over (a “sword”). Instead, its function was to protect board members from liability if they acted in good faith (a “shield”). Legally, this is an indemnification clause. Think of it as a form of insurance, designed to protect volunteer board members from being personally sued for making reasonable decisions, not a weapon for homeowners to attack those decisions.
In his testimony, Mr. Stewart even acknowledged this “shield” versus “sword” distinction but proceeded with the argument anyway. The lesson for homeowners is unequivocal: you must understand the precise legal function of a clause within your governing documents, not just its keywords.
2. The “Pandora’s Box” Defense Is a Powerful Argument
The Board’s primary reason for denying Mr. Stewart’s variance request was its fear that approval “would open a Pandora’s Box where other unit owners would request variances.” While a homeowner might hear “Pandora’s Box” and think it’s a lazy excuse, the court viewed it as the board performing its fundamental duty.
The judge stated this reasoning “was not an unreasonable position for the Board of a condominium association.” This validation is incredibly impactful because it shifts the focus from the merits of one homeowner’s request to the Board’s overarching fiduciary duty to uphold the rules consistently for the entire community. It shows that an HOA’s duty to maintain consistent enforcement and avoid setting a messy precedent is a legally sound basis for a decision, making the specific details of one homeowner’s changes irrelevant.
3. Being on the Board Won’t Give You a Pass
In a surprising twist, Mr. Stewart was a member of the HOA Board at the very time he made the unauthorized changes and requested the variance. This created a clear conflict of interest and ultimately did not help his case.
The situation culminated in Mr. Stewart resigning from the Board during the meeting where his request was considered. He stated he resigned because he felt “the other Board members’ minds were made up” and they would not approve his request. This incident serves as a stark reminder: holding a position on the board does not grant special privileges or exceptions to the rules. In fact, it can complicate personal matters and highlight a direct conflict between a board member’s duties to the association and their personal interests.
4. “Whataboutism” Is Not a Legal Strategy
Like many homeowners in a dispute, Mr. Stewart argued that he was being treated unfairly because other units in the community were also out of compliance with the CC&Rs. This is a common defense, but its legal failure in this case is a masterclass in what courts actually require for proof.
Mr. Stewart’s effort was commendable but legally insufficient. He presented photos of other non-conforming units and even “verified with the Association that none of these units had received a variance in the last two years.” However, his evidence collapsed under cross-examination when he “acknowledged… he did not know if any of these units had received variances more than two years ago or whether preapproval for the changes had been granted.”
The judge dismissed his evidence entirely. This transforms the lesson from a simple “don’t point fingers” to a much more sophisticated legal principle: to prove selective enforcement, you must prove others in the identical procedural situation were treated differently, and incomplete evidence is no evidence at all.
5. The Burden of Proof Is Everything
Perhaps the most stunning fact from the case is that the Association “presented no witnesses” at either the initial hearing or the subsequent rehearing. They won the case without putting a single person on the stand to testify.
They could do this because the legal system placed the “burden of proof” squarely on Mr. Stewart. As the petitioner, it was his job to prove his claims of bad faith, bias, and unfair treatment by a “preponderance of the evidence.” The Association didn’t have to prove it acted in good faith; Mr. Stewart had to prove it acted in bad faith. He failed to meet this standard. In other words, he had to prove that his claims were more likely to be true than not—even if only by a 51% to 49% margin.
The court document formally defines this legal standard 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 a legal dispute with your HOA, the case is not about who is morally right or wrong. It’s about who can meet their required burden of proof with convincing, relevant evidence.
Conclusion: Know the Rules Before You Fight the Rulers
The case of Lawrence M. Stewart is a cautionary tale that every homeowner should internalize. His failed lawsuit, which likely became a five-figure mistake when factoring in legal fees for both sides, underscores that HOA governing documents are a binding contract. Challenging the Board requires more than a sense of unfairness. It demands a precise, evidence-backed legal argument that aligns with the specific terms of that contract and the applicable legal standards.
Before you declare war on your HOA, ask yourself: are you prepared to prove your case with irrefutable evidence, or are you just banking on a feeling of being wronged?
Case Participants
Petitioner Side
Lawrence M. Stewart(petitioner) Also served as a Board member for Respondent until resigning during the variance request consideration.
Respondent Side
Mark K. Sahl(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent in the initial hearing.
Nicolas C. S. Nogami(attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent in both the initial hearing (listed as 'Nichols C. S. Nogami') and the rehearing.
Sandra Fernandez(board member) Canyon Gate Condominium Association, Inc. Voted to deny Petitioner's variance request.
David Larson(board member) Canyon Gate Condominium Association, Inc. Voted to deny Petitioner's variance request; Petitioner alleged he was biased.
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate Recipient of the decision copies.
F. Del Sol(administrative staff) Office of Administrative Hearings Signed the transmission of the decision copies.
Laveen Meadows HOA c/o Planned Development Services
Counsel
Chad Gallacher, Esq.
Alleged Violations
CC&Rs Sections 10.11.2, 10.11.4, and 10.16; A.R.S. § 32-2199.01(A)
Outcome Summary
The Petitioner's challenge against the HOA was dismissed because the Petitioner failed to prove by a preponderance of the evidence that the HOA violated the community documents or statutes when issuing citations.
Why this result: Petitioner failed to meet the burden of proof.
Key Issues & Findings
Challenge to HOA fine citations/improper enforcement of parking and nuisance rules
Petitioner claimed the Respondent HOA improperly issued citations against him for vehicle violations (inoperable vehicle, street parking, nuisance), asserting the HOA could not violate CC&R 10.11.4 but that the citations alleging the violation were unwarranted.
Orders: Petitioner Jerry R. Collis’s petition is dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
BLACK’S LAW DICTIONARY 1373 (10th ed. 2014)
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
ARIZ. REV. STAT. § 32-2199.01
Analytics Highlights
Topics: HOA Enforcement, CC&Rs, Vehicle Parking, Nuisance, Burden of Proof
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
BLACK’S LAW DICTIONARY 1373 (10th ed. 2014)
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
ARIZ. REV. STAT. § 32-2199.01
Video Overview
Audio Overview
Decision Documents
19F-H18020-REL Decision – 677244.pdf
Uploaded 2026-01-23T17:25:31 (97.6 KB)
Briefing Doc – 19F-H18020-REL
Briefing Document: Collis v. Laveen Meadows HOA (Case No. 19F-H18020-REL)
Executive Summary
This document synthesizes the findings and decision in the administrative hearing of Jerry R. Collis (Petitioner) versus the Laveen Meadows HOA (Respondent). The Administrative Law Judge dismissed Mr. Collis’s petition, which alleged the HOA had wrongly issued citations concerning his vehicle.
The central issue revolved around a series of violation notices issued to Mr. Collis for an “Inoperable Vehicle.” While Mr. Collis focused his argument on proving the vehicle was, in fact, operational, the HOA successfully argued that the citations were based on a broader set of violations. These included not only the vehicle’s condition under CC&R Section 10.11.4 but also violations for street parking (Section 10.11.2) and creating a nuisance (Section 10.16) due to its unsightly appearance, which included cobwebs, debris, a flat tire, and a covered window.
The Judge concluded that the petitioner, Mr. Collis, failed to meet the burden of proof. By only addressing the vehicle’s operability, he did not disprove the other valid grounds for the citations. Consequently, the Judge found that the HOA had not violated its own governing documents or state statutes, dismissing the petition and declaring the HOA the prevailing party.
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1. Case Overview and Core Dispute
• Case Number: 19F-H18020-REL
• Parties:
◦ Petitioner: Jerry R. Collis (representing himself)
◦ Respondent: Laveen Meadows HOA (represented by Chad Gallacher, Esq.)
• Adjudicator: Thomas Shedden, Administrative Law Judge
• Hearing Date: December 4, 2018
• Decision Date: December 20, 2018
The Petitioner’s Allegation
On September 17, 2018, Jerry R. Collis filed a petition with the Arizona Department of Real Estate. The initial Notice of Hearing framed the allegation as the Laveen Meadows HOA having violated Article 10, Section 10.11.4 of its Covenants, Conditions, and Restrictions (CC&Rs), which pertains to inoperable vehicles.
At the December 4, 2018 hearing, Mr. Collis clarified his position. He argued that the issue was not that the HOA itself could violate that section, but that the HOA had wrongly issued him citations alleging a violation of that provision when his vehicle was fully operational.
The Respondent’s Position
The Laveen Meadows HOA, represented by Community Manager Lisa Riesland, objected to this reframing of the issue. The HOA contended that the citations issued to Mr. Collis were justified under multiple sections of the CC&Rs, not solely the “inoperable vehicle” clause. The HOA’s actions were based on violations of Sections 10.11.2 (street parking), 10.11.4 (inoperable vehicle), and 10.16 (nuisance).
2. Relevant CC&R Provisions
The dispute centered on the interpretation and application of three specific sections within the Laveen Meadows HOA CC&Rs.
Section
Title / Subject
Description
10.11.4
Inoperable Vehicles
Prohibits any motor vehicle “which are not in operating condition” from being parked in unenclosed areas, including driveways. This section was amended in May 2013 to clarify the definition of “operating condition.”
10.11.2
Street Parking
Prohibits parking on the streets within the community.
Nuisances
Prohibits nuisances, which are defined to include conditions that are “unsightly or that could reasonably cause annoyance to other members of the Association.”
3. Analysis of Evidence and Timeline
Violation Notices and Fines
Between September 2016 and June 2017, the HOA sent seven notifications to Mr. Collis regarding his vehicle. A key finding from the hearing was that while all seven notices stated, “Violation: Vehicle Parking – Inoperable Vehicle,” none of them cited a specific provision of the CC&Rs.
The timeline of notifications and fines is as follows:
• September 19, 2016: Initial letter citing expired tags and an inoperable vehicle on the street. Given 10 days to correct.
• October 11, 2016: Letter warning of a potential $25 fine. Notified of appeal rights. No evidence of appeal by Collis.
• December 1, 2016: A $25 fine was charged to Mr. Collis’s account. Mr. Collis appealed this to the HOA Board.
• January 26, 2017: The HOA Board sent a letter to Mr. Collis denying his appeal.
• April 20, 2017: A $50 fine and a $10 mailing fee were charged. No evidence of appeal.
• May 9, 2017: A $100 fine and a $10 mailing fee were charged. No evidence of appeal.
• May 23, 2017: A $100 fine and a $10 mailing fee were charged. No evidence of appeal.
• June 8, 2017: A $100 fine and a $10 mailing fee were charged. No evidence of appeal.
• June 26, 2017: A $100 fine and a $10 mailing fee were charged. No evidence of appeal.
For each fine assessed from October 2016 onwards, the HOA’s letters informed Mr. Collis of his right to appeal to the Board and to request an administrative hearing. The record shows no evidence that Mr. Collis requested an administrative hearing for any of the fines prior to filing his petition in 2018.
Competing Testimonies
• Petitioner (Collis): Testified that his vehicle was never inoperable. He acknowledged that at the time of the June 2017 letters, the vehicle had a flat tire and a covered window, but explained this was the result of vandalism.
• Respondent (HOA): Community Manager Lisa Riesland provided testimony deemed “credible” by the Judge. She stated that the vehicle’s condition constituted a nuisance under Section 10.16. Specific details included:
◦ Cobwebs and debris on or beneath the vehicle.
◦ At various times, cobwebs extended from the vehicle to the ground, trapping leaves.
◦ The condition was deemed “unsightly.”
4. Legal Conclusions and Final Order
Burden of Proof
The Judge established that Mr. Collis, as the petitioner, bore the burden of proof. The standard required was a “preponderance of the evidence,” meaning evidence sufficient to incline a fair and impartial mind to one side of the issue over the other.
Judge’s Rationale
The decision rested on the following legal conclusions:
1. CC&Rs as a Contract: The CC&Rs constitute a binding contract between the homeowner and the HOA, requiring both parties to comply with its terms. The HOA must act reasonably in exercising its authority.
2. Multiple Grounds for Citations: The preponderance of evidence demonstrated that the HOA’s citations were based on violations of Sections 10.11.2 (street parking), 10.11.4 (inoperable vehicle), and 10.16 (nuisance).
3. Insufficiency of Petitioner’s Argument: Because the citations were multifaceted, Mr. Collis’s argument that his vehicle was in operating condition was insufficient to prove the citations were unwarranted. His claim did not address the evidence of street parking or the unsightly conditions that constituted a nuisance.
4. Failure to Meet Burden of Proof: Ultimately, the Judge concluded: “Mr. Collis has failed to show that the Respondent violated any of the CC&Rs, other community documents, or the statutes that regulate planned communities.”
Final Order
IT IS ORDERED that Petitioner Jerry R. Collis’s petition is dismissed.
The decision established the Laveen Meadows HOA as the prevailing party. This order is binding unless a rehearing is requested with the Commissioner of the Department of Real Estate within 30 days of the service of the order (December 20, 2018).
Study Guide – 19F-H18020-REL
Study Guide: Collis v. Laveen Meadows HOA
This guide provides a detailed review of the Administrative Law Judge Decision in the matter of Jerry R. Collis (Petitioner) versus Laveen Meadows HOA (Respondent), Case No. 19F-H18020-REL. It includes a short-answer quiz with an answer key, a set of essay questions for deeper analysis, and a glossary of key terms found within the legal document.
Short-Answer Quiz
Instructions: Answer the following questions in 2-3 sentences based on the provided source document.
1. Who were the primary parties involved in this administrative hearing, and who represented them?
2. What was the original violation Mr. Collis alleged against the Laveen Meadows HOA in his petition filed on September 17, 2018?
3. How did Mr. Collis clarify or reframe the issue he was raising during the December 4, 2018 hearing?
4. According to the HOA’s community manager, Lisa Riesland, what three CC&R sections were the basis for the citations issued to Mr. Collis?
5. What common phrase was used to describe the violation in all seven notifications sent to Mr. Collis, and what crucial detail did these notifications omit?
6. Describe the initial fine issued to Mr. Collis, including the date of the letter and the amount.
7. What physical evidence did the HOA present to support its claim that Mr. Collis’s vehicle created an “unsightly condition” under CC&R Section 10.16?
8. In addition to the unsightly conditions, what two other issues with the vehicle were noted around June 2017, and what was Mr. Collis’s explanation for them?
9. According to the “Conclusions of Law,” who bears the burden of proof in this matter, and what is the required standard of proof?
10. What was the final order issued by the Administrative Law Judge, and what was the legal consequence of this decision for the parties?
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Answer Key
1. The primary parties were Jerry R. Collis, the Petitioner, who appeared on his own behalf, and Laveen Meadows HOA, the Respondent. The Respondent was represented by Chad Gallacher, Esq.
2. Mr. Collis’s original petition, as shown in the Notice of Hearing, alleged that the Laveen Meadows HOA had violated Article 10, Section 10.11.4 of its own CC&Rs. This section pertains to parking motor vehicles that are not in operating condition in unenclosed areas.
3. At the hearing, Mr. Collis acknowledged the HOA could not violate its own rule and clarified that the real issue was that the HOA had wrongly issued him citations for violating Section 10.11.4. He argued that he was not, in fact, in violation of that provision.
4. Lisa Riesland testified that the citations were based not just on Section 10.11.4 (inoperable vehicles), but also on Section 10.11.2, which prohibits parking on the streets, and Section 10.16, which prohibits nuisances.
5. All seven notifications sent to Mr. Collis included the statement: “Violation: Vehicle Parking – Inoperable Vehicle.” However, none of the notifications listed a specific provision of the CC&Rs that had allegedly been violated.
6. The first fine was detailed in a letter dated December 1, 2016. The letter informed Mr. Collis that his account had been charged a $25 fine for the ongoing violation of storing an inoperable vehicle on the street.
7. The HOA presented credible testimony from Lisa Riesland that there were cobwebs and debris on or beneath the vehicle. At various times, these cobwebs extended from the vehicle to the ground and had trapped leaves, creating an unsightly condition.
8. Around June 2017, the vehicle also had a flat tire and a bag or cardboard covering one window. Mr. Collis acknowledged these facts and explained that the vehicle had been vandalized.
9. The “Conclusions of Law” state that Mr. Collis, the petitioner, bears the burden of proof. The standard of proof required to decide all issues in the matter is that of a “preponderance of the evidence.”
10. The Administrative Law Judge ordered that Mr. Collis’s petition be dismissed. This legally binding order deemed the Respondent (Laveen Meadows HOA) to be the prevailing party in the matter.
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Essay Questions
Instructions: The following questions are designed for longer, essay-style responses to encourage a deeper analysis of the case. Answers are not provided.
1. Analyze the discrepancy between Mr. Collis’s initial petition alleging a violation of Section 10.11.4 and the actual issue he raised at the hearing. How did this “reframing” of the issue affect his case, and how did the Respondent react?
2. Discuss the concept of “preponderance of the evidence” as defined in the document. Explain how the Administrative Law Judge applied this standard to the evidence presented by both Mr. Collis and the HOA to reach the final decision.
3. Trace the series of notifications and fines issued by the Laveen Meadows HOA, beginning with the September 19, 2016 letter. Evaluate the HOA’s process and communication based on the details provided in the letters. Did the HOA act reasonably, according to the legal standards cited in the decision?
4. The HOA cited three different CC&R sections (10.11.2, 10.11.4, and 10.16) as the basis for the citations, even though the notifications only stated “Vehicle Parking – Inoperable Vehicle.” Explore the significance of each of these sections and explain why Mr. Collis’s focus on his vehicle being operable was insufficient to win his case.
5. Examine the appeal options available to Mr. Collis at each stage of the violation process. Based on the “Findings of Fact,” what actions did he take or fail to take regarding his appeal rights, and how might this have impacted the overall trajectory of the dispute?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official (Thomas Shedden in this case) who presides over administrative hearings, weighs evidence, and makes legal rulings and decisions.
ARIZ. ADMIN. CODE
The Arizona Administrative Code, a compilation of rules and regulations of Arizona state agencies. Section R2-19-119 is cited as establishing the standard of proof for the hearing.
ARIZ. REV. STAT.
The Arizona Revised Statutes, which are the codified laws of the state of Arizona. Various sections are cited regarding homeowner association disputes and administrative procedures.
Appearances
A formal term for the individuals present and participating in the hearing. In this case, it was Jerry R. Collis and Chad Gallacher, Esq.
The governing body of the Laveen Meadows HOA, to which Mr. Collis had the right to appeal fines. He appealed one fine to the Board, which was denied.
Burden of Proof
The legal obligation of a party in a dispute to provide sufficient evidence to prove their claim. In this case, the burden of proof was on Mr. Collis.
CC&Rs (Covenants, Conditions & Restrictions)
The governing legal documents that set out the rules for a planned community or homeowners’ association. The decision establishes the CC&Rs as a contract between the HOA and its members.
Community Manager
An individual responsible for managing the operations of the HOA. Lisa Riesland served this role for the Respondent and testified at the hearing.
Conclusions of Law
The section of the decision where the Administrative Law Judge applies legal principles and statutes to the established facts to reach a judgment.
Findings of Fact
The section of the decision that lists the established, undisputed facts of the case based on evidence and testimony presented during the hearing.
Nuisance
A condition prohibited by CC&R Section 10.16. It is defined as a condition that is unsightly or could reasonably cause annoyance to other members of the Association.
Operating Condition
A term from CC&R Section 10.11.4, which was amended in May 2013 to clarify its meaning. Mr. Collis argued his vehicle was always in operating condition.
The final, legally binding ruling of the Administrative Law Judge. In this case, the Order was to dismiss the petitioner’s petition.
Petitioner
The party who initiates a legal action or files a petition. In this matter, Jerry R. Collis is the Petitioner.
Preponderance of the Evidence
The standard of proof required in this hearing. It is defined 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. In this matter, Laveen Meadows HOA is the Respondent.
Blog Post – 19F-H18020-REL
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19F-H18020-REL
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The provided text consists of an Administrative Law Judge Decision from the Office of Administrative Hearings concerning a dispute between Petitioner Jerry R. Collis and the Laveen Meadows HOA, which is the Respondent. This decision addresses Mr. Collis’s petition alleging the HOA violated its CC&Rs by improperly issuing citations related to his vehicle. The Findings of Fact detail that Mr. Collis’s vehicle was cited for being inoperable, having expired tags, and creating an unsightly condition defined as a nuisance under multiple CC&R sections. Ultimately, the Conclusions of Law state that Mr. Collis failed to meet his burden of proof to show the HOA violated any community documents or statutes, leading to the dismissal of his petition.
Case Participants
Petitioner Side
Jerry R. Collis(petitioner)
Respondent Side
Chad Gallacher(HOA attorney) Maxwell & Morgan, P.C. Counsel for Respondent Laveen Meadows HOA
Lisa Riesland(community manager) Laveen Meadows HOA Testified for Respondent
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(Commissioner) Arizona Department of Real Estate
Other Participants
f del sol(admin support) Signed copy distribution notice
Laveen Meadows HOA c/o Planned Development Services
Counsel
Chad Gallacher, Esq.
Alleged Violations
CC&Rs Sections 10.11.2, 10.11.4, and 10.16; A.R.S. § 32-2199.01(A)
Outcome Summary
The Petitioner's challenge against the HOA was dismissed because the Petitioner failed to prove by a preponderance of the evidence that the HOA violated the community documents or statutes when issuing citations.
Why this result: Petitioner failed to meet the burden of proof.
Key Issues & Findings
Challenge to HOA fine citations/improper enforcement of parking and nuisance rules
Petitioner claimed the Respondent HOA improperly issued citations against him for vehicle violations (inoperable vehicle, street parking, nuisance), asserting the HOA could not violate CC&R 10.11.4 but that the citations alleging the violation were unwarranted.
Orders: Petitioner Jerry R. Collis’s petition is dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
BLACK’S LAW DICTIONARY 1373 (10th ed. 2014)
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
ARIZ. REV. STAT. § 32-2199.01
Analytics Highlights
Topics: HOA Enforcement, CC&Rs, Vehicle Parking, Nuisance, Burden of Proof
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
BLACK’S LAW DICTIONARY 1373 (10th ed. 2014)
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
ARIZ. REV. STAT. § 32-2199.01
Video Overview
Audio Overview
Decision Documents
19F-H18020-REL Decision – 677244.pdf
Uploaded 2025-10-09T03:33:11 (97.6 KB)
Briefing Doc – 19F-H18020-REL
Briefing Document: Collis v. Laveen Meadows HOA (Case No. 19F-H18020-REL)
Executive Summary
This document synthesizes the findings and decision in the administrative hearing of Jerry R. Collis (Petitioner) versus the Laveen Meadows HOA (Respondent). The Administrative Law Judge dismissed Mr. Collis’s petition, which alleged the HOA had wrongly issued citations concerning his vehicle.
The central issue revolved around a series of violation notices issued to Mr. Collis for an “Inoperable Vehicle.” While Mr. Collis focused his argument on proving the vehicle was, in fact, operational, the HOA successfully argued that the citations were based on a broader set of violations. These included not only the vehicle’s condition under CC&R Section 10.11.4 but also violations for street parking (Section 10.11.2) and creating a nuisance (Section 10.16) due to its unsightly appearance, which included cobwebs, debris, a flat tire, and a covered window.
The Judge concluded that the petitioner, Mr. Collis, failed to meet the burden of proof. By only addressing the vehicle’s operability, he did not disprove the other valid grounds for the citations. Consequently, the Judge found that the HOA had not violated its own governing documents or state statutes, dismissing the petition and declaring the HOA the prevailing party.
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1. Case Overview and Core Dispute
• Case Number: 19F-H18020-REL
• Parties:
◦ Petitioner: Jerry R. Collis (representing himself)
◦ Respondent: Laveen Meadows HOA (represented by Chad Gallacher, Esq.)
• Adjudicator: Thomas Shedden, Administrative Law Judge
• Hearing Date: December 4, 2018
• Decision Date: December 20, 2018
The Petitioner’s Allegation
On September 17, 2018, Jerry R. Collis filed a petition with the Arizona Department of Real Estate. The initial Notice of Hearing framed the allegation as the Laveen Meadows HOA having violated Article 10, Section 10.11.4 of its Covenants, Conditions, and Restrictions (CC&Rs), which pertains to inoperable vehicles.
At the December 4, 2018 hearing, Mr. Collis clarified his position. He argued that the issue was not that the HOA itself could violate that section, but that the HOA had wrongly issued him citations alleging a violation of that provision when his vehicle was fully operational.
The Respondent’s Position
The Laveen Meadows HOA, represented by Community Manager Lisa Riesland, objected to this reframing of the issue. The HOA contended that the citations issued to Mr. Collis were justified under multiple sections of the CC&Rs, not solely the “inoperable vehicle” clause. The HOA’s actions were based on violations of Sections 10.11.2 (street parking), 10.11.4 (inoperable vehicle), and 10.16 (nuisance).
2. Relevant CC&R Provisions
The dispute centered on the interpretation and application of three specific sections within the Laveen Meadows HOA CC&Rs.
Section
Title / Subject
Description
10.11.4
Inoperable Vehicles
Prohibits any motor vehicle “which are not in operating condition” from being parked in unenclosed areas, including driveways. This section was amended in May 2013 to clarify the definition of “operating condition.”
10.11.2
Street Parking
Prohibits parking on the streets within the community.
Nuisances
Prohibits nuisances, which are defined to include conditions that are “unsightly or that could reasonably cause annoyance to other members of the Association.”
3. Analysis of Evidence and Timeline
Violation Notices and Fines
Between September 2016 and June 2017, the HOA sent seven notifications to Mr. Collis regarding his vehicle. A key finding from the hearing was that while all seven notices stated, “Violation: Vehicle Parking – Inoperable Vehicle,” none of them cited a specific provision of the CC&Rs.
The timeline of notifications and fines is as follows:
• September 19, 2016: Initial letter citing expired tags and an inoperable vehicle on the street. Given 10 days to correct.
• October 11, 2016: Letter warning of a potential $25 fine. Notified of appeal rights. No evidence of appeal by Collis.
• December 1, 2016: A $25 fine was charged to Mr. Collis’s account. Mr. Collis appealed this to the HOA Board.
• January 26, 2017: The HOA Board sent a letter to Mr. Collis denying his appeal.
• April 20, 2017: A $50 fine and a $10 mailing fee were charged. No evidence of appeal.
• May 9, 2017: A $100 fine and a $10 mailing fee were charged. No evidence of appeal.
• May 23, 2017: A $100 fine and a $10 mailing fee were charged. No evidence of appeal.
• June 8, 2017: A $100 fine and a $10 mailing fee were charged. No evidence of appeal.
• June 26, 2017: A $100 fine and a $10 mailing fee were charged. No evidence of appeal.
For each fine assessed from October 2016 onwards, the HOA’s letters informed Mr. Collis of his right to appeal to the Board and to request an administrative hearing. The record shows no evidence that Mr. Collis requested an administrative hearing for any of the fines prior to filing his petition in 2018.
Competing Testimonies
• Petitioner (Collis): Testified that his vehicle was never inoperable. He acknowledged that at the time of the June 2017 letters, the vehicle had a flat tire and a covered window, but explained this was the result of vandalism.
• Respondent (HOA): Community Manager Lisa Riesland provided testimony deemed “credible” by the Judge. She stated that the vehicle’s condition constituted a nuisance under Section 10.16. Specific details included:
◦ Cobwebs and debris on or beneath the vehicle.
◦ At various times, cobwebs extended from the vehicle to the ground, trapping leaves.
◦ The condition was deemed “unsightly.”
4. Legal Conclusions and Final Order
Burden of Proof
The Judge established that Mr. Collis, as the petitioner, bore the burden of proof. The standard required was a “preponderance of the evidence,” meaning evidence sufficient to incline a fair and impartial mind to one side of the issue over the other.
Judge’s Rationale
The decision rested on the following legal conclusions:
1. CC&Rs as a Contract: The CC&Rs constitute a binding contract between the homeowner and the HOA, requiring both parties to comply with its terms. The HOA must act reasonably in exercising its authority.
2. Multiple Grounds for Citations: The preponderance of evidence demonstrated that the HOA’s citations were based on violations of Sections 10.11.2 (street parking), 10.11.4 (inoperable vehicle), and 10.16 (nuisance).
3. Insufficiency of Petitioner’s Argument: Because the citations were multifaceted, Mr. Collis’s argument that his vehicle was in operating condition was insufficient to prove the citations were unwarranted. His claim did not address the evidence of street parking or the unsightly conditions that constituted a nuisance.
4. Failure to Meet Burden of Proof: Ultimately, the Judge concluded: “Mr. Collis has failed to show that the Respondent violated any of the CC&Rs, other community documents, or the statutes that regulate planned communities.”
Final Order
IT IS ORDERED that Petitioner Jerry R. Collis’s petition is dismissed.
The decision established the Laveen Meadows HOA as the prevailing party. This order is binding unless a rehearing is requested with the Commissioner of the Department of Real Estate within 30 days of the service of the order (December 20, 2018).
Study Guide – 19F-H18020-REL
Study Guide: Collis v. Laveen Meadows HOA
This guide provides a detailed review of the Administrative Law Judge Decision in the matter of Jerry R. Collis (Petitioner) versus Laveen Meadows HOA (Respondent), Case No. 19F-H18020-REL. It includes a short-answer quiz with an answer key, a set of essay questions for deeper analysis, and a glossary of key terms found within the legal document.
Short-Answer Quiz
Instructions: Answer the following questions in 2-3 sentences based on the provided source document.
1. Who were the primary parties involved in this administrative hearing, and who represented them?
2. What was the original violation Mr. Collis alleged against the Laveen Meadows HOA in his petition filed on September 17, 2018?
3. How did Mr. Collis clarify or reframe the issue he was raising during the December 4, 2018 hearing?
4. According to the HOA’s community manager, Lisa Riesland, what three CC&R sections were the basis for the citations issued to Mr. Collis?
5. What common phrase was used to describe the violation in all seven notifications sent to Mr. Collis, and what crucial detail did these notifications omit?
6. Describe the initial fine issued to Mr. Collis, including the date of the letter and the amount.
7. What physical evidence did the HOA present to support its claim that Mr. Collis’s vehicle created an “unsightly condition” under CC&R Section 10.16?
8. In addition to the unsightly conditions, what two other issues with the vehicle were noted around June 2017, and what was Mr. Collis’s explanation for them?
9. According to the “Conclusions of Law,” who bears the burden of proof in this matter, and what is the required standard of proof?
10. What was the final order issued by the Administrative Law Judge, and what was the legal consequence of this decision for the parties?
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Answer Key
1. The primary parties were Jerry R. Collis, the Petitioner, who appeared on his own behalf, and Laveen Meadows HOA, the Respondent. The Respondent was represented by Chad Gallacher, Esq.
2. Mr. Collis’s original petition, as shown in the Notice of Hearing, alleged that the Laveen Meadows HOA had violated Article 10, Section 10.11.4 of its own CC&Rs. This section pertains to parking motor vehicles that are not in operating condition in unenclosed areas.
3. At the hearing, Mr. Collis acknowledged the HOA could not violate its own rule and clarified that the real issue was that the HOA had wrongly issued him citations for violating Section 10.11.4. He argued that he was not, in fact, in violation of that provision.
4. Lisa Riesland testified that the citations were based not just on Section 10.11.4 (inoperable vehicles), but also on Section 10.11.2, which prohibits parking on the streets, and Section 10.16, which prohibits nuisances.
5. All seven notifications sent to Mr. Collis included the statement: “Violation: Vehicle Parking – Inoperable Vehicle.” However, none of the notifications listed a specific provision of the CC&Rs that had allegedly been violated.
6. The first fine was detailed in a letter dated December 1, 2016. The letter informed Mr. Collis that his account had been charged a $25 fine for the ongoing violation of storing an inoperable vehicle on the street.
7. The HOA presented credible testimony from Lisa Riesland that there were cobwebs and debris on or beneath the vehicle. At various times, these cobwebs extended from the vehicle to the ground and had trapped leaves, creating an unsightly condition.
8. Around June 2017, the vehicle also had a flat tire and a bag or cardboard covering one window. Mr. Collis acknowledged these facts and explained that the vehicle had been vandalized.
9. The “Conclusions of Law” state that Mr. Collis, the petitioner, bears the burden of proof. The standard of proof required to decide all issues in the matter is that of a “preponderance of the evidence.”
10. The Administrative Law Judge ordered that Mr. Collis’s petition be dismissed. This legally binding order deemed the Respondent (Laveen Meadows HOA) to be the prevailing party in the matter.
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Essay Questions
Instructions: The following questions are designed for longer, essay-style responses to encourage a deeper analysis of the case. Answers are not provided.
1. Analyze the discrepancy between Mr. Collis’s initial petition alleging a violation of Section 10.11.4 and the actual issue he raised at the hearing. How did this “reframing” of the issue affect his case, and how did the Respondent react?
2. Discuss the concept of “preponderance of the evidence” as defined in the document. Explain how the Administrative Law Judge applied this standard to the evidence presented by both Mr. Collis and the HOA to reach the final decision.
3. Trace the series of notifications and fines issued by the Laveen Meadows HOA, beginning with the September 19, 2016 letter. Evaluate the HOA’s process and communication based on the details provided in the letters. Did the HOA act reasonably, according to the legal standards cited in the decision?
4. The HOA cited three different CC&R sections (10.11.2, 10.11.4, and 10.16) as the basis for the citations, even though the notifications only stated “Vehicle Parking – Inoperable Vehicle.” Explore the significance of each of these sections and explain why Mr. Collis’s focus on his vehicle being operable was insufficient to win his case.
5. Examine the appeal options available to Mr. Collis at each stage of the violation process. Based on the “Findings of Fact,” what actions did he take or fail to take regarding his appeal rights, and how might this have impacted the overall trajectory of the dispute?
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official (Thomas Shedden in this case) who presides over administrative hearings, weighs evidence, and makes legal rulings and decisions.
ARIZ. ADMIN. CODE
The Arizona Administrative Code, a compilation of rules and regulations of Arizona state agencies. Section R2-19-119 is cited as establishing the standard of proof for the hearing.
ARIZ. REV. STAT.
The Arizona Revised Statutes, which are the codified laws of the state of Arizona. Various sections are cited regarding homeowner association disputes and administrative procedures.
Appearances
A formal term for the individuals present and participating in the hearing. In this case, it was Jerry R. Collis and Chad Gallacher, Esq.
The governing body of the Laveen Meadows HOA, to which Mr. Collis had the right to appeal fines. He appealed one fine to the Board, which was denied.
Burden of Proof
The legal obligation of a party in a dispute to provide sufficient evidence to prove their claim. In this case, the burden of proof was on Mr. Collis.
CC&Rs (Covenants, Conditions & Restrictions)
The governing legal documents that set out the rules for a planned community or homeowners’ association. The decision establishes the CC&Rs as a contract between the HOA and its members.
Community Manager
An individual responsible for managing the operations of the HOA. Lisa Riesland served this role for the Respondent and testified at the hearing.
Conclusions of Law
The section of the decision where the Administrative Law Judge applies legal principles and statutes to the established facts to reach a judgment.
Findings of Fact
The section of the decision that lists the established, undisputed facts of the case based on evidence and testimony presented during the hearing.
Nuisance
A condition prohibited by CC&R Section 10.16. It is defined as a condition that is unsightly or could reasonably cause annoyance to other members of the Association.
Operating Condition
A term from CC&R Section 10.11.4, which was amended in May 2013 to clarify its meaning. Mr. Collis argued his vehicle was always in operating condition.
The final, legally binding ruling of the Administrative Law Judge. In this case, the Order was to dismiss the petitioner’s petition.
Petitioner
The party who initiates a legal action or files a petition. In this matter, Jerry R. Collis is the Petitioner.
Preponderance of the Evidence
The standard of proof required in this hearing. It is defined 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. In this matter, Laveen Meadows HOA is the Respondent.
Blog Post – 19F-H18020-REL
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19F-H18020-REL
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The provided text consists of an Administrative Law Judge Decision from the Office of Administrative Hearings concerning a dispute between Petitioner Jerry R. Collis and the Laveen Meadows HOA, which is the Respondent. This decision addresses Mr. Collis’s petition alleging the HOA violated its CC&Rs by improperly issuing citations related to his vehicle. The Findings of Fact detail that Mr. Collis’s vehicle was cited for being inoperable, having expired tags, and creating an unsightly condition defined as a nuisance under multiple CC&R sections. Ultimately, the Conclusions of Law state that Mr. Collis failed to meet his burden of proof to show the HOA violated any community documents or statutes, leading to the dismissal of his petition.
Case Participants
Petitioner Side
Jerry R. Collis(petitioner)
Respondent Side
Chad Gallacher(HOA attorney) Maxwell & Morgan, P.C. Counsel for Respondent Laveen Meadows HOA
Lisa Riesland(community manager) Laveen Meadows HOA Testified for Respondent
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(Commissioner) Arizona Department of Real Estate
Other Participants
f del sol(admin support) Signed copy distribution notice
18F-H1818045-REL (Consolidated with 18F-H1818029-REL-RHG & 18F-H1818054-REL)
Agency
ADRE
Tribunal
OAH
Decision Date
2018-10-18
Administrative Law Judge
Thomas Shedden
Outcome
partial
Filing Fees Refunded
$500.00
Civil Penalties
$0.00
Parties & Counsel
Petitioner
Warren R. Brown
Counsel
—
Respondent
Mogollon Airpark, Inc.
Counsel
Gregory A. Stein, Esq.
Alleged Violations
ARIZ. REV. STAT. section 33-1803(A)
Outcome Summary
Petitioner Brown prevailed in the 045 matter regarding the excessive late fee ($25 instead of $15 or 10%) in violation of ARS 33-1803(A). However, both petitioners (Brown in 029, Stevens in 054) failed to prove a violation of ARS 33-1803(A) regarding the overall 39.4% assessment increase, resulting in those petitions being dismissed.
Why this result: Petitioners lost the challenge to the assessment increase because their definition of “regular assessment” was not supported by principles of statutory construction, which would have rendered the word “regular” trivial or void in the statute.
Key Issues & Findings
HOA charging excessive late payment fees and interest.
Mogollon charged a $25 late fee, exceeding the statutory limit set in ARS 33-1803(A), which limits late charges to the greater of $15 or 10% of the unpaid assessment.
Orders: Mogollon Airpark Inc. must rescind the $25 late fee assessed against Mr. Brown and must pay to Mr. Brown his filing fee of $500.00 within thirty days.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
Cited:
ARIZ. REV. STAT. section 33-1803(A)
Analytics Highlights
Topics: HOA assessment increase, Late fees, Statutory interpretation, Regular vs Special assessment, Homeowner petition
Additional Citations:
ARIZ. REV. STAT. section 33-1803(A)
ARIZ. REV. STAT. section 33-1806
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Audio Overview
Decision Documents
18F-H1818029-REL-RHG Decision – 666285.pdf
Uploaded 2025-10-08T07:04:50 (151.9 KB)
18F-H1818029-REL-RHG Decision – 672623.pdf
Uploaded 2025-10-08T07:04:51 (144.6 KB)
Briefing Doc – 18F-H1818029-REL-RHG
Administrative Law Decision Briefing: Brown and Stevens vs. Mogollon Airpark, Inc.
Executive Summary
This document provides a detailed analysis of the Administrative Law Judge (ALJ) Decision from October 18, 2018, concerning three consolidated petitions filed by homeowners Warren R. Brown and Brad W. Stevens against their homeowners’ association (HOA), Mogollon Airpark, Inc. The core of the dispute centers on Mogollon’s 2018 financial actions, specifically a 39.4% increase in total annual assessments and the imposition of new late payment penalties.
The case produced a split decision. The ALJ ruled in favor of Mogollon Airpark on the primary issue of the assessment increase. The judge determined that the statutory 20% cap on annual increases, as defined in ARIZ. REV. STAT. § 33-1803(A), applies exclusively to “regular assessments” and not to “special assessments.” Mogollon had structured its $325 increase as a combination of a compliant 14.1% regular assessment hike and a separate $209 special assessment, a practice the ALJ found permissible under the law.
Conversely, the ALJ ruled in favor of Petitioner Brown regarding the HOA’s $25 late fee. The judge found this fee to be in direct violation of § 33-1803(A), which limits such charges to “the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.” The ALJ’s rationale was that this statutory limit applies to all “assessments” without qualification, not just regular ones.
While the hearing was limited to these specific statutory violations, the petitions were underpinned by serious allegations from Brown and Stevens of deceptive accounting practices and financial mismanagement by Mogollon’s leadership, intended to create a “fabricated shortfall” to justify the fee increases. These underlying allegations were not substantively addressed in the hearing.
Case Overview
This consolidated matter combines three separate petitions heard before the Arizona Office of Administrative Hearings. The hearing was conducted on September 28, 2018, with Thomas Shedden serving as the Administrative Law Judge.
• Petitioners: Warren R. Brown and Brad W. Stevens.
• Respondent: Mogollon Airpark, Inc.
• Docket Numbers:
◦ 18F-H1818029-REL-RHG (“029 matter”), Petitioner: Warren R. Brown
◦ 18F-H1818045-REL (“045 matter”), Petitioner: Warren R. Brown
◦ 18F-H1818054-REL (“054 matter”), Petitioner: Brad W. Stevens
Core Issues Contested
The dispute arose from Mogollon Airpark’s 2018 decision to increase assessments and institute new fees for late payments and past-due accounts.
1. The 2018 Assessment Increase
The central conflict involved the legality of a significant increase in annual homeowner assessments.
• Financial Details:
◦ Previous Year’s Assessment (2017): $825
◦ 2018 Total Increase: $325
◦ Total Percentage Increase: 39.4%
• Mogollon’s Breakdown of the Increase:
◦ Regular Assessment Increase: $116 (a 14.1% increase over $825)
◦ Special Assessment: $209
Argument on the Assessment Increase
Petitioners (Brown & Stevens)
Argued that the entire $325 increase constituted a single assessment action. Because the 39.4% increase exceeded the 20% annual cap stipulated in ARIZ. REV. STAT. § 33-1803(A), it was unlawful. They contended that the term “regular assessment” in the statute refers to the process by which an assessment is created (i.e., by motion, second, and vote), not a specific type of assessment. They further alleged that Mogollon’s governing documents provided no authority to levy a “special assessment.”
Respondent (Mogollon Airpark, Inc.)
Asserted that § 33-1803(A) applies only to “regular assessments.” They argued that their regular assessment increase of $116 (14.1%) was well within the 20% limit. The $209 portion was a “special assessment,” which they described as a “term of art in the industry” not subject to the 20% cap. They cited the use of the term “special assessment” in another statute, § 33-1806, as evidence of legislative intent to differentiate between assessment types.
2. Late Payment Charges
Petitioner Brown separately challenged the legality of newly instituted penalties for late payments.
• Charges Implemented by Mogollon:
◦ A flat $25 fee for late payments.
◦ 18% interest on past-due accounts.
• Petitioner’s Argument (Brown): The $25 late fee violated the plain language of § 33-1803(A), which explicitly limits late payment charges to “the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.” Brown provided an invoice showing he was charged a $25 late fee and $1.57 in interest.
• Respondent’s Argument (Mogollon): The HOA argued that the statutory limits on late fees did not apply in this case because the fee was charged on a special assessment, which they contended was outside the scope of § 33-1803(A).
Underlying Allegations of Financial Misconduct
Although the hearing was limited to the narrow legal questions above, the petitioners’ filings contained extensive allegations of financial impropriety against Mogollon’s treasurer and board. These claims formed the motive for the contested assessments.
• Core Allegation: The petitioners asserted that the HOA leadership engaged in “numerous accounting improprieties” and used “deceptive and nonstandard accounting methods, including keeping two sets of books.”
• Alleged Purpose: The goal was to create a “fabricated shortfall” and present an “inaccurate picture of the HOA finances.” This was done, according to Mr. Brown, “ostensibly to show that the 2016 board of directors left office showing a loss of funds,” when in fact they had improved the treasury by approximately $200,000.
• Justification for Increase: This artificially created financial need was then used “to convince the Board that a 39.4% increase in dues was required.”
• Evidence and Testimony: Mr. Stevens submitted a 45-page petition with over 600 pages of exhibits detailing the alleged accounting practices. He testified that Mogollon possessed over $1 million and did not need an assessment increase. He also stated his belief that the $209 special assessment was a “trial run” for future assessments for purposes not authorized by the governing documents.
• ALJ’s Position: The judge noted these underlying allegations but stated, “the substance of their allegations was not addressed in this hearing.” A footnote suggested that “the civil courts may be better suited than an administrative tribunal to address the issues they raise.”
Administrative Law Judge’s Decision and Rationale
The ALJ issued a split decision, ruling for the Respondent on the assessment increase and for the Petitioner on the late fee. The decision was based on established principles of statutory construction.
Legal Principles Applied
• Burden of Proof: Placed on Petitioners Brown and Stevens to prove their allegations by a preponderance of the evidence.
• Statutory Construction:
1. Statutes must be interpreted to yield a “fair and sensible result” and avoid “absurd and unreasonable construction.”
2. Every word and phrase in a statute must be given meaning so that no part is “void, inert, redundant, or trivial.”
3. When a term is used in one part of a statute but omitted in another, it should not be read into the section where it is absent.
Conclusion on the Assessment Increase (Matters 029 & 054)
• Verdict: The petitions of Mr. Brown and Mr. Stevens were dismissed. Mogollon Airpark, Inc. was deemed the prevailing party.
• Rationale: The ALJ rejected the petitioners’ definition of “regular assessment.” The judge reasoned that if “regular” simply meant passed by a regular process (motion, second, vote), then the word would be meaningless (“trivial or void”), as all assessments are assumed to follow that process. This would violate a core principle of statutory construction. Therefore, the legislature must have intended “regular assessment” to be a specific type of assessment, distinct from others like “special assessments.” Because the 20% cap in § 33-1803(A) explicitly applies only to regular assessments, Mogollon’s $209 special assessment was not subject to that limit.
Conclusion on the Late Fee (Matter 045)
• Verdict: Petitioner Warren R. Brown was deemed the prevailing party.
• Rationale: The ALJ found that the statutory clause limiting late fees applies to “assessments” in general, not specifically to “regular assessments.” The legislature’s omission of the word “regular” in this part of the statute was deliberate. Mogollon’s argument that the limit only applied to regular assessments required reading a word into the statute that was not there, which “violates principles of statutory construction.” The $25 fee clearly exceeded the allowable limit.
Final Orders
The ALJ issued separate orders for each consolidated docket, reflecting the split decision.
The Administrative Law Judge dismissed Petitioner Lawrence M. Stewart's petition and deemed the Respondent, Canyon Gate Condominium Association, Inc., to be the prevailing party.
Why this result: Petitioner failed to prove the Association violated Bylaws Section 5.4 or acted unreasonably or in bad faith when denying his request for a variance. The Bylaw section cited was determined to be a liability shield for the Board, not a source of duty owed to the homeowner.
Key Issues & Findings
Alleged failure of HOA Board to act in good faith when denying Petitioner's request for a variance for unauthorized common area changes
Petitioner made changes to the common area without permission and the Board denied his subsequent request for a variance. Petitioner alleged the Board violated Bylaws Section 5.4 by failing to act in good faith and showing bias. The ALJ found that Section 5.4 is a liability shield for the Board, not a duty imposed upon them, and Petitioner failed to meet the burden of proof to show bad faith or unreasonableness.
Orders: Petitioner Lawrence M. Stewart’s petition is dismissed. Respondent is deemed to be the prevailing party in this matter.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Analytics Highlights
Topics: HOA governance, variance denial, common area modifications, good faith requirement, board liability shield, prevailing party
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
The Administrative Law Judge dismissed Petitioner Lawrence M. Stewart's petition and deemed the Respondent, Canyon Gate Condominium Association, Inc., to be the prevailing party.
Why this result: Petitioner failed to prove the Association violated Bylaws Section 5.4 or acted unreasonably or in bad faith when denying his request for a variance. The Bylaw section cited was determined to be a liability shield for the Board, not a source of duty owed to the homeowner.
Key Issues & Findings
Alleged failure of HOA Board to act in good faith when denying Petitioner's request for a variance for unauthorized common area changes
Petitioner made changes to the common area without permission and the Board denied his subsequent request for a variance. Petitioner alleged the Board violated Bylaws Section 5.4 by failing to act in good faith and showing bias. The ALJ found that Section 5.4 is a liability shield for the Board, not a duty imposed upon them, and Petitioner failed to meet the burden of proof to show bad faith or unreasonableness.
Orders: Petitioner Lawrence M. Stewart’s petition is dismissed. Respondent is deemed to be the prevailing party in this matter.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
Cited:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Analytics Highlights
Topics: HOA governance, variance denial, common area modifications, good faith requirement, board liability shield, prevailing party
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
Video Overview
Audio Overview
Decision Documents
18F-H1818052-REL Decision – 660026.pdf
Uploaded 2025-10-09T03:33:02 (91.5 KB)
18F-H1818052-REL Decision – 720468.pdf
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This is a concise summary of the administrative law proceedings concerning Lawrence M. Stewart's petition against the Canyon Gate Condominium Association, Inc., drawing from the original hearing (September 6, 2018) and the subsequent rehearing (January 2, 2019).
Summary of Administrative Law Case: Stewart v. Canyon Gate Condominium Association, Inc.
Key Facts
The Petitioner, Lawrence M. Stewart, an owner and former Board member, made changes to the common or limited common area around his unit without prior permission, violating section 5.1 of the CC&Rs. After being informed of the violation, Mr. Stewart requested a variance from the Association Board while he was still a member. At a Board meeting on February 18, 2018, Mr. Stewart resigned, and the two remaining Board members (Sandra Fernandez and David Larson) voted to deny his variance request, requiring him to restore the areas to their original condition.
Main Issues and Petitioner's Arguments
Mr. Stewart filed a petition with the Arizona Department of Real Estate alleging the Association violated Bylaws section 5.4. His central argument was that the Board did not act in good faith when denying the variance request. He asserted that Board member David Larson was biased against him and that the denial was unfair because other units were also non-conforming with the CC&Rs. Mr. Stewart cited Bylaws Section 5.4 because he testified it was the only section referring to a “good faith” requirement in the governing documents.
Key Legal Points and Analysis
Burden of Proof: Mr. Stewart bore the burden of proof by a preponderance of the evidence. The Bylaws are considered a contract, and the Respondent (Association) is required to act reasonably in exercising its authority.
Applicability of Section 5.4: The Administrative Law Judge (ALJ) concluded that Bylaws Article V, Section 5.4 (Liability/Indemnification) does not impose any duty on the Board members; rather, it merely shields them from liability if they act in good faith. Mr. Stewart eventually acknowledged that the Association had not technically violated Section 5.4.
Reasonableness of Board Action: The Board's stated reason for denying the variance was fear of "open[ing] a Pandora’s Box" where other unit owners would request variances. The ALJ found this concern to be a not unreasonable position for a condominium association board.
Lack of Evidence for Bias/Unfairness: The ALJ found that Mr. Stewart did not demonstrate by a preponderance of the evidence that the Board lacked good faith, was biased against him, or treated him unfairly. Regarding the assertion of other non-conforming units, there was no evidence that those owners had requested variances, making that testimony not probative of the issue at hand.
Outcome
The Administrative Law Judge determined that Mr. Stewart failed to meet his burden of proof. Consequently, Petitioner Lawrence M. Stewart’s petition was dismissed in both the initial decision (September 14, 2018) and the binding order issued after the rehearing (January 17, 2019). The Respondent, Canyon Gate Condominium Association, Inc., was deemed the prevailing party.
Study Guide – 18F-H1818052-REL
Study Guide: Stewart v. Canyon Gate Condominium Association, Inc.
This study guide provides a review of the administrative legal case Lawrence M. Stewart v. Canyon Gate Condominium Association, Inc. (Case No. 18F-H1818052-REL). It covers the key facts, legal arguments, and outcomes of the initial hearing and subsequent rehearing as detailed in the decisions issued by the Arizona Office of Administrative Hearings.
Short-Answer Quiz
Answer the following ten questions based on the provided case documents. Each answer should be approximately two to three sentences long.
1. What initial action taken by Lawrence M. Stewart prompted the Canyon Gate Condominium Association to contact him with a notice of violation?
2. What specific section of the Association Bylaws did Mr. Stewart allege was violated in his petition to the Department of Real Estate?
3. What was Mr. Stewart’s position within the Association at the time he requested a variance for the changes he had made?
4. According to Mr. Stewart, what was the Board’s primary reason for denying his variance request?
5. Why did Mr. Stewart ultimately resign from the Association’s Board during the February 18, 2018 meeting?
6. In the initial hearing, what three pieces of evidence did Mr. Stewart present to support his allegation that Board member David Larson was biased against him?
7. What is the legal standard of proof required in this matter, and which party bears the burden of meeting that standard?
8. How did the Administrative Law Judge interpret the function of Bylaws Section 5.4, characterizing it as either a “shield” or a “sword”?
9. During the rehearing, what new piece of evidence did Mr. Stewart introduce to support his claim of bias from Mr. Larson?
10. What was the final ruling in both the initial hearing (September 14, 2018) and the rehearing (January 17, 2019)?
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Quiz Answer Key
1. Mr. Stewart made changes to the common area and/or limited common area around his condominium unit without first getting permission from the Association. This action was a violation of section 5.1 of the CC&Rs, leading the Association’s counsel to send him a letter on November 15, 2017.
2. Mr. Stewart’s petition alleged that the Association violated Bylaws Section 5.4. He later clarified that he cited this specific section because it was the only one in the governing documents that included a “good faith” requirement, which he believed the Board had failed to meet.
3. At the time he requested a variance to approve the changes he had made, Mr. Stewart was an active member of the Association’s Board of Directors. The other two members were Sandra Fernandez and David Larson.
4. The Board denied his request because they feared it would “open a Pandora’s Box,” leading other unit owners to request variances for changes to the common area. The judge found this was not an unreasonable position for a condominium association board to take.
5. Mr. Stewart resigned from the Board because he got the sense “right away” that the other two board members, Ms. Fernandez and Mr. Larson, had already made up their minds to deny his request and would not approve it.
6. To support his bias claim, Mr. Stewart relied on: (1) a biography of Mr. Larson prepared by the property manager, (2) statements Mr. Larson made in notes from a November 28, 2017 Board meeting, and (3) his belief that the other members had already decided the matter without his input.
7. The standard of proof is a “preponderance of the evidence.” The burden of proof to meet this standard rests entirely on the Petitioner, Mr. Stewart.
8. The judge concluded that Section 5.4 acts as a “shield” to protect Board members from liability when they act in good faith. It does not impose a duty on them and cannot be used as a “sword” by an owner to force a particular action from the Board.
9. At the rehearing, Mr. Stewart entered into evidence an October 3, 2018 letter written by Mr. Larson to the Association’s members. In the letter, Mr. Larson urged the members not to vote for Mr. Stewart in an upcoming election.
10. In both the initial hearing and the rehearing, the Administrative Law Judge ordered that Mr. Stewart’s petition be dismissed. The Respondent, Canyon Gate Condominium Association, Inc., was deemed the prevailing party in the matter.
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Essay Questions
1. Analyze the legal reasoning behind the Administrative Law Judge’s conclusion that Bylaws Section 5.4 was not applicable to Mr. Stewart’s claim. How did Mr. Stewart’s interpretation of the section as a “sword” versus a “shield” contribute to this outcome?
2. Discuss the concept of “preponderance of the evidence” as defined in the case documents. Evaluate the evidence Mr. Stewart presented to prove bias and unfair treatment, and explain why the judge found it insufficient to meet this standard.
3. Examine the Board’s justification for denying the variance request (the “Pandora’s Box” argument). Based on the court’s conclusions, discuss why this was considered a “reasonable position” for a condominium association board, even without a detailed inspection of Mr. Stewart’s specific changes.
4. Trace the evolution of Mr. Stewart’s arguments and evidence from the initial hearing on September 6, 2018, to the rehearing on January 2, 2019. What new evidence was introduced, and did it fundamentally change the core issues or the final outcome of the case?
5. Explore the principle established in the “Conclusions of Law” that Association Bylaws function as a contract between the parties. How does this principle require both homeowners and the Association Board to act, and how did it influence the judge’s final decision in this matter?
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Glossary of Key Terms
Definition in the Context of the Case
Administrative Law Judge (ALJ)
The official, Thomas Shedden, who presided over the hearings, reviewed the evidence, and issued the final decisions in this matter.
Bylaws
A contract between the Association and its members. The parties are required to comply with its terms, and the Association must act reasonably in exercising its authority under them. Mr. Stewart alleged a violation of Bylaws Section 5.4.
Covenants, Conditions, and Restrictions. Mr. Stewart was found to be in violation of section 5.1 of the CC&Rs for making unapproved changes to a common area.
Common Area
An area around a condominium unit that is not privately owned. Mr. Stewart made unauthorized changes to the common and/or limited common area around his unit.
Good Faith
A standard of conduct mentioned in Bylaws Section 5.4, which shields Board members from liability if they act accordingly. Mr. Stewart’s core argument was that the Board did not act in good faith when denying his variance request.
Indemnification
The subject of Article V of the Bylaws. Section 5.4, titled “Liability,” falls under this article and serves to protect, or indemnify, the Board from liability.
Petitioner
The party who initiates a legal action by filing a petition. In this case, the Petitioner was Lawrence M. Stewart.
Preponderance of the Evidence
The standard of proof required for the Petitioner to win the case. It is defined 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.”
Recuse
To formally withdraw from a decision-making process due to a conflict of interest. The Association’s attorney incorrectly stated in a letter that Mr. Stewart had recused himself from voting on his own variance request.
Respondent
The party against whom a petition is filed. In this case, the Respondent was Canyon Gate Condominium Association, Inc.
Variance
A formal request for an exception to the established rules (the CC&Rs). Mr. Stewart requested a variance to gain approval for the changes he had already made to the common area.
Blog Post – 18F-H1818052-REL
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4 sources
These documents consist of Administrative Law Judge Decisions from the Office of Administrative Hearings in Arizona, detailing a dispute between Petitioner Lawrence M. Stewart and the Canyon Gate Condominium Association, Inc. The core issue revolves around Mr. Stewart making unauthorized changes to the common area of his unit and his subsequent failed attempt to obtain a variance from the Association’s Board. The sources include an initial decision (dated September 14, 2018) and two decisions stemming from a rehearing (both dated January 17, 2019, though one is more detailed), all concluding that Mr. Stewart’s petition must be dismissed. The Administrative Law Judge determined that Mr. Stewart failed to prove by a preponderance of the evidence that the Association acted in bad faith or was biased against him when it denied his request, despite his reliance on a Bylaws section regarding indemnity which the court found acted as a “shield” for the Board rather than a source of duty.
Based on 4 sources
Case Participants
Petitioner Side
Lawrence M. Stewart(petitioner) Was also a board member during the variance request period, but resigned prior to the vote to deny his request
Respondent Side
Mark K. Sahl(Respondent Attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
Nicolas C. S. Nogami(Respondent Attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Also appears as 'Nichols C. S. Nogami'
Sandra Fernandez(board member) Canyon Gate Condominium Association, Inc. Voted to deny Petitioner's variance request
David Larson(board member) Canyon Gate Condominium Association, Inc. Voted to deny Petitioner's variance request; Petitioner alleged bias against him
Neutral Parties
Thomas Shedden(ALJ) Office of Administrative Hearings
Judy Lowe(Commissioner) Arizona Department of Real Estate
F. Del Sol(Administrative Staff) Transmitted copies of the decision
Bylaws Article VIII Bylaws Article VIII; Bylaws Article IV, Section 1 ARIZ. REV. STAT. sections 33-1812(A), (A)(1), and (A)(2)
Outcome Summary
The Petitioner's petition, raising three issues concerning the HOA's election nominating process, was dismissed entirely. The Respondent was deemed the prevailing party.
Why this result: The Petitioner failed to meet the burden of proof on all issues. The ALJ found that the Nominating Committee acted within the authority granted by the Bylaws regarding deadlines and nominee selection discretion, and the relevant election statute (A.R.S. § 33-1812) was not applicable to the nomination process.
Key Issues & Findings
Nominating Committee disregarded a September 29, 2017 deadline by which parties were to submit applications to nominate themselves.
Petitioner alleged the Nominating Committee violated Article VIII by accepting applications after the September 29th administrative deadline, arguing the deadline was a 'term[], limitation[], or rule[] adopted by the Board of Directors'.
Orders: The claim was dismissed. The deadline was an administrative deadline set by management, not a rule adopted by the Board, and therefore the Committee did not violate Bylaws Article VIII by accepting applications late.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
Bylaws Article VIII
The Nominating Committee exceeded its authority by asking candidates questions that had the effect of imposing qualification requirements for the Board’s Directors that exceed those set out in the Bylaws.
Petitioner alleged that the Committee imposing questions (such as whether an applicant had filed a lawsuit against the Association) created unauthorized qualifications for the Board, violating the Bylaws.
Orders: The claim was dismissed. Bylaws Article IV Section 3 grants the Nominating Committee discretion to determine the number of nominations, and it was not unreasonable for the Committee to question applicants while exercising this explicit discretion.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
Bylaws Article VIII
Bylaws Article IV, Section 3
By failing to include on the election-ballot members who had submitted 'self-nominations,' the Committee violated election statutes.
Petitioner asserted that because members could not vote for the four applicants the Nominating Committee did not nominate, the Committee engaged in proxy voting, violating election requirements set forth in A.R.S. § 33-1812.
Orders: The claim was dismissed. Because Bylaws Article IV Section 3 requires nominations to be made by the Nominating Committee, nominations are not 'votes allocated to a unit' and ARIZ. REV. STAT. section 33-1812 is not applicable.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
ARIZ. REV. STAT. sections 33-1812(A)
ARIZ. REV. STAT. sections 33-1812(A)(1)
ARIZ. REV. STAT. sections 33-1812(A)(2)
Analytics Highlights
Topics: HOA Election, Nominating Committee, Bylaws Enforcement, Director Qualifications, Administrative Deadline, Statutory Interpretation, Self-Nomination
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
ARIZ. REV. STAT. section 33-1812
Video Overview
Audio Overview
Decision Documents
18F-H1817017-REL Decision – 615818.pdf
Uploaded 2025-10-09T03:32:12 (125.4 KB)
Briefing Doc – 18F-H1817017-REL
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.
Study Guide – 18F-H1817017-REL
Study Guide: Travis v. The Val Vista Lakes Community Association
Short-Answer Quiz
Instructions: Answer the following questions in 2-3 complete sentences based on the provided source context.
1. Who were the primary parties involved in case number 18F-H1817017-REL, and what were their roles?
2. What were the three central issues that petitioner William Travis raised regarding the Board election held on November 16, 2017?
3. What was the petitioner’s argument concerning the September 29, 2017, application deadline set by the Association?
4. According to the Association’s on-site manager, Simone McGinnis, what was the origin and purpose of the September 29th deadline?
5. How did the petitioner claim the Nominating Committee exceeded its authority by questioning candidates?
6. What was the Association’s defense for the Nominating Committee’s practice of interviewing and questioning applicants?
7. What is the sole qualification required to serve on the Board of Directors, according to the Val Vista Lakes Community Association Bylaws?
8. How did the petitioner link the Nominating Committee’s failure to place all applicants on the ballot to a violation of ARIZ. REV. STAT. section 33-1812?
9. According to testimony during the November 16, 2017, Board meeting, how long had the Association been strictly adhering to the Bylaw requirement of using a Nominating Committee?
10. What was the final Order issued by Administrative Law Judge Thomas Shedden in this case?
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Answer Key
1. The primary parties were the Petitioner, William Travis, who brought the complaint, and the Respondent, The Val Vista Lakes Community Association, which was defending its actions. Mr. Travis represented himself, while the Association was represented by attorneys Mark K. Sahl and Nicholas C. Nogami.
2. The three issues raised by Mr. Travis were: (1) the Nominating Committee improperly disregarded the September 29th application deadline; (2) the Committee exceeded its authority by asking questions that effectively added new qualification requirements for Board members; and (3) the Committee’s failure to include all “self-nominations” on the ballot constituted a violation of Arizona state statutes on proxy voting.
3. Mr. Travis argued that the September 29th deadline was a “term, limitation, or rule adopted by the Board of Directors” under Bylaws Article VIII. Therefore, by accepting applications after this date, the Nominating Committee violated the Association’s own rules.
4. Simone McGinnis testified that the Board did not impose the deadline. Instead, it was an administrative deadline set by the Association’s management company to allow sufficient time for the Nominating Committee to review applications and have ballots printed.
5. Mr. Travis argued that by asking applicants questions, the Nominating Committee was effectively imposing qualification requirements beyond the single one set out in the Bylaws (being a member of the Association). He asserted the committee had no authority to ask any questions at all as part of its process.
6. The Association contended that questioning applicants was a reasonable exercise of the Nominating Committee’s discretion. This discretion is granted by the Bylaws, which state the Committee shall make as many nominations as it determines is appropriate.
7. According to Bylaws Article IV, Section 1, the only qualification required for an individual to serve on the Board of Directors is that they must be a member of the Association. No other qualifications are specified in the Bylaws.
8. Mr. Travis asserted that because members were not allowed to vote for or against the four applicants who were not nominated, the Committee effectively engaged in proxy voting. He argued this violated ARIZ. REV. STAT. section 33-1812, which requires that ballots provide an opportunity to vote for or against each proposed action.
9. During the meeting, the Board acknowledged that it had only been following the Bylaw requirement to use a Nominating Committee for the last two years. Prior to that, for approximately thirty years, strict adherence to this Bylaw had not been observed.
10. The Administrative Law Judge ordered that Petitioner William Travis’s petition be dismissed. The Judge also deemed the Respondent, The Val Vista Lakes Community Association, to be the prevailing party in the matter.
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Essay Questions
Instructions: The following questions are designed to test a deeper understanding of the case. Formulate a comprehensive response to each prompt using only the information and arguments presented in the source document.
1. Analyze the conflicting interpretations of the Nominating Committee’s role and authority as presented by William Travis and the Association. How did the Administrative Law Judge use the plain language of Bylaws Article IV, Section 3 to resolve this dispute?
2. Discuss the significance of the September 29, 2017 deadline. Evaluate the evidence and arguments presented by both parties regarding its legitimacy and binding nature, and explain the Judge’s reasoning for concluding it was an administrative deadline.
3. Explain William Travis’s legal argument that the Nominating Committee’s selection process constituted a form of proxy voting in violation of ARIZ. REV. STAT. section 33-1812. Detail the Judge’s conclusion on this matter and the legal reasoning used to determine the statute’s applicability.
4. Examine the concept of “discretion” as it applies to the Nominating Committee’s actions. Based on the hearing testimony, including the Board attorney’s explanation, what are the implied powers and limitations of this discretion?
5. The Judge determined that Mr. Travis failed to meet the “preponderance of the evidence” standard. Identify the key claims made by Mr. Travis and detail why the evidence he presented (or failed to present) was insufficient to prove his case on each of the three issues.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official (Thomas Shedden in this case) who presides over administrative hearings, hears evidence, and makes legal findings and decisions.
Petitioner
The party who files a petition initiating a legal case. In this matter, the petitioner was William Travis.
Respondent
The party against whom a petition is filed and who must respond to the allegations. In this matter, the respondent was The Val Vista Lakes Community Association.
Bylaws
The formal rules and regulations governing the internal management of an organization, such as a homeowners’ association. They are considered a contract between the association and its members.
An acronym for Covenants, Conditions, and Restrictions, which are rules governing the use of real estate within a planned community. Mr. Travis initially alleged a violation of CC&R Article V, Section 3.
Nominating Committee
A committee, established by the Bylaws, responsible for nominating candidates for election to the Board of Directors. It consists of a Chairperson from the Board and two or more other persons.
Self-Nomination
The act of a member putting their own name forward for consideration for a Board position. The petitioner acknowledged that the Bylaws do not explicitly provide for self-nomination.
Burden of Proof
The legal obligation of a party in a trial to produce evidence that proves the claims they have made against the other party. In this case, the burden of proof was on Mr. Travis.
Preponderance of the Evidence
The standard of proof required in this case. It means the evidence presented is more convincing and has superior evidentiary weight than the evidence offered in opposition, inclining an impartial mind to one side over the other.
Proxy Voting
A form of voting where a member authorizes another person to vote on their behalf. ARIZ. REV. STAT. section 33-1812 prohibits this practice for community associations after the period of declarant control.
Prevailing Party
The party that wins the lawsuit. In this case, the Respondent Association was deemed the prevailing party upon the dismissal of the petition.
Blog Post – 18F-H1817017-REL
Your HOA Bylaws Might Not Mean What You Think: 3 Surprising Lessons from a Legal Showdown
Introduction: The Devil in the Details
Anyone who has ever sat through a contentious HOA annual meeting or received a violation notice for an overgrown flowerbed knows the feeling. You live in a community governed by rules, and you assume those rules operate on a shared understanding of common sense. But what happens when that common sense collides with the cold, hard text of your community’s governing documents?
A recent administrative law case in Arizona, Travis vs. The Val Vista Lakes Community Association, provides a fascinating and instructive look under the hood of HOA governance. The dispute reveals how the precise, technical wording of community bylaws can lead to surprising and counter-intuitive outcomes for residents. This case isn’t just about one community; it’s a masterclass for any homeowner. Here are the three most impactful lessons from the legal showdown.
1. A Deadline Isn’t Always a Deadline
The first major complaint from the petitioner, Mr. Travis, seemed straightforward. For an election with three open seats on the Board of Directors, the HOA’s Nominating Committee had accepted applications after a publicly announced deadline of 5:00 p.m. on September 29, 2017. Four applications arrived on time, but four more—including one from Mr. Travis himself—were accepted after the cutoff. In a delicious twist of irony, Mr. Travis was a sitting Board member who had twice attempted to have the Board formally extend the deadline, but both motions failed. A missed deadline is a missed deadline, right?
Not in this case. The judge dismissed the complaint entirely, drawing a critical distinction: the September 29th deadline was not a formal “term, limitation, or rule adopted by the Board.”
Testimony from the Association’s manager, Simone McGinnis, revealed the deadline’s true nature. It was merely an administrative deadline set by the management company for purely logistical reasons, such as allowing the Nominating Committee enough time to review applications and get the ballots printed.
The Lesson: In legal and governance contexts, the source of a rule is as important as the rule itself. An administrative guideline set by a third-party manager for convenience does not carry the same binding legal weight as a formal rule passed by the Board of Directors according to the procedures outlined in the bylaws.
2. “Nomination” Is a Process of Selection, Not Just Collection
Mr. Travis’s second argument centered on the Nominating Committee’s actions. The committee interviewed all eight applicants and asked them questions, including whether they had ever sued the Association or had any compliance violations. Mr. Travis contended that the committee had exceeded its authority. In fact, he argued that because four members had applied by the original deadline for the three open seats, the committee’s job was already done—it shouldn’t have even been formed, let alone vetted anyone. His position was that its role was simply to collect names, not to filter them.
This argument also failed. The judge found the committee acted squarely within its rights as defined by the Association’s Bylaws. Article IV, Section 3 explicitly grants the Nominating Committee the discretion to “make as many nominations for election to the Board of Directors as it shall in its discretion determine.” The judge concluded that questioning applicants was a reasonable part of exercising this discretion to select candidates.
Adding a fascinating historical twist, the Board admitted during a meeting that for thirty years prior, the Association had not strictly followed its own Bylaw requiring the use of a Nominating Committee, only beginning to do so in the last two years. A long-ignored rule had suddenly become the central mechanism for determining board candidacy.
While the committee must act reasonably—it couldn’t disqualify a candidate for having red hair, the Board’s attorney noted—it absolutely has the power to be selective. The core issue decided by the court was not how the committee used its discretion, but whether the Bylaws granted it discretion in the first place. The answer was a clear yes.
The Lesson: The term “Nominating Committee” can be misleading. Depending on your bylaws, it may not be a passive paper-pusher that forwards all names to the ballot. It can be an active gatekeeper empowered to interview, question, and ultimately select which members get a chance to be elected.
3. The ‘Right’ to Run for Your HOA Board Might Be a Myth
The final issue gets to the heart of homeowner assumptions. Mr. Travis argued for a right to “self-nominate”—his term for a system where any member could place themselves directly on the ballot. He claimed that by failing to include all applicants, the Association was engaging in a form of illegal proxy voting under Arizona state law.
The judge’s refutation of this idea was decisive. Mr. Travis himself acknowledged that the Bylaws contained no provision allowing a member to “self-nominate.” The court found that the only path to the ballot specified in the governing documents was via nomination by the Nominating Committee.
This created a critical procedural prerequisite. Because the Bylaws require nomination by the committee before a member can become a candidate, the state law governing voting (ARIZ. REV. STAT. § 33-1812) was legally inapplicable. The judge ruled that the act of nomination is not a “vote allocated to a unit.” In other words, if you don’t clear the prerequisite of being nominated, your right to be voted upon by the membership doesn’t even come into play.
The Lesson: This is a powerful and potentially shocking takeaway for many homeowners. Unless your community’s governing documents explicitly guarantee it, you may not have an inherent “right” to run for your HOA board simply by being a member in good standing. The power to decide who appears on the ballot can be exclusively vested in a small, appointed committee.
Conclusion: Read Your Bylaws. Really.
The case of Mr. Travis vs. Val Vista Lakes is a stark reminder that an HOA’s governing documents are a binding contract. In the courtroom of community governance, common-sense assumptions are legally irrelevant; only the written word matters. An administrative deadline may be toothless, a nominating committee may be a powerful gatekeeper, and the right to run for office may not be a right at all.
It all comes down to what is written in the documents. So, when was the last time you read your community’s governing documents from start to finish? The power structures they define might be very different from what you imagine.
Case Participants
Petitioner Side
William Travis(petitioner)
Respondent Side
Mark K. Sahl(respondent attorney) Carpenter, Hazelwood, Delgado & Bolen, PLC
Nicholas C. Nogami(respondent attorney) Carpenter, Hazelwood, Delgado & Bolen, PLC
Simone McGinnis(property manager) Testified as a witness
Bylaws Article VIII Bylaws Article VIII; Bylaws Article IV, Section 1 ARIZ. REV. STAT. sections 33-1812(A), (A)(1), and (A)(2)
Outcome Summary
The Petitioner's petition, raising three issues concerning the HOA's election nominating process, was dismissed entirely. The Respondent was deemed the prevailing party.
Why this result: The Petitioner failed to meet the burden of proof on all issues. The ALJ found that the Nominating Committee acted within the authority granted by the Bylaws regarding deadlines and nominee selection discretion, and the relevant election statute (A.R.S. § 33-1812) was not applicable to the nomination process.
Key Issues & Findings
Nominating Committee disregarded a September 29, 2017 deadline by which parties were to submit applications to nominate themselves.
Petitioner alleged the Nominating Committee violated Article VIII by accepting applications after the September 29th administrative deadline, arguing the deadline was a 'term[], limitation[], or rule[] adopted by the Board of Directors'.
Orders: The claim was dismissed. The deadline was an administrative deadline set by management, not a rule adopted by the Board, and therefore the Committee did not violate Bylaws Article VIII by accepting applications late.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
Bylaws Article VIII
The Nominating Committee exceeded its authority by asking candidates questions that had the effect of imposing qualification requirements for the Board’s Directors that exceed those set out in the Bylaws.
Petitioner alleged that the Committee imposing questions (such as whether an applicant had filed a lawsuit against the Association) created unauthorized qualifications for the Board, violating the Bylaws.
Orders: The claim was dismissed. Bylaws Article IV Section 3 grants the Nominating Committee discretion to determine the number of nominations, and it was not unreasonable for the Committee to question applicants while exercising this explicit discretion.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
Bylaws Article VIII
Bylaws Article IV, Section 3
By failing to include on the election-ballot members who had submitted 'self-nominations,' the Committee violated election statutes.
Petitioner asserted that because members could not vote for the four applicants the Nominating Committee did not nominate, the Committee engaged in proxy voting, violating election requirements set forth in A.R.S. § 33-1812.
Orders: The claim was dismissed. Because Bylaws Article IV Section 3 requires nominations to be made by the Nominating Committee, nominations are not 'votes allocated to a unit' and ARIZ. REV. STAT. section 33-1812 is not applicable.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
Cited:
ARIZ. REV. STAT. sections 33-1812(A)
ARIZ. REV. STAT. sections 33-1812(A)(1)
ARIZ. REV. STAT. sections 33-1812(A)(2)
Analytics Highlights
Topics: HOA Election, Nominating Committee, Bylaws Enforcement, Director Qualifications, Administrative Deadline, Statutory Interpretation, Self-Nomination
Additional Citations:
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)
McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
ARIZ. REV. STAT. section 33-1812
Video Overview
Audio Overview
Decision Documents
18F-H1817017-REL Decision – 615818.pdf
Uploaded 2026-01-23T17:22:17 (125.4 KB)
Briefing Doc – 18F-H1817017-REL
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.
Study Guide – 18F-H1817017-REL
Study Guide: Travis v. The Val Vista Lakes Community Association
Short-Answer Quiz
Instructions: Answer the following questions in 2-3 complete sentences based on the provided source context.
1. Who were the primary parties involved in case number 18F-H1817017-REL, and what were their roles?
2. What were the three central issues that petitioner William Travis raised regarding the Board election held on November 16, 2017?
3. What was the petitioner’s argument concerning the September 29, 2017, application deadline set by the Association?
4. According to the Association’s on-site manager, Simone McGinnis, what was the origin and purpose of the September 29th deadline?
5. How did the petitioner claim the Nominating Committee exceeded its authority by questioning candidates?
6. What was the Association’s defense for the Nominating Committee’s practice of interviewing and questioning applicants?
7. What is the sole qualification required to serve on the Board of Directors, according to the Val Vista Lakes Community Association Bylaws?
8. How did the petitioner link the Nominating Committee’s failure to place all applicants on the ballot to a violation of ARIZ. REV. STAT. section 33-1812?
9. According to testimony during the November 16, 2017, Board meeting, how long had the Association been strictly adhering to the Bylaw requirement of using a Nominating Committee?
10. What was the final Order issued by Administrative Law Judge Thomas Shedden in this case?
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Answer Key
1. The primary parties were the Petitioner, William Travis, who brought the complaint, and the Respondent, The Val Vista Lakes Community Association, which was defending its actions. Mr. Travis represented himself, while the Association was represented by attorneys Mark K. Sahl and Nicholas C. Nogami.
2. The three issues raised by Mr. Travis were: (1) the Nominating Committee improperly disregarded the September 29th application deadline; (2) the Committee exceeded its authority by asking questions that effectively added new qualification requirements for Board members; and (3) the Committee’s failure to include all “self-nominations” on the ballot constituted a violation of Arizona state statutes on proxy voting.
3. Mr. Travis argued that the September 29th deadline was a “term, limitation, or rule adopted by the Board of Directors” under Bylaws Article VIII. Therefore, by accepting applications after this date, the Nominating Committee violated the Association’s own rules.
4. Simone McGinnis testified that the Board did not impose the deadline. Instead, it was an administrative deadline set by the Association’s management company to allow sufficient time for the Nominating Committee to review applications and have ballots printed.
5. Mr. Travis argued that by asking applicants questions, the Nominating Committee was effectively imposing qualification requirements beyond the single one set out in the Bylaws (being a member of the Association). He asserted the committee had no authority to ask any questions at all as part of its process.
6. The Association contended that questioning applicants was a reasonable exercise of the Nominating Committee’s discretion. This discretion is granted by the Bylaws, which state the Committee shall make as many nominations as it determines is appropriate.
7. According to Bylaws Article IV, Section 1, the only qualification required for an individual to serve on the Board of Directors is that they must be a member of the Association. No other qualifications are specified in the Bylaws.
8. Mr. Travis asserted that because members were not allowed to vote for or against the four applicants who were not nominated, the Committee effectively engaged in proxy voting. He argued this violated ARIZ. REV. STAT. section 33-1812, which requires that ballots provide an opportunity to vote for or against each proposed action.
9. During the meeting, the Board acknowledged that it had only been following the Bylaw requirement to use a Nominating Committee for the last two years. Prior to that, for approximately thirty years, strict adherence to this Bylaw had not been observed.
10. The Administrative Law Judge ordered that Petitioner William Travis’s petition be dismissed. The Judge also deemed the Respondent, The Val Vista Lakes Community Association, to be the prevailing party in the matter.
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Essay Questions
Instructions: The following questions are designed to test a deeper understanding of the case. Formulate a comprehensive response to each prompt using only the information and arguments presented in the source document.
1. Analyze the conflicting interpretations of the Nominating Committee’s role and authority as presented by William Travis and the Association. How did the Administrative Law Judge use the plain language of Bylaws Article IV, Section 3 to resolve this dispute?
2. Discuss the significance of the September 29, 2017 deadline. Evaluate the evidence and arguments presented by both parties regarding its legitimacy and binding nature, and explain the Judge’s reasoning for concluding it was an administrative deadline.
3. Explain William Travis’s legal argument that the Nominating Committee’s selection process constituted a form of proxy voting in violation of ARIZ. REV. STAT. section 33-1812. Detail the Judge’s conclusion on this matter and the legal reasoning used to determine the statute’s applicability.
4. Examine the concept of “discretion” as it applies to the Nominating Committee’s actions. Based on the hearing testimony, including the Board attorney’s explanation, what are the implied powers and limitations of this discretion?
5. The Judge determined that Mr. Travis failed to meet the “preponderance of the evidence” standard. Identify the key claims made by Mr. Travis and detail why the evidence he presented (or failed to present) was insufficient to prove his case on each of the three issues.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official (Thomas Shedden in this case) who presides over administrative hearings, hears evidence, and makes legal findings and decisions.
Petitioner
The party who files a petition initiating a legal case. In this matter, the petitioner was William Travis.
Respondent
The party against whom a petition is filed and who must respond to the allegations. In this matter, the respondent was The Val Vista Lakes Community Association.
Bylaws
The formal rules and regulations governing the internal management of an organization, such as a homeowners’ association. They are considered a contract between the association and its members.
An acronym for Covenants, Conditions, and Restrictions, which are rules governing the use of real estate within a planned community. Mr. Travis initially alleged a violation of CC&R Article V, Section 3.
Nominating Committee
A committee, established by the Bylaws, responsible for nominating candidates for election to the Board of Directors. It consists of a Chairperson from the Board and two or more other persons.
Self-Nomination
The act of a member putting their own name forward for consideration for a Board position. The petitioner acknowledged that the Bylaws do not explicitly provide for self-nomination.
Burden of Proof
The legal obligation of a party in a trial to produce evidence that proves the claims they have made against the other party. In this case, the burden of proof was on Mr. Travis.
Preponderance of the Evidence
The standard of proof required in this case. It means the evidence presented is more convincing and has superior evidentiary weight than the evidence offered in opposition, inclining an impartial mind to one side over the other.
Proxy Voting
A form of voting where a member authorizes another person to vote on their behalf. ARIZ. REV. STAT. section 33-1812 prohibits this practice for community associations after the period of declarant control.
Prevailing Party
The party that wins the lawsuit. In this case, the Respondent Association was deemed the prevailing party upon the dismissal of the petition.
Blog Post – 18F-H1817017-REL
Your HOA Bylaws Might Not Mean What You Think: 3 Surprising Lessons from a Legal Showdown
Introduction: The Devil in the Details
Anyone who has ever sat through a contentious HOA annual meeting or received a violation notice for an overgrown flowerbed knows the feeling. You live in a community governed by rules, and you assume those rules operate on a shared understanding of common sense. But what happens when that common sense collides with the cold, hard text of your community’s governing documents?
A recent administrative law case in Arizona, Travis vs. The Val Vista Lakes Community Association, provides a fascinating and instructive look under the hood of HOA governance. The dispute reveals how the precise, technical wording of community bylaws can lead to surprising and counter-intuitive outcomes for residents. This case isn’t just about one community; it’s a masterclass for any homeowner. Here are the three most impactful lessons from the legal showdown.
1. A Deadline Isn’t Always a Deadline
The first major complaint from the petitioner, Mr. Travis, seemed straightforward. For an election with three open seats on the Board of Directors, the HOA’s Nominating Committee had accepted applications after a publicly announced deadline of 5:00 p.m. on September 29, 2017. Four applications arrived on time, but four more—including one from Mr. Travis himself—were accepted after the cutoff. In a delicious twist of irony, Mr. Travis was a sitting Board member who had twice attempted to have the Board formally extend the deadline, but both motions failed. A missed deadline is a missed deadline, right?
Not in this case. The judge dismissed the complaint entirely, drawing a critical distinction: the September 29th deadline was not a formal “term, limitation, or rule adopted by the Board.”
Testimony from the Association’s manager, Simone McGinnis, revealed the deadline’s true nature. It was merely an administrative deadline set by the management company for purely logistical reasons, such as allowing the Nominating Committee enough time to review applications and get the ballots printed.
The Lesson: In legal and governance contexts, the source of a rule is as important as the rule itself. An administrative guideline set by a third-party manager for convenience does not carry the same binding legal weight as a formal rule passed by the Board of Directors according to the procedures outlined in the bylaws.
2. “Nomination” Is a Process of Selection, Not Just Collection
Mr. Travis’s second argument centered on the Nominating Committee’s actions. The committee interviewed all eight applicants and asked them questions, including whether they had ever sued the Association or had any compliance violations. Mr. Travis contended that the committee had exceeded its authority. In fact, he argued that because four members had applied by the original deadline for the three open seats, the committee’s job was already done—it shouldn’t have even been formed, let alone vetted anyone. His position was that its role was simply to collect names, not to filter them.
This argument also failed. The judge found the committee acted squarely within its rights as defined by the Association’s Bylaws. Article IV, Section 3 explicitly grants the Nominating Committee the discretion to “make as many nominations for election to the Board of Directors as it shall in its discretion determine.” The judge concluded that questioning applicants was a reasonable part of exercising this discretion to select candidates.
Adding a fascinating historical twist, the Board admitted during a meeting that for thirty years prior, the Association had not strictly followed its own Bylaw requiring the use of a Nominating Committee, only beginning to do so in the last two years. A long-ignored rule had suddenly become the central mechanism for determining board candidacy.
While the committee must act reasonably—it couldn’t disqualify a candidate for having red hair, the Board’s attorney noted—it absolutely has the power to be selective. The core issue decided by the court was not how the committee used its discretion, but whether the Bylaws granted it discretion in the first place. The answer was a clear yes.
The Lesson: The term “Nominating Committee” can be misleading. Depending on your bylaws, it may not be a passive paper-pusher that forwards all names to the ballot. It can be an active gatekeeper empowered to interview, question, and ultimately select which members get a chance to be elected.
3. The ‘Right’ to Run for Your HOA Board Might Be a Myth
The final issue gets to the heart of homeowner assumptions. Mr. Travis argued for a right to “self-nominate”—his term for a system where any member could place themselves directly on the ballot. He claimed that by failing to include all applicants, the Association was engaging in a form of illegal proxy voting under Arizona state law.
The judge’s refutation of this idea was decisive. Mr. Travis himself acknowledged that the Bylaws contained no provision allowing a member to “self-nominate.” The court found that the only path to the ballot specified in the governing documents was via nomination by the Nominating Committee.
This created a critical procedural prerequisite. Because the Bylaws require nomination by the committee before a member can become a candidate, the state law governing voting (ARIZ. REV. STAT. § 33-1812) was legally inapplicable. The judge ruled that the act of nomination is not a “vote allocated to a unit.” In other words, if you don’t clear the prerequisite of being nominated, your right to be voted upon by the membership doesn’t even come into play.
The Lesson: This is a powerful and potentially shocking takeaway for many homeowners. Unless your community’s governing documents explicitly guarantee it, you may not have an inherent “right” to run for your HOA board simply by being a member in good standing. The power to decide who appears on the ballot can be exclusively vested in a small, appointed committee.
Conclusion: Read Your Bylaws. Really.
The case of Mr. Travis vs. Val Vista Lakes is a stark reminder that an HOA’s governing documents are a binding contract. In the courtroom of community governance, common-sense assumptions are legally irrelevant; only the written word matters. An administrative deadline may be toothless, a nominating committee may be a powerful gatekeeper, and the right to run for office may not be a right at all.
It all comes down to what is written in the documents. So, when was the last time you read your community’s governing documents from start to finish? The power structures they define might be very different from what you imagine.
Case Participants
Petitioner Side
William Travis(petitioner)
Respondent Side
Mark K. Sahl(respondent attorney) Carpenter, Hazelwood, Delgado & Bolen, PLC
Nicholas C. Nogami(respondent attorney) Carpenter, Hazelwood, Delgado & Bolen, PLC
Simone McGinnis(property manager) Testified as a witness
