Briefing Document: Legal Proceedings and Testimony Regarding Desert Ranch HOA vs. Tom Bars

Executive Summary

This document synthesizes the testimony and legal findings from the consolidated matters of Case Nos. 22 FH222050 REL and 22 SH22254 REL, presided over by Administrative Law Judge (ALJ) Jenna Clark. The proceedings center on a dispute between homeowner Tom Bars (Petitioner) and the Desert Ranch Homeowners’ Association (Respondent), managed by Associated Asset Management (AAM).

The core of the dispute involves allegations that the HOA and AAM violated Arizona Revised Statutes (A.R.S.) §§ 33-1804 and 33-1805 by failing to provide complete records, prohibiting homeowners from recording meetings, and producing edited or incomplete audio/video recordings. The testimony of Lori Loch-Lee, Vice President of Client Services at AAM, highlights a significant transition from a self-managed association to professional management, which coincided with the adoption of more restrictive data privacy and recording policies.

Critical Takeaways:

• Recording Irregularities: Multiple board meeting recordings were found to be incomplete or contained abrupt cuts. AAM staff attributed these to technical errors or personal oversight (forgetting to start the recorder) rather than intentional editing.

• Access to Records: While the ALJ found that the majority of records requests were fulfilled, specific violations were identified regarding the failure to provide survey proposals and certain board communications.

• Privacy vs. Precedent: A significant conflict exists regarding homeowner rosters. Historically, the HOA provided unredacted rosters; however, under current management, AAM maintains that email addresses and phone numbers are private information and has withheld them from the Petitioner.

• Homeowner Recording Restrictions: The HOA implemented a policy and board resolution asserting its own recording as the “official” version and used Zoom settings to block homeowners from recording meetings directly to their devices.

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Witness Profile: Lori Loch-Lee

Lori Loch-Lee serves as the Vice President of Client Services for Associated Asset Management (AAM). She has been employed in this capacity for over nine years and has acted as the community manager for Desert Ranch HOA since approximately April 1, 2018.

Key Responsibilities:

• Financial management and accounting coordination with CPAs.

• Production of financial statements.

• Record-keeping for the association (though she clarifies that AAM is primarily a financial management company for this specific client).

• Attending board meetings and recording them via Zoom.

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Analysis of Record-Keeping and Transparency Disputes

1. Incomplete and “Edited” Meeting Recordings

A primary point of contention is the integrity of meeting recordings provided to the Petitioner.

• April 27, 2021 Meeting: The recording provided was 36 minutes and 48 seconds long, whereas the meeting itself lasted approximately one hour and six minutes. Loch-Lee testified that she “forgot to start the recording at the very beginning” and denied any intentional editing.

• September 2020 Meeting: This meeting involved an incident where the Petitioner was removed from a board member’s home. Testimony and video evidence showed an “abrupt cut” in the recording at 17 minutes and 20 seconds and another at 30 minutes and 24 seconds.

• Witness Defense: Loch-Lee repeatedly stated, “I do not edit anything. I’m lucky I turned it on and turn it off. I don’t know how to edit.” She attributed cuts to the Zoom platform or the suspension of meetings when disruptions occurred.

2. Policies on Homeowner Recording

The Petitioner alleged that the HOA violated statutory rights by prohibiting homeowners from making their own recordings.

• Technological Prohibitions: Evidence (Exhibit P243) showed a Zoom notification stating: “This meeting is not allowed to be recorded to your device. Please stop recording to continue the meeting.” Loch-Lee claimed she had never seen this message from her end.

• Board Resolutions: The board adopted a resolution stating that the HOA’s recording is the “official” version. Loch-Lee interpreted this as a means to prevent “intimidating” behavior by homeowners who would bring equipment and “cameras on their hats” to the business office, causing distress to staff.

• Consistency of Enforcement: While Loch-Lee stated she could not stop a homeowner from recording on their own side of a phone line, the HOA maintained a policy (Exhibit P71) that “no audio or visual equipment can be used by individual members of the association.”

3. Homeowner Roster and Data Privacy

The dispute over the membership roster highlights a shift in HOA policy following the hiring of AAM.

• Historical Context: Prior to 2018, the association (then self-managed) voluntarily provided unredacted rosters, including emails and phone numbers, to all homeowners.

• Current Stance: Loch-Lee testified that she treats emails and phone numbers as “private and personal and confidential.” She stated, “I have not been providing homeowner rosters to homeowners when they ask for it because it’s not a directory.”

• The “Opt-In” vs. “Opt-Out” Conflict: The Petitioner argued the association historically used an “opt-out” provision for sharing info. Loch-Lee contended that AAM uses an “opt-in” system through their mobile app, where homeowners must choose to share contact information.

• Justification for Restriction: The HOA alleged that the Petitioner used previous rosters to “blast” unsolicited emails to members, leading the board to stop disseminating the information in 2018.

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4. Bids and Financial Records

The Petitioner sought copies of various bids, particularly for street work and common area surveys.

• Retention Policy: Loch-Lee testified that she only retains bids if they are “contracted.” If the board procures a bid but does not accept it, she claims she does not keep it in the official files.

• Holbrook Asphalt Bid: Despite claims of not having certain bids, a proposal for $10,738.60 from Holbrook Asphalt was identified with Loch-Lee’s name in the “attention” line. She stated she had “no idea” why she was listed and denied destroying any documents.

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Legal Findings (ALJ Order – Case No. HO22-22050/22054)

The ALJ’s final order, issued February 21, 2023, summarized the findings based on the evidence and testimony provided during the January 2023 hearings.

Statutory Requirements (A.R.S. Title 33)

Statute

Requirement

§ 33-1804(A)

Meetings must be open to all members; any person may tape record or use a video camera subject to reasonable board rules.

§ 33-1805(A)

All financial and other records shall be made reasonably available for examination within 10 business days.

§ 33-1805(B)

Certain records may be withheld (e.g., attorney-client privilege, pending litigation, personal/health/financial info of individual members).

Summary of Rulings

• Records Compliance: The ALJ found that the “overwhelming majority” of the Petitioner’s records requests were complied with fully and timely.

• Specific Violations: The Respondent failed to timely and completely fulfill requests regarding:

◦ Survey proposals (April 27, 2021).

◦ Specific board communications involving Brian Schoeffler (December 07, 2021).

• Recordings: The ALJ noted that the beginning of the April 27 meeting was missing and that the September 2020 recording was stopped twice, but did not find sufficient evidence of “purposeful” or “flagrant” editing.

• Outcome: The ALJ ordered the Respondent to provide the missing survey proposals and communications. However, the request to levy civil penalties against the HOA was denied, and the Respondent was not required to reimburse the Petitioner’s filing fees.

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Key Quotes from Testimony

On Recording Errors: “I provided the recording that I had and I forgot to start it at the very beginning. I believe this is the meeting that it happened in… I simply forgot.” — Lori Loch-Lee

On Historical Transparency: “That was then… I don’t know of any specific change, sir. What I do know is when I started managing, there’s never been any conversation about homeowner rosters.” — Lori Loch-Lee, responding to evidence that rosters were previously public.

On Data Privacy: “I’ve never sent a I don’t recall ever sending a redacted one. I have sent recently a roster with just the names on it, but homeowner addresses and email s are considered private information. I’ve always been trained that way.” — Lori Loch-Lee

On Recording Prohibitions: “I will remind you that no tape recording nor visual recording can or will be done in this business office… [the Petitioner’s family] were being very intimidating and causing a ruckus. So that’s when we stopped it.” — Lori Loch-Lee