Administrative Hearing Briefing: Wheeler v. Beaver Dam Estates Homeowners Association

Executive Summary

This briefing document synthesizes the findings and orders from the case of Jerry Wheeler versus the Beaver Dam Estates Homeowners Association (HOA). The central issue was the HOA’s failure to conduct annual meetings as legally required by Arizona state law. The petitioner, Jerry Wheeler, provided uncontested evidence that the HOA had not held a meeting for several years, specifically since his tenure began on April 1, 2014.

The case was complicated by the death of the HOA’s president prior to the hearing and the association’s subsequent failure to appoint a new representative or appear at the proceedings. The Administrative Law Judge (ALJ) conducted the hearing in the respondent’s absence and ruled decisively in favor of the petitioner.

The final judgment, adopted by the Arizona Department of Real Estate, found the Beaver Dam Estates HOA in violation of A.R.S. § 33-1804(B). The HOA was ordered to hold a meeting on a specified date, reimburse the petitioner’s filing fee, and pay a civil penalty of $250.00 for the violation.

Case Overview

The matter was initiated by a petition filed with the Arizona Department of Real Estate and was subsequently referred to the Office of Administrative Hearings for a formal hearing and decision.

Case Detail

Information

Petitioner

Jerry Wheeler

Respondent

Beaver Dam Estates Homeowners Association

Case Number (OAH)

18F-H1717036-REL

Case Number (Dept. of Real Estate)

HO 17-17/036

Petition Filed

June 8, 2017

Hearing Date

September 5, 2017

ALJ Decision Date

September 6, 2017

Final Order Date

September 13, 2017

Presiding Judge

Suzanne Marwil, Administrative Law Judge (ALJ)

Adopting Authority

Judy Lowe, Commissioner, Arizona Department of Real Estate

Petitioner’s Allegations and Evidence

The petitioner’s case was built on the central allegation that the Beaver Dam Estates HOA had failed to comply with its statutory duty to hold annual meetings.

• Core Allegation: The HOA was in violation of Arizona Revised Statutes (A.R.S.) § 33-1804(B), which mandates that a members’ association meeting “shall be held at least once each year.”

• Petitioner Testimony: Jerry Wheeler testified that since moving into the community on April 1, 2014, the HOA had not held a single meeting. He also testified regarding his numerous efforts to compel the HOA president, Randy Hawk, to convene a meeting for the purpose of reviewing the association’s financial statements with homeowners.

• Supporting Evidence: The petitioner submitted numerous written statements from other homeowners within the Beaver Dam Estates community. These statements corroborated his testimony, confirming that no HOA meeting had been held for several years. This evidence was referred to as “Exhibit B” in the proceedings.

Respondent’s Actions and Procedural Failures

The respondent’s engagement with the legal process was minimal and ultimately ceased, leading to a judgment in its absence.

• Initial Response: The HOA’s then-president, Randy Hawk, initially responded to the petition by agreeing to hold a meeting.

• First Meeting Attempt: A meeting was scheduled for July 18, 2017. However, only about ten people attended, prompting Hawk to reschedule for December 28, 2017. A letter was sent to all members notifying them of the new date and the intent to hold an election for a new president and vice president.

• Death of Representative: The petitioner subsequently informed the Tribunal that Randy Hawk had passed away, leaving the HOA without a clear representative for the legal matter.

• Failure to Appoint New Representative: On August 16, 2017, the Tribunal issued an order, mailed to the respondent’s address of record, requesting that the HOA name a new representative. The HOA failed to do so.

• Failure to Appear: The respondent did not appear for the scheduled hearing on September 5, 2017, nor did it request to appear telephonically. After a 20-minute grace period, the ALJ proceeded with the hearing in the respondent’s absence.

Legal Framework and Conclusions of Law

The ALJ’s decision was based on a clear statutory requirement and the uncontested evidence presented by the petitioner. The burden of proof was on the petitioner, with the standard of proof being a preponderance of the evidence.

• Statutory Violation: The central finding was that the respondent violated A.R.S. § 33-1804(B). The pertinent text of the statute states:

• Key Conclusion: The ALJ determined that “The unconverted evidence established that Respondent violated A.R.S. § 33-1804(B) by failing to hold the statutorily required annual meeting of Respondent for several years prior to the filing of the petition.”

• Recommended Action: Based on this conclusion, the ALJ stated that the respondent “should hold an annual meeting in accordance with the planned community statutes.”

Final Order and Penalties

The ALJ’s decision was formally adopted by the Commissioner of the Department of Real Estate, making it a binding Final Order. The order mandated several actions by the respondent.

IT IS ORDERED that:

1. The petitioner’s petition is granted.

2. The respondent must hold a meeting in accordance with planned community statutes as scheduled on December 28, 2017.

3. Pursuant to A.R.S. § 32-2199.02(A), the respondent shall pay the petitioner the filing fee required by section 32-2199.01.

4. The respondent shall pay to the planned community hearing office fund a civil penalty of $250.00 for the violation.

This Final Order was declared a final administrative action, effective immediately upon service on September 13, 2017. The parties were notified of their right to apply for a rehearing within thirty days or to appeal the decision by filing a complaint for judicial review.