Tag Archives: Stratman Law Firm, PLC

Richard J. Jones v. Desert Oasis of Surprise Master Association

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Case Summary

Case ID 21F-H2121038-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-11-15
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Richard J Jones Counsel —
Respondent Desert Oasis of Surprise Master Association Counsel Troy Stratman, Esq.

Alleged Violations

Design Guidelines; CC&Rs Section 4.1.1

Outcome Summary

The Administrative Law Judge dismissed the petition, finding that Petitioner Richard J. Jones failed to meet his burden of proof to show the Association violated its Design Guidelines or engaged in selective enforcement.

Why this result: Petitioner did not show by a preponderance of the evidence that the Association violated the Guidelines or engaged in selective enforcement. Evidence indicated that the Petitioner was in violation of the existing Guidelines by failing to obtain prior approval for his driveway extension and failing to meet the required setback.

Key Issues & Findings

Petitioner alleged the Association violated Design Guidelines regarding setback requirements for driveway extensions and engaged in selective enforcement.

Petitioner filed a single issue petition asserting that Design Guidelines did not require a twelve-inch setback for driveway extensions from the property line and that the Association was selectively enforcing its rules. The Petitioner had installed a concrete driveway extension without obtaining prior ARC approval, and approval was denied due to the lack of the twelve-inch setback.

Orders: Richard J. Jones’s petition is dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.02(A)
  • Johnson v. The Pointe Community Association, 205 Ariz. 485, 73 P.3d 616 (App. 2003)
  • Tierra Ranchos Homeowners Ass’n v Kitchukov, 216 Ariz. 173, 165 P.3d 173 (App. 2007)

Analytics Highlights

Topics: Driveway Extension, Architectural Review Committee, Setback Requirements, Design Guidelines, Selective Enforcement, HOA Violation
Additional Citations:

  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 32-2199.02(A)
  • ARIZ. REV. STAT. section 32-2199.02(B)
  • ARIZ. REV. STAT. section 32-2199.04
  • ARIZ. REV. STAT. section 41-1092.09
  • Johnson v. The Pointe Community Association, 205 Ariz. 485, 73 P.3d 616 (App. 2003)
  • Tierra Ranchos Homeowners Ass’n v Kitchukov, 216 Ariz. 173, 165 P.3d 173 (App. 2007)

Audio Overview

Decision Documents

21F-H2121038-REL Decision – 924982.pdf

Uploaded 2025-10-09T03:36:49 (100.9 KB)

21F-H2121038-REL Decision – 924983.pdf

Uploaded 2025-10-09T03:36:50 (94.9 KB)

Aaron Ricks (Somerstone Properties, LLC), v. Montelena Master

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Case Summary

Case ID 21F-H2120024-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-02-16
Administrative Law Judge Tammy L. Eigenheer
Outcome none
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Aaron Ricks (Somerstone Properties, LLC) Counsel —
Respondent Montelena Master Community Association Counsel Troy Stratman

Alleged Violations

A.R.S. § 33-442, A.R.S. § 33-1806

Outcome Summary

The Administrative Law Judge dismissed the Petition because the Petitioner failed to meet the burden of proof to establish that the Montelena Master Community Association violated A.R.S. § 33-442 or its CC&Rs regarding the imposition of a transfer fee. The ALJ found that the use of the fee to fund operating expenses and/or reserves was an acceptable purpose under the relevant statute.

Why this result: Petitioner failed to establish Respondent acted in violation of the community documents and A.R.S. § 33-442.

Key Issues & Findings

Challenge to unauthorized/unlawful transfer fees charged by HOA

Petitioner alleged that the $2500.00 transfer fee charged to the purchaser was an unlawful transfer fee in violation of A.R.S. § 33-442 and specific CC&R provisions, arguing that the authorized use of the fee (Master Association’s operating expenses and/or reserves) was not specific enough to meet the statutory exception under A.R.S. § 33-442(C).

Orders: Petitioner’s petition is dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 33-1806
  • A.R.S. § 33-442
  • A.R.S. § 32-2199
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)

Analytics Highlights

Topics: HOA transfer fee, A.R.S. 33-442, CC&R violation, Operating expenses, Reserves
Additional Citations:

  • A.R.S. § 33-1806
  • A.R.S. § 33-442
  • A.R.S. § 32-2199
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)

Audio Overview

Decision Documents

21F-H2120024-REL Decision – 855401.pdf

Uploaded 2025-10-09T03:36:34 (95.8 KB)

N. Wayne Dwight, Jr. vs.

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Case Summary

Case ID 19F-H1918027-REL
Agency ADRE
Tribunal OAH
Decision Date 2019-01-29
Administrative Law Judge Diane Mihalsky
Outcome none
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner N. Wayne Dwight, Jr. Counsel —
Respondent Whisper Mountain Homeowners Association Counsel Troy B. Stratman, Esq.

Alleged Violations

CC&Rs §§ 3.2 and 7.7

Outcome Summary

The Administrative Law Judge denied the petition, finding that the HOA Board had the authority under the CC&Rs and related documents to remove non-Board ARC members and appoint itself to perform the functions of the ARC, thus validating its approval of the homeowner's detached garage application.

Why this result: The Petitioner failed to establish by a preponderance of the evidence that the Respondent violated CC&Rs §§ 3.2 or 7.7. The Board, having assumed the developer's rights, was authorized to remove and appoint ARC members.

Key Issues & Findings

Alleged violation of CC&Rs regarding ARC dissolution and architectural approval authority.

Petitioner alleged that the HOA Board violated CC&Rs §§ 3.2 and 7.7 by dissolving the ARC and then acting as the ARC to approve a modification (detached garage) for a homeowner.

Orders: Petitioner's petition was denied because he failed to establish that CC&Rs §§ 3.2 or 7.7 prohibited the Respondent HOA from replacing non-Board ARC members, appointing its own members to act as the ARC, or approving the detached garage application.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(D)
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)

Analytics Highlights

Topics: HOA, ARC, CC&Rs, Board Authority, Architectural Review
Additional Citations:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(D)
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)

Audio Overview

Decision Documents

19F-H1918027-REL Decision – 685758.pdf

Uploaded 2025-10-08T07:07:54 (194.8 KB)





Briefing Doc – 19F-H1918027-REL


Administrative Law Judge Decision Briefing: Dwight vs. Whisper Mountain HOA

Executive Summary

This document summarizes the Administrative Law Judge (ALJ) decision in case number 19F-H1918027-REL, concerning a dispute between homeowner N. Wayne Dwight, Jr. (“Petitioner”) and the Whisper Mountain Homeowners Association (“Respondent”). The Petitioner alleged that the HOA Board violated the community’s Covenants, Conditions, and Restrictions (CC&Rs) by suspending the Architectural Review Committee (ARC) and subsequently approving a homeowner’s construction application.

The ALJ denied the petition in its entirety, finding that the HOA Board acted within its authority. The decision established that upon the departure of the original developer (the “Declarant”), the Board inherited the Declarant’s full rights and responsibilities, including the power to both appoint and remove members of the ARC. The Judge explicitly rejected the Petitioner’s argument that ARC members held lifetime appointments, deeming such an interpretation contrary to the democratic principles of HOA governance. Consequently, the Board’s decision to remove the non-Board ARC members and appoint itself to serve as the ARC was ruled a valid exercise of its powers, and its subsequent approval of the construction application was not a violation of the CC&Rs.

Case Overview

Entity

Petitioner

N. Wayne Dwight, Jr. (Homeowner and former ARC member)

Respondent

Whisper Mountain Homeowners Association (HOA)

Adjudicator

Administrative Law Judge Diane Mihalsky

Case Number

19F-H1918027-REL

Hearing Date

January 14, 2019

Decision Date

January 29, 2019

Core Allegation

The Petitioner alleged that the Respondent’s Board violated two sections of the CC&Rs:

1. § 7.7 (Improvements and Alterations): By approving a homeowner’s application to build a detached garage on September 19, 2018, without the approval of a properly constituted ARC.

2. § 3.2 (Appeal): By creating a situation where the body making an architectural decision (the Board acting as the ARC) is the same body that would hear an appeal of that decision, rendering the appeal process meaningless.

This was based on the Petitioner’s central claim that the Board’s action on August 6, 2018, to “dissolve” or “suspend” the ARC was a violation of the governing documents.

Key Factual Background & Timeline

• Prior to 2015: The developer, VIP Homes (“Declarant”), establishes the ARC as required by the CC&Rs.

• 2015: The Declarant turns over control of the HOA to the resident-elected Board of Directors.

• March 15, 2016: The Board adopts an ARC Charter, which explicitly states: “The right to appoint and remove all appointed [ARC] members at any time is hereby vested solely in the Board.” The Petitioner is appointed as one of three non-Board members to the ARC.

• 2017 or 2018: A proposed amendment to the CC&Rs to formally replace references to “Declarant” with “Board” or “Association” is not adopted by the general membership.

• July 17, 2018: The ARC meets to consider a detached garage application from homeowners Mark and Connie Wells. The meeting is contentious, with the Petitioner expressing doubts about the ARC’s authority to grant a variance from city setback requirements. The meeting adjourns abruptly after the applicant allegedly “verbally threatened the committee.”

• August 6, 2018: The HOA Board meets and passes a motion “to suspend the ARC committee for 60 days until guidelines/expectations are clarified.” The motion states that in the interim, the Board will review and approve all ARC submissions.

• August 24, 2018: The Board sends a letter to the non-Board ARC members, including the Petitioner, informing them of the 60-day suspension.

• September 17, 2018: The Board meets and approves a revised application from the Wells, which now aligns with City of Mesa code.

• September 19, 2018: The Board, formally acting as the ARC, reviews and approves the Wells’ revised application.

• October 22, 2018: The Petitioner files his complaint with the Arizona Department of Real Estate.

• November 19, 2018: The Board adopts a “Resolution Regarding the ARC” to clarify its position. The resolution states the Board had “(i) temporarily removed the current members of the [ARC] (via a suspension) and (ii) chose to act and serve as the current [ARC].” It also formally ratifies the approval of the Wells’ garage.

Central Arguments Presented

Petitioner’s Position (N. Wayne Dwight, Jr.)

• Limited Board Authority: The CC&Rs (§ 3.4) grant the Declarant the “sole right to appoint and remove” ARC members. After the Declarant’s departure, this section states that members “shall be appointed by the Board.” The Petitioner argued this only conferred the power to appoint, not to remove.

• Failed Amendment: The failure of the membership to amend the CC&Rs to explicitly grant the Board the Declarant’s powers proves that the Board does not possess the power of removal.

• Lifetime Appointments: The Petitioner argued that once appointed, ARC members could only be removed for specific cause (e.g., moving out of the community, incapacitation) and were otherwise entitled to serve for life.

• Improper ARC Suspension: The Board’s action to suspend the committee was a violation of the CC&Rs, as the Board lacked the authority to do so.

• Invalid Approval: Because the ARC was improperly suspended, the Board’s subsequent approval of the Wells’ application violated § 7.7, which requires ARC approval for all alterations.

• Meaningless Appeals: If the Board can act as the ARC, the appeal process outlined in § 3.2, which allows a homeowner to appeal an ARC decision to the Board, becomes an “exercise in futility.”

Respondent’s Position (Whisper Mountain HOA)

• Inherited Powers: Upon the Declarant’s departure, the Board assumed all of its rights and responsibilities under the CC&Rs, including the power to both appoint and remove ARC members.

• Authority from ARC Charter: The ARC Charter, adopted in 2016, explicitly grants the Board the sole right to remove ARC members at any time.

• Intent of the Board: The Board’s intent was not to abolish the ARC, but to address concerns about the committee’s conduct, including its “way of questioning applicants” and a need for more civility, fairness, and consistency.

• Clarification of “Suspension”: The use of the word “suspend” in communications by the management company (Mariposa Group) was “unfortunate and inaccurate.” The Board’s true action, clarified in its November 19 resolution, was to remove the non-Board members and appoint its own members to serve as the ARC.

• Valid Approval: The Board was legitimately acting as the ARC when it approved the Wells’ application; therefore, § 7.7 was not violated.

Administrative Law Judge’s Analysis and Conclusions

Interpretation of Governing Documents

The ALJ concluded that restrictive covenants must be construed as a whole and interpreted to give effect to the intent of the parties. The Judge found the Petitioner’s interpretation of the CC&Rs to be unpersuasive and ultimately harmful to the community.

• The Judge stated that the Petitioner’s interpretation “elevates non-elected members of ARC above elected Board members, abrogates any community control over ARC, and does not serve the underlying purposes of the CC&Rs.”

• This “unelected lifetime appointment” concept was found to be contrary to the “democratic principles underlying HOA law in Arizona.”

On the Board’s Authority

The ALJ affirmed the HOA’s authority to manage the ARC as it did.

• Assumption of Powers: The decision concludes that “When Declarant turned Respondent HOA over to its Board, the Board assumed all of Declarant’s rights and responsibilities under the CC&Rs and related documents.” This included the power to remove ARC members.

• ARC Charter: The Judge noted that the ARC Charter also “expressly provided that the Board had the power to remove as well as to appoint members of the ARC.”

• Legitimacy of Actions: The Board was found to have acted within its authority in August 2018 when it “removed the three non-Board members of the ARC and appointed itself to perform the functions of the ARC.”

On the Alleged Violations

Based on the finding that the Board acted within its authority, the ALJ concluded that no violations occurred.

• Conclusion on CC&R § 7.7 (ARC Approval): The petition failed on this point because the Board was legitimately acting as the ARC when it approved the Wells’ application in September 2018.

• Conclusion on CC&R § 3.2 (Appeals): The petition failed on this point because the CC&Rs do not prohibit Board members from acting as the ARC. While acknowledging that appealing a decision to the same body “may be an exercise in futility,” the Judge noted that under the CC&Rs, the Board is not required to hear appeals in any event.

Final Order and Implications

Order: The petition filed by N. Wayne Dwight, Jr. was denied. The Judge found he had not established that the HOA violated CC&Rs §§ 3.2 or 7.7.

Implications: This decision establishes a strong precedent for interpreting HOA governing documents in a manner that favors functional, democratic governance over literal interpretations that could lead to impractical or absurd outcomes. It affirms that an HOA Board generally inherits the full operational powers of the original developer unless explicitly restricted, and that a Board can act to reform or reconstitute committees to ensure they serve the community’s best interests.


N. Wayne Dwight, Jr. vs.

Posted on by

Case Summary

Case ID 19F-H1918027-REL
Agency ADRE
Tribunal OAH
Decision Date 2019-01-29
Administrative Law Judge Diane Mihalsky
Outcome none
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner N. Wayne Dwight, Jr. Counsel —
Respondent Whisper Mountain Homeowners Association Counsel Troy B. Stratman, Esq.

Alleged Violations

CC&Rs §§ 3.2 and 7.7

Outcome Summary

The Administrative Law Judge denied the petition, finding that the HOA Board had the authority under the CC&Rs and related documents to remove non-Board ARC members and appoint itself to perform the functions of the ARC, thus validating its approval of the homeowner's detached garage application.

Why this result: The Petitioner failed to establish by a preponderance of the evidence that the Respondent violated CC&Rs §§ 3.2 or 7.7. The Board, having assumed the developer's rights, was authorized to remove and appoint ARC members.

Key Issues & Findings

Alleged violation of CC&Rs regarding ARC dissolution and architectural approval authority.

Petitioner alleged that the HOA Board violated CC&Rs §§ 3.2 and 7.7 by dissolving the ARC and then acting as the ARC to approve a modification (detached garage) for a homeowner.

Orders: Petitioner's petition was denied because he failed to establish that CC&Rs §§ 3.2 or 7.7 prohibited the Respondent HOA from replacing non-Board ARC members, appointing its own members to act as the ARC, or approving the detached garage application.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(D)
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)

Analytics Highlights

Topics: HOA, ARC, CC&Rs, Board Authority, Architectural Review
Additional Citations:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(D)
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)

Audio Overview

Decision Documents

19F-H1918027-REL Decision – 685758.pdf

Uploaded 2025-10-09T03:33:43 (194.8 KB)





Briefing Doc – 19F-H1918027-REL


Administrative Law Judge Decision Briefing: Dwight vs. Whisper Mountain HOA

Executive Summary

This document summarizes the Administrative Law Judge (ALJ) decision in case number 19F-H1918027-REL, concerning a dispute between homeowner N. Wayne Dwight, Jr. (“Petitioner”) and the Whisper Mountain Homeowners Association (“Respondent”). The Petitioner alleged that the HOA Board violated the community’s Covenants, Conditions, and Restrictions (CC&Rs) by suspending the Architectural Review Committee (ARC) and subsequently approving a homeowner’s construction application.

The ALJ denied the petition in its entirety, finding that the HOA Board acted within its authority. The decision established that upon the departure of the original developer (the “Declarant”), the Board inherited the Declarant’s full rights and responsibilities, including the power to both appoint and remove members of the ARC. The Judge explicitly rejected the Petitioner’s argument that ARC members held lifetime appointments, deeming such an interpretation contrary to the democratic principles of HOA governance. Consequently, the Board’s decision to remove the non-Board ARC members and appoint itself to serve as the ARC was ruled a valid exercise of its powers, and its subsequent approval of the construction application was not a violation of the CC&Rs.

Case Overview

Entity

Petitioner

N. Wayne Dwight, Jr. (Homeowner and former ARC member)

Respondent

Whisper Mountain Homeowners Association (HOA)

Adjudicator

Administrative Law Judge Diane Mihalsky

Case Number

19F-H1918027-REL

Hearing Date

January 14, 2019

Decision Date

January 29, 2019

Core Allegation

The Petitioner alleged that the Respondent’s Board violated two sections of the CC&Rs:

1. § 7.7 (Improvements and Alterations): By approving a homeowner’s application to build a detached garage on September 19, 2018, without the approval of a properly constituted ARC.

2. § 3.2 (Appeal): By creating a situation where the body making an architectural decision (the Board acting as the ARC) is the same body that would hear an appeal of that decision, rendering the appeal process meaningless.

This was based on the Petitioner’s central claim that the Board’s action on August 6, 2018, to “dissolve” or “suspend” the ARC was a violation of the governing documents.

Key Factual Background & Timeline

• Prior to 2015: The developer, VIP Homes (“Declarant”), establishes the ARC as required by the CC&Rs.

• 2015: The Declarant turns over control of the HOA to the resident-elected Board of Directors.

• March 15, 2016: The Board adopts an ARC Charter, which explicitly states: “The right to appoint and remove all appointed [ARC] members at any time is hereby vested solely in the Board.” The Petitioner is appointed as one of three non-Board members to the ARC.

• 2017 or 2018: A proposed amendment to the CC&Rs to formally replace references to “Declarant” with “Board” or “Association” is not adopted by the general membership.

• July 17, 2018: The ARC meets to consider a detached garage application from homeowners Mark and Connie Wells. The meeting is contentious, with the Petitioner expressing doubts about the ARC’s authority to grant a variance from city setback requirements. The meeting adjourns abruptly after the applicant allegedly “verbally threatened the committee.”

• August 6, 2018: The HOA Board meets and passes a motion “to suspend the ARC committee for 60 days until guidelines/expectations are clarified.” The motion states that in the interim, the Board will review and approve all ARC submissions.

• August 24, 2018: The Board sends a letter to the non-Board ARC members, including the Petitioner, informing them of the 60-day suspension.

• September 17, 2018: The Board meets and approves a revised application from the Wells, which now aligns with City of Mesa code.

• September 19, 2018: The Board, formally acting as the ARC, reviews and approves the Wells’ revised application.

• October 22, 2018: The Petitioner files his complaint with the Arizona Department of Real Estate.

• November 19, 2018: The Board adopts a “Resolution Regarding the ARC” to clarify its position. The resolution states the Board had “(i) temporarily removed the current members of the [ARC] (via a suspension) and (ii) chose to act and serve as the current [ARC].” It also formally ratifies the approval of the Wells’ garage.

Central Arguments Presented

Petitioner’s Position (N. Wayne Dwight, Jr.)

• Limited Board Authority: The CC&Rs (§ 3.4) grant the Declarant the “sole right to appoint and remove” ARC members. After the Declarant’s departure, this section states that members “shall be appointed by the Board.” The Petitioner argued this only conferred the power to appoint, not to remove.

• Failed Amendment: The failure of the membership to amend the CC&Rs to explicitly grant the Board the Declarant’s powers proves that the Board does not possess the power of removal.

• Lifetime Appointments: The Petitioner argued that once appointed, ARC members could only be removed for specific cause (e.g., moving out of the community, incapacitation) and were otherwise entitled to serve for life.

• Improper ARC Suspension: The Board’s action to suspend the committee was a violation of the CC&Rs, as the Board lacked the authority to do so.

• Invalid Approval: Because the ARC was improperly suspended, the Board’s subsequent approval of the Wells’ application violated § 7.7, which requires ARC approval for all alterations.

• Meaningless Appeals: If the Board can act as the ARC, the appeal process outlined in § 3.2, which allows a homeowner to appeal an ARC decision to the Board, becomes an “exercise in futility.”

Respondent’s Position (Whisper Mountain HOA)

• Inherited Powers: Upon the Declarant’s departure, the Board assumed all of its rights and responsibilities under the CC&Rs, including the power to both appoint and remove ARC members.

• Authority from ARC Charter: The ARC Charter, adopted in 2016, explicitly grants the Board the sole right to remove ARC members at any time.

• Intent of the Board: The Board’s intent was not to abolish the ARC, but to address concerns about the committee’s conduct, including its “way of questioning applicants” and a need for more civility, fairness, and consistency.

• Clarification of “Suspension”: The use of the word “suspend” in communications by the management company (Mariposa Group) was “unfortunate and inaccurate.” The Board’s true action, clarified in its November 19 resolution, was to remove the non-Board members and appoint its own members to serve as the ARC.

• Valid Approval: The Board was legitimately acting as the ARC when it approved the Wells’ application; therefore, § 7.7 was not violated.

Administrative Law Judge’s Analysis and Conclusions

Interpretation of Governing Documents

The ALJ concluded that restrictive covenants must be construed as a whole and interpreted to give effect to the intent of the parties. The Judge found the Petitioner’s interpretation of the CC&Rs to be unpersuasive and ultimately harmful to the community.

• The Judge stated that the Petitioner’s interpretation “elevates non-elected members of ARC above elected Board members, abrogates any community control over ARC, and does not serve the underlying purposes of the CC&Rs.”

• This “unelected lifetime appointment” concept was found to be contrary to the “democratic principles underlying HOA law in Arizona.”

On the Board’s Authority

The ALJ affirmed the HOA’s authority to manage the ARC as it did.

• Assumption of Powers: The decision concludes that “When Declarant turned Respondent HOA over to its Board, the Board assumed all of Declarant’s rights and responsibilities under the CC&Rs and related documents.” This included the power to remove ARC members.

• ARC Charter: The Judge noted that the ARC Charter also “expressly provided that the Board had the power to remove as well as to appoint members of the ARC.”

• Legitimacy of Actions: The Board was found to have acted within its authority in August 2018 when it “removed the three non-Board members of the ARC and appointed itself to perform the functions of the ARC.”

On the Alleged Violations

Based on the finding that the Board acted within its authority, the ALJ concluded that no violations occurred.

• Conclusion on CC&R § 7.7 (ARC Approval): The petition failed on this point because the Board was legitimately acting as the ARC when it approved the Wells’ application in September 2018.

• Conclusion on CC&R § 3.2 (Appeals): The petition failed on this point because the CC&Rs do not prohibit Board members from acting as the ARC. While acknowledging that appealing a decision to the same body “may be an exercise in futility,” the Judge noted that under the CC&Rs, the Board is not required to hear appeals in any event.

Final Order and Implications

Order: The petition filed by N. Wayne Dwight, Jr. was denied. The Judge found he had not established that the HOA violated CC&Rs §§ 3.2 or 7.7.

Implications: This decision establishes a strong precedent for interpreting HOA governing documents in a manner that favors functional, democratic governance over literal interpretations that could lead to impractical or absurd outcomes. It affirms that an HOA Board generally inherits the full operational powers of the original developer unless explicitly restricted, and that a Board can act to reform or reconstitute committees to ensure they serve the community’s best interests.


Barry Saxion vs. Silverton II Homeowners Association, Inc.

Posted on by

Case Summary

Case ID 17F-H1716023-REL
Agency ADRE
Tribunal OAH
Decision Date 2017-05-16
Administrative Law Judge Tammy L. Eigenheer
Outcome no
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Barry Saxion Counsel —
Respondent Silverton II Homeowners Association, Inc. Counsel Troy B. Stratman, Esq.

Alleged Violations

Declaration Section 12.1

Outcome Summary

The Commissioner of the Department of Real Estate accepted the ALJ Decision, ordering the petition be dismissed because the governing documents require the claim be handled through internal dispute resolution prior to administrative action.

Why this result: Petitioner failed to use the mandatory dispute resolution procedures set forth in the Declaration before filing the administrative action.

Key Issues & Findings

Requirement for mandatory dispute resolution procedures

The Petition was dismissed because the Declaration of Homeowners Benefits and Covenants, Conditions, and Restrictions for Silverton II requires that all covered claims must be resolved using internal dispute resolution procedures in lieu of initiating administrative proceedings.

Orders: The ALJ recommended that the Petition be dismissed, and the Commissioner accepted the ALJ decision.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • Declaration Section 12.1
  • A.R.S. § 41-1092.08

Analytics Highlights

Topics: Mandatory Dispute Resolution, Dismissal, Standing Issue Denied
Additional Citations:

  • Declaration Section 12.1
  • A.R.S. § 41-1092.08

Audio Overview

Decision Documents

17F-H1716023-REL Decision – 564668.pdf

Uploaded 2025-10-08T06:50:18 (51.2 KB)

17F-H1716023-REL Decision – 564672.pdf

Uploaded 2025-10-08T06:50:18 (54.6 KB)

17F-H1716023-REL Decision – 568837.pdf

Uploaded 2025-10-08T06:50:19 (425.5 KB)





Briefing Doc – 17F-H1716023-REL


Briefing on Case No. 17F-H1716023-REL: Saxion vs. Silverton II HOA

Executive Summary

This briefing details the administrative proceedings and final disposition of the case involving petitioners Barry and Sandra Saxion and respondent Silverton II Homeowners Association, Inc. The petition was ultimately dismissed by the Arizona Department of Real Estate, which adopted the recommendation of an Administrative Law Judge (ALJ). The dismissal was based on a procedural failure by the petitioners to adhere to the mandatory dispute resolution process outlined in the HOA’s governing documents before initiating administrative action.

The respondent’s motion for dismissal presented two primary arguments. The first, challenging petitioner Barry Saxion’s standing due to non-ownership of property, was denied by the ALJ, who found that co-petitioner Sandra Saxion did own property and had standing. The second, and decisive, argument was that the HOA’s Declaration explicitly requires all “covered claims” to be resolved through its internal dispute resolution procedures in lieu of administrative proceedings. The ALJ agreed with this argument, leading to a recommendation for dismissal, the vacating of a scheduled hearing, and the issuance of a final order confirming the dismissal.

Case Overview

This section outlines the primary participants, key identifiers, and procedural timeline of the administrative action.

Affiliation

Petitioner

Barry Saxion

Petitioner

Sandra Saxion

Property owner within the Association

Respondent

Silverton II Homeowners Association, Inc.

Adjudicator

Tammy L. Eigenheer

Administrative Law Judge, Office of Administrative Hearings

Final Authority

Judy Lowe

Commissioner, Arizona Department of Real Estate

Respondent’s Counsel

Troy B. Stratman, Esq.

Stratman Law Firm, PLC

Identifier

Case Number

HO 17-16/023

Docket Number

17F-H1716023-REL

Jurisdiction

Office of Administrative Hearings (OAH), Phoenix, Arizona

Referring Body

Arizona Department of Real Estate (Department)

• Petition Filed: Both Barry and Sandra Saxion signed a Homeowners Association (HOA) Dispute Process Petition.

• Referral to OAH: The Department of Real Estate referred the matter to the Office of Administrative Hearings, creating the caption Barry Saxion v. Silverton II Homeowners Association, Inc.

• Motion for Summary Judgment: The Respondent HOA filed a motion to dismiss the petition.

• May 16, 2017: Administrative Law Judge Tammy L. Eigenheer issued a decision recommending the petition be dismissed.

• May 16, 2017: A Minute Entry was issued, vacating the hearing scheduled for May 22, 2017, based on the dismissal recommendation.

• May 30, 2017: The Commissioner of the Department of Real Estate, Judy Lowe, issued a Final Order adopting the ALJ’s decision and officially dismissing the petition.

Analysis of the Motion for Summary Judgment

The Silverton II HOA’s Motion for Summary Judgment was the pivotal filing in this case. It presented two distinct arguments for dismissal, which were addressed separately by the Administrative Law Judge.

Respondent’s Arguments

1. Lack of Standing: The initial argument was that the petitioner, identified in the case caption as Barry Saxion, did not own property within the Association and therefore lacked the legal standing necessary to pursue the action.

2. Failure to Adhere to Governing Documents: The second argument was that the petition must be dismissed because it violated the procedural requirements set forth in the HOA’s governing documents. Specifically, Section 12.1 of the Declaration of Homeowners Benefits and Covenants, Conditions, and Restrictions for Silverton II (the “Declaration”) mandates a specific internal dispute resolution process for all “covered claims.”

Administrative Law Judge’s Decision

The ALJ’s decision, issued on May 16, 2017, analyzed both of the respondent’s arguments and made distinct recommendations for each.

• The ALJ recommended that the motion to dismiss be denied on the grounds of standing.

• The judge acknowledged the fact, undisputed by the petitioner, that Barry Saxion does not own property within the association.

• However, the judge’s review of the original HOA Dispute Process Petition revealed that Sandra Saxion, who does own property, had also signed the petition as a petitioner. The judge concluded that the case caption, which named only Barry Saxion, was an administrative creation by the Department of Real Estate upon referral.

• The finding was that Sandra Saxion clearly “has standing to pursue this action,” thereby nullifying the argument for dismissal based on a lack of standing.

• The ALJ recommended that the petition be dismissed for failing to follow the mandatory dispute resolution procedures outlined in the HOA’s Declaration.

• The judge cited Section 12.1 of the Declaration, which defines “covered claims” as “all claims, grievances, controversies, disagreements, or disputes that arise in whole or part out of . . . the interpretation, application, or enforcement of the Declaration or the other Project Documents.”

• The judge found that the current dispute fell squarely within this definition.

• The decision states that the “plain language of the Declaration prevents this dispute… to be brought in the Office of Administrative Hearings and mandates that the dispute must be handled through the dispute resolution process set forth in the Declaration and Bylaws.”

• The conclusion was that the petition was improperly filed, as the internal remedies had not been pursued first.

Final Disposition and Subsequent Actions

The ALJ’s recommendation to dismiss directly led to the final resolution of the case.

Vacating of Hearing

A Minute Entry dated May 16, 2017, formally vacated the hearing that was scheduled for May 22, 2017. The order was a direct result of the ALJ’s decision recommending the complaint be dismissed.

Final Order from the Department of Real Estate

On May 30, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued a Final Order that officially concluded the matter.

• Adoption of ALJ Decision: The Order explicitly states, “The Commissioner accepts the ALJ decision that the petition in this matter be dismissed as the applicable governing documents require that the claim must be handled through the dispute resolution process prior to administrative proceedings being brought.”

• Effective Date: The Order was designated a “final administrative action” and was effective immediately from the date of service.

• Appellate Rights: The parties were informed of their right to file for a rehearing or review within 30 days of the order. They were also advised of their right to appeal for a judicial review by filing a complaint pursuant to Arizona Revised Statutes Title 12, Chapter 7, Article 6. A court-obtained stay would be required to delay the order during a judicial review.

Official Communications

The Final Order and related documents were formally transmitted to all parties of record via certified mail or electronic means on May 30, 2017. Recipients included:

• Barry Saxion

• Troy B. Stratman, Esq. (counsel for the HOA)

• The Office of Administrative Hearings

• Judy Lowe and other staff at the Arizona Department of Real Estate


Barry Saxion vs. Silverton II Homeowners Association, Inc.

Posted on by

Case Summary

Case ID 17F-H1716023-REL
Agency ADRE
Tribunal OAH
Decision Date 2017-05-16
Administrative Law Judge Tammy L. Eigenheer
Outcome no
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Barry Saxion Counsel —
Respondent Silverton II Homeowners Association, Inc. Counsel Troy B. Stratman, Esq.

Alleged Violations

Declaration Section 12.1

Outcome Summary

The Commissioner of the Department of Real Estate accepted the ALJ Decision, ordering the petition be dismissed because the governing documents require the claim be handled through internal dispute resolution prior to administrative action.

Why this result: Petitioner failed to use the mandatory dispute resolution procedures set forth in the Declaration before filing the administrative action.

Key Issues & Findings

Requirement for mandatory dispute resolution procedures

The Petition was dismissed because the Declaration of Homeowners Benefits and Covenants, Conditions, and Restrictions for Silverton II requires that all covered claims must be resolved using internal dispute resolution procedures in lieu of initiating administrative proceedings.

Orders: The ALJ recommended that the Petition be dismissed, and the Commissioner accepted the ALJ decision.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • Declaration Section 12.1
  • A.R.S. § 41-1092.08

Analytics Highlights

Topics: Mandatory Dispute Resolution, Dismissal, Standing Issue Denied
Additional Citations:

  • Declaration Section 12.1
  • A.R.S. § 41-1092.08

Audio Overview

Decision Documents

17F-H1716023-REL Decision – 564668.pdf

Uploaded 2025-10-08T06:57:21 (51.2 KB)

17F-H1716023-REL Decision – 564672.pdf

Uploaded 2025-10-08T06:57:21 (54.6 KB)

17F-H1716023-REL Decision – 568837.pdf

Uploaded 2025-10-08T06:57:22 (425.5 KB)





Briefing Doc – 17F-H1716023-REL


Briefing on Case No. 17F-H1716023-REL: Saxion vs. Silverton II HOA

Executive Summary

This briefing details the administrative proceedings and final disposition of the case involving petitioners Barry and Sandra Saxion and respondent Silverton II Homeowners Association, Inc. The petition was ultimately dismissed by the Arizona Department of Real Estate, which adopted the recommendation of an Administrative Law Judge (ALJ). The dismissal was based on a procedural failure by the petitioners to adhere to the mandatory dispute resolution process outlined in the HOA’s governing documents before initiating administrative action.

The respondent’s motion for dismissal presented two primary arguments. The first, challenging petitioner Barry Saxion’s standing due to non-ownership of property, was denied by the ALJ, who found that co-petitioner Sandra Saxion did own property and had standing. The second, and decisive, argument was that the HOA’s Declaration explicitly requires all “covered claims” to be resolved through its internal dispute resolution procedures in lieu of administrative proceedings. The ALJ agreed with this argument, leading to a recommendation for dismissal, the vacating of a scheduled hearing, and the issuance of a final order confirming the dismissal.

Case Overview

This section outlines the primary participants, key identifiers, and procedural timeline of the administrative action.

Affiliation

Petitioner

Barry Saxion

Petitioner

Sandra Saxion

Property owner within the Association

Respondent

Silverton II Homeowners Association, Inc.

Adjudicator

Tammy L. Eigenheer

Administrative Law Judge, Office of Administrative Hearings

Final Authority

Judy Lowe

Commissioner, Arizona Department of Real Estate

Respondent’s Counsel

Troy B. Stratman, Esq.

Stratman Law Firm, PLC

Identifier

Case Number

HO 17-16/023

Docket Number

17F-H1716023-REL

Jurisdiction

Office of Administrative Hearings (OAH), Phoenix, Arizona

Referring Body

Arizona Department of Real Estate (Department)

• Petition Filed: Both Barry and Sandra Saxion signed a Homeowners Association (HOA) Dispute Process Petition.

• Referral to OAH: The Department of Real Estate referred the matter to the Office of Administrative Hearings, creating the caption Barry Saxion v. Silverton II Homeowners Association, Inc.

• Motion for Summary Judgment: The Respondent HOA filed a motion to dismiss the petition.

• May 16, 2017: Administrative Law Judge Tammy L. Eigenheer issued a decision recommending the petition be dismissed.

• May 16, 2017: A Minute Entry was issued, vacating the hearing scheduled for May 22, 2017, based on the dismissal recommendation.

• May 30, 2017: The Commissioner of the Department of Real Estate, Judy Lowe, issued a Final Order adopting the ALJ’s decision and officially dismissing the petition.

Analysis of the Motion for Summary Judgment

The Silverton II HOA’s Motion for Summary Judgment was the pivotal filing in this case. It presented two distinct arguments for dismissal, which were addressed separately by the Administrative Law Judge.

Respondent’s Arguments

1. Lack of Standing: The initial argument was that the petitioner, identified in the case caption as Barry Saxion, did not own property within the Association and therefore lacked the legal standing necessary to pursue the action.

2. Failure to Adhere to Governing Documents: The second argument was that the petition must be dismissed because it violated the procedural requirements set forth in the HOA’s governing documents. Specifically, Section 12.1 of the Declaration of Homeowners Benefits and Covenants, Conditions, and Restrictions for Silverton II (the “Declaration”) mandates a specific internal dispute resolution process for all “covered claims.”

Administrative Law Judge’s Decision

The ALJ’s decision, issued on May 16, 2017, analyzed both of the respondent’s arguments and made distinct recommendations for each.

• The ALJ recommended that the motion to dismiss be denied on the grounds of standing.

• The judge acknowledged the fact, undisputed by the petitioner, that Barry Saxion does not own property within the association.

• However, the judge’s review of the original HOA Dispute Process Petition revealed that Sandra Saxion, who does own property, had also signed the petition as a petitioner. The judge concluded that the case caption, which named only Barry Saxion, was an administrative creation by the Department of Real Estate upon referral.

• The finding was that Sandra Saxion clearly “has standing to pursue this action,” thereby nullifying the argument for dismissal based on a lack of standing.

• The ALJ recommended that the petition be dismissed for failing to follow the mandatory dispute resolution procedures outlined in the HOA’s Declaration.

• The judge cited Section 12.1 of the Declaration, which defines “covered claims” as “all claims, grievances, controversies, disagreements, or disputes that arise in whole or part out of . . . the interpretation, application, or enforcement of the Declaration or the other Project Documents.”

• The judge found that the current dispute fell squarely within this definition.

• The decision states that the “plain language of the Declaration prevents this dispute… to be brought in the Office of Administrative Hearings and mandates that the dispute must be handled through the dispute resolution process set forth in the Declaration and Bylaws.”

• The conclusion was that the petition was improperly filed, as the internal remedies had not been pursued first.

Final Disposition and Subsequent Actions

The ALJ’s recommendation to dismiss directly led to the final resolution of the case.

Vacating of Hearing

A Minute Entry dated May 16, 2017, formally vacated the hearing that was scheduled for May 22, 2017. The order was a direct result of the ALJ’s decision recommending the complaint be dismissed.

Final Order from the Department of Real Estate

On May 30, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued a Final Order that officially concluded the matter.

• Adoption of ALJ Decision: The Order explicitly states, “The Commissioner accepts the ALJ decision that the petition in this matter be dismissed as the applicable governing documents require that the claim must be handled through the dispute resolution process prior to administrative proceedings being brought.”

• Effective Date: The Order was designated a “final administrative action” and was effective immediately from the date of service.

• Appellate Rights: The parties were informed of their right to file for a rehearing or review within 30 days of the order. They were also advised of their right to appeal for a judicial review by filing a complaint pursuant to Arizona Revised Statutes Title 12, Chapter 7, Article 6. A court-obtained stay would be required to delay the order during a judicial review.

Official Communications

The Final Order and related documents were formally transmitted to all parties of record via certified mail or electronic means on May 30, 2017. Recipients included:

• Barry Saxion

• Troy B. Stratman, Esq. (counsel for the HOA)

• The Office of Administrative Hearings

• Judy Lowe and other staff at the Arizona Department of Real Estate


Barry Saxion vs. Silverton II Homeowners Association, Inc.

Posted on by

Case Summary

Case ID 17F-H1716023-REL
Agency ADRE
Tribunal OAH
Decision Date 2017-05-16
Administrative Law Judge Tammy L. Eigenheer
Outcome no
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Barry Saxion Counsel —
Respondent Silverton II Homeowners Association, Inc. Counsel Troy B. Stratman, Esq.

Alleged Violations

Declaration Section 12.1

Outcome Summary

The Commissioner of the Department of Real Estate accepted the ALJ Decision, ordering the petition be dismissed because the governing documents require the claim be handled through internal dispute resolution prior to administrative action.

Why this result: Petitioner failed to use the mandatory dispute resolution procedures set forth in the Declaration before filing the administrative action.

Key Issues & Findings

Requirement for mandatory dispute resolution procedures

The Petition was dismissed because the Declaration of Homeowners Benefits and Covenants, Conditions, and Restrictions for Silverton II requires that all covered claims must be resolved using internal dispute resolution procedures in lieu of initiating administrative proceedings.

Orders: The ALJ recommended that the Petition be dismissed, and the Commissioner accepted the ALJ decision.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • Declaration Section 12.1
  • A.R.S. § 41-1092.08

Analytics Highlights

Topics: Mandatory Dispute Resolution, Dismissal, Standing Issue Denied
Additional Citations:

  • Declaration Section 12.1
  • A.R.S. § 41-1092.08

Audio Overview

Decision Documents

17F-H1716023-REL Decision – 564668.pdf

Uploaded 2025-10-08T07:01:32 (51.2 KB)

17F-H1716023-REL Decision – 564672.pdf

Uploaded 2025-10-08T07:01:33 (54.6 KB)

17F-H1716023-REL Decision – 568837.pdf

Uploaded 2025-10-08T07:01:34 (425.5 KB)





Briefing Doc – 17F-H1716023-REL


Briefing on Case No. 17F-H1716023-REL: Saxion vs. Silverton II HOA

Executive Summary

This briefing details the administrative proceedings and final disposition of the case involving petitioners Barry and Sandra Saxion and respondent Silverton II Homeowners Association, Inc. The petition was ultimately dismissed by the Arizona Department of Real Estate, which adopted the recommendation of an Administrative Law Judge (ALJ). The dismissal was based on a procedural failure by the petitioners to adhere to the mandatory dispute resolution process outlined in the HOA’s governing documents before initiating administrative action.

The respondent’s motion for dismissal presented two primary arguments. The first, challenging petitioner Barry Saxion’s standing due to non-ownership of property, was denied by the ALJ, who found that co-petitioner Sandra Saxion did own property and had standing. The second, and decisive, argument was that the HOA’s Declaration explicitly requires all “covered claims” to be resolved through its internal dispute resolution procedures in lieu of administrative proceedings. The ALJ agreed with this argument, leading to a recommendation for dismissal, the vacating of a scheduled hearing, and the issuance of a final order confirming the dismissal.

Case Overview

This section outlines the primary participants, key identifiers, and procedural timeline of the administrative action.

Affiliation

Petitioner

Barry Saxion

Petitioner

Sandra Saxion

Property owner within the Association

Respondent

Silverton II Homeowners Association, Inc.

Adjudicator

Tammy L. Eigenheer

Administrative Law Judge, Office of Administrative Hearings

Final Authority

Judy Lowe

Commissioner, Arizona Department of Real Estate

Respondent’s Counsel

Troy B. Stratman, Esq.

Stratman Law Firm, PLC

Identifier

Case Number

HO 17-16/023

Docket Number

17F-H1716023-REL

Jurisdiction

Office of Administrative Hearings (OAH), Phoenix, Arizona

Referring Body

Arizona Department of Real Estate (Department)

• Petition Filed: Both Barry and Sandra Saxion signed a Homeowners Association (HOA) Dispute Process Petition.

• Referral to OAH: The Department of Real Estate referred the matter to the Office of Administrative Hearings, creating the caption Barry Saxion v. Silverton II Homeowners Association, Inc.

• Motion for Summary Judgment: The Respondent HOA filed a motion to dismiss the petition.

• May 16, 2017: Administrative Law Judge Tammy L. Eigenheer issued a decision recommending the petition be dismissed.

• May 16, 2017: A Minute Entry was issued, vacating the hearing scheduled for May 22, 2017, based on the dismissal recommendation.

• May 30, 2017: The Commissioner of the Department of Real Estate, Judy Lowe, issued a Final Order adopting the ALJ’s decision and officially dismissing the petition.

Analysis of the Motion for Summary Judgment

The Silverton II HOA’s Motion for Summary Judgment was the pivotal filing in this case. It presented two distinct arguments for dismissal, which were addressed separately by the Administrative Law Judge.

Respondent’s Arguments

1. Lack of Standing: The initial argument was that the petitioner, identified in the case caption as Barry Saxion, did not own property within the Association and therefore lacked the legal standing necessary to pursue the action.

2. Failure to Adhere to Governing Documents: The second argument was that the petition must be dismissed because it violated the procedural requirements set forth in the HOA’s governing documents. Specifically, Section 12.1 of the Declaration of Homeowners Benefits and Covenants, Conditions, and Restrictions for Silverton II (the “Declaration”) mandates a specific internal dispute resolution process for all “covered claims.”

Administrative Law Judge’s Decision

The ALJ’s decision, issued on May 16, 2017, analyzed both of the respondent’s arguments and made distinct recommendations for each.

• The ALJ recommended that the motion to dismiss be denied on the grounds of standing.

• The judge acknowledged the fact, undisputed by the petitioner, that Barry Saxion does not own property within the association.

• However, the judge’s review of the original HOA Dispute Process Petition revealed that Sandra Saxion, who does own property, had also signed the petition as a petitioner. The judge concluded that the case caption, which named only Barry Saxion, was an administrative creation by the Department of Real Estate upon referral.

• The finding was that Sandra Saxion clearly “has standing to pursue this action,” thereby nullifying the argument for dismissal based on a lack of standing.

• The ALJ recommended that the petition be dismissed for failing to follow the mandatory dispute resolution procedures outlined in the HOA’s Declaration.

• The judge cited Section 12.1 of the Declaration, which defines “covered claims” as “all claims, grievances, controversies, disagreements, or disputes that arise in whole or part out of . . . the interpretation, application, or enforcement of the Declaration or the other Project Documents.”

• The judge found that the current dispute fell squarely within this definition.

• The decision states that the “plain language of the Declaration prevents this dispute… to be brought in the Office of Administrative Hearings and mandates that the dispute must be handled through the dispute resolution process set forth in the Declaration and Bylaws.”

• The conclusion was that the petition was improperly filed, as the internal remedies had not been pursued first.

Final Disposition and Subsequent Actions

The ALJ’s recommendation to dismiss directly led to the final resolution of the case.

Vacating of Hearing

A Minute Entry dated May 16, 2017, formally vacated the hearing that was scheduled for May 22, 2017. The order was a direct result of the ALJ’s decision recommending the complaint be dismissed.

Final Order from the Department of Real Estate

On May 30, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued a Final Order that officially concluded the matter.

• Adoption of ALJ Decision: The Order explicitly states, “The Commissioner accepts the ALJ decision that the petition in this matter be dismissed as the applicable governing documents require that the claim must be handled through the dispute resolution process prior to administrative proceedings being brought.”

• Effective Date: The Order was designated a “final administrative action” and was effective immediately from the date of service.

• Appellate Rights: The parties were informed of their right to file for a rehearing or review within 30 days of the order. They were also advised of their right to appeal for a judicial review by filing a complaint pursuant to Arizona Revised Statutes Title 12, Chapter 7, Article 6. A court-obtained stay would be required to delay the order during a judicial review.

Official Communications

The Final Order and related documents were formally transmitted to all parties of record via certified mail or electronic means on May 30, 2017. Recipients included:

• Barry Saxion

• Troy B. Stratman, Esq. (counsel for the HOA)

• The Office of Administrative Hearings

• Judy Lowe and other staff at the Arizona Department of Real Estate


Barry Saxion vs. Silverton II Homeowners Association, Inc.

Posted on by

Case Summary

Case ID 17F-H1716023-REL
Agency ADRE
Tribunal OAH
Decision Date 2017-05-16
Administrative Law Judge Tammy L. Eigenheer
Outcome no
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Barry Saxion Counsel —
Respondent Silverton II Homeowners Association, Inc. Counsel Troy B. Stratman, Esq.

Alleged Violations

Declaration Section 12.1

Outcome Summary

The Commissioner of the Department of Real Estate accepted the ALJ Decision, ordering the petition be dismissed because the governing documents require the claim be handled through internal dispute resolution prior to administrative action.

Why this result: Petitioner failed to use the mandatory dispute resolution procedures set forth in the Declaration before filing the administrative action.

Key Issues & Findings

Requirement for mandatory dispute resolution procedures

The Petition was dismissed because the Declaration of Homeowners Benefits and Covenants, Conditions, and Restrictions for Silverton II requires that all covered claims must be resolved using internal dispute resolution procedures in lieu of initiating administrative proceedings.

Orders: The ALJ recommended that the Petition be dismissed, and the Commissioner accepted the ALJ decision.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • Declaration Section 12.1
  • A.R.S. § 41-1092.08

Analytics Highlights

Topics: Mandatory Dispute Resolution, Dismissal, Standing Issue Denied
Additional Citations:

  • Declaration Section 12.1
  • A.R.S. § 41-1092.08

Video Overview

Audio Overview

Decision Documents

17F-H1716023-REL Decision – 564668.pdf

Uploaded 2025-10-09T03:31:18 (51.2 KB)

17F-H1716023-REL Decision – 564672.pdf

Uploaded 2025-10-09T03:31:18 (54.6 KB)

17F-H1716023-REL Decision – 568837.pdf

Uploaded 2025-10-09T03:31:18 (425.5 KB)





Briefing Doc – 17F-H1716023-REL


Briefing on Case No. 17F-H1716023-REL: Saxion vs. Silverton II HOA

Executive Summary

This briefing details the administrative proceedings and final disposition of the case involving petitioners Barry and Sandra Saxion and respondent Silverton II Homeowners Association, Inc. The petition was ultimately dismissed by the Arizona Department of Real Estate, which adopted the recommendation of an Administrative Law Judge (ALJ). The dismissal was based on a procedural failure by the petitioners to adhere to the mandatory dispute resolution process outlined in the HOA’s governing documents before initiating administrative action.

The respondent’s motion for dismissal presented two primary arguments. The first, challenging petitioner Barry Saxion’s standing due to non-ownership of property, was denied by the ALJ, who found that co-petitioner Sandra Saxion did own property and had standing. The second, and decisive, argument was that the HOA’s Declaration explicitly requires all “covered claims” to be resolved through its internal dispute resolution procedures in lieu of administrative proceedings. The ALJ agreed with this argument, leading to a recommendation for dismissal, the vacating of a scheduled hearing, and the issuance of a final order confirming the dismissal.

Case Overview

This section outlines the primary participants, key identifiers, and procedural timeline of the administrative action.

Affiliation

Petitioner

Barry Saxion

Petitioner

Sandra Saxion

Property owner within the Association

Respondent

Silverton II Homeowners Association, Inc.

Adjudicator

Tammy L. Eigenheer

Administrative Law Judge, Office of Administrative Hearings

Final Authority

Judy Lowe

Commissioner, Arizona Department of Real Estate

Respondent’s Counsel

Troy B. Stratman, Esq.

Stratman Law Firm, PLC

Identifier

Case Number

HO 17-16/023

Docket Number

17F-H1716023-REL

Jurisdiction

Office of Administrative Hearings (OAH), Phoenix, Arizona

Referring Body

Arizona Department of Real Estate (Department)

• Petition Filed: Both Barry and Sandra Saxion signed a Homeowners Association (HOA) Dispute Process Petition.

• Referral to OAH: The Department of Real Estate referred the matter to the Office of Administrative Hearings, creating the caption Barry Saxion v. Silverton II Homeowners Association, Inc.

• Motion for Summary Judgment: The Respondent HOA filed a motion to dismiss the petition.

• May 16, 2017: Administrative Law Judge Tammy L. Eigenheer issued a decision recommending the petition be dismissed.

• May 16, 2017: A Minute Entry was issued, vacating the hearing scheduled for May 22, 2017, based on the dismissal recommendation.

• May 30, 2017: The Commissioner of the Department of Real Estate, Judy Lowe, issued a Final Order adopting the ALJ’s decision and officially dismissing the petition.

Analysis of the Motion for Summary Judgment

The Silverton II HOA’s Motion for Summary Judgment was the pivotal filing in this case. It presented two distinct arguments for dismissal, which were addressed separately by the Administrative Law Judge.

Respondent’s Arguments

1. Lack of Standing: The initial argument was that the petitioner, identified in the case caption as Barry Saxion, did not own property within the Association and therefore lacked the legal standing necessary to pursue the action.

2. Failure to Adhere to Governing Documents: The second argument was that the petition must be dismissed because it violated the procedural requirements set forth in the HOA’s governing documents. Specifically, Section 12.1 of the Declaration of Homeowners Benefits and Covenants, Conditions, and Restrictions for Silverton II (the “Declaration”) mandates a specific internal dispute resolution process for all “covered claims.”

Administrative Law Judge’s Decision

The ALJ’s decision, issued on May 16, 2017, analyzed both of the respondent’s arguments and made distinct recommendations for each.

• The ALJ recommended that the motion to dismiss be denied on the grounds of standing.

• The judge acknowledged the fact, undisputed by the petitioner, that Barry Saxion does not own property within the association.

• However, the judge’s review of the original HOA Dispute Process Petition revealed that Sandra Saxion, who does own property, had also signed the petition as a petitioner. The judge concluded that the case caption, which named only Barry Saxion, was an administrative creation by the Department of Real Estate upon referral.

• The finding was that Sandra Saxion clearly “has standing to pursue this action,” thereby nullifying the argument for dismissal based on a lack of standing.

• The ALJ recommended that the petition be dismissed for failing to follow the mandatory dispute resolution procedures outlined in the HOA’s Declaration.

• The judge cited Section 12.1 of the Declaration, which defines “covered claims” as “all claims, grievances, controversies, disagreements, or disputes that arise in whole or part out of . . . the interpretation, application, or enforcement of the Declaration or the other Project Documents.”

• The judge found that the current dispute fell squarely within this definition.

• The decision states that the “plain language of the Declaration prevents this dispute… to be brought in the Office of Administrative Hearings and mandates that the dispute must be handled through the dispute resolution process set forth in the Declaration and Bylaws.”

• The conclusion was that the petition was improperly filed, as the internal remedies had not been pursued first.

Final Disposition and Subsequent Actions

The ALJ’s recommendation to dismiss directly led to the final resolution of the case.

Vacating of Hearing

A Minute Entry dated May 16, 2017, formally vacated the hearing that was scheduled for May 22, 2017. The order was a direct result of the ALJ’s decision recommending the complaint be dismissed.

Final Order from the Department of Real Estate

On May 30, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued a Final Order that officially concluded the matter.

• Adoption of ALJ Decision: The Order explicitly states, “The Commissioner accepts the ALJ decision that the petition in this matter be dismissed as the applicable governing documents require that the claim must be handled through the dispute resolution process prior to administrative proceedings being brought.”

• Effective Date: The Order was designated a “final administrative action” and was effective immediately from the date of service.

• Appellate Rights: The parties were informed of their right to file for a rehearing or review within 30 days of the order. They were also advised of their right to appeal for a judicial review by filing a complaint pursuant to Arizona Revised Statutes Title 12, Chapter 7, Article 6. A court-obtained stay would be required to delay the order during a judicial review.

Official Communications

The Final Order and related documents were formally transmitted to all parties of record via certified mail or electronic means on May 30, 2017. Recipients included:

• Barry Saxion

• Troy B. Stratman, Esq. (counsel for the HOA)

• The Office of Administrative Hearings

• Judy Lowe and other staff at the Arizona Department of Real Estate


Kurt Gronlund vs. Cottonfields Community Association

Posted on by

Case Summary

Case ID 17F-H1716024-REL
Agency ADRE
Tribunal OAH
Decision Date 2017-05-11
Administrative Law Judge Diane Mihalsky
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Kurt Gronlund Counsel —
Respondent Cottonfields Community Association Counsel Troy B. Stratman, Esq.

Alleged Violations

A.R.S. § 32-2199.01(A)

Outcome Summary

The Commissioner accepted the ALJ decision granting the Respondent's Motion for Summary Judgment, recommending dismissal of the petition due to the Department's lack of statutory jurisdiction over the dispute, which involved a Reciprocal Easement and Maintenance Agreement (REMA) and the rights of a third-party Golf Course Owner.

Why this result: The Department lacked jurisdiction to resolve the dispute because the REMA was not considered a 'community document' under A.R.S. § 33-1802(2) and the requested relief implicated the rights of a non-party (the Golf Course Owner) over whom the Department has no jurisdiction.

Key Issues & Findings

Jurisdiction over REMA Amendment Dispute

Petitioner sought a finding that REMA Amendments 2 and 3 were void because the HOA board unilaterally amended the REMA without the required member vote (two-thirds majority) as specified in the CC&Rs and REMA, and sought an order for the removal of the amendments from the record.

Orders: The Administrative Law Judge recommended granting Respondent's Motion for Summary Judgment and dismissing the Complaint.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 32-2199.01(A)
  • A.R.S. § 33-1802(2)
  • CC&Rs 14.2
  • REMA Article 12

Analytics Highlights

Topics: jurisdiction, summary judgment, golf course, REMA, third party
Additional Citations:

  • A.R.S. § 32-2199.01(A)
  • A.R.S. § 33-1802(2)
  • A.R.S. § 32-2199.02(A)
  • CC&Rs 14.2
  • REMA 5.1
  • REMA Article 12

Audio Overview

Decision Documents

17F-H1716024-REL Decision – 563660.pdf

Uploaded 2025-10-08T06:50:24 (99.8 KB)

17F-H1716024-REL Decision – 568840.pdf

Uploaded 2025-10-08T06:50:25 (854.5 KB)





Briefing Doc – 17F-H1716024-REL


Briefing Document: Gronlund vs. Cottonfields Community Association (Case No. 17F-H1716024-REL)

Executive Summary

This document synthesizes the legal proceedings and decision in the case of Kurt Gronlund versus the Cottonfields Community Association, adjudicated by the Arizona Office of Administrative Hearings. The core of the dispute centers on the petitioner’s allegation that the Homeowners Association (HOA) board improperly amended a critical land-use agreement in 2011 without a required vote of the membership, ultimately enabling the commercial rezoning of an adjacent golf course.

The Administrative Law Judge (ALJ) granted the HOA’s motion for summary judgment, and the Commissioner of the Arizona Department of Real Estate adopted this decision, dismissing the petition. The dismissal was not based on the merits of the petitioner’s claim but on a crucial lack of jurisdiction. The ALJ determined that the Department of Real Estate could not rule on the matter for two primary reasons:

1. The governing agreement in question (the REMA) is not a “community document” as defined by the relevant Arizona statute, placing it outside the Department’s purview.

2. The relief sought by the petitioner would directly implicate the property rights of a third party (the Golf Course Owner) and a prior legal settlement, which exceeds the Department’s statutory authority.

While acknowledging the petitioner’s concerns about the golf course development may be “well-founded,” the decision concluded that the petitioner’s available remedies lie in electing a new HOA board, filing a lawsuit in a judicial forum, or seeking legislative change.

Case Overview

This case involves a dispute between a homeowner and his HOA regarding the amendment of a land-use agreement governing a golf course property.

Parties Involved

Name / Entity

Description

Petitioner

Kurt Gronlund

A homeowner within the Cottonfields community and a member of the Respondent association.

Respondent

Cottonfields Community Association

The Homeowners Association (HOA) for the Cottonfields development.

Third Party

The Golf Course Owner

A separate legal entity that owns the golf course property adjacent to the community.

Case Chronology

• December 11, 2001: The developer records both the Reciprocal Easement and Maintenance Agreement (REMA) and the community’s CC&Rs.

• March 2011: The Cottonfields HOA board votes 3-2 to amend the REMA.

• March 3 & May 16, 2011: Amendments 2 and 3 to the REMA, which alter the legal description of the golf course property, are officially recorded.

• 2014: Litigation (Case No. CV2014-000639) begins in Maricopa County Superior Court between the HOA and the Golf Course Owner regarding the REMA and its amendments.

• July 2015: The HOA and the Golf Course Owner execute a settlement agreement.

• August 7, 2015: The superior court lawsuit is dismissed with prejudice.

• October 5, 2016: The HOA president represents to the City Council that homeowners favor rezoning the golf course. The Council approves a rezone from “GC” (Golf Course) to Commercial, relying on the 2011 REMA amendments.

• February 3, 2017: Kurt Gronlund files a Homeowners Association Dispute Process Petition with the Arizona Department of Real Estate.

• April 27, 2017: The HOA files a Motion for Summary Judgment, arguing a lack of jurisdiction.

• May 10, 2017: Oral arguments on the motion are held.

• May 11, 2017: The Administrative Law Judge issues a decision recommending dismissal.

• May 11, 2017: The Commissioner of the Department of Real Estate issues a Final Order adopting the ALJ’s decision and dismissing the case.

Core Dispute: Unilateral Amendment of the REMA

The petitioner’s case is founded on the claim that the HOA board acted in violation of its own governing documents when it facilitated changes to the REMA without consulting the community’s homeowners.

Petitioner’s Allegations

On February 3, 2017, Kurt Gronlund filed a petition asserting that the HOA board’s actions in 2011 were illegal and directly led to the loss of protection for homeowner property values.

• The Unilateral Action: The petition states, “[In] March 2011 the HOA board voted 3-2 to unilaterally amend REMA 5.1’s use restriction on the golf course property without the required vote of the approximately 450 eligible class members…”

• The Consequence: These amendments were used as justification for the HOA president to support a commercial rezoning of the golf course property before the City Council on October 5, 2016. The petitioner argues this “stripped away that last layer of protection” for homeowners who believed the golf course could not be developed without their approval.

• Homeowner Reliance: During oral arguments, the petitioner testified that members relied on the protections within the CC&Rs and REMA when purchasing their homes, believing development required a two-thirds majority vote.

Petitioner’s Requested Relief

The petitioner respectfully requested that the Administrative Court issue the following orders:

1. Find that REMA Section 5.1 may not be amended without the member vote required by REMA Article 12 and CC&Rs Section 14.2.

2. Find that Amendments 2 and 3 to the REMA are void and unenforceable.

3. Order the HOA Board to remove Amendments 2 and 3 from the public record.

Analysis of Governing Document Provisions

The dispute hinges on the interpretation of and interaction between two key legal documents: the REMA and the HOA’s CC&Rs.

Document

Section

Description

Key Language

Section 5.1

Use Restriction: Restricts the golf course property’s use to either a golf course or open space.

“The Golf Course Property shall be used solely and exclusively for Golf Course Use or as open space, and for no other purposes.”

Article 12

Amendment Procedure: Stipulates that changes to Section 5.1 require the same member vote as an amendment to the HOA’s Declaration (CC&Rs).

“…no termination, cancellation, change, modification or amendment of paragraph 5.1… shall be made without the written approval thereof by the number of Members… required to amend the Declaration pursuant to Section 13.2 thereof.”

Section 14.2

Member Vote Requirement: Defines the threshold for amending the CC&Rs.

“…may be amended only by the affirmative vote (in person or by proxy) or written consent of: (a) Members holding not less than two-thirds (2/3) of all Class A votes then entitled to be cast; and (b) Members holding not less than two thirds (2/3) of all Class B votes…”

Section 14.17

Third-Party Rights: Protects the rights of the Golf Course Owner, stating that provisions benefiting them cannot be amended without their written consent.

“…no provision of this Declaration… which grants to or confers upon the Golf Course Owner or the Golf Course Property any rights… shall be modified, amended or revoked in any way without the express written consent of the Golf Course Owner.”

Jurisdictional Challenge and Legal Rationale for Dismissal

The HOA’s defense focused not on the factual allegations but on the argument that the Department of Real Estate was the improper forum for this dispute. The ALJ ultimately agreed with this position.

Respondent’s Motion for Summary Judgment

The Cottonfields Community Association argued that the Department could not grant the petitioner’s requested relief because:

1. The REMA is not a “community document” as defined under Arizona law (A.R.S. § 32-2199.01(A)).

2. The Golf Course Owner is a third party over whom the Department lacks jurisdiction.

3. Any ruling would affect the rights of this third party and could impact the 2015 settlement agreement from the superior court case.

Administrative Law Judge’s Conclusions of Law

The ALJ’s decision was based on a strict interpretation of the Department’s statutory authority.

• REMA is Not a “Community Document”: The judge found that although the REMA references the CC&Rs, it does not meet the legal definition of a community document under A.R.S. § 33-1802(2), which defines them as “the declaration, bylaws, articles of incorporation, if any, and rules, if any.” The Department’s authority under A.R.S. § 32-2199.01(A) is limited to violations of these specific documents.

• Implication of Third-Party Rights: The decision states that the petitioner’s request to void the amendments “implicates the Golf Course Owner’s interests in its property and may affect the settlement that the Golf Course Owner entered into with Respondent.” The law does not grant the Department “jurisdiction over disputes that implicate the rights of third parties.”

• Petitioner’s Available Remedies: While validating the petitioner’s underlying worries, the judge outlined specific alternative courses of action. The decision states: “Petitioner’s concerns about development of the golf course may be well-founded. However, under applicable statutes, at this time, his available remedies are to elect a board that will better protect members’ interest in maintaining the golf course, to file suit in a judicial forum against Respondent and the Golf Course Owner, or to ask the legislature to amend A.R.S. §§ 33-1802(2) and 32-2199.01(A).”

Final Order and Disposition

Based on the legal conclusions regarding jurisdiction, the case was dismissed.

• ALJ Recommendation: On May 11, 2017, Administrative Law Judge Diane Mihalsky recommended that the complaint be dismissed.

• Commissioner’s Final Order: On May 11, 2017, Judy Lowe, Commissioner for the Arizona Department of Real Estate, issued a Final Order stating: “The Commissioner accepts the ALJ decision that the petition in this matter be dismissed.”

• Further Action: The Final Order noted that a party may file for a rehearing or review within thirty days, or may appeal the final administrative decision by filing a complaint for judicial review.


Kurt Gronlund vs. Cottonfields Community Association

Posted on by

Case Summary

Case ID 17F-H1716024-REL
Agency ADRE
Tribunal OAH
Decision Date 2017-05-11
Administrative Law Judge Diane Mihalsky
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Kurt Gronlund Counsel —
Respondent Cottonfields Community Association Counsel Troy B. Stratman, Esq.

Alleged Violations

A.R.S. § 32-2199.01(A)

Outcome Summary

The Commissioner accepted the ALJ decision granting the Respondent's Motion for Summary Judgment, recommending dismissal of the petition due to the Department's lack of statutory jurisdiction over the dispute, which involved a Reciprocal Easement and Maintenance Agreement (REMA) and the rights of a third-party Golf Course Owner.

Why this result: The Department lacked jurisdiction to resolve the dispute because the REMA was not considered a 'community document' under A.R.S. § 33-1802(2) and the requested relief implicated the rights of a non-party (the Golf Course Owner) over whom the Department has no jurisdiction.

Key Issues & Findings

Jurisdiction over REMA Amendment Dispute

Petitioner sought a finding that REMA Amendments 2 and 3 were void because the HOA board unilaterally amended the REMA without the required member vote (two-thirds majority) as specified in the CC&Rs and REMA, and sought an order for the removal of the amendments from the record.

Orders: The Administrative Law Judge recommended granting Respondent's Motion for Summary Judgment and dismissing the Complaint.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 32-2199.01(A)
  • A.R.S. § 33-1802(2)
  • CC&Rs 14.2
  • REMA Article 12

Analytics Highlights

Topics: jurisdiction, summary judgment, golf course, REMA, third party
Additional Citations:

  • A.R.S. § 32-2199.01(A)
  • A.R.S. § 33-1802(2)
  • A.R.S. § 32-2199.02(A)
  • CC&Rs 14.2
  • REMA 5.1
  • REMA Article 12

Audio Overview

Decision Documents

17F-H1716024-REL Decision – 563660.pdf

Uploaded 2025-10-08T06:57:25 (99.8 KB)

17F-H1716024-REL Decision – 568840.pdf

Uploaded 2025-10-08T06:57:26 (854.5 KB)





Briefing Doc – 17F-H1716024-REL


Briefing Document: Gronlund vs. Cottonfields Community Association (Case No. 17F-H1716024-REL)

Executive Summary

This document synthesizes the legal proceedings and decision in the case of Kurt Gronlund versus the Cottonfields Community Association, adjudicated by the Arizona Office of Administrative Hearings. The core of the dispute centers on the petitioner’s allegation that the Homeowners Association (HOA) board improperly amended a critical land-use agreement in 2011 without a required vote of the membership, ultimately enabling the commercial rezoning of an adjacent golf course.

The Administrative Law Judge (ALJ) granted the HOA’s motion for summary judgment, and the Commissioner of the Arizona Department of Real Estate adopted this decision, dismissing the petition. The dismissal was not based on the merits of the petitioner’s claim but on a crucial lack of jurisdiction. The ALJ determined that the Department of Real Estate could not rule on the matter for two primary reasons:

1. The governing agreement in question (the REMA) is not a “community document” as defined by the relevant Arizona statute, placing it outside the Department’s purview.

2. The relief sought by the petitioner would directly implicate the property rights of a third party (the Golf Course Owner) and a prior legal settlement, which exceeds the Department’s statutory authority.

While acknowledging the petitioner’s concerns about the golf course development may be “well-founded,” the decision concluded that the petitioner’s available remedies lie in electing a new HOA board, filing a lawsuit in a judicial forum, or seeking legislative change.

Case Overview

This case involves a dispute between a homeowner and his HOA regarding the amendment of a land-use agreement governing a golf course property.

Parties Involved

Name / Entity

Description

Petitioner

Kurt Gronlund

A homeowner within the Cottonfields community and a member of the Respondent association.

Respondent

Cottonfields Community Association

The Homeowners Association (HOA) for the Cottonfields development.

Third Party

The Golf Course Owner

A separate legal entity that owns the golf course property adjacent to the community.

Case Chronology

• December 11, 2001: The developer records both the Reciprocal Easement and Maintenance Agreement (REMA) and the community’s CC&Rs.

• March 2011: The Cottonfields HOA board votes 3-2 to amend the REMA.

• March 3 & May 16, 2011: Amendments 2 and 3 to the REMA, which alter the legal description of the golf course property, are officially recorded.

• 2014: Litigation (Case No. CV2014-000639) begins in Maricopa County Superior Court between the HOA and the Golf Course Owner regarding the REMA and its amendments.

• July 2015: The HOA and the Golf Course Owner execute a settlement agreement.

• August 7, 2015: The superior court lawsuit is dismissed with prejudice.

• October 5, 2016: The HOA president represents to the City Council that homeowners favor rezoning the golf course. The Council approves a rezone from “GC” (Golf Course) to Commercial, relying on the 2011 REMA amendments.

• February 3, 2017: Kurt Gronlund files a Homeowners Association Dispute Process Petition with the Arizona Department of Real Estate.

• April 27, 2017: The HOA files a Motion for Summary Judgment, arguing a lack of jurisdiction.

• May 10, 2017: Oral arguments on the motion are held.

• May 11, 2017: The Administrative Law Judge issues a decision recommending dismissal.

• May 11, 2017: The Commissioner of the Department of Real Estate issues a Final Order adopting the ALJ’s decision and dismissing the case.

Core Dispute: Unilateral Amendment of the REMA

The petitioner’s case is founded on the claim that the HOA board acted in violation of its own governing documents when it facilitated changes to the REMA without consulting the community’s homeowners.

Petitioner’s Allegations

On February 3, 2017, Kurt Gronlund filed a petition asserting that the HOA board’s actions in 2011 were illegal and directly led to the loss of protection for homeowner property values.

• The Unilateral Action: The petition states, “[In] March 2011 the HOA board voted 3-2 to unilaterally amend REMA 5.1’s use restriction on the golf course property without the required vote of the approximately 450 eligible class members…”

• The Consequence: These amendments were used as justification for the HOA president to support a commercial rezoning of the golf course property before the City Council on October 5, 2016. The petitioner argues this “stripped away that last layer of protection” for homeowners who believed the golf course could not be developed without their approval.

• Homeowner Reliance: During oral arguments, the petitioner testified that members relied on the protections within the CC&Rs and REMA when purchasing their homes, believing development required a two-thirds majority vote.

Petitioner’s Requested Relief

The petitioner respectfully requested that the Administrative Court issue the following orders:

1. Find that REMA Section 5.1 may not be amended without the member vote required by REMA Article 12 and CC&Rs Section 14.2.

2. Find that Amendments 2 and 3 to the REMA are void and unenforceable.

3. Order the HOA Board to remove Amendments 2 and 3 from the public record.

Analysis of Governing Document Provisions

The dispute hinges on the interpretation of and interaction between two key legal documents: the REMA and the HOA’s CC&Rs.

Document

Section

Description

Key Language

Section 5.1

Use Restriction: Restricts the golf course property’s use to either a golf course or open space.

“The Golf Course Property shall be used solely and exclusively for Golf Course Use or as open space, and for no other purposes.”

Article 12

Amendment Procedure: Stipulates that changes to Section 5.1 require the same member vote as an amendment to the HOA’s Declaration (CC&Rs).

“…no termination, cancellation, change, modification or amendment of paragraph 5.1… shall be made without the written approval thereof by the number of Members… required to amend the Declaration pursuant to Section 13.2 thereof.”

Section 14.2

Member Vote Requirement: Defines the threshold for amending the CC&Rs.

“…may be amended only by the affirmative vote (in person or by proxy) or written consent of: (a) Members holding not less than two-thirds (2/3) of all Class A votes then entitled to be cast; and (b) Members holding not less than two thirds (2/3) of all Class B votes…”

Section 14.17

Third-Party Rights: Protects the rights of the Golf Course Owner, stating that provisions benefiting them cannot be amended without their written consent.

“…no provision of this Declaration… which grants to or confers upon the Golf Course Owner or the Golf Course Property any rights… shall be modified, amended or revoked in any way without the express written consent of the Golf Course Owner.”

Jurisdictional Challenge and Legal Rationale for Dismissal

The HOA’s defense focused not on the factual allegations but on the argument that the Department of Real Estate was the improper forum for this dispute. The ALJ ultimately agreed with this position.

Respondent’s Motion for Summary Judgment

The Cottonfields Community Association argued that the Department could not grant the petitioner’s requested relief because:

1. The REMA is not a “community document” as defined under Arizona law (A.R.S. § 32-2199.01(A)).

2. The Golf Course Owner is a third party over whom the Department lacks jurisdiction.

3. Any ruling would affect the rights of this third party and could impact the 2015 settlement agreement from the superior court case.

Administrative Law Judge’s Conclusions of Law

The ALJ’s decision was based on a strict interpretation of the Department’s statutory authority.

• REMA is Not a “Community Document”: The judge found that although the REMA references the CC&Rs, it does not meet the legal definition of a community document under A.R.S. § 33-1802(2), which defines them as “the declaration, bylaws, articles of incorporation, if any, and rules, if any.” The Department’s authority under A.R.S. § 32-2199.01(A) is limited to violations of these specific documents.

• Implication of Third-Party Rights: The decision states that the petitioner’s request to void the amendments “implicates the Golf Course Owner’s interests in its property and may affect the settlement that the Golf Course Owner entered into with Respondent.” The law does not grant the Department “jurisdiction over disputes that implicate the rights of third parties.”

• Petitioner’s Available Remedies: While validating the petitioner’s underlying worries, the judge outlined specific alternative courses of action. The decision states: “Petitioner’s concerns about development of the golf course may be well-founded. However, under applicable statutes, at this time, his available remedies are to elect a board that will better protect members’ interest in maintaining the golf course, to file suit in a judicial forum against Respondent and the Golf Course Owner, or to ask the legislature to amend A.R.S. §§ 33-1802(2) and 32-2199.01(A).”

Final Order and Disposition

Based on the legal conclusions regarding jurisdiction, the case was dismissed.

• ALJ Recommendation: On May 11, 2017, Administrative Law Judge Diane Mihalsky recommended that the complaint be dismissed.

• Commissioner’s Final Order: On May 11, 2017, Judy Lowe, Commissioner for the Arizona Department of Real Estate, issued a Final Order stating: “The Commissioner accepts the ALJ decision that the petition in this matter be dismissed.”

• Further Action: The Final Order noted that a party may file for a rehearing or review within thirty days, or may appeal the final administrative decision by filing a complaint for judicial review.