Case Summary
| Case ID | 17F-H1716031-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2017-06-28 |
| Administrative Law Judge | Diane Mihalsky |
| Outcome | loss |
| Filing Fees Refunded | $0.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Jason West | Counsel | — |
|---|---|---|---|
| Respondent | Desert Sage Two Homeowners Association | Counsel | Stewart F. Salwin, Esq. |
Alleged Violations
Bylaw § 3.6
Outcome Summary
The Administrative Law Judge denied the homeowner’s petition alleging the HOA failed to fill board vacancies (Bylaw § 3.6 violation), finding that the HOA had made reasonable efforts, but vacancies could not be filled because no eligible members were willing to serve, partly due to the Petitioner's actions.
Why this result: Respondent established that the Board performed all reasonable actions to fill vacancies, but no eligible members were willing to serve, in part due to Petitioner's obstructionist tactics, rendering enforcement of the Bylaw impossible as it would lead to an absurdity.
Key Issues & Findings
Refusing to fill vacancies on Respondent’s Board of Directors
Petitioner alleged Respondent violated Bylaw § 3.6 by refusing to fill vacancies on the Board of Directors. The Administrative Law Judge determined that the Board had done all it could to fill vacancies, but no eligible members were willing to serve, and Bylaw § 3.6 does not empower the Board to conscript unwilling members.
Orders: Petitioner's petition is denied.
Filing fee: $0.00, Fee refunded: No
Disposition: respondent_win
- A.R.S. § 41-2198.01
- 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)
- A.A.C. R2-19-119(B)(2)
- MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
- BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999)
- Mail Boxes v. Industrial Comm’n of Arizona, 181 Ariz. 119, 122, 888 P.2d 777, 780 (1995)
- A.R.S. § 32-2199.02(B)
- A.R.S. § 32-2199.04
Analytics Highlights
- A.R.S. § 41-2198.01
- 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
- A.A.C. R2-19-119(B)(2)
- MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
- BLACK’S LAW DICTIONARY
- Mail Boxes v. Industrial Comm’n of Arizona
- A.R.S. § 32-2199.02(B)
- A.R.S. § 32-2199.04
Audio Overview
Decision Documents
17F-H1716031-REL Decision – 572314.pdf
17F-H1716031-REL Decision – 576049.pdf
Briefing Document: West v. Desert Sage Two Homeowners Association (Case No. 17F-H1716031-REL)
Executive Summary
This briefing document analyzes the administrative hearing and final order concerning a petition filed by homeowner Jason West (“Petitioner”) against the Desert Sage Two Homeowners Association (“Respondent”). The Petitioner alleged that the HOA’s Board of Directors violated its own Bylaw § 3.6 by failing to fill vacant board positions.
The Administrative Law Judge (ALJ) denied the petition, a decision that was subsequently adopted as a Final Order by the Commissioner of the Arizona Department of Real Estate. The central finding was that the Respondent had made repeated and reasonable efforts to fill the vacancies but was unsuccessful due to a lack of willing and eligible candidates. The ALJ concluded that the governing bylaw mandates the appointment of willing members but does not grant the power to conscript individuals to serve against their will. Furthermore, the decision determined that the shortage of volunteers was attributable, in part, to the Petitioner’s own “obstructionist tactics,” which created a hostile and dysfunctional environment, leading to a series of board member resignations and deterring potential candidates.
Case Overview
• Case Number: 17F-H1716031-REL
• Petitioner: Jason West, a homeowner and member of the Desert Sage Two Homeowners Association.
• Respondent: Desert Sage Two Homeowners Association, representing a small community of approximately 40 homes.
• Core Allegation: On April 10, 2017, the Petitioner filed a single-issue petition alleging the Respondent violated Bylaw § 3.6 by refusing to fill vacancies on its Board of Directors.
• Hearing Date: June 21, 2017, before Administrative Law Judge Diane Mihalsky.
• Final Disposition: The Petitioner’s petition was denied in a decision dated June 28, 2017. This decision was adopted as a Final Order by the Arizona Department of Real Estate on July 12, 2017, making it binding on the parties.
Governing Bylaw in Dispute
The central issue revolved around the interpretation of Section 3.6 of the HOA’s Bylaws, which states:
Vacancies. Vacancies on the Board caused by any reason other than the removal of a director in accordance with the provisions of Section 3.3 of these Bylaws shall be filled by a majority vote of the remaining directors at the first regular or special meeting of the Board held after the occurrence of such vacancy, even though the directors present at such meeting may constitute less than a quorum. Each person so elected shall serve the unexpired portion of the prior director’s term.
Key Parties and Witnesses
Role / Affiliation
Key Testimony / Actions
Jason West
Petitioner, Homeowner, Former Board President
Filed the petition alleging bylaw violation. Previously filed recall petitions against other board members, resigned from the board himself, and proposed a bylaw amendment that disqualified newly elected members.
Eugenia (“Gina”) Murray
Respondent’s Board President
Testified that the board made repeated efforts to find volunteers, but no one was willing to serve, citing the Petitioner’s behavior as a major cause for resignations and lack of interest.
Edward (“Eddie”) Padilla
Community Manager, National Property Service (NPS)
Testified about sending multiple email requests for board candidates on behalf of the board, which yielded no interested parties other than those who would later be disqualified.
Christina Van Soest
Former Board Member
Resigned on Feb. 8, 2017, stating, “I have found the direction of some of the board does not appear to be in the best interest of the community as a whole.” Testified she was uncomfortable with the Petitioner.
Elizabeth Mayhew
Former Board Member
Resigned on Apr. 4, 2017, citing stress directly related to the Petitioner: “I have enough stress daily with my job and cannot handle this or him. It is making me physically ill and he is not worth that.”
Myron (“Ray”) Elmer
Former Board Member
Resigned on Apr. 5, 2017, with the stated reason: “[d]ue to continued problems Jason etc.”
Korey Hjelmeir & Debra Epstein
Former Board Members
Testified for the Petitioner’s rebuttal. Both had previously resigned in June 2016 in response to the Petitioner’s recall petitions and were later disqualified from serving by a bylaw amendment he proposed.
Chronology of Board Destabilization and Resignations
The hearing evidence established a pattern of significant board turnover and dysfunction between June 2016 and June 2017.
• June 23, 2016: Board members Adrian Justiniano, Debra Epstein, and Korey Hjelmeir resigned after the Petitioner filed recall petitions against them.
• August 3, 2016: The Petitioner, June Thompson, and Christina Van Soest were elected to the Board. The Petitioner served as president.
• August 18, 2016: The Board expanded from 3 to 5 members, appointing Gina Murray and Ray Elmer.
• August 29, 2016: June Thompson resigned.
• February 8, 2017: Christina Van Soest resigned, citing the board’s direction and her discomfort with the Petitioner’s “research into members’ backgrounds and history, and the way he was making Board decisions.”
• February 18, 2017: The Petitioner resigned from the Board because he had “more important things to worry about than the management of this dysfunctional community.”
• April 4, 2017: Elizabeth Mayhew resigned, stating she could not handle the stress caused by the Petitioner and his “verbal assaults, constant lashing out, and personal attacks.”
• April 5, 2017: Ray Elmer resigned, attributing his departure to “continued problems Jason etc.” This left Gina Murray as the sole remaining board member.
Respondent’s Efforts to Fill Vacancies
The Respondent provided evidence of multiple, documented attempts to recruit new board members.
• February 23, 2017: Following the resignations of Ms. Van Soest and the Petitioner, Community Manager Eddie Padilla sent an email requesting “motivated and dedicated individuals” to serve on the Board. No one responded.
• March 31, 2017: At an open Board Meeting with “Board appointments” on the agenda, Gina Murray asked for volunteers and nominations from the floor. No one responded.
• April 4 & 18, 2017: Mr. Padilla sent two further emails requesting members interested in serving on the board to submit biographies for an upcoming annual meeting. The only individuals to respond and submit biographies were Mr. Justiniano and Ms. Hjelmeir.
• May 15, 2017: At the annual meeting, Ms. Murray again accepted nominations from the floor. Debra Epstein was nominated.
• June 5, 2017: After the newly elected board was disqualified, Mr. Padilla sent another email asking for volunteers.
Petitioner’s Actions and Their Consequences
The Administrative Law Judge’s decision identified the Petitioner’s own actions as a primary cause for the board’s inability to fill vacancies.
• Instigation of Resignations: The Petitioner’s recall petitions in June 2016 and behavior cited in the 2017 resignation letters from Van Soest, Mayhew, and Elmer directly contributed to the board vacancies.
• Contradictory Claims: The Petitioner testified that four individuals (Linda Siedler, Teresa Price, Bret Morse, and Bryan Brunatti) were interested in serving. However, the sign-in sheet for the March 31, 2017 meeting, where appointments were to be made, showed none of these individuals were present.
• Disqualifying Bylaw Amendment: The Petitioner proposed a new bylaw, § 3.12, which was passed at the May 15, 2017 meeting. It stated:
• Attempted Removal of Remaining Director: On June 12, 2017, the Petitioner submitted a petition to remove Gina Murray, the last remaining original board member, which would have left the board entirely vacant.
Administrative Law Judge’s Findings and Decision
The ALJ’s conclusions of law were decisive in denying the petition.
1. Burden of Proof: The Petitioner bore the burden of proving by a preponderance of the evidence that the Respondent had violated its bylaws.
2. Interpretation of Bylaw § 3.6: The Judge ruled that while the bylaw requires the Board to appoint members to fill vacancies, “it does not empower the Board to conscript members who are not willing to serve on the Board.”
3. Principle of Absurdity: Citing legal precedent, the decision stated that bylaws must be construed to avoid an absurd result. Forcing an HOA to operate without a board because no eligible members are willing to serve, especially when the situation is exacerbated by the Petitioner, would be such an absurdity.
4. Respondent’s Due Diligence: The Judge found that “Respondent established that the Board has done all it could to fill vacancies.”
5. Petitioner’s Culpability: The final conclusion explicitly states that “at this time, no eligible members are willing to serve, in part due to Petitioner’s obstructionist tactics, including Petitioner and his claimed supporters.”
Based on these findings, the ALJ ordered that the Petitioner’s petition be denied. The order became final and binding upon adoption by the Arizona Department of Real Estate on July 12, 2017.