Tag Archives: HOA Governance

Jay A. Janicek vs. Sycamore Vista NO. 8 Homeowners Association

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Case Summary

Case ID 19F-H1918001-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2019-03-25
Administrative Law Judge Jenna Clark
Outcome full
Filing Fees Refunded $0.00
Civil Penalties $250.00

Parties & Counsel

Petitioner Jay A. Janicek Counsel Jake Kubert, Esq.
Respondent Sycamore Vista No. 8 Homeowners Association Counsel Evan Thompson, Esq.

Alleged Violations

ARIZ. REV. STAT. § 33-1804(B)

Outcome Summary

The ALJ granted the petition, finding that the HOA Board violated ARIZ. REV. STAT. § 33-1804(B) and the Association Bylaws by amending the Bylaws on November 20, 2017, without a quorum of Association members voting in favor and without proper notice. The amendment was invalidated, and the HOA was fined $250.00 and ordered to refund the Petitioner's filing fee.

Why this result: The Board lacked the authority to amend the Bylaws without the vote of the Association membership, and failed to provide required notice for the proposed amendment, violating ARIZ. REV. STAT. § 33-1804(B) and the Association Bylaws.

Key Issues & Findings

Whether Sycamore Vista No. 8 Homeowners Association violated Association Bylaws Article III, Sections 3 & 4 and Article VIII, Section 1 in an action taken by the board on November 20, 2017.

The Respondent HOA Board amended Association Bylaws on November 20, 2017, without proper notice to the members and without a vote by a majority of Association members, which violated the statutory notice requirement and the Bylaws. The Board action was consequently invalidated.

Orders: The Petitioner's petition was granted. The Respondent's third amendment to the Association Bylaws, dated November 20, 2017, was invalidated. Respondent was ordered to pay the Petitioner's filing fee and pay a civil penalty of $250.00 to the Planned Community Hearing Office Fund.

Filing fee: $0.00, Fee refunded: Yes, Civil penalty: $250.00

Disposition: petitioner_win

Cited:

  • Powell v. Washburn, 211 Ariz. 553, 125 P.3d 373, 374 (Ariz. 2006)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • Mail Boxes v. Indus. Comm’n of Ariz., 181 Ariz. 119, 122, 888 P.2d 777, 780 (1995)

Analytics Highlights

Topics: Open Meeting Law, Bylaw Amendment, Notice Violation, Membership Vote, HOA Governance
Additional Citations:

  • Powell v. Washburn, 211 Ariz. 553, 125 P.3d 373, 374 (Ariz. 2006)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • Mail Boxes v. Indus. Comm’n of Ariz., 181 Ariz. 119, 122, 888 P.2d 777, 780 (1995)

Audio Overview

Decision Documents

19F-H1918001-REL Decision – 696205.pdf

Uploaded 2025-10-09T03:33:14 (169.8 KB)





Briefing Doc – 19F-H1918001-REL


Briefing Document: Janicek v. Sycamore Vista No. 8 Homeowners Association

Executive Summary

This document synthesizes the findings from the Administrative Law Judge (ALJ) Decision in case number 19F-H1918001-REL-RHG, concerning a dispute between homeowner Jay Janicek (“Petitioner”) and the Sycamore Vista No. 8 Homeowners Association (“Respondent”). The central conflict revolved around the HOA Board of Directors’ unilateral amendment of the Association’s Bylaws on November 20, 2017, without a vote of the general membership.

The ALJ ruled decisively in favor of the Petitioner, invalidating the Board’s amendment. The decision hinged on the interpretation of the word “members” in Article XIII of the Bylaws, which governs amendments. The ALJ concluded that “members” unambiguously refers to the homeowners who constitute the Association, not the members of the Board of Directors. Consequently, the Board’s action was found to be outside its authority as defined in the governing documents.

Furthermore, the ALJ determined that the Board’s action violated Arizona’s Open Meeting Law, specifically ARIZ. REV. STAT. § 33-1804(B), because the required notice for a proposed bylaw amendment was not provided to the Association’s membership. The Respondent’s arguments were found to be unpersuasive. As a result of the ruling, the amendment was nullified, and the HOA was ordered to pay the Petitioner’s filing fee and a civil penalty of $250.

1. Case Overview

• Case Number: 19F-H1918001-REL-RHG

• Petitioner: Jay Janicek, a property owner and member of the Association.

• Respondent: Sycamore Vista No. 8 Homeowners Association (“the Association”).

• Presiding Judge: Administrative Law Judge Jenna Clark.

• Central Issue: “Whether Sycamore Vista No. 8 Homeowners Association (Respondent) violated Association Bylaws Article III, Sections 3 & 4 and Article VIII, Section 1 in an action taken by the board on November 20, 2017.”

2. Procedural History and Timeline

• July 25, 2018: Petitioner Jay Janicek filed a petition with the Arizona Department of Real Estate.

• September 5, 2018: An initial evidentiary hearing was held at the Office of Administrative Hearings (OAH).

• September 25, 2018: The OAH issued an initial ALJ Decision in favor of the Petitioner.

• October 23, 2018: Respondent submitted a Request for Rehearing.

• November 7, 2018: The Department granted the Respondent’s request for a rehearing.

• March 5, 2019: A rehearing was held. Per a stipulated agreement, no new evidence was presented; instead, counsel for both parties submitted legal briefs and presented closing arguments.

• March 25, 2019: The final ALJ Decision was issued, reaffirming the initial ruling in favor of the Petitioner.

3. The Disputed Action of November 20, 2017

At a regular Board of Directors meeting held on November 20, 2017, the Association’s Board voted to approve a third amendment to the Association Bylaws. The amendment altered Article VIII Section 6(d), which pertains to the Association’s financial oversight.

• Original Clause: Required the Board to “cause an annual audit of the Association books to be made by a public accountant at the completion of each fiscal year.”

• Amended Clause: Changed the requirement to “cause an annual audit, review, or compilation of the Associations financial records to be made by a public accountant within 180 days after the end of the HOA’s fiscal year.”

The Petitioner argued that while he had not been directly impacted, he could be in the future, as the amendment modified a prior third-party audit requirement. He asserted an interest as a homeowner in ensuring the Association’s financials were correct and not subject to self-auditing.

4. Analysis of Core Arguments

The case centered on the conflicting interpretations of the Association’s governing documents, particularly the clause authorizing Bylaw amendments.

4.1. Petitioner’s Position (Jay Janicek)

The Petitioner contended that any amendment to the Bylaws required a vote by the general membership of the Association, not just the Board of Directors.

• Textual Interpretation: Petitioner focused on Bylaws Article XIII, Section 1, which states: “These Bylaws may be amended at a regular or special meeting of the Board of Directors of the Association by a vote of a majority of a quorum of members present in person or by proxy.” He argued “members” refers to homeowners as defined in the Association’s Declaration, not Board members.

• Use of “Proxy”: The inclusion of the term “proxy” was cited as evidence supporting this interpretation, as Board members are not permitted to vote by proxy, whereas Association members are.

• Delineation of Powers: Petitioner noted that Article VII, which outlines the “Powers and Duties of the Board of Directors,” does not grant the Board the authority to amend the Bylaws.

• Intent of the Drafter: The argument was made that the Bylaws’ drafters intentionally used the words “directors” and “members” distinctly throughout the document, indicating that the use of “members” in the amendment clause was a deliberate choice to refer to the homeowners.

• Statutory Violation: The Petitioner argued the Board’s action violated Arizona’s Open Meeting Law (ARIZ. REV. STAT. § 33-1804), which requires specific notice to members between 10 and 50 days in advance of any meeting where a Bylaw amendment is proposed.

• Legal Precedent: The Petitioner cited Powell v. Washburn, which holds that restrictive covenants should be interpreted to give effect to the intention of the parties as determined from the language of the entire document.

4.2. Respondent’s Position (Sycamore Vista No. 8 HOA)

The Association argued that the Board of Directors possessed the authority to amend the Bylaws during a properly convened Board meeting.

• Board Authority: Respondent cited Article IV of the Bylaws, which states that the “affairs of this Association shall be managed by a Board.”

• Meeting Protocol: The action took place at a regular monthly Board meeting, as permitted by Article VI. The meeting on November 20, 2017, had three Board members present, constituting a quorum as required by the Bylaws.

• Interpretation of “Members”: The Respondent’s central argument was that the phrase “a quorum of members” in Article XIII referred to the members of the Board of Directors, thereby empowering them to pass the amendment.

• Compliance with Open Meeting Law: The Association argued its conduct was not a violation of the law because a necessary quorum of directors was present for the vote.

5. Administrative Law Judge’s Findings and Conclusions

The ALJ found the Petitioner’s arguments convincing and concluded that he had sustained his burden of proof by a preponderance of the evidence. The Respondent’s closing arguments were described as not persuasive.

• Violation of Statute: The Judge determined that the Board’s action violated ARIZ. REV. STAT. § 33-1804(B) because “there was no notice of the proposed amendment” provided to the Association members. The conduct was described as going “against the spirit of the legislative intent” of the statute due to a lack of transparency.

• Interpretation of Governing Documents: The decision firmly established the correct interpretation of the Bylaws.

◦ The terms “members” and “directors” are clearly and intentionally differentiated throughout the document. “Members” refers to the body of homeowners, while “directors” refers to the elected Board.

◦ The conclusion states: “The voices of few cannot speak for all, unless all have bestowed those few with the power and authority to speak on their behalf.”

◦ It was concluded that the Board “does not have power to act where authority is expressly delegated to the membership of the Association.”

• Invalidation of Board Action: The ALJ concluded that the Board’s action on November 20, 2017, was invalid because it was taken “in the absence of a quorum of Association members whereby a majority of said members voted in favor of the proposed third amendment.”

6. Final Order and Penalties

Based on the findings of fact and conclusions of law, the Administrative Law Judge issued the following orders:

1. Petition Granted: The Petitioner’s petition was granted.

2. Amendment Invalidated: The “third amendment to the Association Bylaws, as taken on November 20, 2017, is invalidated.”

3. Fees and Penalties: The Respondent (HOA) was ordered to:

◦ Pay the Petitioner the filing fee.

◦ Pay a civil penalty of $250.00 to the Planned Community Hearing Office Fund.

The decision, having been issued as a result of a rehearing, is binding on the parties.


Lawrence M. Stewart v. Canyon Gate Condominium Association, Inc.

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Case Summary

Case ID 18F-H1818052-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2019-01-17
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Lawrence M. Stewart Counsel —
Respondent Canyon Gate Condominium Association, Inc. Counsel Nicolas C. S. Nogami

Alleged Violations

Association Bylaws section 5.4

Outcome Summary

The Administrative Law Judge dismissed Petitioner Lawrence M. Stewart's petition and deemed the Respondent, Canyon Gate Condominium Association, Inc., to be the prevailing party.

Why this result: Petitioner failed to prove the Association violated Bylaws Section 5.4 or acted unreasonably or in bad faith when denying his request for a variance. The Bylaw section cited was determined to be a liability shield for the Board, not a source of duty owed to the homeowner.

Key Issues & Findings

Alleged failure of HOA Board to act in good faith when denying Petitioner's request for a variance for unauthorized common area changes

Petitioner made changes to the common area without permission and the Board denied his subsequent request for a variance. Petitioner alleged the Board violated Bylaws Section 5.4 by failing to act in good faith and showing bias. The ALJ found that Section 5.4 is a liability shield for the Board, not a duty imposed upon them, and Petitioner failed to meet the burden of proof to show bad faith or unreasonableness.

Orders: Petitioner Lawrence M. Stewart’s petition is dismissed. Respondent is deemed to be the prevailing party in this matter.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)

Analytics Highlights

Topics: HOA governance, variance denial, common area modifications, good faith requirement, board liability shield, prevailing party
Additional Citations:

  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)

Audio Overview

Decision Documents

18F-H1818052-REL Decision – 660026.pdf

Uploaded 2025-10-08T07:06:05 (91.5 KB)

18F-H1818052-REL Decision – 720468.pdf

Uploaded 2025-10-08T07:06:06 (103.5 KB)

Lawrence M. Stewart v. Canyon Gate Condominium Association, Inc.

Posted on by

Case Summary

Case ID 18F-H1818052-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2019-01-17
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Lawrence M. Stewart Counsel —
Respondent Canyon Gate Condominium Association, Inc. Counsel Nicolas C. S. Nogami

Alleged Violations

Association Bylaws section 5.4

Outcome Summary

The Administrative Law Judge dismissed Petitioner Lawrence M. Stewart's petition and deemed the Respondent, Canyon Gate Condominium Association, Inc., to be the prevailing party.

Why this result: Petitioner failed to prove the Association violated Bylaws Section 5.4 or acted unreasonably or in bad faith when denying his request for a variance. The Bylaw section cited was determined to be a liability shield for the Board, not a source of duty owed to the homeowner.

Key Issues & Findings

Alleged failure of HOA Board to act in good faith when denying Petitioner's request for a variance for unauthorized common area changes

Petitioner made changes to the common area without permission and the Board denied his subsequent request for a variance. Petitioner alleged the Board violated Bylaws Section 5.4 by failing to act in good faith and showing bias. The ALJ found that Section 5.4 is a liability shield for the Board, not a duty imposed upon them, and Petitioner failed to meet the burden of proof to show bad faith or unreasonableness.

Orders: Petitioner Lawrence M. Stewart’s petition is dismissed. Respondent is deemed to be the prevailing party in this matter.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)

Analytics Highlights

Topics: HOA governance, variance denial, common area modifications, good faith requirement, board liability shield, prevailing party
Additional Citations:

  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)

Audio Overview

Decision Documents

18F-H1818052-REL Decision – 660026.pdf

Uploaded 2025-10-09T03:33:02 (91.5 KB)

18F-H1818052-REL Decision – 720468.pdf

Uploaded 2025-10-09T03:33:02 (103.5 KB)

Lewis Smith v. Desert Isle Homeowners Association, Inc.

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Case Summary

Case ID 18F-H1817020-REL
Agency ADRE
Tribunal OAH
Decision Date 2018-05-29
Administrative Law Judge Velva Moses-Thompson
Outcome full
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Lewis Smith Counsel Mark J. Bainbridge, Esq.
Respondent Desert Isle Homeowners Association, Inc. Counsel William D. Condray, Esq.

Alleged Violations

ARIZ. REV. STAT. section 33-1804(F)

Outcome Summary

The Administrative Law Judge granted the Petitioner's request for relief, finding that the Respondent HOA violated ARIZ. REV. STAT. section 33-1804(F) by failing to provide adequate notice and agenda information regarding the proposed CC&R amendment to prohibit short term rentals. The Respondent was ordered to pay the filing fee to the Petitioner.

Key Issues & Findings

Violation of open meeting and notice requirements regarding CC&R amendment

The Board violated ARIZ. REV. STAT. section 33-1804(F) when it failed to provide notice or an agenda to all of its members of information that was reasonably necessary to inform the members that an amendment to the CC&Rs to prohibit short term members would be discussed at its special board of directors meetings held on November 8, 2017 and November 20, 2017.

Orders: Petitioner's petition was granted. Respondent was ordered to pay Petitioner the filing fee required by ARIZ. REV. STAT. section 32-2199.01.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • ARIZ. REV. STAT. section 33-1804
  • ARIZ. REV. STAT. section 33-1804(B)
  • ARIZ. REV. STAT. section 33-1804(E)(1)
  • ARIZ. REV. STAT. section 33-1804(F)
  • ARIZ. REV. STAT. section 41-2198.01
  • ARIZ. REV. STAT. section 32-2199.02(A)
  • ARIZ. REV. STAT. section 32-2199.01

Analytics Highlights

Topics: Open Meetings, HOA Governance, Notice Requirements, CC&R Amendment, Short Term Rentals
Additional Citations:

  • ARIZ. REV. STAT. section 33-1804
  • ARIZ. REV. STAT. section 33-1804(B)
  • ARIZ. REV. STAT. section 33-1804(E)(1)
  • ARIZ. REV. STAT. section 33-1804(F)
  • ARIZ. REV. STAT. section 41-2198.01
  • ARIZ. REV. STAT. section 32-2199.02(A)
  • ARIZ. REV. STAT. section 32-2199.01

Audio Overview

Decision Documents

18F-H1817020-REL Decision – 629473.pdf

Uploaded 2025-10-08T07:04:05 (46.2 KB)

18F-H1817020-REL Decision – 629515.pdf

Uploaded 2025-10-08T07:04:06 (51.9 KB)

18F-H1817020-REL Decision – 636989.pdf

Uploaded 2025-10-08T07:04:07 (139.8 KB)





Briefing Doc – 18F-H1817020-REL


Administrative Law Judge Decision Briefing: Smith vs. Desert Isle Homeowners Association, Inc.

Executive Summary

This document provides a comprehensive analysis of the legal dispute between Petitioner Lewis Smith and Respondent Desert Isle Homeowners Association, Inc. The core of the case revolves around allegations that the HOA’s Board of Directors violated Arizona’s open meeting laws.

The Administrative Law Judge (ALJ) ultimately ruled in favor of the Petitioner, finding that the Desert Isle HOA violated ARIZ. REV. STAT. § 33-1804(F). The decision established that the Board failed to provide its members with agendas containing information “reasonably necessary to inform the members” about discussions concerning a proposed amendment to the Covenants, Conditions, and Restrictions (CC&Rs) that would prohibit short-term rentals. This failure occurred during Board of Directors meetings held on November 8 and November 20, 2017.

As a result of this finding, the Petitioner’s petition was granted, and the Respondent was ordered to pay the Petitioner’s filing fee. The ruling underscores the state’s policy that planned community meetings must be conducted with transparency, and agendas must provide sufficient detail for members to understand the matters to be discussed or decided.

Case Overview

Case Number

18F-H1817020-REL

Tribunal

Office of Administrative Hearings (Phoenix, Arizona)

Petitioner

Lewis Smith

Respondent

Desert Isle Homeowners Association, Inc.

Administrative Law Judge

Velva Moses-Thompson

Hearing Date

April 16, 2018

Decision Date

May 29, 2018

Central Allegation

On or about December 5, 2017, Petitioner Lewis Smith filed a petition with the Arizona Department of Real Estate alleging that the Desert Isle HOA violated ARIZ. REV. STAT. § 33-1804. The petition contended that the Board of Directors discussed and advanced a significant CC&R amendment without proper notification to the association members.

The petition states, in part:

“All Board members have been meeting to discuss and add an amendment to the CC&R’s [sic] Prohibiting short term renters. These meetings have not been conducted openly and no notice or agenda were provided containing information necessary to inform members of the association of the matters to be discussed… At no time was the issue to add an amendment for short term rentals properly noticed or on an agenda for discussion before it became a ballot vote.”

Chronology of Events

October 23, 2017:

• Lewis Smith, William H. Winn, Kevin Barnett, and Chester Jay submit a formal request to the Board for a special members’ meeting.

• The stated purposes of the meeting were to:

1. Select and fund an attorney to update the HOA’s bylaws and CC&Rs to comply with current Arizona law.

2. Discuss obtaining a reserve study for the association’s capital needs.

3. Discuss a separate attorney letter regarding HOA governance.

October 24, 2017:

• Board President Doug Robinson responds to the request, expressing support for a meeting but stating that more than 30 days would be needed to gather supporting documentation.

October 31, 2017:

• A second group of homeowners, including Board members Greg Yacoubian, Doug Robinson, Curt Carlson, and Mike Andrews, submits a request to add an item to the agenda of the forthcoming special meeting.

• Their request was to “amend the CC&Rs by adding a section prohibiting ‘Short Term Rentals’ and defining minimum time allowed for Rentals.”

November 5, 2017:

• The Board provides an agenda for a Board of Directors meeting scheduled for November 8, 2017. The agenda did not include any item related to the proposed amendment to prohibit short-term rentals.

November 8, 2017:

• The Board of Directors meeting is held.

• The Board votes to call a special members’ meeting before November 23, 2017, to address the two petitions.

• During the “BOARD INPUT” section, member Curt Carlson “spoke of past issues about short term renting,” but this was not a formal agenda item for discussion or action.

November 10, 2017:

• The Board emails Lewis Smith, acknowledging his petition and requesting a “narrative explanation from you on each of your subjects” by November 17, 2017, to prepare the meeting information package for all homeowners.

November 18, 2017:

• The Board sends an agenda for another Board of Directors meeting scheduled for November 20, 2017.

• The agenda lists “Review/approval of special meeting mailing package” as a topic but provides no specific details regarding the proposed amendment on short-term rentals.

December 1, 2017:

• Board President Doug Robinson emails all homeowners to explain the upcoming special meeting on December 16, 2017.

• The email states: “To avoid cost and time we put both petitions together and are having one meeting that will required [sic] all owners to vote for or against these two petitions.”

• The agenda for the December 16 meeting is attached, which explicitly lists a vote on prohibiting short-term rentals.

December 16, 2017:

• The special members’ meeting is held. A vote is taken on the proposed amendment to prohibit short-term rentals.

• Vote Result: 9 homeowners in favor, 6 homeowners against.

Legal Framework and Analysis

The case centered on the interpretation and application of Arizona Revised Statutes related to planned communities.

Key Statute: ARIZ. REV. STAT. § 33-1804

This statute governs meetings and notices for planned communities. The judge’s decision rested heavily on the policy outlined in subsection (F).

• § 33-1804(B): Requires that notice for any special meeting of members must state the purpose, including “the general nature of any proposed amendment to the declaration or bylaws.”

• § 33-1804(E)(1): Requires that the agenda for a Board of Directors meeting be made available to all members in attendance.

• § 33-1804(F): This subsection contains the state’s declaration of policy, which was central to the judge’s conclusion. It states:

Burden of Proof

The Petitioner, Lewis Smith, bore the burden of proving that the Respondent violated the statute by a “preponderance of the evidence.” This standard is defined as evidence that is sufficient “to incline a fair and impartial mind to one side of the issue rather than the other.”

Findings and Conclusion of the Court

The Administrative Law Judge found that the Petitioner successfully met the burden of proof. The decision concludes that the agendas for the November 8 and November 20 Board of Directors meetings were legally insufficient.

Conclusion of Law #4:

“Petitioner established by a preponderance of the evidence that the Board violated ARIZ. REV. STAT. section 33-1804(F) when it failed to provide notice or an agenda to all of its members of information that was reasonably necessary to inform the members that an amendment to the CC&Rs to prohibit short term members would be discussed at its special board of directors meetings held on November 8, 2017 and November 20, 2017.”

Final Order

• The Petitioner’s petition in the matter was granted.

• Pursuant to ARIZ. REV. STAT. § 32-2199.02(A), the Respondent (Desert Isle HOA) was ordered to pay the Petitioner the filing fee.

• The Order is legally binding unless a rehearing is requested with the Commissioner of the Department of Real Estate within 30 days of the service of the Order.

Parties and Legal Representation

Address

Legal Counsel

Petitioner

Lewis Smith
5459 E. Sorrento Dr.
Long Beach, CA 90803

Mark J. Bainbridge, Esq.
The Bainbridge Law Firm LLC
2122 E. Highland Ave. Ste. 250
Phoenix, AZ 85016-4779

Respondent

Desert Isle Homeowners Association, Inc.
411 Riverfront Dr. #7
Bullhead City, AZ 86442

William D. Condray, Esq.
2031 Highway 95 Ste. 2
Bullhead City, AZ 86442-6004


Lewis Smith v. Desert Isle Homeowners Association, Inc.

Posted on by

Case Summary

Case ID 18F-H1817020-REL
Agency ADRE
Tribunal OAH
Decision Date 2018-05-29
Administrative Law Judge Velva Moses-Thompson
Outcome full
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Lewis Smith Counsel Mark J. Bainbridge, Esq.
Respondent Desert Isle Homeowners Association, Inc. Counsel William D. Condray, Esq.

Alleged Violations

ARIZ. REV. STAT. section 33-1804(F)

Outcome Summary

The Administrative Law Judge granted the Petitioner's request for relief, finding that the Respondent HOA violated ARIZ. REV. STAT. section 33-1804(F) by failing to provide adequate notice and agenda information regarding the proposed CC&R amendment to prohibit short term rentals. The Respondent was ordered to pay the filing fee to the Petitioner.

Key Issues & Findings

Violation of open meeting and notice requirements regarding CC&R amendment

The Board violated ARIZ. REV. STAT. section 33-1804(F) when it failed to provide notice or an agenda to all of its members of information that was reasonably necessary to inform the members that an amendment to the CC&Rs to prohibit short term members would be discussed at its special board of directors meetings held on November 8, 2017 and November 20, 2017.

Orders: Petitioner's petition was granted. Respondent was ordered to pay Petitioner the filing fee required by ARIZ. REV. STAT. section 32-2199.01.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • ARIZ. REV. STAT. section 33-1804
  • ARIZ. REV. STAT. section 33-1804(B)
  • ARIZ. REV. STAT. section 33-1804(E)(1)
  • ARIZ. REV. STAT. section 33-1804(F)
  • ARIZ. REV. STAT. section 41-2198.01
  • ARIZ. REV. STAT. section 32-2199.02(A)
  • ARIZ. REV. STAT. section 32-2199.01

Analytics Highlights

Topics: Open Meetings, HOA Governance, Notice Requirements, CC&R Amendment, Short Term Rentals
Additional Citations:

  • ARIZ. REV. STAT. section 33-1804
  • ARIZ. REV. STAT. section 33-1804(B)
  • ARIZ. REV. STAT. section 33-1804(E)(1)
  • ARIZ. REV. STAT. section 33-1804(F)
  • ARIZ. REV. STAT. section 41-2198.01
  • ARIZ. REV. STAT. section 32-2199.02(A)
  • ARIZ. REV. STAT. section 32-2199.01

Audio Overview

Decision Documents

18F-H1817020-REL Decision – 629473.pdf

Uploaded 2025-10-09T03:32:20 (46.2 KB)

18F-H1817020-REL Decision – 629515.pdf

Uploaded 2025-10-09T03:32:20 (51.9 KB)

18F-H1817020-REL Decision – 636989.pdf

Uploaded 2025-10-09T03:32:20 (139.8 KB)





Briefing Doc – 18F-H1817020-REL


Administrative Law Judge Decision Briefing: Smith vs. Desert Isle Homeowners Association, Inc.

Executive Summary

This document provides a comprehensive analysis of the legal dispute between Petitioner Lewis Smith and Respondent Desert Isle Homeowners Association, Inc. The core of the case revolves around allegations that the HOA’s Board of Directors violated Arizona’s open meeting laws.

The Administrative Law Judge (ALJ) ultimately ruled in favor of the Petitioner, finding that the Desert Isle HOA violated ARIZ. REV. STAT. § 33-1804(F). The decision established that the Board failed to provide its members with agendas containing information “reasonably necessary to inform the members” about discussions concerning a proposed amendment to the Covenants, Conditions, and Restrictions (CC&Rs) that would prohibit short-term rentals. This failure occurred during Board of Directors meetings held on November 8 and November 20, 2017.

As a result of this finding, the Petitioner’s petition was granted, and the Respondent was ordered to pay the Petitioner’s filing fee. The ruling underscores the state’s policy that planned community meetings must be conducted with transparency, and agendas must provide sufficient detail for members to understand the matters to be discussed or decided.

Case Overview

Case Number

18F-H1817020-REL

Tribunal

Office of Administrative Hearings (Phoenix, Arizona)

Petitioner

Lewis Smith

Respondent

Desert Isle Homeowners Association, Inc.

Administrative Law Judge

Velva Moses-Thompson

Hearing Date

April 16, 2018

Decision Date

May 29, 2018

Central Allegation

On or about December 5, 2017, Petitioner Lewis Smith filed a petition with the Arizona Department of Real Estate alleging that the Desert Isle HOA violated ARIZ. REV. STAT. § 33-1804. The petition contended that the Board of Directors discussed and advanced a significant CC&R amendment without proper notification to the association members.

The petition states, in part:

“All Board members have been meeting to discuss and add an amendment to the CC&R’s [sic] Prohibiting short term renters. These meetings have not been conducted openly and no notice or agenda were provided containing information necessary to inform members of the association of the matters to be discussed… At no time was the issue to add an amendment for short term rentals properly noticed or on an agenda for discussion before it became a ballot vote.”

Chronology of Events

October 23, 2017:

• Lewis Smith, William H. Winn, Kevin Barnett, and Chester Jay submit a formal request to the Board for a special members’ meeting.

• The stated purposes of the meeting were to:

1. Select and fund an attorney to update the HOA’s bylaws and CC&Rs to comply with current Arizona law.

2. Discuss obtaining a reserve study for the association’s capital needs.

3. Discuss a separate attorney letter regarding HOA governance.

October 24, 2017:

• Board President Doug Robinson responds to the request, expressing support for a meeting but stating that more than 30 days would be needed to gather supporting documentation.

October 31, 2017:

• A second group of homeowners, including Board members Greg Yacoubian, Doug Robinson, Curt Carlson, and Mike Andrews, submits a request to add an item to the agenda of the forthcoming special meeting.

• Their request was to “amend the CC&Rs by adding a section prohibiting ‘Short Term Rentals’ and defining minimum time allowed for Rentals.”

November 5, 2017:

• The Board provides an agenda for a Board of Directors meeting scheduled for November 8, 2017. The agenda did not include any item related to the proposed amendment to prohibit short-term rentals.

November 8, 2017:

• The Board of Directors meeting is held.

• The Board votes to call a special members’ meeting before November 23, 2017, to address the two petitions.

• During the “BOARD INPUT” section, member Curt Carlson “spoke of past issues about short term renting,” but this was not a formal agenda item for discussion or action.

November 10, 2017:

• The Board emails Lewis Smith, acknowledging his petition and requesting a “narrative explanation from you on each of your subjects” by November 17, 2017, to prepare the meeting information package for all homeowners.

November 18, 2017:

• The Board sends an agenda for another Board of Directors meeting scheduled for November 20, 2017.

• The agenda lists “Review/approval of special meeting mailing package” as a topic but provides no specific details regarding the proposed amendment on short-term rentals.

December 1, 2017:

• Board President Doug Robinson emails all homeowners to explain the upcoming special meeting on December 16, 2017.

• The email states: “To avoid cost and time we put both petitions together and are having one meeting that will required [sic] all owners to vote for or against these two petitions.”

• The agenda for the December 16 meeting is attached, which explicitly lists a vote on prohibiting short-term rentals.

December 16, 2017:

• The special members’ meeting is held. A vote is taken on the proposed amendment to prohibit short-term rentals.

• Vote Result: 9 homeowners in favor, 6 homeowners against.

Legal Framework and Analysis

The case centered on the interpretation and application of Arizona Revised Statutes related to planned communities.

Key Statute: ARIZ. REV. STAT. § 33-1804

This statute governs meetings and notices for planned communities. The judge’s decision rested heavily on the policy outlined in subsection (F).

• § 33-1804(B): Requires that notice for any special meeting of members must state the purpose, including “the general nature of any proposed amendment to the declaration or bylaws.”

• § 33-1804(E)(1): Requires that the agenda for a Board of Directors meeting be made available to all members in attendance.

• § 33-1804(F): This subsection contains the state’s declaration of policy, which was central to the judge’s conclusion. It states:

Burden of Proof

The Petitioner, Lewis Smith, bore the burden of proving that the Respondent violated the statute by a “preponderance of the evidence.” This standard is defined as evidence that is sufficient “to incline a fair and impartial mind to one side of the issue rather than the other.”

Findings and Conclusion of the Court

The Administrative Law Judge found that the Petitioner successfully met the burden of proof. The decision concludes that the agendas for the November 8 and November 20 Board of Directors meetings were legally insufficient.

Conclusion of Law #4:

“Petitioner established by a preponderance of the evidence that the Board violated ARIZ. REV. STAT. section 33-1804(F) when it failed to provide notice or an agenda to all of its members of information that was reasonably necessary to inform the members that an amendment to the CC&Rs to prohibit short term members would be discussed at its special board of directors meetings held on November 8, 2017 and November 20, 2017.”

Final Order

• The Petitioner’s petition in the matter was granted.

• Pursuant to ARIZ. REV. STAT. § 32-2199.02(A), the Respondent (Desert Isle HOA) was ordered to pay the Petitioner the filing fee.

• The Order is legally binding unless a rehearing is requested with the Commissioner of the Department of Real Estate within 30 days of the service of the Order.

Parties and Legal Representation

Address

Legal Counsel

Petitioner

Lewis Smith
5459 E. Sorrento Dr.
Long Beach, CA 90803

Mark J. Bainbridge, Esq.
The Bainbridge Law Firm LLC
2122 E. Highland Ave. Ste. 250
Phoenix, AZ 85016-4779

Respondent

Desert Isle Homeowners Association, Inc.
411 Riverfront Dr. #7
Bullhead City, AZ 86442

William D. Condray, Esq.
2031 Highway 95 Ste. 2
Bullhead City, AZ 86442-6004


Charles Mandela vs. Blue Ridge Estates Homeowner Association

Posted on by

Case Summary

Case ID 18F-H1817006-REL
Agency ADRE
Tribunal OAH
Decision Date 2017-12-06
Administrative Law Judge Diane Mihalsky
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Charles Mandela Counsel —
Respondent Blue Ridge Estates Homeowner Association Counsel Brian C. Axt, Esq.

Alleged Violations

CC&Rs § 3.1(a); Architectural Committee Aligned Standard 3(D)

Outcome Summary

The Administrative Law Judge denied the homeowner's petition, finding that the HOA did not violate its CC&Rs by allowing play structures on properties that already contained a detached garage or shed, because play structures are not easily convertible into a second residence, which was the underlying concern of the relevant CC&R section.

Why this result: Petitioner failed to establish by a preponderance of the evidence that Respondent violated CC&R § 3.1. The ALJ determined that the HOA correctly clarified the status of play structures through an amendment to the Architectural Committee's regulations.

Key Issues & Findings

Alleged violation of CC&Rs § 3.1(a) and Architectural Committee regulation 3(D) regarding allowing play structures (swing sets, treehouses) when another detached structure (garage or shed) is present.

Petitioner alleged that the Respondent HOA violated CC&Rs § 3.1(a) and Architectural Committee regulation 3(D) by permitting members to construct play structures (swingsets, treehouses, etc.) on properties that already contained one detached structure (garage or shed), arguing that the rules allowed only one detached structure of any type.

Orders: Petitioner's petition is denied because he failed to establish that CC&R § 3.1 prohibits play structures under any circumstances. All play structures that the Architectural Committee has previously approved are allowed to remain, and the Architectural Committee may consider and grant future Play Structure Approval Requests.

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(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)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09

Analytics Highlights

Topics: HOA governance, CC&R interpretation, detached structures, play structures, Architectural Committee regulations, burden of proof
Additional Citations:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • 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)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09

Audio Overview

Decision Documents

18F-H1817006-REL Decision – 604710.pdf

Uploaded 2025-10-08T07:03:18 (155.4 KB)





Briefing Doc – 18F-H1817006-REL


Briefing Document: Mandela v. Blue Ridge Estates Homeowner Association (No. 18F-H1817006-REL)

Executive Summary

This document synthesizes the findings of an Administrative Law Judge (ALJ) decision regarding a dispute between a homeowner, Charles Mandela (“Petitioner”), and the Blue Ridge Estates Homeowner Association (“Respondent”). The core issue was whether the HOA violated its Covenants, Conditions, and Restrictions (CC&Rs) by permitting homeowners to install play structures (e.g., swing sets, treehouses) on lots that already contained another detached structure, such as a garage or shed.

The Petitioner argued that the HOA had historically enforced a strict “one detached structure” rule and that its recent allowance of play structures constituted a violation of CC&R § 3.1. In contrast, the Respondent contended that the underlying intent of the CC&Rs was to prevent secondary residential dwellings, not to prohibit recreational structures consistent with a family-oriented community. The HOA asserted it had properly amended its Architectural Committee regulations, not the CC&Rs, to clarify this distinction.

The ALJ ruled decisively in favor of the Respondent HOA. The central finding was that the intent of the restrictive covenant was to maintain the single-family residential character of the community. Because play structures cannot be easily converted into secondary residences, they are not inconsistent with this intent. The ALJ concluded that the HOA was not required to amend the CC&Rs (which requires a 75% member vote) but acted within its authority to amend its rules and regulations via a simple board vote. The Petitioner’s petition was denied.

Case Overview

• Case Number: 18F-H1817006-REL

• Parties:

◦ Petitioner: Charles Mandela

◦ Respondent: Blue Ridge Estates Homeowner Association

• Hearing Date: November 28, 2017

• Presiding Judge: Administrative Law Judge Diane Mihalsky

• Core Allegation: The Petitioner alleged that the Respondent HOA violated CC&R § 3.1(a) and Architectural Committee Aligned Standard 3(D) by allowing members to build play structures, swing sets, or treehouses on properties that already had another detached structure like a garage or shed.

Central Arguments and Presented Evidence

Petitioner’s Position (Charles Mandela)

The Petitioner’s case was built on the premise of a long-standing, strict interpretation of the “one detached structure” rule.

• Core Argument: For 18 years, the Respondent interpreted CC&R § 3.1 to permit only one detached structure on any given lot, regardless of its type.

• Evidence and Testimony:

◦ Historical Enforcement: Testified that between 2002 and 2016, the HOA enforced this rule by removing nine non-compliant structures, including a gazebo, a playhouse, an observation deck, and a zipline structure.

◦ 2006 Legal Opinion: Submitted a February 7, 2006, letter from the law firm Carpenter Hazlewood, PLC, which opined on the ambiguity of CC&R § 3.1. The letter stated, “It still appears that only one structure (garage or shed) is permitted,” and supported the HOA’s ability to “enforce the ‘one detached structure’ requirement.” The letter did not specifically mention play structures.

◦ Invalid Approval Form: Presented a “Play Structure Approval Request” form he had drafted while on the board. This form incorrectly stated that the Board of Directors had voted on June 25, 2016, “to adopt changes to the CCR’s [sic], which will allow play structures.” Petitioner argued this was invalid because changing the CC&Rs requires a 75% vote of the membership, which was not obtained.

◦ Ancillary Documents: Submitted documents related to a housing discrimination claim filed by the HOA’s current president, Joseph Hancock, and a letter concerning another member. Petitioner testified these matters involved play structures, though the documents themselves did not mention CC&R § 3.1.

Respondent’s Position (Blue Ridge Estates HOA)

The Respondent’s defense centered on the purpose of the CC&Rs and its authority as a board to clarify and amend its own rules and regulations.

• Core Argument: The HOA did not violate the CC&Rs because the intent of the relevant articles is to prohibit secondary residential dwellings, not recreational structures suitable for a community intended to be a “uniquely planned recreation property.”

• Evidence and Testimony:

◦ Community Status: There are currently 16 swingsets or play structures within the 193-lot development. The HOA president, Joseph Hancock, testified he has a swingset used by his children, grandchildren, and neighbors.

◦ Legal Counsel: The HOA retained the firm of Poli & Ball, PLC, which opined that because the community is for recreation and family use, “[p]lay structures are perfectly consistent with recreation and family use.” The firm advised that the Architectural Committee’s regulations could be changed to reflect this without amending the CC&Rs. Another law firm, Carpenter Hazlewood, generally agreed with this opinion.

◦ Correction of Clerical Error: Mr. Hancock testified that the form submitted by the Petitioner contained a typographical error. The board’s intent in its June 25, 2016, vote was to amend the Architectural Committee’s regulations, not the CC&Rs.

◦ Board Meeting Minutes: The HOA submitted minutes from board meetings in December 2016 and October 2017. These minutes document the board’s discovery of the error on the website form and subsequent votes to formally clarify that the change was to the rules and regulations, not the CC&Rs, thereby ratifying its decision.

◦ Amended Approval Form: Respondent submitted the corrected “Play Structure Approval Request” form, which states, “Per the modified Rules and Regulations dated April 6, 2016, this form must be submitted to Architectural Committee for approval of any Play Structure.”

Governing Rules and Covenants

The dispute hinged on the interpretation and interplay of several key provisions in the community’s governing documents.

Document / Section

Key Provision

CC&R § 3.1

“No building or structure shall be erected or maintained separate from the Single Family Residence located on any Lot, other than a garage… No garage or shed shall be built prior to the issuance of a Coconino County building permit for the construction of a Single Family Residence.”

Architectural Regulation 3(D)

“One detached structure may, with Architectural Committee approval, be constructed on a property. The residence must be constructed and completed before the detached structure is built.”

CC&R § 4.2

“By a majority vote of the Board, the Association may, from time to time… adopt, amend and repeal rules and regulations to be known as the ‘Rules and Regulations.’”

CC&R § 12.2

Amending the Declaration of CC&Rs requires “the affirmative vote… or written consent of Members owning at least seventy-five percent (75%) of all Lots.”

Administrative Law Judge’s Findings and Legal Rationale

The ALJ found that the Petitioner failed to meet his burden of proof and that the Respondent acted properly within its authority.

• Intent of the Covenant: The Judge determined that CC&R Article III is fundamentally “concerned with keeping Respondent single-family residential by prohibiting structures and vehicles that could be used as a second residential dwelling on a lot.” This interpretation is supported by other rules in the article prohibiting mobile homes and clarifying that “If you can live/sleep in it, you cannot park it” in the development.

• Status of Play Structures: The decision concludes that a play structure “cannot be easily converted into a second residence.” Therefore, permitting a play structure in addition to a garage or shed is not inconsistent with the primary purpose of CC&R § 3.1.

• Board Authority vs. Member Vote: Because allowing play structures was not inconsistent with the CC&Rs, the Respondent was not required to amend the CC&Rs through a 75% member vote. Instead, the Board was empowered by CC&R § 4.2 to “amend the Architectural Committee’s regulations to provide clarification on the status of play structures” through a majority vote of the Board.

• History of Enforcement: The Judge found that the Petitioner failed to establish a uniform history of enforcement against play structures. Rather, “it appears that the status of play structures, swingsets, and tree houses has been unsettled and the subject of some contention,” partly due to the Petitioner’s own advocacy.

• Conclusion: The Respondent properly resolved the ambiguity by amending its regulations.

Final Order and Implications

• Decision: The petition was denied because the Petitioner did not establish that CC&R § 3.1 prohibits play structures under any circumstances.

• Outcome for the Community:

1. The HOA’s amendment of its rules to explicitly permit play structures was deemed valid.

2. All play structures previously approved by the Architectural Committee are allowed to remain on members’ properties.

3. The Architectural Committee is authorized to consider and approve future Play Structure Approval Requests that are submitted in accordance with the established regulations.


Charles Mandela vs. Blue Ridge Estates Homeowner Association

Posted on by

Case Summary

Case ID 18F-H1817006-REL
Agency ADRE
Tribunal OAH
Decision Date 2017-12-06
Administrative Law Judge Diane Mihalsky
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Charles Mandela Counsel —
Respondent Blue Ridge Estates Homeowner Association Counsel Brian C. Axt, Esq.

Alleged Violations

CC&Rs § 3.1(a); Architectural Committee Aligned Standard 3(D)

Outcome Summary

The Administrative Law Judge denied the homeowner's petition, finding that the HOA did not violate its CC&Rs by allowing play structures on properties that already contained a detached garage or shed, because play structures are not easily convertible into a second residence, which was the underlying concern of the relevant CC&R section.

Why this result: Petitioner failed to establish by a preponderance of the evidence that Respondent violated CC&R § 3.1. The ALJ determined that the HOA correctly clarified the status of play structures through an amendment to the Architectural Committee's regulations.

Key Issues & Findings

Alleged violation of CC&Rs § 3.1(a) and Architectural Committee regulation 3(D) regarding allowing play structures (swing sets, treehouses) when another detached structure (garage or shed) is present.

Petitioner alleged that the Respondent HOA violated CC&Rs § 3.1(a) and Architectural Committee regulation 3(D) by permitting members to construct play structures (swingsets, treehouses, etc.) on properties that already contained one detached structure (garage or shed), arguing that the rules allowed only one detached structure of any type.

Orders: Petitioner's petition is denied because he failed to establish that CC&R § 3.1 prohibits play structures under any circumstances. All play structures that the Architectural Committee has previously approved are allowed to remain, and the Architectural Committee may consider and grant future Play Structure Approval Requests.

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(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)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09

Analytics Highlights

Topics: HOA governance, CC&R interpretation, detached structures, play structures, Architectural Committee regulations, burden of proof
Additional Citations:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • 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)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09

Audio Overview

Decision Documents

18F-H1817006-REL Decision – 604710.pdf

Uploaded 2025-10-09T03:32:05 (155.4 KB)





Briefing Doc – 18F-H1817006-REL


Briefing Document: Mandela v. Blue Ridge Estates Homeowner Association (No. 18F-H1817006-REL)

Executive Summary

This document synthesizes the findings of an Administrative Law Judge (ALJ) decision regarding a dispute between a homeowner, Charles Mandela (“Petitioner”), and the Blue Ridge Estates Homeowner Association (“Respondent”). The core issue was whether the HOA violated its Covenants, Conditions, and Restrictions (CC&Rs) by permitting homeowners to install play structures (e.g., swing sets, treehouses) on lots that already contained another detached structure, such as a garage or shed.

The Petitioner argued that the HOA had historically enforced a strict “one detached structure” rule and that its recent allowance of play structures constituted a violation of CC&R § 3.1. In contrast, the Respondent contended that the underlying intent of the CC&Rs was to prevent secondary residential dwellings, not to prohibit recreational structures consistent with a family-oriented community. The HOA asserted it had properly amended its Architectural Committee regulations, not the CC&Rs, to clarify this distinction.

The ALJ ruled decisively in favor of the Respondent HOA. The central finding was that the intent of the restrictive covenant was to maintain the single-family residential character of the community. Because play structures cannot be easily converted into secondary residences, they are not inconsistent with this intent. The ALJ concluded that the HOA was not required to amend the CC&Rs (which requires a 75% member vote) but acted within its authority to amend its rules and regulations via a simple board vote. The Petitioner’s petition was denied.

Case Overview

• Case Number: 18F-H1817006-REL

• Parties:

◦ Petitioner: Charles Mandela

◦ Respondent: Blue Ridge Estates Homeowner Association

• Hearing Date: November 28, 2017

• Presiding Judge: Administrative Law Judge Diane Mihalsky

• Core Allegation: The Petitioner alleged that the Respondent HOA violated CC&R § 3.1(a) and Architectural Committee Aligned Standard 3(D) by allowing members to build play structures, swing sets, or treehouses on properties that already had another detached structure like a garage or shed.

Central Arguments and Presented Evidence

Petitioner’s Position (Charles Mandela)

The Petitioner’s case was built on the premise of a long-standing, strict interpretation of the “one detached structure” rule.

• Core Argument: For 18 years, the Respondent interpreted CC&R § 3.1 to permit only one detached structure on any given lot, regardless of its type.

• Evidence and Testimony:

◦ Historical Enforcement: Testified that between 2002 and 2016, the HOA enforced this rule by removing nine non-compliant structures, including a gazebo, a playhouse, an observation deck, and a zipline structure.

◦ 2006 Legal Opinion: Submitted a February 7, 2006, letter from the law firm Carpenter Hazlewood, PLC, which opined on the ambiguity of CC&R § 3.1. The letter stated, “It still appears that only one structure (garage or shed) is permitted,” and supported the HOA’s ability to “enforce the ‘one detached structure’ requirement.” The letter did not specifically mention play structures.

◦ Invalid Approval Form: Presented a “Play Structure Approval Request” form he had drafted while on the board. This form incorrectly stated that the Board of Directors had voted on June 25, 2016, “to adopt changes to the CCR’s [sic], which will allow play structures.” Petitioner argued this was invalid because changing the CC&Rs requires a 75% vote of the membership, which was not obtained.

◦ Ancillary Documents: Submitted documents related to a housing discrimination claim filed by the HOA’s current president, Joseph Hancock, and a letter concerning another member. Petitioner testified these matters involved play structures, though the documents themselves did not mention CC&R § 3.1.

Respondent’s Position (Blue Ridge Estates HOA)

The Respondent’s defense centered on the purpose of the CC&Rs and its authority as a board to clarify and amend its own rules and regulations.

• Core Argument: The HOA did not violate the CC&Rs because the intent of the relevant articles is to prohibit secondary residential dwellings, not recreational structures suitable for a community intended to be a “uniquely planned recreation property.”

• Evidence and Testimony:

◦ Community Status: There are currently 16 swingsets or play structures within the 193-lot development. The HOA president, Joseph Hancock, testified he has a swingset used by his children, grandchildren, and neighbors.

◦ Legal Counsel: The HOA retained the firm of Poli & Ball, PLC, which opined that because the community is for recreation and family use, “[p]lay structures are perfectly consistent with recreation and family use.” The firm advised that the Architectural Committee’s regulations could be changed to reflect this without amending the CC&Rs. Another law firm, Carpenter Hazlewood, generally agreed with this opinion.

◦ Correction of Clerical Error: Mr. Hancock testified that the form submitted by the Petitioner contained a typographical error. The board’s intent in its June 25, 2016, vote was to amend the Architectural Committee’s regulations, not the CC&Rs.

◦ Board Meeting Minutes: The HOA submitted minutes from board meetings in December 2016 and October 2017. These minutes document the board’s discovery of the error on the website form and subsequent votes to formally clarify that the change was to the rules and regulations, not the CC&Rs, thereby ratifying its decision.

◦ Amended Approval Form: Respondent submitted the corrected “Play Structure Approval Request” form, which states, “Per the modified Rules and Regulations dated April 6, 2016, this form must be submitted to Architectural Committee for approval of any Play Structure.”

Governing Rules and Covenants

The dispute hinged on the interpretation and interplay of several key provisions in the community’s governing documents.

Document / Section

Key Provision

CC&R § 3.1

“No building or structure shall be erected or maintained separate from the Single Family Residence located on any Lot, other than a garage… No garage or shed shall be built prior to the issuance of a Coconino County building permit for the construction of a Single Family Residence.”

Architectural Regulation 3(D)

“One detached structure may, with Architectural Committee approval, be constructed on a property. The residence must be constructed and completed before the detached structure is built.”

CC&R § 4.2

“By a majority vote of the Board, the Association may, from time to time… adopt, amend and repeal rules and regulations to be known as the ‘Rules and Regulations.’”

CC&R § 12.2

Amending the Declaration of CC&Rs requires “the affirmative vote… or written consent of Members owning at least seventy-five percent (75%) of all Lots.”

Administrative Law Judge’s Findings and Legal Rationale

The ALJ found that the Petitioner failed to meet his burden of proof and that the Respondent acted properly within its authority.

• Intent of the Covenant: The Judge determined that CC&R Article III is fundamentally “concerned with keeping Respondent single-family residential by prohibiting structures and vehicles that could be used as a second residential dwelling on a lot.” This interpretation is supported by other rules in the article prohibiting mobile homes and clarifying that “If you can live/sleep in it, you cannot park it” in the development.

• Status of Play Structures: The decision concludes that a play structure “cannot be easily converted into a second residence.” Therefore, permitting a play structure in addition to a garage or shed is not inconsistent with the primary purpose of CC&R § 3.1.

• Board Authority vs. Member Vote: Because allowing play structures was not inconsistent with the CC&Rs, the Respondent was not required to amend the CC&Rs through a 75% member vote. Instead, the Board was empowered by CC&R § 4.2 to “amend the Architectural Committee’s regulations to provide clarification on the status of play structures” through a majority vote of the Board.

• History of Enforcement: The Judge found that the Petitioner failed to establish a uniform history of enforcement against play structures. Rather, “it appears that the status of play structures, swingsets, and tree houses has been unsettled and the subject of some contention,” partly due to the Petitioner’s own advocacy.

• Conclusion: The Respondent properly resolved the ambiguity by amending its regulations.

Final Order and Implications

• Decision: The petition was denied because the Petitioner did not establish that CC&R § 3.1 prohibits play structures under any circumstances.

• Outcome for the Community:

1. The HOA’s amendment of its rules to explicitly permit play structures was deemed valid.

2. All play structures previously approved by the Architectural Committee are allowed to remain on members’ properties.

3. The Architectural Committee is authorized to consider and approve future Play Structure Approval Requests that are submitted in accordance with the established regulations.