ALJDEC decisions subject to certification as final

17F-H1716018-REL-RHG · Department of Real Estate - H/C · 2018-03-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Thomas Satterlee

Petitioner,

Green Valley Country Club Vistas II Property Owners’ Association

Respondent.

No. 17F-H1716018-REL-RHG

No. 17F-H1716022-REL-RHG

ADMINISTRATIVE LAW

JUDGE DECISION

ORAL ARGUMENTS: February 20, 2018

APPEARANCES: Petitioner Thomas Satterlee appeared on his own behalf. Respondent Green Valley Country Club Vistas II Property Owners’ Association was represented by James A. Robles.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Hearing in the consolidated matters of 17F-H1716018-REL and 17F-H1716022-REL was set to convene on June 28, 2017.

On March 15, 2017, Respondent filed a Motion to Dismiss alleging that the Office of Administrative Hearings lacked subject matter jurisdiction over the petitions because Respondent was not a planned community as defined by A.R.S. § 33-1802(4) because it did not own or operate real estate or have a roadway easement or covenant. Because the motion was potentially dispositive, oral argument was held in lieu of hearing.

At oral argument, both Respondent and Petitioner agreed that the Respondent did not currently own or operate real estate or have a roadway easement or covenant.

Petitioner urged the Office of Administrative Hearings to nevertheless exercise jurisdiction and hear the case because former Administrative Law Judge Douglas had exercised jurisdiction over a Petition he filed against Respondent in docket number 15F-H1515008-BFS. Petitioner also argued that the because Respondent’s community documents contemplate being bound by the law governing planned communities, subject matter jurisdiction should be conferred upon the Office of Administrative Hearings.

The Administrative Law Judge concluded that because Respondent was not a “planned community” as defined by statute, the Office of Administrative Hearings and the Arizona Department of Real Estate lacked jurisdiction over the petitions.

On July 7, 2017, the Commissioner entered the final order accepting the Administrative Law Judge’s recommended decision.

On September 18, 2017, Petitioner filed a “notice of rehearing” with the Arizona Department of Real Estate. On September 26, 2017, the Commissioner granted Petitioner’s request for rehearing.

Rehearing in these matters was set to convene on February 20, 2018.

Prior to the hearing, Respondent filed a Renewal of its Motion to Dismiss asserting that the Arizona Department of Real Estate continued to lack jurisdiction over the matters set forth in the consolidated petitions.

Because the motion was potentially dispositive, oral argument was held in lieu of hearing.

During oral arguments, Petitioner argued that because the developer built walls and a sign at the entrance of the community and Respondent had maintained the landscaping around the sign since that time, Respondent had a “covenant to maintain roadways” that would give the Arizona Department of Real Estate jurisdiction over the issues because Respondent was a “planned community.” Petitioner’s argument was based largely on his interpretation that “roadway” in the statute included “roadway systems,” which would include the land at the entrance of the community.

Respondent argued that the landscaping surrounding the sign did not constitute a roadway and that because the statute defines a “planned community” as a real estate development that includes “a covenant to maintain roadways”, Respondent was not subject to the jurisdiction of the Arizona Department of Real Estate.

CONCLUSIONS OF LAW

A lack of subject matter jurisdiction cannot be waived and must be addressed because “[a]dministrative decisions that reach beyond an agency’s statutory power are void.” Ariz. Bd. of Regents for & on Behalf of Univ. of Ariz. v. State ex rel. State of Ariz. Pub. Safety Ret. Fund Manager Adm’r, 160 Ariz. 150, 156 (App. 1989). See also Swichtenberg v. Jack Brimer, 171 Ariz. 77, 828 P.2d 1218 (App. 1991). Similarly, “it is settled that . . . [j]urisdiction of the subject matter cannot be conferred upon a court by, or be based on, the estoppel of a party to deny that it exists.” Swichtenberg, 171 Ariz. at 81, 828 P.2d at 1222, citing, 21 C.J.S. Courts § 108 at 161. Accord 20 Am. Jur. 2d Courts § 95 at 455. For this reason, the statutes, not the parties, lay out the boundaries of administrative jurisdiction.

A.R.S. § 33-1802 provides in pertinent part:

In this chapter and in the community documents, unless the context otherwise requires:

. . . .

4. “Planned community” means a real estate development that includes real estate owned and operated by or real estate on which an easement to maintain roadways or a covenant to maintain roadways is held by a nonprofit corporation or unincorporated association of owners, that is created for the purpose of managing, maintaining or improving the property and in which the owners of separately owned lots, parcels or units are mandatory members and are required to pay assessments to the association for these purposes. Planned community does not include a timeshare plan or a timeshare association that is governed by chapter 20 of this title or a condominium that is governed by chapter 9 of this title.

Emphasis added. Before it was amended in 2014, the statute only required the ownership of real estate for an association to be considered a planned community. See Sunrise Desert Vistas v. Salas, 1 CA-CV 14-052 (Ct. App. 2016) at footnote 2 (noting revision) and ¶ 8 (providing language of prior version).

Regardless of whether Respondent had a covenant to maintain the area around the walls and sign at the entrance of the community, the Administrative Law Judge declines Petitioner’s invitation to interpret “roadways” in the statute to mean “areas adjacent to roadways” such that Respondent’s maintenance of the area around the walls and sign at the entrance of the community renders Respondent a “planned community.”

Because Respondent is not a “planned community” as defined by statute, the Office of Administrative Hearings and the Arizona Department of Real Estate lack jurisdiction over these Petitions. Petitioner remains free, however, to file an action in a court of competent jurisdiction as specified by Respondent’s community documents.

RECOMMENDED ORDER

In view of the foregoing, the Petitions in these consolidated matters are dismissed with prejudice.

Done this day, March 15, 2018.

/s/ Tammy L. Eigenheer

Administrative Law Judge

NOTICE

This administrative law judge order, having been issued as a result of a rehearing, is binding on the parties. A.R.S. § 32-2199.02(B). A party wishing to appeal this order must seek judicial review as prescribed by A.R.S. § 41-1092.08(H) and title 12, chapter 7, article 6. Any such appeal must be filed with the superior court within thirty-five days from the date when a copy of this order was served upon the parties. A.R.S. § 12-904(A).

Transmitted by either mail, e-mail, or facsimile March 15, 2018 to:

Judy Lowe, Commissioner

Arizona Department of Real Estate

2910 North 44th Street, Room 100

Phoenix, AZ 85018

Attn:

[email redacted]

Thomas Satterlee

270 W. La Canoa

Green Valley AZ 85614

James A. Robles

722 East Osborn Road, Suite 100

Phoenix, Arizona 85014

[email redacted]

By Felicia Del Sol