ALJDEC decisions subject to certification as final

17F-H1716022-REL · Department of Real Estate - H/C · 2017-07-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Thomas Satterlee,

Petitioner,

vs.

Green Valley Country Club Vistas II Property Owners Association

Respondent.

No. 17F-H1716022-REL

No. 17F-H1716018-REL

ADMINISTRATIVE LAW JUDGE DECISION

ORAL ARGUMENT: June 27, 2017

APPEARANCES: Thomas Satterlee (Petitioner) represented himself. James Robles, Esq. represented Green Valley Country Club Vistas II Property Owners Association (Respondent).

ADMINISTRATIVE LAW JUDGE: Suzanne Marwil

FINDINGS OF FACT

Hearing in these consolidated matters was originally set for April 4, 2017 and then continued to June 28, 2017, due to some personal issues that arose in Petitioner’s life.

On March 15, 2017, Respondent filed a motion to vacate 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.

CONCLUSIONS OF LAW

1. 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). Petitioner moved into the community in 2014, but under either definition Respondent is not a planned community because it does not own or operate real estate or have an easement or covenant to maintain roadways within that community.

2. The Administrative Law Judge declines to accept Petitioner’s invitation to construe the introductory sentence of A.R.S. § 33-1802 as permission to rewrite or expand the express language of the definition of a planned community. As the Sunrise Desert Vista Court noted at ¶ 10 when presented the same argument:

Although A.R.S. § 33-1802 includes “unless the context otherwise requires” in the introductory sentence, the plain language of paragraph four requires that in order to be considered a “planned community”” an entity must own and operate real estate. This court has interpreted the phrase “unless the context otherwise requires” to allow some flexibility in interpreting a statute, but not to the extent of disregarding the language of a statute or the legislative intent embodied by that language. See Cable One, Inc. v. Ariz. Dept. of Revenue, 232 Ariz. 275, 284,¶ 42 (App. 2013) (“Although this prefatory phrase may allow some flexibility in interpreting or applying [the statute at issue], that flexibility does not allow us to disregard legislative intent or to read into the statute terms, limits, or requirements that are simply not there.”) (Internal citation omitted). Even though this court has noted that this prefatory language means a statute is “not to be applied mechanistically and rigidly,” State v. Heylmun, 147 Ariz. 97, 99 (App. 1985), interpreting § 33-1802(4) to mean what it precisely says is neither mechanical nor rigid. The plain meaning of the statute requires ownership and operation of real property in order for an entity to qualify as a “planned community.” Based on that reading, we conclude that Sunrise was not a “planned community” as defined by A.R.S. § 33-1802.

Modification in original.

3. The undersigned has reviewed Administrative Law Judge Douglas’ prior decision in 15F-1515008-BFS and finds that, although it contains standard boilerplate language regarding jurisdiction, no party raised the issue of subject matter jurisdiction and as such Judge Douglas did not consider it. In any event, 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.

4. 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, it is recommended that the Petitions in these consolidated matters be dismissed with prejudice.

In the event of certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of these Orders will be 40 days from the date of the certification.

Done this day, July 6, 2017.

/s/ Suzanne Marwil

Administrative Law Judge