ALJDEC decisions subject to certification as final

18F-H1817008-REL-RHG · Department of Real Estate - H/C · 2018-07-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Thomas Barrs,

Petitioner,

Desert Ranch Homeowners Association,

Respondent

No. 18F-H1817008-REL-RHG

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 17, 2018 and June 11, 2018.

APPEARANCES: Petitioner Thomas Barrs appeared on behalf of himself.

Brian Schoeffler appeared on behalf of Respondent Desert Ranch Homeowners Association.

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

FINDINGS OF FACT

On February 26, 2018, the Arizona Department of Real Estate issued a Notice of Re-Hearing setting the above-captioned matter for hearing on April 17, 2018 at the Office of Administrative Hearings in Phoenix, Arizona.

The Notice of Re-Hearing shows that the issue is whether Respondent Desert Ranch Homeowners Association (“Desert Ranch”) violated Ariz. Rev. Stat. section 33-1805 and section 33-1812.

Petitioner Thomas Barrs alleged that Desert Ranch denied 9 separate requests to view and obtain copies of Desert Ranch’s records. Mr. Barrs alleged that Desert Ranch denied a May 19, 2017 request to view documents regarding the April 29, 2017 board election (“Issue 1”), that Desert Ranch denied a April 18, 2017 request to review documents related to the March 18, 2017 Board election (“Issue 2”), that Desert Ranch denied a July 11, 2017 request that Desert Ranch provide copies of its insurance policies by electronic mail (“email”) (“Issue 3”), that Desert Ranch denied a request to receive copies of the Secretary’s shorthand notes from the March 18, 2017 meeting by email (“Issue 5”), and that Desert Ranch denied a July 11, 2017 request for a written record of all actions taken by the EDC after July 2016, including correspondence (“Issue 7”).

The original hearing on Mr. Barrs’s petition was conducted on December 1, 2017. After the Administrative Law Judge issued his decision, Mr. Barrs requested a rehearing, which led to this matter being conducted.

At this hearing, Mr. Barrs presented his own testimony and the testimony of Abraham Barrs and Stephen Barrs. Desert Ranch presented the testimony of Catherine Overby and Brian Schoeffler.

Issue 1

6. On May 19, 2017, Mr. Barrs requested to view documents related to the

April 29, 2017 Board election. On June 3, 2017, the Board allowed Mr. Barrs to view the documents. Catherine Overby, the President of Desert Ranch’s board, informed Mr. Barrs that Board member Patrick Rice possessed one late ballot from the April 29, 2017 board election. However, the Board did not allow Mr. Barrs to view the late ballot and did not provide a copy of the late ballot until a few months after Mr. Barrs’s May 19, 2017 request. There was no evidence presented at hearing that there were ballots which were returned as undeliverable.

Issue 2

7. On April 18, 2017, Mr. Barrs requested to view documents related to the

March 18, 2017 Board election. On April 19, 2017, Kate Merolo provided documents regarding the election to Mr. Barrs, with the exception of two ballots.

Issues 3, 5, and 7

8. On July 11, 2017, Mr. Barrs requested that the Desert Ranch Board

provide copies of Desert Ranch’s insurance policies, the Desert Ranch secretary’s short hand notes from the March 18, 2017 meeting, and a written record of all actions taken by the EDC after July 2016. Mr. Barrs submitted the request by email to Desert Ranch board members, but Mr. Barrs did not include Brian Schoeffler in the email.

9. On July 11, 2017, Board President Catherine Overby informed Mr. Barrs

that she would forward the request to Mr. Schoeffer.

10. On July 12, 2017, Mr. Schoeffler informed Mr. Barrs by email that he

could meet with him on any day but the 13th. On July 16, 2017, Mr. Barrs informed Ms. Overby by email that that he was not including Mr. Schoeffler in the emails that he sent to the Board.

11. On July 25, 2017, Mr. Barrs informed Board members that he had blocked

Mr. Schoeffler’s emails so that he was not receiving emails sent by Mr. Schoeffler.

12. Ms. Overby took shorthand notes during the March 18, 2017 meeting.

However, Ms. Overby was not the Secretary of Desert Ranch on March 18, 2017. There was no evidence presented at hearing that the Secretary of Desert Ranch took short hand notes during the March 28, 2017 meeting.

13. At hearing, Desert Ranch contended that the late ballot from the April 29, 2017 Election was not valid. Furthermore, Desert Ranch contended that the two ballots from the March 18, 2017 election which were not provided with the Kate Merolo’s submission, did not change the outcome of the election.

CONCLUSIONS OF LAW

Ariz. Rev. Stat. section 41-2198.01 permits an owner or a planned community organization to file a petition with the Department for a hearing concerning violations of planned community documents or violations of statutes that regulate planned communities. That statute provides that such petitions will be heard before the Office of Administrative Hearings.

Petitioner bears the burden of proof to establish that Respondent violated Ariz. Rev. Stat. section 33-1805 by a preponderance of the evidence. Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Ariz. Rev. Stat. section 33-1805 provides as follows:

A. Except as provided in subsection B of this section, all financial and other records of the association shall be made reasonably available for examination by any member or any person designated by the member in writing as the member's representative. The association shall not charge a member or any person designated by the member in writing for making material available for review. The association shall have ten business days to fulfill a request for examination. On request for purchase of copies of records by any member or any person designated by the member in writing as the member's representative, the association shall have ten business days to provide copies of the requested records. An association may charge a fee for making copies of not more than fifteen cents per page.

B. Books and records kept by or on behalf of the association and the board may be withheld from disclosure to the extent that the portion withheld relates to any of the following:

1. Privileged communication between an attorney for the association and the association.

2. Pending litigation.

3. Meeting minutes or other records of a session of a board meeting that is not required to be open to all members pursuant to section 33-1804.

4. Personal, health or financial records of an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association, including records of the association directly related to the personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association.

5. Records relating to the job performance of, compensation of, health records of or specific complaints against an individual employee of the association or an individual employee of a contractor of the association who works under the direction of the association.

C. The association shall not be required to disclose financial and other records of the association if disclosure would violate any state or federal law.

Mr. Barrs established by a preponderance of the evidence that Desert Ranch failed to allow him to view all of the documents related to the April 29, 2017 Board election. The preponderance of the evidence showed that Desert Ranch did not fulfill Mr. Barrs’s request within 10 business days of his request.

The preponderance of the evidence shows that Desert Ranch did not fulfill Mr. Barrs’s request to view documents related to the March 18, 2017 election within ten business days of his request. Although Kate Merolo provided most documents related to the March 18, 2017 Board election on April 19. 2017, there were two ballots which were not provided until several months after Mr. Barr’s April 18, 2017 request.

Mr. Barrs has not established by a preponderance of the evidence that Desert Ranch violated Ariz. Rev. Stat. section 33-1805 by failing to email records to him because Mr. Barrs refused to contact and receive communication from Mr. Schoeffler. Although Desert Ranch offered to meet with Mr. Barrs, Mr. Barrs declined.

This Tribunal concludes that Desert Ranch violated the charged provision of Ariz. Rev. Stat. section 33-1805.

order

In view of the foregoing, it is ORDERED that Petitioner be deemed the prevailing party in this matter.

It is further ORDERED that Desert Ranch comply with the applicable provisions of Ariz. Rev. Stat. section 33-1805 regarding Petitioner’s request of Desert Ranch’s records within 10 days of the Order entered in this matter.

It is further ORDERED that Desert Ranch pay Petitioner his filing fee of $500.00, to be paid directly to Petitioner within thirty (30) days of this Order.

No Civil Penalty is found to be appropriate in this matter.

NOTICE

This administrative law judge order, having been issued as a result of a rehearing, is binding on the parties. Ariz. Rev. Stat. section 32-2199.02(B). A party wishing to appeal this order must seek judicial review as prescribed by Ariz. Rev. Stat. section 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. Ariz. Rev. Stat. section 12-904(A).

Done this day, July 2, 2018

/s/ Velva Moses-Thompson

Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner

Arizona Department of Real Estate

Transmitted U.S. Mail to:

Thomas Barrs

P O Box 14122

Scottsdale, Arizona 85267

Desert Ranch Homeowners Association

34216 N Segundo Circle

Scottsdale, AZ 85262