ALJDEC decisions subject to certification as final

18F-H1817022-REL · Department of Real Estate - H/C · 2018-03-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Thomas P. Satterlee,

Petitioner,

vs.

Green Valley Country Club Vistas II Property Owners' Association,

Respondent.

No. 18F-H1817022-REL

ADMINISTRATIVE LAW

JUDGE DECISION

FINDINGS OF FACT

Hearing in this matter is set to convene on March 19, 2018.

Prior to the hearing, Respondent filed a Motion to Dismiss alleging that the Arizona Department of Real Estate and 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 is potentially dispositive, the Administrative Law Judge has chosen to address the merits in advance of the scheduled hearing. In reviewing the Motion to Dismiss in this matter, the Administrative Law Judge has considered the arguments presented by the parties during oral arguments on a similar motion to dismiss filed in 17F-H1716018-REL-RHG and 17F-H1716022-REL-RHG.

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.

ORDER

IT IS ORDERED that Petitioner’s petition is dismissed with prejudice.

Done this day, March 15, 2018

/s/ Tammy L. Eigenheer

Administrative Law Judge

NOTICE

Pursuant to A.R.S. §32-2199.02(B), this Order is binding on the parties unless a rehearing is granted pursuant to A.R.S. § 32-2199.04. Pursuant to A.R.S. § 41-1092.09, a request for rehearing in this matter must be filed with the Commissioner of the Department of Real Estate within 30 days of the service of this Order upon the parties.

Transmitted by either mail, e-mail, or facsimile March 14, 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