ALJDEC decisions subject to certification as final

19F-H1918040-REL-RHG · Department of Real Estate - H/C · 2020-03-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Gregory L Czekaj,

Petitioner,

Colonia Del Rey HOA,

Respondent.

No. 19F-H1918040-REL-RHG

ADMINISTRATIVE LAW JUDGE REHEARING DECISION

REHEARING: December 6, 2019 and March 5, 2020.

APPEARANCES: Gregory L. Czekaj appeared on his own behalf. Colonia Del Rey HOA, Inc. was represented by its President, Marybeth Andree.

ADMINISTRATIVE LAW JUDGE: Kay Abramsohn

_____________________________________________________________________

-54864001

001

-137160-45720000

FINDINGS OF FACT

The Arizona Department of Real Estate (“the Department”) is authorized by statute to receive and to decide Petitions for Hearings from members of home owners’ associations in Arizona.

Gregory L. Czekaj (“Petitioner”) purchased his home in Colonia Del Rey HOA, Inc. (“HOA”) in March 2017. On or about December 20, 2018, Petitioner filed three separate single-issue petitions against the HOA with the Department.

Established in 1984, HOA is comprised of nine (9) homes on a private road in Tucson, Arizona. The HOA has common areas and a Ramada, but has no pool and has no HOA office. The HOA Board is comprised of elected volunteers.

Complaint ONE contained the following issue to be determined: Petitioner alleged that the HOA failed to provide records he had requested, at three different times, in violation of A.R.S. § 33-1805.

In Minute Entry dated May 16, 2019, the Tribunal reminded Petitioner that Complaint ONE would be limited to record requests he had made prior to the filing of the Complaint.

Complaint TWO contained the following issue to be determined: Petitioner alleged that the HOA’s May 6, 2017 five dollar fee increase was invalid due to the allowance of a proxy vote, in violation of the HOA rules and A.R.S. § 33-1812(A).

Complaint THREE contained the following issue to be determined: Petitioner alleged that the HOA failed to give a ten-day notice for a meeting to be held on November 18, 2018 to vote on amendments to the HOA By-Laws, in violation of A.R.S. § 33-1804(B).

The Department consolidated the petitions and referred those three petitions to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.

At the initial hearing session on June 14, 2019, Petitioner presented documentary evidence regarding the three Petitions and his testimony regarding the matters. Petitioner was given the opportunity to question the HOA representative and to cross-examine the witness called by the HOA, Mr. Tick (the HOA’s insurance agent).

At the initial hearing, Petitioner presented thirty-three exhibits, designated as Exhibits 1 through 33, regarding the three Petitions. At that hearing, HOA presented sixteen exhibits, designated as Exhibits A through P.

Following the June 14, 2019 hearing, the Administrative Law Judge issued a Decision dated July 8, 2019 in which she concluded that Petitioner’s alleged violations in Petitioner’s three Petitions had not been proven and that the HOA was the prevailing party on Petitioner’s three Petitions.

On or about August 12, 2019, after the issuance of the Administrative Law Judge Decision, Petitioner filed a Homeowner’s Association (HOA) Dispute Rehearing Request citing as particular grounds for the request that “irregularity in the proceedings by the ALJ as well as misconduct by the ALJ [had] deprived [Petitioner] of a fair hearing.” Within the rehearing request, Petitioner alleged that a retroactive swearing-in of Petitioner and the HOA representative was “a serious irregularity” and was “a serious breach of misconduct” by the ALJ that had deprived Petitioner of a fair hearing. Petitioner argued that a retroactive swearing-in cannot substitute for the initial error “because the parties are not penalized for disingenuous prior testimony.”

On or about August 27, 2019, the Commissioner of the Arizona Department of Real Estate issued an Order Granting Rehearing and Notice of Hearing (Order). In that Order, the Commissioner indicated “the Department hereby grants the Petitioner’s request for rehearing for the reason outlined in the ... Rehearing Request.”

On December 10, 2019, and on March 5, 2020, the Tribunal conducted the requested rehearing. The Tribunal had previously advised the parties that the exhibits from the first hearing would be admitted to the rehearing and that any “new” proposed exhibits were required to be disclosed and to be marked with Petitioner’s letters and HOA numbers. For the rehearing, Petitioner submitted proposed exhibits marked with letters A through GG.

At the rehearing, the exhibits from the first hearing were admitted to the rehearing record; they are referred to herein as “Initial Exhibits.” During the rehearing, Petitioner relied on exhibits both from the initial hearing and from his new exhibits (referred to herein as “New Exhibits”). As to Complaint One, Petitioner presented Initial Exhibits 1, 2, 5, A, E, G, and New Exhibits A, S, AA, BB, and GG. As to Complaint Two, Petitioner presented Initial Exhibits 16, 17, 18, 19, 20, 21, 22, 23, 24, 26, 27, and New Exhibits E, I, J, K, Y, CC, and FF. As to Complaint Three, Petitioner presented Initial Exhibits 28, 29, 30, 31, 32, 33, and K, and New Exhibits L, M, N, and O.

Because Petitioner’s request for a rehearing centered on his allegation of a procedural error (a retroactive swearing in of himself and Ms. Andree), the Findings of Fact in this Rehearing Decision are the result of evidence and arguments from the Initial Hearing and from the Rehearing. Overall, some but not all factual evidence from the Initial Hearing was repeated in the rehearing sessions by reference to some Initial Exhibits, and some factual evidence was either corrected or clarified with the evidence presented at the rehearing sessions.

At the rehearing sessions, Petitioner presented documentary evidence regarding the three Petitions and his testimony regarding the matters. Petitioner was given the opportunity to question the HOA representative and to cross-examine the witness called by the HOA, Mr. Phil Oliver, the HOA’s former president.

At the second rehearing session, Petitioner requested to have, as a witness, the clerk from the UPS store, “Damian.” Petitioner had not requested a subpoena for the clerk. The clerk gave his name on the rehearing record as Damian Schaffer. The HOA was able to cross-examine Mr. Schaffer.

At the second rehearing session, Petitioner requested to have, as a witness, Susan Sotelo, the HOA former Secretary. While Petitioner had previously requested a subpoena for Susan Sotelo for the December 10, 2019 hearing, Petitioner had not requested a new subpoena for the March 5, 2020 hearing session nor had he notified Susan Sotelo that he would be calling her. She gave her name on the rehearing record as Dr. Susan B. Sotelo. The HOA was able to cross-examine Dr. Sotelo.

At the initial hearing, HOA had indicated that it would provide a copy of any final IRS report that it might receive to Petitioner. At some point, HOA provided a copy to Petitioner. See New Exhibit A. At the second rehearing session, Petitioner expressed his dissatisfaction with the provision of the particular document, arguing that HOA had redacted the document, that he was entitled to an unredacted version, and that the Administrative Law Judge had not directed that HOA could redact it.

COMPLAINT ONE

On April 21, 2018, Petitioner requested “to review any and all [HOA] documents including all organizational, business, corporate and financial records that the CDR/HOA has.” See New Exhibit GG.

On May 2, 2018, Ms. Andree responded, asking Petitioner to narrow his request and indicating the “request is burdensome.” Id; see also Initial Exhibits 4 and 5.

On May 6, 2018, Petitioner clarified he wanted to “start” with “all the organizational and corporate documents, which includes policies and procedures.” See Initial Exhibit 5. He also noted that this should include digital and paper documents.

On May 14, 2018, Ms. Andree emailed Petitioner documents. Id.

On May 22, 2018, Petitioner responded: “Thanks Marybeth. Are there not more documents? Greg.” Id. At hearing, Petitioner argued that he felt the HOA was “withholding” documents from him.

Three days later, on May 25, 2018, Ms. Andree indicated there were no more documents and she listed the documents she had provided on May 14, 2018, as follows: CDR Articles [of Incorporation]; CDR Bylaws; CDR CC&Rs; and, CDR Rules and Regs. Id.

On May 25, 2018, Petitioner responded “thank you.” Id. At this point, Ms. Andree presumed that the request was fulfilled.

At the initial hearing, Petitioner argued that the HOA had not, in fact, provided the new Articles of Incorporation, which he indicated he had to obtain from the state at a cost of $54.00.

At the rehearing, the HOA clarified that it did not have a copy of those new Article of Incorporation within its papers at the time of his Petitioner’s request. The HOA noted that the May requests were met by May 22, 2018, referring to Initial Exhibit 1.

In 2002, the HOA had formed a nonprofit corporation and filed its [new] Articles of Incorporation. See New Exhibit S.

On November 13, 2018, Petitioner requested “financial books and records since the date I purchased my property ... under ARS 33-1805(A) from the time I closed escrow to the present”. See Initial Exhibit 1, page 3.

On November 14, 2018, Petitioner contacted his attorney. See Initial Exhibit 7.

On November 14, 2018, Petitioner’s attorney contacted the HOA’s attorney, requesting her to ensure that Petitioner received the documents “within 10 days.” See Initial Exhibit 8. He listed out various types of documents: as follows: copies of “all association financials, balance sheets, bank statements, tax returns, audited and otherwise, corporate records, minutes of meetings, books and records that have not already been provided.” Id.

On November 19, 2018, the HOA advised Petitioner that he could review the records at the Ramada on November 23, 2018. Id. In response, first, Petitioner wanted to know about more time for the review and, the next day, he indicated to the HOA that he wanted to “have copies of reviewed documents” and he requested to meet at one of several particular places so that he could make and pay for the copies. See Initial Exhibits 1 and 9.

The HOA and Petitioner met on November 23, 2018 for over two hours.

At that time, Petitioner refused to sign off on a review statement indicating that he had already received certain documents and that, at that date, he was reviewing certain documents. See Initial Exhibit F.

At the initial hearing, Ms. Andree indicated that Petitioner had wanted to see a “bank activity report” which was not a type of record that the HOA kept (i.e., created).

On November 23, 2018, while at the records review, Petitioner hand wrote a request for “all financial and other records of the [HOA] from 1984 to the present,” noting that he also wanted copies at 15 cents per page, a cost that he would reimburse. See Initial Exhibit 10. However, at hearing, Ms. Andree indicated that Petitioner did not give her that handwritten request while at the records review (indicating instead that he had informed her that he would email his request to the Board); she further noted that, during the records review, Petitioner had not requested any particular copies.

On November 26, 2018, Petitioner’s attorney, Gary Wolf, contacted the HOA’s attorney, Carolyn Goldschmidt, indicating that the records review was “not complete.” See Initial Exhibit G. Mr. Wolf mentioned the 2017 federal and state HOA returns, indicating that Ms. Andree had indicated those were kept by the CPA and he requested that those be forwarded to Petitioner. Mr. Wolf mentioned that “bills” of the HOA should have been included, such as for the landscapers. Mr. Wolf mentioned that Ms. Andree had indicated something about some records having already been shredded, and he requested that Ms. Goldschmidt explain “record-keeping” requirements to the HOA. Mr. Wolf mentioned that Ms. Andree had told Petitioner that he would need to make a special request for “copies” for her to take to the Board. Mr. Wolf advised that they would be entitled to attorney’s fees “if Petitioner does not receive all requested records, including an opportunity to photocopy those records, ... a request for production of records is basic and primary and has always been protected by the courts.” Emphasis added here.

In response, on November 30, 2018, Ms. Goldschmidt noted Petitioner had asked for a tax “statement” and the HOA had not realized he wanted a copy of a tax “return” when they had provided the County tax statement to him. See Initial Exhibit G. Ms. Goldschmidt indicated that, pursuant to A.R.S. § 33-1812(A)(7), the ballots on May 6, 2017 votes had been shredded after the requisite one year retention period had elapsed. Ms. Goldschmidt provided attachments to her response with “the remaining records that [Petitioner] has requested to review, including copies of the tax returns and the expense invoices.”

At the initial hearing, Petitioner argued that, at the records review, he did not receive a copy of the “tax return” (which he later received). Petitioner further indicated that he had only received an invoice for the HOA insurance policy. See Exhibit 12. Petitioner’s overall argument as to records requests was that the HOA “withheld” information from him, arguing it was information to which he is legally entitled.

At the initial hearing, Ms. Andree indicated that the HOA presumed the April 2018 and May 2018 records requests had been satisfied with the May 2018 disclosure when Petitioner had responded “Thank you.”

At the initial hearing, Ms. Andree indicated that the state tax return was not completed at the time of the records review and was not actually done until April of 2019. Regarding an insurance policy, she indicated that Petitioner had asked for “financial books and records” in November 2018, and the HOA had not believed an insurance policy was a part of such requested records. Overall, Ms. Andree noted that the HOA believed they responded appropriately to the records requests when the requests were specified, and that Petitioner since had also been provided copies electronically at no cost.

At the rehearing, Petitioner argued that the HOA May 2, 2018 email request to narrow his request was, in fact, a “refusal” because he has the right under the [1984] CC&Rs (Article 12, Section 2) to inspect the books and records. See New Exhibit BB.

At the rehearing, Petitioner argued that his request was not burdensome because the HOA was required under the [1984] By-Laws (Article 10) to have its records available at all times for inspection “at the principal office” of the HOA. See New Exhibit AA. Petitioner compounded on this argument, further arguing that the HOA was in violation of A.R.S. §§ 10-11601(E) and 10-11602(A) and (B) regarding nonprofit’s corporate records being required to be maintained “at its principal offices, at its known place of business or at the office of its statutory agent” and available to members to inspect. Petitioner argued that there should be a business office.

At the rehearing, the HOA noted that it did not have a business office with any particular hours, because there was no need for the HOA to experience such an expense; Ms. Andree further indicated that the HOA records are simply retained at Board members’ homes. Ms. Andree essentially noted that, at no time, would the HOA Articles of Incorporation give Petitioner (or any other member) the right to 24-hour access to records at a Board member’s home.

COMPLAINT TWO

The agenda for the May 6, 2017 Annual Meeting indicated that a vote would be taken on a proposal to increase the members’ Assessments by “up to $5 per month.” See Initial Exhibit 18. If the proposal passed, the assessment would increase from $75.00 per month to $80.00 per month. See Initial Exhibit 19. The agenda erroneously stated that six (6) of nine (9) votes were needed to approve an increase.

There were six persons present at the meeting: Ms. Andree (and her husband, Les), Phil Oliver, Petitioner, Maryanne Beerling, and Sara Hitch. Sara Hitch was not an HOA member but was a tenant; she had no membership voting rights.

The amended minutes for the meeting provide further explanation for the events of the Annual Meeting than do the original minutes. See Initial Exhibit 21. When a vote was taken on the increase in the assessments, the count was noted as 5 YES votes and 1 NO vote. At that point, the former president of the HOA had asked Sara Hitch if she wanted to cast Ed Freemen’s proxy vote on file, and she agreed to do so. Thus, the result of the vote taken on that day became 6 YES votes and 1 NO vote, and the HOA determined that the proposal had passed and the Assessments were revised.

Regarding the use of a proxy vote, Petitioner argued that A.R.S. § 33-1812(A) and the HOA’s own policy on Absentee Ballots, Resolution 20140315-01, prohibited proxy voting, and thus, the fee increase was invalid. See Initial Exhibit 17.

At a Board meeting on July 15, 2017, Petitioner questioned the counting of those Assessments’ votes; Petitioner’s belief was that the final vote was really only 5 YES with 1 NO.

The amended Annual Meeting minutes indicate the following:

Note: Due to questions regarding the vote cast for Ed Freeman by Proxy Sarah Hitch, the board reviewed and determined the change in Arizona State Law prohibiting the use of Proxy votes. Further review of the HOA controlling documents indicated passage of the Assessment actually required two-thirds (2/3) of the votes cast, not two-thirds (2/3) of the members vote as the ballot incorrectly stated. The final result of the votes cast was 5 YES votes and 1 NO vote, there were more than 2/3 of the 6 votes, or 4 YES votes, so the decision to pass the proposal to increase the assessment stands. Phil provided email clarification to all members ... . [Emphasis added here.]

In his arguments, Petitioner also relied on the Article IV of the CC&Rs, Section 8, Special Assessments for Capitol Improvements, and Section 9, Notice and Quorum for Any Action Authorized under Section 5 and 8 for his argument that the $5.00 fee increase had required a certain quorum.

Article IV of the CC&Rs, Section 5(b) and (f), together, provide that 2/3 of the votes who are voting (i.e., of the votes cast) is required to pass annual assessments in excess of the maximum amount of an increase (i.e., ten percent over the prior years’ annual assessment).

Article IV of the CC&Rs, Section 8, provide that 2/3 of the votes who are voting (i.e., of the votes cast) is required to pass special assessments for capitol improvements.

Article IV of the CC&Rs, Section 9, provides a “quorum” is met with the presence of members entitled to cast fifty percent (50%) of the votes.

At hearing, the HOA position was that, based on the Article IV of the CC&Rs, Sections 5(f), 8, and 9, there was a quorum of more than 50% of the members present and that, with the six members present voting (and not including any “proxy”), a vote of 5 YES and 1 NO was a 2/3 vote in favor of the increases in the assessments.

At rehearing, Petitioner argued that 6 YES votes had been needed for the fee increase to pass. Petitioner argued that the only solution was for the HOA to admit they were wrong, to go back and refund or credit the $5.00 increase and then take another vote on a fee increase.

Additionally, at rehearing, Petitioner argued, for the first time, pursuant to various subsections in A.R.S. § 33-1812(A): (a) the ballots used were not appropriate because the physical ballots, as counted, did not contain the names, addresses, and signatures of the voters; (b) that mailed-in ballots could not be used, (c) the ballots “expired” at the end of the meeting (and could not be reconsidered later), and/or (d) the ballots were required to have been retained and made available.

At rehearing, HOA argued it had not noticed the error as to having announced needing 6 votes until Petitioner raised the question of the use of a proxy (as was later discussed at the June 2017 meeting). Further, HOA argued that the proxy vote was not counted, and the outcome at the time of initial count was passage with the 5 YES votes. Finally, HOA indicated that the names and addresses were on a detachable portion of the ballots and that because it was a secret ballot, that portion was detached prior to the casting and counting.

COMPLAINT THREE

Petitioner argued, based on a November 5, 2018 receipt for the copies made of the ballot (a 15 page document), that nine full copies of the meeting notice/ballot to vote to amend the HOA Bylaws were not made and, therefore, 9 ballots could not have been “mailed” or “hand-delivered” to the nine members on that date.

Petitioner further argued (a) that the notices were not picked up from the UPS store by the postal service until November 6, 2018 and (b) that he had “received” his notice on Friday, November 9, 2018, which was only nine (9) before the meeting on November 18, 2018. Petitioner argued that the Amended Bylaws were not valid due to these mailing and delivery issues.

Dr. Sotelo went to the UPS store on November 5, 2018, made eight copies of the ballot, keeping the original for herself and “mailed” the notices at the UPS store. The time of the transaction, on the receipt, for the copies and mailing is 3:29 p.m. See Initial Exhibit 28.

Dr. Sotelo also emailed the information on November 4, 2018 to the HOA members. See Initial Exhibit 32. She indicated in her email dated November 6, 2018 that she had sent hard copies “by post” and implored the members to inform her if they had not received the hard copy by November 9, 2018.

The UPS store clerk testified that the UPS store was a U.S. postal service contract office.

Petitioner did not present any evidence to the contrary.

The UPS store clerk further indicated, that most likely, given the time of the mailing (i.e., 3:29 p.m.) that the postal service would not have come to the UPS store to pick up mail at that hour, would not have picked it up until the next day, and that the mail would then go to Phoenix for sorting before going back to Tucson for delivery. See New Exhibit O.

Petitioner received his mailed copy on November 9, 2018. See Initial Exhibit 30. Petitioner argued that he needed to have received his copy of the notice/ballot no later than November 8, 2018 or 10 days before the meeting and, thus he received his one day late.

A.R.S. § 33-1804(B), in pertinent part, provides that “not fewer than ten ... days in advance” of a meeting, the HOA secretary shall “cause notice to be hand-delivered or sent prepaid by [U.S.] mail to the mailing address designated in writing by a member.” Emphasis added here.

The hearing record demonstrates that the ballots were emailed to the HOA members on November 4, 2018. See Initial Exhibit 32.

The hearing record demonstrates that the ballots were also mailed at a U.S. Postal service contract office location on November 5, 2018 by Dr. Sotelo. See Initial Exhibits 28 and 32.

The hearing record demonstrates that the mailing to Ed Freeman in Oregon was returned by the postal service. See Initial Exhibit K. Petitioner argued that Mr. Freeman did not receive his notice/ballot until November 22 or November 27, which was long after the 10-day prior mailing requirement.

The HOA position was that the statute does not require that a meeting notice be “received” within a time frame, only that the HOA cause notice to be made within a time frame. The HOA argued that the mailing on November 5, 2018 at the UPS store, which is a U.S. postal service contract location, met the statutory requirement because it was a mailing at a contract postal service carrier.

Ms. Andree argued that nine ballots were cast for the proposal to amend the By-Laws, with Mr. Freeman’s ballot received on November 4, 2018 by his response email. See Initial Exhibit 33. She argued that A.R.S. § 33-1812(A), in pertinent part, provides that absentee ballots are acceptable and that the HOA may allow absentee voting to be cast by email.

Ms. Andree argued that A.R.S. § 33-1804(B) provides that a failure of a member to receive the “actual notice” does not affect the validity of actions taken at the meeting.

CONCLUSIONS OF LAW

This matter lies within the Department’s jurisdiction. Pursuant to A.R.S. §§ 32-2102 and 32-2199 et al., regarding a dispute between an owner and a planned community association, the owner or association may petition the department for a hearing concerning violations of condominium documents or violations of the statutes that regulate condominiums as long as the petitioner has filed a petition with the department and paid a filing fee as outlined in A.R.S. § 32-2199.05.

Pursuant to A.R.S. §§ 32-2199(2), 32-2199.01(D), 32-2199.02, and 41-1092, OAH has the authority to hear and decide the contested case at bar. OAH has the authority to interpret the contract between the parties. See Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)

In these proceedings, a petitioner bears the burden of proving by a preponderance of the evidence that a respondent, with the alleged actions, has violated the planned community document(s) provisions or statutes alleged in the petition to have been violated. Similarly, in a rehearing, that petitioner bears the burden to prove the allegations in the filed petition.

“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.”

COMPLAINT ONE

A.R.S. § 33-1805(A) states that, with the exceptions stated in subsection (B), “all financial and other records of the association shall be made reasonably available for examination...” and that a home owners association has “ten business days” to fulfill a written request. In the absence of evidence otherwise, the Administrative Law Judge presumes that the HOA generally operates on a 5-day business week with regard to any of its HOA business and responsibilities.

The hearing record demonstrates that the HOA reasonably asked Petitioner to narrow his April 21, 2018 request “to review any and all [HOA] documents including all organizational, business, corporate and financial records that the CDR/HOA has.” Based on the hearing record, the Administrative Law Judge concludes that Petitioner’s request, as stated, was burdensome and needed to be clarified given that the HOA has been in existence since 1984, has no office, and various persons have been officers over the past years. Petitioner’s clarification on May 6, 2018 for “starting” with particular documents was timely responded to by the HOA on May 14, 2018 with an email/attachment of documents. Once Petitioner said “Thank You” on May 25, 2018, and until Petitioner requested to review more documents, the HOA appropriately determined that the May 6, 2018 records review request was satisfied.

Regarding the November 13, 2018 request, the parties met timely on November 23, 2018 and Petitioner was given the opportunity to review the records.

Although the hearing record indicated that Petitioner hand wrote a November 23, 2018 note asking for certain documents and “copies,” the hearing record does not demonstrate when he emailed such a request to the HOA.

However, following Mr. Wolf’s November 26, 2018 letter, on November 30, 2018, Ms. Goldschmidt, on behalf of the HOA, emailed to Petitioner “the remaining records that [Petitioner] has requested to review, including copies of the tax returns and the expense invoices.”

The hearing record demonstrated that the HOA did not have in its possession a copy of the new Articles of Incorporation, and could not have provided that to Petitioner at the time of his request.

The Administrative Law Judge concludes that the hearing record demonstrates that, at no time did the HOA refuse to provide records, and that the HOA timely provided the requested records in compliance with A.R.S. § 33-1805 and the HOA is the prevailing party on this Petition/Complaint.

COMPLAINT TWO

The hearing record demonstrates that, at the May 6, 2017 Annual Meeting, the “proxy” vote initially allowed was subsequently determined to not be permitted and, as a result, no “proxy” vote was counted in a final tabulation of votes on the proposed fee increase. The hearing record further demonstrates that, at the time of the May 6, 2017 meeting, a vote count of 5 YES and 1 NO was a vote that met the HOA’s requisite voting criteria for approval of a fee increase because the votes in favor of a fee increase were 2/3 of the votes cast. Therefore, removing the erroneous use of a proxy vote gave the result initially tabulated on May 6, 2017 of 5 YES and 1 NO. The Administrative Law Judge concludes that the no “proxy” vote was utilized in the tabulation of the vote as to a $5.00 fee increase; therefore, the vote approving the $5.00 fee increase was not invalid. The HOA is the prevailing party on this Petition/Complaint.

COMPLAINT THREE

The hearing record demonstrates that, in compliance with A.R.S. § 33-1804(B), the HOA caused the notice packages for a November 19, 2018 meeting to be mailed more than ten days prior to the meeting. The hearing record demonstrated that Susan Sotelo, the HOA secretary at that time, mailed the packages on November 5, 2018 at a U.S. postal service contracted location, thus, at the post office. The Administrative Law Judge concludes that Petitioner’s argument fails that the notice packages had to be “received” more than ten days prior to the meeting; such a position is a misreading of the statutory requirement. Furthermore, A.R.S. § 33-1804(B) provides that a failure of a member to receive the “actual notice” does not affect the validity of the action taken at the meeting. The HOA is the prevailing party on this Petition/Complaint.

order

IT IS ORDERED that the HOA be deemed the prevailing party with regard to Complaint One, Complaint Two, and Complaint Three because Petitioner has not proven the alleged violations in those three Petitions. Petitioner bears his filing fees.

ORDERED this day, March 25, 2020.

/s/ Kay Abramsohn

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 electronically to:

Judy Lowe, Commissioner

Arizona Department of Real Estate

Transmitted through US Mail to:

Gregory L. Czekaj

3749 N. Avenida Arbodela

Tucson, Arizona 85716

Marybeth Andree

3719 N Avenida Arbodela

Tucson, AZ 85719