ALJDEC decisions subject to certification as final

19F-H1919059-REL · Department of Real Estate - H/C · 2019-09-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 29, 2019 APPEARANCES: Mary J. Bartle on her own behalf; Nicole Payne, Esq. for Respondent ADMINISTRATIVE LAW JUDGE: Thomas Shedden FINDINGS OF FACT 1. On May 28, 2019, the Arizona Department of Real Estate issued a Notice of Hearing setting the above-captioned matter for hearing on July 19, 2019 at the Office of Administrative Hearings in Phoenix, Arizona. The matter was continued and the hearing was conducted on August 21, 2019. 2. The Notice of Hearing shows that Petitioner Mary J. Bartle alleges that Respondent Saguaro West Owner’s Association has violated Ariz. Rev. Stat. section 33-1810, Association Bylaws Article VIII, section 8(d), and CC&Rs Article VIII, section 1 in a single issue petition. 3. Ms. Bartle appeared and presented the testimony of Lois O’Neil and Ray Tweedie; the Association presented the testimony of its current Board president James Quaid. 4. Through Orders dated June 11 and August 5, 2019, the undersigned Administrative Law Judge informed the parties that he read the petition to encompass more than one issue and that Ms. Bartle would be required either to identify a single issue for hearing or to pay to the Department the appropriate fee for a multi- issue hearing. 5. At the hearing, Ms. Bartle agreed to limit her petition to the single issue of whether the Association had violated Bylaws Article VIII, section 8(d) by making a withdrawal of $49,000.50 from the operating account on October 22, 2018, and redepositing the same amount on November 30, 2018. 6. Bylaws Article VIII, section 8(d) provides: The Treasurer shall receive and deposit in the Association’s bank accounts all monies received by the Association and shall disburse such funds as directed by resolution [of] the Board of Directors; shall properly prepare and sign all checks before presenting them to be co-signed; keep proper books of account; cause an annual audit of the Association’s books to be made by a public accountant at the completion of each fiscal year; and shall prepare an annual budget to be presented to the membership at the annual meeting; to cause all Federal and State reports to be prepared; and shall prepare all monthly statements of finance for the Board of Directors.

7. Mr. Quaid testified to the effect that Ms. Bartle and Mr. Tweedie had filed a civil lawsuit against the Association that covered the same issues that were raised in Ms. Bartle’s petition, and that the Association had acquiesced to their demands, including hiring an accountant who has access to all transactions, and providing monthly bank statements and other information to the Association members. 8. As part of the resolution of the lawsuit, the Board that was in place between September and December 2018, was replaced with a new Board in January 2019. It was at that time that Mr. Quaid became the Board president. 9. Mr. Quaid also testified to the effect that the Association had reported to the police and to the Attorney General’s Office that illegal activity related to the Association’s accounts may have occurred. The police suggested that the Association work to get control of its accounts, which it did. 10. The Association acknowledges that $49,000.50 was withdrawn from the operating account on October 22, 2018 and that the same amount was deposited on November 30, 2018, but takes the position that this was not a violation of Article VIII, section 8(d) because that section imposes on the treasurer a duty to the Board and not a duty to the membership. 11. Mr. Quaid testified to the effect that the two transactions at issue were not made by the treasurer, but rather by former Board members. CONCLUSIONS OF LAW 1. Ms. Bartle alleges that the Association has violated its Bylaws. Consequently, the Department of Real Estate has authority over this matter. Ariz. Rev. Stat. Title 32, Ch. 20, Art. 11. 2. Ms. Bartle bears the burden of proof, and the standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119. 3. A preponderance of the evidence is: The 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. Black’s Law Dictionary 1373 (10th ed. 2014). 4. The Bylaws are a contract between the parties and the parties are required to comply with its terms. See McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.). 5. The evidence shows that $49,000.50 was withdrawn from the Association’s account in October 2018 and the same amount was deposited in November 2018, and there is evidence to suggest that the transactions may have been in violation of the law. But Ms. Bartle has not shown by a preponderance of the evidence these transactions violated any of the specific duties of the treasurer that are set forth in Bylaws Article VIII, section 8(d). 6. Consequently, Ms. Bartle’s petition should be dismissed. ORDER IT IS ORDERED that Mary J. Bartle’s petition is dismissed. NOTICE Pursuant to Ariz. Rev. Stat. section 32-2199.02(B), this Order is binding on the parties unless a rehearing is granted pursuant to Ariz. Rev. Stat. section 32-2199.04. Pursuant to Ariz. Rev. Stat. section 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.

Done this day, September 18, 2019.

/s/ Thomas Shedden Thomas Shedden Administrative Law Judge

Transmitted to:

Judy Lowe, Commissioner Arizona Department of Real Estate 100 N. 15th Avenue, Suite 201 Phoenix, Arizona 85007

Mary Bartle 4813 E Westland Rd Cave Creek, AZ 85331

Nicole Payne Edith Rudder Carpenter, Hazlewood, Delgado & Bolen, PLC 1400 E. Southern Ave., Suite 400 Tempe, AZ 85282

By FDS

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Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826