ALJDEC decisions subject to certification as final

19F-H1919062-REL-RHG · Department of Real Estate - H/C · 2020-01-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Sean McCoy

Petitioner,

vs.

Barclay Place Homeowners Association,

Respondent.

No. 19F-H1919062-REL-RHG

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 4, 2019

APPEARANCES: Petitioner Sean McCoy appeared on his own behalf. Respondent Barclay Place Homeowners Association was represented by Nathan Tennyson.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

On or about May 8, 2019, Petitioner Sean McCoy filed a Homeowners Association (HOA) Dispute Process Petition (Petition) with the Arizona Department of Real Estate (Department). Petitioner indicated a three issues would be presented, paid the appropriate $1,500.00 filing fee, and asserted violations of A.R.S. § 33-1810, A.R.S. § 33-1805, A.R.S. § 33-1804, Barclay Place Homeowners Association Bylaws Article VIII, Section 8(D), and Amendment to the Bylaws 3.3, and Desert Ranch Bylaw 2.4. Petitioner summarized his three issues as follows:

Complaint One: Failure to allow videotaping, discriminatory application. . . .

Complaint Two: Failure to provide required Compiled Financial Statement. . . .

Complaint Three: Denial of Homeowner’s right to reasonable access and communication.

On or about May 31, 2019, Respondent submitted an Answer to the Petition in which it denied all of the complaint items in the Petition.

On or about June 11, 2019, the Department issued a Notice of Hearing in which it set forth the issue for hearing as follows:

The Petitioner alleges that the Barclay Place Homeowners Association violated A.R.S. § 33-1810, 33-1805, 33-1804 and Community Document Bylaws Article VIII, Section 8(D), Amendment to Bylaws in a multiple issue petition.

At the initial hearing, Petitioner testified on his own behalf. Frank Puma, Jamie Murad, and Dana Young Jungclaus testified on behalf of Respondent.

At the conclusion of the initial hearing, the Administrative Law Judge issued an Administrative Law Judge Decision in which Petitioner was deemed the prevailing party with respect to Complaint Item Two and Respondent wad deemed the prevailing party with respect to Complaint Items One and Three.

Petitioner filed a Request for Rehearing seeking a rehearing on Complaint Item Three. The Department of Real Estate granted the Request for Rehearing. The rehearing was held on December 4, 2019.

Complaint Item Three

On January 11, 2019, Jamie Murad, Community Manager with AZCMS, emailed Petitioner a “response to the letter” Petitioner had issued to the residents of Barclay Place. The response was a letter from Respondent’s attorney Jonathan Olcott asking Petitioner to provide Mr. Olcott with information Petitioner had referenced in his letter to the residents.

On or about January 14, 2019, Petitioner sent a letter to Mr. Olcott that provided, in part, as follows:

I am confused as to who on the Board instructed you to initiate this communication. Please provide the name of the Board member, the date of the communication, the method of communication, and if in writing, please provide a copy of the communication. If this communication is pursuant to a Board Resolution, please provide a copy of the Resolution, the Notice of Meeting, the agenda and the vote tally for the meeting at which this Resolution was passed.

If this communication was initiated by someone other than a Board member, please so state and identify the communicant, including the date, time and method of communication. This request is made pursuant to ARS §33-1805 A.

All errors in original.

On or about January 24, 2019, Jamie Murad, Community Manager with AZCMS, emailed Petitioner a “cease and desist” letter from Respondent’s attorney Jonathan Olcott. The letter advised Petitioner as follows:

This law firm represents the Barclay Place Homeowners Association (“Association”). Please be advised all of your further communications regarding the community must be directed to Brown│Olcott. Please do not contact the directors or management company to address any concerns you may have within the community. They will not return your telephone calls. They will not respond to your emails. If you wish to address any community concerns, you may contact Brown│Olcott in writing at 5201 N. 7th Avenue, Phoenix, AZ 85013. You may also attend board meetings. You may not communicate directly with the Board Members outside of the board meetings. You may not communicate directly with any Arizona Community Management Service employees. That you for your anticipated cooperation.

On or about January 24, 2019, Petitioner’s attorney, James A. Whitehill, sent a letter to Mr. Olcott indicating that Petitioner was “entitled to communicate with his fellow members of the association and with the board members of his homeowner’s association” and that he also had “a right to communicate with the management firm of the association regarding association business.” At hearing, Petitioner asserted that this letter from his attorney, in some way, rescinded the cease and desist letter issued by Respondent’s attorney on January 14, 2019.

On or about March 6, 2019, Petitioner emailed Ms. Murad the following document request,

Please send me copies of each year’s contracts and fee schedules for contracts between AZCMS and Barclay Place HOA for the years 2017-18 and 2018-19. I am making this request under the provisions of ARS 33-1805A. Your timely compliance with this request is both anticipated and appreciated.

All errors in original.

On or about March 8, 2019, Frank Puma, Vice President of Client Operations with AZCMS, responded to Petitioner’s email as follows:

Attached please find the letter, dated January 23, 2019, sent to you from Jonathan Olcott, legal counsel for Barclay Place Homeowners Association. You have failed to comply with the communication instructions outlined in the letter. Please consider this email as our final notice that this office, will no longer accept emails from you (any AZCMS employee). We have blocked you from our server effective immediately. Please send further correspondence as directed in the attached letter. Other forms of correspondence will not be accepted.

All errors in original.

Attached to the email was a letter from Mr. Olcott that provided as follows:

This law firm represents the Barclay Place Homeowners Association (“Association”). Please be advised all of your further communications regarding the community must be directed to Brown│Olcott via United States Mail. Please do not contact the directors or management company to address any concerns you may have within the community. They will not return your telephone calls. They will not respond to your emails. If you wish to address any community concerns, you may contact Brown│Olcott in writing at 5201 N. 7th Avenue, Phoenix, AZ 85013. You may also attend board meetings. You may not communicate directly with the Board Members outside of the board meetings. You may not communicate directly with any of Arizona Community Management Service employees. That you for your anticipated cooperation.

CONCLUSIONS OF LAW

Arizona statute 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. A.R.S. § 32-2199 et seq. 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 committed the alleged violations 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.”

Complaint Item Three

A.R.S. § 33-1805 provides, in relevant part, 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. . . .

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.

Petitioner’s January 14, 2019 request was made to the attorney prior to Mr. Olcott issuing the cease and desist letter on January 24, 2019. Further, the request was seeking privileged communications between Mr. Olcott and the association. Accordingly, Mr. Olcott was not required to respond to Petitioner’s January 14, 2019 request at that time.

Petitioner’s March 6, 2019 request was made to Ms. Murad after Mr. Olcott issued the cease and desist letter on January 24, 2019. While Petitioner asserted that the January 24, 2019 letter from his attorney to Mr. Olcott somehow terminated the cease and desist letter, Petitioner offered no authority for such an assertion. Accordingly, Ms. Murad was not required to respond to Petitioner’s March 6, 2019 request at that time.

Thus, Petitioner failed to establish that Respondent violated the provisions of A.R.S. § 33-1805.

ORDER

IT IS ORDERED that Petitioner’s petition is denied as set forth above.

IT IS FURTHER ORDERED that Respondent be deemed the prevailing party with respect to Complaint Item Three.

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).

-54864001

001

-137160-45720000Done this day, January 2, 2020.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile January 2, 2020 to:

Judy Lowe, Commissioner

Arizona Department of Real Estate

100 N. 15th Avenue, Suite 201

Phoenix, Arizona 85007

Attn:

[email redacted]

Sean McCoy

PO Box 12757

Scottsdale, AZ 85267

Nathan Tennyson

BROWN/OLCOTT, PLLC

373 S. Main Ave.

Tucson, AZ 85701

Nathan Tennyson

5201 N. 7th Ave

Phoenix, AZ 85013

[email redacted]

-54864001

001

-137160-45720000