ALJDEC decisions subject to certification as final
20F-H2019007-REL · Department of Real Estate - H/C · 2020-02-04
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
John B. Clark Jr.,
Petitioner,
vs.
Foothills Community Association,
Respondent.
No. 20F-H2019007-REL
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: January 15, 2020
APPEARANCES: Mitchell Vasin, Esq. appeared on behalf of Petitioner John B. Clark Jr. B. Austin Baillio, Esq. appeared on behalf of Respondent Foothills Community Association.
ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson
_____________________________________________________________________
FINDINGS OF FACT
1. The Arizona Department of Real Estate (Department) is authorized by statute to receive and to decide Petitions for Hearings from members of homeowners’ associations and from homeowners’ associations in Arizona.
2. Respondent Foothills Community Association is a homeowners’ association (HOA) whose members own property and/or residences in the Foothills Community Association in Phoenix, Arizona.
3. Petitioner John B. Clark Jr. owns a house or property in the Foothills Community Association and is a member of Respondent.
4. Petitioner was a member of the Respondent’s Design Review Committee (DRC) from 2011 to 2019.
5. On or about July 10, 2019, Respondent notified Petitioner in writing that it had selected a new member for the Design Review Committee (DRC) due to its need to meet quorum every month. The Board acknowledged Petitioner’s need to be absent due to commitments. The July 10, 2019 letter provided, in relevant part, as follows:
The Foothills Board of Directors would like to thank you for your recent years serving as a member of the Design Review Committee. Your participation and experience has been most helpful to the Committee and greatly appreciated.
With the need for the Committee to meet quorum on a monthly basis to conduct business in an efficient manner for the homeowners, and recognizing your commitments and schedule often necessitate your absence, the Board has selected a new member for the Committee.
Again, we thank you for your term service as a Committee member, John.
Respectfully,
Board of Directors
The Foothills Community Association
6. On July 16, 2019, Michael Owen, sent an electronic mail message (e-mail) to Petitioner which provided, in relevant part, as follows, “The truth of the matter is, since April of 2015 you have attended only 19 of the 54 DRC meetings and only 4 of the last 18.” Mr. Owen sent the e-mail to Petitioner after he contacted the Community Manager about his removal.
7. In August of 2019, Petitioner filed a single-issue petition with the Department that alleged that Respondent removed him from the DRC for a pretextual reason. Petitioner also alleged that he was removed from the DRC in bad faith. Petitioner alleged that Respondent had violated Articles of Incorporation 1, 5, 6, 11, 12, and 15. Petitioner also alleged that Respondent had violated Article II, Section 2.3, Article III, Section 3.5, and Article IV, Section 4.8(c) of Respondent’s Bylaws.
8. Respondent filed a timely response to the petition.
9. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing.
10. On October 2, 2019, the Department issued a Notice of Hearing setting the above-captioned matter for hearing on November 8, 2019 at the Office of Administrative Hearings in Phoenix, Arizona.
11. The Notice of Hearing shows that Petitioner alleges that
Respondent Foothills Community Association violated Articles of Incorporation 1, 5, 6, 11, 12, and 15 in a single-issue petition.
12. At hearing, Petitioner testified on behalf of himself. Respondent presented the testimony of Respondent’s Community Manager, Patricia Wontor, and Michael Owen.
13. Petitioner explained that he is an Air Force Reservist, a realtor, and a pilot for American Airlines. Although Petitioner has the ability to modify his schedule as a pilot, it is more difficult to do so when he is “on call”. Petitioner informed the Board in 2011 of his schedule when he was asked to join the DRC.
14. Petitioner explained that it became more difficult for him to attend the DRC meetings after the meeting time was changed to from 3pm to 2pm. The DRC meetings were held the second Wednesday of every month. Petitioner asserted that he consistently informed the DRC of whether he could attend a meeting after receiving an email regarding a DRC meeting. Petitioner also asserted that not all members attended every meeting.
15. Petitioner expressed dissatisfaction because no one previously expressed concern to him about his absence from DRC meetings.
16. Petitioner asserted that his removal from the DRC “wreaked of politics.”
17. Ms. Wontor is an employee of Premier Community Management.
Ms. Wontor is the community manager assigned to Respondent. Ms. Wontor has worked as a community manager for 16 years and managed master planned communities during the last 12 years. Ms. Wontor implements board policies and oversees the day to day operations of HOAs. She communicates the decision of the Board to its homeowners.
18. Ms. Wontor explained that she sends out notices of meetings and agendas. The notices of meetings and agendas are uploaded to Respondent’s website. Ms. Wontor stated that the Board removed Petitioner and appointed new members at a board meeting.
19. Ms. Wontor explained that she sends out a notices of Respondent’s annual member meetings. Ms. Wontor explained that Petitioner would have been sent notice of Respondent’s Board of Director’s Open Session Meetings that were held on May 22, 2019 and June 26, 2019.
20. The minutes of Respondent’s May 22, 2019 Board of Director’s Open Session Meeting (May 22, 2019 meeting) meeting show that new members of the DRC would be appointed in the coming month.
21. The minutes of Respondent’s June 26, 2019 Board of Director’s Open Session Meeting (June 26, 2019 meeting) show that two new members of the DRC were appointed and two others were appointed as alternate members. The appointment was approved unanimously.
22. The Agenda for the May 22, 2019 meeting and Revised Agenda for the June 26, 2019 meeting show that the DRC would be discussed at both meetings.
23. Mr. Owen explained that he served on the DRC with Petitioner and is a member of the Board. Mr. Owen explained that Petitioner was removed and replaced during the June 26, 2019 meeting. Mr. Owen explained that although alternates are called when a quorum cannot be met, those alternates are not available. Mr. Owen explained that all homeowners have access to the website. Although the Board can increase the size of the DRC, the Board chose not to do so. Mr. Owen explained that Petitioner as not removed for political reasons. Petitioner was removed due to their inability to meet quorum.
24. Article IV, Section 4.8(c) of Respondent’s Bylaws require that the secretary keep the minutes of all meetings and proceedings of the Board and of the Members. See Exhibit R6, pg4.
25. Petitioner also contended at hearing that he was removed from the DRC in violation of Arizona Revised Statutes (A.R.S.) § 10-3830.
CONCLUSIONS OF LAW
1. A.R.S. § 32-2199(B) permits an owner or a planned community organization to file a petition with the Department for a hearing concerning violations of Title 33, Chapter 16. This matter lies with the Department’s jurisdiction.
2. The Administrative Law Judge does not have jurisdiction to determine whether Respondent violated A.R.S. § 10-3830.
3. Petitioner bears the burden of proof to establish that Respondent violated Articles of Incorporation 1, 5, 6, 11, 12 and 15 by a preponderance of the evidence. Petitioner bears the burden of proof to establish that Respondent violated Article II, Section 2.3, Article III, Section 3.5, and Article IV, Section 4.8(c) of the Bylaws. Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.
4. “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.”
5. Petitioner failed to establish by a preponderance of the evidence that Respondent removed him from the DRC for a pretextual reason. The preponderance of the evidence shows that Respondent removed Petitioner and replaced him with a new member due to its desire to meet quorum on a monthly basis.
6. Upon consideration of the evidence presented, the Administrative Law Judge concludes that Petitioner failed to establish that Respondent violated Article II, Section 2.3, Article III, Section 3.5, and Article IV, Section 4.8(c) of Respondent’s Bylaws.
7. Petitioner failed to establish that Respondent violated Articles 1, 5, 6, 11, 12, and 15 of its Articles of Incorporation.
8. Because Petitioner did not establish that Respondent violated any statute or Bylaw charged in his petition, his petition must be dismissed.
9. With respect to Respondent’s request for attorney’s fees, in American jurisprudence, attorney’s fees cannot be awarded without a statute specifically authorizing the award. The legislature has not empowered the Department or OAH to award attorney’s fees in administrative proceedings involving a member’s petition against his homeowners’ association that the member has filed with the Department.
order
IT IS ORDERED that Petitioners’ 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, February 4, 2020.
/s/ Velva Moses-Thompson
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile February 5, 2020 to:
Judy Lowe, Commissioner
Arizona Department of Real Estate
100 N. 15th Avenue, Suite 201
Phoenix, Arizona 85007
Mitchell A. Vasin, Esq.
Vasin & Rocco, PLLC
3100 W. Ray Road, Suite 201
Chandler, AZ 85226
Jeffrey B. Corben, Esq.
Austin Baillio, Esq.
MAXWELL & MORGAN, P.C.
4854 E. Baseline Road, Suite 104
Mesa, AZ 85206
John B. Clark
16205 S. 4th St.
Phoenix, AZ 85048
By: A. Leverette