ALJDEC decisions subject to certification as final

20F-H2019018-REL · Department of Real Estate - H/C · 2020-01-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Robert L Greco,

Petitioner,

vs.

Bellasera Community Association, Inc.,

Respondent.

No. 20F-H2019018-REL

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 9, 2020

APPEARANCES: Petitioner Robert L. Greco appeared on his own behalf. Respondent Bellasera Community Association, Inc. was represented by Nathan Tennyson.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Bellasera Community Association, Inc. (Respondent) is an association of homeowners located in Arizona.

On or about October 11, 2019, Robert L. Greco (Petitioner) filed a Homeowners Association (HOA) Dispute Process Petition (Petition) with the Arizona Department of Real Estate (Department) alleging that Respondent had violated the provisions of A.R.S. § 33-1803(B). Petitioner’s statement of the issue provided as follows:

Petitioner has resided in the Bellasera Community for 17 years, and has made all quarterly dues payments in a timely manner. On July 1, 2019, Petitioner was denied automatic gate access and use of clubhouse facilities.

All errors in original.

After being notified of the Petition, Respondent filed a response in which Respondent denied all of the complaint items in the Petition.

At hearing, Petitioner testified on his own behalf and submitted six exhibits. Respondent presented the testimony of David Reid, member of the Board of Directors, and Annette McCarthy, Acting Manager, and submitted four exhibits. Based on the evidence presented at hearing, the following occurred:

On or about February 5, 2013, Respondent sent Petitioner an Initial Notice (Courtesy Notice) to his residential address notifying him that “[d]uring a regular community inspection on 02/05/2013, it was noted that your garage is faded and needs to be repainted which is a violation of the Design Guidelines.” Included with the Courtesy Notice was an Architectural Review Committee Submittal Petitioner could fill out and submit to get approval for painting the garage.

On or about March 14, 2013, Respondent sent Petitioner a Final Notice to his residential address indicating as follows:

This is a follow-up to my letter to you of 02/05/2013. I have not heard from you since sending my previous letter and I observed in a repeat inspection that the violation described in my earlier letter either continues or has reoccurred.

On behalf of Bellasera’s Board of Directors, I regret to inform you that, in accordance with your community’s Violation Enforcement policy, dated February 24, 2011, available at www.azbellasera.org, a fine of $250.00 has been posted to your account for the violation indicated above. An additional fine of $250 will be assessed automatically every 14 days after your receipt of this notice if the violation remains uncorrected. An additional fine of $250 will be assessed if the violation is cured and the same violation reoccurs within 60 days of the original violation.

On or about April 2, 2013, Respondent sent Petitioner a Notice of Remedy to his residential address indicating as follows:

This is a follow-up to my letters to you of 2/5/2013 and 3/14/13. I have not heard from you since sending my previous letters and I note from a repeat inspection that the following violation continues on your property:

A violation of the CC&Rs, Article V, 5.2 and Bellasera’s Design Guidelines, J was noted.

On behalf of Bellasera’s Board of Directors, I regret to inform you that, in accordance with your community’s Violation Enforcement policy, dated April 24, 2008, available at www.azbellasera.org, the Board has declared a continuing violation and a fine of $250.00 has been posted to your account for the violation indicated above. Please note if this violation is not corrected the Homeowner’s Association has the ability to suspend privileges for use of the Recreational Facilities.

In accordance with the Enforcement Policy, you may request a hearing before the Board of Directors to appeal this action by delivering a Notice of Appeal by certified mail to me at the above address within 14 days after receipt of this letter. The Notice of Appeal must set forth the reasons that you believe the alleged Violation is invalid or the proposed remedy is not warranted.

On or about May 7, 2013, Respondent sent Petitioner a Fourth Notice of Non-Compliance/Fine Notification to his residential address indicating as follows:

We have become aware of violation(s) of the governing documents in connection with your lot/unit that appears to deviate from community restrictions and ask that it be brought into compliance. You are hereby notified of the following violation:

A violation of the CC&Rs, Article V, 5.2 and Design Guidelines, J was noted.

A fine of $250.00 has been posted to your account for the violation indicated above. Please bring this issue into compliance within 14 days of this notice. Pursuant to Arizona law, you have the right to appeal the fine before the fine becomes a permanent obligation. Please visit http://www.hoacompliance.com/Appeals to file your appeal. Requests for appeal must be received within 15 days of receipt of this letter and present applicable back up documentation supporting your extenuating circumstances. If the Board approves your appeal, the fine will be reversed.

On or about June 5, 2013, Kelly Oetinger, counsel for Respondent, sent a letter to Petitioner at his residential address. The letter provided, in pertinent part, as follows:

I have reviewed communications from the Association relating to your violation of the use restrictions contained in the Declaration of Covenants, Conditions and Restrictions (“CC&Rs”). You are required to maintain the exterior appearance of Lot 73. The paint on your garage door is fading. You must repaint the exterior of your garage door. The Association has sent you four (4) violation notices requesting that you repaint the exterior of your garage door. Despite these notices, you have not repainted the exterior of the garage door on Lot 73. Your failure to repaint the exterior of your garage door is a violation of the CC&Rs.

The Association has received complaints about the exterior appearance of your Lot. . . . When you purchased your home within the Association, you were on notice of Article V, Section 5.2 of the CC&Rs that states in pertinent part that, “Each Owner shall maintain their Lot, and Dwelling Unit, and all structures, parking areas, landscaping, and other improvements comprised the Lot in a manner consistent with the Community-Wide Standard and all applicable covenants.” You were also on notice of Article III, Section J of the Design Guidelines that states in pertinent part that, “Colors should be deep, muted tones chosen to blend with the natural colors of the desert vegetation and mountains.” . . . .

Please repaint the exterior of your garage door within fifteen (15) days of this letter. If you do not repaint the exterior of the garage door within the time frame the Association may disable the transponder you use to enter the community and may disable the fobs you use for the clubhouse. You have already been fined for these violations.

On or about July 5, 2013, Respondent sent a letter to Petitioner at his residential address that provided as follows:

It was brought to my attention that you have complied to the request to paint your garage door and I thank you. The Board of Directors have agreed if you pay $500.00 of the total $900.00 in fines that are due within 10 days of receipt of the letter, the Association will forgive the other $400.00. However, if we do not receive the $500.00 within 10 days we will take further action which can include the deactivation of your gate openers and fobs.

On or about July 5, 2013, Petitioner sent a letter to Respondent in which he stated the following:

I wish to inform you that I have re-painted the garage door of my home. I apologize for any inconvenience. Also, I believe that is necessary for you to understand the time-line of my schedule.

To effectively manage my workload, I dispose of unsolicited mail. Routinely, Saturdays are my mail pick-up days, and invariably, I walk straight to the re-cyclable container, and deposit the mail in the receptacle. At first glance, I was discarding the Brown/Olcott, PLLC letter until I realized that the contents could contain information requests concerning my company’s liabilities. I opened the letter, read the first paragraph, and noted that there is a concern about the appearance of my garage door. I was astonished to learn that my garage door failed inspection. This is my initial alert of the garage door condition.

Reviewing my work/travel schedule, the first opportunity to paint the garage door would be Thursday, July 4th. I entered the paint project into my calendar, made preparations to determine the correct color, and the retail outlet to purchase the paint. Previous to the Brown/Olcott letter, I have targeted the week of October 28th to re-paint the exterior of my entire hourse.

On again, I apologize for any inconvenience. In the future, I will exercise greater caution in disposing of unsolicited mail.

On or about July 17, 2013, Respondent sent a letter to Petitioner at his residential address, that provided as follows:

Thank you for your letter dated July 5, 2013. Attached are copies of the violation letters you requested that were mailed on February 5th, March 14th, April 2nd, and May 7th, 2013. A copy of the July 1, 2013 statement for assessments is also attached which shows that fines were added to your homeowner ledger.

I do owe you an apology, as the amount of the fines should be $750 (as shown on your July statement) and not $900 as indicated in my letter due to an AAM internal accounting error. The Board of Directors have agreed if you pay $375 of the total $750 in fines that are due within 10 days of the receipt of this letter, the balance of $375.00 will be waived. At this time, there are no attorney fees due.

Since 2013, Petitioner received quarterly statements indicating a $750.00 balance and the current assessments. Each quarter, Petitioner would cross out the $750.00 balance and pay the current assessment.

In or around June 2019, Petitioner received a telephone call from Dennis Carson, a friend who was sitting on the Board of Directors. Mr. Carson informed Petitioner that his name was on a list of penalties and the Board was going to deactivate Petitioner’s security gate fob and access to the clubhouse. Mr. Carson advised Petitioner to offer $100.00 or $150.00 to the Board to settle the outstanding fines.

Petitioner made an offer of $100.00 to the Board to resolve the outstanding fine issue. The Board responded that it would accept $250.00 to settle the matter. Petitioner responded that he would pay $251.00, $250.00 to settle the outstanding fines and $1.00 to rent the clubhouse on a specific date.

The Board declined Petitioner’s offer of $251.00.

At some point, Respondent deactivated Petitioner’s security gate fob and access to the clubhouse.

CONCLUSIONS OF LAW

The Department has jurisdiction to hear disputes between a property owner and a homeowners association. A.R.S. § 32-2199 et seq.

In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated A.R.S. § 33-1803(B). A.A.C. R2-19-119.

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.” Black's Law Dictionary 1220 (8th ed. 2004).

A.R.S. § 33-1803(B) provides, in pertinent part, as follows:

After notice and an opportunity to be heard, the board of directors may impose reasonable monetary penalties on members for violations of the declaration, bylaws and rules of the association. Notwithstanding any provision in the community documents, the board of directors shall not impose a charge for a late payment of a penalty that exceeds the greater of fifteen dollars or ten percent of the amount of the unpaid penalty. A payment is deemed late if it is unpaid fifteen or more days after its due date, unless the declaration, bylaws or rules of the association provide for a longer period.

Notice is not defined in Title 33, Chapter 16. Notice is commonly defined as “[l]egal notification required by law or agreement, or imparted by operation of law as a result of some fact (such as the recording of an instrument); definite legal cognizance, actual or constructive, of an existing right or title.” Black's Law Dictionary 1090 (8th ed. 2004).

Actual notice is commonly defined as “[n]otice given directly to, or received personally by, a party.” Id. Constructive notice is commonly defined as “[n]otice arising by presumption of law from the existence of facts and circumstances that a party had a duty to take notice of” or “notice presumed by law to have been acquired by a person and thus imputed to that person.” Id.

Petitioner asserted that he did not receive any of the notices from Respondent prior to the letter from the letter from the attorney. Petitioner stated that because he promptly painted the garage door after receiving the letter from the attorney, he should not have been fined. Petitioner appeared to argue that unless he had actually received the four prior notices sent by Respondent regarding the garage door, he could not held responsible for the warnings included therein.

Petitioner did not provide any authority that the “notice” required in A.R.S. § 33-1803(B) had to be “actual notice.” To accept Petitioner’s argument, all notices would have to be sent via certified mail to prove a homeowner received them and a homeowner would be able to avoid receiving “actual notice” by simply refusing to sign for a certified mailing.

Petitioner received constructive notice of the violation of the CC&Rs via the multiple mailings that were presumably delivered to his residential address. Petitioner was also advised in those mailings how to appeal the matter to the Board if he disagreed with the alleged violation. Accordingly, Petitioner was provided notice and an opportunity to be heard in accordance with A.R.S. § 33-1803(B).

Petitioner also raised an allegation that the Board improperly imposed late fees of $500.00 on the original fine of $250.00 when a maximum late charge of the greater of $15.00 or 25% of the unpaid penalty.

The notices issued by Respondent clearly stated that an ongoing failure to remedy the violation would resulting in additional fines every 14 days. Petitioner was first fined $250.00 on March 14, 2013, and he did not paint the garage door until July 5, 2013. Accordingly, Respondent was entitled to impose three fines for the ongoing condition of the garage door.

Therefore, this Tribunal concludes that Respondent did not violate the provisions of A.R.S. § 33-1803(B).

ORDER

IT IS ORDERED that Petitioner’s petition is dismissed.

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.

-54864001

001

-137160-45720000Done this day, January 29, 2020.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner

Arizona Department of Real Estate

100 N. 15th Avenue, Suite 201

Phoenix, Arizona 85007

Robert L Greco

7363 E Visao Drive

Scottsdale, AZ 85266

Nathan Tennyson

Brown|Olcott, PLLC

373 South Main Avenue

Tucson, AZ 85701

-54864001

001

-137160-45720000