ALJDEC decisions subject to certification as final

20F-H2020064-REL · Department of Real Estate - H/C · 2020-09-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Nancy L. Babington,

Petitioner,

vs.

Park Scottsdale II Townhouse Corporation,

Respondent.

No. 20F-H2020064-REL

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 28, 2020

APPEARANCES: Petitioner Nancy L. Babington appeared on her own behalf. Respondent Park Scottsdale II Townhouse Corporation was represented by Lydia Linsmeier.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Park Scottsdale II Townhouse Corporation (Respondent) is an association of condominium owners located in Scottsdale, Arizona.

On or about May 28, 2020, Nancy L. Babington (Petitioner) filed a petition with the Arizona Department of Real Estate (Department), alleging that Respondent had violated the provisions of A.R.S. Title 33, Chapter 16, Section 33-1258. Petitioner specifically alleged, in relevant part, as follows:

After repeated attempts since the beginning of this year to get information, on April 29, 2020 I emailed Associa Arizona and the Board of Directors of Park Scottsdale II formally requesting records per ARS 33-1258 and to date, May 25, 2020, I have not received anything.

On or about June 1, 2020, the Department issued a notice to Respondent regarding the petition.

On or about June 25, 2020, Respondent filed an answer to the petition denying all allegations.

On or about July 1, 2020, the Department issued a Notice of Hearing to the parties notifying them that a hearing on the petition would be conducted by the Office of Administrative Hearings.

On August 28, 2020, a hearing was held on the petition and the parties presented evidence and argument regarding the violation alleged in the petition.

Based on the evidence presented at the hearing, the following events occurred.

By letter dated June 28, 2019, Community Management & Consulting, LLC (CMC) provided notice to Respondent that it intended to terminate the Management Agreement at the end of August 2019.

By letter dated July 16, 2019, CMC notified Respondent that it was “immediately terminating” the Management Agreement.

Respondent hired Associa Arizona (Associa) as its new management company. Associa attempted to obtain Respondent’s records, including financial records, from CMC to enable it to engage in a smooth transition of the management services.

Respondent retained counsel to assist in its efforts to obtain the records CMC was withholding due to a financial disagreement.

On or about April 8, 2020, Petitioner sent an email to Associa with a list of questions for the Board to address at its annual meeting.

On or about April 11, 2020, Petitioner sent an email to Associa indicating she had asked a question in the prior email and until she received an answer to the question, she would continue paying maintenance fees of the prior amount.

On or about April 29, 2020, Petitioner sent an email to Associa stated that Respondent and/or Associa had not responded to her request for information sent by email. Petitioner wrote as follows:

I am formally requesting from the Board of Directors of Park Scottsdale II, Debbie Schumacher, Marty Shuford, Joe Silberschlag, Angelina Rajenovich, Dermot Brown, Lori Nusbaum and Associa all Park Scottsdale II records as required per ARS 33-1258.

I know that Associa’s contract with this Board started Sept 1, 2019. I am requesting records from September 1, 2019 through April 28, 2020. I have requested answers to questions that are in these documents numerous times since there is no answer. Either the Board and/or Associa is refusing to answer my requests for information.

On or about May 1, 2020, Linda Parker, Director of Client Services with Associa, responded to the email and wrote as follows:

Thank you for reaching out to Associa Arizona with your records request for Park Scottsdale II. Ms. Evelyn Shanley and Ms. Laura Smith have previously been in communication with you directly via email and telephone and attempted to answer any and all questions possible.

Your email below does not indicate any specific record request. Please identify what you are specifically requesting, and Associa Arizona will be glad to respond and provide any and all records within our possession on behalf of the association, as permitted by law.

On May 1, 2020, Petitioner responded to Ms. Parkers email as follows:

This is the list of records I am requesting:

All bank statemetns with copies of cancelled checks since Sept 1, 2019.

Any and all financial statements since Sept 1, 2019.

Any and all 1099s issued for 2019.

Any and all Executive Session meeting minutes conducted in 2020, excluding the exemptions listed in the statute.

Any and all contracts signed in 2020.

Any and all outstanding invoices that have a due date that is over 45 days.

Any documentation regarding the legality of the $204.75 maintenance fee.

Any proof of Stephen Silberschlag’s liability insurance.

Any landscaping plans.

On May 4, 2020, Ms. Parker responded to Petitioner’s email indicating that she understood Petitioner’s request, but that Associa could only provide records within Associa’s possession.

On or about May 14, 2020, Petitioner emailed Ms. Parker noting that she had yet to receive any response to her document request.

On or about May 15, 2020, Ms. Parker emailed Petitioner and wrote as follows:

Please know that we have scheduled a meeting with the board for this coming Wednesday evening, May 20th to discuss further any details or information that Associa Arizona still needs in order to answer questions. I am hopeful that following the meeting we are able to answer your questions more thoroughly.

Petitioner acknowledged that her formal request was made on May 1, 2020, and no one with Respondent or Associa ever said they would not give her the requested documents.

Joseph Silberschlag, Secretary of Respondent’s Board of Directors, testified that because of the issues with CMC, neither Respondent nor Associa had possession of a number of documents. Mr. Silberschlag also indicated that because Respondent did not have the previous financial documents, Respondent did not have the starting balances necessary to create current financials.

Respondent argued that it was unable to provide documents not in its possession and that it was under no statutory obligation to create documents to respond to Petitioner’s request.

CONCLUSIONS OF LAW

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

In this proceeding, Petitioner bear the burden of proving by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258. A.A.C. R2-19-119.

A preponderance of the evidence is “[e]vidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (6th ed. 1990).

A.R.S. § 33-1258 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. On request for purchase of copies of records by any member or any person designated by the member in writing as the member's representative, the association shall have ten business days to provide copies of the requested records. An association may charge a fee for making copies of not more than fifteen cents per page.

There was no dispute that Respondent did not provide the requested documents within 10 days. However, Respondent did not have possession of any of the documents requested at the time of Petitioner’s request and Petitioner did not provide any authority that Respondent was required to create a document responsive to her request. Thus, Petitioner failed to establish by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A).

ORDER

IT IS ORDERED that Petitioner’s petition is denied.

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, September 17, 2020.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile September 17, 2020, to:

Judy Lowe, Commissioner

Arizona Department of Real Estate

100 N. 15th Avenue, Suite 201

Phoenix, Arizona 85007

Attn:

[email redacted]

Nancy L. Babington

5751 N. Granite Reef

Scottsdale, AZ 85250

Lydia A. Peirce Linsmeier

CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP

1400 E. Southern Ave., Suite 400

Tempe, Arizona 85282

[email redacted]

By-54864001

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-137160-45720000 c. serrano