ALJDEC decisions subject to certification as final

21F-H2120009-REL-RHG · Department of Real Estate - H/C · 2021-04-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

John D. Klemmer,

Petitioner,

Caribbean Gardens Association,

Respondent.

No. 21F-H2120009-REL-RHG

ADMINISTRATIVE LAW JUDGE DECISION

REHEARING: April 8, 2020

APPEARANCES: John D. Klemmer (“Petitioner”) represented himself. Nicole D. Payne, Esq., represented Respondent Caribbean Gardens Association (“Caribbean”).

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

_____________________________________________________________________

FINDINGS OF FACT

The initial hearing in this matter was heard before the Office of Administrative Hearings on November 6, 2020.

The issue in the initial hearing in this matter was Petitioner’s allegation that the Caribbean Board is in violation of the Caribbean CC&Rs by refusing to “manage, operate, maintain and administer” one particular area within Caribbean, which area Petitioner argues is a “common area” or “common element.” Petitioner alleged Caribbean violations of CC&Rs Article 1, Sections 1.5 and 1.8; Article 3, Section 3.4; Article 4, Section 4.1; Article 8, Section 8.1; and, Article 12, Section 12.4.”

An Administrative Law Judge Decision (“Decision”) was issued on December 17, 2020 finding no violations by Caribbean.

Thereafter, Petitioner submitted a HOMEOWNER’S ASSOCIATION (HOA) DISPUTE REHEARING REQUEST (“Request”) to the Arizona Department of Real Estate (“Department”).

In his Request, Petitioner argued that the Decision was not supported by the evidence, i.e., the Declaration and the Plat. The Request focused on Petitioner’s disagreement with the Administrative Law Judge’s application of A.R.S. § 33-1212[A](4) as a determining factor that the specific disputed area was neither a “common area” nor a “common element” but was a balcony “designed to serve a single unit [i.e., Unit 207], [] located outside the unit’s boundaries” and was not delineated in either the Declaration or Plat as an “Apartment,” a “patio,” a “balcony.”

The Commissioner of the Department granted the Request and a rehearing was conducted on April 8, 2021.

At the rehearing, Petitioner essentially argued that the Decision was incorrect in not finding that the Declaration and the Plat were, in fact, determinative of the designation of the specific disputed area as a common element because the Decision had ignored the exception clause of A.R.S. § 33-1212 which states “Except as provided by the Declaration.” Petitioner argued that the Decision had not explained any “fault or insufficiency” in the Declaration or Plat such that A.R.S. § 33-1212[A](4) would apply.

Petitioner argued that the Plat, as part of the Declaration, does not “show” the specific disputed area as being a part of Unit 207 and only shows the Plat-designated second level balconies.

Petitioner maintained his original position that the specific disputed area is a “common area” or “common element” that is owned by all the unit owners, to whom Caribbean owes a duty to: (a) defend the Caribbean assets, one asset of which is/are all such areas in Caribbean; (b) claim ownership and maintain the area; and (c) not permit any one owner to possess to the exclusion of other owners.

The Plat documents two “balconies” on a typical second level unit; the balconies are denoted by lines surrounding a space which contains the letter “B.” Regarding Unit 207, those two Plat-documented “balconies” are located at the southeastern and northeastern corner portions of Unit 207, while the specific disputed area is at the northwestern corner of Unit 207. On the Plat document, the specific disputed area is not “drawn” as any particular feature at Caribbean but is simply a blank space between Unit 206 and Unit 207.

This otherwise blank space on the Plat document between Unit 206 and Unit 207 is, in fact, taken up by a concrete slab and outside iron railings attached to the slab which railings essentially fence off the slab between the two Units. The area is not a staircase landing and may only accessed by Unit 207 through a door from one of the rooms in Unit 207.

At hearing, Caribbean argued that the Decision was supported by the evidence presented at the initial hearing because the Plat does not delineate the specific disputed area and, further, A.R.S. § 33-1212[A](4) was properly applied to appropriately determine that the specific dispute area is a “limited common element” of which the Unit 207 owners have the exclusive right to use. Caribbean further argued, as it had at the initial hearing, that Caribbean has never acknowledged the specific disputed area as a common element and has never maintained that particular area or any of the various units’ Plat-designated balconies.

CONCLUSIONS OF LAW

The Department has jurisdiction to receive petitions, hear disputes between a property owner and a condominium community association, and take other actions pursuant to Arizona Revised Statutes (A.R.S.), Title 33, Chapter 16.

The Arizona Office of Administrative Hearings (Tribunal) is a separate state agency authorized by statute to hear and decide agency-referred contested matters through the conduct of an administrative hearing and issuance of a written decision.

In this proceeding, pursuant to Arizona Administrative Code (A.A.C.) R2-19-119, Petitioner bears the burden of proving by a preponderance of the evidence that, as alleged, Caribbean has violated CC&Rs Article 1, Sections 1.5 and 1.8; Article 3, Section 3.4; Article 4, Section 4.1; Article 8, Section 8.1; and, Article 12, Section 12.4” by refusing to claim ownership and manage, operate, maintain and administer the at-issue.

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).

Article 1, Section 1.5 of the CC&Rs defines “Apartment” as follows:

“Apartment” means a part of the Property, including one or more rooms situated in an Apartment Building comprising a part of the Property designated or intended for independent use as a dwelling unit, as so specified on the plat or survey attached as Exhibit “B”. Each Apartment shall consist of the space enclosed and bounded by the horizontal and vertical planes as shown on said Plat, and shall also include the patio and balcony areas identified with the Apartment by said Plat.

Article 1, Section 1.6 of the CC&Rs defines “Common Elements” as follows:

“Common Elements” means the “general common elements” as that term is defined in Section 33-551, Arizona Revised Statutes, together with the parking areas, yard areas, storage areas, swimming pool and swimming pool furniture and equipment, outside walks and driveways, landscaping, and all other portions of the Property except the Apartments.

Article 1, Section 1.8 of the CC&Rs defines “Plat” as follows:

“Plat” means the plat of survey of the Property and of all Apartments submitted to this horizontal regime, said Plat being in two pages, attached hereto as Exhibit “B” and recorded simultaneously with the recording of this Declaration.

Article 3, Section 3.4 of the CC&Rs provides as follows:

The Common Elements shall be exclusively managed, operated, maintained and administered by the Association, acting through its Board, for the use and benefit of all Owners, and for such other purposes as determined from time to time by said Board. The Board shall have the exclusive right and power to establish and impose rules and regulations governing the use, maintenance and development of all and any part of the Common Elements, and any Owner, or any other person using any part of the Common Elements shall abide by such rules and regulations.

Article 4, Section 4.1 of the CC&Rs provides as follows:

Title to the Common Elements shall be vested in the Owners who, as among one another, shall own such Common Elements as tenants in common, with ownership of an undivided percentage interest in said Common Elements in accordance with their respective percentage interests in the Common Elements as set forth in Exhibit “C”, provided, however, that no Owner shall exercise any right of partition with respect to his undivided percentage interest in said Common Elements, or bring any action for dissolution of the Association, so long as anyone of the restrictions or conditions stated in any part of Article III or this Article IV, remain in effect, it being agreed that these restrictions are necessary in order to preserve the rights of the Owners with respect to the operation and management of the Common Elements.

Article 7, Section 7.2 of the CC&Rs provides, in pertinent part, as follows:

Each Owner shall be entitled to the exclusive use of the interior surfaces (extending to the middle) of the perimeter walls including patio and balcony walls, doors, floors and ceilings and the surfaces of the patio and balcony floors within his Apartment ...

Article 8, Section 8.1 of the CC&Rs provides as follows:

If any portion of the Common Elements shall actually encroach upon any Apartment, or if any Apartment shall actually encroach upon any portion of the Common Elements, or if any Apartment shall actually encroach upon another Apartment, as the Common Elements and the Apartments are shown by the surveys comprising the Plat, there shall be deemed to be mutual easements in favor of the Owners of the Common Elements and the respective Owners involved to the extent of such encroachment so long as the same shall exist.

Article 9, Section 9.2 of the CC&Rs provides as follows:

The Common Elements shall be used only by the Owners residing therein, their guests and other authorized visitors and for such purposes as are incidental to the residential use of the Apartments or such other purposes as may be approved by the Board.

Article 12, Section 12.4 of the CC&Rs provides as follows:

Each grantee of Declarant, by the acceptance of a deed of conveyance, or each purchaser under any agreement of sale, accepts the same subject to all restrictions, conditions, covenants, reservations, liens and charges, and the jurisdiction, rights and powers created or reserved by this Declaration, and all rights, benefits and privileges of every character hereby granted, created, reserved or declared, and all impositions and obligations hereby imposed shall be deemed and taken to be covenants running with the land and equitable servitudes, and shall bind any person having at any time any interest or estate in said land, and shall inure to the benefit of such grantee or purchaser in like manner as though the provisions of this Declaration were recited and stipulated in full in each and every deed of conveyance or purchase contract.

A.R.S. § 33-1212, Unit Boundaries, provides as follows:

Except as provided by the Declaration,

...

4. Any shutters, awnings, window boxes, doorsteps, stoops, porches, balconies, entryways or patios, and all exterior doors and windows or other fixtures designed to serve a single unit, but located outside the unit's boundaries, are limited common elements allocated exclusively to that unit.

A.R.S. § 33-1218, Limited Common Elements, provides as follows:

Except for the limited common elements described in § 33-1212, paragraphs 2 and 4, other than porches, balconies, patio and entryways, the declaration shall specify to which unit or units each limited common element is allocated. ...

CC&R Article 1, Section 1.5 defines Apartment as the part of the Property so delineated on the Plat document. However, the Plat document does not delineate the specific disputed area in any manner. The specific disputed area is not delineated on the Plat document as a part of the “Apartment” or as a “patio” or as a “balcony.” The parties did not dispute that access to the specific disputed area may only be gained through Unit 207.

CC&R Article 1, Section 1.6 describes a Common Element with some specificity, but also includes “all other portions of the Property except the Apartments.” The Apartments are clearly delineated on the Plat document.

CC&R Article 9, Section 9.2 provides that Common Elements are used “for such purposes as are incidental to the residential use of the Apartments or such other uses as may be approved by the Board.” Caribbean’s position is that the disputed area is a “balcony” attached to Unit 207; however, there is no evidence of any particular Board approval determination reduced to writing and designating the disputed area as a “balcony.”

A.R.S. § 33-1212[A](4) provides that “[a]ny shutters, awnings, window boxes, doorsteps, stoops, porches, balconies, entryways or patios, and all exterior doors and windows or other fixtures designed to serve a single unit, but located outside the unit's boundaries, are limited common elements allocated exclusively to that unit.”

Based on the hearing record, the Administrative Law Judge concludes that the Declaration and Plat fail to delineate the specific disputed area as an “Apartment,” a “patio,” or a “balcony.” Therefore, pursuant to A.R.S. § 33-1212[A](4), the specific disputed area must be considered to be a limited common element designed to serve a single unit but located outside the boundaries of that singe unit and, thus, in this case, the specific disputed area is a limited common element allocated exclusively to Unit 207.

Therefore, based on the hearing record, the Administrative Law Judge concludes that Petitioner has not established, as alleged, any violation by Caribbean of the referenced CC&R provisions. As a result, the Administrative Law Judge concludes that Petitioner’s Petition shall be dismissed.

RECOMMENDED ORDER

IT IS ORDERED that Petitioner’s Petition is dismissed as to the issue forwarded for rehearing.

IT IS FURTHER ORDERED that Petitioner continues to bear his $500.00 filing fee.

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).

Done this day, April 28, 2021.

/s/ Kay Abramsohn

Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner

Arizona Department of Real Estate

100 N. 15th Avenue, Suite 201

Phoenix, Arizona 85007

John D. Klemmer

1901 E. Missouri Ave, #101

Phoenix, AZ 85016

[email redacted]

Petitioner

Lydia A. Pierce Linsmeier, Esq.

Nicole D. Payne, Esq.

Carpenter, Hazlewood, Delgado & Bolen, LLP

1400 E. Southern Ave, Ste 400

Tempe, AZ 85282

[email redacted]

Counsel for Respondent