HOA - ALJDEC decisions

22F-H2221008-REL · Department of Real Estate - H/C · 2021-11-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Susan L Jarzabek,

Petitioner,

vs.

Hillcrest Improvement Association #2,

Respondent

No. 22F-H2221008-REL

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: November 5, 2021

APPEARANCES: Susan L. Jarzabek on her own behalf; Haidyn DiLorenzo, Esq. for Respondent

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On September 15, 2021, the Arizona Department of Real Estate issued a Notice of Hearing setting the above-captioned matter for hearing on November 5, 2021 at the Office of Administrative Hearings in Phoenix, Arizona.

Petitioner Susan L. Jarzabek appeared and testified on her own behalf; Respondent Hillcrest Improvement Association #2 was represented by counsel and presented the testimony of Robert Cody, president of the Association’s Board.

On or about August 11, 2021, Ms. Jarzabek filed with the Department a single issue petition through which she alleged that Respondent had violated CC&R Article 1, Section 10 and its Enforcement, Fines and Appeals Policy (“Policy”) when it charged her attorney’s fees.

According to Ms. Jarzabek, the attorney’s fees at issue were wrongfully assessed because the Policy requires the owner of record to be provided two warning notices and a certified letter before a matter is escalated to attorney involvement.

CC&R Art. VIII, Section 1, Enforcement, provides that the Association may recover from an owner its enforcement costs, including attorney’s fees.

The Policy sets out a procedure in which owners who are alleged be in violation of the CC&Rs will be provided Notices, with escalating fines for noncompliance.

The Policy also provides in pertinent part that the Association may escalate a matter to its attorney for further action, if a matter is escalated to the attorney, the notice-procedure will no longer apply, and the owner will be responsible for the attorney’s fees and costs.

As pertinent to this matter, CC&R Article 1, Section 10 defines “Owner” as the record owner.

Ms. Jarzabek is the sole owner of Lot 125, with an address of 601 East Boca Raton Road in Phoenix.

The Association received from one of Ms. Jarzabek’s neighbors a complaint to the effect that a tree on her property was overhanging the neighbor’s property and causing damage to the neighbor’s roof.

The Association mailed a certified letter dated January 15, 2019 to Ms. Jarzabek’s address, but that letter had John Jarzabek’s name on it, not Ms. Jarzabek. John Jarzabek is Ms. Jarzabek’s husband. Neither Mr. Jarzabek, nor Ms. Jarzabek claimed the certified letter and it was returned to the Association.

The Association’s letter of January 15, 2019 informed Mr. Jarzabek that the Association had determined that the Jarzabeks were in violation of CC&R Art. IV, Section 3, and provided that they had 30 days to cure the violation.

The letter of January 15, 2019 does not meet the Association’s policy for Notices of Violation because it does not include all the required elements.

The Association engaged the Mulcahy Law Firm on October 15, 2019. That law firm subsequently sent Ms. Jarzabek Notices of Violation on October 17 and November 5, 2019.

The Association did assess against Ms. Jarzabek fines, but had removed or rescinded those fines prior to the hearing. The Association had also assessed against Ms. Jarzabek interest on the disputed attorney’s fees, but had removed or rescinded those charges prior to the hearing

The law firm’s letters do not show that Ms. Jarzabek will be assessed attorney’s fees in the matter.

Although Mr. Cody testified that the Association sent additional letters to Ms. Jarzabek before engaging the law firm, those are not in the record.

Ms. Jarzabek testified that she was not aware that there was an allegation that she was not in compliance with the CC&Rs until she received the law firm’s letter of October 15, 2019.

Prior to filing her petition, Ms. Jarzabek submitted written requests for the documentation the Association asserted it sent to Ms. Jarzabek prior to the law firm’s involvement. A Board member informed her that it did not have copies of those documents, but the law firm did have copies. There was no evidence adduced showing that either the law firm or the Association provided Ms. Jarzabek with these documents.

Ms. Jarzabek asserts that she was denied due process because she did not receive proper notice of the allegations against her.

CONCLUSIONS OF LAW

In her petition, Ms. Jarzabek alleges that the Association has violated its Enforcement, Fines and Appeals Policy. Consequently, the Department of Real Estate has authority over this matter. See Ariz. Rev. Stat. Title 32, Ch. 20, Art. 11.

Ms. Jarzabek bears the burden of proof to show that the alleged violation occurred. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119.

A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

“The administrative law judge may order any party to abide by the statute, condominium documents, community documents or contract provision at issue and may levy a civil penalty on the basis of each violation.... If the petitioner prevails, the administrative law judge shall order the respondent to pay to the petitioner the filing fee required by section 32-2199.01.” Ariz. Rev. Stat. § 32-2199.02(A).

The Policy is part of contract between the parties and the parties are required to comply with its terms. See Johnson v. The Pointe Community Association, 205 Ariz. 485, 73 P.3d 616 (App. 2003).

Ms. Jarzabek has not met her burden to show that the Association violated the Policy because that Policy does not require that an owner receive two notices before a matter is escalated to attorney involvement.

Ms. Jarzabek’s petition should be dismissed.

ORDER

IT IS ORDERED that Susan L. Jarzabek’s 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.

-54864001

001

-137160-45720000Done this day, November 19, 2021.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile November 19, 2021 to:

Louis Dettorre

Arizona Department of Real Estate

100 N. 15th Avenue, Suite 201

Phoenix, Arizona 85007

Attn:

[email redacted]

Susan L Jarzabek

601 E Boca Raton Rd

Phoenix, AZ 85022

Beth Mulcahy, Esq.

Mulcahy Law Firm, PC

3001 E. Camelback Rd., Ste. 130

Phoenix, AZ 85016

[email redacted]

By Miranda Alvarez