HOA - ALJDEC decisions

22F-H2221017-REL-RHG · Department of Real Estate - H/C · 2022-08-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Anthony T. Horn,

Petitioner,

vs.

Sun Lakes Homeowners Association #1, Inc.,

Respondent.

No. 22F-H2221017-REL-RHG

ADMINISTRATIVE LAW JUDGE DECISION

REHEARING: August 1, 2022

APPEARANCES: Petitioner Anthony T. Horn appeared on behalf of himself. Emily Mann, Esq. appeared on behalf of Respondent Sun Lakes Homeowners Association #1.

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

1. Petitioner Anthony T. Horn owns property in and is a member of Respondent Sun Lakes Shadows Homeowners Association, Inc. (Sun Lakes).

2. On or about October 13, 2021, the Arizona Department of Real Estate (Department) received a single-issue petition from Mr. Horn alleging that Sun Lakes violated Arizona Revised Statutes (A.R.S.) § 33-1804(F) regarding a conversion of a tennis court to pickleball courts.

3. The petition was referred to the Office of Administrative Hearings (OAH)

for an evidentiary hearing.

4. Sun Lakes filed a Motion for Summary Judgment, a Motion to Dismiss, and a Motion for Summary Disposition.

5. The Administrative Law Judge granted the Motions and dismissed the

petition.

6. Mr. Horn filed a timely request for rehearing.

7. On April 6, 2022, the Department issued a Notice of Rehearing setting the petition for rehearing on May 26, 2022.

8. A hearing was conducted on August 1, 2022.

9. At hearing, Mr. Horn testified on behalf of himself and presented the testimony of a Sun Lakes homeowner, Ralph Howlen. Sun Lakes presented the testimony of its general manager, Kelly Haynes.

Relevant Statute

10. A.R.S. § 33-1804(F) provides, as follows:

........................................

It is the policy of this state as reflected in this section that all meetings of a planned community, whether meetings of the members' association or meetings of the board of directors of the association, be conducted openly and that notices and agendas be provided for those meetings that contain the information that is reasonably necessary to inform the members of the matters to be discussed or decided and to ensure that members have the ability to speak after discussion of agenda items, but before a vote of the board of directors or members is taken. Toward this end, any person or entity that is charged with the interpretation of these provisions, including members of the board of directors and any community manager, shall take into account this declaration of policy and shall construe any provision of this section in favor of open meetings.

........................................

Hearing Evidence

11. On July 2, 2021, Sun Lakes notified its members that it would discuss and vote on the following motion at its July 6, 2021 board meeting:

Motion 3: Tennis Courts Upgrade & Repair – Fiscal Impact $76,439 from the Reserve Fund

12. On July 6, 2021, Sun Lakes held an open session board meeting.

13. During the July 6, 2021 board meeting, the board reviewed a bid proposal from Elite Sports Builders that included the conversion of the Sun Lakes tennis court to four pickle ball courts (tennis court conversion).

14. The board allowed Sun Lakes members to speak on Motion 3 after discussion.

15. After the homeowners in attendance provided commentary on Motion 3, the Board voted unanimously to approve Motion 3, including the tennis court conversion.

16. Mr. Horn subsequently complained to the board that Sun Lakes failed to properly notify the homeowners that the tennis court conversion would be discussed at the July 6, 2021 board meeting.

17. On November 5, 2021, Sun Lakes provided notice of a November 9, 2021 board meeting to Mr. Horn and the other Sun Lakes members. The notice included the agenda for the November 9, 2021 board meeting. The agenda provided that the following resolution would be discussed before a board vote:

Motion #3 – Clarification of Motion 3 of the July 6, 2021 Board Meeting – Conversion of Court 1 to four Permanent Pickleball Courts..”

18. Mr. Horn attended the November 5, 2021 board meeting was given the opportunity to express his opinion regarding Motion 3. Ralph Howlen, a Sun Lakes homeowner, attended the November 5, 2021 board meeting and expressed that the tennis club needed access to the pavilion to continue acting as a club. Mr. Howlen also inquired with the board whether the tennis court could be built in another location.

19. After listening to the Sun Lakes members, the board voted unanimously, for a second time, to approve the tennis court conversion to pickle ball courts.

20. Although Mr. Horn attended the November 9, 2021 board meeting, Mr. Horn stated at hearing that he did not receive notice of the November 9, 2021 board meeting.

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 planned community documents under the authority Title 33, Chapter 16. Such petitions will be heard before the Office of Administrative Hearings, an independent state agency.

2. Petitioner bears the burden of proof to establish that Respondent violated A.R.S. § 33-1804(F) by a preponderance of the evidence. Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.

3. “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.”

4. The preponderance of the evidence shows that Sun Lakes properly notified Sun Lakes members, through the July 2, 2021 notice, of the information that was reasonably necessary to inform the members of the matters to be discussed at the July 6, 2021 board meeting. The July 2, 2021 notice regarding the July 6, 2021 board meeting informed the Sun Lakes members that it would discuss and vote on an upgrade of the tennis courts. Sun Lakes was not required to specify the method of upgrade: a conversion to pickleball courts. Nonetheless, the weight of the evidence presented at hearing shows that Sun Lakes notified Sun Lakes members, on November 5, 2021, that it would discuss and vote on the conversion of the tennis court to pickle ball courts at its November 9, 2021 meeting, in compliance with A.R.S. § 33-1804 (F).

5. Therefore, the Administrative Law Judge concludes that Sun Lakes did not violate A.R.S. § 33-1804(F) with respect to the July 6, 2021 board meeting. Even if Sun Lakes had violated A.R.S. § 33-1804(F) with respect to the July 6, 2021, Sun Lakes cured the violation when it provided timely notice that the tennis court conversion would be discussed and voted on at the November 9, 2021 board meeting.

6. Therefore, Mr. Horn’s petition must be dismissed.

RECOMMENDed order

IT IS ORDERED that Petitioner Anthony T. Horn’s petition against Sun Lakes Homeowners Association #1, Inc., is dismissed.

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).

-54864001

001

-137160-45720000Done this day, August 22, 2022.

/s/ Velva Moses-Thompson

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile August 22, 2022 to:

Anthony T. Horn

9243 E. Fairway Blvd.

Sun Lakes, AZ 85248

[email redacted]

Emily H. Mann, Esq.

Phillips, Maceyko & Battock, PLLC

5010 E. Shea Blvd, Ste. 155

Scottsdale, AZ 85254

[email redacted]

Chris Johnston, CIC

Senior Account Manager

USI Insurance Services LLC

2375 E. Camelback Rd, Suite 250

Phoenix, AZ 85016

[email redacted]

Louis Dettorre

Commissioner

Arizona Department of Real Estate

100 N. 15th Avenue, Suite 201

Phoenix, Arizona 85007

Attn:

[email redacted]

By: Miranda Alvarez

Legal Secretary