HOA - ALJDEC decisions

22F-H2221026-REL · Department of Real Estate - H/C · 2022-03-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Judy Clapp,

Petitioner,

vs.

Forest Trails Homeowners Association,

Respondent.

No. 22F-H2221026-REL

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 9, 2022

APPEARANCES: Kevin Harper, Esq. appeared on behalf of Petitioner Judy Clapp. Edward D. O'Brien, Esq. appeared on behalf of Respondent Forest Trails Homeowners Association.

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

FINDINGS OF FACT

1. The Arizona Department of Real Estate (the Department or ADRE) is authorized by statute to receive and to decide Petitions for Hearings from members of homeowners’ associations in Arizona.

2. Respondent Forest Trails Homeowners Association (Respondent or the Association) is a homeowners’ association whose members own lots in the Forest Trails community in Prescott, Arizona.

3. Petitioner Judy Clapp owns a lot in and is a member of the Association.

4. The Forest Trails community is located near a Prescott National Forest (the forest) trailhead. The trailhead is located on Lot 33 of the Association. The residential streets in the Forest Trails community are private streets that are approximately 40 inches wide and are owned by the Association. The private streets are included within the “Common Area” as defined in the Association’s Declaration of Covenants, Conditions, and Restrictions (the Declaration). The Common Area encompasses the private streets and the unpaved roadways that are located at the shoulders of the paved roadways. The Association owns the paved roadways and about 8 inches of the unpaved roadways that are located on each side of the paved roadway surfaces, running parallel to the paved roadways.

5. In 2020, James and Cynthia Norman (the Normans) purchased lot 1473 from its owner.

6. On or about October 22, 2020, the Normans submitted a request to the Association’s Architectural Committee to landscape the Common Area located at the south of their lot. At the time, the Board of Directors (Board) was acting as the Architectural Committee. Dean Meyers was a member of the Association’s board at the time that the Normans’ submitted their request. Mr. Meyers is a professional landscaper.

7. At the time that the Normans submitted the request, most of the homes in the Association had landscaping in the Common Area adjacent to their home.

8. The Association approved the Normans’ request.

9. The Normans hired Mr. Myers to place landscaping rocks in the Common Area adjacent to their home.

10. On or about December 29, 2021, Ms. Clapp filed a petition with the ADRE. Through the petition, Ms. Clapp alleged that the Association violated Section 2.2. of the Association’s CC&Rs when it approved the Normans’ request to landscape the Common Area at the south side of their lot.

11. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing.

12. On February 3, 2022, the ADRE issued a Notice of Hearing setting

Ms. Clapp’s petition for hearing on March 9, 2022 at the Office of Administrative Hearings in Phoenix, Arizona.

13. The Notice of Hearing shows that the issue set for determination was

whether Respondent violated section 2.2. of the Declaration. The Notice of Hearing also provides that the dispute arises out section 2.2 and 2.2.1 of the Declaration, and the Association’s Architectural Guidelines.

14. A hearing was held on March 9, 2022.

15. At hearing, Ms. Clapp testified on behalf of herself. The Association presented the testimony of Mr. Meyers.

16. Ms. Clapp has lived in Forest Trails since September of 2006.

17. Ms. Clapp testified to the effect that for several years she and other individuals have parked their cars on an unpaved side of the road located at the south of the Normans’ lot to gain quick access to the forest. The trailhead is situated approximately a mile from Ms. Clapp’s residence. Ms. Clapp explained walked to the trailhead from her home would increase her hike by approximately 2 miles round trip. Ms. Clapp explained that before the Normans landscaped the Common Area at the South of their lot, one or two cars could be seen parked in that area.

18. Ms. Clapp served on the Association’s Board from 2007 to 2017.

Ms. Clapp was actively involved in community governance.

19. Ms. Clapp stated that in or around 2002 or 2003, the Association determined that homeowners would be responsible for maintaining the Common Area that the homeowner had received approval for landscaping. See Ms. Clapp’s testimony on the Hearing Audio (1200 2022-03-09).AAC) at 23:30 – 26:20).

20. Ms. Clapp stated that section 2.2 of the Declaration provides that the Common Area is for the benefit of all members of the Association. Ms. Clapp believes that the landscaping on the Common Area adjacent to the Normans’ lot deprives her of the benefit of easy access to the trailhead. Ms. Clapp stated that the Common Area is not in its natural state. Ms. Clapp believes that as a result of the landscaping, the Normans are the only people benefitting from the Common Area that lies at the south of their lot. Ms. Clapp stated that because the Normans have landscaped the Common Area at the south of their log, she parks further down on Serenity Way, a private street in the Association, to access the trailhead.

21. Ms. Clapp asserted that the Board never voted on or approved the Normans’ request. Ms. Clapp contended that the Normans’ submitted their request to the Architectural Committee twelve days after they purchased their home.

22. Ms. Clapp believes that the Association is giving preferential treatment to persons who play tennis over those that hike because the Association paved a parking lot for its members to easily access the tennis courts.

23. On cross-examination, Ms. Clapp acknowledged that people can walk through the Common Area. However, Ms. Clapp believes that someone might sprain their ankle walking over the landscaped rocks to reach the unpaved area.

24. Mr. Meyers is a member of the Association’s Board. Mr. Meyers’s father was the developer of Forest Trails. Mr. Meyers explained that his father cared about Forest Trails. Forest Trails does not have sidewalks.

25. Mr. Norman talked to Mr. Meyers multiple times regarding landscaping the Common Area at the south of his lot.

26. Initially, Mr. Norman bought individual boulders and placed them in the Common Area at the south of his lot. However, Mr. Norman wanted to do something nicer. Mr. Meyers installed more expensive rocks and matching gravel.

27. Mr. Meyers explained that most of the lots in the Association have landscaping in the Common Area adjacent to their lots. Mr. Meyers explained that it is difficult to determine where the property line ends for a lot and where the Common Area begins.

28. Mr. Meyers explained that the Association required that its owners pay for any damage caused by a snow plow, unless the person snow plowing, “does something stupid.”

29. Mr. Meyers explained that the Board voted unanimously to approve the landscaping request submitted by the Normans. If the Board would have denied the request, the Normans would have been the first lot owners to have been denied a request to landscape the Common area. The Board did not consider the Common Area to the south of the Normans’s lot to be exclusively used for parking. Mr. Meyers explained that the Normans do not have exclusive use of the Common Area because anyone can access the Common Area.

30. Mr. Meyers testified to the effect that the number of homeowners who use the tennis court is far greater than the number of homeowners who hike in the forest. There is also a basketball court near the tennis court. Such facilities are not connected to the trailhead. See Exhibit 16 and Mr. Meyers’s testimony on the (Hearing Audio Record at 1308 2022-03-09).AAC) at 52:30 to 55:04.

31. The Association has approved the requests of other homeowners to landscape the Common Area adjacent to their homes. See Exhibits 10 and 11; See

Mr. Meyers’s testimony on the Hearing Audio Record at 1308 2022-03-09).AAC at 54:15 to 58:56.

32. The Normans specifically asked for the approval of landscaping rocks similar to their neighbor’s home. See Exhibit 12 and Mr. Meyers’s testimony on the Hearing Audio Record at 1308 2022-03-09).AAC at 54:15 to 1:00:00 to 1:01:14.

33. Mr. Meyers explained that the Association is responsible for maintaining the Common Area. See Mr. Meyers’s testimony on the Hearing Audio Record at 1308 2022-03-09).AAC at 1:04:00 to 1:04:02. Mr. Meyers explained that the Common Area adjacent to the Normans’s home began to erode and eventually, the Association would have been required to repair the area because it was frequently used for parking. See id. The Association does not have police powers to keep the pubic from parking in the Common Areas in the Association. However, Mr. Meyers explained that after the Board began posting towing signs, it eliminated 98% of the problem. The closest open parking area close to the trailhead is 30 feet away which is a third to a quarter of a mile. The paved tennis court parking is approximately a mile and a half away. The trail that is located in the forest is about 1 1⁄2 to 2 miles each way. Mr. Meyers knows two people who walk from their homes in Forest Trails to the trailhead.

34. Mr. Meyers is a general contractor and 95% of his business is conducted in the Forest Trails. Mr. Meyers has been conducting business in Forest Trails since 1993. The Normans were not on the Board when they submitted the landscaping application. Mr. Meyers believes that he declared a conflict at the time that the Board considered the Normans’ application. Mr. Meyers charged the Normans a normal fee to perform the landscaping work.

35. The Board never considered the trailhead to be an amenity that it was required to maintain.

36. Mr. Meyers explained that many lots have landscaping in the Common Area adjacent to their lot that prohibits parking.

37. The Declaration, at Appendix A, Section 2.2., provides in relevant part as

follows:

Common Areas and Open Space. All tracts designated for use as common areas and open space on the plat(s) and easements for common areas and open space as shown on the plat(s) shall be for the use and benefit of all members of the Forest Trails Homeowners’ Association and their guests and invitees, including members by virtue of new land added pursuant to Section 5.2 of [the Amended] Declaration. These areas shall be left in their natural state, unless used for trails, walkways, driveways, parking areas, appropriate signs, recreational amenities, landscaping, and easements for utilities (including cable television). All easements dedicated on the plat(s) for driveways and emergency vehicle access may be used for ingress and egress by any lot fronting thereon.

38. The Declaration, at Appendix A, Section 2.21, requires the Association’s compliance with its Architectural Guidelines. The Association’s Architectural Guidelines provide, in relevant part, as follows:

Landscaping (hard and soft) of the unpaved area owned by the Association between the lot line and the street (approximately eight feet) is permitted only with approval of [Architectural Control Committee, “ACC”]. Any approval by the ACC of such landscaping will be conditioned on the property owner being responsible for maintenance of this landscaped area, but will not give the property owner exclusive use of this Association property.

39. The Declaration, at Appendix A, Section 3.4, provides for the powers and duties of the Association, providing in pertinent parts (emphasis added):

Powers and Duties of the Association. It is the intention of the Declarant that the Association own, repair, manage, operate, and maintain the common areas and open space and improvements thereon in the development known as Forest Trails (all units), according to the plat or plats thereof to be placed in the office of the County Recorder of Yavapai County, State of Arizona; and it is the intention of the Declarant to have the Association supervise the performance of such duties, to maintain and create active and passive facilities, to supply basic services such as, but not limited to, groundskeeping, road repair, and any other community facilities which the Association deems necessary or advisable; and it is the intention to give the Association the greatest possible flexibility in management so that as much as possible of the assessments collected pursuant to Section Four of [the Amended] Declaration will be used for these purposes and not be expended in administrative costs. Consistent herewith, the widest possible powers are granted to the Association to collect the monies necessary for its operation. The Association shall have the following powers herein granted or necessarily implied which it shall exercise in its sole discretion, construing the powers herein granted and implied to the broadest extent consistent with the best interests of the members:

. . . 3.4.3 Employ or contract for water, area maintenance, and renovation of common areas and open spaces (including all tracts designated for that use), hiking and riding trails, and all future tracts, common areas or open spaces of Forest Trails Unit One or any units added pursuant to Section Five; and . .

. 3.4.9 Be the final judge of all aesthetic matters and act in its sole discretion without liability to any member, with the exception of those matters pertaining to architectural control, which shall be the responsibility of the Architectural Control Committee.

40. The Declaration, at Appendix A, Section 4.1, provides for the powers and duties of the Association, in relevant part, as follows:

Common Area Maintenance.

For the mutual benefit of the owners of lots and tracts in Forest Trails Unit One, and new lands subsequently added pursuant to Section Five of [the Amended] Declaration, the Association as owner of all tracts designated for use as common areas and open space, for drainage purposes, or for private roadways shall be responsible for the repair, maintenance, management and operation of all tracts, riding and hiking trails and open areas illustrated on the plat. Responsibilities of the Association as set forth in [the Amended] Declaration and the articles of incorporation and bylaws are intended to give the Association maximum flexibility in management within minimum administrative costs. The Association is granted the power to collect from lot owners the monies necessary for the performance of its specified duties.

CONCLUSIONS OF LAW

1. Arizona Revised Statutes (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. Petitioners bear the burden of proof to establish that Respondent violated the Act or Respondent’s CC&Rs 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. In Arizona, if a restrictive covenant is unambiguous, it is enforced to give effect to the intent of the parties. “Restrictive covenants must be construed as a whole and interpreted in view of their underlying purposes, giving effect to all provisions contained therein.”

5. It is undisputed that Section 2.2 of the Declaration provides that the Common Area shall be for the use and benefit of all members of the Association. Futhermore, Section 2.2. allows the Common Area to be used for landscaping. Petitioner has not established that the Association violated the Declaration when it approved the Normans’ request to landscape in the Common area to the south of its lot. Petitioner has not provided any legal authority to support its claim that the Common Area to the south of the Normans’s lot must be exclusively used for parking.

6. Because Petitioner has not established by a preponderance of the evidence that Respondent violated the Declaration or any statute, her petition must be dismissed.

RECOMMENDed order

IT IS ORDERED that Petitioner Judy Klapp’s petition against Forest Trails Homeowners Association 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, March 29, 2022.

/s/ Velva Moses-Thompson

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile March 29, 2022 to:

Louis Dettorre

Commissioner

Arizona Department of Real Estate

100 N. 15th Avenue, Suite 201

Phoenix, Arizona 85007

Attn:

[email redacted]

Edward O’Brien, Esq,

Carpenter, Hazlewood, Delgado & Bolen, PLC

Edith Rudder

1400 E. Southern Ave., Suite 400

Tempe, AZ 85282

[email redacted]

Kevin R. Harper, Esq.

HARPER LAW PLC

350 N. Gilbert Road, Suite 204

Gilbert, AZ 85234

[email redacted]

By: