HOA - ALJDEC decisions

23F-H055-REL · Department of Real Estate - H/C · 2023-08-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of

Rosalie Lynne Emmons

Rovey Farm Estates Homeowners Association

No. 23F-H055-REL

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: August 2, 2023

APPEARANCES: Rosalie Lynne Emmons appeared on her own behalf. Mike McCleran appeared on behalf of Rovey Farm Estates Homeowners Association. Matt Johnson appeared as a witness on behalf of Rovey Farm Estates Homeowners Association.

ADMINISTRATIVE LAW JUDGE: Brian Del Vecchio

FINDINGS OF FACT

Background and Procedure

The Arizona Department of Real Estate (Department) is authorized by statute to receive petitions for hearings from members of homeowners’ associations and from homeowners’ associations in Arizona.

On or about April 11, 2023, Rosalie Lynne Emmons (Petitioner) filed a single issue petition with the Department which alleged that the Rovey Farm Estates Homeowners Association (Respondent or Association) enforcement of the Covenants, Conditions and Restrictions for Rovey Farm Estates (CC&Rs) selectively, arbitrarily, and capriciously, specifically CC&Rs Article 2 §§ 3.2, 3.3, and 3.11.

On or about May 1, 2023, Respondent submitted its Answer to the Department whereby it denied Petitioner’s claim.

On or about May 19, 2023, the Department referred this matter to the Office of Administrative Hearings (OAH), an independent state agency, for an evidentiary hearing on June 22, 2023, which was continued until August 2, 2023, to determine whether the Board violated Article 2 Sections 3.2, 3.3, and 3.11 of the CC&Rs.

The Parties and Governing Documents

Respondent is an association of townhome owners whose members own properties in the Rovey Farm Estates residential real estate development located in Lakeside, Arizona. Membership for the Association is compromised of the Rovey Farm Estates subdivision.

Petitioner is a Rovey Farm Estates property owner and a member of the Association.

Hearing Evidence

Petitioner testified on her own behalf. Petitioner’s Exhibits A through N were admitted. Respondent’s Exhibits 1 through 12 were admitted; exhibit 12 was confidential, admitted under seal, and reviewed in camera. Respondent called Matt Johnson as a witness. The Department’s electronic file and Notice of Hearing were also admitted into the record. The substantive evidence of record is as follows:

In May of 2020, when Petitioner purchased her home she received a copy of the CC&Rs.

In the fall of 2021, Petitioner built a shed on her property which was taller than her fence line, visible from the street, and without prior approval from the Design Review Committee.

In December of 2021, Petitioner submitted a request for approval from the Design Review Committee of the already completed shed.

On or about February 7, 2022, Respondent denied Petitioner’s application to build her shed.

Arguments

Petitioner’s argument

Petitioner argued Respondent engaged in selective enforcement regarding their shed policy. Petitioner claimed there were several houses in plain view from the street which were not in compliance with CC&Rs §§3.2, 3.3, and 3.11. Petitioner testified she spoke with several other home owners within the community which allegedly admitted they were not in compliance with CC&Rs §§3.2, 3.3, and 3.11 and were not given similar compliance notifications and fines.

Respondent’s argument

Respondent’s representative and its witness argued enforcement of the CC&Rs was uniform and neither arbitrary nor capricious. Respondent’s witness testified during COVID enforcement was reduced, however, following the reopening of the economy post-COVID, enforcement was resumed. Respondent’s witness testified during the height of COVID the Design Review Committee rules were enforced, applications for variances were required, but overall compliance violations and fines were minimized.

Ultimately, Respondent requested that the Tribunal dismiss Petitioner’s appeal.

Conclusions of Law

This matter lies within the Department’s jurisdiction pursuant to Ariz. Rev. Stat. §§ 32-2102 and 32-2199 et seq., regarding a dispute between an owner and a planned community association. The owner or association may petition the department for a hearing concerning violations of community documents or violations of the statutes that regulate planned communities as long as the petitioner has filed a petition with the department and paid a filing fee as outlined in Ariz. Rev. Stat. § 32-2199.05.

Pursuant to Ariz. Rev. Stat. §§ 32-2199(2), 32-2199.01(A), 32-2199.01(D), 32-2199.02, and 41-1092 et seq. OAH has the authority to hear and decide the contested case at bar. OAH has the authority to interpret the contract between the parties.

In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated CC&Rs §§3.2, 3.3, and 3.11.

“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.”

The pertinent sections of the CC&Rs state in pertinent part:

§3.1 Approval Required

. . .No Construction or Modification shall be made or done without prior written approval of the Design Review Committee.

Any Owner desiring approval of the Design Review Committee for any Construction or Modification shall submit to the Design Review Committee a written request for approval specifying in detail the nature and extent of the Construction or Modification which Owner desires to perform

§3.3 Variances

The Design Review committee may authorize variances from compliance with any provision of the Design Guidelines

. . .

No variance shall be effective unless in writing and signed by an authorized representative of the Design Review Committee.

§3.11 Design Review Committee

. . . The Design Review Committee may adopt, amend and repeal architectural guidelines, standards and procedures to be used in rendering its decisions. . .

All errors in original.

In this case, Petitioner failed to meet her burden. The sole issue is whether Petitioner’s failure to obtain prior authorization by the Design Review Committee to build her shed ought to be excused because of alleged selective enforcement. Here, Petitioner admitted she built her shed without prior approval from the Design Review Committee, she never subsequently received approval for her shed, her shed is taller than the current fence line, and the shed can be seen from the street; all of which are violations of the CC&Rs. Petitioner alleged but failed to provide sufficient evidence of Respondent’s supposed selective enforcement. Respondent, through its witness testimony and exhibits evidenced a multitude of compliance letters, violations, fines, and approved and rejected shed applications associated with the enforcement of CC&Rs §§3.2, 3.3, and 3.11.

Based upon a review of the credible and relevant evidence in the record, Petitioner failed to meet her burden of proof.

Therefore, the Administrative Law Judge concludes that Respondent did not violate CC&Rs §§3.2, 3.3, and 3.11.

ORDER

IT IS ORDERED that Petitioner’s petition in this matter be dismissed.

IT IS FURTHER ORDERED that Petitioner’s request to levy a civil penalty against Respondent 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, August 22, 2023.

/s/ Brian Del Vecchio

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile August 22, 2023 to:

Susan Nicolson

Commissioner

Arizona Department of Real Estate

100 N. 15th Avenue, Suite 201

Phoenix, Arizona 85007

Attn:

[email redacted]

Rosalie Lynne Emmons

[email redacted]

Michael S. McLeran

Childers Hanlon & Hudson, PLC

[email redacted]

By: OAH Staff