Case No 07F-H067010-BFS & 07F-H067011-BFS

Complaint:                   

violations of CC&Rs and ACC; failure of HOA to respond within in specified time.

 

 Source of Law:            Declarations. 

Discussion:                 

The CC&Rs contain no requirement that the DRC can only approve an application if it finds a “compelling reason” for departing from the original community plans or a prior practice.  Neither applicable statute nor common-law authority supports such requirement. 

Petitioners therefore have not established that the proposed private gate at the end of their shared driveway, off the cul-de-sac, would “maintain uniformity of architectural and landscaping standards throughout Eagle Mountain and thereby enhance the aesthetic and economic value of Eagle Mountain” or that the DRC should have approved their application under § 11.2 of the CC&Rs. 

However, Petitioners have established that the DRC did not furnish a written decision within 45 days of the date that they submitted the application. 

Therefore, under § 11.4 of the CC&Rs, the DRC’s admitted failure either to disapprove Petitioner’s application on the merits or to disapprove it as incomplete in writing within 45 days requires the application to be deemed approved. 

Although Petitioners prevailed in this matter, an administrative proceeding is not an “action” such as to make attorney’s fees awardable under A.R.S. §§ 33-1807(H) or 12-341.01.  Petitioners’ request for attorneys’ fees must therefore be denied.

Holding:                       

IT IS ORDERED granting Petitioners’ Petition and requiring Respondent to deem approved the application for the private gate at the end of Petitioners’ shared driveway.

IT IS FURTHER ORDERED that Respondent pay to Petitioners the filing fees, $550.00 each, for a total of $1,100.00, that they paid to initiate these administrative complaints within forty (40) days of the date that this order is mailed, if no appeal is taken.

  

Additional Remarks: 

A consolidated case generally occurs when more than one complaint deals with the same legal issues. More than one homeowner is involved — one for each case.

Took HOA 72-days to respond to ACC request; CC&Rs specified a 45 day response time. Failure to respond constituted an automatic approval. (This was a 4-hour plus hearing!)  Petitioner’s wanted to install a private gate on for their custom homes with 300-foot driveways. Homeowners were not allowed to remain in ACC committee during its supposed approval.

HOA claimed an incomplete submission was made — needed a waiver from neighbors.  Yet, there is no waiver requirement by neighbors in the CC&Rs or rules and regulations. Aesthetic concerns were reason for denial.  Mulcahy now claims, even though not stated by ACC for denial at the time in question — which is the issue — that HOA never approved private gates for private driveways.

Second issue raised by Mulcahy, again not reason for the denial, gates were not aesthetically appropriate – denial was required within 45 days as per the written contract, “black-letter law”. It was the custom of ACC to get waivers, although not in the governing documents.

A decision against homeowners would, once again, demonstrate that when it comes to protecting homeowners, the CC&Rs are not worth the paper it’s written on. We are well aware of court opinions referring to the written contract and the meaning of the provisions as stated, unless ambiguous. (No case history was mentioned in the opening arguments by either lawyer).

ALJ said, “I always forget what CC&Rs stand for.”           

And to Ms. Mulcahy, “I saw your firm and recognized it.” 

Beth Mulcahy for the HOA. Mr. Lynch for homeowners. Also asked for attorney fees.

Case No 07F-H067008-BFS

Complaint:                    enforce the architectural standards (allow petitioner’s changes)          

 Source of Law:           

declaration; bylaws; Rules & Regs 

Discussion:                  

However, to the extent that Arizona case law is applicable to and informs an alleged violation, it should be considered, and the Administrative Law Judge will do so herein. 

[T]he Administrative Law Judge first observes that Mr. Fairfield comes before this Tribunal with unclean hands in that he directly violated the terms of the Declaration by proceeding with the installation of the driveway extension without first obtaining the approval of the Architectural Committee (approval he knew he was required to have). 

The evidence in the instant case demonstrated that the Architectural Committee considers the type of extension installed by Mr. Fairfield to conflict with the harmony of the external design of lots within the subdivision, and that in the past six years, the Architectural Committee has not granted any requests to install such extensions. 

Holding:                       

IT IS ORDERED that Mr. Fairfield’s petition is denied.

Additional Remarks:           

Homeowner sought to cover driveway with concrete to prevent drainage runoff from eroding front yard in this desert-landscaped community. HOA considered this to be a structure and subject to its prior approval. No Cave Creek ordnance violation.  Cement addition existed for some time period, about a month, before HOA insisted that it be removed, and threaten fines if homeowner did not comply. Cement composition was same as used on existing driveway.  Other properties have extensions – what was allowed leads to the meanings of the rules.

 

HOA notice referred to a violation that in reality did not exist – “driveway must extend to garage”.  Homeowner seeks approval; HOA seeks removal.

 

Homeowner attorney stated that the restriction was a rule and not a covenant in the CC&Rs, and that HOA could not add to CC&Rs by means of rules. [Cases exist relating to the meaning of “to amend” – to modify or to change, but not to add]. There is no mention of driveways in CC&Rs, but only in the Rules & Regs.  HOA claims general powers under ”abiding by ACC decisions”.

 

HOA attorney clarifies that “going to the city for approval is not the same as going to the HOA for approval.”  Furthermore, he argued that it was irrelevant what other properties looked like since HOA can change the rules, unless it could be shown that other properties were subject to same set of rules or CC&Rs.

 

Homeowner failed to get prior approval of ACC for any appearance or landscaping changes.  Portrays HOA as really cooperative, helpful and willing to resolve the issue.

 

HOA board has broad discretionary powers, as granted by the CC&Rs, in regard to concerns relating to appeal of community. In the last paragraph in the Discussion above, we see that the ALJ may have ignored the fact that ALJ did not state whether there had been requests for extensions, but simply said the HOA did not grant other extensions.  The Petitioner alleged that other lots had similar modifications, but is not clear whether or not the others, existing since the time of construction, were a meaningful deviation from the Petitioner’s extension.  In any event, Petitioner had argued that his extension blended in with the landscaping as currently existed, but did not argue for arbitrary or capricious inforcement.

 

Morgan of Maxwell & Morgan, representing HOA. James Tanner of Jackson, White, representing homeowner.  HOA is Rancho Manana in Cave Creek.

Case No 07F-H067002-BFS

Complaint:

Source of Law:
ARS 41-2198.01 relating to OAH authority.

Discussion:
Dismissed; no jurisdiction.

Holding:
Because Petitioner Mr. Wojtowicz admitted that his dispute is against the successor in interest to the original developer, Voyager at Juniper Ridge, L.L.C. and its principal N.E. Isaacson, regarding their amendments to the original declarations of Covenants, Conditions, and Restrictions (“CC&Rs”) when they took over development of the planned community rather than against Respondent Voyager at Juniper Ridge Homeowners’ Association for any alleged violation of valid CC&Rs.

IT IS FURTHER ORDERED allowing Respondent leave to file an application for attorney’s fees and costs and affidavit on or before February 9, 2007. As the Administrative Law Judge stated on the record, she does not believe that attorney’s fees and costs are available as a matter of right to a Homeowners’ Association in an administrative proceeding, even if, as here, it prevails on the merits. The statutes and regulations governing procedure in the Office of Administrative Hearings do not provide for counterclaims in this type of proceeding. Respondent has not paid any filing fee or filed any petition for affirmative relief against Petitioner under the CC&Rs, which A.R.S. § 41-2198.01(B) allowed it to do. Moreover, an administrative proceeding such as this one is not an “action” such as to make attorney’s fees available under either A.R.S. §§ 33-1807(H) or 12-341.01. The Administrative Law Judge requests Respondent to address these concerns in its application for attorney’s fees and costs.

Additional Remarks:
The Holding above relates to a third party, the developer and not the HOA. Only complaints against the HOA are permitted.

HOA is not entitled to fees if HOA wins as in civil court case, but attorney must argue why it should be paid fees and costs.

HOA filed a response seeking to declare the new law, ARS 33-2198.01 as unconstitutional and that OAH lacks jurisdiction. OAH replied that constitutional challenges are not within its jurisdiction and must be filed in Superior Court. It further advised parties that OAH “will not rule of Respondent’s constitutional argument, but merely notes that the argument was properly preserved for purposes of any appeal …” (An appeal must specify goings on at the trial level, and if an issue was not raised there, it cannot be raised on appeal).

From material provided to me to my petitioner, this seems to be a case where a developer declared himself Declarant, by means of amendments and proceeded to create his own personal fiefdom, solely controlling amendments without member approval, and exempting Declarant from all restrictions.

Original CC&Rs make it clear from its wording that no amendments were permitted until after the initial 30 year period. The amendments violated Arizona law with respect to uniformity of covenants. La Esparanza Town Home Association, Inc. v. Title Security Agency of Arizona, 142 Ariz. 235, 689 P.2d 178 (App. 1984).

Finally, petitioner’s attorney wrote Respondent in 2005 that there is no documentation on record showing that alleged declarant, the Respondent, was the legal successor or assignee assigned of the original declarant. The property, the lots still owned by Developer were purchased through bankruptcy sales, but this alone does not make the original lot purchaser the Declarant. We have, thereby, a broken and invalid chain of subsequent property owners claiming to be the Developer’s assigns or successor’s in interest. Consequently, Respondent has no standing as declarant and no control of HOA board.

Property is in the Pinetop, AZ area, northeast of Phoenix.

Case No 07F-H067001-BFS

Complaint:
violated rights under CC&Rs

Source of Law:
Declaration and Amendment

Discussion:
The 1987 Declaration superseded the 1971 Declaration. The 1987 Declaration governs, among other things, the “replacement of an existing mobile home.” Therefore, it is concluded that Petitioner is subject to the provisions of the 1987 Declaration, which was approved by a majority of the association’s homeowners as required by the 1971 Declaration.

Petitioner failed to obtain Committee approval of his proposed replacement of his existing mobile home prior to purchasing it as required by both the 1987 and 1971 Declarations. Respondent did not abuse its discretion to grant Petitioner a hardship variance to the replacement age limitation under the 1987 Declaration.

Holding:
Denied petition. Homeowner is subject to new CC&RS.

Additional Remarks:
Petitioner sought variance from amended CC&Rs that prohibited replacing mobile homes with homes more than 5 years old. He claimed financial hardship if he had to buy a home 5-years or less.

Ex post facto “laws” are valid in HOAs.

Case No 07F-H067005-BFS

Complaint:
ACC prohibition of backyard playground

Source of Law:
Declaration; case history relating to CC&Rs

Discussion:
The record in this matter shows that Architectural Committee and the San Marcos Manor HOA board refused to consider Mr. Ketchum’s requests to approve the play structure until he reduced its height to 6’ or less. The board did not even suggest that it might approve a structure that was higher than 6’ until its August 14, 2006 letter to Mr. Ketchum, which was written after the board had consulted counsel and after fines had started to accrue under the notice policy. At that point, it offered to approve the play structure if its height was reduced to within 18” of the perimeter wall. This requirement is not found in the CC&Rs or Architectural Guidelines.

Mr. Ketchum is correct when he points out that neither the CC&Rs nor the Architectural Guidelines absolutely prohibited improvements higher than 6’ in members’ backyards. The Architectural Committee and HOA Board both refused to approve the play structure unless it was lowered to less than 6’, which would not have required any approval under the CC&Rs and Architectural Guidelines. Their refusal to exercise discretion was arbitrary and capricious.

Holding:
IT IS ORDERED granting Petitioner’s Petition and requiring Respondent to exercise its discretion under the CC&Rs and Architectural Guidelines to consider Petitioner’s request for approval of the play structure in his backyard.

Additional Remarks:
This is a usual case where board refuses to OK variances from ACC, gives verbal assurances, and then issues a decision that is inconsistent with CC&Rs. It arbitrarily decided a 6 foot height or less would be approved.

Mulcahy law firm represented HOA.