In an appeal* by CAI attorneys of an OAH decision questioning the constitutionality of OAH hearing** HOA complaints, the Superior Court appellate decision said it was a violation of the separation of powers of Art III of the Arizona Constitution, and all other constitutions for that matter.Essentially, relying on the AZ Cactus Wren*** case and its citations of Hancock^ and a California case, McHugh^^, the trial judge said the statute did not grant any regulatory powers over HOAs and, therefore, OAH cannot hear HOA disputes. Regulation is a prerequisite for executive adjudication, said the judge. The judge stated that regulation of HOAs was non-existent within the statute. (DBFLS, under the statute is the actual agency granted powers to hear complaints to be submitted to OAH, in accordance with its powers under the AZ Adm. Procedures Act.)
At the same time the judge dismisses any “valid policy reason” for allowing OAH to hear disputes and characterized the statute as simply the parking of adjudication for HOAs within OAH. Such reasons as providing for justice under the Constitution, since the Legislature refused to allow JP courts to hear HOA disputes and denying homeowners the equal protection of the laws, was not her concern. The judge ignored a justification in the Cactus case, which she explicitly quotes, saying that,
“[A]s a practical matter, the Department’s objective of administering compliance with the Act is furthered by inclusion of its hearing officer function. This purpose would be less easily met if matters relating to the Act were left to the judicial process.” (emphasis added).
While Judge Downey cites the burden against constitutionality, she fails to apply it to her decision:
The party challenging the constitutionality of a statute bears the burden of overcoming a strong presumption of constitutionality. Doubts are resolved in favor of upholding a statute against constitutional challenges.
What can homeowners expect from this decision? While it’s not precedent and only applies to this case, the decision has broad application to every case brought before OAH. CAI/HOA attorneys will respond with, “OAH is exceeding its authority under the constitution” and ask that the case be dismissed. This decision must be appealed!
Doing justice was not the judge’s concern. Arizona homeowners must write the Attorney General, who had filed a memorandum in the appeal, demanding Appellate Court review of the judge’s decision, in support of justice.
References
* Troon Village v.Waugaman, LC2007-000598-001, Maricopa County, October 3, 2008.
** OAH case number, No. 07F-H067029-BFS (not mentioned in any of the Superior Court filings or judge’s decision, like they do not want anyone to read the ALJ’s basis for his decision).
*** Cactus Wren Partners v. Arizona Dept. of Building & Fire Safety, 177 Ariz. 559, 869 P.2d 1212 (App. Div. 1 1993).
^ J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, 690 P.2d 119 (App. 1984).
^^ McHugh v. Santa Monica Rent Control Board, 777 P.2d 91 (1989).
Arizona HOA Case Reviews 
[…] Constitutionality challenge update Filed under: Uncategorized — pvtgov @ 9:20 am CAI lobbyist and HOA attorney Carpenter filed for an order rendering the Judge’s decision in this case to be applied to all cases before Arizona’s OAH. Here’s the AG’s objection to this order: “The Complaint requested the Court to reverse the final decision of the Administrative Law Judge issued in case no. HO 06-7/029 (Nancy Waugaman v. Troon Village Master Association). The scope of the requested relief was limited to the decision in that matter only. Under A.R.S. § 12-911(E), the Court’s authority is to “affirm, reverse, modify or vacate and remand” the challenged agency decision. The Court’s October 2, 2008, decision is consistent with the scope of review and is limited to a reversal of the final administrative decision in case no. HO 06-7/029. It does not order the injunctive relief proposed by Plaintiff/Appellant that would affect other similar administrative proceedings.” Homeowners are waiting for the Attorney General to appeal that decision. Homeowner complaints are still not being accepted. Such an action appears frivolous and taking up the court’s time needlessly. CAI opposed this year’s SB1162 and HB 2724 that would have imposed penalties on such conduct by any party in an OAH hearing, or in an appeal of such hearing. The bills were defeated. See videos at http://youtube.com/hoagov. For more info, see Superior Court judge declares OAH adjudication as unconstitutional. […]
Has the AG yet appealed the DBFLS decision not to accept request for hearings? If so has any decision come down?
The AG waited until the last moment to file a notice of appeal. Shortly thereafter, too late to take any other action, the Director of DFBLS withdrew his notice of appeal. The decision stands — there is no appeal.
I will be meeting with the Director and several state attorneys, including from the AG’s office, on January 5th. As you may recall, the AG had filed a brief in support of constitutionality. So, what gives???