Скачать или смотреть Peter Biondi, Jr., vs. Lakeshore at Andersen Springs Homeowners Association - 18F-H1818048-REL

This summary pertains to the Administrative Law Judge Decision in the matter of Peter Biondi, Jr. v. Lakeshore at Andersen Springs Homeowners Association (No. 18F-H1818048-REL).

Key Facts and Hearing Proceedings

The Petitioner, Peter Biondi, Jr., is a member of the Respondent Homeowners Association (HOA). The matter stemmed from a dispute involving the HOA's Board of Directors. Two directors, Messrs. Luzzis and Dubasquier, had been removed by their fellow directors for allegedly violating the HOA’s Covenants, Conditions and Restrictions (CC&Rs) Section 8.13 by operating short-term Vacation Rentals By Owner (VRBOs).

Messrs. Luzzis and Dubasquier filed a petition with the Department of Real Estate challenging their removal. At this time, Bonnie Henden was the sole remaining Director on the Board. Ms. Henden, after consulting with three attorneys, chose not to file an answer or defend the HOA in the former directors' petition. Consequently, the Department issued a decision in favor of Messrs. Luzzis and Dubasquier, and Ms. Henden reinstated them.

Petitioner Biondi then filed a new petition, alleging that the HOA (through Ms. Henden) violated A.R.S. §§ 33-1242 and 33-1243, Bylaws, and CC&Rs by refusing to defend the initial removal action and by subsequently reinstating the directors.

Main Issues and Legal Points

The dispositive issue was not whether the removed directors violated the CC&Rs regarding short-term rentals, but the legal issue of whether the directors properly removed them and whether Ms. Henden should have contested the subsequent challenge to that removal.

The Administrative Law Judge (ALJ) focused on the Arizona Planned Community Statutes, specifically A.R.S. § 33-1243, concerning the removal of directors.
Improper Board Removal: A.R.S. § 33-1243(B) specifically prohibits a condominium association's board of directors from determining the qualifications of other directors. A.R.S. § 33-1243(H) unequivocally requires that the removal of a director must be initiated by a petition signed by a specified number of association members and accomplished by a majority vote of the unit owners at a special meeting. This statutory requirement overrides any contrary provisions in the HOA’s bylaws or CC&Rs.
Lack of Legal Defense: Because the Board failed to follow these specific statutory procedures when removing Messrs. Luzzis and Dubasquier, the Respondent lacked any good legal defense to their challenge of the removal.
Refusal to Defend: A.R.S. § 33-1242(A)(4) states that the association "may" defend litigation. The use of "may" indicates permissive intent. Ms. Henden’s decision not to contest the former directors' petition was based on legal advice that the defense likely would fail due to the Board’s prior improper action and would incur unnecessary fees. The ALJ concluded that no statute requires a director "to mount a defense of a previously taken ill-advised act that likely will fail on its merits".

Outcome

Based on the conclusion that the original removal of the directors was legally invalid under A.R.S. § 33-1243, and that Ms. Henden was not statutorily required to defend a losing position, the Petitioner’s petition was denied.

Case Details:
Case ID: 18F-H1818048-REL
Docket: 18F-H1818048-REL

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