Paul Gounder vs. Royal Riviera Condominium Association - 17F-H1716002-REL-RHG

Описание: This summary addresses the administrative hearing proceedings initiated by Paul Gounder against the Royal Riviera Condominium Association regarding the Board election held on March 14, 2016.

Key Facts and Procedural History

Petitioner Paul Gounder, a condominium owner and member of the Association (Respondent), alleged that the Association violated A.R.S. § 33-1250(C)(2) and its Covenants, Conditions, and Restrictions (CC&Rs) by employing two substantively different ballots for the election of seven open Board member positions. The Association had distributed an absentee/mail-in ballot listing six candidates plus a line for a write-in candidate. However, the ballot distributed to members who attended the annual meeting listed seven candidates, including Eric Thompson (a write-in who agreed to serve), and omitted the write-in option.

The initial hearing was held on October 17, 2016, resulting in a recommended order of dismissal on October 18, 2016. The initial Administrative Law Judge (ALJ) found that no statute or bylaw, by its plain language, prevented the Association from adding names to the meeting ballot.

Petitioner requested and was granted a rehearing, which took place on May 17, 2017.

Main Legal Issues and Arguments

The central issue on rehearing was whether the Association’s use of two substantively different ballots violated A.R.S. § 33-1250(C)(2), which requires that a ballot used for association action "shall provide an opportunity to vote for or against each proposed action".
Petitioner's Argument: Gounder contended that the addition of a seventh candidate's name (Eric Thompson) to the meeting ballot, a name not included on the absentee ballot, deprived members who did not attend the meeting of their right to vote for or against every proposed action. He also argued the meeting ballot violated A.R.S. § 33-1250(C)(4) because it was not mailed seven days in advance and did not specify a return date.
Respondent's Argument: The Association denied any violation, arguing that statutes do not require identical ballots and that using separate absentee and meeting ballots is common practice. The Association also maintained that the matter was moot because a new board had been elected in 2017.

Final Decision and Outcome

The ALJ on rehearing found that the Association committed a statutory violation. The ALJ concluded that the use of two substantively different ballots in the March 2016 election violated A.R.S. § 33-1250(C)(2). Because members who did not attend the meeting were not notified of Mr. Thompson's candidacy, they were denied the opportunity to vote for or against all proposed actions contained in the meeting ballot. The decision clarified that while ballots do not need to be identical, substantive changes must be presented to all members.

The ALJ also ruled that the matter was not moot, despite a new board being seated.

Regarding the secondary issue, the ALJ concluded that the Association did not violate A.R.S. § 33-1250(C)(4) because the absentee ballot complied with the seven-day mailing requirement, and a meeting ballot only needed to contain that information if it were substantively the same as the absentee ballot.

The recommended order granted the Petitioner's petition. The Respondent was ordered to reimburse the Petitioner's filing fee. The Department of Real Estate Commissioner accepted the ALJ's decision on June 12, 2017, ordering the Association to reimburse the $500.00 filing fee within thirty days.

Case Details:
Case ID: 17F-H1716002-REL
Docket: 17F-H1716002-REL-RHG

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