Lawrence Stewart, Petitioner, vs. Canyon Gate Condominium Association, Inc., Respondent. - 18F-H1818

Описание: This is a concise summary of the administrative law proceedings concerning Lawrence M. Stewart's petition against the Canyon Gate Condominium Association, Inc., drawing from the original hearing (September 6, 2018) and the subsequent rehearing (January 2, 2019).

Summary of Administrative Law Case: Stewart v. Canyon Gate Condominium Association, Inc.

Key Facts

The Petitioner, Lawrence M. Stewart, an owner and former Board member, made changes to the common or limited common area around his unit without prior permission, violating section 5.1 of the CC&Rs. After being informed of the violation, Mr. Stewart requested a variance from the Association Board while he was still a member. At a Board meeting on February 18, 2018, Mr. Stewart resigned, and the two remaining Board members (Sandra Fernandez and David Larson) voted to deny his variance request, requiring him to restore the areas to their original condition.

Main Issues and Petitioner's Arguments

Mr. Stewart filed a petition with the Arizona Department of Real Estate alleging the Association violated Bylaws section 5.4. His central argument was that the Board did not act in good faith when denying the variance request. He asserted that Board member David Larson was biased against him and that the denial was unfair because other units were also non-conforming with the CC&Rs. Mr. Stewart cited Bylaws Section 5.4 because he testified it was the only section referring to a “good faith” requirement in the governing documents.

Key Legal Points and Analysis
Burden of Proof: Mr. Stewart bore the burden of proof by a preponderance of the evidence. The Bylaws are considered a contract, and the Respondent (Association) is required to act reasonably in exercising its authority.
Applicability of Section 5.4: The Administrative Law Judge (ALJ) concluded that Bylaws Article V, Section 5.4 (Liability/Indemnification) does not impose any duty on the Board members; rather, it merely shields them from liability if they act in good faith. Mr. Stewart eventually acknowledged that the Association had not technically violated Section 5.4.
Reasonableness of Board Action: The Board's stated reason for denying the variance was fear of "open[ing] a Pandora’s Box" where other unit owners would request variances. The ALJ found this concern to be a not unreasonable position for a condominium association board.
Lack of Evidence for Bias/Unfairness: The ALJ found that Mr. Stewart did not demonstrate by a preponderance of the evidence that the Board lacked good faith, was biased against him, or treated him unfairly. Regarding the assertion of other non-conforming units, there was no evidence that those owners had requested variances, making that testimony not probative of the issue at hand.

Outcome

The Administrative Law Judge determined that Mr. Stewart failed to meet his burden of proof. Consequently, Petitioner Lawrence M. Stewart’s petition was dismissed in both the initial decision (September 14, 2018) and the binding order issued after the rehearing (January 17, 2019). The Respondent, Canyon Gate Condominium Association, Inc., was deemed the prevailing party.

Case Details:
Case ID: 18F-H1818052-REL
Docket: 18F-H1818052-REL-RHG

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