Pima County Superior Court Case: C20044596
Heritage Highlands Redhawk Master Home Owners Association
An Arizona Corporation:
John Does I-V; Jane Does I-V; XYZ Corporations I-V
John and Patricia Teager
Attorney for the Plaintiff:
Stephan M. Weeks
An adjoining property owner took down four sections of 5-foot high wrought iron fencing and replaced it with concrete masonry unit (CMU) wall panels. The wall panels were built on top of a 5-foot rip rap wall and blocked the plaintiffs view of the Catalina Mountains.
Additional investigation revealed numerous construction defects and failures to comply with the 2000 International Residential Code, the requirements of the Arizona Registrar of Contractors, the Town of Marana Building Code and the Association governing documents.
The Association Governing Document (current at that time):
CC&Rs SECTION 11.23 View Obstruction:
Pertinent statements from Section 11.23:
“No walls, fences, trees, shrubs, or other structure or landscaping, shall be placed, located, or constructed on any Lot if the Architectural Committee, as the sole and final judge of the matter, determines that such improvements would reasonable interfere with or impede a material view available on another Lot and that other more reasonable alternatives exist in design and construction with causing undue hardship or expense to the Resident Owner requesting the approval in question”.
The Architectural Committee was required to make a determination that such improvements would not interfere or impede a material view available on another Lot… The plaintiffs stated for the record that no person from the Architectural Committee, staff person, or Board member ever made such a determination from the plaintiff’s lot. The CC&R’s did not define what constituted a material view.
“Each Owner shall indemnify the Architectural Committee against any action or complaint arising out of or related to such Owner’s construction or placement of any landscaping or structures approved by the Architectural Committee pursuant to its powers under that Declaration.”
The HOA Board of Directors did not comply with the provisions of this section by failing to require the adjoining lot owner to indemnify the HOA. (The adjoining lot owner was also a member of the Board of Directors).
CC&Rs SECTION 12.1(A) states:
“The Owners of contiguous Lots who have a common wall shall have reciprocal easements for support and an equal right to use such wall provided that such use by one Owner does not interfere with the use and enjoyment of same by the other Owner.”
The Mission, Vision and Goals / Objectives of the Architectural Committee distributed to the homeowners at a town meeting stated:
“The committee must be sensitive to all concerns. Committee members must follow the CC&R’s and Design Guidelines, not just personal preferences”.”The committee must consider all views of a property, including views from the golf course”
Attempts to Discuss and Resolve the Issue
For three months in 2003, the Plaintiff made several verbal and written attempts to discuss and resolve the issue with the Architectural Committee, the HOA General Manager, Board of Directors President and other officers of the Declarant. None of those attempts produced a substantive response or movement toward resolution.
Finally, the Plaintiffs advised the Board of Directors they would file a lawsuit if they were unwilling to discuss and resolve this issue. There was no response.
2004 – 2006
Lawsuit C 20044596 Was Filed in Pima County Superior Court in December 2004
(1) The following information was reported in court documents.
(2) The Board of Directors (Board) referred to was the Declarant Board.
(3) The General Manager (GM) referred to was the first General Manager.
Testimony presented to the court disclosed numerous governance irregularities.
(1) Approval Process Step 1. The original request for approval of the block wall construction to the Member Architectural Review Committee (ARC) from the adjoining property owner was in form of a letter to the HOA General Manager. The required Change Request Form was then filled out by the HOA staff and later signed by the adjoining property owner.
(2) The form contained a signature block for the Committee members to sign and indicate approval (or disapproval). There were no signatures in the block and no indication of approval.(3) The Plaintiffs testified in a petition that construction of the block wall was complete by the date on the form that was submitted for approval.
(4) Approval Process Step 2. The minutes submitted in court filings, and offered as evidence of approval by the Advisory Council, showed no submittal or disposition for the adjoining property owner’s construction request.
(5) No disposition of the construction request was shown in subsequent Council minutes granting approval for the project, in documents submitted to the Court.
(6) Approval Process Step 3. The minutes submitted in court filings showed the adjoining property owner’s construction request to the Board Architectural Review Committee was put on hold pending further discussion.
(7) No disposition of the request was shown in subsequent Board meeting minutes granting approval for the project.
(8) The HOA General Manager wrote a letter to the neighbor granting approval for the construction project. The height of the block wall was not to exceed 5 feet. It measured 5.5 feet and was never challenged by the HOA.
Defendant Testimony Under Oath
The HOA General Manager testimony disclosed:
(1) Falsified Evidence. The former GM took existing evidence – the Board minutes and changed them without Board consent. At the bottom of the disclosed document, a section was added favorable to the Defendant’s position.
Noticing the change in font, Plaintiff’s counsel demanded the GM appear at his deposition with the original file. The added language was not present on the original document, only on the copies previously turned over as disclosure. The Board President later testified that the changes to the minutes were not authorized.
(2) The ‘Blinder Test’. The ‘blinder test’ considered only a view directly out of the back of a person’s house without glancing to the left or the right. The first time this test was mentioned was during the GM’s deposition. There was nothing disclosed that set forth the ‘blinder’ test. There was nothing disclosed which showed the blinder test being used on any other property. There were no written rules setting forth the test.
One of the duties requires a homeowner’s association is “to act reasonably in the exercise of its discretionary powers including rulemaking, enforcement and design-control powers”. Here, when it benefits a Board member in a dispute with the Plaintiffs, the ARC decided to ignore its own written guidelines calling for the ARC to respect and protect “all views of a property”.
The Procession of Defense Attorneys
During the course of discovery, the Board hired three different law firms to try to defend their actions:
(1) The initial law firm was terminated several months into the process – after representing the GM and the Board President at their depositions.
(2) A second law firm was engaged and indications surfaced that they did not want to defend the case at trial.
(3) The Board then engaged a third law firm to act as chief defense counsel.
Resignation of the Declarant Board
In a rather unprecedented move and nearing a projected trial date, the Declarant Board resigned in total and turned over the Board duties to the appointed Advisory Council. This was more than a year prior to the projected build-out by the Declarant and 7 months until a member board could be elected at the next Annual Meeting.
Attempts to Reach a Settlement Agreement
Two years after the lawsuit was filed, the Plaintiffs made a settlement offer that was rejected by the Defendants. During subsequent mandatory Court supervised Settlement Conference, the Plaintiffs made a second settlement offer that was rejected by the Defendants. During a second mandatory Court supervised Settlement Conference requested by the Plaintiffs, and with the new Board in place, the parties reached a settlement agreement.
The Settlement Agreement
The Settlement Agreement provided for the following:
(1) One of four sections of the CMU wall was to be removed and replaced with wrought iron fencing, as originally constructed.
(2) The remaining three wall sections were to be reduced in height (to return some of the Plaintiff’s view) and the remainder of the 5-foot required height to be wrought iron.
(3) The Defendant was required to pay the Plaintiffs a five-figure sum of money.
(4) The adjoining property owner did not pay any of the reconstruction or litigation costs, all costs being voluntarily borne by the Association.
The Costs to Litigate
The Association members were never provided a written breakdown of costs to litigate. Based on the known costs to the Plaintiffs and a projection of both direct and indirect costs to the Defendant, the total costs to both parties is estimated to have approached, if not exceed, $100,000.