Arizona Constitution Separation of Powers Renders HOA Administrative Procedure Unconstitutional

Posted by: Ted Schmidt, Dev Sethi, Matthew Schmidt and Burt Kinerk Civil Procedure/Constitutional Law - Separation of Powers

Gelb v. Department of Fire, Building & Life Safety, __Ariz. Adv. Rptr. __, 1 CA CV 09-07444 (App. Div. I, October 29, 2010) (J. Thumma)

ADMINISTRATIVE HEARING PROCESS FOR HOMEOWNER'S ASSOCIATION DISPUTES VIOLATES SEPERATION OF POWERS CLAUSE IN ARIZONA CONSTITUTUION

In 2006 the Arizona Legislature established an administrative procedure whereby disputes between homeowners and their homeowner's ass'n concerning CC & R's were to be resolved by the Arizona Dept. of Fire, Building & Life Safety (ARS sec. 41-2198 et seq.). Notably, there is no right to review or rehearing once the administrative law judge makes a decision concerning these disputes except for an appeal to the Arizona superior court.

In 2005 plaintiff built a home and put in landscaping. Thereafter the HOA put crushed rock in the front of the plaintiff's home without his knowledge or permission so plaintiff filed an administrative claim under the statute claiming the HOA was in violation of the CC &R's. The administrative law judge ruled for the HOA and the plaintiff appealed to superior court and the HOA moved to dismiss claiming the statute violated the Az constitutional provision establishing a separation of powers. The superior court denied the motion and sustained the administrative law judge's decision and this appeal followed.

Holding the statute unconstitutional the Arizona court of appeals not4ed that Arizona Const. Art. 3 mandates that the executive, legislative and judicial branches of Arizona's government "shall be separate and distinct, and no one of such departments shall exercise the powers properly belonging to either of the others." However, these departments are not "mutually exclusive" and there can be some "blending of authority" among the branches. Hence the legislature has properly vested certain administrative agencies with judicial powers.

Where, as here, the judicial function being exercised does not relate to the "agency's primary regulatory purpose" it invades the separation of powers clause. Rather the regulatory purpose of the Fire, Building & Life Safety agency is to regulate building of manufactured structures consistent with fire safety goals. Nowhere in the legislative description of this agency is it stated that it is expected to regulate planned communities or HOAs. Thus, while there may be a legitimate interest in creating an administrative procedure for resolving HOA disputes, this is not the appropriate agency to perform that function.