STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES

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1 STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION-HOA ELECTION STEPHEN A. BRAND and DAVID E. LAPOINTE, Petitioners, v. Case No SUNDANCE ASSOCIATION, INC., Respondent. / SUMMARY FINAL ORDER Statement of the Issues Is a verbal resignation from the board of directors effective when given at a properly noticed meeting of the board of directors? Relevant Procedural History On February 1, 2016, Petitioners filed a homeowner association mandatory arbitration petition, election dispute, against Sundance Association, Inc. (the Association) alleging that they did not effectively resign from the Association s board of directors. On March 10, 2016, the Association filed an answer. In late March, both parties filed motions for summary final order and responses to each other. This Summary Final Order is based on the pleadings and exhibits filed by the parties. Findings of Fact 1. Sundance Association, Inc. is the legal entity responsible for the maintenance and operation of the Sundance community. Page 1 of 5

2 2. Petitioners are members of the Association. 3. At the November 17, 2015 board of director s meeting, Petitioners who were members of the Association s board of directors, verbally resigned from the board. Conclusions of Law Sections and , Florida Statutes, provide that the Department shall conduct mandatory binding arbitration of election disputes between a member and a homeowners association. Because there is no issue of material fact in dispute after the filings provided to date by the parties, this case is appropriate for summary disposition pursuant to Rule 61B , Florida Administrative Code. Petitioners alleged that their verbal resignations were not effective, because under Florida law, resignations must be in writing. The Association argues that because the resignations were at a properly noticed meeting, the resignations were effective. Section (5), Florida Statutes states, (5) Unless expressly stated to the contrary, corporations that operate residential homeowners associations in this state shall be governed by and subject to part I of chapter 607, if the association was incorporated under that part, or to chapter 617, if the association was incorporated under that chapter, and this chapter. This subsection is intended to clarify existing law. Section , Florida Statutes states, Resignation of directors. (1) A director may resign at any time by delivering written notice to the board of directors or its chair or to the corporation. (2) A resignation is effective when the notice is delivered unless the notice specifies a later effective date. If a resignation is made effective at a later date, the board of directors may fill the pending vacancy before the effective date if the board of directors provides that the successor does not take office until the effective date. Page 2 of 5

3 In their current substantive form, these chapter 617 statutes were enacted and became law in Chapter , section 43, Laws of Fla. Subsequent arbitration cases have recognized a verbal resignation occurring at a board meeting. See Dehne v. Ocean Club II Condo. Ass'n Inc., Arb. Case No , Summary Final Order (Jan. 31, 1994) quoting Petito v. Gleenglades Condo. Ass n Inc., Arb Case No , Summary Final Order (January 13, 1994) ( The requirement of Chapter 617, Florida Statutes, that a board member resign in writing was designed to insure adequate notice to the proper persons of the resignation. Where, as here, the verbal resignation or "withdrawal" occurred at an official meeting of the association, there is no reason to strictly apply the provisions of Chapter 617, Florida Statutes. ). However in more recent case, Florida s First District Court of Appeal reached a different conclusion when interpreting Section , Florida Statutes in Pain Reduction Concepts, Inc. v. Frisbie, 147 So. 3d 12 (Fla. 1 st DCA 2013). Section , Florida Statutes states, Resignation of directors. (1) A director may resign at any time by delivering written notice to the board of directors or its chair or to the corporation. (2) A resignation is effective when the notice is delivered unless the notice specifies a later effective date or an effective date determined upon the subsequent happening of an event. If a resignation is made effective at a later date or upon the subsequent happening of an event, the board of directors may fill the pending vacancy before the effective date occurs if the board of directors provides that the successor does not take office until the effective date. (3) A resignation that specifies a later effective date or that is conditioned upon the subsequent happening of an event may provide that the resignation is irrevocable. Page 3 of 5

4 Chapter 607 regulates For-Profit corporations while Chapter 617 regulates corporation not-for-profit. The First District found that pursuant to Section , Florida Statutes, Chapter 607 requires notice must be in writing, unless notice is expressly authorized by the articles of incorporation or the bylaws, and [is] [r]easonable under the circumstances. Section , Florida Statutes mandates the same requirements for non-profit corporations. The arbitrator finds no substantial difference between the two statutes, therefore the arbitrator must recede from the previous arbitration cases and follow the First District reasoning in interpreting Section , Florida Statutes. Since oral resignations are not explicitly authorized by the Association s governing documents, resignations from the Association s board of directors must be in writing and properly delivered to the Association to be effective. Therefore, Petitioners verbal resignations at the November 17, 2015 board of directors meeting were ineffective. Based upon the foregoing, it is ORDERED: 1. Petitioners requested relief is GRANTED. 2. As of the date of the mailing of this order, Petitioners Stephen A. Brand and David E. LaPointe are immediately seated on the board of directors of Sundance Association, Inc. to serve the remainder of their terms. As of the date of the mailing of this order, any replacement directors for Petitioners are REMOVED as directors. DONE AND ORDERED this 6th day of July, 2016, at Tallahassee, Leon County, Page 4 of 5

5 Florida. Terri Leigh Jones, Arbitrator Department of Business and Professional Regulation Arbitration Section 2601 Blair Stone Road Building B, 4th Floor Tallahassee, Florida Telephone (850) Facsimile (850) Certificate of Service I hereby certify that a true and correct copy of the foregoing final order has been sent by U.S. Mail and facsimile to the following persons on this 6th day of July, 2016: Charles W. Malloy, Esq. Terrence F. Pyle, P.A. 707 Del Webb Blvd. West Sun City Center, FL Fax: Attorney for Petitioners Joseph G. Riopelle, Esq. 400 North Ashley Drive Suite 1150 Tampa, FL Fax: Attorney for Respondent Terri Leigh Jones, Arbitrator Page 5 of 5