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

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1 STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS, AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION LAKES OF WOODHAVEN CONDOMINIUM ASSOCIATION, INC., Petitioner, v. Case No UNIT OWNERS VOTING FOR RECALL, Respondent. / SUMMARY FINAL ORDER ON PETITION FOR RECALL ARBITRATION Rule 61B (2), Florida Administrative Code, provides: At any time after the filing of the petition, if no disputed issues of material fact exist, the arbitrator shall summarily enter a final order denying relief and certifying the recall if the arbitrator finds that no preliminary basis for relief has been demonstrated in the petition. On March 18, 2005, Lakes of Woodhaven Condominium Association, Inc., (association or petitioner) filed a petition for recall arbitration pursuant to rule 61B (1)(b), Florida Administrative Code, seeking affirmation of its decision not to certify a recall by written agreement. The petition for recall arbitration generally complied with rule 61B (5), Fla. Admin. Code, although certain additional information was required. The group of unit owners who voted to recall the board members was named as the respondent in this action in accordance with section (2)(j)3., Fla. Stat. (2003) and rule 61B (3), Fla. Admin. Code. 1

2 The petitioner is a condominium association with 44 voting interests; therefore, 23 voting interests must vote in favor of a recall for it to be effective. On March 4, 2005, petitioner was served with a written recall agreement consisting of 27 separate ballots. There was no cover letter; however, each of the ballots sought to recall all five board members: Martin Yoffe, George Kurteff, Nancy Kurteff, Ronald Ferlazzo, and August Longo. According to the minutes, the board unanimously determined not to certify the recall because the ballots of 14 of the units did not have a properly executed agreement due to the lack of proper signatures on the agreement. The board considered that the following units had a ballot that lacked a proper signature: 6109/138; 6117/135B; 6133/231; 6149/127; 6149/128; 6157/126B; 6165/124B; 6165/223; 6165/224B; 6133/232; 6109/238; 6125/133; 6133/131A; and 6149/ The minutes did not explain why the signatures on the ballots submitted for these units were not valid. The petition for arbitration stated the reasons for the board s determination that the ballots lacked the proper signature. The petition claimed that the ballots for units 138, 135, 231, 127, 128, 126, 124, 224, and 232 were rejected because both owners of the Unit failed to sign the ballot. The ballots for units 238, 223, 133, 131, and 227 were rejected because those units are owned in the name of a trust and the signature on the ballot is not the signature of the owner. On March 24, 2005, a conference call with counsel for the petitioner and counsel for the respondent was held. The parties were advised that this matter would be expedited since it was a petition for recall arbitration and the written agreement attached 2

3 to the petition appeared facially valid. Counsel for the petitioner was advised that the petition for arbitration failed to include some necessary information and exhibits. Therefore, the petitioner was required to supplement the petition with the following information: (a) the provisions of the condominium documents that support the rejection of the ballots; (b) the names of the owners of each of the units in question, and whether the owners were married; (c) if the unit is owned by a trust, the name of the trust and the trustee; and (d) evidence that the association has routinely enforced the voting certificate requirement in the past, if petitioner claims any ballot was rejected because a voting certificate was not on file for the unit. The supplemental information was filed on March 31, According to the petitioner, of the nine ballots rejected because both of the unit owners failed to sign the ballot, seven of the units are owned by a husband and wife. Petitioner does not contend that the recall ballot was not signed by either the husband or wife. Petitioner again fails to cite any provision of the condominium documents to support its assertion that both unit owners must sign the ballot. Instead, the petitioner states that requiring the signatures of all unit owners on any documents requiring unit owner signatures is its policy. Petitioner provided an affidavit of the condominium manager, who attested to the fact that on any document requiring unit owner(s) signatures, the Association requires that all unit owners sign the document. This policy has been in place for 4.5 years. Petitioner attached copies of proxies that have been used at the condominium over the past few years, all of which contain lines for more than one unit owner signature and some of which contain statements such as [m]ust be 1 For simplicity, hereinafter the units will be designated by only their 3-digit numbers. 3

4 signed by all owners of the unit or the voting representative (proxies signed in 2001 and 2002), or, over the signature line, [t]he owner(s) of the unit, or the owner designated as voting representative on a certificate signed by all owners of the unit (2004 proxy). Article V of The Declaration of Condomium of Lakes of Woodhaven 1, A Condominium, (declaration) provides as follows: There shall be one person with respect to each unit ownership who shall be entitled to vote at any meeting of the association. Such a person shall be known (and is hereinafter referred to) as a Voting Member. If a unit is owned by more than one person, the owners of said unit shall designate one of them as the Voting Member.... The designation of the Voting Member shall be made as provided by and subject to the provisions and restrictions set forth in the By-Laws of the Association. The total number of votes shall be equal to the total number of units in the Condominium and each Condominium unit shall have no more and no less than the one (1) equal vote in the Association. If one individual owns two (2) Condominium parcels, he shall have two (2) votes. A vote of a Condominium unit is not divisible. (e.s.) Article II of the bylaws provides, in pertinent part, as follows: Section 1. Membership in the Association shall be limited to owners of the Condominium units... If unit ownership is vested in more than one person, then all of the persons so owning said unit shall be members eligible to hold office, attend meetings, etc., but, as hereinafter indicated, the vote of the unit shall be cast by the voting member. If unit ownership is vested in a Corporation, said corporation may designate an individual officer or employee of the Corporation as its voting member.... Section 2. Voting. The owner(s) of each Condominium unit shall be entitled to one (1) vote for each Condominium unit owned... The vote of a Condominium unit is not divisible. * * * Section 4. Proxies. Votes may be cast in person or by proxy. All proxies shall be in writing and signed by the person entitled to vote. Where a 4

5 unit is owned jointly by a husband and wife, and if they have not designated one of them as a voting member, a proxy must be signed by both husband and wife where a third person is designated.. Section 5. Designation of Voting Member. If a Condominium unit is owned by one person, his right to vote shall be established by the recorded title to the unit. If a Condominium unit is owned by more that one (1) person, the person entitled to cast the vote for the unit shall be designated in a Certificate, signed by all of the recorded owners of the unit.... The person designated in such Certificate who is entitled to cast the vote for a unit shall be known as the voting member. If such a Certificate is not on file with the Secretary of the Association...the vote of the unit concerned shall not be considered...except if said unit is owned by a husband and wife. If the Condominium unit is owned jointly by a husband and wife, the following three provisions are applicable thereto: (a) They may, but they shall not be required to, designate a voting member. (b) If they do not designate a voting member, and if both are present at a meeting and are unable to concur in their decision...they shall lose their right to vote on that subject at that meeting. (c) Where they do not designate a voting member and only one is present at a meeting, the person present may cast the unit vote just as though he or she owned the unit individually and without establishing the concurrence of the absent person. From the above-quoted language it is quite apparent that either the husband or the wife may cast the vote for a unit owned by a husband and wife. According to the bylaws, it is only when a third party is appointed to vote for the unit that both the husband and the wife must sign the document. Since the requirement that both the husband and wife must sign a proxy statement is stated in the bylaws, and the bylaws clearly indicate that the requirements for a valid proxy are different from those for a valid vote, the petitioner s reliance on the proxy statements to support its position that all of the owners must sign a valid recall ballot is misplaced. The bylaws make it clear that at a meeting when a unit is owned by a husband and a wife, and they don t file a voting certificate, either the husband or the wife may vote, but if both want to vote and they disagree, the vote for their unit will not be 5

6 counted. Therefore, it is only logical that when there is a recall by written agreement, either the husband or the wife may sign the ballot for the unit, which is valid unless they both sign contradictory ballots for the unit. In the instant case, either the husband or the wife signed the ballot for the unit. Since either the husband or the wife may vote for the unit they jointly own, the ballot cast for unit 138 by Mae Chang is valid, the ballot cast for unit 135 by Leonard Alban is valid, the ballot cast for unit 127 by Paul Piccoletti is valid, the ballot cast for unit 128 by Donald Workman is valid, the ballot cast for unit 126 by Harold Applebaum is valid, the ballot cast for unit 124 by Robin Saltz is valid, and the ballot cast for unit 224 by Howard Appell is valid. Each of these units are owned by a married couple, and each of the ballots was cast by either the husband or wife. Therefore, each of the ballots were valid. See, e.g., East Lake Woodlands Condo. Ass n, Inc. v. Unit Owners Voting for Recall, Case No , Case Management Order (October 3, 1996)(although the voting certificate designated the wife and recall agreement was signed by the husband, the recall vote was valid because the bylaws stated that either may cast the vote). In addition to the ballots signed by a husband or wife, the ballot for unit 231 is valid because it is signed by Perry Sakellson, who is the unit owner designated by all of the owners of the unit to vote for the unit. The voting certificate designating Perry Sakellson as the voting member appears to have been attached to the recall ballot, and thus it is a valid voting certificate for the recall. See Ocean Point Condo. Ass n, Inc. v. Unit Owners Voting for Recall, Arb. Case No , Report of Special Master (February 17, 2004)(since the voting certificates were served with the recall ballots, the ballots were improperly rejected for lack of a voting certificate). 6

7 The petition alleged that the vote for unit 231 had been rejected because both owners did not sign the recall ballot. However, the supplemental information filed March 31, 2005, reflects that the unit is owned by three people. Although the petitioner has failed to produce any evidence that would suggest that it has ever enforced the voting certificate requirement, it certainly cannot reject a ballot because it is not signed by all of the unit owners when it is signed by the authorized voting member. The petitioner appears to have turned earlier arbitration cases on their heads. Arbitration cases have held that even though an association requires and enforces voting certificates, if all of the unit owners of the unit sign the recall ballot, the ballot cannot be rejected. See 333 By the Sea Condo. Ass n, Inc, v. Unit Owners Seeking Recall, Arb. Case No , Summary Final Order Denying Relief and Cerifying Recall (May 15, 1998)(To reject a ballot when all of the unit owners have signed it because a voting certificate was not on file would lead to an absurd result). In this case, the petitioner is apparently claiming that even though there is a voting member designated by a voting certificate, as required by the bylaws, since the association does not enforce the voting certificate requirements, then all of the unit owners must sign the recall ballot for the ballot to be valid. Obviously, when unit owners comply with the declaration and bylaws and file a voting certificate, the association s policy cannot be used to invalidate a ballot signed by the legitimate voting member. Finally, the ballot for unit 232 was signed by Nanci Grindlinger, but the unit is owned by Nanci Grindlinger and Howard Grindlinger, who are not a married couple. Petitioner rejected the ballot because the ballot was not signed by both unit owners. However, there is nothing in the condominium documents requiring the signatures of all 7

8 the unit owners. There is a requirement that when a unit is owned by more that one owner a voting certificate must be filed naming the voting member. However, the petitioner did not allege that a voting certificate was not on file for the unit nor did it allege that Nanci Grindlinger was not the designated voting member of the unit. Therefore, the statement that both owners did not sign the ballot is an insufficient reason to reject the ballot for unit 232. The petitioner also rejected five votes because the unit was owned by a trust and the ballot was not executed by the trustee. The ballot for unit 238 was rejected. The unit is owned by Ora S. Daniels, as Trustee of the Ora S. Daniels Revocable Trust Agreement. The ballot for unit 238 was signed by Ora S. Daniels. The ballot for unit 133 was rejected. Unit 133 is owned by Raymond G. Scheib, Trustee and his successors in Trust, of the Raymond G. Scheib Revocable Trust. The ballot for unit 133 was signed by Raymond G. Scheib. The ballot for unit 131 was rejected. Unit 131 is owned by Judith Freeman, Trustee of the revocable trust agreement of Judith Freeman. The ballot for unit 131 was signed by Judith Freeman. The ballot for unit 227 was rejected. Unit 227 is owned by Anita Lonstein, as trustee of the Anita Lonstein revocable trust. The ballot for unit 227 was signed by Anita Lonstein. All of the ballots that were rejected were signed by the trustees, the unit owners, and all of the ballots were valid. Although they may own the unit as the trustee of a trust, they are the only people who can make decisions concerning the unit. Their failure to place the word trustee after their names does not justify rejecting their ballots. In each of these cases, the individual signing the ballot is the trustee of his or her own revocable trust. It is not necessary for that individual to write the word trustee 8

9 after his or her name on a recall ballot for it to be valid. Since the person signing the ballot owns the unit in his or her capacity as the trustee of the trust, obviously that is the capacity in which he or she is signing the ballot. See Coquina Isle Condo. Ass n, Inc. v. Unit Owners for Recall, Arb. Case No , Summary Final Order (March 30, 2005)(the technical failure of the trustee to use the designation trustee on the voting certificate did not render the ballot signed by the individual invalid). The association also rejected the ballot for unit 223 signed by Peter Heuer, who, according to the association, owned the unit with Lois M. Voron, as Trustee of the Lois M. Voron Revocable Trust. The voting certificate for the unit was signed by Peter Heuer and Lois M. Voron. It designated Peter Heuer as the voting member of the unit. The board apparently rejected the ballot signed by Peter Heuer because Lois M. Voron did not sign the voting certificate as trustee. Nevertheless, as stated above, the voting certificate would be valid notwithstanding the lack of the word trustee. However, it must be noted, according to the documents the association attached to its Response to Arbitrator s Order Requiring Supplemental Information, Lois M. Voron, as Trustee of the Lois M. Voron Revocable Trust Agreement dated December 27, 1989, conveyed her 50% interest in the unit to Lois M. Voron, a single woman, on October 27, Therefore, according to that deed, Lois M. Voron, individually, is the co-owner of the unit. Nevertheless, whether Lois M. Voron owns a portion of the unit individually or whether she owns a portion of the unit as the trustee of her trust, Lois M. Voron s signature on the voting certificate is sufficient. As shown above, none of the ballots rejected by the board should have been rejected for the reasons given. However, assuming arguendo that the petitioner s 9

10 assertions of invalidity had been correct, i.e., all owners of a unit had to sign each ballot and the trustees had to write the word trustee after their names, it is still questionable whether the board s refusal to certify the recall could have been approved. The petitioner would have had to establish that the board articulated those specific reasons at the meeting when they rejected the ballots since the minutes of the board meeting failed to state the specific reason each individual ballot was rejected. 2 The minutes of the board meeting should be specific. See, e.g., Pendleton Club Ass n, Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (September 28, 2001)(the board s general conclusory allegations that the recall was illegal or otherwise invalid are not sufficient; objections to ballots must be specific). In this case, the board provided the unit numbers of the rejected ballots and stated that they all were rejected because they did not have a properly executed purported agreement due to the lack of proper signatures on the agreements. According to the minutes, it is not certain whether the board ever stated that the ballots were being rejected because not all of the unit owners signed the ballot or because the unit owner did not state trustee after his or her name. It is not sufficient for the minutes to simply list all 2 The respondent asserts that these reasons were never articulated by the board as reasons to reject the recall. However, since the reasons alleged in the petition were insufficient to justify rejection of the recall in any event, the allegations in the petition have been addressed to avoid spending additional time determining whether those reasons were properly raised. 10

11 of the rejected ballots by unit number and state that they have been rejected due to the lack of proper signatures. Unless the board has indicated the specific reason for the rejection of a ballot, which reason should be recorded in the minutes, the rejection of the ballot will not be upheld unless it is facially invalid. The statement in the minutes that the signatures on the ballots are not proper signatures is too broad. The reasons articulated by a board for rejection of ballot must be specific, and the minutes must reflect that specificity. The other reasons set forth in the petition to justify the rejection of the recall are not only totally without any merit, they were not even arguably included in the minutes as a basis for the rejection of the recall. Therefore, based on the foregoing, it is ORDERED: The recall of board members Nancy Kurteff, August Longo, George Kurteff, Martin Yoffe, and Ronald Ferlazzo is hereby CERTIFIED. The recall is effective immediately. Any association records in the possession of any of the recalled board members shall be given to the new board within five (5) days of the date of this order. As the entire board has been recalled, the replacement candidates, Christinia Maffei, Peter Heuer, Don Workman, Howard Appell, and Theodore Landau, shall immediately take the seats of the recalled board members in accordance with rules 61B (3)(b)4. and (6)(d), Fla. Admin. Code.. 11

12 Florida. DONE AND ORDERED this 8th day of April, 2005, at Tallahassee, Leon County, Diane A. Grubbs, Arbitrator Dep t of Business and Professional Regulation Arbitration Section Northwood Centre 1940 North Monroe Street Tallahassee, Florida Certificate of Service I hereby certify that a true and correct copy of the foregoing summary final order has been sent by U.S. Mail to the following persons on this 6th day of April, 2005: Deborah S. Sugarman, Esquire ROBERT KAYE & ASSOCIATES, P.A. Corporate Park 6261 N.W. 6 th Way, Suite 103 Ft. Lauderdale, Florida FAX: (954) Attorney for Petitioner Jennifer Perelman, Esquire Becker & Poliakoff 3111 Stirling Road Ft. Lauderdale, Florida FAX: (954) Unit owner representative Diane A. Grubbs, Arbitrator 12