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 STEPHEN A. SHIELDS, Petitioner, v. Case No VERSAILLES GARDENS I CONDOMINIUM ASSOCIATION, INC., Respondent. / SUMMARY FINAL ORDER This order is entered pursuant to Rule 61B , Florida Administrative Code, which permits the arbitrator to enter a summary order where there are no disputed issues of material fact. APPEARANCES The petitioner was represented in this proceeding by Louis David Huss, Esq. The respondent was represented by Edo Meloni, Esq. PROCEDURAL STATEMENT The original petition for arbitration was filed in this matter on February 2, An Order Striking Claims and Order to Show Cause was entered on February 16, An Order Requiring Answer was served on the association on March 4, On March 27, 1998, the association filed a Motion to Dismiss the petition on the grounds of mootness. The association argued that since all the documents requested by the petitioner which were in the association s possession were made available on December 3, 1997, the dispute was moot. In response, the petitioner argued that the issue of damages remained, and therefore, the case was not moot. The petition was dismissed as moot by order entered April 15, 1998, because no damages were sought in the pet ition, however, the petitioner was given an opportunity to file an amended petition requesting damages. An amended

2 petition was filed on April 28, 1998, and stated a claim for damages for failure to provide access to official records. An order requiring the respondent to file an answer to the amended petition was entered on May 27, 1998, and an answer was filed June 8, A Notice of Intent to Issue Summary Order was entered on June 9, 1998, and the parties filed responses and legal arguments, with the latest filing being made on June 29, 1998, by fax. ISSUE PRESENTED Whether the association willfully failed to provide access to official records in violation of Section (12), Florida Statutes. FINDINGS OF FACT 1. Stephen A. Shields (pet itioner) owns a unit in the Versailles Gardens I Condominium, managed by the Versailles Gardens I Condominium Association, Inc. (respondent or association). 2. In October, 1995, the directors of the associat ion approved a special assessment in the amount of $178, for repairs and changes to the condominium buildings. The share of the assessment attributable to the petitioner s unit is $ The petitioner received a request for payment of his share of the assessment on February 20, By letter dated February 26, 1996, and sent by certified mail, the petitioner requested to inspect and obtain copies of certain official records of the association: 1) the minutes of all association, board of director, and general meetings where the special assessment referred to in [the notice of special assessment] was discussed, debated, planned, estimated, calculated, and/or otherwise determined; 2) financial records, bid specifications, bid responses, calculations, and other supporting documentation used to arrive at the special assessment amount if not included in #1 above; 3) the minutes of the association, board of director, or general meeting (apparently October 5, 1995) where the special assessment referred to in [the notice of special assessment] was voted upon and approved; and 4) the minutes of the association, board of director, or general meeting subsequent to #3 above, where the minutes of the meeting referred to in #3 above were approved. This request was received by the association on March 5, On March 20, 1996, the petitioner sent a written complaint by certified mail, 2

3 attacking: 1) the association s failure to respond in a timely manner to his request to inspect and obtain copies of records relating to the special assessment, and 2) the board s attempt to impose a special assessment which was conceived and imposed unlawfully. The letter was received by the association on March 21, By letter dated November 19, 1996, the association s CPA gave the petitioner final notice that he owed $ for the special assessment and that the association intended to place a lien on his unit if he failed to pay the assessment. 6. By letter dated November 26, 1996, the pet itioner replied to the association board and the CPA, complaining that he had attempted to resolve the debt with the association on two separate occasions. 7. By letter dated January 8, 1997, counsel for the associat ion provided petitioner a copy of a lien against his unit and informed him that the association intended to file a foreclosure action against his property based on non-payment of the special assessment. 8. By letter dated January 13, 1997, the petitioner informed the association s attorney that he disputed the validity of the special assessment and had made his objections known via a series of certified letters. Attached to this letter was a copy of the petitioner s November 26, 1996, letter. The letter was received on January 14, Thereafter, the association filed a foreclosure action against the petitioner. Petitioner responded by filing a counterclaim on the alleged records violation. As part of his counterclaim, petitioner requested production of all records kept by the association pursuant to Section (12), Florida Statutes, including copies of the board s meeting minutes and notices of board meetings. On November 19, 1997, the circuit court denied the associat ion s motion to strike the unit owner s affirmative defenses and to dismiss Count II of the unit owner s counterclaims (Slander of Title). The court stayed the association s motion to dismiss the records claim (Count I) pending 3

4 arbitration. 10. On December 3, 1997, pursuant to the unit owner s request for production in the circuit court action, the unit owner and his attorney were given access to the association s records. They spent an hour and a half reviewing the records and had 62 pages of the records copied. The petitioner claims that there are many problems with the documents: pages are missing; some are not dated, are misdated or are illegible; one letter does not have an enclosure although an enclosure is indicated; one letter is unsigned; there is only one document for all of 1993; there are no documents for all of 1994; minutes of some meetings are in Spanish with incomplete English translations; and, over a period of more than six years, there are only two documents that are announcements, notices of meeting, or affidavits showing that the condo minium meetings were conducted in conformity with Section (2)(c), Florida Statutes. Specifically, the petitioner claims that the records as to the noticing of the meeting at which the special assessment was purportedly approved have not been produced to this date. Instead, the association has submitted an affidavit of a former board member, executed after the litigation between the parties commenced and after the request for production was made, stating that the meeting notices were properly posted and mailed. 4

5 CONCLUSIONS OF LAW Section (12)(c), Florida Statutes, provides that the official records of the association shall be open to inspection by any association member at all reasonable times. The right to inspect records includes the right to make or obtain copies. The association s failure to provide requested records within 10 working days after receipt of a written request from a member shall create a rebuttable presumption that the association willfully failed to comply... with the statute. Section (12)(a) lists the items which constitute the official records of an association. By letter dated February 26, 1996, sent certified mail, and received by the association on March 5, 1996, the petitioner requested to inspect and obtain copies of certain records of the association, including the minutes and notices for certain board and association meetings and financial records supporting a special assessment. The association did not respond to the request. By letter of March 20, 1996, sent certified mail, and received by the association on March 21, 1996, the petitioner complained that the association had failed to respond in a timely manner to his request to inspect and obtain copies of the records. The association still did not respond to the request. The petitioner also sent letters to the association dated November 26, 1996, and January 13, 1997, disputing the validity of the special assessment and complaining about the association s collection actions. The unfulfilled request for access to the association s records became an issue raised by the petitioner in the association s foreclosure action in circuit court, which foreclosure action was based on the petitioner s failure to pay the special assessment. Access to the association s records was provided to Shields on December 3, 1997, pursuant to Shields request for production of documents in the foreclosure proceeding. Meeting minutes of the board and of the association are official records. See Section (12)(a)6., Florida Statutes ( official records includes the minutes of all meetings of the 5

6 association, of the board of directors, and of unit owners ). Likewise, financial records supporting a special assessment and evidence of compliance with the notice requirements contained in Section (2)(c), Florida Statutes, for meetings, if they exist, are also official records. 1 See Section (12)(a)15., Florida Statutes (official records includes [a]ll other records of the association... which are related to the operation of the association. ). Pursuant to the statute, the association was obligated to provide access to the minutes and financial records within 5 days, or by March 12, The records were not produced until December 3, The association s failure to produce the records within 10 days after receipt of Shields request, or by March 19, 1996, raises a presumption that the association s failure was willful. Section (12)(c), Florida Statutes. The association argues that it did not willfully deny inspection of the records, but offers no factual support. A willful act is one done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Black s Law Dictionary (6th Ed., 1990). In Steiner v. Hollywood Beach Resort Condo. Assn., Inc., Arb. Case No , Final Order (May 19, 1993), it was determined that the association failed to rebut the presumption of willfulness when it refused to copy the first 18 pages of the declaration of condominium as requested by a unit owner, requiring him to pay $75.00 for a complete set of the condominium documents. In Young-Ling v. Ebb Tide Condominium Assn.., Inc., Arb. Case No , Summary Final Order (Feb. 16, 1994), it was determined that the association willfully failed to provide access to official records where the association was served with the owner s petition and order requiring answer by the arbitrator and yet failed, over a period of 1 In this regard it is noted that the statute requires that evidence of compliance with the 48-hour notice requirement for meetings concerning special assessments shall be made by affidavit executed by the person providing the notice and filed among the official records of the association. 6

7 months, to provide copies of all annual financial statements and ballots and proxies utilized during the last year of the association s operation. In the instant case, the petitioner made a written request to the association in March of 1996, followed up 11 working days later by a written complaint regarding the association s failure to permit inspection. The petitioner also raised the association s failure to provide access to the records in his September 4, 1997, counterclaim to the association s foreclosure action. Finally, the records were produced on December 3, 1997, except f or the affidavit regarding the assessment meeting notice and some pages which presumably have been lost or misplaced. Under these facts, a delay of over 20 months to produce official records, it is determined that the association has failed to rebut the presumption that its failure to afford access to the records was willful. The petitioner argues that he still has not received access to all of the records that the association is required to keep pursuant to the Condominium Act. According to the petitioner, the records reviewed on December 3, 1997, were incomplete or otherwise deficient: pages are missing; some of the documents are not dated, are misdated or are illegible; an enclo sure to a letter is missing; a letter is unsigned; there is only one document for all of 1993; and there are no documents for all of 1994, et cetera. The association argues that it has not willfully denied inspection of these records to the petitioner. It suggests that the fact that the petitioner did not obtain all of the records that he requested is an indication that the association used to have poor record keeping practices. The association correctly notes that an association cannot produce records that it does not have, citing Zwirn v. Karanda Village V Condominium Association, Inc., Arb. Case No , Order Determining Jurisdiction (Aug. 12, 1997) in which the undersigned arbitrator dismissed an official records claim because the petition indicated that the reason that the requested record--the quarterly financial report--was not made available was because it was not completed at the time that the petitioner requested it. The deficiencies in the instant case do not prove a continuing willful denial 7

8 of access to records, rather they show poor record keeping practices, a claim beyond the arbitrator s reach. The association argues that the letters the petitioner sent to the association dated November 26, 1996, and January 13, 1997, disputing the validity of the special assessment and complaining about the association s collection actions, do not constitute records requests subject to Section (12)(c), Florida Statutes. The arbitrator agrees that because the letters do not seek access to records or copies of records, but instead complain about the special assessment and the action of foreclosure, the letters do not constitute additional records requests. The petitioner seeks minimum statutory damages o f $50.00 per day for more than 10 days, as well as attorney s fees and actual damages. As actual damages, the petitioner claims attorney s fees expended in the circuit court action. Section (12)(c), Florida Statutes, provides in pertinent part that: [a] unit owner who is denied access to official records is entitled to the actual damages or minimum damages for the association s willful failure to comply with this paragraph. The minimum damages shall be $50 per calendar day up to 10 days, the calculation to begin on the 11th working day after receipt of the written request. The failure to permit inspection of the association records as provided herein entitles any person prevailing in an enforcement action to recover reasonable attorney s fees from the person in control of the records who, directly or indirectly, knowingly denied access to the records for inspection. Attorney s fees expended by a unit owner in an effort to enforce his right of access to official records are not an element of damages under Section (12), Florida Statutes. See MacClary v. Carlton Towers Condominium Association, Inc., Arb. Case No , Final Order (Feb. 27, 1995); Quinn v. Soundwind Association, Inc., Arb. Case No , Final Order (Aug. 31, 1995). Thus, the petitioner s attorney s fees attributable to the circuit court action cannot be awarded on the theory that they constitute actual damages. The statute provides that any person prevailing in a records access enforcement action is entitled to an award of his attorney s fees. Petitioner did not 8

9 file an enforcement action in the circuit court, rather he filed a counterclaim in response to the association s foreclosure action. The counterclaim was abated and arbitrated instead. Thus, assuming the arbitrator had the power to award fees for legal services pertaining to the circuit court action, the petitioner cannot be considered the prevailing party in the circuit court action and, therefore, cannot be awarded his attorney s fees in the circuit court case under this alternative theory, either. Petitioner may only be awarded his reasonable attorney s fees expended in the arbitration action, upon proper motion. Since the only element of actual damages raised by the petitioner is his attorney s fees generated in the circuit court action, which are not recoverable as damages, petitioner shall be awarded the minimum damages under the statute. The one request for records which has been shown to have been willfully denied was the one of February 26, Based on the foregoing, it is ORDERED: The relief requested in the petition, payment of damages both actual and statutory minimum, is GRANTED in part. Within 30 days from the date of this order, the association shall pay to the petitioner the sum of $ (10 days x $50 per day). Petitioner may file a motion for attorney s fees pursuant to Rule 61B , Florida Administrative Code. 9

10 DONE AND ORDERED this 15th day of July 1998, at Tallahassee, Leon County, Florida. Patricia A. Draper, Arbitrator Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida RIGHT OF APPEAL In accordance wit h Section , Florida Statutes, a part y adversely affected by this final order may appeal from the order by filing, within 30 days of entry and mailing of the order, a complaint for trial de novo with a court of competent jurisdiction within the circuit in which the condominium is located. This order does not constitute final agency action and is not appealable to the district courts of appeal. CERTIFICATE OF MAILING I HEREBY CERTIFY that a true and correct copy of the foregoing was mailed by U.S. mail, postage prepaid, to Louis David Huss, Esq., 9703 S. Dixie Highway, #3J, Miami, FL and Edo Meloni, Esq., 27th Floor Museum Tower, 150 West Flagler Street, Miami, FL this the 15th day of July Patricia A. Draper, Arbitrator 10