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

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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 - COOP Merritt Island Cooperative Housing Association, Inc., Petitioner, v. Case No Unit Owners Voting For Recall, Respondent. / SUMMARY FINAL ORDER Statement of Issue The issue in this case is whether the Cooperative Association properly chose not to certify a recall by written agreement. Procedural Matters On July 22, 2009, Merritt Island Cooperative Housing Association, Inc. (the Association) filed a Petition for Recall Arbitration. An Order Allowing Answer was entered on July 23, An Answer was filed on July 31, On August 10, 2009, a Reply was filed by Petitioner. This Summary Final Order is entered based upon the pleadings and documents filed by the parties. FINDINGS OF FACT 1. The Association is a non-profit association created in 1980 to own and operate an apartment complex consisting of 216 units. The board consists of seven directors. 2. On July 8, 2009, a recall petition consisting of 121 written agreements was 1

2 served on the Association. 3. The written agreements provide ballots to recall two directors, with 119 votes to recall Juliet Jenkins and 111 votes to recall Walter Konkel. 4. On July 15, 2009, the Association s board of directors held a meeting at which time it decided not to certify the recall. 5. The minutes from the July 15, 2009, board meeting indicated that the board declined to certify the recall for the following reasons: a. Unit D-204 The unit owner was more than 30 days delinquent on required payments and, therefore, the governing documents prohibit him from voting on any matter; b. Unit A1-106 The signature on the ballot does not match a signature on the Occupancy Agreement ( OA ) required to be signed by the unit owner, because the OA was signed by a non-owner; c. Unit A2-201 No signature on file to validate the owner s signature; d. Unit A2-205 Ballot signed by Mary Maynard, but signature on OA indicates the unit is owned by Orville Maynard; e. Unit A3-106 Signature does not match signature on OA; f. Unit A3-108 Signature does not match signature on OA; g. Unit B1-203 Signature does not match signature on OA; h. Unit B2-106 Ballot signed by Cynthia Ingram, but signature on OA indicates the unit is owned by Thurston Ingram; i. Unit B3-104 Signature does not match signature on OA; j. Unit C1-203 Signature does not match signature on OA; 2

3 k. Unit C3-203 Signature does not match signature on OA, because the OA was signed by a non-owner; l. Unit D-102 No signature on file to validate the owner s signature; m. Unit A Signature does not match signature on OA; n. Form of written agreements refers to statute and rule numbers for condominium recalls and not cooperative recalls; o. Ballots were collected in an insecure and unmonitored ballot box which could have allowed vote tampering or fraud; p. Ballots were collected in a plastic bag hung from the door of the unit owner representative which could have allowed vote tampering or fraud; q. Ballots were not required to be in sealed envelopes when put into the ballot box, which could have allowed vote tampering or fraud and left doubt that the person who submitted the ballot cast the actual vote; r. A director put a sample ballot in the box, but the sample ballot was not served with the recall; s. A ballot was received from a unit owner who was away during the solicitation of recall votes; t. A unit owner did not receive a copy of the form written agreement; 6. Respondent admits that the vote of Unit D-204 should not be counted because the unit owner is more that 30 days delinquent. 7. With the Answer, Respondent filed a copy of the Merritt Island Co-op Members List as of 7/17/09. Petitioner s Reply acknowledges the authenticity of the list. 3

4 8. The Members List documents that Mary Maynard is an owner of Unit A The Occupancy Agreement and the Members List both document that Cynthia Ingram is an Owner of Unit B2-106, although her signature does not appear on the OA. 10. Comparison of signatures on the exemplar Occupancy Agreements filed by Petitioner with signatures on the ballots for Units A3-106, B1-203, B3-104, C1-203 and A2-206 reveals many obvious similarities between signatures; the signature for the ballot of Unit A3-108 is too jittery to allow for a comparison. 11. The Unit Owner Representative distributed ballot packets by placing them on the unit owner doors. Most ballots were collected in a cardboard box, taped shut which was left in the Association office, normally occupied by the secretary and the manager. One or more ballots were left in a plastic bag on the front door of the unit owner representative s unit. CONCLUSIONS OF LAW The arbitrator has jurisdiction over this recall dispute pursuant to sections (1)(f) and , Florida Statutes, and Rule 61B , Florida Administrative Code. The proceedings are governed by Rules found in Chapter 61B-50, F.A.C. Rule 61B , F.A.C., requires the arbitrator, at any time after the filing of the petition and where no disputed issues of material fact exist, to enter a final order which can either certify the recall or affirm the board s decision not to certify the recall. Rule 61B (5)(h), Florida Administrative Code, provides that each petition 4

5 shall contain: Each specific basis upon which the board based its determination not to certify the recall, including the unit number and specific defect to which each challenge applies. Any specific reason upon which the board bases its decision not to certify the recall that is stated in the petition for recall arbitration, but absent from the board meeting minutes or attachments thereto, shall be ineffective and shall not be considered by the arbitrator. A board member may be recalled with or without cause. The fact that a unit owner may have received misinformation in no a valid basis for rejecting a recall agreement and shall not be considered by the arbitrator. Article IV, Section 7 of the By-Laws of the Merritt Island Cooperative Housing Association, Inc., provides that any joint owner may cast the vote for a unit. Therefore, the votes cast for Unit A2-205 and B2-106 were not properly rejected. The Association did not obtain a signature of the joint owner on the OA for either of these units, but that failure cannot be used to deprive a known member of the right to vote. Similarly, the Association improperly rejected the votes for Units A1-106, A2-201, C3-203 and D-102 because the Association did not have the signatures of the owners on OA s. Rejection of a ballot because the signature does not match a single exemplar on file with the Association is one of the weakest allegations presented in recall cases. As a practical matter people use different signatures for different types of documents or may be in an awkward position while signing. Advanced age or ill health will change signatures over time. It is noted that a 55-year old who signed an Operating Agreement the year after the cooperative was created would now be 83. An alleged failure to match a signature on file will not be found to create a disputed issue of fact without supporting affidavits from the individual unit owners disclaiming a signature or expert testimony from a qualified document examiner who 5

6 has had the opportunity to inspect known original signatures. See, Lake and Tennis Villas Condominium Ass n., Inc. v. Unit Owners Voting for Recall, Arb. Case No , Recall Final Order (September 4, 2008). Because Petitioner has alleged nothing more than lay review of photocopies, no issue was properly raised to reject votes on this basis. In such a case, the arbitrator would be in as good a position as the board to compare signatures and reach a contrary conclusion. It is concluded that Petitioner improperly rejected votes for Units A3-106, B1-203, B3-104, C1-203, A2-206 and A The Association asserts that Respondent did not provide any cognizable evidence to rebut rejection of the allegedly non-matching signatures, citing The Decoplage Condominium Assoc., Inc. v. Unit Owners Voting for Recall, Arb. Case , Summary Final Order (January 16, 2003). Although the arbitrator in that case found that affidavits proved up signatures, it is not proper to conclude that the burden of proof for the authenticity of signatures rests with the unit owners who exercise their statutory right to recall board members. Section (1)(f), Florida Statutes and Rule 61B , Florida Administrative Code, place the burden on the cooperative association to respond to a recall by holding a meeting, considering each ballot individually, maintaining complete and current minutes of the meeting, and filing a petition for recall arbitration if the board does not certify the recall. Rule 61B , Florida Administrative Code, limits the defenses available to the association. The burden is on the association to establish the case for rejecting a recall. When the minutes and other attachments to the Petition for 6

7 Recall Arbitration do not establish substantial bases to defend against a recall, the unit owners voting for recall don t have to do anything and the recall must be certified. When the ballots reflect the vote of a majority of the members, the fact that the form used refers to the condominium statute and rules does not affect the substance or validity of a recall. See, Westlake Gardens Condominium Assoc., Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (August 7, 2008)(Fact that recall effort used Homeowners Written Recall Agreement/Ballot rather than condominium form not reason to reject ballots.) The statue and rules treat recalls very differently than elections. No specific procedures and time frames are imposed on unit owners collecting written recall agreements before the recall is served on the board. A unit owner or groups of unit owners may take possession of ballots, collected personally or by mail, without regard to security or secret ballots, and need not deliver originals to the board. In the absence of facts supporting a reason to believe that a particular ballot was, in fact, altered or forged, the irregularities the Association has listed for collection of ballots in this case are simply irrelevant. Because only one ballot was properly rejected by the board, the recall effort produced 118 votes to recall Juliet Jenkins and 110 votes to recall Walter Konkel. In this Association 109 votes represents a majority of the voting interests, so sufficient votes were secured as to each of the directors subject to recall. Based on the foregoing, it is ORDERED: 1. The recall of Juliet Jenkins and Walter Konkel is Certified; 7

8 2. Within five (5) days of this Order, each of the recalled board members shall hand over all association property and documents in his or her possession to one of the remaining members of the board; 3. The seats vacated by this recall may be filled by the vote of a majority of the remaining board members provided the recalled individuals shall not be appointed. DONE AND ORDERED this 17th day of August, 2009, at Tallahassee, Leon County, Florida. Bruce A. Campbell, Arbitrator Dept. of Bus. & Prof. Reg. Arbitration Section 1940 North Monroe Street Tallahassee, Florida Certificate of Service I hereby certify that a copy of the foregoing summary final order has been sent by U.S. Mail to the following persons on this 17th day of August, 2009: Timothy F. Pickles, Esq. Watson Soileau 3490 North U. S. Highway 1 Cocoa, Florida Margaret VanDemark 160 Bounty St. #208 Merritt Island, FL Bruce A. Campbell 8