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 Hibiscus Gardens Condominium, Inc., Petitioner, v. Case No Unit Owners Voting For Recall, Respondent. / SUMMARY FINAL ORDER This final order is entered pursuant to rule 61B (2), Florida Administrative Code, which requires the arbitrator, at any time after the filing of the petition and where no disputed issues of material fact exist, to 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. FINDINGS OF FACTS 1. On February 9, 2005, the board of directors for Hibiscus Gardens Condominium, Inc., received via certified mail, a letter from the unit owner representative, Carl Belforti, seeking recall by written agreement and requesting that the board hold a meeting within five days pursuant to section , Florida Statutes. The letter did not include any written recall agreements. 2. The board held a meeting on February 12, 2005, to consider the recall. At the meeting, the board received by hand-delivery copies of the written recall agreements. 1

2 3. The written recall agreements sought the recall of board members Anne Adelman and Goldie Krittman, with 21 votes in favor of recalling each board member. 4. There are thirty-six (36) voting interests in the association and five seats on the association s board of directors. 5. The minutes for the February 12 meeting (the minutes) indicate that the board chose not to certify the recall because, this gang are sore losers. They lost the election held on October 31, 2004, by a wide margin. The minutes also generally allege that signatures on the recall petitions were obtained through false allegations and threats of litigation. Specifically, the minutes indicate that Dennis Henry was harassed into voting in favor of the recall. 6. The association filed its petition for recall arbitration on February 18, CONCLUSIONS OF LAW In its recall petition, the association contends that the recall should not be certified because it was not properly served on association in accordance with section (2)(j)2, Florida Statutes. The petition also alleges that one recall agreement was rescinded and two were signed by persons who are not the current unit owners. However, none of these reasons are addressed in the board s minutes for the meeting at which it determined not to certify the recall. Rule 61B (4)(d), Fla. Admin. Code, provides that the minutes of the board meeting at which the board determines not to certify the recall must contain the specific reasons it was not certified. Accordingly, reasons contained in the petition which are not stated in the meeting minutes may not be considered. See Arlington Park Condo. Assoc., Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order and Order on Motions to 2

3 Strike (October 22, 2003)(where revocation of certain ballots was not included in the board s recall meeting minutes as a reason for not certifying the recall, the association would not be permitted to assert such a reason in its petition); also see Cape Palms Condo. Assoc., Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (January 28, 2004). Therefore, the reasons stated in the petition for rejecting recall agreements, but not found in the meeting minutes, may not be considered at this point. 1 The minutes indicate that the board rejected recall agreements for the following reasons. First, the minutes state, The reason that the three (3) Board Members did not certify the recall votes is because this gang are sore losers. They lost the election held on October 31, 2004, by a wide margin. Apparently, the board chose not to certify the recall effort because it thought the persons organizing the effort did so for an improper motive. The motivation for recalling the board of directors is irrelevant and not a proper basis for rejecting a recall, as section (2)(j), Florida Statutes, provides any member of the board may be recalled and removed from office with or without cause by the vote or agreement in writing by a majority of all voting interests. See The Moorings Condo. Assoc., Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (September 18, 2003). 1 The undersigned notes that the allegation that the recall agreements were not properly served would ultimately fail because arbitration case law has consistently held that where there is no dispute as to when the association received the recall agreement, the method of delivery is of no significance, as the law only requires formal service in order to determine exactly when the agreements were received. See Aqua Gardens Townhouse Assoc., Inc. v. Unit Members Voting for Recall, Arb. Case No , Recall Arbitration Summary Final Order (December 24, 2002)(service by hand-delivery deemed adequate); see also, Opal Towers Condo. Assoc., Inc. v. Unit Members Voting for Recall, Arb. Case No , Recall Arbitration Summary Final Order)(December 24, 2002)(service by hand-delivery deemed adequate); and Stonebridge Gardens, Section One, Condo. Assoc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (April 17, 2002)(method of delivery unknown). 3

4 The minutes also indicate that another reason the board did not certify the recall effort is that the signatures on the recall agreement were obtained through false allegations and threats of litigation. The petition further elaborates that some of the unit owners were told that the purpose of the written recall agreement was to investigate the recent election. Rule 61B (5)(h), Fla. Admin. Code provides that the fact a unit owner may have received misinformation is not a valid basis for rejecting a recall agreement and shall not be considered by the arbitrator. Moreover, each written recall agreement attached to the petition clearly states that it is for the purpose of recalling the named board member. If the unit owners were told information contrary to what is clearly indicated on the face of the written recall agreement, it is not unreasonable to expect them to ask questions if they have doubts before signing the document. Furthermore, a unit owner is expected to read the written recall agreement before signing it. See Greentree Condo. Assoc., Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (May 25, 2004)(unit owners are presumed to be aware of the content of documents which they sign, are expected to ask questions when in doubt and ultimately refrain from signing a particular document if they are unsure of its contents or ramifications). Therefore, this is not a valid reason for failing to certify the recall. The minutes state that Dennis Harry was harassed into voting in favor of the recall. However the meeting minutes provide no details as to the form of harassment. The recall petition further alleges that several members who signed the recall complained that they felt coerced and intimidated to sign as they were threatened with retaliation and litigation. Neither the petition nor the meeting minutes specify which unit 4

5 owners felt intimidated and the nature of the intimidation. Therefore, the minutes fail to comply with rules 61B (4)(d) and 61B (5)(h), Fla. Admin. Code, and this can not be asserted as basis for rejecting the recall. The association in its response to the respondent s answer argues that the recall was invalid from the start as it failed to obtain twenty-one votes as required by law. As there are thirty-six (36) voting interests in the association, nineteen (19) votes in favor are needed recall a board member. As the minutes arguably only provide a specific reason for rejecting one recall agreement, it is evident that there were a sufficient number votes to recall each named board member. 2 The arbitrator may review the written recall agreement to determine if on its face it complies with all of the requirements of rule 61B , Fla. Admin. 2 Even if it were presumed that Dennis Henry s vote was properly excluded based upon harassment/coercion, there remain a sufficient number of votes in favor of recall to remove each board member. 5

6 Code, that might have an effect on the validity of the recall and to determine if there are a sufficient number of agreements in favor of recall. Sterling Condo. Assoc. v. Group of the Members of the Association Who Voted for Recall, Arb. Case No , Arbitration Summary Final Order (May 4, 1994). The undersigned finds that, facially, the recall agreements substantially comply with the rule and that the association was served with a sufficient number of agreements to recall the board members. The association contends that the recall effort was invalid from the start because it failed to obtain a sufficient number of votes in that two of the agreements were not signed by the current unit owners and one was rescinded. These reasons were not raised in the meeting minutes. In order to make such a determination, the arbitrator would have to delve beyond the four corners of the recall agreement to determine why certain agreements that appear valid on their face are in fact not for reasons not stated in the meeting minutes. This would make the requirement that minutes of the meeting at which the board fails to certify the recall provide specific reasons for rejecting agreements completely meaningless. Based upon the foregoing, the board improperly failed to certify the recall. The minutes of the board meeting at which the board decided not to certify the recall failed to provide valid and specific reasons for rejecting the recall. As the recall effort results in the removal of less than a majority of the board members, replacement board members may be appointed by the remaining board members, pursuant to rule 61B , Fla. Admin. Code. ACCORDINGLY, IT IS ORDERED: 6

7 The recall of Anne Adelman and Goldie Krittman is hereby CERTIFIED and they are REMOVED as directors effective as of the date of the mailing of this order. Within five full business days from the effective date of this recall, Anne Adelman and Goldie Krittman shall deliver to the board any and all records of the association in their possession. The remaining members of the association s board of directors shall appoint replacement board members pursuant to rule 61B , Fla. Admin. Code. DONE AND ORDERED this 31 st day of March 2005, at Tallahassee, Leon County, Florida. James W. Earl, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida

8 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 31 st day of March 2005: Rachel E. Frydman, Esq. Katzman & Korr, P.A NW 49 th Street Suite 202 Ft. Lauderdale, Florida Facsimile: Attorney for Petitioner Dennis J. Eisinger, Esq. Phillips Eisinger & Brown, P.A Hollywood Boulevard Suite 265-S Hollywood, Florida Facsimile: Attorney for the Respondent James W. Earl, Arbitrator 8