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 Los Suenos Condominium Association, Inc., Petitioner, v. Unit Owners Voting for Recall, Respondent. Case No / FINAL ORDER CERTIFYING RECALL OF ARELYS LOPEZ Procedural History On September 3, 2009, Los Suenos condominium Association, Inc., ( Association) filed a Recall Petition asking for a Final Order Affirming its decision to not certify a recall served upon the Association s Board on August 21, On September 28, 2009, an Order Requiring Answer was sent to the Unit Owner Representative; the Order was mailed to the address for the representative given by the Petitioner, but that address was not correct. It is unknown if the unit owner representative ever received that Order, despite the wrong address. No Answer was received. Notwithstanding that fact, there are no questions of material fact pertaining to the recall, and entry of a final order is appropriate. Fla. Admin. Code R. 61B (2009). On November 3, 2009, the Association was ordered to file on or before November 13, the following items: 1. Voting certificates on file with the Association as of August 21, 2009; 2. Evidence that voting certificates were enforced in prior elections and recalls; 1

2 3. An affidavit from Juan Miguel Otano Valdes, owner of Unit F-131, stating with specificity the request he made concerning his ballot at the August 27, 2009, board meeting and the reason for the request. On November 16, 2009, the Association filed a response including only the affidavit from Mr. Otano. The information concerning the voting certificates was not provided. The excuse given was that two additional days were needed to verify the information required. Ironically, this is the information that was presumably available to the Association on the day of the recall meeting on August 28, As of the date of this order, the Association has not provided any of the information responsive to requests 1 and 2. FINDINGS OF FACT 1. The total number of voting interests in the Association is The number of voting interests needed to effectuate the recall of a board member is On July 23, 2009, there were three seats on the Board of Directors, and the following individuals filled those seats: A. Raimundo Mena; B. Maya Vazquez Linaje; and, C. Arelys Lopez. 4. At a July 24, 2009, Board Meeting, Raimundo Mena resigned his position with the Board. 5. On July 27, 2009, the following events occurred: A. Maya Vazquez Linaje, resigned as a board member; 2

3 B. At 1:00 p.m., a board meeting was held to appoint a replacement for the seat held by Maya Vazquez Linaje; Jesus Toledo was selected to fill the vacancy. This July 27, 2009, board meeting was called and conducted by two board members: (1) Arelys Lopez; and (2) Ivette Marin Lassise. There are no meeting minutes to reflect how or when Ivette Marin Lassise came to be a board member. C. At 8:00 p.m. a board meeting was held without a quorum present. The board minutes state that the following board members were at that meeting: (i) (ii) (c) Arelys Lopez; Raimundo Mena; and, Maya Vazquez Linaje. Mena and Linaje had resigned on the 24 th and 25 th of July, respectively, leaving Lopez as the sole Board member was present, which did not constitute a quorum. D. A Notice of Emergency Board Meeting for July 30, 2009, was posted stating that the purpose of the meeting was to appoint a new board member. 6. There are no minutes of any meeting on July 30, 2009, so it is unknown if such a meeting occurred; and, if that meeting did occur, what board members may have been in attendance. 7. On August 21, 2009, the Board was served with 207 ballots to recall board members Raimundo Mena, Maya Vazquez Linaje, and Arelys Lopez. 8. An emergency meeting was held on August 27, 2009, at 8:00 p.m. to determine if the Board would certify the recall. The minutes state that the following Board Members were present: A. Ivette M. Lassise; B. Arelys Lopez; and, C. Jesus Toledo. 3

4 theory: 9. The Board voted to not certify the recall based upon two theories: A. All votes cast were invalid as a group, for various reasons; or, B. Between 22 and 27 votes were invalid for other reasons, leaving an insufficient number of votes to certify the recall. 10. More specifically, the minutes specify the following reasons for each A. All votes cast were invalid The Association stated that all written recall votes were fatally defective because (i) (ii) (iii) Two of the board members being recalled had resigned; Three replacement candidates are named to replace only one director subject to recall; Two replacement candidates are delinquent in their payment of monthly assessments; B. Invalidity of recall votes The Association alternatively argues that the following identified votes are invalid, rendering the total of valid votes insufficient to certify the recall. The following 22 votes were deemed invalid because a voting certificate was not on file and the units were jointly owned. The failure to have a voting certificate on file for a jointly-owned unit constituted a violation of Article III, Section 8 of the By-Laws, except for married people. (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (ix) (xi) (xii) Unit D-111 Salgado & Ramos; Unit D-312 Emma & Dupont; Unit F-121 Consuega & Consuega; Unit F-202 Arceo & Arceo; Unit F-217 Lopez & Barrieri; Unit F-224 Sanchez & Perez; Unit F-304 Sardinas & Hernandez; Unit F-311 Valle & Ramon; Unit G-218 Gonzales & Valdez Unit G-308 Estopinan & Garcia; Unit G-309 Betran & Romera; Unit G-311 Lamas, Lamas & Lamas; 4

5 (xiii) Unit M-105 Consuega & Aponte; (xiv) Unit M-201 Montenegro & Montenegro;; (xv) Unit M-202 Perez & Hernandez; (xvi) Unit M-205 Salsedo, Salsedo, & Solsedo; (xvii) Unit M-315 Rodriguez & Ruiz; (xviii) Unit M-321 Castell & Castell; (ixx) Unit M-324 Vargas & Asinas; (xx) Unit S-207 Gomez & Gomez; (xxi) Unit S-307 Juarez & Santiesteban; (xxii) Unit S-328 Tabraue & Hernandez. The following three votes were deemed invalid because the signatories do not appear in the Association s Owner s Roster as the registered owner for the property, and the Association has not approved that unit owner s application to the Association. (i) (ii) (iii) Unit F-307 Rebecca Quintana; Unit G-201 Dulce Fernandez; Unit F-315 Jesse Guocellose. The following vote was deemed invalid because the ballot does not reflect unit owners for property. Unit S-219 Qaundo & Harrero. The following vote was deemed invalid because the unit owner, prior to the meeting approached the board and its counsel and stated that he believed his vote had been tampered with. Unit F-131 Juan Otano Valdes 11. The Association filed documentation with its Petition identifying unit owners who owed assessments to the Association as of September 1, According to that document A. Replacement board member Jesus Toledo was delinquent in the amount of $ in past-due assessments to the Association. B. Replacement board member Ivette Marin Lassise was delinquent in the amount of $ in past-due assessments to the Association. 5

6 CONCLUSIONS OF LAW The arbitrator has jurisdiction over the parties and the subject matter of this dispute pursuant to (2)(j)(3), Fla. Stat. and (2009). A Summary Final Order is appropriate because there are no disputed issues of fact. Fla. Admin. Code R. 61B (2009). Any member of an Association s board of directors may be recalled and removed from that office, with or without cause, provided a majority of the Association s voting interests agree to do so by written ballot or agreement (2)(j). Failure To Give Proper Notice of Board Meeting Emergency Meeting The minutes of the recall meeting, held August 27, 2009, state that it was An Emergency Board of Directors Meeting in Order to Determine Whether to Certify Written Recall Agreements. Fla. Admin. Code R (3) (2009) states: It shall be presumed that service of a written agreement to recall one or more board members shall not, in and of itself, constitute grounds for an emergency meeting of the board to determine whether to certify the recall. Subsection (7) of that Rule states that the failure to duly notice and hold a board meeting to consider a recall within five business days of service requires that the recall be deemed effective immediately. Duly noticed is defined in Sec (2)(c) Fla. Stat. (2009) to mean notice posted conspicuously on the condominium property at least 48 continuous hours before the meeting, except in an emergency. A board meeting to consider a written recall agreement is not an emergency meeting. Town & Country Estates Condo. Apartments 6

7 Ass n. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (April 4, 2007). In this case, the Association s Notice of the Emergency Meeting is written in Spanish and is undated. Only Page 1 of the Notice is included. Because the board minutes reflect that the meeting on August 27, 2009, was an emergency meeting, it can be concluded that the meeting was not duly noticed as required by statute. This fact is critical, because, according to the Petition, the recall agreement was served on August 21, and the meeting was held on August 27, the fourth business day after service. If an emergency meeting was noticed on the 27 th and then held that evening, the recall would be appropriate to certify on that basis alone. However, it is not necessary to reach this question because there are other reasons, as stated below, that require the recall to be certified. Resignation of Two Directors Dispute Moot Based upon the Association s minutes of its various meetings in July, it is not clear who was on the board or directors from July 27, 2009, through August However, there is substantial and competent evidence showing who was not on the board. On July 24, 2009, board member Raimundo Mena resigned his position with the board, and on July 27, 2009, Maya Vazquez Linaje, resigned her position as a board member. Accordingly, these two individuals were not on the board as of July 27, 2009, and the recall voting agreement as to those two board members is MOOT. The only remaining question is whether the 209 votes served upon the Board on August 21, 2009, are sufficient to recall and remove board member Arelys Lopez. 7

8 Recall Ballots are Valid The Association argues that the recall votes are not sufficient to effectuate the recall of Lopez for several reasons. The Association first argues that the recall votes should all be discounted because A. Two of the board members being recalled had resigned; B. Three replacement candidates are named to replace only one director subject to recall; and, C. Two replacement candidates are delinquent in their payment of monthly assessments. These arguments fail for the following reasons: A. The resignation of two of the board members renders the recall moot as to those two candidates; the recall voting agreements are not thereby invalid; B. The matter of replacement candidates is separate from the recall and removal of board members. The recall of directors and the election of their replacements are two separate questions. Natalie Suites Condo. Ass n, Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (June 21, 2007). C. The fact that two of the replacement candidates may be ineligible to serve on the board pursuant to (2)(d)(n), Fla. Stat. (2009) is not a sufficient reason to reject the recall. To the extent that such candidates may be ineligible to serve does not affect the validity of the recall if the written recall agreements otherwise substantially comply with the requirements of Fla. Admin. Code R. 61B (1)(c) (2009). Natalie Suites Condo. Ass n, Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (June 21, 2007). Moreover, any disqualification for delinquency in the payment of assessments requires a showing of 90 days delinquency, rather than just any amount of delinquency. Sec (2)(n), Fla. Stat. (2009). Ironically, Association Exhibit G, the Delinquency Report, shows that both Jesus Toledo and Ivette Marin L. are delinquent in the payment of monthly assessments. 8

9 The Association next argues that between 22 and 27 of the votes are invalid for various reasons. The Association s argument begins with the list of 22 votes identified in Findings of Fact Paragraph 9(B). The reason for disqualifying those votes is because the units in question are owned by more than one person, but no voting certificate is on file, as is required by Article III, Section 8 of the By-Laws. Article III, Section 8 of the By- Laws states: Section 8. Right to Vote and 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 than one 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 and filed with the Secretary of the Association.... 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 for a Unit owned by more tha[t] one person or a corporation, the vote of the Unit concerned shall not be considered in determining the requirement for a quorum or for any other purpose requiring the approval of a person entitled to cast the vote for the Unit, except if said Unit is owned by a husband and wife.... [emphasis added]. The Association interprets this provision of the By-Laws to require that a voting certificate must be filed with the Association, even if all owners of the unit sign the ballot. If a certificate is not on file, the vote will not be counted. Using this argument, the Association attempts to disqualify many of the 22 votes identified in Paragraph 9(B) of the Statement of Facts. The Association s reasoning and argument, however, fail for several reasons. No Evidence of Past Compliance with Voting Certificate Requirement The Association has not represented or provided proof that it has enforced the voting certificate requirement in the past. Where an association rejects recall ballots 9

10 based on a unit owner's failure to comply with voting certificate requirements, the association bears the burden of demonstrating that the condominium documents require voting certificates and that such requirements have been consistently enforced in the past. The Harvest Condo. Ass n., Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (December 10, 2003). The Association, was ordered to produce voting certificate evidence by November 13, 2009, but it did not timely produce any response. When the Association did choose to respond, on November 16, 2009, the response to the Order did not include any evidence that it had any voting certificates on file as of August 21, 2009, or that it had ever enforced such a requirement. Based upon the above-stated principles, all 22 ballots are appropriate to include in the recall count. Aside from these two reasons to include all 22 ballots, there are additional factual bases to include at least 21 of the 22 votes, based upon the following articulated analysis: 1. Mortgage as Proof of Ownership for 13 of 22 Units. The evidence of ownership provided by the Association for 13 of the 22 units is a mortgage, not a deed. Submission of mortgage documentation is insufficient evidence of unit ownership. Bay Tree Patio Homes Condo. Ass n. Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (January 13, 2005); Natalie Suites Condo. Ass n, Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (June 21, 2007). Accordingly, these 13 votes will be counted toward the recall (Units D-11, F-202, F-217, F-304, F-311, G-308, G-309, M-201, M-321, M-324, S-207, S-307, S-328). 2. Absence of Ownership Documentation In the list of 22 votes that were not included in the count due to multiple ownership of the unit, with no voting certificate on file, the Association 10

11 includes Units F-121, M-205, and D-312. The Association has failed to provide any evidence as to title of these units. For Unit D-312, the Association provided only a digital orthophotography map of the residence showing that it is owned by one individual, Louise Emma Jasmine Dupont. Accordingly, there is no basis upon which to discount these 3 votes, and they will be counted toward the recall. 3. All Unit Owners Signed the Recall Vote The recall votes for units F-224, G-311, M-105, M-202, were signed by all individuals who had an ownership interest in the unit. Where all individuals who own the unit have signed the ballot, there is no need for a voting certificate. 333 By the Sea Condo. Ass n. v. Unit Owners Seeking Recall, Arb. Case No Summary Final Order (May 15, 1998). The recall vote for Unit M-315 contains the signature of the unit owner and another individual. The deed to the unit, dated in 2002, shows only one unit owner. The Association argues that, despite the fact that the unit owner signed the recall vote, the extra signature invalidates it. The fact that the recall vote was signed by the owner and an additional person does not invalidate that vote, and it should be counted. The existence of extra signatures on a ballot does not invalidate a ballot. Coral Towers Condo. Ass n., Inc. v. Unit Owners Voting for Recall, Arb. Case No , Final Order (May 7, 2001). Accordingly, these five votes will be counted toward the recall. 4. One Recall Vote of Signed By One of Two Owners Unit G-218 submitted a recall vote signed by Gonzales, one of two owners. Because the Association has neither alleged nor provided evidence that it enforced the voting certificate requirement in the past, this vote is deemed valid. Accordingly, this vote will be counted toward the recall. 5. Remaining Votes The Association identifies 5 remaining votes that should not be included in the recall vote tally. Based upon the reasons stated below, 1 of those votes will be discounted, but the other 4 will be counted. 11

12 A. Unit Owner F-131 The Association did not include Unit Owner 131 in the recall tally because he purportedly told the Association and its counsel at the time of the recall meeting that he believed his vote had been tampered with. The Association alleges that this unit owner (Valdes) signed his ballot, but did not fill it out. Instead, he told the individual who presented the ballot to him that he wanted to vote to retain the Board Members up for recall, and she was to fill out the ballot accordingly. The affidavit claims that Valdes looked at his ballot for the first time at the recall ballot, and that he told counsel for the Association that the ballot was not marked as he wanted, but had been filled out contrary to his instructions. The allegation is one of fraud. In examining the signature of the affidavit with that of the ballot, it is apparent that the signature is not the same. Notwithstanding this fact, the vote will be discounted. Accordingly, this vote will not be counted toward the recall. B. Unit Owner S-219 Two people signed this ballot: Liumilo Quando & Yudel Harrero. The Association rejects the vote because the ballot was not signed by individuals registered as unit owners of the Association. The Association has not claimed the individuals do not own the unit, nor has the Association provided any documentation to show that these people do not own it. The apparent reason the Association rejects this vote is because the Association has not registered these individuals. The Association s Declaration, at Subparagraph states: All Unit Owners shall automatically be members of the Association, and said membership shall terminate when they no longer own said Units. Because the Association maintains a position that the Declaration is valid, its stated reason for rejecting this vote would violate this provision of its Declaration. Accordingly, this vote will be counted toward the recall. 12

13 C. Unit Owners F-307, G-201 and F-315 The stated reason for rejecting these three recall ballots is that they were signed by individuals who do not appear in the Owner s Roster for the Association as registered owner for the property, and whose buyer applications have never been submitted to nor approved by the Association. As stated in the analysis immediately above, the provisions of the Declaration require these individuals to be members of the Association. There is no requirement to become a member of the Association, except to own a unit. Accordingly, these 3 votes will be counted toward the recall. Conclusion The number of valid votes for the recall of Arelys Lopez total 206. Accordingly, the recall of Board Member Arelys Lopez will be CERTIFIED. The vacancy created by his removal from the Board may be filled by an affirmative vote of the majority of the remaining board members. The replacement for Lopez will serve until Lopez term expires. The arbitrator is not ruling on whether replacement Board Members Jesus Toledo and Ivette Marin L. were legitimately placed on the Board because no question about the legitimacy of his or her placement was presented. Based upon the foregoing, IT IS ORDERED: A. The recall of Board member Arelys Lopez is CERTIFIED and he is REMOVED as director effective as of the date of the mailing of this order; B. The two current serving Board members may fill the vacated seat of Lopez by their affirmative vote. Any replacement candidate is to serve for the unexpired term of the seat held by Lopez. Lopez cannot be appointed to fill the vacancy. 13

14 C. Within five (5) full business days from the effective date of this order, Arelys Lopez is to return all records of the Association in his possession to the Association for delivery to the replacement board member, if any. DONE AND ORDERED this 19 th day of November 2009, at Tallahassee, Leon County, Florida. Shirley J. Whitsitt, Arbitrator Dept. Bus. and Prof. Reg., Arbitration Section 1940 North Monroe Street Tallahassee, Florida Fax: (850) CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing final order was sent to the below-named individuals by U.S. mail, postage prepaid, this 19 th day of November 2009, and by facsimile to Moises Kaba, III, Esq. via facsimile: Moises Kaba, III, Esq. Kaba Law Group P.L L.C West 49 th St., Ste. 100 Hialeah, FL Fax: (305) Sergio Del Vallie 1725 West 60 th St., F-311 Hialeah, FL Shirley J. Whitsitt, Arbitrator 14