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

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1 STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMSHARES AND MOBILE HOMES IN RE: PETITION FOR NON-BINDING ARBITRATION Jesus Fernandez, Qualified Representative for: Lisset Fernandez, Lorenzo Marsalas, Silvia Beltran, Zoraida De Franco, Francisco Travieso, Clodomiro Reyes, Davio Robinette, Luci Agusti, Orlando Hernandez, Leonor Henriquez, v. Petitioners, Greentree Condominiums Association, Inc., Case No Respondent. SUMMARY FINAL ORDER CERTIFYING RECALL Primary Issue Should the recall of four board members be certified? Procedural History / On July 8, 2011, Petitioners filed for Arbitration against the Greentree Condominiums Association, Inc. ( Association ) by naming directors Rafael Sosa, Francisco Paramio, Martha Ramos, and Marta Orgeta as Respondents and asserting 1. These four individuals had been recalled as directors by written agreement in June 2011 and they were again recalled at a unit owner s meeting held on June 30, 2011; 2. Greentree Condominiums Association, Inc. ( Association ) did not hold a Board of Directors meeting to certify or not certify the recall, nor did the Association file a Recall Arbitration Petition; and, 3. The named directors refused to relinquish their positions on the board. 1

2 On July 19, 2011, the undersigned issued the Association an Order Requiring Answer ( ORA ) within 14 days. The Order was sent to Harold Truppman, Esq., identified as the Association s registered agent by the Florida Corporations web page. On July 27, 2011, Attorney Francisco Aguero filed a letter stating 1. He was representing the Association in this action, not Truppman; 2. He had received the ORA, but not a copy of the Petition with Attachments, so please forward him those documents; and, 3. He would need additional time to file an Answer, but he did not request a particular amount of time. On July 28, 2011, the undersigned issued an Amended ORA, which changed the Association s deadline to Answer the Petition from August 2 to August 15, The Amended ORA and a copy of the Petition and all attachments were addressed to Attorney Francisco Aguero. On August 17, 2011, a Default was entered against the Association because it had not timely filed an Answer or any other communication. The following day, on August 18, 2011, the Association filed an Answer asking that the recall not be certified because: 1. The unit owners did not properly serve the Association with the recall ballots (or written agreements); nor was the Association notified of or aware of any unit owner meeting to recall the four Board Members; 2. The format of the written recall ballots (agreements) did not comply with the law because the ballots were not dated; 3. Twenty-six of the recall agreements were invalid for other reasons, such as: A. The signatory was not the unit owner; B. The signatory did not identify the unit number; 2

3 C. Not all unit owners signed the recall agreement; D. Four unit owners rescinded their recall ballot during August. On August 22, 2011, the Association filed a Motion to Vacate the Entry of Default for the reason that the Association had attempted to send its Answer on the 15 th of August, 2011, by facsimile, but that the fax machine apparently failed to do its job. On August 26, 2011 an evidentiary hearing was held by telephone to determine if service of the recall agreements upon Director Beltran, the one board member not targeted in the recall, was effective, in light of the four other Directors denial that they had received a copy of the recall agreement. After reviewing the filings by each party and considering the evidence, there are no questions of fact remaining, and entry of a Summary Final Order is appropriate. 1 FINDINGS OF FACT 1. The Association has 184 voting interests; there are five seats on the board of directors. 2. Ninety-three recall ballots, or agreements, are needed to recall any board member. 3. On June 13, 2011, ninety-eight recall agreements were personally served upon Board Member Silvia Beltran. A Notification that the recall agreements were served upon Director Beltran was then sent by regular mail to Board Members Marta Ortega and Martha Ramos. 4. The recall targeted the following four Board Members: A. Marta Ortega; 1 Fla. Admin. Code R. 61B (2011). 3

4 B. Marta Ramos; C. Francisco Paramio; and, D. Rafeal Sosa. 5. All ninety-eight recall ballots voted to recall Marta Ortega; Martha Ramos; and, Rafeal Sosa. Ninety-seven recall ballots voted to recall Francisco Paramio. 6. The Association did not notice or hold a board meeting at any time to determine whether to certify the recall Because the Board did not schedule or hold a meeting at any time within the required time period 3 or thereafter, the unit owners on June 28, 2011, requested a special unit owners meeting to address the matter of the recall. Twenty-one unit owners signed the request and submitted it to Board Member Beltran. 8. The unit owners meeting was set for Thursday, June 30, 2011, at 7:00 p.m., to be held in the pool area of the Association property (a covered area where board meetings are commonly held). 9. Notices of the meeting were posted in various locations throughout the Association property, and the following people were individually mailed a Notice of the Meeting: A. Each of the four Board members targeted in the recall; (2)(j)(2), Florida Statutes (2011) requires the board to notice and hold a board meeting within five full business days after receipt of the recall agreement. 3 Fla. Admin. Code R. 61B (3) (Within five full business days after service of the recall agreements, the Board is to hold a duly noticed meeting to determine whether to certify the recall). 4

5 B. The association manager; and, C. Attorney Francisco Aguero. 10. At the designated meeting time, the unit owners arrived at the pool area and found the pool area locked, so they could not access that area for the meeting. 11. Shortly after 7:00 p.m., a security guard arrived at the locked area; she advised the unit owners that the Board would not be conducting any meeting and that the unit owners should leave the area. 12. Despite such admonition, 31 unit owners met and held a meeting in an area adjacent to the pool, in the rain. The security officer remained in the vicinity and was joined by a Metro Dade police officer. 13. During the meeting, the unit owners conferred with each other and agreed as follows: A. Since serving the recall agreements upon the Board (i) (ii) No board meeting occurred; and, No Notice of Board Meeting was ever posted; B. The unit owners reaffirmed their recall ballots. 14. On July 8, 2011, the Petitioners filed the instant action for relief, asking that the recall be certified. CONCLUSIONS OF LAW The arbitrator has jurisdiction over the parties and the subject matter of this dispute pursuant to (2)(j)(3) and , Fla. Stat. (2011). Entry of Default The Entry of Default will be set aside. The Respondent s Answer was filed one day after the Default was entered, and the Motion to Vacate the Default states that an 5

6 attempt was made on the 15 th of August 2011 to send the Answer by facsimile. The arguments made by the Respondent in the Answer are addressed below. Is the Recall Valid? In considering whether the recall of the four named Board Members was valid, three questions must be addressed and answered: 1. Did the Petitioners properly serve the recall agreements upon the Board? 2. Does the form of the ballots substantially comply with Florida Administrative Rule 61B (1) (2011)? 3. Do the ballots, or written agreements, constitute a majority of the voting interests in the Association? Service of the Recall Agreements The Association contends that the Recall of the four Board members should not be certified because service of the recall agreements upon the Board was improper for the following reasons: A. The Recall Agreements were not served by personal service or by certified mail, as required by Florida Administrative Code Rule 61B (1)(g); B. The Board Member served, Sylvia Beltran, was ineffective service because Beltran was more than 90 days delinquent in payment of her unit account, rendering her a non-board member and so legally unable to receive service; and, C. Even if Sylvia Beltran was a Board Member when she was served, she did not notify other Board Member s of the recall. The Association s arguments are without merit. A currently serving Board Member was served with the recall agreements 4 on June 13, 2011, after 5:00 p.m. There was no evidence that she was delinquent in payment of any assessment or other association bills. 4 Fla. Admin. Code R. 61B (1)(g) (2011). 6

7 Accordingly, Director Beltran was clothed with implied and apparent authority to receive service of the recall. Service was made by South Florida World Courier Ground. A letter from the Qualified Representative for Petitioners accompanied the recall ballots advising that 98 unit owners voted to recall. The letter also requested that the Board hold a meeting within five business days and certify the recall. This letter, dated June 10, 2011, was sent by regular mail to Board Members Marta Ortega and Martha Ramos. The Association s Answer does not deny this fact but states that Ortega and Ramos did not get a copy of the recall ballots. The Association contends that Board Member Sylvia Beltran, was favorable to the homeowners, and she was not targeted. Therefore, she did not notify the other board members of the recall, which is why no meeting was held. That theory was refuted at the evidentiary hearing held on August 26, The Qualified Representative testified that he attempted to personally serve the recall ballots upon Board Members Ramos and Ortega (who both own a unit and live in it), but he was unable to personally contact them at their units. He then tried to personally serve Director Beltran with the recall, but she would not come to her door. For this reason, the Qualified Representative opted to serve Ms. Beltran with World Courier Ground service. The Association was properly served. Despite having been properly served with the recall agreements, the Board did not hold a meeting within five business days, or at any time, to consider the recall. In its Answer, the Association admits, at Paragraph (4) that it did not hold a meeting. 7

8 Under the terms of (2)(j)(4), Florida Statutes (2011), if the board fails to notice and hold a board meeting within five full business days of service of an agreement in writing, the recall is deemed effective and the board members recalled are to turn over to the board any and all records and property of the association. However, these strict remedial provisions for failing to hold a meeting are tempered by arbitration case law. The arbitrator may refuse to certify a recall despite the board s failure to conduct a timely meeting to consider the recall if the recall ballots (or agreements) are invalid on their face. 5 Facial invalidity occurs when the total number of votes voting for the recall does not constitute a majority. 6 Other than ballots that do not vote for a recall, the arbitrator may not consider issues presented by the Association that require reviewing evidence other than the face of the ballot. 7 Ballot Format The unit owners did not use the standard form for a recall ballot adopted by the Division. However, the ballots substantially comply with the required statutory components for a recall ballot, despite that fact. Florida Administrative Code Rule 61B states that a written agreement used for a recall vote is to contain the following components: 1. The name of each board member subject to recall; 2. Spaces by the name of each such board member to allow the ballot signatory to indicate whether he or she votes to recall or retain such candidate; 5 The Fountains Association, Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (January 18, 2006). 6 Lauderdale Oaks Condo. 10, Inc. v. Unit Owners Voting for Recall, No , 2010 WL , (Fla. DBPR Arb, Oct. 12, 2010). (Emergency board meeting to consider recall is not a validly noticed meeting to consider the recall within 5 business days of service and is tantamount to no meeting.). 7 See id. 8

9 3. Eligible replacement candidates, in a number equal or greater than the number of candidates for recall, who are willing to serve, and including a space for a write-in candidate; 4. A space for the signatory to state A. His or her name; B. Unit number; and, C. The date. 5. A signature line; 6. Designation of a representative who has various administrative duties to oversee the process. These recall ballots include every requirement listed except the date the ballot was signed. However, written ballots do not expire with the passage of time. 8 Accordingly, the recall ballots used in the instant case substantially comply with the listed requirements, and substantial compliance is sufficient. 9 Majority of Voting Interests The only remaining question is whether the number of recall ballots served upon the Board constituted a majority of the voting interests. The Association states that the number of voting interests is 184. Ninety-three ballots are needed to recall the four board members targeted. All ninety-eight recall ballots voted to recall Marta Ortega, Martha Ramos, and Rafeal Sosa. Ninety-seven recall ballots voted to recall Francisco Paramio. The majority of the voting interests have voted to recall these four directors. The replacement candidates with the highest number of votes, Lisset Fernandez, Zoraida De Franco, Clodomiro Reyes, and Leonor Henriquez are to replace them. 8 Fla. Admin. Code R. 61B (1)(i) (2011). 9 Fla. Admin. Code R. 61B (2) (2011). 9

10 Based upon the foregoing, IT IS ORDERED: A. The Entry of Default filed against the Association is SET ASIDE; B. The recall of Board members Marta Ortega, Martha Ramos, Francisco Paramio, and Rafeal Sosa is CERTIFIED and they are REMOVED as directors effective as of the date of mailing this order; C. Replacement candidates Lisset Fernandez, Zoraida De Franco, Clodomiro Reyes, and Leonor Henriquez are to take the seats of the recalled Board members, effective immediately; D. Within five (5) full business days from the effective date of this order, Marta Ortega, Marta Ramos, Francisco Paramio, and Rafeal Sosa are to deliver any and all records of the Association in their possession to the new board of directors. DONE AND ORDERED this 26 th day of August Shirley J. Whitsitt Dep t. of Bus. & Prof. Reg. - Arbitration Section 1940 North Monroe Street Tallahassee, Florida Fax: (850) Tel: (850)

11 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing final order was sent to the below-named individuals this 26 th day of August 2011, by facsimile and on August 29, 2011 by U.S. mail, postage prepaid to Jesus Fernandez Qualified Representative 9790 SW 58 th St. Miami, FL Fax: (786) Francisco J. Aguero, Esq. Francisco J. Aguero P.A LeJeune Rd., PH 1-D Coral Gables, FL Fax: (786) Shirley J. Whitsitt 11