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 SEAWARD MANAGEMENT, INC. a/k/a SEAWARD CONDOMINIUM, Petitioner, v. Case No UNIT OWNERS VOTING FOR RECALL, Respondent. / SUMMARY FINAL ORDER Statement of Issue The issue presented for determination by the arbitrator is whether the written recall agreement served on the Association s board of directors on September 4, 2008, should have been certified. Findings of Fact 1. On September 17, 2008, the Association filed a recall arbitration petition. 2. There are 47 voting interests in the association. Therefore, a minimum of 24 votes are necessary to recall a member of the Association s board directors. 3. The total number of seats on the board is On September 4, 2008, the Association was served with a written recall agreement consisting 27 ballots voting in favor of the recall of the following members of the board of directors: Robert Ferdinand (26 votes) and Jennie Sinko (24 votes). 1

2 Accompanying each signed ballot was a copy of the deed and property appraiser s report for that unit. 5. Section IV page 5 of the Bylaws provides, in pertinent part, as follows: Where a condominium Unit is owned by the corporation, no vote shall be allowed for such condominium unit. Where a condominium Unit is owned by more than one person, all the owners thereof shall be collectively entitled to the vote assigned to such unit and such owners shall, in writing, designate an individual who shall be entitled to cast the vote on behalf of the owners of such condominium unit of which each is a part until such authorization shall have been changed in writing. 6. The Association held a meeting to consider the recall on September 10, The only item on the agenda was the recall. While the following eight ballots were approved by the board: B203; B301; B402; B404; B504; B603; C104; and C201, the remaining nineteen votes were rejected. The Board voted to reject the recall petition for the following reasons: a. Seventeen ballots were rejected for not having a voting certificate or proxy on file: B101; A102; C101; Donald J. Curran; A301; B102; B103; B202; B104; B201; B302; Bette Ra Ivey; C102; Bowen Zarn; D101; D201; and D202. b. One ballot rejected for having a suspect signature : D102 c. Additionally, the entire written agreement was rejected for the following reasons: the affirmation states the unit owner is authorized to cast this vote on behalf of the unit, instead of using the word the ; the unit owners had improper reasons for seeking the recall; the recall ballots refer to Seaward Condominium and the association s name is Seaward Management, Inc.; the recall ballots were not provided to all owners; and the Association was not provided the original ballots. 2

3 7. On November 8, 2008, an Order Requiring Supplemental Information was entered, which required the association to provide proof of prior enforcement of its voting certificate requirement in past unit owner votes On November 20, 2008, the association filed a Response to Order Requiring Supplemental Information and provided, in pertinent part, the following: a. A copy of the Seward Bylaws requiring the use of voting certificates by certain types of owners; b. Letter dated September 2, 2004, to the association s manager providing a copy of the Resignation and Appointment of Successor Trustee for Unit C204 and requesting that all correspondence from the manager be sent to the trustee as such communications confused and upset the owner who suffers from early Alzheimer s Disease. c. Notice of Date of Board Meeting dates and First Notice of Annual Meeting and Board Election and Qualifying Procedures dated February 15, The notices do not state a requirement for voting certificates or proxies. d. A Second Notice of Annual Meeting dated March 14, The notice reminds the owners: The election of Directors is by Ballot. In order to have your vote count on other issues you must attend the Annual Meeting or submit a Proxy designating someone to cast your vote. e. A blank Certificate of Appointment of Voting Representation. 1 Such proof can be established by providing meeting minutes where votes were rejected due to the lack of a voting certificate and other documentation in the association s possession that reflects that the voting certificate requirement has been previously enforced. 3

4 f. Multiple second notices of annual meetings dated March 21, 1996; March 19, 1999; February 27, 2003; April 17, 2004; March 11, 2005; and March 11, 2008, each of which states in regard to voting certificates as follows: A Proxy is for the purpose of appoint another person to vote for you as you specifically direct (except for non-substantive matters) in the event that you might not be able to attend the meeting. It must be signed by ALL OWNERS of the unit or the one among them that they have designated on the Voting Certificate. g. A blank Limited Proxy form for the April 20, 1996, meeting related to waiving of specific fund reserves and payment options. h. Completed Voting Certificates for the following units: B101 (March 23, 1997; B401 (April 7, 1997); C201 (March 22, 1997); B404 (March 21, 1997); B201 (March 27, 1997); A102 (March 26, 1997); C203 (April 5, 2006); Karen Rogers/Michael Manley (September 10, 2008); B501 (December 13, 1995); and B503 (March 10, 2004). i. A limited proxy with an illegible signature dated November 6, j. Meeting minutes dated May 27, The minutes indicate that 45 ballots were cast and 43 were valid. There was no statement as to the reason why two of the ballots were invalid. k. Meeting minutes dated: April 20, 2002; April 26, 2003; June 6, 2002; and March 20, There were numerous votes taken and no statement regarding rejection of any votes or ballots. l. An dated August 5, 2007, regarding the recall of a board member. The stated that a special meeting had been held in unit A101 on August 4, 2007, that 28 votes/proxies were counted, and that the board had 5 days to verify the current proxies. 4

5 9. On November 21, 2008, Respondent filed a Notice of Filing consisting in pertinent part, of the sworn affidavits of Robert Kettlewell, Jerry W. Fallin (former board member), Gordon H. Shepherson (former board member/former board president), Harold Arthur (former board member/former board president), Donald P. Wilson (former board member/former board president), and Michael K. Cochran (former board member/former board president) stating the association has not required voting certificates in prior voting events. 10. Upon review of the supplemental filings of both the association and the respondent, it is determined that the association has not enforced the voting certificate requirement of the association s governing documents in prior elections or unit owner voting events. Conclusions of Law The arbitrator has jurisdiction of the parties and the subject matter of this dispute pursuant to Sections (2)(j) and , Florida Statutes. A Summary Final Order is appropriate in this case pursuant to Rule 61B , Florida Rules of Administrative Procedure, because no disputed issues of material fact exist. A. Voting Certificates Voting certificate requirements are allowable devices to avoid confusion from possible conflicting votes from a single unit. Rule 61B (3)(b)6., Florida Administrative Code, provides, The failure of the association to enforce a voting certificate requirement in past association elections and unit owner votes shall preclude the association from rejecting a written 5

6 recall ballot or agreement for failing to comply with a voting certificate requirement. Article IV, page 5 of the Bylaws requires that where a condominium unit is owned by multiple owners the unit owners must assign a person to cast a vote on behalf of the unit. The petitioner was required to prove that the association had required voting certificates in elections during the past two years. The association introduced a barrage of unrelated documents and minutes of meetings held on May 27, 1995, April 20, 2002, April 26, 2003, June 6, 2002, and March 20, Only the minutes of May 27, 1995, indicated the rejection of any ballots and the reason for the rejection was not provided in the minutes. The respondent provided six sworn affidavits, including five from former board members/former board presidents, which stated that the voting certificate requirement had never been enforced by the association. Upon review of the documentation and affidavits, the association has not established that it has actively enforced the voting certificate requirement in past elections. See Second Horizons Condominium Association, Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (November 4, 2003)(Acceptable documentation that demonstrates that an association has actively enforced a voting certificate requirement includes official voting records that demonstrate that specific votes were rejected on this basis, including minutes of the election meeting, tally sheets, or discarded ballots indicating the reason for the rejection). Accordingly, as the association has failed to demonstrate that it has actively enforced the voting certificate requirement in previous elections. Therefore, the association improperly rejected the 17 recall ballots, listed above, on this basis. 6

7 B. Other Reasons Board Rejected Ballots The minutes indicated that certain members of the board rejected the written recall due to misrepresentations of the board, and that not all the unit owners had received recall ballots. Additionally, the association rejected some ballots that were rejected for lack of a voting certificate for additional reasons, as follows: Donald J. Curran, Jr. B202 B104 Bette Ra Ivey Bowen Zarn D102 D201 Failed to list unit number in space designated Ballot not legible on whether to retain or recall Robert Ferdinand Alleged to be pre-marked Failed to list unit number in space designated Alleged that unit number is illegible Alleged suspect signature Not signed properly (name printed on the bottom and signed where it should have been printed) 1. Substantial Compliance Rule 61B (1), Florida Administrative Code, provides the requirements relating to the form of a written agreement. Rule 61B (2), Florida Administrative Code, requires the ballots used in the recall effort to substantially comply with the rules governing the recall procedure. The association rejected the ballots of Donald J. Curran, Jr.; Bette Ra Ivey; and Bowen Zarn, due to failure of a ballot to list or to list legibly, the unit number. Failure of a ballot to include the unit number does not render the ballot void. In the case at hand, it is undisputed that each signed recall ballot submitted to the association was accompanied by a printout of the deed for the unit and the property appraiser s report. Although the ballots of Donald J. Curran, Jr., Bette Ra Ivey, and Bowen Zarn failed to 7

8 list the unit numbers, in all other ways, these ballots substantially comply with the requirements of the rule relating to the listing of the unit number. Determination of the identity of the owner and unit number was clearly possible when reviewed with the attachments which were submitted with the ballots. Accordingly, the ballots substantially comply with rule 61B (1), Florida Administrative Code, and the association improperly rejected the ballots of Donald J. Curran, Jr., Bette Ra Ivey, and Bowen Zarn on this basis. The association rejected the ballot of unit D201, because the signature was signed where it should have been printed and hand printed on the bottom of the ballot. The ballot was signed. The ballot included both the signature of the person casting the ballot and the hand written printed name. The ballot substantially complies with the requirements of rule 61B (1), Florida Administrative Code, and the association improperly rejected the ballot for unit D201 on this basis. 2. Unclear Marking of Ballot The association rejected the ballot for unit B202, because it was unable to determine if the unit owner had voted to recall or retain one of the two listed board members, Robert Ferdinand. Upon review of the ballot, it is clear that there are markings in both of the Recall boxes and no markings in either of the Retain boxes. Accordingly, the board improperly rejected the ballot for unit B202 on this basis. 3. Pre-marked Ballot The association rejected the ballot for unit B104, additionally alleging it was premarked due to the use of two colors of ink. The ballot on it face is not obviously premarked. Petitioner failed to submit any affidavit from the unit owner of unit B104 8

9 attesting to the ballot s pre-marking or other any other proof to substantiate the allegation of pre-marking of the ballot. The mere fact that an individual uses two different pens while filling out and signing a ballot is not sufficient to sustain such an allegation, especially when only one of the twenty-seven ballots is alleged to be premarked. Accordingly, the ballot for unit B104 was improperly rejected on this basis. 4. Fraudulent Signature The association rejected the ballot for unit D102, as a suspect signature ; however, the exemplar provided by the association consisted of a warranty deed by Karen I. Karr to Kayla M. Lindquist. The warranty deed is signed by Ms. Karr and two witnesses, Karen Fisher and Rosemarie Frutchey. Ms. Lindquist s signature is not on the deed submitted by the association as the example of her signature. The burden to prove the signature on the ballot is suspect is on the petitioner, and the petitioner has failed to meet that burden. See Hidden Forrest Condo. Assoc. Inc v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (August 29, 2002)(The association challenged the written recall ballots stating that the signature did not match those on file with the association. Where the minutes merely state that there appears to be a discrepancy with some ballots and does not list the individual challenges, Rule 61B (4)(d), Florida Administrative Code, which requires that the board record the specific reasons for not certifying the recall, has not been complied with.) Accordingly, the ballot for unit D102 was improperly rejected on this basis. C. Additional Objections to the Ballots in General by the Association The association alleged the recall agreement was defective because the affirmation stated that the unit owner is authorized to cast this vote on behalf of the 9

10 unit, instead of using the word the. The association s allegation is without merit. The recall ballots and agreement as a whole substantially comply with Rule 61B , Florida Administrative Code. Additionally, the lack of the affirmation in total would not have invalidated the recall agreement. See Kendallwood Villas Condo. Assoc. v. Unit Owners Voting for Recall, Arb. Case No , Partial Summary Final Order and Order Requiring Answer (June 26, 2002)(Recall agreements are not invalid because they do not contain a statement that the unit owner is authorized to vote for the unit.); and Opal Glen Condo. Assoc., Inc. v. Unit Members Voting for Recall, Arb. Case No , Summary Final Order (December 24, 2002)(Not having a statement on the recall ballot for the person signing to affirm that he is authorized to cast the unit s vote is not critical and will not justify rejection of the recall.) Accordingly, the association s rejection of the written recall agreement for the use of the word this instead of the word the was improper. The association rejected the written recall agreement asserting the unit owner s motives were improper. Section (2)(j), Florida Statutes, provides that any member of the board of administration may be recalled and removed from office with or without cause by the vote or agreement in writing by a majority of all the voting interests. The reason for seeking the recall of a board or board members is not relevant to the determination of the validity of the recall agreement. See Las Casas Owners Assn., Inc. v. Group of Members of Condominium Corp. Who Executed a Written Agreement to Recall Members of the Board of Directors, Arb. Case No , Summary Final Order (October 31, 1995)(Arbitrator will not consider the motivation of the voters of the true or falsity of the representations made in the recall 10

11 campaign). Accordingly, the association s rejection of the recall agreement based on the alleged improper motives of the unit owners was in itself, improper. The association rejected the recall alleging misinformation was provided to the unit owners by those initiating the recall. Rule 61B (5)(h), Florida Administrative Code, provides that a unit owner s receipt of misinformation is not a valid basis for rejecting a recall agreement and shall not be considered by the arbitrator. Additionally, each written recall agreement clearly states that it is for the purpose of recalling the named board members. If a unit owner is told information contrary to what is clearly indicated on the face of the ballot, it is the unit owner s responsibility to ask questions before signing the document, if the unit owner has doubts. Moreover, 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 the 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). Accordingly, the association improperly rejected the written recall agreement for this reason. Based upon the foregoing, it is ORDERED: The recall of board members Robert Ferdinand and Jennie Sinko is hereby CERTIFIED. The recall is effective immediately. Any Association records in the possession of any of the recalled board members shall be given to the new board of directors within five (5) days of the date of this order. 11

12 DONE AND ORDERED this 13 th day of January 2009, at Tallahassee, Leon County, Florida. Tonya S. Chavis, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida Certificate of Service I hereby certify that a true and correct copy of the foregoing summary final order has been sent by U.S. Mail to the following persons on this 13 th day of January, 2009: Christopher J. Atcachunas, Esquire FAX: Livingston Street Orlando, Florida Richard M. Coln, Esquire FAX: Concourse Parkway South Suite 105 Maitland, Florida Tonya S. Chavis, Arbitrator 12