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 MARSHA DEAN P. BUCKLEY, Petitioner, v. Case No BAYSHORE DIPLOMAT CONDOMINIUM ASSOCIATION, INC., Respondent. / SUMMARY FINAL ORDER Procedural History On April 23, 2015, Marsha Dean P. Buckley (Petitioner) filed a petition for mandatory non-binding arbitration naming Bayshore Diplomat Condominium Association, Inc. (the Association) as the respondent. On May 22, 2015, the Association filed its answer. On July 2, 2015, Petitioner filed an Emergency Motion For Temporary Injunctive Relief to which the Association file a response on July 7, Statement of the Issues The issue in this case is whether the term of office of the Association s board of directors is limited to one year, and if so is the bylaw s one year waiting period between terms applicable. Findings of Fact 1. The Association is the legal entity responsible for the operation of the Bayshore Diplomat Condominium. 1 During a telephonic case management conference held July, 14, 2015, the undersigned denied Petitioner s motion. 1

2 2. Petitioner owns a unit at the condominium and is a member of the Association. 3. In 1995, section 3.1 of the Association s bylaws was amended to read as follows: 3.1. NUMBER, TERM, AND QUALTIFICATIONS. The affairs of the Corporation shall be governed by a Board composed of not less than three (3), nor more than nine (9) Directors, the exact number to be determined by the Board at the Special Meeting at which additional nominations are to be taken as required by Law, or if not so provided, then not less than thirty-five (35) days prior to the election. All Directors shall be members. All officers of a corporation, trust, partnership or other such owner shall be deemed to be members so as to be eligible for Board membership. Directors shall be elected by the Voting interests of the Association on the date of the annual meeting for three year terms. The term of each Director s service shall extend until their elected term is completed and thereafter until their successor is duly elected and qualified or until the Director is recalled in the manner provided in the Condominium Act or resigns. At the completion of the Director s term, the member shali wait one year until again serving as Director. A seat held by a Director who ceases to be an owner, shall thereby automatically become vacant. 4. Prior to October 1, 2008, the Florida Statutes did not limit the length of a term of office for a member of a condominium association s board of directors. 5. In 2008, effective October 1, 2008, section (2)(d)1., Florida Statutes, was amended to limit the length of a term, stating, in pertinent part, as follows: The terms of all members of the board shall expire at the annual meeting and such board members may stand for reelection unless otherwise permitted by the bylaws. In the event that the bylaws permit staggered terms of no more than 2 years and upon approval of a majority of the total voting interests, the association board members may serve 2-year staggered terms. 6. In its answer, the Association addressed how it applied the 2008 amendment: Respondent acknowledges that in 2009 and each year subsequent, the three year term for directors permitted by Respondent s Bylaw 3.1 was inconsistent with the then-current version of Florida Statute (2)(d). Therefore, beginning in 2009, the Board Directors made the determination to implement two year staggered terms of office, as permitted by current Florida law. Members were notified in the Notice of Annual Meetings that each position to come up for re-election at the annual meeting would be elected to a two-year term of office the maximum term then allowable 2

3 by the statutes. This policy stayed in place through the 2015 annual meeting and election. 7. Section (2)(d)2., Florida Statutes was amended, effective July 1, 2013, to read, in pertinent part, as follows: Except in a timeshare condominium, or if the staggered term of a board member does not expire until a later annual meeting, or if all members terms would otherwise expire but there are no candidates, the terms of all board members expire at the annual meeting, and such members may stand for reelection unless prohibited by the bylaws. If the bylaws or articles of incorporation permit terms of no more than 2 years, the association board members may serve 2-year terms. 8. On January 14, 2015, the Association sent its members a first notice of its election and annual meeting stating that an election would be held on March 16, 2015, to fill five vacancies on the board of directors. 9. There are seven seats on the Association s board of directors. 10. By letter dated January 29, 2015, addressed to the Association s attorney, Petitioner s attorney informed the Association of his client s position that two-year director terms are impermissible unless the Association amends it bylaws. Conclusions of Law Bayshore Diplomat Condominium is a condominium within the meaning of section , Florida Statutes. The undersigned has jurisdiction over the parties and subject matter of this dispute pursuant to section , Florida Statutes. This order is entered in accordance with Rule 61B , Florida Administrative Code, because the dispute does not involve any disputed issues of material fact. Term Length Section (2)(d), Florida Statutes (the Statute), was amended in 2008 to limit the maximum length of a director s term of office. In 2008, the Division issued the 3

4 Declaratory Statement In Re: Petition For Declaratory Statement The Decoplage Condo Ass n, Inc., Docket No , that addressed the intended application of the 2008 amendment: The legislature intended that the board members terms must expire at the annual meeting, whether or not it is mentioned in the bylaws, Fla, H.R. Comm. on Saf. and Sec. Council, HB 995 (2008) Staff Analysis 8 (rev.april14,2008)(available at The legislature created one exception to the one-year term for an association that adopted or reaffirmed an existing bylaw allowing for 2-year staggered terms.(footnote omitted). Effective July , the statute was amended 2 to eliminate the requirement that two-year terms must be approved by the membership and that the terms must be staggered. Therefore as of July 1, 2013, the only exception to the statute s intent that terms must expire at the annual meeting, is where an association s bylaws presently permit two year terms or are amended to so provide. The Association acknowledges that in 2009 and each year subsequent, the three year term for directors permitted by Respondent s Bylaw 3.1 was inconsistent with the then current version of Florida Statute (2)(d). Therefore, beginning in 2009, the Association s Board of Directors made the determination to implement two year staggered terms of office, as permitted by current Florida law. The Association s interpretation of the statute is incorrect. Section 3.1 of the Association s By-Laws provides that directors serve three-year, staggered terms. Therefore, under either the 2008 or 2013 amendment, the statute s intent that terms must expire at the annual meeting is applicable to the Association until it amends its bylaws to provide for two-year terms. Starting with the 2009 annual election, the Association s directors should have served one year terms that expired at the annual 2 The statute also was amended in 2014, however, the amendment is not pertinent to this case. 4

5 meeting. Therefore, the Association must hold a new election during which all seats on its Board of Directors will be open for election. The Association argues that Petitioner should be estopped from challenging the 2014 and 2015 elections because he participated and voted in both elections. Estoppel is shown where the party asserting the defense reasonably relies on a material representation made by another to the party s detriment. Esplanade Patio Homes Homeowners Ass n, Inc. v Rolle, 613 So.2d 531 (Fla. 3d DCA 1993). The Association must demonstrate that Petitioner made a material representation that two-year terms are permissible. The record in this case indicates that Petitioner s position prior to the 2015 election was that two-year director terms are impermissible unless the Association amends its bylaws. Therefore, Petitioner is not found to be estopped from asserting her claims. Term Limit Section 3.1 of the Association s bylaws requires a director wait one year until again serving as Director. Subsequent to the 2008 amendment, the statute limited the term of service of the Association s board members to one year. However, the one-year waiting period was adopted with the intent that board members would serve three year terms. Therefore, since the bylaws three-year term has been has been nullified by the statute, the one-year waiting period also is found to be nullified. 3 Based upon the foregoing it is ORDERED: 1. The Association s 2015 election of its Board of Directors is declared void. 3 Term limits are permissible. Goldberg v. Admiral s Port Condo. Ass n, Inc., Arb. Case No , Summary Final Order (July 9, 2014). In Re Petition For Declaratory Statement Fiddler s Green Condo Ass n, Inc., Docket No Therefore, the Association may reinstate term limitations by amending is bylaws. 5

6 2. The present Board shall consist of the board members serving at the time of the 2015 election. If any of these members are currently unavailable to serve, the remaining board members shall appoint replacement board members pursuant to section (2)(d)9., Florida Statutes. 3. Within twenty days of the date of this order, the Association shall notice, pursuant to section (2)(d), Florida Statutes, an election for all seats on its Board. 4. Board members elected during the new election shall serve until the next regularly scheduled annual election. 5. The one year waiting period between terms contained in section 3.1 of the Association s bylaws is hereby declared void and of no effect. Florida. DONE AND ORDERED this 23 rd day of July, 2015, at Tallahassee, Leon County, James W. Earl, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida Telephone: (850) Facsimile: (850) Trial de novo and Attorney s Fees This decision shall be binding on the parties unless a complaint for trial de novo is filed in accordance with section , Florida Statutes. As provided by section , Florida Statutes., the prevailing party in this proceeding is entitled to have the other party pay reasonable costs and attorney s fees. Any such request must be filed in accordance with Rule 61B , Florida Administrative Code. 6

7 Certificate of Service I hereby certify that a true and correct copy of the foregoing final order of dismissal has been sent by U.S. Mail to the following persons on this 23 rd day of July 2015: Bryant H. Dunivan, Jr., Esq. Law Offices of Michael J. Owen, PLLC. 330 Pauls Drive Suite 104 Brandon, FL Fax: (813) Attorney for Petitioner Kimberly M. Valasinas, Esq. Douberley, McGuinnes & Cicero 1000 Sawgrass Corporate Parkway Suite 590 Sunrise, FL Fax: (954) Attorney for Respondent James W. Earl, Arbitrator 7