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 JOHN JACK McKENNA, JR., Petitioner, v. Case No HAMMOCK PINE VILLAGE II ASSOCIATION, INC., Respondent. / SUMMARY FINAL ORDER This order is entered pursuant to Rule 61B , Florida Administrative Code, which permits the arbitrator to dispose of a case summarily if no disputed issues of material fact exist and no meritorious defenses have been presented. The petitioner filed this action for non-binding arbitration on June 19, 1998, naming Hammock Pine Village II Association, Inc. (hereinafter association ) as respondent. An order requiring answer was entered, and the association filed its answer on July 13, Petitioner filed a response to the answer on July 24, 1998, and an order setting pre-hearing procedure was entered on August 18, The respondent and petitioner filed their responses to the order setting pre-hearing procedure on September 28, 1998, and October 5, 1998, respectively. On October 2, 1998, the order setting pre-hearing procedure was vacated and a notice of intent to issue a summary final order was entered, at the request of both parties. On October 20, 1998, both petitioner and respondent filed memoranda of law on the issues involved, and the petitioner and respondent filed notices of additional legal authority on October 28, 1998, and October 1

2 30, 1998, respectively. Findings of Fact The petitioner is the fee simple owner of Units 503 and 508 in Hammock Pine Village II. The association issued to the unit owners a first and second notice of the association s annual meeting and election (scheduled for February 3, 1998, at 7:00 p.m.) which stated that the location of the meeting was to be Heritage United Methodist Church Lighthouse, 2680 Landmark Drive, Clearwater, Florida. The Heritage United Methodist Church owns several buildings which form a complex around or near the main church building. The building known as the Lighthouse is one of the buildings in the church complex. The building known as the Lighthouse has a number on it indicating its street address is 2650 Landmark Drive, although church employees state that all mail directed to the church comes to the main building at 2680 Landmark Drive. The association has held its annual meetings in the main church building before, but never in the Lighthouse. On February 3, 1998, a group of about twenty unit owners, including petitioner, gathered in the main building at the Heritage United Methodist Church shortly before 7:00 p.m. with the expectation of attending the annual meeting and casting their ballots. When the group of unit owners was unable to locate the association s annual meeting within the main church building, members of the group inquired of two individuals who appeared to be affiliated with the church. The first church employee, an unidentified woman, indicated that she did not know of any meetings being held at the church that evening. The second church employee, Morris Booker, advised the group that he was unaware of any meetings being held in the church that night, but when the group members showed him the annual meeting notice indicating the meeting was to be held 2

3 in the Lighthouse, he directed them to the building within the church complex which is called the Lighthouse. By the time the group of some twenty unit owners, including the petitioner, arrived at the Lighthouse at about 7:10 p.m., the association had closed the polls, and the group was not permitted to cast their ballots to elect board members. The group s ballots were not accepted by the board, and thus were not marked as late or disqualified and retained by the association. The total number of voting interests in Hammock Pine Village II is eighty-four (84). Fewer than forty-two unit owners attended the annual meeting (at least prior to the closing of the polls) resulting in less than a quorum being present. The petitioner was running for membership on the association s board of directors. He asserts that if the group had been able to find the meeting and cast their ballots he would have been elected, because he had at least five ballots in his possession or control, and he lost the election by less than five votes. The association denies those allegations pertaining to the number and content of ballots in petitioner s possession and control, but other material facts are undisputed. Issues of Law The association asserts that the petitioner did not give adequate notice of his intent to file a petition for arbitration, pursuant to Section (4)(b), Florida Statutes. The association also asserts the affirmative defense of estoppel, claiming that petitioner failed to exercise due diligence in ascertaining the location of the meeting by walking about the church grounds, and therefore relinquished his right to attend the meeting. Additionally, the association also asserts that the Florida Administrative Code provides for only three sets of circumstances wherein an election can be declared void, 3

4 and since none of those three circumstances applies in the instant case, the election cannot be voided. On or about May 19, 1998, counsel for the petitioner sent a letter to Robert L. Norek, the condominium s property manager, which essentially set forth the allegations contained in the petition for arbitration in the instant case, the relief requested, and stated that a petition for arbitration would be filed if the petitioner s demands for relief were not met. At the time the letter was sent, a prior petition for arbitration (Case No ) on the same dispute was pending. A final order was entered on June 11, 1998, dismissing that petition because the notice letter of May 19, 1998, had been sent after the petition was filed. However, in the instant case the letter of May, 19, 1998, along with the prior petition for arbitration were sufficient to place the association on notice that the petitioner planned to a subsequent petition for arbitration on the same disputed issues. Rule 61B , Florida Administrative Code, sets forth three election requirements, each of which if not met will render the election null and void. However, common sense dictates that these are not the only deficiencies which may render an election void. Rule 61B , Florida Administrative Code, states that the association s bylaws shall provide for the method of calling meetings of unit owners, including annual meetings. Section 2.4 of the bylaws of Hammock Pine Village II Association, Inc., states in applicable part: Notice of a Meeting of members stating the time and place and the objects for which the meeting is called shall be given by the officers calling the meeting. The bylaws do not contain any specific notice requirements for elections, except to state in Section 3.2(a) that Election of directors shall be held at the annual members meeting. From this it can be extrapolated that the 4

5 bylaws notice requirements were intended to apply to both notices of annual members meetings and to those elections conducted at annual members meetings. At least one prior arbitration case has held that the failure to properly notice the annual meeting would not invalidate the election held on the same date, assuming that the election itself was properly noticed. Sun Resort, Inc. v. Jellystone Park Condominium Association, Inc., Arb. Case No , Partial Summary Final Order (June 21, 1996). The arbitrator in that case stated: Section (2)(d), Florida Statutes, provides for different notice procedures for elections and meetings of the owners. For elections, 60-day and 30-day notices are required; in the case of an annual meeting, the statute provides for a minimum of 14 days notice mailed to [or] delivered to the owners. The statute provides that the elections shall occur on the date of the annual meeting. Rule 61B , Florida Administrative Code, provides that elections shall occur at the time and place at which the annual meeting is scheduled to occur, regardless of whether a quorum is present. The rule also provides that at the annual meeting, as the first order of business, ballots not yet cast are to be collected. Thus, the statute and the rule and the association s bylaws contemplate that the election occurs at the annual meeting. However, no quorum is needed for an election to occur, while in order to transact other business, a quorum of the owners is required. Given that different notice provisions apply for elections and annual meetings, and that different participation requirements attach to each event, there is an absence of statutory authority to invalidate an election where proper election notice is given, but improper meeting notice is given. The instant case can be distinguished from Sun The instant case can be distinguished from Sun Resort, however, because in the instant case the notice given for both the annual meeting and the election was invalid in that it did not give the correct address. While there appears to be no case law that is on point for this issue, it is obvious that notice must be adequate and must apprise the membership of the meeting location with reasonable certainty. When approximately 20 5

6 individuals (about 25% of the total voting interests) had so much difficulty finding the location of the annual meeting/election that they showed up at the meeting too late to cast their ballots, the notice was clearly inadequate on its face. The association s affirmative defense of estoppel is rejected because estoppel requires a representation as to a material fact, reasonable reliance on the representation, and a detrimental change in position caused by the representation. Enegren v. Marathon Country Club Condominium Association, Inc., 525 So.2d 488 (Fla. 3rd DCA 1988). The association has not specifically alleged waiver as an affirmative defense, but it is possible to infer from its answer that it may have intended to. Waiver is the intentional or voluntary relinquishment of a known right, or conduct which implies the relinquishment of a known right. Mizell v. Deal, 654 So. 2d 659, 663 (Fla. 5 th DCA 1995). In the present case, the association has not alleged facts which would establish either estoppel or waiver as a defense. The association has not alleged that the petitioner made any representations to the association about his anticipated attendance at the meeting or that the association relied to its detriment on any representations made by the petitioner. As for waiver, it is undisputed that it was dark and rainy on the evening of the annual meeting and election, and that the building in which the annual meeting and election occurred is separated from the main church building by a distance of at least 150 feet, and possibly as much as 500 feet, based on the affidavit of the church s office coordinator. It is also undisputed that in years past, annual meetings had been held in the main church building where the petitioner and about 20 other unit owners gathered (and which is designated with the street address of 2680 Landmark Drive, the address printed on the notice of the meeting/election). Finally, it is 6

7 undisputed that the association had never before held meetings in the Lighthouse, and that the Lighthouse is designated with the street address of 2650 Landmark Drive, which address did not appear on the notice of the meeting/election. The association alleges that the petitioner failed to make sufficient effort to find the location of the meeting by walking around the church grounds and failed to make diligent inquiry as to the location of the meeting, and has therefore relinquished his right to attend the meeting and is estopped from complaining about it. However, it is undisputed that the petitioner, and/or persons accompanying the petitioner to the annual meeting, inquired of two persons affiliated with the church as to the location of the meeting. The necessity for making such an inquiry clearly would not become apparent until the immediate time for the meeting approached and there was no evidence of the meeting taking place in the location where it had been held in past years and where the unit owners thought it was to be held on the evening in question. Based on the undisputed facts of the case, the petitioner s actions under the circumstances were reasonable and do not suggest a lack of due diligence. The petitioner seeks, as relief, an order requiring the association to comply with Section , Florida Statutes, and Rule 61B , Florida Administrative Code, and that the unit owners who appeared at the main building of the Heritage United Methodist Church but were unable to find the meeting be permitted to vote their ballots and that a recount occur. Given the fact that the election was inadequately noticed, a recount would not rectify the lack of notice. The appropriate remedy in this case is to hold a new election. However, during the pendency of the arbitration proceeding the 1999 annual election was held, at which time all positions on the board were subject to replacement 7

8 or re-election. Thus, it is unnecessary to award the relief requested by the petitioner because the new election has already been held. Cottone v. Bay Plaza Owners Association, Inc., Arb. Case No Order (July 22, 1992); Greenlee v. Oceanside Terrace Condominium Association, Inc., Arb. Case No Final Order (March 26, 1997). The petitioner could have run for a seat on the board in Based on the foregoing, it is hereby ORDERED that: 1. The election held by Hammock Pine Village II Association, Inc., on February 3, 1998 is null and void. DONE AND ORDERED this 17 th day of February, 1999, at Tallahassee, Leon County, Florida. Leslie O. Anderson-Adams, Arbitrator Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida RIGHT TO TRIAL DE NOVO PURSUANT TO SECTION , FLORIDA STATUTES, THIS DECISION SHALL BE BINDING ON THE PARTIES UNLESS A COMPLAINT FOR TRIAL DE NOVO IS FILED BY AN ADVERSELY AFFECTED PARTY IN A COURT OF COMPETENT JURISDICTION IN THE CIRCUIT IN WHICH THE CONDOMINIUM IS LOCATED WITHIN 30 DAYS OF THE DATE OF MAILING OF THIS ORDER. THIS FINAL ORDER DOES NOT CONSTITUTE FINAL AGENCY ACTION AND IS NOT APPEALABLE TO THE DISTRICT COURTS OF APPEAL. 8

9 CERTIFICATE OF MAILING I hereby certify that a true and correct copy of the foregoing was mailed by U.S. mail, postage prepaid, this 17 th day of February, 1999, to: STEVEN H MEZER ESQ 1212 COURT ST STE B CLEARWATER FL Attorney for petitioner ROBERT L TANKEL ESQ 1299 MAIN ST STE F DUNEDIN FL Attorney for respondent Leslie O. Anderson-Adams, Arbitrator 9