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 RECALL ARBITRATION CARRIAGE HOMES AT DUNWOODY COMMONS CONDOMINIUM ASSOCIATION, INC., Petitioner, v. Case No UNIT OWNERS VOTING FOR RECALL, Respondent. / Summary Final Order Statement of the Issue The issue in this case is whether Carriage Homes at Dunwoody Commons Condominium Association, Inc. (the Association) properly rejected the recall by written agreement of four members of a five member board of directors. Relevant Procedural History On September 5, 2014, the Association filed a petition for recall arbitration with the Division of Florida Condominiums, Timeshares and Mobile Homes. On September 9, 2014, an Order Requiring Answer to Petition for Recall Arbitration was entered. The unit owners representative was served with the petition and the Order Requiring Answer. On September 15, 2014, Respondent filed a response to the petition for recall arbitration. On October 1, 2014, a telephonic case management conference was conducted in this case. Both parties appeared at the case management conference. Also on 1

2 October 1, 2014, the arbitrator entered an Order After Case Management Conference directing the Association to file certain documents. On October 9, 2014, the Association filed documents in response to the Order After Case Management Conference. On October 20 and 21, 2014, Respondent filed a response to the documents filed by the Association. This Summary Final Order is based upon the pleadings in the file. Findings of Fact 1. The Association is the legal entity responsible for the operation of Carriage Homes at Dunwoody Commons, a Condominium. 2. The total number of active voting interests of the Association is 148; therefore, 75 votes in favor of recall are necessary to recall a board member. 3. The date of the next regularly-scheduled election for the seats of the board members being recalled is March, On August 26, 2014, the Association received a written recall agreement containing 79 purported votes seeking to recall John McAuliffe; 80 purported votes seeking to recall Janet Fox and Bobby McCullars; and 81 purported votes seeking to recall Paula Mooty. 5. The written recall agreement designated Dolly Roland as the Unit Owner Representative. 6. On September 2, 2014, the Association s board of directors held a meeting to consider the recall. 7. According to the minutes of the meeting, one of the reasons the board determined not to certify the recall was the failure of certain units to have a voter/voting certificate on file, as required given the ownership of the applicable unit. Accordingly, 2

3 recall ballots for the following units were rejected for lack of a voter/voting certificate: Unit 5325 Maxon Terrace; Unit 5065 Maxon Terrace; Unit 308 Ulrich Point; Unit 5365 Maxon Terrace; Unit 5317 Maxon Terrace; Unit 5279 Maxon Terrace; and Unit 5224 Maxon Terrace. Each of these seven units voted to recall all of the board members at issue in the instant petition. These seven units are owned by multiple persons or a corporation and none had a voter/voting certificate on file with the Association at the time that the recall agreement was served. 8. Article 2, Section 2.5(b), of the Association s Bylaws provides as follows: If a Unit is owned by one person, that person s right to vote shall be established by the record title to the Unit. If any Unit is owned by more than one person, or is under lease, the person entitled to cast one vote for the Unit shall be designated by a certificate signed by all of the record Owners of the Unit and filed with the Secretary of the Association. If a Unit is owned by a corporation, the person entitled to cast the vote for the Unit shall be designated by a certificate signed by the President or duly authorized officer and filed with the Secretary of the Association. Such certificates shall be valid until revoked or until superseded by a subsequent certificate or until a change in the ownership of the Unit concerned. If such certificate is not on file, the vote of such Owner shall not be considered in determining the requirement for a quorum nor for any other purpose. 9. In the response to the Order After Case Management Conference, the Association filed evidence demonstrating that, since turnover occurred on March 10, 2008, the Association has not needed to conduct any elections either due to a lack of candidates or a lack of the required 20% of eligible voters casting a ballot. 10. Respondent s response to the documents filed by the Association fails to contradict the Association s position that it has not needed to conduct any elections since turnover. Moreover, Respondent fails to identify any elections or unit owner votes 3

4 actually occurring since turnover wherein the Association disregarded a unit s failure to have a voter/voting certificate on file and allowed that unit to vote. 11. The recall meeting minutes identify numerous other reasons for rejecting specific ballots. However, given that the matter concerning the lack of a voter/voting certificate is dispositive of this case, the arbitrator will not address these other reasons in this Order and neither accepts or rejects them. 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 (3), Florida Administrative Code. In the case at issue, 75 votes in favor of recall are necessary to recall a board member. The director receiving the most purported recall votes, Paula Mooty, received 81 recall votes. Therefore, if seven of those recall votes were properly rejected, the recall effort against Paula Mooty would have, at most, 74 recall votes. Thus, the recall effort against Paula Mooty would fail for a lack of a majority. Of course, subtracting those same seven recall votes from the other directors recall vote counts would also result in a lack of a majority. Article 2, Section 2.5(b), of the Association s Bylaws requires that if a unit is owned by more than one person or by a corporation, the unit must have a voter/voting certificate on file with the Association in order for that unit s vote to count. Accordingly, the recall ballots for the following units were rejected for lack of a voter/voting certificate: Unit 5325 Maxon Terrace; Unit 5065 Maxon Terrace; Unit 308 Ulrich Point; Unit

5 Maxon Terrace; Unit 5317 Maxon Terrace; Unit 5279 Maxon Terrace; and Unit 5224 Maxon Terrace. Each of these seven units voted to recall all of the board members at issue in the instant petition. Therefore, if the recall ballots for these units were properly rejected, the recall ballot count for each director would be decreased by seven votes, which would preclude a majority voting for recall as to any candidate. Arbitration cases have held that when an association has not consistently enforced provisions requiring voting certificates, failure to comply with technical requirements of such provisions will not be accepted as grounds to reject recall votes of unit owners of the condominium. See, e.g., El Galeon by the Sea Condominium Association, Inc. v. Unit Owners Voting for Recall, Arb. Case No (June 6, 2002); The Caribbean Condominium Management Association, Inc. v. Kennedy, Arb. Case No (October 27, 1993). Moreover, in prior cases, an association's failure to enforce voting certificates has estopped the Association from attempting to enforce the requirement in a recall because each failure was detrimentally relied upon by the owners or the association was deemed to have waived the right to enforce the requirement. Tinney v. The Grand Bellagio at Baywatch Association, Inc., Arb. Case No , Final Order (January 23, 2008). Essentially, voting certificates will not be rigidly enforced to disenfranchise voters who came to rely upon a lack of enforcement. Esplanade Club, Inc. v. Unit Owners Voting For Recall, Arb. Case No , Summary Final Order (October 10, 2010). Contrary to the above authorities cited, in the case under consideration the Association has not needed to conduct any elections since turnover occurred either due to a lack of candidates or a lack of the required 20% of eligible voters casting a ballot. 5

6 Furthermore, Respondent has failed to identify any elections or unit owner votes actually occurring since turnover wherein the Association disregarded a unit s failure to have a voter/voting certificate on file and allowed that unit to vote. The underlying basis for disregarding an association s voting certificate requirement in its governing documents is that the association has failed to enforce the voting certificate requirement in past elections or votes. Case law has held that the unit owners are entitled to reasonably rely on this lack of enforcement, and the Association is estopped from enforcing the voting certificate requirement. However, if there have been no elections or votes, then there would have been no opportunities for the Association to disregard the voting certificate requirement. Hence, no reliance could have been created upon which estoppel would lie. This is the situation in the instant case. As a result of the foregoing, the arbitrator concludes that the Association was entitled to enforce its voter/voting certificate requirement contained within Article 2, Section 2.5(b), of its Bylaws. Therefore, the Association properly rejected the recall ballots for Unit 5325 Maxon Terrace; Unit 5065 Maxon Terrace; Unit 308 Ulrich Point; Unit 5365 Maxon Terrace; Unit 5317 Maxon Terrace; Unit 5279 Maxon Terrace; and Unit 5224 Maxon Terrace. Section (2)(j), Florida Statutes, requires that a majority vote be obtained before a recall is effective. As a result of the above finding that the Association properly rejected seven recall ballots, the highest number of recall votes against any director is 74. Accordingly, the recall fails for lack of a majority, and the Association properly 6

7 rejected the written recall agreement. The Association s decision not to certify the recall must be affirmed. AFFIRMED. Based on the foregoing, it is ORDERED: The Association s decision not to certify the recall by written agreement is DONE AND ORDERED this 13 th day of November, 2014, at Tallahassee, Leon County, Florida. David R. Slaton, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida Telephone (850) Facsimile (850) Certificate of Service I hereby certify that a true and correct copy of the foregoing final order has been sent by U.S. Mail to the following persons on this 13 th day of November, 2014: Brian S. Hess, Esquire Clayton & McCulloh 1065 Maitland Center Commons Blvd Maitland, Florida Attorney for Petitioner Dolly Roland 627 Allerton Way Sanford, Florida Unit Owners Representative David R. Slaton, Arbitrator 7

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