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 THE PALMS OF DESTIN RESORT AND CONFERENCE CENTER CONDOMINIUM ASSOCIATION, INC., Petitioner, v. Case No UNIT OWNERS VOTING FOR RECALL, Respondent. / SUMMARY FINAL ORDER The issue in this case is whether The Palms of Destin Resort and Conference Center Condominium Association, Inc. (Association) properly rejected the attempted recall by written agreement of all five members of the board of directors. Relevant Procedural History On September 2, 2015, the Association filed a petition for recall arbitration. On September 10, 2015, the arbitrator entered an Order Requiring Answer. Also on September 10, 2015, the arbitrator entered an Order to Show Cause Why the Recall Should Not Be Certified because the minutes of the board meeting did not state specifically which units ballots were being rejected. On September 21, 2015, Petitioner filed its Response to the Order to Show Cause and Motion for Leave to Amend Petition for Recall Arbitration. 1 On September 28, 2015, Respondent filed an answer. 1 Because of the result of this Order, it is not necessary to address the motion for leave to amend. Page 1 of 6

2 Findings of Fact 1. The Palms of Destin Resort and Conference Center Condominium Association, Inc. is the legal entity responsible for the operation of The Palms of Destin Resort and Conference Center, a Condominium. The Board of Directors (Board) of the Association is comprised of five members. 2. The total number of voting interests in the Association is 310. To recall a board member, 155 votes in favor of recall are needed Written recall agreements were served on August 20, 2015 seeking to recall all five directors. 4. The directors sought to be recalled and the corresponding number of votes for recall as to each is: Doug Harris 165 Phillip Franco 161 Robert Zapotocky 158 Tynette Lynch 159 Andrew Richards On August 26, 2015, the Board held a meeting to consider the recall. The board did not certify the recall at the meeting. 6. The minutes of the August 26, 2015 meeting are attached to the petition. The minutes of the board meeting do not state specifically which units ballots were being rejected. 2 Fifteen unit owners voting rights might be suspended. Therefore, the voting interests may be 295 and 148 votes for recall would be required. However, the arbitrator does not have to determine whether the rights were properly suspended because the results would be the same. Page 2 of 6

3 7. The following 51 unit owners allegedly voted to recall all five members of the board, but their ballots were signed by some form of electronic signature: 2114, 1114, 2208, 2903, 1803, 1708, 2902, 2913, 2103, 2702, 2104, 1907, 11211, 11015, 2602, 2803, 11011, 21201, 1917, 1205, 1207, 1903, 21008, 2717, 2317, 1115, 1910, 21213, 21215, 2509, 2807, 1316, 2907, 11114, 2603, 2908, 2502, 2815, 1705, 11101, 1605, 1615, 11002, 2309, 1409, 21205, 21016, 11217, 1314, 1104, and Instead of physically signing the ballot, the owner s signature was either affixed on the ballot by an electronic program or printed with a cursive font. 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 Administrative Code. Failure of Minutes to Include Specific Reasons for Not Certifying Rule 61B (4)(d), Florida Administrative Code, provides, (4) Board Meeting Minutes. The minutes of the board meeting at which the board determines whether to certify the recall... shall record:... (d) If the recall was not certified, the specific reasons it was not certified. Further, in pertinent part, Rule 61B (5)(h), Florida Administrative Code, provides, (5)... Each petition shall contain: (h) Each specific basis upon which the board based its determination not to certify the recall, including the unit number and specific defect to which each challenge applies. Any specific reason upon which the board bases its decision not to certify the recall that is stated in the petition for recall arbitration, but absent from the board meeting minutes or attachments thereto, shall be ineffective and shall not be considered by the arbitrator. Page 3 of 6

4 The minutes of the board meeting do not reject any specific ballot or provide the specific reason for the rejection of a specific ballot. Therefore, pursuant to Rule 61B (5)(h), because none of the specific reasons stated in the petition for rejecting specific ballots is stated in the minutes, all such reasons stated in the petition are ineffective and shall not be considered. See Town Park Plaza North Condo., Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order on Petition for Recall Arbitration (July 25, 2005) (minutes of board meeting must be specific, and reason for rejecting ballot stated in petition not found in minutes may not be considered); Pendleton Club Ass n, Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (September 28, 2001) (board s general conclusory allegations that recall was illegal or otherwise invalid not sufficient). When no reasons are provided in the minutes for the rejection of ballots, the arbitrator may only look to the facial validity of the ballots in deciding whether to accept or reject them. Villas of West Miami Condo. Ass n, Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (March 17, 2006)(citation omitted). Arbitration cases hold recalls void ab initio where the ballot forms conflict with Rule 61B , Florida Administrative Code, or where the recall effort did not obtain enough recall votes to represent a majority of the voting interests. Dieppa v. Lisette Condo. Ass n., Inc., Arb. Case No (March 7, 2006); Carlton Place Condo. Ass n, Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (August 25, 2003). Page 4 of 6

5 In pertinent part, Rule 61B (1), Florida Administrative Code, provides: (1) Form of Written Agreement. All written agreements used for the purpose of recalling one or more members of the board of administration shall:... (d) Provide a space for the person signing the written agreement to state his name, identify his unit and indicate the date the written agreement is signed; (e) Provide a signature line for the person executing the written agreement to affirm that he is authorized in the manner required by the condominium documents to cast the vote for that unit; At least 51 ballots were signed by some sort of electronic signature. An electronic signature is not a validly executed signature on a recall ballot. Shores of Panama Resort Community Ass n, Inc. v. Unit Owners Voting Recall, Arb. Case No , Summary Final Order and Denial of Motion to Dismiss (June 25, 2015). As a maximum number of 124 valid votes were served on the Association, the recall fails for a lack of a majority. Because of this result, the arbitrator need not consider, and neither accepts nor rejects, the propriety of any of the Association s other reasons for not certifying the recall. The board s decision not to certify the recall will be affirmed due to a failure to obtain a majority vote to recall any board member. Based on the foregoing, it is ORDERED: 1. The Association s decision not to certify the recall is AFFIRMED. 2. The Association s Motion for Leave to Amend is DENIED as moot. DONE AND ORDERED this 2nd day of October, 2015, at Tallahassee, Leon Page 5 of 6

6 County, Florida. Terri Leigh Jones, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida Section Telephone: Section Facsimile: Certificate of Service I hereby certify that a true and correct copy of the foregoing final order has been sent by U.S. Mail and facsimile (if provided) to the following persons on this 2nd day of October, 2015: John L. Wharton, Esq. Dean, Mead & Dunbar 215 S. Monroe Street Suite 815 Tallahassee, FL Fax: Attorney for the Association Ben Robinson P.O. Box 5446 Destin, FL Unit Owner Representative Terri Leigh Jones, Arbitrator Page 6 of 6