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 Kendalaire Villas Condominium Association, Inc., Petitioner, Unit Owners Voting for Recall, Case No and Case No Respondent. / ORDER CONSOLIDATING CASES AND SUMMARY FINAL ORDER Consolidation of Cases On May 26, 2011, Kendalaire Villas Condominium Association, Inc. (the Association) filed a Recall Arbitration Petition, Arbitration Case Number (first recall), naming the Unit Owners Voting for Recall as Respondent. On July 28, 2011, the Association filed a Recall Arbitration Petition, Arbitration Case Number (second recall), naming the Unit Owners Voting for Recall as Respondent. As of the date of this Summary Final Order, no final order has been entered in either case. Both cases involve the recall of four members of the five member board of directors (board) of the Association. The two cases are consolidated pursuant to Rule 61B (6), Florida Administrative Code. 1 1 The rule provides, If, during the pendency of a recall arbitration, the unit owners in the condominium or cooperative attempt another recall effort and the board files another petition for arbitration, the newly filed petition shall be consolidated with the pending case. (emphasis added). 1

2 Statement of the Issue The issue presented is whether the written recall agreement served on the Association on July 15, 2011, should have been certified. Procedural History On May 26, 2011, the Association filed a petition for recall arbitration wherein the board of the Association did not certify the recall. 2 That case was assigned Arb. Case No Before a disposition could be rendered in the first recall case, the Association filed the second recall arbitration petition on July 28, 2011, which was assigned Arb. Case No On August 4, 2011, an Order Requiring Answer was entered. On August 19, 2011, Respondent filed Respondent s Motion for Extension of Time to Respond to Petition for Arbitration. The motion requested an extension of time through September 23, 2011, to file an answer. On August 19, 2011, the Association filed a response to Respondent s motion for extension of time to file an Answer. Despite the Association s dissatisfaction with some of Respondent s representations in Respondent s motion, the Association ultimately did not object to Respondent s motion for extension of time, and Respondent was granted until September 23, 2011, to file an Answer. 2 After notice to the Association, the filing fee was received on June 1, On July 20, 2011, an Order Setting Case Management Conference was entered in Arb. Case No , setting the conference for July 29, Because the Association filed the second petition for recall arbitration on July 28, 2011, the arbitrator addressed both petitions at the July 29, 2011 case management conference. The parties were advised that where signatures are at issue, the burden is on the party challenging the signature, here the Association, and supporting affidavits would be necessary, but Respondent could obtain affidavits if it so desired. On August 1, 2011, an Order After Case Management Conference was entered in each case assigning Arb. Case No to the second petition, requiring submission of the filing fee for the second petition, which was received on August 1, 2011, and denying Respondent s July 18, 2011 Motion to Declare Invalid Recent Appointments of Board Members and for Ruling on Second Set of Recall Ballots in Case No

3 On September 22, 2011, Respondent filed an Answer. On September 23, 2011, the Association filed a motion for enlargement of time to file a reply to Respondent s Answer. On the same day, September 23, 2011, Respondent filed an objection to the Association s motion for additional time to file a reply. Findings of Fact 1. On May 26, 2011, the Association filed a petition for recall arbitration, Arb. Case No While that case was pending, the Association filed a second petition for recall arbitration on July 28, 2011, Arb. Case No The unit owners voting in favor of the recall are the Respondent in this matter. 3. The total number of voting interests in the Association is 67, therefore a minimum of 34 votes in favor of recall is necessary to recall a member of the board of directors. 4. The total number of seats on the board is five (5). One of the five seats was vacant at the time of the recall. 5. On July 15, 2011, the Association was served with a second recall agreement consisting of 40 recall ballots, using the Division s form ballot, seeking the recall of the following members of the board of directors: Patricia Botero, Conseulo Coello, Estela Leon and Ilda Gloria Esquives. 6. The recall ballots listed the following as replacement board members: Luis Castillo, Karla Ortega, Marcela Ortega and Claudia Varela. In Arb. Case No , Respondent filed copies of messages dated July 14, 2011 wherein replacement candidates Marcela Ortega and Claudia Varela withdrew as replacements. 3

4 7. Respondent admits that Luis Castillo is not eligible to serve as a replacement board member; he is not a unit owner. 8. Board member Estela Leon resigned her seat on May 11, Her resignation pre-dates the May 13, 2011 service of the recall on the board in Arb. Case No Board member Ilda Gloria Esquives resigned her seat on June 3, Her resignation occurred after service of the recall ballots on the board and after the filing of the recall petition in Arb. Case No That case was still pending when the recall ballots were served on July 15, 2011, and the recall petition was filed in Arb. Case No As evidence of the appointment of new directors to fill the three vacant seats, the Association filed minutes of a meeting of the board on June 8, In pertinent part, the minutes state: The purpose of the meeting was to formally accept the resignation of llda Gloria Esquivez, effective June 3, 2011, and appoint some new members to the board in order to be in compliance with the Association s documents which requires [sic] at least a three (3) board member [sic]. Ms. Bolero appointed Omar Diaz of unit 14, to serve as the association s Treasurer; the motion was seconded by Mr. [sic] Coello, however, Mr. Diaz explained that although he would like to be of more help to the association, his work as a police officer could allow him to have [only] so much participation in the daily responsibilities as Treasurer, so he will prefer a less committed position. Ms. Botero then, appointed Mr. Diaz as Secretary, Mr. Diaz-accepted and the motion was approved. Ms. [sic] Coello suggested it was a good idea to appoint more members so that board [sic] could be formed of more unit owners willing to help the association with its daily tasks. Ms. [sic] Coello appointed Salome Uribe of unit 32, to serve as the new Treasurer; the motion was seconded by Mr. Diaz and accepted by Ms. Salome and approved. 4

5 Also, Aurora Rodriguez of unit 95, volunteer [sic] to serve on the board of directors. Ms. Botero made a motion to appoint Ms. Rodriguez as Director; the motion was seconded by Ms. [sic] Coello and approved. As a result, the board will be formed of: Patricia Botero, President [signature] Consuelo Coello, Vice-President [signature] Salome Uribe, Treasurer [signature] Ormar Diaz, Secretary [signature] Aurora Rodriguez, Director [signature] The minutes reflect that there was never a vote to appoint Omar Diaz or Salome Uribe as directors, and there is no indication they earlier were appointed as directors. With respect to Aurora Rodriguez, the minutes do not reflect the actual vote to appoint Ms. Rodriguez. 11. Minutes of the July 22, 2011 board meeting to address the second recall reflect the board rejected 19 of the 40 recall ballots served on the board. The table below summarizes: the ballots rejected by the board with the stated reason for rejection and the proof accompanying the minutes; Respondent s proof of validity of the ballot; and the arbitrator s determination of the validity of the ballot. 4 Total Ballots & Unit # #93 2 #92 Reason Ballot Rejected by Association (Ass n) as Stated in Minutes / Proof Accompanying Minutes Victor G. Moussa signature on ballot & voting certificate (VC) not that of unit owner / copy of signature page from recorded mortgage Jose Enrique Alvarado signature on VC not that of joint tenant owner / copy of quit claim deed recorded in 2004 showing Maria Antonia Bringuier De Castro, a widow and Jose Enrique Alvarado as joint tenants with right of survivorship; copy of Non-Identity Affidavit recorded in 2002 which states, in pertinent part, The affiant was the legal title holder to the following described property[:] Lot 5, in Block Proof Filed by Unit Owners Affidavit of Victor G. Moussa attesting that signature on ballot & VC are his Arbitrator s Determination of Ballot Validity (=ballot valid) No proof as to validity of Jose Enrique Alvarado signature : Ass n proffered no proof as to invalidity of Jose Enrique Alvarado signature: 1) Alvarado s signature not on 2004 quit claim deed as he was a grantee; 2) Legal description of unit in Non- Identity Affidavit is not same 4 The arbitrator recognizes that the entries in the table below under the column indicating the arbitrator s determination contain conclusions of law, however for clarity of presentation, these conclusions are included here. 5

6 Total Ballots & Unit # Reason Ballot Rejected by Association (Ass n) as Stated in Minutes / Proof Accompanying Minutes 4, of Vista Bella Estates, according to the plat thereof, recorded in Plat Book 116, at Page 75 of the Public Records of Miami-Dade County. #91 Oscar E. Solis signature on ballot & VC not that 3 of unit owner / copy of signature page from recorded mortgage Walter Gonzales signature on ballot & VC not 4 #84 that of unit owner / copy of signature page from recorded condominium rider Gloria Suarez signature on VC not that of joint 5 #82 owner / copy of signature page from recorded mortgage 6 # #31 8 #34 9 # # #71 Armando Cruz signature on VC not that of joint owner / copy of signature page from recorded condominium rider Jorge Fleites signature on ballot & VC not that of unit owner / copy of signature page from recorded condominium rider Luis Castillo signature on ballot & VC not that of unit owner / copy of July 20, 2011 online Property Information Report for unit from Miami-Dade Co. Property Appraiser showing unit owned by Tomas Rodriguez Manuel A. Cruz signature on ballot & VC not that of unit owner / copy of signature page from recorded mortgage Victor G. Moussa signature on ballot & VC not that of unit owner / copy of signature page from recorded condominium rider Robert Alvarez signature on ballot & VC not that of unit owner and Gelcys M. Alvarez signature on VC not that of joint owner / copy of signature page from recorded condominium rider Proof Filed by Unit Owners Affidavit of Oscar E. Solis attesting that signature on ballot & VC are his Affidavit of Walter Gonzales attesting that signature on ballot & VC are his Arbitrator s Determination of Ballot Validity (=ballot valid) as that found in the Declaration of Condominium. Thus, neither document is a comparison document for signature on VC. No proof as to validity of Gloria Suarez signature : the arbitrator finds there is no legitimate issue as to the authenticity of the signature of Gloria Suarez on the VC when compared to the signature offered by the Ass n. See Esplanade Club, Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (Oct. 20, 2010). Copy of deed for unit showing Armando Cruz & Anabel Leal own unit as husband and wife. [ballot signed by Anabel Leal] Affidavit of Jorge Fleites attesting that signature on ballot & VC are his Respondent admits that ballot & VC are invalid Affidavit of Manuel A. Cruz attesting that signature on ballot & VC are his Affidavit of Victor G. Moussa attesting that signature on ballot & VC are his; copy of online document from Miami-Dade Co. showing Victor G. Moussa is married to Sawsan Gabriel Matta who signed VC as Sawsan Moussa Affidavit of Robert Alvarez attesting that signature on ballot & VC are his; copy of deed for unit showing Robert Alvarez & Gelcys M. Alvarez own unit as husband and wife. [ballot signed by Robert Alvarez] copy of on-line document from Miami-Dade Co. : Art. 2, s 2.5 provides, If a unit is owned jointly by a husband and wife,... : (a) They may, but they shall not be required to, designate a voting member[.] Thus, no need to determine validity of Armando Cruz signature on VC. NO : Art. 2, s 2.5 provides, If a unit is owned jointly by a husband and wife,... : (a) They may, but they shall not be required to, designate a 6

7 Total Ballots & Unit # 12 #75 13 # #52 Reason Ballot Rejected by Association (Ass n) as Stated in Minutes / Proof Accompanying Minutes Danilo Cuarezma signature on ballot & VC not that of unit owner / copy of quit claim deed recorded in 1996, Danilo A. Cuarezma and Maria A. Cuarezma, husband & wife to Danilo A. Cuarezma Marcela Ortega signature on ballot & VC not that of unit owner and Leonardo Ortega signature on VC not that of joint owner / copy of recorded mortgage Renelia Parra signature on VC not that of joint owner / copy of signature page of recorded mortgage [language on the single page copied actually shows Renelia Parra & Carlos T. Quintero are husband and wife] 15 #53 Fidel M. Hernandez signature on ballot & VC not that of unit owner / copy of signature page of recorded mortgage 7695 Carlos Solorzano signature on VC not that of 16 #64 joint owner / copy of quit claim deed recorded in 1997, Carlos Solorzano to Carlos Solorzano, Antonio Reyes and Veronica Reyes 7680 Alexis M. Hernandez signature on VC not that 17 #116 of joint owner / copy of Non-Identity Affidavit (Buyer) recorded in #115 Jacqueline Orta signature on ballot & VC not that of unit owner / copy of personal check dated May 21, 2011 signed by Jacqueline Orta #122 Victor G. Moussa signature on ballot & VC not that of unit owner / copy of signature page from recorded condominium rider Proof Filed by Unit Owners showing Robert Alvarez is married to Gelcys Maria Fagundo who signed VC as Gelcys Alvarez No proof filed by Respondent Affidavit of Marcela Ortega attesting that signature on ballot & VC are his; copy of quitclaim deed recorded in 2008 showing title transferred from Leonardo Ortega to Marcela Ortega Copy of entire recorded mortgage relied on by Ass n showing Carlos T. Quintero and Renelia Parra are husband and wife No proof filed by Respondent No proof filed by Respondent No proof as to validity of Alexis M. Hernandez signature Copy of warranty deed recorded in 1997 showing Jacqueline Orta as grantee Affidavit of Victor G. Moussa attesting that signature on ballot & VC are his; copy of online document from Miami-Dade Co. Clerk of Court showing Victor G. Moussa is married to Sawsan Gabriel Matta who signed VC as Sawsan Moussa; copy of warranty deed recorded in 2004 showing grantees as Victor Moussa and Sawsan Moussa, husband and wife Arbitrator s Determination of Ballot Validity (=ballot valid) voting member[.] Thus, no need to determine validity of Gelcys M. Alvarez signature on VC. No ruling necessary : Ass n s proof actually shows Renelia Parra & Carlos T. Quintero are husband and wife, but neither party has produced a deed showing they are husband and wife. However, the arbitrator finds there is no legitimate issue as to the authenticity of the signature of Renelia Parra on the VC when compared to the signature offered by the Ass n. See Esplanade Club, Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (Oct. 20, 2010). No ruling necessary No ruling necessary No ruling necessary No ruling necessary 7

8 12. There is no indication in the minutes of the July 22, 2011 board meeting to address the second recall that the board rejected any of the remaining 21 recall ballots served on the board. 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, because no disputed issues of material fact exist. Ballots The Association bears the burden of proof when it rejects a ballot for a particular reason. The Harvest Condominium Association, Inc., v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (Dec. 10, 2003)(Where Association rejects recall ballots because unit owners failed to comply with voting certificate requirement, it follows that Association, as party asserting the legal theory, bears the burden of establishing a legal basis for so doing). Twenty-one (21) of the recall ballots in the second recall were not challenged by the Association. The table above shows that in the second recall, the Association improperly rejected 13 recall ballots, therefore Respondent obtained the 34 votes necessary to recall board members Patricia Botero and Conseulo Coello. Because the minimum number of votes to recall these two board members was attained, it is unnecessary to address the remaining recall ballots that were rejected. 5 5 Respondent also asserted that the voting certificate requirement cannot be enforced in this recall, because the Association has not enforced the requirement in past elections and votes. Because the recall is certified as if the voting certificate requirement had been enforced, it is unnecessary to address this issue. 8

9 Resignations and Appointments In pertinent part, Rule 61B (5)(b), Florida Administrative Code, provides, (5) After service of a recall agreement on the board:... (b) Where the board determines not to certify the recall of a director and that director resigns, any appointment to fill the vacancy shall be temporary pending the arbitration decision. The rationale for the rule is to prevent a board member or board members who ultimately are recalled by the arbitration decision from controlling the destiny of the board by appointing board members while the recall is pending. Under the circumstances of the cases consolidated herein, there are two pending arbitration cases seeking to recall the same board members. The resignation of board member Ilda Gloria Esquives occurred during the pendency of the recall in Arb. Case No , and under the rule, any appointment to fill that vacancy is temporary. No decision had been rendered in Arb. Case No , when the second recall case was filed involving recall of the same board members. Given the purpose of the rule, there is no reason why any appointment to fill the seat of Ilda Gloria Esquives should not be considered temporary for purposes of these consolidated cases, pending the arbitration decision herein. Further, where, as here, the entire board is subject to recall, any appointment to the board by the board members who are recalled to fill the seat vacated by Ilda Gloria Esquives may not be allowed to remain in office, because to allow such appointed persons to remain in office after the certification of the recall would circumvent the meaning and intent of the rules regarding recall. Riviera Villas Condo. Ass n, Inc. v. 9

10 Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (July 6, 2004). It is clear that board member Estela Leon resigned her seat on the board before the initial recall was served on the board. Therefore, the recall is moot as to her. See The Woodlands Condo. Ass n, Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (Aug. 2, 2010). However, under the rationale of Riviera Villas, any person appointed by the recalled board members to the seat vacated by Estela Leon or to the other seat that was vacant at the time the first recall was served will not be allowed to remain in office. In any event, as noted above, the three purported appointments to the board on June 8, 2011, all failed because the minutes of that meeting do not reflect that a vote was actually taken to appoint Omar Diaz or Salome Uribe as directors, and the minutes do not reflect that a vote was actually taken to appoint Aurora Rodriguez as a director. Association s Motion for Extension of Time to File a Reply to Respondent s Answer The Rules of Procedure Governing Recall Arbitration, Chapter 61B-50, Florida Administrative Code, do not specifically provide for the filing of a reply to an answer. In any event, a reply to Respondent s Answer is unnecessary, therefore any extension of time to do so also is unnecessary. Based upon the foregoing, it is ORDERED: 1. The Association s motion for extension of time to file a reply to Respondent s Answer is DENIED, as a reply is unnecessary. 2. The recall of Patricia Botero and Conseulo Coello is CERTIFIED and Patricia Botero and Conseulo Coello are REMOVED as directors effective as of the date of the 10

11 mailing of this order. Within five (5) full business days after the date of the mailing of this order, Patricia Botero and Conseulo Coello shall deliver any and all records of the Association in their possession to the new board of directors. 3. Omar Diaz, Salome Uribe and Aurora Rodriguez, the board members purportedly appointed to fill the existing vacancy and the vacancies created by the resignation of Ilda Gloria Esquives and Estela Leon, are REMOVED as directors effective as of the date of the mailing of this order. Within five (5) full business days after the date of the mailing of this order, Omar Diaz, Salome Uribe and Aurora Rodriguez shall deliver any and all records of the Association in their possession to the new board of directors. 4. Karla Ortega shall take office as a replacement director effective upon the mailing of this order, and Karla Ortega shall serve until the next regularly scheduled election. Board members for the four (4) remaining seats shall be selected or elected pursuant to Section (2)(d)9., Florida Statutes, however no person may be selected or elected whose recall has been certified in this Summary Final Order. 5. No party shall be entitled to recover its costs and attorney s fees in a recall proceeding initiated pursuant to Section (2)(j)..., Florida Statutes. Fla. Admin. Code R. 61B DONE AND ORDERED this 5 th day of October, 2011, at Tallahassee, Leon 11

12 County, Florida. Glenn Lang, 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, postage pre-paid, and facsimile to the following persons on this 5 th day of October, 2011: Edo Meloni, Esq. Fein & Meloni, Esqs. 900 S.W. 40 th Avenue Plantation, Florida Facsimile: Counsel for Petitioner Robert E. Paige, Esq. The Paige Law Group. P.A South Dadeland Boulevard Suite 550 Miami, Florida Facsimile: Counsel for Respondent Glenn Lang, Arbitrator 12