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 BINDING ARBITRATION - HOA Driftwood Estates Phase II Homeowners Association, Inc., Petitioner, v. Case No Homeowners Voting for Recall, Respondent. / SUMMARY FINAL ORDER Statement of the Issue The issue in this case is whether Driftwood Estates Phase II Homeowners Association, Inc. (the Association) properly rejected the attempted recall of all five members of the board of directors by written recall agreement. Facts On August 11, 2011, the Association filed a Mandatory Binding Arbitration Petition - Recall Dispute, seeking to affirm the decision of the board of directors not to certify the recall. On July 29, 2011, the Association was served with a written recall agreement attempting to recall all five members of the board of directors: Laura Mutter, Jeff Herrin, Rodney Elkins, Mark Owens and Jack Elliot. The replacement candidates are Ralph N. Menetre III, Robert Garner, Brian Berns, C. Wayne Jones and H. A. Laird, III. 1

2 On August 4, 2011, the board held a meeting to consider the recall, and the board determined not to certify the recall. The board filed a petition for recall arbitration on August 11, According to the petition, there are 463 voting interests in the Association. Therefore, 232 valid votes in favor of recall are necessary to recall a board member. The petition was accompanied by two ballots in the form found on the Division s website. One ballot represents the votes of MFB # 2, LLC, as indicated in the attachment to that ballot. The other ballot represents the votes of HAL Holdings, Inc. and CWJ Holdings, Inc., as indicated in the attachment to that ballot. The unsigned draft minutes of the board meeting to address the recall reflect that the board rejected the recall ballots for the 69 lots owned by HAL Holdings, Inc. and CWJ Holdings, Inc. and the 168 lots owned by MFB # 2, LLC, for a total of 237 votes to recall all five board members, solely because those lots[ ] voting rights have been suspended by the Driftwood Estates Phase II Board of Directors for being in arrears of their assessments for more than 90 days. The petition also was accompanied by the unsigned draft minutes of a board meeting held immediately before the board meeting to address the recall. The minutes of this board meeting reflect that the board voted to suspend the voting rights and use rights of various lots, including all of the lots represented by the 237 recall votes. Conclusions This final order is entered pursuant to section (1), Florida Statutes, which requires recall disputes filed with the Division to be conducted in accordance with the provisions of sections (2)(j) and , Florida Statutes, and the rules 2

3 adopted by the Division. Rule 61B , Florida Administrative Code, provides for summary disposition of a petition for recall arbitration where there are no issues of material fact in dispute. In pertinent part, the current statute relating to suspension of voting rights, as amended by the Florida Legislature in 2011, provides, (4) An association may suspend the voting rights of a parcel or member for the nonpayment of any monetary obligation due to the association that is more than 90 days delinquent. A voting interest or consent right allocated to a parcel or member which has been suspended by the association may not be counted towards the total number of voting interests for any purpose, including, but not limited to, the number of voting interests necessary to constitute a quorum, the number of voting interests required to conduct an election, or the number of voting interests required to approve an action under this chapter or pursuant to the governing documents. The notice and hearing requirements under subsection (2) do not apply to a suspension imposed under this subsection. The suspension ends upon full payment of all obligations currently due or overdue to the association. (5) All suspensions imposed pursuant to subsection (3) or subsection (4) must be approved at a properly noticed board meeting. Upon approval, the association must notify the parcel owner and, if applicable, the parcel s occupant, licensee, or invitee by mail or hand delivery. (emphasis added). Ch , 18, at 36, Laws of Fla.; Fla. Stat. Ann (West 2011). There is no indication in the petition or any of the attachments to it, including the minutes of either board meeting held on August 4, 2011, that the owners of the parcels whose recall ballots were rejected for delinquent payment of assessments properly were notified by mail or hand delivery of such action as required by the statute, before their recalls ballots were rejected for this reason. Moreover, even if the Association had somehow provided notification of the suspension by mail or hand delivery before the meeting to address the recall, such notification would not have provided a basis for rejecting these recall ballots, because the notification would have 3

4 occurred after the recall ballots were served. See Larkenheath Villas Homeowners Ass n, Inc. v Homeowners Voting for Recall, Arb. Case No , Summary Final Order (Jan. 27, 2010), Summerfield Master Community Ass n, Inc. v Homeowners Voting for Recall, Arb. Case No , Summary Final Order (April 2, 2009); Cypress Creek Property Owners Ass n, Inc. v. Homeowners Voting for Recall, Arb. Case No , Summary Final Order (May 18, 2007). Given the preceding analysis and that the recall ballots are valid on their face and that there is a sufficient number to recall each of the five board members, the recall will be certified. 1 The filing of an Answer by Respondent is not necessary. Based upon the foregoing, it is ORDERED: 1. The recall of board members Laura Mutter, Jeff Herrin, Rodney Elkins, Mark Owens and Jack Elliot is hereby CERTIFIED and they are REMOVED as directors effective as of the date of the entry of this order. 2. Replacement candidates Ralph N. Menetre III, Robert Garner, Brian Berns, C. Wayne Jones and H. A. Laird, III shall take seats on the board effective immediately for the remainder of the term Within five (5) full business days from the effective date of this recall, Laura Mutter, Jeff Herrin, Rodney Elkins, Mark Owens and Jack Elliot shall deliver any and all records of the Association in their possession to the new board of directors. DONE AND ORDERED this 23 rd day of August 2011, at Tallahassee, Leon 1 In the July 28, 2011 letter filed with the petition which accompanied service of the written recall agreement on the board, the homeowners representative, and apparently counsel for the two homewners, indicated there is a total of 292 lots in the subdivision. Regardless of whether the total number of voting interests is 292 or 463, as stated in the petition, the 237 voting interests represented by the two recall ballots exceeds the 232 majority necessary if the number 463 is used to make the calculation. 2 The By-laws, at Article II, section 2.2, state that directors serve a one year term. The petition indicates the next scheduled election will be in December

5 County, Florida. Glenn Lang, Arbitrator Division of Florida Condominiums, Timeshares & Mobile Homes Dept. of Business & Professional Regulation 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 where available, to the following persons on this 23 rd day of August, 2011: Laura Mutter, President Driftwood Estates Phase II Homeowners Association, Inc. 72 Red Bay Court Santa Rosa Beach, Florida Dawn E. Norris, Esq. Matthews, Jones & Hawkins, LLP 4475 Legendary Drive Destin, Florida Facsimile: Homeowners Representative Glenn Lang, Arbitrator Courtesy copy to: James C Barth, Esq. James C Barth, PA Post Office Box 6966 Destin, Florida Facsimile: Jay B. Gelder, PCAM Registered Agent Emerald Coast Association Management, Inc Emerald Coast Parkway #23 Miramar Beach, Florida Facsimile: