STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMSHARES AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION Joseph Prycodzien, Petitioner, v. Case No. 2013-03-7396 Northwest Lakes Condominium Association, Inc., Respondent. / SUMMARY FINAL ORDER Statement of the Issues There are two (2) issues for review in this case: 1. Did Northwest Lakes Condominium Association, Inc. (the Association) improperly certify the recall of Joseph Prycodzien (Petitioner); and 2. Did the Association improperly fail to provide timely access to its official records after a request by Petitioner? Procedural History On September 9, 2013, Petitioner filed a petition for mandatory non-binding arbitration. On September 12, 2013, Petitioner was ordered to file a copy of the petition for service on the Association; on September 20, 2013, Petitioner complied with the Order. On October 16, 2103, the Association filed an Answer pursuant to the September 27, 2013 Order Requiring Answer. 1
On November 26, 2013, an Order Setting Case Management Conference (CMC) was entered. The CMC was rescheduled from December 11, 2013, to January 8, 2014, at the request of counsel for the parties. On January 9, 2014, an Order Following Case Management Conference was entered. On January 22, 2014, the parties filed their responses to the Order Following Case Management Conference. On March 4, 2014, Petitioner filed a Request for Status Update. On April 2, 2014, a second case management conference was held pursuant to the Order entered on March 20, 2014. On April 7, 2014, an Order After Second Case Management Conference was entered requiring the Association to make certain filings; on April 14, 2014, the Association complied. Findings of Fact 1. Petitioner owns a unit within Northwest Lakes Condominium, and by virtue of such ownership, Petitioner is a member of the Association. 2. The Association is the corporate entity responsible for the operation of Northwest Lakes Condominium. Recall Dispute 3. In January 2013, Petitioner was elected to a seat on the Association s board of directors (board) for a term of two years. 1 4. On June 8, 2013, the Association was served with 139 written recall ballots in the form available on the Division s website. The board is comprised of five (5) members. 1 Not until the arbitrator inquired at the April 2, 2014 Case Management Conference did counsel for the parties inform the arbitrator that Petitioner had been elected to a seat with a two-year term. 2
Petitioner was the only board member subject to recall on the ballot, and each ballot contained a vote to recall Petitioner. 5. There are 249 voting interests in the Association. Therefore, 125 votes in favor of recall are necessary. 6. Article III, Section 3., of the Association s by-laws provides in its entirety: Section 3 - Reqular Meetings. Regular meetings of the Board may be held at such time and place permitted by law and from time to time as may be determined by the Directors, and special meetings may be called by the President or a majority of the Board. Notice of regular and special meetings of the Board shall be given to each Director in the manner provided under the Condominium Act, as amended. The Board may, by resolution duly adopted, establish regular monthly, quarterly, or semiannual meetings. All meetings of the Board shall be open to the members of the Association, who shall be given conspicuously posted notice forty-eight (48) continuous hours in advance thereof except in an emergency. 7. On June 9, 2013, the Association noticed a board meeting to address the recall. The notice is quoted as follows: NORTHWEST LAKES CONDOMINUM ASSOCIATION, INC. Notice of Meeting of the Board of Directors 7:30 P.M. Tuesday, June 11, 2013 At the Clubhouse AGENDA Call to order Roll Call Reading of the Minutes Adjournment This meeting will follow the format of: ROBERT S RULES OF ORDER. This regular board meeting Notice must be posted upon the Condominium Association Property at least forty-eight (48) hours in advance of 3
scheduled meeting. (Posted: Date: 6/9/13 Time: 6:30 P.M.) Board member and President, Jack Slough, initialed the notice. 8. On June 11, 2013, the board held a meeting at which the recall of Petitioner was certified. None of the recall ballots was rejected by the board. Access to Records Dispute 9. By letter dated June 5, 2013, Petitioner made a request for access to all of the records the Association is required to maintain pursuant to Section 718.111(12)(a), Florida Statutes, by listing verbatim the 16 items set out in the statute, and one other item, 17. A copy of any and all documents provided to the associations [sic] banking institution which provide for signatory powers. 10. By letter dated August 19, 2013, the Association responded in writing to the June 5, 2013 request for access to records as follows: Dear Mr. Wood [Petitioner s counsel]: Please be advised this office represents Northwest Lakes Condominium, Inc. (the Association ). Pursuant to our telephone conversation and in response to your correspondence, the Association has no objection to your client reviewing the requested records. However, as discussed in our telephone conversation, please accept this correspondence as a demand that your client return all Association property and records [that] were taken from the locked office on the Association s premises. Please feel free to contact [me] at any time to cooridinate [sic] a review of the requested records, as well as a return of the Association s property from your client. Thank you in advance for your anticipated cooperation in resolving this matter immediately. If you have any questions or comments, please do not hesitate to contact me. This is the only written response to Petitioner s records request that was filed in this case. 11. The parties agree that before Petitioner s June 5, 2103 request for access to records, Petitioner removed certain of the Association records. 4
12. Pursuant to the January 9, 2014 Order After Case Management Conference, counsel for the parties went to the Association s records storage office on the condominium property and compiled an inventory of the records found there. The parties also prepared an inventory of the records in Petitioner s possession. Certain of the Association s 2013 and 2012 records in Petitioner s possession could not be found among the Association s records. Conclusions of Law The Association is an association within the meaning of Section 718.103, Florida Statutes. Pursuant to Section 718.1255, Florida Statutes, the undersigned has jurisdiction over the parties to, and the subject matter of, these disputes. If no disputed issues of material fact exist, the arbitrator may enter a summary final order. Fla. Admin. Code R. 61B-45.030. Recall Dispute Pursuant to Section 718.112(2)(j)3., Florida Statutes, only the Association may file a petition for recall arbitration. However, the petition filed in the instant case is permitted pursuant to Section 718.112(2)(j)7. 2 Petitioner argues that as a member of the Association s board, he was not given notice of the board meeting to address the recall as required by Article III, Section 3., of 2 The statute provides: 7. A board member who has been recalled may file a petition pursuant to s. 718.1255 challenging the validity of the recall. The petition must be filed within 60 days after the recall is deemed certified. The association and the unit owner representative shall be named as the respondents. Before the enactment of the statute, such a petition was permitted by arbitration case law. See Ringler v. Tower Forty One Ass n, Inc., Arb. Case No. 2005-04-1867, Summary Final Order (Dec. 12, 2005); Scariati v. The Villages at Emerald Lakes One Condo. Ass n, Inc., Arb. Case No. 2005-02-1485, Summary Final Order (Sept. 2, 2005). 5
the Association s by-laws. In pertinent part, that provision states, Notice of regular and special meetings of the Board shall be given to each Director in the manner provided under the Condominium Act, as amended. Section 718.112(2)(c)1., Florida Statutes (2013), provides, in part, 1. Adequate notice of all board meetings, which must specifically identify all agenda items, must be posted conspicuously on the condominium property at least 48 continuous hours before the meeting except in an emergency. The Association s by-laws look to the Florida Statutes for proper notice to directors of a board meeting. Petitioner does not suggest in the petition or elsewhere that the notice of the June 11, 2013 board meeting to address the recall was not posted conspicuously on the condominium property at least 48 continuous hours before the meeting. Further, Petitioner has not offered anything to rebut the presumption that the meeting to address the recall was not an emergency meeting. See Fla. Admin. Code R. 61B-23.0028(3). Therefore, Petitioner s argument that he did not receive proper notice of the June 11, 2013 board meeting to address the recall pursuant to Article III, Section 3., of the Association s by-laws is without merit. The next question is whether the notice posted on June 9, 2013 for the June 11, 2013 board meeting to address the recall was defective. Section 718.112(2)(c)1., Florida Statutes (2013), requires adequate notice of all board meetings, which must specifically identify all agenda items. Black s Law Dictionary, Seventh Edition, defines agenda as, A list of things to be done, as items to be discussed at a meeting. The June 9, 2013 notice lists the following as an Agenda - Call to order, Roll Call, Reading of the Minutes and Adjournment. What the Association listed as an agenda in the June 9, 2013 notice is merely the order of 6
business for the meeting, and in fact, there is no order of business for discussion of anything at the June 11, 2013 board meeting, much less an agenda item relating to the instant recall. Therefore, the June 9, 2013 notice is defective as notice for the June 11, 2013 meeting to address the recall. Rule 61B--23.0028(7), Florida Administrative Code, provides, in part, (7) Failure to Duly Notice and Hold a Board Meeting. If the board fails to duly notice and hold the board meeting to determine whether to certify the recall within five full business days of service of the written agreement, the following shall apply: (a) The recall shall be deemed effective immediately upon expiration of the last day of the five full business days after service of the written agreement on the board. Given the defective notice of the board meeting to address the recall and the rule, Petitioner s recall can become effective under the applicable law. See Windrush Condo. Ass n, Inc. v. Unit Owners Seeking Recall, Arb. Case No. 00-1560, Summary Final Order (Nov. 21, 2000)(Where notice of board meeting to consider recall failed to include place or agenda or time of meeting, notice defective and recall certified). However, if the recall effort is void ab initio due to a fatal flaw in the form of the agreement or due to the lack of a majority of the voting interests voting in favor of the recall, the recall agreement will not be certified. Unit Owners Voting for Recall v. New World Condo. Apts. III Condo. Ass n, Inc., Arb. Case No. 2004-00-8532, Summary Final Order (April 7, 2004). Petitioner claims in the petition that the Association did not allow him to examine or view the recall ballots to validate signatures or ensure that the ballots met the legal requirements. These issues need not be decided, because Petitioner has had a copy of the recall ballots since the Association filed an Answer on October 16, 2013, to which the 7
recall ballots were attached with the certification that a copy was sent to Petitioner. As of the date of the final order entered herein, Petitioner has neither claimed that he did not receive the recall ballots with the Answer nor sought to discard any of the recall ballots. Further, the recall agreement facially is valid; the ballots are substantially similar to the Division's sample ballot for written recall. 3 Similarly, Petitioner also claims in the petition that the Association did not identify the total number of voting interests in the Association. The Association identified in the Answer that the total voting interests in the Association is no more than 249. Again, Petitioner has had since October 16, 2013, to contest the total number of voting interests, but has not done so. Given a total number of voting interests equalling 249, 125 votes to recall a board member are necessary. The Association filed 139 recall ballots, all voting to recall Petitioner. Therefore, the recall of Petitioner must be certified. Access to Records Dispute In pertinent part, Section 718.111(12), Florida Statutes, provides, (a) From the inception of the association, the association shall maintain each of the following items, if applicable, which constitutes the official records of the association: [The statute lists 16 types of records the Association is required to maintain as the official records of the Association, including a catch-all which requires the Association to keep all other records not specifically included in the list which are related to the operation of the Association.] (b)... The records of the association shall be made available to a unit owner within 45 miles of the condominium property or within the county in which the condominium property is located within 5 working days after receipt of a written request by the board or its designee.... This paragraph may be complied with by having a copy of the official records of 3 A sample ballot is available on the Division s arbitration webpage: www.myflorida.com/dbpr/lsc/arbitration/index.shtml. 8
the association available for inspection or copying on the condominium property or association property, or the association may offer the option of making the records available to a unit owner electronically via the Internet or by allowing the records to be viewed in electronic format on a computer screen and printed upon request. (c) The official records of the association are open to inspection by any association member or the authorized representative of such member at all reasonable times. The right to inspect the records includes the right to make or obtain copies, at the reasonable expense, if any, of the member. The association may adopt reasonable rules regarding the frequency, time, location, notice, and manner of record inspections and copying. The failure of an association to provide the records within 10 working days after receipt of a written request creates a rebuttable presumption that the association willfully failed to comply with this paragraph. A unit owner who is denied access to official records is entitled to the actual damages or minimum damages for the association s willful failure to comply. Minimum damages shall be $50 per calendar day up to 10 days, the calculation to begin on the 11th working day after receipt of the written request. On June 5, 2013, Petitioner made a request for access to all of the records the Association is required to maintain pursuant to the statute. It was not until August 19, 2013, that the Association responded in writing to Petitioner s June 5, 2013 request for access to records by inviting Petitioner to contact the Association at any time to coordinate a review of the requested records. 4 While it was improper for Petitioner to remove some of the Association s records, the Association s remedy under the statute was not to delay timely access to the official records of the Association that are within the possession of the Association. The failure of an association to provide access to the records within 10 working days after receipt of a written request creates a rebuttable presumption that the association willfully failed to comply with the statute. The fact that Petitioner had some of the records does not rebut the presumption with respect to the records that the Association did have. Therefore, the Association 4 The offer also invited Petitioner to coordinate a return of the Association s records that were in Petitioner s possession. 9
willfully failed to comply with the required time frame for providing access to the Association s records. Based upon the foregoing, it is ORDERED: 1. Petitioner s request that his recall not be certified and that he remain on the board is DENIED. 2. No later than 5:00 p.m. on April 30, 2014, the Association shall pay to Petitioner the sum of $500.00 as damages pursuant to Section 718.111(12)(c), Florida Statutes. 3. Within five (5) full business days from the date of mailing of this Order, Joseph Prycodzien shall deliver any and all records of the Association in his possession to the board of directors. 5 4. If it has not already done so, the Association shall make available all of the official records requested by Petitioner in this case, and at all times in the future, shall make available official records requested by Petitioner in accordance with Section 718.111(12), Florida Statutes. DONE AND ORDERED this 17 th day of April, 2014, at Tallahassee, Leon County, 5 This includes, but is not limited to, all of the records identified as within Petitioner s possession in the parties Joint Stipulation filed on January 22, 2014. 10
Florida. Glenn Lang, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida 32399-1030 Section Telephone: 850-414-6867 Section Facsimile: 850-487-0870 Trial de novo and Attorney s Fees This decision shall be binding on the parties unless a complaint for trial de novo is filed in accordance with section 718.1255, Florida Statutes. As provided by section 718.1255, Florida Statutes, the prevailing party in this proceeding is entitled to have the other party pay reasonable costs and attorney s fees. Any such request must be filed in accordance with Rule 61B-45.048, Florida Administrative Code. Certificate of Service I hereby certify that a true and correct copy of the foregoing final order has been sent by facsimile, where available, and by U.S. Mail to the following persons on this 17 th day of April 2014: Joseph Wood, Esq. Arcadier & Associates, P.A. 2815 W. New Haven, Suite 304 Melbourne, Florida 32904 Facsimile: 321-953-6075 Attorneys for Petitioner Brian D. Kozlowski, Esq. Law Office of Patrick Willis 150 N. Orange Avenue Suite 418 Orlando, FL 32801 Facsimile: 407-903-9929 Attorneys for Respondent Glenn Lang, Arbitrator 11