STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES IN RE: PETITION FOR BINDING ARBITfjjATIJjN. - HOA ELECTION ALEXIS K. (KENNY) BOBB, Arbitration Section Petitioner, JUM 3 0 2015 V. Div of FL condos, Tlmeshares & MH Case No. 2015-00-3330 Dept. oi Business & Professional Reg. BUENA VISTA WOODS HOMEOWNERS ASSOCIATION, INC., Respondent. SUMMARY FINAL ORDER After review of the pleadings in this case, there are no material issues of fact in dispute in this case. There is one issue of law regarding the election of the Board of Directors for Buena Vista Woods Homeowners Association, Inc. ("Master Association"), which was scheduled to be held on November 20, 2014. Statement of the Issue Whether the Master Association should schedule and hold a new election because it made a determination at its annual meeting on November 20, 2014, that a quorum was not present, and that therefore, an election would not be conducted, based upon an admittedly unreliable count of the voting interests present at the annual meeting. Relevant Procedural History On January 16, 2015, Alexis K. (Kenny) Bobb filed a petition for arbitration Buena Vista Woods Homeowners Association, Inc. was named as Respondent. On January 29, 2015, an Order Requiring Answer was entered, which was duly served to the Master Association on February 2, 2015. Page 1 of 9
A default was entered against the Master Association on February 27, 2015, for failure to respond to the petition and the order requiring answer. Thereafter, the Master Association filed an answer, and a supplement to its answer, on March 6, 2015. A case management conference was scheduled for March 24, 2015, and was rescheduled at the Master Association's request. The case management conference was held on March 30, 2015, at which both parties were represented by counsel. The default previously entered against the Master Association was vacated in an order entered on March 31, 2015. The Master Association filed a motion for clarification on April 6, 2015. On April 13, 2015, the Master Association filed an "Initial Disclosure." On April 14, 2015, Petitioner filed a reply to the Master Association's motion for clarification. On May 5, 2015, Petitioner filed a motion for entry of a summary final order. On May 6, 2015, the Master Association filed a notice of compliance with the order of March 31, 2015, with an exhibit attached. On May 19, 2015, Petitioner filed a supplement to his motion for entry of a summary final order. On May 21, 2015, the Master Association filed an amended notice of compliance. On June 4, 2015, the Master Association filed a second supplement to its notice of compliance. On June 8, 2015, Petitioner filed a second supplement to his motion for entry of a summary final order. On June 17, 2015, the Master Association filed a motion to schedule a case management conference. On June 18, 2015, Petitioner filed a reply to the Master Association's motion to schedule a case management conference. On June 29, 2015, the Master Association filed a "status disclosure or motion to amend case management conference in the alternative." This Summary Final Order is based on the Page 2 of 9
pleadings and exhibits filed by the parties. Findings of Fact 1. The Master Association held its annual meeting on November 20, 2014. An election was also scheduled for that date, but was not held. 2. Petitioner currently serves on the board of one of Master Association's subassociations, and was listed on the ballot as a candidate for the Master Association's board of directors, as a voting representative for the sub-association. The Master Association's board consists of three (3) members. 3. Section 4.4 of the Master Association's bylaws states, in pertinent part: Quorum. A quorum at Members' meetings shall consist of thirty percent (30%) of the total voting interest in the Association, whether represented in person or by proxy. If a quorum is present, the affirmative vote of a majority of votes represented at a meeting in person or by proxy shall constitute the acts of the Members, except when approval by a greater number of Members is required by the Declaration, these Bylaws, the Articles, or by law. 4. It is uncontested that a quorum consists of 149 voting interests for the purpose of determining whether an election should be held at the Master Association's annual meeting. 5. Section 4.6 of the Master Association's By-laws states: Adjourned Meetings. When an annual or special meeting is adjourned to a different date, time or place, the new date, time and place to which the meeting is adjourned must be announced at the meeting at which the adjournment is taken, or notice must be given of the new date, time and place pursuant to Section 4.3 hereof. Any business may be transacted at the adjourned meeting that might have been transacted on the original date of the meeting. If, however, after the adjournment the Board fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given in compliance with the Bylaws to Members entitled to Page 3 of 9
vote at such meeting who were not Members as of the previous record date. 6. The annual meeting held on November 20, 2014, was not adjourned. 7. At the annual meeting on November 20, 2014, the Master Association's two community association managers (at least one of whom is no longer employed by the Master Association) kept a tally of the voting interests present in person or by proxy. 8. No election was held at the November 20, 2014 annual meeting, because it was determined by the Master Association's board and/or its community association managers that a quorum was not present. 9. Petitioner claims that a quorum was present at the annual meeting, and that the scheduled election should have been conducted. 10. The Master Association claimed, in its answer to the petition, that 146 voting interests were present at the annual meeting. In subsequently filed pleadings, the Master Association claimed that its initial count of 146 voting interests had been wrong, and that numerous voting interests had been erroneously counted as present but should now be removed from the tally. In a later pleading, the Master Association claimed that eighteen (18) additional owners who it initially claimed had been counted as present were not actually counted as present. The Master Association admits that its tally contains "what appear to have been inadvertent errors." 11. The Master Association was ordered, on March 31, 2015, to file a list identifying the 146 voting interests that it originally claimed were present at the annual meeting. The Master Association filed, in response to the order, a 20 page tally sheet that it stated was compiled by its community association managers at the meeting. The tally sheet contains notations and other markings in red, yellow, orange, and green, the Page 4 of 9
meaning of which the Master Association claims cannot be discerned without the testimony of its community association manager. The Master Association further claims that the tally sheet is "merely documentation that can assist in understanding all facts and circumstances surrounding the tally." The Master Association has never filed a list or other document identifying the 146 voting interests that it claimed were counted as present at the annual meeting, as it was directed to do in the order of March 31, 2015. 12. The Master Association claims that at the November 20, 2014 annual meeting, "the Association was forced to process the massive volume of documents presented by the Petitioner and his cohorts, including proxies and certificates of designated voter forms, most of which were designated to the wrong Association" and "...it is perhaps appropriate that the Petitioner cited to Bush v. Gore as the extreme confusion addressed and described with respect to 'hanging chads' is factually analogous to the fiasco and complete and utter confusion created at the hands of the Petitioner and his small band of cohorts who reside within the Emerald Forest community." 13. The Master Association's records pertaining to the November 20, 2014 annual meeting are so unreliable that it cannot be determined how many voting interests were actually present at the meeting. Conclusions of Law Sections 720.306 and 720.311, Florida Statutes, provide that the Department shall conduct mandatory binding arbitration of election disputes between a member and a homeowners' association. Because there is no issue of material fact in dispute after the filings provided to date by the parties, this case is appropriate for summary disposition pursuant to Rule 61B-80.114, Florida Administrative Code. Page 5 of 9
The legislature has imposed specific obligations upon homeowners' associations to know and keep track of the voting membership. Among other requirements, Section 720.303(4)(g), Florida Statutes, requires a homeowners' association to maintain as an official record, "A current roster of all members and their mailing addresses and parcel identifications." Additionally, Section 720.306(9)(a), Florida Statutes, states, "Except as otherwise provided in the governing documents, boards of directors must be elected by a plurality of the votes cast by eligible voters." Section 3.3 of the Master Association's bylaws provides, "Every Member of the Association...shall have one (1) vote for each Lot to which it holds title." The burden is always on the homeowners' association to know who is entitled to vote and to conduct its elections accordingly. See Casfro v. Snapper Creek Townhouse Home Owners Ass'n, Inc., Arb. Case No. 2009-01-2882, Summary Final Order (July 10, 2009). In the present case, by the Master Association's own admissions it did not make an accurate count, at the time of its annual meeting and scheduled election, of how many owners who were entitled to vote were present at the meeting. Subsequent to the meeting, it continued to discover and disclose sizeable errors in the tally of voting interests that it had originally counted as present. Even in response to a direct order of the arbitrator, the Master Association cannot, or will not, identify the 146 voting interests that it originally counted as present at the annual meeting. As late as June 29, 2015, the Association stated, in its status disclosure, that it was finally going to comply with the order of March 31, 2015, and disclose the identities of the 146 voting interests that it counted as present at the annual meeting. But it then requested an additional fourteen (14) days to do so. Page 6 of 9
An association's substantial compliance with election procedures is required. Alvarez v. Club Atlantis Condo. Ass'n, Inc., Arb. Case No. 92-0305, Final Arbitration Order (March 25, 1993)(only substantial compliance with statute and rules pertaining to voting procedure required in order to cast valid ballot; strict compliance is not required); but see North County Co., Inc. v. Yogi-by-the-Sea Condo. Ass'n, Inc., Arb. Case No. 93-0119, Amended Final Order (Dec. 10, 1993)(sufficient errors in election process to declare election null and void, although new election not ordered for practical reasons). See also Boardman v. Esteva, 323 So.2d 259, 264 (Fla. 1959)(substantial compliance with absentee voting laws is all that is required to give legality to ballot). Applying the approach used in Boardman and followed by the arbitrator in Alvarez and North County, the question is "whether or not the irregularity complained of has prevented a full, fair and free expression of the public will." Boardman at 265. Prior arbitration cases have ordered a new election when election irregularities were such that it was impossible to determine, in retrospect, what the outcome would have been if the irregularities had not occurred. See, e.g., Maignan v. Star Lakes Association, Inc., Arb. Case No. 2009-02-5151, Summary Final Order (September 9, 2009)(new election ordered where, if the votes cast for ineligible candidates were taken out of consideration, the spread of votes was so close between the remaining candidates that the outcome could easily have been different if only a few votes were different). There is perhaps no more fundamental way to prevent a full, fair and free expression of the public will than to fail to hold an election at all. In the instant case, the governing documents would have required an election to take place if a quorum of the voting interests was present at the annual meeting. The Master Association made the Page 7 of 9
decision not to hold an election, due to what it perceived as a lack of a quorum, under circumstances that it claims were wildly chaotic. The resulting count of voting interests present at the meeting was, with the benefit of hindsight, subject to so many errors as to render it unreliable for use in determining retroactively whether a quorum was present. The Association's ongoing revelations of newly discovered errors in the tally confirm that the true number of voting interests who were present at the meeting cannot be accurately determined. Under these circumstances, the only way to ensure that the full, fair and free expression of the will of the membership is achieved is to hold an election. Based upon the foregoing, Petitioner's request for relief in the form of a new election will be granted. The Master Association shall schedule, notice, and hold a new election by August 1, 2015. Petitioner's remaining requests for relief, that the arbitrator "establish the procedures to be utilized for the purpose of nominating candidates for the board, preparation and return of election ballots, etc., in advance of the meeting and determine whether such procedure is authorized by the governing documents and/or the Florida Statutes; AND Determine the number of vacant seats on the board of directors which should be subject to election at the rescheduled meeting..." are denied as a request for an advisory opinion. It is therefore ORDERED: 1. The Master Association shall schedule and conduct a new election by August 1, 2015. The first notice of the election shall be provided to the membership by July 15, 2015. Page 8 of 9
2. The election shall be conducted in accordance with the Master Association's governing documents and the applicable law. 3. All pending motions are denied as moot. DONE AND ORDERED this 30th day of June, 2015, at Tallahassee, Leon County, Florida. j i O. Leslie O. Anderson-Adams, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida 32399-1030 Telephone (850) 414-6867 Facsimile (850) 487-0870 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 to the following persons on this 30th day of June, 2015: James E. Olsen, Esq. 646 E. Colonial Dr. Orlando, FL 32803 Fax: (407)999-5291 Attorney for Petitioner Frank A. Ruggieri, Esq. The Ruggieri Law Firm, P.A. 390 N. Orange Ave., Ste. 2300 Orlando, FL 32801 Fax: (407)730-4584 Attorney for Respondent / Leslie O. Anderson-Adams, Arbitrator Page 9 of 9