STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION-HOA BRAXTON MILLER, Petitioner, v. Case No. 2011-03-0323 CRESCENT LAKE CLUB HOMEOWNERS ASSOCIATION, INC., / SUMMARY FINAL ORDER Statement of the Issues The issues presented in the Amended Petition are: 1. Whether the Association utilized an improper general proxy form at its 2011 annual meeting of the members and election. 2. Whether the Association improperly rejected Petitioner s nominations from the floor for candidates for the Association s board of directors at its 2011 annual meeting of the members and election. 3. Whether the Association illegally utilized mail in secret ballots at its 2011 annual meeting of the members and election. 4. Whether the Association has denied Petitioner access to the voting records concerning its 2011 annual meeting of the members and election. Relevant Procedural History On June 14, 2011, Petitioner Braxton Miller filed a petition for binding arbitration against Crescent Lake Club Homeowners Association (Association) concerning an 1
election dispute. On August 8, 2011, Respondent filed an Answer. On September 6, 2011, the arbitrator conducted a case management conference. On September 7, 2011, the arbitrator entered an Order After Case Management Conference which required the parties to file certain documentation concerning the issues in this case. The parties thereafter filed documents responsive to the Order After Case Management Conference. On September 8, 2011, Respondent sought leave to amend its answer, and such leave was granted on September 13, 2011. On September 27, 2011, Petitioner sought leave to amend his petition, and such leave was granted on October 12, 2011. On October 19, 2011, Respondent filed an answer to the amended petition. This order is entered after the arbitrator has considered the pleadings and the documents filed by the parties. Findings of Fact 1. Petitioner is the owner of a lot governed by the Association and the governing documents, including the Declaration of Covenants and Restrictions, Articles of Incorporation and By-laws. 2. Respondent Association is the entity responsible for implementing the governing documents. 3. The Association s board of directors is composed of five members. 4. The Association s 2011 annual meeting of the members and election was originally scheduled for April 25, 2011. However, due to a lack of turnout on that date, it was rescheduled for May 16, 2011, and it was held on that date. 2
5. The notice for the 2011 annual meeting of the members and election included a sample ballot for the homeowner. The sample ballot listed five candidates and contained a space for write-in candidates. 6. In connection with the 2011 annual meeting of the members and election, in addition to the sample ballot, the Association mailed its members a blank general proxy form with the Secretary of the Association as the default proxy holder. Unlike the general proxy form used by the Association in prior years, the 2011 general proxy form contained no line or space for the grantor of the proxy to designate someone other than the Secretary of the Association to serve as proxy holder. 7. At the 2011 annual meeting of the members and election, Petitioner initially nominated himself for a position on the board of directors. He then withdrew his candidacy prior to a vote. 8. At the 2011 annual meeting of the members and election, Petitioner attempted to nominate from the floor candidates for the Association s board of directors. However, the persons nominated from the floor by Petitioner were not present at the meeting to accept Petitioner s nomination. Petitioner s nominees also had not previously notified the Association of their desire to be candidates, or whether they would accept Petitioner s nomination from the floor. As a result, the Association did not allow Petitioner s nominees to stand for election. 9. After Petitioner withdrew his candidacy for director of the Association, there were only five persons nominated for five director positions. Accordingly, the Association did not conduct an election, and the five candidates were seated as directors of the Association. 3
Conclusions of Law The Division has jurisdiction over the parties and the subject matter pursuant to Sections 720.306(9), 720.311 and 718.1255, Florida Statutes. This Summary Final Order is entered pursuant to Rule 61B-80.114, Florida Administrative Code, which requires the arbitrator to summarily enter a final order if no disputed issues of material fact exist. For the alleged violations in the conduct of the election, Petitioner seeks an Order setting aside the election results from May 16, 2011, and requiring a new election for the members of the board of directors. The General Proxy Form for the 2011 Annual Meeting Petitioner contends in the petition that the Association utilized improper proxies. Petitioner argues that, unlike the general proxy form used by the Association in prior years, the 2011 general proxy form contained no line or space for the grantor of the proxy to designate someone other than the Secretary of the Association to serve as proxy holder. Petitioner therefore argues that the Association s use of its general proxy form was contrary to the law. For its part, the Association admits to using the general proxy form as alleged by Petitioner, but contends that its general proxy form complied with Section 720.306(8), Florida Statutes. As to proxies, Section 720.306(8), Florida Statutes, provides: PROXY VOTING. The members have the right, unless otherwise provided in this subsection or in the governing documents, to vote in person or by proxy. (a) To be valid, a proxy must be dated, must state the date, time, and place of the meeting for which it was given, and must be signed by the authorized person who executed the proxy. A proxy is effective only for the specific meeting for which it was originally given, as the meeting may lawfully be adjourned and reconvened from time to time, and automatically expires 90 days after the date of the meeting for which it was originally given. A proxy is revocable at any time at the pleasure of the person who 4
executes it. If the proxy form expressly so provides, any proxy holder may appoint, in writing, a substitute to act in his or her place. (b) If the governing documents permit voting by secret ballot by members who are not in attendance at a meeting of the members for the election of directors, such ballots must be placed in an inner envelope with no identifying markings and mailed or delivered to the association in an outer envelope bearing identifying information reflecting the name of the member, the lot or parcel for which the vote is being cast, and the signature of the lot or parcel owner casting that ballot. If the eligibility of the member to vote is confirmed and no other ballot has been submitted for that lot or parcel, the inner envelope shall be removed from the outer envelope bearing the identification information, placed with the ballots which were personally cast, and opened when the ballots are counted. If more than one ballot is submitted for a lot or parcel, the ballots for that lot or parcel shall be disqualified. Any vote by ballot received after the closing of the balloting may not be considered. Furthermore, Article IV, Section 5 of the Association s By-laws states: Proxies. At all meetings of members, every member may vote in person or by proxy. All proxies shall be in writing and filed with the secretary. Every proxy shall be revocable and shall automatically cease upon conveyance by the member of his Lot. Nowhere in either the statute or the By-laws is it stated that the Association s general proxy form must contain a line or space for the grantor of the proxy to designate someone other than the Secretary of the Association to serve as proxy holder. Furthermore, Petitioner has cited no case law or other legal authority demonstrating that a general proxy form must contain such a line or space. Moreover, Petitioner has not cited authority that requires an Association to even send a proxy form to its members. Finally, Petitioner has not shown that he was prohibited from using his own general proxy form, rather than the one sent to him by the Association. Petitioner merely argues that it was the Association s prior long-standing practice to send its members a general proxy form containing such a line or space. This is not a 5
basis to rule that the Association was legally required to send a general proxy form containing such a line or space to its members. Therefore, the arbitrator concludes that the Association did not violate its documents and applicable law by using the 2011 general proxy form which contained no line or space for the grantor of the proxy to designate someone other than the Secretary of the Association to serve as proxy holder. Petitioner s Nominations from the Floor Petitioner contends that he attempted to nominate from the floor candidates for the Association s board of directors at the 2011 annual meeting of the members and election. Petitioner argues that the Association s refusal to allow his floor nominations to be candidates was illegal. The Association, admittedly, did not allow Petitioner s nominees to stand for election, and it alleges that its actions complied with Section 720.306(9), Florida Statutes. Section 720.306(9)(a), Florida Statutes, provides: ELECTIONS AND BOARD VACANCIES. Elections of directors must be conducted in accordance with the procedures set forth in the governing documents of the association. All members of the association are eligible to serve on the board of directors, and a member may nominate himself or herself as a candidate for the board at a meeting where the election is to be held or, if the election process allows voting by absentee ballot, in advance of the balloting. Except as otherwise provided in the governing documents, boards of directors must be elected by a plurality of the votes cast by eligible voters. Furthermore, Article VI, Section 1 of the Association s By-laws states: Nomination. Nomination for election to the Board of Directors shall be made by a Nominating Committee. Nominations may also be made from the floor at the annual meeting. The Nominating Committee shall consist of a Chairman, who shall be a member of the Board of Directors, and two or more members of the Association. The Nominating Committee shall be 6
appointed by the Board of Directors prior to each annual meeting until the close of the next annual meeting and such appointment shall be announced at each annual meeting. The Nominating Committee shall make as many nominations for election to the Board of Directors as it shall in its discretion determine, but not less than the number of vacancies that are to be filled. Such nominations may be made from among members or non-members. The persons nominated from the floor by Petitioner were not present at the meeting to accept Petitioner s nomination. Petitioner s floor nominees also had not previously notified the Association of their desire to be candidates, or whether they would accept Petitioner s nomination from the floor. For these reasons, the Association did not allow Petitioner s nominees to stand for election. Notwithstanding, it is unnecessary for the arbitrator to rule as to the validity of the Association s reasons for not allowing Petitioner s floor nominees to sit for election. Petitioner lacks standing to bring this claim. Petitioner initially nominated himself for a position on the board of directors, but withdrew his candidacy prior to a vote. Therefore, Petitioner was not a candidate whose floor nomination was rejected. Furthermore, none of Petitioner s floor nominees are a party to this case. Instead, Petitioner is attempting to assert the rights of persons, his floor nominees, who are non-parties. In Greenlee v. Oceanside Terrace Condominium Association, Inc., Arb. Case No. 95-0497 (May 10, 1996) 1, the arbitrator held that the petitioner did not have the authority to allege that the Association failed to properly handle another unit owner s candidacy for the board. The arbitrator finds no basis to depart from the sound 1 Prior arbitration case law has held that, although the rules and case law applicable to condominiums do not control homeowners' associations, they do provide persuasive authority to evaluate the fairness of homeowner association elections. Parker v. East Linden Homeowners Ass'n, Inc., Arb. Case No. 2007-04-5781, Summary Final Order (October 1, 2007). 7
reasoning of the Greenlee decision. If Petitioner s floor nominees felt that their candidacy was improperly rejected by the Association, it was their burden to file for arbitration on this issue, not Petitioner s. Accordingly, the arbitrator concludes that Petitioner lacks standing to contest the Association s refusal to allow his floor nominees to be candidates for election. Whether the Association Utilized Mail In Secret Ballots Petitioner contends that the Association improperly utilized mail in secret ballots for the 2011 annual election. The Association answers that it did not use a mail in ballot for 2011 annual election. The Association also suggests that Petitioner appears to be confusing the sample ballot sent with the notice for the 2011 annual election with the actual ballots handed out at the election. It is needless for the arbitrator to rule on the mail in ballots, as this issue is moot. After Petitioner withdrew his candidacy for director of the Association, there were only five persons nominated for five director positions. Section 720.306(2), Florida Statutes recognizes that there are certain situations where it is unnecessary for an association to hold an election. Section 720.306(2) provides, in pertinent part: The election of directors, if one is required to be held, must be held at, or in conjunction with, the annual meeting or as provided in the governing documents. (Emphasis supplied). Accordingly, due to the fact that there were only five people running for five director positions, the Association did not need to conduct an election, and the five candidates were seated as directors of the Association. Therefore, the arbitrator concludes that any issue as to whether mail in secret ballots were collected by the Association is 8
moot, because the Association ultimately did not need to conduct an election, and no election was held. Whether the Association Denied Access to its Voting Records Petitioner alleges that the Association has illegally denied him access to the voting records concerning its 2011 annual meeting of the members and election. The Association answers that it has made all of its records available to Petitioner for inspection and copying. Therefore, there is a dispute of material fact as to this issue. However, the arbitrator lacks jurisdiction to adjudicate this matter. Pursuant to Section 720.311(1), Florida Statutes, the arbitrator only has jurisdiction to conduct mandatory binding arbitration of recall disputes and election disputes between a member and an association. Petitioner s claim that the Association illegally denied him access to the voting records concerning its 2011 annual meeting of the members and election is a records dispute, not an election dispute. This claim is therefore not within the arbitrator s jurisdiction under Section 720.311(1), Florida Statutes. See Fennessy et al. v. Coastal Estates, Inc., Arb. Case No. 2010-02-7151, Order Requiring Amended Petition and Qualified Representative Application (June 11, 2010)(the Legislature has limited the arbitrator's jurisdiction in homeowner s association cases to recall and election disputes; inspection of records disputes are not within the jurisdiction of the arbitrator). Petitioner may pursue this claim against the Association in a court of competent jurisdiction. Based upon the foregoing, it is ORDERED: 9
Petitioner s Request for Relief seeking an Order setting aside the election results from May 16, 2011, and requiring a new election for the members of the board of directors is DENIED. Any and all pending motions are also DENIED. DONE AND ORDERED this 20 th day of December, 2011, at Tallahassee, Leon County, Florida. David R. Slaton, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida 32399-1029 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 to the following person on this 20 th day of December, 2011: Braxton Miller 10517 Via De Robina Court Clermont, FL 34711 Petitioner Thomas R. Slaten, Jr., Esq. Larsen & Associates, P.A. 300 S. Orange Avenue Suite 1200 Orlando, FL 32801 Attorney for Respondent David R. Slaton, Arbitrator 10