STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS, AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION M. J. Gentry, Petitioner, v. Case No. 02-5687 Casa del Sol (Winter Haven) Condominium Association, Inc., Respondent. / SUMMARY FINAL ORDER Comes now, the undersigned arbitrator, and issues this summary final order as follows: Petitioner filed a petition for arbitration in this matter on October 10, 2002. According to the petition, at the annual meeting and election held on March 19, 2002, the association counted ballots that were not cast in an inner envelope as required by rule 61B-23.021(8), F.A.C. Inner envelopes were not provided to the owners. Instead, only one envelope was provided to the membership along with a ballot. The envelope contained a space on the back of the envelope and a label for the signature. Petitioner has made no allegation that the violation was willful, or that the outcome of the election was affected by the defective procedure utilized, or that the secrecy of the vote was compromised. Petitioner requests entry of a final order setting aside the results of the election. The association filed its answer on November 22, 2002. The association 1
admits that an inner envelope was not provided to the owners. The association argues that the outer envelope that was provided was sufficient to ensure the integrity of the election, and that the owners were not prejudiced and the vote was not affected by the absence of the second envelope. The association also argues that there is nothing in the statute or rules that requires the remedy of a new election under these circumstances. On November 27, 2002, the arbitrator issued an order permitting the parties to file brief memoranda on the issues presented. Each party filed its written arguments, with the last argument filed on December 16, 2002. The arbitrator has considered each memorandum in the preparation of this final order. Petitioner argues, correctly, that the association has plainly violated rule 61B- 23.002(8),(10), F.A.C., which requires that associations utilize an outer and an inner envelope in elections for the board. The association has also violated the intent of the statute in requiring the Division to establish voting procedures consistent with the provisions contained herein, including rules providing for the secrecy of ballots. Section 718.112(2)(d)3., Florida Statutes. As argued by petitioner, unit owners have the right to expect that the election would be conducted in accordance with procedures mandated by statute and rule, and that the voting would be secret. The association argues that the failure to provide inner envelopes did not affect the confidentiality of the election or the outcome of the election. The association also indicates that the Division has previously investigated this issue pursuant to its enforcement authority contained in s. 718.501, Florida Statutes, and concluded that this was not a serious violation. The Division issued an information letter to the 2
association and did not pursue enforcement proceedings against the association. The association characterizes the violation as a technical flaw which amounts to harmless error, and cites prior arbitration cases that have refused to require a new election for technical flaws that did not affect the integrity of the election. In the arbitration case of Rose v. The Village of Kings Creek Condominium Association, Inc., Arb. Case No. 00-1996, Final Order (March 14, 2001), the arbitrator declined to order a new election where the association circulated a two page candidate information sheet for some candidates, with the front of the page containing an English version and the back containing a Spanish version, where the administrative rules only permitted a single page information sheet. The arbitrator found that substantial compliance with the statute and rules existed, and that it was unlikely that the appearance and length of the information sheet, as contrasted with its substance, would prevent the owners from freely exercising their right to vote. In Grossman v. Bonavida Condominium Association, Inc., Arb. Case No. 00-0367, Final Order (August 8, 2000), the arbitrator ordered a new abbreviated election where the association failed to include one individual s name on the ballot who had timely submitted his notice of intent to run for the board. In Marott Partnership v. Maracay Association, Inc., Arb. Case No. 00-0461, Final Order (June 28, 2000), the association improperly disregarded a ballot but a new election was not ordered where the petition did not allege that the outcome of the election would have been different. In McHale v. Lakes of Newport Condominium 1 Association, Inc., Arb. Case No. 00-0997, Final Order (November 6, 2000), the arbitrator ordered a new election where the owners were prohibited from occupying the area where the 3
envelopes were being opened and the ballots tallied, where the association failed to maintain a list of qualified voters, and where the association discarded some but not all of the ballots where the unit number was not indicated on the outer envelope. In Warren v. Springfield Village Condominium Association of Longwood, Inc., Arb. Case Nos. 00-0177; 00-2153, Final Order on Rehearing (August 28, 2001), the association opened the outer envelopes and immediately opened the inner envelopes, thus potentially compromising the confidentiality of the ballots. The arbitrator stated: Whether anyone actually observed the manner in which the owners had voted is irrelevant to a determination that the rule was violated and that the election was potentially compromised on that basis; this may find relevance in fashioning the appropriate remedy for the violation of the administrative rule. The arbitrator ultimately did not order the association to conduct a new election in Springfield. A recount was ordered in Alvarez v. Club Atlantis Condominium Association, Inc., Arb. Case No. 92-0305, Final Order (March 25, 1993) where the association failed to count a number of ballots where the owners, despite instructions to the contrary, had signed their ballots or the inner envelopes. The arbitrator stated:..where the unit owner signs the ballot or the inner envelope, it is plain that the secrecy sought to be guaranteed by the Legislature beginning with the 1991 amendments to Chapter 718, Florida Statues, is eliminated This concern with secrecy may be traced back to the Condominium Study Commission which initially recommended to the Legislature that the previous voting system utilizing proxies and voting-in-person be substituted for the ballot system, and which further recommended legislation which would ensure the secrecy of ballots. Testimony presented to the Condominium Study Commission, and which prompted the change in the method of election, included testimony of unit owners to the effect that they feared reprisal if it became public knowledge that they failed to vote for the incumbent boards. 4
The arbitrator, in ordering a recount, found that the right to voter privacy was intended to primarily benefit the voters and not the association, and that the voters could waive their right to privacy. The arbitrator, in ordering the association to count the ballots, held that the ballots exhibited substantial compliance with the statute and rules and should have been counted by the association. In Greenlee v. Oceanside Terrace Condominium Association, Inc., Arb. Case No. 95-0497, Final Order (March 26, 1997), the arbitrator held the election was null and void where the association had failed to include a timely-submitted candidate information sheet with the second notice of election. A new election was not ordered since a new election had been conducted by the association during the course of the arbitration proceeding. In Sun Resort v. Jellystone Park Condominium, Case No. 96-0007, Partial Summary Final Order (June 13, 1996), the arbitrator found fundamental error where the association improperly rejected the candidacies of 2 individuals it considered to be ineligible. The arbitrator does not agree with the association s characterization of the election flaws in this case as merely technical or harmless error. The failure of an association to adopt election protocol that ensures the confidentiality of the vote is a substantial error that goes to the very heart of the election process envisioned by the Legislature and implemented by the Division through its adoption of rules governing elections. By opening up the ballots to public scrutiny, the association has defeated the fundamental legislative objective of ensuring secrecy of the vote and preventing possible reprisal by the incumbent board. Certainly, at a minimum, those individuals who performed the opening of the ballot envelopes had access to confidential information they were not entitled to view. Nonetheless, in the absence of evidence 5
that the failure of the association to use the correct outer envelope procedure actually or likely compromised the secrecy of the election or otherwise impacted the outcome of the vote in a material manner 1, the arbitrator is reluctant to conclude that the error committed was fundamental per se requiring the conduct of a new election. Here, there is no indication that the will of the voters was not fulfilled, and prior cases do not require that a new election be ordered under these facts. Instead of ordering a new election, the arbitrator hereby orders the association to conduct its future elections in accordance with the statute and the rules, and to use the two-envelope system as required. 2 DONE AND ORDERED this 6th day of February, 2003, at Tallahassee, Leon County, Florida. Karl M. Scheuerman, Arbitrator Department of Business and Professional Regulation Arbitration Section Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-1029 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 persons on this 6 th day of February, 2003: John A. Leklem, Esquire 5151 Adanson Street, Ste.98 Orlando, Florida 32804 1 For example, if a group of owners, realizing that the outer envelope was missing and that their votes would be subject to public scrutiny, changed their selection of candidates on the ballot, it is plain that the outcome of the election could be affected thereby. 2 It is suggested that the parties confer and reach an agreement on the matter of attorney s fees in this matter rather than continuing to litigate and generate additional attorney s fees on the issue of entitlement to attorney s fees. 6
Brandon R. Scheele, Esquire Fowler, White, Boggs, Banker, P.A. 501 E. Kennedy Blvd., Ste. 1700 Tampa, Florida 33601 Karl M. Scheuerman, Arbitrator Right to Appeal As provided by s. 718.1255, F.S., this final order may be appealed by filing a complaint for trial de novo with a court of competent jurisdiction in the circuit in which the condominium is located, within 30 days of the entry and mailing of this final order. This order does not constitute final agency action and is not appealable to the district courts of appeal. If this final order is not timely appealed, it will become binding on the parties and may be enforced in the courts. Attorney s Fees As provided by s. 718.1255, F.S., the prevailing party in this proceeding is entitled to have the other party pay its reasonable costs and attorney s fees. Rule 61B-45.048, F.A.C. requires that a party seeking an award of costs and attorney s fees must file a motion seeking the award not later than 45 days after rendition of this final order. The motion must be actually received by the Division within this 45 day period and must conform to the requirements of rule 61B-45.048, F.A.C. The filing of an appeal of this order does not toll the time for the filing of a motion seeking prevailing party costs and attorney s fees. 7