STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION ELECTION DISPUTE DRB DEVELOPMENT, LLC, Petitioner, v. Case No. 2015-00-3393 THE PALMS OF DESTIN RESORT AND CONFERENCE CONDOMINIUM ASSOCIATION, INC., Respondent. / FINAL ORDER OF DISMISSAL DUE TO LACK OF JURISDICTION On January 20, 2015, DRB Development, LLC (Petitioner) filed a petition for mandatory non-binding arbitration naming The Palms of Destin Resort and Conference Condominium Association, Inc. (the Association) as the respondent. On February 17, 2015, the Association filed an answer. A telephonic case management conference was held in this matter on March 10, 2015. The petition alleges that Petitioner owns multiple units and is entitled to appoint a developer representative to the Association s board of directors and that the Association has failed to permit it to appoint a representative. 1 Additionally, the petition alleges that the Association refused to place on the ballot for the annual election of directors two or three persons who had timely requested to be added to the ballot. Therefore, Petitioner claims that a vote should have been held. 2 The petition further alleges that the 1 Petitioner claims that, pursuant to section 4.2(a) of the Association s by-laws, it is entitled to appoint one director because it is holding out for sale at least 5% of the units. 2 It is undisputed that no vote was held because the Association determined that there were only five candidates for the five seats open for election. 1
Association denied Petitioner the right to vote on other issues at the Association s annual meeting because the Association wrongly claimed to have properly suspended Petitioner s voting rights. In its answer, the Association states that three potential candidates were not included on the ballot because two withdrew their candidacies and the other was found to be ineligible to be a candidate pursuant to section 718.112(2)(d)2., Florida Statutes, because he was delinquent in the payment of a monetary obligation due to the Association. The Association claims that it properly suspended Petitioner s voting rights pursuant to section 718.305(5), Florida Statues, because Petitioner was more than 90 days delinquent in payment of monetary obligations due the Association. Pursuant to section 718.303(6), Florida Statutes, suspension of voting rights must be approved at a properly noticed board meeting and upon approval, the Association must notify the unit owner by mail or hand delivery. Attached to the Association s answer is a copy of the minutes for the October 24, 2014, meeting of the Association s Board directors during which Petitioner s voting rights were suspended. Additionally, for each unit owned by the Petitioner that the Association claims is more than 90 days delinquent in the payment of a monetary obligation due the Association, the Association has filed copies of letters addressed to the Petitioner providing notice of the suspension of Petitioner s voting rights for that unit. Based upon the documentation filed by the Association, it is evident that the Association complied with the statutory procedural requirements to suspend Petitioner s voting rights. Therefore, the only basis Petitioner has for challenging its suspension is 2
to claim either that at all relevant times it was not in arrears as to any monetary obligation due the Association or claim that it is not obligated to pay the monetary obligation that the Association claims is past due. During the case management conference, further clarification was provided by the parties regarding the assessment or monetary obligation dispute that is the basis of the suspension. The voting rights for all of Petitioner s units have been suspended because it has failed to pay the Association the amount due the Association which the Association uses to pay club dues. The Association claims that payment of club dues by the Association is a common expense to be paid by all members for which the Association may levy an assessment. Petitioner claims that the Association has failed to pay the club, and therefore, Petitioner directly paid the club. In addition to the failure to pay the club dues, the Association suspended the voting rights for two lobby units owned by Petitioner because Petitioner failed to pay these units share of the expenses related to maintaining portions of the building envelope that the Condominium s Declaration designates as limited common elements of the lobby units for which the Association is solely financially responsible for maintaining. The Association contends that the Declaration may not designate such components as limited common elements, rather, the components must be deemed common elements for which the lobby units are under the same obligation to pay their share of related common expenses as any other unit. Petitioner disagrees with the Association s conclusion. Pursuant to section 718.1255(1), Florida Statutes, disputes primarily involving the levy of fee or assessment or the collection of an assessment are not eligible for 3
arbitration. In order to determine whether Petitioner s voting interests were subject to suspension, the undersigned will have to necessarily rule upon the disputed assessments. Therefore, the dispute involving suspension of voting rights is not within the undersigned s jurisdiction. See Gupta v. Tradewinds East Condo. Ass n, Inc., Arb. Case No. 2013-02-9840, Final Order Dismissing Petition for Lack of Jurisdiction (August 1, 2013). Pursuant to section 718.112(2)(n), Florida Statutes, a director who is more than 90 days delinquent in the payment of any monetary obligation due an association shall be deemed to have abandoned the office, creating a vacancy in the office to be filed according to law. Therefore, in order to provide Petitioner any practical relief regarding its claim that it is entitled to appoint a developer director, the undersigned must rule upon the disputed assessments. Therefore, this dispute is not within the arbitrator s jurisdiction. Id. The disputes that are within the undersigned s jurisdiction are inextricably intertwined with the ones over which the undersigned lacks jurisdiction. 3 In accordance with Rule 61B-45.013(4), Florida Administrative Code, the undersigned finds that the disputes eligible for arbitration cannot be severed from ineligible ones. Accordingly, this case will be dismissed. Based upon the foregoing, it is ORDERED: Arbitration case number 2015-00-3393 is dismissed due to lack of jurisdiction. Petitioner is free to seek relief in a court of competent jurisdiction. 3 Furthermore, even if it were determined that the Association s procedure for suspending Petitioner s voting rights was flawed, judicial economy would favor dismissal of both disputes so that the common assessment dispute could be addressed in a single forum. 4
Florida. DONE AND ORDERED this 19 th day of March, 2015, at Tallahassee, Leon County, James W. Earl, 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 of dismissal has been sent by email U.S. Mail to the following persons on this 19 th day of March 2015: S. Thomas Peavey Hoffer, Esq. Matthew & Jones, P.A. 4475 Legendary Drive Destin, FL 32451 Attorney for Petitioner Peter M. Dunbar, Esq. Dean, Mead, Egerton, Bloodworth, Capouano & Bozarth, P.A. 215 South Monroe Street Suite 815 Tallahassee, FL 32301 Attorney for Respondent James W. Earl, Arbitrator 5