STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION GARY R. TROYAN and BARBARA E. OLSON, Petitioners, v. Case No. 2011-05-4917 736 ISLAND WAY ASSOCIATION, INC., Respondent. / SUMMARY FINAL ORDER Statement of Issue The issue for decision in this case is whether the Board of Directors (Board) of 736 Island Way Association, Inc. (the Association) improperly amended the minutes of the October 14, 2010 meeting of the Board. Procedural History On November 14, 2011, Gary R. Troyan and Barbara E. Olson (Petitioners) filed a Petition for Mandatory Non-binding Arbitration naming the Association as Respondent. By Order entered on November 21, 2011, Petitioners were required to file proof of pre-arbitration notice, and Petitioners dispute relating to a written inquiry was stricken. On November 29, 2011, Petitioners filed the required proof. By order entered on December 6, 2011, Petitioners were required to file an Amended Petition excluding the 1
written inquiry dispute, and Petitioners filed an Amended Petition on December 15, 2011. An Order Requiring Answer was entered on December 19, 2011. On January 11, 2012, the Association requested additional time to file an Answer, which was granted. The Association filed an Answer on January 18, 2012. Findings of Fact 1. Respondent, 736 Island Way Association, Inc., is the corporate entity responsible for the operation of 736 Island Way Condominium. 2. Petitioners own Unit 704 within the condominium. 3. Petitioners sent a memorandum letter to the Board and others dated, August 30, 2010, alleging the installation of unauthorized, non-standard flooring in Unit 804 in violation of the governing condominium documents. 4. On October 14, 2010, the Board held a meeting. Thereafter, minutes of the meeting were drafted which included, under the heading Communications, a summary of Petitioners August 30, 2010 memorandum letter and other related information. 1 The 1 The summary in the draft minutes is quoted as follows: Communications: Martin read a registered letter sent to all board members from Gary and Barbara Troyan stating that the board failed to enforce the documents in allowing the owner in unit 804 to use improper underlay for travertine tile, causing excessive noise to be heard in their unit 704. Their letter demanded that the board force the 804 owner to replace her floor and use cork as required. Their letter also pointed out that the initial request for remodeling the flooring information clearly states as of yet undetermined but to be installed over proper insulation. Martin Cook pointed out that an un-scientific sound test was done in the 2 [sic] units without finding excessive sound. Sheron Nichols reported that during a check in the [sic] unit 804, area rugs were in place and Proflex 90 was found, at least by the entry where underlay was checked. There was discussion on the performance of Proflex 90 compared to cork and how much noise is normal and tolerable in a multifamily building. Martin Cook reported the letter from Nobles Management, [sic] sent to the Owner of Unit 804 should have stated that the inspection did show there was underlay, but it did not conform to the material required for Travertine marble. This fact would have been pointed out, if the owner had property requested approval of the installation, instead of just verbally asking 2
original draft of the minutes was modified several times and a final version was signed as submitted by Sandra Munt and approved by the President, Martin Cook. Petitioners admit in their Statement of Facts that the final draft of the minutes was distributed as Approved to the membership, and Petitioners attached a copy to the petition. 5. Between October 14, 2010 and April 27, 2011, several meetings of the Board were held, but the draft of the minutes of the October 14, 2010 board meeting was not considered at any of these meetings, but minutes of other board meetings were considered. The interim meetings and the minutes considered were as follows: DATE MEETING MINUTES CONSIDERED & APPROVED Dec. 8, 2010 Annual Meeting of Membership & Board of Directors (BOD) Meeting Previous annual meeting minutes were approved. Board of Directors meeting did not consider any minutes. Feb. 7, 2011 Special BOD meeting to discuss special assessment for certain repairs No minutes considered or approved Feb. 18, 2011 BOD meeting to elect No minutes considered or approved Recreation Committee Members March 21, 2011 BOD meeting BOD approved minutes of Dec. 8, 2010 BOD meeting, Feb. 7, 2011 Special BOD meeting and Feb. 18, 2011 meeting. Draft minutes of Feb. 18, 2011 meeting were amended to correct date of meeting, shown as Feb. 8, to Feb. 18, and approved as amended. Dec. 8, 2010 and Feb. 7, 2011 minutes approved as distributed about tile flooring. The normal procedure, a written request, has never been received by the Board for approval nor information about underlay of flooring from the owner of unit 804. The letter from Mr. and Mrs. Troyan, also referred to the Travertine installation in Units #1203 and #1205 using prescribed cork underlay with no noise complaints from units below. Sheron Nichols stated that during a recent Board Meeting, when a previous complaint had been made, both parties involved had agreed to meet together to work out a solution among themselves, but she has not heard of any further discussions. Martin Cook requested a Motion to follow up on the requested action in the letter but no Motion was made. However[,] it was emphasized that any future remodeling job must get prior approval and inspections. It was suggested to properly research the attributes of Proflex 90 compared to cork or any other acoustical material. 3
6. On April 27, 2011, the Board held a meeting. The Board approved the minutes of March 21, 2011 Board meeting. An amendment to the October 14, 2010 minutes was offered to replace the summary under the Communications heading in the draft minutes with a revised summary. 2 The October 14, 2010 minutes, as amended, were approved. 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, this dispute. If no disputed issues of material fact exist, the arbitrator may enter a summary final order. Fla. Admin. Code R. 61B-45.030. Specifically, Petitioners assert that the approximately six-month delay in approving the minutes of the October 14, 2010 Board meeting violates Section 2.6 of the Association s By-Laws. That section of the By-Laws states: 2.6 Order of Business. The order of business at all meetings of the Board shall be as follows: A. Roll Call B. Reading of minutes of last meeting C. Consideration of communications D. Resignations and elections E. Report of officers and employees F. Report of committees 2 The revised summary is quoted as follows: Unit 704 sent a letter, dated August 30, 2010, (on file as part of the record of this proceeding) to unit 804, the 736 Island Way board of directors, and Nobles Management Company alleging the unauthorized installation of non-standard flooring in unit 804, and demanding that this flooring be removed, replaced with authorized underlay, or recovered. The board discussed the various types of board-approved underlay, unscientific noise tests conducted on existing underlay in the building, and the history of noise related problems and solutions. The president then called for a motion to proceed with the demands in the unit 704 letter. No motion was offered. 4
G. Unfinished business H. Original resolutions and new business I. Adjournment (emphasis added). Nothing in Chapter 718 or Chapter 617, Florida Statutes, requires the Association s Board to read minutes of the last Board meeting at the next meeting of the Board. However, based upon the requirements of paragraph B. of Section 2.6 of the Association s By-Laws, the Association violated that section when the minutes of the October 14, 2010 meeting were not read until the Board meeting of April 27, 2011, when there had been intervening meetings of the Board. Petitioners Request for Relief is quoted in its entirety a follows: Amended minutes are to be reinstated for the seven (7) year retention period, from the date of reinstatement. Board members that Amended the minutes, are asked or be required to be requested to resign [sic] and not be able to hold a position on any Condominium Board in the State of Florida for the next five (5) years or any time the Division may feel appropriate. (If allowed). All unauthorized legal fees generated regarding this subject to be refunded to the Association. (If appropriate from Arbitration). All incidental costs, court costs, all legal (FS 718.125), including Arbitration expenses, and miscellaneous fees to be reimbursed to the claimant, up to the date of reinstatement of the minutes. Any allowable and appropriate fines or reprimands for this action as allowed by Division, for both the Board of Directors and Management Company (Registered Agent of Association) (If allowed) While not entirely clear from Petitioners Request for Relief, it appears that Petitioners are requesting that the Association be ordered to reconsider the October 14, 2010 minutes, as amended, and approve the October 14, 2010 minutes as drafted and distributed. Such relief will not be granted. 5
Petitioners do not allege that the amended minutes for the October 14, 2010 Board meeting are inaccurate. However, the amended minutes do not include a summary of discussion that Petitioners perhaps may want included for other purposes. Further, Petitioners admitted that the October 14, 2010 minutes as originally drafted were distributed, and Petitioners apparently have a copy of the original draft which they may use as they wish. In any event, [i]f the [minute] entry faithfully shows what was done, it is comparatively unimportant when it was actually made. Caldwell v. Dean, 10 F.2d 299, 301 (5 th Cir. 1926) (rehearing denied) (Bank entered into lease of property owned by mercantile company and constructed bank building on property. Bank went into receivership, and receiver sought to cancel lease. At time of the lease, majority of directors of bank board also were on board of mercantile company. In part, Receiver argued lack of good faith because minute entry of date of bank board meeting authorizing lease was incorrect and meeting was not held on day stated. Minute entry corrected after original writing to make it conform to terms of lease and option. Judgment for lessor mercantile company upheld.) Based upon the foregoing, it is ORDERED: Pursuant to Paragraph B. of Section 2.6 of the Association s By-Laws, at all meetings of the Board, minutes of the last Board meeting shall be read. Pursuant to Rule 61B-45.048, Florida Administrative Code, any issue of prevailing party attorney s fees and costs will be addressed only after a timely filed motion by a party. Petitioners remaining requests for relief are not within the arbitrator s jurisdiction to provide, and therefore, are DENIED. DONE AND ORDERED this 27 th day of January, 2012, at Tallahassee, Leon 6
County, Florida. Glenn Lang, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida 32399-1029 Phone: 850-414-6867; FAX: 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 Fla. Admin. Code R. 61B-45.048. 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 27 th day of January 2012: Gary R. Troyan Barbara E. Olson-Troyan 736 Island Way, #704 Clearwater Beach, FL 33767 Petitioners Elizabeth R. Mannion, Esq. Strohauer, Mannion & Son, P.A. Fifth Third Building Suite 300 1150 Cleveland Street Clearwater, Florida 33755 Counsel for Respondent Glenn Lang, Arbitrator 7