STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION PHILIP ANDRYSIAK, Petitioner, v. Case No: 2015-01-8628 NARANJA LAKES CONDOMINIUM NO. 5, INC., Respondent. / FINAL ORDER Pursuant to notice, the undersigned arbitrator of the Division of Florida Condominiums, Timeshares and Mobile Homes conducted a telephonic final hearing in this case on August 18, 2015. During the hearing, the parties presented the testimony of witnesses, entered documents into evidence and cross-examined witnesses. The parties have filed post-hearing memoranda. This order is entered after consideration of the complete record. Appearances For Petitioner: Mario G. Menocal, Esq. 815 NW 57 th Ave., Suite 315 Miami, FL 33126 For Respondent: Paul A. McKenna, Esq. 1360 South Dixie Highway Suite 100 Coral Gables, FL 33146 Page 1 of 8
Statement of the Issue 1. Who are the proper board members of Naranja Lakes Condominium No. 5, Inc. (hereinafter the Association)? 2. Is the Association required to vote at an open meeting before renewing a contract? Relevant Procedural History On April 20, 2015, Petitioner filed a petition. On May 29, 2015, the Association filed its answer and affirmative defenses. On June 18, 2015, Petitioner filed a reply. On August 18, 2015, a final hearing was held. On September 9, 2015, Petitioner filed a legal brief and proposed final order. On September 10, 2015, the Association filed a legal brief and proposed final order. Findings of Fact 1. Naranja Lakes Condominium No. 5, Inc. is the corporate entity responsible for the operation of Naranja Lakes No. 5, a condominium. 2. Philip Andrysiak owns a unit in the condominium, and therefore, is a member of the Association. 3. On August 18, 2015, a final hearing was held. Three witnesses testified at the hearing: Petitioner, Cesar Vazquez and Milagros Fernandez, the Association s community association manager. Election 4. The Association board consists of seven (7) directors. Page 2 of 8
5. An undated First Notice of Annual Meeting and Election of Board of Directors was mailed to the members of the Association on December 23, 2014. The notice stated in pertinent part: The Annual Meeting of the Association and the election for the Board of Directors will be held Wednesday, February 25, 2015 6:00 P.M. at... If you wish to run for the Board of Directors you must submit the attached NOTICE OF INTENT TO BE A CANDIDATE FOR THE BOARD so that it is received by the Association no later than January 16, 2015. In addition, attached is a Condominium Association Candidate Certification Form... The Condominium Certification Form must also be received by the Association no later than January 16, 2015. (emphasis in original). 6. The Association admits it received four (4) notices of intent to be a candidate by January 16, 2015 from the following individuals: Petitioner, Leonard Anthony, Alfred Hernandez and Mariano Ceamanos. Petitioner, Leonard Anthony, and Alfred Hernandez were current members of the board. The other three incumbents, Gerald Kratz, Rebecca Ramos and Jose Elguezabal did not file notices of intent. One director seat was vacant. 7. According to Ms. Fernandez, the Association did not accept Mariano Ceamanos notice of intent because he did include a completed background check with his notice of intent. There was no requirement in the notice or certificate form that a candidate also had to include a background check. 8. Cesar Vazquez claimed he sent his notice of intent days after receipt of the first notice. Ms. Fernandez did not know if Mr. Vazquez submitted a timely notice because someone else on her staff handled the notices of intent. Ms. Fernandez admitted neither she nor her staff date-stamped the notices as a matter of course. Petitioner s notice was the only one of the notices on which a date of receipt by the Page 3 of 8
Association was noted, which Petitioner states that he insisted the manager s staff provide him. Based on the testimony of Cesar Vazquez and the Association s lack of any procedures for handling the notices, the arbitrator finds that there is sufficient credible evidence to prove that Cesar Vazquez timely submitted his Notice of Intent to be a Candidate. 9. On February 25, 2015, the Association announced that since fewer candidates submitted notices of intent than the number of directors, it was cancelling the election, and the previous board would holdover. The Association then appointed Blanca Rivas to the open seat. Contract Renewel 10. On December 1, 2014, the President of the Association signed a contract with the management company, Innovated Property Management Services of South Florida, Inc. The purported contract extended the existing contract, which was expiring March 1, 2015, for three more years. Petitioner alleges that the Board was required to approve the renewal contract at an open meeting. 11. In its answer, the Association states: There is nothing in the Association s Declarations or Bylaws which requires the board to vote on any or all contracts the association enters into. Furthermore, PHILIP ANDRYSIAK fails to point to any part of the Declaration, Bylaws, statute or legal precedent requiring that the association put all contracts it enters into to a board vote. In this particular instance, the board President sent an email to each and every board member asking for their input on the renewal of the Innovative Property Management Services of South Florida, Inc. contract. Only one board member responded to the President s email and that board member approved the renewal of the contract. Accordingly, the association did not violate any rule, regulation, Declaration or Bylaw covering the entering into of contracts with association vendors, including the property management company. Page 4 of 8
Conclusions of Law The undersigned has jurisdiction of the parties and this dispute pursuant to Section 718.1255, Florida Statutes. Election Section 718.112(c), Florida Statutes, provides in pertinent part: An election is not required if the number of vacancies equals or exceeds the number of candidates. For purposes of this paragraph, the term candidate means an eligible person who has timely submitted the written notice, as described in sub-subparagraph 4.a., of his or her intention to become a candidate. (emphasis supplied.) The Association received five (including Cesar Vazquez s) timely notices of intent. Since seven seats were up for an election, an election was not required. The Association did not accept Mariano Ceamanos notice of intent because he did not include a completed background check with his notice of intent. The notice of election did not include such a requirement, and even if it did, the statute does not permit the Association to add requirements to be an eligible candidate. 1 The statute clearly defines an eligible candidate to be a member who timely submits a notice of 1 Section 718.112(2)(d)(2), Florida Statutes, further defines who is eligible for the board as follows: A person who has been suspended or removed by the division under this chapter, or who is delinquent in the payment of any monetary obligation due to the association, is not eligible to be a candidate for board membership and may not be listed on the ballot. A person who has been convicted of any felony in this state or in a United States District or Territorial Court, or who has been convicted of any offense in another jurisdiction which would be considered a felony if committed in this state, is not eligible for board membership unless such felon s civil rights have been restored for at least 5 years as of the date such person seeks election to the board. Page 5 of 8
intent. 2 Mario Ceamanos timely submitted his notice of intent, therefore he was an eligible candidate for the board. The Association argues that since fewer candidates timely submitted notices of intent, the existing board holds over. Section 718.112(d)(2), Florida Statutes, states in pertinent part: If the number of board members whose terms expire at the annual meeting equals or exceeds the number of candidates, the candidates become members of the board effective upon the adjournment of the annual meeting. Unless the bylaws provide otherwise, any remaining vacancies shall be filled by the affirmative vote of the majority of the directors making up the newly constituted board even if the directors constitute less than a quorum or there is only one director. Therefore, only the candidates who timely submitted their notices of intent are members of the board. The terms of Gerald Kratz, Rebecca Ramos and Jose Elguezabal s have expired and they are no longer directors. Because the directors who appointed Blanca Rivas were not the proper board, her appointment is null and void. Thus, the Association s directors are: Petitioner, Leonard Anthony, Alfred Hernandez, Cesar Vazquez and Mariano Ceamanos. Contract Renewel Section 718.112(c), Florida Statutes provides in pertinent part: Meetings of the board of administration at which a quorum of the members is present are open to all unit owners. Members of the board of administration may use e-mail as a means of communication but may not cast a vote on an association matter via e-mail. The Association argues that it is entitled to a directed verdict on this allegation because the Petitioner presented no evidence at trial. However, the Association admitted in its 2 The Association required that the candidate also submit a condominium certification with his/her notice. Pursuant Section 718.112(d)(4)(b), Florida Statutes, the form needs to be completed within 90 days of being elected or appointed. Therefore, the form does not need to be submitted with the notice of intent. Page 6 of 8
answer that the contract was entered into by the Association without a vote at a meeting after the President of the Association sent an email to the other directors for input. Facts admitted in an answer are taken as true and require no proof. Griffith v. Henderson, 55 Fla. 625 (Fla. 1908). The Association argues there is no requirement in the Association s governing documents that require it to vote on any or all contracts. This argument has no merit. The Association may only act through its directors. Boca Cove Home Condo. Ass n, Inc. v. Basile, Arb. Case No. 93-0207, Notice of Correspondence and Order Denying Motion for Disqualification (March 21, 1994). The only way to determine the will of the majority of the directors is through a vote. The question should be whether the President under the governing documents has authority to enter into contracts without the vote of the directors. The Association has provided no citation to its governing documents that permitted the President to renew the management company s contract without approval of the majority of the directors. While the directors may communicate through email, the vote was required to be at a meeting open to all members. Based upon the foregoing, it is ORDERED: 1. The Association s board of directors are: Philip Andrysiak, Leonard Anthony, Alfred Hernandez, Cesar Vazquez and Mariano Ceamanos. The board may appoint the directors to the two vacant seats as permitted by law. All terms end at the next annual election. 2. Within five full business days from the effective date of this Order, Blanca Rivas, Gerald Kratz, Rebecca Ramos and Jose Elguezabal shall deliver to the board any and all records of the Association in their possession. Page 7 of 8
3. No later than November 12, 2015, the Association shall hold a properly noticed open meeting to discuss and vote on ratification of the 2014 renewal of the contract between the Association and Innovated Property Management Services of South Florida, Inc. DONE AND ORDERED this 13 th day of October, 2015, at Tallahassee, Leon County, Florida. Terri Leigh Jones, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida 32399-1030 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 Rule 61B-45.048, Florida Administrative Code. 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 email to the following persons on this 13th day of October, 2015: Mario G. Menocal, Esq. 815 NW 57 th Ave., Suite 315 Miami, FL 33126 Email: service.address@mgmpa.com Attorney for Petitioner Paul A. McKenna, Esq. 1360 South Dixie Highway Suite 100 Coral Gables, FL 33146 Email: paul@pmcklaw.com Attorney for Respondent Terri Leigh Jones, Arbitrator Page 8 of 8