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IN RE: PETITION FOR BINDING ARBITRATION-ELECTION DISPUTE Case No. 2005-01-6667 Wallace
A. Ritchie and Deborah M. Ritchie, Petitioners, V. Spruce Creek Property Owners' Association, Inc., Respondent. SUMMARY FINAL ORDER Pursuant to rule 61 B-80.114, Florida Administrative Code, where there are no disputed facts, the arbitrator shall decide the dispute based on the pleadings and evidence presented by the parties. As there are no disputed issues of material fact, this summary final order is entered accordingly. PROCEDURAL HISTORY On March 23, 2005, the petitioners in this action filed a petition for arbitration naming Spruce Creek Property Owners' Association as the respondent. The petition challenges the manner, in which the association held elections for the board of directors in 2003 - 2005 among other disputes. On May 20, 2005, the association filed a motion to dismiss the petition arguing that the Division does not have jurisdiction over the disputes raised in the petition. The petitioners filed a response thereto on May 26, 2005. Specifically, the association argued that the Division does not have jurisdiction over disputes involving the 2003 and 2004 elections, the dispute concerning the “election committee", the dispute involving the vote on an amendment to the by-laws, the dispute regarding the appointment of board member Johnson to the board of directors and the organizational meeting following the annual meeting/election that took place on February 21, 2005. On June 10, 2005, the arbitrator issued an order in response to the association's motion, in which the motion was granted in part and denied in part. While the 2005 election disputes are subject to arbitration pursuant to rule 61B80.103, Florida Administrative Code, the arbitrator ruled that the allegations concerning the 2003 election would have been rendered moot by the following year's election, notwithstanding the allegations that the same type of infractions occurred in the 2004 and 2005 elections. See Cottone v. Bay Plaza Owners Association, Inc., Arb. Case No. 92-01 1 1, Order (July 22, 1992)(where the petition alleges that the board failed to properly conduct the 1 991 election, the dispute is rendered moot after the 1992 election has been conducted). However, the arbitrator ruled that the disputes relating to the 2004 election are within the jurisdiction of the Division as the board members have staggered terms and it appears that at least three board seats from the 2004 election were open and, not subject to the 2005 election. Accordingly, the order held that the disputes concerning the 2004 and 2005 elections were properly before the Division. The order further held that the disputes concerning the "election committee' and the appointment of board member Johnson to the board of directors are within the jurisdiction of an election dispute under rule 61 B-80.103, Florida Administrative Code, and are appropriate for arbitration. The disputes involving the vote on an amendment to the by-laws and the organizational meeting following the annual meeting/election that took place on February 21, 2005, were ruled ineligible for arbitration based on those disputes qualifying for mediation pursuant to section 720.311(2)(a), Florida Statutes. On June 30, 2005, the association submitted its answer alleging that the election procedures followed at the 2004 and 2005 elections were in compliance with all governing documents and the Florida Statutes. The respondent filed a reply to the association's answer on June 20, 2005.(1) On August 15, 2005, the petitioners filed a motion for summary final order and a supplement thereto, including a request for attorney's fees and costs, on August 29, 2005. The association filed a response to the petitioners' motions on August 29, 2005.(2) This order is entered after consideration of the full record in this matter. CONCLUSIONS OF LAW Section
720.306(9), Florida Statutes, provides the following: ELECTIONS.--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 shall be 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. Except as otherwise provided in the governing documents, boards of directors must be elected by a plurality of the votes cast by eligible voters. Any election dispute between a member and an association must be submitted to mandatory binding arbitration with the division. Such proceedings shall be conducted in the manner provided by s. 718.1255 and the procedural rules adopted by the division. (1)
The association's motion to strike petitioner's reply is denied and due
to the facts presented in the association's answer, no response is necessary
from the association and this summary final order may be entered based thereon. (2)
The rulings in the arbitrator's previous orders remain unchanged. As the rules governing election disputes in homeowners' associations do not provide procedures for the manner in which associations conduct elections, other than providing that election disputes are subject to arbitration with the Division under Chapter 61B-80, Florida Administrative Code, compliance with the statute and the association's governing documents are the only requirements.(3) Thus, the rulings herein will focus on whether the association has conducted annual elections in accordance with its governing documents and the appropriate provisions of Chapter 720, Florida Statutes. The 2005 annual meeting/election was conducted on February 21, 2005. According to its answer, the association is comprised of 1,606 total voting interests and 109 interests were present in person at the meeting and 435 were present by proxy. Thus, a total of 544 interests were present, either in person or by proxy, in compliance with quorum requirements of section 720.306(l), Florida Statute, requiring 30% of the voting interests to achieve quorum, unless a lower number is provided in the bylaws. As the bylaws require a higher percentage for quorum, the statute controls and 30% is required. With 1,606 voting interests, quorum is achieved with at least 482 interests. However, the petitioners claim the proxy form utilized by the association is not valid as it does not provide a space for the homeowner's signature authorizing the proxy, rather, it only provides, a space for the homeowner's printed name, in non-compliance with section 720.306(8), Florida Statutes. Pursuant to section 720.306(8), Florida Statutes: (3) In contrast, rule 61B-23.0021, Florida Administrative Code, provides for specific requirements for compliance with elections conducted within condominium associations. 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.
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 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. The
arbitrator is not persuaded by the petitioners' argument that the proxy form is
facially invalid because it lacks a signature line.
The limited proxy form denotes at the bottom separate lines entitled
'NAME', 'ADDRESS', "UNIT NO (S)", and 'DATE.' The line entitled
"NAME' is sufficient for the homeowner to provide his or her signature
authorizing the limited proxy to be used at the 2005 election.
Accordingly, the limited proxy form utilized by the association is valid. Notwithstanding
the foregoing, the association's limited proxy, on its face, is only valid for
establishing a quorum at the February 21st
meeting and for no other purpose. The
language on the proxy reads as follows: THIS
LIMITED PROXY IS GIVEN SOLELY FOR THE PURPOSE OF ESTABLISHING A QUORUM AT THE
ANNUAL MEETING DESCRIBED ABOVE AND AT ANY AND ALL ADJOURNMENTS THEREOF.
THIS LIMITED PROXY IS GIVEN PURSUANT TO FLORIDA STATUTES FOR ESTABLISHING
A QUORUM AND FOR NO OTHER PURPOSE. Based
on the language cited above, the proxies are only valid for establishing quorum
at the annual meeting. Thus, the
435 interests represented by proxy at the In
evaluating the voting that took place at the annual meeting, article V(B.) of
the bylaws provides the following, in pertinent part: Candidates
for election as directors shall be elected by the vote of Members in
attendance or by proxy at a Members' Election Meeting held during the first
two weeks of November ... [emphasis added] Based on the clear language of the bylaws referenced above, the only manner in which directors can be elected is by vote of the members attending the meeting in person or by use of a proxy which authorizes the person named therein to vote in the named election. Voting via mail-in ballot is not permitted by the association's by-laws. Notwithstanding the association's argument that the bylaws do not disallow mail-in voting, the only two methods of permissible voting are in person voting or proxy voting, assuming a valid proxy agreement is utilized. When analyzing an association's governing documents, notions of statutory construction provide that these documents are susceptible to, basic rules of interpretation. Koplowitz v. Imperial Towers Condominium, Inc., 478 So.2d 504, 505 (Fla. 4th DCA 1 985). One of the basic principles of construction holds that the mention of one thing implies the exclusion of the other. Towerhouse Condominium, Inc. v. Millman, 475 So.2d 674, 676(Fla. 1985). The drafters of the bylaws specifically named those manners in which voting may occur, that is, by voting in person at the election meeting or by the use of a valid voting proxy. If the drafters had intended to allow for voting by mail-in ballot, the bylaws would have reflected such an intent as it did so with in person voting and proxy voting.(4) As only 109 members appeared at the meeting and assuming all of these interests voted in the election, the voting tallies indicated in the minutes for the February 21st meeting citing board candidate Ray Gage as receiving 265 votes, Steve, O'Donnell receiving 395 votes and Tim Plunkett receiving 345 votes(5), show that the association must have permitted votes received by mail-in ballots(6), which is invalid because the bylaws do not allow for votes to be cast by mail-in ballot.(7) By allowing mail in voting in contravention of its governing documents, the association failed to properly conduct its 2005 and prior elections; thus, the elections are declared invalid.(8) Because a letter addressed to the petitioner and signed by Karla Baumann, association manager, indicates that due to the use of secret ballots, it is unknown which votes were cast by voting interests appearing for the election meeting in person and which votes were cast by mail-in ballots, it cannot be determined how the 109 members present at the meeting voted in order to determine which candidates received the most votes f or the open board seats. Accordingly, a new election will be ordered. Regarding the two remaining disputes, while the association has the power to nominate an election committee, it seems appropriate that to' ensure the validity of the election process, that votes shall be counted at the election meeting in view of the membership in attendance. (4) Certainly, if the members wish to include voting. by Mail-in ballot as an acceptable voting procedure, the bylaws may be amended, assuming the proper vote is obtained. (5) Apparently several other members received one or two votes for election to the board. (6) Having received the most votes for the 2 open board seats, Mr. O'Donnell and Mr. Plunkett were declared the winners of the election and seated on the board. (7) While it does not appear that votes were cast with the proxy form used to establish quorum, such voting would be improper as the proxy states on its face that it is only valid for quorum purposes. (8) The association admits in its answer that the same voting procedures were used in the 2005 elections and previous elections. The dispute regarding the appointment of board member Johnson to the board of directors is deemed moot as a new election will be conducted. It is therefore ORDERED: 1 . Within thirty (30) days of the date of this order, the association shall deliver a notice of special election to the association membership to be conducted within forty-five (45) days of the date of the notice of special election. Such notice shall include a notice of candidacy for interested members to be submitted at least ten (10) days prior to the date of the intended election and may also include a proxy for the use of establishing quorum and/or an appropriate proxy for voting purposes. 2. All five board seats shall be open for this special election. So as to preserve the staggered terms for board members, the three (3) candidates receiving the most votes will have an initial two year term and the remaining two (2) winning candidates will have a one year term to expire in 2006. Thereafter, board members will have one year staggered terms as determined in the bylaws. 3. Because article V of the association's bylaws indicates that elections are to be held in November of each year, with board members taking office in January or February of the following year, it seems illogical to order a special election just a month or so before the upcoming November 2005 election date.(9) As such, the special election ordered herein shall take the place of the November 2005 (9) It does not appear that the association followed this procedure as the 2005 election actually occurred in February 2005 and not in November of the preceding year. election; however, the duly elected board members shall take office immediately upon the conclusion of the meeting and release of the election results. DONE AND ORDERED this 31st day of August 2005, at Tallahassee, Leon County, Florida.
Certificate of Service I hereby certify that a true and, correct copy of the foregoing summary final order has been sent by U.S. Mail to the following persons on this 31st day of August 2005: Wallace & Deborah Ritchie 2 Lazy Eight Drive Port Orange, Florida 32128 Petitioners Harry W. Carls, Esq. Robyn Severs Braun, Esq. Taylor & Carls, P.A. 850 Concourse Parkway South Suite 105 Maitland, Florida 32751 Attorney for Respondent
SIGNATURE
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Melissa Mnookin, Arbitrator |