Opinion By Jan Bergemann
April 9, 2006
Here we have another example how certain presidents choose to squander their associations’ money just to push their own agenda. The President of this association has been a board member for eight of the last ten years. But, according to the arbitration ruling, he must have forgotten to read the regulations and laws pertaining to Florida homeowners' associations. If you see the history of this association, reports haven't been filed timely, so the association legally ceased to exist for a period of time. There are many other issues that need to be resolved, but it seems the president is busier trying to silence his opposition than to take care of business.
In this case it's not a matter of whether or not the members really wanted to recall the board member, but the way it was attempted, under the leadership of the president. This president of the HOA wanted somebody in office who follows his party line rather than somebody who sometimes criticizes his leadership.
As the arbitrator stated in her ruling (quote): "Virtually none of these requirements were complied with by the members seeking t he recall or by the association, which would have to be considered complicit with the homeowners seeking the recall in failing to follow the rules."
In other words: ‘Everything that could have been done wrong was done wrong!’
It shows that the board members in charge would rather choose to squander their neighbors' money instead of taking a few minutes to learn how things should be done. And now that they received a devastating ruling that clearly shows their incompetence, they are scrambling and trying to avoid the consequences.
If they don't comply with the ruling -- word
by word -- it will create even more legal fees for the association, meaning the
owners. (We saw in Indian Creek
Indian Ph. III-B HOA, when the board fought the Jupiter flag man, what happens
if the owners let a few individuals run the show -- and let them make the
decisions.) Already it has
cost the Bella Vista HOA members large amounts in legal fees -- and more
payments are still looming -- after they finally lost the battle.
Community leaders have the fiduciary duty to work for the welfare of the community. Part of this duty is to take a little time to read the governing documents and the statutes regulating homeowners' associations. If they don't -- you see the results in arbitration rulings like this.
When will the HOA neighbors
finally realize that it's their money being squandered by uninformed actions of
When will the Florida taxpayers finally realize that it’s their money being squandered by this kind of ignorant and incompetent “leaders”?
Division of Florida Land Sales, Condominiums, and Mobile Homes (Division)
received this petition for mandatory binding arbitration for an election and
recall dispute on February 7, 2006. The
petitioners are Ellie Patrone, a former board member who asserts that her recall
was improperly certified by the association, and Susan Giza, a current board
member. The Bella Vista Homeowners
Association, Inc., (association) is named as the respondent in the petition.
The Division assigned this case to the undersigned arbitrator.
petition for arbitration describes what, is more commonly known as a reverse
recall," which qualifies for mandatory binding arbitration pursuant to
section 720.31 1 (1), Florida Statutes, and over which the arbitrator has
jurisdiction. In a reverse recall,
the petitioner alleges, essentially, that the association failed to comply with
section 720.303(10), Florida Statutes, and the rules promulgated pursuant
After consideration of the petition for arbitration and the answer, and the exhibits to both, and after a case management conference with the parties held on March 24, 2006, by telephone, it was apparent that no relevant facts were in dispute and an evidentiary hearing would not be necessary. Therefore, this order is based on the parties' pleadings, the exhibits and documents submitted with the pleadings, and undisputed statements made during the case management conference.
1. The Bella Vista Homeowners Association, Inc.,, (association) is a "Homeowners' Association" or "Association" as defined in section 720.301(9), Florida Statutes. Its voting membership is made up of parcel owners or, their agents and membership in the association is mandatory for the parcel owners. The association is responsible for the operation of the Bella Vista community.
2. The petitioners
are members of the association. Both
petitioners, Ellie Patrone and Susan Giza, were board members at the time of the
2006 annual meeting
of the association. Ms. Patrone was the secretary of the association and had one more year left on her term as a board member.
3. The Bella Vista Homeowners' Association; Inc., has 136 voting interests. A majority of the voting interests, or 69 votes, are necessary to recall a board member. The board of directors has five board members.
The annual meeting of the association was held on January 24, 2006.
According to the minutes of the meeting prepared by the respondent, the
meeting was called to order and the president, Mr. Pick, announced that he
"was in receipt of a recall petition for board director E. Patrone and
asked for a 15-minute postponement of the members [sic] meeting so that a
special board meeting could be held to consider the petition." The board
determined that 48 hours notice of a board meeting was required, and two of the
board members, the petitioners in this case, would not waive the notice
requirements. Therefore, the board
determined that the petition, apparently a written recall agreement, could not
be considered at that time.
5. After it was determined that the written recall agreement could not be addressed by the board at the annual meeting, a motion was 'made "to suspend the normal order of business to consider a motion to remove E. Patrone from the board. After some discussion, the motion passed by a vote taken by a show of hands." A motion was then made and seconded to remove Ms. Patrone from the board of directors. A discussion ensued determining the procedure to follow and the number of votes sufficient for removal. Ballots were distributed by the president using the phone list for distribution and registration purposes. The president and others apparently used the general proxies they held for use at the annual meeting to vote in the recall election
The ballots were counted by the election counters, and it was announced that of the 104 members present in person or by proxy, 74 members had voted to recall Ms. Patron and 28 had voted to retain her. Ms. Patrone was then summarily removed from the board of directors.
6. After the recall of Ms. Patrone, the election of the new directors was held. The president announced that although the ballots indicated that each member should only vote for three candidates for the board, members should now vote for four candidates, with the candidate receiving the fewest votes being the replacement board member for Ms. Patrone. The four candidates receiving the greatest number of votes were C. Rathke, 78; D. Cicotte, 69; R. Seh, 67, and M. Pick, 67. Since two candidates tied for receiving the fewest votes of the winning candidates, it was announced that the director who would serve the one-year term, i.e. Ms. Patrone's replacement, would be determined at the following organizational board meeting.
7. The organizational board meeting was held on January 30, 2006, The minutes of the meeting reflect that the four members elected at the annual meeting were now considered members of the board, which was in accord with the action taken at the annual meeting. However, in an apparent attempt to comply with the rules and statute governing recalls, the new board "certified" the recall of Ms. Patrone from the board of directors and also voted to remove Ms. Patrone as the secretary of the association, in effect ratifying action that had already been taken by the association.
8. At the outset of the "organizational" meeting, according to the minutes, the president stated that
main purpose of the meeting was to decide what to do with the recall
petition received at the annual meeting. Since the recall by the members
had made the petition moot, M. Pick recommended that the petition be accepted without certification, sealed and sent to the association attorney for custody. A motion was made to do same, (D. Cicofte) and seconded (R. Seh). There followed some discussion during which S. Giza noted that we should certify the petition since the recall will be challenged. The motion as presented (without certification) passed with a four to one vote, S. Giza voting Nay. (emphasis in original)
No further action was taken on the written recall agreement.
9. Although it was not recorded in the minutes, Ms. Giza, who is on the board and was at the meeting, reported during the case management conference that at the meeting Mr. Pick announced that Mr. Seh and Mr. Pick flipped a coin to determine who would serve the one-year term, i.e. be Ms. Patrone's replacement, and who would serve the full term and that Mr. Seh was determined to be the replacement board member for Ms. Patrone. Mr. Seh was at the board meeting when Mr. Pick made the announcement and did not dispute the statement. The respondent agreed that Mr. Seh was the replacement board member.
10. The petition for arbitration challenging the association's actions certifying the recall of Ms. Patrone was filed on February 7, 2006.1 The association's answer was filed on March 16, 2006, and the case management conference was held on March 24, 2006.
OF LAW 2
proceeding is governed by sections 720.311(l), 720.303(10), and 718.112(2)0),
Florida Statutes, and Chapters 61 B-81 and 61 B-80, Florida Administrative Code.
The arbitrator has jurisdiction over the parties to and the subject
matter of the proceeding pursuant to section 720.31 1 (1), Florida Statutes.
1 Due to the original petition and exhibits being misplaced after receipt by the Division, the petition for arbitration was not received by the arbitrator until February 20, 2006.
label "Conclusions of Law" is for organizational purposes.
Some facts may be stated for the first time in this section.
Section 720.303(10), Florida Statutes, provides as follows:
1. Regardless of any provision to
the contrary contained in the governing documents ... any member of the board of
directors may be recalled and removed from office with or without cause by a
majority of the total voting interests.
1. Board directors may be recalled
by an agreement in writing or by written ballot without a membership meeting.
1. If the declaration, articles of
incorporation, or bylaws specifically provide, the members may also recall and
remove a board director or directors by a vote taken at a meeting.
If so provided in the governing documents, a special meeting of the
members to recall a director or directors of the board of administration may be
called by ten percent of the voting interests giving notice of the meeting as
required for a meeting of members, and the notice shall state the purpose of the
The board shall duly notice and hold a board meeting within 5 full
business days after the adjournment of the member meeting to recall one or more
directors. At the meeting, the
board shall certify the recall, in which case such member or members shall be
recalled effective immediately or shall proceed as set forth in subparagraph
If the board determines not to certify the written agreement or written
ballots to recall a director or directors of the board or does not certify the
recall by vote at a meeting, the board shall, within 5 full business days after
the meeting,, file with the department a petition for binding arbitration
pursuant to the applicable procedures in ss.. 718.112(2)0) and 718.1255 and the
rules adopted thereunder.
As stated above, the members of a homeowners' association may recall a director at a meeting of the members if the governing documents of the association provide for a recall by vote at a meeting. If so, "a special meeting of the members to recall a director or directors of the board of administration may be called by ten percent of the voting interests giving notice of the meeting as required for a meeting of members, and the notice shall state the purpose of the meeting."
Section 5 of the bylaws of the association provides that the annual members meeting shall be held on the second Monday in January each year, and that the purpose of the meeting "shall be to elect directors and to transact any other business authorized to be transacted by members...." During the case management conference held on March 24, 2006, the respondent asserted that this provision was sufficient to support the action taken at the annual meeting to recall Ellie Patrone, when read in conjunction with section 12, which states that "[a]ny director may be removed by concurrence of two-thirds of the votes of the entire membership at a special meeting of the members called for that purpose." In effect, respondent argues that section 12 authorizes the recall of a board member at a homeowners' meeting, and section 5 authorizes the members to transact "any other business authorized to be transacted by members," and therefore the recall of Ellie Patrone at the annual meeting instead of a special meeting was appropriate. However, this argument ignores the rest of the language of section 12, which authorizes a recall by vote only "at a special meeting of the members called for that purpose." Further, it ignores the statute, which also requires that the recall be at "a special meeting of the membership recall a director or directors of the board."
argument that Ms. Patrone's recall a the annual meeting was valid because
section 5 authorizes the members "to transact any other business authorized
to be transacted by the members," ignores not only the fact that the
members are only authorized to recall a board member at a special meeting called
for that purpose, but it also ignores the notice requirements for the
association's annual meetings. Section
7 of the bylaws states that the notice of members' meetings must be provided at
least fourteen days before the meeting
Regardless of the interplay between the various sections of the bylaws of the association or the procedures set forth in the bylaws for a recall at a meeting, the Division has promulgated rules that govern a recall at a homeowners' meeting when the bylaws authorize a recall by vote at a meeting. Rule 61 B-81.002, Florida Administrative Code, reads, in pertinent part, as follows:
(1) Calling a Recall Meeting. If the governing documents specifically allow a recall at a homeowners' meeting, 1 0 percent of the voting interests may call a meeting of the homeowners to recall one or more directors of the board by the voting interests giving the notice specified in paragraphs (2)(a) and (b) below.
Noticing a Recall Meeting
Signature List. Prior to noticing a homeowners' meeting to recall one or more
directors of the board, a list shall be circulated for the purpose of obtaining
signatures of not less than 10 percent of the voting interests.
Recall Meeting Notice. The
recall meeting notice shall:
State that the purpose of the members' meeting is to recall one or
directors of the board and, if a majority or more of the board is subject to
recall, the notice shall also state that an election to replace recalled
directors will be conducted at the meeting:
List by name each director sought to be recalled at the meeting....
Specify a person, other than a director subject to recall at the
who shall determine whether a quorum is present, call the meeting to order,
preside, and proceed as provided in paragraph (3)(b) of this rule;
List at least as many eligible persons who are willing to be candidates
for replacement directors as there are directors sought to be recalled....
Candidates for replacement directors shall not be listed when a minority of the
board is sought to be recalled, as the remaining directors may appoint
Have attached to it a copy of the signature list referred to in
(2) (a) above;
Be mailed or delivered to all homeowners as required in the governing
documents for a meeting of homeowners; and
Be delivered to the board at least 10 days prior to the recall meeting.
The notice shall become an official record upon actual receipt by the
Recall Meeting; Electing Replacements
Date for Recall Meeting. A
recall meeting shall be held not less
10 days nor more than 20 days from the date when the notice of the recall
meeting is mailed or delivered.
Conducting the recall meeting. After
determining that a quorum
be used to establish a quorum) and the meeting is
interests shall proceed as follows:
A representative to receive pleadings ... on behalf of the recalling
... shall be elected or designated by the presiding officer. 2. A person to
record the minutes of the recall meeting ... shall be elected or designated by
the presiding officer.
compliance with the provisions of subsections (1),
and (3) of this rule shall be required for the effective recall of
one or more directors of the board. (e.s.)
none of these requirements were complied with by the members seeking the recall
or by the association, which would have to be considered complicit with the
homeowners seeking the recall in failing to follow the rules.
Instead of the president observing that the motion to recall Ms. Patrone
at the association's annual meeting was out of order and failed to comply with
the bylaws as well as the statute and rules governing recalls by vote at a
meeting, the association, acting through its president, called a halt to the
business actually on the annual meeting's agenda, actively participated in the
recall activities, immediately recognized the recall of Ms. Patrone, and then
had the members vote for a replacement board member during the scheduled
Because the recall by vote at a members' meeting failed to comply with rule 61 B81.002(l),(2) and (3), Florida Administrative Code, as well as the statute and the bylaws, the certification of the recall cannot be affirmed.
the "petition for recall," presumably a written recall agreement, was
mentioned both at the annual meeting and at the subsequent board meeting, the
board determined that it was moot due to the recall of Ms. Patrone at the annual
meeting. Apparently, the board
never saw the actual written recall agreement, and the board voted to have it
sealed and given to the association's attorney for safekeeping.
Of course, at the time the board discussed what to do with the agreement,
the recall agreement was moot. Wrongfully
or not, Ms. Patrone was recalled at the annual meeting and was no longer on the
board at the time of the board meeting. The
recall was moot at that time because Ms. Patrone could not be recalled once
again. Although this case is
unusual because the recall at the annual meeting was clearly improper, normally
it would serve no purpose for a board to consider a written recall agreement to
recall certain board members after the board member or members had already been
recalled. What if the written
recall agreement is invalid? The
board could not certify an invalid agreement, and if it did not certify the
recall by written agreement it would have to file a petition for arbitration
explaining why the recall was not certified, which would cost the association
time and money. Meanwhile, of
course, the board members sought to be recalled would have already been
recalled. When a recall has been
certified, the recalling homeowners have gotten what they set out to
accomplish-the recall of the
On the other hand, the recalling homeowners should be allowed to pursue the recall in the event that the recall that was certified is successfully challenged, as in this case. Because recall ballots or petitions may be reused in a subsequent recall, there is no reason the homeowners seeking the recall cannot re-serve the written agreement on the board after the "recalled" board member has been placed back on the board.3 Of course, the recalling homeowners should not re-serve the written recall agreement unless they are sure it complies with the requirements of the statute and rule 61B81.003, Florida Administrative Code. . The board cannot properly certify a written recall agreement that does not substantially comply with the rule.
the association has asserted, in essence, that since the majority of the
homeowners at the annual meeting voted to recall Ms. Patrone, the, recall should
be certified, regardless of the rules and statute- because the recall was what
the majority of the homeowners wanted. Of course, the purpose of procedural rules is to ensure that
the will of the majority is actually carried out.
Procedural rules are not meant to be roadblocks to a successful recall,
but are put in place to guarantee that a board member who has been legitimately
elected by the homeowners is not removed from office by
3 If the agreement that was served on the board is the original and the recalling homeowners do not have a copy of it, they can get a copy of it by accessing the official records of the association. A written recall agreement becomes an official record of the association upon service of the agreement upon the board. Fla. Admin. Code R. 61 B-81.003(l)(h).
In Maya Marca Condominium Apartments, Inc. v. Unit Owners Voting for Recall, Arb. Case No. 2005-05-5661, Summary Final Order (January 7, 2005), the necessity of compliance with the rules governing recalls was explained as follows:
The administrative rules must be substantially followed for the recall ballot to be valid regardless of the intent of the individual voter. Although rules are to be liberally construed in favor of the right to vote, even when a right is a constitutional right it is subject to reasonable rules and regulations, as the Supreme Court recognized in Krivanek v. The Take Back Tampa Political Committee, 625 So. 2d 840 (Fla. 1993), stating:
Given its constitutional underpinnings, the right to petition is inherent and absolute. This does not mean, however, that such a right is not subject to reasonable regulation. Quite the contrary, reasonable regulations on the right to vote and on the petition process are necessary to ensure ballot integrity and a valid election process.
Pursuant to statutory authority, the division has established rules regulating the procedures to be followed in recalls by written agreement. For the recall to be successful, unit owners seeking to recall board members must substantially follow those procedures.
Based on the foregoing and on the failure of the recalling homeowners, as well as the association, to comply with section 720.303(l 0)(c), Florida Statutes, and rule 61 B-81.002, it is
Since the recall of Ellie Patrone by vote at the annual meeting did not comply with the statute or the rules of the Division, the recall of Ellie Patrone was not effective and should not have been recognized by the association and certified by the board. Ms. Patrone is reinstated to the board, effective immediately, taking the seat of the replacement board member Mr. Seh. Mr. Seh, who was designated to take Ms.Patrone's seat on the board of directors, shall immediately return to the board any and all association records and property in his possession.
AND ORDERED this 30th day of March 2006, at Tallahassee, Leon County, Florida.
Diane A. Grubbs, Arbitrator
Department of Business and Professional Regulation
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 and facsimile copy, where indicated, to the following persons on this 30th day of March, 2006:
Seminole E. #7B
Seminole E. #34A
Island, Florida 33404
Diane A. Grubbs, Arbitrator
Right to Appeal
order does not constitute final agency action and cannot be appealed to a
district court of appeal.
Fees and Costs
provided by section 720.31 1 (1), F.S., the prevailing party in this proceeding
is entitled to have the other party pay its reasonable costs and attorney's
fees. A party that represents
herself or herself or has a qualified representative is entitled to recover
costs, including the filing fee. Rule
61 B-80.123, F.A.C., requires that a party seeking an award of costs and/or attorney's
fees must file a motion seeking the award not later than 30 days after rendition
of this final order. The motion must be actually
received by the Division within this 30-day period and must conform to the
requirements of rule 61B80.123, F.A.C.
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