DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS, AND MOBILE HOMES

ELLIE PATRONE and

SUSAN GIZA,

Petitioner,

V.                                                              Case No. 2006-00-8669

BELLA VISTA HOMEOWNERS

ASSOCIATION, INC.,

Respondent.

SUMMARY FINAL ORDER

BACKGROUND

The 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.

The 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 thereto, by improperly proceeding with a recall by vote at a meeting or a written recall agreement after service on the board.  The petitioner must also establish that the board committed fundamental error in certifying the recall.  In this case, the petitioner alleged, inter alia, that the homeowners voted for her recall at the annual meeting, not at a special meeting; failed to provide any notice that the recall would be on the agenda of the annual meeting; immediately removed her from the board at the annual meeting; and elected her replacement at the annual meeting by proclaiming that four board members would be elected rather than the three that had been announced.

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.

FACTS

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.

4.          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

the 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.

CONCLUSIONS OF LAW 2

This 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. 

2 The 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:

(a) 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.

(b) 1.  Board directors may be recalled by an agreement in writing or by written ballot without a membership meeting. ...

(c) 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 meeting. ...

2.         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 (d).

(d)         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."

Respondent's 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 and that the notice shall contain "the objects for which the meeting is called." The respondent did not dispute that the notice of the annual meeting did not mention that an object of the meeting was to recall Ms. Patrone.  Respondent asserted that section 11 of the bylaws, which sets forth the order of business at an annual meeting, includes "new business," which could include the recall of a board member.  However, since the recall of a board member by vote at a members' meeting is supposed to occur only at a special meeting called for that purpose, it is apparent that a recall election would at least have to be noticed.

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.

(2) Noticing a Recall Meeting

(a)     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.

(b)       Recall Meeting Notice.  The recall meeting notice shall:

1.       State that the purpose of the members' meeting is to recall one or

more 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:

2.       List by name each director sought to be recalled at the meeting....

3.       Specify a person, other than a director subject to recall at the

meeting, 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;

4.     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 replacements. ...

5.     Have attached to it a copy of the signature list referred to in

paragraph (2) (a) above;

6.     Be mailed or delivered to all homeowners as required in the governing documents for a meeting of homeowners; and

7.     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 board.

(3)          Recall Meeting; Electing Replacements

(a)          Date for Recall Meeting.  A recall meeting shall be held not less

than 10 days nor more than 20 days from the date when the notice of the recall meeting is mailed or delivered.

(b)       Conducting the recall meeting.  After determining that a quorum exists (proxies

may be used to establish a quorum) and the meeting is called to order, the voting

interests shall proceed as follows:

1.       A representative to receive pleadings ... on behalf of the recalling

homeowners ... 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.

   (4)       Substantial compliance with the provisions of subsections (1),

(2)     and (3) of this rule shall be required for the effective recall of one or more directors of the board. (e.s.)

Virtually 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 election for board members.  It was only after the replacement board member was already on the board that the board "certified" the recall of Ms. Patrone.

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.

Although 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 board member-and taking action on subsequent recall agreements would serve no purpose.  Therefore, the board should be able to declare the recall agreement moot without having to "certify" or "not certify" the recall of a board member who has already been recalled and without having the recall "deemed effective" by operation of statute, since the recall is already in effect due to the prior certified recall.

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.

Finally, 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 anything less than a true majority of the homeowners, who actually want this board member removed from office.

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

ORDERED:

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.

Certificate of Service

                                                                                          _____SIGNATURE________ 

                                                                                          Diane A. Grubbs, Arbitrator

                                                 Right to Appeal

This order does not constitute final agency action and cannot be appealed to a district court of appeal.

Attorney's Fees and Costs