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An
Opinion By Jan Bergemann April 12, 2006
This was a real interesting recall. Read about all the tricks the former board tried to avoid being recalled. They even hired a certified forensic document examiner to prove that petitions were pre-marked by hand or otherwise completed by someone other than the individual casting the vote.
The new board is already cleaning house. In a special meeting the licensed manager was let go, with and without cause! This case is far from over. There is a lot more to come! Just read the arbitration ruling. It's an eye-opener showing how certain board members cling to their seats on the board. And all at the expense of the homeowners, who pay for recalling a bord that uses their money to avoid a majority decision!
IN
RE-.
PETITION FOR BINDING ARBITRATION-RECALL DISPUTE Sandpointe Townhouses Owners' Association, Inc., Petitioner, V.
Case
No. 2006-00-7925 Homeowners Voting for Recall, Respondent. SUMMARY
FINAL ORDER BACKGROUND On
February 10, 2006, Sandpointe Townhouses Owners' Association, Inc. (petitioner
or association), filed a petition for recall arbitration with the Division
seeking affirmation of its decision not to certify a recall by written
agreement. (1) The group of homeowners
who voted (1)
This
recall agreement was the second of two served on the board, with the first
recall agreement served on January 18, 2006. The first recall agreement was also
rejected by the board and subsequently forwarded to the Division for recall
arbitration. At the time of service
of the second recall agreement, the first recall arbitration was pending,
however, on February 17, 2006, the parties agreed that a summary final order
should be entered in the first recall proceeding.
Accordingly, a summary final order was entered on February 17, 2006,
affirming the board's decision not to certify that recall, as the recall
agreement failed to include separate recall and retain lines next to each board
member sought to be recalled. See
Pre-Hearing Order, Arb. Case No.
2006-00-7925 (February 17, 2006). Order to Show Cause, A . Case No 2006-00-3035
(February 1, 2006). to recall the board members was named as the respondent in this action. On February 17, 2006, an Order Allowing Answer was issued and on February 20, 2006, an Amended Order Allowing Answer was issued as a result of the respondent's motion for an extension of time to respond, Also, on February 17, 2006, a pre-hearing conference to define the issues was held and a Pre-Hearing Order summarizing the conference was issued. On March 9, 2006, the respondent timely filed an answer to the petition, denying the validity of the three reasons asserted by the board in rejecting the recall agreement. Both parties have submitted numerous filings to support their arguments, including affidavits of the association manager and members voting in the recall and video recordings of the meetings. FACTS The
homeowners' association consists of 368 total voting interests, which would
require 185 votes to recall a board member.
On January 27, 2006, the association was served with a written recall
agreement in an attempt to recall five of the seven members of the board.
The board members sought to be recalled are: Sheila Somers, Bethany
Prendergast, (2)
Dennis Smeltz, Harvey Heard and Phyllis Rampulla.
A total of 202 votes were attained for the recall of members Somers and
Prendergast, separately, and 201 separate votes were attained for the recall of
members Smeltz, Heard, and Rampulla. (2) The petition states that Ms. Prendergast resigned from the board on January 20, 2006, and was replaced after service of the second recall agreement by Earl Lear. This appointment, however, does not affect the initial recall attempt of the five seats, as the filling of this vacancy is temporary pending the arbitration decision. See Oak Park Villa Condo. Assn. of Jacksonville, Inc,v. Unit Owners Voting for Recall, Arb. Case No. 2006-00-4080, Summary Final Order (February 21, 2006) On
February 2, 2006, the association held a meeting, where counsel for the
association suggested the following three reasons for rejecting the recall: I
Twenty-seven (27) ballots were completed or pre-marked by someone other
than the signatory, 2.
Nine (9) ballots were rejected for miscellaneous reasons other than
pre-marking, including ballots cast by non-homeowners, suspect signature, ballot
signed by remainderman. 3.
Forty-one (41) ballots were over 90 days in arrears according to
association records and therefore the delinquent voters were not entitled to
cast a vote per resolution of the board and the governing documents of the
association. A majority of the board voted not to certify the recall based on the above-stated reasons. The minutes of the meeting filed with the petition for arbitration included these three reasons, along with respective lists of the rejected ballots and members alleged to be in arrears, as announced at the meeting. DISCUSSION 1.
PRE-MARKED BALLOTS The
association alleges that 27 ballots (3)
were properly rejected as pre-marked by hand or otherwise completed by
someone other than the individual casting the vote. This assertion is based on
" uniform check marks on the recall/retain lines and replacement directors
with different ink used on the signature lines." In support of the
petitioner's allegation, a forensic examination of the ballots was conducted.
This examination was performed by Thomas W. Vastrick, a certified forensic
document examiner by the American Board of Forensic Document Examiners. Mr.
Vastrick has offices in Orlando, Florida and Memphis, Tennessee.
Mr. Vastrick's findings were included
in a Forensic Document Examination Report (the report), (3)
The ballots
utilized by the respondent were identical to, if not copies of, the sample
recall ballot provided on the Division's website at www.myflorida.com/dbprllsclhoa dated
March 14, In
her order dated February 24. 2006, the arbitrator held that only the ballots
specifically identified as being pre-marked in the meeting minutes could be
considered on this basis, in spite of the petitioner's argument that other
ballots should also be rejected as pre-marked should the document expert so
find. Reasoning
for the arbitrator's disallowing the petitioner the opportunity to submit
additional ballots or reasons for rejecting additional ballots is based on the
principle behind rule 61 B81.003(4)(f), Florida Administrative Code, which
requires the meeting minutes to include the specific reasons for the board's
failure to certify the recall, including specifically identifying each ballot,
and on numerous recall arbitration cases whereby the arbitrators refused to
consider additional grounds or ballots not identified raised that were not
identified in the meeting minutes (nor, in this case, in the petition for
arbitration). The
reasoning is simple.
To allow a petitioner the opportunity to supplement its reasons stated at
the recall board meeting ignores the statutory time limits imposed by the
Legislature and the requirement that the board, at that meeting, identify each
ballot rejected and announce the basis for its decision to certify or not
certify the agreement. (4)
In the
Order of February 24, 2006, the petitioner was advised that expert testimony was
required to "At some point, regardless of the nature of the grounds for rejecting the recall, the issues must be defined and ruled upon." See Cape Palms Condo. Assn., Inc. v. Unit Owners Voting for Recall, Arb. Case No. 2003-07,9946, Summary Final Order (January 28, 2004). Therefore, in accordance with the pre-hearing order of February 17, 2006, only the initial 27 challenged ballots can be considered, and of those, only the seven ballots determined by the petitioner's expert as "contain[ing) checkmarks that bear evidence of common authorship" could be considered pre-marked These ballots are identified as: 1) Kenneth and Thelma Payne; 2) Cecilia Bautista (8265); 3) Shesha Milty Khanna; 4) Joseph Bret Voisin; 5) Farheen Mahmood Revocable Trust; 6) Sandra Rose Schunkde Araujo; and, 7) John DeChristopher.
II.
90-DAY DELINQUENCY Forty-one
(41) ballots were rejected based on delinquent member accounts over 90 days.
The minutes include a listing entitled “Recall residents over 90 days in
arrears." The petitioner argues that the authority of the association to
suspend a member's right to vote where the1(b), which reads: Section
1. Powers- The Board of Directors shall have the power to: ***** (b)
suspend the voting rights and right to use of the recreational facilities
of a member during any period in which such member shall be in default in the
payment of assessment levied by the Association. Such rights may also be
suspended after notice and hearing, for a period not to exceed 60 days for
infraction of published rules and regulations. Section
720.305(3), Florida Statutes, permits such suspension as follows: If the governing documents so provide, an association may suspend the voting rights of a member for the nonpayment of regular annual assessments that are delinquent "in excess of 90 days. [emphasis supplied.] Based
on the "accounts in arrears” listing provided in the meeting minutes, the
arbitrator is unable to determine if the delinquent amounts are indeed regular
annual assessments. However, the
petitioner filed a supporting affidavit of Neville Spracklen, the association's
certified manager. Included with
the affidavit are copies of late notices to members dated September 15, 2005,
along with corresponding account detail The
respondent, however, in footnote 1 of the answer, argues that these late fees
are not regular annual assessments and, therefore, the association's authority
to suspend the voting rights for late fees is unfounded.
The respondent states: Petitioner
assesses a late fee of $15.00 in the event that a homeowner has not paid his or
her account by the fifteenth day of the month in which it falls due. These "late fees" are not "regular annual
assessments," and therefore -- assuming purely arguendo
- that these "late fees" are due, the recall votes of these
twenty-one homeowners would not be disqualified on that basis.
Furthermore, there is absolutely no authority in either the Declaration,
By-laws, or the Articles of Incorporation governing Petitioner that authorize
the levying of "late fees' in any event. The
arbitrator agrees with the respondent in that the monthly late fees charged by
the association are not regular annual assessments in that section 720.301(1),,
Florida Statutes, defines an assessment as follows: "Assessment"
or "amenity fee" means a sum or sums of money payable to the
association, to the developer or other owner -of common areas, or to
recreational facilities and other properties serving the parcels by the' owners
of one or more parcels as authorized in the governing documents, which if not
paid by the owner of a parcel, can result in a lien against the parcel, (5)
In his affidavit, Mr. Spracklen admits that the account of Barry and Rebecca
Poston was current at the time of the recall and therefore, this ballot was
improperly rejected, Mr. Spracklen also admits that the association's financial
records were inaccurate prior to his employment by the association in
October 2005, due to previous mismanagement of the financial accounts and
due to the association database being infected with a computer virus in July
2005. He believes, however, that
the financial records of the association, including the account detail sheets
relied upon during the recall are now accurate. Therefore, the board's determination that 41 ballots were invalid because of “arrears" in excess of 90 days is unjustified. Interesting, however, is the fact that on January 18, 2006, shortly after the association filed the petition for arbitration in the first recall and prior to service of the second recall agreement, a meeting was held by the board whereby the board announced by way of "resolution" that it would thereafter enforce the provisions of article VII, section 1(b), which allows the suspension of voting rights for members delinquent in the payment of assessments. Of course, the implementation of this new policy (although already provided in the governing documents), would possibly invalidate approximately 19 ballots (6) cast in the second recall. Based
on the arbitrator's viewing of the recording of the January 18, 2006, meeting,
the board focused solely on the board's ability to enforce the voting suspension
provision, either by way of resolution or by mere authority granted in the
governing documents, but failed to even discuss methods of collecting the
delinquent "fees" and assessments or procedures for implementing this
provision. Additionally,
the agenda for this interim meeting did not include any mention of the future
enforcement of the voting suspension provision (the board took up the
"resolution" item at the end of the meeting), which indicates that the
board's desire to derail the recall effort, rather than its desire to collect
outstanding "fees" and assessments, was the motivating factor for the
suspension of voting rights at this time.
Because the board had not previously enforced this voting suspension
provision, the board cannot, in the face of a recall effort, rely on its
authority to suspend voting rights to disenfranchise otherwise eligible voters (6)
This
count is based on the 19 members whose accounts were listed in the petitioner's
"arrears' listing provided in the meeting minutes and delinquent over 90
days in amounts other than $15.00,
$45,00, and $60.00, plus the exclusion of Barry and Rebecca Poston. participating in the recall. This situation is analogous to a board deciding to reject a recall agreement because no voting certificates were on file with the association at the time the recall agreement was served on the board even though the board has never enforced the requirement in past elections. See Florida Ocean Club Condo. Assn., Inc. v. Unit Owners Voting for Recll, Arb. Case No, 03-6024, Summary Final Order (March 17, 2003)(fallure to have a valid voting certificate on file with the association was not a valid basis for the board not to certify the recall where the association does not demonstrate enforcement of the voting certificate requirement in the past)-, The Decoplage Condo. Assoc., Inc. v. Unit Owners Voting for Recall, Arb. Case No. 025830, Amended Summary Final Order (January 16, 2003)(where an association has failed to enforce a voting certificate requirement in prior elections, the requirement will not be enforced in a recall arbitration to disenfranchise voters).
Based on the foregoing, the board's action taken at the meeting held on January 18, 2006, does not apply to the instant recall and, therefore, the 41 ballots rejected because of "arrears" were improperly rejected by the petitioner. III. MISCELLANEOUS REASONS As for the eleven (I 1) ballots rejected by the petitioner based on 'miscellaneous' reasons, only four were properly rejected by the petitioner. Ballots submitted by Katia Manjani and Maria Auge (8304 Sandpoint Blvd.) were properly rejected as not being the owner of record for the parcel. The ballot submitted by Bernard D. Klein failed to include a signature, therefore this ballot is invalid, regardless of the notary signature attached to the ballot. The ballot submitted by Johanna L. Kellog was properly rejected as Ms. Kellog is listed as the remainderman for the estate and no other adequate showing that Ms. Kellog is authorized to vote on behalf of the parcel has been made.
The ballots submitted by Thomas Cummings, Josephine Caputo, and Shesha Khanna were included as "miscellaneous" rejections, yet these three ballots were already rejected as pre-marked ballots by the petitioner. No other reason was given for their rejection, therefore, these ballots were addressed in the above discussion of premarked ballots. The ballots submitted by Maria Aughtman, Ralph W. Simon, III, and John D. Haupt shall be counted, as the respondent submitted deeds for each of the parcels showing that each of these homeowners are the owners of record and are thus authorized to cast their ballots. Last, as for "suspect signature" and the misspelled name on the ballot cast by Maximilien Beaux, the respondent submitted an affidavit whereby Mr. Beaux attests as to the authenticity of his ballot and explains in an attached letter that because his first name was misspelled on the county tax records as 'Miximilien," Mr. Beaux purposefully misspelled his name on the ballot. Mr. Beaux also states that he has since corrected his name on the county tax records.
Based on the foregoing, at most, 11 ballots (7 pre-marked and 4 'miscellaneous" rejected ballots) can be deducted from the 202 original votes attained for the recall of both Sheila Somers and Bethany Prendergast, and the 201 votes separately attained for the recall of Dennis Smeltz, Harvey Heard, and Phyllis Rampulla. This equals 191 votes for the recall of Sheila Somers and Bethany Prendergast, and 190 votes for Dennis Smeltz, Harvey Heard, and Phyllis Rampulla, separately. Therefore, a majority vote has been attained in the recall of Sheila Somers, Bethany Prendergast, Dennis Smeltz. Harvey Heard, and Phyllis Rampulia. It
is therefore ORDERED:
1.
The
recall of Sheila Somers, Bethany Prendergast, Dennis Smeltz, Harvey Heard, and
Phyllis Rampulla is hereby CERTIFIED.
2. Sheila
Somers, Bethany Prendergast, Dennis Smeltz, Harvey Heard, and Phyllis Rampulia,
or any individuals appointed to serve in their seats..shall step down as
directors of the board immediately.
3. Any
and all official records of the association still in the possession of
the recalled board members shall be turned over to the remaining board members
within five (5) calendar days from the date of this Order. 4.
The replacement directors are those directors receiving the highest
number of votes, who are: Morris Bodia, Rosalie Mocsary, Janet Scott, Regis
Emard, and Timothy Nycum.
These five replacement directors shall serve out the term for the
respective seat filled, DONE AND ORDERED this 24th day of March, 2006, at Tallahassee, Leon County,
________SIGNATURE____________
Susan Wilkinson Hamden, Arbitrator Division of Florida Land Sales, Condominiums & Mobile Homes,- Arbitration Section Dept. of Business & 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- Order' has been sent by facsimile and by U.S. Mail to the following persons on this 24th day of March, 2006:
Peter McGrath, Esquire 801 North Magnolia Ave., Suite 304 Orlando,FL 32803 Attomey for Petitioner James A. Gustino, Esquire 2433 Lee Road Winter Pa , FL 32789-1755 Attorney for Respondent
_____SIGNATURE________ Susan Wilkinson Hamden, Arbitrator |
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