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STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF LAND SALES , CONDOMINIUMS, AND MOBILE HOMES
IN RE: PETITION FOR BINDING ARBITRATION-ELECTION DISPUTE Steven and Kirn Jakubaitis,
Petitioners, Section 20 Property Owners' Association, Inc., Respondent. SUMMARY FINAL ORDER COMES NOW, the undersigned arbitrator, and issues this Summary Final Order as follows: Pursuant to Chapter 720, Florida Statutes, the Division has jurisdiction over election disputes between homeowners' associations and its members. Section 720.311(1), Florida Statutes, requires the Division to conduct mandatory arbitration of election disputes between a member and an association pursuant to section 718.1255, Florida Statutes, and the rules promulgated by the Division. Procedural History
These proceedings were instituted on January 3, 2005, by Petitioners, Steven and Kim Jakubaitis ("Petitioners"). Petitioners filed with the Division an election dispute petition, along with an amendment to their petition (which has been incorporated into the original petition), naming Section 20 Property Owners' Association, Inc. ("Respondent"), as Respondent. The petition alleges that Respondent improperly and in bad faith conducted the 2004 annual election of the association by: failing to timely hold the annual election in October 2004; failing to certify proxies provided by Petitioners prior to the noticed election meeting of December 6, 2004, as prescribed by the governing documents and as set forth in the meeting agenda; failing to conduct elections at the noticed election meeting of December 6, 2004, and therefore, postponing the elections; failing to certify or otherwise provide specific reasons for the failure to certify over 600 of the more than 900 proxies submitted on behalf of Petitioners prior to the annual election meeting; failing to specifically identify which proxies were rejected and which proxies were certified by the board; providing different, inconsistent ballots, and no ballots to some members at the election meeting; failing to amend ballots to reflect the resignation of candidate, Robert T. Evans; and, altering and announcing a different election outcome after the adjournment of the December 28, 2004, election meeting where the election results were announced initially announced by Respondent.
On February 14, 2005, Respondent filed its Answer and Affirmative Defenses to Petition with the arbitrator. On January 19, 2005, Petitioners filed a motion to conduct discovery with the arbitrator, and on January 20, 2005, Respondent filed a similar motion. On February 10, 2005, Petitioners also moved the arbitrator to compel Respondent's production of certain documents. On March 23,2005, Respondent submitted a substantial amount of supplemental information (occupying two large filing boxes), in response to arbitrator's Order Requiring Supplemental Information of March 4, 2005. On April 20, 2005, the arbitrator issued a Notice of Intent to Issue Summary Final Order, allowing the parties fourteen (14) days to submit any additional arguments. On April 28, 2005 Petitioners submitted its final memorandum on May 24, 2005, while Respondent requested an additional extension of time. On May 27, 2005, the arbitrator granted, in part, Respondent's Motion for Continuance, allowing Respondent to submit final arguments in this case no later than June 1, 2005. On June 1, 2005, Respondent submitted its final memorandum. After review of the pleadings and all evidence submitted on behalf of both parties, the arbitrator issues this summary final order, and finds the dispositive issue in this case is whether the election of December 28, 2004 was properly and in good faith conducted by Respondent. In order to resolve this remaining issue, other sub-issues raised by the parties will also be addressed , including, but not limited to, whether or not all candidates and ballot items should have been included on the ballots, and whether or not the results of the December 28, 2004, election were properly tabulated and the results accurately reported by Respondent. The order also hereby denies the discovery motions made by the parties in this matter. APPLICABLE LAW Whether or not the election of December 28, 2004, was conducted properly and in good faith by Respondent is based on the actions or inactions of Respondent and applicable law in this case. As for applicable law in the elections of directors of a homeowners' association, section 720.306(9), Florida Statutes, provides that the "[ejections of directors must be conducted in accordance with the procedures set forth in the governing documents of the association." In addition, section 720.302(5), Florida Statutes, further provides that: Unless expressly stated to the contrary, corporations not for profit that operate residential homeowners' associations in this state shall be governed by and subject to chapter 617 and [Chapter 720, Florida Statutes]. This subsection is intended to clarify existing law. Where the statute and the governing documents of the association are silent, the arbitrator shall look to the principles of fairness in the electoral process to determine whether the outcome of the election may be said with some assurance to reflect the will of the electorate. Discussion I. Holding of Election Petitioners claim that Respondent failed in its duty to conduct elections in the month of October, rather than December, in the 2004 fiscal year, as required by the association's governing documents. Petitioners also state that Respondent improperly postponed the first election meeting of December 6, 2004, until December 28, 2004. Although Respondent admits to both claims made by Petitioners, the Division finds that Respondent's conduct of the annual election meeting in the month of December rather than October, within the 2004 fiscal year, does not in and of itself require that the 2004 election be set aside. As for Respondent's postponement of the December 6, 2004, meeting until December 28, 2004, upon review of the evidence, the arbitrator finds that Respondent's reasons for postponing the election meeting of December 6, 2004, are singularly unpersuasive. The evidence shows that during the December 6, 2004, election meeting, board president, Lee Dunn, stated that the board secretary, Robert T. Evans, did not have sufficient time to count proxies submitted to Respondent, and thus, was unable to certify the proxies. Upon review of the evidence, Respondent had ample notice and time to count and certify the proxies, as Petitioners notified Respondent, via email between party counsels on December 2, 2004, that Respondent would be receiving "hundreds of proxies" for the December 6, 2004, election. {See Petitioner1 Exhibit #7.) Petitioners delivered their proxies to Respondent on December 6, 2004, on or around 9 a.m. (however, Petitioners, in their December 2, 2004, email to Respondent, offer to deliver Petitioners' proxies one hour earlier), in light of this evidence, and in light of the fact that Respondent, again, at the December 28, 2004, election, stated that it was unable to certify proxies at the December 28, 2004, election meeting—even though the certification of proxies is required in the governing documents and was listed as an agenda item at both of the election meetings, and even though the majority of the proxy ballots had been in the possession of Respondent since December 6, 2004—Respondent's postponement of the December 6, 2004, election meeting was improper. (See Petitioners Exhibit #1 of Petitioners' Amendment to Petition.)
II. Nominating Committee Petitioners claim that Respondent failed in its obligation to appoint a nominating committee as required in the association's governing documents. The association's bylaws are clear in the requirement that the board appoint a nominating committee for the election of directors prior to the annual members' meeting. Section 3.6(1), Substantial Rewording of Bylaws, Section 20 Property Owner's Association, Inc., states, in pertinent part:
A Nominating Committee of five (5) members shall be appointed by the Board of Directors not less than thirty (30) days prior to the annual members' meeting. The committee shall nominate the number of candidates needed to fill vacancies that may exist at the time of the annual meeting.
Although Respondent admits that a nominating committee was not appointed, Respondent denies Petitioners' allegation that Respondent had an obligation to appoint a nominating committee, as stated in paragraph "IP(d)" of Respondent's answer. Short of Respondent's denial that it had a legal obligation to do so. Respondent offers no supporting evidence as to why a nominating committee was not appointed. Petitioners claim that Respondent stated in documents prepared for and sent to members prior to the election that the election candidates had been nominated by the board-appointed "Nominating Committee," In direct contradiction to the statements contained in the election documents sent to members by the board, then-acting board president, Lee Dunn, stated at the December 6, 2004, meeting, that no such nominating committee had been appointed by the board. (See Petitioners' Evidence Tape, December 6, 2004, Election Meeting).
In Respondent's answer to this allegation, Respondent states that a form document was utilized to explain the statements contained in the annual meeting notice package sent to members prior to the meeting. In addition, Respondent denies in its answer that Respondent did not attempt to form or appoint a nominating committee. Petitioners, however, do not allege that no attempt was made by Respondent to appoint a nominating committee, but merely that Respondent failed to do so as required by the governing documents, and that inconsistent statements were made by Respondent to members in regards to whether or not Respondent had in fact appointed a nominating committee.
Furthermore, the arbitrator rejects Respondent's "form document" explanation as to why Respondent made inconsistent statements to members in election documents distributed prior to the election. In at least one of the two documents prepared and distributed by the association, it is clear that at least one document was not a form document (See Petitioners' Exhibit #3.) The opening sentence of the document entitled, "Section 20 Property Owner's Association, Inc., 2004-2005 Board of Directors' Candidate Resumes," reads: The following persons have been recommended by the nominating committee to fill the three (3) seats open for election to the Board of Directors at the December 6, 2004 annual meeting. The remaining text of this document consists of three separate statements submitted by candidates Robert Evans, Edward Halle, and David Mooney, specific to the 2004 annual election—candidates chosen by Respondent. (Petitioners' Exhibit #3). As such, Respondent's argument that this document is a form document is hereby rejected. As for the second document which mentions that a nominating committing had been appointed by Respondent, (Petitioners' Exhibit #3, letter signed by Lee Dunn, dated October 1, 2004), this document could very well have been a form document from previous elections; however, this document was an official record of the association signed by association president, Lee Dunn. One presumes that Mr. Dunn, or any signatory acting in such a capacity, would proof election documents for accuracy in its representations to thousands of voting members prior to signing. Respondent cannot avoid its obligation to appoint a nominating committee by relying on a form document defense as a reason for misrepresenting to its members that a nominating committee had been appointed by Respondent, when in fact, it had not, and that this nominating committee has recommended certain candidates for the upcoming election. Neither document, however, outweighs Mr. Dunn's admission at the December 6, 2004, election meeting, that no nominating committee had been formed by Respondent. (See Petitioners' Evidence Tape, December 6, 2004 Election Meeting). Based on the evidence, it appears to this arbitrator that Respondent has acted as the nominating committing, rather than fulfilling its obligation as set forth in its governing documents, and purposefully or not, Respondent misled its members prior to the election to believe that Respondent had fulfilled its obligation of appointing a nominating committee, when no such action had been taken by Respondent. Whether the failure to appoint a nominating committee substantially affected the outcome of the election need not be decided here given the disposition of the case.
III. Certification of Proxies Petitioners claim that Respondent failed to certify the proxies of the election during the election meeting, including the over-nine-hundred (900) proxies submitted on behalf of Petitioners, as required in the governing documents of the association. Section 2.G., Substantial Rewording of Bylaws, Section 20 Property Owner's Association, Inc., provides, in pertinent part, that "[t]he order of business at annual members' meetings and as far as practical at other members' meetings, shall be: (1) Calling of the roll and certifying proxies."
Respondent, in its answer, admits Respondent skipped this agenda item at each of the December election meetings. This is also evident from the Division's review of evidence tapes submitted by Petitioners of both December meetings. In its answer and at the December 28, 2004, meeting, Respondent attempts to defend why proxies were not certified at the December 28, 2004, meeting by stating that Lee Dunn was not the secretary, the designated officer in charge of certifying proxies, and, therefore, Lee Dunn was unable to certify proxies. Respondent also admits its failure to certify or give an account of proxies received to its members at the annual election meeting of December 28, 2004. in the opening paragraph of its Election Results document of January 11, 2005. (Petitioners' Exhibit #1, Petitioners' Amendment to Petition), which reads: Because the Board Secretary, Robert Evans, was unable to attend the Section 20 Property Owner's Association Annual Meeting held on December 28, 2004, Jane Austin became the Secretary effective that date for purposes of overseeing and validating the election as well as performing any other duties of the Secretary. Preliminary tallies were announced at the meeting, however, since there was no opportunity before the election for her to do so, Ms. Austin subsequently reviewed all election documents before releasing her conclusions regarding certification of proxies, ballots and the tabulation of election results.
This evidence is significant for several reasons. First, Respondent admits it failed to abide by its governing documents by not certifying the proxies at the meeting. Second, this evidence shows Respondent's consistent avoidance in a crucial portion of the election—the certifying of proxies — further obfuscating the issues by relying on the absence or inability of the board secretary. Respondent's continued reliance on the absence of the secretary is further weakened, if not made completely void of credibility, by the fact that Respondent duly appointed Jane Austin as the acting board secretary at the December 28, 2004, election meeting, whereby Ms. Austin left the meeting room after the collection of votes and returned later to announce the results of the 2004 election. (See Petitioners' Evidence Tape, December 28, 2004 Election Meeting.) Yet, Respondent states in its re-announcement of the election results on January 11, 2005, that Ms. Austin was unable to fulfill her duty of certifying proxies until the following day of the December 28, 2004, election meeting, (although Respondent did not release these results until two weeks after the December 28, 2004, election). Third, it raises the question as to why Respondent fails to admit in its January 11, 2005, the "Election Results" communication to its members that Robert Evans resigned as secretary on December 28, 2004, as evinced by Mr. Evan's resignation letter submitted by Respondent (although Respondent admits to Mr. Evan's resignation in its answer). (See Respondent's Exhibit #2, Letter of Resignation from R.T. Evans dated December 28, 2004). Fourth, this evidence is wholly inconsistent with markings found on proxy ballots submitted by Respondent with over 5 instances where the initials "LD" or the signature "Lee Dunn," along with the notation "not to count" appear. Fifth, and most significant to this case, is the fact that Respondent admits in its "Election Results" document of January 11, 2005, that Respondent announced the election results at the December 28, 2004, election meeting with full knowledge that all proxies and or ballots were not counted. (Respondent states that the results announced at the annual meeting of December 28, 2004, were "preliminary results.") The arbitrator finds the law devoid of ability or authority by the board to change or reverse election results once the election has concluded and election results announced to its members. There is no finality or reliability found in such a practice. Respondent's engaging in such a practice exceeds the bounds of proper election ethics and violates the principle of fairness in the electoral process. Based on these reasons, Respondent improperly failed to conduct a significant and vital portion of the election by failing to certify the proxies as required in its governing documents, and by "re-announcing," changing, and reversing the election results two weeks after the adjournment of the election meeting.
IV. Election Results - Failure to Validate Petitioners' Proxies Petitioners claim that proxies cast by Petitioners were improperly invalidated or otherwise not counted by Respondent, which resulted in the election of Robert T. Evans, Edward D. Halle, and David E. Mooney, rather than the winners of the December 28, 2004, election being Petitioner Kim Jakubaitis, Michael Delia Camera, and Mike Brown. Specifically, in the weeks preceding the December 6, 2004. and the December 25, 2004, annual election meetings of the association, Petitioners claim to have acquired more than nine hundred and fifty (950) total proxy votes, with at least six hundred and fifty-four (654) votes for Kim Jakubaitis, Michael Delia Camera, and Mike Brown, and another one hundred and seventy-four (174) votes by members who did not cast a specific vote, but rather designated Petitioner, Kim Jakubaitis, to cast votes on their behalf. Petitioners state that over 600 of the total 950 proxies filed by Petitioners were invalidated by Respondent.
Respondent admits to invalidating over 600 of Petitioners' proxy votes and, it appears from Respondent's answer, Respondent invalidated proxies based on four reasons. The first reason Respondent gives for invalidating certain Petitioners' proxies is that there was no indication on "a number" of corporate proxies as to the title or position for the person signing on behalf of the corporation, and that such persons had no authority to cast proxies for person(s) signing these corporate proxies. Respondent relies on two statutory provisions of Florida law to support its first reason for invalidating corporate proxies.
Respondent cites section 617.0721(3), Florida Statutes, which provides authority for any officer of a corporation that is a member of a not-for-profit corporation under Chapter 617 (i.e., the association), to execute proxies on behalf of that member corporation. According to this section, the authority to vote "shall be deemed by the corporation in which membership is held." Nowhere does this section of law authorize the association to determine which officers of the voting member corporation are or are not authorized to execute proxies on behalf of that member corporation, as urged by the Respondent, although it would be appropriate for the association documents to provide this function. Thus, section 617.0721(3), Florida Statutes, cannot be used in the manner argued by the Respondent, and therefore, Respondent's reason for invalidating Petitioners' proxies based on this provision of law is rejected.
Respondent also cites section 607.0724, Florida Statutes, to support its rejection of certain corporate proxies submitted by Petitoners. Section 607.0724, Florida Statutes, entitles a corporation to reject a vote or proxy appointment if the corporate officer (e.g., secretary), acting in good faith, has a reasonable basis for doubt about the validity of its signature or the signatory's authority to sign for the shareholder. The Respondent has not demonstrated that the corporation was acting in good faith in this regard, and therefore, this portion of the statute, assuming that it applies at all, is not shown to be dispositive of this case. Here, the corporations were voting members of the association entitled to vote by proxy. There is no dispute that the corporate proxies submitted by Petitioners were timely filed with the association secretary prior to the adjournment of the annual election. Furthermore, Petitioners submitted documents to show as proof that the individuals executing proxies on behalf of their respective corporations were entitled to do so. As no reference to the procedures or protocol for denying proxies submitted by a corporate voting member, or otherwise, are contained within the governing documents of the association, and as Respondent relies on inapplicable law in justifying its failure to validate corporate proxies submitted on behalf of Petitioners, with no other showing of proof that the persons or entities executing proxies submitted by Petitioners were not authorized to do so, the arbitrator finds that Respondent had no basis for invalidating the hundreds of corporate proxies submitted by Petitioners.
As Respondent's second reason for invalidating certain proxies, Respondent states that several individual member proxies or "owners' proxies," were deemed by Respondent as abstentions due to the fact that both an "X" and the name of the candidate(s) were not provided on the ballot sheets. In support of this reason, Respondent relies on Hornsbv v. Milliard. 189 So. 2d 361, 363 (Fla. 1966) in which the Court stated: A blank or spoiled ballot, or one that is so illegible that the choice of the elector on the specific issue for which the election is held cannot be ascertained, does not constitute, in our opinion, an expression of a choice (by the voter) either for or... [against], [emphasis added]. The arbitrator takes no issue with the (Hornsby decision but would distinguish it on its facts, Hornsbv deals with the proper procedures for holding and conducting school district elections, with specific instructions provided by sections of Florida Statutes. Specifically, section 236,32, Florida Statutes Annotated (1965), required the ballot in a school tax district millage levy, where paper ballots were used, to instruct voters to indicated by marking an "X" in the space after the line if in favor of the proposed rate, or by writing in another millage levy rate. Here, the proxy ballots consisted of votes for three candidates or write-ins, and two additional issues. The failure of a voter to provide both an "X" and the name of the candidate(s) on the ballot does not rise to the level of being so illegible or unascertainable as found in Moms by. Upon review of proxy ballots rejected by Respondent for failure to write in candidate names and mark with an "X," it was clear to the arbitrator as to the choice(s) made by voters who took the time to write the names of their choices for the three write-in candidate(s), but inadvertently failed to check or mark the preceding box (a set of parentheses) with an "X." Therefore, these ballots should have been counted by Respondent as the intent of the voter for all three candidates was legible and ascertainable. Ballots with only one candidate written on the ballot and no markings were rightfully not counted by Respondent. As for ballots whereby no "X" or marking was made next to either of the two remaining issues (i.e., budget, architectural review criteria), yet, the voter indicated a vote for a candidate or candidates, Respondent was right to deem votes for the budget and or the architectural review criteria as abstentions. This arbitrator also found that Respondent improperly excluded entire proxy ballots from its tabulations where votes for issues other than the election of board members were clearly marked with an "X," yet the voter failed to vote for or write-in the candidate names, thus, Respondent improperly excluded portions of certain ballots where the voter's choice was clear.
Respondent's third reason for not counting proxy ballots is based on section 2E of the bylaws of the association, which allows only one vote per lot and all owners for each lot must sign the same owner's statement. Respondent properly excluded these ballots from their count, and it is not disputed by Petitioners, therefore, no discussion as to the exclusion of these proxy ballots is warranted.
Respondent's fourth and final reason for invalidating or failing to include Petitioners' proxy ballots in its tabulations is based on misrepresentation. In support of Respondent's claim that misrepresentation occurred, Respondent states that some proxies where not counted due to the fact that there were discrepancies in the writing and printing on the ballots, or that different inks were used on the ballots. Other than submitting the proxy ballots for review by Division, Respondent fails to offer any support of misrepresentation on behalf of Petitioners. Upon the arbitrator's review of each of these proxy ballots, it could not be determined that misrepresentation was at play, especially when members authorized to vote have signed the ballots in dispute, and those signatures appear to match their respective voter certificates. Furthermore, Petitioners successfully rebutted Respondent's allegations of misrepresentation by admitting that Petitioners assisted some voters with filling out their ballots prior to the election. Based on Respondent's lack of evidence in support of a claim of misrepresentation, Respondent improperly excluded these proxies in Respondent's election tabulations. Based on the above findings, Respondent improperly failed to include the majority of the proxies submitted by Petitioners. It is also important to note that prior to the filing of the petition, Respondent failed to provide its specific reasons for invalidating Petitioners' proxies (nor does Respondent ever provide exactly how many were rejected for each reason). Nowhere on the election documents, including the actual ballots themselves, in meeting minutes, or on any tabulation sheets does Respondent articulate the reasons for rejecting these proxies. For the same reason the refusal of a board to certify the recall of directors in Division recall cases is reversed by the Division whereby the board fails to specifically articulate its reasons at the recall meeting (and within the meeting minutes), the same reason to refuse Respondent's justifications for Respondent's failure to count Petitioners' proxy ballots may be applied here. It goes against legal rationale and the concept of fair play to allow a governing body during an election to rely on unspecified reasons for rejecting certain ballots, and only until legal counsel has had the opportunity to review the ballots and fashion a legal argument, does the governing body articulate their reasons. Such secrecy flies in the face of fairness. The failure to Include and count appropriate and legitimate ballots disenfranchised those owners and would in and of itself require a new election.
V. Inclusion of $80 Increase in Dues/Assessment in Annual Election Respondent included in its annual election meeting a one-time, $80.00 assessment. This item was improperly included in the 2004 election, as this one-time fee is a special assessment as defined in section 720.301(1), Florida Statutes, and Respondent failed to properly notice the assessment. Chapter 720, Florida Statutes, is clear in its requirement that an assessment or special assessment taken up at a meeting and levied by a board must be properly noticed. Pursuant to section 720.303(2)2, Florida Statutes: An assessment may not be levied at a board meeting unless the notice of the meeting includes a statement that assessments will be considered and the nature of the assessments. Written notice of any meeting at which special assessments will be considered or at which amendments to rules regarding parcel use will be considered must be mailed, delivered, or electronically transmitted to the members and parcel owners and posted conspicuously on the property or broadcast on closed-circuit cable television not less than 14 days before the meeting (emphasis added).
Respondent failed to properly notice the $80.00 special assessment prior to either of the annual election meetings of December 6, 2004, and December 28, 2004. This assessment item was also not included on the proxy ballots prepared by Respondent, but was announced to members at the December 28, 2004, election meeting. As such, Respondent improperly placed the $80.00 special assessment before its members as an election item.
VI. Results of Election - Tabulations Upon review of the election documents, including the tabulation sheets submitted by Respondent, the arbitrator finds the records of the annual election conducted by Respondent confusing and unorganized. The tabulation sheets submitted by Respondent are particularly troubling for several reasons. First, Respondent submitted to the Division three sets of "total tabulations" for the 2004 annual election: a tabulation sheet with the printed date of December 28, 2004, a tabulation sheet with a handwritten date of December 29, 2004, and results of tabulations contained in Respondent's "Election Results" document of January 11, 2005, sent by Respondent as "final results" to its members.
Second, after reviewing the tabulation sheets, the arbitrator found it impossible to match and compare proxies and ballots to the tabulation sheets. The arbitrator was unable to verify which proxies were received by whom and exactly when they were received (or any breakdowns for rejected versus received proxies) on the tabulations sheets. The arbitrator was unable to determine the total number of ballots received versus the total number of proxies received, and the matching of the ballot counts to the markings or tabulations on the tabulation sheets. Some of the tabulation sheets were blank.
Third, the absence of the secretary's certification or signature on any of the tabulation sheets leaves the arbitrator guessing as to which or how many persons were responsible for the calculations and final tabulations of the election. Overall, the tabulation sheets are a sloppy, indiscernible collection of over thirty sheets containing handwritten tickings and numbers—an unacceptable system and procedure for the conducting of an official election of this size and impact. Fourth, neither on the December 29, 2004, tabulation, nor on the "Election Results" document of January 11, 2005, does Respondent eliminate Mr. Evans as a candidate and announce the winning candidate who received the next highest number of votes—even though Respondent admits Mr. Evans resigned the evening of December 28, 2004, in its answer. Respondent also fails to include the names of other candidates for which votes were received (i.e., Charles Stuart, Martin Florence, Martinez Ricardo, Jim Fisher, Wayne Milby, Michele Delfividas, and Mahon Miller). Fourth, when this arbitrator compared the final tabulation sheet dated December 29, 2004, to the Election Results document of January 11. 2005, with the exception of total votes received for candidate Mike Brown, none of the totals on the Election Results document matched the totals on the December 29,2004, tabulation sheet, for the remaining five candidates or for any of the three issues.
Fifth, based on the arbitrator's re-tabulations of all of the ballots and proxy ballots of the election, including ballots and proxies improperly excluded by Respondent as discussed above, the results of the 2004 annual election of directors are as follows:
Michael Brown - 640 votes Kim JaKubaitis - 638 votes Michael Delia Camera - 627 votes David Mooney - 594 votes Edward Halle - 591 votes. Based on the arbitrator's count, the results of the annual budget approval and the adoption of the architectural review criteria ("ARC""), are as follows: Annual Budget: YES, to approve - 529 votes NO, to disapprove - 696 votes ARC: YES, to approve - 527 votes NO, to disapprove ~ 703 votes.
Respondent, in its final memorandum, argues that Petitioners' claims carry no merit or support of law. The applicable portions of Chapter 720, Florida Statutes, and the governing documents of the association, as cited above, state otherwise. In addition, and most applicable in this case, is the fundamental principle of fairness—an integral part of the electoral process and vitaf to the success of any election. The concept of fairness includes the manner and organization in which an election is conducted, the consistency in the validation and certification of votes, and the accuracy in the tabulation of those votes. Under the law, Respondent has a fiduciary responsibility to its members to ensure the reliability of its elections.1 This includes the organization of the annual election meetings, the tabulating of the votes, and the record keeping of the official documents of the association.
For future elections, the Division strongly urges Respondent to utilize the experience and expertise of professional management or an outside source (e.g., certified public accounting firm), in assisting Respondent in the conducting of its elections, and that Respondent establish and adopt, in writing, specific guidelines for the holding of its elections—cursory knowledge of Robert's Rules of Order and the presence of the board attorney are clearly not enough. Based on the foregoing, the manner in which Respondent conducted the 2004 election of the association, including the tabulation and re-announcement of election results was improper. However, rather than require the association bear the cost of a new election, which could cost the association and its members thousands of dollars and many more months of delay (and as the 2005 election approaches), the re-tabulations of the arbitrator shall be adopted as the official results of the 2004 election. WHEREFORE, the arbitrator finds Respondent improperly and in bad faith conducted portions of the 2004 annual election of the association, and the results of the election as announced by Respondent are voided. 1 Section 720.303(1), Florida Statutes, provides, in part, that, "[t]he officers and directors of an association have a fiduciary relationship to the members who are served by the association." It is hereby ORDERED: 1. Effective immediately upon issuance of this order, the winners of the 2004 annual election of the board of directors of Section 20 Property Owners' Association are declared to be Mike Brown, Kirn Jakubaitis, and Michael Delia Camera. 2. Edward Halle, David Mooney, Robert Evans, and or any individuals serving in lieu of these candidates, shall step down as directors of the board, immediately. Any official documents of the association in possession of these individuals shall be turned over to the board within 5 business days of this Order. 3. The result of ballot item "Adoption of 2004-2005 Operating Budget," is REVERSED. 4. The result of ballot item "Adoption of Architectural Review Criteria" is REVERSED. 5. The adoption and implementation of an $80.00 assessment is REVERSED/
6. Respondent shall conduct all future elections in good faith and properly, in accordance with its governing documents, the applicable laws of this State, and this Order.
7. Respondent shall be responsible for full payment of Division's time and administrative costs in this case, totaling 82 hours in time at $35 per hour, equaling two thousand eight hundred seventy dollars and zero cents ($2,870.00), in accordance with section 720.311. Florida Statutes. Respondent shall remit payment in full within thirty (30) days of this Order to: Division of Land Sales, Condominiums, and Mobile Homes HOA Mediation and Arbitration Section 1940 North Monroe Street, Tallahassee, FL 32399-1030 DONE AND ORDERED this 6th day of July 2005, at Tallahassee, Leon County, Florida.
Susan Wilkinson Harnden, Arbitrator Homeowners' Association Mediation and Arbitration Program Division of Florida Land Sates, Condominiums, and Mobile Homes Department of Business & Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-1030 Certificate of Service I hereby certify that a true and correct copy of the foregoing Order has been sent by U.S. Mail to the following persons on this 6th day of July, 2005: Bernard O'Donnell, Jr., Attorney for Respondent Henderson, Franklin, Starnes & Holt, PA Post Office Box 280 Fort Myers, FL 33902-0280 Brian Beason, Attorney for Petitioners Wilkins, Frohlich, Russell, Hanaoka & Mlzell, PA 18501 Murdock Circle, Sixth Floor Port Charlotte, FL 33948 |
