STATE OF FLORIDA
DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION
DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS, AND MOBILE HOMES
IN RE: PETITION FOR ARBITRATION
RICHARD K. VAN WEELDEN,
Petitioner,
v.
Case No.: 2003-05-2528
GULF ISLAND BEACH & TENNIS
CLUB I CONDOMINIUM, INC.,
Respondent.
__________________________________/
FINAL ORDER
Pursuant to notice, the undersigned arbitrator of the Division of Florida Land
Sales, Condominiums and Mobile Homes convened a formal hearing in this case on
June 16, 2003, at the Gulf Island Condominium, in Hudson, Florida, with the
arbitrator appearing by phone.
During the hearing, both parties presented the
testimony of witnesses and tendered documents into evidence.
The parties
submitted proposed recommended orders after the conclusion of the hearing. This
order is entered after consideration of the complete record in this matter.
APPEARANCES
For Petitioner:
Cynthia L. Gleason1
645 Terry Court
Lawrenceville, GA 30044
Ms. Gleason, an attorney not licensed to practice in the State of Florida,
represented Petitioner as an authorized representative in this matter.
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For Respondent:
Steven H. Mezer, Esquire
Bush Ross Gardner Warren & Rudy, P.A.
P.O. Box 3913
Tampa, Florida, 33601
STATEMENT OF THE ISSUE
1. Whether the annual election for the board of directors held on January
27, 2003, was valid.
2. Whether the board of directors abused its discretion by improperly
declaring that the January 27, 2003, election of Richard K. Van Weelden was
invalid and scheduling a new election.
FACTS
1.
Gulf
Island
Beach
&
Tennis
Club
I
Condominium,
Inc.
(respondent/association) is the entity responsible for governing the Gulf Island
Beach & Tennis Club I condominium located in Hudson, Florida.
2.
Richard K. Van Weelden (Petitioner/Unit Owner) is the owner of a unit
in the Gulf Island Beach & Tennis Club I Condominium.
3.
The association held its annual meeting and election for the board of
directors on January 27, 2003. The association’s board consists of three members
who serve for terms of three years. Each position on the board is staggered so
that one board position is open for election at each year’s annual meeting.
4.
The petitioner was one of four candidates seeking the board seat that
was open at the January 2003 election.
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5.
A committee of unit owners, Andre Wacker, James Combs, and
Robert LaPenna were selected by the association and counted the ballots at the
meeting.
6.
After the votes were counted, the final vote tally was 33 votes for
petitioner, 19 votes for Douglas Cohan, 4 votes for Joseph Kulwicki, and 0 votes
for Charlotte Pierce.2 Each of the members of the committee agreed on the count.
A total of 56 ballots were counted.
7.
Petitioner presented the testimony of Alfredo Baryol, owner of unit
635. Mr. Baryol testified that he arrived at the annual meeting of the condominium
association approximately one-half hour before the meeting was scheduled to occur
to set up video equipment. At that time, Mr. Baryol testified that employees of the
management company had already opened the outer envelopes and that the yellow
inner ballot envelopes were stapled to the blue outer envelopes.
8.
Upon inquiry by Mr. Baryol to the employees of the management
company, it was also determined that neither Mr. Baryol’s voting certificate nor his
ballot had been received by the Association.
Mr. Baryol was provided with a
replacement ballot that he marked and gave to the representatives of the
management company. Mr. Baryol was not provided with a ballot envelope or an
outer envelope for his ballot.
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Ms. Pierce announced prior to the casting of the ballots that she no longer desired to run for
office.
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9.
Mr. Baryol testified that the yellow inner ballot envelopes and at least
two ballots without envelopes were placed in a box and given to the committee of
unit owners to be counted.
10.
Petitioner presented the testimony of Jim Combs, a unit owner and a
member of the committee of unit owners that counted the ballots.
On cross
examination, Mr. Combs indicated that he had not reviewed any of the signatures
on the outer envelopes, that he had not reviewed the voting certificates, and that
he could not confirm that any of the ballots were actually cast by unit owners.
11.
Petitioner presented the testimony of Andre Wacker, a unit owner and
a member of the committee of unit owners that counted the ballots. Mr. Wacker
testified on cross-examination, that he could not verify that any of the ballots were
actually cast by unit owners.
12.
Mr. Wacker testified that the committee rejected 19 ballots in total.
The committee rejected 18 ballots because they were cast in three envelopes with
six ballots each and the one ballot because the yellow envelope was slit open prior
to its receipt by the committee. Mr. Wacker testified that there were a few ballots
received without envelopes and that all of those ballots were counted.
13.
Petitioner presented the testimony of Richard Pellett, the owner of unit
106, 309 and 409. Mr. Pellett testified that he is the co-owner of two of his three
units with his brother. Mr. Pellett testified that he was permitted to cast ballots for
all three units, even though voting certificates were not on file for his units.
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14.
Petitioner presented the testimony of Richard Freed, the owner of unit
801. Mr. Freed indicated that he arrived at the annual meeting with his blue outer
envelope in hand. Mr. Freed’s ballot was accepted by the representatives of the
management company without question and without a signature on the outer
envelope.
15.
Respondent presented the testimony of Dianna Savasta, the office
manager of the management company. Ms. Savasta acknowledged that she or an
administrative assistant with the management company had opened each of the
blue outer envelopes, checked off the names on a roster and stapled the outer
envelope to the yellow ballot envelope.
All of the ballots received by the
management company were delivered to the annual meeting.
16.
Ms. Savasta further testified that an individual was permitted to
retrieve his ballot and that that ballot was apparently recast and that after the
closing of the polls, a unit owner was permitted to vote.
17.
Ms. Savasta testified that that no effort was made to confirm the
signatures on the outer envelopes or to verify the qualifications of the voters
pursuant to the voting certificates as provided by the Bylaws of the Association.
18.
Ms. Savasta testified that that 52 ballots had been checked in and
that three envelopes which were later found to have 6 ballots in each envelope
were not checked in but were given to the committee of owners to be counted.
19.
The Respondent presented the testimony of Robert Lapenna, a unit
owner and a member of the committee that counted the ballots.
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Mr. Lapenna
testified that he observed several white ballots that were not in the yellow inner
ballot envelopes when the committee received the ballots and that there were two
additional green ballots that were not in envelopes. Mr. Lapenna was unable to
explain the origin of the green ballots.
DISCUSSION
The association held an election at the annual meeting January 27, 2003 for
the election of one director. The election process and procedure used prior to the
annual meeting are not in dispute.
However, the procedures used by the
association and results of the counting of the ballots at the annual meeting are the
focus of the dispute in this matter. The testimony of the witnesses in this matter
demonstrates that the following errors occurred:
1. The association received 52 ballots that were checked in against the roster
of unit owner, however, the committee counted a total of 56 ballots.
2. Unit owners were permitted to cast ballots without inner envelopes.
3. At least one unit owner was permitted to retrieve his ballot and change it.
4. The outer ballot envelopes were open prior to the election and not in the
presence of the unit owners.
5. No one verified signatures on the outer ballot envelopes.
6. At least one unit owner was allowed to cast a ballot after the polls had
closed.
Rule 61B 23.0021, Florida Administrative Code (2002), provides in pertinent
part:
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(8) In accordance with the requirements of Section 718.112(2)(d),
Florida Statutes, the association shall mail or deliver to the eligible
voters at the addresses listed in the official records a second notice of
the election, together with a ballot and any information sheets timely
submitted by the candidates… Accompanying the ballot shall be an
outer envelope addressed to the person or entity authorized to receive
the ballots and a smaller inner envelope in which the ballot shall be
placed. The exterior of the outer envelope shall indicate the name of
the voter, and the unit or unit numbers being voted, and shall contain
a signature space for the voter. Once the ballot is filled out, the voter
shall place the completed ballot in the inner smaller envelope and seal
the envelope. The inner envelope shall be placed within the outer
larger envelope, and the outer envelope shall then be sealed. Each
inner envelope shall contain only one ballot, but if a person is entitled
to cast more than one ballot, the separate inner envelopes required
may be enclosed within a single outer envelope. The voter shall sign
the exterior of the outer envelope in the space provided for such
signature. The envelope shall either be mailed or hand delivered to the
association. Upon receipt by the association, no ballot may be
rescinded or changed.
*
*
*
(10) Envelopes containing ballots received by the association shall be
retained and collected by the association and shall not be opened
except in the manner and at the time provided herein.
(a) Any envelopes containing ballots shall be collected by the
association and shall be transported to the location of the duly called
meeting of the unit owners. The association shall have available at the
meeting additional blank ballots for distribution to the eligible voters
who have not cast their votes. Each ballot distributed at the meeting
shall be placed in an inner and outer envelope in the manner provided
in subsection (8) of this rule. Each envelope and ballot shall be
handled in the following manner. As the first order of business, ballots
not yet cast shall be collected. The ballots and envelopes shall then be
handled as stated below by an impartial committee as defined in
paragraph (b) below appointed by the board. The business of the
meeting may continue during this process. The signature and unit
identification on the outer envelope shall be checked against a list of
qualified voters, unless previously validated as provided in paragraph
(b) below. Any exterior envelope not signed by the eligible voter shall
be marked “Disregarded” or with words of similar import, and any
ballots contained therein shall not be counted. The voters shall be
checked off on the list as having voted. Then, in the presence of any
unit owners in attendance, and regardless of whether a quorum is
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present, all inner envelopes shall be first removed from the outer
envelopes and shall be placed into a receptacle. Upon the
commencement of the opening of the outer envelopes, the polls shall
be closed, and no more ballots shall be accepted. The inner envelopes
shall then be opened and the ballots shall be removed and counted in
the presence of the unit owners. Any inner envelope containing more
than one ballot shall be marked “Disregarded”, or with words of
similar import, and any ballots contained therein shall not be counted.
All envelopes and ballots, whether disregarded or not, shall be retained
with the official records of the association.
(b) Any association desiring to verify outer envelope information in
advance of the meeting may do so as provided herein. An impartial
committee designated by the board may, at a meeting noticed in the
manner required for the noticing of board meetings, which shall be
open to all unit owners and which shall be held on the date of the
election, proceed as follows.… At the committee meeting, the
signature and unit identification on the outer envelope shall be
checked against the list of qualified voters. The voters shall be
checked off on the list as having voted. Any exterior envelope not
signed by the eligible voter shall be marked “Disregarded” or with
words of similar import, and any ballots contained therein shall not be
counted.
Based upon the testimony at the final hearing, the counting of the ballots at
the January 27, 2003, election meeting violated five separate provisions of rule
61B-23.0021, Florida Administrative Code.
Additionally, the fact that 56 votes
were counted when only 52 ballots were checked in raises serious doubts about
the accuracy of the balloting process as well. These violations are so varied and
numerous as to clearly affect the reliability of the election results. While each of
these deficiencies considered in isolation may not warrant a conclusion that the
elections results do not fairly reflect the will of the electorate, the defects
considered in conjunction with each other cumulatively create a substantial doubt
concerning the outcome of the election.
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Faced with these issues, the board made the decision to the reject the
election results and to reschedule the election. The board is typically given broad
discretion in its exercise of ordinary business judgment, and, according to the
business judgment rule, actions taken by the board within the scope of its authority
are presumptively correct, absent a showing of mismanagement, fraud, or breach
of trust. See Lake Region Packing Association v. Furze, 327 So. 2d 212 (Fla.
1976) (directors generally have wide discretion in the performance of their duties;
court will not attempt to pass upon questions of mere exercise of business
judgment).
The association, in making decisions regarding the election results,
would be entitled to the deference provided by the business judgement rule, absent
a demonstration of fraud or other similar showing. In the instant case, there is no
evidence that the board’s actions regarding the election were fraudulent or were
designed to cause the invalidation of the election.
Accordingly, it has not been
demonstrated that the association abused its discretion in rejecting the result of the
January 27, 2003, election.
Based on the foregoing, it is ORDERED AND ADJUDGED that:
1. The relief requested by petitioner is DENIED.
2. The decision of the board to reject the results of the January 27, 2003,
election is AFFIRMED.
DONE AND ORDERED this 8th day of August 2003, at Tallahassee, Leon
County, Florida.
____________________________________
Richard M. Coln, Arbitrator
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Arbitration Section
Department of Business and
Professional Regulation
1940 North Monroe Street
Tallahassee, Florida 32399-1029
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RIGHT OF TRIAL DE NOVO
PURSUANT TO SECTION 718.1255, FLORIDA STATUTES, THIS DECISION
SHALL BE BINDING ON THE PARTIES UNLESS A COMPLAINT FOR TRIAL DE
NOVO IS FILED BY AN ADVERSELY AFFECTED PARTY IN A COURT OF
COMPETENT JURISDICTION IN THE CIRCUIT IN WHICH THE CONDOMINIUM IS
LOCATED WITHIN 30 DAYS OF THE DATE OF MAILING OF THIS ORDER. THIS
FINAL ORDER DOES NOT CONSTITUTE FINAL AGENCY ACTION AND IS NOT
APPEALABLE TO THE DISTRICT COURTS OF APPEAL.
ATTORNEY’S FEES
As provided by s. 718.1255, F.S., the prevailing party in this proceeding is
entitled to have the other party pay its reasonable costs and attorney’s fees. Rule
61B-45.048, F.A.C., requires that a party seeking an award of costs and attorney’s
fees must file a motion seeking the award not later than 45 days after rendition of
this final order. The motion must be actually received by the Division within this
45-day period and must conform to the requirements of rule 61B-45.048, F.A.C.
The filing of an appeal of this order does not toll the time for the filing of a motion
seeking prevailing party costs and attorney’s fees.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and accurate copy of the foregoing final order
was mailed and faxed this 8th day of August 2003, to:
Cynthia L. Gleason
645 Terry Court
Lawrenceville, GA 30044
(770) 979-8844 Fax
Steven H. Mezer, Esq.
Bush Ross Gardner Warren & Rudy, P.A.
P.O. Box 3913
Tampa, FL 33601-3913
(813) 223-9620 Fax
_________________________
Richard M. Coln, Arbitrator
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