STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES

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1 STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES IN RE: PETITION FOR RECALL ARBITRATION VILLAGE CREEK CONDOMINIUM ASSOCIATION, INC., Petitioner, v. Case No UNIT OWNERS VOTING FOR RECALL, Respondent. / FINAL ORDER On July 11, 2016, Village Creek Condominium Association, Inc. (the Association) filed a petition for recall arbitration. The unit owners voting in favor of the recall are the respondent in this matter. On August 4, 2016, Respondent filed an answer to the petition. A telephonic final hearing was held in this matter on October 10, 2016, at which time the parties were permitted to present evidence and witness testimony. During the hearing, the Association stipulated that it waived any basis for rejecting recall ballots raised in its petition that were not addressed by it during the hearing. At the conclusion of the hearing, the parties were directed to file proposed final orders, which both parties have done. Along with its proposed final order, Respondent filed affidavits from the owners of units 213 and 1104, deed and tax records for unit 101 and a legal opinion from a German attorney regarding the legal requirements for a German power of attorney. Petitioner has filed a motion to strike these post-hearing 1

2 filings. Other than the proposed orders, the parties were not authorized to make any post-hearing filings. Therefore, any additional post-hearing filings by Respondent are hereby struck and will not be considered by the undersigned. APPEARANCES For the Association: Robert Cooper, Esq. Hahn Loeser & Parks, LLP 2400 First Street, Suite 300 Fort Myers, FL Bradley W. Butcher, Esq. Butcher & Associates, P.L Porto Fino Circle, Suite 2 Fort Myers, FL For Respondents: Diane M. Simons, Esq. Simons Law Group, PLLC 1222 SE 47 th Street, Suite 405 Cape Coral, FL Findings of Fact 1. The Association is the legal entity responsible for the operation of the Village Creek Condominium located in. 2. The Association contains 240 voting interests. 3. At all times relevant to this dispute, the total number of seats on the Association s board of directors (the Board) is On June 27, 2016, the Association received a written recall agreement. 5. The written recall agreement consisted of 138 ballots of the form available from the Division s website. 6. The recall targeted directors Gary Oaks and John Todd with each receiving 138 votes in favor of their recall. 2

3 7. At a meeting held on July 1, 2016, the Board chose not to certify the recall (board recall meeting). 8. At the meeting the Association rejected various ballots for various reasons. However, at the final hearing the Association stipulated that it waived any basis for rejecting recall ballots raised in its petition or at the board meeting to address the recall that were not addressed by it during the hearing. Therefore, the Association continues to challenge the validity of the following ballots rejecting them as follows: a. Units 116 and 1017 were rejected because they failed to vote. b. Units 413 and 416 were rejected because the owner s name was incorrect. c. Ballots for units 101, 213 and 1104 were rejected by Petitioner because the ballots were pre-printed. Unit 101 was also rejected because the signature of owner is not original but is possibly forged. d. Ballots for units 120, 205, 220, 301, 303, 305, 313, 411, 417, 505, 520, 706, 707, 716, 815, 817, 1013, and 1220 were rejected by Petitioner because the signatories of the ballots who are not owners were not authorized to vote on behalf of the unit because the power of attorney purportedly granting them such authority was invalid. e. Ballots for units 121, 203, 206, 214, 306, 319, 401, 402, 407 and 502 were rejected due to incorrect owner name. 9. In its answer, Respondent conceded that that the ballots for units 116, 3

4 1017, 413 and 416 were properly rejected. 10. During the final hearing, the Association conceded that the ballot for unit 407 had not been rejected by the Association. 11. The following units ballots were signed by a person who was not the unit s owner but who was appointed the voting owner representative for the units by the agent of a power of attorney (POA). Unit Agent Date and Location where executed 120 Florida Homes 11/26/ Cape 11/07/ Cape 9/27/ Cape 6/01/16 Germany 305 Florida Homes 313 Florida Homes 10/02/16 5/15/ Cape 6/01/2016 Germany Cape 9/27/2015 Board s Reason for Rejection 1 Parcel held in trust, not individual. Individual POA invalid as individual does not own. POA invalid as lacks 2 witness per Fla. Stat witnesses per Fla. State POA invalid does not comport with Fla. Stat designee not financial institution Quoted from the spread sheet of objections attached to the Board meeting at which the recall was rejected. 4

5 505 Florida Homes 12/14/ Cape 6/01/2016 Germany 706 Florida Homes 707 Florida Homes 716 Florida Homes 815 Florida Homes 817 Florida Homes 1013 Florida Homes Cape 6/01/16 Germany 1/23/ /26/ /26/ /26/ /15/ /14/2009 POA invalid does not comport with Fla. Stat designee not financial institution Parcel held in trust, not individual. Individual POA invalid as individual does not own. POA is invalid as lacks 2 witness per Fla. Stat Parcel held in trust, not individual. Individual POA invalid as individual does not own. POA is invalid as lacks 2 witness per Fla. Stat POA invalid does not comport with Fla. Stat designee not financial statute. POA invalid does not comport with Fla. Stat designee not financial institution None of the POAs included two subscribing witnesses. 13. The Board Recall meeting minutes state that Harald Uli Kleber owns unit 220. Although, Harald Uli Kleber, granted 123 Cape the power of attorney to manage the unit, the ballot was signed by Uli Kleber. 5

6 14. Except for the handwritten signatures, the ballots for units 101, 213, and 1104 were typewritten including marking of the voting boxes with typewritten X s. However, the placement of the X s and font type used on each ballot differ. 15. Additionally, the form of the unit number on the ballots is not consistent. Unit 1104 states the unit number as 2935 WINKLER AVE 1104 whereas units 101 and 213 state their unit numbers as 2855/101and 2835/ The ballot for unit 121 was signed by Jorge A. Tinoco, Sr. 17. This ballot was rejected. The minutes of the Board meeting state, Information on ballot incorrect Jorge A. Tinoco is not unit owner as signed. 18. The minutes of the recall meeting state that Unit 121 is owned by 1510 NE LLC. 19. When the written agreement was received by the Association it included a voting certificate for unit 121 designating Jorge Tinoco as the unit s voting representative. The voting certificate was signed by Jorge A. Tinoco, Sr. 20. Records maintained by the Division of Corporations of the Florida Department of State indicate that Jorge A. Tinoco, Sr. is an authorized person for 1510 NE, LLC, which owns unit The ballots for units 203, 206, 214, 306, 401, 402, 407, 502 were signed by Larry Barry. 22. The minutes of the board recall meeting state that units 203, 206, 214, 319, 401, 402, and 502 are owned by Alegiant II, LLC (Alegiant II). 23. These ballots were rejected by the Board. The minutes of the Board meeting state, Information on ballot incorrect Larry Barry not unit owner as signed. 6

7 Certificate of Appointment invalid Larry Barry is not President of owner LLC. 24. When the written agreement was received by the Association it included voting certificates for each of the Alegiant II units designating Larry Barry as the units voting representative. The voting certificates were signed by Larry Barry as president of Alegiant II. 25. Records maintained by the Division of Corporations of the Florida Department of State indicate that Larry Barry is managing member of Alegiant II, LLC The minutes of the board recall meeting state that unit 306 is co-owned by Alegiant II, LLC (95%) and Lisa Marinello USA (5%). Conclusions of Law The undersigned has jurisdiction over this dispute pursuant to sections (2)(j) and , Florida Statutes. The owners voting in favor of the recall are the respondent in this matter. During the hearing, the Association stipulated that it waived any basis for rejecting recall ballots raised in its petition or board recall meeting minutes that were not addressed by it during the hearing. Pursuant to rule 61B (5)(h), Florida Administrative Code, any specific reason upon which the board bases its decision not to certify the recall that is stated in the petition for recall arbitration, but absent from the board meeting minutes or attachments thereto, shall be ineffective and shall not be considered by the arbitrator. Accordingly, the undersigned will only consider the ballots addressed by the petitioner during the hearing and, as to these ballots, will only consider the reasons for rejecting ballots stated in the minutes and the attachments thereto for the board recall meeting. 2 In fact, the records state that Larry Barry is the only member. 7

8 Unit 407 During the final hearing, the Association initially sought to challenge the validity of the ballot for unit 407. However, during the hearing the Association conceded that the ballot had not been rejected at the board recall meeting. Therefore, this ballot will be deemed valid. Allegiant II, LLC and 1510 NE, LLC The minutes of board recall meeting state that the Allegiant II, LLC, is the owner units 203, 206, 214, 319, 401, 402, and 502. The minutes state that the ballots for these units were rejected for the same reason stating, Information on ballot incorrect Larry Barry not unit owner as signed. Certificate of Appointment Invalid Larry Barry is not President of owner LLC. All of these ballots were signed by Larry Barry. Records that are maintained by the Division of Corporations of the Florida Department of State and that are readily accessible indicate that Larry Barry is the sole member and managing member of Alegiant II, LLC. Voting certificates for these units were delivered to the Association along with the written recall agreement appointing Larry Barry as the company s voting representative. 3 The voting certificates are signed by Larry Barry as President of Alegiant III, LLC. The minutes of the recall board meeting state the reason for rejecting the ballot for unit 121 as follows, Information on ballot incorrect Jorge A. Tinoco is not unit owner as signed. The recall minutes indicate that the unit is owned by 1510 NE, LLC. The ballot was signed by Jorge A. Tinoco. Records that are maintained by the Division 3 Voting certificates may be executed and delivered to the Association up to the date and time that the recall agreement is served on the Association. Destiny Springs Condo. Ass n, Inc. v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (September 10, 2007). 8

9 of Corporations of the Florida Department of State and that are readily accessible indicate that Jorge A. Tinoco, Sr. is an authorized representative for the company. A voting certificate for this unit was delivered to the Association along with the written recall agreement. The voting certificate was signed by Jorge A. Tinoco appointing Jorge Tinoco as the company s voting representative. In the recall case Costa Verde Homeowners Ass n, Inc. v. Homeowners Voting for Recall, Summary Final Order Certifying Recall (September 20, 2013), 4 the manager of the limited liability company that owned a unit simply signed the recall ballot for the unit with his name without any indication of his company title. The arbitrator accepted the ballot taking official notice that the Florida Department of State s Division of Corporations website listing the signatory as the manager of the LLC and that Florida law governing limited liability corporations authorized the manger to act on behalf of the company. 5 Although Mr. Barry used the wrong title and Mr. Tinoco failed to state his position with his company, considering the minimal effort with which the Association could have confirmed their authority, such technical errors do not merit rejection their ballots. Therefore, the Association incorrectly rejected the ballots for units 121, 203, 206, 214, 319, 401, 402, and Although the recall involved a homeowners association (HOA) governed by chapter 720, Florida Statutes, the statues and administrative rules governing HOA recalls are substantially the same as those for condominiums (2)(b) & (3), Fla. Stat. 6 The Association claims that it lacked an ownership list at the time of the board recall meeting because its former management company was withholding the list. Therefore, the Association claims it was without knowledge as to the correct owners of these units. However, the minutes of the recall board meeting lists the owners of these units along with owners of all other units who voted. It is evident that the Association was aware of the ownership. Furthermore, there is no explanation as to why the Association was only unable to verify the ownership of a limited number of units. 9

10 Alegiant II/Marinello Unit 306 The minutes of the board recall meeting state that unit 306 is co-owned by Alegiant II, LLC (95%) and Lisa Marinello USA (5%). The voting certificate and ballot for this unit was signed by Larry Barry. The minutes state that, in addition to the reason that the other Alegiant II, LLC ballots were rejected, the ballot for unit 306 was rejected because the other owner did not sign the certificate of authority. The Association has waived its objection to ballots based upon defective voting certificates. Therefore, because Larry Barry was authorized to vote on behalf of the coowner company, as determined above, the ballot for unit 306 was improperly rejected. Pre-marked Ballots The minutes of the recall board meeting state that Association rejected the ballots for Units 101, 213, and 1104 because they were pre-filled/pre-printed. Arbitration cases have rejected ballots when the evidence clearly establishes premarking or alteration. Those cases involved an obvious pattern found in a majority of ballots or extrinsic testimony as to the marking. Lakes of Woodhaven Condo Ass n, Inc., v. Owners Voting for Recall, Case No , Final Order (February 10, 2005) (photocopied identical pre-checked ballots distributed for signatures); Les Chateaux Condo Ass n v. Unit Owners Voting for Recall, Case No , Summary Final Order (April 1, 2008) (recall boxes on majority of ballots checked by same person while signatures executed with different writing instruments); Ashley Arms Condo Ass n, Inc. v. Unit Owners Voting for Recall, Case No , Summary Final Order (October 29, 2004) (uncontested written statement from unit owner presented to board 10

11 before meeting to consider recall that he had signed a ballot without checking any boxes). Although the recall/retain boxes of the ballots were completed using typewritten X s, the ballots differ in the placement of the X s, the font and the format for the unit number. Therefore, the Association has not established a pattern of pre-marking. Additionally, the Association has not submitted any extrinsic evidence proving that the ballots were pre-marked. Accordingly, the Association improperly rejected the ballots for units 101, 213, and 1104 due to pre-marking. Power of Attorney The Association rejected 18 ballots because the ballots were signed by the voting representative appointed by the agent of a power of attorney (POA) which the Association claims was defective. 7 Rule 61B (1)(j), Florida Administrative Code, states, Written recall ballots may be executed by an individual holding a power of attorney or limited proxy given by the unit owner(s) of record. The Association argues that the POAs are governed by the Florida Power of Attorney Act, Part II of Chapter 709 of the Florida Statutes. Respondent contends that the section , Florida Statutes, controls and, therefore, the Florida Power of Attorney Act is inapplicable. Section , Florida Statutes, states as follows: The use of a power of attorney that affects any aspect of the operation of a condominium shall be subject to and in compliance with the provisions of this chapter and all condominium documents, association rules and other rules adopted pursuant to this chapter, and all other covenants, 7 Although the Association indicated during the final hearing that it was no longer challenging the validity of any voting certificates, because all of the disputed POAs appoint a corporation as the principal s agent and the corporate agent appointed a voting representative who signed the ballots, the validity of the ballots and voting certificates are intertwined and depend upon the validity of the POAs. 11

12 conditions, and restrictions in force at the time of the execution of the power of attorney. Respondent contends that the legislative intent of the statute only is to require POAs involving condominiums to comply with Chapter 718, Florida Statues, and rules adopted pursuant thereto and the condominium s governing documents. The undersigned does not agree with Respondent s interpretation. A more reasonable interpretation of the statute is that any additional requirements for POAs found in Chapter 718, the Division s Administrative Rules, or a condominium s governing documents are applicable to the use of a POA that affects the operation of a condominium. In 2011 the Florida statutes governing POAs were significantly revised when the legislature amended Chapter 709 of the Florida Statutes in order to create the Florida Power of Attorney Act. The revisions were made effective October 1, Ch , 34, Laws of Fla. Invalid POAs Due To Lack Of Two Witnesses Signatures The Association rejected the ballots for units, 301, 305, 417, and 707 because the POAs relied upon by non-owner signatories of the ballots lacked the signatures of two witnesses. Section , Florida Statutes, provides that the requirements of the Florida Power Attorney Act related to the execution of a POA are to be applied prospectively stating, in pertinent part, as follows: (1) A power of attorney executed on or after October 1, 2011, is valid if its execution complies with s (2) A power of attorney executed before October 1, 2011, is valid if its execution complied with the law of this state at the time of execution Because all of these POAs were executed on or after October 1, 2011, they must comply with the requirements of section , Florida States. 12

13 Section (2), Florida Statutes, states as follows: A power of attorney must be signed by the principal and by two subscribing witnesses and be acknowledged by the principal before a notary public or as otherwise provided in s The POAs relied upon by non-owner signatories for units 301, 305, 417, and 707 are defective because they lack two subscribing witness. Therefore, the Association properly rejected the ballots for units 301, 305, 417, and 707. Agent Does Not Qualify Under Section (1), Florida Statutes The Association rejected the ballots for units 313, 505, 817, and 1013 claiming that the agent appointed by the POAs for these units is not eligible to serve pursuant to section (1), Florida Statutes. The statue states: The agent must be a natural person who is 18 years of age or older or a financial institution that has trust powers, has a place of business in this state, and is authorized to conduct trust business in this state. The POA for units 313, 505, 817, and 1013, appoint Florida Homes as the principal s agent. It has not been demonstrated that Florida Homes is a financial institution as described by the statute. Therefore, if the statute is applicable, Florida Homes is ineligible to serve as an agent and the POAs are invalid. Respondent argues that because the POAs were executed prior to October 1, 2011, pursuant to section , Florida Statutes, section (1), Florida Statutes, is inapplicable, and the law of the State of Florida in effect at the time of execution applies. However, section , only addresses the prospective application of the new requirements for the execution of a POA. It does not address the qualifications of an agent. 13

14 Section , Florida Statutes, establishes the general applicability of the 2011 amendments as to POAs executed prior to the effective date of the Act. Section , states as follows: Except as otherwise provided in this part: (1) With respect to formalities of execution, this part applies to a power of attorney created on or after October 1, (2) With respect to all matters other than formalities of execution, this part applies to a power of attorney regardless of the date of creation. (3) With respect to a power of attorney existing on October 1, 2011, this part does not invalidate such power of attorney and it shall remain in effect. If a right was acquired under any other law before October 1, 2011, that law continues to apply to the right even if it has been repealed or superseded. (4) An act of an agent occurring before October 1, 2011, is not affected by this part. When the POAs were executed, except for durable POAs, the law did not impose any qualifications for agents and Florida Homes could rightfully serve as an agent. The subject POAs are not durable POAs and, therefore, Florida Homes is not prohibited from serving as an agent. Accordingly, the Association improperly rejected the ballots for unit 313, 505, 817 and Unit 220 The Association rejected the ballot for unit 220 because the POA associated with the unit lacked the signatures of two witnesses. Although the unit owner of unit 220, Harald Uli Kleber, granted 123 Cape the power of attorney to manage the unit, the ballot is signed Uli Kleber. The minutes of the board recall meeting appear to confirm this because they also reject the ballot claiming that the signature appears to pre-filled or pre-printed. Therefore, it is found that the ballot for unit 220 was improperly rejected due to a defective POA. 14

15 Signature Appears to Be Forged In addition to the reasons stated above, the minutes of the Board Recall meeting indicate that the ballot for unit 220 was rejected because the signature appears to be pre-filled or pre-printed. In addition, the minutes state that the ballot for unit 101 was rejected because it was not original. For both ballots, the Association has submitted other documents with owners signatures for comparison. The allegation that a signature does not match exemplars will not be found to create a disputed issue of material fact without supporting affidavits from the unit owner whose signature is in dispute or expert testimony from a qualified document examiner who has had the opportunity to inspect known original signatures. See Monaco Garden Condo. Apts., Inc., v. Unit Owners Voting for Recall, Arb. Case No , Summary Final Order (May 12, 2010). See also Esplanade Club, Inc. v. Unit Owners Voting For Recall, Arb. Case No , Summary Final Order (October 20, 2010). The Association has not provided any such proof and therefore its rejection of the ballots on this basis fails. Conclusion Pursuant to section (2)(j), Florida Statutes, any member of the board may be recalled and removed without cause by the vote or agreement in writing by a majority of all of the voting interests. The Association contains 240 voting interests. Therefore, 121 votes are required to recall a board member. Each board member targeted by the recall received 138 votes in favor of his recall. During the final hearing, the Association has limited its objection to 35 ballots. 8 8 The totals include the ballot for unit 407 which the Association conceded was not rejected by it during the Board recall meeting. 15

16 Of those 35 ballots, the undersigned has found that the Association improperly rejected 18 of them, resulting in 121 votes in favor of recalling each board member. 9 Therefore, the recall will be certified. Based upon the foregoing, it is ORDERED: 1. The recall of Gary Oaks and John Todd is hereby certified and they are removed from the board of directors effective upon the date of the mailing of this order. Within five days of the date this order, Gary Oaks and John Todd shall return all association records and property in their possession to the board. 2. Because less than a majority of the members of the board have been recalled, the vacancy created by the recall may be filled by the affirmative vote of a majority of the remaining directors as provided in section (2)(j)6., Florida Statutes. Leon County, Florida. DONE AND ORDERED this 31 st day of October, 2016, at Tallahassee, James W. Earl, Arbitrator Department of Business and Professional Regulation Arbitration Section 2601 Blair Stone Road Tallahassee, Florida Telephone ; Fax The remaining disputed ballots do not need to be addressed as this is determinative of this matter. 16

17 Certificate of Service I hereby certify that a true and correct copy of the foregoing Final Order has been sent by U.S. Mail and to the following persons on this 31 st day of October 2016: Robert Cooper, Esq. Hahn Loeser & Parks, LLP 2400 First Street, Suite 300 Fort Myers, FL RACooper@hahnlaw.com Bradley W. Butcher, Esq. Butcher & Associates, P.L Porto Fino Circle, Suite 2 Fort Myers, FL bwb@b-a-law.com Diane M. Simons, Esq. Simons Law Group, PLLC 1314 Cape Coral Parkway E. Suite 209 Cape Coral, FL DSimons@simonslawgroup.com James W. Earl, Arbitrator 17

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