RECALL BOMBSHELL: I HATE TO SAY I TOLD YOU SO

When the Condo Crime Bill, HB 1237, was being debated I wrote a blog in March that warned about the bill as follows:

 

I’m almost embarrassed to write the next provision.  Recalls would now be automatic.  If the Board receives a stack of recall ballots that equal more than 50% of the units, the people are recalled, regardless of whether or not all of the ballots are fake, fraudulent or signed by non owners.  It would now be up to the recalled persons to file their own arbitration case.

I thought the idea was to prevent fraud?  This bill encourages fraud.  Just quickly gather as many recall ballots as you can, have them signed by anyone, serve them on the board …and you win.  Make the poor director who was duped responsible for going out and hiring an attorney now.  Where is there any proof or even suggestion that the recall process is flawed?  I can tell you it isn’t.  The process is detailed and during the 5 day period between the time the board gets served with the recall ballots and the recall meeting, a lot of work goes into verification of the ballots.  Duplicates are searched for, photocopies are disregarded, ballots are checked to ensure that the ballot is signed by an owner and not a renter, ballots are checked to ensure the person signing it has the authority to sign it pursuant to a voting certificate.  That all gets thrown out the window now, and he who files fake ballots wins anyway.  I have no idea of the thought process that went into this but this provision is absolutely dangerous and actually rewards illegal behavior.

That’s what I said.  I’m on record.

In response to my concerns, I was assured by legislators and their staff that I was reading the proposed bill incorrectly and that the Board would certainly not lose their right to not certify an obvious invalid recall attempt and they still have the right to file an arbitration action.  I was assured that basically nothing had changed.

Well……..I told you so.  On September 1st Chief Arbitrator James Earl, in Sunbrook Condominium Association v. Unit Owners Voting for Recall, Case No. 2017-03-8121entered an Order that says the Arbitration Division no longer has jurisdiction to hear recall cases filed by a Board who seeks to challenge the recall.  Now, it’s off to court you go.  So, instead of recall cases being determined quickly in arbitration, as required by the statute, recall cases will head off to court, where justice is anything but swift.  Instead of a forum where no discovery is allowed like in arbitration, we go to court where mountains of interrogatories and requests for productions can be served against your adversary and where you can sit parties down for deposition, after deposition, after deposition. Instead of a relatively cheap inexpensive way to resolve recall cases, we can spend tens of thousands of dollars on each case.  What a win for the lawyers!

 

Or…….even if the attempted recall is obviously defective, even if every vote is fraudulent, even if the procedure was done wrongfully in violation of law, you can choose to accept it I guess and reward the illegal behavior and save the unit owners some money.  You can also agree to sell your home and just move out.

 

Again, the recall statute was only broken in one way, but it took real guts to fix it.  The recall statute worked very well, unless and until a Board and their counsel came up with frivolous defenses to certifying a recall.  Several defenses like:

  1. That’s not really the unit owner’s signature on the recall ballot;
  2. The unit owners who signed the recall ballot were duped into signing;
  3. The person who signed the recall ballot was not the person authorized to sign on the voting certificate (yet the association did not require voting certificates in the last election);

are all routinely and repeatedly struck down by arbitrators, year after year, case after case. That didn’t stop Boards and their counsel from using these frivolous defenses year after year after year as reasons for failing to certify a recall.  As a result, the process needlessly dragged on and on with no punishment to the association or their counsel for deliberate delays.

So here’s how you fix it.  You adopt a procedure that already exists in every civil case in court.  Without getting too technical, Florida Statute 57.105 allows a judge to award attorney’s fees against a losing party and their attorney who files a claim or defense that the losing party or the losing party’s attorney knew or should have known:

(a) Was not supported by the material facts necessary to establish the claim or defense; or

(b) Would not be supported by the application of then-existing law to those material facts.

An attorney files a frivolous defense to a recall – hit the board and their counsel with attorney’s fees and costs.

A unit owner representative files fraudulent ballots, hit that unit owner with prevailing party attorney’s fees and costs.

Maybe, just maybe, the shenanigans would stop if there was a monetary penalty attached to it.

I also do not see this as an “us vs. them” situation.  Unit owners v. Board members.  All of us should want a system in place that would leave in tact the ability to remove a Board member by the majority, but only after that board member received due process.  That’s what our justice and legal system is all about.  Nothing else should be tolerated, especially a system that makes the recall “immediate.”  We don’t convict a criminal “immediately” upon his arrest, we don’t award a plaintiff in a civil case a verdict “immediately” upon his complaint being filed against the defendant and we shouldn’t kick a person off the board “immediately” after being served with recall ballots.  Our system of due process and fair play requires nothing less.

 

There may not be a “perfect” system — but as a result of the order by Chief Arbitrator James Earl, the current situation needs to be fixed —- and quick.

Dedicated to all those who lost their lives sixteen years ago today in New York, Washington D.C., Pennsylvania and to all our servicemen and servicewomen who fought and gave their lives fighting for our country in response to that horrific day.  We will never forget.

 

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