STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS REGULATION, ) DIVISION OF FLORIDA LAND ) SALES, CONDOMINIUMS AND MOBILE ) HOMES, )

)

Petitioner, )

)

vs. ) Case No. 85-2614

)

WINDSOR PARK CONDOMINIUM )

ASSOCIATION, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

This case was heard by R. L. Caleen, Jr., Hearing Officer with the Division of Administrative Hearings, on January 9, 1986; in West Palm Beach; Florida. The parties were represented by counsel:

APPEARANCES

For Petitioner: Karl M. Scheuerman; Esquire

725 South Bronough Street Tallahassee, FL 32301

For Respondent: Richard O. Breithart, Esquire

818 U.S. Highway One, Suite 8 North Palm Beach, FL 33408

ISSUE

1. Whether Respondent, a condominium association, violated Section 718.112(2)(c), Florida Statutes; by holding board meetings on January 2, 7, and 16 or 17, 1985, which were not open to all unit owners and for which notice was not posted;

   
   

2. If so, what sanctions should be imposed.

BACKGROUND

By notice to show cause, as subsequently amended, Petitioner, Department of Business Regulation, Division of

Florida Land Sales, Condominiums and Mobile Homes ("Division"), charged Windsor Park Condominium Association, Inc. ("Association"), with violating Section 718.112(2)(c), Florida Statutes, by holding several board meetings in January 1985, which were not open to all unit owners and for which no notice was posted. After the Association denied the charges and requested a hearing, this case was referred to the Division of Administrative Hearings for assignment of a hearing officer.

Hearing was thereafter set for January 9, 1986.

At final hearing, the Division presented the testimony of Muriel Siebern, Norma M. Calhoun, Susan Day and Harry Christie; the Association presented the testimony of Fred Kelly.

Petitioner's Exhibit Nos. 1 through 4 and Respondent's Exhibit No. 1, were received in evidence.

No transcript of hearing was filed. The parties filed proposed findings of fact by February 11, 1986, which are ruled on in the attached Appendix.

Based on the evidence adduced at hearing, the following facts are determined:

FINDINGS OF FACT

1. Petitioner, the Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, is the state agency charged with the duty of enforcing Chapter 718, Florida Statutes, the Florida Condominium Law.

   
   

2. Respondent, Windsor Park Condominium Association, Inc., is the condominium association responsible for a 64-unit residential condominium known as the Windsor Park North Condominium ("Condominium") located at 120 Wettaw Lane, North Palm Beach, Florida.

   
   

3. In their Prehearing Stipulations, the parties agreed that the disputed issues are whether the Association, contrary to law, held condominium board meetings on January 2, 6 and 16 and 17, 1985, which were not open to all unit owners and for which notice was not posted. The Association contends that if such meetings were, in fact, held, they were "emergency" meetings for which notice was not required under the statute.

   
   

4. In December 1984, a five-member board of administration was elected by the members of the Association to run the condominium association in 1985; Muriel Siebern was elected President.

5. Until November 1984, Respondent had contracted with a professional management company known as First Columbia Management to manage the Condominium. Norma Calhoun carried out those management duties on behalf of the company. When the contract expired in November 1984, Harry Christie (then President of the Association) signed a new one-year contract, on behalf of the Association, with Florida Management Professionals, Inc., a newly formed management company which was owned by Norma Calhoun.

6. Until November 1984, the First Columbia Management hired, fired, and supervised employees, maintenance personnel and repairmen billed and collected assessments of common expenses paid Association bills prepared the annual budget and year-end financial statements communicated with the Association's attorney and, attended unit owner meetings. From November until early January, 1985, these functions continued to be performed by Norma Calhoun, on behalf of her newly formed management company. But in early January 1985, the newly elected board of administration terminated the Association's contract with Ms. Calhoun's company and began performing the management duties of the Association without the assistance of a professional management company.

   II.

   
   

7. The newly elected board of administration of the Association held four meetings between January 2 and January 17, 1985. Advance notice of these meetings was not posted on the Condominium property; and no unit owners other than members of the present (or past) board attended.

   
   

8. The first meeting was held on January 2, 1985, at the former management company's offices in North Palm Beach. Four members of the board (a quorum) were present: Muriel Siebern, President; Sue Day, Vice President; Fred Kelly, Treasurer; and Lori Powers, Member-at-Large. Ms. Calhoun, and Harry Christie, President of the outgoing board, were also present.

   
   

9. One purpose of this meeting was to affect a turn-over of the Association's records to the new board. Mr. Christie, outgoing president, presented the key to the locker room, financial statements for the Association from January through October 1984, the book of minutes, a history of the names and addresses of all unit owners, and the results of the vote taken at the December 1984 annual meeting. The board, however, also discussed with Ms. Calhoun the nature and performance of her management duties, reviewed various contracts, and discussed with her a pending court hearing in a lawsuit in which the Association was a party.

   
   

10. No emergency conditions surrounded this meeting which would have precluded the posting of notice at least 48 hours in

    advance. Ms. Siebern had called Ms. Calhoun five days before the meeting to ask her to attend.

    
    

    III.

    
    

11. On January 7, 1985, Ms. Siebern and two other members of the board (a quorum) met in the offices of Richard Breithart (the attorney who now represents the Association) to discuss the management contract which Mr. Christie had signed with Florida Management Professionals, Inc., in November 1984. (The board members had discussed the contract on the way to attorney Breithart's offices and felt it was not binding.) After Mr. Breithart concurred, the board decided to fire Ms. Calhoun and terminate the contract with her management company.

    
    

12. After polling the two absent board members (by telephone) and obtaining their concurrence, the three board members met with Ms. Calhoun that same day at First Columbia Management's offices, and informed her of their decisions. They asked that she turn over to them all of the Association's records, including all financial statements. Some of those records were not immediately available since they were kept at the former management company's offices in Clearwater. Ms. Calhoun responded that she would retrieve the material, but that it would take several weeks to receive it. The board members asked her to call them when it was received. No one told Ms. Calhoun that an emergency existed or that there was an urgent or pressing need for the records. The board members also asked that the Association's checkbook be returned.

    
    

13. Although the Association asserts that these were emergency meetings which excuse their failure to post 48 hours notices, no emergency has been shown. Prior to their January 7 meeting, the individual board members were given at least 24 hours notice. The ostensible "emergency" was based on the need to obtain the Association's complete records from Ms. Calhoun, but Mrs. Siebern and other members of the board became aware of the need to obtain the Association's records as early as December 1984. Moreover, the board members, thereafter, did not articulate a need to obtain the records on an emergency basis, which precluded 48 hours notice. (See letter of Ms. Siebern to Mr. Cassels, dated February 12, 1984, attached to Petitioner's Exhibit No. 2). The Association's answers to the Division's interrogatories also fail to mention the existence of an emergency. (Petitioner's Exhibit No. 3)

    
    

14. Finally, the Association has not shown any likelihood of injury if it had delayed its January 7 meeting an additional

    24 hours in order to post 48-hour notices to all unit owners. Although the board encountered delay in obtaining the

    Association's complete records from Ms. Calhoun, no injury was shown. There is no evidence or even allegation that Ms. Calhoun was guilty of misappropriation of funds or that the Condominium's bills were not being timely paid.

    
    

    IV.

    
    

15. On January 16 or 17, 1985, three board members, including Ms. Siebern, met again at the offices of attorney Breithart. After obtaining concurrence (by telephone) of the two absent board members, the board decided to dispense with the services of attorney Levine, who had been representing the Association in the pending lawsuit, and hire attorney Breithart in his place.

    
    

16. The Association asserts that an emergency existed (precluding the need to post notice in advance of the meeting) since a hearing in the pending lawsuit was imminent. This emergency, however, was self-induced even if it existed, it was brought about by the board's failure to timely act. (The board members were dissatisfied with attorney Levine as early as December 1984, when he advised the members at the annual meeting of the Association that they would not prevail on the merits of the pending lawsuit. The board members were aware--then--that a hearing would be scheduled in the lawsuit during the next several weeks.) Another reason for firing attorney Levine was his alleged charging of expensive fees. But it has not been shown why action could not be taken to resolve this concern after giving 48 hours notice, as required by the Condominium Law.

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. Section 120.57(1), Florida Statutes (1985).

    
    

18. Section 718.112(1), Florida Statutes, declares that the operation of condominium associations shall be governed by the

    by-laws, which are deemed to include the following provisions relating to open meetings:

    
    

    Section 718.112(2)(c) Board of administration meetings. Meetings of the board of administration shall be opened to all unit owners. Adequate notice of all meetings shall be posted conspicuously on the condominium property at least 48 hours in advance, except in an emergency. Notice of any meeting in which assessments against unit owners are to be considered for any reason

    shall specifically contain a statement that assessments will be considered and the nature of any such assessments.

    
    

    Division Rule 7D-23.01(1), Florida Administrative Code, defines "meeting of the board of administration" to mean:

    
    

    1. . . . any gathering of a quorum of the members of the board of directors or representative body responsible for administration of the association, for the purpose of conducting condominium business.

       
       

19. The evidence convincingly establishes that the Association violated Section 718.112, Florida Statutes, on January 2, 7 (twice), and January 16 or 17, 1985, by holding board meetings without placing conspicuous notice on the Condominium's property at least 48 hours in advance. At each of the four meetings, condominium business was conducted. Indeed, the decisions made at those meetings were vital to the condominium unit owners and involved such matters as who would be responsible for the day-to-day management of the Condominiums during the coming year and who would represent it in a pending lawsuit. No emergency was shown which would justify dispensing with the required 48-hour notices. Condominium unit owners have been described as "a little democratic subsociety. "

    Hidden Harbour Estates v.Norman, 309 So.2d 180, 182 (Fla. 4th DCA

    1975). The clear right of unit owners to attend and participate in the meetings of their governing boards is vitiated without adequate prior written notice of each meeting.

    
    

20. Section 718.501(1)(d)4., Florida Statutes, authorizes the Division to impose a civil penalty against a condominium association for any violation of this chapter. A penalty may be imposed on the basis of each day of continuing violation, but the penalty for any offense cannot exceed $5,000. Amounts collected are deposited with the Treasurer to the credit of the Florida Condominiums Trust Fund.

    
    

21. In the instant case, a penalty of $1,000 per violation, as suggested by the Division, is appropriate.

RECOMMENDATION

Accordingly, based on the foregoing, it is RECOMMENDED:

That the Association be found guilty of four violations of Section 718.112(2)(c), Florida Statutes; that it be required to

submit a certified check for $4,000 to the Division; and that it be ordered to henceforth conduct all board meetings in accordance with the notice and open meeting requirements of the Condominium Law.

DONE and ORDERED this 26th day of February, 1986, in Tallahassee, Florida.

R. L. CALEEN, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 26th day of February, 1986.

COPIES FURNISHED:

Karl M. Scheuerman, Esq. 725 S. Bronough St.

Tallahassee, FL 32301

Richard O. Breithart, Esq. 818 U.S. Highway One, Suite 8 North Palm Beach, FL 33408

APPENDIX

1. RULINGS ON PETITIONER'S PROPOSED FINDINGS OF FACT 1-7. Approved, in substance.

   8. Adopted, except the last nine lines are rejected as not supported by a preponderance of the evidence.

   9-31. Adopted, in substance.

2. RULINGS ON RESPONDENT'S PROPOSED FINDINGS OF FACT 1-2. Adopted, in substance.

3a-d; 4-7. Rejected as not supported by a preponderance of the evidence.

Docket for Case No: 85-002614

Orders for Case No: 85-002614