Electing a board member

Dear HOATalk,

We have a split board 2 to 2 on most issues The fifth (resigning) board member always votes with two of them.

Last general meeting the President planned on resigning, but he didn't tell us that ~~ Before he resigned he reccomended his replacement, then they took a vote ~ it carried with him voteing on this position. (3 to 2)

How can he vote for a replacement when at that time their was NO VACENCY. As soon as the vote carried he resigned.

Under 4.4 of our bylaws it clearly states

VACANCIES
Vacancies in the board caused bu any reason shall be filled by vote of the majority of the "REMAINING" directors ~~ etc. etc.

What is the parliamentary procedure on this matter. And if this is wrong, what can we do about it now..... Shall we take it to small claims court??

The other 2 board members had a person they wanted in, so it would have been a deadlock.

NancyM2

Nancy

I agree with Susan, the appointment is invalid as only the remaining directors may appoint a replacement. There is nothing improper for the resigning director to "recommend a replacement, but only the remaining directors may vote on the matter.

Was there a vacancy or not?

WHY would the board vote when there was no vacancy??

No matter if the president resigned later or not, there should have not been a vote if there was not a vacancy.

Besides, the new person is not the new president, just a new board member. Now the shuffle will begin for new officers.

Maybe I'm missing something - I'm not following you, here.

I'm going to disagree with the answers you've received so far in that it all depends on how it was worded. If the president announced: "I am resigning effective at the close of this meeting and I nominate Joe Blow to replace me." Then I would say the vote was valid and proper. I would imagine he did it this way to prevent the Board from being mired in a never ending pi**ing contest to appoint a new member. If you think the person shouldn't be on the BOD then recall them. Otherwise be prepared for expensive and protracted litigation which will do nothing but divide the community further.

Dear HOATalk (Richard)

If section 306 of the civil code dosn't exist any longer ~~ would it still apply?

This is the letter I got from the Mgmt Co's representive.
"quote"

I am aware of the By Laws provision from the Association's corporate counsel citing Corporations Code and Calif, case law which acually "trump" the By Laws.

And Yes it is unusual, I have never see anthing like this in my 20+ years in the industry. However if the attorney says it is legal... I am in no position to argue. (end of quote)

Keep in mind, this attorney is friendly with the person that was appointed, as well as the others that voted her in. She has a lot to gain by giving this reccomendation as they don't look at her billing that closely. The other two do...

Another question would be ~~~ Why contact the corporate counsel if it is already addressed in the Bylaws.

NancyM2

Glen

He didn't say anything during the meeting about resigning ~ but made a motion to appoint this person (which surprised me) ~ It was seconded, and a vote was taken ~~ it carried then he said he was resigning because he needed to sell his house. (he has not lived here for a while)

He then said he had a letter from counsel to confirm that Calif state code would back up this proceedure, and Calif code trumps the Bylaws.

The person that was appointed was not there, however he said he had talked to her and she would be willing to accept the position.

His resigination letter was dated several days before the meeting date, but was contingent on another appointment.(if you can do that)

This attorney that gave this opunion has a lot to gain by this new person being appointed, as a block of three they WON'T be scrutenizing her billing. As it is now our attorney sends in bill's stating~~~ I talked to homeowner ~ (?? time)talked to vendor (?? time)with no explanation of which homeowner or vendor ~ or relateing to what projet or case. The other two did lots of scnitinizing of her billing.

NancyM2

AGREED!!

Glen and Nancy

This was the very reason I had my Association eliminate quorum for ANY member meeting. There really is a problem when power is left to the few, instead of the many.

Nancy IMHO you would be better served to find willing and qualified replacements for the other members and either recall them or wait until their term is up and vote them out.

BTW The new Board member only serves until the old member's term expires unless your CC&R's call for something else. They would then have to face election just as any other Board member.

Yep Glen, that seems to be our only recource ~~~ fortunally we have a very qualified person that is willing to run in the next election. However that will have to be May 2011 (6 months) and a lot of damage could be done before then.

Thanks guys for all your interest and help

NancyM2

Treat the new person with respect and give them a chance, you may be surprised. Treat her as the enemy from the git-go and you can guarantee she will become one.

MaryA1,
The usefulness of proxies varies from State to State and Covenant to Covenant. In VA our HA is a non-taxable corporation. This state recognizes Proxies especially if mentioned in the By-Laws.

Our HA 'Articles of Incorporation' and our 'By-Laws' (written in the '70s) provide:

"...Election to the Board of Directors shall be by written ballot. At such election the members or their proxies may cast, in respect to each vacancy, as many votes as they are entitled to exercise under the provisions of the Declaration..."

"Any director may be removed from the Board, with or without cause, by a
majority vote of the members of the Association. In the event of death, resignation or removal of a director, his successor shall be selected by the remaining members of the Board and shall serve for the unexpired term
of his predecessor."

"Any officer may be removed from office with or without
cause by the Board. Any officer may resign at any time by giving written notice to the Board, the president or the secretary. Such resignation shall take effect on the date of receipt of such notice or at any later time specified therein, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective."

"The presence at the meeting of members entitled to cast, or of proxies entitled to cast one-tenth (1/10) of the votes of each class of membership shall constitute a quorum..."

"...At all meetings of members, each member may vote in person or by proxy. All proxies shall be in writing and filed with the secretary. Every proxy shall be revocable and shall automatically cease upon conveyance by the member of his Lot."

There is similar language in our Covenants. Also some restrictions regarding quorums of larger size for deciding certain issues (selling real estate or amending By-Laws or Covenants, etc.), written notifications for Board meetings, etc. Essentially for our HA purposes a proxy is a (very) limited Power of Attorney.

While it is true that, under Title 13 of the VA Code, proxies can be limited to 11 months, an exception is found when a longer period is expressly provided in the appointment form. [See http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+13.1-847 for more about how this state handles proxies.] All of our HA's proxy forms specifically stipulate until revoked in writing or a transfer of the lot ownership.

The relevance to your comment is in this state, in our HA, a Proxy can be valid for a very long time if a member doesn't sell their lot. This has freed many owners to designate a written proxy holder, then move away to another state. All of our Board members and Officers are members. All of them have acquired (with the passage of enough years) sufficient proxies so that most of them speaks with the authority of representing a double digit percentage of absentee homeowners.

Needless to say proxies can be hot items for those wishing to have their way. [It reached the stage here a decade ago where the Board and the membership had to agree upon ethics rules to stop poaching on each other's proxy turf. We experienced situations in which two or three different Board members would each present a proxy signed by a mischevous owner, all signed on the same day. Publishing a spreadsheet list of which member spoke for who kind of stopped that.]

NancyM2 needs to look at the following Davis Sterling Act explanation http://www.davis-stirling.com/MainIndex/DirectorResignations/tabid/1364/Default.aspx. It clearly shows that a Director has the legal right to resign based on the appointment of his successor. In fact, the wording used to express this condition is given in the text of the reference. The Bylaws of her Association are superceded by the Davis Stering Act. This is one of the reasons her Association's Board of Directors has undertaken to update both the CC&Rs and Bylaws. The text in the reference is given below.
============================================================================================================

Director Letter of Resignation (from the above web reference site)
Written Resignation. A director may resign at any time by submitting an email or a letter of resignation. The writing must be transmitted to the board but it does not need formal acceptance by fellow directors to be effective. Oral resignations are treated differently. A resignation may be withdrawn prior to its effective date.

Effective Date of Resignation. Resigning directors may set the effective dates and times of their resignations. Corp. Code §7224(c). Directors remain in office and continue to fully function as directors until such time as their resignations become effective. They may also participate in the appointment of their replacement.

Sample Letter. If a director wishes to resign from the board of directors, something similar to the following may be used:



Dear Board [or Dear Fellow Directors]:

Please accept my resignation from the Board of Directors and as an officer of the Board [if an office is held].

My resignation shall take effect immediately or or upon the appointment of my successor. [If the resigning director wants to participate in the selection of his/her successor, the resignation should take effect "upon the appointment of my successor"]

signature: _______________________

Officer Resignations. A different letter should be used if the director intends to only resign as an officer but not as a director.

Read more: Director Resignations http://www.davis-stirling.com/MainIndex/DirectorResignations/tabid/1364/Default.aspx#ixzz14oB4q7if
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