Can A Board Usurp an Election?

Started by MichaelB32 • 12 replies • 1197 views

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MichaelB32 (California)
Posts: 141

Posted:

During our yearly election, a member received a mandate of almost 34% of the votes. Going back to 2012, this is the largest number of votes cast for a single member. But during the campaign there was a vicious attack against this member for his concern about HOA cost overrides for unnecessary legal expenses. Our HOA is running a 13% deficit this year. After the election results were announced, the Property Manager asked all the members at the Election meeting to leave the room and locked the doors to hold the Organization Meeting in secret. This appears to be in violation of the Davis-Stirling Open Meeting Act. Before any officers were assigned and seated, three elected attendees voted to remove this member because he does not sleep in his condo on a regular bases. The remaining member abstained. This member protested against this action stating that this was not on the agenda and that this had to be scheduled for another meeting where witness would be invited. They stated that this was so important that they would do it anyway. After the vote, he was asked to leave the room and the elections were announce without him receiving a seat on the Board. He never withdrew. Needless to say, this is not going well with the membership and is polarizing the HOA.

Question1: Did this Board usurp the HOA Election?
Question2: Can the HOA remove a candidate in an Organization Meeting?
Question3: Did these Board members exposed themselves to personal liability by violating the Davis-Stirling Act and therefore the HOA legal council can not defend them.
Question4: Is the Property Management Company violating its duties by allowing and participating with HOA to violate the Davis-Sterling Open Meeting Act.

VOTE PERCENTAGE
CANDIDATE 1 33.64%
CANDIDATE 2 22.42% voted to remove
CANDIDATE 3 18.18% abstained
CANDIDATE 4 13.94% voted to remove
CANDIDATE 5 11.82% voted to remove

Michael Barto
[email protected]

RogerB (Colorado)
Posts: 5,067

Posted:

My answers are:
1) Yes.
2) If you mean a duly called Board meeting, rather than an Organization Meeting, the Board must follow the association's Bylaws.
3) Probably. However the HOA D&O insurance can defend the Board members.
4) Possibly; but more info would be needed since the Management Company's Agent has no control over decisions of the Board.

My concern is- If this member was not qualified to be a Board member then why was their name allowed to be on the ballot?

RichardP13 (California)
Posts: 3,868

Posted:

Michael,

Knowing the circumstances of your HOA, IF the rule about being an on-site is legitimate, then the Inspector of Elections should havee disqualified that person from getting on the ballot. That is their job. That being said:

1) Yes
2) No, first the meeting MUST be held in a open session, open to all members, PERIOD.
3 and 4) They violated Corporation Code, not Civil Code in regards to the Organizational meeting.

Creating qualification rules and placing them in the Elections outside of being in the Bylaws, is a gray area. Placing the onsite qualification into the election Rules without amending the Bylaws will not fly in court, as it is not fair and reasonable. Many HOA Boards throughout the country have an off-site owner on their Board. Look at Palm Springs area, all their Board members live in Canada during the summer.

Can you show that the rule was properly implemented, giving the members the 30 day comment period? If not properly disclosed to the Members, it is null and void.

Things like this is why they are running in the red.

MichaelB32 (California)
Posts: 141

Posted:

The Adoption of the Election Rule had a 30 day comments period with letter sent to the Board that it was an improper rule. Bt the Board passed is anyway with a five man Board with only a vote of three Board members in 2014.
The member in question uses their condo as an extended home. He has declared it to be his primary residence because it s address in on his Driver's License and bills are sent to this address. He does not sleep there on a regular bases but sleeps at another property he owns across the street. The unit is not a rental. It is declared a second home and his daughter is staying there while going to school. She pays nothing. The member has been involved with the HOA since 2012 having served on the Board from 2012 to 2013 as did another non resident from 2013 to 2014.

Michael Barto
[email protected]

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By MichaelB32 on 08/10/2017 10:55 AM
During our yearly election, a member received a mandate of almost 34% of the votes. Going back to 2012, this is the largest number of votes cast for a single member. But during the campaign there was a vicious attack against this member for his concern about HOA cost overrides for unnecessary legal expenses. Our HOA is running a 13% deficit this year. After the election results were announced, the Property Manager asked all the members at the Election meeting to leave the room and locked the doors to hold the Organization Meeting in secret. This appears to be in violation of the Davis-Stirling Open Meeting Act. Before any officers were assigned and seated, three elected attendees voted to remove this member because he does not sleep in his condo on a regular bases. The remaining member abstained. This member protested against this action stating that this was not on the agenda and that this had to be scheduled for another meeting where witness would be invited. They stated that this was so important that they would do it anyway. After the vote, he was asked to leave the room and the elections were announce without him receiving a seat on the Board. He never withdrew. Needless to say, this is not going well with the membership and is polarizing the HOA.

Question1: Did this Board usurp the HOA Election? Yes ... per what you stated.
Question2: Can the HOA remove a candidate in an Organization Meeting? NO ... BOD members are elected by the membership and only the Association members may remove. Other BOD members can only remove an Officer from a position and NOT a fellow BOD member from the Board. The election took place and the individual was elected ... to remove the Membership would need to recall the individual. Which apparently via the votes will not likely happen.
Question3: Did these Board members exposed themselves to personal liability by violating the Davis-Stirling Act and therefore the HOA legal council can not defend them. That would be a question for the HOA insurance company to potentially decide. If determined they violated fiduciary duty, then potentially they could be held personally liable. That would be a question for an attorney or ultimately a judge in a court of law.
Question4: Is the Property Management Company violating its duties by allowing and participating with HOA to violate the Davis-Sterling Open Meeting Act. If what is stated is true then potentially ... Yes

VOTE PERCENTAGE
CANDIDATE 1 33.64%
CANDIDATE 2 22.42% voted to remove
CANDIDATE 3 18.18% abstained
CANDIDATE 4 13.94% voted to remove
CANDIDATE 5 11.82% voted to remove

RichardP13 (California)
Posts: 3,868

Posted:

If the rules was given a 30 day comment period, they are two ways to change. A majority vote of the homeowners can remove a rule implemented by the Board, or challenge the rule in court, which I believe is improper.

AugustinD
Posts: 5,144

Posted:

The advice above appears good. I would add that the HOA general counsel must, by law, take direction from a board majority on issues like this. If even the remotest possibility exists that the board majority is correct in asserting that this member is not eligible to be on the board, then the attorney will likely assist the board majority thusly.

On the other hand, it appears the HOA is highly vulnerable to expensive litigation over this. If I were the HOA attorney, I would tell the new board as much and recommend that it instead seat the member as a director. Then--doh--recognize that the new board has a firm majority who frequently or always opposes this new director. The new board could just outvote the guy at every turn, limit his moves legally through appropriate legitimate maneuvering at meetings, and so on.

Either way, with the overwhelming support of this member/new director, and the seeming incompetence of the new board, I would say the chances are good that issues where you are will be in court within a few years. This may be the shortest path to success.

AugustinD
Posts: 5,144

Posted:

Michael, on June 15, you posted that this person succeeded in getting his 'name on the ballot by legal declaring his Primary Residence to be his Condo.' Do you mean the HOA attorney did approve of this person's running for (and if victorious being seated on) the board? So yesterday, are you saying that the Board is now going against the advice of counsel, and this is well-documented?

If so, this member's case of reckless misconduct and such by the Board is much stronger. When a board fails to follow its attorney's advice, the board's chances of indemnification by the insurer are less.

MichaelB32 (California)
Posts: 141

Posted:

According to our ByLaws and Davis-Sterling, a majority vote of a Board may remove a Board member for whatever reason they want. So the results would be the same except I have a mandate from the voters to be on this Board. We are talking about an illegal procedure where the Board and the property manager violated Davis-Sterling Open Meeting Act. As a Board member, your duty is to enforce the Rules and Regulations, CC&R's and Davis-Stirling. The method they used to remove me was a blatant violation of their fiduciary duty. The person pulling the strings on this is the same former Board member who authorized $130K for litigate against one homeowner with the HOA only receiving back $30K when the issue could of been resolved by simply having the City enforce its building codes. At the "Organizational Meeting", these three Board members wanted me to withdraw after the election results and in close session. I did not do that, so they were there faced with what to and then broke some more Davis-Stirling. Now if these three Board members do not enforce the Davis-Stirling along with the property managers, then they should resign for not doing their duty along with the Property Manager.

The majority of the membership feels very strongly about this. But they do not have an organization method to to this.

A petition has been mounted to remove the Election Rule which will probably be ignored by this Board as they have done for three years.

So now the question comes down to is how do we removed a couple of these Board members for not performing their judiciary duty.

Michael Barto
[email protected]

DouglasK1 (Florida)
Posts: 2,046

Posted:

Quote:

Posted By MichaelB32 on 08/11/2017 11:23 AM
According to our ByLaws and Davis-Sterling, a majority vote of a Board may remove a Board member for whatever reason they want.

I'm not fully up on DS, but my understanding is that a board can remove an officer without cause, I'm not aware that directors can be removed without cause.

Are you sure your bylaws don't refer to officers being removed by board vs. directors being removed by the board?

Escaped former treasurer and director of a self managed association.

RichardP13 (California)
Posts: 3,868

Posted:

A Board CANNOT remove a elected Director unless that director does not meet certain qualifications and they be called to a hearing before removal.

If the Board APPOINTED a director, they can also remove same said director.

KerryL1 (California)
Posts: 14,550

Posted:

I'm with Douglas and Richard. A board a cannot remove a director if the members elected him OR unless there's something in the Bylaws that state a director's seat can be declared vacant if s/he misses too many meetings, doesn't correct violations, or????

Look, Michael, If you're going to make claims that your Bylaws or Davis-Stirling require this or that, please give us the complete relevant citation. To tell the truth, your thread and previous ones are very hard to follow due to the citations problems and because you jump all over the place. Try to be succinct and better organized.

In CA the organizational meeting, where officers are chosen and other bits of housekeeping are also done (e.g., meeting dates). must be an open meeting.

didn't you say previously that the Board attorney attended? What did s/he do/say?

The PM didn't oppose the Davis-Stirling Act, the Board did. PMs can & do advise, but it's the Board who makes motions, votes, approves, etc. I believe I've advised you previously to read your HOA's contract with your Management Company.

To remove directors, you must follow what's in your bylaws and in Davis-Stirling. There's a petition process that you must follow exactly. You maintain you have a lot of support from the community so have one or more members help you with reading the relevant materials and interpreting them.

Please learn the basics: what is the definition of fiduciary duty or fiduciary obligations?

Finally, what does this table mean? "VOTE PERCENTAGE
CANDIDATE 1 33.64%
CANDIDATE 2 22.42% voted to remove
CANDIDATE 3 18.18% abstained
CANDIDATE 4 13.94% voted to remove
CANDIDATE 5 11.82% voted to remove"

Don't your ballots just list the names of the candidates and voters pick the top three (or whatever)? The inspector( of election announcers these raw numbers after all votes are tabulated. Your HOA also must post in a public place within 10 or 15 days the number (not %) of votes each candidate receives. There are no "abstentions."

And what does this quote of yours mean?
"The Adoption of the Election Rule had a 30 day comments period with letter sent to the Board that it was an improper rule." Are you saying that just one Owner who chose to comment opposed the new rule? Here, we get very few comments from Owners, say 8 out of 200+ units. so while we do read them as a Board, the return rate suggests that one or tow opposed can't be taken too seriously.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By MichaelB32 on 08/11/2017 11:23 AM

So now the question comes down to is how do we removed a couple of these Board members for not performing their judiciary duty.

The Membership either conducts a RECALL or the Memberhip waits until the next election and REMOVES the board members by NOT electing them agin to office. If you do a Recall you need to have individuals willing to immediately step up to the plate and assume their duties. Waiting until next election gives you more time to line up said individuals to run for office.

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