Quorum of previous membership meetings questioned

Started by DonnaM20 • 28 replies • 313 views

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DonnaM20 (Missouri)
Posts: 11

Posted:

Our HOA’s newest three board members (on an eight-member board) recently took over the board, claiming that the 2021 and 2022 membership meeting did not have quorums, and therefore the board members elected at those meetings are not valid board members. (At neither meeting, the issue of a quorum was not raised.) The “three” had their own organizational meeting and established officers, after which the HOA lawyer told them that the last “legally” elected board members should still be on the board. The “three” decided that no quorums had existed at memberships meetings since 2011 and 2010. So they added four “old” members from 2010 and 2011 elections to serve until a new election next month. Yet the 2013 minutes say a quorum existed that year (no numbers were given). The board doesn’t “trust” the minutes since no numbers were cited and is ignoring those minutes. Other minutes do not reflect that a quorum did or did not exist, but our management agency contends we did have a quorum in 2022. Again, the “three” do not trust the management agency and refuse to believe it. MY QUESTIONS: What is the process, long after a meeting, for determining whether a quorum existed? What is the process for challenging that? Did the “three” have a quorum when they met to set officers? How should the HOA move forward.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By DonnaM20 on 03/21/2024 10:20 AM
Our HOA’s newest three board members (on an eight-member board) recently took over the board, claiming that the 2021 and 2022 membership meeting did not have quorums, and therefore the board members elected at those meetings are not valid board members. (At neither meeting, the issue of a quorum was not raised.) The “three” had their own organizational meeting and established officers, after which the HOA lawyer told them that the last “legally” elected board members should still be on the board. The “three” decided that no quorums had existed at memberships meetings since 2011 and 2010.

That dog does not hunt. Legally very relevant fact: The prior people who made decisions in the name of "the board" for many years, including 2021 and 2022, did so without anyone objecting. These decisions are legal pursuant to the contract principle of "acquiescence." Why would the courts see things this way? One reason is because otherwise, there is a mess. Which I think you and others actually have noticed. Your HOA attorney should make this point and as needed, someone should nudge the HOA attorney along on it. I am not an attorney. But many here know more HOA law than certain HOA attorneys.

In addition when quorum is not met at an annual meeting, I agree no election can be held. The Missouri nonprofit corporation act says the directors on the board at the time of the annual meeting where quorum was not met remain on the board. See https://law.justia.com/codes/missouri/2022/title-xxiii/chapter-355/section-355-331/. The latter is what the HOA attorney was referencing, with one caveat as follows: I do not care if these directors were elected or not: They served for some period without anyone objecting. They made decisions in the name of the board without anyone objecting. They were directors and remain directors.

You might want to explain why you did not speak to 2023 or 2024 above. When is the annual meeting supposed to occur? Did the annual meeting occur in 2023 or 2024.

You are going to have to post the numbers for how many people are on the board, by your reckoning, according to my presentation above. You are going to have to post what the bylaws say about what a quorum is for a board meeting. The Mo nonprofit corp act says this about quorum for board meetings: https://law.justia.com/codes/missouri/2022/title-xxiii/chapter-355/section-355-401/

Someone needs to stop this "mess" created by three reprobates (IMO). The above is how to do so.

DonnaM20 (Missouri)
Posts: 11

Posted:

Thank you! According to our bylaws, a quorum for the board is a majority. So with eight members, the quorum would be 5. As for the membership meeting, the quorum is one-third of households.

DonnaM20 (Missouri)
Posts: 11

Posted:

Also, the 2023 meeting was held in January 2024 (late), did not have a quorum, was postponed a few weeks, did have a quorum at that meeting. That is when the 3 new board members were elected to three year terms to join the five members whose terms had not expired.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By DonnaM20 on 03/21/2024 11:30 AM
According to our bylaws, a quorum for the board is a majority. So with eight members, the quorum would be 5. As for the membership meeting, the quorum is one-third of households.

If eight members are in office immediately before the meeting begins, and the bylaws say a majority of directors in office at the time yada constitutes a quorum, then I agree.

Now someone has to get the reprobate three to go along with this.

A good HOA lawyer would referee this. The HOA lawyer could inform the reprobate three that they are not a majority of the board so he/she will not take instruction from them. The HOA lawyer would also tell the manager to take direction only from a majority of the board, and that in the attorney's opinion, the three are not a majority.

You are welcome.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By DonnaM20 on 03/21/2024 11:32 AM
Also, the 2023 meeting was held in January 2024 (late), did not have a quorum, was postponed a few weeks, did have a quorum at that meeting. That is when the 3 new board members were elected to three year terms to join the five members whose terms had not expired.

Understood. Be ready to add that the five are bona fide board members because no one objected as they made decisions for years in the name of the board, due to the legal concept of acquiescence.

The only other alternative is to continue with this mess.

If the HOA attorney will not referee this situation, oh well. The mess continues, with people generally not agreeing who is on the board. All should keep in mind that subsequently, the real enemy will be the legal system itself, meaning no one here should start suing unless they are totally stupid here. There is no guarantee as to how a court would rule in this situation. The attorneys will as usual be the main winners, given all the money they will make from this squabbling (which I know is taking a toll on many and so arguably is more than "squabbling"). The HOA attorney needs to "man/woman up" and lay down the law here as he/she sees it, even if it is not what I say above. Then people need to agree to abide by what the HOA attorney says.

DonnaM20 (Missouri)
Posts: 11

Posted:

Unfortunately, the HOA attorney is not on board with what you and I agree is correct. At this point, though, the board voted to table business that was scheduled last night until elections in April determine a "true" board. One concern until then is that the "president" (chosen at the meeting with only the new three board members, so without a quorum) may be signing checks to pay bills. Hopefully, we won't get into any legal issues over that. Your information will be VERY helpful for conversations in the next few weeks! Thank you so much!

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Donna

As the Annual Meeting and Election is in April you need to get working to elect people you want on the BOD. Start by collecting some proxies.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By DonnaM20 on 03/21/2024 12:38 PM
Unfortunately, the HOA attorney is not on board with what you and I agree is correct. At this point, though, the board voted to table business that was scheduled last night until elections in April determine a "true" board. One concern until then is that the "president" (chosen at the meeting with only the new three board members, so without a quorum) may be signing checks to pay bills.

Is there a reason to challenge the bills themselves? If not, isn't it better that the checks be paid?

Otherwise, I hear you. There's no "perfect" here. There is "good enough." If owners get to vote on all directors or at least the five seats some are questioning, that is certainly "good enough," IMO.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By ElleN on 03/21/2024 12:46 PM
If not, isn't it better that the checks be paid?

Post-o. I meant "isn't it better that the //bills// be paid?

DonnaM20 (Missouri)
Posts: 11

Posted:

Yes, the bills need to be paid. (Just don't want someone to claim later that the "president" did not have authority to spend the money.) Crossing my fingers we can move forward to a quick resolution!

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By DonnaM20 on 03/21/2024 12:48 PM
Yes, the bills need to be paid. (Just don't want someone to claim later that the "president" did not have authority to spend the money.)

I hope the President is at least smart enough not to spend money on, and sign a check for, something over-the-top.

While the legality of the current board (of three persons?) is not entirely clear, I agree the president needs to tread carefully here.

KerryL1 (California)
Posts: 14,550

Posted:

JohnC gives good advice. Meantime, are you/were you on the Board, Donna?

I may have missed it? What IS the advice the attorney gave? How did you have access to it?

How many Board members do your Bylaws say the HOA must have, Donna? Is that number expressed as a range, e.g., 5-9? (Eight is an unusual number.)

Quorum of the board: Some bylaws say a quorum of the board is a majority of those currently serving. Let's say the Bylaws call for 7, but there are a couple of vacancies, so there are only 5 directors. In this case a quorum of the Board would be 3.

Other bylaws say that a quorum must be based on the number who SHOULD serve. Let's say the Bylaws say 7. In this case, even if only 5 currently serve, quorum would be 4.

DonnaM20 (Missouri)
Posts: 11

Posted:

The attorney said that the board members elected in 2021 and 2022 (to begin serving in 2022 and 2023) "do not appear to have been properly elected" because a quorum could not be confirmed (though no one raised the lack-of-quorum issues during those meetings). He cited Missouri statutes that say board members continue to serve until their replacements are elected. Based on that advice, the three "new" board members then decided to go back through annual meeting minutes to find the last time the minutes noted the number of attendees and proxies that established the quorum for that given year. They ignored minutes that said a quorum was met but whcih did not contain an actual number. So, they choose board members whose terms expired more than a decade ago to join them to serve until the successors can be elected in mid-April.

The attorney's letter also said, "In the absence of quorums, the meetings, in effect did not occur," ... and "bottom-line, the five individuals elected in 2021 and 2022 acting as directors ... lacked authority to act as association directors... It goes without saying that the (five) board members were not removed. As they did not properly occupy seats on the board, they could not be removed." (The "new" three board members had their own meeting and issued a cease and desist letter to the five board members who had been serving.)

Our bylaws allow for 3 to 9 board members "as the board of directors may from time to time determine by resolution." We have been at 8 for a few years, but I can't remember why it went from 7 to 8. Currently, many HOA members are requesting that the board go to 9 members, with six to be elected at a newly called election meeting set for April 17. (The three "new" members so far have refused to release the minutes of their organizational meeting, so we do not know if they voted on a resolution to reduce the board to three members. However, the attorney's letter does not imply such action was taken; rather, it said to reinstate old board members. Plus, our board was 8 before that meeting began, so 3 would not be a quorum.)

Our bylaws also say we follow Robert's Rules of Order. In researching those rules yesterday, I found citations saying if the quorum was not challenged during the meeting, the meeting actions stand unless "clear and convincing proof" that a quorum did NOT exist can be presented. (There are conflicting statements involving the quorums at these meetings. The management agency says we did indeed have a quorum in 2022, but the "new" board refuses to recognize her statement and says they don't trust her. The management agency is unsure about 2021.)

I am a member of the HOA and have 21 years of experience serving on various nonprofit boards, so I am helping research how this should have been handled, and how the HOA should proceed. So my current role is as a volunteer, as well as an advisor a few dozen members who fear this situation has been mishandled. We have a open meeting scheduled for Sunday. Though we have no power to take action, we can discuss issues. So, that is where I will take any advice you can provide.

DonnaM20 (Missouri)
Posts: 11

Posted:

The attorney's letter (two of them, actually) went to all members via email and links on Facebook.

DonnaM20 (Missouri)
Posts: 11

Posted:

As to what constitutes a quorum of our board, the bylaws state: "At all meetings of the Board of Directors, a majority of the Directors shall constitute a quorum for the transaction of business... " There is no mention of the impact of an open seat on the board.

KerryL1 (California)
Posts: 14,550

Posted:

So.... the upcoming meeting on Sunday....you & other concerned owners have invited all Owners? It's just an informal meeting, right? Yes, do with other push for a 9-member board. An odd number is always best as I'm sure you know, Donna. Also at this meeting try to get commitments from attendees that they'll help get out the vote to be certain the you "make quorum."

Has this upcoming meeting of the members to conduct an election been correctly noticed (posted? eblasted?) per your Bylaws or other policy? Or, if silent MO nonprofit statutes? Must owners vote in person or by proxy?

Your Robert's citation is excellent IF no other higher ranking doc (e.g., your Bylaws) contradicts it!

Was this "organizational meeting that "the 3" held required to be open to owners? Or is MO a "closed meeting" state? Still, are they required to produce minutes or drafts minutes within, say 30 days of the meeting? It does not appear that 3 WAS a required quorum of the Board.

Re: the 2022 members meeting: Are there NO records of it? ARE there minutes that were approved by the members or by the board?? Are other election materials required to be kept in MO? Does MO nonprofits statutes require the number of voters & proxies be recorded in the minutes?? Does Robert's??

Is your hOA's attorney an actual HOA attorney or some other kind? I agree with you "the 3" must not be allowed to "run" your HOA!

KerryL1 (California)
Posts: 14,550

Posted:

So.... the upcoming meeting on Sunday....you & other concerned owners have invited all Owners? It's just an informal meeting, right? Yes, do with other push for a 9-member board. An odd number is always best as I'm sure you know, Donna. Also at this meeting try to get commitments from attendees that they'll help get out the vote to be certain the you "make quorum."

Has this upcoming meeting of the members to conduct an election been correctly noticed (posted? eblasted?) per your Bylaws or other policy? Or, if silent MO nonprofit statutes? Must owners vote in person or by proxy?

Your Robert's citation is excellent IF no other higher ranking doc (e.g., your Bylaws) contradicts it!

Was this "organizational meeting that "the 3" held required to be open to owners? Or is MO a "closed meeting" state? Still, are they required to produce minutes or drafts minutes within, say 30 days of the meeting? It does not appear that 3 WAS a required quorum of the Board.

Re: the 2022 members meeting: Are there NO records of it? ARE there minutes that were approved by the members or by the board?? Are other election materials required to be kept in MO? Does MO nonprofits statutes require the number of voters & proxies be recorded in the minutes?? Does Robert's??

Is your HOA's attorney a true HOA attorney or some other kind? I agree with you "the 3" must not be allowed to "run" your HOA!

DonnaM20 (Missouri)
Posts: 11

Posted:

Yes, the Sunday meeting is open to all homeowners, and all have been invited. Part of the discussion will be on how to get out the vote (and collect proxies) for the April 17 election. Our bylaws (and state laws) allow proxies.

Yes, the upcoming election has been noticed in accordance with the bylaws.

I cannot find anything in our bylaws that addresses how to handle an appeal of a quorum "after the fact" -- soon after or even long after the meeting took place. But under Article 8, our bylaws say we follow Robert's Rules of Order when they do not conflict with the bylaws. (I downloaded the bylaws into a pdf to make them searchable. Have searched all references to "quorum")

The organizational board meeting of the "3" was not properly noticed (only about three hours of notice was given, if I remember correctly). Concerns about that have been raised, but brushed aside by the "3". They say they will not release the minutes until they approve the minutes. That has not been done.

Yes, there are minutes from the 2022 membership meeting, but they fail to mention the word "quorum." I cannot find the 2021 minutes posted online, but we have been told that there is no mention of a quorum in those, either. The board did approve the minutes of both at the subsequent year's annual meeting. No issue was raised at that time about the lack of a quorum.

I have not found reference to a requirement to state the number of voters/proxies in the minutes. I will have to search the bylaws and Robert's more on that topic to make sure.

The HOA attorney is one of several who have represented the HOA off and on for a few years. His online bio says he is a general practice attorney.

TerriS6 (California)
Posts: 3,284

Posted:

I'm guessing your election would have to have been challenged within a year.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By DonnaM20 on 03/21/2024 1:40 PM
Our bylaws also say we follow Robert's Rules of Order. In researching those rules yesterday, I found citations saying if the quorum was not challenged during the meeting, the meeting actions stand unless "clear and convincing proof" that a quorum did NOT exist can be presented.

I agree. The "clear and convincing proof" line comes from RONR 40:12 (emphasis added by me):

40:12 When the chair has called a meeting to order after finding
that a quorum is present, the continued presence of a quorum
is presumed unless the chair or a member notices that a
quorum is no longer present. If the chair notices the absence
of a quorum, it is his duty to declare the fact, at least before
taking any vote or stating the question on any new motion—
which he can no longer do except in connection with the
permissible proceedings related to the absence of a quorum,
as explained above. Any member noticing the apparent
absence of a quorum can make a point of order to that effect
at any time so long as he does not interrupt a person who is
speaking. Debate on a question already pending can be
allowed to continue at length after a quorum is no longer
present, however, until a member raises the point. Because of
the difficulty likely to be encountered in determining exactly
how long the meeting has been without a quorum in such
cases, a point of order relating to the absence of a quorum is
generally not permitted to affect prior action; but upon clear
and convincing proof, such a point of order can be given effect
retrospectively by a ruling of the presiding officer, subject to
appeal (24).1

See https://yorkcountyfireschool.org/wp-content/uploads/2023/05/Roberts-Rules-of-Order-Newly-Revised-12th-Edt.pdf. (Oh my stars. DonnaM20, consider downloading this now. I have never seen the 12th edition of RONR online and free before.)

Quote:

Posted By DonnaM20 on 03/21/2024 1:40 PM
[The reprobate three] ignored minutes that said a quorum was met but whcih did not contain an actual number. So, they choose board members whose terms expired more than a decade ago to join them to serve until the successors can be elected in mid-April.

The assembly's presiding officer is the current president. The current president has ruled that a point of order has been raised (regardless of how clear and convincing the evidence is, it seems) and that it must be applied retroactively. Per 40:12 above, the President's ruling is subject to appeal. See RONR Section 24 "Appeal." The latter is pretty long, but I think at least 24:1 is worth the OP's time:

24:1 By electing a presiding officer, the assembly delegates to
him the authority and duty to make necessary rulings on
questions of parliamentary law. But any two members have the
right to Appeal from his decision on such a question. By one
member making (or “taking”) the appeal and another seconding
it, the question is taken from the chair and vested in the
assembly for final decision.

The attorney botched this. The president is botching this. DonnaM20, go get 'em. ;)

ElleN (Idaho)
Posts: 4,420

Posted:

As well, it appears to me that since the President voided numerous elections in the past decade+, he must also void all past board decisions where, according to him, the board lacked a quorum of lawfully elected directors et cetera.

By any chance were other actions taken at these annual meetings (by a vote of the owners) that also need voiding? [snicker]

This is an instance where RONR is more than a guide. Instead, RONR 40:12 mandates that certain things happen.

Any unhappy owners should cite RONR and consider asking for (demanding, really) a meeting of the owners dedicated to having an owners' vote to throw out the President's ruling.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By DonnaM20 on 03/21/2024 2:27 PM
I cannot find anything in our bylaws that addresses how to handle an appeal of a quorum "after the fact" -- soon after or even long after the meeting took place. But under Article 8, our bylaws say we follow Robert's Rules of Order when they do not conflict with the bylaws.

From RONR:

23:6 The only exceptions to the requirement that a point of order [here, alleged lack of a quorum]
must be made promptly at the time of the breach arise in
connection with breaches that are of a continuing nature,
whereby the action taken in violation of the rules is null and
void. In such cases, a point of order can be made at any time
during the continuance of the breach—that is, at any time that
the action has continuing force and effect—regardless of how
much time has elapsed. Instances of this kind occur when:
[see link above]

It appears to me that the President is claiming that breaches of RONR (and more) are of a continuing nature. Hence I think the President can issue this ruling (and he needs to do it quite formally) but also, the President must allow an appeal by owners, followed by a vote of the owners.

KerryL1 (California)
Posts: 14,550

Posted:

Yes, as noted, I liked the RONR citation too. A "general practice" attorney is not a good relationship has given terrible advice. And I assume "th 3" are paying for this nonsense with HOA funds??? Given that MO doesn't seem to have HOA statutes or laws, a contract attorney* who specializes in non-profits is your best bet, imo. IF enough of you can pool a few 100 dollars, you may be able to buy some advice for the appropriate attorney about pressing forward.

Your community is so lucky to have you given your strong background with nonprofits and your skill at researching some of these issues. Perhaps you'll be Board candidate?

But, Donna, I think you & your fellow travelers should move ahead with your informal meeting owners, get commitments, field candidates if not too late to apply, campaign like crazy. W/o getting into it, My HOA background includes successfully defeating awful board member for re-election. The other is JohnC who remarked. way above.

Say, what size is your HOA? Do you know if a large majority of owners live on your premises? Is there a good meeting room on your premises?

Onward!!

* I served over the years on my HOA's board with 30+ directors. 3 were attorneys, none were helpful as board members because of their unrelated backgrounds.

DonnaM20 (Missouri)
Posts: 11

Posted:

Yes, the attorney’s advice is costing the HOA …. And the advice is bad, indeed!

The last membership meeting DID have a quorum, so I don’t think the new prez could say there is a continuing Point of Order question.

We have about 330 to 340 homes in our HOA. Nearly all owners live on the premises. (Very few rentals.) We do not have our own large meeting facility but use churches or schools or other locations when needed.

I appreciate all of the advice!

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By DonnaM20 on 03/21/2024 7:54 PM

The last membership meeting DID have a quorum, so I don’t think the new prez could say there is a continuing Point of Order question.

The President is saying there is a continuing breach by having directors serve on the board who were "elected" at annual meetings when quorum was not met. This is the only grounds he has to throw off the other five directors. But this ruling of his (to throw these five off the board based on a retroactive point of order) can be appealed to the owners en masse.

Then again, since you say an election will be held in April: Good enough.

TimB4 (Tennessee)
Posts: 21,061

Posted:

Things to learn from this:

1) Have a sign-in sheet (ours indicate if they are a proxy representative as well).
Ours is simple, done with a spreadsheet (so it can be sorted as needed)
Headings are:
x if proxy
Name
Property Address
Lot number
Signature

(name, property address, lot number are filled in by the association)

2) Keep all records of the annual meetings:
a) Proof of notice
b) Membership list at time of meeting
c) Sign-in sheet
d) Proxies
e) ballots
f) ballot tally sheet
g) Minutes with attachments (treasurers report, etc.)

We keep ours in classification folders (less likely papers are lost) for the last 7 years and digital copies for all years.

3) Include numbers in the minutes.
Example: With xx lots represented in person or by proxy, a quorum is present.

DonnaM20 (Missouri)
Posts: 11

Posted:

Great advice, Tim. Details are important!

KerryL1 (California)
Posts: 14,550

Posted:

Yes, Tim's advice looks wonderful. Given the size of your HOA, Donna, and that the election meeting will be offsite, you/your group might think about offering rides since some voters may not drive any longer?

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