PROXY vote ONLY by Member in good standing???

QUESTION: Is it within the power of the Board of Directors to resolve that proxy votes cast for removal of board members - MUST be cast by a qualified member of the POA.

In a TEXAS NON-PROFIT Corporation Property Owners Assocation ----

a "special meeting of members" was called by a petition signed by 10% of the membership for the purpose of removing FOUR majority board members.

On the evening of "record date", a special meeting of the Board of Directors was convened on proper notice for the purpose of opening all proxies and checking them against the list of members qualified to vote. Several proxies were signed by members who were NOT paid up on their assessments and were accordingly disqualified.

HOWEVER, some proxies were signed by qualified, paid up members, but the proxy was given to a person who is NOT themselves a qualified member of the POA (ie: they did NOT own property in the subdivision on "record date", or are NOT paid up on their dues and qualified voting members, or were NOT qualified officers of corporate property owners as of the published "record date" for the special meeting of members). In other words, the member signing the proxy was a valid voting member on record date, but he had given HIS proxy vote to a person who was NOT a member of the POA at all, or who was NOT in good standing on record date and therefore NOT qualified to vote at all.

The board of directors considered and acted upon a resolution concerning the counting of these proxy votes. It was resolved that a proxy vote for the removal of directors must be cast by, and may be cast only by, a person who is otherwise qualified to vote in an election for directors.

This dicision results in a different outcome of the recall election. Specifically whether one director (The President) is removed from the board or not, and therefore is being seriously challanged by several disgruntled members.

Texas Law seems to be silent on the issue. Proxies are valid under applicable Texas Law, but it doesn't say a proxy must be a member, or may not be a member. Further, the law merely says - if the ByLaws doesn't address removal of board members, the a board member may be removed by the same process by which he can be elected - (by majority vote).

The board is of the opinion that members would NOT like board members being elected by persons who do not own property in the subdivision, or by persons who are not paid up members. Therefore, proxies for voting on removal of board members must be cast only by valid members.

What say you --- anyone?

MichaelD

NO. The ByLaws define a member with good specificity, a property owner in fee simple or by contract to acquire fee simple title. It further says each member shall have ONE vote for each director. Elsewhere the governing docs state that a members voting rights are suspended if dues are not paid by a certain date, and further if late fees are not paid by a certain date.

I, along with the majority of other board members feel that a person not meeting the above criteria CANNOT vote a proxy even if given by a person who DOES meet the above criteria.

But as you would expect, the losers at the "recall vote" are challanging this decision. They have based some of their argument on dictionary definition (for corporate proxies) stating that "Generally, a proxy need not be a shareholder". I do not know, but think the Board has the power to make binding determinations on such matters so long as it does not controvert governing law - which seems to be silent on the matter.

Your views are appreciated.

I would say it depends on the power given to the proxy: Is it giving the power to the proxy carrier to actually cast a VOTE or just to carry the Member's ballot to the meeting?

I think that anyone, including a non-member - can carry a Member's proxy ballot to a meeting and present it to the secretary.

If your recall vote was done by ballot, then you must honor those ballots, even if it was carried into the room by a member not in good standing.

IMO the proxy was valid and the holder should have been allowed to vote the proxies assigned to him by any member in good standing. I do not own stock in GM, however if I contact owners of the stock and get their proxy then I can vote in their place. It's unfortunate that Texas law is silent on this however you might check Texas laws for corporations.

Ohio tackled this under their condominium code but it doesn’t apply to single family HOA's. 5311.22 (D) When any fiduciary or representative of a unit owner who is not described in division (C) of this section has furnished the unit owners association with satisfactory proof of authority, that person may vote as though a unit owner.

I've never heard of a proxy having a place to vote for the candidates on the slate, nor of a proxy that only carries a members vote to the meeting. If a member is unable to attend the meeting they can mail in their ballot; this is not a proxy; it's a mail-in ballot. A proxy is a document assigning your right to vote to another individual. That individual actually votes for you. If that individual is not in good standing then they cannot vote for themself or for you regardless of whether you are in good standing or not, the same applies to a non-member, unless of course if the docs say othewise. I believe the assn's bylaws were very clear on this. I believe the board acted IAW the bylaws.

Mail-in ballots work ONLY if:
nominations are closed at some point and the ballot printed, mailed to all members
no nominations from the floor are accepted
no write-in candidates submitted for office.
deadline for the mail-in return ballot is confidential (double enveloped)
the Board has a designated "Teller" to verify and count all ballots.

Mary said: "IMO, this reinforces your BOD's interpretation that a person not in good standing cannot vote for himself nor for an individual giving him a proxy."

I disagree. There are two different votes here. The proxy holder simply carried the vote to the meeting. It was not "his" vote he cast. That proxy giver is being deprived of voting rights due to something out of his control, simply because the Board determined that the proxy "carrier" had no voting rights.

Mary from what I understand from this post is that H/O X was a member not in good standing and could not vote his/her own ballot. Now H/O Z was a member in good standing but for whatever reason could not attend. Now H/O Z gives H/O X their proxy making them their agent, and giving them the legal right to vote in their place. This legal document in effect turns H/O X into H/O Z (a member in good standing) allowing him to vote or take any other action that the proxy gave him authority to do. This is done all the time in the corporate world and IMO if the CC&R's or law (like AZ) do not directly prohibit proxies this person should have been allowed to vote in H/O Z's place.

Now it is evident from the post that the BOD did not want to be recalled and chose this method to block it. MystifieD if you're lucky they won't take you to court over this matter, I think they would win.

Glen,

Forgot to mention. You said they have the legal right to vote. But someone who is delinquent in their assessment does not have the legal right to vote according to the CCRs. So, which legal right prevails? As I said, perhaps this is a matter for an attorney to resolve.

Also - everyone has assumed that this is a general proxy, where the proxy holder can determine the vote.

This may be a designated proxy, where the wishes of the voter are simply carried to the meeting by the courier (proxy holder)

By the way, parliamentary procedure won't touch this: it does not deal with proxies since voting in person is a member's first right and obligation.

TO ALL who have posted:

I have followed (with great interest) each of your thoughts and comments. One thing that emerges through the smoke is that there are definate differences of opinion on the issue. Some for and some against, but the discussion hasn't drawn out any definative law on the matter -- which leaves the question at top of my initial post open:

[[ QUESTION: Is it within the power of the Board of Directors to resolve that proxy votes cast for removal of board members - MUST be cast by a qualified member of the POA. ]]

Would the decision be "void", or merely "voidable". IMO a "void" action is one by a board which is illegal (contrary to written law) or enacted by a board meeting which was illegally constituted (not a quorum present, or not properly noticed, etc). So long as the board is acting in what it believes to be the best interest of the majority of the property owners, IMO the decision how to handle it falls squarely in their lap ---- until such time as it may be resolved by a court.

In this MESS, I have found nothing in law (even corporate law) which seems to give any definative guidance. The nearest is some definations or encyclopedia references that say "Generally any power that a stockholder possesses at a corporate meeting can be delegated to a proxy. An ordinary proxy can vote on regular corporate business, such as the amendment of the bylaws. The proxy is not authorized to vote, however, on extraordinary corporate business, such as a merger, unless given special authority to do so." or "A stockholder can act as a proxy for another shareholder, but it is not necessary for a proxy to be a stockholder."

Therefore the decision seems to fall to the board.

In this MESS, the board met on proper notice on the eve of "record date" ( 36 hours before the special membership meeting) for the purpose of opening, reviewing, and counting ALL proxies received and to determine "members entitled to vote" as of "record date". A quorum was present (six of seven). Some proxies were self designed or written by opposing factions and some were sent out by the board with "notice" of the special meeting. Each "type" or "style" was approved (one conditionally which contained an _electronic signature_). It was resolved the electronic one would be included in the preliminary count but removed if an original signature was not received within one week.

The board resolved (5 for, the Chair did not vote) that "that a proxy vote for the removal of directors must be cast by, and may be cast only by, a person who is otherwise qualified to vote in an election for directors."

GlenL:
(Ohio)
IMO, that action is what would have to be challanged in court, and I readily admit I am not sure how it would come down.
About your own example: If I were a GM stockholder, I would not like it much if FORD stockholders were voting proxies in a GM meeting on issues that would affect the value of my GM stock! What would I say if the GM board refused to accept those proxies?

And ..........
BrianB:
(Arizona)
Certainly (no malice intended) but I would not like your homeless felon voting in an election that affects my property value! I might even parise my board for not accepting his vote -- unless I wanted the outcome to be as he had voted!!!

Glen:
(Ohio) says: "each of those proxy holders has the absolute right to sign in as their parents and vote."

MaryA1
(Arizona) says: "But someone who is delinquent in their assessment does not have the legal right to vote according to the CCRs. So, which legal right prevails?

Several have said: "Perhaps this is really a matter for an attorney.", and probably so. There is a committee of members formed demanding a "reccount" soon, so It may be before an attorney soon.

And I appreciate the all your comments.

OMG!!!

Too funny! Bravo~~

MystifieD, that type of voting is one where proxies are prohibited however you can get married by proxy in Texas.

Trivia: Four states in the United States allow proxy marriages. California, Colorado, Texas, and Montana. California’s proxy marriage is limited to members of the armed forces who are deployed for conflicts or war.

California, Colorado, and Texas require that one of parties must appear before the civil authorities. Montana is the only state that allows a Double Proxy marriage where neither party has to appear before the civil authorities.

I say, unless your By-laws specifically state that the proxy must be a member that anyone can be the proxy (unless there is a state limitation, such as, some states require the proxy to be at least 18 years of age). The proxy is presenting the vote(s) for the member in good standing, not for themselves. Thus the proxy's vote is in compliance with the Board's opinion.