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CCOC Decision Summary

#19-12, Tanouye v. Decoverly I Homeowners Association (March 21, 2013) (Panel: Rosen, Whelan, Wilson)

The homeowner complained that the HOA’s president acted without authority and in violation of the HOA’s bylaws to adjourn the HOA’s annual meeting and election; he further alleged that the purpose of the president’s actions was to change the likely result of the election if it had been held as scheduled.

The evidence showed that the HOA properly called its annual meeting and election.  At stake were two seats on the HOA’ s board of directors, and there were 4 candidates, one of whom was the complainant.  The complainant and his supporters distributed information critical of the current board and opposing the re-election of the two sitting board members.  The fourth candidate also ran in opposition to the sitting board members.  The complainant and his supporters distributed proxy ballots before the election.  These proxies were identical to those approved by the HOA, except for the fact that the complainant’s proxies included check marks next to the names of the two “opposition” candidates.

The HOA’s board president (who was not a candidate) presided over the annual meeting.  It is undisputed that there was a quorum present for this meeting in person and by proxy.  The board president then adjourned the meeting on his own initiative, stating his concerns that the election was tainted by the conduct of the opposition candidates.  He did not call for a vote of the membership, nor was the election rescheduled to a specific later date.

At the hearing, the board president testified he had adjourned the meeting because of several concerns.  First of all, he stated that several women members, whom he did not identify, complained that they had been intimidated into signing the proxies by the persons who came to their homes.  He further stated that the election materials distributed by the opposition candidates were unfair or inaccurate and that the candidates for reelection did not have an opportunity to respond to them, and finally that the proxies distributed by the opposition candidates were not approved by the association.

The hearing panel found that the association acted without legal authority to adjourn the election without taking a vote of the membership.    In the first place, all candidates have the right to distribute election materials.  A dispute over whether such materials are “fair” does not empower the association to cancel or postpone an election.  Moreover, the association’s action violated its bylaws, which state that if any election meeting fails to have a quorum, the members present can vote to adjourn it, and it also conflicts with the recommended practices of Robert’s Rules of Order which states that the presiding officer of a meeting can only adjourn it “when the assembly so votes.”  If the president had doubts about the fairness of the election he should have called for a vote of the membership on a motion to adjourn.

Secondly, the president failed to produce any corroboration of his claims that some women members had complained of intimidation, and the opposition candidates denied the claims.

The panel also noted that there was no evidence that any of the proxy ballots submitted for the election were on the sample forms distributed by the opposition candidates, and that even if they had been, under Chapter 10B of the Montgomery County Code, the association had to have a good reason for rejecting them.  Since the approved and opposition proxies were identical except for the fact that two candidates’ names had been checked off, there was no good cause for rejecting them.

The hearing panel held that it did not have the right to remove directors from the association’s board.  Under Chapter 10B, all disputes must involve the authority of the association, which is usually represented by its board of directors as a body.  The conduct of individual members of the board does not necessarily represent the action of the association.  Therefore the Commission has no authority over the individual members of the board.  In this case, the president was clearly acting for, and with implied approval, of the board.  Moreover, under the corporation laws of Maryland, board members serve until they resign or are replaced.  Hence, the two directors who were running for reelection remained in office.

The hearing panel ordered the association to hold its annual election within 30 days and to distribute a copy of its decision to all the members of the association within 15 days.  It further ordered the association to reimburse the complainant for his $50 filing fee.  Finally, it strongly recommended that the HOA consult with its attorney to develop fair written procedures for the conduct of its annual elections and to consider hiring an impartial third-party, such as the League of Women Voters, to preside over them.

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