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CCOC Decision Summary

#60-09, Cronin v. Leisure World Community Corp. (January 21, 2011) (Panel: Friedman, Molloy, Gelfound).  

Cronin complained that Leisure World Community Corporation (LWCC), a homeowners association consisting of 29 subsidiary communities, was violating the "open meetings" section of the Maryland Homeowners Association Act and was improperly transferring control of a common asset (its medical center) without the approval of the members.

The Commission rejected jurisdiction of the medical center dispute because it was premature.  There was no evidence alleged in the complaint to show that LWCC had made any decisions at all concerning the medical center, other than to investigate how to operate it more efficiently in the future.  The Commission accepted jurisdiction of the "open meetings" disputes and referred them to a hearing panel.

The hearing panel found that LWCC's board of directors had closed their meetings for a proper purpose, namely, to discuss alternatives for the future of the medical center, a matter that involved discussions over possibly subcontracting the medical center operations to a third-party health care firm as well as the future of the employees who worked there.  Such topics fell under the permissible exceptions of discussing "matters related to employees and personnel" and "consideration of the terms or conditions of a business transaction in the negotiation stage."

However, the panel also found that LWCC had violated a separate section of the law that required its minutes to report the vote of the board members on the motion to close the meeting.  While the dispute was pending, and before the hearing could take place, LWCC revised its procedures to have its minutes show the names of any board members opposed or abstaining from the vote to close the meeting. 

Since LWCC had corrected its violation before the hearing, and since it had not made any binding decisions during the closed meetings in dispute, the panel held that the matter was now moot and it dismissed the complaint.  The panel emphasized, however, the importance of stating the identities of any board members opposing a motion, because under LWCC's governing documents, the weight given to board members' votes depended upon the size of the sub-association they represented, so that a majority of the votes cast did no necessarily represent the majority of the weighted votes.  The identities of those voting in favor of a motion, however, could be readily determined by the listing of all those present at the meeting, so it was not necessary to list the vote of each board member by name.

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