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CCOC Decision Summary

#71-06, Fiscina v. Devonshire East Homeowners Association (May 21, 2008) (Panel: Stevens, Gelfound, Vergagni)

The homeowner (HO) complained that the homeowner association (HOA) was in violation of its rules by failing to hold annual meetings on a regular basis, failing to make books and records available, changing the size of the board without a vote of the members; was violating County law through the use of undirected proxy votes at the annual elections; and was violating State law by holding board meetings that were not open to all members.

The HOA denied all claims and defended its right to use undirected proxy votes and to close its meetings whenever discussing possible violations of its architectural rules and making decisions on such possible violations.The hearing panel held no less than 11 separate hearings on the complaints and defenses.

After reviewing all the evidence, the hearing panel made the following rulings:

1. the HOA violated Section 10B-17(b)(2) of the Montgomery County Code by allowing undirected proxies (proxy votes that did not designate the names of the candidates for whom they were to be voted) to be voted by the proxy holder at the elections of the board of directors;

2. the HOA violated the Open Meetings section of the Maryland Homeowner Association Act (Section 11B-111 of the Real Property Article) when the board canvassed the community to look for architectural violations without permitting community members to be present, and by frequently holding its meetings without any advance notice to the community, and sometimes without any notice to certain members of the board; by closing its meetings for reasons not permitted in the open meetings law; and by making decisions on matters which had not been announced in advance;

3. the HOA violated its own governing documents by reducing the size of the board of directors from 7 to 5 members without a vote of the membership;

4. as a result of the finding in Par. 3, above, the HOA also improperly denied a seat on the board to a candidate who received the second-largest number of votes in the most recent election, because there were actually 3 vacancies on the board, not 1 vacancy as the HOA thought;

5. the HOA violated its own rules to hold annual elections on a regular basis by holding them anywhere from 18 to 22 months apart, instead of approximately 12;

6. the HOA violated the Open Records provisions of the Homeowner Association Act (Section 11B-112 of the Real Property Article) by not making records available for inspection upon reasonable request;

7. the HOA violated its rules by creating Nominations Committees controlled by incumbent members of the board, rather than giving a majority of the 3 positions on the committees to non-members of the board;

8. the HOA violated its rules by hiring its managers for two-years terms, when the rules limited each contract to 1 year at a time;

9. the HOA board improperly adopted a resolution confirming all architectural decisions and refusals to take action by previous boards, in spite of any legal improprieties that might have been committed by such boards, on the grounds that such "retroactive" adoptions must specify specific decisions.

The hearing panel issued a lengthy order compelling the HOA to make basic changes in the way it conducted its elections, annual meetings, architectural reviews and decisions, its board meetings, and other matters.

In a significant additional ruling, the panel held that the HO was entitled to be reimbursed by the HOA for her reasonable attorney's fees.The panel cited Section 10B-13(d) of the County Code, which allows for the award of attorney's fees when a rule of the association so provides, and Section 11.02 of the HOA's Declaration of Covenants, which states that"If the Association, or any Owner of any Lot successfully brings an action to extinguish a violation or otherwise to enforce the provisions [of the governing documents], the costs of such an action, including legal fees, shall become a binding personal obligation of the Owner committing such violation..." (emphasis added).

[Staff note:Devonshire East appealed the award of attorney fees (but not the other parts of the CCOC Decision) to the MontgomeryCounty Circuit Court.Following oral argument, the Circuit Judge gave an unwritten opinion, in which he reversed the award of attorney fees on the grounds that in his opinion, the language quoted did not make the Association liable for attorney fees.

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