After my meet, I drafted a letter to Chandler Travis the legal representation for the HOA. I will post his response as soon as it arrives.
Hi Chandler,
Today I visited with Delores Ortega (L332), and Steve Feniello (L330). They mentioned that elections did not take place in November 2011 because they were told by our Management Company that a quorum of the members was not met per Article 2.4 of the Bylaws. Additionally, these members of the association were led to believe by our Management Company that the annual meeting to elect officers of the board requires "in person" attendance of 25% or more of the total number of eligible votes in the Association. This is a clear misrepresentation of Arizona Revised Statute 33-1812 which requires the association to "provide for votes to be cast in person and by absentee ballot". This is in accordance with Article 3.1 of the ByLaws which states that: "Elections for the Board of Directors may be conducted in any one of the following manners (i) by voice vote, roll call vote, hand vote, or written ballot at an annual meeting of the Members; or (ii) by written ballot indicated by mail."
I would like for you to advise your client that continuing to mislead our community on the difficulties of changing the status quo is arbitrary and capricious to her fiduciary responsibilities to this association.
And so now I'd like to flip the coin and focus on Arizona Revised Statute 33-1249.B which governs how a "Quorum of Directors" is defined. It states: "Unless the bylaws specify a larger percentage, a quorum is deemed present throughout any meeting of the board of directors if persons entitled to cast at least fifty per cent of the votes on that board are present at the beginning of the meeting." This is in accordance with Article 3.9 of the Bylaws which state, "A majority of the Directors present at the beginning of the meeting will constitute a quorum for the transaction of business. Unless otherwise specified by these Bylaws, the Articles, or the Declaration, every act or decision done or made by a majority directors present at a duly-held meeting at which a quorum is present will be regarded conclusively as the act of the Board."
Now, per our Management Company, Steve Wadding's term expired on Nov 2011, likewise Pedro Lopez term expired in Nov 2010. I see nothing in Arizona Statute 33 Chapter 9&16, or within the ByLaws which allow a board member whose term has expired to act in any official capacity as an officer of the board, or to continue acting in any official capacity until succession.
In this scenario, how will the board attain a "Quorum of Directors"at the next meeting in May with only a single director? Without being able to make a "Quorum of Directors", it is nearly impossible for the HOA to transact any business. This scenario is designed to be avoided by the staggered terms outlined in Article 3.2 of the Bylaws, however the board has found itself in this position by failing to elect a successor to Pedro Lopez in 2010 despite plenty of interested nominees within the community.
And so, I'd like to know how you will advise your client to proceed through this predicament. I am awaiting a response, and so are the members that I met today. Will you either:
Today I visited with Delores Ortega (L332), and Steve Feniello (L330). They mentioned that elections did not take place in November 2011 because they were told by our Management Company that a quorum of the members was not met per Article 2.4 of the Bylaws. Additionally, these members of the association were led to believe by our Management Company that the annual meeting to elect officers of the board requires "in person" attendance of 25% or more of the total number of eligible votes in the Association. This is a clear misrepresentation of Arizona Revised Statute 33-1812 which requires the association to "provide for votes to be cast in person and by absentee ballot". This is in accordance with Article 3.1 of the ByLaws which states that: "Elections for the Board of Directors may be conducted in any one of the following manners (i) by voice vote, roll call vote, hand vote, or written ballot at an annual meeting of the Members; or (ii) by written ballot indicated by mail."
I would like for you to advise your client that continuing to mislead our community on the difficulties of changing the status quo is arbitrary and capricious to her fiduciary responsibilities to this association.
And so now I'd like to flip the coin and focus on Arizona Revised Statute 33-1249.B which governs how a "Quorum of Directors" is defined. It states: "Unless the bylaws specify a larger percentage, a quorum is deemed present throughout any meeting of the board of directors if persons entitled to cast at least fifty per cent of the votes on that board are present at the beginning of the meeting." This is in accordance with Article 3.9 of the Bylaws which state, "A majority of the Directors present at the beginning of the meeting will constitute a quorum for the transaction of business. Unless otherwise specified by these Bylaws, the Articles, or the Declaration, every act or decision done or made by a majority directors present at a duly-held meeting at which a quorum is present will be regarded conclusively as the act of the Board."
Now, per our Management Company, Steve Wadding's term expired on Nov 2011, likewise Pedro Lopez term expired in Nov 2010. I see nothing in Arizona Statute 33 Chapter 9&16, or within the ByLaws which allow a board member whose term has expired to act in any official capacity as an officer of the board, or to continue acting in any official capacity until succession.
In this scenario, how will the board attain a "Quorum of Directors"at the next meeting in May with only a single director? Without being able to make a "Quorum of Directors", it is nearly impossible for the HOA to transact any business. This scenario is designed to be avoided by the staggered terms outlined in Article 3.2 of the Bylaws, however the board has found itself in this position by failing to elect a successor to Pedro Lopez in 2010 despite plenty of interested nominees within the community.
And so, I'd like to know how you will advise your client to proceed through this predicament. I am awaiting a response, and so are the members that I met today. Will you either:
- advise our Management Company and the remaining director that the one or two directors whose terms have expired continue to operate in there full capacity in order to establish a Quorum of Directors in May? If so, what ARS statute or Article in the ByLaws gives them the authority to do this?
- advise our Management Company and the remaining director that as fiduciaries to the association, that the most reasonable and fair course of action is to allow the Advisory Committee established on Novemeber 2011 consisting of Allen Dodson, Delores Ortega, and Steve Feniello to prepare/mail-out absentee and in-person ballots for the Meeting in May?
Sincerely,
Michael J. Jones
