Removal of a Board Director

Recently our board sent out the Annual meeting notice to all members with a general agenda. After the notice was sent out a landowner posted on our community bulletin board that he intended to make a motion to remove a director from the board. The Board did not send out an additional notification to the members via postal mail service regarding this vote as this was a landowner initiative not a board called vote.

At the meeting the landowner made the motion and it passed with a high percentage and the director was voted off the board, something that has never happened in our community before. Before the vote was taken I spoke to a lawyer who attended the meeting and he agreed that this vote was valid as per the PCA adopted by the community some years ago, by (section 47F-3-103. Executive board members and officers. Some landowners voted against this motion because of (section 47f-3-108. Meetings)which requires that the board to include a vote to remove a director in a mailing notice to the landowners. I disagree, I think the section under "Executive board members and officers" is about curtailing the powers of the board and that a lot owners may remove any member of the executive board at any meeting that is properly called. (And the board does not necessarily have to put this vote on the agenda because it is not a board called vote.)

I think I am right. What do you think? Please see the pertinent sections below, last sentences in both passages.(I wish I could highlight a specific sentence is there a way?) Robin

47F-3-103. Executive board members and officers.
(b) The executive board may not act unilaterally on behalf of the association to amend the declaration (G.S. 47F-2-117), to terminate the planned community (G.S. 47F-2-118), or to elect members of the executive board or determine the qualifications, powers and duties, or terms of office of executive board members (G.S. 47F-3-103(e)), but the executive board may unilaterally fill vacancies in its membership for the unexpired portion of any term. Notwithstanding any provision of the declaration or bylaws to the contrary, the lot owners, by a majority vote of all persons present and entitled to vote at any meeting of the lot owners at which a quorum is present, may remove any member of the executive board with or without cause, other than a member appointed by the declarant.

§ 47F-3-108. Meetings.
(a) A meeting of the association shall be held at least once each year. Special meetings of the association may be called by the president, a majority of the executive board, or by lot owners having ten percent (10%), or any lower percentage specified in the bylaws, of the votes in the association. Not less than 10 nor more than 60 days in advance of any meeting, the secretary or other officer specified in the bylaws shall cause notice to be hand-delivered or sent prepaid by United States mail to the mailing address of each lot or to any other mailing address designated in writing by the lot owner, or sent by electronic means, including by electronic mail over the Internet, to an electronic mailing address designated in writing by the lot owner. The notice of any meeting shall state the time and place of the meeting and the items on the agenda, including the general nature of any proposed amendment to the declaration or bylaws, any budget changes, and any proposal to remove a director or officer.

Procedure or no procedure... Did the majority of people vote the board member out? I mean if you fought this all the way to the highest court, would the results change?

The language in 3-103 is clear. The Members had a properly noticed Annual Meeting which is THEIR meeting. Your bylaw states that the members can remove a director at ANY meeting--whether regular board, special meeting for that purpose, or annual meeting. A general agenda was sent out. The Agenda can be changed by members at their meeting just as agendas can be changed by Board members at their meeting. Notwithstanding the agenda question, which is not addressed as a requirement in your bylaw, a motion was made by a member to remove a director. It passed by a majority of those owners attending the meeting at which a quorum was present. The director is removed.

IMO this was a valid meeting and a valid vote, notwithstanding the contents of the Agenda. Notice was properly given for the Annual Meeting. A notice with a specific purpose is only required to be mailed for Special Meetings which was called by either a Petition by 10% of owners or by the board. The law of contract construction assumes that if a provision is silent on an issue, it is not substantive; (because the maker of the document evidenced awareness of special notice required for one type of meeting). This is not a legal opinion, but I have been present in legal proceedings and am aware of the doctrine.

There are only three kinds of other statutory meetings, speaking in terms of Florida which may or may not be the case for your state; they are a regular Board meeting, a Committee meeting and a "Closed Board Meeting (where counsel is in attendance)".

Is the Board director challenging the community vote? If yes, why? If yes, is the objection substantive or procedural? Do any members object to the outcome of the meeting and, if yes, what is the rationale that they claim overcomes the plain language in your governing documents?

Most associations are incorporated. Is your association a nonprofit corporation?

I found this law in the North Carolina Nonprofit Corporation Act:

§ 55A-8-08. Removal of directors elected by members or directors......
(e) A director elected by members may be removed by the members only at a meeting called for the purpose of removing the director and the meeting notice shall state that the purpose, or one of the purposes, of the meeting is removal of the director.

Okay, so you have two laws that seem to conflict with each other. These are not your bylaws, but rather the NC Planned Community Act. One law says the director can be removed "at any meeting" and the other says "...notice of any meeting shall state...the items on the agenda, including... any proposal to remove a director or officer." I say you have to comply with both laws. The word "meeting" in the first law means a meeting that has been properly noticed as specified in the second law. Therefore I do not think the vote to remove the director was valid.

I agree that the PCA trumps the nonprofit act. There is only PCA to consider.

There is a possible conflict between the two provisions of the PCA that were quoted in the OP (47F-3-103 and 47F-3-108). I say both provisions of the PCA have to be satisfied in order for the removal of the director to be valid. The meeting needs to be properly noticed according to the PCA, which includes notice of "any proposal to remove a director or officer". This meeting did not include that notice, so I conclude that this was not a properly noticed meeting under the PCA and the removal of the director was not valid.

Cumulative Voting

Our original Bylaw allowed Cumulative Voting and also said no proxy voting was allowed. As we had a harmonious turnover, we got the Declarant to use his "voting power" to remove these two things before turnover.

BTW, a meeting can be either the required once a year meeting or a special meeting.

I think one must consider the purpose of "notice." It is to give people a chance to attend and voice their objections, via voting or otherwise. "Notice" is typically required to ensure fairness that will pass legal muster. If people were not properly "noticed" of this recall election, and I were the board member being recalled or a supporter of same, then I would cry foul. As a favorite HOA attorney put it to my former HOA's board; When the stakes are high, the Association must dot every i and cross every t.

Sorry Janet, you are wrong on this one.

§47F-3-103 and §47F-3-108 MUST be used in conjunction with one another.

Sorry Richard ... It is the "Notwithstanding" provision that has me on this issue. That term is in essence: "In spite of, even if, without regard to or impediment by other things".

I see it Jeff's way too.