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KyleB
(Ohio)

Posts:17

03/04/2010 12:42 PM
Five directors were to be elected. Board allowed management company to handle the election . Postcard ballot was sent out with proxy stamped on card. Ballots were returned with candidates apparently elected to the board.Because the ballot had proxy printed on it the old board members think that we have to have a new election. They also think that the old board is still operational even though their terms have expired. No case law available. Bylaws allow for the remaining two board members to appoint the newly elected to the board. Bylaws nor state law address this. Wher do we go from here? KyleB

GlenL
(Ohio)

Posts:3526

03/04/2010 1:22 PM
Kyle if there was no quorum either by members in person or by proxy then the meeting could not occur and the old Board members would remain in place until they resigned or a new meeting could be called. However if enough of the postcard ballot/proxy’s were returned then IMHO the meeting was valid and the people elected. Of course my opinion and $5.00 will get you a small coffee somewhere. What you described would be a directed proxy and would be valid but you should ask the HOA attorney for an opinion.

Too bad the only people who know how to run the country are busy driving cabs and cutting hair. - George Burns

KyleB
(Ohio)

Posts:17

03/04/2010 2:00 PM
Glent, All was in order except the word proxy printed on the ballot.Bylaws permit the two remaining members to appoint the elected individuals to the board. Legally the terms of the old board members have expired. To appoint is the only decision that the two remaining members can make with imunnity from the court. kyleB

GlenL
(Ohio)

Posts:3526

03/04/2010 2:11 PM
Can you post the text of the postcard with the names redacted? Are you a condo association covered under ORC5311 or stand alone homes?

Too bad the only people who know how to run the country are busy driving cabs and cutting hair. - George Burns

KyleB
(Ohio)

Posts:17

03/04/2010 3:45 PM
Glent NO text. Just a postcard with names and and a box to check for whom you were voting. "Proxy" was printed at top of card. Other side had return address. KyleB

GlenL
(Ohio)

Posts:3526

03/04/2010 4:45 PM
Kyle I’m not sure that would qualify as a proxy; usually more information is required. This is the Ohio proxy statute: 1701.48 Voting by proxy. (A) A person who is entitled to attend a shareholders’ meeting, to vote at a shareholders’ meeting, or to execute consents, waivers, or releases may be represented at the meeting or vote at the meeting, may execute consents, waivers, and releases, and may exercise any of the person’s other rights, by proxy or proxies appointed by a writing signed by the person or appointed by a verifiable communication authorized by the person. (B) Any transmission that creates a record capable of authentication, including, but not limited to, a telegram, a cablegram, electronic mail, or an electronic, telephonic, or other transmission, that appears to have been transmitted by a person described in division (A) of this section, and that appoints a proxy is a sufficient verifiable communication to appoint a proxy. A photographic, photostatic, facsimile transmission, or equivalent reproduction of a writing that is signed by a person described in division (A) of this section and that appoints a proxy is a sufficient writing to appoint a proxy. (C) No appointment of a proxy is valid after the expiration of eleven months after it is made unless the writing or verifiable communication specifies the date on which it is to expire or the length of time it is to continue in force. No proxy appointed for or in connection with the shareholder authorization of a control share acquisition pursuant to section 1701.831 of the Revised Code is valid if it provides that it is irrevocable or if it is sought, appointed, and received other than both: (1) In accordance with all applicable requirements of the law of this state and the law of the United States; (2) Separate and apart from the sale or purchase, contract or tender for sale or purchase, or request or invitation for tender for sale or purchase, of shares of the issuing public corporation. (D) Every appointment of a proxy shall be revocable unless that appointment is coupled with an interest, except that, as provided in division (C) of this section, proxies appointed for or in connection with the shareholder authorization of a control share acquisition pursuant to section 1701.831 of the Revised Code shall be revocable at all times prior to the obtaining of that shareholder authorization, whether or not coupled with an interest. A revocation of a revocable appointment may be made only as provided in this section. Without affecting any vote previously taken, the person appointing a proxy may revoke a revocable appointment by a later appointment received by the corporation or by giving notice of revocation to the corporation in writing, in a verifiable communication, or in open meeting. The presence at a meeting of the person appointing a proxy does not revoke the appointment. (E) A revocable appointment of a proxy is not revoked by the death or incompetency of the maker unless, before the vote is taken or the authority granted is otherwise exercised, written notice of the death or incompetency of the maker is received by the corporation from the executor or administrator of the estate of the maker or from the fiduciary having control of the shares in respect of which the proxy was appointed. (F) Unless the writing or verifiable communication appointing a proxy otherwise provides: (1) Each proxy has the power of substitution, and, if three or more proxies are appointed, a majority of them or of their substitutes may appoint one or more substitutes to act for all. (2) If more than one proxy is appointed, then (a) with respect to voting or executing consents, waivers, or releases, or objections to consents at a shareholders’ meeting, a majority of the proxies that attend the meeting, or if only one attends then that one, may exercise all the voting and consenting authority at the meeting; and if one or more attend and a majority do not agree on any particular issue, each proxy so attending shall be entitled to exercise that authority with respect to an equal number of shares; (b) with respect to exercising any other authority, a majority may act for all. Effective Date: 09-13-1999

Too bad the only people who know how to run the country are busy driving cabs and cutting hair. - George Burns

TimB4
(Virginia)

Posts:3247

03/04/2010 5:43 PM
Kyle, It sounds like the management company was trying to have a directed proxy and thought adding the word proxy to the postcard would meet requirements. I'll defer to Glen on if this did or did not meet the requirement. However, if they were accepted by the board a ruling could go either way. Tim

RobertR1
(South Carolina)

Posts:5164

03/04/2010 6:01 PM
What happened to the requirement for secret vote. This ballot or call it what you want had the name of the voter on the otherside of the post card. What am I missing here?

TimB4
(Virginia)

Posts:3247

03/04/2010 6:08 PM
Robert, If a person issues a directed proxy they are in essence waiving their right to a secret ballot. As proxy statements must be made available for review if requested. IMO, if we receive a directed proxy we believe that we are obligated to insure the representative follows the direction of the proxy. Therefore, we require them to fill out the ballot per the directions of the proxy in front of us. I should not this is not done for a general proxy or any portion of the directed proxy that allows the representative to vote as the think best. Tim

RobertR1
(South Carolina)

Posts:5164

03/04/2010 7:07 PM
Tim, This apparently was a postcard with the name of the candidates on one side and the name of the voter on the other. Nowhere was it stated that there was even proxy directions included. It was called \ a Ballot and sent out. Now someone stamped the word proxy on the ballot. A ballot and a proxy are two different items and are used to accomplish two different tasks. If there was a mistake here, beside stamping Proxy on the Ballot it certainly appears to me the non secret method of voting is the most serious of the two and the Ballots/Proxies what ever, must be tossed out. You are not suggesting that the intent was to have everyone vote by directed proxy? Sorry, but I would also take exception that a directed proxy waives the right to a secret ballot. If the assigned voter is verifed as being proper, and has the return addressed label on the outside affixed by the association, and the voter wants to assign that vote to anyone, the person holding the outside envelope, simply marks a ballot, seals it in the small unmarked envelope and then puts it in the large envelope, then it is treated as any other sealed ballot (vote).

TimB4
(Virginia)

Posts:3247

03/04/2010 8:10 PM
Robert, My understanding was the word Proxy was stamped on the postcard prior to the mailing and not affixed after they were mailed back. As for the intent of the management company, I don't have enough information or background knowledge to answer. I was providing a possible explanation as to why they were sent that way. I don't believe it was proper. However, based on the OP, it appears that proper or not this is the way it happened. The larger question is, were the proxies accepted at the meeting and did it move forward? The OP isn't clear in this. If the meeting happened and the proxies were accepted there are two issues by rejecting them now: 1. Why weren't the proxies rejected at the meeting (as should have been done)? 2. Was a quorum met if the proxies are dismissed? As I understand it, a directed proxy requires any directions to be printed on the proxy appointment letter. Otherwise, it is considered a general proxy and any agreement between the proxy and the member is private and not open to verification or review. Since any proxy appointment can be reviewed by any member requesting to see the records of the Association, the directions on the proxy are then available. Since the proxy statement and directions also contain the name of the member, the right to a privacy on how you directed the proxy to vote is waived (expecting of course that the directions were followed). The Association could trust that the proxy follows the directions and just let them fill in the ballot. However, my Association believes that by accepting the proxy we are also required to accept any directions of the member printed on the proxy. Other then having the proxy fill out the ballot per the directions in front of us, the only other recourse would be to match up every directed proxy with a matching ballot. Worse case, if a directed proxy doesn't match up an argument could be made to through the results out and hold a new election. It should be noted, that our ballots are passed out at the meeting and not mailed to members ahead of time. This is because our documents allow for nomination from the floor and there are some years that enough nominees didn't come forward to fill the board until the actual meeting. I should also point out that the only directed proxies we have seen dealt with bylaw amendments or guidelines vs. election of the Board. Where elections are concerned, all the proxies have been general or marked as the proxy thought best. Tim

TimB4
(Virginia)

Posts:3247

03/04/2010 8:14 PM
Posted By TimB4 on 03/04/2010 8:10 PM Worse case, if a directed proxy doesn't match up an argument could be made to through the results out and hold a new election. This is what happens when your tired. It should say throw out vs. through out.

GlenL
(Ohio)

Posts:3526

03/05/2010 1:27 AM
This is what happens when the Board neglects its responsibility and doesn’t oversee what the MC is doing since according to the OP the BOD decided to let the MC handle it. IMO this is not a valid proxy in that doesn’t contain who the proxy is being granted to, how it may be revoked or superseded and a signature but I’m not an attorney and the HOA attorney may have a different perspective. I would declare the meeting and election void due to a procedural error and redo it with new forms approved by the BOD. The BOD should have the power in the CC&R’s to call a special meeting to accomplish this. Although don’t be surprised if the loosing members of the BOD drag their feet on this.

Too bad the only people who know how to run the country are busy driving cabs and cutting hair. - George Burns

KyleB
(Ohio)

Posts:17

03/05/2010 12:49 PM
Messy Election in Ohio Ballots return address was to the MC, Voter had to sign on ballot side and return. Only two people remain on the board. They contend that the old board is still seated. My atorney says that the board members whose term expired are no longer board members. He says that bylaws allow the two remaining board members to appoint the newly elected to the board without any ramifications. I think he is right. The two old board refuses to accept this decision and are acting as if they still have a board and are planning an election. KyleB

KyleB
(Ohio)

Posts:17

03/05/2010 12:49 PM
Messy Election in Ohio Ballots return address was to the MC, Voter had to sign on ballot side and return. Only two people remain on the board. They contend that the old board is still seated. My atorney says that the board members whose term expired are no longer board members. He says that bylaws allow the two remaining board members to appoint the newly elected to the board without any ramifications. I think he is right. The two old board refuses to accept this decision and are acting as if they still have a board and are planning an election. KyleB

MaryA1

Posts:0

03/06/2010 7:18 AM
Kyle, IMO, the board members whose terms expired and didn't get re-elected are just doing whatever they can to remain in office and the remaining 2 board members are going along with them. I don't see why the "proxy" ballots cannot be counted. Even though the attorney said the 2 remaining board members have the right to appoint board members to fill the vacancies, I doubt your bylaws say they "must" do this. Instead they have chosen to have another election. So be it! Let the members vote again and let them elect others to fill the vacancies again. This time the election will be handled by the 2 board members so they won't be able to claim it was handled incorrectly and is again void. Bottom line: Who is going to take the BOD to court over this? I would venture to say: "NO ONE!" And, like most states, there most likely is no state agency to oversee HOAs and settle disputes. So, the members are really stuck with what the board wants to do!!

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