Elections, Insurance, and a Senseless Death

This season, more than any other of late, the issue of condominium election ballot verification reared up.  The condominium election process is unique and very regulated.  In addition to many other requirements, ballots are to be placed in an inner plain and unmarked envelope which is to be placed inside a larger envelope which must, as per Florida law, contain the unit owner’s name, address, unit number and signature.  As part of the election process, this information is later verified against the associations’ membership records to ensure that only the unit owner, or the unit owner’s designated voter, cast their ballot.  It is the plain inner envelope that guarantees anonymity.

Given the sheer volume of units in many condominium communities, which translates to the number of ballots that can be received, the process of tabulating the ballots can take hours.  To speed things up, some condominium communities prefer to verify the outer envelope information in advance of the election ballot tabulation that takes place during the annual members’ meeting.  That said, and what may come as a surprise to some, is that you cannot just start verifying the outer envelopes.  If you do, then your entire election is subject to challenge.  Tampering with the election materials creates an inescapable cloud over the entire election process from which there is no escape, but a new election.  It is so simple to avoid, too.

Section 61B-23.0021, of the Florida Administrative Code, details the verification process as follows: “Any association desiring to verify outer envelope information in advance of the meeting may do so as provided herein.  An impartial committee designated by the board may, at a meeting noticed in the manner required for the noticing of board meetings, which shall be open to all unit owners and which shall be held on the date of the election, proceed as follows. For purposes of this rule, impartial shall mean a committee whose members do not include any of the following or their spouses: 1) Current board members; 2) Officers; and 3) Candidates for the board. At the committee meeting, the signature and unit identification on the outer envelope shall be checked against the list of qualified voters.  The voters shall be checked off on the list as having voted.  Any exterior envelope not signed by the eligible voter shall be marked ‘Disregarded’ or with words of similar import, and any ballots contained therein shall not be counted.”  Now you know how to have your cake and eat it, too.  Just follow the simple procedures to verify the outer envelopes and you can be home in time for the 10:00 P.M. news.

Once you are elected to the board, make certain the directors’ and officers’ liability coverage is in place.  In most instances, a board member’s duty is to exercise their reasonable business judgment.  They can make decisions that later turn out great or bad, but so long as they acted reasonably under the circumstances, and without malicious intent, the association’s insurer typically stands by their coverage obligations. Noteworthy is that, as related to procurement of insurance, a condominium board member’s statutory duty as set out in s. 718.111(11), Fla. Stat, is one of “best efforts”. Casualties of all sorts can occur at any time. For example, just look to the recent tragedy that led to the death of Trayvon Martin.

Friends, family and clients are all asking, will George Zimmerman’s homeowners’ association be sued?  Yes, most likely it will.  That is one deep pocket not likely to be missed.  We could also see intentional tort claims brought against the individual directors by the victim’s family.  If such claims are victorious, then it’s the individual directors who are liable, not the association’s insurer.  Under the circumstances, as reported thus far, a finding of individual board member liability is not unlikely.

The more difficult question to answer is whether the HOA will have liability for its actions or failures to act?  Was the association, based on the acts of its boards (both past and present) negligent or grossly negligent (reckless disregard that rises to such a level so as to appear to be an almost willful violation of the safety of others)?  If so, the insurers would likely fight to pay only their fractionalized share of the association’s blame.  This is referred to as “contributory negligence” where each culpable party pays their share of the blame.  You might also hear about some court activity where the plaintiffs try to force the association to suffer its judgment separate from the other defendants.  Doing so could create opportunity for larger settlements and judgments.  Think of it this way, would you rather receive just $1,000 from 10 people, or have 10 people each give you $1,000?

In many ways, suing a homeowners’ association is like suing a successful, well capitalized corporation.  Without proper insurance coverage in place, a judgment against your association would also be your next special assessment.  Make sure your association’s insurance professional is made aware of all activities taking place in your community, from watch committee activity to use of the clubhouse by private organizations.  Crime and accidents occur everywhere, at any time, when you least expect it and without notice.  Advance planning is your only defense.

Posted in Elections, Insurance.