STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS, AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION Joel D. Ronan and Jana L. Ronan, Petitioners, v. Case No. 2007-00-4239 Imperial Apartments Association, Inc., Respondent. / FINAL ORDER Pursuant to notice, the undersigned arbitrator of the Division of Florida Land Sales, Condominiums, and Mobile Homes convened a formal hearing in this case on September 25, 2007. During the hearing, the parties presented the testimony of witnesses, entered documents into evidence and cross-examined witnesses. Both parties have timely submitted recommended orders. This order is entered after consideration of the complete record in this matter. Appearances For the Ronans: Deborah Ross, Esq. Ross, Earle & Bonan, P.A. P.O. Box 2401 Stuart, Florida 34994 For the Association: Ryan S. Grazi, Esq. Law Offices of Grazi & Gianino 217 E. Ocean Blvd. Stuart, Florida 34994 1
Statement of Issue Whether the Association denied Petitioners access to its official records and, if so, whether such denial was willful? Findings of Fact 1. Imperial Apartments Association, Inc. (the Association) is the legal entity responsible for the operation of the Imperial Apartments condominium. 2. Joel D. Ronan and Jana L. Ronan (Petitioners) have ownd units 4-2, 4-8 and 5-3 at the condominium since February 2005 1. 3. At all times relevant to this dispute, Coastal Community Association Management Services, Inc. (the management company) has been the property management company hired by the Association to manage the condominium. Suzie Butler owns the management company and is the licensed community association manager for the condominium. 4. Petitioners are real estate investors. Their units are mortgaged. The mortgagee, Gulfstream Business Bank, requires Petitioners to provide proof of insurance on the property. Therefore, when they purchased the units, Petitioners requested that the Association s property manager send them a copy of the insurance policy. The manager did so by facsimile. 5. By letter dated March 27, 2006, Gulfstream Bank informed Mr. Ronan that the hazard insurance policy for the property had either been cancelled or expired. The bank requested that petitioners forward a copy of the declarations page for the current insurance policy for the property indicating the bank as an insured mortgagee. 1 At the time the dispute arose, Petitioners owned an additional unit which has since been sold. 2
6. By letter dated May 22, 2006, the mortgagee informed Mr. Ronan that unless it received proper proof of insurance coverage for the property, within 15 days, it would obtain coverage at Petitioners expense. 7. Soon after receiving the May 22, 2006, letter, Ms. Ronan telephoned the Association s property manager, Suzie Butler, to request the Association s insurance information. 8. Ms. Butler informed Ms. Ronan that the Association did not have copies of the insurance policy. Since it was the Association s standard procedure to forward insurance information directly to mortgagees, Ms. Butler offered to request that the Association s insurance agent forward the information to the bank, but Ms. Ronan declined. Therefore, Ms. Butler provided Ms. Ronan the telephone number for the Association s insurance agent. However, the insurance agent refused to provide Ms. Ronan the information. The insurance agent did offer to forward the information to the mortgagee if Petitioners provided the agent with a copy of the mortgagee s letter. The Ronan s did not wish to forward the letter to the insurance agent. Ms. Ronan telephoned Ms. Butler to inform her of the agent s response. 9. In June 2006, Petitioners received assessment notices for their units. Because the mortgagee had purchased insurance at their expense when they were unable to provide proof of insurance, Petitioners withheld paying the assessments. 10. In June and July of 2006, the Association was in the process of switching to a new insurance provider. The Association received the new policy in July 2006. 11. Eventually, the matter of the Petitioners delinquent assessments was turned over to the Association s attorney, Deborah Ross. At the time, Ms. Ross was retained by the Association to represent it only in the assessment matter. 3
12. By letter dated June 15, 2007, through its attorney, the Association demanded that Petitioners pay the delinquent assessments. 13. Petitioners responded to the June 15, 2006 demand, by letter dated July 18, 2006, addressed to the Association s attorney, Deborah Ross. The letter stated that Petitioners attempted to obtain proof of insurance, and that since they had to provide their own insurance, they had withheld payment of the assessment. The letter further stated that Petitioners had decided to pay the assessments. The letter also requested that Ms. Ross provide them proof of insurance coverage. A copy of this letter also was provided by Ms. Ronan to the Association s management company. The bottom of the letter indicates, Cc: Costal Properties. 14. During an Association board meeting held on July 19, 2006, Ms. Butler announced that the Association had received new insurance policies prior to the meeting. 15. On July 20, 2006, Ms. Ross faxed a copy of the Petitioners July 18, 2006, letter to Ms. Butler. Ms. Butler informed all the members of the Association s board of directors about the Petitioners July 18, 2007, letter. She did not take action regarding it, because she was not provided instructions from the board. 16. By letter dated December 28, 2006, addressed to Ms. Ross, Petitioners attorney addressed issues concerning the assessment matter and informed Ms. Ross that Petitioners had not received the requested insurance certificates. 17. The Association s insurance agent had forwarded the insurance information to the Gulfstream Bank which Ms. Butler thought resolved Petitioners request for proof of insurance. 4
18. Ms. Ross only communicated with Petitioners regarding the assessment dispute. After the initial letter from Ms. Ross, Ms. Ronan directed other inquiries directly to the Association manager, including matters involving plumbing, tenants, the procedure for the sale of a unit, and miscellaneous matters. 19. The Association never responded to any of Petitioners requests for proof of insurance by providing the documents directly to Petitioners. As of the date of the final hearing, the Association had not provided Petitioners the requested documents. Conclusions of Law The Imperial Apartments is a condominium within the meaning of section 718.103, Florida Statutes. The undersigned has jurisdiction over the parties and subject matter of this dispute, pursuant to section 718.1255, Florida Statutes. In accordance with section 718.111(12), Florida Statutes, the insurance records requested by Petitioners are official records of the Association which the Association must maintain and make available to its members within 5 working days after receipt of a written request for access to them. Failure to make the records available within 10 days of receipt of the request results in a statutory presumption that the violation was willful. Prior arbitration cases have held that an association does not have a duty to mail or otherwise deliver copies of its official records to its members. See Radcliffe v. 5200 Club Ass n, Inc, Arb. Case No. 2005-06-4680, Final Order Dismissing Petition (October 29, 2005), see also Kavalec v. Continental Inn Condominium of Key Colony Beach, Inc., Arb. Case No. 98-5271, Summary Final Order (December 3, 1998). However, the instant matter is distinguishable from such prior arbitration cases. It is clear that based upon prior conduct between the parties, it was routine for the Association, through its management company, to respond to requests for records by providing copies. In fact, 5
the Association has responded to prior verbal requests by Petitioners by providing them copies via facsimile. If the Association intended to establish a different, more formal policy for requesting access to records, it needed to do so by notifying the members of the change in policy or by responding to requests for records by describing the new procedure and that the request was being rejected for failure to comply with the new policy. The Association argues that Petitioners request for proof of insurance was not a records request, but a request for information. The Association relies upon the arbitration case Bazak v. Windermere Condo. Ass n, Inc., Arb. Case No. 96-0019, Final Order (December 4, 1996). In Bazak the petitioner had requested that the respondent association provide him its insurance information so that he could contact the insurance carrier in order to file a claim. In contrast, in the instant case, Petitioners request was that the Association provide proof of insurance. A reasonable person would interpret such a request as a request to be provided a document. The Association contends that Petitioners record request was not properly served on the Association since it was directed to the Association s attorney who was only authorized to represent the Association in the assessment collection matter. In Halley v. Park Lake Condo. Ass n, Inc., Arb. Case No. 2005-00-5766, Summary Final Order (July 22, 2005), the arbitrator held that where a records request was directed to the association s collection attorney, who was not was not authorized by the association to receive such requests, that service of the request was improper. The instant case differs from Halley in that a copy of the records request, the July 18, 2006 letter, was also copied to the Association s property manager. In Walters v. The Preserve at Walnut Creek Condo. Ass n, Inc., Arb. Case No. 2006-00-5300, Final Order May 4, 6
2006) the undersigned concluded that where a letter was directed to the Association s management office, which apparently lost the request, and where a copy was also mailed to its registered agent, that the Association s time to comply with the request would at least commence upon the date the registered agent received the copy of the request. The July 18, 2006, records request in the instant matter was copied to the Association s property management company. Petitioners indicate that they delivered a copy by hand. Moreover, it is clear that the Association s attorney sent a copy of the letter via facsimile to the property manager on July 20, 2006. Considering that the letter specifically indicated that it was being copied to the management company by the Petitioners and that the property manager informed the Association s board of directors about the letter, the undersigned finds it was sufficiently served on the Association. The Association contends that it did not have a copy of the insurance policy at the time of Petitioners request and, therefore, the correct violation is failure to maintain an official record rather than failure to permit access to the record. This argument was contradicted by the testimony of Ms. Butler who indicated that the Association received the insurance policy prior to the July 19, 2006 meeting, which would have been in time to comply with Petitioners request. Section 718.111(12)(c), Fla. Stat., provides, in pertinent part: The failure of an association to provide the records within 10 working days after receipt of a written request shall create a rebuttable presumption that the association willfully failed to comply with this paragraph. A unit owner who is denied access to official records is entitled to the actual damages or minimum damages for the association's willful failure to comply with this paragraph. The minimum damages shall be $50 per calendar day up to 10 days, the calculation to begin on the 11th working day after receipt of the written request. 7
The Association s failure, as of the date the final hearing in this matter, to provide the requested records creates the rebuttable presumption that such denial was willful. The Association has failed to rebut this presumption. Therefore, Petitioners are entitled to the maximum statutory damages of $500.00. Based upon the foregoing, it is ORDERED: Within ten days of the date this order the Association shall provide Petitioners the Association s proof of insurance and pay Petitioners $500.00 in statutory damages.. DONE AND ORDERED this 12 th day of December 2007, at Tallahassee, Leon County, Florida. James W. Earl, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida 32399-1029 Trial de novo and Attorney s Fees This decision shall be binding on the parties unless a complaint for trial de novo is filed in accordance with section 718.1255, Florida Statutes. As provided by section 718.1255, Florida Statutes., the prevailing party in this proceeding is entitled to have the other party pay reasonable costs and attorney s fees. Any such request must be filed in accordance with Rule 61B-45.048, F.A.C. Certificate of Service I hereby certify that a true and correct copy of the foregoing final order has been sent by U.S. Mail to the following persons on this 12 th day of December 2007: Ryan S. Grazi, Esq. Law Offices of Grazi & Gianino 217 E. Ocean Blvd. Stuart, Florida 34994 Deborah Ross, Esq. Ross, Earle & Bonan, P.A. P.O. Box 2401 Stuart, Florida 34994 James W. Earl, Arbitrator 8