Vote without quorum, inactive clerk

[Albert]

I am in a HOA (timeshares) and the clerk did not record minutes of a seminal meeting. Here is the apparent account.

At the hour appointed by the association board on 5 November 2022, the President called the meeting to order. He introduced a Consultant from Atlanta covering for the absent Association Compliance Officer. The Clerk was present but he didn’t take notes. (The Treasurer, was absent.) The president announced that an employee of the Clerk was taking notes.

 

The consultant announced the meeting was inquorate as the thirty owners present—even complemented by written proxies—was less than the required total of 807., half of the owners. The President, seconded by the consultant, announced the meeting was inquorate but proposed that the owners in attendance approve a call to a special meeting after adjournment so that business could be conducted with a quorum of 404. Without objection, a vote was held and the resolution passed. The President adjourned the meeting.

 

My minutes construct seems to be an accurate record. The notes taken for the clerk have vanished and the Clerk is silent. At the resumed meeting, ballots by the corporate owner were sufficient to enable a bargain purchase (6o percent discount) of all timeshares by the CEO of the company that owns about about 30 percent of the timeshaes. He would save about $5 million if the land court approves this meeting. The Clerk and President work for the CEO. The Consultant used to work for the CEO but this was an assignment for a fee. I believe the court should compel the minutes from the Clerk under oath.

[Josh Martin]

On 12/30/2023 at 3:14 PM, Albert said:

The President, seconded by the consultant, announced the meeting was inquorate but proposed that the owners in attendance approve a call to a special meeting after adjournment so that business could be conducted with a quorum of 404.

I assume this procedure is based on something in your bylaws or applicable law. RONR does permit (and indeed, recommends) an assembly to establish an adjourned meeting (not a special meeting) even in the absence of a quorum, but doing so does not cause the quorum to be cut in half. I have heard, however, of organizations which have provisions of this nature in their bylaws. Such rules are also sometimes found in state law.

"Even in the absence of a quorum, the assembly may fix the time to which to adjourn (22), adjourn (21), recess (20), or take measures to obtain a quorum. Subsidiary and incidental motions, questions of privilege, motions to Raise a Question of Privilege or Call for the Orders of the Day, and other motions may also be considered if they are related to these motions or to the conduct of the meeting while it remains without a quorum...

If there is important business that should not be delayed until the next regular meeting, the assembly should fix the time for an adjourned meeting and then adjourn." RONR (12th ed.) 40:6-8

On 12/30/2023 at 3:14 PM, Albert said:

At the resumed meeting, ballots by the corporate owner were sufficient to enable a bargain purchase (6o percent discount) of all timeshares by the CEO of the company that owns about about 30 percent of the timeshaes. He would save about $5 million if the land court approves this meeting. The Clerk and President work for the CEO. The Consultant used to work for the CEO but this was an assignment for a fee.

This is all very interesting, but there does not seem to be any parliamentary issue here.

If your concern is regarding "conflict of interest" rules, then I would consult an attorney.

On 12/30/2023 at 3:14 PM, Albert said:

I believe the court should compel the minutes from the Clerk under oath.

If your question is whether a court should compel the minutes from the Clerk under oath, then you should direct that question to an attorney. RONR has nothing to say regarding what a court should so.

So far as RONR is concerned, the Clerk, or the employee assisting the clerk, or failing that, a committee appointed by the assembly should create minutes for the meeting in question, so that the meeting has minutes.

Edited December 30, 2023 at 09:31 PM by Josh Martin

[Albert]

Thank you. At this time, I am a committee of one.  I hold that the Clerk who was present has an obligation to present minutes. The meeting reset was not an option under our bylaws but rather a responsibility of the board of directors. The clerk is not an owner and not a party to the association but hired by the association as manager for a fee; his company is legally known as the managing entity. The half-quorum rule is an artifact of special meetings that the board calls with prescribed notice to owners by USPS. The owners overwrote an alternate meeting set and advertised by the board of directors. 
 

The Clerk has refrained from issuing minutes of either the called meeting or the resumed meeting. it is a court that can request/demand meeting minutes by discovery if such exist. The more important minutes are those of the  resumed meeting and those too are absent. Your point is well taken that if conflict of interest overrides parliamentary procedure that could more properly be a legal issue. Thank you.

[Josh Martin]

On 12/30/2023 at 4:16 PM, Albert said:

 I hold that the Clerk who was present has an obligation to present minutes.

Yes, certainly he does.

But it seems that, for whatever reason, the Clerk failed to fulfill this obligation. The assembly still needs minutes of that meeting, so if the Clerk refuses to provide them, it would seem prudent to have someone create minutes of the meeting in question. (It might also be prudent to replace the Clerk.)

While I suppose the organization is free instead to try to go to court to compel the Clerk to produce the minutes, (although I must note I am not an attorney and this is not legal advice), legal proceedings tend to be lengthy, so it may still be prudent in the interim for the society to appoint someone else to recreate the minutes.

On 12/30/2023 at 4:16 PM, Albert said:

The meeting reset was not an option under our bylaws but rather a responsibility of the board of directors... The half-quorum rule is an artifact of special meetings that the board calls with prescribed notice to owners by USPS.

Thank you for these additional facts. Based on these additional facts, the board may take advantage of this "half-quorum rule," but only by following the prescribed procedure, which we are told involves the board calling the meeting with prescribed notice to owners by USPS. So the membership's action in this matter at the meeting would be immaterial.

The assembly does have the option under RONR to establish an adjourned meeting, even without a quorum, but this does not have the effect of reducing the quorum requirement.

On 12/30/2023 at 4:16 PM, Albert said:

The owners overwrote an alternate meeting set and advertised by the board of directors. 

Please clarify what is meant by this.

On 12/30/2023 at 4:16 PM, Albert said:

The Clerk has refrained from issuing minutes of either the called meeting or the resumed meeting. it is a court that can request/demand meeting minutes by discovery if such exist.

Okay. That continues to be a question for an attorney.

Edited December 31, 2023 at 02:49 PM by Josh Martin

[Richard Brown]

On 12/30/2023 at 4:16 PM, Albert said:

The owners overwrote an alternate meeting set and advertised by the board of directors.

I, too, wonder what this means and what actually happened.

On 12/31/2023 at 8:47 AM, Josh Martin said:

The assembly does have the option under RONR to establish an adjourned meeting, even without a quorum, but this does not have the effect of reducing the quorum requirement.

I agree that it does not have the effect of reducing the quorum requirement by virtue of any provision in RONR, but it is POSSIBLE that it does by virtue of the bylaws or controlling state law.  It depends on the language of the provision reducing the quorum requirement for a subesequent meeting. An adjourned meeting is a separate meeting, but is a continuation of the same session.  That issue is also best resolved by consulting an attorney.