|
April 1, 1996 MEMORANDUM TO CLIENTS
ATTORNEY-CLIENT MEETINGS: ENSURE YOUR CONFIDENCES ARE PROTECTED Nearly every Florida resident has heard of "The Sunshine Law". Unfortunately, though most people understand that the law generally requires open or public meetings, many people mistakenly believe that the law applies to condominium, cooperative and homeowner association meetings. Actually, the law applies only to governmental entities, not to associations. Though the Sunshine Law has a relatively narrow application, the Sunshine Law indirectly but significantly impacts association governance. Courts look to the Sunshine Law when considering disputes as to whether certain association meetings should be open. The reason the courts look to the Sunshine Law is that the policy underlying the mandate for open governmental decision making also may apply to association decision making. Because Sunshine Law and association law disputes may be related, lawyers carefully follow Sunshine Law decisions. Recently a significant Sunshine Law appeal was decided, School Board of Duval County Florida v. Florida Times Union, _____ So. 2d _____, 21 Fla. L. Weekly D500 (Fla. 1st DCA, February 20, 1996). The dispute arose when the School Board held a non-public, private settlement/negotiating strategy meeting with the Board attorney to discuss litigation. Originally the Sunshine Law did not authorize any private meetings; however, the law was amended to authorize private meetings to include the Board's attorney and "chief executive." The problem occurred when the School Board also allowed staff members and a consultant to attend the meeting. The Board's decision who to invite to the meeting was not without thought. The Board's decision to meet in private with the additional persons was in reliance of an opinion issued by the Attorney General of Florida. Inevitably the private meeting piqued the media's interest. A newspaper challenged the Board's ability to meet in private with individuals not specified in the statute. On appeal the issue was whether the legislature's language should be strictly construed. The School Board claimed, as do many association directors in similar circumstances, that a strict interpretation was unreasonable and absurd. The appellate court declined to extend the narrow exception for a private meeting with an attorney to allow a private meeting in which staff members, a consultant, or others could attend. The Sunshine Law exception was strictly interpreted. It applies only to meetings among the School Board, its chief executive and the attorney from which the Board desires advice concerning settlement negotiations or strategies. When the topic or attendees do not match what the Sunshine Law allows, then the meeting must be open. This decision will be of significance especially to homeowner associations. The "Homeowners' Association Law", specifically §617.303(2) Fla. Stat. (1995), requires public directors' meetings, with an exception. Homeowners' associations can generally meet with their attorney in private; however, the law limits private meetings to those:
Thus, as in the Sunshine Law, the statutory exception for private meetings with an attorney is narrowly written. While many homeowners' association directors argue that the open meeting law is unreasonable or absurd, as the Florida Times Union Court ruled the, decision of who can attend meetings is the legislature's. It is noted that the Condominium and the Cooperative Acts do not have any private meeting provisions; thus, these types of associations may not be able to have any private meetings! WHAT RECORDS MUST ASSOCIATIONS FURNISH TO MEMBERS?
Directors discussing public meeting requirements frequently digress into comments concerning corporate records inspections. Most directors and managers are aware that condominium, cooperative and homeowners' association members have statutory entitlements to inspect association official records. Because each type of association is governed by a different chapter of the law, what constitutes an association official record is governed by law that specifically applies to that type of association. Though the Condominium Act and the Cooperative Acts broadly construe what is an official record, the Homeowners' Association Law narrowly defines official records. Thus, one question that constantly arises is whether homeowner association members are entitled to particular office records which the law does not specifically designate as official records? Because association law is a relatively new jurisprudence, many courts look to general corporate law appellate court decisions for guidance. Thus, it is appropriate to see how a similar inspection issue was addressed in Nu Med Home Health Care, Inc. v. Hospital Staffing Services, Inc., _____ So. 2d _____, 21 Fla. L. Weekly D40 (Fla. 4th DCA December 20, 1995). Certain shareholders of Hospital Staffing requested a particular shareholder list. The laws regulating Hospital Staffing provide that regular lists are to available to members. This dispute arose because the list sought was not the "normal" list contemplated by the law. The list contained additional information, was relatively expensive to produce and was not in Hospital Staffing's possession. Because the list was not expressly required to be produced by law and because a separate entity prepared and possessed the list, Hospital Staffing did not designate the list as an official record. However, the corporation had access to and could obtain the list from the outside source. The appellate Court's reasoning underlying its holding that Hospital Staffing did not have produce the list provides associations valuable guidance. The Court initially noted that the law did not require the list to be created or maintained. Notably the Court could have stopped its analysis at that point, and ruled. Instead, the Court continued its analysis and expressly based its ruling on the fact that Hospital Staffing did not possess the list. The Court held that no law required Hospital Staffing to produce an item not required to be kept and which was not in its possession. What is the impact for associations? It appears that documents in an association's possession may have to be provided to a member upon request even though the Association may not be required to keep the document. Similarly, an association does not have to provide documents not statutorily designated as official records which were never in the association's possession. This conclusion has a caveat; the Condominium Act and the Cooperative Act presently provide broad member inspection privileges.
|