Click History for a list of changes and updates.
__Not only was the 2009 Nov 29 dues increase proposal a surprise to most MOA members, the notice is defective likely because everything was done at the eleventh hour. Haste makes waste. Because of the defects in the notice, an affirmative vote for the dues increase is likely not enforceable, in my opinion. MOA has enough problems without that cloud having over an "approved" dues increase.
__Since the proposal that was put forward was likely done in good faith, the positive action is for the board to acknowledge the defects, take corrective action by issuing a new notice that can still be voted on in December.
__The continuation of this post is my email to the board providing the specific defects and recommending specific corrective action. Anyone who agrees with this approach should immediately send an email to the board so recommending. The new notice will have to be in the mail by Dec 01 for a vote on Dec 30.
Don Nordeen
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Please be advised that the writer is not an attorney, and this is not legal
advice. The information is based on research on information available
in the public domain.
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Please be advised that the writer is not an attorney, and this is not legal
advice. The information is based on research on information available
in the public domain.
-------------------------------------------------------------------------------------
- Key Words:_ Financial Information - 2009 General, MOA Board of Directors, MOA Members & Members' Rights, balanced budget, budget, Covenants Conditions and Restrictions, duty of obedience, fiduciary duty, governing documents
Email to MOA Board Re Notice for Dues Increase is Defective (continued)
From: Don Nordeen
Date: 2009 November 23 16:12:53 EST
To: Carolyn Study, Jay Welter, Mike Buckley, Rich Gaubatz, Tad Latuszek,
___ Vicky Rigney, Steve Renton
Cc: Todd Chwatun
Subject: Notice for Dues Increase is Defective
Date: 2009 November 23 16:12:53 EST
To: Carolyn Study, Jay Welter, Mike Buckley, Rich Gaubatz, Tad Latuszek,
___ Vicky Rigney, Steve Renton
Cc: Todd Chwatun
Subject: Notice for Dues Increase is Defective
2009 November 23
Dear Board Members:
Re: Notice for Dues Increase is Defective__
__The Notice for the Proposed Membership Vote on the COLA Proposal is defective for three reasons. When an organization makes a mistake, the competent organizations acknowledge the mistake, apologize to the people affected, make the necessary corrections, and move on. Corrections can easily be made in time for a vote in 2009 by making the standing requirement clear and eliminating the COLA provision. My recommendation is to salvage what the board decided to do independent of the merits of the proposal.
__Inherent in the dues increase proposal is a decision by the board to not proceed with a budget that balances in numbers only. That is favorable but the timing is very unfavorable. The financial problems in MOA have been known for 8 years.
__The three defects are:
1. Failure to provide proper notice of a board motion to seek a dues increase — The notice of the Board meeting at which the motion was approved to seek a dues increase in December was not previously noticed in the notice of the meeting or otherwise. The MOA board is governed by MOA's bylaws which state:__It is not in anyone's interest to have a cloud over the COLA provision or the validity of any approval vote because of the defects described. The Board can take the necessary action to issue a new notice by Dec 01 acknowledging the error in the Nov 29 notice, correcting the standing requirement with a new date for determining standing limited to the 2009 and prior dues, and eliminating the COLA provision in the motion. Then the motion should be valid except for the first item which the Board could affirm by approving a motion to correct the original notice and set a new date for the meeting and counting of the vote. By the defective notice, members have been informed.
"Article XIV. Parliamentary Authority — The rules contained in the current edition of Robert's Rules of Order Newly Revised and any statutes applicable to this Association shall be used as a general guideline by the Association in any cases in which they are applicable and in which they are not inconsistent with these Bylaws and any special rules of order the Association may adopt. Failure to conform to the letter of Robert’s Rules of Order Newly Revised shall not affect action taken at a meeting as long as the fundamental concepts of fairness and due process are observed."__Unless there was a motion to adopt other rules, the board is obligated to abide by the provisions in Robert's. RONR clearly states that previous notice is required. The reason for the notice requirement is to ensure that board members can be fully prepared to debate and consider a motion. A motion on a dues increase is obviously important and requires advance notice.
__Furthermore, the advance notice of the motion for a dues increase is required because of a prior motion approved by the board to delay consideration of a vote on a dues increase until the 2010 annual meeting. Rescinding a prior motion clearly requires notice to board members so they can be fully prepared to debate and consider the issues involved.
__There is no indication that the board considered the effects on members of a surprise change in policy concerning timing of a dues increase proposal. Given its importance, the notice of the board meeting should have been sent by email to the email list. It is unreasonable to expect that members will check the MOA website daily for special board meetings.
__At the Nov 21 Open Forum, I stated that members deserve even more consideration in defining any motion for a dues increase than the board provides itself with multiple readings on proposed policies.
2. The "Be a member in Good Standing" requirement is incorrect. The requirement states "all dues ... must be paid". The requirement in the bylaws is that the 2009 dues must be paid. The questions at the 2009 Nov 21 Open Forum clearly indicate that the requirement in the notice is incorrect. If a vote is taken, there is no way to know how many members in good standing for 2009 did not vote because of the wording in the standing requirement.
3. The COLA provision is not authorized in the Declaration of Master Covenants, Conditions and Restrictions (DMCCR). Throughout the DMCCR, the reference is to a singular dues cap as a specific number not to a schedule, or worse a changing number for future years that is unknown — lack of a clear standard. Moreover, any COLA assessment would be uncollectible because ambiguities are construed against the party seeking enforcement. The latest rules for interpreting restrictive covenants from the Michigan courts are in David Ribick v Inverrary LLC. The opinion states:
“Restrictive covenants are to be read as a whole to give effect to the ascertainable intent of the drafter,” Mable Cleary Trust v Edward-Marlah Muzyl Trust, 262 Mich App 485, 505; 686 NW2d 770 (2004), citing Borowski v Welch, 117 Mich App 712, 716; 324 NW2d 144 (1982), and strictly construed against grantors and the parties seeking to enforce the covenants. All doubts are to be resolved in favor of the free use of property. O’Connor v Resort Custom Builders, Inc, 459 Mich 335, 341-342; 591 NW2d 216 (1999); Stuart v Chawney, 454 Mich 200, 210; 560 NW2d 336 (1997). Courts should not infer restrictions that are not expressly provided for in the controlling documents. O’Connor, supra at 341, citing Margolis v Wilson Oil Corp, 342 Mich 600, 603;70 NW2d 8111 (1955)." [underline emphasis added by writer and not in the original email]The key phrases are "strictly construed against grantors and the parties seeking to enforce the covenants" and "Courts should not infer restrictions that are not expressly provided for in the controlling documents." The first means that MOA could not enforce collection of any COLA billed to members. The second means that the court will not read into the DMCCR what is not clearly stated — namely that the authority of the association to include a COLA provision in a vote on changing the dues cap is not expressly provided in the DMCCR.
Don Nordeen
(989) 939-8240
cc: Michaywé POA Weblog
- History:_
- 2009 Nov 23 — Initial Post
- Links:__Email to MOA Board Re Notice for Dues Increase is Defective at [http://swagmanmwpoa.blogspot.com/2009/11/email-to-moa-board-re-notice-for-dues.html]
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