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Condo Media


Loyalty and Duty
By: Nena Groskind

Newly elected condominium trustees are instructed somberly that they have a “fiduciary duty” to the association and its members; assured that they will not have to worry about personal liability (too much) because the “business judgment rule” will protect them, as long as they exercise “good judgment” and avoid “conflicts of interest”; and admonished sternly never to breach the “attorney-client privilege” that protects communications between the board and the association’s attorney.

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Dealing with Rogue Board Members

Question: Q: What’s the best way to deal with a “rogue” board member, who makes decisions and takes actions on his own, without consulting other board members or even informing them of the actions he is taking?

Answer: A: The question arises frequently enough to make condominium attorneys cringe when they hear it. Sometimes the rogue is the board chairman, who thinks (as was once said of an overbearing judge) “he was anointed” to his position. Sometimes it’s a member of the board who has a personal agenda, or who honestly thinks he/she knows better than the other members what is best for the community. The key point that rogues fail to understand or choose to ignore is this: An association’s governing board is a unit; a majority of the board members must approve all decisions. No single member, including the president, has the authority to act alone.
The best strategy for dealing with a rogue, if your board is are afflicted with one, depends in part on who it is (a member of the board or its president) and the damage he or she is causing. Most governing documents give board members the authority to remove a president or any other officer from that position (although not from the board) with a majority vote. Removing a sitting board member from the board, on the other hand, typically requires a recall vote by association members – a more difficult process that is often far more disruptive to the community.
Richard Brooks, a partner in the law firm Marcus, Errico, Emmer & Brooks, P.C. says he deals with a rogue chairman first by “trying to educate” him or her. Because the chairman usually deals directly with the association’s attorney, he notes, there is often an established relationship and “an element of trust” between them, making it easier to initiate what can be a difficult conversation. When the rogue is the board chairman, Brooks says, “we can usually get him/her to do the right thing.”
An education effort is also the first step in dealing with an errant board member, who isn’t the board president, Brooks says. “We’ll call the individual first or send a stern letter,” explaining that his/her actions are unacceptable and noting the liability risks the board member may be incurring by exceeding his/her authority.
Ellen Shapiro, a partner in the law firm Goodman, Shapiro & Lombardi, LLC, got a call recently about a board member who had signed a contract with a vendor that the board had not authorized, nor even considered. The board member “probably thought he was being helpful,” Shapiro says, but the fact remains, he had no authority to make that commitment. Her message to that board member: “I hope you can get out of the contract. If you can’t I hope you have the money to pay the damages for breaching it, because the board’s directors and officers liability insurance won’t cover you.”
If Shapiro’s liability reminder and Brooks’ “stern letter” aren’t enough to make rogue board members behave, the only remaining option is to seek their removal. Whether he takes that step, Brooks says, depends on how concerned the other board members are about the board member’s actions and “whether they are angry enough” to try to oust him. Removal is a last resort and usually an undesirable one, Brooks emphasizes, because it will require embroiling owners in a public and potentially divisive battle. But sometimes simply threatening removal is enough to make the trustee either resign “or change his behavior.”
Boards can “educate” and admonish rogues and ultimately push to remove them, Shapiro agrees. But when it comes down to it, she says, boards really don’t have much leverage. “If you remove a rogue president from office, the rogue president becomes a rogue board member,” she notes. And if a rogue board member has leaked confidential information, “the damage has already been done,” and removing them won’t un-do it.
It’s not just the lack of leverage that makes dealing with rogue situations so difficult, Shapiro observes; it’s that the situations are often so murky. Is the rogue who is defying the board an unreasonable obstructionist, she asks, or a “whistleblower” who has serious cause to question what the board is doing? “What if the rogue is right and it’s the rest of the board that is wrong?” Right and wrong aren’t always easy to discern, she cautions. “You have to be very careful.”


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