Court Says Phone Meetings Are OK During Pandemic
In the face of the COVID-19 pandemic, many community associations have turned to virtual or telephonic meetings, but some have run into members who object. A recent ruling by a New York state court provides some reassurance that your clients have some wiggle room when it comes to strict adherence to annual meeting requirements amidst a public health emergency.
The Bristol Harbour Village Association, Inc., which has more than 300 members, has bylaws that mandate an annual meeting for board elections and other business at 10:00 a.m. on the first Saturday of October “or at such other time as the Board of Directors shall determine.”
On July 9, 2020, the manager formally announced that the annual meeting would be advanced to August 22 via phone conference, citing COVID-19. The vote would be done through mail-in ballots.
Some owners sought a temporary restraining order and a preliminary injunction prohibiting the annual meeting from taking place as planned. They claimed it would violate the law and the bylaws and therefore deprive them of various voting rights. The owners argued the date couldn’t be changed and complained that the defendant directors had not adopted any guidelines to ensure full participation in the remote event.
The board members countered that they had the discretion to change the meeting date and time, and the court agreed. It found that the bylaws gave them a degree of discretion in scheduling the meeting.
The court dismissed the owners’ “narrow interpretation of the bylaws” — that the board could change the time of the meeting only, not the day. It noted the association’s history of non-compliant dates, including some meetings held when the plaintiff owners were on the board.
As to the owners’ claim about the lack of guidelines, the court referred to a recent amendment to the state’s not-for-profit corporation law. Due to the pandemic, the law was amended to provide that boards may, at their sole discretion, determine that meetings should be held partially or solely by electronic means of communication.
To learn whether you might have similar leeway during the pandemic, read the full article now:
Court Upholds Annual Meeting by Phone During Pandemic