Association Operations: The Court of Appeals of Massachusetts held that an electronic ballot that operated as a directed proxy was acceptable, in principle, where the bylaws required voting at a meeting, but the ballot did not comply with the bylaws’ specific requirements for proxies.

Gutierrez v. Board of Managers of Flagship Wharf Condominium, 100 Mass. App. Ct. 678 (Mass. App. Ct. Feb. 2, 2022)

Association Operations: The Court of Appeals of Massachusetts held that an electronic ballot that operated as a directed proxy was acceptable, in principle, where the bylaws required voting at a meeting, but the ballot did not comply with the bylaws’ specific requirements for proxies.

Flagship Wharf Condominium Association (association) governed a condominium in Charlestown, Mass. The condominium consisted of 201 residential units and two commercial units located in the historic Charlestown Navy Yard. The condominium was managed by a board of managers (board).

In 2019, two seats on the board were open for election. Connie Gutierrez decided to run for a board seat. Prior to 2019, paper ballot forms were used to cast votes. However, the board decided to use electronic balloting and an online voting tool in place of paper ballots for the 2019 election. The electronic system provided a link to an electronic ballot for each unit owner to vote starting one week before the annual meeting.

Gutierrez requested the board amend the association’s bylaws to address electronic voting because she thought that the election was not being carried out in accordance with the bylaws. The board did not amend the bylaws and held the annual meeting as planned. Most unit owners cast their electronic ballots in advance of the meeting.

The unit owners were entitled to vote by attending the meeting and voting in person or by casting an electronic ballot in advance of the meeting. The electronic ballot specified that the owner was giving a proxy to the property manager to cast the owner’s vote as directed on the ballot. The board set a deadline of noon on the day of the annual meeting to cast electronic ballots and for revocation of any existing proxy designation. Gutierrez lost the election.

Gutierrez requested that the board provide her with all documents pertaining to the election, including vote tallies and proxies, but the board declined to do so. Gutierrez then sued the board, seeking to have the election declared void because electronic voting was not permissible under the bylaws or, if electronic voting was permissible, to determine the election was not carried out in accordance with the bylaws.

The trial court granted summary judgment (judgment without a trial based on undisputed facts) in the board’s favor. Gutierrez appealed.

Gutierrez argued that the 2019 election violated the bylaws in three ways: (1) by allowing owners to vote in advance of the annual meeting; (2) in directing that owners’ proxy designations be made to the property manager, and not the board’s clerk; and (3) by limiting the owners’ ability to revoke their proxy designations at any time.

The bylaws provided that the board shall be elected by ballot of the owners at the annual meeting, with meetings being held at such suitable place as designated by the board. Each owner may vote in person or by proxy and shall be entitled to cast the vote for such owner’s unit at all meetings of the owners. The designation of any such proxy shall be made in writing to the clerk and shall be revocable at any time by written notice to the clerk.

Gutierrez argued that, by providing that owners “shall” be entitled to cast their votes at association meetings, the bylaws required that all votes be cast in person or by proxy at the meeting rather than in advance of the meeting. The appeals court found that use of “shall” was directed at ensuring owners had a right and an opportunity to vote, not to the specifics of how the election was to be managed. The bylaws did not provide that voting “shall only” take place “at” and during the annual meeting, nor did they impose any limits on where and when, relative to the annual meeting, voting could take place.

The fact that the electronic ballot required any owner not attending the meeting in person to designate a proxy “to represent you and your vote … at the meeting” meant that any vote cast by an owner who did not appear in person was a directed proxy vote, and was permitted under the bylaws. The appeals court was not persuaded that this interpretation allowed the board to usurp rights reserved to the owners in the bylaws. The bylaws did not reserve to the owners the exclusive right to establish the methods by which the voting was to be conducted. The appeals court concluded that the board’s decision to allow owners to vote through the online process and in advance of the annual meeting was permitted under the bylaws and was within the board’s authority.

The electronic ballot directed owners to provide their proxies to the property manager and provided that the ballot could not be changed once submitted. The appeals court agreed with Gutierrez that these two bylaw provisions were mandatory and discerned no reason for deviating from the requirements that proxies be given to the clerk and were revocable at any time before the vote is cast, at least up to the time of the meeting.

The board argued that it was sufficient that it substantially complied with the bylaws’ requirements. The appeals court did not agree and held that Gutierrez was entitled to a declaration that the ballots did not comply with the bylaws.

Accordingly, the trial court’s judgment was reversed in part and affirmed in part.