Washington Appellate Court Rules Board Appointment of Directors Appropriate When Board Elections Could Not Be Held

The Court of Appeals of the State of Washington Division II recently ruled that a community association board of directors appropriately appointed association members to the board to fill vacancies when board member elections had not occurred due to lack of membership quorum. The case, Parker Estates Homeowners Association v. Pattison, involved a 195-unit subdivision in Camas, Washington that is governed by the Parker Estates Homeowners Association. In 2009, William and Lesley Pattison purchased a home at Parker Estates, but failed to pay the monthly assessments charged to all Association members. The Association eventually filed a lien against the Pattison's property and later filed a lawsuit to recover the unpaid assessments and late fees.

The Pattisons filed counterclaims against the Association asserting that the Association lacked authority to impose assessments or late fees because the Association had failed to follow its Bylaws and Washington law with regard to the creation of the Association's board of directors. Specifically, the Pattisons argued before the Court of Appeals that 1) the Association had previously failed to obtain quorum of its membership to amend its Bylaws to create its board of directors, and 2) the Association lacked a valid board of directors as the Association had failed to obtain quorum of its membership for several years of annual meetings when board elections were held.

The Court of Appeals first determined that it was unnecessary for the Association to obtain quorum of its membership to amend the Bylaws to create its board of directors. Instead, pursuant to the Washington Nonprofit Corporation Act, the existing officers of the Association had the authority to amend the Bylaws to create the board of directors, so long as such action was undertaken by a quorum of the officers and approved by a majority of the officers. The Court determined that the Bylaws were properly amended by the action of a majority of the officers.

Second, the Court of Appeals rejected the Pattisons’ argument that the Association lacked a valid board of directors based upon the Association’s difficulty obtaining a quorum of membership when board elections were held. The Court noted that the Association had not obtained quorum at an Association annual meeting since at least 2007, and that in the absence of quorum, the Board appointed directors as needed to fill vacancies until a proper election could be held. The Court determined that this was a proper application of the Washington Nonprofit Corporation Act, the Washington Homeowners’ Association Act, and the Association’s Bylaw 3.4, which stated: “[a]ll officers shall hold office for a terms [sic] of one (1) year from the date of electio[n], or until the respective successor of each officer is elected.” The Court explained that the effect of Bylaw 3.4 was that until a valid election is held, the term of a director does not expire, and the board may continue to appoint volunteers to fill board vacancies.

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