Tim Kazee and Matt Bernstein (DeLand/Central FL) (D & O), in the case of Bluegreen Vacations Unlimited, Inc. and Vacation Trust, Inc. v. Kathleen McHugh, et al., defeated Plaintiffs’ Motion for Preliminary Mandatory Inunction attempting to require Directors of a Timeshare-Condominium Association to hold an Association election.
The primary argument by the Plaintiffs was that the individual Directors were acting ultra vires to unlawfully prevent annual elections and, therefore, injunction was necessary to ensure the next election. In support, the Plaintiffs argued that the individuals allegedly, unlawfully, conspired against the Association’s former management company (the Plaintiffs’ business affiliate) to wrongly terminate the management contract and, relatedly, to wrongly disenfranchise the affiliate corporate Plaintiffs by preventing their ability to vote.
In response, the Defense argued that the Association was a necessary and indispensable party to the litigation because Directors in their individual capacities could not be compelled to conduct or interfere with official Association business, such as an election. The Defense also argued that the Plaintiffs failed to bring the action derivatively, failed to seek statutorily required arbitration, and that any alleged failure of the Association to hold an election was justified temporarily by the former management company’s failure to properly maintain Association records, including a current member roster.
Following an evidentiary hearing, the Court denied the injunction agreeing with the Defense that the Association was a necessary and indispensable party to the litigation,that it appeared the prospect of arbitration was the reason for the Plaintiffs not joining the Association, and that the Plaintiffs did not have a substantial likelihood of prevailing against the Defense.