Battle for Preservation Organization Lands in Court

Susan Askew
Susan Askew

Battle for Preservation Organization Lands in Court:

Miami design preservation league in jeopardy of losing city funds

The dispute between two competing factions for the Board of the Miami Design Preservation League has landed in court. In an emergency hearing Friday, Judge Bronwyn Miller of the Eleventh Circuit set up a hearing for next week to try to determine which board should be the sitting board. 

Meanwhile, the Miami Beach City Commission's Finance and Citywide Projects Committee has recommended putting funding for the organization’s most significant event, Art Deco Weekend, on hold and City National Bank has frozen the group’s accounts until the dispute can be resolved. 
As we reported last week, two groups are claiming to be the legitimate Board elected by a membership vote on June 18. At issue are new membership applications, payments, and proxies presented in person on election night. One board, supported by Executive Director Daniel Ciraldo and chaired by Jack Johnson, claims memberships can only be accepted online and invalidated the applications made on election night, declaring themselves the elected Board. They also question payments made in cash and by check by three members of the rival board who brought in those memberships. Finally, they contest the validity of the proxies, which they contend were executed before the membership applications.
The other board, chaired by Steve Pynes, says an independent accounting firm validated the proxies and overall vote, certifying them as the elected Board. They suspended Ciraldo with pay, but they say Ciraldo refuses to acknowledge their board or his suspension, locking out their board and staff from the organization’s email, website, and social media accounts. 
When the dispute came to light and both boards notified the City they were the legitimate Board, City attorney Raul Aguila sent a letter requesting that no one speak before the Commission or any land use boards representing MDPL until the dispute is resolved. In addition to providing funding for MDPL events and programs, the City has an agreement with the organization to manage the City-owned facility at 1001 Ocean Drive which includes a Welcome Center and Art Deco museum (photo above). “Due to the election discrepancies, the City is not in a position to determine who the correct contact is for MDPL,” Aguila wrote in the letter to both groups. “Once you have all finalized your dispute, please contact us with the accurate information. Again, the City will not be involved in determining who is (are) the correct MDPL representative(s).” The emphasis in bold was included by Aguila.
City National Bank has taken a similar posture, sending a letter to both groups stating, “CNB is merely an innocent stakeholder in this matter and is neither in a position nor under a duty to make a decision between the conflicting parties. CNB will not undertake such a duty and will not act as a judge or referee in the dispute.” Co-Counsel Mario Carballo wrote the bank was placing a hold on the organization’s accounts.
“We note that there are various items that are paid by automatic debit from the Business Accounts, including payroll and the payments under the Credit Line,” according to Carballo’s letter. “We bring this to your attention in the event that both claimants agree that certain items should continue to be paid, and then we would require joint instructions concerning those items.”
The Commission’s Finance and Citywide Projects Committee also took a step back, recommending all funding for MDPL be placed on hold until the dispute is resolved. Committee Chair, Commissioner Ricky Arriola said, “I think we’ve all heard and seen there’s now a cloud hanging over the organization that runs the Art Deco Weekend which is the Miami Design Preservation League and the Board of Directors there and whether or not there’s some funny business going on there. To my mind, and from what I’ve seen, it does look like there’s some folks there that hijacked the board, don’t know what their motives are at this time, don’t know why they did it, but it does seem that at the 11th hour some folks, you know, stuffed the ballot box with proxies, took over the board, kicked out the Executive Director, put in a new slate of Board of Directors and I’m not comfortable putting public money in this organization’s hands until such time as we have more clarification of what happened, make sure everything is proper, that the people there are noble and that they’re going to continue the mission of the organization. So that’s my two cents. Right now, I’m not comfortable with what I had previously recommended which was additional funding for Art Deco Weekend until such time as we’ve got more clarity on what’s happened with the organization.”
Arriola was referring to a video posted on Facebook by Ciraldo, showing Board candidate Randy Hilliard attaching $50 bills to membership applications. (The Prince of Darkness moniker referenced in the post was used in a New Times article from 2007 which stated Hilliard once listed himself that way in a Key West phone directory.) The video was not visible on a search when we wrote our article last week but, for now, it can be found here.

Commissioner Micky Steinberg said, “The truth is our budgeting cycle’s coming up. I would hate to miss an opportunity to find the funding for such an important impactful weekend especially in an area that we tried to positively activate so maybe we can have this as a line item at the budget so we can just see it in context of everything and, hopefully by then, whatever issues anybody has will be resolved and, if not, we’ll figure it out.”
Arriola responded, “I for one am not comfortable providing public money for Miami Design Preservation League to host a weekend until such time as we have a much better understanding of what’s going on there. I just think it would be irresponsible to do that.”
“We’ve had the discussion. We’re going to go to budget,” he added. “It’s a tight budget year. We’ve earmarked $100,000 for Art Deco Weekend. I’m unlikely given the timeframe we have to have our next budget meeting to recommend that we fund that line item. I’m unlikely to recommend that we fund that line item but we’ll cross that bridge at the next budget meeting” which is July 13th.
City CFO John Woodruff noted MDPL also receives a grant of $23,000 annually.
“That’s on the table too,” Arriola said. “It’s our responsibility to fund responsible organizations that are well run, that we trust the management, etc… Right now, the facts that we have in front of us show funny business and we’re going to be held to account if it turns out months from now that, you know, funny business occurred.”
Aguila added, “MDPL via our Code has certain stature and status before the land use boards.” As a result, he said, “This needs to be clarified sooner rather than later.”
Aguila also suggested, and the Committee agreed, that the City should “do a site inspection of the 10th Street auditorium and see if it’s operating because it is a very valuable City asset and they have a long-term management agreement there.”
At an emergency hearing Friday, the dispute – and the organization’s ability to operate given the holds on funding and bank accounts – played out before Circuit Court Judge Bronwyn Miller.
Joseph Geller, attorney for the Board chaired by Pynes, sought immediate injunctive relief to force Ciraldo to “recognize and accede to his suspension” and turn over access to the organization’s website, social media, and email. “The problem,” he said, “has been that the Executive Director does not recognize the Board.” Geller said Ciraldo “changed the registration on the corporate documents in Tallahassee on Sunbiz, listing himself as CEO.” (A check of the Sunbiz corporate registration website shows three recent amended annual reports, one by Steve Pynes on June 25 listing his board’s officers; one by Daniel Ciraldo on June 28 listing his board’s officers, his home address, and his title as CEO; and, again, on July 3, Pynes filed another amended report with his officers.)
“To some degree the organization is at a standstill,” Geller said.  In the meantime, he added, “The reputation of the organization is being damaged.” 
Geller said there was “need of some urgent action” because “grants are in peril” and the “bank has frozen funds.” Some staff, he noted, are paid through grants.
Stuart Reed, a member of the MDPL Board recognized by Ciraldo and who is acting as Ciraldo’s attorney, said, “For a temporary injunction, there has to be a clear legal right free from reasonable doubt, in addition to being irreparably harmed.” 
“We stipulate the organization is being irreparably harmed by this controversy,” Reed said. “There’s a dispute over who is the elected board, yet they’re suing on behalf of Miami Design Preservation League.” The motion for injunctive relief is filed as Miami Design Preservation League vs. Daniel Ciraldo.
The judge agreed. “The direction that the plaintiff is asking the Court to take hinges on the validity of the election... The validity of the election is what matters.” She noted the lack of “clarity” in the bylaws that do not address details such as when results are tabulated or when a new board is installed. 
She also agreed that “the brand is suffering” in the meantime.
With regard to the heart of the matter, the validity of the membership applications and the proxies, Geller said the only place there is reference to applications only being accepted online is in a memo from the Executive Director. Adding there was a critical point around the election when the membership area of the website was down for six hours, he said, “The Board never approved saying you can only join online on a website that may or may not be functioning.” 
“There’s nothing in the Bylaws, Articles [of Incorporation] or State statute that says when and how members can join,” Geller said. The election night applications were “verified, declared new members, and they voted” via proxy.
Each group is interpreting which type of votes were allowed on election night differently. An email sent to members on July 1 from the election committee provides a link to an online “proxy absentee ballot” stating:
This is a revised ballot which includes all current board candidates. If you had submitted any prior proxy, IT IS NOT VALID. Please complete and submit this Absentee Proxy Ballot as per instructions OR vote in person at the Annual Meeting continuation on June 18 at 7 PM.
The original election was scheduled for May 17 but when some members showed up with proxies, Pynes previously told us that a determination was made to delay the election until a formal process could be set up that would allow the right to vote by proxy to all members.
RE:MiamiBeach was sent a copy of the election email from an MDPL member not affiliated with either group claiming to be the MDPL Board. This member stated they were uncertain if this applied only to absentee proxies or if proxies could be presented by an in-person representative. 
The Ciraldo/Johnson Board contends all proxies had to be submitted by the Friday before. The Pynes’ Board states all members were eligible to vote either in-person or via proxy presented in person, and that new members as of the election day itself had that right to vote either in-person or via proxy
At the emergency hearing, Geller said, “They are asking the memberships and proxies be thrown out and [saying] only online votes will count,” Geller said. “They just lost the election and now all these things are bubbling up” with regard to the interpretation of the rules.
“It was not a perfect process,” Geller said, “but a level playing field, open to all. This is about injunctive relief truly on an emergency basis.”
Miller responded, “To do that, I have to make a determination on which board should be sitting.”
Amid questions of malintent and distrust from both sides, the propriety of the Executive Director campaigning for a board slate and accusations that he “hacked into” the election information to publish the results for his side, the stack of cash paying for memberships by a candidate for the other board slate, claims of attacks on social media by Ciraldo and misuse of the organization’s email database by a candidate on the opposing slate, it was clear to Miller that the two sides would not be able to mediate their way through the dispute. 
In the meantime, she weighed which board should govern while waiting for a hearing to determine the validity of the proxies. 
Geller said the Pynes’ Board included “returning directors of many years … It’s not like they’re some group of interlopers.” The Business Manager, he said, has been with the organization for 18 years and can handle the day-to-day operations. 
“At a minimum this organization may not survive… it has to have some ability to operate.”
Every day, he said, the bank sends an email to both attorneys to approve payments of things like the light bill. “One expense is payroll. In the interest of not acting unfairly,” the Pynes’ Board approved payment of Ciraldo’s salary. Despite a “raise that was pretty controversial… we did not ever dispute that [payment].” A recent payraise for Ciraldo from $67,000 to $114,000 is one point of contention between the two groups. 

Geller asked for “some agreed list of expenses that will continue to be paid without daily emails to the attorneys” and allow the Business Manager to run the day-to-day business affairs.
Again, noting the “very perfunctory” bylaws with “no installation process, no affirmation process,” Miller contemplated leaving the previous Board in place.
Reed noted that “a quorum of the previous board voted to reject the proxies” at an emergency meeting the weekend following the election. 
Miller responded, “But I don’t know if the Board has the power to do that.” 
RE:MiamiBeach was present at that meeting. The quorum was made up of directors from the Ciraldo/Johnson Board slate. Geller later argued keeping the old Board in place would put his group, elected when the membership “rose up” to overturn the old Board, at "a tremendous disadvantage." When Miller set a hearing date for next week to review the proxies and the election results, Geller said “Who the board is can wait until Wednesday.” Miller agreed.
With regard to the IT assets and access, Geller said Ciraldo “transferred everything to his personal name, using his personal address” adding “They’ve used that website to communicate for their Board.”
Miller ordered the MDPL website should be used only for “unified messages” and “needs to be devoid of the Board of Directors.” (The Johnson Board was still listed at the time of this publication, Saturday evening, July 7.)
“It should not be a propaganda website,” she said.
“Everybody doesn’t have to air their dirty laundry to the public,” she said. “It does devalue the product… The general public doesn’t need to know there’s a power struggle going on,” she said indicating the website should be used for membership information, tours, and “art deco positive messages.”
She also ordered open access to email. “Everyone should be able to access their own email. They can’t be locked out by the Executive Director,” she said. “I’m very concerned about hearing people are locked out of their email.”
Miller also asked both sides, “Why not agree to have a new election?” After ordering an inspection of proxies and ballots before Wednesday’s hearing to give both sides an opportunity to “talk about which ballots you believe are valid and invalid,” she encouraged them to “consider a new election” versus lengthy litigation.  “One side’s not going to like my ruling,” she said. “You may find yourself in a lengthy process.”
Several times Miller said, “There should be room for everyone in a nonprofit.”
“The more membership, the more power [an organization] has to carry out its mission. There should always be room for everybody in non-profits.”
She urged both sides to be “considerate of individual feelings and egos that are involved” in public elections and cautioned against “boasting about what the results for an election are and take over a website.”
“There’s a classy and dignified way to handle things as a director,” she said. Volunteers and donors should be respected for giving their time and money. She said she was directing her comments toward “all the leadership of the organization” to handle MDPL’s volunteers in a “thoughtful, appropriate” manner “with class and decorum so they can feel appreciated.”
Pending the hearing next week, she ordered the bills to be paid, open access to emails with any reference to the election deleted from social media, and only “pro art deco messages” on the website without mention of a Board. She also directed that the organization’s Business Manager have equal access to what Ciraldo has access to, including the website, social media, and Quickbooks.
Reed then asked that Ciraldo be given equal access to the MDPL offices where, he said, the Pynes’ Board had changed the locks. Geller responded by asking that “Mr. Ciraldo not attempt to tell the staff what to do and how to do it.”
After some back and forth, Miller allowed Ciraldo’s suspension to stand. “They’re paying him so they’re not causing any damages to him,” she reasoned.
Reed interjected, “It is causing damage…”
Miller interrupted. “Well there are a lot of people causing damage to the organization. They’ve chosen to not have him perform his duties but they are compensating him,” she noted.
Next week’s hearing on the validity of the proxies was set for Wednesday, July 11. The City’s Finance Committee will hold its next budget briefing on Friday, July 13.
Following the Court hearing, Johnson said “In the spirit of today’s hearing, I’m not going to comment” on the proceedings.
Pynes said, “I’m encouraged she’s trying to find a fair solution.”
To pay his legal fees, Ciraldo has set up a gofundme page with a goal of $10,000. As of 3:00 pm Saturday, July 7, the campaign had reached $5,545. Initially, the campaign made statements such as “Miami Design Preservation League is under attack” via an election that was “manipulated”, naming three candidates who paid for memberships themselves the night of the election, and asking donors to “help us with our Legal Defense Fund so that we may proceed on taking back the MDPL and allowing the organization to serve the community once again.” 
Following an inquiry from RE:MiamiBeach regarding Judge Miller's comments at the hearing and whether his page would remain, a truncated version is now in its place. In both versions, the site reads “If we win and and [sic] retain control of the MDPL, I will work to have all funds refunded to our donors upon request from the MDPL.  [Emphasis Ciraldo’s.]
According to the MDPL website, the organization which was founded in 1976 by noted preservationist Barbara Capitman, is the oldest Art Deco society in the world.

Photo: MDPL Welcome Center, from Greater Miami Convention and Visitors Bureau

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