A judge has denied an emergency motion for a temporary injunction to “immediately oust” the executive director of the Miami Design Preservation League (MDPL) pending resolution of his suspension. Daniel Ciraldo was suspended in June by one of two groups vying for control of the organization. The group, led by Steve Pynes, claims to be the legitimately elected Board of Directors following an election on June 18.
In her ruling, Judge Bronwyn C. Miller of the Eleventh Circuit Court ruled an injunction could only be enforced in the event of irreparable harm, of which she found none. At the same time, she wrote, after hearing the evidence presented, “[T]he Court cannot conclude that the election was legitimate, thus, Petitioner [the Pynes’ board] has failed to establish a clear legal right to relief.”
The contentious election opened a major rift in the preservation community with allegations of fraud and vote buying and resulted in the public airing of internal personnel issues. When the dust settled, two groups claimed victory. The dispute forced the City of Miami Beach to withhold funding it traditionally provides for the organization’s popular Art Deco Weekend and to request that no one claim to represent MDPL before the City Commission or any Boards and Committees until there was a clear resolution. (MDPL has special status within the City Code to have a representative on the Historic Preservation Board (HPB) and to appeal decisions of that Board.) In addition, City National Bank froze the group’s bank accounts. Through an order from Judge Miller, both groups were to agree on bills to be paid, thus allowing the organization to continue to function.
In the background section of her opinion, Miller alluded to the internal personnel issues. “The decision to appoint Ciraldo to the position [of Interim Executive Director in 2017] was not without controversy. Marie Hernandez (hereinafter “Hernandez”), Business Manager of MDPL, was also considered to be a contender for the executive director position. Hernandez’s mother, former Miami Beach Mayor Matti Bower, is a member of the Board of Trustees of MDPL. Nonetheless, it was not until after Ciraldo sought a significant salary adjustment that the seeds of the instant controversy were planted.
“Ciraldo’s compensation is determined by the Board of Directors. After Ciraldo was promoted from Interim Executive Director to Executive Director, the board unanimously voted to increase his annual salary. The board was divided on the appropriate amount of increase and research regarding the appropriate level of compensation was presented by various board members. Negotiations ensued and, ultimately, Ciraldo received a marked increase in salary. Tension ensued between the then-Board Chair, Steve Pynes, and Ciraldo.”
Those tensions came to a head following cancellation of the Board election originally scheduled for May 17th. Pynes indicated he cancelled the election due to concerns over proxies. A new election was scheduled and Pynes appointed an election committee to oversee the election process. “According to Pynes, all Proxy/Absentee Ballots and membership applications were required to be submitted by Friday, June 15, 2018 at 7:00 pm,” Miller wrote.
Continuing with the background section of the opinion from Miller: “Various slates were created and the MDPL membership was targeted with voter recommendations. Notably, those board members seeking re-election who advocated for Ciraldo’s [salary] increase, along with Ciraldo, were subject to a negative campaign initiated by an e-mail account user identified as ‘Jose Viernes.’ In response, Ciraldo prepared and forwarded his own e-mail, recommending the election of certain directors.
“On Monday, June 18, 2018, notwithstanding the Pynes-imposed deadline, candidates arrived with 131 new membership applications, along with proxy documents and membership fees, most of which were in cash. Randy Hilliard, a political consultant who had purportedly opposed the elections of several sitting members of the City Commission, before whom MDPL regularly appears, appeared with numerous proxies. Many proxies predated the membership applications. Multiple applications had cash clipped to them. Ciraldo videotaped Hilliard laughing, completing empty fields on proxies, and appending cash to the membership applications. Although many membership applications were missing data, had incorrect or unworkable telephone numbers, and reflected illegible names, Hernandez toiled throughout the evening to input all of the purposed ‘new member’ information.
“Pynes and Ciraldo sent competing emails announcing the ‘winners’ of the election to the membership base. Immediately thereafter, in accord with the Bylaws, ten percent of the pre-election board called a special meeting to discuss election irregularities and the effect of the proxies… Pynes sent an email rejecting the special meeting. The pre-election board met, nonetheless, and decided by vote, to immediately terminate the Board’s counsel and to reject all proxy ballots.” The Board's counsel was Joseph Geller who represented the Pynes' board in court. The board member calling the special meeting was Stuart Reed who later resigned from the Board to act as Ciraldo’s attorney in court.
At that point, Miller noted, “Pynes furnished Ciraldo with a notice of suspension, indicating that although Ciraldo would continue to receive compensation, he was prohibited from performing further employment duties. Petitioner, in the form of the ‘newly-elected’ board, inclusive of all proxy votes, seeks to enforce the suspension.”
With regard to the injunction, she wrote, “A party seeking an injunction under general Florida case law must demonstrate: (1) irreparable harm; (2) a clear legal right; (3) an inadequate remedy at law; and (4) consideration of the public interest… Since a temporary injunction is an extraordinary remedy, it should be granted sparingly and only after the moving party has alleged and proved facts entitling it to relief…”
Citing precedent, she wrote, “[T]he courts have found that the ‘threat of loss of employment does not constitute irreparable harm.’ … In the instant case, it is clear from the testimony that Ciraldo has worked tirelessly to further the stated goals of the organization. Although some controversy ensued over his salary, ultimately, the Board of Directors ratified the increase following careful, methodical, and well-researched presentations. Petitioner contends that Ciraldo’s response to the contentious pre-election efforts and lack of neutrality in the election process gives rise to a violation of some unidentified maxim. However, the neutrality requirement is not contained within the governing documents. As such, there is no indication that Ciraldo’s continued employment will result in irreparable harm. Instead, Ciraldo produced evidence that his leadership resulted in the resolution of a six-figure judgment against Petitioner and brought financial stability to the organization. This position is anecdotally supported by the financial issues that have arisen since Ciraldo has been divested of power to make MDPL’s financial decisions. Finally, credible testimony was presented that Ciraldo enjoys a cooperative relationship with the City Commission. As such, it stands to reason that his continued advocacy further the goals of the organization. Thus, there is no showing of irreparable harm.”
Miller wrote there is an adequate remedy of law via what is known as a “quo warranto” filing. Further, she wrote, “The Court is not persuaded that Petitioner has met its burden of demonstrating that the ‘post-election’ board has been properly ‘qualified.’ Alleged election irregularities, including the payment of piles of cash, the ‘gifting’ of memberships, the drafting of proxies by individuals who were not yet members, the failure to corroborate membership information, the postponement of the original election, and the violation of the originally imposed deadline for candidate submission undermine the legitimacy of the election.”
Miller then quoted a July 2001 Washington Law Review article written by Douglas R. Cole, “Vote-buying … is not limited to political arena; it has implications for corporate governance as well.”
“Under the circumstances presented, the Court cannot conclude that the election was legitimate, thus, Petitioner has failed to establish a clear legal right to relief,” she wrote.
“Finally,” Miller opined, “it is axiomatic that non-profit corporations should endeavor to internally resolve their own conflicts. This is simply good governance. MDPL was provided with the opportunity to explore the allegations of pervasive election irregularities and fashion a self-directed resolution when Mr. Reed invoked the special meeting provision of the By-Laws. Instead of seizing this occasion, and allowing for the ‘airing of the grievances,’ Mr. Pynes refused to participate, announced the ‘winners,’ and immediately suspended Mr. Ciraldo without any transition or termination plan. As attested, the optics of the situation resulted in a lack of confidence in the management of MDPL in the community at large and particularly before the City Commission. As such, the public interest dictates against the issuance of an injunction."
This is step one. There's more to come. Earlier this month, Miller ordered the parties to begin mediation within 30 days.
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