Jan. 6., 2022 • 443-359-7527
SPECIAL REPORT
Rick Farr prevails in voter eligibility case; Judge Campen rejects OPA arguments Court orders board to seat winning candidate in 2021 election By TOM STAUSS Publisher udge Sidney Campen late in the afternoon of Jan. 5 issued a decision in the Richard D. Farr vs. Ocean Pines Association candidate eligibility case declaring that Farr won the 2021 Board of Directors election and should be immediately seated on the board. He ruled that Farr and incumbent candidate Frank Daly “shall” be installed on the board in a special meeting or at the next regular meeting of the board for three-year terms backdated to Aug. 15 of last year. Judge Campen ruled that Farr, as an equitable owner of property in Ocean Pines, “at all relevant times was qualified as a candidate for election” and that the “Board of Directors ... acted improperly, mistakenly, and without good faith, in contravention of the By-laws, the Charter, and Declarations, by attempting to invalidate” his candidacy. These attempts occurred after his candidacy had been certified by former OPA Secretary Camilla Rogers and he had been permitted “to be included on all distributed ballots, and after many votes had already been cast and received by the Ocean Pines Association,” the judge said. In his ruling, he ordered that the Elections Committee count all votes cast for Farr and other candidates and that the “OPA board shall by appropriate means disseminate and publish the results of the 2021 Election for Board of Directors.” The 33-page decision by Judge Campen effectively dismantled all arguments made by Anthony Dwyer, the lawyer for the OPA’s insurance company, on behalf of the board majority. He affirmed the arguments made on Farr’s behalf by his Ocean City lawyer, Bruce Bright, but with a hint of his own folksy judicial spin. Judge Campen ruled against the OPA on the business
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judgment rule, which precludes judicial review of legitimate business decisions of an organization, absent fraud or bad faith. The efforts by the board “to exclude a popular candidate for election to the board have been conducted in bad faith, and are therefore not protected,” he said. According to the judge, the “OPA maintains that the decisions of its Board, with respect to the 2021 election, were legitimate, reasoned, based on advice Judge Sidney Campen of counsel, and consistent with the OPA By-laws. Specifically, the OPA maintains that regardless of the correctness of the Board Secretary’s interpretations, the rule of non-intervention constrains the court from substituting its judgment for that of the Secretary (and the Board). Therefore, according to the OPA, the court should not intervene, because there has been no showing of fraud or bad faith.” The court, Campen said, “does not agree,” citing a relevant case in which a court “noted that if an organization acts inconsistently with its own rules, its actions may be sufficiently arbitrary to invite judicial review.” He also said the court in that case “also observed that the policy of minimizing judicial involvement in private organizations does not mean that members have no guarantee of procedural fairness.” Judge Campen said Farr’s candidacy was derailed despite his participation in a candidate forum, a campaign of door-knocking, media contacts and making the “community aware of his positions regarding OPA issues. u
2 Ocean Pines PROGRESS Jan. 6, 2022 SPECIAL REPORT Richard Farr prevails in voter eligibility case From Page 1 “However, based on the anonymous telephone ‘tip’ two weeks before the deadline for casting ballots, the Board called the Special Meeting of July 30, 2021, at which time Mr. Farr was declared ineligible and “de-certified,” the judge said, He said the decision to boot Farr from the ballot was based on a flawed interpretation of the by-laws by the OPA. This decision “not only deprived a previously qualified candidate of the opportunity to continue his campaign, but clearly disenfranchised the OPA members who had already voted for him, and thwarted potential votes in his favor by members who had not yet returned their ballots,” Judge Campen said. On the meaning of the term “owners of record” referenced in the OPA by-laws and who is eligible to run for and serve on the board, Judge Campen came down in favor of the Farr position, after initially acknowledging that the term is not defined in the by-laws. He rejected the OPA position that only owners of real property specifically named on a deed of conveyance are permitted to run for the board. He said that equitable owners of property are bonafide members of a homeowner association and are eligible to run and serve on the board if elected. Farr, he said, was an equitable owner of property in Ocean Pines on Jan. 1, the date when a candidate must be an owner of record to be eligible to run. “If the term ‘owners of record’ is meant to be interpreted in such a manner as to require a candidate’s name to actually appear as grantee on the deed to the property, as suggested by the OPA, then it would follow that a qualified equitable owner would not be permitted to be a candidate for election to the Board,” Judge Campen reasoned. But he noted that OPA witnesses were divided as to whether or not a member of an LLC or a beneficiary of a trust or a principal of a professional corporation owning Ocean Pines property could qualify to run for a seat on the Board. After dismissing the relevancy of two cases cited by Dwyer on the issue, Judge Campen then introduced an argument by OPA attorney Jeremy Tucker, who “has suggested that the common meaning of the term refers to an owner as shown in the land records but offered no authority to define the term, other than a Black’s Law Dictionary definition. He interpreted the By-law language by engrafting the word ‘public’ so that to him the term means owner of public record,” Judge Campen said. He then cited three OPA officials who in testimony stated that they do not rely on land deeds to determine candidate eligibility but on the OPA owner database and the State Department of Assessments and Taxation records for candidate information. “They were inconsistent in their interpretation and
Bruce Bright statement:
“We are very pleased with the Court’s thorough and well-reasoned ruling, which settles all issues in the case. The Court has found that Rick Farr was at all relevant times eligible to run for the Board and to serve as a Board member, under the Bylaws and other governing documents. The Court has found that Rick was improperly disqualified as a candidate, and that the Perrone majority’s decision-making in regard to Rick’s candidacy and related election matters lacked good faith, was undertaken to influence the outcome of the election in an unauthorized manner, and was not in the best interests of the OPA membership. “The Court has rejected all of the defenses advanced by the Board, including its attempt to insulate the Board’s wrongful decision-making within the so-called “Business Judgment Rule.” In keeping with the Court’s clearly articulated directives, we expect that the Board will act immediately to formally recognize Rick as a duly elected member of the Board, serving in place of Mr. Brown. “We also hope that his status and service as a Board member will not be hampered or interfered with by any ill will or targeting based on having prevailed in this case. And we believe that any further litigation of this matter by the Board, for example an appeal, would be wasteful and counter-productive. Rick is ready to get on with serving the OPA membership as a duly-elected Board member and to work constructively with the rest of the Board to get important work done. Hopefully the other Board members will be like-minded. Bruce Bright is Rick Farr’s Ocean City attorney.
Richard Farr statement:
“I want to thank everyone who supported us through this difficult time ... and also to compliment my attorney, Bruce Bright, who believed in this case, that right was right, and that the board had acted improperly [in denying my candidacy]. I believe you have to fight what you believe is right. Now that the judge has made his decision, it’s time that we all work together on behalf of every resident of Ocean Pines.” application” of Section 5.02a of the OPA by-laws with respect to eligibility, Judge Campen said. When by-law language is unclear or invites multiple interpretations, Judge Campen it’s up to the court to avoid ambiguity or a construction “that is illogical, unreasonable, or inconsistent with common sense.” Citing the text of by-laws and charter, their purpose and “the circumstances of the parties,” Judge Campen said that “a reasonable person may interpret the phrase u
SPECIAL REPORT Jan. 6, 2022 Ocean Pines PROGRESS 3
Doug Parks: Board to determine next steps
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cean Pines Association President Larry Perrone did not return a Progress phone call for comment on the outcome of Farr vs. OPA litigation; nor did he offer an opinion on next steps. OPA Treasurer Doug Parks was more forthcoming, advising that he had only just read the Jan. 5 decision by Judge Sidney Campen and needed more time to digest it. But on first reading he said to him it seemed as though Judge Campen left no issue unanswered. “There are no ambiguities,” Parks said. He said the board would need to meet to decide how to proceed. Among the options would be a decision to seat Farr and Daly as duly elected directors, or to appeal, with Parks appearing to lean against that. The appeal would be to the next highest court in Maryland, the Court of Special Appeals. An appeal might include a request for an emergency stay of Judge Campen’s order that Farr and his fellow candidate, Frank Daly, be seated as directors at a special meeting or at the next regularly scheduled monthly meeting. Without an emergency stay granted by the higher court, Judge Campen’s order to seat Farr would remain in force. If a stay is granted, an appeal could drag out for years, well after another OPA election is conducted. Stays are normally difficult to attain, as defendants must show a substantial likelihood of prevailing on the
Farr prevails in voter eligibility case From Page 1 ‘owners of record’ to mean an OPA property owner who is a voting member of record within the meaning of [Charter] Article 1, Subsection 1.07 definition of member. That definition refers to the “owner of a residential lot, condominium unit, single family attached dwelling or other real property in the Subdivision, as specified in the Declarations of Restrictions and Charter, which confers voting privileges on the owner,” he said. “Without additional language, the meaning of the concept ‘owners of record,’ as written in the By-laws, does not necessarily mean the recorded deed grantee in the land records as suggested by OPA.” Judge Campen noted Tucker’s conclusion that there are two “entirely different qualifications for a person to be appointed as opposed to a candidate wishing to run for election to fill a Board vacancy. Construing the By-laws in such a manner produces a totally illogical and arbitrary inconsistency within the same Article.” He added the OPA has effectively conceded that this interpretation “would have permitted Mr. Farr to be appointed to one of the open seats on the Board, during this litigation, but he cannot be allowed to have his votes
merits. Appeals courts normally defer to lower courts absent egregious errors, which might be difficult to find in this case. Judge Campen has said there are two ways under the by-laws that, once seated, that Farr could be removed as a director. One would be by petition and referendum, unlikely as a scenario because Farr was the top vote-getter in the 2021 election with 1,629 votes. Daly won 1,571 votes and second place, winning re-election by 60 votes. They were followed by Stuart Lakernick with 1,511 votes and David Hardy with 941. The second option cited by Judge Campen would be removal of Farr after he was seated by majority vote of the board for “cause”. Given the definitive judgment by Judge Campen that Farr was and is eligible to run and serve on the board, it’s difficult to see what the “cause” would be to justify his removal once seated. It’s also not clear that the OPA’s insurance company would finance an appeal. The OPA presumably has already exceeded its $25,000 deductible in the case. In a related matter, Farr confirmed that he and his attorney, Bruce Bright, have decided not to seek attorney’s fees as the prevailing party. “We thought that filing for fees would be divisive and would not help Ocean Pines to heal and move on,” Farr told the Progress. counted as the front runner in the 2021 election. “The application of the Bylaws in such a manner leads to a logical stretch contrary to the intent and purpose” of the Articles of Incorporation, he concluded Judge Campen also found that the OPA adopted an “overly restrictive meaning of the term “owners of record” within the “context of this case and further, that a reasonable interpretation of Section 5.02(a) [of the by-laws] includes an equitable owner of family trust property, who had become a resident, dues-paying member, eligible to vote, on the roster of the Association.” That definition fits Farr to a tee. Judge Campen said that if it’s the desire of the OPA to require candidates to be named as owners in the land records of Worcester County, it should amend the by-laws to clarify the term “owners of record.” In the decision’s final pages, Judge Campen took on the argument by some within the OPA that Farr, in completing his candidate form for the 2021 election, made mistakes in doing so. Vice President Colette Horn made that allegation in at least one public forum, as did Cheryl Jacobs, a former board member who’s currently listed as chair of the OPA’s Communications Advisory Committee. Judge Campen determined that Farr had made no mistakes in his candidate filing. [See separate article in this Special Report for details.]
4 Ocean Pines PROGRESS Jan. 6, 2022 SPECIAL REPORT
‘No lack of candor or truthfulness’ on Farr candidate application, Judge Campen determines
By TOM STAUSS Publisher t was said by opponents of Richard D. Farr’s candidacy this past summer that his application as a candidate was a mistake or disingenuous, or that he purposefully disguised his signature so that it would be indistinguishable from that of his late father. Also asserted was that he knew he was not eligible when he filed his candidate papers, knowing that he was a trust beneficiary as opposed to a trustee in the family trust that holds title to his home on 21 Birds Nest Drive in Ocean Pines. The “mistake” narrative was advocated by Ocean Pines Association Vice President Colette Horn in more than one public meeting this past summer, and it was publicly echoed in one of those meetings by a former OPA director, Chery Jacobs, as well. Jacobs is currently listed as chair of the OPA’s Communications Advisory Committee. In his Jan. 5 order mandating that Farr be seated on the board in a special meeting or at the next scheduled board meeting, Judge Sidney countered the “mistake” narrative, He made it clear that a board secretary, once having certified a candidate as meeting various eligibility requirements, cannot then reverse herself and disqualify that candidate. “Although the Secretary is authorized to verify eligibility and certify the list of candidates to the Elections Committee, nothing can be found in the by-laws which gives the Secretary unilateral authority to disqualify a candidate at any time thereafter, certainly not during the election,” Judge Campen said. While he agreed that the “authority and delegated powers” allow the secretary to “change her mind to correct a mistake if presented with new evidence,” Judge Campen said that power comes with “certain limitations. “Clearly, the Secretary cannot disqualify a candidate after she has timely qualified and certified that candidate who has actively engaged in a contested political campaign for election and also after many Ocean Pines voters have already cast their ballots for that candidate,” he said. The duties outlined in OPA governing documents “do not imbue the Secretary with that degree of unlimited authority and control over the functions associated with contested OPA elections,” he said. Indeed, as Farr’s attorney pointed out in various briefs filed in the case, the OPA by-laws do not give the secretary authority to act as she did. They’re completely silent on what happens when a challenge to a candidate comes in
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within weeks of the scheduled vote count. OPA President Larry Perrone in a public comment said that OPA bylaws give the board wide authority to act in the “best interests” of Ocean Pines, citing as precedent a board decision in 2020 to defer by three months the due date on the annual OPA election. Judge Campen did not comment directly on that point, as it was not part of the OPA case. Even so, he made it clear that the board’s discretion Richard Farr to act without explicit language in the governing documents is not as broad as Perrone believes it is or should be. In his decision, Judge Campen said that the “OPA maintains that Mr. Farr was disingenuous in failing to include his middle initial in the typed portion of his application and knew he was not an owner of record as his name was not on the deed of conveyance in the name of the Farr Living Trust, a family trust.” But Judge Campen said that a “review of his signature on the application indicates that he signed his name as Richard D. Farr,” not using his father’s middle initial as some had alleged. Judge Campen also noted that Farr is a “direct beneficiary” under the Farr Living Trust which was established in 1999 and “he had been a dues-paying member resident at 21 Bird Nest Drive since 2019. “In reviewing the record, there is no apparent lack of candor or truthfulness on the part of Mr. Farr in supplying the information on his application form,” Judge Campen said. He tied the “mistake” narrative to what he called the OPA’s “overly restrictive interpretation of the ‘owners of record’ requirement by the Secretary and Board and the manner in which it was applied.” He said it was “an attempt to disqualify a candidate and disenfranchise a large segment of voters in the middle of the election [and] was a mistaken attempt on the part of the OPA Board to interfere with the 2021 election process, clearly not permitted by the governing documents.”
SPECIAL REPORT Jan. 6, 2022 Ocean Pines PROGRESS 5
OPVFD hits budgetary turbulence; Perrone questions personnel increase Parks says he’s ‘very close” to a yes on the ‘Big Ask’ By TOM STAUSS Publisher t was supposed to be a 2022-23 budget review meeting hosted by the Budget and Finance Advisory Committee, but a session with Ocean Pines Volunteer Fire Department personnel instead was dominated by questions and comments from Ocean Pines Association President Larry Perrone. Perrone made it clear he remains unconvinced that the OPVFD’s requested year-over-year increase of $319,074 is justified. The department’s total request is $1.038 million, up from this year’s estimated $744,950. The review meeting was conducted in-person and via Microsoft Meetings on Jan. 5 in the Administration Building’s board room. Some of that requested increase is to provide for four full-time paramedics, two per crew, 24 hours per day, seven days a week. It’s less than that now during some shifts, and that can cause an issue when one crew is already out on a call. About $254,00 of the requested increase falls into the compensation and related cost category, with more than $100,000 in salary and wage increases year-over-year. Other increases show up in Medicare and FICA expenses, insurance deductions, pension benefits, worker’s compensation expenses, and EMS training. Other increases are proposed in operating and apparatus replacement expenses. Perrone focused on the manpower and compensation package in the proposed OPVFD budget, asking why there seems to be little or no increase in revenue from hospital transports with the requested increase in personnel. Answer: There were 458 house calls made by OPVFD paramedics in 2021 that did not result in a transport to a local hospital or medical facility, meaning there was no compensation by the county or insurance company reimbursement. OPVFD President Dave Van Gasbeck said the department couldn’t responsibly budget more revenue from house calls over the current year’s total, although total number of calls have been creeping up over the years. Perrone repeated his concern. “I don’t understand why you’re looking at a [higher] head count if nothing organically is changing [in Emergency operations],” he said. “I don’t understand why you need more people.” Van Gasbeck said the OPVFD’s reliance on volunteers to help with emergency calls is not as strong as it once was. To cope with that, the department recently upgraded two part-timers to full-time EMTs, but he said the department is still unable to provide two crews of two people each
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in three shifts, seven days a week, 24 hours per day. He cited the recent survey of Ocean Pines residents in which safety was the number one concern of those responding. That didn’t satisfy Perrone. “That’s an explanation,” he said. “I’m not sure I accept it.” Director Frank Daly didn’t offer an opinion, but asked some questions. Larry Perrone He was told that of 1,106 emergency calls this past year, 458 did not involve transport out of the home. He was also told that there 280 instances of emergency calls coming in when one crew was already out on a call. Perrone then jumped back into the conversation, asking whether the OPVFD had hired any of the additional personnel called for in the budget. Answer: Yes. Two part-timers who also worked in Ocean City were upgraded to full-time status in Ocean Pines. Fire Chief Steve Grunewald attempted to explain to Perrone what happens when a second call comes in when one crew is already out. “If a second call comes in and we can’t get a driver, [we have to call in a crew} from Berlin or Showell,” he said. That can add ten minutes or more to response time, and that can mean the difference between life and death, he said. When calls are handled by Ocean Pines EMTs, the response time is six minutes or less. He also said that with the addition of full-timers, overtime expenses drop. A skeptical Perrone said he wanted to see those numbers, and also said he and the other board needed to see more detail on the compensation package increase. “We need to see where we’re at,” he said. “It’s a big ask.” Director and OPA Treasurer Doug Parks seemed more receptive, citing the community survey which listed safety as the number one concern of Ocean Pines residents. “I don’t see the connection between staffing levels and EMS billing,” he said, adding that he didn’t “have a problem with asking for more staff to bring people more safety.” In a later conversation with the Progress, he said he was “very close” to being on-board with the requested increase but wanted to reflect on any additional supporting information that might come in. Perrone concluded that until he had more information detailing salary and benefits in the proposed OPVFD budget, “I am not going to be satisfied.” Perrone, of course, is one vote on a board of seven.