September 1, 2011

To: Mr.Joseph Reynolds
84 Watertown Road
Ocean Pines, MD 21811

From: STATE OF MARYLAND
OFFICE OF THE ATTORNEY GENERAL
CONSUMER PROTECTION DIVISION

RE: Ocean Pines Association, Inc.

CASE # 202702-E12-017

Dear Mr. Reynolds:

I am writing to you in reference to your complaint against the Board of Directors for the Ocean Pines Association, Inc. Enclosed is a copy of the letter our office received from Mr. Joseph Moore, the attorney for the Board of Directors, in response to your inquiry about closed meetings of the facilities planning group.

As we understand it, the long-term facilities replacement plan started by Mr. Thomas Olson, has been continued by Robert Thompson the present General Manager. The Board did not create the facilities planning group, nor did the Board require Mr. Thompson to create the group, though it was done with the approval of the Board. It is our understanding that the group serves to advise Mr. Thompson on strategies for recommending to the Board the repair or replacement of the aging infrastructure within the community. According to Mr. Moore's letter, these individuals serve only in an advisory capacity to Mr. Thompson, and are not a committee created by or accountable to the Board.

 After a further review of Mr. Moore's letter along with the sections of the By-Laws regarding the duties of the General Manager,it appears that Mr. Thompson has been assigned a broad range of responsibilities and obligations for managing the day to day operations of the Association which includes giving recommendations to the Board for the future needs of the Association. As such, it may be expected that Mr. Thompson informally consults with staff and other departments of the Association about matters before him on a regular basis. His process in doing so, however, is not considered a committee meeting that would be governed by the Maryland Homeowners Association Act since it is not a committee created by or governed by the Board.

The Maryland Homeowners Association Act and your By-Laws provide the framework for the democratic process by which decisions are made. Homeowners are encouraged to participate in their homeowners association by attending meetings and supporting candidates for the Board of Directors who share their views on how the association should be managed.

This office does not handle disputes among homeowners or between individual homeowners and their Boards of Directors that do not relate to statutory violations. Disputes involving your General Manager and the procedures he utilizes to formulate his recommendations to the Board, or possible violations of rules or by-laws by the General Manager must 'be resolved through the governing mechanism of the homeowners association or the judicial system.

We are sorry that we cannot assist you further with this matter but hope that this information is helpful to you.

Sincerely,

Kathryn Bliven

Consumer Affairs Specialist

Enclosure

LETTER FROM JOE MOORE

LAW OFFICES
WILLIAMS, MOORE, SHOCKLEY [6 HARRISON, L.L.P.

August 12, 2011

RE: Joseph Reynolds

CASE # 202702-E12-017

Dear Ms. Bliven:

Thomas Terry, President of Ocean.Pines Association, Inc. has asked me to respond to your letter of July 29, 2011 with respect to the above entitled mutter. As you may be aware, Mr. Reynolds has been represented by Robert K. McIntosh, Esquire whose office is at 212 North Main Street, Berlin, Maryland 21811. In Mr. Reynolds letter to you of July 25, 2011, he references the fact that Mr. McIntosh and I have communicated with respect to the matter, the last communication being my letter of July 21,2011 (which was attached to Mr. Reynolds' notification to you), in which I put forth the position of Ocean Pines Association regarding this matter. I have not had a response to my assertions in that correspondence.

As you are aware, Ocean Pines Association is, indeed, a Homeowners Association and is thus governed by the provisions of Title 11 B of the Real Property Article of the Annotated Code. Under the governing documents of Ocean Pines Association, the elected Board of Directors governs the activities of the Association, which was formed and exists as a Maryland non-stock Corporation: Under the provisions of the By-Laws of the Association, a General Manager shall be employed by and serve at the pleasure of the Board of Directors. He or she shall be the Chief Administrative Officer of the Association and shall be responsible for the operational management of the Association. (Ocean Pines Association, Inc. By-Laws Section 9.01)

Thus, the General Manager is the Chief Administrative Officer of the Association responsible for the operational management of the Association but is not the governing body thereof, nor is he a member of the governing body.

He does not, under the By-Laws have the authority to appoint committees. That authority is limited to the Board of Directors under the provisions of Section 10.01 of the By-Laws which states as follows: "The Board of Directors shall establish committees prescribed in the charter or By-Laws, define their primary duties, and determine their size. The Board may also establish other committees by Resolution and any ad-hoc advisory bodies it deems appropriate." Section 10.02 provides as follows: "Chairpersons and members [of committees] shall be members of the Association eligible to vote and shall be appointed or reappointed by the President with the consent of the Board of Directors."

The former General Manager of the Association, Thomas Olson, provided for a long-term facilities replacement program, which related to the facilities utilized as amenities of the community such as the Yacht Club, Country Club, Beach Club, and various other physical facilities owned by the Association.

Mr. Olson was replaced in August of 2010 by Robert Thompson, the present General Manager. One of Mr. Thompson's tasks was to continue the formulation of recommendations to the Board of Directors for facilities replacement, maintenance and funding thereof. In an effort to aid him in that task, Mr. Thompson formulated the facilities planning group, which consists of staff members, including the Public Works Director, and certain members of the community, with experience in determination of such matters. Mr. Thompson has utilized that advisory group for the purpose of aiding him in making recommendations with regard to setting priorities for facilities management and replacement, which he will submit to the Board of Directors for its consideration.

While meetings of committees of the Homeowners Association are subject to the open meetings requirements set forth in the Maryland Homeowners Association Act, it is the position of Ocean Pines Association, Inc. that a group (whether formal or informal) which is requested by the General Manager - not the Board of Directors - to aid him in his task for the purpose of recommending matters to the Board of Directors, is not required to hold open meetings. As I have stated in my correspondence to Mr. McIntosh (provided by Mr. Reynolds to you) a logical extension of the position that the General Manager may not seek advice from any group unless it is formulated in open session, would effectively preclude the General Manager from seeking any kind of advice from any group no matter how informal unless all meetings are public. Thus, were the open meetings provision of the Homeowners Association Act to require any group denoted by the General Manager to hold its meetings in open sessions, no member of Ocean Pines Association except for legal counselor staff members, could ever meet with the General Manager for the purpose of providing him with advice related to any function of his position.

While Mr. Reynolds makes the point that the advice being sought from the facilities planning group will involve" ... the potential expenditure of $4 million or more of Association member dollars ... ", the advice which they provide is to the General Manager for his review, consideration, alteration, acceptance or rejection. The General Manager ultimately decides whether or not to include any or all of the information in his proposal to the Board of Directors, in open session, which may or may not, act upon such advice but must do so, likewise, in open session, in budgetary hearings, which are required under the By-Laws, to be reviewed by the Budget and Finance Committee (a standing committee which is required to meet in open session) and finally determined by the Board of Directors which is required to hold a public hearing prior to the final approval of the budget by the Board. Thus, those multiple processes of deliberation by the committee and, subsequently, the Board of Directors, are held in open session.

The position of General Manager of Ocean Pines Association is analogous to the Administrative Director of a County governmental body. The Maryland Open Meetings Law, applicable to governmental agencies, does not preclude the Administrative Director of any County government from seeking advice from groups of citizens or other persons, in closed session, or in any manner which he or she may deem appropriate.

In conclusion, if the determination of the General Manager of Ocean Pines Association, Inc. with regard to matters such as the expenditure of funds were a final determinative action, I may concede Mr. Reynolds' position. However, because the function of the General Manager in such matters is advisory without any final authority and the Board of Directors is the final determining body of all such matters, it is submitted that such General Manager advisory groups are not included within the provisions of Article 11 B of the Real Property Article of the Annotated Code of Maryland.

Finally, with regard to your invitation to propose a resolution of the dispute, Ocean Pines Association, Inc. would most assuredly agree that any group or committee - even if appointed by the General Manager - would be required to be held in open session " ... when a final decision will be made regarding the expenditure of Association funds, or other matters to which the decision is not merely advisory, but is provided to be the final determination of the subject matter". (Similar to the Florida Condominium Law - F.S.A., Section 720.303(2)(a))

I am hopeful that this correspondence adequately responds to your request of Ocean Pines Association, Inc. dated July 29,2011.

Joseph E. Moore