Our Clients Ask Us: Settlements

Q: Our Association is involved in pending litigation, and we have reached a tentative settlement with the opposing party. We need to vote on approving the settlement, however, one of our board members is out of the country and cannot be reached at this time. Can the 4 out of 5 board members just vote to approve the settlement?

ANSWER: NO! Any action without a meeting must be approved UNANIMOUSLY by the Board. This means that all board members must vote in the same manner for approval of the settlement if no meeting is held. If you are able to get a unanimous, affirmative vote, then be sure to notate the vote in the minutes of your next board meeting.

If, however, you have a meeting scheduled, depending on your governing documents, you can probably vote without the last board member. However, keep in mind, if a member is out of the country, there are

still ways to have meetings. Unless your documents prevent it, meetings

can be held via telephone, Skype, or some sort of chat room. The only stipulation is that board members must be able to participate in real time (that is, review and respond), so having a meeting via email is not an option. Any vote on email must be unanimous, and again, notated in the minutes of your next board meeting. So in this case, unless you are able to schedule a meeting, the Board cannot approve the settlement agreement.

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