Condominium Association Faces Unit Owner Class Action
Pinnacle Condo. Ass’n, Inc. v. Haney, 44 Fla. L. Weekly D203 (Fla. 3d DCA Jan. 9, 2019)
After Hurricane Wilma and Hurricane Katrina caused structural damage to the four high-rise towers of the Pinnacle Condominium in 2005, the Condominium Association entered into two contracts to repair the damage. Before the work was finished, disgruntled unit owners recalled the Association’s Board of Directors and a new Board took its place. The New Board sought to renegotiate or cancel the contracts, resulting in litigation and a settlement wherein the Association paid $2,440,000.00 to the contractor. The New Board also failed to notify the Association’s members of the cancellation of the contracts or the status of the multi-year litigation and claimed that the Association owed significantly less than it did. The Association imposed a special assessment on all unit owners to meet this financial obligation.
Disgruntled unit owners filed suit against the Pinnacle Condominium Association, claiming the New Board breached its fiduciary duties and acted negligently in terminating the two contracts. In addition to raising claims on their own behalf, the disgruntled unit owners sought certification pursuant to Florida Rule of Civil Procedure 1.220 on behalf of a class of individuals who were caused to incur a debt and additional expenses based upon the alleged improper conduct of the New Board.
After conducting a hearing, the trial court certified the class of all Pinnacle Condominium unit owners who suffered financial damage from the obligations imputed upon them by the settlement agreement with the contractor. Specifically excluded from the class were members of the New Board. The Condominium Association appealed the class certification order to Florida’s Third District Court of Appeal.
In a unanimous opinion, a three judge panel of the Third District affirmed the class certification order. The Appellate Court found that the 230 member class was so numerous that it make separate joinder of each member impracticable, the claims made by the class representatives were typical of the claims of each member of the class, and that the attorneys seeking to represent the class acted diligently and in a timely manner.
While Condominium Associations frequently represent their members on a “class” basis in litigation (including construction defect and turnover cases) as provided for in Florida Rule of Civil Procedure 1.221 and Florida Statute §718.111(2) and (3), the Pinnacle decision opens the door for disgruntled unit owners to bring a class action against the Association on behalf of all aggrieved unit owners.
Tower Crane Allowed to Operate Over Adjacent Property Despite Temporary Injunction
WD 19790, LLC v. Dan Trust., 3D16-2796 (Fla. 3d DCA Jan. 23, 2019)
In a not-so-uncommon situation, the developer of a zero-lot-line, twelve story office building required temporary access onto an adjacent property for construction purposes. When the developer entered upon the property and failed to heed the owner’s demand that it cease and desist, the property owner filed suit for trespass and sought an emergency injunction.
After several hearings, the trial court entered a temporary injunction enjoining the developer and its agents from trespassing on the owner’s property. After entry of the temporary injunction, the developer installed a tower crane which at times swung over the adjacent property. The property owner filed a motion to have the developer held in contempt for violation of the temporary injunction enjoining trespass.
The Third District Court of Appeal reviewed the case and held that the temporary injunction did not prohibit the developer from utilizing the tower crane or committing an “airspace trespass”. The Third District’s decision was based on the fact that the property owner’s complaint and emergency motion were devoid of any reference to airspace trespass or use of a tower crane over its property. Since those activities were not alleged, they could not be enjoined by the trial court’s order. Accordingly, the developer was allowed to continue to operate the tower crane over the adjacent property.
Trial Court Ordered to Reconsider Developer’s SLAPP Suit
Gundel v. AV Homes, Inc., 2D18-899 (Fla. 2d DCA Feb. 1, 2019)
Chapter 720, Florida Statutes contains a strong provision against Strategic Lawsuits Against Public Participation (SLAPP) illustrated by this recent decision of the Second District Court of Appeal.
Three residents brought suit against the developer of their community claiming violation of the Florida Homeowners’ Act and the Deceptive and Unfair Trade Practices Act. In response to that lawsuit, the developer filed a counterclaim against the residents alleging, among other things, that they unjustifiably interfered in the developer’s attempt to sell certain amenities to two community development districts at a cost of $73.7 million. The residents admitted their opposition to the sale as well as some of the alleged conduct and moved to dismiss the counterclaim as violative of Sections 720.304 and 768.295, Florida Statutes (2017), because it sought damages from the residents for assembling, engaging in free speech and seeking redress before their government.
The trial court denied the motion to dismiss the counterclaim and the residents sought review by the Second District Court of Appeal via a petition for writ of certiorari. The Second District determined that the trial court departed from the essential requirements of law, quashed its order denying the residents’ motion to dismiss and for summary judgment accordingly, and ordered the trial court to reconsider its prior rulings under a standard more deferential to the residents.
Summary Judgment in favor Condominium Association and Property Manager Reversed
Middleton v. Don Asher & Associates, Inc., 5D17-3884 (Fla. 5th DCA Jan. 25, 2019)
After fifteen-year resident of the Lemon Tree Condominium tripped on an uneven sidewalk in the community, she brought suit against the condominium association as well as its property manager. The trial court granted summary judgement in favor of the association and the manager on the basis that the cracked and uneven sidewalk was so open and obvious that it could not constitute a hidden, dangerous condition for which the defendants would have had a duty to warn.
Florida’s Fifth District Court of Appeal reversed the summary judgment as to both the association and the manager, finding that while they may not have had a duty to warn the resident of the condition of the sidewalk, they had a duty to repair it. The Fifth District further found that a factual issue remained as to whether the association and property manager should have anticipated that condominium residents would use the sidewalk and encounter the cracked, uneven concrete, notwithstanding that the condition was obvious.
This case illustrates the difficulty in defending claims brought by an injured party against those responsible for maintaining real property and serves as a warning to community associations and property managers to take those steps necessary to maintain their property in good condition.
Florida Supreme Court Awards Attorneys Fees in Foreclosure Action
Glass v. Nationstar Mortgage., LLC, 44 Fla. L. Weekly S100 (Fla. January 4, 2019)
A bank filed a verified complaint to foreclose a reverse mortgage against a homeowner which complaint was dismissed with prejudice by the trial court because it found the bank lacked standing. After the homeowner’s attorney sought attorneys fees, the bank filed a notice of appeal. The homeowner’s attorney demanded additional attorneys fees incurred in the appeal. The Fourth District Court of Appeal denied the motion for appellate attorneys fees because the homeowner prevailed in the trial court based on her standing argument. The homeowner sought review in the Florida Supreme Court.
Writing for a 4-3 majority, Justice Peggy Quince distinguished this case from cases where it was found that no contract existed. The majority reasoned a reverse mortgage contract clearly existed between the homeowner and the bank even though the homeowner prevailed as the bank failed to demonstrate it was a rightful successor in interest. Accordingly, the Supreme Court quashed the Fourth District’s decision and held that a voluntary dismissal provides the basis for the non-dismissing party to be considered the prevailing party for an award of attorneys fees.
Jed Frankel is a shareholder with Eisinger Law. He is a Florida Certified Circuit Mediator and is Board Certified in Condominium and Planned Development Law, as well as Civil Trial Law, by The Florida Bar. He focuses his practice on community association law, litigation and dispute resolution. He can be reached at email@example.com or 954-894-8000 x 301.