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Insider Real Estate and Community Association Law Update

January 2020







PRIVATE AVIATION COMMUNITY MEMBERSHIP TERMINATED



Naked Lady Ranch, Inc. v. Wycoki, 44 Fla. L. Weekly D2787 (Fla. 4th DCA November 20, 2019)



A member in a private aviation community consisting of fifty private residences paid a private pilot to fly him and several co-workers out of the community’s airport several times per week.  The community’s board of directors called a meeting to review the member’s status in light of those flights, which it contended constituted use of the facilities for commercial operations.



The member was represented by an attorney at the meeting and given the opportunity to present evidence and witnesses, and cross examination.  After the meeting, the board suspended the membership finding that the flights constituted commercial activity.  Notwithstanding the suspension, the member continued the early morning flights out of the community airport.  Thereafter, the board held another meeting and terminated the membership.



The former member sued for reinstatement of his membership and after a lengthy bench trial, the trial court ruled in his favor, finding that the community had failed to establish a basis for the suspension/termination.  The community appealed that decision to Florida’s Fourth District Court of Appeal.  Citing the “rule of judicial deference” which makes the governing body of a private membership organization the final decision maker in suspension and termination decisions, the Fourth District reversed the trial court’s ruling and ordered the judgment be entered in the community’s favor, upholding the suspension and termination.






ESCROW AGREEMENT CONTROLS OVER  PURCHASE AGREEMENT



Carter Dev. of Mass., LLC v. Howard, 44 Fla. L. Weekly D2833 (Fla. 1st DCA November 26, 2019)


 

     In a case involving a failed real estate project, an investor sought to recover $650,000 it had deposited pursuant to a purchase agreement with the project’s developer.  After a downturn in the real estate market sunk the developer’s plans, the investor sued the escrow agent named in the purchase agreement claiming that it had improperly disbursed funds for project-related costs that were to be used exclusively to fund an earnest money deposit.



The escrow agent, however, was not a party to the purchase agreement and was bound only by the escrow agreement pursuant to which it did not owe the investor a duty. Since the escrow agreement authorized the disbursement of funds for project-related costs and expenses, the escrow agent acted properly and judgment in its favor and against the investor was proper.


 


 




LENDER NOT ALLOWED TO PRESENT ADDITIONAL PROOF THREE YEARS AFTER TRIAL



Robinson v. Nationstar Mortg. LLC, 44 Fla. L. Weekly D2889 (Fla. 2d DCA December 4, 2019)




     A foreclosure action was filed against the Robinsons on February 28, 2012.  As part of their defense, the Robinsons contended that the original plaintiff lacked standing to bring suit. Shortly thereafter, Nationstar was substituted as the plaintiff.  After a nonjury trial, the court entered a final judgment of foreclosure in Nationstar’s favor on June 25, 2015.



A foreclosure sale took place on December 16, 2015 but was vacated because of procedural problems with the final judgment.  Before another final judgment could be rendered, Nationstar moved to reopen the evidence so that it could “present additional proof of standing” to counter the Robinsons’ defense.  The trial court granted that request and conducted a second trial on June 20, 2018 after which it entered an amended final judgment of foreclosure in Nationstar’s favor.



The Robinsons appealed the amended final judgment and the Second District Court of Appeal ruled that it was improper for the trial court to give Nationstar a “do over” in the form of a second trial three years after first to correct the failure to present sufficient proof. The case was involuntarily dismissed, in favor of the Robinsons.


 




HOMEOWNERS CLAIMS NOT SUBJECT TO ARBITRATION



Wiener v. Taylor Morrison Servs., No. 1D19-1649, 2019 Fla. App. LEXIS 18805, at *1 (1st DCA Dec. 19, 2019)



Taylor Morrison Services constructed and sold a residence to the Wieners and provided them with a two-year “blanket” warranty and a ten-year “structural” warranty.  The Wieners experienced problems with their stucco and sued Taylor Morrison for violation of the Florida Building Code, without reference to either warranty.



Taylor Morrison moved to stay the lawsuit and compel arbitration pursuant to a provision in the structural warranty.  The structural warranty covered only claims pertaining to a “defect which causes actual physical damage to the load-bearing elements of [a] home … which damage is cause by the failure of such load-bearing elements and is sufficiently severe such that your home becomes unsafe or uninhabitable.” That warranty further specifically excluded claims for stucco.  Accordingly, the Wieners case was properly brought in and will proceed in state circuit court.







FORMER OWNER ALLOWED TO CONTEST LIEN AFTER SALE OF PROPERTY



Real Estate Sols. Home Sellers, LLC v. Viera E. Golf Course Dist. Ass’n, No. 5D18-3569, 2020 Fla. App. LEXIS 53, at *2 (5th DCA Jan. 3, 2020)



After Real Estate Sols. Home Sellers (“RESHS”) purchased a property located in a homeowners association at a foreclosure sale the Property, the Association asserted that its lien had survived the foreclosure and notified RESHS that it owed almost twenty thousand dollars for unpaid HOA assessments and penalties incurred by the previous owner. RESHS refused to pay and filed suit against the HOA seeking a judicial declaration that it was not responsible for those amounts.



Notwithstanding the lawsuit, RESHS sold the property.  The court granted the HOA’s motion to dismiss the lawsuit as moot because RESHS no longer owned the subject property.  The Fifth District Court of Appeal reversed and ordered the case be reinstated.  Even though RESHS sold the property, that sale did not resolve the dispute with the HOA and there is still a need for a judicial determination to determine whether RESHS is responsible for any of the unpaid HOA assessments and other amounts claimed.







LENDER NOT REQUIRED TO SEND NEW DEFAULT NOTICE



Nationstar Mortg., LLC v. Glisson, No. 2D18-686, 2019 Fla. App. LEXIS 19200, at *1 (2d DCA Dec. 27, 2019)



Prior to the start of a foreclosure trial, the homeowners filed a motion for judgment in their favor claiming that the lender was required to send a new default notice because a prior foreclosure case had been dismissed. The judge granted the motion and entered  judgment for the homeowners.



Nationstar appealed, and the appellate court reversed, finding that a new default notice was not required before the second lawsuit was filed. The first case was dismissed “without prejudice” and therefore was not an adjudication on the merits in favor of the homeowners. Accordingly, Nationstar could proceed with its second lawsuit without a new default notice.







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 jfrankel@eisingerlaw.com or 954-894-8000 x 301.