Bennett v. Behring Corp.

• Decision Date: 15 February 1979
• Docket Number: No. 72-886-Civ-JAG.,72-886-Civ-JAG.
• Parties: William R. BENNETT, Virginia M. Bennett, Alexander Wagner, on behalf of themselves and all persons similarly situated, Plaintiffs, v. BEHRING CORPORATION, Leadership Housing, July Investment Corp., Cerro Marmon Corp., Al Schecter, A. D. Bessemer, M. A. Bessemer, H. J. Fox, C. Fox, Stephen Arent, Margery Arent, Albert Arent, Andrew Manno, Elaine Manno, George Gouveia, Margret Gouveia, Gil Pacheo, Joseph Tavares, Esther Rosenman, J. Sidney Wolf, Mark Twain Hotel, Norene Ficery, Judith Contich, Majorie Daniele, George Mercier, Tamarac Enterprises, Jack Najor, Dorathy Najor, Jacob Lutz, Arthur Rosenthal, George Najjar, Georgette Najjar, Abe Blinder, Henriette Blinder, K. E. Behring and P. R. Behring, Defendants.
• Court: U.S. District Court — Southern District of Florida

466 F. Supp. 689

William R. BENNETT, Virginia M. Bennett, Alexander Wagner, on behalf of themselves and all persons similarly situated, Plaintiffs, v. BEHRING CORPORATION, Leadership Housing, July Investment Corp., Cerro Marmon Corp., Al Schecter, A. D. Bessemer, M. A. Bessemer, H. J. Fox, C. Fox, Stephen Arent, Margery Arent, Albert Arent, Andrew Manno, Elaine Manno, George Gouveia, Margret Gouveia, Gil Pacheo, Joseph Tavares, Esther Rosenman, J. Sidney Wolf, Mark Twain Hotel, Norene Ficery, Judith Contich, Majorie Daniele, George Mercier, Tamarac Enterprises, Jack Najor, Dorathy Najor, Jacob Lutz, Arthur Rosenthal, George Najjar, Georgette Najjar, Abe Blinder, Henriette Blinder, K. E. Behring and P. R. Behring, Defendants.

No. 72-886-Civ-JAG.

United States District Court, S. D. Florida, Civil Division.

February 15, 1979.

COPYRIGHT MATERIAL OMITTED

Jon E. Krupnick, Krupnick & Campbell, Fort Lauderdale, Fla., John P. Freeman, Columbia, S. C., for plaintiffs.

Gilbert A. Haddad, Miami, Fla., Maurice M. Garcia, Hollywood, Fla., George I. Platt, Fort Lauderdale, Fla., Joe Easthope, Houston, Faircloth, Cooper & Easthope, Fort Lauderdale, Fla., Konrad Stauch, Stauch & Arabo, P.C., Southfield, Mich., Stephen Shamberg, Friedman & Koven, Chicago, Ill., Michael H. Krul, Fort Lauderdale, Fla., Jeffry M. Weissman, Miami, Fla., for defendants.

MEMORANDUM OPINION

GONZALEZ, District Judge.

This cause is before the Court upon Cross-Motions for Summary Judgment as to Counts II, III and IV of the Amended Complaint filed herein.

This suit was filed by Plaintiffs on behalf of all present and future owners of single family homes in the City of Tamarac, Florida. Defendants are the Behring Corporation, the original developer of the City of Tamarac, plus various other defendants that have, or have had, an interest in the respective Recreational Leases which encumber the deeds to homes in the city.

Tamarac, Florida is a development of single family homes consisting of 31 different communities, or sections, each of which was platted and developed separately, but as part of an over-all master plan. Each community is provided with a separate recreational facility consisting of a club-house, swimming pool, shuffle-board courts, etc. For the use and maintenance of which, each of the homeowners is required to pay a monthly fee. These fees are required by the terms of certain Recreation Leases which apply to each of the 31 separate communities and which are contained in the Declaration of Restrictions applicable to each separate parcel or home within each separate community.

These deed restrictions were filed by the original developer, Behring Corporation, and require all homeowners to be lessees of the recreational facility provided for that particular community.

In some instances the monthly rental is fixed over the entire life of the lease. In other instances the leases contain an escalator clause providing for rental increases depending upon changes in the consumer price index.

It is alleged that, in some cases, Behring Corporation caused the deed restrictions to be filed of record subsequent to the execution of certain of the contracts for purchase and sale of homes in Tamarac. It is not disputed, however, that all deed restrictions were filed prior to the closing of each and every home in Tamarac.

Upon completion of development Behring Corporation divested itself of all interest in the disputed leases by selling and assigning its rights thereunder to various investors, Defendants herein under Count VII hereof, who presently collect the monthly rentals.

In addition, the homeowners in several individual communities have purchased the recreational lease for their particular facility through the medium of not-for-profit homeowners associations or corporations to whom the monthly fees are now paid.

Plaintiffs have launched a seven count multi-pronged attack upon the validity and enforceability of the deed restrictions which require the homeowners to be lessees of the recreational facilities of each of their respective communities. Plaintiffs allege, inter alia, that the deed restrictions were illegally tied to the sale of the homes; that the defendant, Behring Corporation, fraudulently misrepresented the nature of the deed restrictions; and that Behring breached its contract for purchase and sale by delivering deeds encumbered by the deed restrictions complained of. Plaintiffs Count V claim that Behring violated the Interstate Land Sales Act, 15 U.S.C. § 1701, et seq. has been dismissed.

The plaintiffs' fraudulent misrepresentation claims, Count I and VI, are being prosecuted by three individual plaintiffs, William and Virginia Bennett, and Alexander J. Wagner against the individual defendant, Behring Corporation. These two counts have been severed and are set for trial.

Count VII is being prosecuted by a Rule 23(b)(3) class of all single family homeowners in the City of Tamarac against all lessors who have or have had an interest in the various recreation leases. Count VII alleges a Sherman Antitrust Act tie-in claim and will be set for trial by a future order of this Court.

Count II, as amended, is also a Rule 23(b)(3) certified class action on behalf of all single family homeowners in Tamarac and alleges that the deed restrictions are unconscionable, unreasonable and unenforceable.

Count II is now before the Court upon cross-motions for summary judgment.

In Counts III and IV, a Rule 23(b)(3) certified subclass alleges that Defendant-Behring promised in its form contracts for purchase and sale to deliver deeds free and clear of all encumbrances. Plaintiffs allege that Behring breached its contract by delivering deeds encumbered by the Declaration of Restrictions which require rental and maintenance of the various recreational facilities. Behring does not deny that the contract called for the delivery of "free and clear" deeds, nor do they deny that the deeds as delivered were, in fact, encumbered.

Counts III and IV are likewise before the Court today upon cross-motions for summary judgment.

Two things cannot be over-emphasized in an understanding of this highly complex litigation which has been pending for almost seven years; the court file of which exceeds five feet in height:

(1) This is not a condominium case. This is an action involving separate, individually owned, single family dwelling in 31 different sections of the City of Tamarac.

(2) The Behring Corporation is the sole defendant as to Counts I, II, III, IV and VI. Count VII, the antitrust count, names Behring plus a large number of other defendants who have, or have had, an interest in the subject recreation leases.

Count II as originally filed in 1972 sought to remove the restrictions placed upon plaintiffs' deeds requiring Tamarac homeowners to make rental and maintenance payments on the recreational facilities. Paragraphs 24 and 25 of the original complaint allege that the restrictions should be declared unenforceable because they "purport to require affirmative acts" and as such "are unenforceable restrictions on alienation."

Count II further alleged that the "Behring Corporation or its subsidiaries" caused the restrictions to be placed upon the deeds.

Since the challenged deed restrictions "purport(ed) to require affirmative acts" of all homeowners in Tamarac, the Honorable Norman C. Roettger on July 3, 1974 certified Count II as a Rule 23(b)(3) class action consisting of all homeowners in Tamarac who are required to make recreation lease payments.

On October 18, 1978 plaintiffs moved for leave to file an amended Count II to clarify the issues presented. Leave was granted by Order dated October 24, 1978 and an amended Count II was filed on that date.

Amended Count II all but abandoned the original legal theory asserted (save for a passing reference in paragraph 22); instead it alleges that the deed restrictions should be declared unenforceable as "unconscionable, unreasonable, and violative of Florida law and public policy." Plaintiffs also assert that the restrictions are unenforceable as against homestead property since enforcement would violate the homestead provisions of the Florida Constitution; and that Behring was guilty of a conflict of interests, or self-dealing. Finally, amended Count II seeks an award of money damages to recover those sums previously paid pursuant to the allegedly illegal restrictions.

The Court will dispose of the homestead question first.

The Court finds that the deed restrictions are not unenforceable as potentially violative of the Florida Constitution "Homestead Provision", Article X, Section 4. Bessemer v. Gersten (Fla. February 8, 1979.)

As stated in Point East One Condominium Corp., Inc. v. Point East Developers, Inc., 348 So.2d 32 (Fla. 3d DCA 1977),

"The possibility that a forced sale of a homestead might under some circumstances arise in the future does not form a basis for a declaration that the lease is unenforceable. The prohibition against forced sale of a homestead is a prohibition against the use of process for that purpose. It does not invalidate the debt or the lien, but under certain circumstances, merely takes priority over the debt or lien. See, for example, Milton v. Milton, 63 Fla. 533, 58 So. 718 (1912) and Quigley v. Kennedy & Ely Insurance, Inc., 207 So.2d 431 (Fla.1968). We therefore, do not reach the question of whether the lien is exempted from the constitutional prohibition by the method of its creation at the time of the purchase of the condominium. See Platt v. Platt, 50 Fla. 594, 39 So. 536 (1905). The complaint gives no facts which would entitle any of the plaintiffs to a declaration of their possible rights in the future. See Hunt v. Smith, 137 So.2d 232 (Fla. 2d DCA 1962), and Perry v. Genung, 163 So.2d 54 (Fla. 2d DCA 1964)." Id. at 36. (Emphasis supplied.)

As noted the sole defendant named in amended Count II is the Behring Corporation. Behring is not presently a...