HOLLYWOOD LAKES CTY. CLUB, INC. v. Community Ass'n Services, Inc., 4D00-148.
| Decision Date | 25 October 2000 |
| Docket Number | No. 4D00-148.,4D00-148. |
| Citation | 770 So.2d 716 |
| Parties | HOLLYWOOD LAKES COUNTRY CLUB, INC., Appellant, v. COMMUNITY ASSOCIATION SERVICES, INC., Appellee. |
| Court | Florida District Court of Appeals |
Catherine Rafferty, Fort Lauderdale, for appellant.
No brief filed on behalf of appellee.
A developer sued the management association that provided management services for the community it had developed. The complaint brought causes of action for breach of contract based upon a third-party beneficiary theory, for fraudulent misrepresentations to the developer, to recover amounts paid by the developer to the management association under a theory that the developer was entitled to be subrogated to the rights of the community association, and negligence on the part of the management company in the performance of its contractual duties. The trial court dismissed the fourth amended complaint with prejudice. We reverse the dismissal as to the fraudulent misrepresentation and equitable subrogation counts but affirm the trial court's ruling with respect to the remaining counts.
The developer, Hollywood Lakes Country Club, Inc., developed Grand Palms, a residential community. On behalf of the community association of Grand Palms, the developer's president contracted with Community Association Services ("CAS") for the latter to provide management services and carry out all responsibilities of the association as provided in its Declaration, Articles of Incorporation, and Bylaws. This included the collection and enforcement of assessments for common expenses. Pursuant to the association's declaration, the developer is responsible for any shortfalls of assessments over expenses of the association.
According to the allegations of the complaint, CAS misrepresented to the developer that it was effectively doing its job and was collecting and enforcing all community assessments, including sending out the appropriate assessment notices to homeowners and builders who were responsible for paying the assessments, causing the developer to refrain from independently acting to collect assessments. The complaint also alleges that CAS knew that these representations were false. Further, the complaint alleges that the developer incurred substantial liabilities due to its responsibility for shortfalls of assessments over expenses of the association because CAS failed to collect assessments and keep accurate accounting records.
Actionable fraud requires: "(1) a false statement concerning a material fact; (2) knowledge by the person making the statement that the representation is false; (3) the intent by the person making the statement that the representation will induce another to act on it; and (4) reliance on the representation to the injury of the other party." Lance v. Wade, 457 So.2d 1008, 1011 (Fla.1984); see also Frenz Enters., Inc. v. Port Everglades, 746 So.2d 498, 502-3 (Fla. 4th DCA 1999)
. Additionally, all averments of fraud must state the circumstances constituting fraud with such particularity as the circumstances may permit. See Fla. R. Civ. P. 1.120(b). The fourth amended complaint includes all of the necessary allegations to state a cause of action for fraud, and the court erred in dismissing this count of appellant's complaint.
We also reverse the dismissal of the count for equitable subrogation. This theory is appropriate when: (1) the subrogee made the payment to protect his or her own interest; (2) the subrogee did not act as a volunteer; (3) the subrogee was not primarily liable for the debt; (4) the subrogee paid off the entire debt; and (5) subrogation would not work any injustice to the rights of a third party. See National Union Fire Ins. Co. of Pittsburgh, Pa. v. KPMG Peat Marwick, 742 So.2d 328, 332 (Fla. 3d DCA 1999),
decision approved by 765 So.2d 36 (Fla.2000) (citing Dade County Sch. Bd. v. Radio Station WQBA, 731...
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