Joy v. Oaks Club Corp.
| Decision Date | 08 July 2022 |
| Docket Number | 2D21-1159 |
| Parties | DANIEL JOY and MADELINE JOY, Appellants, v. OAKS CLUB CORPORATION, Appellee. |
| Court | Florida District Court of Appeals |
Appeal from the Circuit Court for Sarasota County; Stephen M Walker, Judge.
Daniel F. Joy, pro se; Gregg M. Horowitz, Sarasota; and George R McLain, Sarasota, for Appellants.
Ryan W. Owen and David L. Boyette of Adams and Reese LLP Sarasota, for Appellee.
On this appeal from the entry of final summary judgment, Daniel and Madeline Joy (the Joys) challenge the trial court's conclusion that the Oaks Club Corporation (Club) properly used its bylaw amendment procedure to require that a property owner purchase a new Club membership for each additional lot or condominium unit acquired in the Oaks real estate development. Because redefinition of the membership requirement instead required amendment of the Declaration of Covenants (Declaration) by a super-majority of the property owners, we reverse.
The Oaks is an upscale real estate development in Osprey, Florida, located on Sarasota Bay. It includes three residential neighborhoods comprising waterfront homes, townhouses, villas, and high-rise condominiums. It also includes the Club, which operates two golf courses, a tennis and aquatics complex, a fitness and wellness center, and dining facilities.
From 1985, when the Declaration was recorded, until 2015, when the Club amended its bylaws, an existing Oaks property owner could purchase a new lot or condominium unit within the Oaks without purchasing an additional Club membership. For this thirty-year period, the source of the mandatory Club-membership requirement was the Declaration.
The Club changed this requirement in 2015 but did so by amending its bylaws instead of the Declaration. Under the 2015 bylaw amendments-apart from a few exceptions and some grandfathering-an existing Oaks property owner who purchases additional property must now also purchase an additional Club membership with each new Oaks property acquired.
The Joys first purchased property-a condominium-at the Oaks in 2017. As required by the Declaration, they also purchased a Club membership at that time. Their application with the Club obligated them to abide by its bylaws.
When the Joys sought to purchase a second condominium in 2020, they were told they must purchase a second Club membership based on the 2015 bylaw amendments. After the Club refused to waive that requirement, the Joys walked away from their purchase of the second condominium, forfeiting their deposit. The Joys then sued the Club, seeking declaratory relief in Count One and injunctive relief and damages in Count Two. They contended that the 2015 amendments to the bylaws were void and that only an amendment to the Declaration could change the mandatory Club-membership requirement. The Club counterclaimed for declaratory relief, asking the trial court to conclude that the bylaw amendments were lawful.
The Joys ultimately moved for final summary judgment on each of their claims and on all of the Club's affirmative defenses. The Club likewise sought summary judgment on its declaratory judgment claim and on its affirmative defenses of statute of limitations, equitable estoppel, and laches, asking the trial court to declare that the 2015 bylaw amendments were valid.
After a hearing, the trial court denied the Joys' motion and granted the Club's motion. This appeal follows.
The Club, like many such nonprofit corporations in Florida, is governed by its Declaration, articles of incorporation, and bylaws. Here, the mandatory Club-membership requirement found its initial home in the Declaration, not in the bylaws.
Several provisions in the Declaration create and inform the Club-membership requirement. Article II, section 2, reads, in pertinent part:
[T]he Developer can not [sic] amend this Declaration or any other restriction or covenant relating to the Property, in such a way as to modify the requirements that: (a) all Property Owners must be Members; or (b) all Members must be Property Owners . . . .
(Emphasis added.) The Declaration, in turn, defines "Property Owner" as "the record owner, whether one or more persons or entities, of the fee simple title to any Homesite which is a part of the Property." "Homesite" is "any platted residential lot or condominium unit in Oaks I or Oaks II."[1] Finally, article III, section 1, states: "All Property Owners have received written acceptance of their membership application in the Club for their membership in the Club." The Declaration expressly states that its obligations, including the covenant to be a Club member, "run with the land."
Article VI, section 1, describes the super-majority required to amend the Declaration:
The covenants, set forth herein may be amended at any time and from time to time upon the execution and recordation of an instrument executed by Property Owners owning not less than seventy-five (75%) percent of the Homesites . . . .
The Club's bylaws, in contrast, can be amended by a simple majority vote of the Club's board of governors together with a majority vote of the Club's equity members.[2] The 2015 bylaw amendments were passed initially by the Club's governing board and later by the Club's equity members at the annual meeting.
The Declaration includes language delineating the scope of the Club's powers and responsibilities, stating that the Club "shall administer and operate the facilities and amenities . . . for the exclusive use and benefit of the Oaks Club Corporation members." In addition, article III, section 5, titled Equal Treatment of Property Owners, provides, in pertinent part:
The Club acknowledges and covenants that Members who own Property in Oaks I shall be treated no less favorably than Members who own Property in Oaks II, and that Members who own Property in Oaks II shall be treated no less favorably than Members who own Property in Oaks I. Such equal treatment of all Members extends to all rights of access to and use of the Club Facilities, the terms by which Property Owners may become Members, the annual dues to be paid by the Members, and all other duties and benefits of being a Member in the Club. Nothing herein shall be construed as preventing the Club from establishing different rights pertaining to each class or from establishing different initiation fees based solely upon the date of initiation or the number of Members of the Club . . . .
The trial court reasoned that the Club's authority to "administer and operate" the Club, together with the Club's authority to set "the terms by which Property Owners may become Members," necessarily delegated to the Club any decision about redefining the mandatory membership requirement. We disagree.
Summary judgment is proper only if (1) there is no genuine issue of material fact and (2) the moving party is entitled to judgment as a matter of law. Fla. R. Civ. P. 1.510(a) (2020); see Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla. 2000). This court reviews de novo a grant of summary judgment. Id. If the record reveals even the slightest doubt that a genuine issue of material fact might exist, summary judgment is improper.[3] Cook v. Bay Area Renaissance Festival of Largo, Inc., 164 So.3d 120, 122 (Fla. 2d DCA 2015) (citing Schmidt v. State Farm Mut. Ins. Co., 750 So.2d 695, 698 (Fla. 2d DCA 2000)).
"Where the determination of the issues of a lawsuit depends upon the construction of a written instrument and the legal effect to be drawn therefrom," however, "the question at issue is essentially one of law only and determinable by entry of summary judgment." Angell v. Don Jones Ins. Agency, 620 So.2d 1012, 1014 (Fla. 2d DCA 1993) (citing Kochan v. Am. Fire & Cas. Co., 200 So.2d 213, 220 (Fla. 2d DCA 1967)). This court may reach a construction or interpretation of a contract contrary to that of the trial court. See Bethany Trace Owners' Ass'n v. Whispering Lakes I, LLC, 155 So.3d 1188, 1191 (Fla. 2d DCA 2014).
The Club's Declaration is its "constitution." See Beachwood Villas Condo. v. Poor, 448 So.2d 1143, 1145 (Fla. 4th DCA 1984) (quoting Schmidt v. Sherrill, 442 So.2d 963, 965 (Fla. 4th DCA 1983)); see also Pepe v. Whispering Sands Condo. Ass'n, 351 So.2d 755, 757 (Fla. 2d DCA 1977) ().[4] And a declaration of covenants must be strictly construed. Cool Spaze, LLC v. Boca View Condo. Ass'n, 292 So.3d 769, 772 (Fla. 4th DCA 2020) (citing Cali v. Meadowbrook Lakes View Condo.Ass'n "B", Inc., 59 So.3d 363, 367 (Fla. 4th DCA 2011)). So long as a bylaw does not contravene an express provision of the Declaration, or a right reasonably inferable therefrom, it is valid. Beachwood Villas, 448 So.2d at 1145; see also S & T Anchorage, Inc. v. Lewis, 575 So.2d 696, 698 (Fla. 3d DCA 1991) ().
Given that the obligation of an Oaks property owner to purchase a single club membership was based for thirty years on the Declaration, we are hard-pressed to see how the Club could redefine the membership requirement through a simple bylaw amendment. The Declaration requires only that all property owners be members; once membership is obtained, the Declaration imposes no limitations on the nature or scope of the property that may be owned. Thus, the right of a property owner to own multiple properties while only being required to...
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