Madison at SoHo II Condo. Ass'n, Inc. v. Devo Acquisition Enters., LLC

• Decision Date: 24 August 2016
• Docket Number: No. 2D15–2067.,2D15–2067.
• Citation: 198 So.3d 1111
• Parties: MADISON AT SOHO II CONDOMINIUM ASSOCIATION, INC., a Florida not-for-profit corporation, Appellant, v. DEVO ACQUISITION ENTERPRISES, LLC, a Florida limited liability company, Appellee.
• Court: Florida District Court of Appeals

198 So.3d 1111

MADISON AT SOHO II CONDOMINIUM ASSOCIATION, INC., a Florida not-for-profit corporation, Appellant,

v.DEVO ACQUISITION ENTERPRISES, LLC, a Florida limited liability company, Appellee.

No. 2D15–2067.

District Court of Appeal of Florida, Second District.

Aug. 24, 2016.

Jacob A. Brainard and Scott Davis of Business Law Group, P.A., Tampa, for Appellant.

Shazia N. Sparkman of Sparkman & Sparkman, P.A., Tampa, for Appellee.

BADALAMENTI

, Judge.

I. INTRODUCTION

Madison at SoHo II Condominium Association, Inc. (the Association) sued Devo Acquisition Enterprises, LLC (Devo), for foreclosure or a money judgment, alleging that Devo was liable for $40,645.70 in unpaid condominium fees and assessments. Devo argued that the Association's acceptance of Devo's $2412 payment constituted an accord and satisfaction of that debt, pursuant to section 673.3111, Florida Statutes (2014)

. The Association countered that accord and satisfaction principles were inapplicable to the collection of unpaid fees and assessments under section 718.116(3), Florida Statutes (2014). While the litigation was pending in the trial court, this court decided St. Croix Lane Trust v. St. Croix at Pelican Marsh Condominium Ass'n, 144 So.3d 639 (Fla. 2d DCA 2014), review denied, 160 So.3d 898 (Fla.2015). In St. Croix Lane Trust, we held that section 718.116(3), the text of which is incorporated into the Association's Declaration of Condominium (Declaration), did not operate to limit or alter the law concerning accord and satisfaction. Id. at 643. Relying upon St. Croix Lane Trust, the trial court granted summary judgment to Devo.

During the pendency of this appeal and in the legislative session immediately following our St Croix Lane Trust decision, the legislature passed an amendment to section 718.116(3)

expressly clarifying that section 718.116(3) applies notwithstanding the law of accord and satisfaction under section 673.3111. See ch. 2015–97, § 9, at 18–19, Laws of Fla. The dispositive issue in this appeal is whether this court may utilize the legislature's recent clarifying amendment to a statute, enacted during the pendency of this appeal, to interpret the pre-amended version of that statute. We answer this question in the affirmative, recognize that our decision in St. Croix Lane Trust has been abrogated, reverse the grant of summary judgment to Devo, and remand to the trial court for proceedings consistent with this opinion.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. The Initial Dispute

The Association is a not-for-profit corporation designed to manage an eponymous condominium development in Hillsborough County. Devo acquired title to unit 939B of the Association's condominium development. The previous owners of the unit had been delinquent in paying assessments and related charges to the Association. In acquiring title to the unit, Devo became jointly and severally liable for the delinquent assessments and charges under the terms of the Declaration. The Association attempted to obtain payment from Devo. In turn, Devo disputed the amount it owed.

On January 28, 2014, Devo sent the Association a proposed offer for accord and satisfaction of the contested debt, along with a corresponding check for $2412. The Association does not contest that Devo intended its check to be an accord and satisfaction of the delinquent amount owed. On February 17, 2014, the Association's counsel informed Devo by email that Devo's offer was rejected. On July 1, 2014, the Association filed a lien foreclosure complaint against Devo for failing to pay certain assessments due from November 2008 through April 2014. The Association alleged that Devo owed $28,472 in unpaid assessments, plus other associated fees and costs, for a total outstanding amount of $40,645.70. On July 21, 2014, Devo filed a verified motion to dismiss the Association's complaint. In or around October 2014, Devo discovered that the Association deposited Devo's check for $2412 two days after Devo sent its offer of accord and satisfaction, despite the Association's previous representation that it was not accepting Devo's offer.

B. The Court's Intervening Decision in St. Croix Lane Trust

On August 8, 2014, approximately one month after the Association commenced its foreclosure action, this court issued St. Croix Lane Trust. In St. Croix Lane Trust, a condominium association sought to foreclose a lien against a condominium unit owned by a trust because of past-due assessments. 144 So.3d at 640

. The trust argued that accord and satisfaction, pursuant to section 673.3111, occurred when the condominium association deposited the trust's $840 check in full satisfaction of the more than $36,000 in various assessments and fees owed to the condominium. St. Croix Lane Tr., 144 So.3d at 642. The trial court granted summary judgment in favor of the condominium association, ruling that section 718.116(3), Florida Statutes (2011), rendered ineffective any accord and satisfaction offered by the trust. Id. at 641. At the time of the controversy in St. Croix Lane Trust, section 718.116(3) read, in pertinent part:

Any payment received by an association must be applied first to any interest accrued by the association, then to any administrative late fee, then to any costs and reasonable attorney's fees incurred in collection, and then to the delinquent assessment. The foregoing is applicable notwithstanding any restrictive endorsement, designation, or instruction placed on or accompanying a payment.

(Emphasis added.) Thus, the trial court in St. Croix Lane Trust held that when a condominium association negotiates a check, the order of priority set out in section 718.116(3)

governs how the check must be applied to amounts due, irrespective of the law of accord and satisfaction.

On appeal, this court disagreed, holding that nothing in section 718.116(3)

's legislative history revealed any intention to make the accord and satisfaction principles set forth in section 673.3111 inapplicable to condominium associations. St. Croix Lane Tr., 144 So.3d at 643. In particular, we did not entertain the condominium association's argument that the term “restrictive endorsement” applied to accord and satisfaction. Id. We also noted that a case from the Third District, Ocean Two Condominium Ass'n v. Kliger, 983 So.2d 739, 741 (Fla. 3d DCA 2008), could be read to reach the opposite construction. St. Croix Lane Tr., 144 So.3d at 643. However, we distinguished Kliger on its facts and on the apparent unavailability of legislative materials to aid the Kliger court in its analysis. See

St. Croix Lane Tr., 144 So.3d at 643–44.

C. The Trial Court Grants Summary Judgment in Favor of Devo

On October 9, 2014, after discovering that the Association had deposited Devo's $2412 check, Devo filed an amended motion to dismiss, alleging in part that the negotiation of Devo's check operated as accord and satisfaction, and citing this court's decision in St. Croix Lane Trust for support. On November 12, 2014, Devo filed an answer and affirmative defenses. Devo's first affirmative defense was accord and satisfaction, pursuant to section 673.3111

. On November 18, 2014, the trial court denied Devo's amended motion to dismiss.

On February 10, 2015, Devo moved for summary judgment. This motion again alleged, in part, that accord and satisfaction occurred pursuant to section 673.3111

, and again cited St. Croix Lane Trust for support. On April 1, 2015, the trial court heard argument on Devo's motion for summary judgment. At the hearing, Devo reiterated its point concerning accord and satisfaction. The Association pointed to paragraph 13.10 of its Declaration and argued that St. Croix Lane Trust did not apply because it concerned statutory interpretation, whereas the litigation concerned contractual interpretation. Paragraph 13.10, which tracks the statutory language of section 718.116(3), reads:

13.10 Application of Payments. Any payments received by the Association from a delinquent Unit Owner shall be applied first to any interest accrued on the delinquent installment(s) as aforesaid, then to any administrative late fees, then to any costs and reasonable attorneys' fees incurred in collection and then to the delinquent and any accelerated Assessments. The foregoing shall be applicable notwithstanding any restrictive endorsement, designation or instruction placed on or accompanying a payment.

(Emphasis added.) The Association argued that this contractual language precluded accord and satisfaction, even though St. Croix Lane Trust held that the same language in section 718.116(3)

had no such effect. In the alternative, counsel for the Association alerted the trial court that the legislature was considering an amendment to section 718.116(3). In the words of the Association's counsel, this amendment would “overrule the St. Croix Lane Trust decision and include accord and satisfaction designations within the statutory language, and it also includes a sentence that says, ‘This is intended to clarify existing law.’ ” Devo replied by arguing that the Association should not be able to contract around a clearly unfavorable statutory interpretation, and that the trial court should not rule on an amendment which had yet to pass the legislature. After the hearing, the trial court granted summary judgment to Devo on the grounds that “a full accord and satisfaction took place pursuant to Florida Statutes.”

D. The Clarifying Amendment to Section 718.116(3)

On June 2, 2015, the clarifying amendment, which the Association had pointed out to the trial court was pending in the legislature, was approved by the governor after passing both houses of the legislature. See ch. 2015–97, § 9, at 18–19, Laws of Fla. The approval occurred almost one month after Devo filed its notice of appeal, two months after the trial court had granted summary judgment, and ten months after this court decided St. Croix Lane Trust. As amended, the pertinent part of section 718.116(3)

now reads as follows:

(3) Any

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