Rogers & Ford Const. Corp. v. Carlandia Corp.

• Decision Date: 10 November 1993
• Docket Number: No. 80788,80788
• Citation: 626 So.2d 1350
• Parties: , 18 Fla. L. Weekly S592 ROGERS & FORD CONSTRUCTION CORPORATION, etc., et al., Petitioners, v. CARLANDIA CORPORATION, Respondent.
• Court: Florida Supreme Court

Page 1350

626 So.2d 1350

62 USLW 2348, 18 Fla. L. Weekly S592

ROGERS & FORD CONSTRUCTION CORPORATION, etc., et al., Petitioners, v. CARLANDIA CORPORATION, Respondent.

No. 80788.

Supreme Court of Florida.

Nov. 10, 1993.

Thomas D. Daiello of Marchbanks, Daiello & Leider, P.A., Boca Raton, and Roy E. Fitzgerald of Gunster, Yoakley & Stewart, P.A., West Palm Beach, for petitioners.

Louis R. McBane and J. Kory Parkhurst of Boose, Casey, Ciklin, Lubitz, Martens, McBane & O'Connell, West Palm Beach, for respondent.

BARKETT, Chief Justice.

We have for review Carlandia Corp. v. Rogers & Ford Construction Corp., 605 So.2d 1014 (Fla. 4th DCA 1992) (on rehearing), which certified the following as a question of great public importance:

May an individual condominium unit owner maintain an action for construction defects in the common elements or common areas of the condominium?

Id. at 1016. To clarify the issue in conformity with the facts presented in this case, we rephrase the question to ask two questions:

(1) Does a condominium unit owner have standing to sue the developer or general contractor to recover damages for construction defects or deficiencies in the common elements or common areas of the condominium?

(2) If so, must the interests of the other unit owners be represented in the suit for the unit owner with standing to maintain the action?

We answer both questions in the affirmative as set forth below. ¹

In 1986, Carlandia Corporation (Carlandia) purchased a condominium unit in the Two North Breakers Row Condominium in Palm Beach County. Flagler Properties, Inc. (Flagler) developed the property, and Rogers & Ford Construction Corp. (Rogers & Ford) was the general contractor. ²

About four years later, Carlandia filed suit against Flagler and Rogers & Ford. ³ Its amended complaint sought damages arising from thirty-three alleged construction defects or deficiencies in various common areas or elements of the condominium, but did not allege any defects in Carlandia's individual unit. The allegations concerned breaches of duties allegedly owed to all of the unit owners rather than duties owed to any one particular unit owner.

Flagler and Rogers & Ford moved to dismiss, contending, among other reasons, that Carlandia had no standing because the Condominium Act, codified in chapter 718, Florida Statutes (1991), gave only the condominium association the right to sue for damages to common elements of the condominium; that Carlandia was not the real party in interest under Florida Rule of Civil Procedure 1.210; and that Carlandia did not join an indispensable party, the condominium association. The circuit court granted the motions and dismissed the complaint with prejudice on the sole ground that

an individual unit owner may not maintain a claim for [construction] defects in the common elements or common areas of the condominium.

The court reaffirmed its ruling on rehearing and expressly stated that its decision was not based on the indispensable party doctrine, thereby precluding Carlandia from joining the condominium association or the other unit members to maintain the action.

The Fourth District reversed, holding that Carlandia had standing to sue. The court reasoned that pursuant to the definitions in sections 718.103(10) & (11), Florida Statutes (1991), condominium unit owners own an undivided share in the common elements and therefore must be real parties in interest under Florida Rule of Civil Procedure 1.210(a). Moreover, section 718.111(3), which conferred on a condominium association certain powers to sue, preserved the unit owner's statutory and common law right to bring any action without participation by the condominium association. Carlandia Corp., 605 So.2d at 1015.

The condominium is a hybrid estate in property law whereby an individual obtains fee simple ownership of a unit and shares with other unit owners an undivided interest in the common elements. See, e.g., Sec. 718.103, Fla.Stat. (1991). In Florida, this form of property has been expressly recognized by the Legislature and is subject to its control and regulation. See id. Sec. 718.102; see also Century Village, Inc. v. Wellington, E, F, K, L, H, J, M, & G, Condominium Ass'n, 361 So.2d 128, 133 (Fla.1978).

Although the Legislature may regulate property rights with respect to condominium property, the Legislature may not constitutionally determine whether a party has standing in a particular cause. Only courts can define the proper parties in litigation. Avila South Condominium Ass'n, Inc. v. Kappa Corp., 347 So.2d 599, 608 (Fla.1976); see also The Fla. Bar re Rule 1.220(b), Fla. Rules of Civil Procedure, 353 So.2d 95, 97 (Fla.1977). The determination of standing to sue concerns a court's exercise of jurisdiction to hear and decide the cause pled by a particular party. Generally, one with a legally protectible right or interest at stake in an otherwise justiciable controversy is a proper party to obtain judicial resolution of that controversy. See Fla.R.Civ.P. 1.210(a); Kumar Corp. v. Nopal Lines, Ltd., 462 So.2d 1178, 1183 (Fla. 3d DCA), review denied, 476 So.2d 675 (Fla.1985). The party with the right or interest at stake generally should also be a "real party in interest," that is, " 'the person in whom rests, by substantive law, the claim sought to be enforced.' " Kumar, 462 So.2d at 1183 (quoting Author's Comment to Fla.R.Civ.P. 1.210, 30 Fla.Stat.Ann. 304, 306-07 (1967)). Thus, although courts determine standing, legislation may affect standing through substantive regulation of the rights or interests at issue. Carlandia's complaint certainly alleged that Carlandia has a sufficient interest at stake to be a party in litigation to protect its property. Carlandia owns an undivided share of the common elements in the Two North Breakers Row Condominium. Any damages caused to the common elements necessarily affects Carlandia's property interest.

Nonetheless, Flagler and Rogers & Ford argue that the Legislature effectively denied Carlandia standing by transferring the right to sue over the common elements from unit owners to the condominium association in section 718.111(3), ⁴ thereby designating the condominium association as the only real party in interest, hence the only party with standing, in suits concerning the common areas or common elements. We disagree.

The plain language of section 718.111(3) says nothing about designating the condominium association as the exclusive holder of the right to sue over the common elements. The statute merely confers on condominium associations the substantive "capacity" to sue. Id. Additionally, the statute contains an express reservation of rights clause that reserves to the unit owners the "statutory or common-law right ... to bring any action without participation by the association which may otherwise be available." Sec. 718.111(3), Fla.Stat. (1991). Likewise, Florida Rule of Civil Procedure 1.221 ⁵ contains no exclusivity provision and has a similar reservation of rights clause.

The history of these provisions ⁶ reveals that the rights reserved to unit owners include the right of an individual unit owner to sue with respect to construction defects or deficiencies in the common areas or common elements. Early interpretations of the Condominium Act, originally adopted in chapter 63-35, Laws of Florida, held that individual unit owners did have standing to maintain actions arising over disputes about the common elements, and that condominium associations lacked standing to sue either in their individual capacity or as class representatives of similarly situated unit owners. See Rubenstein v. Burleigh House, Inc., 305 So.2d 311 (Fla. 3d DCA 1974) (condominium association lacked standing either in individual capacity or as class representative to sue developer for breach of warranty with respect to common elements, but individual unit owner could maintain action on his own behalf and for others similarly situated); Commodore Plaza at Century 21 Condominium Ass'n, Inc. v. Saul J. Morgan Enters., Inc., 301 So.2d 783 (Fla. 3d DCA 1974) (condominium association lacked standing to sue to quiet title to the common elements either in its individual capacity or as class representative), dismissed, 308 So.2d 538 (Fla.1975); Hendler v. Rogers House Condominium, Inc., 234 So.2d 128 (Fla. 4th DCA 1970) (condominium association had no standing to sue in class action regarding failure of property owner to include swimming pool in condominium conversion).

The Legislature responded to these decisions by amending the statute in 1974 to enlarge the standing of condominium associations while reserving all the unit owners' statutory and common law rights that were available, including standing. Ch. 74-104, Sec. 7, Laws of Fla. The amendment effectively abrogated Rubenstein, Commodore Plaza, and Hendler, see Imperial Towers Condominium, Inc. v. Brown, 338 So.2d 1081 (Fla. 4th DCA 1976) (condominium association and individual unit owners had standing as class representatives to maintain action in contract, warranty, and other claims concerning common elements), appeal dismissed, 354 So.2d 978 (Fla.1977); Wittington Condominium Apartments, Inc. v. Braemer Corp., 313 So.2d 463 (Fla. 4th DCA 1975) (condominium association and unit owners had standing to maintain action both individually and as class representatives in negligent construction and breach of contract suit concerning common elements), cert. denied, 327 So.2d 31 (Fla.1976); cf. Royal Bahamian Ass'n, Inc. v. Morgan, 338 So.2d 876 (Fla. 3d DCA 1976) (as lessee for lease of common elements, condominium association had no standing to seek declaration of rights and to quiet title of leasehold properties); Reibel v. Rolling Green Condominium A, Inc., 311 So.2d 156 (Fla. 3d DCA 1975) (condominium association could represent unit owners as class representative but could not proceed individually in action to quiet title), while continuing to give unit...