S & T Anchorage, Inc. v. Lewis

• Decision Date: 05 February 1991
• Docket Number: Nos. 90-1951,90-1756,s. 90-1951
• Court: Florida District Court of Appeals
• Parties: 16 Fla. L. Weekly 388 S & T ANCHORAGE, INC., Appellant and Cross/Appellee, v. Jonathan LEWIS and Peter Lewis, Appellees and Cross/Appellants.

Page 696

575 So.2d 696

16 Fla. L. Weekly 388

S & T ANCHORAGE, INC., Appellant and Cross/Appellee, v. Jonathan LEWIS and Peter Lewis, Appellees and Cross/Appellants.

Nos. 90-1951, 90-1756.

District Court of Appeal of Florida,

Third District.

Feb. 5, 1991.

Rehearing Denied April 1, 1991.

Thomson, Muraro, Bohrer & Razook and Parker D. Thomson and Steven W. Davis, Miami, for appellant and cross/appellee.

Weil, Gotshal & Manges and Bruce J. Berman and Jamie A. Cole, Miami, for appellees and cross/appellants.

Before BASKIN, FERGUSON and LEVY, JJ.

BASKIN, Judge.

Jonathan Lewis appeals an adverse final summary judgment holding that he has no right to assert a counterclaim to establish his waterfront rights. In addition, S & T Anchorage, Inc. [Anchorage] appeals a final judgment dismissing its counterclaim for abuse of process; Jonathan and Peter Lewis cross-appeal the final judgment, which also dismisses their counterclaims for abuse of process and breach of fiduciary duty. The appeals have been consolidated. We reverse the final summary judgment prohibiting Jonathan Lewis's claims and remand for further proceedings; however, we affirm the final judgment as to all parties.

Anchorage acquired property which was subdivided into nine lots for individual sale. Seven of the lots were inland; two were on the waterfront. Howard Scharlin, Anchorage's president and director, wrote and recorded a Declaration of Covenants for the subdivision. The Declaration defined the common areas of the subdivision to include the dock area, and set forth the rights and responsibilities of the owners. The Declaration established the Anchorage Owners Association, Inc., [Association] and named Anchorage as a shareholder.

After the seven inland lots had been sold, Scharlin, as president of the Association, executed an Assignment of Harbor, transferring the Association's waterfront rights to Anchorage. Scharlin also executed the Assignment as president of Anchorage.

Challenging the Assignment, the Association sued Anchorage, but settled the lawsuit and agreed to dismissal with prejudice. The Association relinquished its waterfront rights, and recognized the efficacy of the assignment. ¹

Anchorage had responded to the Association's lawsuit by filing a counterclaim against Jonathan Lewis, a lot owner, ² for damages predicated on abuse of process. ³ Jonathan Lewis filed a counterclaim against Anchorage to enforce his waterfront rights as an individual lot owner and to obtain an easement by necessity to gain access to the waterfront; he joined with Peter Lewis to claim damages from Anchorage for abuse of process, and damages from Anchorage's principals for breach of fiduciary duty.

After the settlement of the Association's lawsuit, Anchorage moved for summary judgment against Jonathan Lewis, arguing that his counterclaim was barred by the Association's relinquishment of waterfront rights. Jonathan Lewis moved for summary judgment against Anchorage claiming that his refusal to consent to the Association's relinquishment of its rights preserved his individual rights to the waterfront. Denying Jonathan Lewis's motion and granting Anchorage's motion, the trial court entered final summary judgment against Jonathan Lewis on his waterfront rights claim.

Next, the trial court entered a final judgment dismissing the Lewises' counterclaims for abuse of process and breach of fiduciary duty, and dismissed Anchorage's counterclaim for abuse of process. Anchorage appeals and the Lewises cross-appeal the judgment.

First, Anchorage argues that Jonathan Lewis is barred from reasserting a claim for waterfront rights in view of the Association's settlement ratifying the Assignment. Second, Anchorage contends that under the Declaration, Lewis has no individual right to assert an individual claim, as the Declaration grants the Association all rights to the waterfront. We reject both arguments.

Contrary to the trial court's decision, the settlement agreement and subsequent voluntary dismissal of the Association's lawsuit do not extinguish Jonathan Lewis's individual rights. Because the Association is a corporation, it may not act in any way not authorized in its articles of incorporation or bylaws. Randall v. Mickle, 103 Fla. 1229, 138 So. 14 (1931); Sudduth v. St. Andrews Bay Community Hotel Corp., 99 Fla. 151, 126 So. 302 (1930). The articles and bylaws must be consistent with the provisions of the superior document, the Declaration. See Roth v. Springlake II Homeowners Ass'n, 533 So.2d 819 (Fla. 4th DCA 1988) (approval of each and every lot owner was required, where declaration provided that no structure could be maintained on common areas, to grant easement in contravention to declaration; homeowners' association could not grant exclusive easement); R. Natelson, Law of Property Owners Associations, § 4.5 (1989).

The binding Declaration does not grant any authority to the Association to sell, convey, assign, or in any way encumber the common areas. The Declaration gives the Association the authority to levy general assessments, Declaration, Art. 5 § 2a, to levy special assessments, Art. 5 § 3, to bid on foreclosed lots, ⁴ sell, acquire, hold, lease, mortgage, and convey the lots, Art. 5 § 5, to enforce monthly maintenance assessments on dock slips, Art. 8 § 1, and to assign to the owners its rights and duties respecting the dock area. Art. 8 § 1. The Declaration defines owners as class A voting stock holders, and Anchorage as a class B stockholder. Art. 3 § 2.

The Declaration does not empower the Association to sell or convey the dock areas or the common areas. The Assignment, executed by Scharlin on behalf of the Association, and the Association's subsequent ratification of the Assignment are invalid because they exceed the Association's authority and are ultra vires acts. Wenger v. Breakwater Homeowners Ass'n, 423 So.2d 619 (Fla. 4th DCA 1982); Barnett & Klein Corp. v. President of Palm Beach--A Condominium, Inc., 426 So.2d 1074 (Fla. 4th DCA 1983), see Lakes of Emerald Hills v. Silverman, 558 So.2d 442 (Fla. 4th DCA 1990) (association...