Schalamar Creek Mobile Homeowner's Ass'n v. Adler

• Decision Date: 07 December 2021
• Docket Number: 8:19-cv-291-TPB-AEP
• Parties: SCHALAMAR CREEK MOBILE HOMEOWNER'S ASSOCIATION, INC., et al., Plaintiffs, v. STEVEN ADLER, et al., Defendants.
• Court: U.S. District Court — Middle District of Florida

SCHALAMAR CREEK MOBILE HOMEOWNER'S ASSOCIATION, INC., et al., Plaintiffs,
v.
STEVEN ADLER, et al., Defendants.

No. 8:19-cv-291-TPB-AEP

United States District Court, M.D. Florida, Tampa Division

December 7, 2021

REPORT AND RECOMMENDATION

ANTHONY E. PORCELLI UNITED SPATES MAGISTRATE JUDGE

This cause comes before the Court upon Defendants' Supplemental Motion for Prevailing Party Attorney's Fees and Costs (Doc. 158). Plaintiffs filed a response in opposition to Defendants' request for fees and costs (Doc. 159) and a notice of supplemental authority (Doc. 163). For the reasons discussed below, it is recommended that the motion be granted in part and denied in part without prejudice.

I. Background

Plaintiff Schalamar Creek Mobile Homeowner's Association, Inc. (the “Plaintiff Association”) is the mobile homeowner's association in the Schalamar Creek Golf Mobile Home Park (“Schalamar Creek Park”) (Doc. 2, at ¶¶ 17-20). On February 5, 2019, the Plaintiff Association filed a Complaint on behalf of current and former homeowners (Doc. 2). The Complaint alleged violations of the federal

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and state Racketeer Influenced and Corrupt Organizations Act (“RICO”), unjust enrichment, violations of Florida's Deceptive and Unfair Trade Practices Act (“FDUTPA”), and violations of the Americans with Disabilities Act (“ADA”), against 16 defendants: the individual and corporate current and former owners and operators of Schalamar Creek Park, a sanitation company and its owner, a law firm and attorneys of that law firm, and a manufactured housing association (Doc. 2, at ¶¶ 22-50).

The Plaintiff Association's claims raised several allegations, including the alleged wrongdoing related to the sale of Schalamar Creek Park in 2011, which resulted in higher pass-on ad valorem taxes for the mobile homeowners and allegations that in 2016, Defendants induced the mobile homeowners to sign a new prospectus which altered their lot rents and their resale rights (Doc. 2). Defendants moved to dismiss the initial Complaint (Docs. 8 & 11). The Court granted Defendants' motion to dismiss without prejudice (Doc. 36). The Court found that the Plaintiff Association lacked standing to assert any of the claims in the initial Complaint other than the ADA claim (Doc. 36). The Court also found that the Plaintiff Association's RICO claims failed for lack of specificity because the Plaintiff Association failed to state with particularity the circumstances constituting fraud and failed to allege facts with respect to each Defendants' participation in the fraud (Doc. 36, at 19). Additionally, the Plaintiff Association failed to enumerate racketeering activities (Doc. 36, at 19).

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The Plaintiff Association and additional Individual Plaintiffs^[1] (collectively “Plaintiffs”) filed an Amended Complaint (Doc. 44). The Individual Plaintiffs raised four federal and state RICO and RICO conspiracy claims and the Plaintiff Association raised an ADA claim (Doc. 44).^[2] Defendants moved to dismiss the Amended Complaint (Doc. 50), and for sanctions against the Plaintiff Association and its counsel under Florida Statutes §57.105 and Federal Rule of Civil Procedure 11 and moved for a bond under section 501.211, Florida Statutes (Docs. 48 & 49). The Court denied the motion for sanctions without prejudice (Doc. 61) and denied Defendants' motion to dismiss the Amended Complaint (Doc. 50).

Subsequently, Defendants Richard Lee and David Eastman, their law firm Lutz, Bobo & Telfair, P.A., and former owners of the mobile home park Randall Knapp and Schalamar GP, Inc., moved for summary judgment on the RICO claims (Docs. 92 & 93). The Court granted summary judgment in favor of the movant Defendants on the RICO claims (Doc. 103). The Court found that the Individual Plaintiffs lacked standing to assert claims based on alleged wrongdoing related to the sale of Schalamar Creek Park, which allegedly resulted in higher pass-on ad valorem taxes for the mobile homeowners (Doc. 103, at 5-6). Similarly, the Court found that the Individual Plaintiffs lacked standing to assert claims related to

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Defendants' allegedly forcing new homeowners to enter into rental agreements subject to a new prospectus (Doc. 103, at 7). The Court found that the Individual Plaintiffs' claims were disjointed, lacked factual support, and bore no causal connection to the acts about which the Individual Plaintiffs complained (Doc. 103, at 8). The Court also ordered the Individual Plaintiffs to show cause why the non-movant Defendants were not also entitled to summary judgment on the RICO claims. Id.

The Individual Plaintiffs responded to the Court's Order to Show Cause and argued that each of them had standing “regarding” some of the non-movant Defendants (Marti Newkirk, Lorraine DeMarco, and Murex Properties, LLC), but did not raise any arguments regarding the remaining non-movant Defendants (Doc. 107). The Court concluded that the Individual Plaintiffs^[3] claims against non-movant Defendants Newkirk, DeMarco, and Murex Properties, LLC should survive because the Individual Plaintiffs only addressed standing regarding those Defendants in response to the Court's Order to Show Cause (Doc. 109, at 2). The Court granted summary judgment in favor of non-movant Defendants Steven Adler, R. Scott Provost, Charles Crook, The Northwestern Mutual Life Insurance Company, and Osprey Links, LLC on Individual Plaintiffs' RICO claims (Doc. 109, at 2).

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The remaining Defendants moved for summary judgment (Doc. 110). The Court^[4] granted summary judgment in favor of the remaining Defendants on the RICO claims (Doc. 121, at 4-6). The Court also granted summary judgment against the Plaintiff Association on the ADA claim (Doc. 121, at 6-7). Plaintiffs appealed the summary judgment order entered in Defendants favor on the federal RICO claims and the ADA claim. The Eleventh Circuit Court upheld the district court's decisions. See Schalamar Creek Mobile Homeowner's Ass'n, Inc. v. Adler, 855 Fed.Appx. 546 (11th Cir. 2021).

Defendants filed a Verified Motion for Award of Attorney's Fees and Costs (Doc. 124). Plaintiffs responded to Defendants' motion (153). The undersigned denied Defendants' motion without prejudice, holding that Defendants could renew their motion or submit a supplemental motion after resolution of the pending appeal (Doc 154). Following the Eleventh Circuit's decision, Defendants filed a Supplemental Motion for Prevailing Party Attorney's Fees and Costs (Doc. 158), which incorporated Defendants' previous motion for attorney's fees and costs. Plaintiffs responded to the same (Doc. 159).

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II. Discussion

“Federal courts adjudicating state law claims, including claims brought under the court's supplemental jurisdiction, must apply the substantive law of the state along with the procedural law of the federal system.” Shelton v. Schar, No. 5:17-cv-86-PGB-PRL, 2018 WL 6261485, at *1 (M.D. Fla. Oct. 18, 2018) (citing Horowitch v. Diamond Aircraft Indus., Inc., 645 F.3d 1254, 1257 (11th Cir. 2011)), report and recommendation found moot due to parties' settlement, Doc. 282 (M.D. Fla. Feb. 12, 2019). Statutes allowing for the recovery of attorney's fees generally apply in federal court because they reflect the substantive policy of the state. Id. (citing Horowitch, 645 F.3d at 1259). Defendants argue that they are entitled to attorney's fees pursuant to the following statutory attorney's fees provisions: (1) the prevailing party provision of the Florida Mobile Home Act (“FMHA”), section 723.068, Florida Statutes; (2) the Florida's RICO Act, sections 772.11 and 772.104, Florida Statutes; and (3) the prevailing party provision of the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), section 501.2105(1), Florida Statutes. The undersigned will discuss Defendants' entitlement to attorney's fees and costs pursuant to each claim in turn.

A. Attorney's Fees Under the FMHA

Under the FMHA, a prevailing party is entitled to reasonable attorney's fees “in any proceeding between private parties to enforce provisions” of the FMHA. Fla. Stat. § 723.068. Defendants argue that they are entitled to attorney's fees pursuant to the FMHA because Plaintiffs' grievances centered on alleged violations

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of the FMHA, which constituted the underlying predicate acts for the federal and Florida RICO claims, the FDUTPA claim, and the unjust enrichment claim. Plaintiffs respond that Defendants are not entitled to attorney's fees pursuant to the FMHA because Plaintiffs did not go through the FMHA's dispute resolution process or asserted an FMHA claim.

Defendants provide no authority for the proposition that an action of common law and statutory claims not specifically arising under the FMHA should be treated as FMHA claims merely because conduct that violates the FMHA forms a part of the factual basis for those claims. Rather, Florida caselaw has found that simply invoking provisions of the FMHA is not sufficient to confer entitlement to attorney's fees. See T & W Developers, Inc. v. Salmonsen, 31 So.3d 298, 301 (Fla. 5th DCA 2010). In Salmonsen, the plaintiff filed a three-count complaint seeking injunctive and declaratory relief. Id. at 300. Count II of the Complaint sought a declaration that an amendment to the deed of restrictions which had been adopted by the residents of the mobile home association was invalid because it unreasonably changed the general plan of development and sought a declaration that a review committee was the only entity empowered to enforce the deed of restrictions. Id. Count III sought a declaration that a provision in the amended deed of restrictions which required the plaintiff to provide cable television basic services was, alternatively, (1) unenforceable, (2) only required the plaintiff to provide access to basic cable television, (3) only required the plaintiff to provide basic service programming as defined by the FCC, or (4) declare that section...