De Soleil S. Beach Residential Condo. Ass'n, Inc. v. De Soleil S. Beach Ass'n, Inc.
| Decision Date | 02 June 2021 |
| Docket Number | No. 3D19-617,No. 3D19-2013,3D19-2013 |
| Citation | 322 So.3d 1189 |
| Parties | DE SOLEIL SOUTH BEACH RESIDENTIAL CONDOMINIUM ASSOCIATION, INC., Appellant, v. DE SOLEIL SOUTH BEACH ASSOCIATION, INC., et al., Appellees. |
| Court | Florida District Court of Appeals |
Law Offices of Jason Gordon, P.A., and Jason Gordon (Hollywood), for appellant.
Genovese Joblove & Battista, P.A., and Richard Sarafan and Michael Bild, for appellee South Beach Resort Development, LLC; and Young, Berman, Karpf & Gonzalez, P.A., and Andrew S. Berman and Jamie Webner, for appellee De Soleil South Beach Association, Inc.
Before LOGUE, HENDON, and BOKOR, JJ.
Appellant, De Soleil South Beach Residential Condominium Association, Inc. (the "Residential Association"), plaintiff below, appeals from the September 19, 2019 order denying its motion for rehearing of the trial court's order on Appellees’, South Beach Resort Development, LLC (the "Developer"), and De Soleil South Beach Association, Inc. ("Master Association") (collectively, the "Defendants") cross-motions for summary judgment rendered on July 11, 2019, and the July 25, 2019 Final Judgment. We affirm in part, and reverse in part.
The dispute arises out of the operation of a South Beach hotel, the Z Ocean Hotel (the "Building"). The Building is composed of three legal parcels of land: a residential parcel, a commercial parcel, and a garage parcel, each governed by separate rights, obligations and interrelationships. The owners of those three parcels are the three members of the Master Association. The Master Association's board consists solely of the owners of these three parcels: the Developer, which is the owner of both the garage and commercial parcels; and the Residential Association, an entity governed by a board and a membership consisting of the owners of the eighty condominium units.
Two recorded documents govern the structure and relationships among the entities in the Building's ownership and operations, and each unit owner purchased their properties subject to these documents: (1) the Declaration of Covenants, Easements, and Restrictions (the "Master Declaration"), which was recorded first, and (2) the Declaration of Condominium, which governs the hotel room portion of the Building. The Master Declaration established the Master Association to operate the "Shared Facilities" used in common by the three parcels. Under these two recorded documents, the Master Declaration controls in the event of any conflicts or inconsistencies. The residential form of property ownership is condominium, through the Condominium Declaration. The plaintiff Residential Association is the association governed by the Condominium Declaration. The residential owners are not parties to the Master Declaration.
The eighty individual hotel rooms in the hotel Building are also the eighty individual condominium units in the residential parcel. Members of the Residential Association are entitled to one vote per unit in all Residential Association matters, equal to eighty member votes. Each unit owner purchased their unit subject to both Declarations. The Developer of the condominium currently owns twelve units in the residential parcel, is a member of the Residential Association, and has twelve member votes.1 Most of the unit owners, including the Developer, are part of a hotel unit rental program administered by De Soleil Management ("DSM"), the management company that pays all the bills. According to the Residential Association, DSM is controlled by the Developer.
In April 2016, the Developer amended the Master Declaration to allow the Master Association to collect assessments directly from unit owners, impose fees and fines, and to evict any unit owner not in compliance with the Master Declaration, although residential owners are not parties to the Master Declaration. In June 2016, DSM stopped forwarding assessment money belonging to the Residential Association paid by unit owners in the rental program. Then the Residential Association stopped paying its assessments to the Master Association. The Residential Association also refused to pay DSM (acting for the Master Association) amounts DSM had paid for the Residential Association's repair and restoration obligations of common areas.
In December 2017, the Residential Association held a board meeting and purported to suspend the voting rights of roughly 60% of its members for the alleged nonpayment of assessments to the Residential Association (the "First Suspension"). By suspending the voting rights of most of the owners (including the Developer's), the Residential Association believed this would eliminate the need to satisfy the 75% membership approval condition precedent needed to file a lawsuit. In January 2018, the Residential Association filed suit seeking declaratory judgment against the Defendants. The Second Amended Complaint sought, among other things, declaratory relief for a conflict of interest between the Residential Association and the Master Association, alleging that the Defendants amended the governing documents to directly assess fees and fines in order to circumvent the Residential Association's purportedly exclusive statutory and contractual powers to do those things regarding its membership.2
In October 2018, the Defendants moved for summary judgment, arguing that the Residential Association's December 2017 First Suspension of member voting rights was unlawful and invalid because the Residential Association had failed to satisfy the condition precedent necessary to file a suit, and thus lacked standing because it had failed to obtain a three-fourth's vote of its members necessary to file suit.
The trial court entered summary judgment and dismissed the suit in favor of the Defendants, concluding:
On appeal, this Court held that the Master Association did not have standing to assert the Residential Association's failure to satisfy the three-fourths authorizing vote requirement, but because the Developer was part of the Residential Association by virtue of owning certain units, the Developer did have standing. De Soleil S. Beach Residential Condo. Ass'n, Inc. v. De Soleil S. Beach Ass'n, Inc., No. 3D18-1423, 315 So. 3d 58 (Fla. 3d DCA Jan. 15, 2020) (" De Soleil 1").3
On November 23, 2018, the Residential Association's board held a meeting at which it again purported to suspend the voting rights of its members, including the Developer's (the "Second Suspension"). The Residential Association also sought to remove two of the four board members from the Residential Association board and to replace them with their own choices. Subsequently, the Residential Association's board declined to recognize the recall.
On January 17, 2019, the trial court granted the Defendants’ motion for summary judgment, concluding that the suspension of voting rights was invalid and that the Residential Association failed to satisfy the condition precedent that it obtain 75% member approval prior to filing this lawsuit. The Residential Association sought reconsideration and rehearing; the matter was reheard; the order stood. The Residential Association has appealed.
On January 28, 2019, the Defendants asked the trial court to invalidate the Second Suspension of voting rights and to validate the recall, and filed counterclaims seeking the same relief.
Prior to entry of final judgment, the Developer moved for leave to amend to add counterclaims. The trial court rendered its Final Judgment on March 4, 2019 based on the summary judgment determination that the First Suspension was invalid, and that the Residential Association failed to obtain the votes required to the file the action. The trial court held, however, that the Residential Association was deprived of the opportunity to be heard regarding the Second Suspension of voting rights, as that action by the Residential Association took place before the summary judgment order was entered. Eighteen days after final judgment was entered, the trial court granted the Developers’ Motion for Leave to Amend that was filed prior to entry of the March 4 final judgment, to allow the Defendants to add counterclaims.
On July 11, 2019, the trial court entered summary judgment in favor of the Defendants on Counts V, VI and VII of their counterclaim, setting aside both the First and Second suspensions of voting rights, unwound certain ultra vires actions, and recognized the validity of the recall. The Residential Association has appealed.
In December 2019, this Court entered an order consolidating the two appeals: 3D19-617 and 3D19-2013 .
Standard of review
We review de novo a trial court's interpretation of a condominium declaration. Lenzi v. Regency Tower Ass'n, Inc., 250 So. 3d 103, 104 (Fla. 4th DCA 2018). We review the grant of summary judgment de novo. Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000). Summary judgment is proper when there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. Id.; Cia. Ecuatoriana de Aviacion C.A. v. U.S. & Overseas Corp., 144 So. 2d 338, 340 (Fla. 3d DCA 1962) (); Fla. R. Civ. P. 1.510.
The trial court held that, as a matter of law, the Residential Association lacked the power to suspend its members’ voting rights...
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