||Third District Court of Appeal State of
Florida, July Term, A.D., 2011
||August 3, 2011
||CORAL WAY CONDOMINIUM INVESTMENTS, INC.
21/22 CONDOMINIUM ASSOCIATION, INC., APPELLEE.
||An appeal from the Circuit Court for
Miami-Dade County, Victoria Platzer, Judge. Lower Tribunal No. 09-44l7l
||G. Frank Quesada and Juan C. Valdes, for
appellant. Gregory R. Beck and Yaneixa Hermoso (Ft. Lauderdale), for
||The opinion of the court was delivered by:
||Not final until disposition of timely filed
motion for rehearing.
||Before SUAREZ and LAGOA, JJ., and SCHWARTZ,
||Coral Way Condominium Investments, Inc.,
appeals from a final judgment of foreclosure entered in favor of 21/22
Condominium Association, Inc. For the following reasons, we affirm.
||I. FACTUAL AND PROCEDURAL HISTORY
||21/22 Condominium Association, Inc. (the
"Association") is a Florida commercial condominium association
created to operate the 21/22 Condominium (the "Condominium")
located in Miami, Florida. Coral Way Condominium Investments, Inc.
("Coral Way") owns six of the Condominium's commercial units. In
August of 2008, a Special Assessment was passed by the Association in the
amount of $348,703.75 to pay for flood damage repairs and cleaning of the
air conditioning system's condenser coil. The Condominium had suffered
flood damage when a pipe burst in the building's air conditioning system
caused by sediment build-up in the air conditioning system's lines. This
flood damage included damage to the Condominium's only functional elevator
at the time. XXX 1
||Coral Way disputed the need and validity of
the August 2008 Special Assessment and demanded that the Association
provide proof of the need for such an extensive assessment. Coral Way
eventually was given access to the Association's records for 2008 and
limited access to the records for 2007. Its review allegedly revealed that
the Association had paid, as a common expense and as a charge to all unit
owners, expenses that were not common expenses, including payments for
maintenance expenses that did not concern common elements and improper
payment of legal fees that were not incurred by the Association.
||Additionally, the records allegedly revealed
that the Association had received a lump sum payment in connection with a
rooftop lease that had not been accounted for.
||The Association demanded payment of Coral
Way's portion of the Special Assessment, plus interest, attorneys' fees
and costs and provided Coral Way with notice that it would record separate
claims of lien against each of Coral Way's respective units. Coral Way
refused to pay the special assessment and the claims of lien were
subsequently recorded on May 14, 2009. On June 10, 2009, the Association
filed its complaint against Coral Way seeking to foreclose the claims of
lien. Coral Way responded to the Association's complaint and filed its own
counterclaim, raising breach of fiduciary duty as both an affirmative
defense and a counterclaim. The Association subsequently moved for summary
judgment as to its complaint and on March 30, 2010, the trial court
granted the Association's motion and entered a final summary judgment of
foreclosure against Coral Way.
||We review a trial court's ruling on a motion
for summary judgment de novo.
||SeeVolusia Cnty. v. Aberdeen at Ormond
Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000). Coral Way argues that the
trial court erred in granting summary judgment in favor of the Association
because the validity of the special assessment at issue remained a
contested fact. SeeFisher v. Tanglewood at Suntree Country Club Condo.
669 So. 2d 1050
(Fla. 5th DCA 1995) (holding that summary judgment which permitted
foreclosure of a lien securing assessments was improper where the validity
of the assessments remained a contested fact). Coral Way also contends
that the trial court improperly severed the foreclosure action from Coral
Way's amended counterclaim for breach of fiduciary duty because the facts
underlying each claim are inextricably interwoven. We address each
argument in turn.
||A. Validity of Summary Judgment of
||The record demonstrates that no genuine
issue of material fact exists as to the validity of the special
assessment. A condominium association has the power to make and collect
assessments for common expenses. See §§ 718.111(4), 718.115(2), Fla.
Stat. (2009). The common expenses of an association include expenses
incurred in the operation, maintenance, repair or replacement of the
common elements, and any other expense designated as a common expense by
the association's declaration or bylaws. § 718.115(1), Fla. Stat. (2009).
The common elements of a condominium include condominium property which is
not included within the units. § 718.108(1)(a), Fla. Stat. (2009).
||It is undisputed that the special assessment
at issue here was passed to pay for maintenance of the building's air
conditioning system and repair of the building's elevator, both common
elements of the building. Furthermore, it is undisputed that the special
assessment was passed in the manner required by the Condominium's bylaws.
A special meeting was called by the Association and appropriate notice of
the meeting was sent to Coral Way. At the special meeting a quorum was
present and the special assessment was passed by a majority of those
||Coral Way does not dispute the foregoing
facts. Rather, Coral Way contends that the special assessment would not
have been necessary were it not for the Association's alleged breach of
fiduciary duty, which Coral Way argues depleted the Association's funds.
Avoidance of the payment of a valid assessment, however, is not a remedy
available to unit owners to cure unauthorized acts by officers or
directors of an association. Ocean Trail Unit Owners Ass'n v. Mead, 650
So. 2d 4, 7 (Fla. 1994). "[I]f the officers or directors of an
association act in an unauthorized manner, the unit owners should seek a
remedy through elections or, if factually supported, in an action for
breach of fiduciary duty." Id. Thus, while Coral Way's allegations
relating to improper payments made by the Association are the proper
subject of an independent, affirmative claim for breach of fiduciary duty
against the Association, those allegations are not a valid defense or
avoidance to payment of the special assessment.
||"[A] unit owner's duty to pay
assessments is conditional solely on whether the unit owner holds title to
a condominium unit and whether the assessment conforms to the declaration
of condominium and bylaws of the association, which are authorized by
chapter 718, Florida Statutes." Id. (emphasis added). It is
undisputed that Coral Way holds title to the condominium units.
Furthermore, as discussed above, the assessment conforms to the
declaration of condominium and the Association's bylaws. Accordingly, no
genuine issue of material fact exists as to the validity of the special
assessment and Coral Way was obligated to pay the special assessment.
||Moreover, even if we were to accept Coral
Way's allegations of breach of fiduciary duty as a defense in this matter,
that defense would not overcome Coral Way's obligation to pay the special
assessment at issue, as insufficiency of funds is not a prerequisite to
the passing of a special assessment. The Association's bylaws permit the
Association to levy special assessments, "should such be required by
the Board of Directors," in the same manner as any other assessment.
The Condominium's governing documents do not require the Association to
exhaust all funds prior to making and passing any assessment. Furthermore,
Coral Way provides no case law to support its argument that an association
must exhaust all funds before making a special assessment.
||Based on the foregoing, no genuine issue of
material fact exists as to the validity of the special assessment, and the
trial court properly granted summary judgment to the Association.
||B. Severing of Complaint and Counterclaim
||The trial court properly severed the
Complaint and the Counterclaim, as the facts giving rise to each claim are
not inextricably interwoven. As discussed above, the Association's
foreclosure action arose as a result of Coral Way's failure to pay the
August 2008 Special Assessment, and it is undisputed that the Special
Assessment was duly passed for the payment of common expenses-the repair
of the elevator and maintenance of the air conditioning system-resulting
from a flood in the building.
||Coral Way's claim for breach of fiduciary
duty, in turn, arose from payments allegedly made by the Association for
expenses unrelated to the flood that were not common expenses including
payments for maintenance expenses that did not concern common elements and
improper payment of legal fees that were not incurred by the Association.
Coral Way also charged the Association with receiving a lump sum payment
in connection with a rooftop lease that was not accounted for. The only
connection between each party's claim is Coral Way's argument that the
Special Assessment would not have been necessary but for the Association's
breach of fiduciary duty. As discussed above, that argument is not legally
relevant to the Association's claim for foreclosure.
||Moreover, any breach of fiduciary duty on
the part of the Association's officers and directors would not obviate
Coral Way's duty to pay the special assessment. Instead, any success on
its claim for breach of fiduciary duty would entitle Coral Way only to
reimbursement of dues paid toward the purported improper expenditures.
Coral Way would remain responsible for payment of the special assessment.
Thus, even if Coral Way were successful on its counterclaim, the
Association would still be entitled to enforce its claim of lien against
Coral Way for its failure to pay the special assessment. Accordingly, the
Association's Complaint could be properly severed from Coral Way's
||For the foregoing reasons, we affirm the
trial court's final summary judgment of foreclosure in favor of the
The Condominium's second elevator was undergoing renovations at the time
unrelated to the flood damage.