CASE NUMBER 01-21824 SP 23


a Florida non-profit corporation, Plaintiff,



as Tenant in possession, Defendants.



THIS CAUSE came before the Court for a two day trial.  After careful consideration of the evidence, testimony, legal authorities and being fully advised, the Court's findings are set forth below.



Plaintiff, MIRAMAR GARDENS TOWNHOUSE HOMEOWNERS ASSOCIATION, INC. ("Miramar”) brought this lawsuit against Defendants, ORLANDO LUIS LEIVA ("Mr. Leiva"), TAIMIRA LEIVA ("Ms. Leiva"), MIAMI-DADE COUNTY (sometimes hereinafter referred to as the "County") and JOHN DOE, as Tenant in possession.on September 28, 2001 (1). Plaintiff seeks foreclosure and damages alleging that Mr. Leiva and Ms. Leiva (sometimes hereinafter referred to as "The Leivas") failed to pay special assessments and maintenance fees.  The Leivas denied that the assessments were proper and challenged the Plaintiffs attempt to collect the levies or obtain foreclosure.

(1) The trial of this case was initially delayed because Ms. Leiva had filed for bankruptcy.  That proceeding was eventually dismissed.  Following the dismissal of the Defendant's bankruptcy case, Plaintiff filed a lis pendens on Defendant's property.

History: The Previously Adjudicated Circuit Court Case 

This case has its genesis in a previous adjudication, in the matter of Metropolitan Dade County v. Vista Verde Townhomes Assoc., Inc. and Miramar Garden Townhouse Homeowners Assoc., Inc., Circuit Court Case Number 97-10798 CA 41 (03).  In that case, the County petitioned the Circuit Court for an appointment of a Receiver due to the derelict conditions of the Plaintiffs property which were not being addressed, in part, because the homeowners association had been dissolved and was not functioning. (2) Granting the County's request for relief, the Circuit Court appointed former Judge Moie Tendrich as the Receiver of Miramar Gardens.  Mr. Tendrich then asked Timberlake Group, Inc. to act as the management company for Plaintiffs development.  The Circuit Court approved this arrangement. (See Order Granting Receivers Ore Tenus Motion for Authority to Employ The Timberlake Group, Inc. dated January 26, 1998 and Order Approving Final Accounting of Timberlake Group, Inc. dated December 21, 2000).

Because the property was distressed, Miami-Dade County provided loans in the amount of $249,000 in order to effect repairs to and restore the property.(3)  Prior to the Receivership, pursuant to the Declarations of Covenants, Conditions and Restrictions of the Plaintiff Homeowner Association, the property owners were paying a maintenance fee of $27 per month.  However, because the loan needed to maintain the property could not be repaid from the existing monthly maintenance fee, a special assessment of $35

2                      The initial case was brought pursuant to See. 617.305, Fla.  Stat.  It is undisputed that Plaintiffs property was in a state of distress.  The common areas were in disrepair and littered with garbage.  In addition, several of the units were used as crack houses and the property was plagued by crime.


3                        Plaintiff's property, Miramar Gardens, was one of two developments that were the subject of the forgoing lawsuit.  The other development was known as Vista Verde.  Miami-Dade County extended additional loans to Vista Verde, but those transactions are not relevant to this case.

per month (in lieu of the $27 monthly fee) was sought by the Receiver.  This monthly fee was approved by the Circuit Court and became effective in April 1998, retroactive to March 1, 1998.  After a period of time during which certain repairs and other actions were taken to remedy the problems that gave rise to the Receivership, the Receiver was discharged on December 21, 2000 and the Circuit Court entered an order approving the final accounting.  No appeal was taken from the final orders entered by the Circuit Court in this previously litigated matter.

Events After Discharge of Receiver

On January 16, 2001, Miami-Dade County entered into a "Forgiveness Agreement" with the Plaintiff.  Pursuant to the Forgiveness Agreement, the Plaintiff would be absolved of its obligation to pay back the $249,000 loan "if [Plaintiff] has complied with all the conditions and requirements [contained in the Agreement]" including "making] every effort to Maintain a collection ratio [of maintenance assessments] that is forty (40%) per-cent or better (4).

The Forgiveness Agreement also required: that the new Board of Directors conduct regular board meetings; "participate in training on subjects related to the management and operation of a homeowners association"; and "Comply with all requirements, duties and obligations outlined in but not limited to: the Declaration of Covenants, Conditions and Restrictions, the Articles of Incorporation; the Bylaws; the

(4)  The Forgiveness Agreement did not specify a monthly assessment amount per home.  However,

Plaintiff’s witness, Patrick Brown, Director of the Public Housing Division for Miami-Dade County, testified that the County would not have agreed to forgive the debt if the Plaintiff did not impose a fee higher than the $27 cap referred to in the Declarations.  Nevertheless, as will become apparent below, Plaintiff failed to follow the appropriate procedures to implement a fee in excess of the maximum allowed by the Declarations after the Receiver was discharged.

State of Florida statutes and regulations governing homeowners associations; and federal taxation laws." (Plaintiff's Exhibit 8, Section IV) (5)

The Association

The Forgiveness Agreement acknowledged that a Board of Directors had already been "duly elected" in September of 2000, permitting the homeowners to maintain the 6

property (6).  According to Plaintiff, the "Board of Directors" determined to continue assessing the $35 per month fees to every homeowner.  This second set of monthly assessments has allegedly been in place since January 2001, after the Receiver was discharged, until the present and shall be referred to as "the Additional Assessments".

Remedies Sought in This Case

Plaintiff first seeks recovery of the fees and assessments levied during the period of the Receivership.  This first portion of the maintenance fees sought will be referred to as "The Circuit Court Special Assessments".  The total amount sought to be recovered for this item is 34 months at $35 per month plus, attorney's fees, costs and interest.

In addition, Plaintiff seeks recovery of the fees and assessments levied after the

Receivership was terminated (7).  It is undisputed that the Defendants never paid any of

(5)        Miami-Dade County had previously filed an answer admitting to an interest in this case, but stating that it was without knowledge as to the other allegations in the complaint.  Other than through the testimony of Mr. Brown, the County did not formally appear at trial.

(6)           As will be explained infra, however, the evidence presented in this matter casts extreme doubt on whether a Board was elected in accordance with the established Declaration of Covenants.

(7)              Plaintiff, through the testimony of Mr. Robert Dugger on behalf of the management company, submits that the amount due for the Additional Assessments is the number of months for the period not paid at  $35 per month.  Plaintiff maintains that $35 per month is the correct amount because the Circuit Court order that imposed the Special Assessment was carried forward 'by implication' after the Receiver was discharged at the end of 2000.  The Court finds that Plaintiffs contention is not supported by either the Circuit Court Orders that were rendered in the previous litigation nor the documentation and evidence submitted in this case.  Thus, because the Plaintiff Homeowner's Association was required to follow the Declarations in imposing any further assessments, the appropriate amount that could be charged was $27 per month.

the $35 per month fees to Plaintiff. (8) The amount in dispute for this period of time equals $1,431.  The Defendants contest the propriety of both the Circuit Court Special Assessments and the Additional Assessments.

Preliminary Procedural Matters Concerning this Case

A pre-trial conference was held in this case on January 4, 2002.  At that hearing, Defendant, Taimira Leiva appeared.  According to a return of service in the file, Defendant, Orlando Leiva was served through substitute service on Ms. Leiva at the residence which is the subject of this foreclosure action.  Ms. Leiva, however, informed the Court that Mr. Leiva no longer lived at the property and was not living on the property at the time of service.  On December 13, 2004, since Mr. Leiva was not present and he had not objected to the service, the Court entered a default against Defendant Orlando Leiva.  However, on January 25, 2005, Mr. Leiva filed a pro se answer informing the Court that he is a co-owner of the property but does not live at the premises.  Mr. Leiva expressed concern that he had never been served with the subject lawsuit despite the fact that Plaintiff knew he was still an owner. (9)

(8)       During the pendency of this lawsuit, Defendant agreed to deposit $35 per month into the trust account of Plaintiffs attorney.  At the time of the first part of this trial, $2,670 was deposited with Plaintiff's attorney.


(9)                      Mr. Leiva was noticed to appear at the mediation scheduled for February 4, 2005 and he complied.  The mediation resulted in an impasse.  Mr. Leiva also appeared and testified at trial.  Accordingly, the Court has considered Defendant's letter as a request for the default to be set aside and permit him to be a part of this action.  The Court grants Defendant's motion to vacate the default, finds that Mr. Leiva has accepted service by filing an answer and holds that Mr. Leiva is therefore bound by any judgment set forth herein as a party Defendant.


The Circuit Court Special Assessments

As to the Circuit Court Special Assessments, this Court finds that Defendants, Taimira Leiva and Orlando Luis Leiva, owe Plaintiff the $35 per month from March 1998 through December 2000 based upon the principles of resjudicata.  See Gomez-Ortega v. Dorten, Inc., 670 So.2d 1107 (Fla. 3d DCA 1996).  The Circuit Court considered the condition of the property and determined to assess the homeowners for the above stated period.  In addition, there was no appeal taken of the Circuit Court's rulings.(10) Accordingly, this Court finds that Defendants are liable for the Circuit Court Special Assessments in the amount of $1,610. (11)

The Additional Assessments

The Defendants raise several affirmative defenses in opposition to Plaintiffs claim that they owe any assessments which were imposed after the Receiver's discharge.  Among the defenses, the Defendants claimed that Plaintiff failed to comply with notice and meeting requirements pursuant to the Plaintiffs own Declarations of Covenants; that the Plaintiff has exceeded the maximum amount of annual

(10)         Ms. Leiva argues that the homeowners never received of the Circuit Court Special Assessments and that the Receiver was without authority to impose such an assessment.  Ms. Leiva also asserts that she was never provided the opportunity to present her objections in the Circuit Court case.  The Circuit Court, however, did hold a hearing and by Order dated, September 22, 1998, granted a Motion to Intervene filed on behalf of a group of homeowners of which Ms. Leiva was a member.  After the Court's Order discharging the Receiver, the Intervenors filed a motion for rehearing claiming that they did not receive notice of the hearing on the Receiver's Motion to Discharge.  The County objected to the Intervenors Motion for Rehearing which was eventually was denied.  Subsequently, Ms. Leiva (then known as Taimira Perez) filed a pro se motion seeking to reopen the proceedings.  That motion was also denied.

(11)     The Court further finds that because the intervenor action was granted in the Circuit Court case, Defendants herein were parties to that lawsuit as members of the homeowner's association.  See Gomez-Ortecia, 670 So.2d at 11 09 ("ones in privity with actual parties, participants in the action having an interest but not technically parties, and persons virtually, though not actually, represented by the parties of record.")

assessments; that Plaintiff's board of directors unlawfully delegated their duties to the management company; that the Defendants are entitled to an accounting; that Plaintiff's claims are barred by estoppel, waiver and laches; that Plaintiff's action constitutes selective enforcement; that Plaintiffs charges are usurious; and that Plaintiff has unclean hands. (12)

In cases such as that presented here, "[o]nce a defendant makes a specific denial of a particular element of a claim, the plaintiff has the burden of proving its entitlement to judgment. ... in order to prevail on a suit to foreclose an assessment lien, a homeowner's association is obligated to show that it has properly levied the assessment in accordance with the ... declaration ... and by-laws when the defendant challenges the lack of compliance..." McKenna v. Camino Real Village Association, Inc., 877 So.2d 900, 902 (Fla. 4 th DCA 2004) citing Berg v. Bridle Path Homeowners Ass'n, 809 So.2d 32, 33 (Fla. 4th DCA 2002).  Here, this Court held a lengthy trial over two separate days and heard from many witnesses.  After carefully considering the evidence, the Court finds that the Plaintiff failed to establish that it properly adopted or imposed the assessments at issue.  In so doing, the Court finds that several of Defendant's defenses are meritorious.

First, the Plaintiff was unable to demonstrate that, subsequent to the Receivers discharge, it conducted a meeting or meetings, in accordance with the procedures mandated by the Declaration of Covenants and Restrictions, By-Laws and Articles of

(12)              Defendant's answer also contained a Third-Party Complaint against The Timberlake Group as management company for Plaintiffs association for an alleged violation of the Florida Consumer Collection Practices Act.  This Third-Party Complaint was not served and is, therefore, not at issue.

Incorporation ("Declarations").  See Plaintiffs Exhibit 2, Art.  IV, Sec. 4 and 6 and Defendant's Exhibit D.

Second, Art.  IV, sec. 3 (c) of the Declarations prohibits assessments in excess of $27.32 without a vote of the membership.  Plaintiff's continued assessments of $35 per month could not be imposed, therefore, unless notices were properly sent and a vote occurred.  Here, the Plaintiff also failed to demonstrate that these procedures were followed.

Third, the Defendants more than established their defense that the Plaintiff has unclean hands. (13) The testimony of various witnesses manifestly demonstrated that the Plaintiff Association is merely a sham entity and that all decisions concerning its governance and the imposition of any assessment were made solely and exclusively by the current or previous management company, Community Association Management Consultants Group d/b/a Timberlake Group, Inc., and not the Board of Directors. Moreover, these decisions were without regard to the interests of the homeowners or Declarations. (14)

In support of this finding, the Court notes the following evidence:
(1) The current President of Plaintiff's Homeowners Association, Claudette Brinson, could not remember who the other members of the

(13) To the extent that other defenses were raised, but not discussed herein, the Court has considered those defenses and rejects same.

(14)        On December 21, 2000, the day that the Circuit Court issued its Order discharging the Receive "Miramar Gardens Townhouse Homeowners Association, Inc." allegedly entered into a Management Agreement with The Timberlake Group, Inc. (Defendants Exhibit L).  The Agreement proffered at trial, however, and entered into evidence was incomplete, as it does not contain a signature page.  Therefore the evidence does not establish that this Management Agreement is valid.  In addition, there is no evidence that the Plaintiff Association agreed to the substitution or assignment of the Management Agreement to Community Association Management Consultants Group.  Indeed, how the present management company came to hold its current position was never adequately explained.

Board of Directors were or wrongly identified those board members.  She also did not know whether the Board Members were delinquent in their maintenance payments, which would prevent them from serving on the Board.  In sum, Ms. Brinson's lack of knowledge placed her credibility in doubt.

(2)         During the 2004 election, witness Hugo Ruiz ran for the position of Board Member.  However, Mr. Ruiz was informed by Robert Dugger, on behalf of the management company, that he could not run for office, as Mr. Ruiz was allegedly in default on his maintenance payments.(15) Mr. Ruiz disagreed, but was still prevented from holding office.  Mr. Dugger later admitted that he made a mistake and, in fact, Mr. Ruiz was in good standing on his payments.  As a result of Mr. Dugger's actions, Mr. Ruiz could not take his place, on the Board of Directors.  The Court found Mr. Ruiz's testimony to be credible.

(3)          Yet another witness, Nelson Rodriguez, was elected to be a Board Member in 2001 or 2002.  He was later informed by Ms. Brinson that he was removed from the Board for missing meetings. As a result, Mr. Rodriguez believed he was no longer a Board Member and did not participate in any meetings.  Nevertheless in 2003, Mr. Rodriguez's name was listed as a Board Member on the election notice.  That

(15)               Mr. Dugger testified that he is merely an employee of the management company and that he does not know the identity of the true owner of Community Management Consultants Group.  Similarly, Mr. Dugger maintains that he is but an agent of the Plaintiff Association.  However, the evidence presented demonstrated that Mr. Dugger and his wife, Rachael Dugger make all the major decisions on behalf of, the management company and the Plaintiff's Homeowner's Association.  The credibility of their testimony, therefore, is questionable.

notice was not received by Mr. Rodriguez and he did not ask to be on the Board in 2003.  According to Ms. Brinson, Mr. Rodriguez was still a Board Member at the time of this trial, despite the fact that he is apparently in arrears in his maintenance payments, missed many meetings and did not knowingly run for election in 2003.  Indeed, Mr. Dugger testified that even though Mr. Rodriguez is not qualified to be a Board Member, he could not be removed without a resolution by the Board.  The Court found Mr. Rodriguez's testimony to be credible.


(4)       Another witness, Teresa Tejera, testified that she was a Board Member in 

2000 or 2001 and that during that election; people were elected to the Board even though they were not present at the meeting.  Yet, when Ms. Tejera wanted to run for election in 2004, she was informed by Mr. Dugger or Ms. Brinson that she had to be present at the election meeting or she could not hold office.  This information is also in complete contradiction to the fact that Mr. Rodriguez was on the ballot without his presence being required and, indeed, even without his knowledge.  As a result of the misinformation. provided by Ms. Brinson or Mr. Dugger, Ms. Tejera did not run for election.  The Court found Ms. Tejera's testimony to be credible.


(5)       The Declarations require annual I elections and notice of meetings to be given to homeowners.  The evidence demonstrated that there were many irregularities and inconsistencies in . holding elections..-. Essentially, Plaintiff failed to show by any competent evidence that elections were properly held or that notices were sent to th homeowners in accordance with the Declarations.  Indeed, Plaintiff's own witnesses presented conflicting testimony as to whether an election had yet been scheduled for the year 2005.  Mr. Dugger stated that the election was noticed for July 2005.  However, Ms. Brinson, the President of the Association, stated that an election had not yet been scheduled and that the management company informs the Board of the election dates.  Ms. Brinson also acknowledged that all notices are sent by the management company.

(6)            The lack of propriety of these elections is also demonstrated by minutes purportedly taken at meetings dated September 14, 2000 and March 6, 2003.  Both sets of minutes are identical, except for the "call to order' time. (Defendants' exhibits Q and R).  The authenticity of these minutes is especially crucial because the County based its Forgiveness Agreement, in part, upon the representation that there had been a "duly elected" Board in September of, 2000. (P's Exhibit 8, p. 2).       After completely contradicting her testimony as to which minutes were accurate, Ms. Brinson ultimately testified that the March 6, 2003 minutes (Defendant's Exhibit Q) were incorrect and were actually reflected in Defendant's Exhibit S. However, no one could explain why Defendant's Exhibit Q exists.  Moreover, Ms. Brinson's knowledge of any of the facts was either minimal., non-existent or conflicting.  Therefore, the validity of the crucial September 14, 2000 minutes is in serious doubt.  Thus, the record does not contain any credible evidence that a proper election was conducted in September 2000 or that there was any notice to the homeowners of such an election.

(7)         Mrs. Rachel Dugger testified, that she works for Mr. Dugger in the capacity of personal assistant and wife, not for the management company.  However,.  Mrs. Dugger had much more knowledge about the identity of the Board Members than any other witness. Mrs. Dugger attends and writes notes at the meetings.  She is also permitted to speak during the meetings.  Mr. Dugger testified that the Board Members do not actually do any work, but rather, all duties are delegated to the management company.  Indeed, the Board's own President has no idea who her Board Members are or what procedures are being followed.

In sum, the Plaintiff has failed to demonstrate that there was a properly held election in September 2000 naming a President and Board of Directors.  In addition, the Plaintiff has failed to show either that there was a notice sent to the homeowners or a subsequent meeting held to increase the amount of. the monthly assessments from $27.32 which is the approved amount in the Declaration of Covenants.  See generally, Star Lakes Estates Assn, Inc. v. Auerbach, 656 So.2d 271 (Fla. 3rdDCA 1995).  That amount could not be increased without a vote of the homeowners.(16)

(16)                  There are minutes from a Board meeting held on January 16, 2001 wherein Mrs. Dugger, then called Rachel Suarez, chaired the meeting on behalf of the Board members.  The minutes state that two members of the Board voted to execute the Dade County Repayment Agreement, but there is no mention of the amount to be assessed.  Nor is there any notation of a vote being taken by the homeowners to increase the assessment amount. (Plaintiff's Exhibit 11).

hold a meeting to increase the monthly assessment.  Furthermore, the manner in which the Board was constituted is questionable, since -there was no competent testimony from anyone identifying the September 2000 minutes.  Finally, it is clear that the Association is merely a sham which does not exercise any authority and acts solely at the behest of the management company.  Accordingly, Plaintiff has unclean hands in this lawsuit.

It is well-settled that unclean hands is a valid defense to a foreclosure action. See Carroll & Assoc., P.A. v. Galindo, 864 So.2d 24, 30 (Fla. 3d DCA 2003) citing Limner v. Country Pines Condo.  Assn, Inc., 709 So.2d 154 (Fla. 4 th -DCA 1998) (confirming that the unclean hands doctrine applies to the equitable remedy of foreclosure); Knight Energy Servs., Inc. v. Amoco Ofl Co.,- 660 So.2d 786, 789 (Fla. 4 th DCA 1995) (holding that a "foreclosure action is an equitable proceeding which may be denied if the holder of the note comes to the court with unclean hands or the foreclosure would be unconscionable"); Lamb v. Pike, 659 So.2d 1385, 1387 (Fla. 3d DCA 1995) (stating that unclean hands is a valid equitable defense to a foreclosure action); Sponder v. Equity Capital Co., 248 So.2d 251, 252, I Fla. 3d DCA 1971) (finding that a junior mortgagee with unclean hands should be denied the equitable relief of foreclosure).

In this case, the Plaintiff's conduct has resulted in injury to Mr. Leiva and Ms. Leiva, as they have been subjected to a fee put into place by the management company without regard to the Declarations or any of its requirements.  In addition, Plaintiff has filed a lis pendens on the property encumbering it from sale.  The Court finds that Plaintiff has failed to meet its burden of proof that it properly implemented the Additional Assessments and, accordingly, that portion of the claim is determined in favor of Defendants, Taimira Leiva and Orlando Leiva.


 Because Defendant has proven its unclean hands defense, Plaintiff s request to foreclose on the subject property is DENIED, as are all requests to award any costs and fees in pursuing that portion of the claim.  See generally, Castigliano v. O'Connor, 911 So.2d 145 (Fla. 3rd DCA 2005) (equitable remedy inappropriate where legal requirements do not exist to permit litigant to invoke relief requested).

Accordingly, FINAL JUDGMENT is entered in favor of Plaintiff, MIRAMAR GARDENS TOWNHOUSE HOMEOWNERS ASSOCIATION, INC. for part of the claim sought in the amount of $1,610, plus court costs, interest and aftorney's fees limited to pursuing that amount of the recovery.  Similarly, the lis pendens as it relates to any of the Additional Assessments is dissolved.  Plaintiffs counsel shall disburse all funds held in the trust account in excess of this judgment to Defendant, Taimira Leiva.

DONE AND ORDERED at North Miami, Florida on January 13, 2006.

            SIGNATURE               .





JAN 13, 2006