Case Name: OCEAN TRAIL UNIT OWNERS ASSOCIATION, INC., Petitioner, v. States MEAD and William Brister, as representatives of a class of unit owners at the Ocean Trail Condominiums, Respondents
Court: Florida Supreme Court
Jurisdiction: Florida
Decision Date: 1994-11-10
Citations: 650 So. 2d 4
Docket Number: No. 82083
Parties: OCEAN TRAIL UNIT OWNERS ASSOCIATION, INC., Petitioner, v. States MEAD and William Brister, as representatives of a class of unit owners at the Ocean Trail Condominiums, Respondents.
Judges: GRIMES, C.J., and OVERTON, SHAW and HARDING, JJ., and McDONALD, Senior Justice, concur.
Reporter: Southern Reporter, Second Series
Volume: 650
Pages: 4–9

Head Matter:
OCEAN TRAIL UNIT OWNERS ASSOCIATION, INC., Petitioner, v. States MEAD and William Brister, as representatives of a class of unit owners at the Ocean Trail Condominiums, Respondents.
No. 82083.
Supreme Court of Florida.
Nov. 10, 1994.
Rehearing Denied Feb. 17, 1995.
Daniel S. Rosenbaum of Becker & Polia-koff, P.A., West Palm Beach, for petitioner.
David L. Gorman and Peter S. Van Keuren of David L. Gorman, P.A., North Palm Beach, for respondents.

Opinion:
WELLS, Justice.
We have for review Mead v. Ocean Trail Unit Owners Association, Inc., 638 So.2d 963 (Fla. 4th DCA 1993), in which the Fourth District Court of Appeal certified the following question as being of great public importance:
WHETHER A CONDOMINIUM ASSOCIATION CAN ENFORCE A SPECIAL ASSESSMENT IMPOSED TO PAY JUDGMENTS, ATTORNEY'S FEES AND COSTS INCURRED IN CONNECTION WITH A LAWSUIT BROUGHT BY UNIT OWNERS AGAINST THE ASSOCIATION IN WHICH THE ASSOCIATION'S PURCHASE OF REAL PROPERTY WAS INVALIDATED AS AN UNAUTHORIZED ACT AND SUBSEQUENTLY RESCINDED.
We have jurisdiction pursuant to article V, section 3(b)(4), Florida Constitution. We answer the certified question "yes."
Having accepted jurisdiction to answer the certified question, we may review the entire record for error. Lawrence v. Florida E. Coast Ry., 346 So.2d 1012 (Fla.1977). Based on our review, we conclude that the district court erred in reversing the final judgment entered by the circuit court. We therefore quash the decision of the Fourth District and remand to the district court with instructions to affirm the final judgment.
The facts giving rise to this action involve a purchase of property by Ocean Trail Unit Owners Association, Inc. (the Association), which the Fourth District held invalid as beyond the powers of the Association's board of directors. See Ocean Trail Unit Owners Association, Inc. v. Levy, 489 So.2d 103 (Fla. 4th DCA 1986). The board thereafter filed a claim against its insurance carrier and imposed a $500 special assessment upon the unit owners to cover the costs associated with the invalid purchase. Specifically, the funds obtained through the special assessment were used in part to pay the $194,-079.37 judgment for attorney fees, which was rendered against the Association in favor of the attorney representing the 150 unit owners who successfully opposed the purchase. The remaining special assessment funds were used to pay judgments rendered against the Association and in favor of unit owners who sued to recover the original $1,500 assessment, which the Association used to make the invalid purchase.
Several months after the special assessment was imposed, the Association settled its claim against its insurance carrier. The Association also obtained $630,000 as a result of a rescission action arising from the invalid purchase. These funds, in addition to the funds obtained from the special assessment, were used to reimburse all unit owners for the original purchase assessment.
Prior to the full reimbursement, however, the respondents brought suit as representatives of the unit owners for a declaratory judgment that the $500 assessment was unauthorized. The respondents also challenged the amount of the insurance settlement and disbursement of the proceeds, claiming that the selective disbursement of the proceeds to only those unit owners who sued the Association for a refund of the purchase assessment constituted a breach of the Association's fiduciary duty.
In evaluating the propriety of the assessment, the district court concluded that assessments used to pay expenses are proper only when the expenses are incurred in carrying out the authorized powers of an association. The court reasoned that a board of directors cannot be unauthorized to do an act and, at the same time, authorized to impose assessments to pay for the consequences of the unauthorized act. Mead, 638 So.2d at 964. Because the judgments were incurred from the litigation attributable to the unauthorized purchase of the property, the district court determined that these expenses were not "properly incurred by the association for the condominium." Id. (quoting § 718.103(8), Fla.Stat. (1991)). The district court's decision erroneously ignores that the special assessments were collected in order to pay valid judgments against the Association.
The circuit court, in its final judgment, found that the Association's board of directors reasonably believed that this special assessment was necessary to pay these judgments and protect the Association's common properties and facilities from execution and levy. Accordingly, the trial court concluded, and we agree, that the judgments were a common expense for which the Association had the authority to impose an assessment.
Every condominium in Florida is created pursuant to chapter 718, Florida Statutes. § 718.104, Fla.Stat. (1987). A condominium is created by recording a declaration of condominium in the public records of the county where the condominium is to be located. § 718.104(2), Fla.Stat. (1987). A condominium association operates the condominium pursuant to the association's bylaws, which must be included as an exhibit in the recorded declaration. § 718.112(l)(a), Fla.Stat. (1987).
A condominium association has the power to make and collect assessments, and to lease, maintain, repair, and replace the common elements. § 718.111(4), Fla.Stat. (1987). Specifically, the association can make assessments against unit owners to pay for common expenses. § 718.115(2), Fla.Stat. (1987). Common expenses of the association include "the expenses of the operation, maintenance, repair, or replacement of the common elements, costs of carrying out the powers and duties of the association, and any other expense designated as common expense by this chapter, the declaration, the documents creating the condominium, or the bylaws." § 718.115(1), Fla.Stat. (1987).
Condominium associations may also sue or be sued with respect to the exercise or non-exercise of their powers. § 718.111(3), Fla. Stat. (1987). This process necessarily contemplates that judgments may be entered against the association. A judgment against an association renders the property of the association subject to execution and levy.
In the condominium form of ownership, protection of the common elements is vital. Each unit owner owns a proportionate undivided share of the common elements appurtenant to the unit. § 718.103(10), (24), Fla. Stat. (1987). If assessments cannot be enforced to pay judgments which have been entered against the association and which can be executed against the association property, the condominium could be destroyed, to the detriment of all the owners.
The Association undoubtedly recognized this problem when it included section 6.5 in its declaration of condominium. Section 6.5 provides that any lien upon any portion of the common areas shall be paid by the association as a common expense. The provision is clearly authorized by chapter 718, which provides a condominium association with the powers to manage and operate the condominium property, including the power to maintain the common elements.
The district court's decision, which approves nonpayment of assessments by owners, leaves the Association property vulnera-' ble to levy and execution of the judgments. The court essentially evaluated the judgments against the Association and decided whether an assessment to pay the judgments could be enforced on the basis of its evaluation of the reasons for the judgments. However, it is the existence of the judgments that imperils the Association property. The judgments' existence alone, therefore, authorizes the assessment and necessitates its enforcement.
As set forth in the final judgment entered by the trial court, the reason why the judgments were entered should not determine whether the assessments can be enforced. Rather, 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 with the declaration of condominium and bylaws of the association, which are authorized by chapter 718, Florida Statutes.
The unit owners elect the officers and directors of the association, and those officers and directors have a fiduciary duty to the unit owners. § 718.111(l)(a), Fla.Stat. (1987). Accordingly, if the officers or directors 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. The owners' remedies do not include failing to pay an assessment to protect against a judgment which has been lawfully entered against the association.
Scudder v. Greenbriar C Condominium Association, Inc., 566 So.2d 359 (Fla. 4th DCA 1990), and Rothenberg v. Plymouth # 5 Condominium Association, 511 So.2d 651 (Fla. 4th DCA), review denied, 518 So.2d 1277 (Fla.1987), on which the unit owners and the Fourth District rely, are clearly distinguishable. The courts in these cases merely determined whether a particular expenditure was proper. The decisions did not involve lawful judgments rendered against the associations for unlawful expenditures and therefore do not compel the decision rendered by the Fourth District in this case.
The trial court's final judgment was also correct with respect to the remaining issues in this case. The insurance settlement and disbursement of proceeds did not require court approval. The settlement was within the discretion of the officers and board of directors acting for the association in managing and operating the condominium property.
It is so ordered.
GRIMES, C.J., and OVERTON, SHAW and HARDING, JJ., and McDONALD, Senior Justice, concur.
KOGAN, J., concurs in part and dissents in part with an opinion.
. Formerly section 718.103(7), Florida Statutes (1987).
. The 1987 version of the Condominium Act applies in this case because the special assessment was imposed in March 1988.