Court Opinion

ID: 1040645
Source: CourtListenerOpinion
Date Created: 2013-09-12 19:20:01.599321+00
Date Added: 2024-06-11T12:49:47.332241
License: Public Domain

Case: 12-11141      Date Filed: 09/12/2013     Page: 1 of 7

                                                                  [DO NOT PUBLISH]

                 IN THE UNITED STATES COURT OF APPEALS

                          FOR THE ELEVENTH CIRCUIT
                            ________________________

                                   No. 12-11141
                             ________________________

                     D.C. Docket No. 8:11-cv-01100-JDW-TGW

MICHAEL McGEE, et al.,

                                                                   Plaintiffs-Appellants,

                                          versus

COMMONWEALTH LAND TITLE INSURANCE COMPANY, et al.,

                                                                  Defendants-Appellees.

                           __________________________

                     Appeal from the United States District Court
                         for the Middle District of Florida
                          _________________________

                                 (September 12, 2013)

Before PRYOR, JORDAN, and KLEINFELD, * Circuit Judges.

PER CURIAM:

*
  Honorable Andrew Kleinfeld, United States Circuit Judge for the Ninth Circuit, sitting by
designation.
              Case: 12-11141     Date Filed: 09/12/2013   Page: 2 of 7

      The plaintiffs, a group of individuals who purchased units in an unsuccessful

condominium development project, filed suit against Commonwealth Land Title

Insurance Company alleging they were entitled to collect on their title insurance

policy. The district court dismissed the complaint for failure to state a claim, and

the plaintiffs filed this timely appeal. Following oral argument, and review of the

record and the parties’ briefs, we affirm.

                                             I.

      This case arises out of a real estate deal gone bad. On November 17, 2005, a

real estate developer filed a 60-page “Declaration of Sarasota Cay Club

Condominium” with the clerk of court for Manatee County, Florida. The

declaration provided a detailed description of various aspects of the Sarasota Cay

Club condominium development, such as rules for buying insurance premiums, the

required method of assessment collection, and the portions of the Club defined as

“Common Elements.” A map and further details, attached to the declaration as an

exhibit, boasted of elegant floor plans, a large swimming pool, and a “no children”

policy.

      Sometime after the declaration was filed, the plaintiffs individually

purchased a number of units in the condominium development project. The

development, however, was never completed, and the plaintiffs did not receive the

units they had bought.

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       On May 18, 2011, the plaintiffs filed suit against approximately 70

defendants, alleging that they were defrauded by nearly every person and entity

that was involved in their real estate transaction. The district court severed the

complaint into seven actions.

       This appeal pertains to the plaintiffs’ suit against Commonwealth, the

company from which the plaintiffs purchased title insurance. The plaintiffs alleged

in their complaint that they received defective title to their purchased Sarasota Cay

Club units, entitling them to collect on their title policy, because the 60-page

Sarasota Cay Club declaration was defective and therefore legally did not create a

condominium development. 1

       As noted, the district court granted Commonwealth’s motion to dismiss

pursuant to Rule 12(b)(6). The court concluded that under Fla. Stat. § 718.110(10)

(2010), a declaration is effective to create a condominium, despite any fatal

defects, so long as no action is brought within three years from the recording of the

declaration to determine whether it complies with the mandatory requirements for

the formation of a condominium. Noting that the plaintiffs’ suit fell well outside of

that three-year window, the district court reasoned the declaration must have

1
  The plaintiffs alleged the declaration was defective because there were no common elements
and because the declaration’s “joinder,” which involved the owner of the land on which the
development would be built conveying his rights for purposes of establishing the condominium,
was invalid.
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                Case: 12-11141        Date Filed: 09/12/2013       Page: 4 of 7

created a condominium under Florida law. After dismissal, this timely appeal

ensued.

                                               II.

       “We review de novo the district court’s grant of a motion to dismiss for

failure to state a claim under Fed. R. Civ. P. 12(b)(6), accepting the allegations in

the complaint as true and construing them in the light most favorable to the

plaintiff.” Timson v. Sampson, 518 F.3d 870, 872 (11th Cir. 2008). We review

“questions of statutory interpretation de novo.” United States v. Anton, 546 F.3d

1355, 1357 (11th Cir. 2008). “As a federal court sitting in diversity jurisdiction, we

apply the substantive law of the forum state, in this case Florida, alongside federal

procedural law.” Horowitch v. Diamond Aircraft Indus., Inc., 645 F.3d 1254, 1257

(11th Cir. 2011).

                                               III.

       We conclude that the district court properly granted Commonwealth’s

motion to dismiss. Simply stated, Fla. Stat. § 718.110(10) (2010) bars the plaintiffs

from arguing that purported errors in the Sarasota Cay Club declaration prevented

the document from creating a condominium development. 2

2
  We expressly limit our holding to the version of § 718.110(10) in existence at the time the
plaintiffs filed their action. In 2013, the Florida Legislature materially amended the statute. Our
decision does not reach any of the plaintiffs’ other claims which are not before us. We only hold
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                 Case: 12-11141        Date Filed: 09/12/2013        Page: 5 of 7

       Under Florida law, a condominium is a creature of statute, and is created by

recording a condominium declaration in the public records of the county where the

land is located. See Fla. Stat. § 718.104(2) (2002). See also Tranquil Harbour

Dev., LLC v. BBT, LLC, 79 So. 3d 84, 87 (Fla. 1st DCA 2011). Although §

718.104(4) contains an explicit list of what a declaration “must” contain, §

718.110(10) provides a period of repose for challenges to a defective declaration.

Under § 718.110(10), if an action to determine whether a declaration complies

with the mandatory requirements for the formation of a condominium is not

brought within three years from when the declaration was recorded, the declaration

will generally create a condominium:

       If an action to determine whether the declaration or another
       condominium document complies with the mandatory requirements
       for the formation of a condominium is not brought within 3 years of
       the recording of the declaration, the declaration and other documents
       shall be effective under this chapter to create a condominium, as of
       the date the declaration was recorded, whether or not the documents
       substantially comply with the mandatory requirements of law.

In our view, the plain language of § 718.110(10) severely limits the plaintiffs’

argument that alleged defects in the Sarasota Cay Club declaration precluded the

document from creating a condominium development. See Daniels v. Fla. Dept. of

Health, 898 So. 2d 61, 64 (Fla. 2005) (“When the statute is clear and unambiguous

that, as far as the plaintiffs’ claims against their title insurance company are concerned, the claim
that the declaration failed to create a condominium development is barred.
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. . . the statute’s plain and ordinary meaning must control, unless this leads to an

unreasonable result or a result clearly contrary to legislative intent.”).

       We need not decide the full sweep of this provision, nor must we determine

whether an unchallenged declaration could make a mere pile of bricks a

condominium. We conclude only that, at the very least, a condominium is created

as a matter of Florida law where, as here, a declaration includes statutorily

recognized common elements,3 and the declaration is not challenged within the

three year period prescribed by § 718.110(10). Cf. Daytona Dev. Corp. v.

Bergquist, 308 So. 2d 548, 550 (Fla. 2d DCA 1975) (“[O]ne must reach the

inescapable conclusion that all condominium units have an undivided share of the

common elements and neither can exist separately from the other.”). 4

                                              IV.

3
  As the district court properly explained, common elements are defined under Fla. Stat. §
718.108(1) as, among other things, “[a]n easement of support in every portion of a unit which
contributes to the support of a building,” and the Sarasota Cay Club declaration adopted this
definition in defining its own common elements.
4
   The plaintiffs repeatedly rely in their briefs on an email from the Division of Florida
Condominiums, Timeshares, and Mobile Homes, a Florida administrative agency, concluding
that a Sarasota Cay Club declaration failed to include common elements. The email, however,
states that the declaration the Division reviewed was in existence as of June 13, 2005, whereas
the declaration at issue here was first signed in July 21, 2005, and was not even filed until
November 17, 2005. The Division also asserted in its email that the June 2005 declaration
included language stating that “there are NO common elements,” language which is not in the
declaration at issue here. Nevertheless, the plaintiffs contend we should “assume” that the
version examined by the Division was a “draft” of the declaration at issue here. See Appellant’s
Br. at 29 n.3. We need not assume any such thing; the documents are different, and the
declaration filed on appeal very clearly includes common elements.

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The district court’s decision is affirmed.

AFFIRMED.

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