Court Opinion

ID: 9371103
Source: CourtListenerOpinion
Date Created: 2023-02-15 16:04:17.012309+00
Date Added: 2024-06-11T17:16:25.138950
License: Public Domain

Third District Court of Appeal
                               State of Florida

                       Opinion filed February 15, 2023.
       Not final until disposition of timely filed motion for rehearing.

                            ________________

                             No. 3D21-1963
                       Lower Tribunal No. 19-12993
                          ________________

                    Robert G. Risman, Trustee, et al.,
                               Appellants,

                                     vs.

 Seaside Villas Condominium Association, Inc. (Fisher Island), et al.,
                           Appellees.

     An Appeal from the Circuit Court for Miami-Dade County, Barbara
Areces, Judge.

    Stroock & Stroock & Lavan, LLP, and Paul A. Shelowitz and Gabriel
Mandler; Joel S. Perwin, P.A., and Joel S. Perwin, for appellants.

     Kula & Associates, P.A., Elliot B. Kula, W. Aaron Daniel and William
D. Mueller; Meland | Budwick, P.A., and Eric W. Ostroff, for appellee 159
Fisher Island Holdings, LLC; Cole, Scott & Kissane, P.A., and Scott A. Cole
and John Cody German, for appellee Seaside Villas Condominium
Association, Inc. (Fisher Island).

Before SCALES, MILLER and BOKOR, JJ.
      SCALES, J.

      Appellants, 1 plaintiffs below, appeal the trial court’s September 14,

2021 final summary judgment disposing of Appellants’ claims alleging that

(i) demolition and significant alterations to a condominium unit owned by

appellee and defendant 159 Fisher Island Holdings, LLC (“Holdings”), and

(ii) a lease of common elements and/or limited common elements to

Holdings – all of which were approved by the Board of Directors of appellee

and defendant Seaside Villas Condominium Association (“Association”) –

required amendment to the declaration of condominium (the “Declaration”).

Appellants’ operative third amended complaint also alleges that the Board of

Directors vote on the lease was invalid because one of the Board members

who voted to approve the lease had an undisclosed conflict of interest, and

therefore the lease was adopted without a quorum.

      Because the trial court correctly construed the relevant portion of the

Declaration giving Association the last word in interpreting Declaration

provisions, we affirm the trial court’s final summary judgment for Holdings on

Appellants’ claim that Holdings’s demolition and new construction plan

required an amendment to the Declaration. We are compelled, however, to

1
  Appellants are Robert G. Risman, trustee of William B. Risman Trust, and
Betty Rae Sherman, representative of the Estate of George Sherman
(together “Appellants”).

                                      2
reverse that portion of the final summary judgment on Appellants’ conflict of

interest claim because, contrary to the mandates of Florida’s new summary

judgment rule, neither the trial court’s order, nor any statement by the trial

court on the record, discloses the reason the trial court granted Holdings’s

summary judgment motion as it related to the alleged conflict of interest

issue.2

      I. Relevant Background

      In 2018, Holdings purchased a condominium building (“Building 9”) on

Fisher Island, Miami Beach. Building 9 was one of the nine buildings of the

Association. With the approval of Association’s Board of Directors, Holdings

demolished Building 9 with the intention of constructing only a large, single-

family home on the site. To facilitate Holdings’s project, Association – with

the approval of Association’s Board of Directors – leased approximately 960

square feet of common elements and/or limited common elements property

to Holdings for ninety-nine years (subject to renewal) in exchange for a one-

time rent payment of $381,046.

2
  Florida Rule of Civil Procedure 1.510(a), applicable to summary judgment
hearings conducted after May 1, 2021, reads, in relevant part, as follows:
“The court shall state on the record the reasons for granting or denying the
motion.” See In re Amendments to Fla. R. Civ. P. 1.510, 317 So. 3d 72, 77-
78 (Fla. 2021).

                                      3
      Association’s three-person Board of Directors approved Holdings’s

demolition and new construction plan on October 10, 2018, by a 3-0 vote;

and on May 30, 2019, the Board of Directors approved the lease by a 2-0

vote. Association’s counsel, an attorney board-certified in condominium law,

advised that, pursuant to the Declaration, the Board of Directors’ votes on

the Building 9 project did not require amendment to the Declaration or

ratification of the other condominium unit owners. Holdings’s real estate

agent, Board of Directors member Archie Drury (who had received a

commission when Holdings purchased Building 9), voted to approve both the

demolition and construction plan and the lease. Drury neither disclosed his

earlier financial involvement in the Building 9 project, nor recused himself

from either vote.

      In May 2019, Appellants, two unit owners in a neighboring Association

building, filed their lawsuit against both Holdings and Association. The

gravamen of Appellants’ operative third amended complaint is: (i) both the

demolition and new construction plan and the lease are inconsistent with the

Declaration and exhibits thereto, and therefore, required Declaration

amendments approved by a certain percentage of unit owners, whose

approval did not occur; and (ii) the lease is invalid because Drury should

have recused himself from the lease vote, and, if he had, there would have

                                     4
been no quorum at the May 30, 2019 meeting at which the lease was

approved.

      On May 17, 2021, Holdings filed its amended motion for final summary

judgment, and on June 22, 2021, Appellants filed their response. On

September 14, 2021, after the trial court conducted a hearing on the

summary judgment motion, the trial court granted Holdings’s motion and

entered the challenged final summary judgment in Holdings’s favor as to all

counts of the operative complaint. With regard to Appellants’ claim seeking

a declaratory judgment that the demolition and new construction plan, as

well as the lease, required an amendment to the Declaration, the trial court’s

order stated, in relevant part:

      The declarations sought by the Plaintiffs are contradicted by the
      terms of the Association’s declaration of condominium and the
      lease between Holdings and the Association, and summary
      judgment shall be granted for the reasons set forth in the Motion
      and the Reply in support thereof.

      As for a specific rationale for granting summary judgment on

Appellants’ claim that the Board of Directors May 30, 2019 vote approving

the lease was invalid, the order merely states that Holdings’s motion is

granted “for the reasons stated on the record.”

      Appellants timely appealed this final summary judgment.

                                      5
      II. Analysis3

      A. Inconsistency with Declaration and Requirement of Amendment

      The trial court’s order correctly concluded that Appellants’ claim – that

the demolition and new construction plan and lease required Declaration

amendment – is contradicted by the express terms of the Declaration. No

doubt, the Declaration contains a host of specific provisions regarding

Declaration amendments and Board of Directors decisions with or without

unit owner ratification, pertaining to additions, alterations, or improvements

to units and to the use of common and limited common elements, certain of

which are subject to interpretation. We, however, are compelled to affirm the

trial court’s summary judgment due to an overriding provision of the

Declaration, applicable here, section 25.3, which reads, in its entirety, as

follows:

      Interpretation. The Board of Directors of the Association shall be
      responsible for interpreting the provisions hereof and of any of
      the Exhibits attached hereto. Such interpretation shall be binding
      upon all parties unless wholly unreasonable. An opinion of legal
      counsel that any interpretation adopted by the Association is not
      unreasonable shall conclusively establish the validity of such
      interpretation.

3
  We review de novo both a trial court’s grant of summary judgment and its
interpretation of a declaration of condominium. 814 Prop. Holdings, LLC v.
New Birth Baptist Church Cathedral of Faith Int’l, Inc., 344 So. 3d 535, 538
(Fla. 3d DCA 2022).

                                      6
      It is undisputed that Association’s Board of Directors interpreted the

Declaration as (i) allowing Holdings to demolish Building 9 and undertake

the new construction, so long as approved by the Board, and (ii) authorizing

the Board to enter into the lease of common elements and/or limited common

elements, without having to amend the Declaration. Further, it is equally

undisputed that Association’s legal counsel concluded that Association’s

interpretation of the Declaration in this regard was not unreasonable.4

Therefore, by virtue of the plain and unambiguous language of this provision,

coupled with evidence that Association’s counsel did not opine that

Association’s interpretation was unreasonable, the validity of Association’s

interpretation of the Declaration in this regard is “conclusively establish[ed].”

      While    Appellants     vehemently      disagree     with   Association’s

interpretation of the relevant Declaration provisions, Appellants neither cite

to record evidence as to the inapplicability of Declaration section 25.3, nor

did Appellants seek below, or in this appeal, to challenge the validity of

section 25.3. Hence, even if we were to disagree with Association’s

interpretations of the specific provisions in the Declaration governing

4
  Our record reflects that Association counsel Marnie Ragan participated in
the Board of Directors meetings in which the plans for the Building 9 project
were approved, and issued a written opinion as to the validity of the proposed
lease of approximately 960 square feet of common and limited common
elements.

                                       7
whether certain unit alterations require a ratification vote of Association unit

owners, or whether the Board of Directors was authorized to enter into the

lease, it appears that the drafters of the Declaration established a

mechanism where, if Association’s counsel condones as reasonable

Association’s interpretation of Declaration provisions, Association has the

last word. We are compelled, therefore, to affirm that portion of the trial

court’s summary judgment adjudicating Appellants’ claims that Holdings’s

demolition and new construction plan and lease would require an

amendment to the Declaration and unit owner ratification.

      B. Invalidity of Board Vote on the Lease

      In their operative complaint, Appellants allege that, when the lease

came before Association’s Board of Directors on May 30, 2019, the Board

consisted of three members, and that one of those three, Brian Neff, recused

himself from the lease vote because he was an owner of Holdings.

Appellants allege that, pursuant to Section 718.3027(4) of the Florida

Statutes, 5 “Drury was statutorily required to recuse himself too because of

5
  This statute reads in relevant part: “A director . . . who is a party to, or has
an interest in, an activity that is a possible conflict of interest, . . . may attend
the meeting at which the activity is considered by the board and is authorized
to make a presentation to the board regarding the activity. After the
presentation, the director . . . must leave the meeting during the discussion
of, and the vote on, the activity. A director . . . who is a party to, or has an

                                         8
his conflicts of interest in connection with [Holdings’s] acquisitions in Building

9 and the inextricably intertwined . . . Demolition and New Construction

Plan.” Consequently, because, according to Appellants, Drury was statutorily

prohibited from voting on the lease, Appellants allege that the lease is invalid

for the reason that the Board of Directors lacked a quorum when it approved

the lease on a 2-0 vote.

      While the trial court’s order granting summary judgment for Holdings

on this claim cites to the “reasons stated on the record,” we are unable to

discern from the record (i.e., both the order and the transcript of the summary

judgment hearing) the reasons relied upon by the trial court. In its opinion

adopting the new summary judgment standard, our Florida Supreme Court

expressed its rationale for requiring trial courts to clearly express the reasons

for granting and denying summary judgment motions:

      Where federal rule 56(a) says that the court should state on the
      record its reasons for granting or denying a summary judgment
      motion, new rule 1.510(a) says that the court shall do so. The
      wording of the new rule makes clear that the court's obligation in
      this regard is mandatory.

      To comply with this requirement, it will not be enough for the trial
      court to make a conclusory statement that there is or is not a
      genuine dispute as to a material fact. The court must state the
      reasons for its decision with enough specificity to provide useful
      guidance to the parties and, if necessary, to allow for appellate

interest in, the activity must recuse himself or herself from the vote.” §
718.3027(4), Fla. Stat. (2018).

                                        9
     review. On a systemic level, we agree with the commenters who
     said that this requirement is critical to ensuring that Florida courts
     embrace the federal summary judgment standard in practice and
     not just on paper.

In re Amendments to Fla. R. Civ. P. 1.510, 317 So. 3d at 77 (italicized

emphasis in original, underlined emphasis added).

     While our standard of review is de novo, we will not adjudicate this

issue in the first instance. To be clear, we express no opinion whatsoever on

Appellants’ claim in this regard. We are simply unable to meaningfully review

the trial court’s rationale in granting Holdings’s summary judgment on this

claim. Therefore, to the extent that the trial court granted Holdings’s

summary judgment motion on this claim, we reverse the judgment and

remand for proceedings consistent with this opinion.

     Affirmed in part; reversed in part and remanded.

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