Court Opinion

ID: 6496203
Source: CourtListenerOpinion
Date Created: 2022-06-29 15:02:27.469404+00
Date Added: 2024-06-11T08:48:41.907633
License: Public Domain

Third District Court of Appeal
                               State of Florida

                         Opinion filed June 29, 2022.
       Not final until disposition of timely filed motion for rehearing.

                            ________________

                             No. 3D20-0233
                       Lower Tribunal No. 17-23799
                          ________________

                 814 Property Holdings, LLC, etc.,
                                  Appellant,

                                     vs.

  New Birth Baptist Church Cathedral of Faith International,
                      Inc., etc., et al.,
                                 Appellees.

     An Appeal from the Circuit Court for Miami-Dade County, Alan S. Fine,
Judge.

     Lowy and Cook, P.A., and Leah R. Rose and Jonathan Smulevich;
Gordon Rees Scully Mansukhani LLP, and David M. Gersten, for appellant.

     Akerman LLP, and Carmen I. Tugender (Fort Lauderdale), Gerald B.
Cope, Jr., and Michael B. Chavies, for appellee New Birth Baptist Church
Cathedral of Faith International, Inc.

Before EMAS, LINDSEY and BOKOR, JJ.

     BOKOR, J.
      814 Property Holdings, LLC appeals summary judgment in favor of

New Birth Baptist Church Cathedral of Faith International, Inc. as to two

claims for declaratory and injunctive relief under a condominium declaration.

814 Property argues that the trial court erred by interpreting the declaration

to allow a limited common element appurtenant to a unit to be sold

separately from that unit, as well as by invalidating a purchase option

provision as an unreasonable restraint on alienation. Because we agree with

the trial court’s analysis finding the purchase option provision in the

condominium declaration unenforceable, we affirm the final summary

judgment on appeal.

                               BACKGROUND

      814 Property and New Birth each own a unit in a two-unit condominium

building located in Miami-Dade County. 814 Property owns unit number one,

and New Birth owns unit number two. From its unit, New Birth operates a

gospel radio station that broadcasts via a large radio antenna located on the

condominium property.

      The   declaration   of   condominium     that   created   the   two-unit

condominium includes specific provisions accounting for the radio antenna.

The declaration categorizes the antenna as “a Limited Common Element

appurtenant to Unit. No. 2 [New Birth’s condominium unit],” and includes a

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clause giving 814 Property a first option to purchase New Birth’s

condominium unit:

     Notwithstanding anything to the contrary hereinabove set forth,
     a right of first offer exists in favor of the Owner of Unit No. 1
     (“Owner 1”) to purchase Unit No. 2 upon and subject to the terms
     and conditions hereinafter set forth. The owner of Unit No. 2
     (“Owner 2”), for good and valuable consideration paid by and
     received from Owner 1, has granted and does hereby give and
     grant unto Owner 1 the right and option to purchase (“Purchase
     Option”) Unit No. 2 for the sum of $200,000.00 (“Option Price”)
     upon and subject to the terms and conditions herein contained.
     The owner of Unit No. 2 (“Owner 2”) agrees to use its best and
     good faith efforts to obtain approval for the transfer of the Radio
     Antenna by the Federal Communications Commission (“FCC”).
     On or before five (5) days after receiving such approval, Owner
     2 shall notify Owner 1 in writing (“Offer Notice”) and shall provide
     a copy of the FCC approval. The Purchase Option shall be
     exercisable by Owner 1 giving Owner 2 written notice of its
     exercise within ten (10) business days of receipt by Owner 1 of
     the Offer Notice (the “Notice Period”). If Owner 1 fails to exercise
     the Purchase Option prior to the expiration of the Notice Period,
     then and in such event, the Purchase Option shall be terminated,
     provided however, Owner 1 shall continue to have a right of first
     refusal to purchase Unit No. 2 at a price and upon terms and
     conditions as may thereafter be offered by a third party. Such
     right of first refusal must be exercised, if at all, on or before ten
     business days after receipt of written notice from Owner 2, which
     written notice shall be accompanied by a copy of the outside
     offer.

     In August 2017, 814 Property exercised its right under the option

clause to purchase Unit No. 2.       814 Property directed that New Birth

“immediately use its best and good faith efforts to obtain approval for the

transfer of the Radio Antenna by the [FCC]” to an appointee assigned by 814

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Property.   After New Birth refused to either recognize the purchase or

transfer ownership of the radio antenna, 814 Property sued. Specifically,

814 sought both a declaratory judgment that the declaration obligated New

Birth to use good faith efforts to obtain approval from the FCC for the transfer

of the radio antenna to 814 Property (Count I), and damages and specific

performance for the alleged breach of the declaration due to New Birth’s

failure to comply with the option clause (Count II). New Birth counterclaimed,

seeking that the court declare the option clause unenforceable and void as

a restraint on alienation.

      Both parties moved for summary judgment. After a hearing, the trial

court granted summary judgment in favor of New Birth, interpreting the

declaration to have clearly and unambiguously intended for the word

“transfer” to refer to transferring the antenna to another location, rather than

to 814 Property, upon the exercise of the purchase option, as well as finding

the option clause itself void and unenforceable as an unreasonable restraint

on alienation. This appeal followed.

                                 ANALYSIS

      We review a trial court’s grant of summary judgment de novo to

determine whether there exists any disputed issue of material fact and

whether the moving party was entitled to prevail as a matter of law. See,

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e.g., Garcia v. First Cmty. Ins. Co., 241 So. 3d 254, 256 (Fla. 3d DCA 2018).

“A trial court’s interpretation of a condominium’s declaration is also reviewed

de novo.” Courvoisier Cts., LLC v. Courvoisier Cts. Condo. Ass’n, Inc., 105

So. 3d 579, 580 (Fla. 3d DCA 2012) (italics omitted).

      A condominium declaration is a contract possessing “attributes of a

covenant running with the land” and “spelling out mutual rights and

obligations of the parties thereto.” Cohn v. Grand Condo. Ass’n, Inc., 62 So.

3d 1120, 1121 (Fla. 2011) (quotations omitted); see also Rivercrest Cmty.

Ass’n, Inc. v. Am. Homes 4 Rent Props. One, LLC, 298 So. 3d 106, 111 (Fla.

2d DCA 2020). “When interpreting a contract, the court must first examine

the plain language of the contract for evidence of the parties’ intent.” Beach

Towing Servs., Inc v. Sunset Land Assocs., LLC, 278 So. 3d 857, 860 (Fla.

3d DCA 2019) (quotation omitted). “Expressed intent is that found on the

face of the covenant as shown by the language of the entire instrument in

which the covenant appears.” Id. (quotation omitted); see also Rivercrest,

298 So. 3d at 111 (“[C]ontractual provisions are to be interpreted in the

context of the entire agreement.”).

      Here, the trial court properly entered summary judgment in favor of

New Birth on the basis that the option clause in the declaration was an

unreasonable restraint on alienation.         “In general, restrictions and

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encumbrances on the alienation of property are disfavored, subject to certain

exceptions recognized by the courts.” Sandpiper Dev. & Constr., Inc. v.

Rosemary Beach Land Co., 907 So. 2d 684, 685 (Fla. 1st DCA 2005).

“When determining the validity of restraints on alienation, courts must

measure such restraints in terms of their duration, type of alienation

precluded, or the size of the class precluded from taking.” Id. (quotation

omitted); see also Metro. Dade Cnty. v. Sunlink Corp., 642 So. 2d 551, 552

(Fla. 3d DCA 1992) (same).

      The rule against unreasonable restraints on the use of property
      concerns restraints of such duration that they prevent the free
      alienation of property. While the rule against perpetuities
      invalidates interests which vest too remotely, the rule against
      unreasonable restraints is principally concerned with the duration
      of a restraint on the property rather than the time of vesting. The
      test which should be applied with respect to restraints on
      alienation is the test of reasonableness. The validity or invalidity
      of a restraint depends upon its long-term effect on the
      improvement and marketability of the property. Once that effect
      is determined, common sense should dictate whether it is
      reasonable or unreasonable.

Iglehart v. Phillips, 383 So. 2d 610, 614 (Fla. 1980) (noting also that “[i]t is

generally agreed that an option restraint is reasonable if the option price is

at market or appraised value, irrespective of the duration of the option”); see

also Smurfit-Stone Container Enters., Inc. v. Zion Jacksonville Ltd. P’ship,

52 So. 3d 55, 57 (Fla. 1st DCA 2010) (describing Iglehart as “the seminal

case on the matter of preemptive rights and the alienation of property”;

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reversing in part as to summary judgment based on unreasonable restraint

on alienability where contract allowed first option to purchase with unlimited

duration, but did not require seller to accept offer and thus would not

constrain marketability).

      The declaration imposes both a fixed price and an indefinite duration

on the purchase option. The options clause allows “a right of first offer . . .

in favor of [814 Property] to purchase Unit No. 2” for a fixed price of

$200,000.00. This provision includes no time limit for the option, providing

only that “[t]he Purchase Option shall be exercisable” within ten days of New

Birth providing notice of its effort to obtain transfer of the radio antenna from

the FCC. Nothing requires New Birth to seek such approval within a limited

time, and if New Birth obtained FCC approval, the option would not

terminate; rather, 814 Property would retain a right of first refusal on any

outside offers, and this right would lapse only if not timely exercised.

Because these terms contain none of the limitations outlined in Iglehart and

would constrain the development and marketability of the unit around New

Birth’s endeavors to transfer the radio antenna, the trial court properly

concluded that the options clause was unenforceable and granted summary

judgment on that basis. See Iglehart, 383 So. 2d at 615 (“It is the generally

accepted rule that a fixed price repurchase option of unlimited duration,

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independent of the lease, is an unreasonable restraint. . . . An option for a

fixed price clearly discourages any improvements of the land by the existing

property owner because he could never recover the value of the

improvements should the optionee exercise the option.”); Sunlink Corp., 642

So. 2d at 553 (affirming summary judgment based on unreasonableness of

covenant restricting resale of property where covenant lasted indefinitely,

rendered property effectively unmarketable, and removed beneficial uses);

Brine v. Fertitta, 537 So. 2d 113, 114 (Fla. 2d DCA 1988) (agreeing that

option contract was void due to restraint on alienation where “the option was

for an indefinite period and was, in effect, for a fixed price, i.e., a price which,

while adjustable for inflation, was not adjustable for changes in the market

value of the property”).

      Accordingly, the trial court correctly found the purchase option clause

unenforceable and granted final summary judgment in favor of New Birth. 1

1
  Because we first address the purchase option clause and affirm the order
on appeal on that basis, we need not delve into the interpretation or legality
of the option clause as it pertains to the transfer of Unit No. 2 separate from
its appurtenant limited common element—the antenna. However, we note
that after entry of summary judgment, this court addressed the issue of the
statutory preeminence over conflicting provisions in a condominium
document, disapproving the alienation of a common element separate from
a unit to which it pertains. See IconBrickell Condo. No. Three Ass’n, Inc. v.
New Media Consulting, LLC, 310 So. 3d 477, 480 (Fla. 3d DCA 2020) (“[A]ll
provisions of a condominium declaration must conform to the [Florida
Condominium] Act, ‘and to the extent that they conflict therewith, the statute

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     Affirmed.

must prevail.’” (quoting in part Winkelman v. Toll, 661 So. 2d 102, 105 (Fla.
4th DCA 1995))); Brown v. Rice, 716 So. 2d 807, 809 (Fla. 5th DCA 1998)
(“By enacting these statutes, our legislature has specifically prohibited the
conveyance of all common elements, including limited common elements,
unless such an interest passes along with the title to the living unit.”); see
also § 718.107(1), Fla. Stat. (“The undivided share in the common elements
which is appurtenant to a unit shall not be separated from it and shall pass
with the title to the unit, whether or not separately described.”); §
718.106(2)(a), Fla. Stat. (“There shall pass with a unit, as appurtenances
thereto,” inter alia, “[a]n undivided share in the common elements and
common surplus”); § 718.107(2), Fla. Stat. (“The share in the common
elements appurtenant to a unit cannot be conveyed or encumbered except
together with the unit.”); § 718.103(19), Fla. Stat. (defining “limited common
elements” as a subcategory of “common elements” which are “reserved for
the use of a certain unit or units to the exclusion of all other units”).

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