Court Opinion

ID: 9942521
Source: CourtListenerOpinion
Date Created: 2024-02-21 15:03:40.233094+00
Date Added: 2024-06-11T13:48:13.510219
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                             FOURTH DISTRICT

                      GREEN TERRACE E33, LLC,
                             Appellant,

                                    v.

 JOSEPH ABRUZZO, as Clerk and Comptroller for Palm Beach County,
             and CITY OF WEST PALM BEACH,
                          Appellees.

                            No. 4D2022-2495

                           [February 21, 2024]

  Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Richard L. Oftedal, Senior Judge; L.T. Case No.
502019CA003553.

   Deborah Marks of Deborah Marks, PLLC, Miami, for appellant.

   Kimberly L. Rothenburg of the Office of the City Attorney, City of West
Palm Beach, West Palm Beach, for appellee City of West Palm Beach.

   No brief filed for appellee Joseph Abruzzo.

FORST, J.

   Appellant Green Terrace E33, LLC (“Appellant”) appeals the trial court’s
grant of partial summary judgment in favor of appellee City of West Palm
Beach (“the City”). The City sought a portion of the surplus from a tax
deed sale of an individual condominium unit (“the Condo Unit”) within
Green Terrace Phase II, a condominium (“Green Terrace”). The trial court
found the City was entitled to a distribution from the surplus because the
City’s code enforcement lien against Green Terrace’s common elements
was a lien “against the property” under section 197.582(2)(a), Florida
Statutes (2022), with each unit bearing a proportionate share. We disagree
and reverse.

   Per the City’s argument that the lien was against Green Terrace’s
common elements, the code enforcement lien would violate section
718.121(1), Florida Statutes (2022), because it would be a lien against the
entire Green Terrace, imposed without the unanimous consent of the
individual condominium unit owners. Under these circumstances, the
City is not entitled to a distribution from the tax deed sale surplus.

                               Background

    In 2006, Green Terrace’s common elements were the subject of a code
enforcement action, resulting in a fine for housing code violations. The
City moved against Green Terrace’s condominium owners’ association
(“the Association”) to have the fine recorded as a lien. A code enforcement
special magistrate issued an order imposing a lien after repairs imposed
in a prior order had not been made. The code enforcement fine assessed
Green Terrace $100.00 per day, accruing until the violations were
sufficiently addressed.

   The code enforcement order stated that a lien was being imposed
pursuant to section 162.09, Florida Statutes (2006), and that once
recorded, it would constitute a lien over certain real and personal property:

      This Order shall be recorded in the Public Records of Palm
      Beach County, Florida and shall constitute a lien against all
      real property, and all personal property, owned by the
      Respondent(s) within Palm Beach County, Florida, pursuant
      to Fla. Stat. 162.09.

(Emphasis added). The order explicitly listed the Association as the
respondent in the action, with 2800 Georgia Avenue noted as the “violation
address.” Both Green Terrace’s common elements and the Association
share that address. The order did not state the lien was against any
individual unit owner(s), nor was any individual unit owner listed as a
respondent. No legal description of the property was included in the order,
and no notice was provided to individual unit owners.

   Meanwhile, the code enforcement fine continued to run, and nothing in
the record indicates that it does not still run to this day.

   Over a decade later, one of Green Terrace’s condominium units, the
Condo Unit, was the subject of a tax certificate and a tax deed sale.
Appellant was the owner of the Condo Unit before the tax deed sale. The
tax deed sale resulted in a surplus.

    After the sale, several entities sought distributions from the surplus by
filing claims with the Clerk of Palm Beach County. Only two of these
entities are relevant to the instant case: (1) Appellant, as the prior owner
of the Condo Unit, and (2) the City, as the holder of the code enforcement
lien against Green Terrace’s common elements. The City’s Clerk, being
unsure as to how the surplus should be distributed, filed an interpleader
                                     2
action requesting that the court determine how the funds should be
distributed.

   Eventually, the City moved for summary judgment, arguing that as a
governmental lienholder holding a code enforcement lien on Green
Terrace’s property, it was entitled to a portion of the Condo Unit’s tax deed
sale surplus. The City cited section 197.582(2)(a), Florida Statutes (2022),
in support, arguing that section required the clerk to distribute a portion
of the surplus to governmental holders of recorded liens “against the
property.” The City reasoned that its code enforcement lien was against
Green Terrace’s common elements, and because each condominium unit
owned a proportional share of Green Terrace’s common elements, the lien
was also against the Condo Unit.

  Appellant filed its response, contending that the code enforcement lien
was not a “lien against the property” of Green Terrace, because the lien
was not filed against the units. Appellant attached a title search on the
Condo Unit which did not show the lien.

  The trial court agreed with the City and held the code enforcement lien
was “against” the Condo Unit under section 197.582(2)(a) and that the City
was entitled to portion of the surplus. This timely appeal followed.

                                 Analysis

   We review purely legal questions and the grant of summary judgment
de novo. Fla. Bar v. Rapoport, 845 So. 2d 874, 877 (Fla. 2003); City of
Boynton Beach v. Janots, 101 So. 3d 864, 866 (Fla. 4th DCA 2012).

    Resolution of this case requires us to determine whether the City’s code
enforcement lien entitles the City to a distribution from the Condo Unit’s
tax deed sale surplus.        Under section 197.582(2)(a), governmental
lienholders have first priority in surplus distributions from a tax deed sale
if they have a lien “against the property”:

      The clerk shall distribute the surplus to the governmental
      units for the payment of any lien of record held by a
      governmental unit against the property, including any tax
      certificates not incorporated in the tax deed application and
      omitted taxes, if any.

§ 197.582(2)(a), Fla. Stat. (2022) (emphasis added). 1

1 Generally, the Clerk will disburse the surplus in the following order: (1)
governmental liens, (2) lienholders of record in order of priority, and (3)
                                     3
   We assume for purposes of this appeal that the lien is against Green
Terrace’s “common elements” because that is what the parties have argued
on appeal and below. 2 Thus, the pertinent question to address is whether
a code enforcement lien attached to Green Terrace’s common elements is
also a lien “against” Green Terrace’s property and ultimately the individual
condominium units.

   We hold that the City’s code enforcement lien is not a lien “against” the
property as a whole or the individual Condo Unit. In reaching this
conclusion, we begin with the understanding that the starting point for
statutory interpretation is the plain text of the statute. Conage v. United
States, 346 So. 3d 594, 598 (Fla. 2022).

A. The City’s Position is in Conflict with Section 718.121(1)

   If the meaning of “against the property” means that a lien against
common elements is also a lien against all of Green Terrace’s property and
the individual condominium units, a conflict with section 718.121(1),
Florida Statutes (2022), is created. We are mindful that “[c]ourts, in
construing a statute, must, if possible, avoid such construction as will
place a particular statute in conflict with other apparently effective
statutes covering the same general field.” L.S. v. State, 346 So. 3d 42, 45
(Fla. 4th DCA 2022) (quoting Wakulla Cnty. v. Davis, 395 So. 2d 540, 542
(Fla. 1981)).

   Section 718.121 prohibits liens against a condominium as a whole
without the unanimous consent of the condominium unit owners:

      Subsequent to recording the declaration and while the
      property remains subject to the declaration, no liens of any
      nature are valid against the condominium property as a
      whole except with the unanimous consent of the unit

titleholders of record. Velasquez v. Ettenheim, 89 So. 3d 981, 983 (Fla. 3d DCA
2012).
2 We note that the Association does not own Green Terrace’s common elements

(though it is responsible for their maintenance), and the only apparent basis for
both parties arguing that the lien was being imposed against “the common
elements” is that the order imposing the code enforcement lien states that 2800
Georgia Avenue was the “violation address.” Both Green Terrace’s common
elements and the Association are located at 2800 Georgia Avenue.
Notwithstanding the lien listing the Association as the only “respondent,” both
parties have argued that the lien is against Green Terrace’s common elements;
neither party maintains that the lien is against the Association.
                                       4
      owners. During this period, liens may arise or be created only
      against individual condominium parcels.

§ 718.121(1), Fla. Stat. (2022) (emphasis added).

   A review of chapter 718’s definitions related to condominiums is
pertinent in addressing the dispute at issue. A condominium is “that form
of ownership of real property created pursuant to this chapter, which is
comprised entirely of units that may be owned by one or more persons,
and in which there is, appurtenant to each unit, an undivided share in
common elements.” § 718.103(11), Fla. Stat. (2022) (emphasis added). 3
A “‘[u]nit’ means a part of the condominium property which is subject to
exclusive ownership.” § 718.103(28), Fla. Stat. (2022). “[C]ommon
elements” are “portions of the condominium property not included in the
units.” § 718.103(8), Fla. Stat. (2022). “‘Condominium property’ means
the lands, leaseholds, and personal property that are subjected to
condominium ownership, whether or not contiguous, and all
improvements thereon and all easements and rights appurtenant thereto
intended for use in connection with the condominium.” § 718.103(13),
Fla. Stat. (2022).

    By using the phrase “no liens of any nature,” section 718.121(1) applies
to all types of liens, including code enforcement liens. See Baker v. Econ.
Rsch. Servs., Inc., 242 So. 3d 450, 453 (Fla. 1st DCA 2018) (“‘any’ means
‘all’” (quoting Anders v. Hometown Mortg. Servs., Inc., 346 F.3d 1024, 1028
(11th Cir. 2003))).        Therefore, section 718.121(1) prohibits code
enforcement liens that are placed on a condominium as a whole without
the unanimous consent of the unit owners.

   Bank One, Dayton, N.A. v. Sunshine Meadows Condominium Ass’n, 641
So. 2d 1333 (Fla. 1994), is instructive in construing and applying section
718.121(1). There, the Florida Supreme Court addressed whether a
mortgage encumbering the common elements of a condominium could be
the basis to foreclose on all the individual condominium units.

   The developer completed the first phase of a condominium equestrian
center, recording the declaration and conveying the condominium units to
their owners. Id. at 1334. Soon thereafter, the developer executed a
mortgage to Bank One that secured a loan for the construction of common
elements of the second phase of the condominium, which had not yet been
built. Id. A couple years later, the developer amended the declaration to
include the property in phase II, and then defaulted on the loan. Id.

3 Subsections (1) through (31) of section 718.103, Florida Statutes, were
redesignated as subsections (2) through (32), respectively, in 2023. See Ch.
2023-203, Laws of Fla. (amending § 718.103, Fla. Stat. (2022)).
                                     5
   Bank One subsequently sought foreclosure of the entire condominium
property, including the interest of each unit owner. Id. “Bank One claimed
that when the property covered by the mortgage was submitted to
condominium ownership as part of Phase II, the mortgage encumbered not
only the specifically described common property but also each unit in all
phases of the condominium because the common property became an
appurtenance to each unit.” Id.

    The supreme court rejected Bank One’s argument, relying on the
declaration of condominium, statutes, and mortgage law. Relevant to this
appeal, the court explained that Bank One consented to having its
mortgage subject to the declaration, meaning that section 718.121(1),
Florida Statutes applied. Id. at 1336. The court further explained that the
unit owners had no notice of the mortgage, let alone consented to it, so the
mortgage violated the requirement that condominium owners consent to
liens affecting condominium property as a whole:

         Florida condominium law provides that “while the property
      remains subject to the declaration, no liens of any nature are
      valid against the condominium property as a whole except
      with the unanimous consent of the unit owners. During this
      period, liens may arise or be created only against individual
      condominium parcels.”      § 718.121(1), Fla. Stat. (1983)
      (emphasis added). The unit owners in this case were not even
      given notice of any potential future obligation to pay a
      mortgage incurred on common elements of future phases,
      much less did the owners consent to a lien against the
      condominium property as a whole.

Bank One, 641 So. 2d at 1335.

   The supreme court concluded that Bank One was not entitled to
foreclose on its mortgage:

      [B]ased upon the declaration of condominium, Florida
      condominium law, and the law of mortgages, we find that
      Bank One is not entitled to foreclose its lien against the
      condominium units. . . .       [B]y consenting to the 1987
      amendment to the declaration, Bank One subjected its
      mortgage interest in the condominium property to the
      declaration, including the provisions that prohibit separating
      the title to a unit from the common elements and require the
      common elements to remain undivided so long as the
      condominium exists.

                                     6
Id. By citing section 718.121(1) and finding that the owners did not
consent to a lien against the condominium property as a whole, the
supreme court determined that a lien on the common elements of a
condominium, when applied to all the individual units, was a lien against
the entire condominium property requiring the individual unit owners’
consent.

    Under Bank One’s rationale, the City has attempted to impose a lien on
the entirety of Green Terrace by imposing a lien on the common elements,
which conflicts with section 718.121(1). Indeed, if the code enforcement
lien at issue here applies to the individual condominium units by virtue of
the common elements, that lien essentially encumbers the entire
condominium because the lien affects every interest comprising the
condominium. The lien would be against the common elements, all the
individual units, and the Association (as the named respondent on the
order imposing the lien). When a lien applies equally to every interest
comprising a condominium, the lien is fairly characterized as affecting the
condominium as a whole. Because Green Terrace’s individual unit owners
did not consent to the City’s lien, the lien violates section 718.121(1).

B. Lack of Condo Association Authorization of the Lien

   Apportioning the lien onto individual condominium units would be
error because Green Terrace’s unit owners had not consented and because
the lien’s face does not indicate the lien is attached to individual
condominium units. Our opinion in Royal Ambassador Condominium
Ass’n v. East Coast Supply Corp., 495 So. 2d 932 (Fla. 4th DCA 1986),
dealt with an exception to section 718.121(1) that proves the general rule.

  Royal Ambassador applied section 718.121(2), Florida Statutes (1981),
which provided then, and still provided in 2022, in pertinent part:

      Labor performed on or materials furnished to a unit may not
      be the basis for the filing of a lien under part I of chapter 713,
      the Construction Lien Law, against the unit or condominium
      parcel of any unit owner not expressly consenting to or
      requesting the labor or materials. . . . Labor performed on or
      materials furnished to the common elements are not the basis
      for a lien on the common elements, but if authorized by the
      association, the labor or materials are deemed to be
      performed or furnished with the express consent of each
      unit owner and may be the basis for the filing of a lien
      against all condominium parcels in the proportions for
      which the owners are liable for common expenses.

                                      7
§ 718.121(2), Fla. Stat. (2022) (emphasis added).

   In Royal Ambassador, an order imposing a mechanic’s lien listed the
property subject to the lien as both the condominium and “all of the
condominium parcels, except for Units 1705 and 1007, that have been
created thereon in the proportions for which the owners thereof are liable
for common expenses.” 495 So. 2d at 933. Trying to invalidate the
mechanic’s lien, the condominium association argued that section
718.121(1) rendered the lien unenforceable on the basis that the lien
sought to establish a lien against the property as a whole. Id. at 934. In
response, the builder which held the mechanic’s lien argued that under
section 718.121(2), if the association authorized the work there was
consent of all the individual condominium owners to impose a lien against
the entire complex. Id. at 934.

    We held that a mechanic’s lien for materials furnished for roofing
repairs to a condominium association’s building should be claimed as a
lien against the condominium’s individual units, not the condominium as
a whole:

      Thus, it is apparent that one claiming a lien for repairing
      common elements, such as the roof of a condominium
      building, should claim a lien not upon the whole
      condominium property but, rather, upon all of the
      individual units contained in the condominium building
      in the proportion for which each unit is liable for common
      expenses. Ideally, as we said in Southern Colonial Mortgage
      Company, Inc. v. Medeiros, 347 So. 2d 736 (Fla. 4th DCA
      1977), describing each unit and its respective percentage
      share of common expenses in the claim of lien would neatly
      comply with section 718.121(2).

Royal Ambassador, 495 So. 2d at 934.

    We explained that East Coast Supply was seeking a lien against the
entire condominium, and we found the lien enforceable because it
explicitly mentioned the condominium units and their proportional shares
in the common elements. Id.

  The key distinction between Royal Ambassador and Bank One is that
Royal Ambassador applied section 718.121(2), which explicitly allows a
mechanic’s lien to be imposed against “all condominium parcels.”4

4 Under section 718.121(2), where labor is performed and materials are furnished

to the common elements with the approval of the association, the association’s
                                       8
Because section 718.121(2) applies only to mechanic’s liens, and the
mortgage at issue in Bank One was not a mechanic’s lien, the general
prohibition on liens against a condominium as a whole applied. See Bailey
v. Shelborne Ocean Beach Hotel Condo. Ass’n, Inc., 307 So. 3d 74, 82 (Fla.
3d DCA 2020) (noting that where one of three exceptions did not apply,
the general rule applied). Additionally, section 718.121(2) explicitly allows
a condominium association to furnish the individual owners’ express
consent, whereas section 718.121(1) does not.

   Thus, in Royal Ambassador, we could apportion the lien against
individual units because the lien at issue was a section 718.121(2)
mechanic’s lien; the condominium unit owners had given their express
consent; and the lien explicitly stated it was against certain individual
condominium units.

    Here, by contrast, the code enforcement lien is not a mechanic’s lien,
so section 718.121(2) does not apply. Also, Green Terrace’s unit owners
had not consented, because section 718.121(1) does not permit a
condominium association to consent on behalf of its individual
condominium unit owners. And the code enforcement lien’s face did not
state it was against the individual units or those units’ proportional shares
of the common elements. Nor does the record indicate the individual unit
owners had been provided any notice of the proceedings to impose the lien.
See § 162.06, Fla. Stat. (2022) (requiring notice of a code enforcement
procedure be given to a violator); § 162.12, Fla. Stat. (2022) (governing how
notice may be given).

    We acknowledge Appellant neglected to argue below that Appellant
lacked notice of the lien. However, we further acknowledge significant due
process concerns are implicated where a city imposes a lien on an
individual condominium unit without the owner having any notice of the
lien. The City’s lien did not appear on a title search run on the Condo
Unit. The City’s brief fails to explain how an individual condominium unit
owner would have notice of the lien.

                                Conclusion

    The City sought to impose a lien against Green Terrace as a whole by
imposing a lien against Green Terrace’s common elements. This violates
section 718.121(1), which allows liens against an entire condominium only
with all individual unit owners’ consent. Therefore, the code enforcement
lien was not “against” the Condo Unit, because such a lien cannot be
construed as a lien against Green Terrace’s property as a whole without

approval is deemed acceptance by all the unit owners and may be the basis to
impose mechanic's liens against each individual condominium parcel.
                                     9
Green Terrace’s individual unit owners’ consent.

    Moreover, the City’s imposition of a lien against the entirety of Green
Terrace without notice to any individual condominium unit owners would
be a denial of due process. Also problematic is the City claiming a lien
against every individual condominium unit, yet the City is enforcing this
lien against only those units that are involved in unrelated legal
proceedings.

   Accordingly, we reverse the trial court’s partial summary judgment in
the City’s favor. The City is not entitled to a portion of the surplus funds
based on the City’s 2006 code enforcement lien.

   Reversed and remanded with instructions.

WARNER and MAY, JJ., concur.

                           *         *         *

   Not final until disposition of timely filed motion for rehearing.

                                    10