DE SOLEIL SOUTH BEACH RESIDENTIAL CONDOMINIUM ASSOCIATION, INC.

v.

DE SOLEIL SOUTH BEACH ASSOCIATION, INC., ETC.

Third District Court of Appeal

State of Florida

Opinion filed June², 2021. Not final until disposition of timely filed motion for rehearing.

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Nos. 3D19-2013 and 3D19-617 Lower Tribunal No. 18-2799

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De Soleil South Beach Residential Condominium Association, Inc.,

Appellant,

vs.

De Soleil South Beach Association, Inc., et al., Appellees.

Appeals from the Circuit Court for Miami-Dade County, William Thomas, Judge. Law Offices of Jason Gordon, P.A., and Jason Gordon (Hollywood), for appellant. Genovese Joblove & Battista, P.A., and Richard Sarafan and Michael Bild, for appellee South Beach Resort Development, LLC; and Young, Berman, Karpf & Gonzalez, P.A., and Andrew S. Berman and Jamie Webner, for appellee De Soleil South Beach Association, Inc. Before LOGUE, HENDON, and BOKOR, JJ. HENDON, J.

Appellant, De Soleil South Beach Residential Condominium Association, Inc. (the “Residential Association”), plaintiff below, appeals from the September 19, 2019 order denying its motion for rehearing of the trial court's order on Appellees’, South Beach Resort Development, LLC (the “Developer”), and De Soleil South Beach Association, Inc. (“Master Association”) (collectively, the “Defendants”) cross-motions for summary judgment rendered on July 11, 2019, and the July 25, 2019 Final Judgment. We affirm in part, and reverse in part.

The dispute arises out of the operation of a South Beach hotel, the Z Ocean Hotel (the “Building”). The Building is composed of three legal parcels of land: a residential parcel, a commercial parcel, and a garage parcel, each governed by separate rights, obligations and interrelationships. The owners of those three parcels are the three members of the Master Association. The Master Association’s board consists solely of the owners of these three parcels: the Developer, which is the owner of both the garage and commercial parcels; and the Residential Association, an entity governed by a board and a membership consisting of the owners of the eighty condominium units.

Two recorded documents govern the structure and relationships among the entities in the Building’s ownership and operations, and each unit owner purchased their properties subject to these documents: (1) the Declaration of Covenants, Easements, and Restrictions (the “Master Declaration”), which was recorded first, and (2) the Declaration of Condominium, which governs the hotel room portion of the Building. The Master Declaration established the Master Association to operate the “Shared Facilities” used in common by the three parcels. Under these two recorded documents, the Master Declaration controls in the event of any conflicts or inconsistencies. The residential form of property ownership is condominium, through the Condominium Declaration. The plaintiff Residential Association is the association governed by the Condominium Declaration. The residential owners are not parties to the Master Declaration. The eighty individual hotel rooms in the hotel Building are also the eighty individual condominium units in the residential parcel. Members of the Residential Association are entitled to one vote per unit in all Residential Association matters, equal to eighty member votes. Each unit owner purchased their unit subject to both Declarations. The Developer of the condominium currently owns twelve units in the residential parcel, is a member of the Residential Association, and has twelve member votes.¹ Most of the unit owners, including the Developer, are part of a hotel unit rental program administered by De Soleil Management (“DSM”), the management company that pays all the bills. According to the Residential Association, DSM is controlled by the Developer. In April 2016, the Developer amended the Master Declaration to allow the Master Association to collect assessments directly from unit owners, impose fees and fines, and to evict any unit owner not in compliance with the Master Declaration, although residential owners are not parties to the Master Declaration. In June 2016, DSM stopped forwarding assessment money belonging to the Residential Association paid by unit owners in the rental program. Then the Residential Association stopped paying its assessments to the Master Association. The Residential Association also refused to pay DSM (acting for the Master Association) amounts DSM had paid for the

Standard of review

We review de novo a trial court's interpretation of a condominium declaration. Lenzi v. Regency Tower Ass'n, Inc., 250 So. 3d 103, 104 (Fla. 4th DCA 2018). We review the grant of summary judgment de novo. Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000). Summary judgment is proper when there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. Id.; Cia. Ecuatoriana de Aviacion C.A. v. US. & Overseas Corp., 144 So. 2d 338, 340 (Fla. 3d DCA 1962) ("The fundamental purpose of the summary judgment procedure is to expedite litigation"); Fla. R. Civ. P. 1.510. The Second Voting Rights Suspension The trial court held that, as a matter of law, the Residential Association lacked the power to suspend its members’ voting rights for non-payment of assessments (the Second Suspension). It based its conclusions on the following:¹) Because condominium declarations are creatures of contract, amendments to the Condominium Act, Ch. 718, Florida Statutes, do not apply retroactively without express statutory intent. See Dimitri v. Com. Ctr. of Miami Master Ass'n, Inc., 253 So. 3d 715, 719 (Fla 3d DCA 2018); Tropicana Condo. Ass'n, Inc. v. Tropical Condo., LLC, 208 So. 3d 755, 758 (Fla 3d DCA 2016) (retroactive application of amendment to Condominium Act "impermissible" because it would alter and thereby detract from unit owner rights).²) The Declaration of Condominium here does not contain Kaufman language, i.e., the “as amended from time to time” language subjecting it to future statutory changes to the Condominium Act. Rather, it specifically incorporates only the version of the Condominium Act that existed when the Declaration was recorded, expressly disavowing the application of later amendments to the Condominium Act.⁴ Kaufman v. Shere, 347 So. 2d 627, 628 (Fla. 3d DCA 1977) (holding condominium declaration containing "as it

Discussion

We first address whether the Master Association has standing to challenge the actions of the Residential Association. We conclude, as we did in De Soleil¹, that it does not.

The trial court entered summary judgment in favor of the Master Association and the Developer on their counterclaims, on essentially the same basis as in De Soleil¹, i.e., the invalidity of the Residential Association’s suspension of voting rights in order to counter certain assessment actions taken by the Master Association. The Developer and Master Association argue that De Soleil¹ is distinguishable, because the behind-the-curtain actions of the Condominium Association in violation of its governing document impaired substantive property rights (assessments) of the Master Association, thereby conferring it with the standing that was lacking in the earlier case.

More specifically, the Master Association argues that the actions of the Condominium Association in (a) illegally suspending the voting rights of a majority of owners to reach an artificial 75% threshold calculated upon a small minority of total voting units and (b) then using that manipulated supermajority vote to take affirmative action to attempt to cancel the recorded Master Declaration on real property, were ultra vires acts that substantially and materially impaired the vested interests of the Master Association. That, it argues, gives the Master Association standing to challenge the legality of those actions.

A party has standing when it has such a legitimate interest in a matter as to warrant asking a court to entertain it. Brown v. Firestone, 382 So. 2d 654, 662 (Fla. 1980) (holding a party must “demonstrate a direct and articulable stake in the outcome of a controversy” to open the courthouse doors); Argonaut Ins. Co. v. Com. Standard Ins. Co., 380 So. 2d 1066, 1067 (Fla. 2d DCA 1981); Jamlynn Invs. Corp. v. San Marco Residences of Marco Condo. Ass'n, 544 So. 2d 1080, 1082 (Fla. 2d DCA 1989) (holding a party has standing when it has “a sufficient interest at stake in the controversy which will be affected by the outcome of the litigation”); Whitburn, LLC v. Wells Fargo Bank, N.A., 190 So. 3d 1087 (Fla. 2d DCA 2015); Ferreiro v. Philadelphia Indem. Ins. Co., 928 So. 2d 374, 377 (Fla. 3d DCA 2006) (holding that absent an existing case or controversy between the parties, there would not be standing to pursue a class action claim or represent a class).

The Master Association’s reliance upon Jamlynn for the proposition that it has standing is misplaced. In that case, both parties were subject to the condominium declaration. In this case, the Master Association is not subject to the Condominium Declaration, and consistent with De Soleil¹, does not have standing to challenge the Residential Association’s suspension of its members’ voting rights. The Developer, on the other hand, does have standing because the Developer is also a unit owner and subject to the Declaration of Condominium.

The underlying facts have not essentially changed since De Soleil 1. Accordingly, we reverse as to the Master Association because the Master Association is not a unit owner subject to the Declaration of Condominium. We affirm the final judgment as to the Developer because the Developer is a unit owner and has standing to challenge the Residential Association’s actions.

We next address the question of whether the trial court had jurisdiction to grant the Defendants’ motion for leave to amend the complaint to add counterclaims after summary judgment was entered. We conclude it did, as the time for rehearing had not expired.

The Residential Association concedes the court has jurisdiction to grant leave to amend. “The rule is firmly established in this State that the trial Court loses jurisdiction of a cause after a judgment or final decree has been entered and the time for filing petition for rehearing or motion for new trial has expired or same has been denied.” State ex rel. Am. Home Ins. Co. v. Seay, 355 So. 2d 822, 824 (Fla. 4th DCA 1978) (quoting Gen. Cap. Corp. v. Tel Serv. Co., 212 So. 2d 369, 382 (Fla. 2d DCA 1968)); Liberty Ins. Corp. v. Milne, 98 So. 3d 613, 615 (Fla. 4th DCA 2012). As the deadline to move for rehearing had not expired, and the Residential Association had not yet filed a motion for rehearing, the court still retained jurisdiction to consider the Defendants’ motion to supplement counterclaims and amend the pleadings regardless of the merit of those counterclaims. On de novo review of the record, we affirm the final judgment granting declaratory relief as to the Developer and reverse as to the Master Association for the same reasons as stated in De Soleil 1. Affirmed in part and reversed in part.