12550 BISCAYNE CONDOMINIUM ASSOCIATION, INC. v. NRD INVESTMENTS, LLC

• Court: District Court of Appeal of Florida
• Decided: November 10, 2021
• Docket: 20-0752
• Status: Published

Opinion

Third District Court of Appeal State of Florida

Opinion filed November 10, 2021. Not final until disposition of timely filed motion for rehearing.

________________

Nos. 3D19-1893, 3D20-752, 3D20-292 Lower Tribunal No. 18-27792 ________________

12550 Biscayne Condominium Association, Inc., Appellant,

vs.

NRD Investments, LLC., et al., Appellees.

Appeals from the Circuit Court for Miami-Dade County, Reemberto Diaz, Judge.

Waldman Barnett, P.L., and Glen H. Waldman and Michael A. Sayre, for appellant.

Shubin & Bass, P.A., and John K. Shubin, Juan J. Farach and Mark E. Grafton, for appellees.

Before SCALES, HENDON, and MILLER, JJ.

HENDON, J. 12550 Biscayne Condominium Association, Inc. (the “Association”)

appeals from two orders granting summary judgment in favor of NRD

Investments, LLC (“NRD”), and NR Investments 2, Inc. (collectively,

“Appellees”), and against the Association. We affirm.

Facts

The Association is a commercial condominium association organized

pursuant to Chapter 718, Florida Statutes. Its members own units within

commercial office property (the “Office Condominium”) located at 12550

Biscayne Boulevard in the City of North Miami. That building was constructed

in 1972 and originally used as leased office space. In 2006, NRD 1 purchased

the building and converted it to a commercial condominium form of ownership.

NRD also owns an adjacent three-story parking garage (the “Parking Garage”)

on a separate parcel from the Office Condominium. The Parking Garage is

specifically identified in all documentation as separate from the Office

Condominium. NRD publicly recorded a “Declaration of Covenants,

Restrictions and Reciprocal Easement Agreement” (the “REA”), and in that

1 Appellee NR Investments 2 is an affiliate of NRD and is the owner of Unit CU- 105 within the Office Condominium. Ron Gottesmann, Nir Shoshani, and Terry Wellons (collectively, “Individual Appellees”), comprise the executive management team for NRD and were also the initial members of the Association’s board of directors.

2 document reserved and retained certain air rights, roof rights, and easements

necessary to maintain and operate the existing telecommunication antennas

on the roof of the Office Condominium. NR Investments 2 possesses rights to

the “Rooftop Limited Common Elements,” defined as being appurtenant to Unit

CU-105, as expressly set forth in the Declaration of Condominium. 2

Regarding the Parking Garage, the REA states, “Declarant [NRD]

desires to make available to the [Office] Condominium, including the Unit

Owners, and their tenants, and their respective employees, guests and

invitees, certain parking facilities and easement rights,” within the adjacent

parking garage while, “retaining the right, at its sole option, to further modify,

develop and improve the Easement Parcel [the Parking Garage] . . . subject

to the terms and conditions set forth in this Declaration.” The REA further

provided that NRD, as the Easement Parcel Owner,

shall have the right, in its sole discretion, to grant, temporary or permanent, licenses (each a “Parking License”) to Units to use designated or undesignated Parking Spaces located in the Parking Facilities, and it shall be entitled to receive, and to retain, for its sole use and benefit, all compensation paid in exchange for such Parking Licenses.

2 The Declaration of Condominium further states that “[t]he condominium is within a larger parcel that is subject to the Reciprocal Easement Agreement. Each Unit Owner and its Unit will be subject to all of the terms and conditions of the Reciprocal Easement Agreement, as amended and/or supplemented from time to time.”

3 Near the end of 2018, after every unit purchaser was afforded the opportunity

to purchase a license for a designated parking space in the Parking Garage,

NRD offered the remaining parking licenses to unit owners who wanted

additional spaces. 3

The Dispute

In 2018, the Association sought to reform or eliminate select provisions

of the REA by claiming that it is “one-sided,” “oppressive,” and

“unconscionable” as parking for clients and guests became difficult because of

the limited number of spaces on the unassigned first floor of the Parking

Garage. Further, the Association sought to remove the telecommunication

antennas that it claimed were improperly located on condominium property for

over a decade, and asserted entitlement to recover the past lease revenues

generated from the antennas. The Association took issue with the reservations

in the REA and Declaration that included NRD’s ability to profit from the

condominium building Parking Garage, while burdening the Association with

the obligations to pay the costs of the garage (i.e., maintenance, insurance,

taxes, etc.) as well as to profit from antenna revenues.

3 The Parking Garage has three levels. The record indicates that guests and visitors have always been permitted to park in unassigned parking spaces on the first floor. Access to the second and third floors is restricted by a gate, and is reserved for authorized Unit Owners, their designees and employees.

4 The Association amended its initial complaint twice. The Second

Amended Complaint asserted fifteen counts against NRD, six of which are at

issue here, as follows: 1) count 1, declaratory relief regarding the nature of the

Association’s rights and obligations under the REA, including judicial rewrite of

certain terms of the REA; 2) count III, a claim for unjust enrichment regarding

the Parking Garage revenues and a trial on damages, plus interest and costs;

3) count VI, injunctive relief to require NRD to make all parking equally

available to owners, tenants, guests, and business invitees, and to prevent

NRD from selling any more parking spaces; 4) count VII, injunctive relief to

prevent NRD from installing and leasing any telecommunication antennas on

the common elements of the condominium building, and requiring NRD to

remove all existing cellular and other telecommunication antennas from the

building or to assign all related contracts to the Association; 5) count VIII, a

claim for unjust enrichment for NRD leasing the telecommunication antennas

on the roof of the condominium building without sharing the revenues with the

Association; and 6) count IX, declaratory relief regarding NRD’s retention of

antenna revenues without sharing the revenues with the Association.

The trial court disposed of these six claims with two partial summary

judgment orders. The first order, entered on September 4, 2019, granted partial

summary judgment on counts I, III, and VI in favor of NRD on the Association’s

5 parking issues.4 The second order was entered on January 9, 2020, granting

partial summary judgment in favor of NRD on the antenna issues raised in

counts VII, VIII, and IX. 5 The Association appeals. 6

Standard of Review

The standard of review of a trial court’s ruling on a summary judgment

motion is de novo. Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So.

2d 126, 130 (Fla. 2000); Matheson v. Miami-Dade Cnty., 187 So. 3d 221, 225

(Fla. 3d DCA 2015).

Discussion

The Association first argues that the trial court erred by granting

summary judgment in favor of NRD before the Association’s discovery was

complete, and by disallowing further discovery to defend against NRD’s motion

for summary judgment. The Association’s claims are unsupported by the

record. The record indicates that during the time between the filing of the

Association’s complaint, NRD’s answer, filing of interrogatories, and prior to

4 The subject of appeal in 3D19-1893. 5 The subject of appeal in 3D20-292. 6 The Association’s remaining nine counts, not at issue here, were also the subject of partial summary judgment orders subsequently issued in favor of NRD, and the Individual Appellees (3D20-752). The orders on appeal in the instant case became ripe for appeal on April 28, 2020. Case numbers 3D20- 0752, 3D19-1893, and 3D20-0292, were consolidated for all appellate purposes under case no. 3D19-1893.

6 the hearing on NRD’s motion for summary judgment, the Association failed to

identify the specific discovery it wanted, as well as its availability and

materiality. The Association did not file any motions to compel depositions or

move for a continuance to obtain additional discovery prior to or after the

hearing on the motion for summary judgment. When asked by the court what

specific depositions the Association felt were necessary given the purely legal

issues to be resolved on the motion, the Association’s counsel generally

indicated “everybody.” Even if the Association’s arguments at the summary

judgment hearing can somehow be construed as a request for continuance,

“[t]he granting or denying of a motion for continuance is within the discretion of

the trial judge and a gross or flagrant abuse of this discretion must be

demonstrated by the complaining party before this court will substitute its

judgment for that of the trial judge.” Stern v. Four Freedoms Nat'l Med. Servs.,

Co., 417 So. 2d 1085, 1086 (Fla. 3d DCA 1982).

The Association next argues that It was error to grant summary judgment

on the Association’s declaratory judgment claims because NRD’s allegedly

unconscionable reservation of rights under the REA and the Declaration

cannot be decided on summary judgment. We disagree.

The determination of unconscionability is an issue of law. Belcher v. Kier,

558 So. 2d 1039, 1040 (Fla. 2d DCA 1990); Garrett v. Janiewski, 480 So. 2d

7 1324, 1327 (Fla. 4th DCA 1985) (holding that “the question of unconscionability

is one of law for the court”). To prevail on a claim that a contractual provision

is unconscionable, a party must establish both procedural and substantive

unconscionability. Basulto v. Hialeah Auto., 141 So. 3d 1145, 1148 (Fla.

2014); Hobby Lobby Stores, Inc. v. Cole, 287 So. 3d 1272, 1275 (Fla. 5th DCA

2020). Procedural unconscionability relates to the manner in which a contract

is made and involves consideration of issues such as the bargaining power of

the parties and their ability to know and understand disputed contract terms.

Basulto, 141 So. 3d at 1157; Prieto v. Healthcare & Ret. Corp. of Am., 919 So.

2d 531, 533 (Fla. 3d DCA 2005) (holding the procedural component involves

the circumstances surrounding the entering of the contract, and thus the court

focuses on whether the parties had a reasonable opportunity to understand the

terms of the contract and had a meaningful choice in accepting it); Woebse v.

Health Care & Ret. Corp. of Am., 977 So. 2d 630, 632 (Fla. 2d DCA 2008).

Here, both parties are sophisticated commercial entities presumed to be aware

of the facts prior to contracting with each other.

Substantive unconscionability requires an assessment of whether the

contract terms are “so ‘outrageously unfair’ as to ‘shock the judicial

conscience.’” Id. (quoting Gainesville Health Care Ctr., Inc. v. Weston, 857 So.

2d 278, 285 (Fla. 1st DCA 2003)). A substantively unconscionable contract is

8 one that “no man in his senses and not under delusion would make on the one

hand, and as no honest and fair man would accept on the other.” Id. (quoting

Hume v. United States, 132 U.S. 406, 411, 415 (1889)); see also SHEDDF2-

FL3, LLC v. Penthouse S., LLC, 314 So. 3d 403, 409 (Fla. 3d DCA 2020).

Although a party challenging the contract must establish both procedural and

substantive unconscionability, both do not have to be present to the same

degree. Basulto, 141 So. 3d at 1158-59. Instead, the court can use a “sliding

scale” approach when both procedural and substantive unconscionability are

present to some degree. The more substantively oppressive the contract term,

the less evidence of procedural unconscionability is required to conclude that

the term is unenforceable, and vice versa. Id., 141 So. 2d at 1159.

On de novo review, we conclude that the REA and the Declaration are

neither procedurally nor substantively unconscionable. The commercial

Association members purchased their condominium units with the ability, as

sophisticated businesspeople, to understand the terms in the publicly recorded

REA and the Declaration which govern the parking and antenna easements.

Provisions in an association declaration are clothed with a “very strong

presumption of validity” and will “not be invalidated absent a showing that they

are wholly arbitrary in their application, in violation of public policy, or that they

abrogate some fundamental constitutional right.” See Grove Isle Ass’n Inc. v.

9 Grove Isle Assocs., LLLP, 137 So. 3d 1081, 1091 (Fla. 3d DCA 2014)

(“Restrictions which may be found in a declaration of condominium are clothed

with a very strong presumption of validity when challenged. This presumption

arises from the fact that each individual unit owner purchases his unit knowing

of and accepting the restrictions to be imposed.”). The Association further

argues that the REA and the Declaration contain terms that cannot be found in

similar condominium arrangements. This is, however, not evidence that the

terms are legally unconscionable. 7

The Association next asserts that it should have benefited from a

statutory presumption of unconscionability as provided by section 718.122,

Florida Statutes, entitled “Unconscionability of certain leases; rebuttable

presumption,” which provides that a lease of recreational or other common

7 See also, § 8:1. In general, 1 Law of Condominium Operations § 8:1:

In order to receive a continuing financial benefit from the condominium, even after transition is complete, the developer often reserves certain rights in the condominium property, contracts and services. Common methods of reserving rights to the developer, which often resulted in disputes with unit purchasers, include the execution of recreational leases, management contracts and cable television service contracts. Other methods of reserving developer rights include the temporary or permanent grant or reservation of certain easements.

(footnotes omitted) (emphasis added).

10 facilities located on the real property, for use by condominium owners, is

presumptively unconscionable if the unit owners are required to pay insurance,

maintenance, taxes, etc. Because the REA requires that the Association pay

the taxes, insurance, and maintenance for the Parking Garage, the Association

argues it should have benefitted from a presumption of unconscionability and

that this is a contested fact precluding summary judgment. The record on

appeal indicates that section 718.122 was briefly mentioned but not argued or

explained in the Association’s response in opposition to NRD’s motion for

summary judgment, or during the summary judgment hearing. Merely referring

to an authority without expressly arguing to the lower court the principle that

flows from it is inadequate to preserve the issue for review if the argument was

not considered by the trial court. See Tillman v. State, 471 So. 2d 32, 35 (Fla.

1985) (“[i]n order to be preserved for further review by a higher court, an issue

must be presented to the lower court and the specific legal argument or ground

to be argued on appeal or review must be part of that presentation if it is to be

considered preserved.”); Sunset Harbour Condo. Assoc. v. Robbins, 914 So.

2d 925, 928 (Fla. 2005) (“In order to be preserved for further review by a higher

court, an issue must be presented to the lower court and the specific legal

argument or ground to be argued on appeal or review must be part of that

11 presentation if it is to be considered preserved.”). Thus, the Association’s

argument relating to section 718.122 was not preserved for appellate review.8

Furthering its unconscionability argument, the Association asserts that

section 718.302, Florida Statutes (2021), entitled, “Agreements entered into by

the association,” can be the basis for a declaratory judgment that the terms of

the REA and the Declaration are unconscionable. The purpose of a

declaratory judgment is to “afford parties relief from insecurity and uncertainty

with respect to rights, status, and other equitable or legal relations.” People's

Tr. Ins. Co. v. Franco, 305 So. 3d 579, 582 (Fla. 3d DCA 2020) (quoting Santa

Rosa Cnty. v. Admin. Comm'n, Div. of Admin. Hearings, 661 So. 2d 1190, 1192

(Fla.1995)). The allegations in the second amended complaint are not suitable

for declaratory judgment because, in addition to seeking what amounts to an

advisory opinion, the Association seeks to have the court rewrite certain

express rights and obligations set forth in the publicly recorded REA. 9 On de

8 We note also that section 718.122 pertains to leases of recreational or other common facilities located on the subject real property, not publicly recorded easements and condominium declarations. 9 See 2000 Condo. Ass'n Inc. v. Residences at Sloan's Curve, Inc., 513 So. 2d 1324, 1325 (Fla. 4th DCA 1987) (“Standard real estate easements recorded in the public records by the developer, referred to in the declaration and prior to any unit sales, are not cancellable by a later formed association under Section 718.302, which statutory provision is clearly only directed toward contracts for vending machines, management and the like.”).

12 novo review of the declaratory relief claims, we conclude summary judgment

was proper.

The Association next argues that summary judgment on its unjust

enrichment claims against NRD was improvidently granted. Florida courts

have held, however, that a plaintiff cannot pursue a quasi-contract claim for

unjust enrichment if an express contract exists concerning the same subject

matter. Diamond "S" Dev. Corp. v. Mercantile Bank, 989 So. 2d 696, 697 (Fla.

1st DCA 2008); Ocean Commc'ns, Inc. v. Bubeck, 956 So. 2d 1222, 1225 (Fla.

4th DCA 2007); Kovtan v. Frederiksen, 449 So. 2d 1 (Fla. 2d DCA 1984); see

Sterling Breeze Owners' Ass'n, Inc. v. New Sterling Resorts, LLC, 255 So. 3d

434, 437 (Fla. 1st DCA 2018) (holding an unjust enrichment claim cannot

prevail because a contract prescribes the parties' rights and responsibilities for

such expenses). Thus, because the REA and the Declaration specifically cover

the parking and antenna easement and revenue issues, summary judgment

on the claims of unjust enrichment was proper.

Finally, the Association proposes that there is a material issue as to

whether the antennas are on NRD’s Rooftop Limited Common Elements or the

Association’s Common Elements (i.e., exterior walls). Since the building was

built in 1972, and at the time NRD purchased it in 2006, antennas have existed

on the roof (or otherwise) of the building in the same location that the

13 Association challenges for the first time through Count IX. Where the express

terms of the Declaration and REA (both recorded in 2007) set forth clear and

unambiguous rights and reservations that permit NRD to maintain and operate

the antennas, summary judgment was appropriately granted.

We find the Association’s remaining arguments to be without merit.

Affirmed.