AFP 103 CORP. v. COMMON WEALTH TRUST SERVICES, LLC, etc.

Opinion

Third District Court of Appeal State of Florida

Opinion filed October 25, 2023. Not final until disposition of timely filed motion for rehearing.

No. 3D21-2117 Lower Tribunal No. 20-8291

AFP 103 Corp., Appellant,

vs.

Common Wealth Trust Services, LLC, Appellee.

An Appeal from the Circuit Court for Miami-Dade County, Valerie R. Manno Schurr, Judge.

Carlton Fields, P.A., Christopher W. Smart (Tampa), Dean A. Morande (West Palm Beach), Rachel A. Oostendorp and Michael G. Zilber, for appellant.

Silver Law, P.A., and Scott A. Silver; Russo Appellate Firm, P.A., and Paulo R. Lima, for appellee.

Mrachek Fitzgerald Rose Konopka Thomas & Weiss, P.A., and Manuel Farach (West Palm Beach), for Florida Land Title Association, Inc., as amicus curiae.

Ausley McMullen, and Benjamin B. Bush (Tallahassee), for Florida Home Builders Association, as amicus curiae. Before FERNANDEZ, MILLER, and BOKOR, JJ.

PER CURIAM.

ON MOTION FOR REHEARING

This matter comes to us on AFP 103 Corporation’s (“AFP”) motion for

rehearing. We grant the motion for rehearing in part, withdraw our prior

opinion, and issue the following opinion in its stead.

AFP appeals the trial court’s “Order Granting Third-Party Plaintiff

Common Wealth Trust’s Motion for Final Summary Judgment,” as well as the

trial court’s Order denying AFP’s Motion for Rehearing or Reconsideration.

For the following reasons, we affirm the order granting Common Wealth

Trust’s motion for final summary judgment as well as the trial court’s order

denying AFP’s motion for rehearing and reconsideration.

In the action below, AFP sought to establish that its property

possessed an interest as the dominant estate for certain easements for

ingress and egress and parking over a parcel of land that Common Wealth

Trust owns. Earlier in the litigation, another property owner made similar

claims; summary judgment was entered against that other property owner

and for Common Wealth—no appeal was taken. Ultimately, AFP’s claims for

the easements came before the trial court on Common Wealth Trust’s motion

for summary judgment which the trial court granted.

2 We have carefully reviewed the series of deeds, declarations, and

supplemental declarations upon which AFP’s claims are based. In each

instance, the language, the absence of required signatures, the timing of the

instruments, and other defects undercut the interpretation that AFP puts

forward for its claims. See., e.g., 2000 Presidential Way, LLC v. Bank of N.Y.

Mellon, 326 So. 3d 64, 70 (Fla. 4th DCA 2021) (“[T]he doctrine of

incorporation by reference is generally limited to documents that actually

exist at the time of the incorporation. . . . ‘Incorporation by reference pulls

existing material into the new, incorporating contract; it does not push

material terms into nonexistent, as-yet-unassented-to future contracts.’”).

Under the particular facts of this case, therefore, we find no error in the

trial court’s grant of summary judgment.

Affirmed.

FERNANDEZ and BOKOR, JJ., concur.

3 AFP 103 Corp., v. Common Wealth Trust Services, LLC, etc. Case No. 3D21-2117

MILLER, J., dissenting.

I am compelled to respectfully dissent. In today’s decision, the majority

voids easements for parking and ingress and egress that Miami-Dade County

required by special resolution as a condition precedent to condominium

development nearly forty years ago. The easements were set forth in a series

of duly recorded documents and expressly incorporated into a warranty deed

transferring ownership of the servient tract. Citing nebulous deficiencies, the

majority grants an unprecedented windfall to the entity that acquired the

servient parcel through a foreclosure sale with actual and constructive notice

of the rights of the dominant tracts. The result is to divest the common interest

community of parking and a means of ingress and egress and, on a larger

scale, to undermine the stability and predictability essential to the success of

common interest community development in Florida.

Background and Procedural History

This dispute traces its origins to the development of a mixed-use

condominium venture, known as the Miami International Merchandise Mart, on

contiguous parcels of land in Miami-Dade County. In 1981, the County issued

a resolution approving the project and granting an unusual use “to permit non-

commercial parking on contiguous property under the same ownership in a

4 district more restrictive than the use it serves is located.” In accord with section

33-257 of the Miami-Dade County Code, the resolution was expressly

conditioned upon the filing of a unity of title containing words “to the effect that

the subject property will be developed and incorporated and maintained with

the primary merchandise marked property.” The County further required the

submission of “a plot use plan . . . to include among other things . . . parking

areas.”

A document entitled “Unity of Title” was duly prepared and recorded in

the Public Records of Miami-Dade County. The Unity of Title expressly

prohibited severance of title unless contiguous parking needs were addressed.

This restriction was identified as a “covenant running with the land,” retaining

“full force and effect” on successors in interest until “released in writing by the

Director of the Dade County Building and Zoning Department.”

For reasons indiscernible from the record, development stalled, and on

March 29, 2004, South Florida Hotel (the “Developer”) executed and recorded

a Declaration of Restrictive Covenants in Lieu of Unity of Title (the “Covenant

in Lieu”) in conjunction with a second application for site approval. The

Covenant in Lieu contemplated the property would be initially subdivided into

two lots, the Non-Condominium Lot and Mart Condominium Lot (housing

individually owned units), and that portions of the Non-Condominium Lot would

5 be subject to later conveyance or development. It reserved reciprocal

easements on each parcel for ingress and egress, parking, and passage of

vehicles. 1

1 The document provided, in relevant part:

Owner contemplates that the Property will initially be subdivided into two (2) separate lots consisting of the “Non-Condominium Lot” and the “Mart Condominium Lot” . . . .

....

Owner anticipates that title [to the different lots] will not remain in single ownership and is therefore executing this instrument in order to assure the County that the development of the Property with future multiple ownership will not violate the Zoning Code of Miami- Dade County.

In the event of multiple ownership subsequent to site plan or amended site plan approval, each of the subsequent owners, mortgagees and other parties in interest shall be bound by the terms, provisions and conditions of this instrument. Owner further agrees that it will not convey portions of the Property to such other parties unless said portions of the Property are bound by, and subject to, the Master Covenants, which for the purposes hereof Article Four of the Master Covenants shall be deemed to be the “Easement and Operating Agreement” required by Section 33-257 of the Code of Miami-Dade County and which shall contain, among other things (i) easements in the common area of each parcel for ingress to and egress from other parcels; (ii) easements in the common area of each parcel for the passage and parking of vehicles; (iii) easements in the common area of each parcel for the passage and accommodation of pedestrians;

6 Less than a month later, the Developer recorded a second document,

entitled “Declaration of Covenants, Conditions, Restrictions, Easements and

Operating Agreement for Miami International Merchandise Mart, Hotel Plaza

and Convention Center” (the “Declaration of Covenants”), in the Public

Records of Miami-Dade County. The Declaration of Covenants tracked the

language of section 33-257 of the County Code, which requires a developer to

obtain written approval from the Office of the County Attorney prior to modifying

an approved site plan.

The Declaration of Covenants created easements for parking over areas

designated as the “Shared Essential Components” and “Shared Facilities” and

reiterated that the Non-Condominium Lot and Mart Condominium Lot would

“be under separate ownership.” The Non-Condominium Lot owner was

specifically required to “accommodate, within the Shared Essential

Components, the reasonable parking needs of the Mart Condominium Lot.”

Similarly, all owners and condominium unit owners were granted easements

(iv) easements for access roads across the common area of each parcel to public and private roadways;

(xiii) appropriate agreements between the owners of the several parcels as to the obligation to maintain and repair all private roadways, parking facilities, common areas and the like.

7 for vehicular ingress and egress within the Shared Essential Components and

Shared Facilities.

In late 2005, the Developer subdivided the Non-Condominium Lot into

two parcels, the Non-Condominium Lot and Undeveloped Lot. 2 To account for

the planned parking easement, the Developer, along with MIMM Master

Association, Inc. and MIMM Condominium Association, Inc. (collectively the

“Associations”), executed a Supplemental Declaration to the Declaration of

Covenants, Conditions, Restrictions, Easements and Operating Agreement for

Miami International Merchandise Mart, Hotel Plaza and Convention Center

(the “Supplemental Declaration”).

The Supplemental Declaration required the owner of the newly created

Undeveloped Lot to maintain a minimum of 583 parking spaces for use by

condominium unit owners, tenants, and guests of the Mart Condominium Lot

and Non-Condominium Lot. 3 The execution date remains unclear on this

2 The Supplemental Declaration defined “Lots” as the “Mart Condominium Lot,” “Non-Condominium Lot,” and “Undeveloped Lot.” 3 The Supplemental Declaration provides:

Notwithstanding anything to the contrary contained herein, the NCL [“Non-Condominium Lot”] Owner shall not grant to specific Condominium Unit Owners, or other Owners or occupants of the Properties or to the Master Association or to any Condominium Association, the exclusive right to use, in the aggregate, more than one (1) parking space for each 1,000 square feet of improvements located on the Mart Condominium Lot. NCL Owner agrees to grant

8 record, but the face of the Supplemental Declaration bore a date of September

2005.

On October 3, 2005, the Developer executed a Warranty Deed

to the Condominium Units listed on Schedule A the exclusive right to use the number of parking spaces set forth Schedule A.

The Undeveloped Lot Owner shall not have the right to modify the Site Plan as it relates to the Undeveloped Lot or make any alterations to or construct any improvements on the Undeveloped Lot or otherwise develop the Undeveloped Lot that would result in the number of parking spaces that are located on the Undeveloped Lot being less than the 583 parking spaces currently located on the Undeveloped Lot without, in each instance, the prior written consent of the NCL Owner and any mortgagee of the Non- Condominium Lot, provided that the NCL Owner shall consent to any such development provided that the Undeveloped Lot Owner (a) either (i) constructs sufficient parking in its new development on the Undeveloped Lot to satisfy all zoning and other land use requirements with respect to the Non-Condominium Lot and grants the exclusive right to use not less than 583 parking spaces within its new development on the Undeveloped Lot to the Owners of the Non-Condominium Lot and the Condominium Mart Lot in a Supplemental Declaration or other covenant and/or easement agreement running with the land and to be recorded in the public records or (ii) constructs a parking structure on the Non- Condominium Lot containing not less than 583 parking spaces for the exclusive use of the Non-Condominium Lot, (b) complies with all zoning, land use and other legal requirements and the Covenant in Lieu, or obtains a variance or release therefrom, as applicable, and (c) otherwise complies with all of the terms, conditions and provisions of the Declaration, including obtaining any consents required by Articles 3 and 4 thereof, and obtaining the approval of Miami-Dade County as required therein.

9 conveying two of the three parcels, the Mart Condominium Lot and Non-

Condominium Lot, to SF Hotels, Inc. The Warranty Deed specifically

referenced the Supplemental Declaration and stated that the property was

conveyed “[t]ogether with the Declarant’s and Non-Condominium Lot (NCL)

Owner’s rights” set forth in the Declaration, as amended, and the Supplemental

Declaration. The Warranty Deed was recorded on October 12, 2005, and the

Supplemental Declaration was recorded on November 1, 2005. Meanwhile,

the Developer retained title to the Undeveloped Lot.

On March 20, 2007, the Developer recorded a Corrective Warranty

Deed, correcting the legal description contained in the Warranty Deed. On

August 11, 2009, appellant, AFP 103 Corp., acquired the Non-Condominium

Lot from SF Hotels.

More than a decade later, the Developer lost ownership of the

Undeveloped Lot in foreclosure proceedings. Common Wealth Trust Services,

LLC acquired title to the property and, despite having notice of the recorded

easements, fenced and blocked the Undeveloped Lot.4 The Associations

attempted to resolve the dispute through nonjudicial means, but to no avail.

They then filed suit on behalf of the condominium owners seeking declaratory

4 The operative deed was recorded in the Public Records of Miami-Dade County on June 27, 2019. The title insurance policy issued in conjunction with the transaction contains a specific exception for the Declaration of Covenants and the Supplemental Declaration.

10 and injunctive relief.

Common Wealth Trust filed a counterclaim and moved for summary

judgment on three grounds: (1) the easement was invalid under the common

law doctrine of merger; (2) the easement documents were ineffective because

they ran afoul of the Miami-Dade County Code; and (3) the Supplemental

Declaration was not properly incorporated into the 2005 Warranty Deed.

Shortly before the summary judgment hearing, the Associations’ attorney

withdrew. The trial court granted the motion for summary judgment, and

Common Wealth Trust subsequently filed a third-party complaint against AFP

seeking to quiet title. AFP answered and asserted several equitable affirmative

defenses, including estoppel, laches, and waiver.

Invoking the previous summary judgment order, Common Wealth Trust

moved for summary judgment against AFP. AFP filed a counterclaim

contending that, if the express easement failed, it was entitled to an equitable

easement. The trial court entered final judgment in favor of Common Wealth

Trust, and the instant appeal ensued.

Analysis

The Law of Easements

Rooted in contract law, an easement is defined as “a legal or equitable

right acquired by the owner of one piece of land to use another’s land for a

11 special purpose.” Easement, Garner’s Dictionary of Legal Usage (3d ed.,

Oxford 2011). Such a right may be created by express grant, implication, or

prescription. Dinkins v. Julian, 122 So. 2d 620, 622 (Fla. 2d DCA 1960).

It is well-settled that no magical language is required to create such an

easement. See Am. Quick Sign, Inc. v. Reinhardt, 899 So. 2d 461, 465 (Fla.

5th DCA 2005). “All that is necessary are words showing the intention of the

parties to create an easement on a sufficiently identifiable estate.” Hastie v.

Ekholm, 199 So. 3d 461, 463 (Fla. 4th DCA 2016) (quoting Branscombe v.

Jupiter Harbour, LLC, 76 So. 3d 942, 947 (Fla. 4th DCA 2011)).

Consistent with these principles, a binding servitude is created “if the

owner of the property to be burdened . . . enters into a contract or makes a

conveyance intended to create a servitude that complies with [the statute of

frauds or an exception thereto]” or “conveys a lot or unit in a general-plan

development or common-interest community subject to a recorded declaration

of servitudes for the development or community.” Restatement (Third) of

Prop.: Servitudes § 2.1(1) (Am. L. Inst. 2000).

An express easement is construed as a contract. See 28A C.J.S.

Easements § 71 n.16 (2023). “[I]f the language is clear, concise, and

unambiguous, [courts] must give effect to the terms as stated without resort to

other rules of construction to ascertain their meaning.” Am. Quick Sign, Inc.,

12 899 So. 2d at 465. Conversely, “[i]f the provisions are ambiguous, extrinsic

evidence may be examined to determine the intent of the parties at the time

the document establishing the easement was created.” Id.

The Effect of Recordation

“A recorded easement, like a mortgage, places the world on notice that

the easement owner has an interest in the described property.” Stinnett v.

Dodson, 575 So. 2d 1350, 1351 (Fla. 2d DCA 1991). No specific form of

document is necessary. Hynes v. City of Lakeland, 451 So. 2d 505, 511 (Fla.

2d DCA 1984); see also 28A C.J.S. Easements § 71 (2023). Once recorded,

an easement is binding on all grantees of the servient estate. See 28A C.J.S.

Easements § 133 (2023).

The Easement Documents in the Instant Case

Against this landscape, the unusual use approval and Unity of Title in

this case presciently forecast the parking needs intrinsically associated with

the proposed common scheme of development. The developer was required

to account for parking and ingress and egress.

Consistent with the conditions of site approval, the Covenant in Lieu,

Declaration of Covenants, and Supplemental Declaration created future

easements over the Shared Essential Components and Shared Facilities for

the benefit of the Mart Condominium Lot and Non-Condominium Lot. The

13 Warranty Deed, in turn, conveyed title to SF Hotels subject to the Declaration

of Covenants, as supplemented by the Supplemental Declaration. The

Corrective Warranty Deed expressly referenced the substance of the

easements.

The documents establish and reestablish the intent to encumber the

servient tracts and create easements for the benefit of the owners of the

dominant lots. Indeed, the Warranty Deed, standing alone, sufficiently satisfies

the easement creation requirements delineated in the Restatement. See

Restatement (Third) of Prop.: Servitudes § 2.1 (Am. L. Inst. 2000). Because

the terms of the easements are unambiguous, the court “must give effect to

the terms as stated without resort to other rules of construction to ascertain

their meaning.” Am. Quick Sign, Inc., 899 So. 2d at 465.

Moreover, Common Wealth Trust “[took] the land subject to the

easement[s]” because it acquired title with constructive notice of the recorded

easements and deeds and actual notice of the title insurance policy, which

expressly excepted the Declaration of Covenants as supplemented by the

Supplemental Declaration. 28A C.J.S. Easements § 133 (2023); see also

Restatement (Third) of Prop.: Servitudes § 4.10 cmt. c, illus. 1 (Am. L. Inst.

2000) (explaining easement “for ingress and egress” entitles grantee “to use

the road 24 hours a day by any form of transportation that does not inflict

14 unreasonable damage or unreasonably interfere with the enjoyment of [the

servient estate]”); Hayslip v. U.S. Home Corp., 336 So. 3d 207, 210 (Fla. 2022)

(“[A] deed covenant may be enforced against a successor grantee so long as

the successor grantee had notice of the covenant . . . .”). Consequently, the

easements are fully enforceable.

The Viability of the Supplemental Declaration

The majority, however, has ostensibly determined that the Supplemental

Declaration is unenforceable because it was recorded after the Warranty

Deed. This conclusion conflates recording with execution. Irrespective of this

misconstruction, recording is not necessary to enforce an easement between

grantors and grantees or successors in interest with notice. See Townsend v.

Morton, 36 So. 3d 865, 869 (Fla. 5th DCA 2010) (“The fact that a deed is

unrecorded does not affect the efficacy or validity of the instrument as between

the grantor and grantee or those with notice.”). Further, the Supplemental

Declaration repeatedly reflects it was executed in “September 2005,” and there

is no record support for any contrary proposition. 5 Consequently, at a

minimum, a factual issue precluded summary judgment on this basis.

The Equitable Defenses and Counterclaim

Further, it is axiomatic that “[w]here a party has not filed a summary

5 The Supplemental Declaration predates the controlling Corrective Warranty Deed.

15 judgment motion or where no notice or opportunity to be heard has been given

to the opposing side to present opposing affidavits, a trial court may not sua

sponte grant summary judgment in favor of the non-movant.” Ness Racquet

Club, LLC v. Ocean Four 2108, LLC, 88 So. 3d 200, 202 (Fla. 3d DCA 2011).

In this case, Common Wealth did not move for summary judgment on the

counterclaim. It could not do so because its summary judgment motion

predated the counterclaim. Nor did it file record evidence addressing the

equitable defenses. Under our precedent, this alone warrants reversal. See

Hotel 71 Mezz Lender, LLC v. Tutt, 66 So. 3d 1051, 1054 (Fla. 3d DCA 2011);

Royal Harbour Yacht Club Marina Condo. Ass’n, Inc. v. Maresma, 304 So. 3d

1268, 1269 (Fla. 3d DCA 2020); OTI Fiber, LLC v. CenterState Bank, N.A.,

326 So. 3d 743, 747 (Fla. 2d DCA 2021); Alejandre v. Deutsche Bank Tr. Co.

Americas, 44 So. 3d 1288, 1289 (Fla. 4th DCA 2010).

Conclusion

By disregarding the conditions of site development approval and the

intent of the parties, as evidenced by decades-old duly recorded documents,

the majority releases a rash of uncertainty into commercial real estate

transactions. The ripple effect of this decision will undoubtedly be felt not only

by developers seeking to effectively navigate through the challenges inherent

in planning multi-parcel common interest communities, but also the title

16 insurance industry.

Accordingly, I respectfully dissent.