Betsy Rae Sherman, etc. v. Gursky Ragan, P.A., etc.

• Court: District Court of Appeal of Florida
• Decided: March 20, 2024
• Docket: 2022-2040
• Status: Published

Opinion

Third District Court of Appeal State of Florida

Opinion filed March 20, 2024. Not final until disposition of timely filed motion for rehearing.

________________

No. 3D22-2040 Lower Tribunal No. 21-17152 ________________

Betsy Rae Sherman, etc., et al., Appellants,

vs.

Gursky Ragan, P.A., etc., et al., Appellees.

An Appeal from the Circuit Court for Miami-Dade County, Barbara Areces, Judge.

Shapiro Ramos, Professional Association, and Jeffrey P. Shapiro, for appellants.

Klein Park & Lowe, P.L., and Robert M. Klein, Andrew M. Feldman, and Charles G. Short, for appellees.

Before LOGUE, C.J., and FERNANDEZ and GORDO, JJ.

LOGUE, C.J.

Betsy Rae Sherman and Robert G. Risman, condominium unit owners

on Fisher Island, appeal the dismissal with prejudice of their claims against their association’s general counsel, Gursky Ragan, P.A. and Marnie Ragan,

Esquire (collectively, “General Counsel”). The Unit Owners contend that the

General Counsel breached its fiduciary duty to them when it provided legal

advice that benefited another unit owner’s plans to obtain exclusive use of

part of the common elements. The Unit Owners also argue that the General

Counsel’s legal advice aided and abetted the president’s breach of his

fiduciary duty to the Unit Owners. Because the Unit Owners failed to allege

facts establishing these claims, we find no error.

BACKGROUND

As alleged in the complaint, all six units in one of the association’s nine

buildings were purchased by 159 Fisher Island Holdings, LLC (“Holdings,

LLC”). The association’s president was the realtor in five of those sales.

Holdings, LLC planned to demolish the building, combine the units into one,

and build a single-family home. The home’s footprint would also include

1,500 square feet of greenspace that was part of the common elements of

the association. The complaint further alleged that transfer of ownership of

common elements to one unit owner required the approval of 100% of all the

unit owners in the condominium.

Holdings, LLC sought the advice of the president and the General

Counsel on ways to avoid the unanimous vote. The General Counsel advised

2 that the unanimous vote could be avoided, and a simple majority vote of the

association’s board would be sufficient, if the common elements at issue

were simply leased to Holdings, LLC for an automatically renewing term of

99 years.1

Holdings, LLC subsequently requested the association’s board lease it

the common elements at issue and approve its construction plans to build

the house. Following the advice of its General Counsel that it could do so,

the board – with the president voting – approved the lease of the common

elements and the construction plans. The General Counsel attended the

meetings where the votes took place but did not act to prevent the president

from voting.

The Unit Owners, concerned that Holdings, LLC was given exclusive

use of common elements in this manner, sued the association’s General

Counsel and president. At issue here are the causes of action against the

General Counsel, of which there are two.

The Unit Owners claimed that the General Counsel breached its

fiduciary duty to them by providing the legal advice that a lease of the

common elements was a legal way to allow Holdings, LLC’s construction to

1 We do not consider or address whether the General Counsel’s legal opinion was correct.

3 go forward without a unanimous vote of all unit owners. Next, they claimed

that the General Counsel’s advice aided and abetted the president’s breach

of his fiduciary duty to the Unit Owners, which the president allegedly

committed when he voted to approve the lease and construction plan,

despite being involved in the underlying real estate transactions.

The General Counsel moved to dismiss these claims, arguing that the

Unit Owners failed to sufficiently plead them. The trial court granted the

motion and dismissed the claims with prejudice.

ANALYSIS

We review the order granting the General Counsel’s motion to dismiss

de novo. Morin v. Florida Power & Light Co., 963 So. 2d 258, 260 (Fla. 3d

DCA 2007). Here, the General Counsel had a contractual fiduciary

relationship with the association’s board. Palafrugell Holdings, Inc. v. Cassel,

825 So. 2d 937, 939 n.2 (Fla. 3d DCA 2001). This contractual relationship,

however, did not extend to the individual unit owners who can and often do

have interests adverse to the interests of the board. See Brennan v. Ruffner,

640 So. 2d 143, 145–46 (Fla. 4th DCA 1994) (“[W]here an attorney

represents a closely held corporation, the attorney is not in privity with and

therefore owes no separate duty of diligence and care to an individual

shareholder absent special circumstances or an agreement to also represent

4 the shareholder individually.”); Silver Dunes Condo. of Destin, Inc. v. Beggs

and Lane, 763 So. 2d 1274, 1277 (Fla. 1st DCA 2000) (holding that

shareholders of a condominium association were not third-party

beneficiaries of an attorney’s contract with the association).

The Unit Owners nevertheless argue that there was an implied

fiduciary relationship. A fiduciary relationship can be implied when “there is

a degree of dependency on one side and an undertaking on the other side

to protect and/or benefit the dependent party.” Masztal v. City of Miami, 971

So. 2d 803, 809 (Fla. 3d DCA 2007). Such relationships are “premised upon

the specific factual situation surrounding the transaction and the relationship

of the parties.” Capital Bank v. MVB, Inc., 644 So. 2d 515, 518 (Fla. 3d DCA

1994).

The facts alleged do not support the finding of such an implied

relationship. See Real Estate Value Co., Inc. v. Carnival Corp., 92 So. 3d

255, 261-62 (Fla. 3d DCA 2012) (holding that where a party’s dependency

on another party to act a certain way was not paired with either a contractual

obligation or an undertaking to so act, there was no implied fiduciary

relationship).

The Unit Owners also argue that they sufficiently alleged that the

General Counsel substantially assisted in carrying out the president’s alleged

5 breach. However, when reduced to their essence, the Unit Owners’

allegations only show that the General Counsel failed to prevent the president

from voting based on the president’s alleged conflict of interest. Because the

General Counsel did not owe the Unit Owners a fiduciary duty, this alleged

failure to act does not constitute substantial assistance. See Chang v.

JPMorgan Chase Bank, N.A., 845 F.3d 1087, 1098 (11th Cir. 2017) (“Mere

inaction [in an aiding and abetting claim] constitutes substantial assistance

only if the defendant owes a fiduciary duty directly to the plaintiff.” (citations

omitted)).

Finally, the Unit Owners’ argument that they should have been given

leave to amend is not well taken because it was never raised to the trial court.

See Estate of Herrera v. Berlo Indus. Inc., 840 So. 2d 272, 273 (Fla. 3d DCA

2003) (“[I]ssues not presented in the trial court cannot be raised for the first

time on appeal.”).

Affirmed.

FERNANDEZ, J., concurs.

GORDO, J., concurs in result only.