Fern v. Eagles' Reserve Homeowners' Ass'n

162 So. 3d 257, 2015 Fla. App. LEXIS 3174, 2015 WL 968465
CourtDistrict Court of Appeal of Florida
DecidedMarch 6, 2015
DocketNo. 2D13-5089
StatusPublished

This text of 162 So. 3d 257 (Fern v. Eagles' Reserve Homeowners' Ass'n) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fern v. Eagles' Reserve Homeowners' Ass'n, 162 So. 3d 257, 2015 Fla. App. LEXIS 3174, 2015 WL 968465 (Fla. Ct. App. 2015).

Opinion

ALTENBERND, Judge.

Gail M. Fern, as trustee of the Gail M. Fern Trust, appeals a final judgment in the amount of $71,375.94 in favor of the Eagles’ Reserve Homeowners’ Association, Inc. The judgment arises from Ms. Fern’s long-held belief, alleged as a defense in this action, that she is not required to pay [258]*258an assessment for unauthorized expenditures by the Association. The final judgment notes that she “has objected multiple times, in various forums, to her legal obligation to pay the special assessments at issue in this matter.” While that finding of fact is entirely correct, the record does not demonstrate that Ms. Fern’s defense has been barred by res judicata or collateral estoppel or otherwise resolved in a prior action. We conclude that, at least to some degree, she has been correct in her defense throughout all of these proceedings. Because the circuit court did not adjudicate Ms. Fern’s defense, and instead entered judgment for the Association on the incorrect assumption that Ms. Fern should have obtained a prior ruling in her favor on her defense, we reverse.

I. THE COMPLEX PROCEEDINGS TO THIS POINT

Eagles’ Reserve is a community of townhouses and villas that was constructed pri- or to 2001 on land in northeast Pinellas County, previously famous for a giant sculpture of a boot located on Boot Ranch. Apparently, the initial buildings in this community were poorly constructed. These units required substantial reconstruction, whereas newer units required little or no repair. The members of the Association quickly divided into two camps — the owners of older units (the Berger group), who maintained that the Association had the power and the duty to perform extensive repairs on the townhouses, and the owners of the newer units (the Klak group), who maintained that the repairs were primarily the responsibility of the unit owners. Ms. Fern, through her trust, owned a newer unit and generally sided with the Klak group. Litigation erupted when both the Klak and Berger groups filed separate lawsuits agaipst the Association. These lawsuits were eventually consolidated. Before that occurred, the circuit court entered an order in the Berger lawsuit appointing Andrew Bolnick as receiver to perform repairs and impose assessments, adopting essentially the position of the Berger group. Meanwhile, the same court had entered a final judgment granting declaratory relief in the Klak lawsuit.

That final judgment was appealed to this court in 2001. Judge Canady (now Justice Canady) wrote a lengthy opinion reversing the judgment on appeal and remanding for further proceedings. See Klak v. Eagles’ Reserve Homeowners’ Ass’n, 862 So.2d 947 (Fla. 2d DCA 2004). That opinion provides additional factual information, which we omit to avoid duplication. In that opinion, we held that the trial court had given an overly broad interpretation to the phrase “exterior of the Dwelling Units,” and on this basis had improperly authorized the receiver to perform extensive structural repairs to property owned by individual homeowners. Id. at 954. We concluded that the Association had authority to maintain only the outer surfaces of the dwelling units. Id. at 954-55.

Because the circuit court had given the receiver marching orders to repair these units without delay and before the conditions resulted in even greater damage to the townhouses, the receiver had proceeded with the repairs while the appeal was pending in this court. Before our opinion issued, the receiver had expended a considerable sum on these repairs. By January 1, 2003, Ms. Fern had received assessments from the receiver totaling $28,000, apparently for work performed primarily to repair townhouses that were owned by other members of the Association. Presumably, the other unit owners received similar assessments.

Even before our opinion issued, the receiver sued Ms. Fern in county court for [259]*259unpaid assessments because she had paid only $4000 of the assessments. That action was transferred to the circuit court in 2003. In an order entered on the style of the consolidated proceedings involving the Klak and Berger lawsuits, the action against Ms. Fern and several other similar actions brought by the receiver on behalf of the Association were designated as “companion cases” and also consolidated with the Berger and Klak cases. For the next four years, little or nothing occurred in the action against Ms. Fern. The reason for this inactivity is explained by what occurred in the Klak and Berger cases following the issuance of mandate in Klak.

Our mandate in the Klak opinion did not give precise instructions. We simply ordered further proceedings “consistent with this opinion.” 862 So.2d at 955. At least on first examination by this panel, it seemed that the proceedings on remand might logically have required the circuit court to have someone perform an accounting to separate proper expenses for repair of the exterior of the buildings, as defined in Klak, from improper expenses for repairs beyond this scope. See id. Following such an accounting, the members of the Association could be assessed for their proportionate share of the expenses to repair the exterior, but the Association would need to seek payment or reimbursement for the remaining expenses from the individually benefitted unit owners. Members who had already paid more than their fair share would be entitled to an appropriate reimbursement.

The circuit court never had a reasonable opportunity to fulfill our mandate. As the circuit court was beginning to sort out the many issues among the parties, the Association filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code on July 1, 2004. Prior to the filing of this bankruptcy proceeding and after Ms. Fern’s case was consolidated with the Berger and Klak cases, the circuit court issued an order to show cause why the Association should not be held in contempt for failure to pay the fees of the receiver. In its memorandum in response, the Association stated that it could “not collect assessments for repairs that are not limited to the outer surface of the Dwelling Units” in light of this court’s ruling in Klak. It explained that it should not be held in contempt when it could not lawfully collect the assessments needed to pay the receiver. The Association also filed a motion to add parties, specifically the benefitted unit owners against whom the Association had apparently already filed actions for quantum meruit and equitable liens. Thus, it appears that the Association’s initial opinion of this court’s mandate in Klak was essentially the same as this panel’s initial opinion.

After the filing of the bankruptcy proceeding in July 2004, two activities occurred in the consolidated cases that are worthy of note. The receiver had filed a motion for discharge in April 2004. Ms. Fern, the Association, and others objected to his discharge, but the trial court entered a final order discharging the receiver in December 2004. Thus, the receiver has not been a party to these proceedings for a decade.1

Second, in August 2005, the Berger group filed notices of two settlements in the bankruptcy court that resulted in voluntary dismissals without prejudice in the state court proceedings. Nothing in these settlements appears to resolve Ms. Fern’s [260]*260defense to the state court proceeding filed against her.

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Bluebook (online)
162 So. 3d 257, 2015 Fla. App. LEXIS 3174, 2015 WL 968465, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fern-v-eagles-reserve-homeowners-assn-fladistctapp-2015.