KAREEN LECORPS AND JOHN BAPTISTE v. STAR LAKES ASSOCIATION, INC.

• Court: District Court of Appeal of Florida
• Decided: May 25, 2022
• Docket: 21-2195
• Status: Published

Opinion

Third District Court of Appeal State of Florida

Opinion filed May 25, 2022. Not final until disposition of timely filed motion for rehearing.

________________

No. 3D21-2195 Lower Tribunal No. 21-3058 ________________

Kareen Lecorps and John Baptiste, Appellants,

vs.

Star Lakes Association, Inc., Appellee.

An appeal from a non-final order from the Circuit Court for Miami-Dade County, Beatrice Butchko, Judge.

Law Offices of Shaun M. Zaciewski, P.A., and Shaun M. Zaciewski, for appellants.

Marshall Dennehey Warner Coleman & Goggin, and Kimberly Kanoff Berman, and Patrick M. DeLong, and Holly M. Hamilton (Fort Lauderdale), for appellee.

Before FERNANDEZ, C.J., and EMAS, and MILLER, JJ.

MILLER, J. Created in the late 1960s, Star Lakes Estates is a residential

multicondominium development operated by a single association. After

Building 12 was partially destroyed by fire, appellee, Star Lakes Association

(the “Association”), determined the available insurance proceeds were

insufficient to defray the projected cost of restoration. The Association then

levied a special assessment upon all unit owners. Appellants, Kareen

Lecorps and John Baptiste, along with a now-deceased unit owner, obtained

a preliminary injunction invalidating the assessment, halting construction,

and mandating the Association convene a membership meeting and

community-wide vote. Approximately three weeks later, the Association

successfully moved to dissolve the injunction. In this appeal, appellants

contend the trial court erred in dissolving the injunction absent an identifiable

change of circumstances and because the Association lacked authority to

impose the assessment.1 Discerning no abuse of discretion, we affirm the

well-reasoned order under review.

BACKGROUND

Star Lakes Estates consists of seventeen residential buildings and two

commercial buildings. Through a separate declaration, each of the

1 We summarily reject the unpreserved claim of error relating to reconstruction of the interior units.

2 seventeen residential buildings is a condominium, and each unit owner is

subject to the condominium form of ownership. The Association derives its

powers from its articles of incorporation, by-laws, and the governing

documents of the individual condominiums. In May 2000, the by-laws of

each condominium were amended to include the following: “The Star Lakes

Association may operate the following listed condominiums as a single

condominium for the purposes of financial matters, including budgets,

assessments, accounting, record keeping, and similar matters, pursuant to

the authority of Chapter 718.111(6) of the Florida Statutes . . . .”

In late 2017, Building 12 was engulfed by fire. The top floor units were

destroyed, and the lower units sustained significant structural damage,

rendering the building uninhabitable. The Association timely filed an

insurance claim, and the insurer of the building tendered the full policy limits

of approximately $1.49 million. The Association then notified all institutional

Building 12 first mortgagees of the insurance payment, along with the need

for reconstruction and repair. None of the mortgagees responded.

After retaining an engineer and contractor, the Association learned the

insurance proceeds were insufficient to cover the projected construction

costs. Written notice regarding the funding disparity was forwarded to each

of the institutional first mortgagees, and the Association notified Building 12

3 unit owners that it intended to convene a special meeting to consider whether

to abandon construction or levy a special assessment. After discussion, a

majority of voting unit owners voted to rebuild.

The Association subsequently notified all Star Lakes Estates unit

owners of a scheduled discussion and vote on a community-wide special

assessment. The notice detailed a proposed aggregate special assessment

in the amount of $1.25 million, of which $700,000.00 was allocated for

restoring Building 12 and $550,000.00 was earmarked for the completion of

forty-year recertifications, roof replacements, fire alarm installations, and

legal expenses. At the duly convened meeting, the Association’s board of

directors voted 4-1 to impose the special assessment, payable over an

eighteen-month period. Unit owners were then furnished with notices

reflecting the payment terms.

Nearly all unit owners tendered the special assessment, and

construction commenced. Appellants, unit owners in Buildings 21 and 30,

along with a now-deceased unit owner, then filed suit against the

Association, seeking declaratory and injunctive relief, as well as damages

for breach of contract and negligence. As relevant to this appeal, appellants

sought to terminate reconstruction of Building 12, alleging the special

assessment was invalidly passed in violation of the Association’s governing

4 documents. The trial court convened an injunction hearing, at the conclusion

of which it invalidated the assessment, enjoined any further construction, and

ordered the Association to notice another meeting and allow all unit owners

to vote on the assessment. The Association later successfully moved to

dissolve the injunction, and the instant appeal ensued.

STANDARD OF REVIEW

The trial court enjoys broad discretion in dissolving temporary

injunctions, and such action “will not be interfered with by appellate courts

unless there is a clear showing that the [trial judge] abused his [or her]

discretion.” Cunningham v. Dozer, 159 So. 2d 105, 105 (Fla. 3d DCA 1963).

ANALYSIS

The issuance of a preliminary injunction is an extraordinary remedy

that should be granted sparingly. Fla. High Sch. Activities Ass’n v.

Kartenovich, 749 So. 2d 1290, 1291 (Fla. 3d DCA 2000). Consequently, to

obtain a temporary injunction, the moving party must establish: (1) a

substantial likelihood of success on the merits; (2) the unavailability of an

adequate remedy at law; (3) the likelihood of irreparable harm absent an

injunction; and (4) that the injunction will serve the public interest. Quirch

Foods LLC v. Broce, 314 So. 3d 327, 338 (Fla. 3d DCA 2020).

5 Here, appellants’ challenge to the special assessment is two-fold.

First, they contend the Association was required to fund the outstanding

restoration efforts by levying a special assessment upon only those unit

owners in Building 12. Second, they alternatively assert that a community-

wide vote was a prerequisite to levying the assessment upon all unit owners.

We are not so persuaded.

Crucial to the resolution of these issues are two autonomous, yet

convergent, sources of law. The first is Florida’s “Condominium Act” (the

“Act”) codified in chapter 718, Florida Statutes (2022), and the second is the

governing condominium documents.

Every condominium in Florida is created pursuant to chapter 718 of the

Florida Statutes. § 718.102, Fla. Stat. “As condominium ownership is

created only by statute, [legislative] acts also regulate the operation of

condominiums.” IconBrickell Condo. No. Three Ass’n, Inc. v. New Media

Consulting, LLC, 310 So. 3d 477, 480 (Fla. 3d DCA 2020). In this vein, a

declaration of condominium and by-laws must conform to the Act, and to the

extent that they conflict therewith, the statute will prevail. Winkelman v. Toll,

661 So. 2d 102, 105 (Fla. 4th DCA 1995).

It is well-settled law that “[a] condominium association has the power

to make and collect assessments, and to lease, maintain, repair, and replace

6 the common elements.” Ocean Trail Unit Owners Ass’n, Inc. v. Mead, 650

So. 2d 4, 7 (Fla. 1994) (citing § 718.111(4), Fla. Stat.). In accord with this

principle, an association may levy a special assessment upon unit owners to

pay for common expenses. § 718.115(2), Fla. Stat. “Common expenses”

are statutorily defined to include “the expenses of the operation,

maintenance, repair, replacement, or protection of the common elements

and association property, [and the] costs of carrying out the powers and

duties of the association.” § 718.115(1)(a), Fla. Stat. Property insurance

deductibles and damages in excess of available insurance coverage also

constitute common expenses. § 718.111(11)(j), Fla. Stat. In this regard,

section 718.111(11), Florida Statutes, entitled “Insurance,” reads:

In order to protect the safety, health, and welfare of the people of the State of Florida and to ensure consistency in the provision of insurance coverage to condominiums and their unit owners, this subsection applies to every residential condominium in the state, regardless of the date of its declaration of condominium. It is the intent of the Legislature to encourage lower or stable insurance premiums for associations described in this subsection.

Consistent with this stated goal, the Act mitigates the risk associated with

underinsuring the condominium property by additionally providing for the

following:

Any portion of the condominium property that must be insured by the association against property loss pursuant to paragraph (f) which is damaged by an insurable event shall be reconstructed,

7 repaired, or replaced as necessary by the association as a common expense. . . . All property insurance deductibles and other damages in excess of property insurance coverage under the property insurance policies maintained by the association are a common expense of the condominium . . . .

§ 718.111(11)(j), Fla. Stat.

Against this body of authority, it is evident that the Association was

entitled to specially assess those expenses necessary to restore “the

common elements and association property.” § 718.115(1)(a), Fla. Stat.

Such expenses necessarily involve the “maintenance, repair, replacement,

or protection” of the elements and property. Id.; see § 718.111(11)(j), Fla.

Stat.

Appellants rely upon a discrete provision in the Building 12 Declaration

for the proposition that such expenses are properly levied only upon unit

owners in the damaged building. Specifically, appellants contend that by

notifying the institutional first mortgagees of the intent to rebuild, the

Association triggered a requirement that it “immediately levy” a special

assessment “against each unit” in Building 12. The provision upon which

they rely reads as follows:

In the event institutional first mortgagees unanimously agree to have the insurance proceeds applied to reconstruction but the insurance proceeds are not sufficient to repair and replace all of the improvements within the common elements and within the units, a membership meeting shall be held to determine whether or not to abandon the condominium project or to levy a uniform

8 special assessment against each unit and the owners thereof as their interests appear, to obtain the necessary funds to repair and restore the improvements within the common elements and the units. In the event the majority of the voting members vote in favor of the special assessments, the Association shall immediately levy such assessment and the funds received shall be delivered to the escrow agent and disbursed as provided above . . . .

Reading the Declaration alone, this interpretation is plausible. The provision,

however, cannot be read in isolation. Instead, we must consider the

evidence of record and the relevant provisions of the Act.

The undeveloped record reflects no indication the “institutional first

mortgagees unanimously agree[d] to have the insurance proceeds applied

to reconstruction.” The notices did not seek consent, and, assuming receipt,

the mortgagees were silent.

Further, although ordinarily, as appellants correctly argue, “[t]he

common expenses of a condominium within a multicondominium are the

common expenses directly attributable to the operation of that

condominium,” there is an exception applicable to certain condominiums

created prior to 1977. 10 Fla. Jur. 2d Condominiums § 76 (2022). In 1998,

the Florida Legislature amended section 718.111(6), Florida Statutes, to

permit the consolidated financial operations of two or more residential

condominiums created before January 1, 1977. Expressly included among

the authorized consolidated operations are “budgets, assessments,

9 accounting, recordkeeping, and similar matters.” § 718.111(6), Fla. Stat. In

the event two or more condominiums choose to consolidate their operations

in accord with this statutory prerogative, notwithstanding other provisions of

the Act, “common expenses for residential condominiums in such a project

being operated by a single association may be [proportionally] assessed

against all unit owners in such project.” Id. (emphasis added).

In the instant case, following turnover, the individual buildings located

within the Star Lakes Estates community opted to consolidate their financial

operations and vest governing authority in the Association. The legal effect

of this merger is clear. There is only one governing entity. The Association

is authorized to operate the seventeen buildings as a single condominium

for financial purposes, including levying assessments. Consequently, the

Association is permitted to make and collect assessments for common

expenses from all unit owners, as though each maintains ownership in a

single condominium.

Moreover, recognizing the need for affordable premiums and the risk

attendant to underinsuring common property, our legislature has recognized

that an association may, at times, prioritize the former over the latter. In such

circumstances, an insurable event encumbers an association with the duty

to assess any excess restoration costs as common expenses. See §§

10 718.111(4), (11)(j), Fla. Stat. Where condominiums have agreed to

consolidated financial operations, limiting collection of the special

assessment from the owners of units in a singularly damaged building would

yield a reduced premium windfall for all other unit owners, while

concomitantly allowing them to avoid any risk associated with underinsuring

the property. The Act carefully guards against this result.

Appellants alternatively argue the assessment was invalid because the

Association failed to convene a vote of all unit owners, as opposed to board

members. A well-developed body of decisional authority holds that an

association need not conduct a vote of unit owners before levying

assessments for urgently needed repairs to the common elements. See

Farrington v. Casa Solana Condo. Ass’n, Inc., 517 So. 2d 70, 72 (Fla. 3d

DCA 1987); Cottrell v. Thornton, 449 So. 2d 1291, 1292 (Fla. 2d DCA 1984).

No provision of the Act suggests otherwise. Instead, all that is required is a

properly noticed meeting declaring the amount of the proposed assessment

and its intended purpose. See § 718.112(2)(c)1., Fla. Stat.

This procedure is consistent with the Association’s by-laws, which

provide, in relevant part:

At all meetings of the Board, a majority of the Directors shall be necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the Directors present at any meeting at which there is a quorum shall be the

11 act of the Board of Directors, except as may be otherwise specifically provided for by statute or by the Certificate of Incorporation or by these By-Laws.

Indeed, a procedure to the contrary would presuppose that unit owners are

incentivized to vote for the collective good, rather than in their own financial

interests. This is precisely why there is a board of a directors with a fiduciary

duty to all unit owners.

Here, it is scarcely debatable the repairs were urgently needed in the

aftermath of the fire. Thus, as the notice preceding the board vote reflected

that portion of the special assessment that would be allocated to the

reconstruction of the damaged building and the special assessment

garnered a majority vote, the Association conformed with the requirements

of law. See § 718.112(2)(c)1. Fla. Stat.

In conclusion, declining to exalt form over substance, we reject the

contention that absent a change in circumstances, the trial court was

constrained by its prior ruling. It is axiomatic that the trial court retains

inherent authority to reconsider any of its nonfinal rulings prior to entry of the

final judgment or another order terminating the action. See Silvestrone v.

Edell, 721 So. 2d 1173, 1175 (Fla. 1998). Rigid adherence to the proposition

that a party moving to dissolve a temporary injunction has the burden to

prove some change of circumstances that justifies dissolution would render

12 a trial court impotent to correct clear error. See Planned Parenthood of

Greater Orlando, Inc. v. MMB Props., 211 So. 3d 918, 920 (Fla. 2017).

Here, in a commendable concession, the trial court found “there was

clear legal error and a misapprehension of facts on its part when it granted”

appellants’ motion for temporary injunction, “thereby leading the [c]ourt to

erroneously determine that [appellants] have a substantial likelihood of

success on the merits of the underlying action.” By the time the court

rendered this ruling, all but seventeen of the nearly four hundred unit owners

had paid the assessment, and the restoration was eighty-percent complete.

Under these circumstances, we conclude there was a sufficient basis in both

law and fact for dissolution, and allowing the injunction to stand would have

been “incompatible with equity principles.” MMB Props., 211 So. 3d at 925.

Accordingly, we affirm in all respects.

Affirmed.