STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES

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1 STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION PARADISE POINTE COMMUNITY ASSOCIATION, INC., Petitioner, v. Case No PARADISE POINTE CONDOMINIUM ASSOCIATION, INC., Respondent. / SUMMARY FINAL ORDER Procedural History On June 5, 2012, Paradise Pointe Community Association, Inc. (Petitioner) filed an arbitration petition naming Paradise Pointe Condominium Association, Inc. (Respondent) as the respondent. On July 19, 2012, Respondent filed an answer. On September 7, 2012, the parties filed memoranda of law in support of their positions. FINDINGS OF FACT 1. Petitioner is the corporate entity responsible for the operation and management of the Paradise Pointe Community, a development located in Miami-Dade County, Florida. 2. Respondent is the corporate entity responsible for the operation of the Paradise Pointe Condominium located within the Paradise Pointe Community. 3. Petitioner serves as a master Association the membership of which includes the Respondent s members and the members of the West Cutler Gardens 1

2 Condominium, Association, Inc. 4. Petitioner owns multiple units within the Paradise Pointe Condominium. 5. At the December 7, 2011, annual election for Respondent s board of directors, Petitioner attempted to vote the units it owns. Respondent did not permit Petitioner to vote. 6. The election was monitored by an election monitor, Nan Green, appointed by the State of Florida, Condominium Ombudsman s Office. Ms. Green determined that Petitioner did not have the right to vote in Respondent s election. 7. Section 1.3 of the Declaration of Condominium for Paradise Point Condominium (Condominium Declaration) defines Master Declaration to mean the Declaration of Paradise Pointe Community. 8. Section 5.1 of the Condominium Declaration provides: Voting. Each Unit Shall be entitled to one (1) vote to be cast by its Unit Owner(s) in accordance with provisions of the By-Laws and Articles. Each Unit Owner shall be a member of the Association. 9. Section 2 of the Condominium Declaration defines Master Declaration to mean the Declaration of Paradise Pointe Community. 10. Section 9 of the Condominium Declaration provides, in pertinent part: Provisions of Master Declaration. Each Unit Owner is subject to all of the terms and conditions set forth in the Master Declaration, all of which, to the extent appropriate, are incorporated herein by reference.this Declaration it subject and subordinate to the Master Declaration. 11. Section 7.1 of Respondent s Articles of Incorporation provides that the members of the Association shall consist of all the record owners of Units in the Condominium from time to time. 12. Section 7.3 of Respondent s Articles of Incorporation provides: 2

3 On all matters upon which the Unit Owners shall be entitled to vote, there shall be only one (1) vote for each Unit, which vote shall be exercised or Cast in the manner provided by the By-Laws. Any person or entity owning more than one (1) Unit shall be entitled one (I) vote for each Unit owned. 13. Section of Respondent s By-Laws provides: Majority Vote. The acts approved by Unit Owners holding a majority of the Voting Interests of the Association present in person or by proxy at a Members Meeting at which a quorum is present shall be binding upon all Unit Owners except where otherwise provided by law or in the Condominium Documents. 14. Section Respondent s By-Laws provides, in pertinent part: Voting Interests. Each Unit Owner shall be a Member of the Association. No person who holds an Interest in a Unit only as security for the reimbursement of an obligation shall be a Member of the Association. Membership shall be appurtenant to and may not be separated from, ownership of any Unit. There shall be one vote appurtenant to each Unit for the purposes of determining who may exercise the Voting interest associated with each Unit. 15. The recitals portion of Declaration for Paradise Pointe (Master Declaration) refers to Paradise Pointe Condominium as the First Condominium. 16. Section 2 of the Master Declaration defines First Condominium Association to mean the Paradise Condominium Association, Inc. 17. Section 2 of the Master Declaration defines home to include a condominium unit constructed within a neighborhood within Paradise Pointe. 18. Section 2 of the Master Declaration defined Owner to mean the record owner (whether one or more persons or entities) of fee simple title to any home. 19. Section 6.3 of the Master Declaration provides: Membership. Upon acceptance of title to a Home, and as more fully provided in the Articles and By-Laws, each Owner (or his or her Lessee, if applicable) shall be a member of the Association. Membership rights are governed by the provisions of this Declaration, the deed to a Home, the Articles and By-Laws. Membership shall be 3

4 an appurtenance to and may not be separated from, the ownership of a Home. Developer rights with respect to the Association are set forth in this Declaration, the Articles and By-Laws. 20. Section 6.5 of the Master Declaration provides that voting interest in the Master Association are governed by the provisions of the Articles and By-Laws. 21. Section 3.1 of Petitioner s Bylaws states, in pertinent part: Voting Interests. Each Owner and Developer shall be a Member of the Association. No person who holds an interest in a Home only as security for the performance of an obligation shall be a Member of the Association. Membership shall be appurtenant to, and may not be separated from, ownership of any Home. There shall be one vote appurtenant to each Home 22. Section of Petitioner s Bylaws, states: Each Neighborhood shall be represented by an individual (the Delegate ). The president of First Condominium Association shall serve as the Neighborhood Delegate for the First Condominium. The Apartment Complex Owner shall designate from time to time its delegate for the Apartment Complex Neighborhood. There shall be no Delegates from and after the Turnover Date. CONCLUSIONS OF LAW The undersigned has jurisdiction over this matter pursuant to section , Florida Statutes. Because there are no disputed issues of material fact, summary disposition is appropriate in this matter. Fla. Admin. Code R. 61B Pre-Arbitration Notice In its answer, Respondent contends that Petitioner failed to provide it with prearbitration notice as required by section (4), Florida Statutes The instant dispute was the subject of litigation brought by Petitioner in court. Respondent successfully moved the court to compel the arbitration of the dispute. As such, the undersigned finds that Respondent was provided sufficient notice of the association s 4

5 intent to pursue this arbitration action should the respondents not comply with its requested relief. See Jarwood v. The Halcyon of Palm Beach Condo. Ass n., Inc., Arb. Case No , Order Denying Motion (June 2003)(Arbitrator found that where the respondent association successfully moved to dismiss petitioner s circuit court counter-claim for failure to arbitrate the dispute, the counter-claim constituted adequate notice as required by section , Florida Statutes). Section (2)(b)(2), Florida Statutes Section 5.1 of the Condominium Declaration and section of Respondent s Bylaws provide that each unit is entitled to one vote to be cast by the owner. Petitioner owns units within Respondent s Condominium. Therefore, according to Respondent s governing documents, Petitioner is entitled to vote at Respondent s election and other unit owner votes. Petitioner claims that Respondent has denied Petitioner the right to vote the voting of interests of the units it owns at Paradise Pointe Condominium. Respondent denies that it is prohibiting Petitioner from exercising its voting rights, rather, Respondent contends that Petitioner does not have a right to vote pursuant to section (2)(b)(2), Florida Statutes. Section (2)(b)(2), Florida Statutes, provides, in pertinent part A voting interest or consent right allocated to a unit owned by the association may not be exercised or considered for any purpose, whether for a quorum, an election, or otherwise. In order to determine whether section (2)(b)(2), Florida Statutes, could possibly be applicable to Petitioner it must be determined whether Petitioner is an association as defined by Chapter 718, Florida Statutes. Section (2) provides: Association means, in addition to any entity responsible for the operation 5

6 of common elements owned in undivided shares by unit owners, any entity which operates or maintains other real property in which unit owners have use rights, where membership in the entity is composed exclusively of unit owners or their elected or appointed representatives and is a required condition of unit ownership Petitioner meets the requirements of the definition: a. In accordance with section 8.1 of the Master Declaration, Petitioner is responsible for the operation of common elements owned in undivided shares by unit owners; and b. Petitioner s membership is exclusively composed of condominium unit owners whose membership is a mandatory condition of condominium ownership as provided by Section 9 of the Condominium Declaration. Respondent contends that section (2)(b)(2), Florida Statutes, should apply to units owned by Petitioner within Respondent s condominium. Petitioner contends that the provision only applies to units owned by an association in that association s condominium. Section (2), Florida Statutes, generally applies to the bylaws of a condominium association providing that the bylaws shall include, and if they do not do so, shall be deemed to include the provisions of the statutory subsection. Subsection (b)(2) of the statute refers to a voting interest allocated to a unit owned by the association. Clearly, the provisions of the statute are intended to be incorporated into the by-laws of the association conducting the election. Moreover, the use of the definite article the, as opposed to the indefinite article a, in reference to the association, indicates that the provision is applicable to the association conducting the election or vote, not any other association that may own units in the condominium. Therefore, as to elections or unit owner votes conducted by Respondent, section (2)(b)(2), Florida Statutes, on its face, does not prohibit Petitioner from exercising the voting interests appurtenant to units owned in Respondent s Condominium. 6

7 Respondent argues that the intent of section (2)(b)(2), Florida Statutes, is to prevent the members of an association s board of directors from acquiring complete control of a condominium through the association acquiring title to units within its condominium. The undersigned agrees that this is the intent of the statute. Because voting interests that are appurtenant to units owned by Petitioner in the subassociation condominiums may not be used in Petitioner s election or other member votes, the members of Petitioner s board of directors may not use such voting interests to directly control Petitioner, the Master Association. Respondent contends that if Petitioner is permitted to vote in sub-association matters, Petitioner might be able to gain control of the sub-associations and, therefore, gain control of the Master Association and the entire community. While this is a remote possibility, if the legislature had intended the statute to apply to such scenarios, it would have so stated. The undersigned declines to interpret the statute beyond its clear application and thereby further limit the appurtenant voting rights of an owner. Waiver, Estopel and Ratification Respondent contends that Petitioner s claims should be barred due to waiver, estoppel and ratification. Respondent argues that these defenses are applicable because Petitioner interpreted section (2)(b)(2), Florida Statutes, as not permitting Respondent to vote the voting interests of units owned by Respondent at Petitioner s board of directors election. Waiver is the intentional or voluntary relinquishment of a known right, or conduct which implies the relinquishment of that right. Mizell v. Deal, 654 So. 2d 659, 663 (Fla. 5th DCA 1995). Petitioner s application of section (2)(b)(2), Florida Statutes, at its election does not support finding a waiver because it is not an intentional or voluntary 7

8 relinquishment of Petitioner s right to vote at Respondent s elections. Estoppel is shown where the party asserting the defense reasonably relies on a material representation made by another to the party s detriment. Esplanade Patio Homes Homeowners Ass n, Inc. v Rolle, 613 So.2d 531 (Fla. 3d DCA 1993). Respondent must demonstrate that Petitioner made a material representation that it is not eligible to vote at the Respondent s elections. The record in this case indicates that Petitioner s position has been that it has a right to vote. Therefore, Petitioner is not estopped from asserting its claim. Likewise, Petitioner s application of section (2)(b)(2), Florida Statutes, at its election does not constitute ratification of Respondent s decision that the statute is applicable to Petitioner at Respondent s election. The facts of the case indicate that Petitioner has actively objected to Respondent s application of the statute. Ripeness Respondent claims that this dispute is not ripe because Petitioner is not contesting the results of Respondent s December 7, 2011, election. Respondent further argues that there is no certainty that section (2)(b)(2), Florida Statutes, will not be amended prior to Respondent s next election. It is highly speculative that the statute will be amended before Respondent s next election. It is evident that Respondent intends to continue to apply the statute at its future elections in the same manner it did at its December 7, 2011, election. Therefore, this dispute is ripe. Improper Party/Condominium Ombudsman Respondent argues that the proper respondent in this dispute is the State of Florida s Condominium Ombudsman because Respondent s December 2011 election 8

9 was monitored by an election monitor appointed by the Ombudsman who determined that Petitioner should not be permitted to vote at Respondent s election. The Ombudsman serves in an advisory capacity and lacks the authority to compel an association to take action. At the most, the Ombudsman may make recommendations to the Florida Division of Condominiums, Timeshares and Mobile Homes to take regulatory action against an association. Op. Att y Gen. Fla (2005). Respondent was not required to follow the findings of the election monitor; therefore, the Ombudsman is not a proper party to this dispute. Based upon the foregoing, it is ORDERED: Section (2)(b)(2), Florida Statues, does not apply to Petitioner s exercise of its voting rights at Respondent s Board of Directors elections and shall not be used as a basis by Respondent to prohibit Petitioner from exercising its voting rights at Respondent s future elections. DONE AND ORDERED this 1 st day of October, 2012, at Tallahassee, Leon County, Florida. James W. Earl, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida Telephone: Facsimile:

10 Certificate of Service I hereby certify that a true and correct copy of the foregoing Summary Final Order has been sent by U.S. Mail to the following persons on this 1 st day of October, 2012: Ross Kulberg, Esq. Alberto N. Moris, P.A West Flagler Street Suite 120 Miami, FL Attorney for Petitioner Michele A. Crosa, Esq. Eisinger, Brown, Lewis, Frankel & Chaiet, P.A Hollywood Boulevard, Suite 265-South Hollywood, FL Attorney for Respondent James W. Earl, Arbitrator 10