STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION LEO-PAUL MASSE, Petitioner, v. Case No. 2012-02-7784 LAS VISTAS IN INVERRARY CONDOMINIUM ASSOCIATION, INC., Respondent. / ORDER DENYING PETITIONER S MOTION TO SUPPRESS RESPONDENT S ANSWER TO ARBITRATOR S AUGUST 14, 2012 ORDER AND SUMMARY FINAL ORDER Order Denying Petitioner s Motion On August 28, 2012, Petitioner filed a Motion to Suppress Respondent s Answer to Arbitrator s August 14, 2012 Order, alleging that the Association had untimely filed a Proposed Summary Final Order. The arbitrator s August 14, 2012 Order After Telephonic Case Management Conference, stated, in pertinent part, as follows: No later than by 5:00 p.m. on August 21, 2012, the parties may file proposed final orders with the arbitrator. Petitioner alleges that he received his copy of the Association s proposed final order on August 22, 2012, and therefore, the Association s proposed final order should be suppressed by the arbitrator. In the case at hand, according to the Division s electronic docketing system, the Association s proposed final order was filed by facsimile on August 21, 2012, at 10:45 a.m. Accordingly, Petitioner s motion is without merit. 1
Summary Final Order Pertinent Procedural History On June 18, 2012, Petitioner, Leo-Paul Masse filed a Petition for Mandatory Nonbinding Arbitration naming Las Vistas in Inverrary Condominium Association, Inc. (the Association) as Respondent. Petitioner alleges that the Association has made and is making, without the requisite unit owner approval, a material alteration to the common element concrete catwalks by replacing the outdoor carpet with Eurotile. 1 Additionally, Petitioner alleged the Association had, without approval of the members of the Association, entered into a contract without obtaining competitive bids for the replacement of the common element catwalk covering. On June 21, 2012, an Order Requiring Answer was entered. On June 27, 2012, the Association filed a Motion to Dismiss and an Answer. On July 10, 2012, Petitioner filed a Response to the Association s Motion to Dismiss. On July 31, 2012, a Notice of Case Management Conference was entered. On August 9, 2012, Petitioner filed a Request to Reschedule Case Management Conference. On August 10, 2012, a Notice of Rescheduled Case Management Conference was entered. On August 13, 2012, a telephonic case management conference was conducted. On August 14, 2012, an Order After Telephonic Case Management Conference was entered which dismissed Petitioner s counts relating to the contract and competitive bidding for catwalk replacement covering. The August 14, 2012 Order also permitted the parties to file proposed final orders by 5:00 p.m. on August 21, 2012. 1 Eurotile is a stamped concrete and acrylic product used to overlay the concrete catwalk structures. 2
On August 21, 2012, the Association filed a Proposed Summary Final Order. On August 22, 2012, Petitioner filed a Supplemental Statement as to a Cause of Action for Which Relief Should Be Granted. On August 23, 2012, Petitioner filed an Introduction of Additional Exhibit by Petitioner consisting of 53 pages of narrative and photographs. On August 28, 2012, Petitioner filed a Motion to Suppress Respondent s Answer to Arbitrator s Order of August 14, 2012 for failing to provide Petitioner a copy of the Association s Proposed Summary Final Order by August 21, 2012. On August 30, 2012, Petitioner filed a Motion for Summary Final Order. On September 19, 2012, Petitioner filed a New Revelation Giving Even More Weight to a Cause of Action for Which Relief Should be Granted. As of the date of this Order, Petitioner has not filed a Proposed Summary Final Order. Statement of Issues May the Association s Board of Directors replace the outdoor carpeting on the common element catwalks with Eurotile without a vote of approval by two-thirds (2/3) of the Association s members? Findings of Fact 1. Petitioner, Leo-Paul Masse, is the owner of 3776 Inverrary Boulevard #406, Lauderhill, Florida, and by virtue of his ownership of the unit, is a member of the condominium association. 2. Respondent, Las Vistas In Inverrary Condominium Association, Inc., is the corporate entity responsible for the operation of the Las Vistas in Inverrary Condominium (the Condominium). 3
3. It is undisputed by the parties that the Condominium is a fifty-five (55) and older residential condominium located in Broward County, Florida. 4. On April 16, 2012, the Association s board of directors voted to replace the common element catwalk carpeting with Eurotile. 5. The replacement of the catwalk carpeting on the ground floors of the condominium with Eurotile was not put to a vote of the Association s membership for approval. 6. It is undisputed by the parties that on April 16, 2012, the Board approved an expenditure of $42,000.00 to replace the catwalk carpeting on the ground floors of the condominium with Eurotile. 6. The replacement of the carpeting on the common element ground floor catwalks of the condominium has not been completed. 7. The carpeting on the common element was installed in 1974 (approximately 38-years ago), and based upon photographic evidence filed by Petitioner, is torn, ripped and in overall a deteriorated condition. 8. The installation of orange Eurotile, as a replacement for the green outdoor carpeting, materially changes the appearance of the of the ground floor catwalks. Conclusions of Law The Association is an association within the meaning of Section 718.103, Florida Statutes. Pursuant to Section 718.1255, Florida Statutes, the undersigned has jurisdiction over the parties to, and the subject matter of, this dispute. Pursuant to Rule 61B-45.030, Florida Administrative Code, if no disputed issues of material fact exist, the arbitrator may enter a summary final order. 4
Petitioner s argument is that, pursuant to Section 718.113(2)(a), Florida Statutes, and Article XVI C. of the Declaration of Condominium, as amended, the replacement of the carpeting on the common element catwalks with Eurotile constitutes a material alteration of the common elements and requires a vote of approval by two-thirds of the unit owners. Section 718.113(2)(a), Florida Statutes, states, in pertinent part, as follows: Except as otherwise provided in this section, there shall be no material alteration or substantial additions to the common elements or to real property which is association property except in a manner provided in the declaration as originally recorded or as amended under the procedure provided therein Article XVI C., of the Declaration of Condominium, as amended, states: The Association shall have the right to make or cause to be made structural changes and improvements of the Common Elements and Limited Common Elements which do not prejudice the right of any Apartment Owner and any first mortgagee unless his or its written consent has been first obtained, provided the making of such alterations and improvements is first approved by the Board of the Association, and which approval shall be submitted for ratification by the affirmative vote of twothirds (2/3) of the apartment Owners if the cost of the same shall be in common Expenses which shall exceed Three Thousand Dollars ($3,000.00). In addressing the issue of material alteration, the court in Sterling Village Condo., Inc. v. Breitenbach, 251 So. 2d 685, 687 (Fla. 4th DCA 1971), defined material alterations to buildings as: To palpably or perceptively vary or change the form, shape, elements or specifications of a building from its original design or plan, or existing condition, in such a manner as to appreciably affect or influence its function, use, or appearance. In this case, the thirty-eight-year-old outdoor carpeting is clearly at the end of its useful life. Based upon the photographic evidence filed by Petitioner, the worn, torn and, in 5
places, missing carpeting clearly no longer serves the function for which it was designed and is beyond reasonable repair efforts. Additionally, there is an exception to the statutory requirements where the material change or alteration implicates the association s duty to maintain and repair the condominium property or improvements. See Tiffany Plaza Condo. Ass n., Inc. v. Spencer, 416 So. 2d 823 (Fla. 2d DCA 1982)(The court ruled that under the provision in the condominium declaration prohibiting structural change or improvement of common elements without unit owner approval that such approval was not necessary if the alteration or improvement is necessary or beneficial in the maintenance, repair or replacement of the common elements.). The board is typically given broad discretion in its exercise of ordinary business judgment, and, according to the business judgment rule, actions taken by the board within the scope of its authority are presumptively correct, absent a showing of mismanagement, fraud, or breach of trust. See Lake Region Packing Association v. Furze, 327 So. 2d 212 (Fla. 1976) (directors generally have wide discretion in the performance of their duties; court will not attempt to pass upon questions of mere exercise of business judgment); A.N. Inc. v. Seaplace Assn., Inc., Arb. Case No. 98-4251, Summary Final Order (November 19, 1998) (The fact that the law requires, in many instances, a vote by the owners for material changes, does not require that the association remain frozen in technological time). The Association argues that case law has determined that alterations or improvements necessary or beneficial for maintenance, repair or replacement of a common element does not necessarily constitute a material alteration, triggering the 6
required vote of the unit owners. Tiffany Plaza Condo. Ass n., Inc. v. Spence, 316 So. 2d 823 (Fla. 2d DCA 1982); Ralph v. Envoy Point Condo. Ass n., Inc. 455 So. 2d 454 (Fla. 2d DCA 1984); Cedar Cove Efficiency Condo. Ass n., Inc. v. Cedar Cove Properties, Inc., 558 So. 2d 475 (Fla. 1st DCA 1992); Sweeney v. Golden Horn Ass n., Inc., Arb. Case 200-06-7026, Final Order (June 12, 2007)(The carpet in the community room needed to be replaced and the Association selected to install tile flooring due to its extended service life and to preclude moisture problems in the future); and A.N. Inc. v. Seaplace Ass n., Inc., Arb. Case No. 98-4251, Summary Final Order, November 19, 1998). Under the facts of this case, the Association s argument fails. The change from the green outdoor carpeting to the orange Eurotile constitutes a material alteration to the common elements and it must be approved by two-thirds (2/3) of the unit owners. Following is the reason for this conclusion. In the case at hand, the Association has exercised its business judgment in determining the necessity of replacing the ground floor carpeting of the catwalks for safety and maintenance reasons. However, the Association has opted to utilize Eurotile. While the Eurotile is comparable in function and use to the original purpose of the carpet and does not change the character of the catwalks in any way, the replacement of the green carpet with orange Eurotile will significantly affect its appearance. The term material alteration or addition means to palpably or perceptively vary or change the form, shape, elements or specifications of a building from its original design or plan, or existing condition, in such a manner as to appreciably affect or influence its function, use, or appearance. George v. Beach Club Villas 7
Condo. Ass n., 833 So. 2d 816, 819 (Fla. 3rd DCA 2002) (citing Sterling Village Condominium, Inc. v. Breitenback, 251 So. 2d 685, 687 (Fla. 4th DCA 1971)). In Haines v. The Longwood Condominium Association, Inc., Arb. Case No. 92-0286, Final Order (April 29, 1994), the association replaced a cable strand barrier near a canal with a chain link fence. The arbitrator, in construing the authority of the board to replace the common elements, addressed Section 718.111(4), Florida Statutes, which provides, in part, that the association has the power to maintain, repair, and replace the common elements... The arbitrator's holding recites in pertinent part: The authority of the association to replace the common elements,... means simply to replace improvements when necessary to maintain the common elements as they have existed. It does not give the association, acting through the board, the power to replace an improvement, such as a wire cable fence, with a totally different type of improvement, such as a chain link fence, even though both might serve the same purpose, e.g. safety. When an improvement needs replacing the board must replace it with something substantially similar, in looks as well as function. Otherwise, the replacement is actually an alteration of the common elements. Unlike Ralph, where the seawall construction was necessary to protect the common elements, and Sweeny, where the carpet in the community club room, an interior room, needed to be replaced due to moisture issues, the Association s decision to replace the green outdoor carpeting with the orange Eurotile goes beyond reasonable maintenance or replacement of a common element because it results in a markedly different appearance, is fundamentally different from carpet and has not been shown to be a superior product. See Newfield v. Aliki Tower Condo. Management Ass n., Inc., Arb. Case No. 2004-05-8013, Final Order (Dec. 18, 2006)(Where an association could have reasonably replaced a defective component of the common elements with one that is comparable in form and function and which would not 8
materially alter the appearance of the common elements, it must do so unless the material changes are appropriately approved.). Therefore, the affirmative vote of twothirds (2/3) the apartment owners is required to replace the green outdoor carpeting with orange Eurotile. Based on the foregoing, IT IS ORDERED: 1. Petitioner s Motion to Suppress is DENIED. 2. The relief requested by Petitioner is GRANTED, pursuant to the requirements of Article XVI C., of the Declaration of Condominium, as amended, unit owner approval is required to install Eurotile as a replacement for the carpeting on the ground floor catwalks. The Association shall immediately cease work on these projects pending two-thirds (2/3) unit owner approval. DONE AND ORDERED this 20 th day of September, 2012, at Tallahassee, Leon County, Florida. Tonya S. Chavis, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida 32399-1029 Telephone: (850) 414-6867 Facsimile: (850) 487-0870 Trial de novo and Attorney s Fees This decision shall be binding on the parties unless a complaint for trial de novo is filed in accordance with section 718.1255, Florida Statutes. As provided by section 718.1255, Florida Statutes, the prevailing party in this proceeding is entitled to have the other party pay reasonable costs and attorney s fees. Any such request must be filed in accordance with Fla. Admin. Code R. 61B-45.048. 9
Certificate of Service I hereby certify that a true and correct copy of the foregoing final order has been sent by U.S. Mail to the following persons on this 20 th day of September, 2012: Leo Paul Masse 3776 Inverrary Blvd. Unit 406-R Lauderhill, Florida 33319 FAX: 954-735-1643 Kristy L. Philipps, Esquire Glazer & Associates, P.A. One Emerald Place 3113 Stirling Road Suite 201 Ft. Lauderdale, Florida 33312 FAX: 954-333-3983 Tonya S. Chavis, Arbitrator 10