Opinion
2D22-1521
08-18-2023
WILLIAM ALLISON, Appellant/Cross-Appellee, v. THE GRAND AT OLDE CARROLLWOOD CONDOMINIUM ASSOCIATION, INC., Appellee/Cross-Appellant.
Jonathan J. Ellis, Duane A. Daiker, and Junior Ambeau of Shumaker, Loop &Kendrick, LLP, Tampa, for Appellant/Cross-Appellee. Elaine D. Walter and Yvette Lavelle of Boyd Richards Parker Colonnelli, Miami, for Appellee/Cross-Appellant.
Appeal from the Circuit Court for Hillsborough County; Cheryl K. Thomas, Judge.
Jonathan J. Ellis, Duane A. Daiker, and Junior Ambeau of Shumaker, Loop &Kendrick, LLP, Tampa, for Appellant/Cross-Appellee.
Elaine D. Walter and Yvette Lavelle of Boyd Richards Parker Colonnelli, Miami, for Appellee/Cross-Appellant.
SILBERMAN, Judge.
After William Allison prevailed in a nonbinding arbitration proceeding, The Grand at Olde Carrollwood Condominium Association, Inc. (the Association), filed a complaint for trial de novo, requesting a declaratory judgment against Allison. The Association complained that Allison replaced carpeting in his condominium unit with hard surfaced flooring in violation of the Association's governing documents. Allison filed an answer, several affirmative defenses, and a counterclaim challenging two fines the Association levied against him. The parties eventually filed competing motions for summary judgment. Following a hearing on the motions, the trial court entered an Order and Summary Final Judgment in favor of the Association as to the flooring issue and in favor of Allison as to one of the fines. Allison appeals and the Association cross-appeals the trial court's order. We reverse and remand for further proceedings because the court failed to conduct a trial de novo.
I. FACTUAL BACKGROUND
The Association manages and operates The Grand at Olde Carrollwood Condominium (the Condominium). Allison purchased a unit in the Condominium in April 2017. About two years later, he replaced the carpet in his unit with vinyl flooring. The Declaration of the Condominium requires written approval of the Association's Architectural Review Committee (ARC) before owners of units that are above other units replace carpeted flooring with hard surfaced flooring, including vinyl. Allison failed to seek written approval prior to replacing his carpeting.
On May 28, 2019, Allison received a violation notice from the Association that he had failed to comply with the Association's governing documents, including its rules and regulations regarding flooring. The notice stated that he had removed carpeting from his unit and replaced it with something other than carpet without conducting a sound test as required by the Association's rules. He was to stop all work until he obtained the required approval. That same day, Allison filed a written application to the ARC requesting approval for his change in flooring.
The ARC denied Allison's application based on his failure to comply with the applicable rules and directed him to correct the violations. The Association imposed two fines against Allison for his installation of the vinyl flooring without express permission, $1,000 in June 2019 and $1,000 in September 2020.
II. ARBITRATION PROCEEDINGS
Allison filed a petition for mandatory nonbinding arbitration pursuant to section 718.1255(4), Florida Statutes (2020), and raised several issues including that the flooring rule was arbitrary and capricious and that the Association had "arbitrarily and capriciously accommodated unit owners who had installed hard surfaced flooring without the Association's approval." He also asserted that the Association had failed to comply with its governing documents by not determining average noise levels in units below other units with carpeted floors or by establishing a standard noise level by reasonable regulation. The Association responded to the petition, denying the material allegations and raising several affirmative defenses.
In support of his claims, Allison maintained that in 2014, another unit owner was permitted to keep hard surfaced flooring after replacing carpeting with laminate flooring based on the new flooring meeting an "impact insulation class (IIC) sound proofing rating of 50." He asserted that the flooring he had installed had soundproofing superior to the flooring installed by the other unit owner. The Association admitted that in an attempt to resolve an earlier dispute with another owner, "it ventured into the mistaken world of numeric standards and allowed flooring that had an IIC of 50." It contended that Allison's willingness to show that his flooring would meet or exceed the IIC rating of 50 was unacceptable.
Based on the evidence presented in the arbitration proceeding, the arbitrator held that the Association's denial of Allison's request to keep the vinyl flooring on the same terms as the owner of the other unit was unreasonable, arbitrary, and capricious. He ruled that Allison could keep his vinyl flooring as installed and ordered the Association to reimburse Allison for the June 2019 fine that he had paid. The arbitrator did not specifically address other issues that had been raised by the parties. He stated that resolution of those other issues was unnecessary as he had resolved the issue that was dispositive of the entire dispute.
III. CIRCUIT COURT PROCEEDINGS
The Association filed a timely complaint for trial de novo pursuant to section 718.1255(4)(k), seeking a declaratory judgment. The Association requested that the trial court enter a judgment setting aside the arbitrator's order, declaring that the Association was entitled to enforce the Declaration and flooring rule against Allison, and awarding the Association its reasonable attorneys' fees and costs. Allison filed an answer, affirmative defenses, and a one-count counterclaim. The affirmative defenses largely mirrored the issues he raised in his petition for arbitration. He contended that the Association was selectively enforcing its flooring rule, that the rule is arbitrary and capricious, that the Association is estopped or has waived its authority to require sound testing under the Declaration, that the Association had no authority to enact the rule, and that the rule conflicts with the Declaration. The parties subsequently filed competing motions for summary judgment.
At the hearing held on the motions, the Association argued, "The very narrow scope that is before Your Honor with the Complaint for trial de novo is strictly a request that the Court review the order from arbitration and declare the order was invalid and improper." Further, the Association asserted that the focus really needs to be on the actual order, because that is what we filed a trial de novo on, I don't believe the other issues regarding the rule of the Board of Directors being in contravention to the declaration is a relevant discussion or an important discussion at all because it's not before the Court on our-you have to remember, the Association now is the plaintiff here. It's our Complaint for trial de novo. The defendant here, Mr. Allison, cannot utilize this summary judgment to add three more areas of relief that they are somehow trying to craft here on a summary judgment. You can't go beyond what the complaint for trial de novo indicates.
The Association also argued that the arbitrator "attempted to set a precedent . . . [on a] concept [that] has never existed before in the history of the State of Florida . . . because the actual idea of it is impossible, offensive selective enforcement."
In response, Allison argued that a trial de novo is not where the trial court sits "in some type of appellate capacity over the arbitrator." Instead, a trial de novo is a "brand new" proceeding. Allison pointed out that while the arbitrator's decision is admissible as evidence in a trial de novo proceeding, nothing restricts the court's ruling to be "some type of appellate capacity aspect."
The trial court agreed with the Association that it was limited to the issue addressed by the arbitrator in his order and that issues not ruled on by the arbitrator would not be considered in a trial de novo. The court added "that the arbitrator's decision is moot with reference to the petition for a trial de novo." In a subsequent written order, the court stated that "due to the specific relief requested by the [Association's] Complaint and [Allison's] Counterclaim, the Court's scope is limited to the decisions rendered by the arbitrator in his Order." The trial court found that "there is no vehicle that would have allowed the [arbitrator] to make findings based upon selective enforcement" because "that is not a vehicle that is supported in the law as a basis to grant" Allison's petition for arbitration. The court found, among other things, that "Allison is governed by and is required to comply with the Declaration, which Allison admittedly failed to do." But the court failed to address Allison's affirmative defenses, most notably that of selective enforcement and waiver and estoppel. Even so, the court made the following findings: that the Association "does not have the authority to enact a rule that conflicts with the Declaration"; that the flooring rule "conflicts with the Declaration"; that the rule "appears to be arbitrary and capricious in that it appears to vary from unit to unit"; and that the Association did not have the authority to fine Allison twice for the same action or violation.
Based on these findings and conclusions, the trial court granted the Association's motion for summary judgment in part. The court also denied Allison's motion for summary judgment in part and granted it in part. The court declared "that the Association is entitled to enforce the Declaration against Allison"; "that Allison is required to abide by all sections of the Declaration"; "that the Association properly levied the June [f]ine against Allison"; and that "[t]he Association did not have a valid basis to levy the September [f]ine against Allison."
IV. ANALYSIS
We review the granting or denying of summary judgment de novo. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla. 2000). "The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Lake Lincoln, LLC v. Manatee County, 355 So.3d 493, 496 (Fla. 2d DCA 2023) (quoting Fla. R.Civ. P. 1.510(a)).
Allison argues that the trial court erred by failing to conduct a trial de novo, limiting its review to the only issue addressed by the arbitrator, failing to fully consider his affirmative defenses, and failing to rule in his favor on those affirmative defenses. In response, the Association largely abandons the argument it made to the trial court that the court had "a very narrow scope" limited to reviewing the arbitrator's decision and declaring it to be invalid and improper. Instead, the Association now argues that the trial court did, in fact, conduct a trial de novo.
It is evident from this record that the trial court did not conduct a trial de novo, instead accepting the Association's contention that the court's role was limited to reviewing the arbitrator's decision as if it were sitting in an appellate capacity. This was error. Indeed, the Association's position reflects a fundamental misunderstanding of what constitutes a trial de novo.
The Fifth District recently analyzed the history of the term "trial de novo." See Dungarani v. Benoit, 312 So.3d 126, 129-30 (Fla 5th DCA 2020) Historically, the term "was generally held to mean a trial anew of the entire controversy, including the hearing of evidence as though no previous action had been taken" Id. at 130 In current usage, "'a trial de novo' is a term-of-art that contemplates a trial of the entire case in the circuit court" Id. at 129-30; see also Chrysler Corp v Pitsirelos, 721 So.2d 710, 715 (Fla 1998) (Overton, J, concurring in part and dissenting in part) ("[T]rial de novo is not in the nature of a standard appeal from a lower court decision because the Arbitration Board decision is not under appellate review. The circuit court does not examine the arbitration decision for error or injustice; rather, the circuit court conducts a trial at which liability is determined.").
Section 718.1255(4)(k) provides that the parties to the arbitration have the right to file a complaint for a trial de novo "in the appropriate trial court for a judicial resolution of the dispute." Section 718.1255(4) provides that an arbitration decision is admissible in evidence in a trial de novo. But the decision is not entitled to a presumption of correctness. See Pitsirelos, 721 So.2d at 714 (discussing the presumption of correctness at a trial de novo following nonbinding arbitration in a Lemon Law case). Notably, nonbinding arbitration is quite informal, and "[s]uch a procedure simply does not suffice as a substitute for trial to which the parties are entitled." Bacon Fam. Partners, L.P. v. Apollo Condo. Ass'n, 852 So.2d 882, 889 (Fla. 2d DCA 2003) (quoting Preferred Mut. Ins. Co. v. Davis, 629 So.2d 259, 260 (Fla. 4th DCA 1993)).
Here, the trial court erred by limiting its review of the arbitrator's decision as if it were sitting in an appellate capacity instead of conducting a trial de novo. And while the court made various findings, some favorable to Allison and others favorable to the Association, because the court did not afford the parties a trial de novo but instead reviewed the issues through a limited scope of review, we are compelled to reverse.
For purposes of remand, we address an argument that the Association has made throughout the proceedings. The Association insists that Allison, as the petitioner in the arbitration proceedings, was precluded from arguing selective enforcement against the Association in the arbitration as an "offensive" strategy. Further, based on its position that the circuit court's role in the trial de novo was simply to review the arbitration order in a manner akin to appellate review, the Association contended that Allison was precluded from raising selective enforcement as an affirmative defense to the Association's complaint for trial de novo and a declaratory judgment. We reject these arguments.
"A party may challenge the enforcement of an otherwise valid restrictive covenant by proving defensive matters that preclude enforcement, such as the enforcing authority acted in an unreasonable or arbitrary manner." Curci Vill. Condo. Ass'n v. Maria, 14 So.3d 1175, 1179 (Fla. 4th DCA 2009). We have no trouble concluding that Allison has properly raised selective enforcement as a defensive shield, both in his petition for arbitration and in the trial court, in response to the Association imposing fines against him and demanding that he remove the hard surfaced flooring he installed in his unit. Because the trial court accepted the Association's argument to the contrary, genuine issues of material fact remain in dispute for resolution in a trial de novo.
Finally, we reject Allison's request that we remand with directions that judgment be entered in his favor. Because the trial court failed to provide a trial de novo on the claims and defenses raised by the parties, we reverse and remand for further proceedings consistent with a trial de novo.
Reversed and remanded.
SLEET, C.J., and MORRIS, J., Concur.
Opinion subject to revision prior to official publication.