Opinion
No. 88-246.
June 15, 1989.
Appeal from the Circuit Court, Volusia County, C. McFerrin Smith, III, J.
Michael P. Falkowski, P.A., Daytona Beach, for appellant.
David A. Vukelja of Moore, Wood, Simpson, Korey, McKinnon Vukelja, Ormond Beach, for appellee.
Oceans Four Condominium Association, Inc. appeals a final judgment in favor of Doris Stafford, the owner of a condominium unit located at Oceans Four. The Association contends that the trial court erred in determining that the Association had wrongfully refused to decide which of two prospective purchasers was entitled to preference in purchasing Mrs. Stafford's unit and that the Association was liable to Mrs. Stafford for damages in the delay of the sale. We agree and reverse.
On July 11, 1985, Mrs. Stafford entered into a contract to sell her condominium unit to the Dismukes for $210,000. The Dismukes did not own a condominium unit at Oceans Four. The Oceans Four declaration of condominium provided that, before an owner may sell his unit to an outside party, the other unit owners have the right to purchase the unit on the same terms. The declaration also provided that if more than one unit owner wishes to purchase, preference is given to the party whose unit is located closest to the unit for sale.
In accordance with the provisions of the declaration, Mrs. Stafford submitted a copy of her contract with the Dismukes and the Association posted the contract. On July 19, 1985, the Hulmes executed a contract for the purchase of the unit and one week later, Louisa Hart presented a contract for the purchase of the unit.
Both the Hulmes and Louisa Hart asserted that their respective units were located closest to the Stafford unit and therefore they were entitled to preference. As a result of the dispute, Mrs. Stafford's attorney asked the Association to make a determination as to which contract the Association would approve so that Mrs. Stafford could proceed with the sale. Acting on the advice of its counsel, the Association declined to select a purchaser.
In September, 1985, Mrs. Stafford filed suit against the Association, the Hulmes, Louisa Hart and the Dismukes for a declaratory judgment and damages. In March, 1986, the Association authorized the Hulmes to purchase the unit. The litigation did not end with this determination as the Dismukes and Mrs. Hart continued to try to acquire the property. The trial court later determined that the Hulmes were entitled to the preference and ordered the sale to them.
The trial court also concluded that the Association had the duty to determine which unit was closest and that the failure of the Association to do so in a timely fashion caused damages to Mrs. Stafford. The court then awarded Mrs. Stafford damages including the loss of use of her property during the time the Association failed to act.
The Declaration of Condominium promulgated under Florida's Condominium Act defines the relationships and duties of the parties involved in this suit. The Declaration of Condominium, in its material parts, is as follows:
11.1 Transfers subject to approval.
a. Sale. No unit owner of a unit may dispose of a unit or any interest in a unit by sale without approval of the Association except to the owner of another unit. [Emphasis added].
* * * * * *
11.2 APPROVAL OF ASSOCIATION
The Approval of the Association which is required for the transfer of ownership of units shall be obtained in the following manner:
a. Notice to Association
(1) Sale. A unit owner intending to make a bona fide sale of a unit or any interest in it shall give to the Association notice of that intention together with an executed copy of the proposed contract with the name and address of the intended purchaser, the price, terms and conditions, if any.
Upon receipt of this information, the members of the Association shall have the First Right to accept such sale at the bona fide price and on terms contained in the contract. Notice to owners shall be made by posting information of the proposed sale along with the price, terms and conditions. Such notice is to be posted for a period of ten (10) days from the date of receipt of the request for approval of sale and any member wishing to exercise the right to purchase shall provide the seller and the Association with written notice of such intent within 15 days of the first day of the intent is posted.
If there is more than one owner wishing to purchase, then first preference will be given to the owner closest to the unit for sale. Owners in the same tower as the unit shall receive preference over owners in other towers. Upon receiving the notice and information the Association, to avoid delay and inconvenience for the unit owner, must act promptly to interview the prospective purchaser and offer first right of refusal to owners in Oceans Four.
b. Certificate of Approval
(1) Sale. If the proposed transaction is a sale to a nonmember, then within fifteen (15) days after receipt of the notice and information the Association must either approve or disapprove the proposed transaction. Such approval or disapproval of the buyer proposed by the unit owner is to be determined by personal interview with the Sales Approval Committee. The 15 days will be extended if necessary to provide reasonable time for the interview and necessary follow-up actions such as reference checks. If approved, the approval shall be stated in a certificate executed by the President and Secretary of the Association in recordable form. The certificate shall be recorded in the Public Records of Volusia County, Florida, at the expense of the purchaser. [Emphasis added].
There is no basis either in the Statute or in the Declaration of Condominium for fastening the extraordinary duty imposed upon the Association by the trial court. In fact, the emphasized portions of the Declaration of Condominium expressly reveal that no such duty existed. The Declaration of Condominium did provide a method for resolving the controversy, but none of the competing would-be purchasers could agree on a proper interpretation of the Declaration in order to settle the dispute.
The ruling of the lower court, in effect, found that the Association had a duty to provide what would amount to binding arbitration, with itself as arbitrator, for resolution of the controversy. Absent any provisions for such a procedure and corresponding duty, the proper forum for resolution was the circuit court.
The Florida Declaratory Judgment Statute provides that persons claiming to be interested in or having doubts about their rights under certain instruments, including contracts or other instruments in writing, may seek a declaration of those rights in a declaratory judgment action filed in the circuit court. § 86.011 et seq., Fla. Stat. (1987). The trial court did, in this case, properly decide which of the competing would-be buyers was entitled to a preference, which decision was wholly within the jurisdiction conferred upon the circuit court by the statute, but erred in holding that the Condominium Association had that very same duty.
The judgment entered against the appellant is therefore reversed and the cause is remanded to the trial court with directions to enter judgment for the appellant, Oceans Four Condominium Association, Inc.
REVERSED and REMANDED.
ORFINGER, J., concurs.
DANIEL, J., dissents with opinion.
I dissent.
The majority, through Associate Judge Evans, has, in their first six paragraphs, most ably set out what I perceive to be the factual scenario and ruling of the trial court.
Contrary to the majority, however, there is every basis in both the Florida Statutes and in the Declaration of Condominium to support the findings and final judgment of the trial court.
Chapter 718, known as Florida's "Condominium Act", gives statutory recognition to the condominium form of ownership of real property and establishes procedures for the creation, sale, and operation of condominiums. Every condominium created in the state is subject to the provisions of this chapter. § 718.102, Fla. Stat. (1987). A condominium is created by recording a declaration in the public records in the county where the land is located. § 718.104(2), Fla. Stat. (1987). The Declaration of Condominium governs the relationships between the condominium unit owners and the condominium association but "is more than a mere contract spelling out mutual rights and obligations of the parties thereto — it assumes some of the attributes of a covenant running with the land, circumscribing the extent and limits of the enjoyment and use of real property." Brickell Bay Club Condominium Association, Inc. v. Hernstadt, 512 So.2d 994, 996 (Fla. 3d DCA 1987).
The Declaration of Condominium is part of the condominium's "constitution" and is susceptible to basic rules of interpretation. Koplowitz v. Imperial Towers Condominium, Inc., 478 So.2d 504 (Fla. 4th DCA 1985). Thus every provision should be given meaning and effect and apparent inconsistencies reconciled if possible. See Excelsior Insurance Company v. Pomona Park Bar Package Store, 369 So.2d 938 (Fla. 1979). In so doing, the court should strive to give effect to the intent of the parties in accord with reason and probability as gleaned from the whole agreement and its purpose. Arthur Rutenberg Corporation v. Pasin, 506 So.2d 33 (Fla. 4th DCA 1987). In determining the intent of the parties, the individual terms of the agreement should not be considered in isolation but as a whole and in relation to one another. Baghaffar v. Story, 515 So.2d 1373 (Fla. 5th DCA 1987); South Florida Beverage Corporation v. Figueredo, 409 So.2d 490 (Fla. 3d DCA 1981).
Here the Declaration provides that "first preference will be given to the owner closest to the unit for sale." The preference is found under section 11.2 which provides for "Approval of Association." This section is concerned primarily with the duties and obligations of the Association. When the rights and obligations of a party other than the Association are involved, the active voice is used and the actor is specified. For example, this section provides that "a unit owner intending to make a . . . sale . . . shall give . . . notice" and "the members . . . shall have the first right to accept such sale . . ." When the passive voice is used and the actor is not specified (for example, "notice is to be posted . . ."), the actor is clearly the Association. The Association did in fact authorize the Hulmes to purchase Mrs. Stafford's condominium. The proper resolution of any inconsistencies which may arguably exist in an agreement is best determined by the manner in which the parties actually perform under it. South Florida Beverage Corporation v. Figueredo.
See majority opinion for pertinent portions of the Declaration of Condominium.
The fact that the preference provision is set forth under the section involving approval by the Association, that the party who is to determine the preference is not expressly named and that the Association did select and approve a purchaser indicates that the parties intended for the Association to determine who is the "closest" unit owner for purposes of applying the preference. However, even if we were to find that a genuine inconsistency or ambiguity exists as to which party had the duty of determining the preference, we would have to construe any ambiguity against the drafter of the Declaration, that is, the Association. Enegren v. Marathon Country Club Condominium West Association, Inc., 525 So.2d 488 (Fla. 3rd DCA 1988); Kaufman v. Shere, 347 So.2d 627 (Fla. 3d DCA 1977). Thus, contrary to the majority, I would conclude that the Association had the duty to decide which of the two prospective purchasers was entitled to the preference in purchasing Mrs. Stafford's unit and that the Association was liable for the damages resulting from its failure to do so.
The Association also argues that the trial court erred in awarding Mrs. Stafford damages for the loss of the use of the sales proceeds from the date of the original closing in the Hulmes' contract until the actual closing. I would conclude that even if this item of damages was not specifically raised in the pleadings, the issue was tried by consent of the parties. See Rosenberg v. Guardian Life Insurance Company, 510 So.2d 610 (Fla. 3d DCA 1987); Smith v. Mogelvang, 432 So.2d 119 (Fla. 2d DCA 1983). The Association failed to act when it had a duty to do so and this failure resulted in a delay of more than one year in Mrs. Stafford receiving the proceeds from the sale of her condominium. Thus she was entitled to damages for the loss of the use of the sales proceeds. See Foresight Enterprises v. Leisure Time Properties, Inc., 466 So.2d 283 (Fla. 5th DCA 1985); Hampton — Chrysler — Plymouth — Dodge, Inc. v. White, 448 So.2d 87 (Fla. 1st DCA 1984).
I would affirm.