Beacon Hill Homeowners Assoc., Inc. v. Colfin Ah-Florida 7, LLC

Third District Court of Appeal

State of Florida

Opinion filed May 24, 2017.

Not final until disposition of timely filed motion for rehearing.

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No. 3D16-1185

Lower Tribunal No. 15-21095

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Beacon Hill Homeowners Association, Inc., et al.,

Appellants,

vs.

Colfin Ah-Florida 7, LLC,

Appellee.

An Appeal from the Circuit Court for Miami-Dade County, Jacqueline

Hogan Scola, Judge.

Paige Law Group, P.A., and Robert E. Paige, for appellants.

Law Offices of Jonathan J. Alfonso, P.A, Jonathan J. Alfonso and Carolina

Maria Dutriz, for appellee.

Before ROTHENBERG, SALTER and FERNANDEZ, JJ.

FERNANDEZ, J.

Beacon Hill Homeowners Association, Inc. and Old Cutler Lakes by the Bay

Community Association, Inc. (collectively, the Associations) appeal the trial

court’s summary final judgment in favor of Colfin Ah-Florida 7, LLC, as well as

the respective parties’ motions for rehearing or reconsideration. We affirm,

adopting the Fourth District Court of Appeal’s decision in Pudlit 2 Joint Venture,

LLP v. Westwood Gardens Homeowners Association, Inc., 169 So. 3d 145 (Fla.

4th DCA 2015).

On October 24, 2011, JPMorgan Chase Bank, National Association filed a

foreclosure action in Miami-Dade County Circuit Court against a property owner.

On February 10, 2015, the Miami-Dade County Clerk of the Court issued the

Certificate of Title to appellee, Colfin AH-Florida 7, LLC, who was the successful

bidder of the underlying property at the foreclosure sale. Pursuant to the recorded

declarations of each associations, Colfin was not liable for any amounts owed by

the previous owners of the property.

For example, Beacon Hill’s Declaration provided:

Section 9. SUBORDINATION OF THE LIEN TO

MORTGAGES. The lien of the assessments provided for herein shall

be a lien superior to all other liens save and except tax liens and

mortgage liens, provided said mortgage liens are first liens against the

property encumbered thereby, subject only to tax liens, and said first

mortgage secures an indebtedness which is amortized on monthly or

quarter-annual payments over a period of not less than ten (10) years.

The sale or transfer of any Lot pursuant to the foreclosure or any

proceeding in lieu thereof of a first mortgage meeting the above

qualifications, shall extinguish the lien of such assessments as to

payments which became due prior to such sale or transfer. No sale or

transfer shall relieve such Lot from liability for any assessments

thereafter becoming due or from the lien thereof.

Old Cutler’s Declaration stated:

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Section 10: Subordination of the Lien to Mortgages. The lien of the

assessments provided for herein shall be a lien superior to all other

liens save and except tax liens and mortgage liens, provided said

mortgage liens are first liens against the property encumbered thereby,

subject only to tax liens, and said first mortgage secures an

indebtedness which is amortized on monthly or quarter-annual

payments over a period of not less than ten (10) years. The sale or

transfer of any Lot pursuant to the foreclosure or any proceeding in

lieu thereof of a first mortgage meeting the above qualifications, shall

extinguish the lien of such assessments as to payments which became

due prior to such sale or transfer. No sale or transfer shall relieve such

Lot from liability for any assessments thereafter becoming due or

from the lien thereof.

In May 2015, Colfin received a claim of lien letter from each association.

The first letter claimed Colfin owed $7,463.25 to Beacon Hill for $1,268.25 in

assessments, $6,025.00 in attorney’s fees, and $170.00 in costs. The second lien

letter claimed Colfin owed $8,072.40 to Old Cutler for $1,998.40 in assessments,

$6,024.00 in attorney’s fees, and $50.00 in costs. Colfin filed a complaint to quiet

title and for a declaratory judgment, contending that the Declaration prohibited

collection of the amounts the Associations claimed were owed.

The trial court held a hearing on Colfin’s Motion for Summary Judgment.

Colfin contended that the Declarations prohibited the collection of the amounts the

Associations claimed were owed. The Associations argued that language in the

Declarations allowing the Associations to exercise any powers afforded to a

corporation amounted to what is referred to as “Kaufman” language, referencing

Kaufman v. Shere, 347 So.2d 627 (Fla. 3DCA 1977). The Associations further

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argued that their Declarations incorporated future changes in the law, and thus the

joint and several liability provision of section 720.3085(2)(b) Florida Statutes

(2016) was incorporated into the terms of their Declarations.1 At the conclusion of

the hearing, the trial court ruled in favor of Colfin, finding that the Declaration of

the Association of each of the associations controlled. The Associations’ separate

motions for rehearing were denied. The Associations now appeal these rulings.

The standard of review on appeal for a motion for summary judgment based

on a quiet title action is de novo. Volusia County v. Aberdeen at Ormond Beach,

760 So. 2d 126, 130 (Fla. 2000). The standard of review on appeal of a motion for

rehearing is abuse of discretion. Villas at Laguna Bay Condo. Assn. Inc. v.

Citimortgage, Inc., 190 So. 3d 200 (Fla. 5th DCA 2016).

The Associations contend that they are allowed to avoid the Declarations

which govern them. We disagree and follow our previous ruling in Garden of

Kendall Condominium v. Valores Agregados, 187 So. 3d 252 (Fla. 3d DCA 2016),

which adopted the Fourth District Court of Appeal’s decision in Pudlit 2 Joint

Venture, LLP v. Westwood Gardens Homeowners Association, Inc., 169 So. 3d

145 (Fla. 4th DCA 2015), by citation in a per curiam affirmance.

1 Section 720.3085((2)(b) provides that a third party purchasing a property is

jointly and severally liable with the previous owner “for all unpaid assessments

that came due up to the time of transfer of title.”

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In Pudlit, the plaintiff/appellant Pudlit 2 Joint Venture, LLP purchased two

properties, at a foreclosure sale, located within communities maintained by

defendant/appellee Westwood Gardens Homeowners Association, Inc. Westwood

demanded payment for all unpaid association assessments left unpaid prior to

Pudlit’s ownership. Id. at 147.

Pudlit sued Westwood for breach of declaration and declaratory relief,

alleging that any liens for past due assessments were extinguished by the

foreclosure judgments pursuant to the terms of the association's Declaration of

Covenants, Conditions, and Restrictions. Id. Westwood cross-moved for summary

judgment, arguing that section 720.3085, Florida Statutes (2013), mandated that

Pudlit was jointly and severally liable with the prior owners for all unpaid

assessments on the subject properties. Id. Pudlit contended that “section 720.3085

did not impose liability upon appellant, because the declaration's express terms

were not invalidated by the statute or waived by appellant, and imposition of the

statute against the declaration's express terms would unconstitutionally impair its

contractual rights.” Id. The trial court denied Pudlit’s summary judgment motion

and granted Westwood’s cross-motion. Id.

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On appeal, the Fourth District Court of Appeal sided with Pudlit, stating:

The association's argument that the legislature's enactment of

section 720.3085 amended the declaration is without merit. A

declaration can be amended according to the procedure outlined

within the declaration, or according to statute, by two-thirds' approval

of the homeowners. See Grove Isle Ass'n, Inc. v. Grove Isle Assocs.,

LLLP, 137 So. 3d 1081, 1090 (Fla. 3d DCA 2014). Generally, “repeal

or invalidation by implication [of restrictions and provisions in a

declaration] is not favored and generally will not be presumed absent

a clear legislative intent.” United States v. Forest Hill Gardens E.

Condo. Ass'n, 990 F. Supp. 2d 1344, 1349 (S.D. Fla. 2014). The

declaration here provides the following amendment procedures:

[A]s long as Declarant controls the Association, the

Declarant may make and file any amendment hereto

required by the Declarant or by the Federal National

Mortgage Association or Veteran's Administration or

Federal Housing Administration or Federal Home Loan

Mortgage Corporation or any governmental body with

jurisdiction over the Property, provided said amendment

does not materially, adversely affect the rights of a Lot

Owner, as determined solely by the Declarant, by an

instrument executed only be the Developer. Such

amendment need not be signed or executed in the manner

otherwise provided for herein.

The only provisions in the declaration providing for automatic

amendment based on legislative action are limited to amendments

which are “required” by the plain language of the legislation. Nothing

in the language of section 720.3085(2)(b) demonstrates that it is

“required” to be adopted by Florida homeowners' associations. Thus,

the association cannot argue that section 720.3085, as enacted by the

Florida legislature, automatically amended the association's

declaration.

The case before us is exactly on point with Pudlit. The joint and several

liability of section 720.3085(2)(b) was not incorporated into the terms of the

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Associations’ Declarations. Accordingly, under the language adopted by the

Associations in their Declarations, Colfin was not liable for any past due

assessments, attorney’s fees, or costs of the prior owner when it purchased the

property in question at the foreclosure sale, for the reasons set forth in Pudlit.2

We thus affirm the trial court’s summary final judgment entered in favor of

Colfin. We further affirm the trial court’s denial of Beacon’s motion for rehearing

and reconsideration and the denial of Old Cutler’s motion for rehearing, as the trial

court did not abuse its discretion in denying these motions.

Affirmed.

2 The Associations claim that language contained in their Declarations asserting

that the Associations “have and exercise any and all powers, rights, and privileges

which a corporation . . . may now or hereafter exercise,” is Kaufman language.

However, we do not agree because the language in the Declarations only

references what constitutes the legal activities which the Associations can engage

in pursuant to Chapter 617, which allows for not-for-profit corporations. As Coflin

points out, in order for the Associations’ language to be considered Kaufman

language, the Associations would have to specifically incorporate the

Homeowner’s Association Act, as amended from time to time. However, there is

no such language in the Associations’ Declarations.

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