A condominium’s declaration is a contract.  As a unit owner, it serves as your contract and will govern your rights with your condominium association.  Just like any contract, disputes arise between a unit owner and the association regarding the interpretation of the declaration.  And, no different than any contract, the interpretation of a declaration is reviewed under a de novo standard of appellate review.  See Lenzi v. The Regency Tower Ass’n, 43 Fla.L.Weekly D1397a (Fla. 4^th DCA 2018).

Lenzi serves as an example of a dispute involving a condominium unit owner and his association regarding the interpretation of a provision in the condominium’s declaration. In this case, the unit owner wanted the court to interpret a word used in the declaration restrictively, which the trial court rejected and the appellate court affirmed. 

When it comes to terms in a declaration (or any contract), terms are to be given their plain and ordinary meaning such that terms are construed in their ordinary sense.  See Lenzi, supra.  Unless a specific word is a defined term in the declaration (or contract), words are to be construed by their generally understood definition. Id.

If you are in a dispute with your condominium association regarding a provision or the interpretation of your declaration, make sure to consult with counsel to make sure your interpretation or basis of your dispute is colorable.   

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Arbitration is a creature of contract, meaning if you want your disputes to be resolved by arbitration through an arbitrator (as opposed to litigation with a judge and/or jury), you need to include an arbitration provision in your contract.   A trial court granting or denying a party’s motion to compel arbitration is a non-final order that is immediately appealable.  See Fla.R.App.P. 9.130(a)(3)(C)(iv).

There are times that a non-signatory to a contract with an arbitration provision wants to compel arbitration.  For example, a signatory to a contract (with an arbitration provision) files suit against a non-party and the non-party moves to compel arbitration based on the contract.  A dispute arises because the non-party is not a party to that contract, and thus, it needs a legal basis to compel arbitration under that contract.  That legal basis to allow a non-party to a contract to compel arbitration against a signatory to the contract is equitable estoppel: 

Courts have recognized that this [compelling arbitration] can be appropriate (1) when the signatory’s claims [against the non-party to the contract] allege “substantially interdependent and concerted misconduct” by the signatory and the non-signatory or (2) when the claims relate directly to the contract and the signatory is relying on the contract to assert its claims against the non-signatory. 

Beck Auto Sales, Inc. v. Asbury Jax Ford, LLC, 43 Fla.L.Weekly D1380a (Fla. 1^st DCA 2018).

However, “even when a non-signatory can rely on equitable estoppel ‘to access [the arbitration] clause,’ the non-signatory can compel arbitration only if the dispute at issue ‘falls within the scope of the arbitration clause.’”  Beck Auto Sales, Inc., supra (citation omitted).  Even if one of the above equitable estoppel circumstances apply, the non-signatory still will not be able to compel arbitration if the scope of its dispute falls outside of the arbitration provision.

An example of the first circumstance was raised in Beck Auto Sales where a car dealership sued its former employee and the former employee’s new dealership/employer for a number of theories relating to their concerted effort to prevent the car dealership from winning a contract with a public entity. 

The former employee had an employment agreement with the car dealership that included an arbitration provision.  The trial court granted arbitration between the car dealership and former employee.  The new employer/dealership, a non-signatory to the employment contract, moved to compel the car dealership’s claims against it to arbitration under the employment contract.  It argued that the car dealership’s claims against it and the former employee (a signatory to the contract) allege substantially interdependent and concerted misconduct by the former employee (signatory) and it (non-signatory). The problem for the new dealership/employer, however, was that the arbitration provision in the employment contract was limited to disputes between the parties to the arbitration agreement.  The scope of the arbitration provision would not cover disputes involving the new dealership/employer; hence, it was unable to take advantage of an equitable estoppel argument to compel arbitration as a non-signatory to the employment contract.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Severability clauses have become fairly commonplace in contracts.  Cut and paste provisions.  However, these clauses can provide tremendous value.  A sample of a severability clause is as follows:

If any provision of this Agreement, the deletion of which would not adversely affect the receipt of any material benefit by or in favor of any party or substantially increase the burden of any party to this Agreement, shall be held to be invalid or unenforceable to any extent, the same shall not affect in any respect whatsoever the validity or enforceability of the remainder of this Agreement.

There are numerous ways to draft this type of clause with the essence being that if anything in the contract is deemed invalid or unenforceable, the balance of the provision and contract shall remain in full force and effect.  Such a provision, regardless of how it is worded, is known as a severability clause. 

An example of the application of the severability clause can be found in Premier Compounding Pharmacy, Inc. v. Larson, 43 Fla. L. Weekly D1340a (Fla. 4^th DCA 2018), dealing with a non-compete agreement between a pharmacy and pharmacist. 

The non-compete agreement in the case contained language that the pharmacy (employer) could obtain injunctive relief without posting an injunction bond.  Requiring a temporary injunction to be posted without a bond is contrary to Florida Statute s. 542.335(j) which states in relevant part, “No temporary injunction shall be entered unless the person seeking enforcement of a restrictive covenant gives a proper bond, and the court shall not enforce any contractual provision waiving the requirement of an injunction bond or limiting the amount of such bond.”

Based on this statute, the language in the non-compete agreement that allowed the employer to move for a temporary injunction without posting a bond was not legal. 

Without going into all of the details of the case, the appellate court maintained that the language in the non-compete agreement that allowed the employer to move for a temporary injunction without posting a bond can be eliminated from the provision, with valid legal obligations remaining in the agreement, i.e., the temporary injunction can be  issued while requiring the employer to post a bond pursuant to Florida law.  

Additionally, the provision also allowed the employer to recover attorney’s fees in obtaining the injunctive relief.  The trial court denied the employer’s request for fees (although the injunction was entered) finding the provision unenforceable because of the preceding invalid sentence that allowed the employer to obtain an injunction without posting a bond.  No different than the appellate court eliminating the “without a bond” from the provision, the court held that, “because the extent of unenforceability of the provision goes solely to the ‘no bond’ requirement of the injunction, the remainder of the provision and the agreement is still enforceable, including the attorney’s fees provision.” Premier Compounding Pharmacy, Inc., supra.

Hence, while the provision at-issue was contrary to Florida law, the severability provision provided value in simply eliminating the invalid language and enforcing the remainder of the provision.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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When real property is the subject to a pending foreclosure action where there is a lis pendens (a formal notice), a buyer that purchase the property outside of the foreclosure “does so at his own risk because he is on notice that the property is subject to the foreclosure action [through the lis pendens].” Bymel v. Bank of America, N.A., 159 So.3d 345, 346 (Fla. 3d DCA 2015). The buyer is not permitted to intervene in the pending foreclosure action. See id. at 346-47.

In a recent case, The Bank of New York Mellon v. HOA Rescue Fund, LLC, 43 Fla.L.Weekly D1312b (Fla. 2d DCA 2018), the bank (mortgagee) filed a foreclosure action and lis pendens. After the bank’s action was pending, the mortgagor’s homeowner’s association foreclosed an unpaid assessment lien. A buyer obtained the property at the foreclosure sale of the assessment lien and then moved to intervene into the bank’s previously filed foreclosure action, which the trial court allowed. (It appeared the bank, although its action was previously filed, did not aggressively prosecute the foreclosure and was fine with allowing its action to sit idle.)

Two issues were addressed on appeal.

First, the buyer that purchased the property through the homeowner’s association’s foreclosure of an assessment lien should NOT have been allowed to intervene. “A purchaser of property that is the subject of a pending foreclosure action in which a lis pendens has previously been recorded is not entitled to intervene in that foreclosure action.” The Bank of New York Mellon, supra. This language is the reason why filing a lis pendens is powerful! The lis pendens puts the subsequent buyer on notice that he is purchasing the property at his own risk knowing the title to the property is subject to a pending lawsuit.

Second, even if the buyer could intervene, the buyer purchased the property subject to a superior interest. In other words, the mortgage was superior to the homeowner’s association’s assessment lien so when the buyer purchased the property at the foreclosure sale of the assessment lien, the purchase was always subject to the superior mortgage. Even if intervention was proper, the buyer still would not be able to participate in the bank’s foreclosure action as if the buyer were a party to the original note and mortgage.

It is extremely important in situations like this that you get a Foreclosure Lawyer involved to go through the case with you. It is a very complex situation to be in, and I would recommend not doing it alone.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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There are two different causes of action known as account stated and open account.  Although these are separate causes of action, and have different burdens of proof, they are oftentimes pled together and confused for one another.   These are causes of action that would be asserted when a party / creditor claims another party / debtor owes it money from a transaction.  

ACCOUNT STATED

An account stated is a cause of action when there is an “agreement between persons who have had previous transactions, fixing the amount due in respect of such transactions, and promising payment.”  Farley v. Chase Bank, U.S.A., N.A., 37 So.3d 936, 937 (Fla. 4th DCA 2010) (quotation and citation omitted).  An “account stated requires an express or implied agreement between the parties that a specified balance is correct and due and an express or implied promise to pay the balance.”  Id.; see also Mercado v. Lion’s Enterprise, Inc., 800 So.2d 753, 755 (Fla. 5^th DCA 2001) (“Where there is no such [express or implied agreement that a certain balance is correct] between the parties, there can be no recovery on this theory.” ); Robert C. Malt & Co. v. Kelly Tractor Co., 518 So.2d 991, 991 (Fla. 4^th DCA 1988) (“Generally, an account stated is established where a debtor does not object to a bill from his creditor within a reasonable time.”).

Florida has a standard form, Form 1.933, regarding how to properly plead a cause of action for account stated.

OPEN ACCOUNT

An open account “is an unsettled debt arising from items of work and labor, with the expectation of further transactions subject to future settlements and adjustments.”  Id. (quotation and citation omitted).  In an action on an open account, the claimant must actually attach a copy of the itemized account, unlike an account stated action.  Id.  An open account “should not include express contracts or other obligations that have been reduced to writing…An obligation does not become an ‘open account’ simply because the amount due under a contract requires calculation.” H&H Design Builders, Inc. v. Travelers’ Indem. Co., 639 So.2d 697, 699 (Fla. 5^th DCA 1994). 

Florida has a standard form, Form 1.932, regarding how to properly plead a cause of action for open account.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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