Filed: Aug. 08, 2014
Latest Update: Mar. 02, 2020
Summary: NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED IN THE DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT ST. CROIX LANE TRUST & M.L. ) SHAPIRO, TRUSTEE, ) ) Appellant, ) ) v. ) Case No: 2D13-3636 ) ST. CROIX AT PELICAN MARSH ) CONDOMINIUM ASSOCIATION, INC., ) ) Appellee. ) ) Opinion filed August 8, 2014. Appeal from the Circuit Court for Collier County; Hugh D. Hayes, Judge. Jeffrey Bluestein of Marc L. Shapiro, P.A., Naples, for Appellant. Todd B. Allen of Geod
Summary: NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED IN THE DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT ST. CROIX LANE TRUST & M.L. ) SHAPIRO, TRUSTEE, ) ) Appellant, ) ) v. ) Case No: 2D13-3636 ) ST. CROIX AT PELICAN MARSH ) CONDOMINIUM ASSOCIATION, INC., ) ) Appellee. ) ) Opinion filed August 8, 2014. Appeal from the Circuit Court for Collier County; Hugh D. Hayes, Judge. Jeffrey Bluestein of Marc L. Shapiro, P.A., Naples, for Appellant. Todd B. Allen of Geode..
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NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
ST. CROIX LANE TRUST & M.L. )
SHAPIRO, TRUSTEE, )
)
Appellant, )
)
v. ) Case No: 2D13-3636
)
ST. CROIX AT PELICAN MARSH )
CONDOMINIUM ASSOCIATION, INC., )
)
Appellee. )
)
Opinion filed August 8, 2014.
Appeal from the Circuit Court for Collier
County; Hugh D. Hayes, Judge.
Jeffrey Bluestein of Marc L. Shapiro, P.A.,
Naples, for Appellant.
Todd B. Allen of Geode, Adamczyk &
DeBoest, PLLC, Naples, for Appellee.
WALLACE, Judge.
The owner of a condominium unit appeals a final summary judgment
declaring that no accord and satisfaction occurred when the condominium association
accepted a check that the unit owner tendered in full satisfaction of the association's
disputed claim for past due assessments and other charges. Because the circuit court
erred in relying on section 718.116(3), Florida Statutes (2011), in ruling that an accord
and satisfaction did not occur, we reverse the final summary judgment.
I. THE FACTUAL AND PROCEDURAL BACKGROUND
St. Croix at Pelican Marsh Condominium Association, Inc. (the
Association), filed an action to foreclose its lien on a condominium unit for past due
assessments, interest, late fees, costs, and attorney's fees. The Association obtained a
final judgment of foreclosure, and the unit was scheduled for sale. The unit was subject
to a first mortgage, and the Association elected not to bid at the sale. St. Croix Lane
Trust (the Trust) was the successful bidder at the sale. On March 13, 2012, the clerk of
the court issued and recorded a certificate of title in favor of the Trust.
The Trust bid $100 for the property at the sale. The $100 bid was
insufficient to pay the amount of the Association's foreclosure judgment. On March 21,
2012, the Association's attorney wrote the Trust a letter demanding payment of
$36,584.54. This figure included unpaid quarterly assessments against the unit for
several years, accrued interest, late fees, a substantial balance for a delinquent water
bill, costs, and attorney's fees. The Association also demanded payment of the
quarterly assessment that fell due on January 1, 2012, the first day of the quarter during
which the Trust took title to the unit. The Trust did not pay the amount demanded, and
the Association filed a claim of lien against the unit. On May 7, 2012, the Association's
attorney sent a letter to the Trust demanding payment of $38,586.11, plus interest
through the date of payment.
The Trust's attorney responded in writing on May 18, 2012. The Trust
disputed the amount of the Association's claim. In the Trust's view, its liability to the
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Association was limited to its share of the first quarterly assessment for 2012, prorated
from March 13, 2012, the date that it took title to the unit. However, the Trust offered to
pay the Association $840, the full amount of the first quarterly assessment, to settle the
matter. In pertinent part, the letter from the Trust's attorney to the Association's attorney
said:
At worst[,] my client only owes the pro rata first quarter
assessment for the period of its ownership. However, in a
good faith effort to resolve this matter I have enclosed
herewith a check in the amount of $840.00 payable to your
Trust Account for the full January 1, 2012 assessment. Be
advised and warned, this check is tendered in full and final
satisfaction of all claims made against the Trust and the
property for the amounts demanded in your May 7, 2012
correspondence. Regardless of intent, negotiation of the
enclosed check shall be deemed an acceptance of the offer
of settlement made herein, and shall be in full and final
satisfaction of all claims against the Trust and the property
. . . as more particularly set forth in your May 7, 2012
correspondence.
(Footnotes omitted.)
The parties (or their attorneys) evidently had a history that preceded the
current dispute. On May 18, 2012, the Association's attorney responded by e-mail to
the Trust's attorney as follows: "We've been through this argument before, so I'm not
going to recite it here again. You know our position, and the case law[1] used to support
it. I have instructed my staff to apply this as a partial payment once it's received
(despite the restrictive endorsement)." In fact, the Association received the Trust's
check for $840 and negotiated it.
1
We assume that the "case law" referenced here is Ocean Two
Condominium Ass'n v. Kliger, 983 So. 2d 739 (Fla. 3d DCA 2008).
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Despite its receipt and retention of the $840 tendered in settlement of its
claims, the Association threatened to file an action to foreclose its claim of lien against
the Trust's condominium unit. The Trust responded by filing an action against the
Association. The Trust's complaint contained two counts. In count one, the Trust
sought declaratory relief as follows: (1) an adjudication concerning whether it was
obligated to pay the Association for the past due assessments and other amounts
claimed; (2) an order discharging the Association's claim of lien against the unit; and (3)
an award of attorney's fees and costs. In count two, the Trust sought damages for the
loss of the rental value of the unit. The Trust alleged that the declaration of
condominium authorized the Association to prohibit the leasing of a unit if the unit owner
was delinquent in the payment of assessments when a unit owner submitted an
application to lease a unit. The Trust alleged further that the submission of an
application to lease the unit would "be futile" under the circumstances.
II. THE CIRCUIT COURT'S RULING
The facts were essentially undisputed, and the parties filed cross-motions
for summary judgment. In June 2013, the circuit court granted the Association's motion
for summary judgment as to count one and denied the Trust's motion. In its order, the
circuit court determined that the Trust was jointly and severally liable with the previous
unit owner for all amounts claimed by the Association through the date of the
foreclosure sale, less the $840 payment. The circuit court's ruling was as follows:
1. Florida Statutes Section 718.116(1)(a) provides
that a parcel owner, regardless of how his or her title to
property was acquired, including by purchase at a
foreclosure sale, is jointly and severally liable with the
previous parcel owner for all unpaid assessments that came
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due up to the time of transfer of title. The common law
doctrine of merger is inapplicable in this instance.
2. [The Trust] acquired title to the subject property by
purchase at a foreclosure sale. Therefore, [the Trust]
became jointly and severally liable with the prior owner for
unpaid assessments that were due and owing to [the
Association] when [the Trust] took title to the subject
property, pursuant to Florida Statutes Section 718.116(1)(a).
3. By operation of ยง 718.116(3), Fla. Stat. [the
Association's] acceptance of a payment from [the Trust] as
an accord and satisfaction was ineffective to satisfy [the
Association's] claims against [the Trust] for amounts in
excess of the amount paid.
4. The assessments for which the [Trust] is jointly
and severally liable with the previous owner to the
[Association] include interest, costs, late fees[,] and
attorney's fees.
In July 2013, the circuit court entered a final judgment in accordance with its prior order.
The final judgment dismissed count two of the Trust's complaint with prejudice. This
appeal followed.
III. THE TRUST'S ARGUMENTS
On appeal, the Trust raises three arguments. First, the Association's
negotiation of the Trust's check that was tendered in full satisfaction of the Association's
claims resulted in an accord and satisfaction. Second, the Association's claim for the
assessment and other charges that accrued before the Trust acquired title to the unit
was extinguished by the common law doctrines of merger and estoppel. Finally, and in
the alternative, the Trust's liability to the Association was limited to the past due
assessments only, exclusive of interest, late fees, interest, utility expenses, costs, and
attorney's fees. We need address only the issue of accord and satisfaction. Our
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standard of review is de novo. Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760
So. 2d 126, 130 (Fla. 2000).
IV. DISCUSSION
Section 673.3111, Florida Statutes (2011), "Accord and satisfaction by use
of instrument," provides, in pertinent part, as follows:
(1) If a person against whom a claim is asserted
proves that that person in good faith tendered an instrument
to the claimant as full satisfaction of the claim, that the
amount of the claim was unliquidated or subject to a bona
fide dispute, and that the claimant obtained payment of the
instrument, the following subsections apply.
(2) Unless subsection (3) applies, the claim is
discharged if the person against whom the claim is asserted
proves that the instrument or an accompanying written
communication contained a conspicuous statement to the
effect that the instrument was tendered as full satisfaction of
the claim.
None of the exceptions provided for in the statute are applicable here. When the
Association negotiated the Trust's check that was tendered in full and final satisfaction
of the Association's disputed claim, an accord and satisfaction resulted. See Miller-
Dunn Co. v. Green, 16 So. 2d 637, 638 (Fla. 1944); United Auto. Ins. Co. v. Palm
Chiropractic Ctr., Inc.,
51 So. 3d 506, 509 (Fla. 4th DCA 2010); Martinez v. S. Bayshore
Tower, L.L.L.P.,
979 So. 2d 1023, 1024 (Fla. 3d DCA 2008). If the Association did not
wish to accept the $840 check in full settlement of its claims in accordance with the
Trust's conditional tender, then it should have returned the check instead of negotiating
it. See The Burke Co. v. Hilton Dev. Co.,
802 F. Supp. 434, 439 (N.D. Fla. 1992)
(applying Florida law). "Simply put, the [Association] cannot have [its] cake and eat it
too."
Id.
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The Association argues that section 718.116(3) of the Condominium Act
requires a different result. Section 718.116(3) provides as follows:
Assessments and installments on assessments which
are not paid when due bear interest at the rate provided in
the declaration, from the due date until paid. The rate may
not exceed the rate allowed by law, and, if no rate is
provided in the declaration, interest accrues at the rate of 18
percent per year. If provided by the declaration or bylaws,
the association may, in addition to such interest, charge an
administrative late fee of up to the greater of $25 or 5
percent of each delinquent installment for which the payment
is late. Any payment received by an association must be
applied first to any interest accrued by the association, then
to any administrative late fee, then to any costs and
reasonable attorney's fees incurred in collection, and then to
the delinquent assessment. The foregoing is applicable
notwithstanding any restrictive endorsement, designation, or
instruction placed on or accompanying a payment. A late
fee is not subject to chapter 687 or s. 718.303(4).
(Emphasis added.) In the Association's reading of the statute, the penultimate sentence
of subsection three protects a condominium association against a claim of accord and
satisfaction when it negotiates a check tendered in payment of claim for assessments
and related charges. We disagree. We interpret the statutory language to mean that
the condominium association must apply such payments to amounts due in accordance
with the statutory command without regard to any accompanying instructions to the
contrary. We do not think that the legislature intended the penultimate sentence of
subsection three to amend section 673.3111 tacitly or to otherwise alter the law of
accord and satisfaction in favor of condominium associations when they accept
payments for assessments and related charges.
The pertinent legislative history confirms our interpretation of the statute.
The language in question was added to subsection three of section 718.116 by chapter
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91-103, section 9, at 735, Laws of Florida (1991). The staff analyses for the House and
Senate explain the purpose of the amendment as follows:
Subsection (3) [of section 718.116] addresses the late fee
which is charged for unpaid assessments. Currently the fee
can be the greater of $25 or 5 percent of the assessment.
Language is added to provide that the late fee applies to
each installment. Currently, the statute provides a formula
which determines how payments are to be applied, with
payments first applied to interest, then to late fees, then to
costs and attorney[']s fees[,] and then to delinquent
assessments. This bill would apply this statutory formula
even if the check which was tendered contained a restrictive
endorsement which provided some other formula for
payment.
Fla. H.R. Comm. on Judiciary, CS for HB 1465 (1991) Staff Analysis 12 (Mar. 28, 1991);
Fla. S. Comm. on Fin. & Tax, CS for SB 1408 (1991) Staff Analysis 7 (Apr. 19, 1991)
(available at Fla. Dep't of State, Fla. State Archives, Tallahassee, Fla.) (emphasis
added). Thus the staff analyses confirm that the pertinent language was added to
subsection three to invalidate restrictive endorsements that provide a formula for the
application of payments other than that set forth in the statute. There is nothing in the
staff analyses suggesting that the amendment was intended to make section 673.3111
inapplicable to condominium associations or that the amendment would otherwise alter
Florida law concerning accord and satisfaction solely for the benefit of condominium
associations.
We recognize that part of the discussion in Ocean Two Condominium
Ass'n v. Kliger, 983 So. 2d 739 (Fla. 3d DCA 2008), can be read to interpret section
718.116(3) differently. We think that the Third District reached the correct result in
Kliger. However, we do not find its discussion of section 718.116(3) persuasive here for
two reasons. First, the monthly maintenance payments for which the unit owners
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tendered their payments in Kliger were conceded to be due and were not subject to any
dispute. Id. at 741. Here, there was a bona fide dispute about the amounts for which
the Trust was liable. This fact is sufficient to distinguish Kliger from the case under
review.
Second, it does not appear from the discussion in Kliger that the Third
District had the benefit of the pertinent legislative history as an aid to its interpretation of
section 718.116(3) when it issued the opinion in that case. We are inclined to believe
that if the Third District had considered the legislative history, its discussion of the
purpose and effect of the statute might have been different.
Before concluding, we also note that the undisputed nature of the
condominium association's claims in Kliger rendered any consideration of the role of the
statute in protecting a condominium association from prejudice or jeopardy by
acceptance of a partial payment unnecessary to the Third District's decision in that
case. In short, the discussion in Kliger on which the Association relies so heavily here
in support of an affirmance is only dicta.
V. CONCLUSION
For the foregoing reasons, we reverse the circuit court's summary
judgment order and the final judgment entered in accordance with it. On remand, the
circuit court shall enter a partial summary judgment declaring that any obligations of the
Trust to the Association for amounts that became due before the Trust acquired title to
the property were discharged by an accord and satisfaction. In addition, the partial
summary judgment to be entered shall also declare that the Trust is entitled to have the
Association's claim of lien against the condominium unit in question cancelled and
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vacated. The Trust's claim for the lost rental value of the unit as asserted in count two
of the complaint remains to be resolved on remand.
Reversed and remanded with directions.
DAVIS, C.J., and CRENSHAW, J. Concur.
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