Sterling Breeze Owners' Association, Inc. v. New Sterling Resorts, LLC and Sterling Breeze, LLC ( 2018 )

FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
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No. 1D17-1553
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STERLING BREEZE OWNERS’
ASSOCIATION, INC.,
Appellant/Cross-Appellee,
v.
NEW STERLING RESORTS, LLC
and STERLING BREEZE, LLC,
Appellee/Cross-Appellant.
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On appeal from the Circuit Court for Bay County.
James B. Fensom, Judge.
September 5, 2018
OSTERHAUS, J.,
Sterling Breeze Owners’ Association brought declaratory,
quiet title, and unjust enrichment claims against the company
owning commercial space on the ground floor of its high-rise
condominium building in Panama City Beach. The Association
alleged that New Sterling Resorts, LLC’s four ground-floor
commercial parcels could not be owned in fee simple outside of the
condominium form of ownership. And it sought to oust New
Sterling Resorts from the building and to have its property
transferred to the Association’s members. The Association also
asserted an unjust enrichment claim because New Sterling
Resorts failed to pay for its share of utilities and other expenses in
the building. The outcome below was mixed. Each party won a
claim and lost a claim. The trial court granted summary judgment
for New Sterling Resorts on the declaratory and quiet title claims.
But it ruled for the Association on the unjust enrichment claim
after a bench trial. Both parties have appealed. We now affirm in
part and reverse in part.
I.
In 2008, a developer recorded a declaration of condominium
for a new 22-story high-rise on Panama City Beach called Sterling
Breeze. According to the Declaration of Condominium, the building
included 145 residential units and common elements, which were
part of the condominium, as well as four ground-floor “associated
commercial parcels” (ACPs), which were not part of the
condominium. The developer retained fee simple ownership of the
four ACPs, which were particularly described in the Declaration
(as well as in an “Associated Commercial Parcels Easement and
Reservation” agreement between the Association and the
developer which was attached to the Declaration). The Easement
and Reservation Agreement provided that the ACPs would be used
for commercial purposes in the building. The ACPs’s owner would
“maintain at its cost and expense the interior of the [ACPs], [as
well as be] responsible for all expenses for services including, but
not limited to, utilities related to the use thereof.”
Some six years later, in August 2014, the Association sued to
nullify the Declaration’s reservation of the ACPs. By that time,
New Sterling Resorts operated one of the four ground-floor parcels
as a wine bar, another as a guest gym, and a third as a laundry
facility. The fourth ACP was being used for storage. The
Association challenged the Declaration’s original reservation,
asserting that because the ACPs were airspace, they could not be
privately owned in fee simple apart from the condominium. It
asked that the ACPs be divested from New Sterling Resorts and
given to the Association’s members as tenants in common.
The Association also brought an unjust enrichment claim to
recoup unpaid expenses for utilities, maintenance, and security
benefits provided to the ACPs, which New Sterling Resorts hadn’t
paid.
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The court ultimately disposed of the declaratory relief and
quiet title claims by granting summary judgment in favor of New
Sterling Resorts. After a bench trial, the court ruled for the
Association on the unjust enrichment claim and awarded it
$332,752.93 in damages.
II.
A.
The circuit court’s order granting summary judgment involves
a pure question of law that we review de novo. Hill v. Suwannee
River Water Mgmt. Dist., 217 So. 3d 1100, 1102 (Fla. 1st DCA
2017).
The Association would oust New Sterling Resorts from its
property on the theory that Florida’s common law doesn’t allow air
space to be owned in fee simple separate and apart from the ground
surface. But we disagree that this case turns on common law
property principles. Here, the developer identified and recorded
the disputed property in 2008 under Florida’s condominium law,
chapter 718, Florida Statutes. The Declaration of Condominium
submitted land that it particularly described to the condominium
form of ownership—including the common elements and many
airspace-residential units in the high-rise building—while
reserving other airspace on the ground-floor for the developer
outside of condominium ownership. Not only did the Declaration
of Condominium particularly identify and reserve the ACPs for
ownership separate from the condominium, but the Association
signed an easement and reservation agreement attached to the
Declaration acknowledging that the ACPs would be commercial
space reserved by the developer. And so, irrespective of how the
common law might have addressed separate owners of surface
space and airspace, the disputed airspace in this case was
identified and reserved via a declaration of condominium and
associated agreement recorded under chapter 718, Florida
Statutes, which specifically addresses airspace. See Maronda
Homes, Inc. of Fla. v. Lakeview Reserve Homeowners Ass’n, Inc.,
127 So. 3d 1258, 1268 (Fla. 2013) (recognizing that the common
law yields where it is inconsistent with state law). Resolution here
thus depends on the statute.
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Under the Declaration of Condominium filed in this case,
almost all of the airspace in the 22-story high-rise was made part
of the condominium. But four airspace parcels were carved out in
the Declaration and reserved for ownership outside of the
condominium. Consistent with this arrangement, Florida’s
condominium law recognizes that condominiums may encompass
both airspace and portions of airspace. The statute’s definition of
“condominium property” includes “lands . . . subjected to
condominium ownership, whether or not contiguous.”
§ 718.103(13), Fla. Stat. (emphasis added). See also Beach Club
Towers Homeowners Ass’n v. Jones, 231 So. 3d 566, 570-71 (Fla.
1st DCA 2017) (relying on the definition of condominium property).
In turn, the statute’s definition of “land” provides that a
declaration of condominium may include “all or any portion of the
airspace” as condominium property:
“Land” means the surface of a legally described parcel of
real property and includes, unless otherwise specified in
the declaration and whether separate from or including
such surface, airspace lying above . . . such surface.
However, if so defined in the declaration, the term “land”
may mean all or any portion of the airspace . . . and
may exclude the surface of a parcel of real property and
may mean any combination of the foregoing, whether or
not contiguous, or may mean a condominium unit.
§ 718.103(18), Fla. Stat. (emphasis added). Contrary to the
Association’s argument, neither the definition of “condominium
property,” nor “land,” requires that all of the airspace be included
within condominium ownership. Rather, the statute contemplates
that portions of airspace may be included or excluded, which is
what occurred here. The declaration in this case subjected most
(but not all) of the airspace to condominium ownership, which is
permissible under the statute.
We therefore agree with the trial court’s statutory
interpretation and decision to grant summary judgment on the
declaratory and quiet title claims here. Florida law does not
require divestment of the ACPs from New Sterling Resorts.
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B.
We also agree with New Sterling Resorts’ legal argument on
its cross-appeal. The Association prevailed on an unjust
enrichment claim based upon New Sterling Resorts’ failure to pay
ACP-related expenses for utilities, maintenance, security, and the
like. But however blameworthy New Sterling Resorts’ conduct
might be, an unjust enrichment claim cannot prevail in this case
because a contract prescribes the parties’ rights and
responsibilities for such expenses.
Florida law is clear that “a plaintiff cannot pursue a quasi-
contract claim for unjust enrichment if an express contract exists
concerning the same subject matter.” Diamond “S” Dev. Corp. v.
Mercantile Bank, 989 So. 2d 696, 697 (Fla. 1st DCA 2008). And in
this case, paragraph seven of the ACP Easement and Reservation
agreement, which was appended to the Declaration of
Condominium, obligated the owner of the ACPs to “be responsible
for all expenses for services including, but not limited to, utilities
related to the use thereof.” In other words, the agreement
specifically addresses the expenses for unpaid services and
utilities sought in the Association’s lawsuit. Because a contract
covers this matter, we reverse and remand the judgment on Count
III and direct that judgment be entered for New Sterling Resorts
on this quasi-contractual claim.
III.
For these reasons, this appeal is AFFIRMED in part, REVERSED
in part, and REMANDED with directions.
WETHERELL and RAY, JJ., concur.
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Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
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John Cottle and Leslie D. Sheekley of Becker & Poliakoff, P.A.,
Fort Walton Beach, for Appellant/Cross-Appellee.
John P. Daniel, Terrie L. Didier, and Joseph A. Passeretti of Beggs
& Lane, RLLP, Pensacola, for Appellee/Cross-Appellant.
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