THE WATERVIEW TOWERS CONDO. ASSOC., ETC. v. CITY OF WEST PALM BEACH and PALM HARBOR HOTEL, LLC ( 2017 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
THE WATERVIEW TOWERS CONDOMINIUM ASSOCIATION, INC., a
Florida corporation not-for-profit, LAURA BENNETT, HELEN BOSSMAN,
and THOMAS J. O’NEILL, individually,
Appellants,
v.
CITY OF WEST PALM BEACH, a Florida Municipal Corporation, and
PALM HARBOR HOTEL, LLC, a foreign limited liability company,
Appellees.
No. 4D16-2858
[November 1, 2017]
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Edward A. Garrison, Acting Circuit Judge; L.T. Case No.
50-2014-CA-005009-XXXX-MB.
Robert J. Hauser of Pankauski Hauser PLLC, West Palm Beach, Robert
Sweetapple of Sweetapple, Broeker & Varkas, PL, Boca Raton, and John
R. Eubanks, Jr. of Breton, Lynch, Eubanks & Suarez-Murias, P.A., West
Palm Beach, for appellants.
K. Denise Haire and Douglas N. Yeargin, Office of the City Attorney,
West Palm Beach, for appellee, City of West Palm Beach.
Bruce S. Rogow and Tara A. Campion of Bruce S. Rogow, P.A., Fort
Lauderdale, and Joseph Ianno, Jr. and Henry S. Wulf of Carlton Fields
Jorden Burt, P.A., West Palm Beach, for appellee, Palm Harbor Hotel, LLC.
GROSS, J.
We hold that unit owners and a condominium association have
standing to enforce certain development restrictions contained in
condominium documents, as defined in the declaration of condominium.
Overview
The property central to this litigation is owned by the City of West Palm
Beach. It is bordered on the west side by Flagler Drive, on the east side
by Lake Worth, on the north side by 5th Street, and on the south side by
1st Street.
It is a single piece of property, divided into three parcels: R-1, C-1, and
C-2. The parcels are aligned like this:
R-1
residential
C-1
marina
C-2
??
N
Palm Harbor Hotel, LLC (the “Hotel”) wants to build a hotel and parking
garage on parcel C-2. The neighbors living in the condominium tower
located on parcel R-1 oppose the Hotel’s plans.
This action was brought by The Waterview Towers Condominium
Association, Inc. and three individuals who own residential units in the
condominium (collectively, the “Plaintiffs”) against the City and the Hotel.
The Plaintiffs asked the circuit court to declare that the Hotel’s plans
violated development restrictions found in various documents.
Historical Background
In 1968, the City leased the parcel to the West Palm Beach Marina, Inc.
for 99 years. In 1979, the City Commission passed Ordinance 1455-79
which permitted the City to amend the lease. The City, as lessor, and the
Marina, as lessee, executed the “Consolidated and Amended Lease” (the
“Lease”). Both parties to the Lease anticipated future development of the
property. While a portion of the property was to be maintained as a
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marina, 1 the remainder of the property could be used in almost any
manner.
Article XXX, section 5 of the Lease is important because it contains two
development restrictions the Plaintiffs seek to enforce in this action, the
“View Restriction,” and the “Unanimity Provision.” The relevant language
reads:
Art. XXX – Miscellaneous Provisions
It is further mutually covenanted and agreed by and between
both of the parties hereto as follows:
***
Section 5. Lessee agrees that it will use good site planning
and architectural design so that the buildings will fit into the
character of the downtown area of West Palm Beach or
enhance the same, and retain the waterfront characteristics
of the area. There are 1,573.35 feet of waterfront view,
measured on a north-south line, presently existing, of which
Lessee agrees to retain open and free from building
obstructions as viewed from Flagler Drive [62.82%]. All
development of the Leasehold Premises herein shall be
pursuant to a site plan to be approved by resolution or motion
of the City Commission unanimously passed, and any
modification, change or amendment thereto shall require a
unanimous vote of approval of same by the City Commission
of the City of West Palm. 2
Under Article XXXVI of the Lease, entitled “Condominium Provisions,”
the parties agreed that the entire property would be submitted to
condominium ownership in accordance with the Condominium Act. The
plan for the “leasehold condominium” was to divide the property into a
residential and a commercial portion. The residential portion would be
further divided into 132 units, and the commercial portion would be
1 The marina, parcel C-1, was the subject of City of West Palm Beach v. Board of
Trustees of the Internal Improvement Trust Fund, 714 So. 2d 1060 (Fla. 4th DCA
1998), approved, 746 So. 2d 1085 (Fla. 1999). That case held that the City’s
ownership interest in parcel C-1 extended only to the “land immediately beneath
the four piers, referred to by the trial court as the ‘footprint’ of the piers.” Id. at
1066.
2 All emphases supplied unless otherwise noted.
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divided into two units. The operation of both the residential and
commercial portions would be conducted by the Association.
In addition to the development restrictions set forth above, the Plaintiffs
sought a declaration that development of Unit C-2 is limited to a four-story
building with surface parking only. The Plaintiffs’ argument relies on the
following language found under Article XXXVI of the Lease:
. . . The Commercial Portion will include boat dockage
facilities, a marina office with related facilities, and surface
parking; additionally, a commercial building having
approximately one hundred (100’) feet of frontage on Flagler
Drive and not exceeding four (4) stories in height may be
constructed on the Commercial Portion.
The following definitions found within the “Condominium Provisions”
of the Lease are relevant to this appeal:
l. “Condominium Documents” means in the aggregate the
“Declaration” (as hereinafter defined), Articles, By-Laws, this
Lease and all of the instruments and documents referred to
therein.
***
q. “Lessee” means in the first instance West Palm Beach
Marina, Inc. . . .; and in the second instance upon [the
Marina’s] assignment of the Lease . . . to LRI, “Lessee” means
LRI; and finally, after Submission and upon assignment of the
First Unit, “Lessee” means the Unit Owners.
One of the documents “referred to” by the Lease is a site plan. In June
of 1979, “Site Plan 7” was unanimously approved by the City Commission.
The Plaintiffs argue that language in Site Plan 7 imposes the same four-
story height restriction as well as a square footage restriction on the future
development of Unit C-2. Site Plan 7 contains this “NOTE:”
THE COMMERCIAL STRUCTURE SHALL NOT EXCEED FOUR
STORIES IN HEIGHT AND 20,000 Sq. Ft. IN AREA. THE
COMMERCIAL STRUCTURE MAY BE LOCATED ANYWHERE
SOUTH OF THIRD STREET, PROVIDED ITS LOCATION IS IN
COMPLIANCE WITH THE CITY OF WEST PALM BEACH
ZONING ORDINANCES. LESSEE MAY BUT IS NOT
REQUIRED TO BUILD THE COMMERCIAL STRUCTURE.
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Shortly after the Lease was executed, it was assigned by the Marina to
Leisure Resorts, Inc. (“LRI”). In 1981, LRI established a condominium on
the entire leased parcel by filing of the “Declaration of Condominium of
The Waterview Towers, A Condominium” (the “Declaration”). The
condominium, including residential and commercial units, was named
“The Waterview Towers, A Condominium.”
Although not attached to the Declaration, the Lease is referenced
throughout the document and, significantly, the Lease and all documents
referenced therein are included in the Declaration’s definition of the term
“Condominium Documents:”
l. “Condominium Documents” means in the aggregate this
Declaration, the Articles, By-Laws, the Lease and all of the
instruments and documents referred to therein.
In addition to the development restrictions in the Lease (and its
referenced documents), the Plaintiffs sought a declaration that
development of Unit C-2 is limited to a single commercial building, not
exceeding seventy-five feet in height, with no more than one-hundred feet
of frontage along Flagler Drive. The Plaintiffs’ argument relies on the
following language of the Declaration:
. . . The Commercial Unit, designated as “C-2” on the Survey
shall contain parking facilities which may be used as
determined by the C-2 Commercial Unit Owner and the
Developer reserves the right for and on behalf of the C-2
Commercial Unit Owner to construct a commercial building
(“Commercial Structure”) within the C-2 Commercial Unit not
exceeding seventy five (75’) feet in height with approximately
one hundred (100’) feet of frontage on Flagler Drive.
More than 25 years after establishing the condominium, in 2007, LRI
sold parcels C-1 and C-2 to Leisure Resorts, LLC (“Leisure Resorts”). The
parties executed a Warranty Leasehold Estate Deed and Partial
Assignment of Lease Agreement which transferred all of LRI’s interest in
parcels C-1 and C-2, including “any and all remaining rights . . . held by
Grantor as ‘Developer’ under the Declaration and/or as the owner of the
Units.”
Current Dispute
In 2009, the City and Leisure Resorts executed a Development
Agreement recognizing Leisure Resorts’ intent to develop Unit C-2 to
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include a hotel and a parking garage (the “Development Agreement”). A
diagram titled “Site Plan No. 8” was attached to the Development
Agreement. The conceptual site plan had been approved by Resolution
239-07 in 2007 by the City Commission.
In the Development Agreement, the City gave “conceptual approval” to
development of Unit C-2 in accordance with Site Plan No. 8. Both parties
agreed to “work cooperatively for a period of up to three (3) years ... towards
a revised site plan ... in lieu of [Site Plan No. 8].”
In the Development Agreement, the City expressly waived any right it
may have had as Lessor to enforce the provisions of Article XXX, section 5
of the Lease “with respect to the Approved Site Plan [Site Plan No. 8] or
any Revised Site Plan.” 3 The City and Leisure Resorts also agreed that the
Development Agreement did not “constitute an amendment or modification
of any of the terms and provisions of the Consolidated Lease,” and none of
the Condominium Documents were modified or amended to reflect the new
development plan for Unit C-2.
After executing the Development Agreement, Leisure Resorts subleased
Unit C-2 to the Hotel. The sublease is subject to the terms and conditions
of the Lease, the Declaration, and the Development Agreement.
Sometime in 2013, the Hotel applied to rezone Unit C-2 so it could build
an eight-story hotel with an attached three story parking garage. The City
approved the rezoning.
Because of their opposition to the proposed development of Unit C-2
(which had been a parking lot since the early 1980’s), the Association and
two R-1 unit owners filed a petition for writ of certiorari in the circuit court.
A three judge panel ruled that the petitioners were denied due process by
the City and quashed the 2014 Development Orders. The circuit court
appellate panel held that the Association and R-1 Unit Owners had
standing to participate in the “quasi-judicial” zoning proceedings due to
their special relationship with the land.
In this case, the Plaintiffs sought a declaration that the Association and
Unit Owners have the right to enforce the development restrictions found
in the referenced documents and that future development of Unit C-2 is
limited to the building of:
3We note that Article XXX, section 5 includes both the View Restriction and the
Unanimity Provision set forth above.
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1. A single commercial office building;
2. Not exceeding four (4) stories;
3. Not exceeding ... [75 feet] in height;
4. Not exceeding ... [100 feet] of total frontage on Flagler Drive;
5. All of which may only utilize surface parking.
The Plaintiffs further sought a declaration that “any proposed
construction on the C-2 Upland Parcel ... must be unanimously approved
by the City Commission.” As an affirmative defense, both the City and the
Hotel averred that the Plaintiffs lacked standing to enforce the
development restrictions.
After a non-jury trial, the circuit court ultimately issued an amended
final judgment, containing the following rulings:
Plaintiffs lack standing to enforce the subject lease against the
Commercial Unit Owner. Only the CITY has standing to
enforce, modify or waive provisions of the Lease with respect
to the Commercial Portion, including the ability to waive the
provisions of Article XXX, Section 5 of the Lease.
Plaintiffs’ standing to enforce the Declaration against the
Commercial Portion is limited to provisions regarding the
height and width of the commercial building which may be
located on the C-2 Commercial Unit as set forth in Article V,
paragraph D of the Declaration. There are no other restrictive
covenants applicable to the Commercial Units, specifically the
C-2 Commercial Unit.
Development of the C-2 Commercial Unit is not limited to a
single four (4) story office building containing a maximum of
20,000 square feet.
The currently approved development and use of the C-2
Commercial Unit consists of a commercial structure and
parking facilities as shown on Site Plan No. 8, the provisions
of which are not challengeable because the applicable statute
of limitations to challenge Site Plan No. 8 has expired.
The Development Agreement is not a statutory development
agreement requiring compliance with Chapter 163 and,
further, any challenges to the Development Agreement and
Site Plan No. 8 are barred by the applicable Statute of
Limitations.
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The Association and the Residential Unit Owners do not have
the right under the Lease to consent or approve any
development plans for the Commercial Units. While Plaintiffs
are permitted to participate as parties in quasi-judicial
proceedings before the City Commission, they are not co-
lessees of the Commercial Portion. They have a partial
assignment of the Lease as to their units and an undivided
portion of the common elements. The Commercial Units are
not common elements of the Association.
This is the Plaintiffs’ appeal from the Amended Final Judgment.
The Plaintiffs Have Standing to Bring an Action Against
Any Unit Owner Not Complying with the Condominium
Documents, which include the Lease
We find that Article XXII of the Declaration grants standing to the
Plaintiffs and that the Hotel and the City are bound by the Declaration.
The City’s interest in the property is subject to the provisions of the
Declaration because, as a lessor, the City consented to its execution. Both
parties to the Lease agreed “that a leasehold condominium shall be created
pursuant to the [Condominium] Act ….” The parties further agreed that
upon the recording of the Declaration, the “Condominium Provisions”
found at Article XXXIV “shall supplement the Lease.”
By statute,
[a] person who joins in, or consents to the execution of, a
declaration subjects his interest in the condominium property
to the provisions of the declaration.
§ 718.104(6), Fla. Stat. (1981). Because the City expressly consented to
the execution of the Declaration, the City’s interest in the property is
subject to the provisions of the Declaration pursuant to section
718.104(6).
The Hotel and the City argue that the residential unit owners lack
standing to enforce the Declaration against the commercial unit owners.
We disagree and find the Declaration clear and unambiguous on this
issue. The drafter of the Declaration was aware of the mixed-use
development being created and was meticulous. He knew how to allocate
rights and remedies to each category of Unit Owner being created. When
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the drafter wanted to distinguish between Commercial and Residential
Units and Commercial and Residential Unit Owners, he did so.
For instance, Exhibit C to the Declaration is entitled “Schedule of
Shares.” It apportions the “percentage share in Common Elements,
Common Expenses and Common Surplus.” This Exhibit is referenced
throughout the Declaration because it allocates to each unit owner their
“share” of these items. Exhibit C lists all of the residential units and then
lists the two commercial units, assigning shares to every unit. This shows
that when he intended to delineate between the residential unit owners
and the commercial unit owners, the drafter used precise language.
A second example of the drafter’s delineation between the residential
and commercial units is found regarding voting rights. Under the
Declaration, membership in the Association is divided into three classes –
residential, C-1, and C-2. Membership on the Board is divided into the
same three classes.
A third example of the drafter distinguishing between the residential
and commercial units is found under the section entitled “Description of
Improvements.” There the drafter refers to the survey, differentiates
between the “Residential Portion” and the “Commercial Portion,” and
explains that “Residential Limited Common Elements are reserved for the
exclusive use of the Residential Units.”
A fourth example of the drafter’s delineation between the residential
and commercial units is found under the section entitled “Occupancy and
Use Restrictions.” There, the drafter carefully spelled out the rules
applicable to the “Residential Units” (addressed under subsection A) and
the rules applicable to the “Commercial Units” (addressed under
subsection B).
When the drafter reached Article XXII of the Declaration, entitled
“Remedies for Violation,” he did not delineate between Residential and
Commercial Unit Owners. The Article provides:
Each Unit Owner shall be governed by and shall comply with
the Act, all of the Condominium Documents and all
amendments to the Condominium Documents. Failure to do
so shall entitle the Association, any Unit Owner, [or
Mortgagee] to bring an action for injunctive relief, damages or
both, and such parties shall have all other rights and remedies
which may be available at law or in equity.
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The Hotel is bound as the “Unit Owner” of Unit C-2. 4 Under the quoted
Article, the Hotel “shall comply” with “all of the Condominium
Documents.” By definition in the Declaration, one of the Condominium
Documents is the Lease. The second sentence quoted above gives both
the Association and any Unit Owner the right to bring an action against a
noncomplying unit owner. Again, the language used is clear and
unambiguous. This paragraph of the Declaration bestows standing on the
Association and each Unit Owner whenever any other Unit Owner fails to
comply with the Condominium Documents. 5
Under the express language of the Declaration, any Unit Owner and the
Association, may bring an action when another Unit Owner violates the
Lease (a Condominium Document). We find the circuit court erred when
it made the blanket declaration that “Plaintiffs lack standing to enforce the
subject lease against the Commercial Unit Owner” and that “only the City
has standing to enforce, modify or waive provisions of the Lease with
respect to the Commercial Portion.”
The Unit Owners Have Standing as Co-lessees and
Grantees from a Common Grantor to Enforce the Restrictive
Covenants Found in the Lease against the Owner of Unit C-2
Under the Lease, the City is the lessor and both the commercial and
residential unit owners are lessees. The Lease defines “Lessee” as “the
Unit Owners” “upon the assignment of the First Unit.”
Each residential unit owner received a “partial assignment” of the
Lease. Under the partial assignments, the unit owners were referred to as
“Grantees,” and each grantee assumed and accepted from the grantor “the
leasehold rights and obligations” enumerated in the partial assignment.
Each grantee was obligated to pay his portion of the rent and operating
expenses due under the Lease and received certain “leasehold rights.”
The residential unit owners seek to use their status as “co-lessees” to
enforce building restrictions found in the Lease against the owner of Unit
C-2, a co-lessee. The provisions the unit owners seek to enforce are:
4The Hotel is bound by the sublease from Leisure Resorts.
5 This argument also supports the Plaintiffs’ standing under Florida Statutes
section 718.303(1) (2016) (allowing actions by both “the association or by a unit
owner against ... a unit owner” who fails to “comply with [the] documents creating
the association.”)
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1. The View Restriction and the Unanimity Provision
contained in Article XXX, Section 5.
2. The Four-Story Height and Surface Parking Restrictions
contained in Article XXXVI.
3. The 20,000 Square Footage Restriction found in Site Plan
7 incorporated into the Lease at Article XXX, section 5.
These building restrictions are restrictive covenants, “equitable rights
arising out of the contractual relationship between and among the
property owners.” Cudjoe Gardens Property Owners Ass’n, Inc. v. Payne,
779 So. 2d 598, 598-99 (Fla. 3d DCA 2001).
While covenants restraining the free use of realty are not favored, “in
order to provide the fullest liberty of contract and the widest latitude
possible in disposition of one’s property, restrictive covenants are enforced
so long as they are not contrary to public policy, do not contravene any
statutory or constitutional provisions, and so long as the intention is clear
and the restraint is within reasonable bounds.” Hagan v. Sabal Palms,
186 So. 2d 302, 308-09 (Fla. 2d DCA 1966).
Restrictive covenants may be enforced by grantees among or between
themselves where the grantees obtained their property from a common
grantor and the restrictive covenants were placed in the transferring
instrument as part of “a general plan of development or improvement,” or
a “general building scheme.” Id. at 307. “Whether restrictions in deeds
are part of a general scheme is to be determined by the intention of the
parties, as gathered from the words used, interpreted in the light of all the
circumstances and the pertinent facts known to the parties.” Id.
Where there is no general building scheme, a restrictive covenant can
be enforced between grantees inter sese where the covenant provides
mutual or reciprocal benefits to the grantees. Rea v. Brandt, 467 So. 2d
368 (Fla. 2d DCA 1985).
Basically, the right to enforce a restrictive covenant requires
proof that the covenant was made for the benefit of the party
seeking to enforce it. Osius v. Barton, 147 So. 862 (Fla. 1933).
A subsequent grantee who seeks to enforce a restrictive
covenant created by a common grantor against another
subsequent grantee of a separate parcel of realty must show
that the covenant was intended to apply to both parcels.
Osius.
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Id. at 369.
Even where there is no general building scheme and no reciprocal
benefit among grantees, a restrictive covenant may be enforced by one
neighbor against another where the restriction is found to be a negative
easement or equitable servitude on the land. See Fiore v. Hilliker, 993 So.
2d 1050 (Fla. 2d DCA 2008) (finding waterfront lot owner could be
prevented from blocking view of adjacent owner by a negative easement
created by the common grantor).
Here, the restrictive covenants imposed by the Lease on Unit C-2 are
enforceable by the unit owners inter sese because (1) they were part of a
general building scheme; and (2) the restrictions provided mutual and
reciprocal benefits to all of the unit owners.
The general building scheme is revealed by the unambiguous language
of the Lease. The parties agreed that the property would be developed as
a single mixed-use condominium. The entire condominium was to be
developed pursuant to a “site plan” that had to be unanimously approved
by the City Commission. The developer/lessee agreed to “maintain the
character of a marina on a portion of the property” and “use good site
planning and architectural design so that the buildings will fit into the
character of the downtown area of West Palm Beach or enhance the same,
and retain the waterfront characteristics of the area.” The
developer/lessee further agreed to “retain open and free from building
obstructions” sixty-two percent of the “waterfront view.”
This general building scheme contemplated a mixed-use development
where all unit owners would benefit from the presence of the marina, the
view, and the unique waterfront character of the area.
“Building restrictions imposed by a grantor on lots, being evidently for
the benefit, not only of the grantor, but also of his grantees and
subsequent successors in title, the burden, as well as the benefit, of the
restrictions is an incident to ownership of the lots, because in a
neighborhood scheme the burden follows the benefit.” Hagan, 186 So. 2d
at 307. The development restrictions found in the Lease, drafted to further
the general building scheme, are enforceable by each of the unit owners
among or between themselves. Id. at 308. Equity does not permit the
owner of unit C-2, which has benefitted from the general building scheme,
to disregard the restrictions that bind the other unit owners simply
because unit C-2 permits a commercial use.
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Similarly the restrictive covenants are enforceable by the residential
unit owners because they were imposed for the benefit of all the unit
owners. Building restrictions have been held to be enforceable by
neighbors on the adjacent property. See Rea, 467 So. 2d 368; Palm Point
Property Owners’ Ass’n of Charlotte Cty., Inc. v. Pisarski, 626 So. 2d 195
(Fla. 1993).
In Rea, the restrictive covenant stated “no water lot shall have a fence.”
When one property owner sought to enforce the covenant against an
adjacent owner, the court found that the restriction was “clearly intended
to benefit and burden more than a single water lot. The restriction was in
the chain of title or deed of each property. Thus, there was a mutual and
reciprocal beneficial interest running to the adjacent parcels held by
appellants and appellees.” Rea, 467 So. 2d at 370 (finding appellants in
violation of the restrictive covenant and directing them to remove their
fence).
In Palm Point, an association sought to enjoin a lot owner from violating
deed restrictions (building a pool, stem wall, and dock). While the supreme
court found that the association lacked standing because the covenants
were not made for its benefit, the court noted that individual property
owners “clearly have standing to enforce the covenants.” Id. at 198
(emphasis added) (affirming the Second District’s finding that “any one” of
the individual property owners “could sue to enforce the restrictions at
issue in this case.” Palm Point Property Owners’ Ass’n of Charlotte Cty.,
Inc. v. Pisarski, 608 So. 2d 537, 538 (Fla. 2d DCA 1992)).
Here, restrictive covenants were imposed on the entire condominium;
every unit was burdened by and benefited from the development
restrictions. The view restriction enhanced the character of the
condominium, inspiring its name: The Waterview Towers, A
Condominium. The limit on the number of stories and the square footage
restrictions further preserved the view while controlling the number of
people and traffic on the parcel. The unanimity provision helped protect
the general building scheme from a change in the political winds.
In sum, each of the restrictions which the residential unit owners, as
co-lessees, seek to enforce on Unit C-2 benefitted the entire condominium.
Under Osius and its progeny, the development restrictions are enforceable
by each of the grantees (unit owners) from the common grantor (the City).
The Association Has Standing Under The Condominium Act
And Florida Rule Of Civil Procedure 1.221
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The Condominium Act provides that an association may institute an
action “in its name on behalf of all unit owners concerning matters of
common interest to most or all unit owners.” § 718.111(3), Fla. Stat.
(2014). Similarly, Rule 1.221 provides:
[A] condominium association ... may institute ... actions or
hearings in its behalf on behalf of all association members
concerning matters of common interest to the members,
including, but not limited to: (1) the common property, area,
or elements ....
Fla. R. Civ. P. 1.221.
“This court has recognized that an association may sue and be sued as
the representative of condominium unit owners in an action to resolve a
controversy of common interest to all units.” Four Jay’s Const., Inc. v.
Marina at Bluffs Condo. Ass’n, Inc., 846 So. 2d 555, 557 (Fla. 4th DCA
2003); see generally Homeowner’s Ass’n of Overlook, Inc. v. Seabrooke
Homeowners’ Ass’n, Inc., 62 So. 3d 667 (Fla. 2d DCA 2011).
Under the Declaration, the Association is responsible for the operation
of the entire condominium. The commercial parcels are part of the
condominium. While the commercial parcels are not “common elements,”
because they are part of the condominium, they are part of the “common
property” and the “common area.”
An aerial view of the property reveals that the unit owners share points
of ingress and egress off Flagler Drive. In addition, the residents’ pool and
a portion of the marina directly abut Unit C-2. Any structure on C-2 will
affect the use and enjoyment of the entire condominium property
(including light, view, and noise). For these reasons, development of Unit
C-2 concerns a matter of “common interest” to members of the Association.
Because Unit C-2 is part of the common property, and because
development of the common property involves matters of common interest
to members of the Association, the Association had standing under the
Condominium Act and Florida Rule of Civil Procedure 1.221 to pursue this
action.
Development Restrictions Limit the Future
Development of Unit C-2
1. Development Restrictions in the Declaration Run With the
Land.
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By statute, “All provisions of the declaration are enforceable equitable
servitudes, run with the land, and are effective until the condominium is
terminated.” § 718.104(7), Fla. Stat. (1981).
By their Second Amended Complaint, the Plaintiffs sought a declaration
that development on Unit C-2 was limited to a single commercial building,
not exceeding 75 feet in height, and not exceeding 100 feet of total frontage
on Flagler Drive – all development restrictions found in the Declaration.
The City and the Hotel concede that they were bound by these restrictive
covenants.
The trial court granted the Plaintiffs’ prayer for declaratory relief in part,
finding there were enforceable restrictive covenants in the Declaration
regarding the height and width of the commercial building. However, the
order went too far by finding that there are “no other restrictive covenants
applicable” to Unit C-2 and that the only restrictive covenants enforceable
by any of the Plaintiffs are those regarding “the height and width of the
commercial building.” This was error.
The trial court was not asked to scour the Declaration for restrictive
covenants enforceable by the Plaintiffs. Indeed, there are at least three
additional restrictive covenants found in the Declaration that are
enforceable by the Plaintiffs:
1. The Association would have standing to enforce the requirement
that Unit C-2 “contain parking facilities.”
2. The Association would have standing to establish and enforce
rules and regulations regarding easements and rights of way
crossing Unit C-2.
3. The Association and Unit Owners would have standing to enforce
the requirement that the C-2 Unit Owner conduct a lawful
commercial enterprise.
The only restrictive covenants found in the Declaration that the
Plaintiffs raised in this case are those with regard to height and width of
the commercial building. Thus, we reverse the trial court’s order to remove
all language that forecloses the Plaintiffs’ rights to enforce the restrictive
covenants contained in the Declaration though not raised in this litigation.
2. The Unit Owners are Entitled to Enforce Restrictive
Covenants Contained in the Lease.
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As indicated above, the individual Plaintiffs have standing to enforce
the restrictive covenants found in the Lease against the owner of Unit C-
2. The following development restrictions are affected by the conclusion
reached in this section:
Restriction Language Source
“Lessee agrees to retain 62.82% of
The View waterfront view (as viewed from Lease, Art.
Restriction Flagler Drive) open and free from XXX, § 5
building obstructions.”
“The commercial structure shall not
Square Footage Site Plan 7
exceed ... 20,000 sq. ft. in area ...”
“[A] commercial structure ... not
Number of exceeding four (4) stories in height Lease, Art.
Stories may be constructed on the XXXVI, § 2.b.
Commercial Portion.”
The trial court therefore erred when it found that “Development of the
C-2 Commercial Unit is not limited to a single four (4) story office building
containing a maximum of 20,000 square feet.”
3. Because the Lease and Declaration are Ambiguous on the
Issue of Two Commercial Buildings on Unit C-2, the Documents
Cannot be Read to Preclude a Parking Garage.
The Plaintiffs argue that only one commercial building can be built on
Unit C-2 and because of this “one building” restriction, a parking garage
cannot be built along with a hotel. The Hotel and the City maintain that
in addition to a commercial building, a “parking facility” may also be placed
on Unit C-2, and that the “parking facility” may be a multi-level garage.
The relevant language reads:
Language Source
“The Commercial Unit, designated as “C-2” on the
Survey shall contain parking facilities which may be used Declaration,
as determined by the C-2 Commercial Unit Owner and Art. V-D
the Developer reserves the right for and on behalf of the
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C-2 Commercial Unit Owner to construct a commercial
building (“Commercial Structure”) within the C-2
Commercial Unit ...”
“... [T]he Developer reserves the right for and on behalf
of the C-2 Commercial Unit Owner to construct the Declaration
Commercial Structure and/or parking facilities within the Art. XXIII-A
C-2 Commercial Unit.”
“... The Commercial Portion will include boat dockage
Lease, Art.
facilities, a marina office with related facilities, and
XXXVI-2.-b.
surface parking ...”
“Restrictive covenants are not favored and are to be strictly construed
in favor of the free and unrestricted use of real property.” Wilson v. Rex
Quality Corp., 839 So. 2d 928, 930 (Fla. 2d DCA 2003). “Any doubt as to
the meaning of the words used must be resolved against those seeking
enforcement.” Id.
The documents do not specify a limitation on the nature of the potential
parking. A “parking facility” is a broad term that includes structures like
a garage. The Lease’s reference to “surface parking” does not mean that
all parking had to be surface parking. Given the strict construction
imposed on restrictive covenants, the ambiguous tension between
“parking facilities” and “surface parking” in the Declaration and the Lease
supports the position of the Hotel and the City on this issue.
4. The Trial Court Erroneously Found That Site Plan No. 8 Is
The “Currently Approved Development.”
Plaintiffs argue that the trial court’s holdings regarding Site Plan No. 8
were erroneous. The trial court held:
The currently approved development and use of the C-2
Commercial Unit consists of a commercial structure and
parking facilities as shown on Site Plan No. 8, the provisions
of which are not challengeable because the applicable statute
of limitations to challenge Site Plan No. 8 has expired.
“Site Plan No. 8,” however, was merely a “conceptual plan” needing
additional governmental approvals to become final.
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The “conceptual site plan” was approved by the City Commission “in its
capacity as the land owner” ― not in its governmental capacity. The
Resolution approving the conceptual site plan states that the plan is
“deemed to be ‘Site Plan No. 8’ under the Marina Lease.” Although the
Lease’s Unanimity Provision was satisfied as evidenced by Resolution 239-
07, the “conceptual site plan” attached to the Resolution still needed
governmental and regulatory approvals and permits.
The Ordinances and Resolutions in evidence do not establish that the
conceptual site plan ever received the requisite governmental approval.
Thus, while Site Plan No. 8 is the currently-approved “site plan” under the
Lease, the trial court’s holding that it is the “currently approved
development and use of the C-2 Commercial Unit” was too broad.
For these reasons, we reverse the Amended Final Judgment and
remand to the circuit court for proceedings consistent with this opinion.
KLINGENSMITH, J., concurs.
CIKLIN, J., dissents with opinion.
CIKLIN, J., dissenting.
I respectfully dissent.
The plaintiffs below are not lessees of the commercial portion of the
subject plat and do not have standing to take independent legal action to
enforce the underlying lease.
The 1981 Declaration of Condominium does not grant or authorize the
plaintiffs to enforce any restrictions in the Lease particularly because the
Declaration clearly delineates between the “Residential Portion” and
“Commercial Portion” of the property and Article XII. B. provides that the
commercial lessees “may conduct any commercial enterprises on the
Commercial Portion to the extent permitted by law and the Lease” and that
“[n]othing contained in this Declaration shall limit the right of the
Commercial Unit Owners or their assigns, lessees, or licensees to conduct
commercial enterprises on the Commercial Portion.”
Clearly, the interplay between Article XIX, section 1, Article XXII, and
Article XXX of the lease contemplates multiple uses of the property and
even permits commercial lessees to change uses and site plans provided
that the City’s duly elected policy makers—in a quasi-judicial setting—
exercise their discretion to permit such changes. As a historical matter of
fact, the 2009 Development Agreement between the City and Leisure
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Resorts, LLC (Palm Harbor’s sublessor) modified the lease requirements of
Article XXX, section 5 to actually require the City Commission’s
unanimous consent of any changes to the site plan—again, after a full
quasi-judicial hearing before the West Palm Beach City Commission.
Nothing in the Declaration of Condominium or the laws of the State of
Florida supports the notion that the plaintiffs have standing to enforce,
modify, waive or contest provisions of the Lease with respect to the
Commercial Portion. Nor do they have standing under the condominium
documents to oversee or challenge use of the property approved by the
City in its proprietary capacity.
Ultimately, of course, all power rests with the plaintiffs through the
power of the ballot box, but until that time, the duly elected members of
the West Palm Beach City Commission have the unbridled discretion to
make all decisions pertaining to the commercial portion of the subject
property.
The plaintiffs assert that the “Amended Final Judgment is inconsistent”
because it “provides standing” . . . to enforce . . . restrictions . . . on the
frontage and height of any new structure on the [commercial] parcel,” while
denying standing “to enforce other more detailed restrictions.” In fact, the
Lease and Development Agreement addressed frontage and height and
once the City Commission approved Site Plan 8 in June 2007, and
incorporated it into the 2009 Development Agreement, the issues of height
and frontage under the lease were resolved. (The only remaining
restriction on the development of the C-2 unit was the 100’ width and 75’
height size limitation contained in Article V.D. of the Declaration).
In my opinion, the trial court properly found that the 2009 Development
Agreement was not governed by Chapter 163 and, notwithstanding that
judicial determination, the time to challenge the 2009 Development
Agreement, including Site Plan 8, has expired in any case.
I would affirm.
* * *
Not final until disposition of timely filed motion for rehearing.
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