IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT, STATE OF FLORIDA
ARLINGTON PEBBLE CREEK, NOT FINAL UNTIL TIME EXPIRES TO
LLC, FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
Appellant,
v. CASE NO. 1D16-1347
CAMPUS EDGE
CONDOMINIUM
ASSOCIATION, INC., a Florida
non-profit corporation,
Appellee.
_____________________________/
ARLINGTON PROPERTIES,
INC.,
Appellant,
v. CASE NO. 1D16-1423
CAMPUS EDGE
CONDOMINIUM
ASSOCIATION, INC.,
Appellee.
_____________________________/
Opinion filed November 6, 2017.
An appeal from the Circuit Court for Alachua County.
Toby S. Monaco, Judge.
Mark A. Boyle, Molly Chafe Brockmeyer, and Alexander L. Brockmeyer of Boyle
& Leonard, P.A., Fort Myers, for Appellant Arlington Pebble Creek, LLC.
Hinda Klein and Brian Lee Ellison of Conroy Simberg, Hollywood; Jeffrey M.
Paskert and Dara L. Dawson of Mills Paskert Divers, P.A., Tampa, for Appellant
Arlington Properties, Inc.
Jefferson M. Braswell of Scruggs & Carmichael, P.A., Gainesville, for Appellee.
BILBREY, J.
Appellants, Arlington Properties, Inc., and Arlington Pebble Creek, LLC,
appeal the final judgment in favor of Campus Edge Condominium Association,
entered after denial of Appellants’ motions for directed verdict and based upon the
jury’s verdict and award of damages. “A directed verdict is proper when the
evidence and all inferences from the evidence, considered in the light most
favorable to the non-moving party, support the movant’s case as a matter of law
and there is no evidence to rebut it.” Wald v. Grainger,
64 So. 3d 1201, 1205 (Fla.
2011). An appellate court reviews an order on a motion for directed verdict de
novo. Kopel v. Kopel, --- So. 3d ---, 42 Fla. L. Weekly S26,
2017 WL 372074
(Fla. Jan. 26, 2017); Christensen v. Bowen,
140 So. 3d 498 (Fla. 2014); Hoffmann-
LaRoche Inc. v. Mason,
27 So. 3d 75 (Fla. 1st DCA 2009). Here, the evidence and
inferences from the evidence do not establish proof of all the elements of
2
fraudulent misrepresentation or negligent misrepresentation, even when viewed in
a light most favorable to the Association. Therefore, the final judgment is reversed
and the trial court is directed to enter judgment in favor of the Appellants.
Arlington Properties, Inc., purchased an existing apartment complex in
January 2006, for the purpose of converting the facilities to condominium
ownership under chapter 718, Florida Statutes. Upon this purchase, Arlington
Pebble Creek, LLC, was created to conduct the conversion, including creation and
initial management of the Association. See § 718.111, Fla. Stat. In December
2008, Arlington Pebble Creek relinquished management and control of the
Association to the unit owners. See § 718.301, Fla. Stat.
The original complaint was filed by the Association on January 6, 2012,
after extensive water intrusion damage to common areas of the condominium
property was discovered. Necessary repairs to the common areas required the
Association to increase, and for some years double or more, the assessments upon
its members in order to preserve the utility and value of both the common areas
and the individual condominium units. The Association sought damages from both
Arlington Properties and Arlington Pebble Creek, asserting that the developer and
the managing company knew of the water intrusion problems but neglected to fully
cure the situation, turned over to the Association responsibility for upkeep and
repairs knowing that damage to the buildings was ongoing, and knew the
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Association would incur substantial expense to preserve the integrity and safety of
the common areas. Based on the factual allegations in its Fourth Amended
Complaint, and after clarification by counsel and the trial court as the litigation
progressed, the Association proceeded on causes of action for fraudulent
misrepresentation and negligent misrepresentation.1
As the Florida Supreme Court has stated, a party seeking to establish
fraudulent misrepresentation is required to prove the following elements:
(1) a false statement concerning a material fact; (2) the representor's
knowledge that the representation is false; (3) an intention that the
representation induce another to act on it; and (4) consequent injury
by the party acting in reliance on the representation.
Butler v. Yusem,
44 So. 3d 102, 105 (Fla. 2010) (quoting Johnson v. Davis,
480
So. 2d 625, 627 (Fla. 1985)). To establish negligent misrepresentation, a party is
required to prove: (1) a misrepresentation of material fact that the defendant
believed to be true but which was in fact false; (2) that defendant should have
1
The Association’s count alleging a violation of section 718.616, Florida Statutes,
based on allegations of Arlington Pebble Creek not fulfilling its statutory
obligation of disclosure upon conversion of the apartment complex into a
residential condominium had been dismissed by the time the case was tried.
Counsel for the Association also clearly represented to the trial court, and in the
Association’s brief in this court, that the Association was not proceeding under a
buyer’s cause of action for fraudulent nondisclosure as provided in Johnson v.
Davis,
480 So. 2d 625 (Fla. 1985), since the Association was not a buyer, the
individual unit owners were. During the discussion of jury instructions and the
parameters of closing arguments after the close of evidence, the trial court ruled
that the Association was proceeding on “a fraudulent and negligent
misrepresentation claim, not a fraudulent nondisclosure case.” The Association
did not object and does not challenge that ruling here.
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known the representation was false; (3) the defendant intended to induce the
plaintiff to rely on the misrepresentation; and (4) the plaintiff acted in justifiable
reliance upon the misrepresentation, resulting in injury. See Specialty Marine &
Industrial Supplies, Inc. v. Venus,
66 So. 3d 306, 309 (Fla. 1st DCA 2011).
The first elements of both causes of action require false statements of
material fact. The Association admitted into evidence Arlington Properties’
Facility Evaluation Report from December 2005. This report was prepared as
required by section 718.616, Florida Statutes, when converting an apartment
complex to a residential condominium. The report stated an estimated remaining
useful life of the structures of 35 to 45 years and described the functional
soundness of the structures as “Good (localized deterioration).” In addition, the
Association presented Arlington Pebble Creek’s budget for Association
maintenance for 2008 (the year immediately prior to turnover of Association
management), showing less than $10,000 expended for building repairs.
To prove the falsity of the Facility Evaluation Report and the maintenance
budget, and to prove the defendants’ knowledge of such falsity (for the fraudulent
misrepresentation count) or that they should have known of the falsity (for the
negligent misrepresentation count), the Association admitted into evidence a
second engineering report, the Property Condition Assessment. Arlington
Properties had obtained the Property Condition Assessment around the time of the
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Facility Evaluation Report in December 2005 as it prepared to purchase the then
apartment complex. The Property Condition Assessment was not filed with the
State of Florida or otherwise published to third parties. It described moisture
intrusion affecting the exterior balconies including columns, handrails, concrete
decks, and balcony ceilings. The Property Condition Assessment included the
engineers’ estimate that at the time of that report water damage to the buildings
required repairs to the “Structure/Building envelope” costing approximately
$290,200.00. According to the Association, the falsity of the 2008 budget was
that it gave no hint that costly repairs were needed immediately and that
extraordinary Association assessments were required in order to preserve the
common areas.
The jury therefore had evidence to support the first and second elements of
the fraudulent and negligent misrepresentation causes of action. However, the
Association failed to present any evidence to prove the third and fourth elements
for both fraudulent and negligent misrepresentation.2 No evidence of any intent of
Arlington Properties or Arlington Pebble Creek to induce reliance by the
2
Although there may have been misrepresentations made to individual unit owners
which were intended to induce them into purchasing their units, the trial court
correctly held that it was necessary for the Association to prove that the Appellants
intended to induce reliance by the Association and that the Association was injured
acting in reliance on the misrepresentation. The Association does not dispute this
on appeal and in fact states in its answer brief, “[t]his case is about fraudulent
misrepresentations made directly to the Association in Association meetings.”
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Association was presented. In addition, the Association failed to present any
evidence that it actually relied on the statutory report or any pre-transfer
Association budgets, and failed to present any evidence that the damages it sought
resulted from its action or inaction attributed to any reliance.
The testimony of Dorothy Benson, a unit owner since 2007 and Association
president at the time of trial, did not describe any action the board took at the time
of transfer or thereafter in reliance on any statement by either defendant. She
never testified that the transfer of Association control to the unit owners was
contingent upon any representation by either defendant. No one representing the
Association asserted that the transfer deviated from any provision of section
718.301, Florida Statutes. Likewise, upon transfer of the Association in December
2008, the first post-transfer property manager, Jeff Sausaman, testified that he
prepared the budgets for the Association for 2009 and years thereafter based on his
experience and with some knowledge of the Association’s budget for 2008. But
Mr. Sausaman had not seen Arlington Properties’ 2005 statutory property
condition report, and thus could not have relied on it, until after the litigation was
commenced in 2012.
The lack of evidence of either defendants’ intent to induce reliance and the
failure to show any actual reliance by the Association via any action or change in
the Association’s position was argued extensively in the defendants’ motions for
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directed verdict at the conclusion of the Association’s presentation of evidence.
The issue of failure of proof was thus preserved for appellate review. The trial
court specifically inquired of counsel what the Association would have done
differently had the Association known of the water intrusion problems earlier in
time. Other than preparing post-transfer budgets with higher projections for repair
expenses, charging unit owners with higher assessments earlier, and perhaps
undertaking repairs sooner, there was simply no evidence that the costs of repairs
eventually incurred was a consequence of any reliance by the Association upon
any false statement made to the Association, either fraudulently or negligently, by
either of the defendants.3
Because the record on appeal fails to contain proof of the third and fourth
elements of both fraudulent misrepresentation and negligent misrepresentation, the
jury’s verdict, and the final judgment based thereon, are not supported by evidence
in the record. Accordingly, the final judgment is REVERSED with directions for
entry of judgment in favor of Appellants.
LEWIS and ROBERTS, JJ., CONCUR.
3
There was no evidence that the Association suffered additional damages by any
delay in repairs. Additionally, although the extent of reliance necessary to prove
fraudulent misrepresentation and negligent misrepresentation differ, here there was
no proof of any reliance to satisfy either cause of action. See Specialty
Marine, 66
So. 3d at 310-11. Contrary to one of the Association’s arguments, the existence of
a fraudulent statement does not in itself establish reliance on that statement — to
so hold would eliminate the third and fourth elements of the cause of action
required by Butler.
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