THE RESIDENCES AT THE BATH CLUB CONDOMINIUM ASSOCIATION, INC., etc. v. BATH CLUB ENTERTAINMENT, LLC, etc. ( 2023 )

Third District Court of Appeal
State of Florida
Opinion filed February 1, 2023.
Not final until disposition of timely filed motion for rehearing.
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No. 3D21-933
Lower Tribunal No. 18-20081
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The Residences at the Bath Club Condominium Association,
Inc., etc., et al.,
Appellants,
vs.
Bath Club Entertainment, LLC, etc.,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Michael A.
Hanzman, Judge.
Kluger, Kaplan, Silverman, Katzen & Levine, P.L., and Alan J. Kluger,
Steve I. Silverman and Becky N. Saka; Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A., and Eugene E. Stearns and Albert D. Lichy, for
appellants.
Armstrong Teasdale LLP, and Glen H. Waldman, Michael A. Sayre
and Marlon Weiss, for appellee.
Before EMAS, HENDON and MILLER, JJ.
HENDON, J.
The Residences at the Bath Club Condominium Association, Inc.
(“Condominium Association”), and The Residences at the Bath Club
Maintenance Association, Inc. (“MXA”) (collectively, “Appellants”) appeal
from the amended final judgment. We affirm.
Facts
Appellee Bath Club Entertainment (“BCE”) owns The Bath Club
(“Bath Club”), an historic social club situated on the beach in Miami Beach.
Appellant Condominium Association operates The Residences at the Bath
Club Spa, the property adjacent to the Bath Club, while co-Appellant MXA
maintains the common areas shared by BCE and the Condominium
Association. BCE’s Bath Club property, also known as the “Easement
Parcel,” includes The Bath Club, cabanas, a garage, and a portion of the
pool deck where food and beverages are served.
In 2010, the parties entered into a comprehensive settlement
agreement (“Settlement Agreement”) to conclude over three years of
litigation involving the parties' respective rights and responsibilities related
to The Bath Club property. In the Settlement Agreement, BCE conveyed
ownership of certain common elements to MXA, such as the pool, spa,
tennis courts, and landscaped areas. BCE also agreed to give
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condominium owners conditional use of certain Bath Club amenities. In
exchange, MXA recognized BCE’s (a/k/a “Easement Parcel Owner” or
“EPO”) right to maintain ownership of those upland areas necessary to
maintain its beach concession licenses. Paragraph 5 of the Settlement
Agreement, provides, in relevant part:
Within 20 business days . . . BCE shall tender to MXA a special
warranty deed . . . to the following areas: the pool (but not the
adjacent pool deck and outdoor dining areas), the spa, tennis
courts and landscaped areas, as the sole Common Areas
under the Governing Documents . . . and otherwise in the
manner provided in Section 3.3 of the Easement Agreement.
Nothing herein shall impair the Easement Parcel Owner’s right
to provide food and beverage and other services, or to conduct
other activities, to the full extent provided in the Governing
Documents. Notwithstanding anything herein to the contrary,
BCE may maintain ownership rights of any “upland” areas that
may be needed to obtain any licenses that may be necessary
or desirable in order to enable it, and its successors and
assigns, to provide beach-related services to the Easement
Parcel and the surrounding beach areas. At the Easement
Parcel Owner's request, Condominium and MXA shall join in or
consent, as required, in any applications or permits that may be
required for any such licenses.
(Emphasis added).
Subsequently, in 2011, the Appellants asked BCE to permit them to
provide their own concessions on BCE’s beachfront property. In the written
agreement, BCE agreed but reserved the right to revoke its approval with a
14-day notice to the Appellants. BCE then sought to fulfil its bargain under
Paragraph 5 of the Settlement Agreement and offered a special warranty
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deed to the common areas it agreed to transfer to MXA. The Appellants
rejected the deed, taking the position that BCE was required to deed the
entire pool deck and mezzanine areas as well. This issue, among others,
went before an arbitration panel in 2013. In an omnibus order on motions
for summary disposition, the arbitration panel decided the matter against
MXA, and relevant to this appeal, directed BCE to draft a warranty deed
that conformed with the Settlement Agreement and Paragraph 5’s plain
language. After a final hearing, the arbitration panel issued the arbitral
award which provided that “BCE fulfilled its conveyance obligations”
through its deed tender and concluded that MXA’s demand for additional
property and refusal to accept the deed was not justified. Pursuant to
section 682.15, Florida Statutes, the arbitral award was confirmed in a final
judgment rendered by the trial court in May 2014. The parties jointly
drafted the February 2013 special warranty deed. 1
From 2013 through 2017, the Appellants continued to annually
request permission from BCE to provide their own concessions, and BCE
continued to grant permission. In 2018, BCE concluded that it was too
1
In February 2014, the Appellants filed their first motion to enforce
compliance with the 2013 Arbitral Award. Residences at Bath Club v. Bath
Club Ent., LLC, 166 So. 3d 910, 912 (Fla. 3d DCA 2015) (affirming in part
and reversing in part the trial court's order denying Appellants’ Motion to
Enforce Arbitration Award and compelling arbitration of two claims raised in
Appellants' Motion to Enforce).
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expensive to allow the Appellants to coattail on BCE’s beach concession
license free of charge. BCE notified the Appellants of this change in their
relationship and invoked the 14-day notice of revocation, giving Appellants
the option of continuing to run their beachfront concession for a monthly
fee or pay BCE to run it for them. Subsequently, and without notice to
BCE, the Appellants applied to the City of Miami Beach for its own
beachfront concession license to operate at The Bath Club, asserting that it
now owned the upland areas necessary to do so, in contravention of the
Settlement Agreement. Appellants based their argument on BCE’s
conveyance of the special warranty deed without having reserved to itself
the upland area necessary to maintain its license. The City of Miami Beach
rejected the application, citing the Settlement Agreement’s clear language
providing that BCE, as well as its successors and assigns, retained
concession privileges and ownership rights of any upland areas needed to
obtain licenses. Appellants applied again, and the City denied the
application again, 2 and rejected MXA’s appeal.
2
The City responded, in pertinent part:
The City relies on the ownership records published in the
Miami-Dade County Property Appraiser's database. You
submitted an application for 5959 Collins Avenue, which the
Property Appraiser identifies with tax folio no. 02-3214-030-
0001. This folio is not associated with the property
immediately westward of the public beach. On the contrary,
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The Appellants then approached the Miami-Dade County Property
Appraiser and succeeded in having that office change the folio number of
the parcel adjacent to the beach area then owned by BCE to MXA.
Appellant MXA then re-applied to the City of Miami Beach with the new
folio number for a concession license. BCE learned of the Appellants’
application and prior to the City’s issuance of a license, petitioned the
circuit court for injunctive relief. The trial court granted in part BCE’s
motion for a temporary injunction without notice. The trial court found that
BCE demonstrated a substantial likelihood of success on the merits of its
claim for injunctive relief. With respect to the first two elements - the
likelihood of irreparable harm and the inadequacy of a remedy at law - the
trial court found that MXA violated a restrictive covenant and thus no
showing of irreparable harm or inadequacy of damages was required. The
trial court also determined that the public interest was served by issuance
of the temporary injunction.
At the November 17, 2020 bench trial, the trial court heard testimony
from witnesses and received exhibits into evidence. After considering the
parties’ arguments, the court concluded that Paragraph 5 of the Settlement
the County Property Appraiser lists Bath Club Entertainment,
LLC (“BCE") as the property-owner of 5937 Collins Avenue.
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Agreement “made it abundantly clear that, despite any obligation to the
contrary, BCE was entitled to maintain ownership of the upland areas” and
also “imposed affirmatively on MXA an obligation to consent and join in any
permits . . . that may be required for such licenses, and to do everything it
could to work cooperatively to finalize a legal description . . . contemplated
by Paragraph 5.” The trial court concluded “that BCE has an ongoing right
to maintain ownership of whatever upland areas are needed to obtain its
licenses that are necessary to operate its facilities. And to the extent that
the 2013 Special Warranty Deed did not reserve that sliver of upland
property, that was by mistake . . . .” The Appellants sought to vacate the
order, which motion the trial court denied.
The trial court held a March 8, 2021, evidentiary hearing to determine
how to reform the special warranty deed to conform to the Settlement
Agreement. The trial court concluded that, based on the evidence
presented, BCE was entitled to a 400-foot strip one inch wide in order to
maintain its beach concession license from the City, while the Appellants
would receive the remaining 138.62 linear feet. The parties agreed that
BCE was entitled to as much of the property “as needed” in order to
provide its services, and no more. The trial court entered its 26-page
amended final judgment, which found, in pertinent part:
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Paragraph 5 of the Settlement Agreement allows BCE to retain
the land necessary to provide its beach related services. It does
not say that under no circumstances shall the condominium
owners receive less than a certain amount of beach front
property.
The way the Settlement Agreement is structured, the
Associations could have ended up with no linear footage on the
beach. That is the agreement they bargained for. It is not the
Court's prerogative to rewrite the Settlement Agreement.
To the extent that the 2013 special warranty deed did not
reserve that sliver of upland property, that was by mistake . . .
However, based upon the current circumstances and the
evidence as it currently sits, this Court finds as a matter of fact
that BCE pursuant to Paragraph 5 of the Settlement Agreement
is entitled to 400 lineal feet (one inch in width); and that there
will be a corrected deed, re-conveying that dimension of the
property back to BCE so that it can provide beach related
services to its members.
The Appellants appealed.
Discussion
The Appellants raise six issues on appeal, none of which provide a
legal basis for reversal. The Appellants first contend that the trial court
erred by interpreting Paragraph 5 of the Settlement Agreement to mean
that BCE has, in perpetuity, ownership rights in the upland area necessary
for it to keep its license. We review de novo the trial court’s interpretation of
a contract, including whether the contract or one of its terms is ambiguous.
Real Est. Value Co. v. Carnival Corp., 92 So. 3d 255, 260 (Fla. 3d DCA
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2012). We begin by examining the plain language of the contract for
evidence of the parties’ intent. Aleman v. Gervas, 314 So. 3d 350, 352 (Fla.
3d DCA 2020); Royal Oak Landing Homeowner's Ass'n, Inc. v. Pelletier,
620 So. 2d 786, 788 (Fla. 4th DCA 1993) (holding the intentions of the
parties govern a contract’s construction and interpretation, and the best
evidence of intent is the contract’s plain language). “To ascertain the
intention of the parties to a contract, the trial court must examine the whole
instrument, not just particular portions, and reach an interpretation
consistent with reason, probability, and the practical aspects of the
transaction between the parties.” Bucacci v. Boutin, 933 So. 2d 580, 585
(Fla. 3d DCA 2006) (quoting Macaw v. Gross, 452 So. 2d 1126 (Fla. 3d
DCA 1984)). “[A] court may not interpret a contract so as to render a
portion of its language meaningless or useless.” TRG Columbus Dev.
Venture, Ltd. v. Sifontes, 163 So. 3d 548, 552 (Fla. 3d DCA 2015) (citing
Moore v. State Farm Mut. Auto. Ins. Co., 916 So. 2d 871, 877 (Fla. 2d DCA
2006)).
In examining the parties’ intent, we note that in 2010, the Appellants
entered into a Settlement Agreement with the property developer to
conclude over three years of litigation involving the parties' respective
rights and responsibilities related to the Bath Club Property. The plain
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language of Paragraph 5 of the Settlement Agreement indicates the clear
intent of the parties that,
[n]othing herein shall impair the Easement Parcel Owner’s right
[to conduct its business] . . . to the full extent provided in the
Governing Documents. . . . BCE may maintain ownership rights
of any “upland” areas that may be needed to obtain any
licenses that may be necessary . . . to enable it, and its
successors and assigns, to provide beach-related services to
the Easement Parcel and the surrounding beach areas.
BCE’s rights to the upland property were further retained based on the
plain language of the subsequent warranty deed, which explicitly states
that “[t]his conveyance evidences a transfer of title . . . pursuant to
Paragraph 5 of that certain Settlement Agreement dated December 2,
2010, and as required by [the Arbitration Order].” Indeed, for several years
after BCE conveyed the mutually agreed-upon special warranty deed, the
Associations recognized BCE as the upland owner and asked BCE for
authorization to use BCE’s upland property in yearly applications to the City
of Miami Beach. See Iniguez v. Am. Hotel Reg. Co., 820 So. 2d 953, 956
(Fla. 3d DCA 2002) (concluding the contract was unambiguous, and in
addition, that the “surrounding circumstances and the conduct of the
parties through their course of dealings clearly support[ed]” contractual
intent). We find the Settlement Agreement’s language to be unambiguous,
and conclude that the record discloses no evidence that BCE was divested
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of its property rights by its post-Settlement Agreement behavior or by the
special warranty deed. The intent of the parties, amply demonstrated in
the record, supports the trial court’s conclusion that the unambiguous
language of Paragraph 5 provides that BCE retains its upland area
ownership rights.
It follows that, finding the Settlement Agreement clear on the parties’
intent regarding BCE’s property rights, to the extent the survey attached to
the 2013 special warranty deed did not reserve a sliver of upland property
necessary to retain BCE’s license, that was by mutual mistake. The record
is clear that throughout the arbitration and crafting of the special warranty
deed, neither party intended that the special warranty deed should divest
BCE of the right to operate its beach concessions or the upland property
necessary to do so. Certainly, the Appellants’ conduct subsequent to the
grant of the special warranty deed acknowledged BCE’s right to the upland
property. The record suggests that only after BCE notified the Appellants
that it intended to charge them for the sublicense or terminate that
privilege, did the Appellants seek to challenge BCE’s right to the upland
beach concession property.
Thus, the lower court’s finding of mutual mistake and its adjustment
of the survey to comport with the Settlement Agreement “[is] entitled to a
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presumption of correctness” and “[s]uch findings are reviewed for clear
error and sufficient evidence.” Losner v. HSBC Bank USA, N.A., 190 So. 3d
160, 161 (Fla. 4th DCA 2016); Sugar v. Guardianship of Stern, 109 So. 3d
809, 810 (Fla. 3d DCA 2013) (holding a decision to impose reformation as
an equitable remedy is reviewed for abuse of discretion). The trial court
appropriately reformed the survey attached to the special warranty deed to
adjust the conveyance of land abutting the beach to accord with the
Settlement Agreement in order to allow BCE to continue to obtain its
concession licensing. “A court of equity has the power to reform a written
instrument where, due to a mutual mistake, the instrument as drawn does
not accurately express the true intention or agreement of the parties to the
instrument.” Sierra v. Albers, 540 So. 2d 907, 907–08 (Fla. 2d DCA 1989),
(citing Providence Square Ass’n, Inc. v. Biancardi, 507 So. 2d 1366, 1369
(Fla.1987)). The foregoing “principle is applicable to instruments of
conveyance of real property as well as to contracts.” Id.In a related issue, the Appellants contend that the trial court’s
subsequent apportionment of the upland area is not supported by
competent, substantial evidence. The trial court’s division of the upland
area as part of the deed reformation is an equitable decision subject to the
abuse of discretion standard. Sugar, 109 So. 2d at 810. That discretion,
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however, is circumscribed by competent, substantial evidence. See, e.g.,
Fernandez v. Fernandez, 314 So. 3d 543 (Fla. 3d DCA 2020). We find no
abuse of discretion, and find competent, substantial evidence in the record
showing the trial court’s division of the upland area comports with the
mandate of Paragraph 5 of the Settlement Agreement, i.e., that BCE
maintains ownership rights of any upland area necessary to enable it and
its successors and assigns to provide beach concession services to the
easement parcel.
The Appellants next contend that the trial court erred by granting
BCE permanent injunctive relief. We disagree. We review the trial court’s
imposition of a permanent injunction for abuse of discretion. Weisberg v.
Albert, 123 So. 3d 663, 664 (Fla. 4th DCA 2013). “But the question of
whether the evidence is legally sufficient to justify imposing an injunction is
a question of law” subject to the de novo standard. Krapacs v. Bacchus,
301 So. 3d 976, 978 (Fla. 4th DCA 2020).
To obtain a permanent injunction, a petitioner must “establish a clear
legal right, an inadequate remedy at law and that irreparable harm will arise
absent injunctive relief.” Hollywood Towers Condo. Ass'n, Inc. v. Hampton,
40 So. 3d 784, 786 (Fla. 4th DCA 2010) (quoting K.W. Brown & Co. v.
McCutchen, 819 So. 2d 977, 979 (Fla. 4th DCA 2002)). BCE established a
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clear legal right to the upland areas necessary to continue its licensure and
business. Further, the trial court did not abuse its discretion by interpreting
Paragraph 5 as containing a restrictive covenant, the violation of which
satisfies the irreparable harm element. Chick-Fil-A, Inc. v. CFT Dev., LLC,
652 F. Supp. 2d 1252, 1263 (M.D. Fla. 2009) ("Under Florida law, where a
party seeks an injunction to prevent the violation of a restrictive covenant,
the party need not allege or show irreparable injury."). The Governing
Documents were expressly modified by the Settlement Agreement, which
enshrined BCE’s property interests in the upland area – meeting the
definition of a covenant that runs with land. See Hayslip v. U.S. Home
Corp., 336 So. 3d 207, 209 (Fla. 2022) (“A covenant running with the land
is defined as one concerning the property conveyed and the occupation
and enjoyment thereof.”) (quoting Maule Indus., Inc. v. Sheffield Steel
Prods., Inc., 105 So. 2d 798, 801 (Fla. 3d DCA 1958)). “If the performance
of the covenant must touch and involve the land or some right or easement
annexed and appurtenant thereto, and tends necessarily to enhance the
value of the property or renders it more convenient and beneficial to the
owner, it is a covenant running with the land.” Maule, 105 So. 2d at 801.
Although violation of a restrictive covenant serves to fulfill the irreparable
harm element of injunction, the record additionally supports the trial court’s
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conclusion that the Appellants’ attempted stealth acquisition of BCE’s
property rights (which included the physical property and BCE’s ability to
keep its concession license) would cause injury by, essentially, putting
BCE out of its longstanding beach concession business.
With that in mind, injunctive relief was appropriate without proof of
irreparable injury or a showing that a judgment for damages would be
inadequate. “The value of a restrictive covenant . . . is often difficult to
quantify and may be impossible to replace.” Autozone Stores, Inc. v. Ne.
Plaza Venture, LLC., 934 So. 2d 670, 673 (Fla. 2d DCA 2006) (citing
Restatement (Third) of Prop.: Servitudes § 8.3 cmt. b (2000)); see also
Velickovich v. Ricci, 391 So. 2d 258, 259 (Fla. 4th DCA 1980) (“Because of
the unique nature of each piece of real property, violations of restrictive
covenants cannot be easily remedied by money damages.”). Accordingly,
we affirm the imposition of the injunction which provides, consistent with
the Settlement Agreement, that BCE has the right in perpetuity to provide
beach-related services at its Bath Club property and the right to retain any
upland areas necessary to accomplish those services.
Finally, the trial court found that the Appellants had not met their
burden on any of their fifteen asserted affirmative defenses, and we decline
to disturb that finding. Accordingly, we affirm the final amended judgment.
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Affirmed.
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