Residences at Bath Club v. Bath Club Entertainment, LLC

Third District Court of Appeal
State of Florida
Opinion filed June 17, 2015.
Not final until disposition of timely filed motion for rehearing.
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No. 3D14-1992
Lower Tribunal No. 13-36250
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The Residences at the Bath Club, etc., et al.,
Appellants,
vs.
Bath Club Entertainment, LLC,
Appellee.
Appeal from the Circuit Court for Miami-Dade County, Rosa I. Rodriguez,
Judge.
Legon Fodiman, P.A., and Todd R. Legon and William F. Rhodes, for
appellants.
Shubin & Bass, P.A., and John K. Shubin, Juan J. Farach, and Lauren G.
Brunswick, for appellee.
Before ROTHENBERG, SALTER and SCALES, JJ.
SCALES, J.
The Residences at the Bath Club Condominium Association, Inc.
(“Condominium Association”), and the Residences at the Bath Club Maintenance
Association, Inc. (“MXA”) (collectively referred to as “Appellants”) appeal the
trial court’s order denying their Motion to Enforce Arbitration Award (“Motion to
Enforce”) and compelling arbitration of two claims raised in Appellants’ Motion to
Enforce.
Because certain determinations in the trial court’s order denying Appellants’
Motion to Enforce are not consistent with the parties’ Arbitration Award, or are
unsupported by competent substantial evidence, we reverse those portions of the
order. We affirm that part of the order that compelled arbitration of one of the
“new” claims raised in Appellants’ Motion to Enforce, i.e., Appellant’s claim that
Bath Club Entertainment, LLC (the “Developer”) is required to provide indoor
dining amenities to Appellants.
I. FACTS
In 2010, the Developer and Appellants (two associations representing unit
owners of condominiums that the Developer constructed) entered into a Settlement
Agreement to conclude over three years of litigation involving the parties’
respective rights and responsibilities related to the Bath Club Property (“Bath
Club” or “the Property”) located on Collins Avenue in Miami Beach. The
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Settlement Agreement incorporated several collateral governing documents related
to the Property.
Pursuant to the terms of the parties’ Settlement Agreement, all future
disputes between the parties related to the agreement were subject to arbitration.
Shortly after the parties executed the Settlement Agreement, the Developer
initiated arbitration proceedings against Appellants, essentially seeking
declarations as to the parties’ rights and obligations under the Settlement
Agreement and its incorporated documents.
Appellants filed a multiple-count counterclaim in the arbitration proceeding.
Only one of the Developer’s claims, and only two counts of Appellants’
counterclaim, are relevant to this appeal: (i) the Developer’s claim challenging the
enforceability of Rule 2a of the Amended Rules and Regulations promulgated by
MXA (requiring the Developer, when conducting special events on the Property, to
provide Appellants with proof of insurance); (ii) Count IV of Appellants’
counterclaim, in which the Appellants sought to compel the Developer to comply
with a governing document provision requiring the Developer to provide outdoor
food and beverage service as an amenity at the Bath Club, and (iii) Count V of
Appellants’ counterclaim, in which Appellants sought to compel the Developer to
rent unused cabanas to unit owners at reduced prices.
3
In the summer of 2013, a three-person arbitration panel conducted a four-
day evidentiary hearing on Developer’s claims and Appellants’ counterclaims,
resulting in a detailed twenty-four-page Arbitral Award, rendered in November
2013.
Relevant to this appeal, the Arbitral Award determined that Appellants had
prevailed on Counts IV and V of their counterclaim, and that the Developer was
therefore required to: (i) provide outdoor dining service “during all Regular
Hours”1 pursuant to the terms of one of the agreements incorporated into the
parties’ Settlement Agreement, and (ii) make cabanas available to unit owners on a
short-term basis at the same rates paid by “Facility Permittees.”2
The Arbitral Award also held enforceable Rule 2a of the Amended Rules
and Regulations promulgated by MXA (requiring the Developer, when conducting
special events on the Property, to provide Appellants with proof of insurance).
Pursuant to section 682.15, Florida Statutes, the Arbitral Award was
confirmed in a final judgment rendered by the trial court in May 2014.
1“Regular Hours” is defined by the Settlement Agreement and its incorporated
documents as “the hours during which any of the Bath Club Facilities or
Additional Facilities shall be available for use by Facility Permittees. . . .”
2“Facility Permittees” is defined by the Settlement Agreement and its incorporated
documents as “Resort Guests, Association Members [i.e., the owners of the
condominium units] and Condominium Guests.”
4
In February 2014, even before the award was confirmed in a final judgment,
Appellants filed their Motion to Enforce.
Appellants’ motion sought enforcement by the trial court of the Arbitral
Award with regard to Count IV (regarding the Developer’s alleged failure to
provide outdoor dining amenities as required by the Settlement Agreement) and
Count V (regarding the Developer’s alleged failure to offer cabanas to the unit
owners for lease pursuant to the Settlement Agreement) of its counterclaim, and of
Rule 2a of MXA’s Amended Rules and Regulations. In regard to Count IV,
however, Appellants’ Motion to Enforce also requested that the trial court require
the Developer to provide indoor restaurant service to unit owners. In regard to
Count V, Appellants’ motion specifically requested that the trial court compel the
Developer to “make unleased cabanas available to unit owners at the same rental
rate as that to be paid by Club Members . . . .” (emphasis added). Appellants’
Motion to Enforce was supported by a seven-page affidavit of Thomas Ireland, the
president of the Appellants.
The Developer responded to Appellants’ Motion to Enforce by filing a
Motion to Compel Arbitration (“Motion to Compel”). The Developer asserted that
Appellants’ indoor restaurant demand and cabana pricing demand were “new”
claims that were not part of the Arbitral Award.
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The trial court conducted a non-evidentiary hearing and ultimately agreed
with the Developer; the trial court entered the order on appeal, which concludes
that these two claims are “new” claims that are subject to arbitration. Without
elaboration, the trial court’s order simply denied Appellants’ Motion to Enforce.
The only evidence before the trial court was Mr. Ireland’s affidavit.
II. ANALYSIS
A. Standard of Review
The trial court’s decision to deny Appellants’ Motion to Enforce and refer
Appellants’ indoor dining request and cabana pricing claims to arbitration was
based in part on findings of fact, presenting us with a mixed question of law and
fact. New Port Richey Med. Investors, LLC v. Stern ex rel. Petscher, 14 So. 3d
1084, 1086 (Fla. 2d DCA 2009). Our review of the trial court’s factual findings is
limited to determining whether they are supported by competent substantial
evidence. Id. We use a de novo standard to review the trial court’s construction of
the
Arbitral Award and its application of the law to the facts found. Id.B. Indoor Food and Beverage Service Claim
Appellants seek to require the Developer to provide indoor food and
beverage services to Appellants. We agree with the trial court that this claim was
not resolved by the parties’ prior arbitration claim; therefore this claim is a “new
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claim” subject to the Settlement Agreement’s arbitration provision. We therefore
affirm that part of the trial court’s order compelling the parties to arbitrate this
claim.
C. Cabana Pricing Claim
Citing a document incorporated into the Settlement Agreement, the Arbitral
Award determined that the Developer was required to make the cabanas “available
. . . for short-term use by Facility Permittees and Club Members3 alike, on a first-
come, first-served basis and at the same rates paid by Facility Permittees
therefore.” (emphasis added).
Appellants’ Motion to Enforce alleged that, despite the findings of the
Arbitral Award, the Developer has not made unleased cabanas available to
Appellants “at the same rental rate as that to be paid by Club Members . . . .”
The trial court denied Appellants’ Motion to Enforce this portion of the
Arbitral Award and referred Appellants’ claim to arbitration. The trial court
determined that Appellants’ claim constituted a “new and different claim than what
was presented to the panel.”
We disagree, and conclude that the trial court erred in referring this claim to
arbitration. As reflected in the Arbitral Award, this claim was presented to, and
determined by, the arbitration panel. Thus, the trial court
3 The term “Club Members” is defined by the Settlement Agreement and its
incorporated documents as members of the historic Bath Club.
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was required to adjudicate this claim in the context of Appellants’ Motion to
Enforce.
Therefore, we reverse that portion of the trial court’s order that referred this
claim to arbitration, and remand so that the trial court may enforce the relevant
provisions of the Arbitral Award that specifically addressed this issue.
D. Outdoor Food and Beverage Service Claim
The Arbitral Award determined that the Developer was required to provide
outdoor food and beverage service consistent with the requirements of an
agreement incorporated into the parties’ Settlement Agreement. Specifically, the
Arbitral Award determined that the Developer was required to provide such
outdoor dining service during all “Regular Hours.” The Arbitral Award granted the
Appellants the remedy of specific performance in this regard.
Appellants’ Motion to Enforce alleged that, notwithstanding the requisites of
the Arbitral Award, the Developer failed to provide the required outdoor food and
beverage service.
The Developer argues that, sometime prior to the entry of the trial court’s
August 8, 2014 order denying, without elaboration, Appellants’ Motion to Enforce,
the Developer came into compliance with the requisites of the Arbitral Award
regarding outdoor food service. Appellants dispute this.
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At the time of the June 3, 2014 hearing on Appellants’ Motion to Enforce,
however, the only evidence before the trial court was Mr. Ireland’s unrebutted
affidavit in which Mr. Ireland averred that Appellants failed to provide outdoor
food and beverage service during “Regular Hours.” This evidence, coupled with
the Developer’s seeming admission in its brief and during oral argument, that the
Developer’s alleged compliance occurred after the June 3, 2014 hearing, requires
us to reverse this portion of the trial court’s order. The trial court’s order denying
Appellants’ Motion to Enforce in this regard is not supported by competent
substantial evidence.
Therefore, we reverse that portion of the trial court’s order that denied,
without elaboration, Appellants’ claim that the Developer had failed to comply
with the Arbitral Award’s remedy on Count IV of Appellants’ counterclaim, and
remand for proceedings consistent herewith.4
E. Insurance Claim
In the arbitration proceedings, the Developer challenged the validity and
enforceability of Rule 2a of MXA’s Amended Rules and Regulations. In relevant
part, Rule 2a requires the Developer to provide Appellants with proof of liability
insurance when functions occur at the Property. Rule 2a requires limits of no less
4 We express no opinion as to whether, on remand, the Developer may be able to
establish compliance with this portion of the Arbitral Award. In adjudicating this
issue, however, we urge the trial court to elaborate on the basis for its
determination.
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than $500,000 per individual and $5,000,000 per occurrence, and that MXA be
named as an additional insured.
The Arbitral Award expressly determined that Rule 2a was enforceable.
Appellants’ Motion to Enforce sought the trial court to enter an order compelling
the Developer to comply with Rule 2a.
At oral argument, the Developer conceded that, at or before the June 3, 2014
hearing on Appellants’ Motion to Enforce, it had not met the obligations of Rule
2a. Again, the only record evidence before the trial court on this issue was Mr.
Ireland’s affidavit asserting that the Developer had not complied with Rule 2a. Yet,
without elaboration, the trial court denied Appellants’ Motion to Compel in this
regard.
This portion of the trial court’s order is not supported by competent
substantial evidence, and therefore requires reversal; we remand for proceedings
consistent herewith.5
III. CONCLUSION
In sum, we affirm that portion of the trial court’s order that compelled
arbitration of Appellants’ request that the Developer provide indoor food and
beverage service.
5 Again, we express no opinion as to whether, on remand, the Developer may be
able to establish compliance with this part of the Arbitral Award, but we encourage
the trial court to elaborate on the basis of its determination in this regard.
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We reverse that portion of the trial court’s order that referred Appellants’
cabana pricing claim to arbitration, and we direct the trial court to enforce the
relevant provisions of the Arbitral Award.
We reverse that portion of the trial court’s order that denied Appellants’
Motion to Enforce the outdoor food and beverage service claim, and remand for
the trial court to adjudicate whether the Developer has complied with the relevant
provisions of the Arbitral Award.
Finally, we reverse that portion of the trial court’s order that denied
Appellants’ Motion to Enforce compliance with Rule 2a.
Affirmed in part; reversed and remanded in part.
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