Ventana Condominium Association, Inc. v. Chancey Design Partnership, Inc.

              NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
                     MOTION AND, IF FILED, DETERMINED


                                            IN THE DISTRICT COURT OF APPEAL

                                            OF FLORIDA

                                            SECOND DISTRICT


VENTANA CONDOMINIUM                   )
ASSOCIATION, INC., a Florida nonprofit)
corporation,                          )
                                      )
               Appellant,             )
                                      )
v.                                    )            Case No. 2D15-1803
                                      )
CHANCEY DESIGN PARTNERSHIP, INC., )
a Florida corporation; GREGORY JONES, )
an individual; ELLIOTT PAXTON         )
WHEELER, an individual; and HARDIN    )
CONSTRUCTION COMPANY, LLC, a          )
foreign limited liability company,    )
                                      )
               Appellees.             )
                                      )

Opinion filed August 12, 2016.

Appeal from the Circuit Court for
Hillsborough County; Claudia R. Isom,
Judge.

Michael A. Zaritsky of Zaritsky Law Firm,
Tampa; and Shyam "Shyamie" Dixit and
Robert L. Vessel of Dixit Law Firm, P.A.,
Tampa, for Appellant.

Stephen B. French and Edward O. Savitz of
Bush Ross, P.A., Tampa, for Appellees
Chancey Design Partnership, Inc., Gregory
Jones, and Elliott Paxton Wheeler.
No appearance for Appellee Hardin
Construction Company, LLC.




BLACK, Judge.

               Ventana Condominium Association, Inc., challenges the final summary

judgment in favor of Chancey Design Partnership, Inc., Gregory Jones, and Elliott

Wheeler.1 Because the trial court erred in determining that no issues of material fact

were in dispute and erred in applying the law, we reverse and remand for further

proceedings.

I.     History

               Ventana Tampa, LLC, the developer, contracted with Hardin Construction

Company, LLC, and Chancey Design to build the condominium. Issues with delays and

additional costs arose, and Ventana Tampa (the Developer) entered into a Mediated

Settlement Agreement (MSA) with Hardin whereby Hardin was given authority to take

action on behalf of the Developer against Chancey Design. The MSA provided that it

was binding upon the parties' successors, assigns, and all those holding title under

them. The Developer did not assign its interests in the claims or the claims themselves

to Hardin via the MSA.

               Hardin sued Chancey Design in July 2008 in its own right and on behalf of

the Developer.2 During the pendency of the suit the development was foreclosed upon,



               1
                Although a party to the action below, Hardin Construction Company, LLC,
is not a party to the order on appeal and has not participated in this appeal.
               2
                Additional defendants were involved in the first lawsuit who are not
parties to the current suit and therefore are not relevant to this opinion.


                                           -2-
and as stated in the foreclosure settlement agreement, the Developer was required to

execute an assignment of its interests in any litigation between it and Hardin and

Chancey Design. The assignee was Mercantile Bank. The final judgment of

foreclosure did not reference an assignment of interests in litigation, nor did the

judgment incorporate the settlement agreement.

              Mercantile Bank subsequently assigned the foreclosure judgment to BMR

Funding, LLC. The assignment to BMR did not reference the assignment of any

interests in the litigation from the Developer to Mercantile Bank. BMR executed an

"agency authority" stating that BMR was "the successor assignee and real party in

interest to, among other things, the direct ('brick and mortar') claims" in the lawsuit

between Hardin and Chancey Design. In February 2010 Hardin and Chancey Design

entered into a confidential settlement agreement, and in May 2010 Hardin—for itself

and BMR—and Chancey Design executed a general release (the Release). The

Release provided, in part:

              Hardin, for itself, its agents, representatives, beneficiaries,
              heirs, successors, creditors, assigns, and executors, hereby
              fully, completely and forever releases and discharges
              Chancey [Design] . . . from and against any and all past and
              present losses, liabilities, responsibilities, demands,
              obligations, actions, causes of action, rights, judgments,
              damages, compensation of any kind, expenses (including
              attorneys' fees and costs), and claims whatsoever, in law or
              in equity, arising out of the facts and circumstances raised in
              the [lawsuit].

              BMR, for itself, its agents, representatives, beneficiaries,
              heirs, successors, creditors, assigns, executors, entities,
              companies and any entities or persons in privity with them,
              hereby fully, completely and forever releases and discharges
              Chancey [Design] . . . from and against any and all past and
              present losses, liabilities, responsibilities, demands,
              obligations, actions, causes of action, rights, judgments,



                                            -3-
                 damages, compensation of any kind, expenses (including
                 attorneys' fees and costs), and claims whatsoever, in law or
                 in equity, arising out of the facts and circumstances raised in
                 the [lawsuit].

                 The lawsuit was dismissed in June 2010. In July 2010 Ventana

Condominium Association obtained operation, control, and duty of maintenance through

turnover from the Developer. The Association filed the current lawsuit in 2014, alleging

design defects with regard to the "amenities deck." The Association sued Chancey

Design, Gregory Jones, and Elliott Wheeler (the Chancey Defendants)3 and Hardin.

II.    Summary Judgment

                 The Chancey Defendants filed their motion for summary judgment on

December 17, 2014, arguing that the Association is a successor to BMR, who—through

Hardin—entered into the Release with Chancey Design, and that the Association's

claims are the same amenities deck claims which were resolved and released in the

prior lawsuit.

                 At the hearing, the Association argued that in the motion for summary

judgment the Chancey Defendants admitted "the Amenities Deck was redesigned and

constructed prior to substantial completion of the [condominiums]. Ventana, as

owner/developer, accepted the redesigned and constructed Amenities Deck." The

Association argued that the defects now at issue are construction defects and/or defects

of the redesign and construction, not the original defects which resulted in the redesign

and construction; that the Release is ambiguous; and that the Release did not expressly




                 3
               Gregory Jones and Elliott Wheeler are employees of Chancey Design
who worked on the condominium project. Mr. Jones and Mr. Wheeler were not
individual defendants in the lawsuit filed by Hardin against Chancey Design.


                                              -4-
state it covered unknown claims arising out of the construction. The Chancey

Defendants responded that the new lawsuit is premised on the same design defects

resolved in the prior suit regardless of "whether it fixed the issue, whether Hardin didn't

do the right work, [or] whether the [Developer] didn't put the money in to do it."

              At the end of the hearing, the court found "based upon the record

evidence that's been submitted, that Ventana Condominium Association is bound by the

[R]elease entered into on behalf of the [Developer] at the time of the prior lawsuit" and

granted the motion for summary judgment:

              Plaintiff, the Ventana Condominium Association, is the
              successor in interest to Ventana Tampa, LLC, the prior
              owner of Ventana. Ventana Tampa, LLC[,] previously
              assigned its interests in claims concerning the Ventana
              building design defects to Hardin Construction Company.
              These claims were settled and [the Release] signed in Case
              No. 08-CA-014505. Because of an identity in interest and
              identity in claims, the court finds plaintiff is bound by the
              [confidential] settlement agreement and [the Release].

III.   Analysis

       A.     The Association and the Developer

              In the order granting the motion for summary judgment the court found

that the Association is the successor in interest to the Developer and that the Developer

had assigned its interest in the claims against Chancey Design to Hardin. The court

further found that the claims against Chancey Design were settled and that the Release

has been executed.

              1. Applicable statutes

              "A condominium is created by recording a declaration in the public records

of the county where the land is located, executed and acknowledged with the




                                            -5-
requirements for a deed." § 718.104(2), Fla. Stat. (2014). "The declaration must

contain or provide for . . . [t]he name of the association, which must be a corporation for

profit or a corporation not for profit," and "[t]he document or documents creating the

association." § 718.104(4)(i), (k). The association, therefore, is created at the same

time that the condominium is created by virtue of the declaration of condominium and

documents creating the association being recorded together. See also § 718.112(1)(a)

("The operation of the association shall be governed by the articles of incorporation if

the association is incorporated, and the bylaws of the association, which shall be

included as exhibits to the recorded declaration."); Grove Isle Ass'n, Inc. v. Grove Isle

Assocs., LLLP, 137 So. 3d 1081, 1090 (Fla. 3d DCA 2014) ("A 'declaration' or

'declaration of condominium' is the instrument or instruments by which a condominium

is created. § 718.103(15), Fla. Stat. (2012). 'The declaration, which some courts have

referred to as the condominium's "constitution," strictly governs the relationships among

the condominium unit owners and the condominium association.' Woodside Vill. Condo.

Ass'n v. Jahren, 806 So. 2d 452, 456 (Fla. 2002). The powers of a condominium

association include those set out in section 718.111, Florida Statutes (2012), and,

except as expressly limited or restricted by the Condominium Act, those set forth in the

declaration of condominium, the bylaws of the association, and the applicable

provisions of the state corporations law. § 718.111(2), Fla. Stat. (2012); see also 10

Fla. Jur. 2d Condominiums & Coop. Apts. § 122 (2012).").

              A condominium association may sue "with respect to the exercise or

nonexercise of its powers," which "include, but are not limited to, the maintenance,

management, and operation of the condominium property." § 718.111(3); see also 10




                                           -6-
Fla. Jur. 2d Condominiums & Cooperative Apartments § 133. And "[a]fter control of the

association is obtained by unit owners other than the developer, the association may

institute . . . actions or hearings in its [own] name on behalf of all unit owners concerning

matters of common interest to most or all unit owners." § 718.111(3).

              "At the time that unit owners other than the developer elect a majority of

the members of the board of administration of an association, the developer shall

relinquish control of the association, and the unit owners shall accept control." §

718.301(4). Prior to that time, control of the association is by the board of

administration as elected by the developer. See § 718.112(2)(a)(1) ("The form of

administration of the association shall be described indicating the title of the officers and

board of administration and specifying the powers, duties, manner of selection and

removal, and compensation, if any, of officers and boards. In the absence of such a

provision, the board of administration shall be composed of five members . . . ."). And

prior to the developer relinquishing control of the association, actions taken by a

member of the board of administration designated by the developer are considered to

be actions taken by the developer, and the developer is responsible to the association

and its members for all such actions. § 718.301(6); see also 10 Fla. Jur. 2d

Condominiums & Cooperative Apartments § 104.

              Based on the plain language of these statutes, the Association—under the

control of the Developer and/or the board of administration—could have been a party to

the original litigation insofar as it concerned design defects. But see Bishop Assocs.

Ltd. P'ship v. Belkin, 521 So. 2d 158, 161 (Fla. 1st DCA 1988) ("The ability to elect the

majority of the board of directors substantially affects non-developer unit owners, as the




                                            -7-
Division director suggests in his final order. For example, until the non-developer unit

owners control the association, the association may not institute, maintain, settle or

appeal actions in its name on its behalf."). However, the Association was not named in

any of the original litigation documents in our record. Ventana Tampa, LLC, as the

developer, was the party involved. Moreover, although the Developer was the only

member of the Association for some period of time, it was not the board of

administration and none of the original litigation documents in our record indicate that

the Developer was acting in any capacity except as developer—a distinct entity

separate from the Association. Cf. Munder v. Circle One Condo., Inc., 596 So. 2d 144,

145 (Fla. 4th DCA 1992) (affirming final judgment in favor of association and against

condominium developer where developer breached the bylaws while in control of the

association).

                The Association could have been a party to the original litigation based on

the language of section 718.111 or through the filing of the lawsuit on behalf of the

Association by the Developer, but it was not. The record indicates that the rights and

interests at issue in the original lawsuit against Chancey Design were those of the

Developer, not those of the Association. In this lawsuit, the rights the Association seeks

to assert are its own, not rights previously asserted and released by the Developer. The

Association has not "stepped into the shoes" of the Developer or otherwise succeeded

to rights that the Developer had in the original litigation.

                2.    Successor in interest




                                              -8-
              Notwithstanding the statutory language, the record evidence does not

support the trial court's conclusion that the Association is a successor in interest to the

Developer. The MSA between the Developer and Hardin provided:

                      5. . . . [Hardin] retains the right to abandon or
              voluntarily dismiss the delay and acceleration claims; but in
              this event, [Developer] may elect to continue with
              [Developer's] direct claim. [Hardin] may only settle or
              compromise the Claims with [Developer's] consent, which
              will not be unreasonably withheld.
                      6. [Hardin] shall undertake the lead role in
              prosecuting the Claims against [Chancey Design] on behalf
              of both [Hardin] and [Developer] . . . .
                      7. . . . [Hardin] will be entitled to receive seventy-
              five percent (75%) of the recovery and [Developer] will be
              entitled to receive twenty-five percent (25%) of the recovery .
              ...
                      ....
                      18. The parties represent and warrant that they
              have not assigned or otherwise transferred any interest in
              any claim that is the subject of the [MSA].

              There is no document in the record evidencing an assignment or

successor-in-interest relationship between the Developer and Hardin. Although the

motion for summary judgment attaches the MSA as evidence of an assignment, nothing

in the MSA indicates more than an agency relationship between the Developer and

Hardin. And while the MSA provided Hardin with the authority to file the lawsuit on

behalf of itself and the Developer, it specifically stated that settlement of the Developer's

claims required the Developer's consent. Nothing in our record indicates that the

Developer consented to settle the claims and enter into a release. However, the

Developer is not a party to the current litigation, and the Association correctly argues

that as the MSA and other documents were confidential, the Association is not privy to

all information from the first lawsuit.




                                            -9-
              Nonetheless, Hardin executed the Release for itself and its "agents,

representatives, beneficiaries, heirs, successors, creditors, assigns, and executors."

But there is nothing in our record to support that the Developer was any of those

things.4 This is a substantial issue of fact in dispute. See Alderman v. BCI Eng'rs &

Scientists, Inc., 68 So. 3d 396, 401 (Fla. 2d DCA 2011). Moreover, the court erred in

finding that the Developer assigned its interests in the claims to Hardin based on the

MSA, the only evidence of the purported assignment. In effect, the court found that an

assignment from the Developer to Hardin and Hardin's later release of claims acted as a

release of any Developer claims. The MSA is not an assignment; rather, it creates an

agency relationship.

       B.     The Association and BMR

              Although the final judgment does not find that the Association is a

successor in interest to BMR, that was the argument made by the Chancey Defendants

in their motion for summary judgment.

              The condominium property was foreclosed upon, and the Developer

entered into a joint stipulation of settlement of the foreclosure action. As part of the

settlement, the parties agreed that the deficiency remaining after foreclosure would be

in the amount of $500,000. As consideration for that stipulated deficiency figure, the

Developer was required to execute an assignment "of any and all interest" it might have

"in any existing or future arbitration or litigation between" it and Hardin and Chancey

Design in favor of Mercantile Bank. The final judgment of foreclosure provided that all

parties consented to entry of the final judgment "pursuant to that certain Joint Stipulation



              4
                  At best, it was a principal in an agency relationship.


                                              - 10 -
of Settlement" and "that certain Stipulation for Entry of Order on Foreclosure and Final

Judgment of Foreclosure." The final judgment does not include a deficiency figure.

Following entry of the final judgment of foreclosure, Mercantile Bank assigned it to

BMR. Mercantile Bank assigned "without warranties or representations of any kind and

without recourse to Assignor, all of Assignor's right, title and interest in and to the Final

Judgment of Foreclosure, including, but not limited to, all bid rights thereunder." The

assignment by Mercantile Bank to BMR does not reference the assignment from the

Developer to Mercantile Bank.

              In short, there was no record evidence before the trial court that BMR held

the interests of the Developer at the time of the Release. Where a final judgment

neither incorporates the settlement agreement nor references the terms of an

agreement "in a manner showing that it was understood to have been adopted into the

Final Judgment," a court cannot enforce the terms of the agreement via a motion to

enforce the final judgment. See Fernandes v. Fernandes, 114 So. 3d 972, 975-76 (Fla.

5th DCA 2012). But see Holton v. Worldwide Event Prods., 164 So. 3d 792, 792 (Fla.

5th DCA 2015) ("While there was no specific incorporation by 'reference' of the MSA

into the Stipulated Final Judgment, it was the primary authority for the final judgment

and was thus incorporated by implication."). If the terms of the agreement cannot be

enforced as part of the final judgment, assignment of the final judgment cannot carry the

terms of the agreement with it. In this case, the assignment of interests in the litigation

was part of the settlement agreement as to a deficiency figure and not part of the final

judgment.

       C.     The claims




                                            - 11 -
              The Chancey Defendants argued in the motion for summary judgment that

the claims raised by the Association are identical to those raised in the first litigation. In

response, the Association filed two affidavits, both of which contained averments that

"latent defects, deficiencies and/or conditions concerning matters of common interest"

were discovered after the Association obtained control from the Developer in 2010 and

that "[i]n the course of conducting repairs and mitigating the damage, the Association

discovered additional defects, deficiencies and/or conditions involving the Chancey

defendants and Hardin." At a minimum, the deposition transcripts attached to the

motion for summary judgment and the affidavits presented by the Association conflict as

to whether the claims at issue are based on patent or latent defects. That is a material

factual issue in dispute and one upon which the Chancey Defendants did not

conclusively demonstrate that the Association could not prevail. See Schornberg v.

Panorama Custom Home Builders, Inc., 972 So. 2d 243, 245 (Fla. 2d DCA 2007).

       D.     The Release language

              "In considering the effect to be given to the Release, we begin with 'the

assumption that the released claims are those that were contemplated by the

agreement.' " Moxley v. U-Haul Co. of Fla., 148 So. 3d 132, 136 (Fla. 2d DCA 2014)

(quoting Mazzoni Farms, Inc. v. E.I. DuPont de Nemours & Co., 761 So. 2d 306, 315

(Fla. 2000)). And "we must give effect to the entire document and not merely consider

its provisions in isolation from each other." Id.

              Here, the Release applies to "any and all past and present losses,

liabilities, responsibilities, demands, obligations, actions, causes of action, rights,

judgments, damages, compensation of any kind, expenses (including attorneys' fees




                                            - 12 -
and costs), and claims whatsoever." The first paragraph of the Release also provides

that it was executed "pursuant to the terms of the Settlement Agreement" attached to

the release. The Settlement Agreement is a handwritten document which provides, in

relevant part, that

              in exchange for [said] payment, Hardin shall execute and
              deliver to Chancey [Design] . . . a General Release of all
              claims by it against Chancey [Design] . . . arising out of the
              facts and circumstances set forth in the instant complaint
              and a General Release by or on behalf of Mercantile Bank,
              as assignee of Ventana Tampa, LLC and Chanelside
              Building, Inc. and by or on behalf of BMR funding as
              assignee of Mercantile Bank.[5]

(Emphasis added.)

              Although not expressly argued by the parties, the Release language

identifies Hardin and BMR as the plaintiffs/releasors, along with their respective "agents,

representatives, beneficiaries, heirs, successors, creditors, assigns, executors," and as

to BMR individually any "entities, companies and any entities or persons in privity with

them." As discussed above, the Association is not a successor to Hardin or BMR, nor

does it appear to fit into any other listed category. Moreover, even had the Release

provided that Hardin's principals were releasing their claims or that entities in privity with

Hardin were releasing their claims, the Release would still be ambiguous as to the

Association because of the existence of the Association at the time of the original

lawsuit and the fact that the Developer—in its own right and not on behalf of the

Association—entered into the agreements in question. The Release also does not

purport to apply to Mercantile Bank as assignee of the Developer.



              5
             The General Releases referred to in the Settlement Agreement were
executed and are herein referred to as the Release.


                                            - 13 -
              Notwithstanding that the Release is not binding upon the Association

through either Hardin or BMR, the release language is ambiguous. The Association

argues that the Release language does not address future losses and that it only

addresses past and then-present losses, causes of action, and claims arising out of the

facts and circumstances raised in the first lawsuit.

              "If the terms of a written instrument are in dispute and are reasonably

susceptible to two different interpretations, then an issue of fact is presented as to the

parties' intent; such an issue of fact cannot be properly resolved by a summary

judgment." Floyd v. Homes Beautiful Const. Co., 710 So. 2d 177, 179 (Fla. 1st DCA

1998). The Association contends that the Release is ambiguous because it is unclear

whether latent defects resulting in future losses were intended to be released. We

agree that "[i]t is not apparent from the four corners of the [R]elease what 'claims' the

parties intended to release." Id. That is, for example, it is not apparent whether the

Release language "present losses, liabilities . . . and claims" "bars a cause of action

relating to a defect in existence at the time of execution of the [R]elease, but unknown

to the parties; or rather, whether that modifying language limits the [R]elease to causes

of action fully accrued at the time of execution." See id. And unlike other cases, the

Release at issue here does not include language indicating that all claims "both known

and unknown" or "whether now known or unknown" are released. Cf. Braemer Isle

Condo. Ass'n v. Boca Hi, Inc., 632 So. 2d 707, 707 (Fla. 4th DCA 1994); Hardage

Enters., Inc. v. Fidesys, Corp., N.V., 570 So. 2d 436, 436-37 (Fla. 5th DCA 1990). The

language of the Release requires inquiry into the intent of the parties as to the scope of

the Release—along with the respective authority of Hardin and BMR. See Soncoast




                                           - 14 -
Cmty. Church of Boca Raton, Inc. v. Travis Boating Ctr. of Fla., Inc., 981 So. 2d 654,

656 (Fla. 4th DCA 2008).

IV.           Conclusion

              Summary judgment is inappropriate "[i]f the record reflects even the

possibility of a material issue of fact, or if different inferences can reasonably be drawn

from the facts." Fla. Atl. Univ. Bd. of Trs. v. Lindsey, 50 So. 3d 1205, 1206 (Fla. 4th

DCA 2010) (quoting Bender v. CareGivers of Am., Inc., 42 So. 3d 893, 894 (Fla. 4th

DCA 2010)). It should only be granted "where the facts are 'so crystalized' that nothing

remains but questions of law." McCabe v. Fla. Power & Light Co., 68 So. 3d 995, 997

(Fla. 4th DCA 2011) (quoting Tolan v. Coviello, 50 So. 3d 73, 74 (Fla. 4th DCA 2010)).

None of the pertinent facts in this case are crystalized. At this stage of the proceedings

and on this record, the Chancey Defendants have failed to establish conclusively that

the Association cannot prevail on its claims. See Schornberg, 972 So. 2d at 246.

              Reversed and remanded for further proceedings.



KELLY and SALARIO, JJ., Concur.




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