A Florida court recently ruled on a case involving a condominium association and its developer, addressing the issue of attorney's fees in disputes related to the Master Declaration of Condominium. The court's decision impacts how fees may be awarded in similar cases, emphasizing the need for clear contractual language.
The case, S.K. Condominium II Association, Inc. v. NS/CSE Siesta Key, LLC, was filed in the District Court of Appeal of Florida under docket number 2D18-4483. The court's opinion was issued on February 5, 2020, and it involved parties from both the condominium association and the developer.
S.K. Condominium II Association, Inc. and SKBP LLC, collectively referred to as S.K. II, brought the case against their condominium developer, NS/CSE Siesta Key, LLC, as well as a sister condominium association, S.K. Condominium Association, Inc. The dispute arose from dissatisfaction over the distribution of rights and obligations under the Master Declaration of Condominium. S.K. II sought declaratory relief, injunctive relief, and judicial revision of the Declaration, which led to the case being resolved through summary judgment.
The trial court ruled in favor of Siesta Key, awarding them attorney's fees based on article IX of the Master Declaration and section 718.125 of the Florida Statutes. S.K. II appealed this decision, leading to the recent ruling by the District Court of Appeal.
The court ruled that the award of attorney's fees to Siesta Key was improper. Chief Judge Khouzam stated, "Florida courts follow the 'American Rule' that attorney's fees may only be awarded pursuant to an entitling statute or agreement among the parties." This means that unless there is a clear contractual or statutory basis for awarding fees, each party typically bears its own attorney's costs.
The court examined the basis for the fee award, starting with article IX(C) of the Master Declaration. This article states that if any party must hire an attorney to enforce the provisions of the Declaration, the non-complying party must pay the costs, including attorney's fees. Siesta Key argued that it had to defend against S.K. II's claims, which it characterized as an enforcement action. However, the court found that Siesta Key did not demonstrate that S.K. II was in breach of the Master Declaration, noting, "Simply by incorrectly perceiving its legal rights under the contract and bringing an action to enforce these rights as it perceived them, the plaintiff was not... in 'breach of this agreement.'"
The court also rejected Siesta Key's argument that the term "non-complying party" was meaningless, stating that every part of a contract should have significance. The court emphasized that they could not rewrite the contract to include language that was not there, as judicial interference in this manner is not permitted.
In addition to the contractual basis, the trial court also referenced section 718.125 of the Florida Statutes, which allows for attorney's fees to be awarded to a unit owner or association if they prevail in litigation against a developer. However, the court found that this statute did not apply in this situation, as the Master Declaration did not support the award of fees to Siesta Key. Thus, the court ruled that attorney's fees could not be granted based on this statute either.
Finally, Siesta Key attempted to argue for attorney's fees under section 718.302(6), which awards fees to the prevailing party in actions to compel compliance with section 718.301. However, the court noted that this section was never discussed or litigated in the trial court, and therefore, S.K. II had no opportunity to present evidence or arguments regarding it. The court concluded that affirming based on this unlitigated ground would be improper.
In summary, the District Court of Appeal reversed the award of attorney's fees to Siesta Key, stating that neither the Master Declaration nor the applicable statutes supported the award. The ruling clarifies the standards for awarding attorney's fees in condominium disputes, emphasizing the importance of clear language in contracts.
The decision has implications for future cases involving condominium associations and developers, as it reinforces the necessity for explicit contractual provisions regarding attorney's fees. This ruling may influence how similar disputes are approached in Florida courts, particularly in terms of defining compliance and enforcement actions.
Moving forward, the parties involved in this case may consider whether to appeal the ruling or to pursue other legal avenues. Additionally, the court did not mention any related cases pending that might impact this decision.