STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES

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1 STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION Sabal Bay Association, Inc., Petitioner, Fees Case No Rel. Fees Case v. Rel. Case No Tara L. Spiller, Respondent. / FINAL ORDER ON PETITIONER S MOTION FOR ATTORNEY FEES On January 22, 2009, Petitioner filed a motion for award of attorney s fees and costs, alleging it was the prevailing party in Arbitration Case No On February 9, 2009, Respondent filed a response to the motion for fees arguing that Petitioner was not the prevailing party because: (1) Respondent had come into compliance after receipt of a demand letter; and (2) Petitioner did not obtain its requested relief for attorney s fees incurred before filing the Petition for Arbitration. In the underlying case, Respondent filed a motion to dismiss based upon compliance rendering the dispute moot; lack of pre-arbitration notice; and an improper claim for past due attorney fees. The case was dismissed as moot based upon Petitioner s admission Respondent had come into compliance. The issue whether Petitioner should be considered the prevailing party requires a detailed analysis of the underlying arbitration and facts alleged in the Petition for Arbitration filed August 1, The Petition alleges an initial substantive dispute that Respondent failed and refused to 1

2 park her car in the garage connected to her unit, but left it out in the driveway. The Petition alleges pre-arbitration notice by a letter mailed June 18, 2007, a copy of which was filed with the Petition. The length of time between the alleged pre-arbitration notice and the filing of the petition for arbitration was more than thirteen months. 1 A party is a prevailing party if it succeeds on a significant issue in the arbitration and achieves some of the benefit sought in bringing the action. Moritz v. Hoyt Enterprises, Inc., 604 So. 2d 807 (Fla. 1992). A party may also be a prevailing party even if the action is not resolved on the merits. Hall v. Dept. of Health & Rehabilitative Services, 409 So. 2d 193 (Fla. 3rd DCA 1982). This applies when a case becomes moot because the opposing party voluntarily provided the relief sought in the action. Prevailing party status may thus be found if the filing of the petition for arbitration was the catalyst motivating the opposing party to provide the relief sought, so long as the opposing party's actions were required by law. 51 Island Way Condominium Association, Inc. v. Williams, 458 So. 2d 364 (Fla. 2nd DCA 1984); Hoffmeister v. Coler, 544 So. 2d 1067 (Fla. 4th DCA 1989). A determination of prevailing party status depends on the particular facts of the case and on the timing of the act that caused the arbitration proceeding to be dismissed. The Laurels at Margate Condominium Association, Inc. v. Slonecky, Arb. Case No F, Final Order on Motion for Attorney s Fees (July 28, 1994); West Wind Condominium Association, Inc. v. Becker, Arb. Case No F, Order on Motion for Attorney s Fees (August 15, 1995). Ordinarily, the issue of whether a respondent came into compliance before a petition for arbitration was filed would have to be resolved by presentation of evidence as to a disputed fact. 1 That the date of the letter was not a typographical error is established by copies of U.S. Post Office documents advising that the certified mail was undelivered as of July 9,

3 The decision in this case, however is controlled by the conclusion that the alleged pre-arbitration letter was so defective that Petitioner cannot be considered the prevailing party. Section (4)(b), Florida Statutes, requires that the petition recite, and have attached thereto, supporting proof that the petitioner gave the respondents: 1. Advance written notice of the specific nature of the dispute; 2. A demand for relief, and a reasonable opportunity to comply or to provide the relief; and 3. Notice of the intention to file an arbitration petition or other legal action in the absence of a resolution of the dispute. The pertinent text of the June 2007 letter states: Section 12.4 of the Declaration of Condominium and paragraph 7 of the Rules and Regulations provide that the owners and occupants of a unit, collectively, are limited to two parking passenger vehicles on the property. One such vehicle must be parked in the garage as stated above, and the other may be parked in the unit s driveway. Please also note that paragraph 7 of the Rules and Regulations provides that: Any Vehicle parked in violation of the parking restrictions is subject to towing, with the owner of the Vehicle responsible for all costs of towing. See also Section 12.4 of the Declaration. (Emphasis added). The purpose of this letter is to put you on notice that if you do not comply with the Declaration immediately, and park your vehicle in the garage and park only one other vehicle in your driveway, the Board will have no alternative but to invoke the provisions of s , Florida Statutes, and would be entitled to recover its attorney s fees and cost incurred in any such action. In addition, Section of the Declaration states that the Association has the authority and responsibility to levy an Owner Charge against an owner for Compliance Expenses and Service Expenses levied against it by the Association, which shall be due upon demand by the Association within ten (10) days after such demand. Please consider this letter the Association s demand for payment of attorney s fees and cost for preparation and mailing of this letter in the amount of $ ($ attorney s fees and $6.67 for mailing costs). 3

4 The entire request for relief stated by the Petition for Arbitration is, require the Respondent to comply with the Declaration of Condominium; reimburse Petitioner for past attorney s fees and for attorney s fees incurred in this action. Depending on the facts of the case, a party may be denied prevailing party status because of an extended delay between the pre-arbitration notice and the petition for arbitration. Brink v. Tudor Cay Condominium Ass n., Inc., Arb. Case No , Final Order on Motions for Costs and Attorney s Fees (December 8, 2004)(Despite fact petitioner obtained relief, he was not the prevailing party, because delay of over a year between the last demand letter and the filing of the petition impaired the reasonable opportunity to comply). Because, in this case, the noncompliant condition, a car parked in the driveway, may change from day to day, exist for months or be remedied in minutes, it cannot be said a violation in August 2008 is the same or a continuation of violations in June Indeed, because the letter demanded compliance immediately a strong presumption must arise that the unit owner complied at some point, in which case there would have to be a new pre-arbitration letter for a new violation. An Association cannot rely on such a letter for enforcement against occasional, intermittent or temporary violations. Additionally, failure to pursue enforcement in a timely fashion may lull a unit owner into believing some of this type of behavior is permissible, especially when neighbors are allowed to park a car in the driveway. 2 It is concluded that the June 2007 letter did not give adequate specific notice or opportunity to comply for the alleged violation presented in the Petition for Arbitration. Therefore, Petitioner is not the prevailing party as to the parking violation. 2 A problem of appearances creates further confusion because Petitioner interprets the Declaration to require that an owner of only one car must park it in the garage, while neighbors with two cars may park the second car in the driveway. 4

5 The letter of June 2007 is also defective because, in addition to compliance with the parking provision, it demands payment of money - reimbursement for the expense of hiring an attorney to write the letter. The validity of the application of the Owner Charge in the letter to enforce the parking regulation is certainly subject to question. Section (3), Florida Statutes, and Article 8 of the bylaws of Sabal Bay both provide the owner has a right to a due process hearing before a fine can be levied. Imposition of a claim for payment of money from the unit owner under a name other than fine cannot be allowed to nullify those provisions. Significantly, neither provision allows the fines to increase by the amount of attorney fees incurred to impose them. Rather, the right to recover fees exists only in legal actions for the prevailing party. Additionally, the specific provision cited in the letter for this charge arises from the declaration s creation of the power to levy and collect assessments. Section , Florida Statutes, excludes the levy of a fee or assessment, or the collection of an assessment levied against a party from disputes subject to arbitration. The letter suggests Petitioner would be entitled to collect this charge even if Respondent immediately complied with the parking regulation. Under those facts, if Petitioner had filed a petition for arbitration solely to collect the fee, the case would have to be dismissed for lack of jurisdiction. See, Towers of Oceanview East Condominium Ass n., Inc. v. Gonzalez, Arb. Case No , Order Determining Jursidiction (November 22, 1996) (when dog is removed from a unit before filing of a petition for arbitration, collection of fine for having had the dog is outside arbitration jurisdiction). In other words, compliance with the parking regulation, without payment of the attorney fee, would prevent the arbitration. Previous arbitration cases have taken jurisdiction over combined disputes including 5

6 requests for money while a dispute continues over the association s authority to required the owners to take action regarding their unit. 3 In Presley v. Venture Out at Panama City Beach, Inc., Arb. Case No , Final Order (January 12, 1996), unit owners sought resolution of a controversy concerning whether the type of porch they constructed violated condominium documents and challenged a $200 fine imposed because of the porch. The arbitrator accepted jurisdiction over both claims, ruling that the porch was a violation, but that imposition of the fine was invalid because the association had not followed proper procedures. Other cases have been accepted where a unit owner challenges the association imposition of a fine without properly noticing or holding a meeting as required by section , Florida Statutes, or condominium documents. 4 Brink v. Tudor Cay Condominium Ass n., Inc., Arb. Case No , Final Order of Dismissal (July 29, 2004); Kreitman v. The Decoplage Condominium Ass n., Inc., Arb. Case No , Amended Final Order (September 14, 1999). In Brink, the association admitted the fine was invalid. In Kreitman, the arbitrator ruled that the fines violated the statute. In the resulting fee case for Brink, the association attempted to argue that because the notices of the specific fines and demands for payment were not legally enforceable, the unit owner did not prevail when his petition for arbitration obtained relief. Brink v. Tudor Cay Condominium Ass n., Inc., Arb. Case No , Final Order on Motions for Costs and Attorney s Fees (December 8, 2004). That argument was rejected because the charges and demands for payment created ground for a dispute, but Mr. Brink was denied fees because his pre-arbitration notice was more than a year old. A consistent point in the arbitration cases that combine a demand for payment with a related alleged violation is that while the money dispute must be related to a violation, it must also 3 Jurisdiction provided by subsection (1)(a)1., Florida Statutes. 4 Jurisdiction provided by subsection (1)(b)2. and 3., Florida Statutes. 6

7 stand on its own merits. That is, the entitlement to charge the money must be established through due process required by the legislature. Of course, if a fine were so established, it could be collected in a direct action in county court. The same court action would be required to enforce an arbitrator s final order requiring payment, so arbitration over such an established fine is an unnecessary waste of resources. While the above legal analysis concludes that a fine should not be part of a concurrent arbitration, the same analysis should apply to a claim for reimbursement for attorney fees incurred by the association. A claim for reimbursement of attorney fees must be established on its own merits with respect to entitlement, reasonableness and necessity. When the legislative scheme for non-binding arbitration is considered as a whole, it is clear the intent was to allow a unit owner to avoid paying attorney s fees incurred by the association if the unit owner promptly agreed to correct a violation after written notice from the association. Adding a claim for money to a demand to cure an existing violation denies the unit owner a reasonable opportunity to comply or to provide the relief. It must be concluded that, if a dispute, as defined by section , Florida Statues, exists between an association and a unit owner, a written demand for resolution of the dispute that includes a new demand for payment of money will not satisfy the pre-arbitration notice requirement of section (4)(b). Based upon the foregoing, it is ORDERED that Petitioner s Motion for Award of Attorney s Fees and Costs is Denied. DONE AND ORDERED this 18th day of February, 2009, at Tallahassee, Leon County, Florida. 7

8 Bruce A. Campbell Arbitrator Dept. of Bus. & Prof. Reg. Arbitration Section 1940 North Monroe Street Tallahassee, Florida Trial de novo This decision shall be binding on the parties unless a complaint for trial de novo is filed in accordance with section , Florida Statutes. CERTIFICATE OF MAILING I hereby certify that a true and correct copy of the foregoing final order was mailed by U.S. mail, postage prepaid, this 18th day of February, 2009, to: Douglas A. Peebles, Esq rd Ave. West, Suite 210 Bradenton, FL Brendan McQuaid, Esq. Fergeson Skipper P.O. Box 3018 Sarasota, FL Bruce A. Campbell 8