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 M.E.D.-79, CORP. and QUATTRO MANAGEMENT, INC. Petitioners, v. Case No THE KENSINGTON CONDOMINIUM ASSOCIATION OF HIALEAH, INC., Respondent. / FINAL ORDER OF DISMISSAL FOR LACK OF JURISDICTION On January 7, 2015, Petitioners M.E.D.-79, Corp. and Quattro Management, Inc., filed a request for expedited determination of jurisdiction and a petition for arbitration, naming The Kensington Condominium Association of Hialeah, Inc. (the Association) as Respondent. The petition contains five claims/disputes. According to the petition, the disputes described therein are claims that were also raised in a pending lawsuit in the Circuit Court of the Eleventh Judicial Circuit, Miami-Dade County, Florida, styled Kensington Condominium Association of Hialeah, Inc. v. M.E.D.-79, Corp. and Quattro Management, Inc., Consolidated Case No CA-41. According to the petition, these disputes were set forth in Counts II, III, IV and V of the Amended Counterclaim filed in the aforementioned court case, but were dismissed by the court a year ago, in January of 2014, and the parties were ordered to participate in arbitration of these claims/disputes pursuant to Section , Florida Statutes. Petitioners seek a jurisdictional determination on whether these Page 1 of 8

2 claims/disputes are subject to arbitration. Claims The first claim in the petition for arbitration is contained within Count II of the Amended Counterclaim in the circuit court case. Petitioners claim that the Association is tortiously interfering with Petitioners business relationships with real estate investors and bankers by recording liens against Petitioners units for unpaid assessments, which Petitioners claim that they had, in fact, paid. The second claim in the petition for arbitration is contained within Count III of the Amended Counterclaim in the circuit court case. Petitioners claim that the Association is denying their tenants access to specific parking spaces that have been assigned to Petitioners units as limited common elements for the exclusive use of these units. The third claim in the petition for arbitration is also contained within Count III of the Amended Counterclaim in the circuit court case. Petitioners claim that the Association is charging Petitioners a $1, fee for use of each designated parking space, despite the alleged fact that the parking spaces have been assigned to Petitioners units as limited common elements for the exclusive use of these units. Petitioners claim that the Association has no authority to impose a fee to access an assigned parking space. The fourth claim in the petition for arbitration is contained within Count IV of the Amended Counterclaim in the circuit court case. Petitioners claim that the Association and its board members have breached their fiduciary duty to the Association s members by failing to maintain accounting records according to good accounting practices. The fifth claim in the petition for arbitration is contained within Count V of the Page 2 of 8

3 Amended Counterclaim in the circuit court case. Petitioners claim that the Association is tortiously interfering with Petitioners business relationships with their tenants and potential tenants by recording six erroneous claims of lien against units owned by Petitioners. Petitioners also claim that the Association is harassing Petitioners tenants in an unspecified manner that pertains to the liens. Further, Petitioners claim that the Association is interfering with Petitioners right to rent their units by imposing a requirement that Petitioners seek the Association s prior approval of leases. Petitioners claim that this violates the Declaration of Condominium, which does not allow the Association to require approval for leasing if the unit owner is up to date on the payment of assessments. Jurisdiction The arbitrator has jurisdiction to hear and decide only those controversies that constitute disputes as defined in section (1), Florida Statutes, which provides as follows: (1) DEFINITIONS.--As used in this section, the term dispute means any disagreement between two or more parties that involves: (a) The authority of the board of directors, under this chapter or association document to: 1. Require any owner to take any action, or not to take any action, involving that owner s unit or the appurtenances thereto. 2. Alter or add to a common area or element. (b) The failure of a governing body, when required by this chapter or an association document, to: 1. Properly conduct elections. 2. Give adequate notice of meetings or other actions. 3. Properly conduct meetings. 4. Allow inspection of books and records. "Dispute" does not include any disagreement that primarily involves: title to any unit or common element; the interpretation or enforcement of any warranty; the levy of a Page 3 of 8

4 (emphasis supplied). fee or assessment, or the collection of an assessment levied against a party; the eviction or other removal of a tenant from a unit; alleged breaches of fiduciary duty by one or more directors; or claims for damages to a unit based upon the alleged failure of the association to maintain the common elements or condominium property. Where the allegations do not constitute a dispute subject to arbitration as contemplated by the legislature under Section (1), Florida Statutes, the Florida District Court of Appeal, Fourth District, has held a trial court's order of dismissal as to those allegations must be reversed. Gomez v. Fradin, 41 So. 3d 1068, 1071 (Fla. 4 th DCA 2010). Likewise, an arbitrator has no authority to accept jurisdiction over disputes that are not subject to arbitration under the statute. First claim (contained within Count II of the Amended Counterclaim): Section (1) does not give the arbitrator jurisdiction over claims of tortious interference with business relationships or over claims regarding the recording of liens based on unpaid assessments. In Cutsinger v. Allard, Arb. Case No , Order Dismissing Petition for Arbitration (May 18, 1995), the arbitrator addressed a unit owner's claim that the association had wrongfully placed a lien on his unit. The arbitrator held, The occasion of the filing of a lien, or the payment or non-payment of assessments, are not proper subjects for the arbitrator's exercise of jurisdiction. Section (1)(b), Florida Statutes. This section of statute expressly excludes from the arbitrator's jurisdiction disputes which involve the levy of a fee or assessment, or the collection of an assessment levied against a party. See also Brooks v. Del Vista B. Condo. Ass n, Inc. Arb. Case No , Order Dismissing Claims and Order to Show Cause (January 7, 1999). Since, in the case presently under consideration, the claim Page 4 of 8

5 concerns liens arising from the alleged non-payment of fees and assessments, the claim must be dismissed as outside the jurisdiction of the arbitrator. Second Claim (contained in Count III of the Amended Counterclaim): Petitioners claim that the Association is denying their tenants access to specific parking spaces that have been assigned to Petitioners units as limited common elements for the exclusive use of these units. Disputes over title to, and the right to use particular condominium parking spaces which are by definition limited common elements, are not subject to the arbitration provisions of Section , Florida Statutes. The Florida Tower Condominium, Inc. v. Mindes, 770 So. 2d 210 (Fla. 3 rd DCA 2000). Third Claim (contained in Count III of the Amended Counterclaim): Petitioners claim that the Association is charging Petitioners a $1, fee for use of each assigned parking space, despite the alleged fact that the parking spaces have been assigned to Petitioners units as limited common elements for the exclusive use of these units. Petitioners claim that the Association has no authority to impose a fee to access an assigned parking space. Disposition of this claim necessarily requires a determination of whether the parking spaces in question are, in fact, limited common elements that have been assigned to Petitioners units for the exclusive use of these units. Disputes over title to and the right to use limited common element parking spaces are not within the arbitrator s jurisdiction. Mindes, 770 So. 2d at 210. Also, as stated previously, disputes involving the levy of a fee or assessment are not subject to arbitration. Page 5 of 8

6 Fourth Claim (contained in Count IV of the Amended Counterclaim): Petitioners claim that the Association and its board members have breached their fiduciary duty to the Association s members by failing to maintain accounting records according to good accounting practices. Section (1) specifically excludes from the arbitrator s jurisdiction claims involving alleged breaches of fiduciary duty by one or more directors. See also, Bers v Gulf of Mexico Drive Apts., A Condominium, Inc., Arb. Case No , Final Order of Dismissal (May 1, 2013). In addition to breach of fiduciary duty, the petition alleges that the association has failed to comply with provisions in the Florida Statutes and the Florida Administrative Code pertaining to its accounting practices. These allegations do not constitute a dispute over which the arbitrator has jurisdiction pursuant to Section (1). See Goodman v. The Ambassador Condo. of Bonita Beach Assn., Inc., Arb. Case No , Final Order of Dismissal (April 12, 2000)(Arbitrator has no jurisdiction over claims that board failed to conduct required audit of accounts and that budget failed to give full details of association's insurance coverage); Terzis v. Ocean Dunes of Hutchinson Island Condo. Assn., Inc., Arb. Case No , Order to Show Cause (September 21, 1994)(Arbitrator lacked jurisdiction over count in petition alleging that association had failed to provide financial reports and had failed to properly disclose reserves in the proposed budget or in the financial report or financial statements). Fifth Claim (contained in Count V of the Amended Counterclaim): Petitioners claim that the Association is tortiously interfering with Petitioners business relationships with their tenants and potential tenants by recording six erroneous claims of lien against units owned by Petitioners. Petitioners also claim that Page 6 of 8

7 the Association is harassing Petitioners tenants in an unspecified manner that pertains to the liens and that the Association is interfering with Petitioners right to rent their units by imposing a requirement that Petitioners seek the Association s prior approval of leases. As stated previously, Section (1) does not give the arbitrator jurisdiction over claims of tortious interference with business relationships. Claims that an association has harassed or abused a unit owner (or in this case, the unit owners tenants) are also outside the jurisdiction of the arbitrator. See Brooks v. Del Vista B. Condo. Ass n, Inc., Arb. Case No , Order Dismissing Claims and Order to Show Cause (January 7, 1999). A claim involving an Association s authority under the condominium s governing documents to require a unit owner to seek the Association s approval prior to leasing a unit may, in some circumstances, be within the jurisdiction of the arbitrator. However, in this case, the Association s Declaration of Condominium states that whether or not Association approval for leasing is required depends upon whether the unit owner is up to date on the payment of assessments. Consequently, it is necessary to first determine whether Petitioners have paid all assessments before the question of Association approval of leasing is reached. Section (1) expressly excludes from the arbitrator's jurisdiction disputes which involve the levy or collection of a fee or assessment. In the present case, none of the disputes described by Petitioners involve issues over which the arbitrator has jurisdiction. Therefore, the petition must be dismissed. Based on the foregoing, it is ORDERED: Page 7 of 8

8 This petition is DISMISSED for lack of jurisdiction, and arbitration case number is hereby closed. Petitioners may seek relief in a court of competent jurisdiction. DONE AND ORDERED this 27 th day of January, 2015, at Tallahassee, Leon County, Florida. Leslie O. Anderson-Adams, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida Telephone (850) Facsimile (850) Certificate of Service I hereby certify that a true and correct copy of the foregoing final order has been sent by U.S. Mail and facsimile to the following person on this 27 th day of January, 2015: Carla A. Jones, Esq. Kenneth E. Walton, II, Esq. WALTON JONES BROWNE 1999 SW 27 th Ave. Miami, FL Fax: (305) Attorneys for Petitioners Raul R. Lopez, Esq. Raul R. Lopez, P.A NW 155 th St. Suite 206 Miami Lakes, FL Fax: (305) Attorney for Respondent Jeannie A. Liebegott, Esq. MARSHALL DENNEHEY 100 NE 3 rd Ave., 11 th Floor Ft. Lauderdale, FL Fax: (954) Attorney for Respondent Leslie O. Anderson-Adams, Arbitrator Page 8 of 8