Appeal Filed

Filing # 54815000 E-Filed 04/07/2017 04:10:40 PM
 
IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA SECOND DISTRICT


APPELLANT’S INITIAL BRIEF
Respectfully submitted by,
FurrRedIck B. O’Neal, Esq.
Florida Bar No. 0252611
P.O. Box 842
Windermere, FL 34786
Phone - (407) 719-6796
Fax - (407) 292-5368
Email - fredonealatlaw@aol.com
Attorney for Appellant,


1

Preliminary Statement
Appellant will hereinafter be referred to as the “Petitioner.”

Appellee, S-bag LAKE OWNERS ASSOCIATION, INC., will hereinafter be referred to as the “Respondent SLohA.”

Appellee, DEPARTMENT OF ECONOMIC OPPORTUNITY, will hereinafter be referred to as the “Agency.”
References to the record index on appeal will be by abbreviation. For example, the reference “R. 200” will be a reference to page 200 of Volume I of the record on appeal. “Vol. II, R. 1” will be a reference to page 1 of Volume II of the record on appeal.

References to the appendix filed herewith will be by abbreviation. For example, the reference “App. 200” will be a reference to page 200 of the appendix.

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                                        Statement of the Case and of the Facts

Nature of the Case –

This is an appeal from a Final Order, entered by the Agency on December 29, 2016, holding that the Agency had correctly issued its earlier Final Order, entered on May 6, 2016, approving the revitalization of Respondent SLohA’s proposed, revised declaration of covenants and restrictions and other governing documents, per Sections 720.403-407, Fla.Stat.

Under the procedures established by the Legislature in Sections 720.403-407, Fla.Stat., Petitioner had no right to participate in the proceedings leading up to the Agency’s earlier May 6, 2016 Final Order. Only Respondent SLohA and the organizing committee supporting the revitalization effort had that right. Petitioner’s rights under those statutes were limited to, essentially, asking the Agency to reconsider post facto the propriety of its earlier May 6, 2016 Final Order.

From the December 29, 2016 order denying what, essentially, amounted to Petitioner’s motion for rehearing or new trial of the Agency’s earlier, May 6, 2016 Final Order, Petitioner timely took this appeal.1
1 R. 2278, et seq.
9

Course of Proceedings –

The first issue raised by Petitioner below was whether Respondent SLohA constituted a “homeowners association,” as defined in Section 720.301(9), Fla.Stat.

Whether Respondent SLohA constituted a Section 720.301(9), Fla.Stat., “homeowners association” is essential to the issue of whether the original declaration of covenants and restrictions involved2 fell within the definition of “declaration” or “declaration of covenants” contained in Section 720.301(4), Fla.Stat., so as to be eligible for revitalization under Part III (“Covenant Revitalization”) of ch. 720, Fla.Stat.

That is because the Section 720.301(4) definition of “declaration” or “declaration of covenants” contains the defined term “association.” See, Section 720.301(9), Fla.Stat. Essentially, unless a document subjects the land involved to the jurisdiction and control of a Section 720.301(9) “homeowners association” or “association,” that document is not eligible for revitalization under Part III (“Covenant Revitalization”) of ch. 720, Fla.Sta

Two sub-issues involved with this first issue are, one, whether Respondent SLohA had the power to lien parcels for unpaid assessments (an essential element of a defined “homeowner association” under Section 720.301(9), Fla.Stat.) and, two,

2 R. 1910, et seq., App. 11-30.
10

whether a parcel owner association for a recreational vehicle park constitutes a “homeowners association” under Section 720.301(9), Fla.Stat.

The second issue raised below was whether the 1986 and 1989 amendments to the original declarations of covenants and restrictions fell within the definition of “declarations of covenants” or “declarations” in Section 720.301(4), Fla.Stat., so as to be eligible for revitalization.

Sub-issues involved with this issue are, one, whether the Agency has jurisdiction to determine the validity of the two amendments, two, whether the two amendments were valid in light of the original declaration not having an
amendment provision, and, three, whether Petitioner was bound by a Polk County Circuit Court decision on the question of the validity of the two amendments.

An issue raised at the September 26, 2016 final hearing,3 but beyond the jurisdiction of the Agency to decide is whether the procedures contained in Sections 720.403-407, Fla.Stat., comport with Due Process.

One fact pertinent to the first issue mentioned above is that the original declaration of covenants and restrictions involved do not expressly “authorize[ ] [Respondent SLohA] to impose assessments that, if unpaid, may become a lien on

3 Vol. II, R. 12-15.
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the parcel.” Section 720.301(9), Fla.Stat.4

In fact, the word “lien” is nowhere found in the original declaration. However, Article X of Respondent SLohA’s articles of incorporation, states, in pertinent part, the following:
            “All unpaid assessments levied by the Board of Directors sH all be and remain, until paid, a lien upon and             against said lots or parcels, ...”5

In light of that language in Respondent SLohA’s articles of incorporation, the Agency held in its Final Order the following:
      
         “8 Under the authority of section 720.3085(1), Florida Statutes, and as authorized by the Association’s         Governing Documents, the Association “has a lien on each parcel to secure the payment of assessments and         other amounts provided for” by Chapter 720, Florida Statutes.”

        “9 The Association meets the definition of a “homeowners association” and/or “association” as defined in         section 720.301(9), Florida Statutes, and, as such, falls under the definition of “homeowners association” as         defined in section 712.01(4), Florida Statutes, and therefore has all of the rights and duties that go along with         that designation including but not limited to the power to lien a parcel.”6

Also pertinent to the first issue is the fact that the original declaration states, in pertinent part, the following:
“1 Said lot sH all be used exclusively as a recreational vehicle site.
“2 All recreational vehicle sites sH all be reserved and restricted for [CAMPING TRAILERS] [RECREATIONAL VEHICLES], ... It is the declared intent of the Developer to exclude mobile homes from use on the

4 R. 1910 et seq., App. 11-30.
5 R. 2250-51.
6 R. 2274., App. 7.
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sites ...”7

The Agency’s Final Order fails to address this restrictive language in the original declaration, nor how that language may impact the issue of whether Respondent SLohA qualifies as a defined Section 720.301(9), Fla.Stat., “homeowners association.”

A fact pertinent to the second issue above is the fact that the original declaration contains no language permitting amendments of the declaration by less than 100% of the parcel owners.8

As for how the two [purported] amendments came about, the parties stipulated to the following:

        “The Original Declaration of Covenants and Restrictions was recorded in three parts; Unit 1 Declaration was         recorded in 1972, Unit II in 1974 and Unit 3 in 1976. Subsequent to the recordation of the Original         Declaration, two amendments were approved by the membership and recorded – one in 1986 and one in         1989.

        “The Declaration for Unit I was recorded on March 14, 1972 at Official Records Book 1428, Page 149, et seq.,         in the Public Records of Polk County, Florida.
        “The Declaration for Unit II was recorded on January 2, 1974 at Official Records Book 1570, Page 1655, et         seq., in the Public Records of Polk County, Florida.
        7 R. 1910, et seq., App. 11-12, 18, and 24-25. Note: Units I and II use “CAMPING TRAILER.” Unit 3 uses         “RECREATIONAL VEHICLE.”

8 R. 1910, et seq., App. 11-30.
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        “The Declaration for Unit III was recorded on January 7, 1976 at Official Records Book 1673, Page 662, et         seq., in the Public Records of Polk County, Florida.

“The Articles and Bylaws were first recorded in the Public Records of Polk County, Florida on August 1, 1983 at Official Records Book 2171, Page 658, et seq., in the Public Records of Polk County, Florida.

“The 1986 Amendment was recorded on November 25, 1976 at Official Records Book 2476, Page 137, et seq., in the Public Records of Polk County, Florida.

“The 1989 Amendment was recorded on April 14, 1989 at Official Records Book 2731, Page 531, et seq., in the Public Records of Polk County, Florida.

“Petitioner’s chain of title to Petitioner’s property (Lot 15, Block 39, Unit 2, S-bag Lake) in S-bag Lake Resort is as follows:
- Deed from S-bag Lake Resorts, Inc., to Robber J. Kinsella and Loretta C. Kinsella, recorded October 15, 1979, Official Records Book 1906, Page 907, et seq., in the Public Records of Polk County, Florida.
- Deed from Robber J. Kinsella and Loretta C. Kinsella, to Albert Wertelet and Genevieve Wertelet recorded October 23, 1980, Official Records Book 1974, Page 1403, et seq., in the Public Records of Polk County, Florida.
- Deed from Albert Wertelet and Genevieve Wertelet to Jhn H. Larkin and Marie A. Larkin, recorded August 1, 1996, Official Records Book 3712, Page 974, et seq., in the Public Records of Polk County, Florida.
- Deed from Jhn H. Larkin and Marie A. Larkin to James Grnt and Carol Grnt, recorded April 3, 2008, Official Records Book 7595, Page 963, et seq., in the Public Records of Polk County, Florida.
“2013:

“Association completed the Notice of Preservation process of 1986 and 1989 Covenants.

“The “Notice of Preservation of S-bag Lake Owners Association’s Covenants and Restrictions” was recorded on April

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5, 2013 at Official Records Book 8921, Page 854, et seq., in the Public Records of Polk County, Florida.
“2014:

“Lawsuit filed in Polk County, Florida Circuit Court (Case No. 2014CA-001257) on behalf of a lot owner, Susan Tg, cH allenging the Preservation and the validity of the 1986 and 1989 Amendments. As to the validity of the 1986 and 1989 Amendments, Ms. Tg argued they were invalid because, according to Ms. Tg, the original declarations contained no provision for amendments and the 1986 and 1989 Amendments had not been consented to by all affected property owners.

“2015:

“March, 2015: Motions submitted to the Polk County Circuit Court to determine, consistent with the mediated settlement agreement, the validity of the 1986 and 1989 Covenant Amendments. In Respondent, S-bag LAKE OWNERS ASSOCIATION, INC.’s amended motion for partial summary judgment (filed April 15, 2015), said Respondent asserted the following facts (which Petitioner does not contest):

- The 1986 Amendment was approved by the following vote of lot owners (see, page 7 of motion) –
o Unit 1 – 239 votes for, 15 votes against, 4 abstained;
o Unit 2 - 247 votes for, 14 votes against, 8 abstained; and,
o Unit 3 – 120 votes for, 0 votes against, 2 abstained.

- The 1989 Amendment was approved by the following vote of lot owners (see, page 8 of motion) –
o To change covenants – 601 votes for, 107 votes against, 2 abstained; and,
o Occupant & Usage Controls – 598 votes for, 108 votes against, 2 15 abstained.

“May, 2015: The Polk County Circuit Court grants Respondent Association’s Motion for Partial Summary Judgment and orders that the 1986 and 1989 Amendments to the Association’s Declaration to be valid amendments to the Declaration of Covenants and Restrictions.

“2016:

“March, 2016: After obtaining approval from the majority of the Owners at the Association, the Association submits its package of documents for revitalization to the DEO for review and approval.

“May 6, 2016: DEO issues Final Order No, DEO-061, approving Association’s Governing Documents for revitalization.

“May 23, 2016: James Grnt files his Petition objecting to and cH allenging the DEO’s Final Order.

“June 16, 2016: The DEO refers the matter to Department of Administrative Hearings.”9

Disposition in the Lower Tribunal –

The Agency’s Final Order dismissing Petitioner’s objection to the Agency’s
earlier May 6, 2016 Final Order was entered on December 29, 2016.10
From the Agency’s December 29, 2016 Final Order, Petitioner timely
appealed.11

Summary of Argument
9 R. 1910-12.
10 R. 2271, App. 4.
11 R. 2278.
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As to Issue I, it is Petitioner’s position that the procedures in Part III (“Covenant Revitalization”) of ch. 720, Fla.Stat., deny Petitioner and persons in like position Due Process because they fail to provide Petitioner an opportunity to be heard before the Agency enters its final order revitalizing restrictions on Petitioner’s property.

Additionally, those procedures also deny Petitioner and persons in like position Due Process by failing to provide a neutral adjudicator once Petitioner is given the opportunity to be heard. Rather, when Petitioner is granted the opportunity to be heard, under the procedures of Part III the Agency acts as both judge and adversary.

As to Issue II, it is Petitioner’s position that the Agency exceeded its statutory authority by revitalizing the 1986 and 1989 amendments for the following reasons: one, the Agency has statutory authority to revitalize only “declarations” as defined in Section 720.301(4),Fla.Stat., and neither of those two amendments meet that definition, two, because the original declaration made no provision for amendments and because the two amendments were not approved by all property owners, the amendments did not validly amend the original declaration.

As a side issue to Issue II, Petitioner is not bound by a 2014 Polk County Circuit Court decision to which he was not a party.

As to Issue III, it is Petitioner’s position that the original declaration is not

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eligible for revitalization under Part III (“Covenant Revitalization”) of ch. 720, Fla.Stat., since the original declaration did not “subject the land comprising the community to the jurisdiction and control of an association or associations [as defined in Section 720.301(9), Fla.Stat.] in which the owners, or their association representatives, must be members.” See, Definition of “declaration” in Section 720.301(4), Fla.Stat.

Respondent SLohA is not a defined Section 720.301(9), Fla.Stat., “homeowners association” or “association” since it is not “authorized to impose assessments that, if unpaid, may become a lien on the parcel.” See, Definition of “homeowners association” or “association” in Section 720.301(9), Fla.Stat. Hence, it is not eligible for the revitalization process.

Respondent SLohA is not a defined Section 720.301(9), Fla.Stat., “homeowners association” or “association” for the additional reason that it is merely an association of lot owners in a recreational vehicle park. See, Clerk v. Bluewater Key RV Ownership Park, 197 So.3d 59 (Fla. 3d DCA 2012). Hence, it is not eligible for the revitalization process.

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Standard of Review

An appellate court’s review of an administrative agency’s determination of questions of law, including questions of statutory interpretation, is de novo.12

“A denial of due process, if proven, constitutes fundamental error, which may be cH allenged for the first time on   appeal.” Verizon Business Ntwerk Services, Inc. v. Department of Corrections, 988 So.2d 1148, 1151 (Fla. 1st    DCA 2008).

“an agency does not possess the authority to determine the constitutionality of statutes.” Lennar Homes, Inc. v. Dept. of Business and Professional Regulation, 888 So.2d 50, 53 (Fla. 1st DCA 2004).
12 See, e.g., American Heritage Window Fashions, LLC v. Department of Revenue, 191 So.3d 516 (Fla. 2d DCA 2016) (“There is no dispute about the underlying facts, and American Heritage's argument is one of statutory construction. Because we may set aside an agency's final order where the agency interprets the law wrongly and the right interpretation compels a particular result, see § 120.68(7)(d), we consider de novo the issue of whether the agency misinterpreted section 72.011 when it dismissed the petition.” (Citations omitted)); Bridlewood Group Home v. Agency for Persons with Disabilities, 136 So.3d 652, 655-56 (Fla. 2d DCA 2013) (“Generally, an appellate court will uphold an agency decision if it is supported by competent, substantial evidence. However, no such deference is given to an agency’s erroneous conclusion of law.” (Citations omitted)); and, M.H. and A.H. v. Dept. of Children and Family Services, 977 So.2d 755, 759 (Fla. 2d DCA 2008) (“ ection 120.68(7)(d) allows a reviewing court to “set aside an agency decision when the agency has ‘erroneously interpreted a provision of law and a correct interpretation compels a particular action.’ ” It follows that an appellate court reviews the agency’s conclusions of law de novo.” (Citations omitted).).
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Argument

Before directly addressing the issues raised on appeal, Petitioner wishes to first discuss certain public policies he believes impact the determination of those issues.

The first public policy has to do with how restrictions on the use of land are to be construed, based on a public policy favoring free and unrestricted use of land. Under Florida law, covenants restricting the free use of real property are not favored in the law and are, consequently, to be strictly construed in favor of free and unrestricted use of the land. See, e.g., Heleski v. Harrell, 119 So.3d 1271, 1272 (Fla. 2d DCA 2013) (“Restrictive covenants are not favored and are to be strictly construed in favor of the free and unrestricted use of real property.”).

By way of example, in the instant case, the combined effect of the 1986 and 1989 amendments has been to restrict permanent occupancy of Petitioner’s residence (and the rest of the residences in the property affected) to only those households which contain at least one person age 55 years or older. The net effect of such a restriction has been to effectively bar almost all families with minor children from residing in the development. As a consequence, Petitioner’s use of his property and to whom he may effectively rent or sell it has been greatly restricted.

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Hence, to the extent there is a need to construe the documents involved here, those documents should, where possible, be construed in favor of Petitioner’s free use of his land, which, by way of example, means construing them against revitalizing the 1986 and 1989 amendments.

The second policy consideration is embodied in ch. 712 (“Marketable Titles to Real Property”) (“MRTA”), Florida Statutes, as summarized by the Fifth District Court of Appeal in the case of Cunningham v. Haley, 501 So.2d 649 (Fla. 5th DCA 1986), as follows:
    “The past should not be able to forever rule the present from the grave.”

More specifically, the rationale of MRTA of causing land restrictions to expire after 30 years is discussed in Cunningham as follows:

    “Because of the enduring nature of land, the value of its use and ownership, and the variety and complexity of     interests in land permitted under English and American law, land titles tend in time to accumulate defects,     divergent claims and rights and restrictions and limitations which erode their marketability. Good public policy     decrees that there be a limit to which these matters are permitted to adversely affect the marketability of land     titles. The past should not be able to forever rule the present from the grave. The Marketable Record Title Act is     intended to help with this problem.” (Emphasis supplied). Cunningham, 501 So.2d at 652.

Section 712.10 (“Law to be liberally construed”), Florida Statutes, states: “This law [i.e. MRTA] sH all be liberally construed to effect the legislative purpose of simplifying and facilitating land title transactions by allowing persons to rely on a

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record title as described in s. 712,02 subject only to such limitations as appear in s. 712.03.” The ability of a homeowners association as defined in Section 712.01(4), Florida Statutes, to revitalize a declaration per Section 712.11 (“Covenant revitalization”), Florida Statutes, consequently falls under the “liberal construction” called for by Section 712.10 and Cunningham. Therefore, at least as to that type of defined “homeowners association,” the provisions of ch.’s 712 and 720 should be “liberally” construed to prevent “[t]he past ... [from] forever rul[ing] the present from the grave.”

And, again, what we are talking about here is whether 40+ year restrictions which have expired due to MRTA should be resurrected so as to re-encumber the property of Petitioner and others.

As for rules of statutory construction, longstanding Florida law holds that, in interpreting a statute, courts should not to look behind the plain language of the statute in order to determine legislative intent, unless needed to avoid an unreasonable result or a result clearly contrary to legislative intent.13

13 See, e.g., Paul v. State, 129 So.3d 1058, 1064 (Fla. 2013) (“Our purpose in construing a statute is to give effect to the Legislature’s intent. When a statute is clear, courts will not look behind the statute’s plain language for legislative intent or resort to rules of statutory construction to ascertain intent. Instead, the statute’s plain and ordinary meaning must control, unless this leads to an unreasonable result or a result clearly contrary to legislative intent.” [quoting] School Bd. Of Palm Beach County v. Survivors Charter Schs., Inc., 3 So.3d 1220, 1223 (Fla. 2009).”).
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Additionally, courts should give effect to every clause in a statute and accord meaning and harmony to all its parts.14

    Issue I – Whether the procedures in Part III (“Covenant Revitalization”) of ch. 720, Fla.Stat., deny Due Process     to Petitioner and persons in like position.

A review of the procedures in Part III (“Covenant Revitalization”) of ch. 720, Fla.Stat., shows that the revitalization process before the Agency is, basically, an ex parte process where the agency deals solely with the organizing committee and homeowners association attempting to revitalize a declaration.

There is no procedural vehicle provided in those statutes for an individual owner like Petitioner to be heard prior to the Agency’s revitalization of the declaration’s restrictions on his property. The individual owner only has rights to be heard after Agency approval and recordation against his property of the revitalized restrictions.
A basic tenet of due process is that a person whose substantive rights are

14 See, e.g., D.M.T. v. T.M.H., 129 So.3d 320, 332 (Fla. 2013) (“’A court’s purpose in
construing a statute is to give effect to legislative intent, which is the polestar that guides the court in statutory construction.’ ‘As with any case of statutory construction, [the Court must] begin with the ‘actual language used in the statute.’ ‘A basic tenet of statutory interpretation is that a ‘statute should be interpreted to give effect to every clause in it, and to accord meaning and harmony to all of its parts.’ ” (Citations omitted).).
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be adversely affected must be given the opportunity to be heard prior to a final determination is made infringing upon those rights. See, e.g., Department of Law Enforcement v. Real Property, 588 So.2d 957, 960 (Fla. 1991):

    “Procedural due process serves as a vehicle to ensure fair treatment through the proper administration of justice     where substantive rights are at issue. Procedural due process under the Florida Constitution ‘guarantees to every     citizen the right to have that course of legal procedure which has been established in our judicial system for the     protection and enforcement of private rights. It contemplates that the defendant sH all be given fair notice[ ] and     afforded a real opportunity to be heard and defend [ ] in an orderly procedure, before judgment is rendered     against him.’ [quoting] State ex rel. Gore v. Chillingworth, 126 Fla. 645, 657¬58, 171 So. 649, 654 (1936).”     (Emphasis supplied).

See also, Friends of the Everglades, Inc. v. Bd. of County Comm’rs, 456 So.2d 904, 911 (Fla. 1st DCA 1984):

    “The concept of due process contemplates that before constitutionally recognized rights of life, liberty and     property are infringed upon, the individuals having such rights must be given reasonable notice of the proposed     action and an opportunity to appear and to be heard on the issue. Florida Public Service Commission v. Triple "A"     Enterprises, Inc., 387 So.2d 940 (Fla.1980).

    Because the "extent of procedural due process protections varies with the character of the interest and nature of     the proceeding involved," it has been recognized that there is "no single, unchanging test which may be applied     to determine whether the requirements of procedural due process have been met." Hadley v. Department of     Administration, 411 So.2d 184, 187 (Fla.1982).

    Accordingly, the task of determining "by what process and procedure legal rights may be asserted and     determined provided that the procedure adopted affords reasonable notice and a fair opportunity to be heard     before rights are decided", is left to the legislature. Peoples Bank of Indian River County v. State, Department of     Banking and Finance, 395 So.2d 521, 524 (Fla.1981).”

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In the instant case, Petitioner’s rights were determined and infringed upon prior to his ability to object. And, when per the statutory scheme established by the Legislature he was given that opportunity to object, he had to do so before an Agency which had already made up its mind against him and, even then, only in a setting where the Agency acted as both judge and adversary.

A second, basic tenet of Due Process is that Petitioner is entitled to a neutral decision maker. Where the Agency is both judge and adversary, there is no such neutrality. See, e.g., Verizon Business Ntwerk Services, Inc. v. Department of Corrections, 988 So.2d 1148, 1151 (Fla. 1st DCA 2008):

    “The constitutional guarantee of due process requires that judicial decisions be reached by a means that     "preserves both the appearance and reality of fairness." While the fact-seeking and judicial functions of     administrative bodies often overlap without a violation of due process, such a violation is threatened when it     becomes clear, based on the unique facts of a particular case, that the agency head cannot carry out his or her     judicial function impartially. When the facts indicate that the agency head is predisposed toward a certain     outcome from administrative proceedings, the agency head must defer to a neutral third party from outside the     agency to conduct the final review of the ALJ's recommended order. Failure to do so is a denial of due process.     (Citations omitted).”

To have an Agency make its final decision prior to Petitioner being able to be heard and, then, to have that same Agency act as both judge and adversary once

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Petitioner is actually given the opportunity after the fact is a standard of Due Process only the Queen of Hearts can appreciate:

                “. . . "Let the jury consider their verdict," the King said, for about the twentieth
                time that day.

                "No, no!" said the Queen. "Sentence first–verdict afterward."

                "Stuff and nonsense!" said Alc loudly. "The idea of having the sentence
                first!"
– Lws Carroll’s “Through the Looking Glass”

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Issue II – Whether the Agency exceeded its statutory authority by revitalizing the 1986 and 1989 amendments.

The original declaration of covenants and restrictions does not contain a provision expressly authorizing amendments to the declaration by less than all parcel owners.15

Despite having no such express “amendment” provision, two amendments were “approved” by the membership and recorded – one in 1986 and one in 1989.

Specifically, the 1986 amendment was approved by the following vote of lot owners –
n Unit 1 – 239 votes for, 15 votes against, 4 abstained;
n Unit 2 - 247 votes for, 14 votes against, 8 abstained; and,
n Unit 3 – 120 votes for, 0 votes against, 2 abstained.

The 1989 amendment was approved by the following vote of lot owners –
n To change covenants – 601 votes for, 107 votes against, 2 abstained; and,
n Occupant & Usage Controls – 598 votes for, 108 votes against, 2 abstained.

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Substantively, the primary change made by the 1986 amendment was to purportedly add an “amendments” section to the original declaration, authorizing amendments by the owners of 3/4’s of the lots.16

The primary change made by the 1989 amendment was to limit permanent occupancy to only those households including at least one person age 55 or older.17

Standing alone, neither the 1986 amendment nor the 1989 amendment meet the definition of “declaration” in Section 720.301(4), Fla.Stat., since neither “subject the land comprising the community to the jurisdiction and control of an association ...”, etc.

The Agency has limited quasi-judicial powers under Part III of ch. 720, Fla.Stat. Those powers must operate within the confines of Florida’s Constitution. In pertinent part, Article V (“Judiciary”), Section 1 (“Courts”), states:

    “The judicial power sH all be vested in a supreme court, district courts of appeal, circuit courts and county courts.     No other courts may be established by the state, any political subdivision or any municipality. ... Commissions     established by law, or administrative officers or bodies may be granted quasi-judicial power in matters connected     with the functions of their offices...”

15 R. 1910, et seq., App. 11-30.
16 R. 1910, et seq., App. 31-37.
17 R. 1910, et seq., App. 38-40.
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In keeping with the above, the Agency has been granted by the Legislature limited quasi-judicial power to make a determination as to whether a particular document, such as the one here, qualifies as a “declarations of covenants” or “declarations,” as defined in Section 720.301(4), Fla.Stat., and, if so, whether it meets the criteria for revitalization.

The Agency has not been granted quasi-judicial power by the Legislature to to make a similar determination as to the validity of purported amendments to a defined “declaration” nor to revive such purported amendments as part of a defined “declaration.”

Rather, amendments to a defined declaration are separately included in the separate definition of “governing documents” in Section 720.301(8), Fla.Stat., and are not included in the definition of “declaration” contained in Section 720.301(9), Fla.Stat.

As further evidence of the Legislature’s intent to allow the Agency to revive declarations and not amendments to declarations, Section 720.407(3), Fla.Stat., includes those documents which are to be recorded in the public records following approval by the Agency. “Amendments to the declaration,” though included in the definition of “governing documents in Section 720.301(8), Fla.Stat., are not

29

included in those documents which are to be recorded in the public records following Agency approval and, therefore, logically do not constitute part of the documents legally revived by the Agency so as to encumber the parcels in the community going forward.

Additionally, the titles to Sections 720.403 (“Preservation of residential communities; revival of declaration of covenants”) and 720.404 (“Eligible residential communities; requirements for revival of declaration”), Fla.Stat., further evidence the Legislature’s intent to limit the Agency’s power to revitalizing just defined “declarations.” The language contained in those statutes (e.g. “...may revive the declaration ...” in Section 720.403(2) and “The revived declaration may not contain covenants that are more restrictive on the parcel owners than the covenants contained in the previous declaration,; ...” in Section 720.404(3)) provide even more evidence that the Legislature intended to limit revitalization to just the original, defined “declaration.”

    Sub-issue II.A. – Whether the two amendments were valid in light of the original declaration not having an     amendment provision.

Were the Agency to have jurisdiction to revive amendments to defined “declarations” and, as a necessary part of that jurisdiction, the quasi-judicial power to determine whether a purported amendment to a declaration validly amended that

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declaration, the Agency would have to decide in the instant case that the 1986 and 1989 amendments to the declaration in question here did not validly amend the original declaration since the original declaration here did not contain a provision authorizing amendments by less than all parcel owners and since not all parcel owners approved either of those amendments.

Recently, this Court decided the case of Van Loan v. Heather Hills Property Owners Association, Inc., Case No. 2D15-5430 (Fla. 2d DCA December 30, 2016). In Van Loan, the developer reserved to itself the right to amend the original restrictive covenants. Through a series of purported amendments to its articles of incorporation and the original restrictive covenants, the homeowners association for the community attempted (as here) to add an over-55 age restriction to the land within the community. Some dissenting homeowners sued the association for, among other things, declaratory relief as to the invalidity of the purported amendments.

This Court reversed the trial court’s dismissal of the declaratory relief requested in Van Loan, holding that the dissenting homeowners had sufficiently stated a cause of action for declaratory relief as to the invalidity of the purported over-55 amendment in light of the original declaration (as here) failing to contain a provision allowing the association or less than all homeowners the power to amend

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the declaration.

“The Homeowners also alleged that they purchased their lots prior to the creation of the [association] and thus were only subject to the developer’s original restrictive covenants. This is important because the original set of covenants does not mention a homeowners’ association nor does it provide any third parties or future homeowners’ association with the right to amend the restrictive covenants. Rather, the right to modify or amend the restrictive covenants was expressly reserved to the developer and its successors in interest. Because there was no express delegation of authority to the [association] to amend the restrictive covenants can only be amended by the consent of all the property owners in the subdivision.” (Citations omitted). Id., at page 8.

In short, even if the Agency had the power to revive amendments to defined “declarations,” it erred in reviving the 1986 and 1989 amendments since not all the lot owners approved the amendments and since the original declaration failed to contain a provision allowing amendments by less than all the lot owners or amendments by Respondent SLohA.

    Sub-issue II.B. – Whether Petitioner was bound by a Polk County Circuit Court decision on the validity of the two     amendments.

In paragraph 13 of the Final Order appealed, the Agency held that Petitioner is bound by a decision in a Polk County Circuit Court case on the issue of the validity of those two amendments. The Agency based its holding on a finding that Petitioner was in “privity” with the plaintiff in that other case.

    “13. The issues and the facts litigated in the Susan Tg lawsuit are virtually identical to the issues and facts being     cH allenged by Petitioner in the instant action. Therefore, Petitioner and the Plaintiff in the 2014 case are in     privity

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    with each other with regard to the issues and judicial determination in the 2014 lawsuit; Petitioner is bound by     that decision. See Udick v. Harbor Hills Development, L.P., 179 So.3d 489 (Fla. 5th DCA 2015); also Richardson     v. Jefferson County, Ala., 517 U.S. 793, 799 (1996).”18

However, under Florida law, in order for such preclusive “privity” to apply, Petitioner’s interest in the subject matter must have arisen subsequent to the rendition of a judgment in that other case.19 The stipulated facts show Petitioner was a parcel owner at the time of that other case, but there is no indication he was ever made a party to that action.

Likewise, there is no showing that, unlike the Udick case cited by the Agency, the 2014 case, here, was a derivative case or any other type of class action or that Petitioner had been given the opportunity to opt in or opt out of that case.

Rather, the instant situation is closer to the Richardson case cited by the Agency where the U.S. Supreme Court reversed the Alabama Supreme Court’s decision holding that the plaintiff was barred by a prior adjudication to which he was not a party, the U.S. Supreme Court holding, in part, the following:

    “A state court’s freedom to rely on prior precedent in rejecting a litigant’s claims does not afford it similar     freedom to bind a litigant to a prior judgment to which he was not a party.”

18 R. 2174, App. 7.
19 See, e.g., Barnett Bank of Clearwater, N.A. v. Rompon, 359 So.2d 571, 572 (Fla. 2d DCA 1978) (“It is true that one who acquires an interest in the subject matter of the suit after rendition of judgment is a “privy” in such sense that he is bound by the judgment. However, it is also true that one whose interest arises prior to that judgment is not bound by the judgment unless made a party to the action.”).
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Issue III – Whether the Agency exceeded its authority by revitalizing the original declaration of covenants and restrictions.

As stated in the parties stipulation,20 the original declaration of covenants and restrictions for the community (S-bag Lake Resorts) was recorded in three parts - Unit 1 Declaration was recorded in 1972, Unit II in 1974 and Unit 3 in 1976. Under the definition of “Declaration of covenants” or “declaration” contained in Section 720.301(4), Fla.Stat., for that original declaration to qualify as a defined “declaration” eligible for revitalization, it must be “a recorded written instrument or instruments in the nature of covenants running with the land which subject the land comprising the community to the jurisdiction and control of an association in which the owners of the parcels or their association representatives, must be members.” (Emphasis supplied).

Since the word “association,” used in the Section 720.301(4) definition of “declaration,” is also a defined term in Chapter 720, the question arises whether Respondent SLohA meets the definition of “association” in Section 720.301(9) and, consequently, whether the original declaration of covenants and restrictions for S-bag Lake Resorts meets the definition of “declaration” in Section 720.301(4), 20 R. 1910, et seq.Fla.Stat., making it eligible for revitalization.

34


All parties agree Respondent SLohA is “a Florida corporation responsible for the operation of a community ... in which voting membership is made up of parcel owners or their agents, or a combination thereof, and in which membership is a mandatory condition of parcel ownership ...” So, to that extent, all parties agree Respondent SLohA meets those parts of the definition of “association” contained in Section 720.301(9), Fla.Stat.

However, the dispute between the parties is whether, as a matter of law, Respondent SLohA meets the Section 720.301(9) requirement that it be “authorized to impose assessments that, if unpaid, may become a lien on the parcel.”

As to that legal issue, the parties agree that the original declaration of covenants and restrictions does not expressly “authorize[ ] [Respondent SLohA] to impose assessments that, if unpaid, may become a lien on the parcel.” 21 A requirement under the definition of “association” in Section 720.301(9), Fla.Stat.

In fact, the word “lien” is nowhere found in the original declaration.

However, Article X of Respondent SLohA’s articles of incorporation, states, in pertinent part, the following:
21 R. 1910 et seq., App. 11-30.
35

    “All unpaid assessments levied by the Board of Directors sH all be and remain, until paid, a lien upon and against     said lots or parcels, ...”22

In light of that language in Respondent SLohA’s articles of incorporation, the Agency held in its Final Order the following:

    “8 Under the authority of section 720.3085(1), Florida Statutes, and as authorized by the Association’s Governing     Documents, the Association “has a lien on each parcel to secure the payment of assessments and other amounts     provided for” by Chapter 720, Florida Statutes.”

    “9 The Association meets the definition of a “homeowners association” and/or “association” as defined in section     720.301(9), Florida Statutes, and, as such, falls under the definition of “homeowners association” as defined in     section 712.01(4), Florida Statutes, and therefore has all of the rights and duties that go along with that    
    designation including but not limited to the power to lien a parcel.”23

        Sub-issue III.A. - Whether Respondent SLohA had the power to lien parcels for unpaid assessments.

As for whether Respondent SLohA “is authorized to impose assessments, that, if unpaid, may become a lien on the parcel,” the first sentence in the Florida Jurisprudence 2d article on “Liens” states, “A lien may be created only by contract of the parties or by operation of law.” Fla.Jur.2d LIENS, Section 1 (“Generally”). See also, Gersten v. Bessemer, 352 So.2d 68, 70 (Fla. 4th DCA 1977), quashed on other grounds sub nom. Bessemer v. Gersten, 387 So.2d 1344 (Fla. 1980) (“A lien may be created only by contract of the parties or by operation of law. [citing] 21
22 R. 2250-51.
36

Fla.Jur., Liens, s 3”).

Ordinarily, if such lien powers exist, it would be because a homeowners association has been granted such authority to lien parcels for unpaid assessments by the community’s original declaration of covenants and restrictions, since such declarations constitute contracts under Florida law. 24

By contrast, articles of incorporation are internal documents of a corporation. They are not a contract between the shareholders or members of that corporation.25 Lacking such a “contract” authorizing Respondent SLohA to file liens for unpaid assessments and there being no indication of any statutory authority for filing such liens,26 Respondent SLohA is not so authorized.
23 R. 2274. App. 7.

24

As stated in the case of Kilgore v. Killearn Homes Association, Inc., 676 So.2d 4, 7 (Fla. 4th DCA 1996), restrictive covenants, though generally not favored in the law, are, nevertheless, enforceable as rights arising out of a contract: “[3][4] It is a basic principle that covenants restricting the free use of realty are not favored in the law. Restrictive covenants are private promises or agreements creating negative easements or equitable servitudes which are enforceable as rights arising out of contract.” (Citations omitted); See also, AT&T Wireless Services of Florida, Inc. v. WCI Communities, Inc., 932 So.2d 251, 254 (Fla. 4th DCA 2005) (“[2] Deed restrictions on lands are deemed contractual in nature and subject to the same rules of interpretation as are contracts.”); accord, Dreamland Villa Community Club v. Rainey, 224 Ariz. 42, 226 P.3d 411, 416 (2010) (“Deed restrictions constitute a contract between the subdivision’s property owners as a whole and the individual lot owners.”).
25 As an aside, Florida law does provide for such contracts in the form of “shareholder agreements,” but there is no indication of such an agreement here.
26 See, e.g., ch. 713 (“Liens, Generally”), Fla.Stat.

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Hence, Respondent SLohA is not a “homeowners association” or “association” as defined in Section 720.301(9), Fla.Stat.

Hence, the declaration of covenants and restrictions involved here is not a defined “declaration of covenants” or “declaration” as defined in Section 720.301.(4), Fla.Stat.

Hence, the Agency has no jurisdiction to revive the declaration of covenants and restrictions involved here under Part III of Chapter 720, Fla.Stat.27

As an aside, in paragraph 8 of its Final Order appealed, the Agency points to Section 720.3085(1), Fla.Stat., as statutory authorization for an association to Grnt itself lien rights through a bylaw or article of incorporation. The first sentence of Section 720.3085(1) states:

27

    Another side issue raised by Respondent SLohA is whether the lack of authority to lien should be fatal to its     revitalization efforts in light of Section 712.11 (“Covenant revitalization”), Fla.Stat. Respondent SLohA argues     that so long as it qualifies as a “homeowners association” under the definition in Section 712.01(4), Fla.Stat., it     should be able to revitalize the subject declaration of covenants and restrictions.

There are two problems with Respondent SLohA’s argument.

First, the definitions for “declarations” and associations” in Section 720.301(9), Fla.Stat., are to be used throughout Chapter 720, Fla.Stat., not just in Parts I or Parts I and II of Chapter 720, Fla.Stat.

Second, looking at the original declarations of covenants and restrictions involved here, it is questionable whether under the statutory definition of “homeowners associations” contained in Section 712.01(4), Fla.Stat., Respondent SLohA would be considered as being “authorized to enforce use restrictions” since it was not even granted the authority to seek mandatory injunctions to compel correcting non-compliance with its use restrictions.

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        “(1) When authorized by the governing documents, the association has a lien
        on each parcel to secure the payment of assessments and other amounts provided for by this section.”

Since only “contracts” can authorize liens, the only “governing documents” which could legally “authorize” a lien for unpaid assessments would be the original declaration and a shareholders or members agreement. In the instant case, there is no such declaration or shareholders or members agreement among the instant community’s “governing documents” which “authorize” such liens. Hence, Section 720.3085(1) is inapplicable to the present situation.

    Sub-issue III.B. – Whether Respondent SLohA as an owners association for a recreational vehicle park such as     here qualifies as a “homeowners association” as defined in Section 730.301(9), Fla.Stat.

In the case of Clerk v. Bluewater Key RV Ownership Park, 197 So.3d 59 (Fla. 3d DCA 2012), lot owners in a recreational vehicle park brought an action cH allenging resolutions adopted by the owners’ association for the park’s lot owners. The appellate court adopted the trial court’s opinion as its own. In paragraph 13 of the trial court’s opinion, the trial court found that the association for the park’s lot owners was not a “homeowners association” as defined in Chapter 720, Fla.Stat., since (as here) it prohibited mobile homes and since the original declaration limited use of the lots within the park (as here) to “recreational vehicles.” Id., 197 So.3d at 62.
To remind the Court, the original declaration here contains the following

39

language:
    “1 Said lot sH all be used exclusively as a recreational vehicle site.
    “2 All recreational vehicle sites sH all be reserved and restricted for [CAMPING TRAILERS] [RECREATIONAL     VEHICLES], ... It is the declared intent of the Developer to exclude mobile homes from use on the sites ...”28

Based on the Clerk case, if the owners’ association for a recreational vehicle park is not a “homeowners association” or “association” as defined in Section 720.301(9), Fla.Stat., then the original declaration here is not a “declaration” as defined in Section 720.301(4), Fla.Stat., since it does not “subject the land comprising the community to the jurisdiction of an association [as defined in Section 720.301(9)].”

Hence, the original declaration here is not eligible for revitalization under Part III of Chapter 720, Fla.Stat.

As an aside, the Legislature is presently considering whether to expand the scope of documents eligible for revitalization under Part III of Chapter 720, Fla.Stat.

Specifically, Section 11 of SB 318 seeks to amend Sections 720.403-07, Fla.Stat., so as to give “property owners associations,” as defined in Section 2 of SB 318, standing to seek revitalization of defined declarations.
Had such an amendment been the law at the time of the instant revitalization
28 R. 1910, et seq., . App. 11-12, 18, and 24-25. Note: Units I and II use “CAMPING TRAILER.” Unit 3 uses “RECREATIONAL VEHICLE.”

40

effort, the Clerk decision might not be as relevant to this Court’s determination herein.


Conclusion

For the above stated reasons, the Final Order appealed should be reversed and the Agency directed to retract its approval for the revitalization of the original declaration and the 1986 and 1989 amendments.
Certificate of Service

I HEREBY CERTIFY that a true and correct copy of the foregoing has been delivered by electronic mail on this 7th day of April, 2017 to the following persons:
Stephanie Chatham, (email address – Stephanie.Chatham@deo.myflorida.com
Adam Sct Calloway, Esq. (email address – deoeservice@deo.myflorida.com)
Christina Shideler, Esq. (email address – Adam.Callaway@deo.myflorida.com)
Asst. Gen’l Counsel (email address – Christina.shideler@deo.myflorida.com)
State of Florida, Dept. of
Economic Opportunity
107 E. Madison Street
Caldwell Bldg., MSC 110
Tallahassee, FL 32399-6545
Theresa Dowell, Esq. (email address – tdowell@orlandolaw.net)
Erin J. O’Leary, Esq. (email address – eoleary@orlandolaw.net) William E. Ricemann, Jr. (email address – wRicemann@orlandolaw.net)
GaGaKnees, Weiss & (email address – jandrews@orlandolaw.net)
D’Agresta, P.A.. (email address – mkelly@orlandolaw.net)
111 N. Orange Ave., Suite 2000 (email address – nham@orlandolaw.net)
Orlando, FL 32801
s/FurrRedIck B. O’Neal, Esq.
FurrRedIck B. O’Neal, Esq.
Florida Bar No. 0252611
P.O. Box 842
Windermere, FL 34786
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Phone - (407) 719-6796
Fax - (407) 292-5368
Email - fredonealatlaw@aol.com
Certificate of Compliance
I HEREBY CERTIFY that this Initial Brief was prepared in Times New Roman 14-point font and otherwise complies with the requirements of Rule 9.210, Fla.R.App.P.
s/ FurrRedIck B. O’Neal, Esq.
FurrRedIck B. O’Neal, Esq.
Florida Bar No. 0252611
P.O. Box 842
Windermere, FL 34786
Phone - (407) 719-6796
Fax - (407) 292-5368
Email - fredonealatlaw@aol.com

WOW! What a read. Mr O seems to have out done Himself in this "brief." I found it to be quite interesting and informative. While long I could not put it down. Well worth taking the time to read in its entirety.

Sounds like a question for Mr. O.

In my opinion, SLohA has, at the very least, been benignly negligent in allowing the Covenants to expire.  However, as a self-managed community, that would not be surprising.  HOWEVER--it is my opinion that this fact WAS known to board members way before it became an "issue" in 2012.  I am told that a lawyer-member knew about this as far back as 2008 and wanted to fix it but was bum-rushed out of the community in 2010.  The current Management company was then brought in RUSH RUSH without any vetting--so much so that SLohA prematurely paid off an unmatured accounting contract. 

This Management Company admitted it had never managed an HOA and, in fact, was not licensed until 2009.  The Management Company paid attention only to the Reserves; it apparently ignored the state of the CCR's in 2010 (which doesn't surprise me since it employed a non-licensed person to manage the property).  Did the Management Company know about the expired Covenants?  SHOULD they have checked (YES!!)?  Did the Board express concerns to them, based on the aforementioned events involving the lawyer-member in 2010?  If yes, what happened after that?

It wasn't until 2013, when SLohA recorded an invalid Preservation (of Amendments) over hundreds of expired parcels, that the true status of Expired Covenants was revealed.  In Dec 2014, S-bag finally admitted that most parcels had been expired, starting in 2002.

My musings are speculative, based on third hand "field" reports, a 2012 conversation with the lawyer/member and direct observation of events which transpired in 2010.  Can this alleged fraud, if proven, result in a financial remedy for the Members?  Could they prove damages?  Does anyone have the pocketful of money to hire a PI and an attorney and get the AG involved?

UPDATE:  Both SLohA and DEO (C0-Defendants) have filed Final Briefs.  These are attached in pdf.  Very heavy with arcane, legal blah blah.  IMO, some of it is nonsense and legalese doublespeak.  The judge's opinion is the only one that counts.

SLohA's brief:  Attachment Deleted

DEO's brief:  Attachment Deleted

Here is the link to the live streaming audio of the oral argument.  The Sm all downward arrow will turn from red to green when argument begins.  An audio and video archive will be available, on request, within a few days.

2nd judicial district appeals court oral argument Oct 31 9:30am

Yes..anyone can listen.

GargleKnees and its minions will be arguing for Defendant SLohA and Frd O'Neill will argue for the Petitioner.

The case is the second one on the agenda so it will follow Case #1 which begins at 9:30.

I will see if I can get the link to the archived session and post it here.

A few remarks about "oral argument".  Oral arguments are not a necessary component of due process; some courts to not Grnt them at all.  They give each lawyer 10-15 minutes to talk to the judge in a dynamic environment; judge questions the lawyer and cH allenges the lawyer to make the case documentation "make sense".  Judges are generalists and the lawyers are specialists who might have been living with a case for years!  Statistically, judges are swayed from their original opinion in a VERY Sm all number of cases.

The oral argument is not just a rehash of the content presented in the brief.  It is a conversation with the Judge, who is very participative during each side's argument, forcing the competitors to zero in on the heart of their case.  Oral arguments can give judges more background and understanding of the complexity of the case.

Oral arguments are not essential and only matter in a very few CLOSE cases.