A few Roundups back we determined that, based on a recent case decided by the 11th Circuit Court of Appeals, community association managers collecting assessments are not subject to the Federal Fair Debt Collections Practices Act. This week, we visit a different issue that, once again, will be of great interest to community association managers.
In 2006, Florida’s Second District Court of Appeals held that a manager was not liable for an injury where the injured plaintiff claimed the manager was at fault for their injury. In that case, Greenacre Properties, Inc. v Rao, 933 So. 2d 19 (Fla. 2d DCA 2006), the plaintiff argued i) “that the property management company breached its contract with the . . . homeowners’ association and ii) that the property management company negligently performed its duties under the contract with the Association….”. The court did not agree and held that, “a person who is not a party to a contract cannot sue for a breach of the contract even if the person receives some incidental benefit from the contract… and “nothing in the indirect relationship between an association’s members and the agents [meaning the manager] performing the association’s duties under a written contract … create a fiduciary duty…”.
In a much more recent case, decided March 6, 2013, Pedro v. The Claridges Condominium, Inc., Case no. 4D11-3494, the Fourth District Court of Appeals reviewed “de novo” style whether a trial court properly dismissed a complaint alleged against a manager. In Pedro, the plaintiffs alleged that the Claridges Condominium association, through its employee property manager, improperly placed, installed, and operated an emergency power generator next to the plaintiffs’ unit. The unit owner plaintiff sued for private nuisance, trespass, and negligence. The manager moved to dismiss the lawsuit based on the Greenacre decision discussed, above. While the trial court had agreed with the manager’s motion to dismiss the case, the 4th DCA did not and, as a result, it reversed the trial court’s decision.
By way of background, a Motion to Dismiss, with very few exceptions, must be filed by a defendant and heard by the trial court before the defendant must serve their “answer” to the plaintiff’s complaint. In plain non-legalese English, in Pedro the 4th DCA’s reversal of the trial court’s decision means that the lawsuit will continue and the defendant is now required to serve their “answer”.
In deciding whether to grant a motion to dismiss, the trial court only looks to the “four corners of the complaint” to determine whether a cause of action against the defendants is properly pled. In other words, are all of the necessary elements that together create the cause of action present? For example, if the allegation is an unlawful battery, did the plaintiff allege an unlawful touching occurred? In reviewing a trial court’s final ruling on a defendant’s motion to dismiss, the appellate court employs a method of review referred to as “de novo” (a fancy legal term that means the appellate court can make its own determination as if this were the first time the matter is being decided and then substitute its ruling in place of the trial court’s previous determination).
In the Pedro case, the appellate court looked to four corners of the complaint and determined that all of the elements for each cause of action were set out in the Plaintiff’s complaint. Therefore, the court found there was “a basis for liability against both the Association and/or the property manager.”
The Pedro complaint, unlike the Greenacre case, did not allege liability based on the contractual relationship between the parties. However, the trial court relied heavily on the Greenacre case in making its determination. It is for that reason the 4th District Court of Appeals reversed the trial court’s decision. In other words, the trial court mistakenly relied on Greenacre which pertained to a breach of contract situation as contrasted against the allegations of private nuisance, trespass, and negligence alleged in the Pedro lawsuit.
Because the court’s opinion was issued on March 6, there remains time for re-hearing and possibly another appeal. But, in the meantime, the case will remand (another fancy legal term that means “return”) to the trial court where the issues will be heard and liability, if any, decided. So what does all this mean? It means we will have to wait and see if the trial court determines whether a manager has liability for private nuisance, trespass, and negligence when the manager acts as agent for the Association.
In an even more recent trial court case that lasted three weeks, a Palm Beach County trial court found a condominium association 30 percent responsible, its management company 60 percent responsible, and the young bicycle rider 10 percent responsible for an accident that led to that bicycle rider’s death. The theory against the management company was that it failed to undertake proper maintenance and trimming of hedges that were twice the lawfully permitted height. I’d expect an appeal based on the Greenacre case, but we’ll have to wait and see.