Ocean Trail Unit Owners Association, Inc. v. Mead

650 So. 2d 4 (1994)

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Ocean Trail Unit Owners Association, Inc. v. Mead

Florida Supreme Court
650 So. 2d 4 (1994)

Facts

The Ocean Trail Unit Owners Association (the association) (defendant) purchased property, but state trial and appellate courts invalidated the purchase because it exceeded the association’s powers. The association then levied a special assessment to cover the costs of the invalid purchase, which included a judgment for the attorney’s fees for the attorney representing the unit owners who successfully opposed the purchase and judgments against the association favoring unit owners who sued the association to recover the association’s assessment levied to make the invalid purchase. After the special assessment was levied, the association received sums in settlement from its claim against its insurance carrier and sums from the recission of the property purchase, which the association used to reimburse all unit owners for the original purchase assessment. Before that, representative unit owners at the condominium (the unit owners) (plaintiffs) sued the association to have the special assessment declared invalid. Under state condominium law, an association had the power to manage and operate condominium property, which included the power to levy and collect assessments against unit owners to pay for common expenses. State law also authorized lawsuits against an association regarding the exercise of its powers, with a judgment against an association subjecting the association’s property to execution and levy. According to the condominium’s declaration, any lien on any portion of the condominium’s common area was to be paid by the association as a common expense. The trial court found that because the association reasonably believed that the special assessment was necessary to pay the judgments to protect the condominium’s common areas from execution and levy, the special assessment was authorized. The appellate court, however, concluded that only expenses incurred in carrying out the association’s authorized powers were proper for assessment, and it reasoned that an association could not simultaneously be unauthorized to act and be authorized to levy an assessment to pay for the consequence of its unauthorized act. Thus, the appellate court held that because the special assessment was levied to pay for expenses that the association did not properly incur for the condominium, it was invalid. The association appealed.

Rule of Law

Issue

Holding and Reasoning (Wells, J.)

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