In LEN-CG S., LLC v.
Champions Club Condo. Ass'n, Inc., No. 5D21-1294, 2022 WL 980910 (Fla.
Dist. Ct. App. Apr. 1, 2022), Florida’s Fifth Circuit Court of Appeals recently
reversed a trial court’s decision to deny a developer’s and contractor’s motion
to compel arbitration. The Court of Appeal held the arbitration provision in
the condominium declaration binds the condominium association, which brought
claims against the contractor and developer on its own behalf and as the class
representative of the unit owners.
Champions Club Condominium
Association, Inc. (“the Association”) sued LEN-CG South, LLC (“the Developer”)
and Lennar Homes, LLC (“the Contractor”) in connection with various
construction defects around the condominium complex. The defects included
problems with the windows, roofs, and air conditioning systems, resulting in
water intrusion and flooding. The Association asserted claims for negligence,
violations of Florida Building Code, breach of implied warranties, and
violations of Florida’s Deceptive and Unfair Trade Practices Act.
The Contractor and
Developer moved to compel arbitration. They argued the Association’s claims
were covered under one of the arbitration provisions existing in four
documents: (1) the condominium declaration; (2) the purchase and sale
agreements for the unit owners; (3) the unit’s limited warranties; or (4) the
unit’s special warranty deeds. The trial court denied the motion to compel
because the unit owner’s contracts, warranties, and deeds did not bind the
Association. The trial court also held the condominium declaration did not
contain plain language requiring the Association to arbitrate.
The Contractor and
Developer appealed, asserting Section 36 of the condominium declaration
required the Association to arbitrate any construction claim relating to any
unit or common area. The Contractor and Developer argued the phrase “as shall
Association” binds the Association to the arbitration requirements in Section
36. The Association argued the phrase only binds the Association to the notice
and opportunity to cure requirements of Section 36 or, alternatively, only applies
to units owned by the Association.
The Court of Appeal
disagreed with the Association’s interpretations. The Court reviewed the
arbitration provision in the condominium declaration de novo. The Court
noted the phrase “as shall Association” within Section 36 clearly and
unambiguously means the Association is bound to arbitrate any claims related to
construction matters. The Court rejected the Association’s argument, stating it
ignored the placement of the phrase in Section 36. The Court reversed the trial
court’s decision and remanded the case with directions to grant the motion to
compel.
