Michael McGee, et al v. Commonwealth Title, et al

Filing

Opinion issued by court as to Appellant Michael McGee. Decision: Affirmed. Opinion type: Non-Published. Opinion method: Per Curiam.

Case: 12-11141

Date Filed: 09/12/2013

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 12-11141
________________________
D.C. Docket No. 8:11-cv-01100-JDW-TGW

MICHAEL McGEE, et al.,
Plaintiffs-Appellants,
versus
COMMONWEALTH LAND TITLE INSURANCE COMPANY, et al.,
Defendants-Appellees.
__________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(September 12, 2013)
Before PRYOR, JORDAN, and KLEINFELD, * Circuit Judges.
PER CURIAM:

*

Honorable Andrew Kleinfeld, United States Circuit Judge for the Ninth Circuit, sitting by
designation.

Case: 12-11141

Date Filed: 09/12/2013

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The plaintiffs, a group of individuals who purchased units in an unsuccessful
condominium development project, filed suit against Commonwealth Land Title
Insurance Company alleging they were entitled to collect on their title insurance
policy. The district court dismissed the complaint for failure to state a claim, and
the plaintiffs filed this timely appeal. Following oral argument, and review of the
record and the parties’ briefs, we affirm.
I.
This case arises out of a real estate deal gone bad. On November 17, 2005, a
real estate developer filed a 60-page “Declaration of Sarasota Cay Club
Condominium” with the clerk of court for Manatee County, Florida. The
declaration provided a detailed description of various aspects of the Sarasota Cay
Club condominium development, such as rules for buying insurance premiums, the
required method of assessment collection, and the portions of the Club defined as
“Common Elements.” A map and further details, attached to the declaration as an
exhibit, boasted of elegant floor plans, a large swimming pool, and a “no children”
policy.
Sometime after the declaration was filed, the plaintiffs individually
purchased a number of units in the condominium development project. The
development, however, was never completed, and the plaintiffs did not receive the
units they had bought.
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On May 18, 2011, the plaintiffs filed suit against approximately 70
defendants, alleging that they were defrauded by nearly every person and entity
that was involved in their real estate transaction. The district court severed the
complaint into seven actions.
This appeal pertains to the plaintiffs’ suit against Commonwealth, the
company from which the plaintiffs purchased title insurance. The plaintiffs alleged
in their complaint that they received defective title to their purchased Sarasota Cay
Club units, entitling them to collect on their title policy, because the 60-page
Sarasota Cay Club declaration was defective and therefore legally did not create a
condominium development. 1
As noted, the district court granted Commonwealth’s motion to dismiss
pursuant to Rule 12(b)(6). The court concluded that under Fla. Stat. § 718.110(10)
(2010), a declaration is effective to create a condominium, despite any fatal
defects, so long as no action is brought within three years from the recording of the
declaration to determine whether it complies with the mandatory requirements for
the formation of a condominium. Noting that the plaintiffs’ suit fell well outside of
that three-year window, the district court reasoned the declaration must have

1

The plaintiffs alleged the declaration was defective because there were no common elements
and because the declaration’s “joinder,” which involved the owner of the land on which the
development would be built conveying his rights for purposes of establishing the condominium,
was invalid.
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created a condominium under Florida law. After dismissal, this timely appeal
ensued.

II.
“We review de novo the district court’s grant of a motion to dismiss for
failure to state a claim under Fed. R. Civ. P. 12(b)(6), accepting the allegations in
the complaint as true and construing them in the light most favorable to the
plaintiff.” Timson v. Sampson, 518 F.3d 870, 872 (11th Cir. 2008). We review
“questions of statutory interpretation de novo.” United States v. Anton, 546 F.3d
1355, 1357 (11th Cir. 2008). “As a federal court sitting in diversity jurisdiction, we
apply the substantive law of the forum state, in this case Florida, alongside federal
procedural law.” Horowitch v. Diamond Aircraft Indus., Inc., 645 F.3d 1254, 1257
(11th Cir. 2011).
III.
We conclude that the district court properly granted Commonwealth’s
motion to dismiss. Simply stated, Fla. Stat. § 718.110(10) (2010) bars the plaintiffs
from arguing that purported errors in the Sarasota Cay Club declaration prevented
the document from creating a condominium development. 2

2

We expressly limit our holding to the version of § 718.110(10) in existence at the time the
plaintiffs filed their action. In 2013, the Florida Legislature materially amended the statute. Our
decision does not reach any of the plaintiffs’ other claims which are not before us. We only hold
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Under Florida law, a condominium is a creature of statute, and is created by
recording a condominium declaration in the public records of the county where the
land is located. See Fla. Stat. § 718.104(2) (2002). See also Tranquil Harbour
Dev., LLC v. BBT, LLC, 79 So. 3d 84, 87 (Fla. 1st DCA 2011). Although §
718.104(4) contains an explicit list of what a declaration “must” contain, §
718.110(10) provides a period of repose for challenges to a defective declaration.
Under § 718.110(10), if an action to determine whether a declaration complies
with the mandatory requirements for the formation of a condominium is not
brought within three years from when the declaration was recorded, the declaration
will generally create a condominium:
If an action to determine whether the declaration or another
condominium document complies with the mandatory requirements
for the formation of a condominium is not brought within 3 years of
the recording of the declaration, the declaration and other documents
shall be effective under this chapter to create a condominium, as of
the date the declaration was recorded, whether or not the documents
substantially comply with the mandatory requirements of law.
In our view, the plain language of § 718.110(10) severely limits the plaintiffs’
argument that alleged defects in the Sarasota Cay Club declaration precluded the
document from creating a condominium development. See Daniels v. Fla. Dept. of
Health, 898 So. 2d 61, 64 (Fla. 2005) (“When the statute is clear and unambiguous

that, as far as the plaintiffs’ claims against their title insurance company are concerned, the claim
that the declaration failed to create a condominium development is barred.
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. . . the statute’s plain and ordinary meaning must control, unless this leads to an
unreasonable result or a result clearly contrary to legislative intent.”).
We need not decide the full sweep of this provision, nor must we determine
whether an unchallenged declaration could make a mere pile of bricks a
condominium. We conclude only that, at the very least, a condominium is created
as a matter of Florida law where, as here, a declaration includes statutorily
recognized common elements,3 and the declaration is not challenged within the
three year period prescribed by § 718.110(10). Cf. Daytona Dev. Corp. v.
Bergquist, 308 So. 2d 548, 550 (Fla. 2d DCA 1975) (“[O]ne must reach the
inescapable conclusion that all condominium units have an undivided share of the
common elements and neither can exist separately from the other.”). 4
IV.

3

As the district court properly explained, common elements are defined under Fla. Stat. §
718.108(1) as, among other things, “[a]n easement of support in every portion of a unit which
contributes to the support of a building,” and the Sarasota Cay Club declaration adopted this
definition in defining its own common elements.
4

The plaintiffs repeatedly rely in their briefs on an email from the Division of Florida
Condominiums, Timeshares, and Mobile Homes, a Florida administrative agency, concluding
that a Sarasota Cay Club declaration failed to include common elements. The email, however,
states that the declaration the Division reviewed was in existence as of June 13, 2005, whereas
the declaration at issue here was first signed in July 21, 2005, and was not even filed until
November 17, 2005. The Division also asserted in its email that the June 2005 declaration
included language stating that “there are NO common elements,” language which is not in the
declaration at issue here. Nevertheless, the plaintiffs contend we should “assume” that the
version examined by the Division was a “draft” of the declaration at issue here. See Appellant’s
Br. at 29 n.3. We need not assume any such thing; the documents are different, and the
declaration filed on appeal very clearly includes common elements.
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The district court’s decision is affirmed.
AFFIRMED.

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