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IN THE FLORIDA SUPREME COURT

ORLANDO LAKE FOREST JOINT VENTURE,

a Florida joint venture; ORLANDO LAKE FOREST INC.,

a Florida corporation; NTS MORTGAGE INCOME FUND,

a Delaware corporation; OLF II CORPORATION,

a Florida corporation; ORLANDO CAPITAL CORPORATION,

a Kentucky corporation,

Petitioners,

vs. CASE NO: _________

Fifth District Court of Appeal

LAKE FOREST MASTER COMMUNITY Case No. 5D08-2096

ASSOCIATION, a Florida not for profit L.T. Case No.: 07-CA-1867

corporation,

Respondent.

______________________________________/

PETITIONERS’ BRIEF IN SUPPORT OF NOTICE TO INVOKE

DISCRETIONARY JURISDICTION

T. Todd Pittenger

Florida Bar No. 0768936

Kristopher Kest

Florida Bar No. 15411

Lowndes, Drosdick, Doster, Kantor & Reed, P.A.

450 South Orange Avenue

Suite 800

Orlando, Florida 32801

Attorneys for Petitioners

TABLE OF CONTENTS

Page

TABLE OF CITATIONS ..................................................................................... iii

STATEMENT OF CASE AND OF THE FACTS ................................................ 1

SUMMARY OF ARGUMENT ............................................................................. 4

ARGUMENT ......................................................................................................... 4

I. The Opinion of the Fifth District Court of Appeal

expressly and directly conflicts with decisions of this

Court and of the Second, Third and Fourth District

Courts of Appeal, and represents a departure from the

Fifth District’s own precedent, on the issue of abatement

versus dismissal as the proper remedy for failure to

comply with a statutory limitation of authority and

condition precedent to the institution of litigation which

Section 720.303(1), Florida Statutes in fact represents . ............ 4-10

CONCLUSION ....................................................................................................10

CERTIFICATE OF SERVICE ............................................................................11

CERTIFICATE OF COMPLIANCE ...................................................................11

APPENDIX

iii

TABLE OF CITATIONS

Page

Alhambra Homeowners Assn. v. Asad,

943 So.2d 316 (Fla. 5

DCA 2006) ...... 5, 6

Blumberg v. USAA Casualty Ins. Co.

, 790 So.2d 1061 (Fla. 2001) .................... …7

Bruce H. Lynn v. Miller

, 498 So.2d 1011 (Fla. 5

DCA 1986) ........................... 5, 8

City of Coconut Creek v. City of Deerfield Beach

, 840 So.2d 389 (Fla. 4

DCA 2003) …………………………………………………………………...5, 6, 8

Ferry-Morse Seed Co. v Hitchcock

, 426 So.2d 958 (Fla. 1983) .......................... 5, 7

Hallstrom v. Tillamook

, 493 U.S. 20 (1990)………………………………………8

Levine v. Dade County School Board

, 442 So.2d 210 (Fla. 1983)…………..5, 7, 8

Motor v. Citrus County School Board

, 856 So.2d 1054 (Fla. 5

DCA 2003) .... 5, 8

Progressive Express Ins. v. Menendez

, 979 So.2d 324 (Fla. 3

DCA 2008)…...5, 8

Sheriff of Orange County v. Boultbee

, 595 So.2d 985 (Fla. 5

DCA 1992) ..…5, 8

Wright v. Life Insurance Co. of Georgia

, 762 So.2d 992 (Fla. 4

DCA 2000) …..7

Statutes

Florida Statute §720.303(1)…………………………………………………passim

Florida Statute §720.305(1)…………………………………………………....1, 10

Florida Statute §720.306(7)………………………………………………….passim

STATEMENT OF CASE AND OF THE FACTS

This appeal involves the alleged failure of the homeowners’ association

board of directors for Respondent (the Plaintiff below), Lake Forest Master

Community Association (the “HOA”), to comply with Section 720.303(1), Florida

Statutes, prior to initiating a $4 million alleged construction defect lawsuit against

the Petitioners on June 29, 2007, one day before a change in the Section

95.11(c)(3) statute of repose from 15 to 10 years. The Trial Court dismissed the

case upon a finding that the HOA Board had failed to comply with Section

720.303(1), which the Petitioners and Trial Court both characterized as a statutory

condition precedent which must be satisfied before an HOA commences litigation

involving amounts in controversy in excess of $100,000. Section 720.303(1)

requires that “before commencing litigation against any party in the name of the

association involving amounts in controversy in excess of $100,000, the

association must obtain the affirmative approval of the majority of voting interests

at a meeting of the membership at which a quorum has been attained.” Petitioners

were lot owners, so Petitioners had standing to raise lack of authority to sue.

As HOA members, Petitioners had the right under Section 720.305 to invoke

all remedies provided for law for redress, and the Trial Court agreed with

Petitioners that a remedy for failure of the Section 720.303(1) statutory condition

precedent was dismissal of this lawsuit. Petitioners asserted that the HOA did not

secure majority approval of all 732 lots owners, as required by Section 720.303(1).

Even if only the vote of a majority of a quorum was required under Section

720.303(1), Petitioners argued the HOA failed to properly adjourn the January 7

annual meeting due to inadequate notice, so that the February 13

and March 13

continuation meetings “broke the chain” of the annual meeting

. Petitioners relied

upon the HOA Board-approved meeting minutes, which the HOA Secretary

confirmed at his deposition were accurate, to support Petitioners’ contention that

neither Section 720.306(7) nor the HOA Bylaws were complied with when the

January 7

annual meeting was reconvened by providing oral notification of the

date, but not the time or the place, of the February 13

meeting. The Trial Court

entered summary judgment of dismissal, based upon HOA Section 720.303(1) non-

compliance for inadequate notice, but did not reach the majority vote issue.

On June 20, 2009, the Fifth District Court of Appeal, issued its revised

opinion (the “Opinion

”), which is included in the Appendix. Although the holding

of the Opinion was that fact issues precluded summary judgment on the Section

720.303(1) statutory non-compliance issue

, the Fifth District also addressed the

Lake Forest has 732 lot owners, so a majority of all lot owners would require a

vote of 367. A quorum is thirty percent of the 732 lot owners, or 220. The

January 7, 2007 annual meeting, according to HOA, was adjourned and

reconvened on February 13, 2007, for the purpose of obtaining additional

proxies to vote for candidates for the ARC. The February 13, 2007 meeting

was then adjourned and reconvened on March 13, 2007, for the purpose of

asking residents to vote on pursuing legal action with the developer. At the

March 13, 2007 meeting, the motion to pursue legal action against the

developer allegedly passed 255 to 35, which represents 34.83% of lot owners.

In Footnote 4 of the Opinion, Section 720.303(1) is construed to only require

approval of a majority of voting interests present, in person or by proxy, at a

meeting at which a quorum has been attained, which is the same standard as

issue of whether dismissal or abatement would be appropriate if Petitioners

demonstrate to the Trial Court that the HOA did not properly obtain prior approval

for the instant lawsuit pursuant to Section 720.303(1)

. The Fifth District decided

that abatement, not dismissal, would be the proper remedy for the HOA’s failure to

comply with Section 720.303(1), and rejected the Trial Court’s characterization of

such statutory non-compliance as a statutory condition precedent to commencing

litigation in excess of $100,000. The Fifth District agreed that Petitioners had the

right to complain about defective notice because of their status as owners with

voting interests, but held it would be a ground for any aggrieved association

member to enjoin HOA from prosecuting this lawsuit. The Fifth District ruled that

Petitioners, as aggrieved owners, were at most entitled to seek abatement pending

statutory compliance, not dismissal. The Opinion explains:

This is a statutory limitation on the authority of the

Homeowners’ Association to commit the resources of the

Association to litigation, designed for the protection of

its members, which, if violated, the members may or may

not elect to enforce. It is not a condition precedent

running in favor of a defendant to the right of any

imposed by Section 720.306(1)(a). Petitioners contend Section 720.303(a)

requires: (what) the affirmative approval of a majority of voting interests

(where) at a meeting of the membership at which a quorum has been attained.

The Opinion states the Bylaws did not displace Section 720.306(7), and Section

720.306(7) does not require anything more than the “changed date, time or

place” to be announced. The Opinion holds summary judgment for Petitioners

to be improper based on a fact issue presented by the HOA Secretary’s

deposition testimony which “amplified the minutes” to show verbal notice of

the date, time and place of the February 13

meeting was allegedly given.

association to file suit to recover damages on behalf of

the Association. Opinion at 14-15

SUMMARY OF ARGUMENT

Because Section 720.303(1) requires that an HOA

obtain the required vote

before commencing litigation

, Petitioners contend that this requirement is a

statutory condition precedent to an HOA initiating litigation. The Fifth District’s

Opinion expressly and directly conflicts with decisions of this Court and of the

Second, Third and Fourth District Courts of Appeal, on the issue of abatement

versus dismissal as the proper remedy for failure to comply with a statutory

limitation of authority and condition precedent to the institution of litigation, which

is in fact what Section 720.303(1), Florida Statutes represents. This Court has

jurisdiction pursuant to Article V, Section 3(b)(3) of the Florida Constitution and

Rule 9.030(a)(2)(A)(iv) of the Florida Rules of Appellate Procedure.

ARGUMENT

I. The Opinion of the Fifth District Court of Appeal

expressly and directly conflicts with decisions of this Court and

of the Second, Third and Fourth District Courts of Appeal, and

represents a departure from the Fifth District’s own precedent,

on the issue of abatement versus dismissal as the proper remedy

for failure to comply with a statutory limitation of authority and

condition precedent to the institution of litigation which Section

720.303(1), Florida Statutes in fact represents.

The Fifth District’s initial Opinion was rendered April 3, 2009. The revised

Opinion came after Petitioners April 17, 2009 Motion for Rehearing, Motion

for Rehearing En Banc, and Motion for Certification, which was denied. The

only difference between the revised Opinion and the initial one is the addition

of these two sentences which concern the statutory condition precedent issue.

The Fifth District decided that abatement, not dismissal, would be the proper

remedy for the HOA’s failure to comply with Section 720.303(1), should

Petitioners establish such statutory non-compliance in proceedings to enjoin the

HOA from prosecuting this lawsuit. This statement of law concerning a statutorily

mandated authorization needed to bring this suit expressly and directly conflicts

with the following decisions: Alhambra Homeowners Assn. v. Asad,

943 So.2d

316 (Fla. 5

DCA 2006); Bruce Lynn v. Miller, 498 So.2d 1011 (Fla. 5

DCA

1986); City of Coconut Creek v. City of Deerfield Beach

, 840 So.2d 389 (Fla. 4

DCA 2003); Ferry-Morse Seed Co. v Hitchcock

, 426 So.2d 958 (Fla. 1983);

Levine v. Dade Co. School Board

, 442 So.2d 210 (Fla. 1983); Progressive Express

Ins. Co. v. Menendez, 979 So.2d 324 (Fla. 3

DCA 2008); Wright v. Life Ins. Co.

of Georgia, 762 So.2d 992 (Fla. 4

DCA 2000). It is also a clear departure from

the Fifth District’s own precedent in Sheriff of Orange Co. v. Boultbee

, 595 So.2d

985 (Fla. 5

DCA 1992) and Motor v. Citrus Co. School Board, 856 So.2d 1054

(Fla. 5

DCA 2003). This Court should therefore grant discretionary review.

First, the Fifth District’s conclusion that Section 720.303(1) is not a

condition precedent running in favor of a defendant – even ones such as Petitioners

whom the Fifth District found have standing to complain because they are lot

owners with the attendant association voting interests –conflicts with the Fourth

District Court of Appeal’s decision construing a different section of the HOA

Chapter (Chapter 720) to be a condition precedent. See Alhambra Homeowners

Ass’n, Inc. v. Asad, 943 So.2d 316, 317-319 (Fla. 4th DCA 2006).

In Alhambra the Fourth District affirmed a final summary judgment in favor

of the defendant/HOA member after the defendant raised the affirmative defense of

failure to allege a statutory condition precedent required by Section 720.311(2)(a),

Fla. Stat. (2004). “Section 720.311(2)(a), Florida Statutes (2004) provides that

‘[d]isputes between an association and a parcel owner regarding use of or changes

to the parcel ... and other covenant enforcement disputes ... shall be filed with the

department [of Business and Professional Regulation] for mandatory mediation

before the dispute is filed in court.’” Alhambra

at 317 n.1. The HOA statute relied

upon by the defendant in Alhambra

is very similar to the language in Section

720.303(1), upon which Petitioners in the instant case relied. Also, like the

defendant in Alhambra

, Petitioners raised the failure to comply with a statutory

condition precedent provided for in Chapter 720 as an affirmative defense, and also

relied on that failure as the basis of their Motion for Summary Judgment. In

Alhambra

, the court approved of the dismissal based on the affirmative defense of

failure to comply with this statutory condition precedent. Alhambra

is consistent

with other Fourth District cases which make clear that a case must be dismissed,

not just abated, where there is a failure to comply with a statutory condition

precedent. See City of Coconut Creek

, 840 So.2d at 393 (“Our courts have

repeatedly affirmed that failure to comply with a statutory condition precedent,

absent waiver or estoppel, requires dismissal.”)

City of Coconut Creek

involves the presuit notice requirements for standing to

enforce a local comprehensive plan in Section 163.3215, Fla. Stat.

It is acknowledged there are situations where the legislature has explicitly

prescribed abatement, not dismissal, as the remedy, such as with Section 558.003,

Florida Statutes. Chapter 720 does not so provide, so the rule that dismissal is the

remedy applies. The Fourth District has recognized that abatement has sometimes

been permitted when litigation is prematurely brought, see Wrights v. Life

Insurance Co., 762 So.2d 882 (Fla. 4

DCA), but that situation applies only where

the condition precedent can be cured by the mere passage of time. See also

Blumberg v. USAA Casualty Ins. Co.

, 790 So.2d 1061 (Fla. 2001)(the proper

remedy for premature litigation is an abatement or stay of the claim for the period

necessary for its maturation under the law). Here, more than “claim maturation” is

required. Section 720.303(1) is explicit that the HOA does not have the authority

to commence litigation for more than $100,000 without statutory compliance.

This Court has itself acknowledged a statutory cause of action cannot

commence until after claimant complies with all valid conditions precedent. Ferry-

Morse v. Hitchcock, 426 So.2d 958, 961 (Fla. 1983). Where (as here), a plaintiff

fails to comply with a statutory condition precedent, the lawsuit is not merely

premature, and dismissal, not abatement, is the proper remedy. Levine v. Dade

County Sch. Bd., 442 So.2d 210, 212-13 (Fla. 1983)

. The Opinion expressly and

directly conflicts with such statements of law emanating from this Court. Even the

United States Supreme Court has held in persuasive but not binding precedent that

Dade County Sch. Bd.

involved the statutory notice of claim to the Department

of Insurance required as a prerequisite to overcoming sovereign immunity.

failure to meet a mandatory condition precedent prior to the institution of suit

requires dismissal. Hallstrom v. Tillamook

, 493 U.S. 20 (1990).

The Opinion further expressly and directly conflicts with decisions from the

Second and Third District Courts of Appeal. In Lynn v. Miller

, 498 So.2d 1011,

1012 (Fla. 2d DCA 1986), the Second District reversed the denial of motion to

dismiss where plaintiff failed to comply with medical malpractice presuit notice

requirements now codified in Fla. Stat. Chapter 766. In Progressive Express v.

Menendez, 979 So.2d 324 (Fla. 3

DCA 2008), the Third District held that:

“Where a plaintiff fails to comply with a statutory condition

precedent, the lawsuit is not merely premature, and dismissal,

not abatement, is the proper remedy”.

Progressive Express

involved the statutory requirement of written notice of

intent to initiate a lawsuit to recover overdue PIP benefits, but the similarity to

Section 720.303(1) is clear. In both instances, a lawsuit requires a showing of

compliance by a plaintiff with the statutory prerequisites in order for the case to

proceed. Dismissal is appropriate even if such dismissal will cause the plaintiff to

lose claims to the statute of limitations or statute of repose and even if the

dismissal will bar the plaintiff’s claims entirely. See Lynn v. Miller

, 498 So.2d at

1012; Coconut Creek

, 840 So.2d at 393; Dade County, 442 So.2d at 212-13.

The Fifth District’s Opinion even departs from its own precedent in Motor v.

Citrus County, 856 So.2d 1054, 1055 (Fla. 5th DCA 2003) (failure to allege

compliance with statutory presuit requirement is grounds for dismissal) and Sheriff

of Orange Co. v. Boultbee, 595 So.2d 985 (Fla. 5

DCA 1992) (failure to comply

with statutory condition precedent is fatal to wrongful death claim, requiring

dismissal of case), which both involve Section 768.28 notice requirements.

Section 768.28(6)(a) expressly states an action may not be instituted on a claim

against the state or one of its agencies or subdivisions unless the required notice is

submitted to the Florida Department of Financial Services. Section 720.303(1)

entitled “powers and duties” similarly provides that “before commencing litigation

against any party in the name of the association involving amounts in controversy

in excess of $100,000, the association must obtain the affirmative approval of a

majority of voting interests at a meeting of the membership at which a quorum has

been attained”. Both impose statutory requirements, although the Fifth District

suggests that Section 720.303(1) – which it labels a “statutory limitation on the

authority of the Homeowners’ Association to commit the resources of the

Association to litigation” - is not a condition precedent, but rather something

“designed for the protection of the members which, if violated, the members may

or may not elect to enforce.” Opinion at 14.

The issue of dismissal versus abatement regarding Section 720.303(1)

affects large numbers of HOA members. The issue of whether dismissal or

abatement is appropriate when the Section 720.303(1) statutory condition

precedent has not been complied with is a fundamental legal issue affecting the

parties’ substantive rights, as well as the rights of members of HOAs throughout

the State of Florida. By enacting Section 720.303(1), the legislature clearly

intended to limit the right of HOAs to commence litigation involving amounts in

controversy in excess of $100,000 unless the requisite percentage of voting

interests in the community approved. The Opinion impedes this statutory mandate

and may actually encourage non-compliance because it relegates compliance to the

situation where an aggrieved association member seeks and obtains injunctive

relief, rather than recognizing it as a statutory condition precedent to bringing suit.

The dismissal versus abatement question under Section 720.303(1) is one of

first impression and public importance. This question of the majority vote required

by Section 720.303(1) is also one of first impression and public importance.

Section 720.305(1) allows for actions at law or in equity, or both, to redress alleged

failure to comply by any member against the HOA, but Section 720.305(1)(d)

expressly states that “[t]his relief does not exclude other remedies provided by law.

This section does not deprive any person of any other available right or remedy.”

Petitioners respectfully submit that moving for dismissal for failure of a statutory

condition precedent is one of those other rights or remedies, and the Fifth District’s

Opinion expressly and directly conflicts with other District Courts of Appeal, and

departed from the precedent of this Court, when the Fifth District’s Opinion held

abatement, but not dismissal, was the only remedy.

CONCLUSION

Petitioners suggest that the Opinion expressly and directly conflicts with the

decisions of this Court and the other District Courts of Appeal on the same

statement of law and this Court should grant the request for discretionary review,

together with such other and further relief as this Court deems just and proper.

Dated this 6

day of July, 2009.

/s/ Thomas Todd Pittenger

T. Todd Pittenger

Florida Bar No. 0768936

Kristopher Kest

Florida Bar No. 15411

Lowndes, Drosdick, Doster, Kantor & Reed, P.A.

450 South Orange Avenue, Suite 800

Orlando, Florida 32801

Telephone: (407) 843-4600

Facsimile: (407) 843-4444

Attorneys for Petitioners

CERTIFICATE OF FONT COMPLIANCE

I HEREBY CERTIFY that this brief has been prepared using Times New

Roman 14 in compliance with Florida Rules of Appellate Procedure 9.210(2).

/s/ Thomas Todd Pittenger

_________________________________

T. Todd Pittenger

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing was

furnished by U.S. Mail to: PATRICK C. HOWELL, ESQ., and ROBYN SEVERS

BRAUN, ESQ., Taylor & Carls, P.A., attorney for Plaintiff, 850 Concourse

Parkway South, Ste. 105, Maitland, FL 32751, with a copy by U.S. Mail to Beth-

Ann Schulman, Esquire, Law Offices of Jeffrey G. Slater, 2420 Lakemont Avenue,

Suite 125, Orlando Florida 32814 on July 6, 2009.

/s/ Thomas Todd Pittenger

___________________________________

T. Todd Pittenger

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