by Michael Gelfand, Esq. / Published October 2014
Why do today what can be done tomorrow? After all, it does seem easier to delay rather than decide. Thus, how long is too long?
In seeking out the boundaries of permissible delay, a Florida appellate court recently addressed whether a condominium association’s alleged delay to provide corporate and insurance documents justified the unit owner’s corresponding delay to file suit over the roof damage. The path of destruction from 2004’s Hurricane Charley through a commercial condominium led to a unit owner versus association dispute addressed in Olean Medical Condominium Associa-tion, Inc. v. Azima, 2D13-370 (Fla. 2nd DCA, June 20, 2014).
The decision indicated that the association spent insurance proceeds for repairs until the funds were depleted.
In response to Dr. Azima’s complaint of unrepaired roof damage, the association responded that they were looking for a roofer to survey the damage. The insurance contractor concluded that only a small portion of the damage to Dr. Azima’s roof was caused by the hurricane.
The contractor concluded that most of the damages were from the roof’s pre-hurricane poor condition.
In 2005, the association told Dr. Azima that the association completed roofing repairs for which the association was responsible, and that the association would not pay for the additional repairs. In response to Dr. Azima filing a lawsuit against the association in 2011 regarding the damage, the association argued that the suit was filed too late.
In Florida, the “statute of limitations” is a law that limits the time within which a claim can be filed. Statutes of limitations recognize a number of traditionally important public policies to promote societal peace and coexistence. One policy is to allow a potential defendant to put the past behind him or her, to stop worrying about an increasingly remote-in-time mistake, or belief of a mistake. Another policy is to force a person who feels wronged to evaluate and file an action relatively swiftly, rather than sitting on rights, perhaps in ambush.
These policies are supported by practical considerations that most associations can recognize. Simply stated, as time passes, memories fade, evidence tends to be misplaced and lost, and witnesses die or are otherwise unavailable; thus, extraordinary delays make the pursuit of justice less certain, less efficient, and, perhaps, less fair, especially to third parties that may be impacted by the filing of a delayed action.
With this backdrop, the Florida Legislature provided that generally claims for money based on a written instrument, such as a declaration of condominium’s repair provisions, must be filed within five years of when the facts justify a claim. Section 95.11(2)(b) Fla. Stat. 2013. Thus, the association claimed that because the statute of limitations required that suit be filed within five years of when the damage occurred, the suit was untimely filed. Although Dr. Azima did not deny that the time period in which to file a lawsuit had passed, he asserted that the association was equitably estopped, barred by the association’s own conduct, from raising the defense of the passage of time. After a trial, the trial court found in favor of Dr. Azima, awarding him a judgment for money.
The Florida appellate court reversed the judgment for Dr. Azima. The court determined that the association’s conduct, whether intentional or not, did not prevent Dr. Azima from timely asserting his claims because by 2005, all parties knew of the limited scope of the repairs actually covered by the insurance policy. Dr. Azima was aware that the association was refusing to further cover his additional repairs.
As the court found:
Because Dr. Azima had all of the information necessary to file an action against the parties at the time the action accrued and because the information contained in the corporate and insurance documents he claims he waited on to his detriment did not deprive him of his ability to bring suit prior to the running of the statute of limitations, the equitable tolling doctrine is also inapplicable to the instant facts.
Thus, equitable estoppel did not apply to bar the association’s defense. The lesson to be learned in the abstract, initially, is to know what is the applicable statute of limitations for your claims. Then, as a practical matter, make certain that you timely decide whether to file a complaint. If litigation is chosen, then confirm that the complaint is filed within the appropriate time period. Because of the need to interpret laws, if you have any questions regarding the timing to file a suit, contact your association’s attorney as soon as you are aware of the existence of a claim.
If the state of Florida seeks to punish you, how much evidence must the state introduce to prevail? The test is called the “burden of proof.”
In the criminal courts, we have heard repetitively that the state’s burden of proof for punishment is “beyond a reasonable doubt,” which is a very high test. What is required to prove an alleged violation if the state is seeking a fine against an association? Clear and convincing evidence or preponderance of the evidence? The latter is a lower test, sometimes described as just crossing the line of persuasion.
What if the punishment is not prison? The conduct of certain developers wound its way to the Supreme Court of Florida, which recently addressed the appropriate burden of proof that state agencies must satisfy before civil penalties, such as fines, may be imposed. In South Florida Water Management District v. RLI Live Oak, 39 Fla. L.Weekly S 345 (Fla., May 22, 2014), land developers filed suit seeking a judicial determination that the property RLI owned did not contain wetlands and, therefore, was not under the jurisdiction of the South Florida Water Management District.
The District argued that the landowners dredged and filled without first obtaining approval from the District. The trial court awarded the District $81,900 in civil penalties. The appellate court found that the trial court based its findings on the lesser burden of proof and reversed the trial court decision.
The Florida Supreme Court reversed the appellate court decision, reinstating the trial court decision in favor of the District. The Supreme Court held that where the legislature statutorily authorizes a state governmental agency to recover a “civil penalty” in a “court of competent jurisdiction” but does not specify the agency’s burden of proof, the agency is required to prove the allegation not by the stricter standard of clear and convincing evidence, but by the lesser standard of preponderance of the evidence.
As the court recounted, generally in civil cases the applicable burden of proof is a “preponderance of the evidence” standard. In other words, “evidence that is ‘more likely than not’ [that] tends to prove a certain proposition.” The higher burden of proof, clear and convincing evidence, is required in such cases as involuntary civil commitment proceedings, deportation cases, and civil theft. The Supreme Court concluded that the higher clear and convincing standard applicable to the imposition of administrative fines does not extend to the award of civil penalties.
Thus, it is easier for the state to proceed in an action to recover civil penalties unless the legislature in drafting the penalty law states otherwise. Therefore, associations should take care when approaching the boundaries of the law.