August 2005
In This Issue:
Only Prevailing Party Is Entitled to Attorney's Fees
Cost of Repair Under the Deductible Amount Is Owner's Responsibility
Association May Levy Annual Assessments to Fund Capital Improvements
Interest in Common Property Terminates When Association Membership Terminates
Collection Letter Violates Fair Debt Collection Practices Acts
Operation of an Adult Bookstore Is Not Industrial Use of Property
Independent Contractor Not Liable to Visitor
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Only Prevailing Party Is Entitled to Attorney's Fees
Jakab v. Gran Villa Townhouses Homeowners Association Inc., 149 S.W.3rd 863 (Tex. App. 2004)
Assessments:  An association is not entitled to attorney’s fees when a unit owner's overpayments offset nonpayment and late charges.

In 1990, the Gran Villa Townhouses Homeowners Association Inc. ("association") voted to increase assessments from $50 to $75 per month. Leonard Jakab purchased five units in Gran Villa in 1991 and another unit in 1995. The association sued Jakab for unpaid assessments and late charges on all six units. Jakab counterclaimed, contending that the dues increase in 1990 was in violation of the community's Declaration of Covenants. The declaration states:

The Association shall have the right, by and through its Board of Directors, to uniformly assess each Owner of a Lot any sum up to Fifty Dollars ($50.00) per month.... However, the annual assessment may be increased effective January 1 of each year without a vote of the membership in conformance with the rise, if any, of the Consumer Price Index (published by the Department of Labor, Washington, D.C.) for the preceding month of July.

The trial court interpreted the declaration to mean that the association could not assess dues greater than $50 per month. Consequently, the trial court determined that the difference between the amount Jakab actually paid and the $50 lawful assessment was an overpayment for which Jakab should be reimbursed. The trial court also found that Jakab missed some payments and made some payments late. The association was awarded $2,250 in past-due assessments and late charges, and Jakab was awarded $11,375 for overpayments improperly collected by the association. The association also received $17,500 in attorney's fees.
       
Jakab appealed the amount of his award as well as the award of attorney's fees to the association.  Jakab contended that the trial court erred in awarding damages to the association since his overpayment was in excess of all non-payments and late fees. The appeals court upheld the trial court's decision as to the damage award to the association of assessments and late charges. The court found that it was within the realm of reasonable disagreement that the declaration did not authorize $25 of the $75 assessment. The court also ruled that the evidence was both legally and factually sufficient to support the awards of assessments and late fees to the association and credit of overpayment of assessments to Jakab.
       
However, the court agreed with Jakab that the association was not entitled to attorney's fees.  On the main issue in the case -- how interpretation of the declaration affected the financial positions of the parties -- the trial court found in favor of Jakab. Further, Jakab's missed payments and late fees were satisfied by his overpayments. The court stated, "It is axiomatic that a party cannot be a prevailing party if it has already been fully compensated for any losses incurred prior to the commencement of litigation." Since the association was not the prevailing party, it was not entitled to attorney’s fees.

©2005 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

Cost of Repair Under the Deductible Amount Is Owner's Responsibility
Highridge Place Condominium Unit Owner's Association v. Langley, 66 Va. Cir.185 (2004)

Risks and Liabilities: Repair costs to condominium units falling under the condominium association insurance deductible are the responsibility of the individual condominium owners harmed.

Howard Langley and his wife owned a unit in the Highridge Place Condominiums. Through no fault or negligence of their own, the Langleys suffered extensive water damage to their unit, which was caused by the water heater within their unit. At the cost of $16,604.03, Highridge Place Condominium Unit Owner's Association ("association") repaired the unit. Even though the association had an insurance policy for water damage due to earlier losses, the deductible for such coverage was $25,000.

To reimburse the association for the repair costs, the association sought payment from the Langleys’ insurance carrier, which was denied. Subsequently, the association sued the Langleys to recover the costs of the repair.

Granting the association's claim for reimbursement, the court determined that the Langleys were financially responsible for the repair and maintenance of their unit. The court ruled that the terms of the condominium's declaration and the association's bylaws placed a burden on the Langleys to "provide for liability insurance for protection against claims originating from the interior of the unit." Furthermore, Virginia law places a duty on the condominium owner to maintain, repair, and restore the unit, and an additional duty to pay the deductible if the cause of the damage originated in the owner's unit, regardless of whether the owner was negligent.

Even though the Langleys argued that the association's bylaws required the association to obtain insurance, "[t]he financial responsibility to maintain and repair individual units is not abrogated by the insurance provisions of the by-laws." And while the bylaws set forth insurance requirements on the association, they further provided that owners are required to promptly perform "all maintenance and repair work within his own unit…and shall be expressly responsible for the damages and liabilities that his failure to do so may engender." Since neither the governing documents nor Virginia statues alter the requirement that the owner is financially responsible for the maintenance and repair of the unit, the responsibility remains with the Langleys. 

In the view of the court, the association met its duty to obtain insurance "to the extent available."  According to the minutes of the association, the $25,000 deductible was the best available insurance.  Because the responsibility for repair was with the Langleys and the amount of the repair was under the deductible amount, the expense falls on the Langleys.

©2005 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.  

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Association May Levy Annual Assessments to Fund Capital Improvements
Graoch Associates #73 Partnership v. Lakeview Estates Lake Association Inc., Nos. 2003-CA-001495-MR and 2003-CA-001793-MR, Ken. App. Ct., Dec. 10, 2004

Assessments/Association Operations: A Kentucky court upheld a trial court's finding that an association has the discretion to use annual assessments, special assessments, or any combination of the two to make capital improvements to subdivision common areas. 
        
In 1967, Lakeview Estates Inc., the developer of Lakeview Estates Lake Association Inc. ("association"), recorded CC&Rs that empowered the association to levy assessments against members in order to improve and maintain the common area in the subdivision. In 1976, the association passed an amendment delineating rights of owners of multi-family properties in the subdivision. In 2001, the association proposed to increase annual assessments from $100 to $350 in order to fund several lake improvement projects. The proposal was approved by a majority of members. Graoch Associates #73 Limited Partnership ("Graoch"), which owns a 331-unit apartment complex in the subdivision and is a member of the association, voted against the increase.

In 2002, Graoch filed a petition for summary judgment, alleging that the annual assessment was disproportionately burdensome, unfair, unlawful, and unconstitutional, and that the association improperly and unlawfully classified it as an annual assessment instead of a special assessment. Graoch further alleged that the voting procedure in the original covenants and the second amendment to the covenants was arbitrary, capricious, and unconstitutional under state and federal law. The association argued that Graoch owed assessments from 2001 in the amount of $2,068.75.  The court entered a judgment in the association's favor, and Graoch appealed.
        
Graoch raised two issues on appeal: that the trial court erred in 1) determining that the association is not required to fund capital improvements exclusively from special assessments, and (2) concluding that the court lacked authority to review the propriety of the association's decision to levy annual assessments for the purpose of funding the improvements.
        
First, considering whether the trial court erred in granting summary judgment to the association, the court concluded that there existed no genuine issue as to the material facts and that the association was entitled to judgment as a matter of law. Since factual findings were not at issue, the court considered Graoch's assertion that the subdivision covenants required all capital improvements to be funded exclusively through special assessments. The court interpreted the covenants in accordance with contract law, giving all words and phrases their ordinary meanings and construing the document as a whole, giving effect to all parts as much as possible. 
        
The original covenants provide that the amount of annual assessments may be increased by a vote of the members, and that the board of directors may fix the assessment at a lower amount. The covenants further provide that the association may levy, in any assessment year, a special assessment, applicable to that year only, to defray the construction or maintenance costs of the common areas. The association may increase the maximum and basis of the assessments with the assent of two-thirds of members. The court interpreted the word "may" used in the covenants to indicate that the association had the discretion to fund projects related to the maintenance and improvement of the common areas and facilities by either annual or special assessments. The court found nothing in the covenants to suggest that the association was required to fund capital improvements exclusively by special assessments, as Graoch asserted. 
        
In considering whether the trial court erred in concluding that it lacked authority to review the propriety of the association's decision to levy an annual assessment to fund capital improvements, the court declined to adopt the "reasonable test" put forward by Graoch. The court determined that the wisdom or advisability of assessments made by homeowner associations was not an issue for the courts to determine absent allegations of fraud, bad faith, or gross mismanagement. The court's review of the case revealed no evidence of fraud, bad faith, or mismanagement on the board's part in submitting the proposed increase to the association members for approval as an annual assessment rather than a special assessment, or on the association's part in approving the increase. Consequently, the court affirmed the trial court's decision.
       
In a dissenting opinion, Judge Taylor stated that he believed the majority had misconstrued the purpose and intent of the covenants. He raised the principle that in Kentucky, the courts have long held that "the fundamental rule in construing restrictive covenants is that the intention of the parties governs." The covenants provide that annual assessments can be increased by a vote of members for a three-year period; however, the board can reduce the annual assessment if the current maintenance costs and future needs so warrant. In Judge Taylor’s opinion, this language can only be interpreted to mean that annual assessments are to be used for maintenance expenses. 
        
Another section of the covenants authorizes the association to levy a special assessment on an annual basis only for the purpose of defraying the cost of any capital improvement to the common area.  In Judge Taylor's opinion, the plain reading of these two provisions together reflects the developer's and the association's intents to levy annual assessments for the purpose of maintaining the common area and funding other operating expenses, and special assessments for the purpose of funding capital improvements to the common area. If the intent were that annual assessments could be used for capital improvements, it would not have been necessary to include a separate provision authorizing special assessments for capital improvements.
        
Although Judge Taylor agreed with the majority that covenants are contractual in nature and words therein should be given their ordinary meaning, he found it axiomatic, under Kentucky law, that contracts be construed as a whole, and all writings that are part of an agreement be construed together. Judge Taylor noted that in 1976, the covenants were amended to add two adjacent properties to the association to be developed as multi-family homes. The amendment provided that the owners of multi-family properties would pay one annual assessment for each four dwelling units owned and would pay one special assessment for capital improvements for each 10 dwelling units owned. He interpreted the clear purpose and intent of the amendment to be to protect multi-family-property owners from paying a disproportionate share of funds for capital improvements. However, that is exactly what occurred in this case.
        
In his view, by creating an annual assessment for capital improvements that would effectively be in place for five years (as opposed to a one-time special assessment), the association assessed multi-family-property owners $28,963 per year under the annual assessment, as opposed to $11,585 had the assessment been approved as a special assessment. The board recommended that the association approve the annual assessment to make the capital improvements, while acknowledging that individual residential unit owners were shifting a disproportionate share of the costs of the capital improvements to multi-family-property owners.
        
In Judge Taylor's opinion, due to the fact that the unit owners controlled the necessary votes to approve any assessment, approving an annual assessment for capital improvements was discriminatory on its face and in total contravention of the covenants, which were designed to protect the multi-family-property owners from just such an occurrence. He felt that the record reflected that the board recommended the annual assessment in lieu of a special assessment knowing the multi-family-property owners would bear a disproportionate burden of the expense. Therefore, he concluded that under Kentucky law, which requires that directors of nonprofit corporations perform their duties in good faith, on an informed basis, and in the best interest of the corporation, the directors' actions were in the best interest of residential unit owners only. Accordingly, he would reverse the trial court's ruling and remand the case for entry of judgment in favor of Graoch.

©2005 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Interest in Common Property Terminates When Association Membership Terminates
Edwards v. Burke, 324 Mont. 358, 102 P.3d 1271 (2004)
Association Operations:  Where law prohibits an unincorporated association from owning real property, ownership in land passes to trustees or members of the association, but the ownership remains with the members only so long as membership in the association continues.

In 1985, various owners of largely undeveloped property along the Yellowstone River in Montana created the Pine Crest Homeowners Association ("association"). The association's founding articles provided that membership was given to "each person who owns property to which the only practicable means of vehicular access consists of roads lying within the boundaries of Pine Crest Ranch." Pine Crest Ranch consisted of nearly 200 tracts of land.
       
In 1988, one member of the association transferred by warranty deed to the association a tract of Pine Crest Ranch, Tract 3, which was subject to an easement allowing the owners of Tracts 1 to 196 and other specified tracts in the area to use the "common land" for recreational purposes, including hiking, fishing, picnicking, and horseback riding.
       
In 1990, a developer in the subdivision who at the time was a member of the association formed its own homeowners group, the Yellowstone River Landowners Corporation ("Yellowstone"). According to Yellowstone's covenants, its membership is comprised of the owners of a number of specific tracts in Pine Crest Ranch. These tracts constituted many, but not all, of the tracts then owned by members of the association.
       
In 1996 and then again in 1997, the association's articles of incorporation were amended to alter the composition of its membership. Instead of defining membership through accessibility to property, the articles were amended to provide that "each person who owns property within the boundaries of Pine Crest Ranch shall be a member." Instead of referring to Pine Crest Ranch, however, the articles now referred to specific tract numbers within Pine Crest Ranch. The tracts referred to are precisely the tracts that are not a part of Yellowstone. Therefore, property owners in Yellowstone who were members of the association ceased to be members as of the date of the amendment.
       
Disputes arose between various parties beginning in 2000. Fearing that "vandals, hedonists, and thieves" were using the common property on Tract 3 to "party," Yellowstone and association members Gary Edwards and Robert Cressman installed a fence and locked gate on a road leading to Tract 3. They provided local residents -- including Dan Sayer, the owner of Tract 2 which abuts Tract 3 -- with the combination to the lock. However, the presence of the locked gate presented a problem for Sayer, as he was in the process of building a house on Tract 2 and had to unlock the gate several times a day for contractors and visitors to come to the property.
       
After their requests to move the gate went unanswered, Sayer and the association decided to take matters into their own hands and moved the gate. Edwards, Cressman, and Yellowstone sued the association, Sayer, and Greg Burke, the owner of Tract 1, who was alleged to have unlawfully erected fences on the common property. The plaintiffs sought recognition as tenants in common with the members of the association in the ownership of Tract 3 so that they would have a say in the gating and fencing of the land.
       
They based their claim of ownership in the common property on the common law rule barring unincorporated associations from owning real property. They argued that the association, as an unincorporated association, could not own Tract 3 when it was deeded to the association in 1988.  Thus, ownership defaulted to the members of the association.  Since Yellowstone (a legally recognized corporation), Edwards, and Cressman all owned land that would have made them members of the association in 1988, they argued that they were now among the owners of Tract 3. However, the trial court agreed with the association's argument that it could own property, and Yellowstone, Edwards, and Cressman appealed.
       
The appeals court declined to determine whether an unincorporated association could own property in Montana because such a determination would not affect the outcome of the case. The court ruled that, assuming the association could not have owned Tract 3 in 1988, ownership would have passed to the association's trustees or members. Generally, when members own common property in lieu of an association owning property, the members of the association have no severable or transferable interest in the property, but are regarded as the beneficial owners in common of the land.
       
The court stated, "Members only 'own' the property as members. When they lose their membership...they lose their ownership interest." In the absence of provisions in the association's articles or bylaws giving members an individual interest in the assets of the association, when membership in the association is lost, whether by their own actions or the actions of other members, ownership interest in the assets of the association stays with the remaining members of the association.
        
Neither the 1985 nor the 1997 versions of the association's articles gave members an individual interest in association property. Therefore, when the articles were amended to terminate Edwards' and Cressman's (or their predecessors') membership in the association, they ceased to have any ownership interest in Tract 3. The only interest they retained in Tract 3 was in the recreation easement granted them by the 1988 deed. Without an ownership interest in Tract 3, the court determined that Edwards and Cressman did not have standing to sue the association, and the case was dismissed for lack of jurisdiction.

©2005 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Collection Letter Violates Fair Debt Collection Practices Acts
Edstrom v. All Services and Processing, No. CO4-1514 BZ, U.S. Dist. Ct., N. Dist. Cal., Feb. 22, 2005
Assessments/Federal Law and Legislation/State and Local Legislation and Regulations:  A notice sent on behalf of a California homeowner association to collect past-due assessments, interest, and collection fees violated state and federal fair debt collection practices acts.

Daniel and Teri Edstrom bought a house in Brentwood, California, and became members of the Apple Hill Association ("association"). Members are subject to the association's CC&Rs and assessment-collection policy. The Edstroms fell behind on their monthly assessment payments and incurred financial obligations to the association. The association granted A.S.A.P. Collection Services ("ASAP") authority to collect the past-due assessments. On July 18, 2003, ASAP sent a letter to the Edstroms that outlined the debt they owed the association. The Edstroms sued ASAP, alleging that the letter violated the federal Fair Debt Collection Practices Act ("Act") and the Rosenthal Fair Debt Collection Practices Act ("California Act"). Both parties moved for summary judgment.
       
The letter that ASAP sent to the Edstroms explained that the association retained ASAP to collect the Edstroms' delinquent payments. It stated that on Aug. 18, 2003, the account balance would be $955.49, and broke down the balance to include $644 in regular assessments, $60 in late fees, $28.72 in interest, a $180 collection fee, and $42.77 in collection costs. The letter requested that the Edstroms pay the full amount by the due date. It also noted that ASAP assumed that the debt was valid unless the Edstroms disputed it in writing within 30 days of the date of the letter, in accordance with the Act.
       
The letter also stated that if the Edstroms disputed the debt, a $75 dispute claim-processing fee would be added to the account. If the association's records proved to be incorrect or if the association's board denied a request for a credit from the Edstroms, the $75 would not be returned. Finally, the letter stated that partial payment would not be accepted and that partial payment would trigger a $45 processing fee. 
        
The Act states that within five days of the initial contact with a consumer in connection with the collection of a debt, the debt collector shall send the consumer a written validation notice containing 1) the amount of the debt; 2) the name of the creditor to whom the debt is owed; 3) a statement that unless the consumer disputes the validity of the debt, or any portion of the debt, within 30 days after receipt of the notice, the debt will be assumed to be valid; 4) a statement that if the consumer notifies the debt collector in writing within the 30-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt and mail a copy to the consumer; and 5) a statement that upon the consumer's written request within the 30-day period, the debt collector will provide the consumer with the name and address of the original creditor if different from the current creditor.
        
ASAP argued that the Edstroms waived their rights under the Act and the California Act by not disputing the debt in an Aug. 7, 2004, handwritten note they sent to the association. The court did not agree, explaining that a debtor's communication to the creditor does not constitute an admission of liability or a waiver of the protections of either the Act or the California Act, and that a debtor has standing to sue under the Act regardless of whether a valid debt exists.
        
The court stated that the Act is a strict liability statute that does not require a showing of intentional conduct on the part of the debt collector. Generally, a validation notice complies with the Act if the content complies with the literal terms of the statute. At a minimum, the Act requires that the notice be included either with the initial communication to the debtor or within five days of the initial communication, and that it include all the information dictated in the statute. 
        
The court interpreted the Act by giving words and phrases their ordinary meanings. It found that the language of the Act is plain and unambiguous, and found that it required that the validation notice state that the debtor may dispute the debt "within 30 days after receipt of this notice." ASAP's letter violated the Act because it required the Edstroms to dispute the letter within 30 days of the date of the letter. The court noted that Congress consciously meant to protect consumers against debt collectors' abusive tactics, such as backdating notices and other practices that might shorten a debtor's time to respond.
        
The court also found that the statement in ASAP's letter that required the Edstroms to dispute the debt "in writing" also contravened the express language in the statute, and violated the Act because the Act does not require that the dispute be in writing. ASAP also violated the Act by failing to inform the debtors of their right to dispute any portion of the debt.
        
The statement that partial payments received without an established payment plan would be returned and incur a $45 processing fee illustrated ASAP's failure to advise the Edstroms of their right to dispute a portion of the debt because it would be misleading to a hypothetical "least-sophisticated consumer."  ASAP's letter further violated the Act because it did not contain an offer to verify the debt and provide evidence to the Edstroms upon written request. Although the letter contained the name of the association, it did not provide the association's address or advise the Edstroms of their right to request the address. 
        
Finally, the court found that ASAP's attempts to collect amounts in addition to the original debt violated the Act, which states, "A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt." Under the Act, collection of amounts (including interest, fees, charges, or expenses incidental to the principal obligation), unless expressly authorized by the agreement creating the debt or permitted by law, is forbidden.
        
ASAP defended the fees by arguing that they were expressly authorized by the association's declaration and collection policy, and were permitted under California's Civil Code. The association's collection policy provides for late charges and interest. California law provides that a homeowner association may recover a late charge --  not to exceed 10 percent of the delinquent assessment or $10, whichever is greater -- as well as interest on all sums at an annual rate of 12 percent. Because the Edstroms clarified at the hearing that they did not challenge ASAP's right to impose late fees and interest, but only the amounts charged, the court found that ASAP had not violated the Act in this regard. The court did not address the amounts of the late fees and interest because neither party briefed the issue.
        
The court concluded that it would not grant summary judgment to either party even if it were assumed that the amounts were authorized by the collection policy, finding that the collection policy and California law restricted ASAP to recovering fees that were incurred and that those fees must be reasonable. The court found that the record was not clear as to whether the collection fee and costs had actually been incurred, whether the amounts of the other fees were related to costs that would be incurred, or whether any of the fees were reasonable.
        
The Edstroms argued that ASAP's violation of the Act also constituted violations of the California Act.  The court responded that the California Act provides that debt collectors shall comply with the Act and shall be subject to remedies set forth in the Act. The court stated that the California Act simply incorporated by reference the text of the federal provisions, and that ASAP's violations of the Act also constituted violations of the California Act.
        
The court granted the Edstroms summary judgment that ASAP's letter violated the Act but denied their motion as to the fees contained in the letter. The court granted summary judgment to ASAP to the extent that the late fees and interest were expressly authorized by the association's declaration and collection policy and permitted under California law, but denied its request for summary judgment on all other counts. The case was remanded for jury trial on the issues regarding the fees.

©2005 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Operation of an Adult Bookstore Is Not Industrial Use of Property
Dynamic Publishing & Distributing LLC v. Unitec Industrial Center Property Owners Association Inc., No. 04-04-00132-CV, Tex. App. Ct., Feb. 15, 2005
Covenants Enforcement: Covenants restricting use of property to "industrial uses," as defined by city zoning ordinances, did not include any uses the city may allow by special permit.

Royal Joint Venture ("Royal") developed an industrial center in Webb County, Texas, just outside the city limits of Laredo. Royal and the City of Laredo entered into a water-supply and development contract under which the city would supply water to the industrial center, which would be used for "industrial purposes" only, as that term was defined in city ordinances. Royal subjected the property to restrictive covenants that provided the property could be used only for "industrial purposes," as defined in the ordinances and any future amendments to the ordinances.
 
The ordinance defined "industrial purposes" as:

Any and all use or uses of land, first allowed in those Districts which are M1 and M2, under the Zoning Ordinance of the City of Laredo, and for clarification, those uses which are so allowed within the meaning of the phrase "industrial purposes" are specified herein....

The ordinance then listed 25 specific uses that were considered to be industrial uses.

The city annexed the industrial center, and it was zoned M2. Dynamic Publishing & Distributing LLC ("Dynamic") purchased one of the units in the center. While sexually oriented businesses were not specifically authorized in the definition of "industrial purposes" or in the M2 zoning ordinance, the city allows adult bookstores to operate on land zoned as M1 or M2 if a special permit is first obtained from the city. Dynamic obtained a special-use permit from the city, allowing it to operate an adult entertainment business in the industrial center.
        
Royal and the Unitec Industrial Center Property Owners Association Inc. ("association") sued Dynamic and the city, asking the court 1) to decide whether and to what extent Dynamic's use of the property violated the restrictive covenants, and 2) to enjoin Dynamic from operating an adult bookstore serving or permitting the consumption of alcoholic beverages and exhibiting, promoting, or permitting live nude dancing on the premises. The trial court found that the definition of industrial purposes prohibited the operation of a sexually oriented business or one that sold, distributed, and displayed adult books, magazines, and movies, or that featured live nude dancing. The court issued a permanent injunction against Dynamic, and Dynamic appealed.
        
Royal and the association argued that "industrial purposes" included only the 25 uses specifically listed in the ordinance. Dynamic relied on the construction principle of ejusdem generis in arguing that the 25 listed uses are merely examples of the possible permitted uses, not the only uses permitted in the zoning or restrictive covenants. However, the appeals court found that the principle of ejusdem generis applies only when a contract is ambiguous, and that it did not apply in this case because the court found that the ordinance was not ambiguous.
        
The court found it instructive that each time the ordinance was amended, the amendment provided that the purpose was to add a new use to the list of uses classified as industrial. Therefore, "industrial uses" were limited to the 25 uses listed in the ordinance and any future uses that may be added by an amendment to the ordinance. The court upheld the trial court's decision.

©2005 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited. 
 

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Independent Contractor Not Liable to Visitor
Blier v. Statewide Enterprises Inc., 890 So. 2d. 522 (Fla. Dist. Ct. App. 2005)
Risks and Liabilities: An independent contractor hired by a condominium association to provide security services is not liable to a third party visiting the condominium.

While visiting a condominium complex, the plaintiff in this case was abducted from the condominium's parking lot and raped. She sued the condominium association and the independent contractor it hired to provide partial security services throughout the condominium complex. While the association's suit was settled before trial, the case against the contractor proceeded to trial. After the plaintiff presented her evidence, the contractor filed a motion for directed verdict, claiming that it owed no duty to the plaintiff.  The trial court denied the motion, and the contractor subsequently appealed.
        
In determining that the case should not have gone to a jury, the appeals court found that the plaintiff failed to meet the threshold issue in negligence because the contractor owed no duty to the plaintiff, a visitor to the complex. The court noted that there was no evidence that the contractor undertook any affirmative act to assume the association's duty to protect its residents and guests.
        
As part of an oral agreement between the contractor and the association, the contractor provided one unarmed guard to patrol the community (which included several buildings and adjoining parking areas), to escort residents to their homes upon request, and to observe and report suspicious incidents.  Neither the contractor nor the association expected or intended any other services. 
        
The court ruled that the mere fact that a security company provided a security guard did not impose any duty to provide all security services, or to undertake the general and broad duty of the association to protect from known risks.

©2005 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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