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Two Islands Development Corp. v. Clarke

Florida Court of Appeals, Third District

January 24, 2018

Two Islands Development Corp., et al., Appellants,
David L. Clarke, et al., Appellees.

         Not final until disposition of timely filed motion for rehearing.

         An Appeal from the Circuit Court for Miami-Dade County Lower Tribunal No. 15-3240, Jerald Bagley, Judge.

          Waldman Barnett, Glen H. Waldman, Eleanor T. Barnett and Michael A. Azre, for appellants.

          Kubicki Draper, Caryn L. Bellus and Barbara E. Fox; Conroy Simberg Gannon Krevans Abel Lurvey Morrow & Kraft, Hinda Klein, and Dale Friedman; Wicker Smith O'Hara McCoy & Ford, Alyssa M. Reiter and Lindsey A. Hicks; Coffey Burlington and Susan E. Raffanello; Boyd Richards Parker & Colonnelli, James K. Parker and Craig J. Shankman; Cole Scott & Kissane, Scott A. Cole and Lissette Gonzalez; Egozi & Bennett, Bernard L. Egozi and Isaac S. Lew; The Arthur Firm and Arthur J. Jones, for appellees.

          Before SUAREZ, EMAS and LOGUE, JJ.

          EMAS, J.


         Appellants, the plaintiffs below, appeal the trial court's final order dismissing, with prejudice, all counts against all defendants.

         For the reasons that follow, we reverse the trial court's order dismissing with prejudice all counts against the Williams Island Defendants, as plaintiffs had already voluntarily dismissed those defendants prior to the trial court's entry of a written order of dismissal. We also reverse the trial court's order dismissing with prejudice Count IV against individual South Island defendants Feder, Sawicki, Kleiman and Coba.

         Finally, we affirm the trial court's order dismissing with prejudice counts I, II and III against the South Island Defendants, and dismissing with prejudice Count V against South Island defendant Feder.


         The Parties

         This appeal concerns three islands located in Aventura, Florida-Williams Island, the North Island, and the South Island, and associated groups of appellees, who are the defendants below:

         Williams Island is the westernmost island with a singular road and bridge connecting it to the South Island. That same road connects the South Island by bridge to the North Island. Williams Island consists of residential homes and the owners of these residential homes are referred to in the instant case as the "Williams Island Defendants." By virtue of their ownership of homes on Williams Island, they are members of the Williams Island Property Owners' Association (the "WIPOA").

         The South Island consists of single family residential homes known as "Island Estates." The owners of these residential homes are referred to as the "South Island Defendants." By virtue of their ownership of homes on the South Island, they are members of the Island Estates Homeowners' Association (the "IEHOA").

         The dispute giving rise to this appeal, however, surrounds the development, construction, marketing and sale of a sixteen-story, two-tower building of condominiums on the North Island known as Príve at Island Estates. The South Island and the North Island will be referred to collectively as "the Two Islands."

         The appellants/plaintiffs below consist of the following:

- Gary Cohen, in his individual capacity, owns a home on the South Island. Cohen is also successor Trustee of Trust No. 75-LT-21 (the "Trust") which is the owner of the North Island. Cohen controls Two Islands Development, NI Holdings and Last Lot.
- Two Islands Development Corp. is the developer of the South Island.
- NI Holdings, LLC owns submerged land adjacent to the islands.
- Last Lot Corp. owns the sole remaining undeveloped lot on the South Island.
- Príve Developers, LLC ("Príve Developers"), is the developer currently developing Príve at Island Estates on the North Island.
- BH3 Realty, LLC is in charge of the marketing and selling of the condominiums currently under development.

         The Allegations

         Appellants' Amended Complaint includes the following allegations: In 1976, the Cohen family secured a final judgment in Miami-Dade County Circuit Court, which granted the Cohen family certain rights related to the development of the Two Islands and compelled Miami-Dade County to rezone them according to certain stated limitations in the judgment. In 2006, the City of Aventura executed and recorded a "Vested Rights Determination Agreement" that reaffirmed the extent of the vested rights for the Two Islands.[1]

         Cohen has served as president of the IEHOA since its inception. In 2011, residents of the South Island expressed an interest in having access to the anticipated amenities that would be included in the development on the North Island. In January 2013, after consulting with counsel, Cohen prepared and presented a plan to the other homeowners of the South Island for their consideration of a Shared Maintenance Association. The plan was emailed to the homeowners with a notice of an upcoming meeting where the plan would be subject to a vote. Also included in the email were details of the planned development on the North Island and a draft of the Easement, Operating and Development Agreement (the "EODA"), which agreement was necessary for creating the Shared Maintenance Association.

         The meeting for the vote on the Shared Maintenance Association was initially scheduled for February 21, 2013, but some homeowners expressed that they needed more time to consider the plan and materials submitted. At their request, Cohen continued the meeting and the vote to February 28, 2013. At the February 28 meeting, the Shared Maintenance Association and plans contained therein were approved by a vote of 11-0, with the balance of the eligible homeowners electing to exercise their right not to vote. Pursuant to the vote, on March 7, 2013, Cohen-in his capacity as president of the IEHOA, the trustee of the Trust, and president of Two Islands Development-executed the EODA. Relevant to this appeal, the EODA (attached as an exhibit to the complaint) provides:

D. Two Islands, Association and Trust, and their respective successors (each a "Party" and collectively, the "Parties") desire to grant, re-grant or re-affirm, as applicable, easements (each an "Easement Area" and collectively the "Easement Areas") over certain portions of the North Island and the South Island, for the mutual benefit of the Parties, as well as for the benefit of the owners (each a "Parcel Owner" and collectively, the "Parcel Owners") of the individual single-family homes ("Dwellings") and/or condominium units ("Units") now or hereafter located within the South Island or the North Island (collectively, the "Properties"), including (without limitation), easements from Two Islands and the [IEHOA] which are being granted pursuant to Section 1(d) of Article IV of the Island Estates Declaration.

         The EODA contains the following covenants at issue:

13. Covenants of Further Assurances. From time to time, at the request of any of the Parties or Associations, the other Parties or Associations shall, without further consideration, promptly agree to execute and deliver any and all other instruments which may be reasonably arising hereunder, including but not limited to any additional easements and other instruments required for the location, installation, construction, maintenance, repair and/or replacement of any and all facilities for water, sewer, electric, other public utilities and surface water management relating to all or any portion of the Properties, and any and all governmental applications, permits, approvals and covenants required in connection with the development, maintenance and operation of any portion of the Properties.
15. Reservation of Development and Other Rights; Ratification of Easements. . . . The Associations each agree, on their own behalf and on behalf of their respective members, to execute any joinders, consents, applications, permits, easements, unity of title, declaration or covenant running with the land in lieu of unity of title, or other documents which may be necessary or desirable to obtain or transfer any governmental approvals in connection therewith, and to otherwise fully utilize, enjoy or transfer the Development Rights. . . . The Parties hereto ratify and reaffirm the easements set forth in the Island Estates Declaration and all easements or rights of record affecting the South Island as of the date of this Agreement, as recorded in the Public Records of Miami-Dade County.
17. Covenants Running with the Land. The easements hereby granted, the restrictions hereby imposed, and the agreements herein contained shall be easements, restrictions and covenants running with the land and shall inure to the benefit of and be binding upon the Associations, the Marina Slip Holders and the Parties hereto, and their respective heirs, successors and assigns, including, but without limitation, all subsequent owners of portions of the Properties and all persons claiming under them.

         Appellants alleged that, in reliance in part on the EODA, Príve Developers proceeded with the development of the Príve at Island Estates on the North Island. Also in reliance in part on the EODA, Príve Developers took steps toward preselling condominium units. As of the filing of the Amended Complaint, 79 of the 160 units had been sold with approximately $222 million in sales under contract with a total amount of approximately $63 million being held in escrow for the purchasers who were originally told to expect delivery of their units by the first quarter of 2016, but now will not take possession until the second quarter of 2017.

         Appellants also alleged that the Williams Island Defendants purchased their properties subject to the vested rights to build high-rise condominium buildings on the North Island and subject to express contracts recorded in the public records and included in their title policies, including one titled "Agreement Not to Object, " which prohibits the Williams Island Defendants from objecting to development on the North Island, and requires their cooperation if needed.

         Appellants alleged that, despite having agreed to the EODA and the Agreement Not to Object, the South Island Defendants and the Williams Island Defendants breached their obligations and have taken steps to protest or otherwise interfere with the development of the North Island. Specifically, this lawsuit is the fifth in a ...

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