New Decision: Ad Valorem Tax Class Action (Central Carillon Beach Cd’m v. Garcia)
March 23, 2018

This Wednesday the Third District Court of Appeal, addressing Rule 1.221 community association class action standing, significantly limited the authority of a community association to serve as owners’ class representative, in an apparent departure from the Florida Supreme Court’s precedent.

In Central Carillon Beach Cd’m Ass’n, Inc. v. Garcia, Case Nos. 3D17-1198 & 3D17-1197 (Fla. 3rd DCA, March 21, 2018), two condominium associations, Central Carillon Beach, administering 140 units, and 2201 Collins Avenue, administering 180 units, each filed for their respective unit owners a single joint ad valorem tax petition challenge to Miami-Dade County’s Value Adjustment Board (VAB). As the appellate opinion recognized, the statute governing the VAB petition process expressly provides criteria for a condominium association to file a joint petition, §194.011(3)(e) Fla. Sta. (2016). The associations prevailed before the VAB, obtaining approximately 20% and approximately 40% reductions, respectively. Note that association standing before the VAB was not at issue in the decision.

The Property Appraiser appealed the VAB reductions in circuit court, filing numerous lawsuits, one for each condominium unit, each lawsuit naming as defendants the individual owners of the subject condominium unit. The trial court denied the Associations’ Motion to Dismiss and Motion for Certification which sought to allow the Associations to serve as owners’ class representative. The Associations appealed.

The appellate court’s analysis focused initially on the definition of “taxpayer.” Unlike the above referenced statute applying to non-litigation VAB proceedings, the “taxpayer” party in litigation is “the person or other legal entity in whose name property is assessed….” §192.001(13) Fla. Stat. (2016).

Shifting to the Condominium Act’s grant of authority, the court commented that there was only one reference to an association’s class representative standing to defend an action. An association “may defend actions in eminent domain or bring inverse condemnation actions” §718.111(3) Fla. Stat. (2016).

Contrasting the two statutes, the court leaned to the more “precise” provision for tax appeals which requires a taxpayer to be named as a party, away from what implicitly were more general application provisions in the Condominium Act providing for defensive class action standing in reference to only eminent domain and inverse condemnation actions.

Moving to the community association class action rule, Florida Rule of Civil Procedure Rule 1.221, the court dismissed the Rule’s independent efficacy as the Rule “essentially repeats” the Condominium Act’s provisions. “Again, the oblique examples and categories within Rule 1.221 must yield to the precise legislative directive in §194.181(2).” Thus, the court held that because “the associations simply do not pay the taxes in question” each individual unit taxpayer shall be the defendant in the litigation contesting that unit’s tax. The court did recognize that a class representative would bring judicial efficiencies, but that did not trump the statutory and rule provisions.

The court’s approach is surprising considering the history and policy of Rule 1.221. The Florida Supreme Court created the rule because that Court held that the Florida Legislature did not have authority to create procedures for class action standing. See Avila South Condominium Ass'n, Inc. v. Kappa Corp., 347 So. 2d 599 (Fla. 1977). Thus, the Third District appears to be breaking with Supreme Court’s Avila South precedent. Further, not addressing the purpose of a class representative, is not a class representative just place holder in name alone? Unit owners are identifiable and are bound by any judgment in which a class representative was a defendant.

Additionally, relegating Rule 1.221 to a seemingly subordinate status to statute, the court’s partial quote, listing some, but not all claims listed as allowing class action representation, seemingly overlooks the crux of the Rule. The Rule’s text is expansive, not limited, authorizing association class action representation “…concerning matters of common interest to the members, including, but limited to:….” (emphasis added). The Rule was deliberately drafted in a broad fashion, the delineation of six categories of claims not meant to be exclusive, but to be merely examples.

The court did distinguish the taxation litigation standing issue on appeal from other situations where an association is a defendant class representative. Perhaps seeking to narrow the decision’s application, for example, the court noted that contractor lien foreclosure actions do not have the same statutory party requirements as tax litigation.

Many thanks to Mr. Christy for immediately providing a copy of the decision.

Best for the weekend.

Michael J. Gelfand

Past Chair

Real Property, Probate and Trust Law Section of The Florida Bar

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Note: This article is not legal advice. Statements and comments made are not those of The Florida Bar or the RPPTL Section. Decisions may not be final.

© 2018 Michael J. Gelfand

Michael J. Gelfand

Florida Bar Board Certified Real Estate Attorney

Florida Supreme Court Certified Mediator:

Civil Circuit Court & Civil County Court

Fellow, American College of Real Estate Attorneys

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