November 2002

ELECTION DAY: DO NOT FORGET TO VOTE

This Tuesday, November 5th, is election day. If you have not voted by absentee ballot, then do not forget to go to the polls and vote! It is your chance to fulfill a critical civic duty and at the same time vote with the new electronic voting machines. On the ballot will be candidates for Congressional, state and local offices as well as for county and circuit judge. This year the ballot will also include numerous constitutional amendments. Because elections deal with legal matters, feel free to contact us with any questions you might have.

CONTRACTS: A NAME IS JUST A NAME, OR IS IT?

What happens when you enter into a contract with a company which performs shoddy work? After attempting to resolve the problem directly, if you are unable to resolve the problem, then you may decide to sue the company you hired to perform the work. What happens when you find out the company you signed the contract with was not the company you thought you were hiring?

In Governing Board of the St. Johns v. Continental Aerial Surveys, Inc., 27 Fla. L. Weekly D2017 (Fla. 5^th DCA, September 6, 2002), a Florida appellate court pointed out the importance of having proper corporate names stated in a contract. St. Johns River Water Management District obtained bids for a contract to produce aerial maps of Seminole County. Out-of-state bidders had to provide certification from the Florida Secretary of State authorizing them to do business in Florida. Continental Aerial Surveys, Inc. submitted a bid using the name of a Tennessee corporation. Although it did not attach a certification from the Secretary of State, Continental represented it was a Florida corporation and listed its address as: 415 Bartow Municipal Airport, Bartow, Florida 33830, which is the principal address of Continental Aerial Surveys of Florida, Inc., a different corporation. The Water District awarded the contract to Continental, thinking it was entering into a contract with a Florida corporation.

The Water District sued Continental of Florida alleging breach of contract and fraud. After the Water District learned Continental of Tennessee was the party which entered into the contract, the Water District amended its complaint to also name Continental of Tennessee. The trial court dismissed the breach of contract claim on the grounds the Water District failed to show a "meeting of the minds" - a mutual agreement - with Continental of Tennessee because the contract listed the wrong corporate name.

 The appellate court reversed the trial court’s decision. The court concluded that if the Water District misunderstood the identity of the corporation agreeing to perform under its contract but chose to continue with the contract nonetheless, the other party cannot avoid the contract on the basis of the Water District’s mistake. In other words, the mistake in identity did not prevent the formation of a contract.

When you enter a contract with a corporation, remember the importance of having the proper corporate name stated in the contract. It is better to get it right at the time the contract is signed, then to argue later that your mistake did not prevent the formation of a contract. Also, make sure your Association’s name is properly stated.

ASSESSMENTS: CAN YOU LEVY OWNERS AT DIFFERENT RATES?

In a community consisting of a variety of types of homes, who pays when only one particular type of home sustains damage? Can you levy assessments against only one class of homeowner? It depends on what the association’s documents say.

A recent decision has emphasized the importance of knowing what your documents say. In Argoff v. Rainberry Bay Homes Assn., Inc., 27 Fla. L. Weekly D2077 (Fla. 4^th DCA, September 18, 2002), the community consisted of zero lot line homes, detached homes and estate homes. Water damaged atrium walls in some of the zero lot line homes. The association repaired and/or replaced the walls using association funds. The board then levied a $75 per quarter assessment against only the zero lot line owners to repay the amounts borrowed from the detached homes and estate homes reserves. The owners of zero lot line homes sued the association, alleging the association did not have the authority to levy the assessment against only the zero lot line owners and did not have the authority to adopt two separate budgets for items other than maintenance costs.

The Florida appellate court found that the plain language of the association’s documents did not cover all of the atrium wall repairs. The documents stated that "The Homes Association shall provide exterior maintenance for each building ... as follows: (a) paint, caulk, repair, replace and care for roofs and roof ventilators, gutters and downspouts, exterior wood, wood composition, stucco and ‘stone’ building surfaces and fences." Although the declaration authorized unequal assessments for maintenance obligations, the court concluded that not all of the work fell within the scope of the maintenance. The court pointed out that the work performed varied widely; in some units, cracks were plugged and in other units, walls were rebuilt.

The bottom line, read your documents carefully before levying an assessment against only a particular class of homeowner.

FIRM NEWS

The firm will be closed in observance of Veteran’s Day on Monday, November 11 and in observance of Thanksgiving on Thursday, November 28 and Friday, November 29.

This information is provided for public information purposes only and is provided without obligation or fee. It is distributed to the firm's association clients to provide a general notice of recent legal changes. This information is not to be considered as legal advice. The changes in the law may not have been reviewed by Florida courts and may be subject to further challenge. Before taking any action you are urged to consult with counsel to ensure that your legal rights are protected.

© 2002 by Gelfand & Arpe, P.A.