Arlington Properties, Inc. v. Campus Edge Condominium Association Inc.
16-1423
| Fla. Dist. Ct. App. | Nov 5, 2017Background
- Arlington Properties, Inc. bought an apartment complex in 2006 to convert it to a condominium; Arlington Pebble Creek, LLC conducted the conversion and initially managed the association.
- A statutory Facility Evaluation Report (Dec. 2005) filed under §718.616 estimated 35–45 years useful life and described structures as "Good (localized deterioration)."
- Arlington Properties had an internal Property Condition Assessment (Dec. 2005) not filed with the state that identified moisture intrusion and estimated ~$290,200 in immediate structural repairs.
- After turnover of control to unit owners in Dec. 2008, the Campus Edge Condominium Association discovered extensive water intrusion requiring large repair expenditures and increased assessments.
- The Association sued for fraudulent misrepresentation and negligent misrepresentation, alleging defendants knew of water problems but failed to fully disclose or cure them and knowingly turned over responsibility to the Association.
- At trial the Association admitted the Facility Evaluation Report, the internal Property Condition Assessment, and budget evidence; the jury returned a verdict for the Association, but defendants moved for directed verdicts preserved for appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Association proved fraudulent misrepresentation | Defendants made false material statements (Facility Report/budget) knowing them to be false to induce the Association; Association relied and was injured | No evidence defendants intended to induce the Association or that the Association actually relied on those statements to its detriment | Reversed — Association failed to prove intent to induce and actual reliance; directed judgment for defendants |
| Whether Association proved negligent misrepresentation | Defendants made false representations they should have known were false, inducing reliance causing injury | No proof defendants knew or should have known such statements would induce Association reliance; no justifiable reliance shown | Reversed — failure to prove intent/knowledge to induce and justifiable reliance; judgment for defendants |
| Whether existence of a false statement alone establishes reliance | False statement demonstrates harm; reliance can be inferred from the existence of misrepresentation | Existence of statement alone is insufficient; plaintiff must show actual reliance and resulting action/change | Held for defendants — false statement alone does not satisfy reliance element |
| Whether any post-transfer conduct showed reliance or increased damages due to delay | Association would have charged higher assessments or done repairs earlier if aware; thus damages flowed from defendants’ misrepresentations | No evidence the Association changed position or suffered additional damages because of any delay or statements; budgets were prepared post-transfer by new manager without seeing the Facility Report | Held for defendants — no evidence linking Association actions/damages to reliance on defendants’ statements |
Key Cases Cited
- Butler v. Yusem, 44 So. 3d 102 (Fla. 2010) (elements of fraudulent misrepresentation)
- Wald v. Grainger, 64 So. 3d 1201 (Fla. 2011) (standard for directed verdict)
- Christensen v. Bowen, 140 So. 3d 498 (Fla. 2014) (de novo review of directed verdict)
- Hoffmann-LaRoche Inc. v. Mason, 27 So. 3d 75 (Fla. 1st DCA 2009) (de novo standard discussion)
- Specialty Marine & Industrial Supplies, Inc. v. Venus, 66 So. 3d 306 (Fla. 1st DCA 2011) (elements and reliance standard for negligent misrepresentation)
- Johnson v. Davis, 480 So. 2d 625 (Fla. 1985) (fraudulent nondisclosure in real estate transactions)