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Florida Resort Succeeds in Defeating a Condo Association’s Claim of Unjust Enrichment

The commercial contracts you create can provide you with many potential benefits if negotiated and executed properly. One of these benefits can, in some circumstances, be protection against certain types of legal claims. For example, if a party seeks to sue you under a quasi-contract theory of unjust enrichment, it can only do that if the subject matter that was the basis of your alleged unjust enrichment wasn’t covered by an actual contract. In other words, you can’t be sued under a quasi-contract theory about something if it is governed by an actual contract. For help with these and other commercial and business issues, it is wise to rely upon experienced South Florida commercial litigation counsel.

A recent case from the Florida Panhandle provides an illustration of this issue of contract versus quasi-contract. The dispute involved the ownership of commercial space in a condo building in Panama City Beach. A resort LLC owned four commercial spaces on the ground floor of the condo building and owned them in fee simple, meaning that the LLC had absolute ownership of those properties. The condo building’s owners association sued the LLC, alleging that the spaces could not be owned outside the “condominium form of ownership.” The relief the association sought was the LLC’s ejection from the building and the distribution of the ground floor commercial spaces to the association’s members. The association also alleged that the resort was being unjustly enriched because it wasn’t paying its fair share of “utilities and other expenses in the building.”

The trial court ruled for the resort on the ownership issue, granting summary judgment in favor of the LLC. That meant that the resort did not have to go to trial on the issue of its ownership of the ground-floor spaces and its right to occupy that property. The court did hold a trial on the association’s unjust enrichment claim, and ultimately issued a judgment in the association’s favor, ordering the resort to pay $332,000 in unjust enrichment damages.

On appeal, the resort was able to emerge completely successful. The appeals court agreed with the trial court that the resort was entitled to retain ownership and possession of its commercial property on the ground floor of the condo building. The resort won because, in spite of the common law argument presented by the association, Florida statutory law favored the resort. The developer recorded the property in 2008 and, when it did so, it identified what areas were to be owned only under the condominium form of ownership and where were not. Several areas of the ground floor were among the excluded areas. That meant that the association’s argument necessarily failed.

The resort also won on the unjust enrichment claim. Why? Florida law is very clear that a party cannot “pursue a quasi-contract claim for unjust enrichment if an express contract exists concerning the same subject matter.” In this case, there was an easement and reservation agreement regarding the associated commercial parcels that the resort owned, and that agreement covered the issue of utilities and other building expenses. Because that contract and contract provision existed, the association couldn’t make a successful unjust enrichment claim under a quasi-contract theory of recovery.

For the helpful advice and diligent representation you need for your commercial real estate or commercial litigation action, contact the skilled South Florida business attorneys at Stok Folk + Kon. Our experienced team has been skillfully helping clients protect their business interests for many years.

Contact us online or by calling (954) 237-1777 to schedule your consultation and find out how this firm can help you.

More blog posts:

Unresolved Factual Disputes Trigger Reversal of $776K Judgment in South Florida Contract Breach Case, Florida Business Lawyers Blog, Dec. 21, 2017

Avoiding Paying Out a Double Recovery in a Florida Commercial Litigation Case, Florida Business Lawyers Blog, Oct. 13, 2017