IN THE CIRCUIT COURT OF THE FIFTH JUDICIAL CIRCUIT, IN AND FOR LAKE COUNTY, FLORIDA
CASE NO.: 03-CA-3530
CROSS TIE RANCH HOA, INC,
a Florida not-for-profit corporation,
Plaintiff,
vs.
UPSON DOWNS LIMITED
PARTNERSHIP,
a Colorado limited partnership; JAMES C.
WATKINS, in his official capacity as LAKE
COUNTY CLERK OF COURT; BOB MCKEE,
in his official capacity as LAKE COUNTY
TAX COLLECTOR; COUNTY OF LAKE,
a political subdivision of the State of Florida,
Defendants.
/
AMENDED COMPLAINT
COMES NOW the Plaintiff, CROSS TIE RANCH HOA, INC. (hereinafter "the Association"), by and through its undersigned counsel, and files this Amended Verified Complaint against Defendants, UPSON DOWNS LIMITED PARTNERSHIP, a Colorado limited partnership, (hereinafter "Upson Downs"); BOB MCKEE, in his official capacity as LAKE COUNTY TAX COLLECTOR (hereinafter “Tax Collector”); JAMES C. WATKINS in his official capacity as LAKE COUNTY CLERK OF COURT (hereinafter “Clerk”); and the COUNTY OF LAKE, a political subdivision of the State of Florida (hereinafter “County”), and states as follows:
ALLEGATIONS COMMON TO ALL MATTERS
1. The Association is a not-for-profit corporation and is a homeowners’ association organized pursuant to Chapter 617, Florida Statutes (1993), created to own, manage, and maintain certain common areas for Cross Tie Ranch Subdivision (hereinafter “Cross Tie”), which is located in Lake County, Florida.
2. The Association brings this action on its own behalf and on behalf of all its members. All the matters complained of herein pertain to parts of the common areas of Cross Tie, as defined by Section 720.301 (2), Florida Statutes, and to matters of common interest.
3. The Association and its members are governed by Chapters 617 and 720, Florida Statutes, and the Declaration of Covenants, Conditions, Restrictions, and Easements of Cross Tie Ranch (hereinafter “Declaration”), recorded on November 23, 1993, at Official Records Book 1261, Page 251, Public Records, Lake County, Florida and any amendments thereto. A copy of the Declaration is attached hereto and incorporated herein as Plaintiff's Exhibit “A.”
4. Upson Downs is a Colorado Limited Partnership and is transacting business in this State without a registration.
5. Tax Collector is the tax collector for Lake County, Florida as defined in Section 192.001(4), Florida Statutes, as follows:
"County tax collector" means the county officer charged with the collection of ad valorem taxes levied by the county, the school board, any special taxing districts within the county, and all municipalities within the county.
6. Clerk is the Clerk of the Court for Lake County, Florida as defined in Section 125.17, Florida Statutes, as follows:
The clerk of the circuit court for the county shall be clerk and accountant of the board of county commissioners. He or she shall keep their minutes and accounts, an perform such other duties as their clerk as the board may direct.
One of the duties of the Clerk is to sell tax deeds at auction after a tax deed application has been filed.
7. The County is a political subdivision of the State of Florida and is the legislative and governing body empowered to carry on county government, including but not limited to, levying and collecting taxes. § 125.01, Fla. Stat. (2002).
8. Upson Downs is the record title holder of property (hereinafter “Subject Property”) located in Lake County, Florida with the following legal description:
Tracts A, B, C, D, E, F, G, and H, CROSS TIE RANCH, according to the plat thereof as recorded in Plat Book 34, Pages 65-69, Public Records of Lake County, Florida;
Tract A, CROSS TIE RANCH PHASE TWO, according to the plat thereof as recorded in Plat Book 35, Pages 65-70, Public Records of Lake County, Florida
9. The Association is the equitable title holder of the Subject Property and is entitled to be the record title holder according to the following:
a. On or about July 16, 1991, the Lake County Board of Commissioners approved a petition for a Planned Unit Development (hereinafter "PUD") submitted by Herbert Mayer, Sr. The PUD would include 210 single-family residences and 173 acres for open space, recreation, pedestrian and bicycle pathways, and commonly shared horse stables. The Subject Property was part of the PUD , which terms would be a covenant running with the land and would bind all subsequent purchasers. A copy of the ordinance granting the petition is attached hereto and incorporated herein as Plaintiff’s Exhibit “B.”
b. On or about November 5, 1992, Cross-Tie Ranch Limited Partnership, a Delaware Limited Partnership (hereinafter "Developer 1"), acquired title to the Subject Property. A copy of the Personal Representative’s Deed is attached hereto and incorporated herein as Plaintiff’s Exhibit “C.”
c. On or about November 2, 1993, the Lake County Board of Commissioners approved the plat of Cross-Tie Ranch (hereinafter “Plat 1") . This plat is recorded at Plat Book 34, Pages 65-69, Public Records, Lake County, Florida. A copy of the pertinent portion of the plat is attached hereto and incorporated herein as Plaintiff's Exhibit “D.”
d. Plat 1 provides that Tracts A, B, C, D, E, F, G, and H are reserved for drainage, landscape, access, and recreational purposes; to be maintained by the homeowners’ association. It further indicates that additional restrictions may be found in documents recorded in the Public Records of Lake County.
e. On or about November 23, 1993, Developer 1 drafted and recorded the Declaration for Cross Tie, which imposed a common plan of development on real property, including the Subject Property.
f. On or about January 28, 1994, Developer 1 created the Association and filed its Articles of Incorporation with the Florida Department of State, Division of Corporations.
g. Article I, Section 5 of the Declaration, in pertinent part, provides:
The Common Areas to be owned and maintained by the Association shall be designated by [Developer 1] and shall include any Recreation area shown on any plat along with any recreational facilities located thereon, drainage retention areas and facilities, pedestrian, horse and bicycle paths, tennis courts, guardhouse, mail center, common stables, landscaped entrance areas and any easements owned or leased for the benefit of the Owners and designated as Common Area by [Developer 1].
h. Article II, Section 1 of the Declaration provides that “[e]very Owner shall have a non-exclusive right and easement of enjoyment in and to the Common Area which shall be appurtenant to and shall pass with the title to every Lot.”
I. Article IV, Section 1 of the Declaration creates a covenant whereby the members of the Association agree to pay maintenance and special assessments to the Association.
j. Article VIII of the Declaration provides that the covenants, restrictions, and easements run with the land, binding the Subject Property for forty (40) years from the recording date and granting the Association the right to enforce the restrictions and covenants imposed by the Declaration.
k. On or about August 16, 1994, the Lake County Board of Commissioners approved the plat for Cross Tie Ranch Phase II (hereinafter “Plat 2"). Plat 2 is recorded at Plat Book 35, Pages 65-70, Public Records, Lake County. A copy of the pertinent portion of the plat is attached hereto and incorporated herein as Plaintiff's Exhibit “E.”
l. Plat 2 provides that Tract A is reserved for recreation purposes and will be maintained by the homeowners’ association. It further indicates that additional restrictions may be found in documents recorded in the Public Records of Lake County.
m. On or about October 31, 1994, Developer I recorded an Amended and Restated Declaration of Covenants, Conditions, Restrictions, and Easements of Cross Tie Ranch, which designated Phase I and Phase II of Cross Tie . The aforementioned provisions of the Declaration were not amended. A copy of the Amended and Restated Declaration is attached hereto and incorporated herein as Plaintiff’s Exhibit “F.”
n. In 1996, Developer 1 filed a Chapter 7 Bankruptcy with the United States Bankruptcy Court, Middle District of Florida, Orlando Division. Pursuant to the bankruptcy, the court authorized the Trustee to sell the Subject Property to Sweetwater Holdings, Inc.(hereinafter “Developer 2"). On March 10, 1999, the Trustee’s Deed was recorded at Official Records Book 1695, Page 1425, Public Records, Lake County, Florida. A copy of the Trustee’s Deed is attached hereto and incorporated herein as Plaintiff’s Exhibit “G.”
o. On or about March 8, 1999, Developer 1 executed an Acquisition and Assignment of Development Rights to and in favor of Developer 2 whereby Developer 1 assigned to Developer 2 all legal and equitable rights to Cross Tie and Developer 2 assumed all of Developer 1's duties and obligations. A copy is attached hereto and incorporated herein as Plaintiff’s Exhibit “H.”
p. On July 21, 2000, Developer 2 deeded the Subject Property to Universal Landholdings, Inc. (hereinafter “Universal”), a Florida Corporation. A copy of the Warranty Deed is attached hereto and incorporated herein as Plaintiff’s Exhibit “I.”
q. In a letter dated September 8, 2000, Developer 2 informed the Association that it had deeded the Subject Property to Universal with the intention that Universal would retain ownership of the Subject Property for the purpose of developing Phase III of Cross Tie. However, Phase III was never developed. A copy of this letter is attached hereto and incorporated herein as Plaintiff’s Exhibit “J.”
r. In November 2000, Developer 2 completed the transfer of association control from developer to members. A copy of the letter evidencing the transfer is attached hereto and incorporated herein as Plaintiff’s Exhibit “K.”
s. On June 21, 2001, Developer 1 amended the Declaration to include Sweetwater Holdings, Inc. in the definition of “Declarant.” A copy of the amendment is attached hereto and incorporated herein as Plaintiff’s Exhibit “L.”
t. On or about November 28, 2001, Rapid Retrieval, Inc., a Florida corporation, as a general partner of the Defendant, instituted an action to foreclose a mortgage against Universal Landholdings, Inc. and on the Subject Property. A copy of the Lis Pendens and Final Judgment of Foreclosure are attached hereto and incorporated herein as Plaintiff’s Composite Exhibit “M.”
u. The Association was not a named defendant in the above-mentioned foreclosure action.
v. Pursuant to a Final Judgment of Foreclosure and Public Sale, the Defendant obtained record title to the Subject Property on April 29, 2002. A copy of the Certificate of Title is attached hereto and incorporated herein as Plaintiff’s Exhibit “N.”
w. The Association did not authorize nor consent to any of the aforementioned transfers of the Subject Property.
10. Since Developer I and its successors in interest to the Subject Property failed to transfer record title to the Association, the following events occurred:
a. On May 24, 2000, the County acquired Tax Certificate Number 5604 for unpaid real property taxes for Tracts A-H of Cross Tie for the 1999 tax year.
b. On July 23, 2002, the Tax Collector, on behalf of the County, applied for a tax deed based on Tax Certificate Number 5604 which was issued on May 24, 2000.
c. On October 6, 2003, the Tax Collector submitted form DR 513 to the Clerk of the Court and, sometime thereafter, deposited the required fees and costs.
d. The Clerk scheduled the Tax Deed Sale for Tuesday, December 2, 2003. A copy of the Notice of Application for Tax Deed is attached hereto and incorporated herein as Plaintiff’s Exhibit “O.”
11. If the transfer of the record title to the Subject Property occurred, as required by the Declaration, PUD ordinance, and plats, then the Association would have received notice of the delinquent taxes, could have rectified the situation at that time, and the current tax deed sale would not have been set.
12. Since the individual lots owners within Cross Tie are assessed real property taxes based on the value of their lot and their proportionate share of the common areas, it is the policy of the Tax Collector to cease imposition of real property taxes against the individual common area parcels when a homeowner’s association acquires record title to the parcels. Therefore, the imposition of real property taxes could have ceased before Tax Certificate Number 5604 was issued and the amount of delinquent taxes owed would be significantly less.
COUNT I
13. This is an action against Defendant, Upson Downs, to impress a constructive trust upon the Subject Property and to seek equitable relief.
14. This Court has jurisdiction pursuant to section 26.012, Florida Statutes (2002).
15. The Association hereby incorporates paragraphs 1 through and including 12 into this Count II of the Amended Complaint as fully as if they had been reproduced herein.
16. Section 617.304(1), Florida Statutes (1993) ( now Section 720.304(1)), provides that "[a]” common areas and recreational facilities serving any homeowners' association shall be available to parcel owners in the homeowners' association served thereby and their invited guests for the use intended for such common areas and recreational facilities."
17. Rapid Retrieval, Inc., a Florida Corporation, is the general partner of Upson Downs and Mark R. Carson is the President of Rapid Retrieval, Inc.
18. Mark R. Carson was also the project manager for Developer 1 from 1995-1998 and was a director for the Association in 1995. An uncertified copy of Association’s annual report and Mark Carson’s Affidavit is attached hereto and incorporated herein as Plaintiff’s Composite Exhibit “P.”
19. As such, Mr. Carson and, in turn, Upson Downs, had actual knowledge that the common areas were to be maintained and owned by the Association.
20. The Declaration, plats, and developers promised the members of the Association that they would own lots within an association controlled subdivision which would have community recreational areas that they could use.
21. The representations on the plats and Declaration were made to induce and were relied upon by the owners of the lots in their decision to purchase lots within Cross Tie. These representations provided that the Subject Property would be owned, used, and maintained by the Association and its members.
22. By purchasing lots in Cross Tie based upon the abovementioned representations, and by paying assessments for the maintenance of the Subject Property, the members have provided valuable consideration.
23. In exchange for the consideration, Upson Downs was to convey ownership of the Subject Property.
24. As a director for the Association, Mark R. Carson had a fiduciary relationship with the members of the Association.
25. The Declaration is a contract between the Association members and Upson Downs, creating a fiduciary relationship.
26. Upson Downs has breached and abused the fiduciary relationship by failing to maintain the Subject Property, by denying the Association and its members their right to use the Subject Property and by refusing to transfer title of the Subject Property to the Association as required by the Declaration and the plats.
27. Upson Downs is unjustly enriched by owning property which it knows should be owned and used by the Association and its members.
28. A constructive trust arises by operation of law against an entity who, by actual or constructive fraud, by duress or abuse of confidence, by mistake, or by any form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good conscience has acquired legal right to property it should not, under equitable principles, hold and enjoy. 55A Fla. Jur. 2d Trusts § 98 (2003) (citing Picallo v. Picallo, 443 So. 2d 190 (Fla. 3rd DCA 1983); Turturro v. Schmier, 374 So. 2d 71 (Fla. 3rd DCA 1979); Staples v. Battisti, 191 So. 2d 583 (3rd DCA 1966); Small Bus. Admin. v. Echevarria, 864 F. Supp. 1254 (S.D. Fla. 1994)).
29. Since the Declaration and Plats were recorded in the Lake County Public Records, Upson Downs took title to the Subject Property with constructive notice of and subject to the restrictions contained in those documents.
30. It is against equity and good conscience that Upson Downs refused to transfer title of the Subject Property knowing that the Association has a legal right to be the record title holders.
31. The Association has no adequate remedy at law in that the Subject Property is unique and is fully integrated in the common plan and design of Cross Tie.
32. The Association has retained the law firm of Taylor & Carls, P.A. to represent it in this matter and has agreed to pay the law firm a fee for its services.
33. The Association is entitled to recover all of its costs expended in this litigation, including reasonable attorney’s fees, from Defendants.
34. The Association has performed all conditions precedent entitling it to bring this action.
WHEREFORE, the Plaintiff, CROSS TIE RANCH HOA, INC, respectfully demands and prays, on behalf of itself and on behalf of the members of its class:
A. That this Court enter a Final Judgment impressing a constructive trust on the Subject Property;
B. That this Court enter a Final Judgment requiring the Defendant, UPSON DOWNS LIMITED PARTNERSHIP, as Trustee under the constructive trust, to deed the Subject Property to the Association as beneficiary under the constructive trust;
C. That this Court enter a Final Judgment requiring the Defendant, UPSON DOWNS, to pay the Plaintiff its costs, including reasonable attorneys' fees, for bringing these proceedings; and
D. That this Court grant such other and further relief as it, in its discretion, deems just and proper.
COUNT II
35. This is an action pursuant to Chapter 86, Florida Statutes, against the Tax Collector, the County, and the Clerk seeking a declaratory judgment determining that Tax Certificate 5604 is null and void.
36. This Court has jurisdiction under Section 86.011, Florida Statutes.
37. The Association hereby incorporates paragraphs 1 through and including12 into this Count III Amended Complaint as fully as if they had been reproduced herein.
38. The Association has the right to have Tax Certificate 5604 canceled in that it had expired and was void.
39. The Tax Collector, on behalf of the County, did not apply for a tax deed, based on tax certificate number 5604, until July 23, 2002, almost four months after it had expired and was void.
40. Section 197.502(3), Florida Statutes, and Rules 12D-13.059(1) and 12D-13.060(1)(a), Florida Administrative Code, read together, invalidate all tax certificates owned by the Tax Collector on behalf of the County, unless the Tax Collector applies for a tax deed based on that certificate within two (2) years after April 1 of the year the tax certificate was issued.
41. The Tax Collector failed to meet the time limitations set forth in those laws in that tax certificate number 5604 was originally issued on May 24, 2000, and the tax deed was not applied for until July 23, 2002.
42. Rule 12D-13.059(2), Florida Administrative Code, forbids Tax Collector’s from making tax deed applications based on expired certificates.
43. The Tax Collector applied for a tax deed after tax certificate number 5604 had expired and was void.
44. The Tax Collector failed to comply with Rule 12D-13.059(3), Florida Administrative Code, and Section 197.482, Florida Statutes, which require that after a tax certificate expires, “the tax collector shall cancel expired certificates. . .and note the date of cancellation upon the list of certificates sold for taxes. . . and note. . .in the case of tax sale certificates: ‘Canceled by Act of the 1973 Florida Legislature’.”
45. The Tax Collector did not cancel tax certificate 5604 and did not note the date of cancellation upon the list of certificates sold for taxes.
46. The Tax Collector failed to comply with Rule 12D-13.057(1), Florida Administrative Code, which requires that the “tax collector shall initiate action to cancel any improperly issued tax certificate or any tax deed sold based upon an improperly issued certificate. . . when an error is brought to the tax collector’s attention.”
47. A constructive trust exists from the time the facts giving rise to the trust occur. In re General Coffee Corp, 828 F. 2d 699, 701-02 (11th Cir. 1987) (citing Wilkins v. Wilkins, 198 So. 335 (Fla. 1940) ; City of Sarasota v. Dixon, 1 So. 2d 198 (Fla. 1941).
48. Since the events giving rise to the constructive trust may have occurred prior to the issuance of Tax Certificate 5604, the Association would be deemed the record title holder as of that date, the Tax Collector would have ceased taxation of the Subject Property, the Association would have received proper notice of the assessments, could have redeemed the Subject Property, and would have been able to exercise the rights under the Florida Tax Payer’s Bill of Rights.
49. While the dispute as to the ownership of the Subject Property and the expiration of the two (2) year period has been brought to Tax Collector’s attention, the Tax Collector has still not initiated any action to cancel tax certificate number 5604.
50. A taxing statute should always be construed in the light most favorable to the taxpayer. Mikos v. Ringling Bros.-Barnum & Bailey Combined Shows, Inc., 497 So.2d 630 at 632 (Fla 1986)(citing Harbor Ventures, Inc. v. Hutches, 366 So.2d 1173 (Fla.1979); Bayonet Point Hospital v. Department of Labor & Employment Security, Division of Unemployment Compensation, 460 So.2d 473 (Fla. 2d DCA 1984)).
51. The facts alleged illustrate the existence of a real and substantial controversy between the Association and the Defendants as a result of which the Association is in doubt as to its respective rights.
52. Questions and controversies have arisen regarding the provisions of the documentation, statutes and rules recited herein.
53. The Association is interested and/or in doubt about its respective rights in and to the Subject Property pursuant to the tax certificate and tax deed sale on that parcel, the Declaration, and Florida law, and request to have determined a question of construction or validity under such instruments and to obtain a Declaration of rights, status, or other legal equitable relations thereunder.
54. The Association has retained the law firm of Taylor & Carls, P.A. to represent it in this matter and has agreed to pay the law firm a fee for its services.
55. The Association is entitled to recover all of its costs expended in this litigation, including reasonable attorney’s fees, from Defendants.
56. The Association has performed all conditions precedent entitling it to bring this action.
WHEREFORE, Plaintiff, CROSS TIE RANCH HOA, INC, respectfully demands and prays:
A. That this Court to enter a Final Judgment declaring the rights of the parties hereto and against Defendants, JAMES C. WATKINS, in his official capacity as LAKE COUNTY CLERK OF COURT; BOB MCKEE, in his official capacity as LAKE COUNTY TAX COLLECTOR; COUNTY OF LAKE, a political subdivision of the State of Florida;
B. That this Court enter a Final Judgment voiding and canceling Tax Certificate Number 5604;
C. That this Court enter a Final Judgment voiding any application for a tax deed based on Tax Certificate Number 5604;
D. That this Court enter a Final Judgment requiring the Defendants to pay the Plaintiff its costs, including reasonable attorneys' fees, for bringing these proceedings; and
E. That this Court grant such other and further relief as it, in its discretion, deems just and proper.
DATED this ___ day of , 2003.
ROBYN SEVERS BRAUN, ESQUIRE
Florida Bar No. 0154504
Taylor & Carls, P.A.
850 Concourse Parkway South, Suite 105
Maitland, FL 32751-6145
Tel (407) 660-1040
Fax (407) 660-9422
Attorneys for
Plaintiff