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Home My WebLink About12-04-2006 Highland Home Owners Association, Inc./City's motion for Sanctions Against PetitionerRECraivED DEC 0 5 2006 BROWN, GARGANESE, WEISS & UAGRESTA, *WOFTHECISPRINGS CLERK Debra S. Babb-Nutcher" Joseph E. Blitch Usher L. Brown' Suzanne D'Agresta" Anthony A. Garganese" J.W. Taylor Jeffrey S. Weiss 'Board Certified Civil Trial Lawyer "Board Certified City, County & Local Government Law Attorneys at Law Offices in Orlando, Kissimmee, Cocoa, Ft. Lauderdale & Tampa December 4, 2006 Vivian Cocotas Michael O'Brien Colgan Scott J. Domstein Mitchell B. Haller Katherine W. Latorre Amy J. Pitsch Erin J. O'Leary Catherine D. Reischmann William E. Reischmann, Jr. Of Counsel DEC 0 4 2006 Via Hand Delivery G`ffY OF VANTER SPRINGS City Manager Ronald McLemore, City Manager City of Winter Springs 1126 East State Road 434 Winter Springs, FL 32708 Re: Highlands Homeowners' Association, Inc./City's Motion for Sanctions Against Petitioner Dear Ron: Enclosed is a copy of the City's Motion for Sanctions Against Petitioner which we filed before the hearing last week. After observing the Petitioner's case at the hearing, it became even more evident that Petitioner's case is without any merit whatsoever. It is truly unfortunate that the city has had to expend significant resources and money to defend against this baseless petition. It is to be seen, however, whether the judge is willing to impose sanctions against them. Please provide a copy of our motion to the Mayor and City Commission. I will keep you apprized as conditions warrant. n e , Garganese City Attorney AAG/kdm Enclosure 225 East Robinson Street, Suite 660 • P.O. Box 2873 • Orlando, Florida 32802-2873 Orlando (407) 425-9566 Fax (407) 425-9596 - Kissimmee (321) 402-0144 • Cocoa (866) 425-9566 • Ft. Lauderdale (954) 670-1979 Website: www.orlandolaw.net • Email: firm@orlandolaw.net R. � /I! ►� R I►A /'/V /� 1a' d' QY. tl Y • ` u c Yi '-01 Vic STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS HIGHLANDS HOMEOWNERS' ASSOCIATION, INC., Petitioner, V. DOAH: Case No. 06-3946GM DCA Docket No. 06-1-NOI-5908-(A)-(1) DEPARTMENT OF COMMUNITY AFFAIRS and CITY OF WINTER SPRINGS, FLORIDA, Respondents. and KEEWIN REAL PROPERTY COMPANY, LLC, Intervenor, CITY'S MOTION FOR SANCTIONS AGAINST PETITIONER Pursuant to sections 120.569(2), 120.595, and 163.3184(12), Florida Statutes, the Respondent, City of Winter Springs, moves for an award of its attorney's fees and costs as sanctions against Petitioner, Highlands Homeowner's Association, for the frivolous nature and improper purpose behind the filing of its petition in this case. The basis for this motion is the complete lack of factual and legal foundation for the petition and the obvious effort to delay the development of the subject property. Further, the public interest supports this motion because the City has had to employ significant resources, and incur significant fees and costs, on behalf of the taxpayers of Winter Springs in order to defend against this frivolous petition. Page 1 of 8 Although it seems inconceivable that residents of a predominately residential; mixed use PUD would object to a change in land use from industrial to medium density residential, those are exactly the facts presented in this case. Even more astonishing is that the Highlands PUD does not even abut the subject property; a medium density residential subdivision sits in between the subject property and the Highlands. Evidence of the frivolous nature and improper purpose of this action is the total lack of support for any of the allegations in the petition. Petitioner had no professional opinions to support the allegations in the petition and based the allegations on the "feelings" of one Helga Schwarz, a single member of the HOA's Board of Directors who failed to obtain proper authority to initiate this action. 1. HELGA SCHWARZ FAILED TO OBTAIN AUTHORIZATION TO SUE The evidence shows that the Highlands HOA did not authorize this action. Despite Petitioner's counsel's promises that there was documentation evidencing the HOA's authorization to assert this action, there were no such documents produced. Further, in the deposition of Helga Schwarz, the secretary of the Board of Directors of the HOA, Ms. Schwarz testified that she spoke on the telephone with Paige Hinton, the president, and the president advised her to have the attorneys initiate this petition on behalf of the HOA. Depo. of Helga Schwarz, p. 21-22. No vote was taken by the Board of Directors or the members of the HOA. Id. Ms. Schwarz could not identify any language in the HOA's governing documents authorizing the president to initiate suit on behalf of the organization. Id., p. 21-23. She testified she did not know whether the governing documents authorized the president of the Board of Directors to spend money and resources of the HOA to Page 2 of 8 institute a lawsuit without the approval of the members of the HOA or the rest of the Board of Directors. Id., p. 23. It is axiomatic that the affairs of a corporation are managed by the corporation's board of directors. Florida not -for -profit corporations can act only through, or as authorized by, its board of directors. Lake Region Audubon Soc. v. S.W. Fla. Water Mngmt Dist., 2005 WL 3733875 (Fla. Div.Admin.Hrgs.). Statutes, articles of incorporation, and by laws define the powers of the corporation's board of directors. A corporation does not act through its individual directors, but rather through its board of directors as a whole. An individual director has no authority to take action on behalf of the corporation without the consent of the board of directors. Relevant to homeowner's associations, section 720.303(1), Florida Statutes (2006) provides that an "association" may institute and maintain actions or hearings in its name on behalf of all members concerning matters of common interest to the members. The terms "association" means "a Florida corporation responsible for the operation of a community." See section 720.301(9), Fla. Stat. Knowing full well the organization did not properly authorize this action, Helga Schwarz insisted this challenge be made. And, as will be described more fully below, the entire basis for this challenge is Ms. Schwarz's "feelings" about the potential impacts of the comprehensive plan amendment's land use change. For these reasons, this action was brought for an improper purpose and without proper authority. This was the personal crusade of one or two members of the Board of Directors and this challenge was not made in good faith. Page 3 of S 2. THE PETITION LACKS LEGAL OR FACTUAL SUPPORT Petitioner has absolutely no basis in fact or in law to assert many of the allegations in the petition. Many of the issues, if not the majority of issues, found in the petition, are beyond the jurisdiction of this Court, as they involve challenges more appropriately raised at the development order stage. For instance, allegations that the plan amendment does not provide for adequate open space and recreation facilities is premature and meritless. Petitioner argues that the "Development Agreement ... is not nearly specific enough with respect to the extent of recreation and open space that is to be reserved within the Subject Property." Amended Complaint, p. 7. Petitioner fails to understand the development process. As stated in the deposition of the City's planning expert, Tracy Crowe, we are simply at the land use designation stage and one would not expect to see such a level of detail at this stage. Petitioner does not seem to have a basic understanding of the phases of development and the purpose of a comp plan amendment to simply change the land use designation, not to approve zoning or a development order or permitting. Petitioner's allegations, its discovery requests, and even the questions posed by Petitioner's counsel during depositions show a complete lack of understanding of the development process. Petitioner focuses on zoning and developmentwhen the property is not at the zoning stage yet. Petitioner objects to the lack of detail and specificity regarding parks on the subject property and regarding potential traffic impacts, yet it is abundantly clear in the City's Codes and Comprehensive Plan that Petitioner is demanding a level of specificity inappropriate at the comp plan amendment stage. Further, Petitioner insists on a requirement for school concurrency when the City does not have a concurrency Page 4 of 8 requirement for schools. Any land planner familiar with comprehensive planning could have advised Petitioner of this. Respondents and Intervenor have expended time, effort and money to educate Petitioner and its attorney. Yet, despite this enlightenment, Petitioner continues to assert its unfounded factual and legal arguments. This Petition was filed without any attempts or intent to obtain any expert opinion to support its technical allegations. As described in the Intervenor's Motion for Sanctions, Petitioner initially listed two expert witnesses. Yet, one expert was never retained by Petitioner and, in fact, it was learned that Petitioner never even contacted this expert. Further, the other expert, Harry Burns, P.E., from Alachua County, Florida, was retained only a day before his deposition and had not done any analysis nor formulated any opinions by the time his deposition was taken one week before the final hearing. The City expended attorney time and costs in preparing for and taking this fruitless deposition. One can only speculate as to why Petitioner, who makes so many predictions of dire impacts due to this change in land use, could not round up a single expert to give any professional opinions in a timely manner. One must also speculate why Petitioner had to reach out to Alachua County, Florida to find a traffic expert when the Central Florida area has a multitude of qualified professional traffic engineers. Because Petitioner does not have any admissible expert testimony, and it is evident from the deposition testimony of Helga Schwarz that Petitioner obtained no professional opinions prior to filing the petition, this action appears to have been made for an improper purpose pursuant to sections163.3184(12) and 120.569(2)(c), Florida Statutes. Petitioner cannot prevail without expert witness testimony, due to the nature of the issues to be Page 5 of 8 resolved in this proceeding, namely, to determine whether the comprehensive plan amendment complies with the relevant provisions of Chapter 163, Chapter 9J-5, Florida Administrative Code and the State Comprehensive Plan. Petitioner's allegations of traffic impacts, traffic safety, and school capacity concerns are issues that demand the analysis and opinions of experts. More importantly, had Petitioner sought the opinions of a planner or traffic expert before filing the petition, most, if not all, of Petitioner's arguments would have been gutted. In Burke v. Harbor Estates Associates, Inc., 591 So.2d 1034 (Fla. 1 st DCA 1991), the Court upheld the hearing officer's finding that the Petitioner had filed a petition for an improper purpose on the basis that the Petitioner presented no evidence to prove facts necessary to sustain its petition and "offered no expert testimony in support of the pleadings and the petition." The fact that the petitioner was a layperson was deemed irrelevant. Petitioner has absolutely no evidence to support its unfounded allegations in the petitioner and has no legal foundation to support the allegations. Section163.3184(12), Florida Statutes provides thatwhen a party signs a pleading, it is a certificate that to the best of his or her knowledge, information and belief, it is not interposed for an improper purpose. The improper purposes listed there include: 1. to harass; 2. to cause unnecessary delay; 3. for economic advantage, competitive reasons, or frivolous purposes; or 4. for needless increase in the cost of litigation. If a judge determines that a pleading is filed in violation of those requirements, the judge may, upon motion or on his or her own initiative, impose upon the person who signs such Page 6 of 8 a pleading, a represented party or both, an appropriate sanction. The sanction may include an order to pay to the other party the amount of reasonable expenses incurred because of the filing of the pleading, including a reasonable attorney's fee. Where costs and fees have been awarded, the court held that the objective standard applicable to a determination of whether a pleading was filed for an improper purpose creates a requirement to make reasonable inquiry regarding pertinentfacts in the applicable law. The issue of whether a party participates in a formal proceeding for an improper purpose is a question of law. Burke v. Harbor Estates Associates, Inc., 591 So. 2d 1034 (Fla. 1st DCA 1991). in that case, the court noted that direct evidence of intent is seldom available so in determining intent, the judge should rely on inferences from facts and circumstances. The facts and circumstances in this case point to the conclusion that Petitioner had no legal or factual foundation for the allegations in the petition and one or two members of the Board of Directors have been on a personal crusade to delay the development of this property. The testimony and evidence will be dramatically one-sided in favor of the Respondents and Intervenors. Where the evidence is overwhelmingly in favor of one party, the judge should award sanctions. In a suit to rescind a doctor's license, the Department of Professional Regulation filed suit twice against Dr. Johnston. Of the thirteen counts brought by the Department, all but five were thrown out before the hearing, and the appellate court threw out the remaining counts. At trial, the doctor presented three board certified witnesses and the Department presented only one non -board certified witness. The appellate court ruled that because the evidence was overwhelming in favor of the doctor, he was entitled to attorney's fees against the Department. Johnston v. Department Page 7 of 8 of Professional Regulation, 456 So. 2d 939 (Fla. 1 st DCA 1984). Similarly, there is overwhelming evidence in this case in favor of the Respondents. WHEREFORE, Respondent, City of Winter Springs, hereby requests this Honorable Court impose sanctions against Petitioner, Highlands Homeowners Association. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been delivered via Facsimile and mail to Russell E. Klemm, Esquire, Clayton & McCulloh,1065 Maitland Center Commons Blvd., Maitland, Florida 32751 and Leslie E. Bryson, Assistant General Counsel, Department of Community Affairs, 2555 Shumard Oak Boulevard, Tallahassee, Florida 32399-2100, and A. Rebecca Furman, Esquire, P.O. Box 2809, Orlando, Florida 32802 this 28th day of Nov 006. q4l"NYeA. GARGANESE, ESQUIRE Florida Bar No. 988294 DEBRA S. BABB-NUTCHER, ESQUIRE Florida Bar No. 996580 BROWN, GARGANESE, WEISS & D'AGRESTA, P.A. Post Office Box 2873 225 East Robinson Street, Suite 660 Orlando, Florida 32802-2873 Telephone: (407) 425-9566 Facsimile: (407) 425-9596 Attorneys for City of Winter Springs Page 8 of 8