Multidisciplinary Approach Obtains Favorable Ruling in Real Estate Dispute

Multidisciplinary Approach Obtains Favorable Ruling in Real Estate Dispute

Clark Partington recently obtained a favorable ruling in another hotly-contested real estate dispute for a condominium association client located in the Blue Mountain Beach area of South Walton County.  This victory underscores—yet again—Clark Partington’s command of Florida real estate law as well as the firm’s inter-disciplinary approach to litigation.

SE Property Holdings, LLC (“SEPH”) filed a declaratory judgment action in Walton County Circuit Court in January 2014 against the Blue Mountain Beach Condominium Association (the “Association”) to declare that SEPH has the right to access and enjoy a Gulf-front parcel (the “Property”) that the Association owns.  The original developer years ago had filed a Chapter 11 bankruptcy, and the Property was conveyed to the Association in settlement of various claims the Association had against the bankrupt developer.  SEPH subsequently acquired an interior parcel adjacent to the Property after foreclosing a mortgage lien that had been granted to SEPH’s predecessor, Vision Bank, an institution that failed in the wake of yesteryear’s financial crisis.  After taking title to this foreclosed property, SEPH filed suit to obtain access and use rights to the Property.  If successful, the lawsuit had the potential to substantially lower the value of the Property to the Association given the resulting impact on access and use rights not only for SEPH, but also other interior upland owners in the subdivision.  In short, the case had all the trappings of a “bet-the-company” dispute from the Association’s perspective.

The Association—led by the Clark Partington litigation team of Will Dunaway and Will Stokes at the helm—defended the suit on several grounds.  The Association contended that it obtained title to the Property pursuant to the project developer’s confirmed Chapter 11 plan, and that this acquisition was “free and clear” of any liens, interests, or encumbrances.  Based on this prior reorganization plan, the Association maintained that SEPH had no right to access or occupy the sandy beach-front portion of the Property.  The Association also disputed SEPH’s access rights based on the plain language of various instruments recorded in the public records of Walton County, Florida that impacted the rights of interior landowners in the development.

Judge Santurri of the Walton County Circuit Court agreed with the arguments Clark Partington made on behalf of the Association.  The court reasoned that SEPH was not entitled to declaratory relief because the issue of access to the Property had already been addressed and decided in the developer’s Chapter 11 proceeding.  Under the circumstances, the court concluded that the issue was res judicata and ruled in favor of the Association.  And in light of this ruling, the court awarded the Association entitlement to recover the attorney fees the Association reasonably incurred in defending the suit.

Undeterred, SEPH appealed to the Florida Court of Appeal, First District.  Consistent with Clark Partington’s routine approach of engaging the attorney best-suited to handle the particular task at hand, Robert Powell engaged to handle the appellate proceeding.  Powell argued on appeal that the trial court correctly granted summary judgment in the Association’s favor—a difficult burden given the appellate standard of review governing summary judgment proceedings.  The appellate court agreed with the Association and affirmed the trial court per curiam (i.e., without issuing any written opinion).  And to sweeten the victory, the appellate court awarded the Association the attorney fees and costs that it incurred in defending the appeal.

Clark Partington is pleased to report this victory as an example of the firm’s commitment to excellence, outstanding advocacy, and protecting the private property rights of another client that owns Gulf-front property in Northwest Florida.  Please contact Clark Partington for all of your real estate, litigation, and appellate needs.