FAIRWAYS ROYALE ASSOCIATION, INC., APPELLANT,
v.
HASAM REALTY CORPORATION, A DELAWARE CORPORATION, APPELLEE
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A condominium association's claim against a corporate lessor for breach of fiduciary duty in secretly including an escalation clause in a recreation lease was properly dismissed because fiduciary duty claims against officers and directors must be brought against those individuals, not the lessor, and any fraud claim vests in individual unit owners, not the association.
A condominium association cannot maintain a cause of action against a corporate lessor for breach of fiduciary duty or fraud based on an escalation clause in a recreation lease; such claims must be brought against individual officers or directors for self-dealing, or by individual unit owners for fraud.
[1] A condominium association's cause of action for breach of fiduciary duty by its initial officers or directors must be brought against those individual officers and direct…
[2] A claim for fraud or non-disclosure regarding lease terms vests in individual unit owners, not in the condominium association itself.
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Join FLexlaw to unlock all legal intelligenceFairways Royale Association, a condominium association that was the lessee of a long-term recreational lease, sued the corporate lessor Hasam Realty C…
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OWEN, WILLIAM C., Jr., (Retired) Associate Judge.
Appellant condominium association, lessee of a long term recreational lease, suffered an adverse summary judgment on its claim for damages against the corporate lessor in which it was alleged that the latter, while in control of the initial board of directors of the association, breached its fiduciary duty to the association and its members by secretly including an escalation clause in the long term recreation lease. We conclude that the trial court correctly held, in granting summary judgment for the corporate lessor, that (1) the association’s cause of action for any self dealing or breach of fiduciary duty on the part of its initial officers or board of directors is solely against such officers and directors as may be alleged and shown to have betrayed their trust for inordinate personal gain at the expense of those to whom they owed a fiduciary duty, Avila South Condominium Ass’n v. Kappa Corp., 347 So. 2d 599 (Fla.1977), and (2) if a cause of action exists against the corporate lessor (who was neither the developer of the project nor seller of the condominium units) for a failure to disclose to unit purchasers the existence of the escalation clause in the recreation lease, the cause of action was essentially one for fraud and deceit and would vest in the unit owners individually and not in the association. Avila South Condominium Ass'n v. Kappa Corp., supra.
AFFIRMED.
DOWNEY and HERSEY, JJ., concur.