Key Points

  • The Third District Court of Appeal granted certiorari and quashed a Miami-Dade circuit court order that refused to dismiss two unit owners' suit against their condominium association.
  • The court held that section 718.303(1) supplies a unit owner's cause of action against the association but does not make every such suit direct, and that section 617.07401 supplied the presuit prerequisites for pursuing the claim derivatively.
  • The owners' claims of fiduciary breach, mismanagement and improper spending were derivative because they sought to enforce a right of the association and alleged the same injury suffered by all unit owners, so the owners had to comply with the statute's verified-demand requirements before suing.
  • A trial court's failure to enforce statutory presuit requirements is irreparable harm that supports certiorari review.
  • Section 617.07401 has since been repealed, effective July 1, 2026, and the same bill enacted section 617.0742, which the opinion notes but does not apply.

Two condominium owners who accused their association of paying both its president and its maintenance company for the same services had to ask the association's board to act before suing, a Florida appeals court ruled on Oct. 7. The court held that the owners were enforcing a right that belonged to the association rather than to them.

A three-judge panel of the Third District Court of Appeal granted a petition for certiorari filed by the association, Gratigny Park Condominium No. 1, Inc. The panel quashed an order by Miami-Dade Circuit Judge William Thomas that had refused to dismiss the suit. Judge Gooden wrote the opinion for a panel that also included Judges Fernandez and Miller.

The decision addresses how two Florida statutes fit together. Section 718.303(1) of the condominium law lets a unit owner sue the association for failing to follow that law and the condominium's governing documents. Section 617.07401 of the nonprofit corporation law set conditions on derivative suits, which are proceedings a member brings in the right of the corporation. The panel held that the first statute does not exempt an owner's suit from the second when the claim is derivative.

The plaintiffs, Reinier Vargas Perez and Alina Garcia Gonzalez, own a unit in a 79-unit condominium managed by Gratigny Park, a nonprofit corporation whose members are all the unit owners. They sued the association and Sun City Condo Solutions, Inc., the maintenance provider, for injunctive and declaratory relief. The complaint alleged breach of fiduciary duty, corporate mismanagement and improper corporate expenditures in violation of the condominium's governing documents. The claims against Sun City were dismissed in the trial court.

The complaint asked the court to order the association to stop paying its president for "Janitorial Services" or other services for which the president allegedly should not have been paid. It also asked for an order requiring the association to end its property management agreement with Sun City, over the manager's alleged licensing violations, and to set up the online records portal that the condominium law requires for owners.

The owners filed suit without following section 617.07401. That statute required a complaint in a derivative suit to be verified and to allege with particularity a demand on the board of directors. The board had to have refused or ignored the demand for at least 90 days, unless the corporation rejected it in writing sooner or waiting would irreparably injure the corporation.

Gratigny Park moved to dismiss, arguing that the claims were derivative. The owners responded that section 718.303(1) gave them a direct right of action. Judge Thomas agreed with the owners. "This statute creates a direct right of action for individual unit owners and does not condition that right upon compliance with the derivative pre-suit demand requirements of Section 617.07401," the trial judge wrote. The trial court later denied the association's motion for reconsideration.

The appeals court read the two statutes differently. Judge Gooden noted that section 617.1703 makes the nonprofit law yield to the condominium law when the two conflict. "Yet there is no conflict here," Judge Gooden wrote, because the statutes "can be read in harmony without rendering either one superfluous or contradictory."

"A claim under section 718.303(1), Florida Statutes, may or may not be derivative depending on the nature of the right asserted and the injury alleged," Judge Gooden wrote. The condominium statute "establishes the substantive cause of action, while section 617.07401, Florida Statutes, supplies the procedural prerequisites for pursuing that claim derivatively."

Although the condominium statute authorizes owners to sue their association, the court wrote, "it does not follow that every action brought under that provision is direct in nature or exempt from the procedural requirements governing derivative proceedings." Judge Gooden wrote that the First and Fourth District Courts of Appeal had reached similar conclusions.

The panel then applied the Third District's 2014 decision in Dinuro Investments, LLC v. Camacho. That case requires a direct harm and special injury to a member, or a special duty owed, for a member to sue individually. Judge Gooden wrote that the complaint and its request for relief showed the owners were seeking "to enforce a right existing in the corporation," and that "the injury sustained by the unit owner is the very same injury sustained by other unit owners."

The owners' label for the case did not change the result. Quoting a 2018 First District decision, the panel wrote that "[p]laintiffs may not decide that they are not subject to statutory requirements merely by labeling their allegations in an effort to avoid them." Judge Gooden added: "It is the substance of the complaint that controls."

The panel also held that the dispute qualified for immediate review. Certiorari requires a departure from the essential requirements of the law that causes harm an ordinary appeal after final judgment cannot fix. The court held that a trial court's failure to enforce statutory presuit mandates meets that standard. Such a failure, Judge Gooden wrote, "deprives a party of its statutory right to presuit notice, demand, and investigation—a right that cannot be meaningfully enforced or restored on plenary appeal."

The court applied the 2025 version of the statutes. A footnote states that the Legislature has since repealed section 617.07401, effective July 1, 2026, and in the same bill enacted section 617.0742, which specifies certain requirements for a complaint brought in the right of a corporation.

Gratigny Park was represented by Evelynn Greenstone Kammet of Vernis & Bowling of Miami, P.A. The unit owners were represented by Eduardo Gomez of Gomez Law.

The opinion ends "Petition granted; order quashed," referring to the trial court's order denying the association's motion to dismiss. The decision is not final until any timely motion for rehearing is resolved.