Arbitration & Mediation

Golf Course Covenant Restriction Interpretation Sends Dispute to Arbitration

By Christopher B. Hopkins, Esq.

As a general rule, when an appellate court opinion contains few legal citations, that decision will likely not mean much to anyone other than the parties to the dispute.

But what about when an opinion has NO CITATIONS AT ALL? Rare, yes. Precedent setting? We doubt it. So let's dispose of this oddity. Time will tell as to its significance.

In Foxfire Properties, LLC and Sugar Loaf Environmental Holdings, LLC v. Foxfire Owners Association, Inc., the Second District (Fulmer, Northcutt, and Villanti) slept-walked through addressed varying interpretations of an arbitration clause.

Here's the deal: an HOA was next to a golf course. The golf course wanted to zone a vacant parcel to be a residential area and the HOA objected. They resolved their differences with a Covenant and Restriction which said (a) the golf course could cease to operate if new laws made it unfeasible or (b) if a panel of three arbitrators determined the continued operation of the golf course was unfeasible.

All was fine for a few years until the golf course changed hands and the new owners sought to shut down the golf course and terminate the Restriction by claiming new laws or regulations made operation unfeasible. About two years later, they switched tactics and said, pursuant to section (b), that arbitrators should decide.

Waiver was not addressed since (1) the trial court made no findings and (2) it appeared that litigation under section (a) and arbitration under section (b) could happen at the same time.

The trial court felt that (b), a decision by arbitrators, required that course to be actually operating at the time of arbitration; the appellate panel, however, did not see those explicit words or requirements and reversed.

Full post as published by Florida Arbitration Law on May 11, 2009 (boomark / email).