Florida’s Supreme Court has declined to hear an appeal by the Boca View Condominium Association of its loss in an October 2022 trial over a unit owner’s right to see the association’s financial records.
But other issues remain to be decided, potentially extending what has become a long and expensive series of fights over record requests at the 72-unit complex, located near the beach in Boca Raton.
On Nov. 27, the court declined to accept jurisdiction in the case and denied the association’s petition for review. That throws remaining issues in the case, including the amount of legal fees that the association must pay, back to the trial court.
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“It is another devastating defeat for the association,” said Andrew Schwartz, one of the attorneys who represented the unit owners, Eleanor and Edward Lepselter, in a lawsuit they first filed against the association in 2020.
Attorneys for the association did not respond to emailed requests for comment about the ruling.
The ruling is the latest chapter in a long-running battle between officers who govern the association, including its 17-year president Diana Kuka, and several of its unit owners over whether and how access to financial records must be provided.
In February 2019, Eleanor Lepselter sent a letter, also signed by Edward, to the association designating Jonathan Yellin’s law firm as their representative authorized to conduct a record inspection on their behalf. On the same day, Yellin sent his own letter stating that he planned to conduct a “forensic audit” of the records.
The state’s Condominium Act obligates condo boards to provide records access “to an association member (unit owner) or the authorized representative of such member.”
But shortly before the date of the record inspection, the association told Eleanor Lepselter that only she, and not Yellin, would be allowed to inspect the records. When they both showed up, the association’s property manager declined Yellin access to the room where the records were gathered.
That triggered a prolonged legal battle that started when a state-appointed arbitrator determined that the Lepselters had the right to appoint Yellin to inspect the records on their behalf. He also rejected the association’s contention, based on a provision of state law pertaining to nonprofit organizations, that it could deny access to records if it determined the requests were not made “in good faith” and for a “proper purpose.”
To support that argument, the association argued that the Lepselters were acting on behalf of other unit owners, David and Dganit Shefets, whose own request to inspect the association’s financial records was denied in 2016 because they had transferred ownership without the association’s approval of two units they owned to a corporation they had formed.
The Shefets contended in a separate ongoing lawsuit they filed in February 2015 that the association does not have the right to require approval of any sale or deed transfer.
The association further supported its argument by introducing testimony from its deposition of another unit owner, Eileen Breitkreutz, that the Shefets promised to pay legal expenses if her record request was denied. Breitkreutz lost a lawsuit challenging her request and in May 2022 was ordered to pay Boca View’s $395,554 legal bill.
The arbitrator’s ruling in the Lepselters’ case was nonbinding and the association appealed it by filing suit in Palm Beach County circuit court over its claim that the word “or” in the law allowed it to determine whether Eleanor Lepselter or Yellin could be granted access to the records.
In December 2022, the trial court judge, John Kastrenakes, ruled in the Lepselters’ favor and said that the law gives the unit owner the right to choose. “It’s ludicrous to believe otherwise,” he said at the conclusion of a three-day trial in October 2022. He also said that as the prevailing party, the couple had the right to collect attorneys fees from the association.
Soon after, the association appealed the ruling, asked for a new trial, and argued that it was the prevailing party because the arbitrator stated that the Condominium Act required that a unit owner “and” — rather than “or” — a representative be given access to records.
Although Kastrenakes had found that the arbitrator had made a “scrivener’s error” when he used the term “and,” the association argued the distinction between “and” and “or” meant that the association had “obtained a ‘more favorable’ judgment” at trial and was entitled to attorneys fees “and further relief.”
The association’s argument was struck down by the trial court and last July by the Fourth District Court of Appeal. In October 2023, a federal judge in West Palm Beach rejected claims made by the association in a separate lawsuit in U.S. District Court in West Palm Beach.
In 2023, the association granted Yellin access to its financial records but the Lepselters contended in a legal filing that it withdrew that access after giving him just 20 hours of inspection time over three days, when he had only copied records up to 2016.
Yellin said in a court filing that he had found questionable receipts that warranted a wider search. The association countered that Yellin refused its offer to allow all of the records to be sent out and professionally scanned.
Reached by phone, the Lepselters declined to comment on the case following the Supreme Court decision, saying their attorneys advised them to wait until the case was over.
Breitkreutz said she can’t believe that officials of the state Department of Business and Professional Regulation haven’t followed up on further requests she made for help securing access to the condominium’s financial records.
She said that she and, as far as she knows, other unit owners have received no assessments for the association’s legal fees, and she said she doesn’t understand how its attorneys are getting paid.
After filing for bankruptcy, she agreed to pay the legal fee judgment at $578 a month for 60 months, she said. When she first made her record-inspection request, “I had no idea this could happen,” she said. Now, “I’ve chosen to put blinders on. I can’t let this affect my health.”
The Nov. 27 decision by the state Supreme Court not to review the case permanently settled the trial court’s ruling that the Lepselters were the prevailing party and entitled to collect legal fees from the association, Schwartz told the South Florida Sun Sentinel.
But it leaves the trial court judge to determine how the association must comply with outstanding requests to further inspect financial records and settle a list of tangential claims filed over the past two years, including various requests by the parties to impose sanctions on their counterparts or find them in contempt of court for alleged misbehavior, Schwartz said.
There were more than 300 filings in the case until the trial court judge issued his written order on Dec. 2, 2022, siding with the Lepselters, court records show. Since then, the parties have filed hundreds of documents, mostly involving the appeals and battle over legal fees.
How much the Lepselters will collect in attorneys fees is among the questions the trial court must now settle. The trial court had ordered the association to pay $232,171 but the appellate court found that some of that amount was impermissible and ordered that it be recalculated. Fees pertaining to the appeals and other costs will also be added, Schwartz said.
Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071 or by email at rhurtibise@sunsentinel.com.