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    Ruling Regarding Acceptance of Partial Payments Overturned

    September 23, 2016


    In a blog entry of August 6, 2015, we discussed the ruling of the Florida Second District Court of Appeal in the case of St. Croix Lane Trust, Et Al v. St. Croix at Pelican Marsh Condominium Association, Inc., 144 So.3d 639 (Fla. 2 DCA 2014). In that case, the owner of a condominium unit appealed a final summary judgment declaring that no accord and satisfaction occurred when the condominium association accepted a check that the unit owner tendered in full satisfaction of the association’s disputed claim for past due assessments and other charges. In that case, the Second District Court of Appeal found Florida Statute §673.311 applied rather than Florida Statute §718.116(3), which permitted the acceptance of partial payments. The Appellate Court found that under §673.311(2), the claim was discharged to the person whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.

    However, in the case of Madison at Soho II Condominium Association, Inc. v. Devoe Acquisition Enterprises, LLC, 2d 15-2067 (Fla. 2d DCA, August 24, 2016), the Second District Court of Appeal overruled the St. Croix Land Trust decision. The Second District Court of Appeal overruled itself pursuant to an amendment to Florida Statute §718.116(3) which now provides for the enforcement of the order of priority set forth in the statute “notwithstanding §673.311, any purported accord and satisfaction.” The District Court of Appeal overruled its earlier decision based first upon the observation the legislature in amending Florida Statute §718.116(3) stated it was intending to clarify existing law, but was also based on the fact the amendment was adopted shortly after the St. Croix decision was issued.

    Accordingly, associations can return to the pre-St. Croix decision where a restrictive endorsement will not bind an association. An association may accept a check and apply it as set forth in §718.116(3). Although this decision arose in the context of a condominium association, there does not appear to be any reason why the same application of a partial payment and the non-binding effect of a restrictive endorsement would not apply to cooperatives and homeowners associations under Chapters 719 and 720.

    Any questions regarding the above-mentioned court decisions or the applicability of the referenced statutes should be directed to the association’s counsel.

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