FOR THE MIDDLE DISTRICT OF FLORIDA JACKSONVILLE … · 2020. 3. 12. · 1. RHC is a Tennessee limited liability company with its principal place of business in Powell, Tennessee

Case 3:19-cv-00345-TJC-JRK Document 44 Filed 02/19/20 Page 1 of 31 PagelD 1472

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA

JACKSONVILLE DIVISION

THE RAVINES COMMUNITY ASSOCIATION, INC.,

Plaintiff/Counter-Defendant,

v. Case No. 3:19-cv-00345-TJC-JRK

RAVINES HOLDING COMPANY, LLC,

Defendant/Counter-Plaintiff.

AMENDED ANSWER, AFFIRMATIVE DEFENSES AND COUNTERCLAIMS OF RAVINES HOLDING COMPANY, LLC

Defendant/Counter-Plaintiff Plaintiff Ravines Holding Company, LLC ("RHC"), by and

through its undersigned attorneys, hereby responds to the Complaint of Plaintiff/Counter-

Defendant The Ravines Community Association, Inc. ("RCA") as follows:

GENERAL ALLEGATIONS

1. Admitted.

2. Admitted.

3. Admitted.

4. Admitted.

5. Admitted.

6. Admitted that the property is generally subject to the provisions of The Ravines

Revitalized Third Amended and Restated Declaration of Covenants, Conditions, Restrictions and

Easements attached as Exhibit B to the Complaint, but denied that RCA has complied with its

obligations thereunder or that all provisions of the Declaration remain applicable.


7. Denied that RHC became subject to the Declaration at the time of taking title to

the Property as RCA was then operating pursuant to an illegally adopted version and not the

Declaration. Denied that RHC agreed to be bound by any amendments or other agreements that

do not comply with the amendment processes provided in the Declaration, the Articles of

Incorporation or the Bylaws. Admitted that Exhibit C contains an incomplete composition of the

Articles of Incorporation and Bylaws and the Declaration, but denied that Exhibit C contains all

portions relevant to this action.

8. Denied that the Governing Documents controlled at the time RHC became the

owner of the subject property. Admitted that, following the adoption of the revitalized

documents, RHC became obligated to pay assessments to RCA imposed in accordance with the

Governing Documents and consistent with the requirements and limited purposes identified in

the Governing Documents. Denied to the extent Paragraph 8 suggests RHC remains obligated to

pay assessments to the RCA.

9. Denied. RHC was not obligated to pay assessments on or about March 1, 2015 or

subsequently.

10. Denied that RHC failed to cure any default because no default had occurred.

Admitted that Exhibit D is a true copy of the written demand from RCA dated June 11, 2018, but

denied that such demand is appropriate or lawful.

11. Without knowledge and therefore denied.

12. Denied.

13. Denied.

14. Denied.

15. Denied.

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Count I — Foreclosure of Lien

16. Admitted that RCA has brought a claim for foreclosure of lien.

17. RHC incorporates by reference its responses to Paragraphs 1-15 above.

18. Denied.

19. Denied.

20. Admitted that on June 11, 2018, RCA provided RHC with a copy of Exhibit D

and that the terms of Exhibit D speak for themselves.

21. Admitted that Exhibit E appears to be a claim of lien and that RCA recorded it

with the Clay County Clerk. RHC denies that the claim of lien is accurate or enforceable.

Otherwise, denied.

22. Admitted that on September 19, 2018 RCA provided RHC with a copy of Exhibit

F. Otherwise, denied.

23. Without knowledge and therefore denied.

24. Denied.

25. Denied.

Count II — Money Judgment

26. Admitted that RCA is seeking monetary relief exceeding $15,000.

27. RHC incorporates by reference its responses to Paragraphs 1-15 above.

28. Denied.

29. Denied.

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AMENDED AFFIRMATIVE DEFENSES

FIRST AFFIRMATIVE DEFENSE

RCA has failed to satisfy all conditions precedent in that, on information and belief, this

matter involves amounts in controversy in excess of $100,000, and RCA has failed to obtain the

affirmative approval of a majority of the voting interests at a meeting of the membership at

which a quorum has been attained.

SECOND AFFIRMATIVE DEFENSE

RCA has failed to provide appropriate notice of default. Therefore, no claim has yet

accrued.

THIRD AFFIRMATIVE DEFENSE

RHC is not obligated to pay the referenced assessments because the assessments were not

levied in accordance with the applicable provisions of the controlling Governing Documents.

FOURTH AFFIRMATIVE DEFENSE

RHC is not obligated to pay the referenced assessments because the Golf Course area has

not been used as a Golf Course since 2006, and therefore the obligation to pay an assessment

relative to the use of roadways for Golf Course-related activity has terminated unless or until the

property is used as a Golf Course.

FIFTH AFFIRMATIVE DEFENSE

RHC is not obligated to pay the referenced assessments because RCA is selectively

enforcing its rules regarding payment of assessments by failing to actively pursue and ultimately

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bring law suits against other owners of property within the Ravines who may have, from time to

time, failed to timely pay assessments when due.

SIXTH AFFIRMATIVE DEFENSE

RCA's lien is unenforceable because it is fraudulent since it purports to attach to parcels

based on RHC's alleged failure to pay assessments due by virtue of RHC's ownership of the

Golf Course, yet which are not part of the Golf Course.

SEVENTH AFFIRMATIVE DEFENSE

RHC is not obligated to pay the claimed assessments because they exceed the permissible

rate allowed by the Governing Documents.

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THE RAVINES HOLDING COMPANY, LLC'S AMENDED COUNTERCLAIM

Plaintiff Ravines Holding Company, LLC ("RHC") asserts the following Amended

Counterclaims against Defendant The Ravines Community Association, Inc. ("RCA"), and states

as follows:

THE PARTIES AND JURISDICTION

1. RHC is a Tennessee limited liability company with its principal place of business

in Powell, Tennessee. All of the members of RHC are citizens of Tennessee. Accordingly, RHC

is a citizen of Tennessee.

2. RCA is a Florida not-for-profit corporation, that, upon information and belief, has

its principal place of business in Clay County, Florida. Accordingly, RCA is a citizen of Florida.

3. RCA is a homeowner's association that governs the Middleburg, Florida gated

community known as The Ravines.

4. RHC owns property within The Ravines that had previously been used as a golf

course, as well as other surrounding land within the community.

5. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b)(1) as this is the

District in which the defendant, RCA, resides.

6. This Court has jurisdiction over this case pursuant to 28 U.S.C. § 1332 in that this

is an action between citizens of different states and the amount in controversy exceeds $75,000.

GENERAL ALLEGATIONS

7. RCA is governed by The Ravines Revitalized Third Amended and Restated

Declaration of Covenants, Conditions, Restrictions and Easements (the "Declaration"), a true and

correct copy of which is attached hereto as Exhibit A. The Declaration provides, among other

things, RCA with the ability to levy and increase assessments on the residents of the community,

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as well as the terms and conditions controlling voting rights and membership on the Board of the

RCA.

8. Article 5 of the Declaration controls RCA's ability to levy assessments, providing

that "[t]he Association shall have the authority to levy assessments as provided herein against the

Dwelling Units, the Lots, the Resort Area and the Golf Course and each Dwelling Unit, Lot, the

Resort Area and the Golf Course is subjected thereto as hereinafter provided." [Exhibit A at § 5].

9. The Third Declaration defines "Golf Course" to mean "that part of the Property

shown on the Plat (as the same may be hereafter amended by replat of the same or any portion

thereof from time to time) as comprising the Golf Course Area, together with all improvements

thereon." [Exhibit A at §1(I)].

10. The Third Declaration defines "Plat" to mean, in pertinent part, "the plat of The

Ravines, recorded in Plat Book 15, pages 38 through 47, of the public records of Clay County,

Florida, as amended in Plat Book 18, page 16 as the same may be further amended from time to

time."

11. The Third Declaration defines "Resort Area" to mean "that portion of the Property

shown on the Plat as 'Resort Area' and designated for use as a resort facility." [Exhibit A at §1(R)].

12. Property owners in the Ravines are subject to a "regular maintenance assessment,"

which is ..." set by the Board, "subject to approval of the [RCA]." [Exhibit A at § 5(B)].

13. RCA's Revitalized Amended and Restated Bylaws ("Bylaws") define "Assessment,"

in pertinent part, as "that annual monetary fee approved by the by the Board and the membership..."

[Revitalized Amended and Restated Bylaws, Ravines Community Association, a true and correct

copy of which is attached as Exhibit B hereto, at Art. II, § 12]. When the Board determines to

impose an assessment, RCA's governing documents require the approval of the membership.

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14. Assessments against RHC are calculated as a percentage of the overall assessments

levied, but importantly, are dedicated in their purpose:

E. Resort Area and Golf Course. The Resort Area and the Golf Course are hereby subjected to regular monthly assessments for their proportionate share of the expenses of the Association in providing maintenance of all Roadwaysl. For the purposes hereof, the "proportionate share" of the Golf Course is deemed to be 5% . . . of the sum of all assessments made by the Association as above provided (it being understood, however, that in determining the amount of all such assessments, there shall be deducted therefrom that portion thereof budgeted for acquisition, rental or maintenance by the Association of artificial recreational facilities such as tennis or racquet courts and swimming pools) and the Board shall calculate the assessments to the Golf Course and the Resort Area based upon such percentage shares. In all other respects, the assessments against the Golf Course and the Resort Area shall comply with and be made in the same manner and times as assessments against Lots or Dwelling Units and shall be subject to the same interest charges and liens.

[Exhibit A at § 5(E)].

15. Assessments paid by the Owner of the Golf Course can only be used for Roadway

maintenance.

16. Assessments paid by the Owner of the Golf Course can only be imposed in an

amount equal to the Owner's proportionate share of Roadway maintenance expenses.

17. The Owner's proportionate share of the Roadway maintenance expenses is deemed

by the Third Declaration to be five percent.

18. RHC owns the Golf Course.

19. RHC owns the Resort Area.

20. Neither the Golf Course nor the Resort Area have operated since June 5, 2006.

21. RHC owns the unimproved lands identified on the Plats as Multi-Family Area A.

1 "Roadways" is defined in the Declaration as "that portion of the Property designated on the Plats as Ravines Road, Crooked Creek Point, Creek Hollow Lane and Hawks Way, Albatross Court and Pheasant Court together with any portion of the Property which may hereinafter be platted as Roadway and designated a 'private street', as well as any real property which may be described by metes and bounds in a subsequently recorded instrument executed by the Developer reciting that the property therein described shall be deemed to be a 'Roadway' and subject to the terms and provisions of this Declaration." [Exhibit A at § 1(Q)].

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22. RHC owns the unimproved lands identified on the Plats as Multi-Family Area D.

23. The Third Declaration defines "Multi-family Lot" to mean "any unimproved

parcel of land within the Property and designated on the Plat as intended for use as a site for

multi-family dwellings including without limitation, condominium regimes, townhouses,

apartments or similar multi-family residences." [Exhibit A at §1(J)].

24. RHC's land within Multi-Family Area A is a Multi-family Lot.

25. RHC's land within Multi-family Area D is a Multi-family Lot.

26. The Third Declaration grants Class B membership to all "Owners of Multi-family

Lots." [Exhibit A at §6(B)(ii)].

27. RHC, as the Owner of Multi-family Lots, is a Class B member.

28. RHC's Multi-family Lots encompass approximately 20 acres.

29. Based on the acreage of RHC's Multi-Family Lots, RHC is entitled to cast

approximately 40 votes as a Class B member. [Exhibit A at §6(C)(ii)].

The 2015 Annual Meeting

30. RCA's annual meeting was noticed on November 10, 2015 as required by the

Bylaws.

31. A quorum of 25% of the members of the RCA was not established, so no member

vote could be held under the terms of the Bylaws.

32. The 2016 budget was discussed at the meeting, but no vote was held to approve

the 2016 Assessments or budget due to the lack of a quorum.

33. At the next regular board meeting, which was held on December 14, 2015, the

Finance Committee reported that the 2016 budget had not been adopted and advised that "[t]he

2015 Expense Budget will stand for 2016."

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34. The minutes of the December 14, 2015 meeting do not reflect any discussion of

the 2016 Assessments or budget, a vote by the RCA membership approving the 2016

Assessments or budget, or any vote to adopt the 2015 budget.

35. RHC refused to pay the unlawful 2016 assessments imposed to meet the 2016

budget, which had been enacted by the Board without the approval of the RCA membership.

The 2016 Annual Meeting

36. On November 8, 2016, RCA held its 2016 annual meeting as required by the

Bylaws. The Board took questions regarding RCA's 2017 budget. But as in 2015, there was no

discussion of 2017 Assessments, and there was no vote by the RCA to approve any assessments

or the budget.

37. RHC again refused to pay the unlawful assessments and budgets, which had again

been enacted by the Board without approval of the RCA membership as required by the Bylaws.

The 2017 Special Meeting to Modify the Governing Documents

38. According to the Bylaws, "[o]nly members in good standing with the [RCA] shall

be entitled to vote for election of Directors." [Exhibit B at Art. V, § 2(B)].

39. On November 13, 2017, RCA held a special meeting of the RCA Board to alter

the definition of the term "good standing" within the Bylaws.

40. At the meeting, the Board voted on a motion to provide that "a member who is

more than 90 days delinquent in assessments dues is a member not in good standing, and all

voting rights are automatically suspended" ("Motion"). [The Ravines Community Association,

Inc. Special BOD Meeting November 13, 2017, a true and correct copy of which is attached as

Exhibit C].

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41. According to the meeting minutes, the Board, excluding any representative of

RHC, unanimously voted in favor of the Motion.

42. On November 16, 2017, RCA's agent sent a letter to RHC, advising RHC that:

[i]n accordance with Florida Statute 720.305, your voting rights have been suspended due to your failure to pay a monetary obligation due to the [RCA]. This suspension was approved by the Board of Directors at a properly noticed Board meeting held November 13, 2017.

("Rights Termination Letter").

43. RCA originally noticed its 2017 Annual Meeting for November 14, 2017, two

days before the issuance of the Rights Termination Letter. Because of an error relating to the

Rights Termination Letter, the Board terminated the meeting and voted to reconvene it on

December 6, 20 days after the delivery of the Rights Termination Letter. At the reconvened

2017 Annual Meeting — at which RHC was not allowed to vote — a vote was held on the 2018

Budget, including on assessments.

The Motion Does Not Provide a Basis to Exclude RHC from Seat No. 8

44. Article IV, Section 1 of the Bylaws provides that RHC, as the owner of the

Ravines Club and Resort (the Golf Course and Resort Area), is entitled to representation on the

Board as a matter of right. [Exhibit B at Art. IV, § 1].

45. The exclusive method of removal of members of the Board is provided by the

Bylaws in Article IV, Section 2(d), which states that "[a] director may be removed from the

Board with or without cause by a majority vote of the membership at a regular or special meeting

of the [RCA]." [Exhibit B, at Art. IV, § 2(D)].

46. The exclusive method to eliminate a seat on the Board would be through an

amendment to the Bylaws.

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47. As the owner of the Golf Course, RHC is the Class C member for voting

purposes.

48. The Declaration and the Articles grant the Class C member enhanced voting

rights on "all matters relating to assessments charged or chargeable" against RHC. [Exhibit A at

§ 6(C)(iii); Revitalized Articles of Incorporation of The Ravines Community Association, Inc.

(the "Articles") at Art. X, a true and correct copy of which is attached hereto as Exhibit D].

49. No vote has ever been held to remove RHC's designee from the Board.

50. The Bylaws have not been amended to eliminate Seat No. 8.

51. Rather, the Board effectively stripped RHC of its Board seat without an

appropriate vote by altering the definition of "good standing" to exclude members who were

delinquent in their payment of assessments—regardless of whether the assessments were

appropriately levied. Based on this decision, the Board has refused to allow RHC to exercise its

right to have representation on the Board.

52. Article VIII of the Articles states that:

The bylaws of the association may be made, altered, or rescinded at any annual meeting of the association, or at any special meeting duly called for such purpose, on the affirmative vote of two-thirds of each class of members existing at the time of and present at such meeting except that the initial bylaws of the association shall be made and adopted by the board of directors.

[Exhibit D at Art. VIII].

Stated differently, the Bylaws can only be altered with a two-thirds vote of each class of

members2 being present at a duly noticed meeting of the membership.

53. Article IX of the Articles controls amendments to the Articles and provides that:

2 Article X of the Articles identifies the four classes of members; the Class C member is the owner of the golf course.

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Amendments to these articles of incorporation may be proposed by any member of the association. These articles may be amended at any annual meeting of the association, or at any special meeting duly called and held for such purpose, on the affirmative vote of two-thirds of each class of members existing at the time of, and present at such meeting.

[Exhibit D at Art. IX].

Thus, like amendments to the Bylaws, 66.66% (two-thirds) of each class of members

must vote to pass any modification to the Articles.

54. Any amendment to the Declaration must be done in accordance with Article 8(A)

of the Declaration, which states:

In addition to the rights of the Developer to amend this Declaration as reserved in paragraph 7, this Declaration may be amended at any time upon the affirmative vote of 75% of the votes cast at a duly called meeting of the Association, the notice for which meeting has contained notice of the proposed amendment. Upon the approval of any such amendment, the President and Secretary of the Association shall execute and record the same in the public records of Clay County, Florida.

[Exhibit A at § 8(A)]. Accordingly, the only way to amend the Declaration is through a vote of 75%

of the members of RCA at a duly noticed meeting.

55. Neither the Bylaws, nor the Articles nor the Declaration have been modified in

any way that would affect RHC's right to Seat No. 8 on the Board.

56. Neither the Bylaws, nor the Articles nor the Declaration have been modified in

any way that would affect RHC's right to cast the Class C votes.

57. The Motion did not comply with the requirements necessary to modify the

Bylaws.


Articles.


Declaration.

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Seat No. 8 is Dedicated to a Representative of the Owner of the Golf Course AND the Owner of the Resort Area

60. The Bylaws state that RCA is to be managed by nine directors, with each seat

being attributed to a particular group of members within particular geographic areas within the

Ravines. [Exhibit B at Art. IV, §1].

61. The Bylaws provide that Seat No. 8 is reserved for the "Ravines Club and

Resort." [Exhibit B at Art. IV, §1].

62. At the original adoption of the Bylaws on April 22, 2005, Ken DeBusk, as

representative of RHC as owner of the Golf Course and Resort Area, occupied Seat No. 8.

[Exhibit B at Art IV, §2(e)].

63. No elections have ever been held for Seat No. 8 since the adoption of the Bylaws.

64. Seat No. 8 is subject to a two-year term, but at the expiry of each term, RHC, in

its capacity as owner of both the Golf Course and the Resort Area, simply appointed a

representative to Seat No. 8.

65. Prior to this litigation, no challenge has ever been raised to RHC's sole and

exclusive right to appoint a representative to serve in Seat No. 8.

66. On February 28, 2019, RHC requested that it be allowed to reoccupy Seat No. 8

as is its right as owner of the Golf Course and the Resort Area.

67. RCA, through its counsel, refused, stating that "RHC has not paid its assessments

since early 2015 and is therefore ineligible to hold Seat 8 on RCA's board." See Electronic Mail

from R. Troy Smith to William E. Adams, Jr. dated March 8, 2019, a true and correct copy of

which is attached as Exhibit E.

68. RCA has never alleged that RHC owes any amounts as the owner of the Resort

Area or is otherwise ineligible to place a representative in Seat No. 8 in that capacity.

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69. Instead, RCA contends that the rights granted to the Owner of the Resort Area as

the Class D member were terminated effective January 14, 2009 by the Transfer and Assignment

of Developers' Rights. A true and correct copy of the Transfer and Assignment of Developer's

Rights (the "Transfer") is attached as Exhibit F.

70. The Transfer provides that "[a]s of June 30, 2005, [RCA] does hereby assume all

rights, powers, privileges, authorities and reservations Developer has as it pertains to the Ravines

Community Association, Inc., except that the Developer shall have the class D voting rights until

the recordation of this Assignment." Exhibit F at §4.

71. RCA contends that the Transfer's assignment of rights extinguished RHC's voting

rights as the Class D member.

72. Voting rights, including the Class D membership rights, are controlled by Section

6 of the Third Declaration.

73. The Third Declaration explains that "Class D membership shall be appurtenant to

ownership of the 'Resort Area' following the Developer's conveyance of all lands within the

Ravines. [Exhibit A at §6(B)].

74. The Transfer contains RCA's agreement that, relative to the Class D membership,

the Developer "has conveyed the Resort Area (to a third party) and owns no property in The

Ravines." [Exhibit F at §3].

75. The Transfer contains RCA's agreement that "Developer shall have conveyed 'all

of the property owned by it within The Ravines Development' as defined by Section 6,

subparagraph C, Voting Rights, so that the voting rights shall be as set forth in Section 6,

subparagraphs C(i), (ii) and (iii), and that under Section 6, subparagraph B entitled Classes, (iv),

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it shall be deemed that the Developer has conveyed the Resort Area (to a third party) and owns

no property in The Ravines." [Exhibit F at §3].

76. RHC repeated its request to appoint a representative to Seat No. 8 in advance of

the 2019 Annual Meeting. [See Letter from William E. Adams, Jr. to Troy Smith and Len

Hackett, dated October 17, 2019, a true and correct copy of which is attached as Exhibit G].

77. RCA again declined RHC's October 17 request based on RHC's refusal to pay the

assessments levied against the Golf Course.

78. As a result, RCA's eight-member Board routinely finds itself deadlocked on a

host of issues, including in connection with the election of officers, leaving RCA out of

compliance with the Bylaws and effectively unable to manage its affairs due to internal

disagreement.

79. On December 2, 2019, just prior to the 2019 Annual Meeting, counsel for RHC

spoke with counsel for RCA regarding RHC's intention to resume its representation on Seat No.

8 and to cast its Class B votes at the annual meeting.

80. RCA's counsel explained that RHC could not vote for RCA's officers due to the

unpaid Golf Course assessments via e-mail before the call and expanded this position to preclude

RHC from retaking Seat No. 8 or casting the Class B votes during the call. [See Electronic Mail

from Len Hackett to William E. Adams, Jr. dated December 2, 2019, a true and correct copy of

which is attached as Exhibit II].

81. At RCA's 2019 Annual Meeting, RHC attempted to cast its Class B votes in

writing. RCA did not accept RHC's votes and did not include them in the elections at the annual

meeting.

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82. RHC's refusal to pay the Golf Course assessments is the basis for RCA's

rejection of RHC's Class B votes.

83. RHC also refused to allow RHC to resume occupancy of Seat No. 8.

84. RHC's refusal to pay the Golf Course assessments is the basis for RCA's

rejection of RHC's effort to reclaim Seat No. 8.

85. To date, RCA has refused to allow RHC to appoint a representative to Seat No. 8.

RCA's Claim of Lien is Fraudulent

86. In connection with RCA's effort to collect the assessments it claims to be due

from RHC for the Golf Course, RCA recorded a Claim of Lien on August 20, 2018 with the Clay

County Clerk of Court. A true and correct copy of RCA's Claim of Lien (the "Lien") is attached

as Exhibit I.

87. While the Claim of Lien purported to cover only three parcels of land, it covered

all of RHC's holdings within the Ravines by virtue of the attached legal description. [Exhibit I at

3-19] .

88. At all relevant times, RCA has been aware of RHC's efforts to market its land

holdings within the Ravines for redevelopment.

89. On December 23, 2019, after RHC advised RCA's counsel that the Lien exceeded

any arguably appropriate scope, RCA recorded its Amendment to Claim of Lien. A true and

correct copy of the Amendment to Claim of Lien (the "Amended Lien") is attached as Exhibit J.

90. The Amended Lien continues to include lands not within the scope of the alleged

dispute. RCA's lien, if proper at all, would rest on the lands falling within the Third

Declaration's definition of "Golf Course," which is only the areas identified on the Plats as the

Golf Course.

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91. The Amended Lien purports to cover all lands described by the following Parcel

ID numbers, taken from the Clay County Tax Collectors' Office: (a) 13-05-24-021388-178-00,

(b) 13-05-24-021388-055-51, (c) 13-05-24-021388-063-00, and (d) 13-05-24-021388-063-01.

True and correct copies of the Parcel records for these parcels (the "Parcel Records"), taken from

the Clay County Tax Collectors' website at www.claycountytax.com, are attached as composite

Exhibit K.

92. RCA uses the parcel identification numbers on the Parcel Records for certain of

RHC's lands within RCA's accounting system.

93. RCA's assessments to RHC claimed due by the Amended Lien equal five percent

of the total assessed amounts, in accordance with the Class C member assessment rate provided

by the Declaration.

94. RCA allocates the five percent claimed due from RHC as the Class C member

among the three accounts corresponding to the Parcel ID numbers in the Parcel Records in its

record keeping.

95. The Declaration, which controls RCA's ability to levy assessments and

specifically identifies lands subject to various membership categories and assessment levels,

does not look to the Parcel ID number or Clay County's tax records. Instead, the Declaration

looks to the recorded Plats for the Ravines to define membership and applicable assessment

categories.

96. By way of example of the disconnect between RCA's lien and the Third

Declaration, the Third Declaration distinguishes between the Golf Course, the Commons, the

Resort Area and Multi-family Lots. Yet the Amended Lien attaches to Parcel ID 13-05-24-

021388-178-00, which is described as:

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PT OF COMMONS AREA & GOLF COURSE THE RAVINES, PT OF COMMONS AREA, PT OF MULTI-FAMILY AREAS "A" & "D", GOLF COURSE, PT OF RESORT AREA & CLUBHOUSE RAVINES RESORT & PT OF RAVINES RD AS REC 0 R 3049 PG 1496 & 3611 PG 1040 EX PT OR 2671 PG 470

[Exhibit J at 3].

97. Similarly, neither Parcel ID Nos. 13-05-24-021388-055-51, 13-05-24-021388-

063-00, 13-05-24-021388-063-00, nor 13-05-24-021388-063-01 are within the Third

Declaration's definition of "Golf Course"

98. By using the property descriptions corresponding with the Clay County Parcel ID

number, RCA is imposing improper assessments and has cause liens to be placed on lands not

within the scope of the Declaration's definition of Golf Course.

99. RCA, through its counsel, was made aware of this fundamental error prior to

filing the Amended Lien.

100. From January 1, 2012 through December 31, 2018, RCA's expenses for

maintenance of the Roadways total $7,335.01, against total budgeted amounts in that period of

$3,500. For this same period, RCA claimed assessments due from RHC totaling $109,583.58.

The excess between RCA's total incurred Roadway maintenance expenses and the total amounts

assessed against RHC from January 1, 2012 through December 31, 2018 is $102,248.57.

101. At all relevant times, RCA has maintained two bank accounts, one for operating

expenses and the other for holding funds for capital expenditures.

102. RCA has consistently represented that the latter account is a reserve account (the

"Account"), such that RCA's members reasonably believed that the Account is a reserve account

in accordance with Florida law.

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103. In 2012, RCA performed an update to a preexisting study of the adequacy of the

funds in the Account to meet RCA's anticipated maintenance costs on certain capital items.

104. In 2014, RCA's members voted to adopt the pooled method of reserve accounting

for the Account.

105. RCA's financial reporting has never contained the required statutory disclaimers

for non-statutory reserve accounts.

106. In addition to these disclaimer failures, RCA has never conducted an audit of its

finances, despite being required to do so by Florida law, with the result that outside accountants

have simply relied on representations concerning the nature of the Account.

107. Subsequent to the commencement of its dispute with RHC and, on information

and belief, in connection with the use of funds from the reserve account for purposes other than

capital improvements, RCA took the position that the Account was not, in fact, a reserve

account.

108. Assessments paid by RHC are dedicated to a singular purpose by the Declaration

and should be maintained in a sequestered account for that purpose.

109. As RCA now disclaims that the Account is restricted in purpose, RHC believes

that RCA has used RHC's funds for purposes other than the payment of RHC's proportional

share of the maintenance of the Roadways.

110. All conditions precedent to the filing of this action have occurred or were waived

by RCA.

COUNT I Declaratory Judgment — Exclusion of RHC from the RCA Board

111. Paragraphs 1-110 are incorporated herein by reference as if fully set forth.

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112. RCA's refusal to allow RHC to hold Seat No. 8 on the Board and to participate in

the business of RCA is based on the Motion adopted at the November 13, 2017 special meeting.

Yet, despite having the effect of changing rights granted by the Bylaws, the Motion did not

comply with the requirements for modification of the Bylaws to either (a) define the "member in

good standing" standard or (b) place a condition on RHC's entitlement to Seat No. 8.

113. Further, RCA's refusal to allow RHC to hold Seat No. 8 on the Board and to

participate in the business of RCA ignores the Bylaws' reservation of Seat No. 8 for the Golf

Course and the Resort Area. RHC owns both the Golf Course and the Resort Area and, while

RHC contends that RCA's prohibition of RHC from retaking Seat No. 8 based on the Motion is

unjust and inappropriate, no basis exists for RHC's refusal to allow RHC as the Owner of the

Resort Area to place a representative in Seat No. 8.

114. RCA has excluded RHC from the Board and has deprived RHC of its right to vote

on business coming before the Board all the while continuing to levy assessments against

RHC, initiating litigation against RHC and otherwise conducting business that materially affects

RHC without providing RHC with representation on the Board.

115. A bona fide, actual and present justiciable controversy exists between RHC and

RCA because RCA and RHC disagree as to whether RCA had the authority to exclude RHC's

designee from holding Seat No. 8 on the Board, and RHC's continued exclusion is causing and

will cause injury now and in the future.

116. RHC is entitled to declarations that (1) it is entitled to representation on the Board

through Seat No. 8 as a matter of right; (2) the Motion did not modify or affect the Bylaws or the

Bylaws' "member in good standing" requirement; (3) RHC's exclusion from participation on the

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Board violates the Bylaws, and (4) all Board votes occurring since RHC's exclusion from the

Board are null, void and of no effect.

117. Because of this controversy, RHC retained the law firm of Gunster, Yoakley &

Stewart, P.A. to represent it in connection with this matter and has agreed to pay it a reasonable

attorneys' fee for its services. RHC is entitled to recover its costs for this action pursuant to Fla.

Stat. § 86.081.

COUNT II Declaratory Judgment — Deprivation of RHC's Class C Voting Rights


119. Since the passage of the Motion, RCA has held votes on which the Class C

member is entitled to cast votes.

120. RCA has refused to allow RHC to cast the Class C votes on appropriate matters.

121. RCA's refusal to allow RHC to cast the Class C votes as provided in the Articles

is based on the Motion.

122. The Motion is not an authorized modification to either the Articles' or the

Declaration's grant of voting rights to RHC as the Class C member.


RCA because RCA and RHC disagree as to whether the Motion was effective to modify the

voting rights of Class C members, whether RHC is a Class C member, and whether the votes

occurring after RHC has been denied voting rights are null and void.

124. RHC is entitled to declarations that: (1) it is the Class C member and is entitled to

vote in accordance with the grant of voting rights in the Articles and Declaration; (2) the Motion

did not modify the grant of voting rights to the Class C member in the Articles or Declaration;

(3) RCA's refusal to allow RHC to vote as the Class C member violates the Articles and

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Declaration, and; (4) all votes of the membership occurring since RCA's denial of RHC's voting

rights as the Class C member on matters which the Class C member is entitled to vote are null,

void and of no effect.




Stat. § 86.081.

COUNT III Declaratory Judgment — Deprivation of RHC's Class D Voting Rights


127. Since the initiation of this dispute, RCA has held votes on which the Class D

member is entitled to cast votes.

128. RCA has refused to allow RHC to cast the Class D votes on appropriate matters.

129. RCA's refusal to allow RHC to cast the Class D votes is based on RCA's dispute

with RHC as a Class C member.

130. RCA's refusal to allow RHC to cast the Class D votes is based on RCA's

erroneous view that the Class D rights expired at the execution of the Transfer.


RCA because RCA and RHC disagree as to whether RHC holds the Class D voting rights,

whether RHC's status as the Class C member affects its rights as the Class D member and

whether the votes occurring after RHC has been denied voting rights are null and void.

132. RHC is entitled to declarations that: (1) it is entitled to cast the Class D votes in

accordance with the grant of voting rights in the Articles and Declaration; (2) RHC's status as

the Class C member does not affect RHC's right to cast the Class D votes; (3) RCA's refusal to

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allow RHC to vote as the Class D member violates the Articles and Declaration, and; (4) all

votes of the membership occurring since RCA's denial of RHC's voting rights as the Class D

member on matters which the Class D member is entitled to vote are null, void and of no effect.




Stat. § 86.081.

COUNT IV Declaratory Judgment —Assessments Since 2016


135. The Declaration and Bylaws require that assessments be approved by the

members of RCA at a duly noticed meeting.

136. At least as to the assessments reflected in the 2016 and 2017 budgets, the

members did not approve of the Assessments or budgets, with the result that the Board's

imposition of those Assessments and passage of budgets was without authority and improper.

137. RCA's exclusion of RHC from the Board and RCA's refusal to allow RHC to

exercise its voting rights as the Class C member (and in turn, the refusal to allow the Class B or

Class D votes) rests, in part, upon RHC's refusal to pay the 2016 and 2017 Assessments. Even

assuming arguendo that the Motion was effective, RCA's decision to deprive RHC of its rights is

improper because the neither the 2016 and 2017 Assessments nor the 2016 and 2017 budgets

were approved. In other words, RHC could not be properly excluded on the basis that it refused

to pay the 2016 and 2017 Assessments because they were not properly levied in furtherance of

an approved budget.

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138. Thus, RCA's "approval" of the 2018 budget is also ineffective since RCA denied

RHC's right to vote as a Class B member, the Class C member and the Class D member.


RCA because the parties disagree as to whether RHC was required to pay the 2016 and 2017

Assessments and thus whether RHC could be excluded for not paying those assessments, and

whether the 2018 Assessment levied without an opportunity to vote by RHC was valid.

140. RHC is entitled to declarations that: (1) the 2016 and 2017 Assessments were not

approved in accordance with the Declaration and Bylaws and were therefore improper, (2)

RCA's decision to exclude RHC from the Board and refusal to allow RHC to vote as a Class B

member, the Class C member or the Class D member was improper, (3) the 2018 Assessment is

invalid because of RCA's improper denial of RHC's right to vote and (4) RHC is not indebted to

RCA in the claimed amount of $74,357.52 (or any amount) as of February 1, 2019.




Stat. § 86.081.

COUNT V Accounting


143. The Declaration expressly restricts the use of RHC's assessments to RHC's

proportionate share of the expense of maintaining the Roadways within The Ravines.

144. As alleged above, assessments levied against RHC have been far in excess of the

entirety of the expenses actually incurred by RCA for the maintenance of the Roadways during

the period put at issue by RCA's claim, much less RHC's proportionate share of those expenses.

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145. The Board has a fiduciary obligation to all members and is bound to comply with

the Declaration, including in the levying and use of assessments.

146. Because RHC's remedies at law are inadequate and will not be as expeditious as

in equity, RHC demands judgment for an accounting and damages against RCA or, in the

alternative, the imposition of a constructive trust against RCA's revenues of an amount equal to

the difference between the assessments levied against RHC and RHC's proportionate share of

the expenses of the RCA in providing maintenance of all Roadways.

COUNT VI Declaratory Judgment and Reformation


148. RCA contends that RHC, as the owner of the Golf Course is responsible for

assessments in the amount of 5% of the sum of all assessments made by RCA.

149. At the time of the Declaration's drafting, the Golf Course was in operation and was

open for public play, with the result that non-residents of The Ravines would travel over the

Roadways.

150. To account for the cost of wear on the Roadways resulting from the use incidental to

the Golf Course's operations, the Declaration provides that the Golf Course will pay assessments for

its "...proportionate share of the expenses of the Association in providing maintenance of all

Roadways."

151. Because the Golf Course has not had operations since 2006, there has been no

significant usage of the Roadways by the Golf Course at any time since then.

152. Despite the absence of any meaningful Golf Course-related use of the Roadways,

RCA has continued to attempt to impose assessments each year in amounts that account for

meaningful use.

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153. Accordingly, a change in circumstances has occurred and continues to occur, such

that the provision within the Declaration setting the amount of the Assessment on the Class C

member is no longer applicable or equitable and should be reformed.


RCA because the parties disagree as to the continued vitality of the requirement that RHC pay

assessments for Roadway maintenance.

155. RHC is entitled to declarations that: (1) a change in circumstances exists such that

the Golf Course should not be compelled to pay assessments in the amount of 5% of the sum of

all assessments made by the RCA and (2) RHC is not obligated to pay any amounts as

assessments until such time as the Golf Course resumes operations.

156. RHC is also entitled to a reformation of the Declaration such that RHC is no

longer required to pay assessments unless or until the Golf Course resumes operations.




Stat. § 86.081.

COUNT VII Declaratory Judgment — Statutory Reserve


159. Historically, RCA's financial reporting has accounted for a reserve maintained by

RCA for certain capital expenditures.

160. Under the Governing Documents, assessments paid by the Class C and Class D

member can only be used for those members' maintenance of the roadways.

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161. Based on RCA's history and its financial reporting, RHC reasonably believed that

any assessments it paid were held in the Account, which is a statutory reserve under Fla. Stat. §

720.303, and that RCA was in compliance with that statutory provision.

162. RCA has recently taken the position that the Account is not a reserve account in

accordance with Fla. Stat. § 720.303. While RHC disputes RCA's position, RCA's financial

reporting is certainly violating multiple requirements of Fla. Stat. § 720.303 by failing to contain

required disclosures and failing to conduct annual audits.

163. RCA has, on information and belief, used funds from the Account, including

RHC's past paid assessments, for unauthorized expenses.


RCA because the parties disagree as to whether the Account is a statutory reserve, whether the

attendant restrictions and requirements of Fla. Stat. § 720.303 apply to the monies held in

Account and whether RCA is in compliance with the requirements of Fla. Stat. § 720.303.

165. RHC is entitled to declarations that: (1) the Account is a statutory reserve account

as provided by Fla. Stat. § 720.303, (2) the Account is subject to the restrictions provided by Fla.

Stat. § 720.303, and (3) RCA is not in compliance with the requirements of Fla. Stat. § 720.303.

Further, RHC is entitled to supplemental relief pursuant to Fla. Stat. § 86.061 including, but not

limited to, an injunction obligating RCA to immediately come into compliance with all

requirements of Fla. Stat § 720.303 and a judgment against the members of RCA's Board of

Directors obligating them to account to RCA for any funds removed from the Account for any

unauthorized purpose.



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Stat. § 86.081.

COUNT VIII Declaratory Judgment — Voting Rights Regarding Class B Votes


168. The Declaration provides that all Owners of Multi-family Lots are Class B

members and grants them the right to vote on matters coming before the association, including in

elections.

169. The Declaration provides that the Owners of Multi-family Lots are entitled to cast

one vote for every 1/2 acre owned.


RCA because RHC is the owner of Multi-family Lots, entitling it to cast votes as a Class B

member, yet RCA has refused to allow RHC to cast those votes.

171. RHC is entitled to declarations that: (1) its ownership of Multi-family Lots entitle

it to exercise the rights of a Class B member, (2) RHC is entitled to cast 40 votes as a Class B

member, and (3) no legitimate basis exists for RCA to refuse to accept RHC's Class B votes.




Stat. § 86.081.

COUNT IX Fraudulent Lien/Slander of Title


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174. RCA filed the Lien on three parcels owned by RHC to collect assessments

allegedly owed by RHC as the Class C member.

175. RHC disputed the legitimacy of the Lien and, as a result, RCA filed the Amended

Lien.

176. The Amended Lien suffers from the same defects as the Lien, as it attaches to

lands that are not subject to the assessments due from the Class C member.

177. RCA has been notified that the lien is inaccurate. But the lien has not been

amended or discharged, and thus, RCA has willfully exaggerated and/or filed a fraudulent lien.

178. RHC is therefore entitled to recovery of its court costs, clerk's fees, reasonable

attorney's fees and costs for services in securing the discharge of the client, the amount of any

premium for a bond given to obtain the discharge of the client, interest on any money deposited

for the purpose of discharging the lien, and its attorney's fees and costs.

WHEREFORE Ravines Holding Company, LLC respectfully requests this Court grant it

declaratory and monetary relief as described above, as well as reformation of the Declaration,

and any other relief the Court deems just and appropriate.

Dated: February 18, 2020 Respectfully submitted,

GUNSTER, YOAKLEY & STEWART, P.A.

By /s/ William E. Adams, Jr. William E. Adams, Jr., Esq. Florida Bar No. 467080 Lauren V. Purdy, Esq. Florida Bar No. 93943 Gunster, Yoakley & Stewart, P.A. 225 Water Street, Suite 1750 Jacksonville, Florida 32202 (904) 354-1980 (904) 354-2170 (facsimile) Primary email: [email protected] Primary email: [email protected]

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Secondary email: [email protected] Secondary email: [email protected]

Attorneys for Ravines Holding Co., LLC

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on February 18, 2020, I electronically filed the foregoing

document with the Clerk of the Court using the CM/ECF system, and a copy thereof has been

furnished by email to the following recipients:

Troy Smith, Esq. Jeffrey Rood, Esq. GrayRobinson, P.A. 50 North Laura Street, Suite 1100 Jacksonville, FL 32202 [email protected] [email protected] [email protected]

Attorneys for The Ravines Community Association, Inc.

Isl William E. Adams, Jr.

ACTIVE 11692015.5

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