Paul Hastings Secures Declaratory Judgment and $8 Million Fee Award in Florida Property Governance Dispute

Paul Hastings LLP won a final judgment for $8 million in attorneys’ fees and litigation expenses in connection with their motion for supplemental declaratory relief on behalf of client CWI-GG RCFL Property Owner, LLC (the Hotel Owner) in the Seventeenth Judicial Circuit in Broward County, Florida. Paul Hastings partners Jodi A. Kleinick and William K. Whitner led the team, which also included of counsel Eric D. Stolze and associate James L. Ferguson. 

The final judgment stems from a previous appellate win in Florida’s Fourth District Court of Appeals by the Paul Hastings team in July 2024. The case, Castillo Grand Hotel Condominium Residences Association, Inc. v. Watermark Capital Partners, LLC et al. (Case No. 4D2023-1587), involved a legal challenge to the governance structure of the Ritz-Carlton Fort Lauderdale, a mixed-use development property comprising three separately owned legal parcels: a hotel parcel and two condominium parcels owned by separate condominium associations. 

The property is governed by a Declaration of Master Covenants, Restrictions and Easements (the “Master Declaration”), which outlines shared rights and responsibilities, including maintenance obligations and shared costs, covering areas called “Shared Facilities” of the Hotel Parcel. Under the Master Declaration, the Hotel Owner is entitled to issue Special Assessments, including costs incurred by the Hotel Owner for its attorneys’ fees relating to the Shared Facilities, against either of the condominium associations in particular circumstances, including when those costs were made necessary by the willful or negligent act of the association. Following extensive briefing, hours of evidentiary hearings conducted by Stolze and significant post-hearing filings, the Broward County court concluded that the plaintiff association’s commencement and pursuit of the action justified the Special Assessment imposed. 

“The fee award judgment has far-reaching implications,” said Kleinick. “It is particularly important for hotel owners, developers, investors, and lenders operating in mixed-use properties that include any condominium component across Florida, where similar structures exist all over the state. It ensures that hotel owners can manage and maintain their properties, including shared facilities, consistent with brand standards, and that the governing documents relating to these types of properties will be enforced. The fee award should also serve to disincentivize a condominium association from bringing or pursuing a legally deficient claim and using a scorched-earth approach as a strategy to drive up legal fees just to alter the parties’ contractually agreed-to economic relationship.”

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