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Dear v. Q Club Hotel, LLC

United States Court of Appeals, Eleventh Circuit

August 9, 2019

GARY DEAR, Plaintiff - Appellee,
Q CLUB HOTEL, LLC, Defendant-Appellant. GARY DEAR, Plaintiff - Appellant,
Q CLUB HOTEL, LLC, Defendant-Appellee.

          Appeals from the United States District Court for the Southern District of Florida D.C. Docket No. 0:15-cv-60474-JIC D.C. Docket No. 0:15-cv-60474-JIC

          Before WILLIAM PRYOR, NEWSOM, and BRANCH, Circuit Judges.


         This case concerns a contract dispute between Q Club-the entity that operates the condominium-hotel at the Hilton Fort Lauderdale Beach Resort-and a class of condo owners over the meaning of the "Declaration" that governs the parties' relationship. We're focused here on the Declaration's cost-sharing arrangement for the maintenance of certain amenities that aren't tied to any particular condo unit-expenses that the Declaration aptly calls "Shared Costs."

         Litigation commenced soon after Q Club announced that it would change the methodology that it uses to calculate these Shared Costs. The new methodology, Q Club explained, would apply not only on a going-forward basis but also retroactively. That meant, in effect, that the owners would be re-billed for assessments that they had paid (or as Q Club sees it, underpaid) in years past.

         The owners' complaint alleged that Q Club's new methodology breached the Declaration as applied both retroactively and prospectively. The district court agreed with the first contention, but a jury disagreed with the second. The parties now appeal the respective judgments against them. The owners separately argue that the district court erred by denying their request for a new trial based on what they say constitutes newly discovered evidence that could have swayed the jury on the prospective-application question. After careful review, we affirm across the board.



         The Hilton Fort Lauderdale Beach Resort includes a number of "Commercial Units" and "Residential Units," as well as one "Hotel Unit." The Residential Units aren't your typical condominiums; as the complaint explains, "no guest, including any Residential Unit owner, may occupy a Residential Unit for more than 120 days in any calendar year." This restriction helps to "ensure the transient nature of the use of the Residential Units"; the owners serve dual roles as both "investor[s] and part-time resident[s] who [can] take advantage of the revenue-generating benefits of putting their unit into the hospitality inventory to be rented out as a luxurious hotel suite when not in use."

         The "Declaration of Q Club Resort and Residences Condominium" outlines a cost-sharing arrangement for the maintenance of what it calls "Shared Components." These Shared Components-which Q Club is responsible for maintaining-include, among other things, "the main hotel lobby; the pools and pool deck; the fitness center . . . and all parking areas and/or parking garages located within the Condominium property." In short, they comprise many of what one might typically call the "common areas." The Declaration grants Residential and Commercial Unit Owners an easement to travel freely through and enjoy the Shared Components in exchange for periodic payments of "Shared Costs." Shared Costs are those "incurred by [Q Club] in (or reasonably allocated to) the repair, replacement, improvement, maintenance, management, operation, ad valorem tax obligations and insurance of the Shared Components." The Declaration requires Unit Owners to pay a portion of these Shared Costs. In particular, Unit Owners must-

pay to [Q Club] annual charges for the operation and insurance of, and for payment of 40.4967% of the Shared Costs . . ., the establishment of reasonable reserves for the replacement of the Shared Components and the furnishings and finishings thereof, capital improvement charges, special charges and all other charges hereinafter referred to or lawfully imposed by [Q Club] in connection with the repair, replacement, improvement, maintenance, management, operation, and insurance of the Shared Components, all such charges to be fixed, established and collected from time to time as herein provided.

         Shared Costs, the Declaration further explains, "shall be paid for in part through charges (either general or special) imposed against the Residential Units and the Commercial Units in accordance with the [Declaration's] terms."

         This arrangement continued without incident from the Declaration's inception in 2007 until 2012, when Q Club determined that it had inadvertently omitted certain expenses that should have been included as Shared Costs. As Q Club describes it, that meant that the Unit Owners hadn't been paying the required 40.4967% of the Shared Costs. Accordingly, it notified the Unit Owners that it would begin to use a different methodology going forward and, further, that it intended to recoup the forgone charges over a 10-year period by applying the new methodology retroactively.


         A class of Unit Owners-whom we'll call "Dear," after the lead plaintiff- filed this action in Florida state court, and Q Club successfully removed to federal court pursuant to the Class Action Fairness Act, 28 U.S.C. § 1453. Dear's complaint asserted (1) that the Declaration doesn't permit Q Club to "back charge" for costs incurred but not assessed and (2) that Q Club's new methodology for determining Shared Costs includes items that it shouldn't. For simplicity's sake, we'll call the first issue the "back-charging" question and the second the "Shared Costs" question.

         Because one of the appeals before us turns on whether the district court properly submitted a particular issue-namely, the Shared Costs question-to the jury, a bit of procedural history is necessary. The parties initially agreed in their Joint Pretrial Stipulation that there were no "issues of law" for the district court to decide. On the back-charging question, Dear submitted as an "issue[] of fact which remain[ed] to be litigated at Trial" the question whether Q Club, "in violation of the Declaration," retroactively assessed Unit Owners for Shared Costs going back to 2007. Dear further included the Shared Costs question among the "issues of fact" for the jury's consideration-in particular, whether "Q Club breached the Declaration . . . by charging and collecting expenses . . . as Shared Costs . . . that are not authorized by the Declaration." For its part, Q Club didn't say anything about the back-charging issue, but it agreed with Dear that whether it had breached the Declaration "by charging for items that were not Shared Costs" was a question of fact for the jury.

         The parties' unanimity on the division of labor between judge and jury was short-lived. When asked by the district court (in a discussion about the appropriateness of considering industry custom) whether "the declaration clearly define[s] what a shared component is," Dear answered "[a]bsolutely." In response, Q Club said that "if this definition is as clear as [Dear] says," then it was "baffled as to why this is a jury trial," and in light of Dear's statement Q Club pivoted to argue that the Shared Costs question was "a matter of law for [the court] to decide, not for the jury." Dear, though, stuck to his guns. When pressed by the district court whether he agreed with Q Club that the Shared Costs issue was "for the Court [rather than] the jury," Dear responded that "it is for the jury." The district court acceded to Dear's view, stating that the determination whether a breach of contract had occurred was "a factual issue" "for the jury determine." It did so over Q Club's objections that it would be improper to "ask[] the jury to make a legal determination of what [the Declaration] says" and that the jury shouldn't "decide if something is a shared component or not."

         Thereafter, Dear's insistence that the Shared Costs question should go to the jury seemed to soften, as evidenced by several instances in which he acknowledged that the issue-or at least portions of it-might be purely legal. For example, when Q Club moved under Federal Rule of Civil Procedure 50(a) for judgment as a matter of law on both the back-charging issue and the Shared Costs issue, it argued that whether the Declaration authorized its changes was "a question of law"-there was, it said, "nothing for the jury to hear." Dear agreed-sort of. He responded that "[t]here's no doubt that [the] two issues in this case are issues of law" and, to that end, he said that he was "expecting and urging the Court to instruct the jury that there is no ambiguity [in the Declaration]." In the same vein, Dear acknowledged that "[w]hether something is a shared component is a matter this Court can determine as a matter of law," and he even indicated that he would be "asking the Court at the conclusion of the case to declare that anything that was expended in the inside of these private property residential condominiums" was not "recoverable as shared costs."[1] Conspicuously, though, Dear never filed his own Rule 50(a) motion on the Shared Costs issue.

         Although the district court denied Q Club's Rule 50(a) motion as to both issues, it later determined that the back-charging issue (but not the Shared Costs issue) presented a legal question that it could and should decide for itself. The court thereafter held that the Declaration "clear[ly] and unambiguous[ly]" forbids "retroactive charging for costs incurred in prior years." Specifically, the court concluded that §§ 12.3 and 12.4, on which Q Club staked (and still stakes) its back-charging position-much more on that below-provided no authority for retroactive assessments. Accordingly, the court entered judgment as a matter of law for Dear on the back-charging issue.

         The case proceeded to trial on the Shared Costs issue. Notably for present purposes, at the charge conference the parties tangled over several key jury instructions. Two disputes are relevant here. First, Dear wanted the district court to tell the jury that the court had decided the back-charging issue in his favor. After some back and forth-Q Club complained that Dear's proposed instruction would be prejudicial-the court settled on the instruction that the matter "ha[d] been adjudicated" and that the jury "should not consider this issue" in deciding the Shared Costs question. Second, Dear asked the district court to instruct the jury that, "as a matter of law," the Declaration's definition of Shared Components controlled and that the jury was "required to use that definition." (Notably, in so arguing, Dear admitted that he "should have probably argued this in the Rule 50.") The court declined to give Dear's proposed instruction; instead, it charged the jury that the parties "dispute[d] the meaning of certain terms," including "shared costs" and "shared components" and that in reaching its decision, it should "consider the plain and ordinary meaning of the language used in the contract" and "the circumstances surrounding the making of the contract."

         Thereafter, the jury returned a unanimous verdict in Q Club's favor, finding that its new methodology for calculating Shared Costs didn't breach the Declaration. Dear filed a post-judgment motion for a new trial. (He didn't file a renewed motion for judgment as a matter of law under Rule 50(b) because he hadn't initially moved-as the Rule requires-for judgment as a matter of law under Rule 50(a).[2]) Dear contended (1) that the district court had erred by allowing the jury to decide the Shared Costs issue, (2) that the court should have given his requested jury instructions, and (3) that he had new evidence that contradicted Q Club's position regarding Shared Costs and proved that Q Club had been "double-billing" for certain items.

         On the first issue, the district court held that, even if it was an error to send the Shared Costs issue to the jury, it was an error that Dear had invited. The court emphasized that Dear had demanded a jury, hadn't moved for summary judgment, and had insisted at the pre-trial calendar call that the Shared Costs issue presented a factual question. The court further concluded that its jury instructions weren't misleading or erroneous and that, in any event, Dear couldn't show that the trial would have turned out any differently had his proposed charge been given. Finally, the court held that the new evidence that Dear had proffered didn't actually contradict Q Club's position on Shared Costs.

         These appeals followed, with Q Club appealing the district court's adverse determination of the back-charging issue, and Dear appealing the jury's verdict on the Shared Costs issue and the court's denial of its new-trial motion.


         We'll start with Q Club's ...

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