1036-00003 · Ridgemark Development Partners · Pleadings

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IN THE CIRCUIT COURT OF THE EIGHTEENTH JUDICIAL CIRCUIT IN AND FOR SEMINOLE COUNTY, FLORIDA

CIVIL DIVISION

Case No.: 2021-CA-002748-18-W

DEFENDANT FAIRWATER REAL ESTATE INVESTMENT TRUST'S RESPONSE IN OPPOSITION TO NON-PARTY PINNACLE SHORES BANK, N.A.'S MOTION TO INTERVENE AS OF RIGHT

Defendant Fairwater Real Estate Investment Trust ("Fairwater" or "FREIT"), by and through its undersigned Florida counsel, Hargrove & Liddell, P.A., and its national counsel, Calderwood & Harkness LLP, respectfully submits this Response in Opposition to the Motion to Intervene as of Right (the "Motion") filed by non-party Pinnacle Shores Bank, National Association ("Pinnacle Shores" or the "Bank") on January 14, 2022, pursuant to Florida Rule of Civil Procedure 1.230(a), and states as follows:

I. INTRODUCTION

Defendant Fairwater Real Estate Investment Trust ("Fairwater" or "FREIT"), by and through undersigned counsel, respectfully submits this Response in Opposition to the Motion to Intervene as of Right filed by non-party Pinnacle Shores Bank, National Association ("Pinnacle Shores" or the "Bank") on January 14, 2022, pursuant to Florida Rule of Civil Procedure 1.230(a). For the reasons set forth below, the Motion should be denied in its entirety.

This action arises from a discrete real property dispute. Plaintiff Ridgemark Development Partners LLC ("Ridgemark") filed a Complaint for Declaratory Judgment on July 19, 2021, seeking a judicial declaration that a 60-foot-wide non-exclusive ingress/egress and utility easement (the "Cross-Parcel Easement") originally recorded on June 22, 1998 in Official Records Book 4517, Page 1283, of the Public Records of Seminole County, Florida, was not extinguished by the Commerce Park Boulevard Phase II Replat recorded on September 15, 2014 in Plat Book 78, Pages 44–46, of the Public Records of Seminole County, Florida (the "2014 Replat"). The central — and indeed the sole — legal question before this Court is whether the 2014 Replat operated to vacate and extinguish the Cross-Parcel Easement.

Fairwater has answered the Complaint, denying the continued validity of the Cross-Parcel Easement and asserting four affirmative defenses: (i) extinguishment by replat; (ii) estoppel and laches; (iii) merger; and (iv) failure to state a cause of action. Discovery has been actively conducted by both parties, and the case is progressing toward resolution on the merits.

Pinnacle Shores now seeks to inject itself into this focused, two-party declaratory judgment action. The Bank asserts that its interest as Ridgemark's construction lender on a $14.6 million construction-to-permanent loan commitment, secured by a first-priority mortgage on Ridgemark's 16.3-acre parcel (the "Southern Parcel," Parcel ID 25-20-30-500-0030-0000), is directly affected by this proceeding. The Bank claims that the outcome of the easement dispute will impair the value and enforceability of its mortgage collateral, thereby warranting intervention as of right under Rule 1.230(a).

Fairwater respectfully submits that the Motion should be denied. Pinnacle Shores fails to satisfy the well-established standards for intervention as of right under Florida law. The Bank's interest is entirely derivative of Ridgemark's claim; Ridgemark, as the existing plaintiff, adequately represents the Bank's interest in maintaining the validity of the easement; and intervention would inject unnecessary complexity and delay into what is otherwise a straightforward declaratory judgment proceeding. For the same reasons, permissive intervention under Rule 1.230(b) is likewise inappropriate.

II. STATEMENT OF RELEVANT FACTS

A. The Underlying Dispute

Fairwater is a Maryland-organized, publicly traded real estate investment trust listed on the New York Stock Exchange under the ticker symbol "FWTR." Fairwater is headquartered at 1400 Waverly Park Drive, Suite 600, Bethesda, Maryland 20814, and invests primarily in industrial and logistics properties throughout the southeastern United States. As of its most recent public filings, Fairwater holds a diversified portfolio of warehouse, distribution, and logistics assets across six states.

Fairwater owns the Fairwater Sanford Logistics Center, a 42.7-acre property located at 4250 Commerce Park Boulevard, Sanford, Seminole County, Florida 32771 (the "Northern Parcel"). The Northern Parcel is improved with a 614,000-square-foot Class-A cross-dock distribution facility, featuring 36-foot clear heights, 130 dock-high doors, and a fully improved truck court designed for tractor-trailer circulation. The facility is strategically situated with direct access to Commerce Park Boulevard, a four-lane divided roadway providing connectivity to State Road 46 and Interstate 4.

Fairwater acquired the Northern Parcel on October 7, 2016 from Sunbelt Distribution Centers, Inc. for a total acquisition price of $47.3 million. The acquisition was financed in part by a $28.4 million first-priority mortgage loan from Kensington Capital Markets, LLC, the mortgage for which was recorded in Official Records Book 6312, Page 0988, of the Public Records of Seminole County, Florida. Fairwater's equity investment in the Northern Parcel, exclusive of subsequent capital improvements, was approximately $18.9 million.

The Northern Parcel is leased in its entirety to Condor Supply Chain Solutions, Inc. ("Condor"), a national third-party logistics provider, under a twelve-year triple-net (NNN) lease with a term commencing October 1, 2016 and expiring September 30, 2028 (the "Condor Lease"). The Condor Lease provides for an annual base rent of $2,386,460, which equates to approximately $3.89 per square foot per annum. Critically, the Condor Lease grants Condor exclusive control over truck-court ingress/egress operations at the facility, reflecting the operational security requirements of Condor's supply chain activities. The integrity of Condor's operational access — unimpeded by third-party vehicular traffic — is a material term of the Condor Lease and a fundamental consideration underlying Fairwater's acquisition of the Northern Parcel.

Ridgemark Development Partners LLC is a Florida limited liability company that acquired the Southern Parcel on March 8, 2019 from the Estate of Roland P. Thurmond for a purchase price of $2.15 million. The Southern Parcel is an unimproved 16.3-acre tract located immediately south of Fairwater's Northern Parcel. Ridgemark has publicly disclosed plans to develop the Southern Parcel as a 96-unit light-industrial flex-space park to be known as "Ridgemark Commerce Village."

Ridgemark asserts that it requires vehicular access across Fairwater's Northern Parcel via the Cross-Parcel Easement to reach Commerce Park Boulevard. Ridgemark contends that its only other road frontage is an unpaved county right-of-way known as Lakemont Trail, which Ridgemark characterizes as inadequate for commercial truck traffic due to its unpaved condition, narrow width, and lack of connectivity to the regional roadway network. Fairwater notes, without conceding the point, that the adequacy of Lakemont Trail as an alternative means of access is a factual question that has not been adjudicated and is not directly before the Court in this declaratory judgment action.

Fairwater contends — and will demonstrate at trial or on dispositive motion — that the Cross-Parcel Easement was extinguished by operation of the 2014 Replat. The Commerce Park Boulevard Phase II Replat, recorded on September 15, 2014 in Plat Book 78, Pages 44–46, of the Public Records of Seminole County, Florida, contains express vacating language providing that "all private easements shown on the prior plat are hereby vacated except as otherwise noted herein." Fairwater contends that the Cross-Parcel Easement, which was depicted on the prior plat, falls within the scope of this vacating clause and was not among the easements excepted from vacation. The 2014 Replat was approved by the Seminole County Board of County Commissioners and was executed by all then-record title holders of the affected parcels.

Ridgemark filed its Complaint for Declaratory Judgment on July 19, 2021, initiating this action and seeking a judicial declaration that the Cross-Parcel Easement survived the 2014 Replat and remains in full force and effect. Fairwater filed its Answer and Affirmative Defenses on August 30, 2021, joining issue on all material allegations and asserting the four affirmative defenses enumerated above.

B. Pinnacle Shores' Role and the Motion to Intervene

Pinnacle Shores Bank, N.A. is a national banking association organized under the laws of the United States and headquartered at 3300 Bayshore Boulevard, Tampa, Florida 33629. Pinnacle Shores is a regional commercial bank engaged in, among other activities, commercial real estate lending in the central Florida market.

On November 12, 2020, Pinnacle Shores extended to Ridgemark a $14.6 million construction-to-permanent loan commitment (the "Pinnacle Loan"). The Pinnacle Loan was secured by a first-priority mortgage encumbering the Southern Parcel, which mortgage was recorded in the Public Records of Seminole County, Florida. The Pinnacle Loan was underwritten to finance the construction and initial lease-up of the Ridgemark Commerce Village flex-space development.

Fairwater understands from the Motion that the Pinnacle Loan conditions future draws upon, among other things, proof of legally enforceable vehicular access from the Southern Parcel to a public right-of-way. This access condition is a standard term in commercial construction loan agreements and reflects prudent underwriting practice; it does not, however, confer upon the Bank any independent interest in the Cross-Parcel Easement itself or in the legal question of whether the 2014 Replat extinguished that easement.

As of the filing of the Motion to Intervene on January 14, 2022, approximately $1.9 million had been drawn on the Pinnacle Loan for site work and preliminary architectural and engineering costs associated with the planned Ridgemark Commerce Village development. The remaining approximately $12.7 million of the Pinnacle Loan commitment remains undrawn and subject to the satisfaction of various disbursement conditions, including the access condition described above.

Pinnacle Shores filed its Motion to Intervene on January 14, 2022. In its Motion, the Bank asserts that the outcome of this declaratory judgment action "will directly affect the value and enforceability of [the Bank's] mortgage collateral" and that the Bank's "security interest in the Southern Parcel is inextricably linked to the resolution of the easement dispute." The Bank further contends that it has "unique lien-priority and consent rights over any easement modification" that may result from this proceeding and that its interests are not adequately represented by Ridgemark.

Pinnacle Shores is represented in connection with the Motion by Carolyn F. Dubrow, Esq. (Florida Bar No. 0412389), of Whitmore Dane LLP, 100 North Tampa Street, Suite 2600, Tampa, Florida 33602.

III. LEGAL STANDARD FOR INTERVENTION AS OF RIGHT UNDER FLORIDA RULE OF CIVIL PROCEDURE 1.230

Florida Rule of Civil Procedure 1.230(a) provides:

Upon timely application anyone shall be permitted to intervene in an action: (a) when a statute confers an unconditional right to intervene; or (b) when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.

Florida courts have consistently interpreted Rule 1.230(a) to require a movant seeking intervention as of right to satisfy each of the following four elements:

(1) The application for intervention must be timely;

(2) The applicant must claim an interest relating to the property or transaction that is the subject of the action;

(3) The applicant must be so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest; and

(4) The applicant's interest must not be adequately represented by existing parties.

See Union Central Life Ins. Co. v. Carlisle, 593 So. 2d 505, 507–08 (Fla. 1992); In re Forfeiture of 1978 Chevrolet Van, 493 So. 2d 473, 474–75 (Fla. 3d DCA 1986); Chiles v. News-Press Publ'g Co., 834 So. 2d 247, 250–51 (Fla. 2d DCA 2002). The movant bears the burden of establishing all four elements of the intervention standard. See Morgareidge v. Howey, 75 Fla. 234, 78 So. 14 (1918); Fox v. Trevino, 303 So. 3d 287, 290 (Fla. 5th DCA 2020). Failure to satisfy any one of the four elements is sufficient grounds to deny the motion. See Union Central Life Ins. Co., 593 So. 2d at 508.

It is well settled in Florida that the right to intervene is not absolute and that Rule 1.230(a) must be construed in light of the overarching principle that "intervention is a matter of discretion" and must be balanced against the interests of existing parties in the orderly and efficient resolution of their dispute. See In re Guardianship of Schiavo, 792 So. 2d 551, 560 (Fla. 2d DCA 2001); Trevino, 303 So. 3d at 291. A claimed interest that is "remote, contingent, or merely consequential" is insufficient to support intervention as of right. See Carlisle, 593 So. 2d at 508.

Moreover, the interest asserted by the proposed intervenor must be a "direct" and "present" interest — not merely a speculative or potential future interest — in the subject matter of the litigation. See City of Coconut Creek v. Broward County, 467 So. 2d 468, 470 (Fla. 4th DCA 1985). A mere economic or financial interest that may be incidentally affected by the outcome of litigation, without more, does not constitute a sufficient interest for purposes of Rule 1.230(a). See Dept. of Environmental Protection v. Maggy Hurchalla, 261 So. 3d 571, 580 (Fla. 4th DCA 2018).

IV. ARGUMENT

A. Pinnacle Shores' Interest Is Derivative of and Subordinate to Ridgemark's Interest and Does Not Satisfy the Requirements of Rule 1.230(a)

Pinnacle Shores fails to demonstrate a sufficient interest in the property or transaction that is the subject of this action. The Bank's claimed interest is entirely derivative of — and subordinate to — Ridgemark's own claim to the Cross-Parcel Easement. Pinnacle Shores does not independently hold, claim, or assert any easement right over Fairwater's Northern Parcel. The Bank is not a party to the original grant of the Cross-Parcel Easement. The Bank is not an owner or occupant of either the dominant or servient tenement. The Bank has no privity with the original grantors or grantees of the easement. In short, Pinnacle Shores has no independent stake in the core legal question before this Court — whether the 2014 Replat extinguished the Cross-Parcel Easement — except insofar as the answer to that question may affect the economic value of the Southern Parcel, which serves as collateral for the Pinnacle Loan.

The Pinnacle Loan is secured by a first-priority mortgage on the Southern Parcel (Parcel ID 25-20-30-500-0030-0000). The mortgage encumbers the Southern Parcel itself; it does not encumber Fairwater's Northern Parcel, the Cross-Parcel Easement, or any other interest in Fairwater's property. Any judicial determination by this Court regarding the continued existence or extinguishment of the Cross-Parcel Easement does not directly impair Pinnacle Shores' lien on the Southern Parcel itself. The Bank's mortgage remains valid, enforceable, and of record regardless of whether the Cross-Parcel Easement exists. A finding that the easement was extinguished may affect the development potential and market value of the Southern Parcel, but it does not extinguish, subordinate, or otherwise impair the Bank's mortgage lien.

The distinction is critical. Pinnacle Shores' interest is economic and contingent. It concerns the development potential — and therefore the market value — of the Southern Parcel as collateral for the Pinnacle Loan. This is fundamentally different from a direct, legally protectable interest in the subject matter of this declaratory judgment action. The subject matter of this action is the existence or non-existence of a specific real property easement across Fairwater's land. The Bank holds no interest, direct or indirect, in that easement. The Bank's sole nexus to the dispute is that the resolution of the easement question may affect the value of the Bank's collateral — a purely derivative and consequential interest.

Florida courts have consistently distinguished between a direct interest in the subject matter of litigation and a mere financial or economic interest that may be incidentally affected by the outcome. In Union Central Life Insurance Co. v. Carlisle, 593 So. 2d 505 (Fla. 1992), the Florida Supreme Court emphasized that the interest required for intervention as of right must be "such a direct interest in the subject matter of the suit that the intervenor will either gain or lose by the direct legal operation and effect of the judgment." Id. at 508. A contingent, remote, or consequential interest — such as the potential diminution in collateral value that Pinnacle Shores identifies here — does not satisfy this standard. See also Mid-Continent Casualty Co. v. Basdeo, 742 So. 2d 294, 296 (Fla. 4th DCA 1999) (denying intervention where proposed intervenor's interest was "at best, derivative and contingent").

The Bank's reliance on its status as a secured lender to establish intervention rights is misplaced. A mortgagee's interest in preserving the value of its collateral, while legitimate and commercially important, is not the type of direct and present interest in the subject matter of litigation that warrants intervention as of right. If the rule were otherwise, every secured lender whose borrower's property is the subject of — or merely tangentially related to — a real property dispute would be entitled to intervene as of right, potentially multiplying parties in actions throughout this State. Such a result would be inconsistent with the purpose and text of Rule 1.230(a) and with the sound administration of justice.

Furthermore, the Bank has not demonstrated that the disposition of this action will, "as a practical matter, impair or impede" its ability to protect its interest. Even if this Court declares that the Cross-Parcel Easement was extinguished, Pinnacle Shores retains the full panoply of remedies available to it as a secured lender. The Bank may enforce the covenants of the Pinnacle Loan, including any access-related conditions. The Bank may decline to fund future draws on the construction loan if the access condition is not satisfied. The Bank may declare a default and accelerate the loan if Ridgemark fails to satisfy its obligations under the loan documents. The Bank may foreclose on its mortgage and recover against the Southern Parcel. None of these remedies is in any way impaired or impeded by the disposition of the present action without the Bank's participation as a party.

In sum, Pinnacle Shores' interest is derivative, contingent, and economic — not direct or legally cognizable under Rule 1.230(a). The Bank's interest fails to satisfy the second and third elements of the intervention standard, and the Motion should be denied on this basis alone.

B. Ridgemark Adequately Represents Pinnacle Shores' Interest, Defeating Intervention as of Right

Even assuming, arguendo, that Pinnacle Shores possesses a cognizable interest in this action — which Fairwater disputes — the Bank's Motion must still be denied because Ridgemark, the existing Plaintiff, adequately represents the Bank's interest. This failure to satisfy the fourth element of the intervention standard provides an independent and sufficient basis for denial.

The question of adequate representation is central to the analysis of intervention as of right. The purpose of the adequacy-of-representation requirement is to ensure that intervention is limited to situations where a proposed intervenor's interests would otherwise go unprotected in the litigation. Where an existing party and the proposed intervenor share the same ultimate objective, there is a strong presumption that the existing party adequately represents the proposed intervenor's interest. See Chiles v. News-Press Publ'g Co., 834 So. 2d 247, 252 (Fla. 2d DCA 2002); National Wildlife Federation v. Lujan, 960 F.2d 184, 190 (D.C. Cir. 1992) (applying the analogous federal standard, upon which Florida's rule is modeled). To overcome this presumption, the movant must make a concrete showing that the existing party's representation "may be" inadequate due to collusion, adversity of interest, nonfeasance, or incompetence. Vague or speculative allegations of potential inadequacy are insufficient.

In this case, the alignment of interests between Ridgemark and Pinnacle Shores is complete and unambiguous. Both Ridgemark and Pinnacle Shores share the identical objective in this litigation: a judicial declaration that the Cross-Parcel Easement remains in full force and effect. The continued validity of the Cross-Parcel Easement is essential to Ridgemark's planned development of the Southern Parcel and, derivatively, to the value of Pinnacle Shores' collateral. There is no divergence whatsoever between the borrower and its construction lender on the central legal question presented by this case.

Ridgemark is represented by highly experienced counsel — Marco D. Castellon, Esq. (Florida Bar No. 0653117), and Rebecca Shin-Torres, Esq., of Castellon Foley & Ruiz LLP, a well-regarded Orlando-based litigation firm with significant experience in real property and land use disputes. Ridgemark has actively and competently litigated this case since its filing on July 19, 2021. Among other things:

• Ridgemark filed a detailed Complaint for Declaratory Judgment on July 19, 2021, supported by exhibits including certified copies of the original easement grant, the 2014 Replat, and relevant chain-of-title documents.

• Ridgemark served its own discovery on Fairwater on November 1, 2021, including interrogatories and requests for production of documents directed at the circumstances surrounding the 2014 Replat and Fairwater's acquisition of the Northern Parcel.

• Ridgemark responded to Fairwater's interrogatories and requests for production by November 15, 2021, within the time permitted by the Florida Rules of Civil Procedure.

• Ridgemark has participated in a case management conference with the Court and has complied with all scheduling orders entered to date.

There is no evidence — and Pinnacle Shores has offered none — that Ridgemark has failed to prosecute this action diligently, that Ridgemark's counsel is incompetent or conflicted, or that Ridgemark has in any way neglected the interests that it shares with the Bank. The Bank's Motion is devoid of any allegation of collusion between Ridgemark and Fairwater, adversity of interest between Ridgemark and the Bank, or nonfeasance by Ridgemark's counsel.

The Bank's principal justification for intervention — its asserted concern that Ridgemark might settle or compromise the easement claim without the Bank's consent — is entirely speculative and does not overcome the presumption of adequate representation. This Court should not grant intervention based on the mere theoretical possibility that a plaintiff might at some future date settle a case on terms unfavorable to a non-party. Such speculation is inherent in virtually every case in which a proposed intervenor shares the objective of an existing party and, if accepted as a basis for intervention, would effectively eliminate the adequacy-of-representation requirement from Rule 1.230(a).

Moreover, the Bank's settlement-related concern is addressed by its own contractual protections. As a sophisticated commercial lender, Pinnacle Shores presumably included in the Pinnacle Loan documents covenants restricting Ridgemark's ability to dispose of, compromise, or release material property rights — including easement rights — without the Bank's prior written consent. Such covenants are standard in commercial construction loan agreements and exist precisely to protect the lender's collateral interest in situations such as this. The Bank's contractual remedies against Ridgemark provide a fully adequate alternative mechanism for protecting the Bank's interest without the need for intervention in this proceeding.

Finally, the Bank's purported interest in asserting its own "lien-priority and consent rights over any easement modification" is a red herring. This action does not involve a modification of the Cross-Parcel Easement or an alteration of lien priority. The Complaint seeks a single, binary declaration: either the Cross-Parcel Easement was extinguished by the 2014 Replat, or it was not. No party has sought an easement modification, a reformation of the easement terms, or any relief that would implicate the Bank's lien-priority rights. If and to the extent that any lien-priority issues may arise between Pinnacle Shores and Ridgemark in the future, those issues are a matter of contract between the Bank and its borrower and are not before this Court. They provide no basis for intervention in the present declaratory judgment action.

For all of these reasons, Ridgemark adequately represents Pinnacle Shores' interest in this litigation, and the Motion must be denied.

C. Intervention Would Unduly Complicate and Delay These Proceedings

Even if the Court were to find that Pinnacle Shores has a cognizable interest and that Ridgemark's representation of that interest may be inadequate — neither of which Fairwater concedes — the Court should nonetheless exercise its discretion to deny intervention because permitting the Bank to intervene would unduly complicate and delay these proceedings to the prejudice of Fairwater.

This case presents a discrete, focused legal question: whether the vacating language in the 2014 Replat operated to extinguish the Cross-Parcel Easement. It is a two-party dispute between the owner of the putative dominant tenement (Ridgemark, owner of the Southern Parcel) and the owner of the putative servient tenement (Fairwater, owner of the Northern Parcel). The issues are well defined, the parties are clearly identified, and the litigation has proceeded efficiently since its inception.

Adding Pinnacle Shores as a third party — with its own counsel (Whitmore Dane LLP), its own litigation strategy, its own discovery needs, and its own procedural posture — will inevitably increase the burden on both existing parties and the Court. Specifically:

First, the addition of a new party at this stage of the proceedings will likely trigger additional discovery. Pinnacle Shores may serve its own interrogatories, requests for production, and requests for admission on Fairwater. Pinnacle Shores may seek to take depositions of Fairwater's representatives and third-party witnesses. Fairwater, in turn, would be entitled to conduct discovery on Pinnacle Shores regarding the terms of the Pinnacle Loan, the Bank's underwriting process, the Bank's assessment of the access issue, and the Bank's communications with Ridgemark concerning the easement dispute. This additional discovery will consume the resources of all parties and may necessitate an extension of the discovery cutoff and a continuance of any trial date.

Second, Pinnacle Shores' intervention threatens to expand the scope of this action beyond the declaratory judgment issues raised in Ridgemark's Complaint. The Bank's Motion expressly references its "lien-priority and consent rights over any easement modification" — issues that are wholly extraneous to the question of whether the 2014 Replat extinguished the easement. If permitted to intervene, the Bank may seek to inject ancillary disputes into this proceeding, including issues of lien priority, loan covenant compliance, the adequacy of the Bank's underwriting, and the Bank's own remedies under the Pinnacle Loan. These issues would transform a focused declaratory judgment action into a sprawling, multi-party proceeding requiring additional briefing, additional witness testimony, and additional judicial resources.

Third, the introduction of a third party with potentially distinct litigation tactics and settlement postures will complicate any future mediation or settlement discussions between Ridgemark and Fairwater. The existing parties' ability to negotiate a prompt, efficient resolution of the easement dispute — a resolution that may or may not involve terms beyond the binary existence/non-existence of the easement — would be significantly impaired by the presence of a third party with its own institutional interests, lending committee approval requirements, and regulatory constraints.

The parties have already engaged in substantial discovery. Fairwater served its first set of interrogatories and requests for production on Ridgemark on October 4, 2021. Ridgemark served responsive discovery on November 15, 2021. Ridgemark served its own discovery on Fairwater on November 1, 2021. Fairwater served its responses on December 17, 2021. The parties have invested significant time and resources in shaping the evidentiary record in this case. Permitting intervention at this juncture — nearly six months after the filing of the Complaint and after the close of initial written discovery — would disrupt the orderly progress of this litigation and impose undue burdens on Fairwater.

Fairwater notes that if, notwithstanding the arguments set forth herein, the Court grants Pinnacle Shores' Motion to Intervene, Fairwater respectfully reserves all rights to oppose any expansion of the scope of these proceedings beyond the declaratory judgment issues raised in Ridgemark's Complaint. Fairwater will seek appropriate protective orders to prevent the injection of ancillary issues — including lien priority, loan covenant compliance, and the Bank's own remedies — into this proceeding.

D. Alternatively, Permissive Intervention Under Rule 1.230(b) Should Be Denied

To the extent Pinnacle Shores alternatively seeks permissive intervention under Florida Rule of Civil Procedure 1.230(b), that request should also be denied.

Permissive intervention under Rule 1.230(b) is committed to the sound discretion of the trial court. See Fox v. Trevino, 303 So. 3d 287, 292 (Fla. 5th DCA 2020). The rule provides that the court may permit intervention when "an applicant's claim or defense and the main action have a question of law or fact in common," but only where "the intervention will [not] unduly delay or prejudice the adjudication of the rights of the original parties." Fla. R. Civ. P. 1.230(b). Courts considering permissive intervention must weigh the totality of the circumstances, including the nature and extent of the proposed intervenor's interest, the adequacy of representation by existing parties, the delay and prejudice that intervention may cause, and the availability of alternative remedies. See Chiles, 834 So. 2d at 253–54.

For the reasons fully stated in Sections IV.A through IV.C above, permissive intervention should be denied. The Bank's interests are adequately protected by Ridgemark, which shares the Bank's objective and has actively and competently prosecuted this case. Intervention would inject unnecessary complexity into the proceedings, delay the resolution of the underlying easement dispute, and prejudice Fairwater's interest in the orderly and efficient adjudication of this case.

Furthermore, the Bank has alternative remedies available that render intervention unnecessary. The Bank may enforce the covenants of the Pinnacle Loan, including any access-related draw conditions, to protect its collateral interest. The Bank may decline to fund future construction draws if the access condition is not satisfied. The Bank may declare a default and accelerate the Pinnacle Loan if Ridgemark fails to maintain legally enforceable vehicular access to the Southern Parcel. The Bank may exercise its rights under the mortgage, including the right to foreclose, if the Bank determines that the value of its collateral has been impaired. These remedies are fully available to the Bank without formal party status in this proceeding.

Additionally, the Bank may monitor these proceedings without intervening. Nothing prevents the Bank from attending hearings, reviewing publicly filed documents, communicating with Ridgemark and its counsel regarding litigation strategy and settlement terms, and exercising its contractual rights to receive information about the status of the case. Informal monitoring, coupled with the Bank's contractual protections, provides an adequate mechanism for the Bank to protect its interests without the burdens that formal intervention would impose on all parties and the Court.

For all of these reasons, permissive intervention under Rule 1.230(b) should be denied.

V. CONCLUSION

Pinnacle Shores Bank, N.A. has failed to carry its burden of demonstrating entitlement to intervention as of right under Florida Rule of Civil Procedure 1.230(a). The Bank's interest as Ridgemark's construction lender is entirely derivative of Ridgemark's claim to the Cross-Parcel Easement, does not constitute a direct and legally protectable interest in the subject matter of this action, and does not satisfy the requirements of Rule 1.230(a). The Bank's interest is adequately — indeed, identically — represented by Ridgemark, the existing Plaintiff, which shares the Bank's objective of obtaining a judicial declaration that the Cross-Parcel Easement remains in full force and effect. And the Bank has wholly failed to demonstrate that its ability to protect its interest will, as a practical matter, be impaired or impeded by the disposition of this action in the absence of the Bank's participation as a party.

Permissive intervention under Rule 1.230(b) should likewise be denied because intervention would unduly complicate and delay these proceedings, would prejudice Fairwater's rights, and is unnecessary in light of the Bank's adequate contractual protections and alternative remedies.

WHEREFORE, Defendant Fairwater Real Estate Investment Trust respectfully requests that this Court enter an Order:

(a) Denying Pinnacle Shores Bank, N.A.'s Motion to Intervene as of Right;

(b) Denying any alternative request for permissive intervention under Rule 1.230(b); and

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 28th day of January 2022, a true and correct copy of the foregoing Defendant Fairwater Real Estate Investment Trust's Response in Opposition to Non-Party Pinnacle Shores Bank, N.A.'s Motion to Intervene as of Right has been furnished by electronic mail and by U.S. First Class Mail, postage prepaid, to the following:

Marco D. Castellon, Esq. Rebecca Shin-Torres, Esq. Castellon Foley & Ruiz LLP 228 South Orange Avenue, Suite 1400 Orlando, Florida 32801 Counsel for Plaintiff Ridgemark Development Partners LLC

Carolyn F. Dubrow, Esq. Whitmore Dane LLP 100 North Tampa Street, Suite 2600 Tampa, Florida 33602 Counsel for Non-Party Movant Pinnacle Shores Bank, N.A.

Respectfully submitted,

HARGROVE & LIDDELL, P.A. Florida Local Counsel for Defendant Fairwater Real Estate Investment Trust

By: ________

Brenda Hargrove, Esq. Florida Bar No. 0987214 501 East Church Street, Suite 300 Orlando, Florida 32801 Telephone: (407) 555-8200 Facsimile: (407) 555-8201

Email: bhargrove@hargroveliddell.com

Of Counsel:

Francesca Morano, Responsible Partner Jeffrey Park, Lead Associate Calderwood & Harkness LLP 1725 K Street NW, Suite 1100 Washington, DC 20006 Telephone: (202) 555-4400 Facsimile: (202) 555-4401

Email: fmorano@calderwoodharkness.com

Email: jpark@calderwoodharkness.com

RIDGEMARK DEVELOPMENT PARTNERS LLC, a Florida limited liability company,

Plaintiff,

FAIRWATER REAL ESTATE INVESTMENT TRUST, a Maryland real estate investment trust,

Defendant.

IN THE CIRCUIT COURT OF THE EIGHTEENTH JUDICIAL CIRCUIT IN AND FOR SEMINOLE COUNTY, FLORIDA
CIVIL DIVISION
Case No.: 2021-CA-002748-18-W
DEFENDANT FAIRWATER REAL ESTATE INVESTMENT TRUST'S RESPONSE IN OPPOSITION TO NON-PARTY PINNACLE SHORES BANK, N.A.'S MOTION TO INTERVENE AS OF RIGHT
Defendant Fairwater Real Estate Investment Trust ("Fairwater" or "FREIT"), by and through its undersigned Florida counsel, Hargrove & Liddell, P.A., and its national counsel, Calderwood & Harkness LLP, respectfully submits this Response in Opposition to the Motion to Intervene as of Right (the "Motion") filed by non-party Pinnacle Shores Bank, National Association ("Pinnacle Shores" or the "Bank") on January 14, 2022, pursuant to Florida Rule of Civil Procedure 1.230(a), and states as follows:
I. INTRODUCTION
Defendant Fairwater Real Estate Investment Trust ("Fairwater" or "FREIT"), by and through undersigned counsel, respectfully submits this Response in Opposition to the Motion to Intervene as of Right filed by non-party Pinnacle Shores Bank, National Association ("Pinnacle Shores" or the "Bank") on January 14, 2022, pursuant to Florida Rule of Civil Procedure 1.230(a). For the reasons set forth below, the Motion should be denied in its entirety.
This action arises from a discrete real property dispute. Plaintiff Ridgemark Development Partners LLC ("Ridgemark") filed a Complaint for Declaratory Judgment on July 19, 2021, seeking a judicial declaration that a 60-foot-wide non-exclusive ingress/egress and utility easement (the "Cross-Parcel Easement") originally recorded on June 22, 1998 in Official Records Book 4517, Page 1283, of the Public Records of Seminole County, Florida, was not extinguished by the Commerce Park Boulevard Phase II Replat recorded on September 15, 2014 in Plat Book 78, Pages 44–46, of the Public Records of Seminole County, Florida (the "2014 Replat"). The central — and indeed the sole — legal question before this Court is whether the 2014 Replat operated to vacate and extinguish the Cross-Parcel Easement.
Fairwater has answered the Complaint, denying the continued validity of the Cross-Parcel Easement and asserting four affirmative defenses: (i) extinguishment by replat; (ii) estoppel and laches; (iii) merger; and (iv) failure to state a cause of action. Discovery has been actively conducted by both parties, and the case is progressing toward resolution on the merits.
Pinnacle Shores now seeks to inject itself into this focused, two-party declaratory judgment action. The Bank asserts that its interest as Ridgemark's construction lender on a $14.6 million construction-to-permanent loan commitment, secured by a first-priority mortgage on Ridgemark's 16.3-acre parcel (the "Southern Parcel," Parcel ID 25-20-30-500-0030-0000), is directly affected by this proceeding. The Bank claims that the outcome of the easement dispute will impair the value and enforceability of its mortgage collateral, thereby warranting intervention as of right under Rule 1.230(a).
Fairwater respectfully submits that the Motion should be denied. Pinnacle Shores fails to satisfy the well-established standards for intervention as of right under Florida law. The Bank's interest is entirely derivative of Ridgemark's claim; Ridgemark, as the existing plaintiff, adequately represents the Bank's interest in maintaining the validity of the easement; and intervention would inject unnecessary complexity and delay into what is otherwise a straightforward declaratory judgment proceeding. For the same reasons, permissive intervention under Rule 1.230(b) is likewise inappropriate.
II. STATEMENT OF RELEVANT FACTS
A. The Underlying Dispute
Fairwater is a Maryland-organized, publicly traded real estate investment trust listed on the New York Stock Exchange under the ticker symbol "FWTR." Fairwater is headquartered at 1400 Waverly Park Drive, Suite 600, Bethesda, Maryland 20814, and invests primarily in industrial and logistics properties throughout the southeastern United States. As of its most recent public filings, Fairwater holds a diversified portfolio of warehouse, distribution, and logistics assets across six states.
Fairwater owns the Fairwater Sanford Logistics Center, a 42.7-acre property located at 4250 Commerce Park Boulevard, Sanford, Seminole County, Florida 32771 (the "Northern Parcel"). The Northern Parcel is improved with a 614,000-square-foot Class-A cross-dock distribution facility, featuring 36-foot clear heights, 130 dock-high doors, and a fully improved truck court designed for tractor-trailer circulation. The facility is strategically situated with direct access to Commerce Park Boulevard, a four-lane divided roadway providing connectivity to State Road 46 and Interstate 4.
Fairwater acquired the Northern Parcel on October 7, 2016 from Sunbelt Distribution Centers, Inc. for a total acquisition price of $47.3 million. The acquisition was financed in part by a $28.4 million first-priority mortgage loan from Kensington Capital Markets, LLC, the mortgage for which was recorded in Official Records Book 6312, Page 0988, of the Public Records of Seminole County, Florida. Fairwater's equity investment in the Northern Parcel, exclusive of subsequent capital improvements, was approximately $18.9 million.
The Northern Parcel is leased in its entirety to Condor Supply Chain Solutions, Inc. ("Condor"), a national third-party logistics provider, under a twelve-year triple-net (NNN) lease with a term commencing October 1, 2016 and expiring September 30, 2028 (the "Condor Lease"). The Condor Lease provides for an annual base rent of $2,386,460, which equates to approximately $3.89 per square foot per annum. Critically, the Condor Lease grants Condor exclusive control over truck-court ingress/egress operations at the facility, reflecting the operational security requirements of Condor's supply chain activities. The integrity of Condor's operational access — unimpeded by third-party vehicular traffic — is a material term of the Condor Lease and a fundamental consideration underlying Fairwater's acquisition of the Northern Parcel.
Ridgemark Development Partners LLC is a Florida limited liability company that acquired the Southern Parcel on March 8, 2019 from the Estate of Roland P. Thurmond for a purchase price of $2.15 million. The Southern Parcel is an unimproved 16.3-acre tract located immediately south of Fairwater's Northern Parcel. Ridgemark has publicly disclosed plans to develop the Southern Parcel as a 96-unit light-industrial flex-space park to be known as "Ridgemark Commerce Village."
Ridgemark asserts that it requires vehicular access across Fairwater's Northern Parcel via the Cross-Parcel Easement to reach Commerce Park Boulevard. Ridgemark contends that its only other road frontage is an unpaved county right-of-way known as Lakemont Trail, which Ridgemark characterizes as inadequate for commercial truck traffic due to its unpaved condition, narrow width, and lack of connectivity to the regional roadway network. Fairwater notes, without conceding the point, that the adequacy of Lakemont Trail as an alternative means of access is a factual question that has not been adjudicated and is not directly before the Court in this declaratory judgment action.
Fairwater contends — and will demonstrate at trial or on dispositive motion — that the Cross-Parcel Easement was extinguished by operation of the 2014 Replat. The Commerce Park Boulevard Phase II Replat, recorded on September 15, 2014 in Plat Book 78, Pages 44–46, of the Public Records of Seminole County, Florida, contains express vacating language providing that "all private easements shown on the prior plat are hereby vacated except as otherwise noted herein." Fairwater contends that the Cross-Parcel Easement, which was depicted on the prior plat, falls within the scope of this vacating clause and was not among the easements excepted from vacation. The 2014 Replat was approved by the Seminole County Board of County Commissioners and was executed by all then-record title holders of the affected parcels.
Ridgemark filed its Complaint for Declaratory Judgment on July 19, 2021, initiating this action and seeking a judicial declaration that the Cross-Parcel Easement survived the 2014 Replat and remains in full force and effect. Fairwater filed its Answer and Affirmative Defenses on August 30, 2021, joining issue on all material allegations and asserting the four affirmative defenses enumerated above.
B. Pinnacle Shores' Role and the Motion to Intervene
Pinnacle Shores Bank, N.A. is a national banking association organized under the laws of the United States and headquartered at 3300 Bayshore Boulevard, Tampa, Florida 33629. Pinnacle Shores is a regional commercial bank engaged in, among other activities, commercial real estate lending in the central Florida market.
On November 12, 2020, Pinnacle Shores extended to Ridgemark a $14.6 million construction-to-permanent loan commitment (the "Pinnacle Loan"). The Pinnacle Loan was secured by a first-priority mortgage encumbering the Southern Parcel, which mortgage was recorded in the Public Records of Seminole County, Florida. The Pinnacle Loan was underwritten to finance the construction and initial lease-up of the Ridgemark Commerce Village flex-space development.
Fairwater understands from the Motion that the Pinnacle Loan conditions future draws upon, among other things, proof of legally enforceable vehicular access from the Southern Parcel to a public right-of-way. This access condition is a standard term in commercial construction loan agreements and reflects prudent underwriting practice; it does not, however, confer upon the Bank any independent interest in the Cross-Parcel Easement itself or in the legal question of whether the 2014 Replat extinguished that easement.
As of the filing of the Motion to Intervene on January 14, 2022, approximately $1.9 million had been drawn on the Pinnacle Loan for site work and preliminary architectural and engineering costs associated with the planned Ridgemark Commerce Village development. The remaining approximately $12.7 million of the Pinnacle Loan commitment remains undrawn and subject to the satisfaction of various disbursement conditions, including the access condition described above.
Pinnacle Shores filed its Motion to Intervene on January 14, 2022. In its Motion, the Bank asserts that the outcome of this declaratory judgment action "will directly affect the value and enforceability of [the Bank's] mortgage collateral" and that the Bank's "security interest in the Southern Parcel is inextricably linked to the resolution of the easement dispute." The Bank further contends that it has "unique lien-priority and consent rights over any easement modification" that may result from this proceeding and that its interests are not adequately represented by Ridgemark.
Pinnacle Shores is represented in connection with the Motion by Carolyn F. Dubrow, Esq. (Florida Bar No. 0412389), of Whitmore Dane LLP, 100 North Tampa Street, Suite 2600, Tampa, Florida 33602.
III. LEGAL STANDARD FOR INTERVENTION AS OF RIGHT UNDER FLORIDA RULE OF CIVIL PROCEDURE 1.230
Florida Rule of Civil Procedure 1.230(a) provides:
Upon timely application anyone shall be permitted to intervene in an action: (a) when a statute confers an unconditional right to intervene; or (b) when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.
Florida courts have consistently interpreted Rule 1.230(a) to require a movant seeking intervention as of right to satisfy each of the following four elements:
(1) The application for intervention must be timely;
(2) The applicant must claim an interest relating to the property or transaction that is the subject of the action;
(3) The applicant must be so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest; and
(4) The applicant's interest must not be adequately represented by existing parties.
See Union Central Life Ins. Co. v. Carlisle, 593 So. 2d 505, 507–08 (Fla. 1992); In re Forfeiture of 1978 Chevrolet Van, 493 So. 2d 473, 474–75 (Fla. 3d DCA 1986); Chiles v. News-Press Publ'g Co., 834 So. 2d 247, 250–51 (Fla. 2d DCA 2002). The movant bears the burden of establishing all four elements of the intervention standard. See Morgareidge v. Howey, 75 Fla. 234, 78 So. 14 (1918); Fox v. Trevino, 303 So. 3d 287, 290 (Fla. 5th DCA 2020). Failure to satisfy any one of the four elements is sufficient grounds to deny the motion. See Union Central Life Ins. Co., 593 So. 2d at 508.
It is well settled in Florida that the right to intervene is not absolute and that Rule 1.230(a) must be construed in light of the overarching principle that "intervention is a matter of discretion" and must be balanced against the interests of existing parties in the orderly and efficient resolution of their dispute. See In re Guardianship of Schiavo, 792 So. 2d 551, 560 (Fla. 2d DCA 2001); Trevino, 303 So. 3d at 291. A claimed interest that is "remote, contingent, or merely consequential" is insufficient to support intervention as of right. See Carlisle, 593 So. 2d at 508.
Moreover, the interest asserted by the proposed intervenor must be a "direct" and "present" interest — not merely a speculative or potential future interest — in the subject matter of the litigation. See City of Coconut Creek v. Broward County, 467 So. 2d 468, 470 (Fla. 4th DCA 1985). A mere economic or financial interest that may be incidentally affected by the outcome of litigation, without more, does not constitute a sufficient interest for purposes of Rule 1.230(a). See Dept. of Environmental Protection v. Maggy Hurchalla, 261 So. 3d 571, 580 (Fla. 4th DCA 2018).
IV. ARGUMENT
A. Pinnacle Shores' Interest Is Derivative of and Subordinate to Ridgemark's Interest and Does Not Satisfy the Requirements of Rule 1.230(a)
Pinnacle Shores fails to demonstrate a sufficient interest in the property or transaction that is the subject of this action. The Bank's claimed interest is entirely derivative of — and subordinate to — Ridgemark's own claim to the Cross-Parcel Easement. Pinnacle Shores does not independently hold, claim, or assert any easement right over Fairwater's Northern Parcel. The Bank is not a party to the original grant of the Cross-Parcel Easement. The Bank is not an owner or occupant of either the dominant or servient tenement. The Bank has no privity with the original grantors or grantees of the easement. In short, Pinnacle Shores has no independent stake in the core legal question before this Court — whether the 2014 Replat extinguished the Cross-Parcel Easement — except insofar as the answer to that question may affect the economic value of the Southern Parcel, which serves as collateral for the Pinnacle Loan.
The Pinnacle Loan is secured by a first-priority mortgage on the Southern Parcel (Parcel ID 25-20-30-500-0030-0000). The mortgage encumbers the Southern Parcel itself; it does not encumber Fairwater's Northern Parcel, the Cross-Parcel Easement, or any other interest in Fairwater's property. Any judicial determination by this Court regarding the continued existence or extinguishment of the Cross-Parcel Easement does not directly impair Pinnacle Shores' lien on the Southern Parcel itself. The Bank's mortgage remains valid, enforceable, and of record regardless of whether the Cross-Parcel Easement exists. A finding that the easement was extinguished may affect the development potential and market value of the Southern Parcel, but it does not extinguish, subordinate, or otherwise impair the Bank's mortgage lien.
The distinction is critical. Pinnacle Shores' interest is economic and contingent. It concerns the development potential — and therefore the market value — of the Southern Parcel as collateral for the Pinnacle Loan. This is fundamentally different from a direct, legally protectable interest in the subject matter of this declaratory judgment action. The subject matter of this action is the existence or non-existence of a specific real property easement across Fairwater's land. The Bank holds no interest, direct or indirect, in that easement. The Bank's sole nexus to the dispute is that the resolution of the easement question may affect the value of the Bank's collateral — a purely derivative and consequential interest.
Florida courts have consistently distinguished between a direct interest in the subject matter of litigation and a mere financial or economic interest that may be incidentally affected by the outcome. In Union Central Life Insurance Co. v. Carlisle, 593 So. 2d 505 (Fla. 1992), the Florida Supreme Court emphasized that the interest required for intervention as of right must be "such a direct interest in the subject matter of the suit that the intervenor will either gain or lose by the direct legal operation and effect of the judgment." Id. at 508. A contingent, remote, or consequential interest — such as the potential diminution in collateral value that Pinnacle Shores identifies here — does not satisfy this standard. See also Mid-Continent Casualty Co. v. Basdeo, 742 So. 2d 294, 296 (Fla. 4th DCA 1999) (denying intervention where proposed intervenor's interest was "at best, derivative and contingent").
The Bank's reliance on its status as a secured lender to establish intervention rights is misplaced. A mortgagee's interest in preserving the value of its collateral, while legitimate and commercially important, is not the type of direct and present interest in the subject matter of litigation that warrants intervention as of right. If the rule were otherwise, every secured lender whose borrower's property is the subject of — or merely tangentially related to — a real property dispute would be entitled to intervene as of right, potentially multiplying parties in actions throughout this State. Such a result would be inconsistent with the purpose and text of Rule 1.230(a) and with the sound administration of justice.
Furthermore, the Bank has not demonstrated that the disposition of this action will, "as a practical matter, impair or impede" its ability to protect its interest. Even if this Court declares that the Cross-Parcel Easement was extinguished, Pinnacle Shores retains the full panoply of remedies available to it as a secured lender. The Bank may enforce the covenants of the Pinnacle Loan, including any access-related conditions. The Bank may decline to fund future draws on the construction loan if the access condition is not satisfied. The Bank may declare a default and accelerate the loan if Ridgemark fails to satisfy its obligations under the loan documents. The Bank may foreclose on its mortgage and recover against the Southern Parcel. None of these remedies is in any way impaired or impeded by the disposition of the present action without the Bank's participation as a party.
In sum, Pinnacle Shores' interest is derivative, contingent, and economic — not direct or legally cognizable under Rule 1.230(a). The Bank's interest fails to satisfy the second and third elements of the intervention standard, and the Motion should be denied on this basis alone.
B. Ridgemark Adequately Represents Pinnacle Shores' Interest, Defeating Intervention as of Right
Even assuming, arguendo, that Pinnacle Shores possesses a cognizable interest in this action — which Fairwater disputes — the Bank's Motion must still be denied because Ridgemark, the existing Plaintiff, adequately represents the Bank's interest. This failure to satisfy the fourth element of the intervention standard provides an independent and sufficient basis for denial.
The question of adequate representation is central to the analysis of intervention as of right. The purpose of the adequacy-of-representation requirement is to ensure that intervention is limited to situations where a proposed intervenor's interests would otherwise go unprotected in the litigation. Where an existing party and the proposed intervenor share the same ultimate objective, there is a strong presumption that the existing party adequately represents the proposed intervenor's interest. See Chiles v. News-Press Publ'g Co., 834 So. 2d 247, 252 (Fla. 2d DCA 2002); National Wildlife Federation v. Lujan, 960 F.2d 184, 190 (D.C. Cir. 1992) (applying the analogous federal standard, upon which Florida's rule is modeled). To overcome this presumption, the movant must make a concrete showing that the existing party's representation "may be" inadequate due to collusion, adversity of interest, nonfeasance, or incompetence. Vague or speculative allegations of potential inadequacy are insufficient.
In this case, the alignment of interests between Ridgemark and Pinnacle Shores is complete and unambiguous. Both Ridgemark and Pinnacle Shores share the identical objective in this litigation: a judicial declaration that the Cross-Parcel Easement remains in full force and effect. The continued validity of the Cross-Parcel Easement is essential to Ridgemark's planned development of the Southern Parcel and, derivatively, to the value of Pinnacle Shores' collateral. There is no divergence whatsoever between the borrower and its construction lender on the central legal question presented by this case.
Ridgemark is represented by highly experienced counsel — Marco D. Castellon, Esq. (Florida Bar No. 0653117), and Rebecca Shin-Torres, Esq., of Castellon Foley & Ruiz LLP, a well-regarded Orlando-based litigation firm with significant experience in real property and land use disputes. Ridgemark has actively and competently litigated this case since its filing on July 19, 2021. Among other things:
• Ridgemark filed a detailed Complaint for Declaratory Judgment on July 19, 2021, supported by exhibits including certified copies of the original easement grant, the 2014 Replat, and relevant chain-of-title documents.
• Ridgemark served its own discovery on Fairwater on November 1, 2021, including interrogatories and requests for production of documents directed at the circumstances surrounding the 2014 Replat and Fairwater's acquisition of the Northern Parcel.
• Ridgemark responded to Fairwater's interrogatories and requests for production by November 15, 2021, within the time permitted by the Florida Rules of Civil Procedure.
• Ridgemark has participated in a case management conference with the Court and has complied with all scheduling orders entered to date.
There is no evidence — and Pinnacle Shores has offered none — that Ridgemark has failed to prosecute this action diligently, that Ridgemark's counsel is incompetent or conflicted, or that Ridgemark has in any way neglected the interests that it shares with the Bank. The Bank's Motion is devoid of any allegation of collusion between Ridgemark and Fairwater, adversity of interest between Ridgemark and the Bank, or nonfeasance by Ridgemark's counsel.
The Bank's principal justification for intervention — its asserted concern that Ridgemark might settle or compromise the easement claim without the Bank's consent — is entirely speculative and does not overcome the presumption of adequate representation. This Court should not grant intervention based on the mere theoretical possibility that a plaintiff might at some future date settle a case on terms unfavorable to a non-party. Such speculation is inherent in virtually every case in which a proposed intervenor shares the objective of an existing party and, if accepted as a basis for intervention, would effectively eliminate the adequacy-of-representation requirement from Rule 1.230(a).
Moreover, the Bank's settlement-related concern is addressed by its own contractual protections. As a sophisticated commercial lender, Pinnacle Shores presumably included in the Pinnacle Loan documents covenants restricting Ridgemark's ability to dispose of, compromise, or release material property rights — including easement rights — without the Bank's prior written consent. Such covenants are standard in commercial construction loan agreements and exist precisely to protect the lender's collateral interest in situations such as this. The Bank's contractual remedies against Ridgemark provide a fully adequate alternative mechanism for protecting the Bank's interest without the need for intervention in this proceeding.
Finally, the Bank's purported interest in asserting its own "lien-priority and consent rights over any easement modification" is a red herring. This action does not involve a modification of the Cross-Parcel Easement or an alteration of lien priority. The Complaint seeks a single, binary declaration: either the Cross-Parcel Easement was extinguished by the 2014 Replat, or it was not. No party has sought an easement modification, a reformation of the easement terms, or any relief that would implicate the Bank's lien-priority rights. If and to the extent that any lien-priority issues may arise between Pinnacle Shores and Ridgemark in the future, those issues are a matter of contract between the Bank and its borrower and are not before this Court. They provide no basis for intervention in the present declaratory judgment action.
For all of these reasons, Ridgemark adequately represents Pinnacle Shores' interest in this litigation, and the Motion must be denied.
C. Intervention Would Unduly Complicate and Delay These Proceedings
Even if the Court were to find that Pinnacle Shores has a cognizable interest and that Ridgemark's representation of that interest may be inadequate — neither of which Fairwater concedes — the Court should nonetheless exercise its discretion to deny intervention because permitting the Bank to intervene would unduly complicate and delay these proceedings to the prejudice of Fairwater.
This case presents a discrete, focused legal question: whether the vacating language in the 2014 Replat operated to extinguish the Cross-Parcel Easement. It is a two-party dispute between the owner of the putative dominant tenement (Ridgemark, owner of the Southern Parcel) and the owner of the putative servient tenement (Fairwater, owner of the Northern Parcel). The issues are well defined, the parties are clearly identified, and the litigation has proceeded efficiently since its inception.
Adding Pinnacle Shores as a third party — with its own counsel (Whitmore Dane LLP), its own litigation strategy, its own discovery needs, and its own procedural posture — will inevitably increase the burden on both existing parties and the Court. Specifically:
First, the addition of a new party at this stage of the proceedings will likely trigger additional discovery. Pinnacle Shores may serve its own interrogatories, requests for production, and requests for admission on Fairwater. Pinnacle Shores may seek to take depositions of Fairwater's representatives and third-party witnesses. Fairwater, in turn, would be entitled to conduct discovery on Pinnacle Shores regarding the terms of the Pinnacle Loan, the Bank's underwriting process, the Bank's assessment of the access issue, and the Bank's communications with Ridgemark concerning the easement dispute. This additional discovery will consume the resources of all parties and may necessitate an extension of the discovery cutoff and a continuance of any trial date.
Second, Pinnacle Shores' intervention threatens to expand the scope of this action beyond the declaratory judgment issues raised in Ridgemark's Complaint. The Bank's Motion expressly references its "lien-priority and consent rights over any easement modification" — issues that are wholly extraneous to the question of whether the 2014 Replat extinguished the easement. If permitted to intervene, the Bank may seek to inject ancillary disputes into this proceeding, including issues of lien priority, loan covenant compliance, the adequacy of the Bank's underwriting, and the Bank's own remedies under the Pinnacle Loan. These issues would transform a focused declaratory judgment action into a sprawling, multi-party proceeding requiring additional briefing, additional witness testimony, and additional judicial resources.
Third, the introduction of a third party with potentially distinct litigation tactics and settlement postures will complicate any future mediation or settlement discussions between Ridgemark and Fairwater. The existing parties' ability to negotiate a prompt, efficient resolution of the easement dispute — a resolution that may or may not involve terms beyond the binary existence/non-existence of the easement — would be significantly impaired by the presence of a third party with its own institutional interests, lending committee approval requirements, and regulatory constraints.
The parties have already engaged in substantial discovery. Fairwater served its first set of interrogatories and requests for production on Ridgemark on October 4, 2021. Ridgemark served responsive discovery on November 15, 2021. Ridgemark served its own discovery on Fairwater on November 1, 2021. Fairwater served its responses on December 17, 2021. The parties have invested significant time and resources in shaping the evidentiary record in this case. Permitting intervention at this juncture — nearly six months after the filing of the Complaint and after the close of initial written discovery — would disrupt the orderly progress of this litigation and impose undue burdens on Fairwater.
Fairwater notes that if, notwithstanding the arguments set forth herein, the Court grants Pinnacle Shores' Motion to Intervene, Fairwater respectfully reserves all rights to oppose any expansion of the scope of these proceedings beyond the declaratory judgment issues raised in Ridgemark's Complaint. Fairwater will seek appropriate protective orders to prevent the injection of ancillary issues — including lien priority, loan covenant compliance, and the Bank's own remedies — into this proceeding.
D. Alternatively, Permissive Intervention Under Rule 1.230(b) Should Be Denied
To the extent Pinnacle Shores alternatively seeks permissive intervention under Florida Rule of Civil Procedure 1.230(b), that request should also be denied.
Permissive intervention under Rule 1.230(b) is committed to the sound discretion of the trial court. See Fox v. Trevino, 303 So. 3d 287, 292 (Fla. 5th DCA 2020). The rule provides that the court may permit intervention when "an applicant's claim or defense and the main action have a question of law or fact in common," but only where "the intervention will [not] unduly delay or prejudice the adjudication of the rights of the original parties." Fla. R. Civ. P. 1.230(b). Courts considering permissive intervention must weigh the totality of the circumstances, including the nature and extent of the proposed intervenor's interest, the adequacy of representation by existing parties, the delay and prejudice that intervention may cause, and the availability of alternative remedies. See Chiles, 834 So. 2d at 253–54.
For the reasons fully stated in Sections IV.A through IV.C above, permissive intervention should be denied. The Bank's interests are adequately protected by Ridgemark, which shares the Bank's objective and has actively and competently prosecuted this case. Intervention would inject unnecessary complexity into the proceedings, delay the resolution of the underlying easement dispute, and prejudice Fairwater's interest in the orderly and efficient adjudication of this case.
Furthermore, the Bank has alternative remedies available that render intervention unnecessary. The Bank may enforce the covenants of the Pinnacle Loan, including any access-related draw conditions, to protect its collateral interest. The Bank may decline to fund future construction draws if the access condition is not satisfied. The Bank may declare a default and accelerate the Pinnacle Loan if Ridgemark fails to maintain legally enforceable vehicular access to the Southern Parcel. The Bank may exercise its rights under the mortgage, including the right to foreclose, if the Bank determines that the value of its collateral has been impaired. These remedies are fully available to the Bank without formal party status in this proceeding.
Additionally, the Bank may monitor these proceedings without intervening. Nothing prevents the Bank from attending hearings, reviewing publicly filed documents, communicating with Ridgemark and its counsel regarding litigation strategy and settlement terms, and exercising its contractual rights to receive information about the status of the case. Informal monitoring, coupled with the Bank's contractual protections, provides an adequate mechanism for the Bank to protect its interests without the burdens that formal intervention would impose on all parties and the Court.
For all of these reasons, permissive intervention under Rule 1.230(b) should be denied.
V. CONCLUSION
Pinnacle Shores Bank, N.A. has failed to carry its burden of demonstrating entitlement to intervention as of right under Florida Rule of Civil Procedure 1.230(a). The Bank's interest as Ridgemark's construction lender is entirely derivative of Ridgemark's claim to the Cross-Parcel Easement, does not constitute a direct and legally protectable interest in the subject matter of this action, and does not satisfy the requirements of Rule 1.230(a). The Bank's interest is adequately — indeed, identically — represented by Ridgemark, the existing Plaintiff, which shares the Bank's objective of obtaining a judicial declaration that the Cross-Parcel Easement remains in full force and effect. And the Bank has wholly failed to demonstrate that its ability to protect its interest will, as a practical matter, be impaired or impeded by the disposition of this action in the absence of the Bank's participation as a party.
Permissive intervention under Rule 1.230(b) should likewise be denied because intervention would unduly complicate and delay these proceedings, would prejudice Fairwater's rights, and is unnecessary in light of the Bank's adequate contractual protections and alternative remedies.
WHEREFORE, Defendant Fairwater Real Estate Investment Trust respectfully requests that this Court enter an Order:
(a) Denying Pinnacle Shores Bank, N.A.'s Motion to Intervene as of Right;
(b) Denying any alternative request for permissive intervention under Rule 1.230(b); and
(c) Granting Fairwater such other and further relief as this Court deems just and proper.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 28th day of January 2022, a true and correct copy of the foregoing Defendant Fairwater Real Estate Investment Trust's Response in Opposition to Non-Party Pinnacle Shores Bank, N.A.'s Motion to Intervene as of Right has been furnished by electronic mail and by U.S. First Class Mail, postage prepaid, to the following:
Marco D. Castellon, Esq. Rebecca Shin-Torres, Esq. Castellon Foley & Ruiz LLP 228 South Orange Avenue, Suite 1400 Orlando, Florida 32801 Counsel for Plaintiff Ridgemark Development Partners LLC
Carolyn F. Dubrow, Esq. Whitmore Dane LLP 100 North Tampa Street, Suite 2600 Tampa, Florida 33602 Counsel for Non-Party Movant Pinnacle Shores Bank, N.A.
Respectfully submitted,
HARGROVE & LIDDELL, P.A. Florida Local Counsel for Defendant Fairwater Real Estate Investment Trust
By: ________
Brenda Hargrove, Esq. Florida Bar No. 0987214 501 East Church Street, Suite 300 Orlando, Florida 32801 Telephone: (407) 555-8200 Facsimile: (407) 555-8201
Email: bhargrove@hargroveliddell.com
Of Counsel:
Francesca Morano, Responsible Partner Jeffrey Park, Lead Associate Calderwood & Harkness LLP 1725 K Street NW, Suite 1100 Washington, DC 20006 Telephone: (202) 555-4400 Facsimile: (202) 555-4401
Email: fmorano@calderwoodharkness.com
Email: jpark@calderwoodharkness.com
RIDGEMARK DEVELOPMENT PARTNERS LLC, a Florida limited liability company,
Plaintiff,
v.
FAIRWATER REAL ESTATE INVESTMENT TRUST, a Maryland real estate investment trust,
Defendant.

IN THE CIRCUIT COURT OF THE EIGHTEENTH JUDICIAL CIRCUIT IN AND FOR SEMINOLE COUNTY, FLORIDA

CIVIL DIVISION

I. INTRODUCTION

II. STATEMENT OF RELEVANT FACTS

IV. ARGUMENT

V. CONCLUSION

CERTIFICATE OF SERVICE

Record

Parties

Dates

Amounts