Case Law Summaries

Jay W. Small

Attorney

Mateer & Harbert, P.A.

225 E. Robinson Street, Suite 600

Orlando, FL 32801

jsmall@mateerharbert.com

(407) 425-9044

1

Hillcrest Property, LLP v. Pasco County, 939 F. Supp. 2d 1240 (M.D. Fla. 2013), reversed, 754 F.3d 1279 (11th Cir. 2014).

Facts: In 2005, Pasco County adopted an ordinance that required an owner applying for a development permit to dedicate to the County the fee simple interest in land within a transportation corridor in exchange for the issuance of the permit. The ordinance established an elaborate and costly variance and waiver procedure for an owner seeking relief from the strict application of the ordinance. An applicant for development permits had the burden of proof under both procedures.

In 2006, Hillcrest began efforts to develop its 16 acre parcel of property into a retail commercial development. Application of the ordinance required the owner to dedicate a strip of land along the property’s State Road 52 frontage. During this time frame, negotiations among the owner, the County, and the Florida Department of Transportation took place, lasting until 2007, resulting in the Department also requiring a building setback. In 2007, the owner submitted a site plan application with a written reservation of rights to the dedication although it did not appeal the dedication requirement or use the variance and waiver procedures. After the site plan was approved, the owner submitted a series of construction permit applications which were conditionally approved subject to the County’s demanded dedication.

Procedural Posture: The owner sued the County alleging federal and state claims for relief including due process, equal protection, denial of access to the courts, and denials of a right to a jury trial, and other state claims for relief, including inverse condemnation. The owner asserted no federal takings claim. In a related state court litigation, the appellant sued the Department alleging state takings claims. The parties filed motions for summary judgment, and the magistrate judge determined that the ordinance could be challenged as a substantive due process violation. The Federal District Court adopted virtually intact the magistrate judge’s report and recommendation. The District Court entered a summary judgment for the owner, granting its facial due process claim. It declined ruling the state takings claim because of the separate suit in state court against the Department and the possible jurisdictional splitting of claims.

The County appealed the District Court’s final judgment, arguing that the District Court erred in holding that Hillcrest’s facial challenge not accrue on the date that the ordinance was enacted and was thus time barred.

Issue: Whether the County’s variance and waiver provisions satisfied federal exaction, criteria, and whether the owner had exhausted its administrative remedies before filing its lawsuit and whether the facial challenge was barred by the statute of limitations.

Analysis and Holding: The District Court resolved the case on substantive due process grounds, relying heavily on the reasoning of Nollan v. California Coastal Commission, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374, 114 S.Ct. 2309, 129 L.Ed. 2d 304 (1994). As a general rule, a governmental accommodation cannot be conditioned on the relinquishment of a constitutional right. Land use exactions conditioning development approval on dedication of a property interest to public uses are limited exceptions to this general rule. Nollan involved a situation in which the dedication did not advance the justification for the exaction and there was no rational nexus between the exaction and the state’s interest. Unlike Nollan, the County’s ordinance did further a public interest in road widening programs by decreasing future acquisition costs. Dolan provided a safe harbor to Nollan if the dedication was roughly proportional to the impact of the proposed development. However, unlike both

2

Dolan and Nollan, Pasco County’s ordinance shifted the burden of proof to the owner to prove the disproportionate impact during the variance and waiver application process. Relying on Florida map of reservation cases, the District Court ruled that the Pasco County ordinance deprived the owner of its substantive due process rights. While decreasing acquisition costs is a justifiable state interest, the means crafted to achieve that interest ran afoul of due process. In the Florida map of reservation cases, the statute at issue froze property values in anticipation of future condemnation. Even more insidious than the moratoriums imposed by the map of reservation statutes, according to the District Court, was the County’s ordinance required an owner immediately to convey the fee simple interest in property at no cost in exchange for a development permit.

The Circuit Court reversed the lower court’s ruling imposing an injunction on the County prohibiting its enforcement of ordinance based on the facial challenge to the ordinance. The Circuit Court ruled that the facial challenge cause of action accrued on the date of the ordinance’s adoption and was barred by the statute of limitations.

3

Theodore Ryan v. City of Boynton Beach, ____ So.3d ____, 40 Fla. L. Weekly D345a (Fla. 4th Cir. 2015).

Facts: Before filing its condemnation suit, the City of Boynton Beach recorded two orders imposing fines for code violations which resulted in two liens attaching to Ryan's real and personal property. Thereafter the City filed a condemnation suit to take the property, and the parties stipulated to the entry of a final judgment in the amount of $99,000.00, with the court reserving jurisdiction over the apportionment claims of lienholders with respect to the award of full compensation.

Several years later, Ryan filed a motion to disburse the final judgment proceeds still held in the registry of the court, and the City sought to satisfy its prior code enforcement liens from the settlement. The trial court denied the City's motion on the basis that it had failed to file a separate petition to enforce the lien under Chapter 162, and the City successfully appealed that decision. On appeal Ryan's motion to tax appellate attorneys' fees was granted, and on remand the lower court was directed to consider the result obtained on appeal in setting the fee.

Procedural posture: Following the appeal, Ryan filed a motion to tax fees and costs incurred in connection with the motions for disbursement and for appellate attorneys' fees. The trial court denied Ryan's motion in its entirety.

Issue: The issue on appeal concerned the extent to which Ryan was entitled to attorneys’ fees for handling the apportionment proceeding.

Analysis and holding: Concerning the appellate attorneys' fees, the appellate court's earlier order awarding Ryan fees resolved that matter and became the law of the case. The appellate court rejected the trial court's rational that, based on the appellate court's ruling to consider the result obtained on appeal, Ryan was not entitled to a fee because he did not prevail on appeal. Section 73.131, Fla. Stat., requires a condemning authority to pay all reasonable costs including attorneys' fees, except up on appeal taken by a defendant in the judgment of the lower court is affirmed.

Concerning the fees for the motions for disbursement, section 73.092(2), Fla. Stat., governed the award of fees for apportionment or for claims arising as a direct result of the eminent domain proceeding. Ryan insisted that the trial court could not deny his motion for attorneys' fees for apportionment because the appellate court had inherently ruled that all matters related to the disposition of the lien claim were directly related to the condemnation. Notwithstanding the fact that the appellate court had earlier ruled that disposition of the funds in the registry of the court could not be denied for the reason that the City failed to filed an independent action, this did not mean that all attorney efforts were directly related to the eminent domain case. Time spent, however, researching issues concerning the validity of the lien would have existed irrespective to the filing of the condemnation proceedings and was not taxable as attorneys’ fees.

4

Horne v. United States Department of Agriculture, 750 F.3d 1128 (9th Cir. 2014), certiorari granted, 2015 WL 213643 (U.S. 2015).

Facts: In the early 1900s, the California raisin market experienced dramatic surges and collapses in the per ton value of raisins. Upheavals in the raisin markets persuaded Congress to enact the Agricultural Marketing Agreement Act of 1937, 7 U.S.C. Section 601, et seq., (“Act”), which sought to bring predictability to the nation's raisin market. The Act established a raiser reserve pool which required either the diversion of excess raisins to a reserve pool or the release of raisins from the pool to smooth out peaks and valleys in the supply curve.

The Act distinguished between raisin "producers" and "handlers." Producers grew grapes until they are sun-dried to the point of being raisins after which they sold to handlers for a fee. Handlers cleaned, sorted, and packaged raisins for market. Handlers bore the obligation of complying with a marketing order which established a required percentage of raisins to be held in a reserve account. The remaining raisins, called "free tonnage" raisins, were sold on the open market under the marketing order. Handlers who did not divert a predetermined percentage of the annual raisin production to the raisin reserve were subject to a fine.

The Hornes devised a novel way to avoid being classified as “handlers.” They bought handling equipment to process, clean, and stem raisins they produced themselves. As to third-party producers, instead of buying raisins outright, they charged a service fee to process them. After a protracted administrative hearing, an administrative law judge found the Hornes liable for a monetary penalty of almost $700,000.00. They sought judicial review of the final agency action, alleging that the penalty violated the Fifth Amendment’s takings clause.

Procedural Posture: The Hornes appealed the District Court’s order affirming the administrative fine.

Issue: The issues presented on appeal are (1) whether the scope of the Fifth Amendment's requirement to pay compensation for a physical taking of personal property is any different than for real property and (2) whether the imposition of a fine or penalty for failure to comply with a governmental regulatory requirement constitutes a taking.

Analysis and holding: Instead of arguing that the Act affected a partial regulatory taking under Penn Central’s ad hoc analysis, the Hornes argued that the Act authorized a per se taking like the regulation which authorized the physical invasion in Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982). The Ninth Circuit declined to categorize the case as a Loretto type of taking because the Act operated on personal rather than real property under the takings clause. It also reasoned that the Act did not deprive the Hornes of each strand of their bundle of property rights because they still retained the right to retain the proceeds from their sale of raisins.

The Ninth Circuit viewed the marketing order as a "mere restriction" on property use as opposed to a physical taking and applied the "nexus and rough proportionality" tests of Nollan/Dolan. According to the court, like the permits in Nollan v. California Coastal Commission, 483 U.S. 825 (1987) and Dolan v. City Tigard, 512 U.S. 374 (1994), the reserve program conditionally granted a governmental benefit in exchange for the surrender of a constitutionally protected property right. Under the Act, the Hornes faced the loss of dispositional control of their raisins.

5

Under Nollan, regulating the amount of raisins annually grown in the market had an essential nexus to the government's interest in eliminating the peaks and valleys in the raisin supply curve. Under Dolan, by annually modifying the amount of raisins in the marketplace to keep pace with changing market conditions, the Act balanced the ability of raisin producers to compete while reducing potential instability in the raisin market. Central to the ruling was the Court’s decision in Koontz v. St. Johns River Water Management District, 133 S. Ct. 2586 (2013), which linked the government’s demand in that case for a monetary exaction to pay for off-site wetlands mitigation to the specific parcel of property for which the owner sought a development permit. Horne reasoned that the Department linked a specific monetary exaction (imposition of a fine) to specific property (reserved raisins) just as the monetary payment in Koontz was linked to the development parcel.

6

Orange County v. Hewlings, 152 So.3d 812 (Fla. 5th DCA 2014).

Facts: Hewlings filed a public information request under Chapter 119 with Orange County seeking copies of documents related to a dangerous dog investigation of her dog. After numerous delays, the County said that it would arrange a time within fourteen days for Hewlings to inspect and designate the records she wanted for copying. Hewlings made clear that she did not want to inspect the records but that she wanted copies of them. She offered to pay the costs of copying and asked for an invoice. After a period of two weeks without a response, Hewlings filed a writ of mandamus alleging that the County had failed to respond to her request for copies with either cost information or copies of the documents.

The trial court granted the petition, directed the County to produce the documents within forty-eight hours but failed to award Hewlings’ attorneys’ fees based on the County’s argument that it did not refuse to produce the documents but simply did not copy them as quickly as Hewlings wanted them copied. The County argued that it could not be held liable for fees for refusing to delay furnishing copies if it otherwise permitted a citizen the opportunity to personally inspect and copy the records. On appeal, the District Court reversed the trial court order denying attorneys’ fees on the basis that the County’s delay in complying with the request was tantamount to a refusal to furnish them, and it remanded to the Circuit Court which conducted further proceedings and concluded that the County had unreasonably delayed in complying with the request. It thereafter entered an order finding that Hewlings was entitled to attorneys’ fees without fixing an amount.

Procedural Posture: The County appealed the Circuit Court order awarding attorneys’ fees on the basis that Chapter 119 did not authorize an award of attorneys’ fees for a delay in responding to a public information request.

Issue: Whether the County was liable for attorneys’’ fees for unreasonably delaying the production of documents.

Analysis and Holding: The County raised the same arguments about entitlement to fees as it did during the first appeal, and the District Court imposed sanctions on the County for filing a frivolous appeal.

As a threshold issue, the District Court determined that it had no jurisdiction to consider an appeal of an order which determined entitlement but not the amount of attorneys’ fees at the trial court level, an issue which Hewlings raised in her answer brief.

Reciting the facts from the initial appeal, the District Court opinion stated that the public records law is designed to provide citizens with a simple and expeditious method of assessing public records, but the County chose to interpose bureaucratic hurdles on Hewlings by forcing her to comb through offices, mark records, and wait for a written estimate of costs, and then wait for the records to be mailed to her. Rather than simply providing the records, the County’s actions caused the litigation to span four years, and required depositions, motions, hearings, and two appeals.

Based on Rule 9.410, Fla. R. App. P., sanctions were imposed on the County for filing a frivolous appeal to litigate issues previously decided by the court.

7

Consumer Rights, LLC v. Union County, Florida, ___So.3d ____, 40 Fla. L. Weekly (Fla. 1st DCA 2015).

Facts: A public records request was made bearing the email address, ask4records@gmail.com, and sent to the County at UCBOCC@windstream.net, an email address on the County’s website, albeit not associated with any particular County employee. The email purported to be made on behalf of an unidentified company. The email request did not contain any information as to how the County could contact the requester. The request directed the County to provide electronic copies of the responsive documents to the email address. The County did not immediately respond to the request because it appeared to constitute “phishing.” The plaintiff then filed suit under section 119.12, Fla. Stat. (2013), some four months later. Thereafter the County provided the documents. The trial court held a hearing on the plaintiff’s motion to tax attorneys’ fees and costs. It concluded that the request was intentionally designed to appear deceptive, and that as a result the County did not unreasonably delay in producing the documents.

Procedural posture: The plaintiff appealed the trial court’s order denying attorney’s fees and costs.

Issue: The issue on appeal was whether the County unreasonably delayed in producing documents responsive to the public information request. Analysis and holding: According to the District Court, the mere delay in responding to a public information request did not in and of itself give rise to liability for violating the public records law. Here the request came from a suspicious email address that might not have had any relation to the person seeking the records, especially in light of the fact that the email address was not easily verified. From the County’s perspective, the email could have contained a virus. Based on the record, the District Court concluded that it had no reason to believe that the County would not have timely responded to the request if the email address was easily verifiable.

8

Kentner v. City of Sanibel, 750 F.3d 1274 (11th Cir. 2014, cert denied, 21 WL 132980 (U.S. 2015).

Facts: The owners of riparian property in a beach zone brought a suit in state court, alleging that the City’s ordinance which prohibited the construction of any new docks or accessory piers in an area fronting a beach zone violated their substantive due process rights under the Florida and U.S. Constitutions. They challenged the ordinance on the ground that it made no specific finding as to the ecological conditions of submerged land, made no allowance for new dock technology that would not harm seagrass, did not identify the boundaries of the beach zone, and allowed for no variance from the operation of the ordinance. The City removed the case to federal district court which granted the City’s motion to dismiss the substantive due process claims based on the fact that the riparian rights were based on state law and therefore not fundamental rights that could support a substantive due process claim.

Procedural Posture: The owners appeal the dismissal of their complaint to the Circuit Court which reviewed it under a de novo standard of review.

Issue: The issue was whether state created property rights were fundamental rights for purposes of substantive due process.

Analysis and Holding: The Circuit Court’s decision first considered the substantially advances test under Agins v. City of Tiburon, 447 U.S. 225 (1980).

A brief discussion of the U.S. Supreme Court’s weaving of substantive due process and takings jurisprudence together is in order. In the years following Agins, its holding had been read to mean that a land use restriction, which failed to advance a legitimate state interest, was facially unconstitutional under the takings clause, thereby entitling the owner to compensation. Joint Ventures, Inc., v. Department of Transportation, 563 So.2d 622 (Fla. 1992).

The Court resolved the longstanding debate about the validity of the “substantially advances” test’s application to takings cases. Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (2005). It discarded the Agins test in land use decisions because that test was logically derived from due process analysis. According to Lingle, Agins commingled due process and takings inquiries. Before Lingle, the Court never had the occasion to consider the “substantially advances” formula as a freestanding takings test.

Lingle rejected the substantially advances inquiry in the context of regulatory takings cases. Justice O’Conner, writing for the majority, expressed the policy concern that this test could create serious practical difficulties because it could be read as demanding a heightened level of scrutiny of virtually any regulation of private property. This would immerse the federal judiciary into a sea of constant scrutiny about the efficacy of a vast array of state and federal land use regulations--a task for which it was ill-suited. Florida anticipated Lingle’s rejection of the Agins test in regulatory takings cases several years earlier in Tampa – Hillsborough County Expressway Authority v. A.G.W.S. Corp., 650 So.2d 54 (Fla. 1994). The owners argued that Lingle created a new substantive due process test that applied to state created property rights.

The Circuit Court observed that the substantive due process component of the Due Process Clause protects those rights that are implicit in the concept of ordered liberty and are those right created by Constitution. It distinguished fundamental rights from property rights created by state law, such as riparian rights. As it relates to state created property rights, the substantive component of the Due Process Clause protects the owner against the government’s arbitrary and irrational action.

9

Since the rights in this case were not fundamental rights, the Circuit Court reviewed the ordinance under the rational basis standard. Under a rational basis standard, those challenging a governmental act must convince the court that the legislative facts on which the classification is based could not reasonably be conceived to be true by the governmental decision maker. On its face, the ordinance’s protection of seagrass and aesthetic preservation offered a rational basis for the ordinance.

10

Kirby v. North Carolina Department of Transportation, ___ N.E. ___, ___S.E. 2d___, No. COA14 – 184 (N.C. App. 17 February 2015).

Facts: In order to prevent property owners from developing property in the pathway of a proposed limited access beltway facility which would loop around the City of Winston-Salem, North Carolina enacted a Map Act statute which prevented owners from obtaining development permits to improve their property. The state was authorized to record in the public records a map, and after its recording no building permits or subdivision approvals could be obtained unless the owner could obtain relief from the act by filing an application for a variance and proving that the owner could obtain no reasonable return could be obtained from the land. Alternatively an owner could file a hardship application which would allow the state to make an advance acquisition of specific properties.

Procedural posture: A group of affected property owners filed a multicount complaint alleging inverse condemnation, equal protection violations, and a declaration that the Map Act was unconstitutional as an invalid exercise of the state’s legislative power. The trial court granted the Department’s motions to dismiss and for summary judgment on the various claims on several bases including ripeness, and the owners appealed to the North Carolina Court of Appeals.

Issue: The issue on appeal was whether the recording of the corridor maps in the public records caused a taking for purposes of fixing inverse condemnation liability.

Analysis and Holding: The issue on appeal was whether the Map Act effected a taking of property. I wanted to give you another perspective on the Kirby case. In my opinion, although the state should lose in some existential sense, I'm not sure the court reached the right result based on the cases it cited.

Kirby cited to Joint Ventures, Inc. v. Department of Transportation, 563 So.2d 622 (Fla. 1990) which declared Florida's right of way reservation map statute unconstitutional. Kirby declared the North Carolina Map Act unconstitutional because, like Joint Ventures, it concluded that depressing property value in anticipation of a proposed taking did not advance a legitimate state interest. Kirby did not discuss any of the Florida case law decided in the wake of Joint Ventures.

Shortly after its decision, Joint Ventures had been construed by many by practitioners to stand for the proposition that the mere recording of a map of reservation constituted an impermissible taking because the statute did not advance a legitimate state interest. This argument was founded on the U. S. Supreme Court’s decision in Agins v. City of Tiburon, 447 U.S. 255 (1980). Like many property owners’ counsel in Florida post-Joint Ventures, the plaintiffs in Kirby argued in their motion for summary judgment that the mere recording of the map in their case amounted to a de facto taking. See n. 1, on page 12 of the slip opinion.

As noted above, the Court’s decision in Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (2005), reframed Agins as a due process case. Florida’s Supreme Court anticipated the U.S. Supreme Court’s repudiation of the theoretical underpinning of Agins in Tampa – Hillsborough County Expressway Authority, 640 So.2d 54 (Fla. 1994) cast map of reservation statutes in due process terms.

In Florida a plaintiff would have to prove either a categorical or ad hoc Penn Central type taking. Usually those sorts of issues are not resolved by a motion for summary judgment under a partial regulatory taking theory at least. The plaintiffs' affidavits in Kirby did not to include any economic expert testimony about the law’s economic impact on the owners’ use of the property.

11

Without mentioning substantive due process, Kirby concluded that depressing values in anticipation of later acquisition did not pass constitutional muster, and the court wrote, "that the Map Act [was] a cost-controlling mechanism. . .[to] decrease the future price the State must pay to obtain those affected parcels."

12

City of Jacksonville v. Smith, ____So.3d____, 40 Fla. L. Weekly D516a (Fla. 1st DCA 2015).

Facts: The Smiths bought a vacant water front lot in a neighborhood with multimillion dollars homes. Next door was a parcel of property owned by the City which was subject to deed restrictions limiting the property to leisure and recreational uses by Duval County employees. After the Smiths bought their property, and unbeknownst to them, the City removed the restriction and rezoned the property. The City ultimately improvement its property with a fire station and a berth to accommodate fire boats and marine rescue boats. The Smiths filed a claim under section 70.001 of the Bert Harris Act, alleging that the construction of the fire station inordinately burdened their property because it made the property unmarketable and diminished its value by $470,000.00. After a bench trial on the liability issue, the trial court ruled that the Smiths had a vested right to build on the property or sell it, but after construction of the fire station, the City imposed an inordinate burden on their property. The court directed a jury to determine the amount of compensation the Smiths were entitled to receive

Procedural posture: The City appealed the trial court order under Rule 9.130(a)(3)(c)(viii).

Issue: As framed by the majority, the issue on appeal was whether a property owner may maintain an action under the Bert Harris Act if that owner has not had a law, regulation, or ordinance applied to the owner’s property or, stated somewhat differently, whether the Act is subject to a limitation on governmental action that affects owner’s private property that is the subject of the governmental action.

Analysis and holding: The majority ruled that the plain language of the Bert Harris Act indicates that only real property that is directly affected by a governmental regulation is covered by the provisions of the Act. The majority relied on Op. Att’y Gen. Fla 95 – 78 (1995) which concluded that the inherent in the definition of “inordinate burden” and the Act is the requirement that the rule or regulation at issue must be directly applied to the plaintiff’s property.

According to the majority, the trial court improperly isolated one section of the statute, the definition of “action of a governmental entity” without reading that language together with language in the statute specifying that the governmental action, as applied, must unfairly affect real property. See e.g., sections 70.001(1) and (3)(d). The court was concerned that the trial court’s ruling could open the floodgates for claims under the Act against any state, regional, or local governmental entity whenever it approves a development on one property or conduct activities which could adversely impact the value of another property.

The dissenters relied, in part, on the plain language of the statute which by its express terms did not limit the Act only to situations in which damage is caused to the property that is the subject of the regulation or governmental action. The dissent pointed out the Texas’ own Bert Harris-type statute expressly limited its statute’s application to a specific action of a governmental entity that affects property that is the subject of the governmental action.

13

Randy Thompson, et a., v. Dave Heineman, in his Official Capacity as Governor of the State of Nebraska, ___N. W. 2d ___, No. S14-158 (Neb. S. Ct. January 9, 2015). Facts: A Nebraska statute permitted TransCanada to obtain route approval for the Keystone Pipeline without approval from the state’s Public Service Commission. Under the statute, route approval was made by the Governor. The statute authorizing gubernatorial approval of the route siting and the common carrier’s eminent domain powers, which was enacted by the Nebraska legislature one day after the President initial denial of TransCanada’s federal permit, only applied to TransCanada.

Procedural Posture: The trial court granted motions for summary judgment against the plaintiffs.

Issue: The issue on appeal was whether the plaintiffs had standing to bring suit against the Governor when none of the plaintiffs’ property had yet been taken in an eminent domain proceeding.

Analysis and holding: The narrow substantive issue was whether the recently enacted Nebraska statute permitting allowed the Governor, rather than the Legislature, to delegate the power of eminent domain to a publically regulated utility.  Several property owners sued, challenging the statute’s constitutionality, and the lower court ruled that the statute had unconstitutionally divested the PSC of its authority over common carriers. The court avoided the substantive question.  

Four out of seven of the court’s justices concluded that the statute was unconstitutional, but, because of what the court described as the Nebraska Constitution’s “unusual supermajority requirement” which required a five justice concurrence to hold a statute unconstitutional, the legislation had to stand by default.  Three of the justices concluded that the owners lacked standing because their property had not yet been taken and lacked taxpayer standing.  According to the dissent, to the extent the plurality’s decision discussed the constitutionality of the siting statute, the plurality’s decision was merely advisory (although it must be said, the dissent did not disagree with anything in the majority’s “advisory” opinion).  Under Nebraska’s condemnation law (just like Florida’s), a property owner whose property is taken by eminent domain has a right to contest not only the amount of compensation to be paid, but also whether the taking is legal and for a valid public purpose.   

14

Orlando/Orange County Authority Expressway Authority, etc. v. Tuscan Ridge, LLC, etc. 137 So.3d 1154 (Fla. 5th DCA 2014), review granted, 147 So.3d 524 (Fla. 2014).

Facts: After the Fifth District’s decision in Orlando/Orange County Expressway Authority v. Tuscan Ridge, LLC, 84 So.3d 410 (Fla. 5th DCA 2012), the trial court, following instructions on remand, determined that the application of subsection 73.092(1), Fla. Stat. (2012) resulted in an unreasonable fee. It also declared that statute unconstitutional, as applied, to the facts of the case. Instead of using the fee formula set forth in subsection 73.092(1), the trial court used subsection 73.092(2) to set the fee by multiplying the number of hours expended by a reasonable hourly rate. The owner’s lawyers spent in excess of 2,600 lawyer and paralegal hours litigating the case.

The trial court identified two specific reasons in support of its ruling and finding that the condemning authority had excessively litigated the case. First, it observed that the condemning authority’s attorneys spent twice as much time deposing the owner’s experts as the owner’s attorneys did when they deposed the condemning authority’s witnesses. Second, the trial court observed that late in the litigation the condemning authority decided to use an expert witness who interjected an entirely new theory into the case. That trial tactic caused a delay in the trial date and resulted in the owner’s attorneys spending considerable time to refute the new theory.

Procedural Posture: The condemning authority appealed the trial court’s order awarding an attorney’s fee under subsection 73.092(2) and ruling subsection 73.092(1) unconstitutional, as applied.

Issue: Whether the trial court correctly ruled that subsection 73.092(1) was unconstitutional, as applied, and whether it correctly applied subsection 73.092(2) to the facts of the case.

Ruling and Analysis: The appellate court rejected the owner’s arguments. Assuming for the sake of argument that the condemning authority had engaged in excessive litigation tactics, the court reasoned that the owner never sought sanctions that would have been otherwise available to them to compensate them over and above the statutory fee by utilizing subsection 57.105(2), Fla. Stat. (2013), or Rules 1.280(e) and 1.380(a)(4), Fla. R. Civ. P. Moreover, the owner’s attorneys never availed themselves of the opportunity to use Rule 1.380(e), Fla. R. Civ. P., to promulgate requests for admissions directed to the expert’s opinions. That rule would have entitled them to additional fees for proving or disproving matters not admitted.

The trial court’s order taxing fees of $816,000.00 was reversed, and the case was remanded to the trial court to enter a judgment in the amount of $227,652.25. This yielded an attorney’s fee with a blended hourly rate of about $87.00 which the court did not deem to be patently unconstitutional, especially when considered in the light of effective hourly rates in capital murder cases.

The court certified to the Florida Supreme Court the following question as one of great public importance:

In an eminent domain proceeding, when the condemning authority engages in litigation tactics causing excessive litigation and the application of the statutory fee formula results in the fee that compensates the landowner’s attorneys at a lower-than-market fee, when measured by the time involved, is the statutory fee deemed unconstitutional as applied, entitling the landowner to pursue a fee under section 73.092(2)?

15

Florida Department of Transportation v. Mallards Cove, LLP, ___ So.3d ___, 40 Fla. L. Weekly D597a (Fla. 2d DCA 2015).

Facts: In 2007, the Department filed a quick-take condemnation proceeding to take property owned by Mallards Cove. On August 30, 2007, the Department deposited $42,004,320.00 into the registry of the court. The initial deposit was disbursed to Mallards Cove on September 13, 2007. The Clerk of the Court elected to invest the amount of the initial deposit under section 74.051(4), Fla. Stat. (2007), and the earned interest on the investment was $4,396.49. The Clerk then disbursed ninety percent of the earned interest to the Department and retained ten percent. A stipulated final judgment was entered on December 13, 2007.

In 2009, Mallards Cove filed an action to declare section 74.051(4) unconstitutional in that it directed the clerk to pay ninety percent of the interest to the Department instead of Mallards Cove and to assert an inverse condemnation claim that basis of which was that the investment interest was property entitled to constitutional protection and that the Clerk took property without paying compensation. Under Rule 1.220, Fla. R. Civ. P., the circuit court granted class certification.

Procedural posture: The Department and Clerk appealed the trial court order on class certification arguing that, because Mallards Cove did not own the deposit funds at the time the interest was earned, the action was barred by res judicata due to the entry of the stipulated final judgment. The appellants argued that the requirements for class certification were not met.

Issue: The issue on appeal was whether Mallards Cove had an ownership interest in the funds on deposit such that the requirement to pay compensation was triggered by Article X, Section 6(a) of the Florida Constitution.

Analysis and holding: Noting that under the Fifth Amendment to the U.S. Constitution and Article X, Section 6(a), the right to compensation is triggered by a taking of property which entitles a property owner to receive the fair market value of the property taken. In this case, while the interest on the property was a component of compensation under either the federal or state constitutions, the District Court held that the circuit court erred in determining that the deposit funds were the personal property of Mallards Cove while they were on deposit. See, Livingston v. Frank, 150 So.3d 239 (Fla. 2nd. DCA 2014). Upon deposit of the initial estimate of value, the owner’s right to compensation vests, not the right to the specific funds on deposit.

In addition, the stipulated final judgment rendered the underlying condemnation case final, and Mallards Cove could not in effect seek additional compensation in a second action.

Facts may have driven the result in Mallards Cove because there was very little delay between the time that the funds were deposited into the court registry and the time that they were disbursed. A question left unresolved by Mallards Cove is what would happen if the Clerk had inordinately delayed disbursement of the initial deposit or had left the funds on deposit in order to accrue an even larger amount of interest. Even if a property owner is not entitled to compensation in the form of the interest earned on the deposit, an inordinate delay in the disbursement would cause the owner lose the time value of the funds to which it was entitled.

4829-6364-8802, v. 1

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