On Petition for Discretionary Review of A Decision of the Third District Court of Appeal, Third District Case No. 3D

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1 IN THE SUPREME COURT OF FLORID 4 Case No. SCl On Petition for Discretionary Review of A Decision of the Third District Court of Appeal, Third District Case No. 3D '' MONROE COUNTY, a political subdivision of The State of Florida, Petitioner, v. GALLEON BAY, a Florida corporation, Respondents. PETITIONER MONROE COUNTY'S BRIEF ON JURISDICTION Derek V. Howard (FBN ) Assistant County Attorney Monroe County Attorney's Office th St., Suite 408 Key West, FL Telephone: (305) Howard-derek@monroecounty-fl.gov Thomas G. Pelham (FBN ) Co-Counsel for Monroe County 1474 Constitution Pl. E Tallahassee, FL Telephone: (850) tgpelham@aol.com

2 TABLEOFCONTENTS TABLE OF CONTENTS...ii TABLE OF AUTHORITIES...iii STATEMENT OF THE CASE AND FACTS...1 SUMMARY OF ARGUMENT...1 ARGUMENT...2 I. Discretionary Jurisdiction Exists Because the Decision Below Creates Express and Direct Conflict...2 II. A. The Decision Conflicts with Florida Caselaw Regarding the Parcel as a Whole Doctrine...2 B. The Decision Conflicts with Florida Caselaw Regarding Lucas Takings...5 C. The Decision Conflicts with Florida Caselaw Regarding Penn Central by Mandating a Finding of Liability Without Evidence of Economic Impact...7 Jurisdiction Should Be Exercised Because this Case Involves Natural Resources of Statewide and National Importance and the Wrongful Imposition of Liability on the County for its Protection of those Resources...8 CONCLUSION...10 CERTIFICATE OF SERVICE...11 APPENDIX...TabA 11

3 Cases TABLE OF AUTHORITIES Ambrose v. Monroe County, 866 So.2d 707 (Fla. 3d DCA 2003)...8 City of Riviera Beach v. Taylor, 659 So.2d 1174 (Fla. 4th DCA1995)...3 City of Venice v. Gwynn, 76 So.3d 401 (Fla. 2nd DCA 2011)...7 Dept. of Transp. v. Jirik, 498 So.2d 1253 (Fla. 1986)...2, 4 Dept. of Enytl. Protection v. Burgess, 772 So.2d 540 (Fla. 1** DCA 2000)... 5 Fla. Dept. of Enytl. Regulation v. Schindler, 604 So.2d 565 (Fla. 2"d DCA 1992)...3 Fla. Game & Freshwater Fish Comm'n v. Flotilla, 636 So.2d 761 (Fla. 2"d DCA 1994)...2, 3 Fla. Key Deer v. Brown, 386 F.Supp.2d 1281 (S.D. Fla. 2005)...9 Gardens Country Club, Inc. v. Palm Beach County, 712 So.2d 398 (Fla. 4th DCA 1998)...4 Graham v. Estuary Properties, 399 So.2d 1374 (Fla. 1981)...2, 3, 5 Leon County v. Gluesenkamp, 873 So.2d 460 (Fla. l t DCA 2004)...7 Lost Tree Vill. Corp. v. City of Vero Beach, 838 So.2d 561 (Fla. 4th DCA 2002)

4 Lucas v. So. Carolina Coastal Council, 505 U.S (1992)...5, 6 Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104 (1978)...4, 5, 7 St. John's River Water Mgmt. Dist. v. Koontz, 77 So.3d 1220 (Fla. 2011)...6 Zupnick Haverland, LLC v. Current Builders of Fla., 7 So.3d 1132 (Fla. 4* DCA 2009)...4 IV

5 STATEMENT OF THE CASE AND FACTS This is an inverse condemnation case in which Galleon Bay alleges that the application of Monroe County's Rate-of-Growth-Ordinance (ROGO) took the remaining acres of the 90 acres it acquired on No Name Key for purposes of development. Following a bench trial on liability in 2010, the trial court determined that Galleon Bay failed to establish a taking under Penn Central because the remaining undeveloped property retained economically viable uses under ROGO, and because Galleon Bay's development expectations were met with the residential development of the other acreage. On appeal, the Third District reversed the judgment of the trial court based in significant part on a 2006 summary judgment order by a predecessor judge that was vacated by the second successor judge whose decision was in turn approved by the third successor judge who presided over the liability trial. In addition to reversal of the trial court's judgment, the Third District mandated that the trial court enter an order finding the County liable for a regulatory taking of the subject property. SUMMARY OF ARGUMENT This Court should exercise its jurisdiction over this significant and multifaceted regulatory takings case because the Third District decision creates express and direct conflict with established state caselaw on the "parcel as a whole" doctrine, the standard and statute of limitations for Lucas takings claims, the 1

6 economic impact prong of Penn Central, and the presumption of correctness of a trial court's finding of fact. The exercise of jurisdiction is also justified because this case is critically important to the natural environmental of the Florida Keys, an Area of Critical State Concern. ARGUMENT I. DISCRETIONARY JURISDICTION EXISTS BECAUSE THE DECISION BELOW CREATES EXPRESS AND DIRECT CONFLICT A. The Decision Conflicts with Florida Caselaw Regarding the Parcel as a Whole Doctrine. The Third District decision creates express and direct conflicts with Graham v. Estuary Properties, 399 So.2d 1374 (Fla. 1981), Dept. of Transp. v. Jirik, 498 So.2d 1253 (Fla. 1986), and their progeny by holding that the trial court incorrectly applied the "parcel as a whole" doctrine in considering the Bahia Shores and Dolphin Harbor developments Galleon Bay completed with the original 90 acres that it acquired on No Name Key to determine whether Galleon Bay's original investment-backed expectations were met, and by not considering the thirteen (13) platted lots separately. "In Graham, [the Florida] supreme court held that the denial of a permit to destroy 1800 acres of protected mangroves, leaving the landowner with 2800 acres and reducing by half the number of housing units the owner intended to build, was not compensable." Fla. Game & Freshwater Fish Comm'n v. Flotilla, 636 So.2d 2

7 761 (Fla. 2"d DCA 1994) (citing Graham, 399 So.2d 1374). As the trial court correctly did in the case at bar, the Second District in Flotilla analyzed the history of development that occurred on the parcel as a whole as acquired and found Graham to be instructive, stating: "By comparison, Flotilla retained the desired use of the majority of its land; most of the property was developed. Because the property as a whole retained an economic life, we cannot agree that the land use restrictions are compensable." 636 So.2d at 765. See also Fla. Dept. of Enytl. Regulation v. Schindler, 604 So.2d 565, 568 (Fla. 2"d DCA 1992) ("The focus is on... the parcel as a whole...."); City of Riviera Beach v. Taylor, 659 So.2d 1174, 1182 (Fla. 4th DCA 1995) ("[A] proper analysis of a takings claim requires consideration of the subject property in its entirety."); Fox v. Treasure Coast Regional Planning Council, 442 So.2d 221 (Fla. 1"* DCA 1983) (stating a regulation can deny development use on property "so long as the tract as a whole retains a viable economic use."). The fact that Galleon Bay was able to build less than it originally proposed to does not establish a taking. Graham, 399 So.2d at 1382 ("Nor is a taking established merely because Estuary may be allowed to build a development about half the size of its original proposal."). In developing a substantial portion of the property that it acquired, Galleon Bay is in the same position Flotilla was in, and Graham should have similarly instructed the Third District's decision. 3

8 The Third District's decision should have also been instructed by the principle that a "lower court's ultimate factual determination during a non-jury trial may not be disturbed on appeal unless shown to be unsupported by competent and substantial evidence or to constitute an abuse of discretion." Zupnick Haverland, LLC v. Current Builders of Fla., 7 So.3d 1132, 1134 (Fla. 4th DCA 2009). See also Gardens Country Club, Inc. v. Palm Beach County, 712 So.2d 398, (Fla. 4th DCA 1998) ("As there is competent substantial evidence to support the court's findings [the owner's investment-backed expectations were not reasonable], we affirm as to the inverse condemnation claim.") The Third District's decision fails to establish that the trial court's findings regarding Galleon Bay's expectations as to the development of the 90 acres it initially acquired were not supported by competent and substantial evidence. The Third District erroneously found that Jirik prohibited the trial court from considering whether some of the subject lots could be aggregated to obtain ROGO allocations to achieve an economically viable use of the property. The issue in Jirik was whether there was a taking of access due to the construction of a road and retaining wall. Jirik was not a regulatory takings case nor was it intended to govern one where the trial court must, as the trial court did below, make the economic impact and reasonable investment-backed expectations inquiries under Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978). Contrary to 4

9 the Third District's decision, the relevant issue in the liability trial was not whether Galleon Bay could achieve its expectation of building one house on each of the platted lots or any other vested or particular use. The First District acknowledged in Dept. of Enytl. Protection v. Burgess that "the standard [for regulatory takings claims] is not whether the landowner has been denied those uses to which he wants to put his land; it is whether the landowner has been denied all or substantially all economically viable use of his land" and "[t]he phrase 'economically viable use should not be read to assure an owner will be able to use property to earn a profit or to produce income. Rather it assures an owner will be able to make some use of property that economically can be executed." 772 So.2d 540 (1" DCA 2000). See also Graham 399 at 1382 (A landowner "is not entitled to the highest and best use of his property if that use will create a public harm."). B. The Decision Conflicts with Florida Caselaw Regarding Lucas Takings The Third District's decision conflicts with Florida caselaw regarding facial takings, also known as total takings, at issue in Lucas v. South Carolina Coastal Council, 505 U.S (1992). The decision confuses the category of taking it was purportedly resolving by citing the mutually exclusive standards set forth in Lucas and Penn Central, and then fails to identify which standard it was applying in mandating that the trial court find liability against Monroe County. 5

10 If the Third District's decision is deemed to be mandating that the trial court f~md a Lucas taking, then this mandate expressly conflicts with St. John's River Water Mgmt. Dist. v. Koontz, 77 So.3d 1220 (Fla. 2011). In that decision, this Court clarified that a Lucas taking is a "total regulatory taking" where a regulation "completely deprives an owner of all economically beneficial use of his or her property." Id. at 1227 (emphasis added). The Third District's mandate contradicts the trial court's finding that the property retained economically beneficial use under ROGO. The unusual mandate is also wholly unsupported by any citation to trial evidence that ROGO eliminated all economic use and value. The decision acknowledges that Galleon Bay's ROGO applications have not been denied and remain competing in the ROGO queue. Finally, the mandate conflicts with Florida caselaw on statute of limitations for Lucas takings. In Lost Tree Vill. Corp. v. City of Vero Beach, 838 So.2d 561 (Fla. 4* DCA 2002), the court confirmed the now well-settled principle that a Lucas taking claim accrues upon the mere enactment of the complained-of regulation. As the Third District's notes, the complained-of regulation-rogowas adopted in 1992 and amended in If the Third District's decision is deemed to mandate an order of liability for a Lucas taking, it eviscerates a settled takings rule because Galleon Bay's claim is time-barred. At the latest, any Lucas 6

11 claim accrued in 1996 and became time-barred in Galleon Bay did not file suit until C. The Decision Conflicts with Florida Caselaw on Penn Central by Mandating a Finding of Liability without Evidence of Economic Impact If the Third District's decision is interpreted as resolving the takings issue under Penn Central, which sets forth the correct standard for the as-applied taking alleged by Galleon Bay, then it still creates express conflict with Leon County v. Glusenkamp, 873 So.2d 460 (Fla. l * DCA 2004) and City of Venice v. Gwynn, 76 So.3d 401 (Fla. 2"d DCA 2011). The conflict is the court's mandate that the trial court f'md takings liability in the absence of any appraisal or other evidence regarding the actual market value impact of ROGO on the property. In Glusenkamp, the court summarized a takings claimant's evidentiary burden under the economic impact prong of Penn Central as follows: The focus of the [the economic impact prong] is on the change in fair market value of the subject property caused by the regulatory imposition.... [T]he court must compare the value that has been taken from the property with the value that remains in the property. 873 So.2d at 467. The Third District's decision cites zero appraisal or other evidence on the change of fair market value of the property caused by ROGO in support of its mandate that a takings liability order be entered against the County. In Gwynn, the Second District held that the lower court departed from the essential requirements of law by failing to meaningfully analyze the market value 7

12 of the landowner's property before and after the enactment of the regulation, and instead focusing on the regulation's alleged interference with the landowner's expectation of a specific use. 76 So.3d at In this case, the trial court found that the Galleon Bay property retained value under ROGO. The four corners of the decision reveal, for example, that Galleon Bay transferred one of its lots to a private party in satisfaction of a debt, and at least one house could have been built. This transfer and potential development evidences the County's case that the lots retained market value even under ROGO. In failing any analysis of actual market value evidence and instead focusing on ROGO's alleged interference with Galleon Bay's expectation of building one house on each of the subject lots, the Third District did exactly what the Second District deemed to be reversible error, and its decision thus creates express and direct conflict with Gwynn. II. Jurisdiction Should Be Exercised Because This Case Involves Natural Resources of Statewide and National Importance and the Wrongful Imposition of Liability on the County for its Protection of Those Resources. There are compelling reasons why this Court should exercise its conflict jurisdiction. First, this case involves the Florida Keys, one of the most environmentally fragile areas in the country. The State Legislature designated the Florida Keys an Area of Critical State Concern where land use decisions "have statewide impact" requiring special state and local regulation. Ambrose v. Monroe County, 866 So.2d 707 (Fla. 3'd DCA 2003) [citing Fla. Stat. Section

13 (1997)]. Also, while the Third District ignored it, the record contains voluminous evidence of federal environmental regulations that substantially impact the development of the property.1 If the decision is allowed to stand, it will have a chilling effect on the enforcement of the regulations that protect the Florida Keys. Second, the Third District took the unusual step of directing the trial court to enter a judgment of takings liability against the County, thereby raising the very real possibility that Galleon Bay's compensation claim of six million dollars may be successful. With due respect to the Third District, its opinion is a very weak and inadequate reed upon which to base a judgment of takings liability. Given the seriousness and impact of an award of substantial compensation, one would expect a careful, detailed analysis of the impact of the challenged regulation and the permissible uses, if any, of the regulated property. The Third District's opinion does not contain such an analysis. The County respectfully submits that a review of the record and the trial court's opinion will show that Galleon Bay does have economically viable uses of its property which were not acknowledged by the Third District. Before the County is subjected to a trial on a multi-million dollar damages claim, this Court should thoroughly review this case to determine if the Third District's decision is supported by the record and established takings law. Third, the Third District's opinion creates doctrinal confusion in Florida 1 See Fla. Key Deer v. Brown, 386 F.Supp.2d 1281 (S.D. Fla. 2005) (discussing federal government regulations applying to land use on No Name Key). 9

14 takings jurisprudence that will affect landowners, local governments, and their lawyers throughout the state. For example, it conveys the impression that the "parcel as a whole" rule can be avoided simply by platting some of the property and invoking Jirik, a loss of access case that this Court has never extended to regulatory takings cases. The Court should review this case to ensure clarity and consistency in Florida takings jurisprudence. Finally, the Third District spent an inordinate amount of time and ink on matters that are at best peripheral and at worst irrelevant to the issue of whether there was a deprivation of all or substantially all economically viable uses. The Third District discussed other litigation involving the property, including the County's handling of a vested rights proceeding, the length of time required to obtain approvals, and the recusal of a judge, all in a tone that might be read as hostile toward the County. The court appeared to question the propriety of a circuit judge's vacation of the summary judgment order although the third judge assigned to the case agreed with that action. Whatever the purpose and intent of these historical excursions, they are no substitute for a fair and principled determination of whether Galleon Bay retains economically viable uses of its property. This Court should review this case to ensure that such a determination is made. CONCLUSION 10

15 For all of the foregoing reasons, Monroe County respectfully urges this Court to accept jurisdiction. Respectfully submitted this 5th day Of April, Derek V. Howard (FBN ) Assistant County Attorney Monroe County Attorney's Office th St., Suite 408 Key West, FL Telephone: (305) Thomas G. Pelham (FBN ) 1474 Constitution Pl. E. Tallahassee, FL Telephone: (850) CERTIFICATE OF SERVICE I certify that on this day of April, 2013, a true copy of the foregoing Jurisdictional Brief was sent by electronic mail and U.S. Mail to Jonathan A. Glogau, Office of Attorney General, State of Florida, PL-01, The Capitol, Tallahassee, FL ; James S. Mattson, Co-Counsel for Galleon Bay, P.O. Box 586, Key Largo, FL, 33037; and Andrew M. Tobin, Co-Counsel for Galleon Bay, P.O. Box 620, Tavernier, FL Attorney CERTIFICATE OF COMPLIANCE I HEREBY CERTIFY that this computer-generated brief is prepared in Times New Roman 14-point font, and complies with the font requirement of Rule 11

16 9.210(a)(2), Florida Rules of Appellate Procedure. Attorney 12