in the fourth district court of appeal in and … · in the fourth district court of appeal . ......
TRANSCRIPT
IN THE FOURTH DISTRICT COURT OF APPEAL IN AND FOR THE STATE OF FLORIDA
FVP MIAMI LAKES, LLC as successor-in-interest and assignee of LENNAR HOMES, LLC Appellant, CASE NO. 4D15-1475 vs. LT. NO. 31-2010-CA-07-4993-XXXXXX INDIAN RIVER COUNTY, a political subdivision of the State of Florida, Appellee. ******************************************************************
INITIAL BRIEF OF APPELLANT, FVP MIAMI LAKES, LLC as successor-in-interest and assignee of LENNAR HOMES, LLC
******************************************************************
WILLIAM J. CORNWELL, ESQ. DAVID K. FRIEDMAN, ESQ.
WEISS, HANDLER & CORNWELL, P.A. Attorneys for Appellant
One Boca Place, Suite 218-A 2255 Glades Road
Boca Raton, FL 33431 Telephone: (561) 997-9995 Facsimile: (561) 997-5280
RE
CE
IVE
D, 7
/20/
2015
8:4
6 PM
, Cle
rk, F
ourt
h D
istr
ict C
ourt
of
App
eal
ii
TABLE OF CONTENTS TABLE OF CONTENTS .......................................................................................... ii
TABLE OF AUTHORITIES ................................................................................... iv
INTRODUCTION ..................................................................................................... 1
STATEMENT OF THE CASE AND THE FACTS .................................................. 1
SUMMARY OF ARGUMENT ...............................................................................20
STANDARD OF REVIEW .....................................................................................21
ARGUMENT ...........................................................................................................22
I. THE TRIAL COURT ERRED IN ENTERING A SUMMARY JUDGMENT THAT FVP’S IMPACT FEE REFUND CLAIMS WERE BARRED BY THE STATUTE OF LIMITATIONS. ............22
II. THE TRIAL COURT ERRED IN FINDING LENNAR’S PAYMENT OF IMPACT FEES WAS A VOLUNTARY PAYMENT THAT BARS FVP’S RIGHT TO A PARTIAL REFUND OF IMPACT FEES PAID IN THIS CASE. ..............................................................29
III. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT TO IRC ON FVP’S CLAIMS THAT IRC CODE § 201.08 ..................................................................................................35
A. The Criteria for a Valid User Fee Has Not Been Met. .............36
B. While the County May Validly Charge Connected Properties Regardless of Whether Service is Used, There is No Just or Equitable Basis to Charge Such Fees to Unconnected Properties. .................................................................................40
IV. THE TRIAL COURT ERRED IN DENYING FVP’S MOTION TO AMEND TO ADD CLASS ALLEGATIONS. ...................................46
CONCLUSION ........................................................................................................47
CERTIFICATE OF SERVICE ................................................................................49
iii
CERTIFICATE OF FONT ......................................................................................49
iv
TABLE OF AUTHORITIES Cases
Albelo v. S. Bell, 682 So. 2d 1126, 1129 (Fla. 4th DCA 1996) ...............................22
Allenby & Assocs., Inc. v. Crown St. Vincent Ltd, 8 So. 3d 1211, 1213 (Fla. 4th DCA 2009) .....................................................................................................22
Beyer v. City of Marathon, 37 So. 3d 932 (Fla. 3d DCA 2010) ..............................27
Cardillo v. Florida Keys Aqueduct Authority, 654 So. 2d 1062 (Fla. 3d DCA 1995) ................................................................................................................ 31, 32
Carillo v. City of Ocean Shores, 94 P.3d 961 (Wash. App. 2004) ..........................45
City of Cooper City v. PCH Corp, 496 So. 2d 843 (Fla. 4th DCA 1986) ...............45
City of Gainesville v. State, 863 So. 2d 138, 146 (Fla. 2003)..................................39
City of Jacksonville v. Jacksonville Mar. Ass’n, Inc., 492 So. 2d 770 (Fla. 1st DCA 1986) ..............................................................................................................41
City of Key West v. Florida Keys Cmty. Coll., 81 So. 3d 494 (Fla. 3d DCA 2012) ................................................................................................................ 35, 40
City of Riviera Beach v. Reed, 987 So. 2d 168, 169 (Fla. 4th DCA 2008) .............25
Commerce Center v. Orange County, 46 So. 3d 134, 136 (Fla. 5th DCA 2010) ....42
Contractors & Builders Ass’n of Pinellas County v. City of Dunedin, 329 So. 2d 314, 320 (Fla. 1976), pet. for cert. den., 444 U.S. 867 (1979) ............... 46, 47
Harris v. Aberdeen Prop. Owners Ass’n, Inc., 135 So. 3d 365, 368-69 (Fla. 4th DCA 2014) .....................................................................................................27
Hutson v. Plantation Open MRI, LLC, 66 So. 3d 1042 (Fla. 4th DCA 2011) ........49
International Patrol and Detective Agency, Inc. v. Aetna Cas. & Sur. Co., 396 So. 2d 774 (Fla. 1st DCA 1981) ..........................................................................49
Jackson v. Federal Insurance Company, 643 So. 2d 56, 58 (Fla. 4th DCA 1994) , rev. denied, 651 So. 2d 1193 (Fla. 1995) ......................................................26
v
Life Gen. Sec. Ins. Co. v. Horal, 667 So. 2d 967 (Fla. 4th DCA 1996) ..................49
Okeechobee Util. Auth. v. Kampgrounds of Am., Inc., 882 So. 2d 445, 447 (Fla. 4th DCA 2004) .............................................................................................. 43, 44
Park v. City of West Melbourne, 999 So. 2d 673, 677 (Fla. 5th DCA 2008) ..........24
Penthouse North Assoc. v. Lambardi, 461 So. 2d 1350, 1352 (Fla. 1984) .............24
Princeton Homes, Inc. v Morgan, 38 So. 3d 207, 208 (Fla. 4th DCA 2010) ..........22
Ruiz v. Brink’s Home Sec., Inc., 777 So. 2d 1062, 1064 (Fla. 2d DCA 2001) . 34, 35
Save Our Septic Sys. Comm., Inc. v. Sarasota County, 957 So. 2d 671, 675 (Fla. 2d DCA 2007) .....................................................................................................47
St. Lucie County v. City of Fort Pierce, 676 So. 2d 35, 37 (Fla. 4th DCA 1996) ...38
State Farm Mut. Auto. Ins. Co. v. Lee, 678 So. 2d 818, 821 (Fla. 1996) ................25
State v. City of Port Orange, 650 So. 2d 1 (Fla. 1994) ...........................................41
Tucci v. City Of Biddeford, 2005 ME 7, 864 A.2d 185 (Me. 2005) ........................45
US v. Gotlieb, 424 F. Supp. 417, 420 (S.D. Fla 1976) ............................................24
Ves Carpenter Contractors, Inc. v. City of Dania, 422 So. 2d 342 (Fla. 4th DCA 1982) ...................................................................................................... passim
Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000) ..............................................................................................................22
Statutes
Fla. Stat. § 153.11(c) ................................................................................................46
Fla. Stat. § 153.12(1) ................................................................................................12
Fla. Stat. § 95.031 ....................................................................................................24
Fla. Stat. § 95.11(3)(p) .............................................................................................22
vi
Other Authorities
12 McQuillin Mun. Corp. § 35:69 (3d Ed.) .............................................................41
IRC Code § 201.02 ...................................................................................................40
IRC Code § 201.03 ...................................................................................................40
IRC Code § 201.08 ........................................................................................... passim
IRC Code § 910.08 ..................................................................................................... 7
1
INTRODUCTION This brief is filed on behalf of the Appellant, FVP MIAMI LAKES, LLC,
seeking reversal of two final summary judgments and denial of the two motions for
partial summary judgment on liability filed by the Appellant. Appellant also seeks
reversal of the trial court’s denial of its motion to amend to add class action
allegations.
Throughout this brief, the Appellant will be referred to as “FVP”; Appellee,
INDIAN RIVER COUNTY, will be referred to as “County” or “IRC.” FVP’s
predecessor in title, Lennar Homes, LLC will be referred to as “Lennar.”
References to the documents included in the appellate record will be
designated “R” followed by the volume and page numbers.
STATEMENT OF THE CASE AND THE FACTS
The following is a brief overview of the case and a summary of the material
facts related to the issues raised on appeal. Since all of the issues on appeal relate
to the trial court's entry of summary judgments against FVP, the plaintiff below,
the facts are presented in the light most favorable to FVP as the nonmoving party.
FVP owns certain properties located in the unincorporated area of Indian
River County that it purchased from Lennar on or about November 30, 2009.
(Compl. ¶ 5, R. 001-022; Deeds attached as Exhibit E to FVP MSJ, R. 096-193).
On November 30, 2009, Lennar executed an assignment whereby Lennar assigned
2
to FVP all of its “right, title and interest … in and to: (i) the Impact Fee Credits (as
defined in the Agreement); and (ii) all licenses, permits, development agreements,
development approvals, governmental approvals, utility agreements, and
concurrency approvals relating to the Property. (R. 034-063.)
The two proposed residential subdivisions were known as Madera Isles
(County PD No. 05-09-16/2003090034-41706) and Tripson Estates (County PD
No. 05-04-0712001090 I 06-454 70). (FVP MSJ ¶3, R. 096-193.)1
The Madera Isles property consists of approximately 72 acres and is located
at the northeast corner of 43rd Avenue and 25th Street SW. (FVP MSJ ¶4, R. 096-
193.) The Tripson Estates property consists of approximately 135 acres and is
located north of 25th Street SW on the west side of 43rd Avenue. (FVP MSJ ¶4, R.
096-193.)
On August 26, 2004, the County Planning and Zoning Commission granted
Preliminary Planned Development (PD) Approval of the proposed Madera Isles
Project. (Composite Exhibit G to FVP MSJ, R. 096-193.)
On March 10, 2005, traffic impact fees in the amount of $1,327,008 were
paid by Lennar to the County for the proposed Tripson Estates Project. These
1 FVP MSJ refers to the first motion for summary filed by FVP relating to impact fees. FVP MSJ2 refers to FVP’s subsequent motion for summary judgment regarding service availability charges.
3
traffic impact fees were assessed at the rate of $4,808 per residence for the 276
residences proposed to be constructed on the Tripson Estates property.
(Defendant’s Interrogatory Answers, Exhibit H to FVP MSJ, R. 096-193.)
On March 10, 2005, water and sewer impact fees in the amount of
$1,130,496 were paid by Lennar to the County for the proposed Tripson Estates
project. These water and sewer impact fees were assessed at the rate of $4,096 per
residence ($1,300 water and $2,796 sewer) for the 276 residences proposed to be
constructed on the Tripson Estates property. Id.
On March 10, 2005, the County issued an Initial Certificate of Concurrency
Determination certifying that adequate transportation, solid waste, drainage, parks,
water and sewer facilities were available for the 276 residences proposed to be
constructed on the Tripson Estates property. (Exhibit “I” to FVP MSJ, R. 096-
193.)
On March 14, 2005, water and sewer impact fees in the amount of $761,856
were paid to the County by Lennar for the proposed Madera Isles project. These
water and sewer impact fees were assessed at the rate of $4,096 per residence
($1,300 water and $2,796 sewer) for the 186 residences proposed to be constructed
on the Madera Isles property. Id.
On March 17, 2005, traffic impact fees in the amount of $894,288 were paid
by Lennar to the County for the proposed Madera Isles project. These traffic
4
impact fees were assessed at the rate of $4,808 per residence for the 186 residences
proposed to be constructed on the Madera Isles property.
On March 18, 2005, the County issued an Initial Certificate of Concurrency
Determination certifying that adequate transportation, solid waste, drainage, parks,
water and sewer facilities were available for the 186 residences proposed to be
constructed on the Madera Isles property. (Exhibit “J” to FVP MSJ, R. 096-193.)
On April 28, 2005, the County Planning and Zoning Commission granted
Preliminary PD Approval of the proposed Tripson Estates project. (Composite
Exhibit “G” to FVP MSJ, R. 096-193.)
After the payment of impact fees, but before obtaining final approvals for
the Projects, Lennar learned that the plans for Madera Isles and Tripson Estates,
which were the subject of the County’s Preliminary PD Approvals, were not in
conformity with the requirements of the applicable land development regulations.
Specifically, Lennar learned that, due to an engineering error, the plans provided
inadequate storm water storage and required modifications. These required
modifications reduced the permitted density for the Madera Isles project from 186
residences to 114 residences and for the Tripson Estates project from 276
residences to 201 residences. (Affidavit of John T. Lynch, III, Exhibit “K” to FVP
MSJ, R. 096-193.)
5
On November 13, 2006, the County issued a Land Development Permit for
the Madera Isles project authorizing the construction of 114 residences which was
72 less than the total number of residences for which traffic, water and sewer
impact fees had been paid. (Madera Isles Land Development Permit, Exhibit “L”
to FVP MSJ, R. 096-193.)
On November 16, 2006, the County issued an Administrative Approval for
the Tripson Estates project which authorized the modification of the Preliminary
PD Approval to reduce the number of residences to be constructed to 201, which
was 75 less than the total number of residences for which traffic, water and sewer
impact fees had been paid. (Tripson Estates Administrative Approval, Exhibit “M”
to FVP MSJ, R. 096-193.) In sum, Lennar paid $1,308,888 in traffic, water and
sewer impact fees for 147 residences which could not legally be constructed in the
Madera Isles and Tripson Estates Projects. These impact fees consist of the
following:
A. At the County’s assessed rate of $4,808 per residence, Lennar paid $346,176 in traffic impact fees for 72 residences which could not be constructed on the Madera Isles Property.
B. At the County’s assessed rate of $4,096 per residence, Lennar paid $294,912 in water and sewer impact fees for 72 residences which could not be constructed on the Madera Isles Property.
C. At the County’s assessed rate of $4,808 per residence, Lennar paid
$360,600 in traffic impact fees for 75 residences which could not be constructed on the Tripson Estates Property.
6
D. At the County’s assessed rate of $4,096 per residence, Lennar paid
$307,200 in water and sewer impact fees for 75 residences which could not be constructed on the Tripson Estates Property.
(FVP MSJ, ¶ 17 R. 096-193.)
On October 5, 2007, the County advised Lennar that even though the
number of residences proposed to be constructed in the Projects had been reduced,
there would be no refund of impact fees. (October 5, 2007 Memorandum, Exhibit
“A” to FVP MSJ, R. 096-193.) As of that date, the County had not spent or
encumbered the traffic, water and sewer impact fees paid on the Madera Isles and
Tripson Estates projects. (Defendant’s Supplemental Interrogatory Answers, Nos.
12 and 13, Exhibit “D” to FVP MSJ, R. 096-193).
Since March 2005 when Lennar prepaid impact fees on the two projects and
continuing through the present, the County Utilities Department has levied
monthly base facilities charges2 and other charges on FVP’s properties in amounts
reflecting water and sewer impact fees for 462 residences. (Affidavit of Alicio
Pina, Composite Exhibit “F” to FVP MSJ, R. 096-193.) Under the County’s Code,
traffic impact fees paid to obtain a five year Initial Concurrency Certificate are
2 The original IRC Code referred to base facilities charges, but was later amended to refer to such charges as “service availability charges.” The two terms are synonymous. (Erik Olson Depo. p. 55, l. 8-17, R. 1058-1146.)
7
subject to a “no refund rule.” (Defendant’s Answer and Affirmative Defenses,
paras. 3 and 7, and Second Affirmative Defense, R. 024-033.)3
No Final Concurrency Certificates were ever issued on the Madera Isles or
Tripson Estates Projects. (MSJ at ¶ 22.) No building permits for the construction
of any residences were ever issued on the Madera Isles or Tripson Estates Projects.
(FVP MSJ at ¶ 23, Depo of Erik Olsen at p. 51, L. 2-6; R. 1058-1146.)
In May 2009, Lennar notified the County that it did not intend to pursue
either the Madera Isles or Tripson Estates Projects at any time in the foreseeable
future. (May 15, 2009 letter, Exhibit “N” to FVP MSJ ¶ 21, R. 096-193.)
In June 2009, the County Attorney rejected Lennar’s request for a refund of
traffic, water and sewer impact fees paid with respect to the Madera Isles and
Tripson Estates Projects. (Defendant’s Answers to Interrogatories, Answer No. 5;
Exhibit “B” and Exhibit “H” to FVP MSJ ¶ 21, R. 096-193.)
Since purchasing the Madera Isles and Tripson Estates properties in
November 2009, FVP has devoted the properties to agricultural use and has
notified the County that the properties were being used solely for agricultural
3 However, if the amount of impact fees associated with the improvements represented by the Initial Concurrency Certificate increases before the Final Concurrency Certificate is issued, the applicant is required to pay the additional increment. (IRC Code § 910.08, MSJ ¶ 21, R. 096-193).
8
purposes. (Affidavit of Alicio Pina, Composite Exhibit “F,” FVP MSJ ¶ 21, R.
096-193.)
In the spring of 2010, FVP, as the subsequent owner of the Madera Isles and
Tripson Estates Projects, requested a partial refund of traffic, water and sewer
impact fees paid on the two properties. (Defendant's Answer and Affirmative
Defenses, ¶ 4, R. 024-033; Exhibit “C”; Exhibit “H,” Answer No. 5, FVP MSJ ¶
21, R. 096-193.)
In June 2010, the County Attorney denied FVP’s request for a partial refund
of traffic, water and sewer impact fees paid on the two properties. (Defendant’s
Answer and Affirmative Defenses, Par. 1, R. 024-033; Exhibit “I”, Answer No. 5;
Exhibit “C,” FVP MSJ ¶ 21, R. 096-193.)
The Water and Sewer Impact Fees
Lennar paid water and sewer impact fees to the County for purposes of
securing five-year concurrency certificates from the County. The amounts of the
water and sewer impact fees paid were as follows:
Madera Isles 186 proposed units Water & Sewer Impact Fees: $761,856 Tripson Estates 276 proposed units
Water & Sewer Impact Fees: $1,130,496
See Exhibit “A” to the Complaint (R. 001-022).
9
Lennar and its successor, FVP, received monthly statements from the Indian
River County Utilities Department that contain base facility charges, billing
charges, franchise surcharges, and other charges (collectively, “Utility Charges”).
(R. Affidavit of Alicio Pina, Composite Exhibit “F,” FVP MSJ, R. 096-193.) All
such Utility Charges were calculated based on a total unit density of 462 units even
though the subject properties were only approved for 315 units. Id.
FVP alleged that it was entitled to a return of all water and sewer impact fees
and other utilities charges paid for the Developments. FVP further contended that
the County’s decision not to return such fees and charges amounted to an
application of a de facto “no refund” rule in violation of state laws relative to
development exactions. (R. 001-022.)
FVP further contended that it could not legally be denied a refund, in whole
or in part, of water and sewer and other Utility Charges paid because such denial
would result in the County imposing a development exaction which lacks a rational
nexus to FVP’s use of the properties. (R. 001-022.)
FVP’s Challenge to the Validity of IRC’s Base Facilities Charge
Pursuant to §§ 201.08 B. and C. of the IRC Code, the County assesses
monthly base facilities charges on every unit “reserved for future use in a
development” (i.e., every unit for which water and sewer impact fees have been
10
paid). The IRC Code provides that the charge “will apply until the facility is
permanently disconnected from the system.” Thus, while the charge is levied upon
unconnected units proposed to be constructed in the future, the only way to
terminate the charge is to permanently disconnect from the system. (R. 001-022.)
County Utility Director, Walter Erik Olson, appeared as the Indian River
County designee to testify on behalf of the County. (November 7, 2012, Olson
Depo., pp. 4-5, FVP Resp. Opp. SJ, R. 1058-1146.) He testified to the following
facts material to the summary judgment on base facilities charges at issue:
1. The “Florida Department of Environmental Regulation” requires
municipal utilities to have capacity available to meet demand. (Olson Depo., pp.
14-15, R. 1058-1146.)
2. Water and sewer impact fees constitute a one-time charge to cover the
capital costs incurred to provide water and sewer services to a new development.
(Olson Depo., p. 24. R. 1058-1146.)
3. The preliminary development approvals issued by the County
provided for 276 units in Tripson Estates and 186 units in Madera Isles. (Olson
Depo. p. 35, I. 12-16. R. 1058-1146.)
4. Notwithstanding the fact that in November 2006, the County issued a
Land Development Permit reducing the number of authorized units in Madera Isles
from 276 to 201 and notwithstanding the fact that the County issued an
11
Administrative Approval reducing the number of authorized units from 276 to 201
in Tripson Estates (total of 315 units), the County continued to assess base
facilities charges on 462 units. (Olson Depo. p. 37, L. 3-8, R. 1058-1146.)
5. Pursuant to §§ 201.08 B. and C. of the IRC Code, the County assesses
monthly service availability charges on every unit “reserved for future use in a
development.” (Olson Depo. p. 41, L. 12-20, R. 1058-1146.)
6. The IRC Code provides that the charge “will apply until the facility is
permanently disconnected from the system.” (Olson Depo. p. 41, I. 21-p. 42, I. 21,
R. 1058-1146.)
7. Under the IRC Code only structures that are actually connected to the
County’s system can eliminate the charges by disconnecting from the system.
Properties such as those that comprise the Developments, which are not connected
to the system, cannot disconnect. Under the IRC Code, FVP is therefore subject to
being perpetually assessed base facility charges ad infinitum for as long as it owns
the properties that comprise the Development. (Olson Depo. p. 45, L. 11-19 R.
1058-1146; See also Olson Depo. p. 43 L. 24-25 through p. 44 L. 23 and p. 45 L.
11-14 R. 1058-1146.)
8. Florida law authorizes the assessment of impact fees to offset one-
time capital costs associated with new growth. Such impact fees must be
earmarked specifically for infrastructure expenditures associated with new
12
development and may not be used for the maintenance of existing facilities. (Olson
Depo. p. 45, L. 20-p. 46, L. 1, R. 1058-1146.)
9. Water and sewer impact fees cannot be used for system maintenance.
(Olsen Depo. p. 20, lines 24-25, p. 21 L. 1, R. 1058-1146.)
10. Fla. Stat. § 153.12(1), authorizes the County to require any lot on
which a building has been constructed to connect to the sewer system. (Olson
Depo. p. 49, R. 1058-1146.)
11. No buildings have ever been constructed on the subject properties
(Madera Isles and Tripson Estates). (Olson Depo. p. 50, L. 18-21, R. 1058-1146.)
12. No building permits have ever been issued for any construction on the
subject properties. (Olson Depo. p. 51, L. 2-6, R. 1058-1146.)
13. There has never been any sewage generated from either the Madera
Isles or Tripson Estates projects. Nor has there been any consumption of water at
either of those project sites. (Olsen Depo. p. 18, L. 15-24, R. 1058-1146.)
14. By letter dated May 15, 2009, Lennar made demand upon the County
for a return of all “prepaid impact fees, capacity charges, utility deposits, base
facilities charges for Madera Isles and Tripson Estates” and advised that Lennar
did not anticipate pursuing the developments under current market conditions.
(Olsen Depo. p. 40-42 and Exhibit 4 thereto, R. 1058-1146.)
13
15. Mr. Olsen was aware in 2009 that the Madera Isles and Tripson
Estates Projects were approved for construction of 315 homes as opposed to the
construction of 462 homes which had been preliminarily approved (and for which
water and sewer impact fees had been paid). (Olsen Depo. p. 43 L. 20-25 through
p. 44 L. 1, R. 1058-1146.)
16. Mr. Olson admitted that the County’s statement (in its Second
Affirmative Defense) that it used the impact fees collected from the Developments
to plan, design and construct water and sewer capacity for the Developments was
untrue. (Olson Depo. p. 53, 1-25 p.54, 1-5, R. 1058-1146.)
17. Property owners who pay water and sewer impact fees must pay
monthly fees for the maintenance of the County’s water and sewer facilities
regardless of whether any structure is ever constructed and connected to the water
or sewer systems. (Olson Depo. p. 54, l. 21-p.55, 1.2, R. 1058-1146.)
18. Owners of unimproved property who have prepaid impact fees are
charged the same monthly maintenance service fees (base facilities charges) as
existing connected users of the County’s water and sewer facilities. (Olson Depo.
p. 55, L. 3-7, R. 1058-1146.)
19. Unpaid base facilities charges, fees, interest and/or penalties
accumulate as a lien on unconnected, undeveloped property. (Olson Depo. p. 56, L.
8-11, R. 1058-1146.)
14
20. Pursuant to County Code, payment of water and sewer impact fees
triggers an obligation by the property owner to pay monthly utilities maintenance
fees in perpetuity. (Olson Depo. p. 68, L.10-16, R. 1058-1146).
21. The base facilities/service availability fees are charged whether the
property owner ever connects to, much less uses, the County’s water and sewer
services. (Olson Depo. p. 68, l. 22-25, R. 1058-1146.)
22. The charges are assessed even if no building permit is ever obtained.
(Olson Depo. p. 69, 1. 1-3, R. 1058-1146.)
23. The County continues to assess the charges even if it never approves
the proposed construction for which the impact fees were paid. (Olson Depo. p. 69,
L. 7-13, R. 1058-1146.)
24. The IRC Utilities Department continues to assess monthly base
facilities/service availability charges even if the property owner notifies the County
that it has no intention of constructing anything on the property at any time in the
foreseeable future. (Olson Depo. p. 69, L. 14-19, R. 1058-1146.)
As of November 2006, with respect to the Tripson Estates and Madera Isles
projects, the County was aware that the number of units approved for the
developments was 315. Nonetheless, the County has continually assessed water
and sewer base facility charges in amounts that correspond to the original density
contained in the preliminary planned development approvals, i.e. 272 units for
15
Tripson Estates and 186 units for Madera Isles. See Affidavit of Dan Delisi, AICP
at ¶ 15, Exhibit “C” (FVP Resp. Opp. SJ, R. 1058-1146).
Indian River County Code § 201.08
The monthly charges at issue in this litigation were assessed pursuant to IRC
Code § 201.08 which provides that:
[S]ervice availability charges [formerly known as “base facility charges”] shall apply to every connected ERU and to each ERU reserved for future use in a development. The service availability charges will apply until the facility is permanently disconnected from the system.4
(Emphasis added).
FVP’s Claims in the Proceedings Below Refund of Impact Fees. On October 20, 2010, FVP filed a Complaint which sought a declaratory
judgment adjudicating that it was entitled to a partial return of traffic, water and
sewer impact fees paid to the County based on the fact that Lennar paid impact
fees for 147 more residential units than the number of units actually approved for
construction in the Developments. FVP also sought return of all Water and Sewer
4 Pursuant to IRC Code Sec. 201.01G the term “Equivalent residential unit (ERU) is defined as the “amount of water or wastewater produced by a typical residential unit …”
16
Impact Fees paid as such fees are not even arguably subject to the “No Refund
Rule” imposed by the IRC Code with respect to traffic impact fees. (R. 001-022.)
On November 8, 2010 an Order was entered denying Defendants’ Motion to
Dismiss the Complaint. (R. 23.) On November 23, 2010 Defendants filed their
Answer and Affirmative Defenses. (R. 024-033.) August 15, 2011, an Agreed
Order was entered permitting FVP to amend the complaint by interlineation to add
claims for prejudgment interest. (R. 65-66.)
Challenge to the Validity of the IRC Code Provisions Authorizing Collection of User Fee Charges from Property Owners Who Have Paid Impact Fees Even if the Property is Not Connected to the County’s Water and Sewer System.
On July 2, 2012, FVP moved for leave to file an amended complaint for
declaratory judgment to add an additional Count III. (R. 702-733.) This new count
alleged that §§ 201.08 B. and C. of the IRC Code, to the extent they purport to
authorize the collection of base facilities charges from property owners such as
FVP whose properties are not connected to the County’s water or sewer systems,
are facially unconstitutional. (R. 702-733). On September 11, 2012, the trial court
granted the motion to amend (R. 911).
On December 19, 2011, the County filed a motion to dismiss alleging that
the action should be dismissed for failure to exhaust administrative remedies. On
June 18, 2012, the trial court entered an Order denying the motion to dismiss. (R.
17
701.) On October 9, 2012, the Defendant filed its Answer and Affirmative
Defenses to the Amended Complaint. (R. 912-919.)
The Parties’ Summary Judgment Motions. On September 21, 2011, FVP filed a motion for partial summary judgment
on the issue of liability (R. 096-222) which was accompanied by the affidavits of
John T. Lynch, III, Rey Melendi and Alicio Pina. (R. 223-279.)
On December 19, 2011, the County filed its Motion for Summary Judgment
as to Impact Fee Refunds. (R. 382-305.)
On July 17, 2012, the Court entered an Order denying FVP’s motion for
partial summary judgment and granting in part (and denying in part) the County’s
Motion for Summary Judgment as to Impact Fees. (R. 734-754.)
On July 26, 2012, FVP filed a limited motion for rehearing which pointed
out that, in granting a final summary judgment and directing the Clerk to close the
file, the Court had overlooked FVP’s prior-filed motion for leave to file an
amended complaint to add a count to challenge the validity and constitutionality of
the IRC Code provisions that purported to authorize the collection of base facilities
charges from property owners whose properties were not connected to the
County’s water or sewer systems. (R. 755-757.) The County did not oppose the
motion for rehearing as it pointed out that the summary judgment order did not
dispose of certain claims relating to base facilities charges.
18
The trial court agreed with the matters raised in the limited motion for
rehearing as it entered an amended order on July 26, 2012 that provided for a
reservation of jurisdiction, which deleted the word “final,” and which deleted the
direction to the Clerk of the Court to close the file. The amended summary
judgment order provided the motion was granted “… on the grounds of statute of
limitations and there shall be no recovery of impact fees voluntarily paid.” (R. 758-
778.)
The Second Summary Judgment. On July 12, 2013, FVP filed a second motion for partial summary judgment
on the issue of IRC’s liability for base facilities charges in accordance with the
claims asserted in the amended complaint. (FVP MSJ2 R. 950-965.) On December
4, 2013, the County filed a Memorandum of Law in Opposition to the motion, and
on March 6, 2014 the trial court entered an order denying the motion. (R. 975-
979.)
On January 21, 2015, the County filed a Motion for Final Summary
Judgment as to Service Availability Charges. (R. 1036-1055.) On February 17,
2015, FVP filed its Response in Opposition to the Defendant’s Motion for Final
Summary Judgment. (R. 1058-1146.)
On March 4, 2015, a hearing was held on the County’s Motion for Final
Summary Judgment. (R. 1153-1187.) The following exchange relevant to this
19
appeal occurred during the hearing concerning the inequitable nature of the
challenged code provision:
THE COURT: So someone else that is connected that no longer uses it [the water and sewer system] can apply to not pay that fee every month but someone that has never used it can't apply? MR. WALKER: Correct. That is what the ordinance says.
(R. 1153-1187 at p. 28, lines 8-13.) The Motion to Amend Complaint to Add Class Action Allegations. During the course of discovery in the underlying action, FVP learned from
its review of County’s records that there are numerous, similarly-situated
landowners in Indian River County who are being assessed on an ongoing and
continuous basis, water and sewer base facilities/service availability charges in
spite of the fact that their respective properties are not connected to IRC’s water
and sewer facilities. (R. 980-1014.)
On August 1, 2014, at a time when the case was not set for trial, FVP filed a
motion for leave to amend the complaint to add class action allegations with regard
to its claim concerning water and sewer base facilities charges. (R. 980-1014.) On
December 2, 2014, the trial court entered an Order denying the motion for leave to
amend. (R. 1031-1035.)
Orders for Which Review is Sought. FVP seeks review of the following orders entered by the trial court:
20
• The Summary Final Judgment entered by the Court on March 20, 2015 entered in favor of the Defendant as to all of Plaintiff’s claims in its Amended Complaint.
• The Order Denying Plaintiff FVP Miami Lakes, LLC’s Motion for
Partial Summary Judgment (As to Base Facilities Charges) entered by the Court on March 6, 2014.
• The Amended Order Denying FVP Miami Lakes LLC’s Motion for
Partial Summary Judgment and Order Granting in Part (and Denying in Part) Indian River County’s Motion for Summary Judgment entered by the Court on July 26, 2012.
• The Order Denying Plaintiff’s Motion for Leave to Amend to Add
Class Action Allegations entered by the Court on December 2, 2014.
SUMMARY OF ARGUMENT The trial court erred in entering a summary judgment in which the court
concluded that FVP’s impact fee claims were barred by the statute of limitations.
It was not until November 2006 that the County approved the two projects and
established a lower density than the density that had been preliminary approved.
Furthermore, it was not until October 2007 that the County applied its impact fee
ordinances to deny Lennar’s refund request. Accordingly, Lennar had no basis to
claim a refund or partial refund of impact fees paid until October 2007, at the
earliest. The underlying action was filed in October of 2010, well within the four-
year statute of limitations. The trial court also erred in granting final summary
judgment on the basis that the impact fees were “voluntarily paid.”
21
Summary judgment was also improperly entered against FVP on its
challenge to the water and sewer base facilities charges as not constituting valid
“user fees.” The trial court failed to recognize that, while the County may properly
charge monthly service availability charges to improved properties that have
connected to the county’s water or sewer system (regardless of whether they chose
to use the system), such charges are not valid user fees as to unimproved properties
that are not connected to the system. Under such circumstances, these ongoing
charges that continue in perpetuity are neither just nor equitable as required under
Florida law.
Finally, the trial court erred in denying FVP’s motion to amend the amended
complaint to add class action allegations. The motion was filed after FVP learned
during discovery that hundreds of unimproved properties not connected to the IRC
water and sewer system are being improperly charged such fees. Importantly, the
motion to amend was filed at a time when the case was not set for trial.
STANDARD OF REVIEW The standard of review of an order granting summary judgment is de novo.
Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla.
2000). When reviewing a final summary judgment, an appellate court must
examine the record in the light most favorable to the non-moving party. Princeton
Homes, Inc. v Morgan, 38 So. 3d 207, 208 (Fla. 4th DCA 2010), citing Allenby &
22
Assocs., Inc. v. Crown St. Vincent Ltd, 8 So. 3d 1211, 1213 (Fla. 4th DCA 2009).
“[T]he burden is upon the party moving for summary judgment to show
conclusively the complete absence of any issue of material fact.” Albelo v. S. Bell,
682 So. 2d 1126, 1129 (Fla. 4th DCA 1996).
ARGUMENT
I. THE TRIAL COURT ERRED IN ENTERING A SUMMARY JUDGMENT THAT FVP’S IMPACT FEE REFUND CLAIMS WERE BARRED BY THE STATUTE OF LIMITATIONS.
There was no dispute below that the statute of limitations applicable to the
claims in this case is four years. Fla. Stat. § 95.11(3)(p). Citing Ves Carpenter
Contractors, Inc. v. City of Dania, 422 So. 2d 342 (Fla. 4th DCA 1982), the
County argued that the four-year limitation period began to run in March 2005
when the impact fees were paid.
The problem with the County’s argument is that Lennar and its
successor/assignee, FVP, had no claim against the County at the time the impact
fees were paid in March 2005. It was not until October 2007, at the earliest, that
the County applied its impact fee ordinances to deny Lennar’s refund request.
Accordingly, Lennar had no basis to claim a refund or partial refund of impact fees
23
paid until October 2007, again, at the earliest.5 (October 5, 2007 Memorandum,
Exhibit “A” to FVP MSJ, R. 096-193.) Additionally, it was not until November
2006 that the Madera Isles project received County approval and that Tripson
Estates received Administrative Approval from the County. It was not until these
approvals occurred that the number of units permitted to be constructed for the
projects was established and that any claim for a refund could have arisen. As this
action was filed on or about October 19, 2010, it was clearly filed within the four-
year statute of limitations.
Under Fla. Stat. § 95.031 (2010) , “Computation of Time”, “… the time
within which an action shall be begun under any Statute of Limitations runs from
the time the cause of action accrues.” The Statute further provides in subsection
(1) that “a cause of action accrues when the last element constituting the cause of
action occurs.” As set forth above, the last element constituting the causes of
action alleged in the Complaint occurred when Lennar was damaged and became
5 Plaintiff’s Complaint challenges the validity of the County’s impact fee ordinances as applied. It was not until October 2007 that the County first advised Lennar that, even though the number of residences proposed to be constructed in the Projects had been reduced, there would be no refund of impact fees. Furthermore, it was not until June 2009 that the County formally denied Lennar’s broader impact fee refund request. Thus, with respect to the overpayment claim, the Statute of Limitations could not begin to run until October 2007, and with respect to the broader refund claim, the Statute of Limitations could not begin to run until June 2009.
24
entitled to assert claims against the County. See, Penthouse North Assoc. v.
Lambardi, 461 So. 2d 1350, 1352 (Fla. 1984); Park v. City of West Melbourne, 999
So. 2d 673, 677 (Fla. 5th DCA 2008); US v. Gotlieb, 424 F. Supp. 417, 420 (S.D.
Fla 1976) (holding that the period of limitations does not always begin on date of
the wrong; no cause of action generally accrues until the plaintiff has a right to
enforce his cause).
Until facts exist which authorize one party to maintain an action against
another party, the running of the statute of limitations cannot be triggered. “Put
another way, the limitations period begins to run when the action may be brought.”
City of Riviera Beach v. Reed, 987 So. 2d 168, 169 (Fla. 4th DCA 2008); State
Farm Mut. Auto. Ins. Co. v. Lee, 678 So. 2d 818, 821 (Fla. 1996).
Here, the lawsuit was in the nature of a declaratory judgment action. The
crux of FVP’s action is not that the impact fees were improperly charged in 2005,
but that when the number of units that could legally be constructed for the project
was reduced from 462 units to 315 units, FVP’s predecessor in interest, Lennar
became entitled to a refund of impact fees previously paid for the units that were
not approved for construction. This reduction in density or buildable units
25
occurred in November 2006, well within four years of the October 19, 2010 filing
of FVP’s complaint for declaratory judgment.6
To prevail on a declaratory judgment action, a plaintiff must show:
1. A bona fide, actual, present practical need for the declaration [no such
need existed in 2005 when the impact fees were paid];
2. The declaration should deal with a present, ascertained or
ascertainable state of facts or present controversy as to a state of facts [again, there
was no controversy or even claim for a refund in 2005 as the issue did not arise
until late 2007 when the County denied a refund request stemming from the
November 2006 approvals decreasing the density of the projects by 147 units];
3. Some immunity, power, privilege or right of the complaining party is
dependent upon the facts or the law applicable to the facts;
4. There is some person or persons who have, or reasonably may have an
actual, present, adverse and antagonistic interest in the subject matter, either in fact
or law [in 2005 no controversy had arisen so there were no persons having a
present or antagonistic relationship];
6 As noted, it was not until October 5, 2007 that IRC Director of Long Range Planning, Sasan Rohani, advised Lennar that, even though the number of units to be constructed on the Projects had been reduced, there would be no refund of impact fees. October 5, 2007 Memorandum of Sasan Rohani (R. 096-193).
26
5. The antagonistic and adverse interests are all before the court by
proper process or class representation and that the relief sought is not merely the
giving of legal advice by the courts or the answer to questions propounded from
curiosity.
See, Jackson v. Federal Insurance Company, 643 So. 2d 56, 58 (Fla. 4th DCA
1994), rev. denied, 651 So. 2d 1193 (Fla. 1995). The absence of any one of these
essential elements renders a claim for declaratory relief premature.
Here, all of the elements required to file a declaratory judgment as to
entitlement to a partial refund of impact fees arising from the reduction in density
for the projects was not present until 2007. The cause of action could not have
accrued prior to such date, and certainly not in 2005 when the impact fees were
paid. See Harris v. Aberdeen Prop. Owners Ass’n, Inc., 135 So. 3d 365, 368-69
(Fla. 4th DCA 2014) (finding that to state a cause of action for declaratory relief,
five elements must be met, including a present controversy as to an ascertainable
state of facts and a present and adverse interest in the subject matter).7
Similarly, in Beyer v. City of Marathon, 37 So. 3d 932 (Fla. 3d DCA 2010),
the Third District held that the statute of limitations applicable to an inverse 7 If the cause of action had been based on a claim that there was no legal basis for charging impact fees, then justification might exist for the running of the statute of limitations from the date the fees were paid. But that is not the claim that is asserted in this case.
27
condemnation action began to run on a landowners’ “as-applied” takings claim on
the date that the city adopted a recommendation denying the landowners’
application for a beneficial use determination, rather than on the [earlier] date of
adoption of a zoning plan change. The court held that the claim was not even ripe
until the landowner took reasonable and necessary steps to allow the city the
opportunity to consider the proposed development plans.
Here, the claim for a partial refund based on the inability to legally build all
of the units for which Lennar paid impact fees was likewise not ripe until the
County issued approvals in November, 2006. These approvals were the first
approvals that actually determined that Lennar would not be able to construct all
the units for which it had paid impact fees. Furthermore, it was not until October
2007 that the County denied Lennar’s right to a partial refund related to the
approved reduced density of the two projects.
The trial court’s running of the statute of limitations from the date in 2005
that Lennar paid the impact fees makes no sense. The partial impact fee refund
claim that is the subject of this action did not exist in 2005. Lennar clearly
intended to build all 462 units at that time. It was not until the number of units for
the project was reduced to 315 in November 2006 that Lennar had any basis to
demand a partial refund of the impact fees.
28
The County’s reliance on Ves Carpenter in the proceedings below was
misplaced. First, Ves Carpenter involved a “facial” constitutional challenge to the
validity of an impact fee ordinance. Unlike in the present case where the
Plaintiff’s claims attack the validity of impact fee ordinances “as applied” to their
individual circumstances, the Plaintiff in Ves Carpenter instituted a class action in
which it asserted that all the impact fees collected were illegal because the City
Commission had not adopted a proper enabling ordinance or resolution.
Ves Carpenter stands for the unremarkable proposition that the claims of the
putative class representative could only be asserted with respect to fees collected
during the four year period preceding the filing of the action. In other words,
claims arising from the illegal collection of fees more than four years prior to the
filing of the Complaint were barred by the Statute of Limitations. In each such
instance, the cause of action accrued on the date the illegal fees were collected.
In the present case, FVP has never contended that the impact fees originally
assessed were illegal. Nor has FVP contended that the County’s impact fee
ordinances are facially invalid. Rather, it was the application of the County’s
ordinances to Lennar and FVP, to deny their refund requests that gave rise to the
impact fee claims. Thus, Plaintiff’s causes of action did not accrue until October
2007 (denial of partial refund request) and June 2009 (broader refund requests).
29
Accordingly, as the Court erroneously concluded that FVP’s claim for a
partial refund of impact fees paid was barred by the statute of limitations, its
summary judgment in favor of IRC should be reversed and remanded with
directions to the trial court to grant FVP motion for partial summary judgment as
to liability.
II. THE TRIAL COURT ERRED IN FINDING LENNAR’S PAYMENT OF IMPACT FEES WAS A VOLUNTARY PAYMENT THAT BARS FVP’S RIGHT TO A PARTIAL REFUND OF IMPACT FEES PAID IN THIS CASE.
Citing Ves Carpenter, the County argued that Lennar’s “voluntary” payment
of impact fees on the Projects defeats any right of recovery. The trial court, in
granting IRC’s motion for summary judgment, stated:
3. Indian River County’s motion for summary judgment as to impact fee refunds is GRANTED on the grounds of statute of limitations and there shall be no recovery of impact fees voluntarily paid. (Emphasis added.)
The implicit suggestion in the trial court’s order is that the trial court may
have accepted IRC’s argument that there can be no recovery of impact fees
voluntarily paid. The County’s reliance on Ves Carpenter was misguided and
misplaced. In Ves Carpenter, the this Court specifically held that the payment of
the impact fees at issue was involuntary:
Applying these principals to the case at bar, we hold that sufficient economic coercion was brought to bear against Ves to require a finding that the fee payments were involuntary…Because the fees in
30
question were collected along with other legitimate fees which were necessary to obtain building permits, certificates of occupancy, etc., Ves was required to pay all of the fees if it wished to engage in any construction at all. In retrospect, it is clear that Ves paid the impact fees to avoid the imposition of a substantial burden upon its property rights. This amounted to coercion and duress sufficient to justify Ves’ recovery of the illegally exacted fees. Accordingly, we reverse the trial court’s blanket denial of restitution to Ves. (Emphasis added.)
Ves Carpenter, 422 So.2d at 345.
In Cardillo v. Florida Keys Aqueduct Authority, 654 So. 2d 1062 (Fla. 3d
DCA 1995), there was absolutely no claim that the impact fees had been
improperly imposed and collected. In fact, as in the present case with respect to
the traffic impact fees, the impact fees at issue were the subject of a “no refund”
rule. Nevertheless, the court ordered the refund of the fees when the payor was
unable to construct the improvements for which the fees had been paid. Rejecting
the same exact arguments the County makes in this case, i.e., that the fees were
voluntarily pre-paid and were subject to a “no refund rule”, the court noted:
…there is no nexus between the impact fee paid by Bayside and retained by FKAA, and the actual or possible increased impact on the water system. Under the circumstances, the application of the “no refund rule” is clearly unfair and inequitable and has led to a result that “defies logic.” (Emphasis added.)
Cardillo, 654 So. 2d at 1063.
The clear and obvious import of the Cardillo decision is that local
government cannot shirk its burden to demonstrate the required existence of a dual
31
rational nexus to support imposition of any impact fees by adopting a “no refund”
rule and thereafter asserting that the impact fees were “voluntarily” paid.
Interestingly, the County acknowledges that payment of the traffic impact
fees prior to the issuance of a building permit was, in fact, mandatory. IRC Motion
for Summary Judgment at p. 9-10 (R. 282-305). It was the “timing” of Lennar’s
payment of the impact fees that the County contends was voluntary. This assertion
is contradicted by clear record evidence previously submitted. John Lynch, the
only Lennar employee involved in the two Projects to testify, stated as follows
with respect to the timing of Lennar’s payment of traffic impact fees:
Q. Do you know if one of those options might have been to wait and pay impact fees at that point in time that the building permits were applied for?
A. Yes. Q. Was that an option for Lennar? A. No, sir. Q. Why not? A. At the time, again, with the political pressure, Indian River
County’s unwillingness to follow their own comprehensive plan to provide additional roadway, water and sewer capacity that any normal municipality would go through, we did not feel comfortable proceeding in that manner because we could end up with a community with one home in it, and have no capacity for other homes.
32
Q. So you and David Baselice had dialogue about not waiting until that point in time that the buildings permits were applied for?
A. Correct.
* * * Q. Well, that is what you implied, at least to me. A. No, sir, I did not. What I said was Indian River County
callously disregarded their own comprehensive plan at that time. That is not a secret, that is not my opinion. You can go pull the files. I couldn’t believe what I was witnessing in the commission meetings, put it that way. You can go pull the audio, the visual, the tape, the notes, and there was a big taboo about 43rd Avenue and expanding 43rd Avenue. And the residents, I don’t want to say they rioted, but they objected strongly. And there has been things in the works that Chris Kafer and others relied on as part of approving projects that suddenly those things, even thought they were within the five-year plan now, were not going to happen.
Deposition of John Lynch, taken November 14, 2011, p. 73, l. 6 – p. 74, l. 21 (R.
342-500) (emphasis added).
Contrary to the County’s assertion that Lennar could have simply waited to
pay traffic impact fees until it applied for building permits for each of the homes to
be constructed, Mr. Lynch clearly testified that this was not an option. Under the
County’s impact fee/concurrency scheme, real estate developers such as Lennar
were placed in the dubious position of investing millions of dollars in land costs,
engineering and land planning, infrastructure and legal costs to develop a project
33
only to learn that, due to a lack of traffic, water and sewer capacity, they were
unable to obtain building permits.
Finally, there can be no voluntary payment without knowledge of all
material facts. Indeed, the voluntary payment doctrine provides that “where one
makes a payment of any sum under a claim of right with knowledge of the facts,
such a payment is voluntary and cannot be recovered.” Ruiz v. Brink’s Home Sec.,
Inc., 777 So. 2d 1062, 1064 (Fla. 2d DCA 2001). In the present case, there was no
evidence in the record that at the time Lennar paid traffic impact fees it had
knowledge that it could not build all of the units on which the impact fees were
assessed. Thus, at the time it paid impact fees for 462 units, Lennar did not know
that it would only obtain approvals to construct 315 units. As the Second District
stated in Ruiz:
The complaint alleges that the amounts the appellants were billed were in excess of the actual tax imposed on Brink’s. Further, it is alleged that the plaintiffs did not know and could not have known that the amounts exceeded the tax actually charged. There is nothing in the complaint that can be read to allege that the plaintiffs voluntarily paid the sums Brink’s charged knowing that they were excessive. Because the complaint does not show on its face the applicability of the voluntary payment doctrine, the trial court erred in granting the motion to dismiss on this ground.
Ruiz, 777 So. 2d at 1064 (emphasis added). See also, City of Key West v. Florida Keys Cmty. Coll., 81 So. 3d 494 (Fla.
3d DCA 2012) (“… the record reflects that the College submitted a sworn affidavit
34
executed by Dr. John Kehoe, the College’s Financial Vice President, specifically
demonstrating that the fees were not paid voluntarily.”). Likewise, in the present
case, the deposition testimony of John Lynch established that the impact fees were
not voluntarily paid or, at a minimum, created a material issue of fact precluding
summary judgment.
Additionally, while the “no refund” rule as to traffic impact fees was
disclosed in a written waiver signed by Lennar, there was no written disclosure of
the County’s unwritten policy of not allowing refunds of water and sewer impact
fees. Significantly, paragraph 6 of the affidavit of IRC employee, Robert Keating
(that was attached to the County’s motion for summary judgment on FVP’s impact
fees claim), only reflects that a written waiver of a right to a refund of the traffic
impact fees was signed by Lennar. (R. 282-305.) It does not state that Lennar
signed any waiver of its right to a return of water and sewer impact fees.8
Additionally, when asked why the County refused to grant Lennar and FVP’s
request for a refund of water and sewer impact fees (ERU’s), the County’s
Assistant Director of Utilities responded: 8 Significantly, any claim that water and sewer impact fees were non-refundable was negated by the fact that the record reflected that the County has granted refunds to property owners in the past, including Lennar as to 4 ERUs, by putting the property owners on a list and processing refunds upon resale of the ERUs to other property owners. See Deposition of Cindy Corrente at p. 43-44, 46-49 R. 501-700).
35
Q. In this instance where the developer [Lennar] has paid for two hundred and seventy-six ERU’s but only could legally construct two hundred and one homes, why were they not entitled to a return of those seventy-five ERUs?
A. They would have purchased voluntarily the two hundred and
seventy six ERU’s, so there’s nothing in the ordinance that covers requests like this.
Depo of Cindy Corrente, at p. 5, 17, R. 501-700 (objection omitted). Accordingly, the summary judgment on FVP’s claim for a partial refund of
impact fees paid should be reversed and remanded with directions to the trial court
to grant FVP’s motion for partial summary judgment as to liability.
III. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT TO IRC ON FVP’S CLAIMS THAT IRC CODE § 201.08 IS INVALID
Summary judgment was improperly entered against FVP on its challenge to
the water and sewer base facilities charges (a/k/a service availability charges)
because the trial court failed to recognize that while the County may properly
charge monthly service availability charges to properties that have connected to the
county’s water or sewer system (regardless of whether they chose to use the
system), such charges are not valid users fees as to unimproved properties that are
not connected to the system.
36
A. The Criteria for a Valid User Fee Has Not Been Met.
In 2005, immediately following Lennar’s payment of water and sewer
impact fees and receipt of an initial certificate of concurrency confirming that the
County had adequate water and sewer capacity to serve the proposed
developments, the County began assessing water and sewer base facilities charges
(purported user fees) on the properties. The record reflects that these charges have
continued for the same 462 units originally proposed for the two properties even
though in November, 2006 the County modified preliminary approvals and
approved only 315 units for construction. Such fees continued to be charged
through and subsequent to 2009 when Lennar advised the County that it had no
present intent to build the projects. Finally, there is no dispute that these charges
continued through and subsequent to 2010, when this lawsuit was filed and FVP,
as the successor owner, informed the county that it intended to use the property for
agricultural purposes.
This Court has set forth the following criteria for determining whether a
charge is a valid user fee: first, the charge must be for a governmental service;
second, the charge must be for a service that benefits the party paying the fee in a
manner not shared by other members of society; and third, the charged fee must be
paid by choice. St. Lucie County v. City of Fort Pierce, 676 So. 2d 35, 37 (Fla. 4th
37
DCA 1996). In the present case, at a minimum the second and third criteria of the
St. Lucie County test have not been met.
As to the second part of the test – the provision of a benefit to the party
paying the fee – the base facilities charges simply provide no benefit to the
unimproved, unconnected land owned by FVP.
The third part – that the charge be of the type that is paid by choice and
which can be avoided by declining the governmental service – also has not been
met. FVP and Lennar did not choose to pay monthly base facilities fees. In fact,
the day after Lennar paid water and sewer impact fees, the County began assessing
the base facilities charges notwithstanding the fact that: (1) the properties were
unimproved; (2) no building permits had been requested, much less issued; and, (3)
the properties were not even capable of being connected to the County’s water and
sewer systems. There simply was no service provided. Furthermore, as admitted
by the County, the only way to terminate the ongoing, monthly, base facilities
charges is to permanently disconnect from the system. However, as the County’s
Utility Director has acknowledged, because Lennar and FVP never connected to
the system, they cannot request to be “disconnected” from the system.
As a result, FVP continues to be charged, not for the 315 units that were
actually approved, but for the 462 units that were proposed when the impact fees
38
were paid. These charges continue in perpetuity with no means by which to ever
stop the charges.9
The County attempted to minimize the element of a choice not to use the
service by citing City of Gainesville v. State, 863 So. 2d 138, 146 (Fla. 2003) and
various out-of-state cases10 in which courts have held that, where a property owner
is mandatorily required to connect to a utility service, the lack of choice will not
prevent the fee from being considered a user charge. The problem with this
argument is that FVP’s property is not subject to any county ordinance requiring a
mandatory connection (unless and until improvements are constructed). Indeed,
the IRC ordinances that contain mandatory connection requirements only apply to
9 Significantly, under IRC Code § 201.08, an owner of land upon which residences have been constructed who has actually availed himself of the benefits of IRC’s water and sewer system by having connected to the system can simply disconnect from the system and cease paying service availability charges. By contrast, an owner of vacant land such as FVP, who has paid over $1,892,000 in water and sewer impact fees, but who has never constructed a residence on the land, must pay service availability charges in perpetuity. In sum, § 201.08 contains no method by which an owner who chooses not to construct residences or buildings for which impact fees have been paid, can terminate monthly service availability charges. 10 The reasons why these cases were distinguishable was argued extensively by FVP’s counsel at the March 4, 2015 summary judgment hearing (R. 1153-1196) and, to the extent raised in the Answer Brief, will be fully addressed in FVP’s Reply brief.
39
improved properties (properties on which any building, mobile home or trailer is
located thereon).11
In short, the County’s only arguable basis for perpetually charging monthly
base facilities fees on these unimproved properties, as distinct from other
unimproved properties in IRC, is that the owners prepaid almost $2 million in
water and sewer impact fees.
What constitutes the payment of a user fee by choice was also analyzed in
Key West, 81 So. 3d 494. In that case, the Third District stated that: “A payment is
considered to have been tendered ‘involuntarily’ if payment is demanded, and the
potential consequences of non-payment are sufficiently severe so as to leave little
or no choice but to tender payment.” Id. at 500. The Court went on to observe that
the City had threatened to file a lien if the utility fees in that case were not paid and
concluded that payment of the fees was involuntary. Likewise, in the present case,
the consequence of FVP not paying the base facilities charges was that the County
filed a lien against FVP’s property for all unpaid charges. Thus, the element of a
valid user fee of paying the charges by “choice” has not been met.
11 Specifically, IRC Code § 201.02 requires the owner of any lot or parcel of land within the county to cause the plumbing of “any building, mobile home or trailer thereon to be connected to the water system of the county.” Likewise, IRC Code § 201.03 contains the same requirement with respect to connection to the County’s sewer system.
40
As applied to unconnected properties such as those owned by FVP, the
County’s base facilities charges are not a valid “user fee”. See, State v. City of Port
Orange, 650 So. 2d 1 (Fla. 1994); City of Jacksonville v. Jacksonville Mar. Ass’n,
Inc., 492 So. 2d 770 (Fla. 1st DCA 1986) (holding that invalid user fee was an
unconstitutional tax where the City had no valid theory under which it is
authorized to impose the user fee in question); see also 12 McQuillin Mun. Corp. §
35:69 (3d ed.) (“On the other hand, if rates for water or light must be paid
regardless of the quantity used or whether any is used, and the plant is owned by
the municipality, such a rate is a tax.”).
B. While the County May Validly Charge Connected Properties Regardless of Whether Service is Used, There is No Just or Equitable Basis to Charge Such Fees to Unconnected Properties.
The primary case relied on by the County in the proceedings below was I-4
Commerce Center v. Orange County, 46 So. 3d 134, 136 (Fla. 5th DCA 2010).
That case involved a property that was connected to the County’s water and sewer
system. The issue in that case stemmed from the fact that the property was served
by two separate water lines having two water meters – a 2 ½” meter and an 8”
meter. The water measured by the 2 ½” meter provided the daily source of potable
water for the property, as well as flows into the toilets, sinks, dishwashers, and
drains, which were connected to the County’s wastewater system. The water
measured by the 8” meter was that water which would be used only if the fire
41
suppression system was triggered. The property owner objected to being charged a
user fee for the 8” water line as that line was not used on a regular or daily basis.
The Fifth District held that the fact that the actual use of the 8” water line was far
less than its maximum potential use did not render Orange County’s rate schedule
illegal.
The Court reasoned that the 8” water line, while not used on a daily basis,
substantially benefitted the property owner by providing an ongoing fire protection
system. In addition, Orange County, by virtue of the connection, was required to
provide service to the larger line at any moment upon activation of the fire
suppression system. Thus, there was a rational basis for charging the property
owner a user fee. In the present case, FVP’s property is completely unimproved
and not connected to the County’s system. The fact that FVP or a successor
property owner at some point in the future may choose to construct homes on the
property and connect to the County’s system is not a valid basis for requiring it to
currently pay the same user fees that properties actually connected to the system
pay.12 Significantly, over ten years have passed since water and sewer impact fees
were paid and not a single home has been constructed on the property.
12 Of course, connected properties also pay a fee based on the actual volume of water used.
42
No Florida appellate court has ever held that unimproved property, which
cannot possibly make use of the water and sewer system, may be charged a
monthly service availability charge based on the mere fact that the property may be
improved and connect to the system at some future point.
In fact, in Okeechobee Util. Auth. v. Kampgrounds of Am., Inc., 882 So. 2d
445, 447 (Fla. 4th DCA 2004), this Court held that a base facilities charge that was
imposed only on those opting to connect to utility lines was a valid “user fee” and
stressed the fact that charge was only imposed on those opting to connect to the
utility lines:
First, the charge is imposed only on those opting to connect to the OUA utility lines. Second, the property owner may avoid the charge by refusing the service. Third, the charge is imposed monthly. Fourth, the charge is not imposed to recover costs of improvements, but for a routine provision of service. Fifth, the OUA is authorized under chapter 367, Florida Statutes (2003), to regulate water and wastewater systems, which includes the ability to impose “user fees.” We recognize the charge is for a traditional utility service and may not be considered voluntary, but those factors alone do not transform the charge into a “special assessment.”
Okeechobee Util. Auth., 882 So. 2d at 447 (emphasis added). Here, the County’s base facilities/service availability charges are charged
not only to those who opt to connect to the system, but to property owners who opt
not to connect to the system. Nor is there any option under the IRC Code for a
property owner to “refuse” the “service” because only property owners who have
43
connected to the system (i.e. built structures having a need to use the system) are
permitted to refuse the service by disconnecting.
As a result of the foregoing, the service availability charges at issue in this
case unfairly require anticipated future users of the system to subsidize the existing
users’ costs to maintain the county’s water and sewer systems. This type of
discriminatory charge which requires anticipated future users to subsidize existing
users’ maintenance costs confers a windfall on the existing users. These types of
charges have, in fact, been stricken. See, City of Cooper City v. PCH Corp, 496 So.
2d 843 (Fla. 4th DCA 1986) (upholding trial court’s order striking ordinance which
“arbitrarily discriminated against new users in favor of existing users.”).
In Carillo v. City of Ocean Shores, 94 P.3d 961 (Wash. App. 2004) the court
held that “availability charges,” which the City assessed against properties that
were not connected to the City’s water and sewer systems, were unconstitutional
property taxes and not permissible regulatory fees. The court observed that there
was no direct relationship between the charges and the benefits received by those
so charged. The court reversed the trial court’s grant of summary judgment for the
City and ordered a refund of the utility service availability charges.
Similarly, in Tucci v. City Of Biddeford, 2005 ME 7, 864 A.2d 185 (Me.
2005) the court held that sewer use fees charged to a property owner while the
44
property was not connected to the city sewer system (due to a collapsed sewer line)
were invalid.
The base facilities charges at issue are governed by Florida Statutes ch. 153,
which requires that the charges be just and equitable. See, Fla. Stat. § 153.11(c). In
the proceedings below, the County improperly argued that the water and sewer
impact fees paid by Lennar were used to expand the system to serve the subject
projects. However, the County’s Director of Utilities Erik Olson, whose
deposition was relied on in the summary judgment proceedings (R. 501-700),
testified that the County affirmatively represented that the water and sewer system
capacity for the projects existed in 2005 when IRC accepted approximately $2
million in water and sewer impact fees and issued concurrency certificates to
Lennar. Indeed, the water and sewer impact fees collected by the County offset
some of the County’s capital costs associated with having constructed such
capacity years earlier. (R. 1188-1196, at p. 18, lines 19-23.) Accordingly, there
was no requirement to build or expand any facilities to create sufficient capacity to
meet the needs of the subject developments.
Under clear impact fee law, a governmental entity may not collect impact
fees for maintenance of the existing system. Contractors & Builders Ass’n of
Pinellas County v. City of Dunedin, 329 So. 2d 314, 320 (Fla. 1976), pet. for cert.
den., 444 U.S. 867 (1979) ). As the Florida Supreme Court stated in Dunedin:
45
Raising expansion capital by setting connection charges, which do not exceed a pro rata share of reasonably anticipated costs of expansion, is permissible where expansion is reasonably required, if use of the money collected is limited to meeting the costs of expansion. Users who benefit especially, not from the maintenance of the system, but by the extension of the system … should bear the cost of that extension.
(Emphasis added.)
Likewise, eleven years later in Save Our Septic Sys. Comm., Inc. v. Sarasota
County, 957 So. 2d 671, 675 (Fla. 2d DCA 2007), the Second District observed
that:
Nevertheless, the supreme court’s distinction between the proper use of impact fees to finance reasonably anticipated costs of expansion versus the prohibited use of such fees to pay for the existing system as a whole remains in place.
(Emphasis added.)
Thus, impact fees are required to be used for capital costs of improvements,
not maintenance of improvements. What the County’s ordinance effectively does
is circumvent the impact fee law by allowing the County to do that which the
Supreme Court of Florida has clearly said it cannot do. The utility ordinance in
question ostensibly permits the County to collect “maintenance” impact fees from
anticipated future users of the system. Significantly, IRC Code §§ 201.08 B. and
C. specifically tie the obligation to pay monthly maintenance fees (base facilities
charges) to the payment of impact fees as the charges are assessed on every unit
46
“reserved for future use in a development.” Under the IRC Code, units are
reserved for future use in a development through the payment of water and sewer
impact fees.
In sum, had FVP applied for and obtained a Certificate of Occupancy for the
Developments, the base facilities charges (user fees) would be justified even if
only one home had been sold. However, the reality is that the land is vacant. FVP
has not even applied for or obtained a single building permit.
IV. THE TRIAL COURT ERRED IN DENYING FVP’S MOTION TO AMEND TO ADD CLASS ALLEGATIONS.
FVP learned from its review of County’s records that there are numerous,
similarly-situated landowners in Indian River County who are being assessed, on
an ongoing and continuous basis, water and sewer base facilities/service
availability charges in spite of the fact that their respective properties are not
connected to IRC’s water and sewer facilities.
At a time when the case was not set for trial, FVP filed a motion to amend to
add class action allegations with proposed amended complaint attached thereto.
The proposed amended complaint did not introduce any new causes of action. The
County objected to the motion claiming that the motion was untimely and would
introduce new issues into the case. The trial court denied the motion to amend.
47
In denying the motion, the trial court relied primarily on International Patrol
and Detective Agency, Inc. v. Aetna Cas. & Sur. Co., 396 So. 2d 774 (Fla. 1st DCA
1981). However, in that case, the plaintiff sought to add a new prayer for
injunctive relief in addition to seeking to add class action claims. In the present
case, FVP only sought to add class allegations with no change in the causes of
action under which discovery in the case had already proceeded. Under the
circumstances, denial of leave to amend was an abuse of discretion. See, Life Gen.
Sec. Ins. Co. v. Horal, 667 So. 2d 967 (Fla. 4th DCA 1996) (health insurer was
entitled to amend pleadings to include affirmative defense and counterclaim
alleging fraudulent omissions in insurance application, even though insurer could
have discovered information through exercise of reasonable diligence, and even
though insurer sought rescission after expiration of two-year period of
contestability; insured would be hard pressed to complain of prejudice since facts
eliciting amendment were known to her); Hutson v. Plantation Open MRI, LLC, 66
So. 3d 1042 (Fla. 4th DCA 2011) (reversing denial of motion to amend where
action had not been set for trial).
CONCLUSION For all of the foregoing reasons, the two summary judgments entered in
favor of IRC should be reversed and remanded with directions to grant FVP’s
48
cross-motions for summary judgment on the issue of liability. Additionally, the
order denying FVP’s motion to add class action allegations should be reversed.
49
CERTIFICATE OF SERVICE I HEREBY CERTIFY, that a true and correct copy of the foregoing has
been furnished, via eservice, to: Dylan Reingold, Esq., ([email protected]; e-
[email protected]; [email protected]; [email protected]) County
Attorney, Indian River County, Florida, 1801 27th Street, Vero Beach, FL 32960;
and Lewis W. Murphy, Jr., Esq. and Casey Walker, Esq., (wmurphy@murphy-
walker.com; [email protected]; pleadings-murphy@murphy-
walker.com; [email protected]; [email protected];
[email protected]) Murphy & Walker, PL, Co-Counsel for Defendant,
2001 U.S. Highway 1, Vero Beach, FL 32960 on this 20th day of July, 2015.
CERTIFICATE OF FONT
I HEREBY CERTIFY that this brief has been typed using the 14-point
Times New Roman font.
WEISS, HANDLER & CORNWELL, P.A. Attorneys for Appellant One Boca Place, Suite 218-A 2255 Glades Road Boca Raton, FL 33431 Telephone: (561) 997-9995 Facsimile: (561) 997-5280 By: /s/ David K. Friedman WILLIAM J. CORNWELL, ESQ. Florida Bar No. 0782017 [email protected] DAVID K. FRIEDMAN, ESQ. Florida Bar No. 307378 [email protected] [email protected] [email protected]