An injunction preventing a County from fulfilling its obligations under a Development Agreement is not a breach of contract; The temporary inability to issue development permits does not constitute a compensable taking.  Leon County v. Gluesenkamp, 29 Fla. L. Weekly (Fla. 1st DCA May 10, 2004).

     Leon County appealed a circuit court’s determination that the County breached a Development Agreement with the Gluesenkamps and that the County’s temporary inability to issue permits constituted a compensable taking of the Gluesenkamps’ property.

     In 1995, Leon County added a Land Use Goal to its Comprehensive Plan that provided for the development and implementation of a comprehensive stormwater management plan in the Bradfordville Study Area (BSA).  In 1998, the County entered into a Development Agreement with the Gluesenkamps’ predecessors in title, whose property was located within the BSA. 

     On April 27, 1998, several parties filed suit challenging the County’s compliance with its Comprehensive Plan and the County’s actions in entering the Development Agreement.  Three days later, the Gluesenkamps purchased property that was subject to the Development Agreement.  On December 15, 1998, the court enjoined the County from issuing any future development or building permits within the BSA.

      In February of 1999, the Gluesenkamps applied for building and environmental management permits.  The County informed the Gluesenkamps that it was enjoined from issuing construction permits for properties within the BSA.  On March 2, 1999, the Gluesenkamps filed an action against the County for, among other things, breach of the Development Agreement and inverse condemnation.  The circuit court found for the Gluesenkamps on the breach of contract and inverse condemnation claims and awarded damages.  The County appealed.

     On appeal, the First DCA reversed the circuit court’s ruling.  In reaching its decision, the court first examined the breach of contract claim and held that the County was not liable for its failure to perform its obligations under the Development Agreement because a court order enjoined it from issuing permits within the BSA.  On the inverse condemnation claim the First DCA held that the temporary prohibition of development within the BSA did not constitute a per se compensable taking of the Gluesenkamps’ property under Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992).  However, the court went on to consider whether a taking occurred under a Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978), analysis.  The court considered the following three Penn Central factors: (1) the economic impact the temporary prohibition had on the Gluesenkamps, (2) the extent that the temporary prohibition interfered with the Gluesenkamps’ distinct investment-backed expectations, and (3) the character of the governmental action. 

     In its consideration of the first factor, the temporary prohibition’s economic impact on the Gluesenkamps, the court noted that a temporary land use regulation would rarely result in a financial loss serious enough to constitute a taking of property.  Additionally, the court noted that the Gluesenkamps’ ability to sell their property for more than $490,000 in profit was not indicative of a reduction in value due to development prohibition within the BSA. 

     In its consideration of the second factor, the extent of the regulation’s interference with the Gluesenkamps’ distinct investment-backed expectations, the court examined whether the Gluesenkamps “bought their property in reliance on a state of affairs that did not include the challenged regulatory regime.”  The court noted that the action challenging the County’s compliance with the Comprehensive Plan was commenced before the Gluesenkamps purchased their property.  Furthermore, the court noted that a reasonable developer should have foreseen the likelihood of future restrictions that would adversely affect development of property within the BSA because the development of a stormwater management plan for the BSA had been ongoing for several years prior to the date the Gluesenkamps purchased their property. 

     Finally, in its consideration of the final factor, the character of the governmental action, the court concluded that the public would benefit from a temporary prohibition of development when the purpose was to ensure compliance with regulations in force that are intended to protect the community.  Thus, the court concluded that the temporary prohibition of development within the BSA, which prevented the Gluesenkamps from obtaining the permits they needed to develop their property, did not constitute a compensable taking.

While Collier County’s interpretation of its Land Development Code was clearly erroneous, petitioners were not entitled to judicial relief because they failed to exhaust the available administrative remedies.  Vanderbilt Shores Condo. Ass’n, Inc. v. Collier County, 29 Fla. L. Weekly D951 (Fla. 2d DCA April 14, 2004).

     Several condominium associations filed an action for declaratory relief and mandamus challenging a building permit issued by Collier County to Aquaport, LLC and Conotel, LC.  The condominium associations claimed that the County’s interpretation of its Land Development Code (LDC) in the issuance of the permit resulted the failure to provide the correct amount of open space for side yard setbacks.  The circuit court held that the County’s interpretation of the LDC was reasonable.  Additionally, the circuit court noted that the condominium associations had failed to exhaust their available administrative remedies.  The condominium associations appealed.

     On appeal, the Second DCA disagreed with the lower court’s ruling on the County’s interpretation of the LDC.  The court noted controlling precedent that mandated deference to the County’s interpretation of the LDC unless that interpretation was “clearly erroneous” or “unreasonable.”  However, the court held that the County’s interpretation was clearly erroneous because the LDC defines a side yard setback as “open space,” and the County’s interpretation of the LDC in this case included a portion of the lower tier of the structure (i.e., space that is not occupied or obstructed) in the calculation of side yard setbacks.  Thus, under the County’s interpretation, the correct amount of side yard setback for buildings consisting of more than one tier would never be provided. 

     Despite this important distinction, the court affirmed the circuit court’s decision because the condominium associations failed to exhaust the available administrative remedies.  Specifically, the Court noted that the LDC provides administrative procedures for obtaining an official interpretation of the LDC from the planning services director, which may be appealed, and procedures for entering complaints with respect to code violations, none of which the condominium associations had pursued.    

Petition seeking certorari review is not the proper procedural vehicle to challenge the constitutionality of a statute or ordinance.  Oceanside at Fisher Island  v. City of Miami Beach, 29 Fla. L. Weekly D988 (Fla. 3d DCA April 21, 2004).

     A condominium association and six individuals did not follow proper procedure for challenging the constitutionality of certain sections of the City of Miami Beach Code.  The Third DCA, citing Miami-Dade County v. Omnipoint Holdings, Inc., 863 So.2d 195 (Fla. 2003), reiterated that the proper method to challenge the constitutionality of a statute or ordinance is not by petition for writ of certiorari but by filing an original action at law for declaratory judgment.  The court denied the petition for writ of certiorari and remanded the petitioners’ case to the circuit court with instructions to treat the case as an original action for declaratory judgment.

Officials’ interpretation of the law has binding effect where such interpretation is “permissible.”  Rollison v. City of Key West, 29 Fla. L. Weekly D922 (Fla. 3d DCA April 14, 2004).     

     In 1997, Kathy Rollison (Rollison) purchased a residentially-zoned condominium in Key West that she planned to use as a vacation home and to rent short-term when she was not vacationing.  At the time Rollison purchased her condominium, city officials interpreted Key West zoning laws as permitting short-term rentals (i.e., rental of property for less than twenty-eight days) of residential property for no more than twenty-six weeks per year provided the owner obtained a non-transient occupational license.  This interpretation was known as the “50% Rule” and was based on language in the City Code that defined transient housing as “commercially operated housing principally available to short-term visitors.”  The reasoning behind the 50% Rule was that a unit was not “principally available” if it was not rented half the time or more.  Thus, a unit, if rented less than 50% of the time would not be considered transient housing.  Rollison complied with the 50% Rule while she owned her condominium.

     In 1998, the City adopted new Land Development Regulations (LDRs) that replaced the zoning law from which the 50% Rule originated.  Additionally, in 1998, the City adopted an ordinance that prohibited rental of residential property to short-term visitors.  After these new regulations were adopted, the City informed Rollison that she was no longer permitted to rent her condominium for short-terms.

     Rollison filed an action for a declaratory judgment seeking classification of the short-term rental of her condominium as a lawful nonconforming use.  Such classification would allow her to continue to rent her property for short-terms despite the new zoning laws because she had previously engaged in this use and the use was lawful under the previous zoning laws.  The City counterclaimed seeking a declaration that short-term rental of Rollison’s condominium was not lawful under the City’s previous zoning laws and, therefore, could not be considered a lawful nonconforming use.  The court ruled in favor of the City and enjoined Rollison from further short-term rental of her property.  Rollison appealed.

     On appeal, the Second DCA reversed the lower court’s ruling, specifically rejecting the lower court’s statement that the 50% Rule cannot have a binding effect because it was merely an official’s interpretation of the law and was never officially approved by the City Commission.  In so holding, the Court reasoned that the 50% Rule was the accepted interpretation of the previous zoning law and that such administrative interpretations must be given deference if they are “permissible” interpretations of law.  The Court found that the 50% Rule was a permissible interpretation rejecting the City’s argument that it was contrary to the language of the zoning code.

     Further, the Court held that Rollison’s ability to rent her property for short-terms was “grandfathered in” as a lawful nonconforming use because Rollison engaged in short-term rentals before the 1998 restrictions were adopted and did so in compliance with the 50% Rule.

Petitioners’ claim of a general interest in maintaining quality of life in the county by controlling future land use and managing growth in the community did not confer standing to appeal an agency’s final order. O’Connell v. Fla. Dep’t of Community Affairs, 29 Fla. L. Weekly D1220 (Fla. 4th DCA May 19, 2004).

     Two citizens and the Martin County Conservation Alliance, Inc. (MCCA) challenged amendments to the Martin County Comprehensive Growth Management Plan (Plan), alleging that the amendments did not comply with the Plan.  The ALJ issued a recommended order to the Department of Community Affairs recommending that the Department enter a final order finding the amendments in compliance.  The Department issued a final order, and an appeal ensued.

     On appeal, the Fourth DCA held that the appellants lacked standing to challenge the Department’s final order and, therefore, dismissed the appellants’ claim.  In so deciding, the court held that the requirements for standing on appeal are more stringent than the requirements for standing at the administrative level because Section 120.68(1), Florida Statutes, states that an appellant must be “adversely affected” or “aggrieved” before judicial review of final agency action is available.  Further, the court held that a general interest in maintaining the quality of life in the county by controlling future land use and managing growth in the county did not confer standing where the appellants had not stated, specifically, how they had been adversely affected by the amendments. 

Section 120.595, F.S., does not preclude an ALJ from awarding attorney’s fees where a notice of dismissal is filed before the ALJ conducts a formal hearing on the merits.  G.E.L. Corp. v. Dep’t of Envt’l Protection, 29 Fla. L. Weekly D1352 (Fla. 5th DCA June 4, 2004).

     Orange City filed a petition for a formal administrative hearing to challenge DEP’s issuance of a permit to GEL.  After referral of the petition to the Division of Administrative Hearings and issuance of a Notice of Final Hearing, GEL filed a motion for attorney’s fees pursuant to Section 120.595, Florida Statutes.  Shortly thereafter, Orange City filed a notice of voluntary dismissal before the Final Hearing on the merits.  Although GEL moved for attorney’s fees, the Administrative Law Judge (ALJ) held that Section 120.595, Florida Statutes, requires a full evidentiary hearing on the merits of a petition before attorney’s fees can be awarded.  The ALJ issued a recommended order of dismissal of GEL’s petition.

     DEP adopted the ALJ’s recommended order but disagreed with the ALJ’s ruling that a full evidentiary hearing is a jurisdictional prerequisite to an award of attorneys’ fees under Section 120.595, Florida Statutes.  Despite its disagreement with the ALJ’s ruling, DEP noted that Subsection 120.57(1)(l), Florida Statutes, precluded it from correcting the ALJ’s error.  DEP reasoned that it was powerless to correct the error because its subject matter jurisdiction is limited to environmental issues and Section 120.57(1)(l), Florida Statutes, only authorizes an agency to reject or modify conclusions of law and interpretations of administrative rules over which it has subject matter jurisdiction.   

     On appeal, the Fifth DCA agreed with DEP’s interpretation of Section 120.595 and Subsection 120.57(1)(l), Florida Statutes.  In reaching its decision, the court first examined Section 120.595(1)(c), Florida Statutes, which requires a “proceeding” before the ALJ can award attorneys fees, and held that the filing of a petition and subsequent order of dismissal prior to a hearing on the merits is a “proceeding” for purposes of awarding attorney’s fees.  In so holding, the court reasoned that a contrary interpretation of the statute would result in delays, unnecessary costs, and an increase in the filing of meritless petitions--all of which are absurd results that the Legislature could not have intended.  The Court found additional support for this interpretation in a 2003 amendment to Section 57.105(5), Florida Statutes – another attorney fee statute – that provides in part: “[a] voluntary dismissal by a non-prevailing party does not divest the administrative law judge of jurisdiction to make the award described in this section.”

     Next, the court examined Subsection 120.57(1)(l), Florida Statutes, and agreed with DEP’s analysis of the subsection’s limitations on agency subject matter jurisdiction.  Finally, the court held that the petitioner’s failure to directly appeal the ALJ’s order of dismissal did not divest the court of jurisdiction to correct the ALJ’s error because the parties had fully argued the issues and ensuring the correctness of the ALJ’s ruling was necessary to properly resolve the appeal.  Therefore, the court reversed DEP’s order and remanded the case to the ALJ to conduct a hearing on GEL’s petition for attorney’s fees. 

Gary K. Hunter, Jr. is a Shareholder with Hopping Green & Sams, P.A. in Tallahassee, Florida.  He received his B.B.A. and J.D. from the University of Georgia.  D. Kent Safriet is an Associate with Hopping Green & Sams, P.A. in Tallahassee, Florida.  He received his B.S. from Clemson University and his J.D. from the University of South Carolina.  Mr. Hunter and Mr. Safriet practice primarily in the areas of environmental and land use litigation and solid and hazardous waste regulation.