CITY OF JACKSONVILLE v. COFFIELD LLC (2009)

The City of Jacksonville appeals the non-final jury impanelment order entered in a case Harold Coffield brought pursuant to section 70.001, Florida Statutes (2006), the Bert J. Harris, Jr., Private Property Rights Protection Act (the “Act”). We have jurisdiction. See § 70.001(6)(a), Fla. Stat. (2006); Fla. R.App. P. 9.030(b)(1)(B), 9.130(a)(3)(C)(viii) (2009).

I.

In early 2006, Mr. Coffield signed a contract for the purchase of approximately two acres from James and Loretta Floyd. The parcel is on the St. Johns River in Jacksonville, adjacent to Windsong Place subdivision, and to a street also named Windsong Place. The agreed sales price was $550,000. Originally, the sale was to close (if at all) on April 30, 2006: Mr. Coffield made a deposit of $25,000 on January 24, 2006, which, the contract provided, the Floyds had to return if, within 60 days, Mr. Coffield determined, “in [his] sole and absolute discretion,” that the property was not suitable for development as residential, single-family lots. He intended to develop the property into eight such lots, each with access from Windsong Place, then a public road in the subdivision.

On February 8, 2006, however, the Windsong Place Homeowners' Association, Inc., filed an application with the City for closure and abandonment of the Windsong Place roadway in order to make it a private, gated road, and so preclude public access. George Paul, the City employee who had been in charge of processing road closure applications for four years, testified that he could not remember any application to close a public road-of which the City receives 45 to 70 per year-that the City denied during his tenure, although he recalled some that were withdrawn in the face of public opposition.

Mr. Coffield learned of the application to close the roadway on February 15, 2006, more than five weeks before the agreed deadline for rescinding the contract and recouping his $25,000 deposit. He decided to proceed with his development plans nevertheless, based in part on what proved to be his mistaken belief that the City would not grant the application for road closure;¹ and in part on the legal mistake that, even if the City did grant the application and close the public road, he would have title to half of the fee interest underlying the abandoned roadway easement.² One way or another, he assumed, access would be available from (perhaps a narrower) Windsong Place. On February 17, 2006, the Floyds executed a notarized document which authorized Mr. Coffield to act on their behalf in connection with the pending application to close the public roadway.

Eventually, the Floyds and Mr. Coffield agreed to extend the deadline for the real estate closing in exchange for Mr. Coffield's additional deposit of $15,000. Meanwhile, on March 22, 2006, the City issued a Concurrency Reservation Certificate (“CRC”) for the proposed development, predicated on “Final Engineering.” In January or February of 2006, Mr. Coffield had begun clearing the property and hiring surveyors and engineers to prepare surveys and plans. The CRC provided: “This development is hereby reserved capacities for potable water, sanitary sewer, solid waste, recreation, roads, mass transit, and drainage.”

On May 31, 2006, Mike Sands, an employee of the City, wrote a letter to Mr. Coffield, which stated that “[a]t this time, driveway connection permits can be issued with proper applications, bonds, and associated fees.” Mr. Sands testified that his office issues driveway connection permits as a matter of course, on proper application, if a roadway is public, the required fees are paid and any required bonds are posted. No application was actually made in the present case and no driveway connection permit actually issued. Nor were fees paid nor any bond posted for driveway connection permits.

On or around June 5, 2006, the sale closed. On August 17, 2006, the City enacted Ordinance 2006-407-E: “An ordinance closing and abandoning Windsong Place, at the request of Windsong Place Homeowners' Association, Inc., to allow the right-of-way to become a private road․” In light of the new ordinance, on September 26, 2006, the City wrote a letter to Mr. Coffield, stating: “The proposed site layout for the Windsong Place subdivision indicate[s] that the lots, after subdivision, will access Windsong Place. The [right-of-way] for Windsong Place has been closed and abandoned as a public road․ Please provide the Development Management Group with documentation that the proposed subdivision lots will have access to the private road for ingress and egress, essential services, etc.” Sean Kelly, a City employee, testified that abandonment of the public right-of-way stymied the proposed development because the property could not be subdivided into eight lots without access from Windsong Place.

Access was not the only obstacle to issuing permits for the development on September 26, 2006, Michael Sands testified. According to Mr. Sands, the biggest hurdle remaining was a prerequisite Conditional Letter of Map Revision. Before that could be issued, he testified, a flood study had to be conducted, and no flood study had been done. But he did not testify that the access problem was not an impediment to the eight-lot subdivision originally contemplated. The evidence suggested that, without access from Windsong Place, no more than two houses could be built.

On November 20, 2006, Mr. Coffield conveyed the property to a wholly owned entity, Windsong Place, LLC (the LLC). On December 19, 2006, Mr. Coffield and his alter ego, the LLC, filed in circuit court, purporting to set out a claim under section 70.001, Florida Statutes, against the City, and alleging damages in the amount of $2,212,000 as a result of their inability to proceed with the proposed development, which the complaint attributed to the closure of Windsong Place as a public road.

After a hearing on May 15, 2008, the trial court concluded that the City had made representations which “would lead a reasonable person to believe that the development of the Property could still proceed despite the application for abandonment of the roadway.” The order under review determined that Mr. Coffield had a vested right to develop the property into eight single-family homes, ruling that development for that purpose was an “existing use” of the property. The trial court determined that, by enacting Ordinance 2006-407-E and by writing the letter of September 26, 2006, the City had “inordinately burdened” an “existing use,” and ordered that a jury be impaneled to assess the amount of damages Mr. Coffield and the LLC had suffered as a result. The City appeals this order.

II.

At the outset, we address the City's interlocking arguments that neither Mr. Coffield nor the LLC were proper parties plaintiff, and that their complaint should have been dismissed on that basis. Citing Palm Beach Polo, Inc. v. Village of Wellington, 918 So.2d 988, 995 (Fla. 4th DCA 2006), the City argues that the LLC is entitled to no relief because it acquired the property only after the City had abandoned the public right-of-way. Since closure of Windsong Place as a public street precluded subdivision into eight lots (at least without an easement from the homeowners' association), the City contends the development restriction complained of was already in place when the LLC acquired the property; and that the LLC could have had no reasonable, investment-backed expectation at the time of acquisition that it was not subject to the restriction. See generally Palazzolo v. Rhode Island, 533 U.S. 606, 626, 121 S.Ct. 2448, 150 L.Ed.2d 592 (2001).

As for Mr. Coffield personally, the City contends, the Act provides that only the “property owner” is eligible for relief, and section 70.001(3)(f) of the Act defines “property owner” as “the person who holds legal title to the real property at issue.” By the time the lawsuit was filed, Mr. Coffield had divested himself of legal title by conveying the property to the LLC. Since he no longer holds legal title to the property personally, the City argues, Mr. Coffield is ineligible personally for any relief under the Act.

This court rejected similar arguments in Equity Resources, Inc. v. County of Leon, 643 So.2d 1112, 1117 (Fla. 1st DCA 1994), which was not, however, decided under the Act. There we said:

․ As earlier noted, at the time the vested rights application was filed, Pelham and his wife jointly owned all of the stock in Equity Resources, Inc., the title holder of the property in question. Since Equity Resources acquired its interest from other Pelham controlled or owned entities, it merely served as a successor entity through which the Pelhams continued to hold an interest, albeit equitable in nature, in the ownership and development of the land in the project. In short, Pelham's transfer of the property to Equity Resources from other entities owned or controlled by him did not necessarily extinguish his interest in the property for purposes of his standing to seek a determination of vested rights to continue development of the property.

․

․ Equity Resources is not an independent corporation, unrelated to Pelham, that obtained its interest in the land as a stranger to the project. On the contrary, it is an entity that was created and controlled by Pelham to hold the land and consummate the development initiated by Pelham.

643 So.2d at 1117-18. For purposes of decision, although without deciding the question, we assume that, because Mr. Coffield and the LLC are alter egos and both have sued, they are entitled to an adjudication of their rights under the Act.

III.

On this assumption, it properly fell to the circuit court to “determine whether an existing use of the real property or a vested right to a specific use of the real property existed and, if so, whether, considering the settlement offer and ripeness decision, the [City had] inordinately burdened the real property.” § 70.001(6)(a), Fla. Stat. (2006). Determinations under the Act that a claimant has “an existing use of the real property or a vested right to a specific use of the real property” and that government action has permanently precluded the claimant from attaining “the reasonable, investment-backed expectation for the existing use of the real property or a vested right to a specific use of the real property” are conclusions of law. § 70.001(3)(e) & (6)(a), Fla. Stat. (2006).

We review conclusions of law de novo. See, e.g., Williams v. Cadlerock Joint Venture, L.P., 980 So.2d 1241, 1243 (Fla. 4th DCA 2008) (“We review all legal determinations de novo, but test findings of fact to see if they are supported by competent, substantial evidence.” (citing State v. Glatzmayer, 789 So.2d 297, 301 n. 7 (Fla.2001))). Although, in important respects, we disagree with the learned trial judge's legal analysis, we begin, with deference to the trial court's fact finding, from the same statutory premise.

IV.

Section 70.001, Florida Statutes provides a remedy for property owners whose property has been “inordinately burden[ed]” by government action that does not, however, rise to the level of a constitutional taking. § 70.001(1), Fla. Stat. (2006). The Act provides: “When a specific action of a governmental entity has inordinately burdened [³ ] an existing use of real property or a vested right to a specific use of real property, the property owner of that real property is entitled to relief․” § 70.001(2), Fla. Stat. (2006).

Few cases interpret the substantive provisions of the Act,⁴ or elaborate on the statutory definitions of “inordinate burden” and “investment-backed expectation.” In Palm Beach Polo, however, the Fourth District concluded there could be no reasonable, investment-backed expectation in developing land that had long been designated a natural reserve, 918 So.2d at 995, and in Holmes v. Marion County, 960 So.2d 828 (Fla. 5th DCA 2007), the Fifth District held that “issuance of a time-limited permit cannot create a reasonable expectation that the specially permitted use will be allowed to continue indefinitely.” Id. at 830.

V.

The Act imports an important body of case law, however, when it provides that the “existence of a ‘vested right’ is to be determined by applying the principles of equitable estoppel or substantive due process under the common law or by applying the statutory law of this state.” § 70.001(3)(a), Fla. Stat. (2006). The Act specifies that “[t]he term ‘existing use’ means an actual, present use or activity on the real property, including periods of inactivity which are normally associated with, or are incidental to, the nature or type of use or activity or such reasonably foreseeable, nonspeculative land uses which are suitable for the subject real property and compatible with adjacent land uses and which have created an existing fair market value in the property greater than the fair market value of the actual, present use or activity on the real property.” § 70.001(3)(b), Fla. Stat. (2006).

The trial court apparently concluded that Mr. Coffield's intentions to subdivide the parcel into eight lots and build single family houses were “reasonably foreseeable, nonspeculative land uses․” Id. This was error. Plainly eight single-family lots were never “an actual, present use or activity on the real property.” § 70.001(3)(b), Fla. Stat. (2006). Nor did Mr. Coffield or the LLC ever have a vested right⁵ to develop the property into eight single-family lots. On February 15, 2006, when Mr. Coffield learned of the homeowners' association's application to close the roadway which provided the ingress and egress essential to his development plans, he had effectively no more than an option to purchase the property.

Actions he took after February 15, 2006, were with full notice that the roadway might be closed, preventing the development he contemplated. As a technical matter, the evidence did not establish any financial outlay-aside from the refundable deposit-prior to his knowledge of the application to close the public road.⁶ Once Mr. Coffield learned that an application had been filed to close the only roadway providing ingress and egress to the property, development of the property into eight single-family lots was, if still a possibility, by no means a “reasonably foreseeable, nonspeculative,” use of the property. § 70.001(3)(b), Fla. Stat. (2006).

Development of the property into eight single-family lots was never an “existing use” of the property or a “vested right.” Mr. Coffield went forward based on mistaken assumptions. He speculated-wrongly, as it turned out-that the public road would not be closed, and that he could develop the property into eight residences regardless of whether the roadway was closed. He testified that he “went along under that assumption for the longest period of time until basically [he] got the letter [from the City on September 26, 2006].”⁷ Mr. Coffield's misapprehensions conferred no legal rights.

VI.

Equitable estoppel principles reinforce this conclusion. Equitable estoppel is appropriate where the proof shows “(1) a property owner's good faith reliance (2) on some act or omission of the government and (3) a substantial change in position or the incurring of excessive obligations and expenses so that it would be highly inequitable and unjust to destroy the right he acquired.” Equity Res. Inc. v. County of Leon, 643 So.2d 1112, 1117 (Fla. 1st DCA 1994) (quoting Franklin County v. Leisure Props., Ltd., 430 So.2d 475, 479 (Fla. 1st DCA 1983)). In a land use context, we said:

One party will not be permitted to invite another onto a welcome mat and then be permitted to snatch the mat away to the detriment of the party induced or permitted to stand thereon. A citizen is entitled to rely on the assurances or commitments of a zoning authority and if he does, the zoning authority is bound by its representations, whether they be in the form of words or deeds․

Id. at 1120 (quoting Town of Largo v. Imperial Homes Corp., 309 So.2d 571, 573 (Fla. 2d DCA 1975)). Thus a necessary precondition for equitable estoppel against the government is a governmental act or omission that invites a citizen “onto a welcome mat.” Here no action or omission on the part of the City reasonably led Mr. Coffield to believe that his proposed development could proceed in the event the City closed or abandoned the roadway.

Neither of the governmental acts to which Mr. Coffield points (issuing the CRC on March 22 and sending the Sands letter about driveway connection permits on May 31) amount, even metaphorically, to “a welcome mat.”

A.

“[L]ocal concurrency management systems are a central feature of Florida's growth management process.[⁸ ] They are based on the requirement that development approvals should not be granted by local governments unless required public facilities and services will be available concurrently with the impacts of development.” Thomas G. Pelham, Restructuring Florida's Growth Management System: Alternative Approaches to Plan Implementation and Concurrency, 12 U. Fla. J.L. & Pub. Pol'y 299, 299-300 (2001). “The purpose of the concurrency management system is to establish an ongoing mechanism which ensures that public facilities and services needed to support development are available concurrent[ly] with the impacts of such development.” Fla. Admin. Code R. 9J-5.0055 (2008). “Concurrency is a land use regulation which controls the timing of new real estate development so adequate public facilities will be available to accommodate the impacts of that new development.” David L. Powell & Michele Gazica, And Now ․ School Concurrency, 79 Fla. B.J., Nov. 2005, at 44.

The CRC which the City issued on March 22, 2006, served only to “reserve [ ] capacities for potable water, sanitary sewer, solid waste, recreation, roads, mass transit, and drainage.” It did not constitute a development order, did not authorize subdivision, and did not permit construction. The City's Ordinance Code explains that a CRC is issued whenever it is determined that a proposed development “will not result in the reduction of the adopted level of service standards for impacted potable water, sanitary sewer, recreation, drainage, solid waste, traffic circulation and mass transit facilities and services ․” § 655.105(i), Jacksonville Ordinance Code (2006). The only representation the City made in issuing the CRC was that these facilities and services-the pertinent infrastructure-were in existence and that their absence or insufficiency could not preclude the proposed development. On this point, the City has never wavered.

B.

Similarly, the letter written by Mike Sands afforded no basis for reasonable reliance. The letter was careful to say, “[a]t this time, driveway connection permits can be issued with proper applications, bonds, and associated fees.” (Emphasis supplied.) Mr. Sands testified that his office issues driveway connection permits as a matter of course so long as the connecting roadway is public, the proper application is submitted, and the required fees are paid and bonds posted. By May 31, 2006, when the letter was written, Mr. Coffield had known for three and a half months (since February 15, 2006) that an application to close the connecting road was pending. Mr. Sands's letter does not address the effect granting the pending application would have. Importantly, no driveway connection permit was ever issued-or even applied for.

C.

There was, in short, no act or omission on the part of the City upon which Mr. Coffield could reasonably rely. The present case differs dramatically from Town of Largo v. Imperial Homes Corp., where property was initially rezoned at the developer's request specifically in order to allow multiple-family high-rise apartments. 309 So.2d 571, 572 (Fla. 2d DCA 1975). Only after this rezoning did the developer purchase the property. Id. The following year, an adjacent tract came on the market. Id. After receiving assurances from town officials that the second tract was also suitable for multiple-family development, the developer purchased that tract as well. Id. Some three years later, when the developer agreed to limit development on the first parcel to 24 units per acre and to use the second parcel for recreational purposes only, the town rezoned all of the property to allow 39 units per acre. Id. A few months later, however, after the political winds shifted, the town voted to rezone the property to allow no more than 2.5 units per acre. Id.

In contrast, Mr. Coffield learned of the application to close the roadway before the City issued the CRC or Mike Sands wrote the letter, and long before closing on the real estate transaction. See Abrahim-Youri v. United States, 36 Fed.Cl. 482, 486 (1996) (“In assessing the reasonableness of investment-backed expectations, the question we ask is whether plaintiffs reasonably could have anticipated that their property interests might be adversely affected by Government action. Where such intrusion is foreseeable, the commitment of private resources to the creation of property interests is deemed to have been undertaken with that risk in mind; hence, the call for just compensation on grounds of fairness and justice is considerably diminished.”). The City took no action upon which Mr. Coffield could reasonably have relied, and certainly none before February 15, 2006. Without a basis for reasonable reliance, equitable estoppel principles do nothing to bolster his or the LLC's claim to a vested right to develop the property into eight single-family lots.

VII.

The City's enactment of the Ordinance closing and abandoning the roadway, followed by the letter of September 26, 2006, did not inordinately burden any “reasonable, investment-backed expectation for the existing use of the real property or a vested right to a specific use of the real property ․” § 70.001(3)(e), Fla. Stat. (2006). Mr. Coffield did not have a vested right to develop the property into eight single-family homes nor did development of the property into eight single-family lots constitute an existing use of the property.

Any expectation Mr. Coffield had of developing the property in this fashion was not objectively reasonable, once he discovered that an application had been filed to close the only roadway which would provide access to the proposed lots. His assumptions that the application would be denied and that, in any event, he would not lose access to a critical portion of the roadway were incorrect and unsupported. He was not prevented from attaining any “reasonable, investment-backed expectation” of developing the property. § 70.001(3)(e), Fla. Stat. (2006).

In sum, the trial court erred, as a matter of law, in concluding that either Mr. Coffield or the LLC ever had a vested right to develop the property as eight single-family homes, that development as eight single-family lots was an existing use of the property, and that the City took any action which constituted an inordinate burden or precluded attaining any reasonable, investment-backed expectation. Accordingly, we reverse the jury impanelment order, and remand with directions that the claim be dismissed.

Reversed.

BENTON, J.

KAHN and BROWNING, JJ., concur.