by Amber L. Ketterer and Rafael E. Suarez-Rivas
Florida is a state that provides relief to private landowners when a law, regulation, or ordinance inordinately burdens, restricts, or limits private property without amounting to a taking under the U.S Constitution.1 The State of Florida enacted the Bert J. Harris, Jr., Private Property Rights Protection Act in 1995, which provides a specific process for landowners to seek relief when their property is unfairly affected by government action. Under the act, a claim exists if a governmental entity inordinately burdens an existing use of real property or a vested right to a specific use of real property.2 The act was subsequently amended in 2008 and 2011. The amendments were principally done to expedite the claims process and clarify the application of the act. The amendments also appeared on their face to extend protection, making it less stringent to landowners. In 2009, the First District Court of Appeal in City of Jacksonville v. Coffield 18 So. 3d 589 (Fla. 1st DCA 2009), said “[w]e have found no case in which an appellate court has affirmed relief granted pursuant to the [a]ct.” While the courts extended protection since then, cases continue to indicate that the courts conservatively construe the act so as not to expose local government to a massive amount of liability. There is new legislation and recent court cases that will have a significant effect on the way Harris Act claims are handled in the judicial system.
In addition, despite the amendments and various court opinions regarding the act, there appears to be a great deal of ambiguity as to what is protected under the act, how it should be applied, and what exactly constitutes a vested right, an existing use, or an inordinate burden. While the cases and the act itself provide some guidance, it is simply not clear at this time. The new legislation that attempts to further clarify the application of the act and the recent case of City of Jacksonville v. Smith, 2015 WL 798154 (Fla. 1st DCA 2015), that certified a major Bert J. Harris Act issue to the Florida Supreme Court evidences such.3 As for now, the trend in the appellate courts appears to be conservative and results in favorable rulings for local government entities, cautioning landowners. The new legislation and recent court cases may change that trend to some degree.
Timing and the “As-Applied” Issue
Attorneys should be mindful of the strict procedural prerequisites of the act, and aware of the courts’ evolving interpretations regarding how they apply. The first requirement to keep in mind is the initial requirement for a timely claim and subsequent lawsuit. The act provides that a claim (versus a lawsuit) must be presented to the governmental agency within one year from the time the law or regulation is first applied by the governmental entity to the property at issue.4 The 2011 amendment further provides that the one-year statute of limitations not only accrues once the law or regulation is first applied, but also when notice is provided by mail to the property owner informing him or her that the regulation may impact the landowner’s property rights and that the landowner may only have one year from receipt of the notice to pursue any rights.5 Otherwise, the clock starts to tick when there is a formal denial of a written request for development or variance, although there is some ambiguity as to when the denial takes effect.6
Generally, a regulation is first applied to a property when the impact of that regulation is readily ascertainable to the property owner.7 If the impact of a new law or regulation is readily ascertainable to the property owner when the regulation is implemented, a claim under the act must be submitted within one year of that new regulation’s enactment.8Further, the timeline for submitting a claim and the four-year statute of limitations is also tolled if the landowner seeks relief from the government action via administrative or judicial proceedings.9
However, there are some instances when the impact of a governmental regulation cannot be determined prior to the submission of an actual development permit.10The definition of what constitutes a development permit is provided in the Community Planning Act.11 For example, in Wendler v. City of St. Augustine, 108 So. 3d 1141 (Fla. 5th DCA 2013), the city amended an ordinance, authorizing the Historical Architectural Review Board to deny demolition or relocation requests for certain structures, including those on the plaintiff landowner’s property. The court ruled that the amendment was not readily ascertainable to the Wendlers as the amendment was general and only potentially applied to the Wendlers’ property. As the city retained significant discretion to grant or deny a permit, the amendment was not reasonably ascertainable to property owners at the time of enactment. As such, the court found that the impact of the ordinance was not readily ascertainable until the Wendlers’ permit applications were denied. Thus, because they filed their claim within one year after their permit application was denied, their claim was timely.12
The Second District also recently discussed the “as-applied” issue in P.I.E., LLC v. Desoto County, 133 So. 3d 577 (Fla. 2d DCA 2014). In P.I.E, the trial court dismissed the Harris Act action because it was filed more than one year after the board’s vote to deny the development permit. The appellate court reversed the dismissal and remanded with instruction to determine what date the board’s denial of the permit took effect, whether it took effect the day the commission voted or the day the denial was reduced to writing. It was a factual determination for the trial court to make. It is suggested that the Third District Court of Appeal would rely on its decision in the case of 5220 Biscayne Boulevard LLC and City of Miami v. Stebbins, et al., 937 So. 2d 1189 (Fla. 3d DCA 2006), in which the court held that in a non-Harris Act case, for purposes of an appeal, a development order was effective when the city clerk received the written development order approved by the city commission. In Stebbins, the date of rendition was held to be when the order is finalized and filed of record, by analogy to a final order of a court.
The most recent case to discuss yet another issue involving the “as-applied” language is Smith, which certifies a question to the Florida Supreme Court. In Smith, the plaintiffs claimed that the establishment of a fire station for the City of Jacksonville inordinately burdened their property, as the city-owned property originally contained a deed restriction limiting the use of the property to leisure and recreation for employees of the county. Jacksonville then obtained a deed cancellation and re-zoned the property to allow for a fire station. The Smiths intended to market their property as a luxury home site. In this case, no new law, regulation, or ordinance was directly applied to the Smiths’ property. However, Jacksonville passed an ordinance allowing for new or different use of an adjacent property, which the Smiths contended was the specific action that inordinately burdened their property. While ruling in favor of Jacksonville and holding that the Harris Act was not intended to capture so broadly government action, the court certified the question: “May a property owner maintain an action pursuant to the Harris Act if that owner has not had a law, regulation, or ordinance directly applied to the owner’s property which restricts or limits the use of the property?”13
The First District’s opinion in Smith is 31 pages long and consists of lengthy, clear, and logical analysis from each side, a majority, and dissent. The majority in Smith maintains that “[t]he [a]ct contains no language to indicate that it intends to create a whole new class of takings to claimants who do not have to demonstrate that a governmental law, rule, or regulation had been applied to their property….”14 The majority references the language of the act and an attorney general opinion. The act specifies that the government action must be directly applied to the claimant’s property in order to maintain an action.15 Further, it explicitly states that the government action must directly restrict or limit the use of the property.16 The attorney general declared that the legislative intent and the plain language of the act require the regulation at issue be directly applied to the subject property.17 Thus, due to the clear and specific language used in the statute, it does not appear that the legislature contemplated extending the protection to real property that may be incidentally affected by a governmental action directed at a separate, specific property.18 Allowing such protection would severely affect the functioning of government action and has the potential to open the floodgates for claims under the act.19 The court leaves it to the legislature to expand the scope of the act to include such claims.20
The dissent interprets the “as applied” and “directly restricted” language of the act more broadly. The dissent is of the opinion that these phrases simply mean causation, specifically, whether the government action immediately and detrimentally affected the value of the property without any other contributing factors.21 Thus, it would follow that the landowners in Smith would be entitled to relief under the act because their property was directly and adversely affected by the governmental action.22 The second dissent interprets the word “affects” as a broad concept and indicates that the act does not provide any limited definition. Thus, the city’s actions in this case affected the Smiths’ property, resulting in loss, and the act applies.23
It would probably be surprising to many, especially government entities, if the Florida Supreme Court strayed from the First District’s majority reasoning and ruling in Smith.24 In the event that it answers this question in the affirmative, it would mean potentially broadening the Harris Act protection exponentially. Government entities would be forced to look back at all of the regulations implemented in at least the past year and defend Harris Act cases they thought could never have existed. It would also force them to tediously opine on how every single piece of property could possibly be affected by any regulation implemented. While the legislature surely wanted to have the government be mindful of their regulations and how they would affect real property, the type of burden that ruling would create is probably beyond their intent. However, the Smith court provides both sides with clear and logical reasoning to back it up. Before the Florida Supreme Court has the opportunity to opine on this important issue regarding the “as-applied” language that was ironically added in the 2011 amendment for clarification purposes, it appears the new legislation may have answered the question for them.
One of the few bills to make it out of the 2015 legislative session was an amendment to the act. One of the amendments to the act specifically addresses the issue discussed in Smith — which property owner can maintain a cause of action against the government action at issue. The Florida Legislature has amended the definition of “property owner” and “real property” for the purposes of the act. Property owner was amended to include, “the real property that is the subject of and directly impacted by the action of a governmental entity.”25 Additionally, “real property” as defined in the act was amended to include, “only parcels that are the subject of and directly impacted by the act of the governmental entity.”26 Such language now clarifies that a property owner adjacent to the alleged government action could not maintain a cause of action pursuant to the act. Similar to the property owners in Smith, a property owner affected incidentally to the government action would not maintain a cause of action, as the Smiths were not the owners of the property that were the subject of the government action.
Vested Right and Existing Use
Another issue that exists in Harris Act claims are the definitions of “vested right” and “existing use.” While the act defines the terms, it also provides that the circuit court shall determine whether an existing use of the real property or a vested right to a specific use of the real property existed. Thus, it gives some guidance, but recognizes that the determination is made on a case-by-case basis and is in the hands of the courts. According to the act, a vested right is determined by applying principles of equitable estoppel or Florida statutory law. Under the principles of equitable estoppel, a property owner has a vested right if he or she 1) in good faith; 2) upon some act or omission of the government; and 3) has made such a substantial change in position or has incurred such extensive obligations and expenses that it would be highly inequitable and unjust to destroy the right he acquired.27 In Citrus County v. Halls River Dev., Inc. 8 So. 3d 413 (Fla. 5th DCA 2009), the Fifth District reversed the trial court and ruled that there is no vested right to intended use of the property based on equitable estoppel, despite the county’s erroneous advice about the property’s permitted uses, as the doctrine of estoppel does not apply to transactions that are forbidden by law or contrary to public policy.28 The governmental agency would need to reasonably lead the landowner to believe he or she had the right, and that may be difficult to prove. The Fifth District recently ruled in Town of Ponce Inlet v. Pacetta, LLC., 120 So. 3d 27 (Fla. 5th DCA 2013), that there was no equitable estoppel when claimant attempted to develop 16 acres that would require changes to the Comprehensive Land-Use Program, and when there were four years of communications and representations between the planning department, citizens, and its council to approve, but the town did not make the changes.29
An “existing use” is defined by the act as:
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, non-speculative 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.
A time-limited permit cannot create a reasonable expectation that the specially permitted use will be allowed to continue indefinitely.30 If government entity and landowner were both mistaken about the use of the property and the use was actually not legal, then there was no existing use.31 The use needs to be one that is reasonably foreseeable and nonspeculative.32
According to the Harris Act, an inordinate burden occurs when a governmental action directly restricts or limits the use of real property such that the owner is unable to attain the reasonable, investment-backed expectation for the existing use or vested right to a specific use; temporary burdens or those impacts caused by governmental action to remediate a public nuisance are not included. The express language of the act indicates that it only applies to as-applied challenges, which brings us back to the above discussion. Until a development plan is submitted, a court cannot determine whether government action has inordinately burdened the property. Thus, a property owner cannot bring a claim until he has applied for a development permit approval and the approval is denied.33 In addition, the act does not apply to government actions dealing with the general police power needs of its citizens, as that would severely limit the willingness of local government to act.34 Lastly, an ordinance could expressly exempt a property, but the exemption does not in and of itself inordinately burden property.35
Before a lawsuit is filed for a Harris Act claim, certain prerequisites are required under the statute. The claim itself must be submitted not less than 150 days prior to filing a lawsuit under the act and accompanied by a bona fide valid appraisal that supports the claim and demonstrates the loss.36 The government entity must then make a written settlement offer or state that the city will take no action. If no settlement is reached during the 150-day notice period, the government entity must issue a written statement of allowable uses identifying the allowable uses.
Failure to follow the procedures will result in a dismissal of the Harris Act claim. For example, the court in Osceola County v. Best Diversified, Inc., 936 So. 2d 55 (Fla. 5th DCA 2006), denied a claim under the act because the claimants failed to submit the bona fide valid appraisal supporting the claim, which cannot be cured by filing an appraisal during the litigation.37 A recent example is in State v. Basford, 119 So. 3d 478 (Fla. 5th DCA 2013), in which the court denied the Harris Act claim because the claimants did not submit the pre-suit notice as required. Despite some ambiguities in the act, the courts strictly construe the procedural requirements. The pre-suit notice requirements may be viewed in the same manner as those required in order to institute tort suits against a local government under F.S. §768.28.
Another aspect of the act is encouragement for the parties to resolve claims by using alternative remedies. During the 150-day notice period, unless extended by agreement of the parties, the government entity must make a written settlement offer that can include adjustment of land development; increase in density, intensity, or use; transfer of developmental rights; land swaps or exchanges; mitigation, including payments in lieu of onsite mitigation; location on the least sensitive portion of the property; conditioning the amount of development or use permitted; etc.38 Any settlement must protect the public interest served by the regulations at issue. As such, if a settlement is reached that contravenes the statute, the parties must file an action for the court to approve the settlement agreement.39
Once a lawsuit is filed, the court is limited to remedy monetary damages only.40 However, the new legislation appears to change that ruling. In Hussey v. Collier County, 2014 WL 5900018 (Fla. 2d DCA 2014), the Second District held that if parties do not settle during the required pre-suit period under the act, the property owner could only bring suit for compensation. At the point of filing a lawsuit after no settlement, the only issue was whether the property owner is entitled to compensation, and, if so, how much. Thus, the remedies available under the act, including transfer of developmental rights and those remedies that would contravene statutes, were only available during the pre-suit period. This limitation is detrimental to both local governments and property owners. Local governments would be forced to use taxpayer funds when other remedies could resolve the matter and landowners may rather have the alternate remedy than monetary compensation.
The 2015 amendment to the act makes a few changes concerning remedies and settlement agreements with the local government entity. Now, it is clarified that settlement agreements pursuant to the act may take place during the 90-day notice period or after the filing of the action in court, as long as the settlement resolves all claims; thus, government entities may avoid or end litigation. Further, the 2015 amendment provides an exception to government action taken to adopt a Flood Insurance Rate Map pursuant to the Federal Emergency Management Agency. While limiting claims pursuant to the act, with said exemption, the 2015 amendment added §70.45, titled “government exactions.” The added section opens entire new causes of action pursuant to the act for “conditions imposed by a governmental entity on a property owner’s proposed use of real property that lacks a nexus to a legitimate public purpose.”41 It will be interesting to see which claims are brought under the new section and how the courts will interpret “legitimate public purpose” along with “conditions imposed by governmental entity.”
The implementation of the Harris Act and the subsequent amendments clearly evidence the Florida Legislature’s desire to recognize landowners’ rights. However, despite the amendments’ clarifications, the courts continue to struggle with the extent to which the protection extends. The courts certainly need some additional clarification from the legislature, and hopefully the new legislation will provide some. Thus far, the judiciary has made rulings to protect both landowners and local government, carrying out the assumed intent of the legislature. While the judicial system has come a long way from Coffield,42 it also has to keep checks and balances so as not to expose local government to massive amounts of claims that would drain taxpayer dollars. Should the Florida Supreme Court agree with the dissent in Smith, it may have this effect among many others.43
1 Fla. Stat. §70.001, et seq., Bert J. Harris, Jr., Private Property Rights Protection Act.
2 Emphasis added.
3 Smith, 2015 WL 798154 (holding that the plaintiffs were not entitled to relief under the Harris Act because the plaintiffs’ property was not itself subject to the governmental action, the case certified the following question: May a property owner maintain an action pursuant to the Harris Act if that owner has not had a law, regulation, or ordinance directly applied to the owner’s property that restricts or limits the use of the property?).
4 Fla. Stat. §70.001(11) (emphasis added); see Citrus County v. Halls River Development, Inc., 8 So. 3d 413 (Fla. 5th DCA 2009) (holding, inter alia, that the claim was untimely despite plaintiff’s assertion that a 2002 ordinance directly restricted its use of the property by applying the first time a 1996 amendment as to fall in within the one year statute of limitation; the court disagrees, indicating that the inordinate burden, if one exists, was created by the 1996 amendment and not by the ordinance passed in 2002).
5 Fla. Stat. §70.001(11)(a)(1).
6 Fla. Stat. §70.001(11)(a)(2); see Wendler v. City of St. Augustine, 108 So. 3d 1141 (Fla. 5th DCA 2013) (holding that the one-year period commenced on the date that a permit was denied, and that the lawsuit needed to be filed within four years of the date of denial); see also P.I.E., LLC v. Desoto County, 133 So. 3d 577 (Fla. 2d DCA 2014).
7 See Halls, 8 So. 3d at 413.
8 Wendler, 108 So. 3d at 1141 (citing Halls, 8 So. 3d at 413).
9 Fla. Stat. §70.001(11); Hussey v. Collier County, 2014 WL 5900018 (Fla. 2d DCA 2014) (holding that the tolling provision applies to both the one-year and the four-year statute of limitations that applies to Harris Act claims).
11 Fla. Stat. §163.3164(16).
12 Wendler, 108 So. 3d at 1141.
13 Smith, 2015 WL 798154.
15 Id. (citing Fla. Stat. §70.001(1) (emphasis added)).
16 Id. (citing Fla. Stat. §70.001(3)(e)1 (emphasis added)).
17 Id. (citing AGO Fla. 95-78 (1995)).
18 Id. (emphasis added).
19 Smith, 2015 WL 798154.
25 Emphasis added.
26 Emphasis added.
27 Coral Springs St. Sys., Inc. v. City of Sunrise, 371 So. 3d 1320 (11th Cir. 2004).
28 Montsdoca v. Highlands Bank & Trust Co., 95 So. 666, 668 (Fla. 1923); Dade County v. Gayer, 388 So. 2d 1292, 1294 (Fla. 3d DCA 1980); Halls, Inc. 8 So. 3d at 413.
29 Town of Ponce Inlet, 120 So. 3d at 27.
30 Holmes v. Marion County, 960 So. 2d 828 (Fla. 5th DCA 2007).
31 Halls, 8 So. 3d at 413.
32 Coffield, 18 So. 3d at 589.
33 M&H Profit, Inc. v. City of Panama City, 28 So. 3d 71 (Fla. 1st DCA 2009).
35 See Halls, 8 So. 3d at 413.
36 Fla. Stat. §70.001(4)(a); see Halls, 8 So. 3d at 413; see also Wendler, 108 So. 3d at 1141.
37 See also Sosa v. City of West Palm Beach, 762 So. 2d 981, 982 (Fla. 4th DCA 2000) (affirmed dismissal of claimant’s complaint for failure to comply with prerequisites of act, specifically, failing to present an appraisal and presenting claim less than 180 days before filing action).
38 See Fla. Stat. §70.001(4)(d)(2).
39 Id. See Charlotte County Park of Commerce, LLC v. Charlotte County, 927 So. 2d 236 (Fla. 2d DCA 2006) (holding that parties may settle a claim under the act before suit is filed and remanding to determine whether the settlement agreement was intended to resolve a claim under the act). See also Florida Panthers v. Collier County, 2014 WL 2742826 (Fla. M.D. 2014) (an example of parties filing a lawsuit to get court approval and that the courts must deny approval if the settlement agreement contravenes a law and does not protect the public interests served by such law).
40 See Collier County v. Hussey, 147 So. 3d 35 (Fla. 2d DCA 2014).
41 Fla. Stat. §70.45(c).
42 Coffield, 18 So. 3d at 589, n.4.
43 Smith, 2015 WL 798154.
Amber L. Ketterer is a practicing litigation attorney in South Florida.
Rafael E. Suarez-Rivas is an assistant city attorney who supervises the land use/ transactional division in the Office of Miami City Attorney Victoria Méndez.
The authors gratefully acknowledge the assistance of Miami Assistant City Attorney J. Gigi Soliman in the preparation of this article.
This column is submitted on behalf of the City, County and Local Government Section, Mark CS Moriarty, chair, and David Miller, editor.