City of Miami v. Keshbro, Inc.

• Court: Florida District Court of Appeals
• Writing for the Court: Before GODERICH and FLETCHER, JJ., and SMITH, LARRY G.; FLETCHER
• Citation: City of Miami v. Keshbro, Inc., 717 So.2d 601 (Fla. App. 1998)
• Decision Date: 16 September 1998
• Docket Number: No. 98-1151,98-1151
• Parties: CITY OF MIAMI, a municipal corporation, and The City of Miami Nuisance Abatement Board, a quasi-judicial board, Appellants, v. KESHBRO, INC., a Florida corporation, d/b/a Stardust Motel; and Harish Gihwala, individually, Appellees.

Page 601

717 So.2d 601

CITY OF MIAMI, a municipal corporation, and The City of Miami Nuisance Abatement Board, a quasi-judicial board, Appellants, v. KESHBRO, INC., a Florida corporation, d/b/a Stardust Motel; and Harish Gihwala, individually, Appellees.

No. 98-1151.

District Court of Appeal of Florida Third District.

Sept. 16, 1998.

Jose Fernandez, Assistant City Attorney; Sweetapple, Broeker & Varkas and Paul B. Feltman, for appellants.

David Forestier, North Miami, for appellees.

Thomas A. Bustin, St. Petersburg, for the City of St. Petersburg as amicus curiae.

Before GODERICH and FLETCHER, JJ., and SMITH, LARRY G., Senior Judge.

FLETCHER, Judge.

The City of Miami [City] and the City of Miami Nuisance Abatement Board ¹ [Board] appeal the trial court's summary judgment order (as clarified) determining the issue of liability in favor of Keshbro, Inc. and Harish Gihwala [the owners] for the temporary taking ² of their property (The Stardust Motel) by virtue of the Board's issuance of a nuisance abatement order which directed closure of the property for approximately six months. We reverse the summary judgment order and remand for further proceedings.

The owners have, since 1988, been the operators of the Stardust Motel, a fifty-seven-unit building located at 6730 Biscayne Boulevard, Miami, Florida. The property has a long history of drug and prostitution activity thereon. ³ In 1992, the Board ordered the motel closed in an effort to curtail such illicit occurrences. It was re-opened in 1993 with the agreement of the owners to maintain the premises free of the proscribed activities. As evidenced by a lengthy list of subsequent criminal events that took place at the motel, the effort to resolve the problem was a failure. As a consequence, a second case regarding the motel was heard by the Board in 1996-97, at which time a stipulation was entered into by which the owners agreed not to contest a Board finding that the premises constituted a public nuisance. The stipulation also provided that six motel rooms be closed for six months. Numerous additional provisions were included in an effort to terminate the nuisance. A Board order was then entered based on the stipulation.

Notwithstanding the stipulation and order, further drug and prostitution-related activities took place on the property, leading the Board to order the closure of seven more rooms. This additional closing did not resolve the problem and the list of proscribed incidents occurring at the motel grew longer. Faced with this continuing activity, the Board ordered the entire property closed for six months. The City and the Board then sought and obtained from the circuit court an injunction enforcing the closure order. ⁴

The circuit court, in its injunctive order, left open for future resolution a claim by the owners for compensation by the City for a temporary taking of the property. In 1997 the owners filed their action alleging that the Board's complete closure of their motel for six months deprived them of all economic use of their property, and thus was a taking for which they are entitled to be compensated by the City. The circuit court granted the owners' motion for summary judgment, ruling that the City is liable to the owners as claimed.

We are faced with a deceptively simple-appearing question: whether the owners are required to be compensated by the City for a valid exercise of the City's power to abate nuisances because that exercise deprived the owners, at least temporarily, ⁵ of all economic use of their property. The owners cite Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992), in support of their position that a total regulatory ⁶ taking requires compensation unless the proscribed use was not part of the owner's title to begin with, thus, as their motel use was an allowed use when they acquired the property, Lucas requires compensation. For further support they cite City of St. Petersburg v. Bowen, 675 So.2d 626 (Fla. 2d DCA), rev. denied, 680 So.2d 421 (Fla.1996), cert. denied, --- U.S. ----, 117 S.Ct. 1120, 137 L.Ed.2d 320 (1997), wherein the Second District Court of Appeal concluded that the action of the City of St. Petersburg in (temporarily) closing an apartment complex in order to curtail drug use by the tenants was a compensable taking as it deprived the owner of all viable economic uses of the property during the closure period.

On the other hand, the City and the Board also cite Lucas in support of their position, contending that the Board's order and the injunction based thereon are aimed at terminating the continuation of activities that have long been considered nuisances. As a consequence, they contend, the Board's action fits neatly into the holding expressed in Lucas, 505 U.S. at 1031-32, 112 S.Ct. 2886:

"As we have said, a 'State, by ipse dixit, may not transform private property into public property without compensation .... ' [citation omitted]. Instead, as it would be required to do if it sought to restrain Lucas in a common-law action for public nuisance, South Carolina must identify background principles of nuisance and property law that prohibit the uses he now intends in the circumstances in which the property is presently found. Only on this showing can the State fairly claim that, in proscribing all such beneficial uses, the [governmental regulation] is taking nothing.''

The City and the Board thus must prove, in order to avoid paying compensation, that at the time the owners purchased the property, prior principles of nuisance law prohibited its use for the purpose proscribed by the Board's order as enforced by the injunction.

The City and the Board also urge on us Zeman v. City of Minneapolis, 552 N.W.2d 548 (Minn.1996) and Bennis v. Michigan, 516 U.S. 442, 116 S.Ct. 994, 134 L.Ed.2d 68 (1996), for their position that no compensation is required under the facts here. These cases, however, are inappropos. In Zeman, the trial court had determined that Zeman did not establish that he had been deprived by the City's action of all viable economic uses of his property. The Minnesota Supreme Court thus found Lucas to be inapplicable, see Zeman, 552 N.W.2d at 553 n. 4, and then applied the "test" set forth in Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978). This test involves consideration of the economic impact of the regulation on the sufferer of the loss, the extent to which the regulation interferes with distinct investment-backed expectations, and an analysis of the character of the governmental action, including whether it is a public "harm-preventing" regulation or one that "confers benefits" on the public. In this case, however, we are not faced with the Penn Central test as the owners here have, as will be discussed been deprived of all viable economic uses of the Stardust Motel, thus Lucas applies.

Neither does Bennis v. Michigan apply here as it involved a proceeding for the forfeiture of property, an action that the United States Supreme Court has concluded is governed more by history than by constitutional logic. In Bennis, the Court followed what it observed to be "a long and unbroken line of cases hold[ing] that an owner's interest in property may be forfeited by reason of the use to which the property is put even though the owner did not know that it was to be put to that use." Bennis, 516 U.S. at 446, 116 S.Ct. 994. Justice Thomas, in his concurring opinion, id. at 454, 116 S.Ct. 994, shed additional light on the unusual result that history had ordained:

"As the Court notes, evasion of the normal requirement of proof before punishment might well seem 'unfair.' ... One unaware of the...