Crapo v. Acad. for Five Element Acupuncture, Inc., 1D17-1895

• Decision Date: 08 July 2019
• Docket Number: No. 1D17-1895,1D17-1895
• Citation: 278 So.3d 113
• Court: Florida District Court of Appeals
• Parties: Edward A. CRAPO, in his capacity as Alachua County Property Appraiser, Appellant/Cross-Appellee, v. ACADEMY FOR FIVE ELEMENT ACUPUNCTURE, INC., a Florida Non-Profit Corporation, Appellee/Cross-Appellant.

278 So.3d 113

Edward A. CRAPO, in his capacity as Alachua County Property Appraiser, Appellant/Cross-Appellee,

v.ACADEMY FOR FIVE ELEMENT ACUPUNCTURE, INC., a Florida Non-Profit Corporation, Appellee/Cross-Appellant.

No. 1D17-1895

District Court of Appeal of Florida, First District.

July 8, 2019

Rehearing Denied July 10, 2019

ON REHEARING EN BANC

Per Curiam.

Alachua County Property Appraiser Edward A. Crapo appeals a circuit court decision awarding the Academy for Five Element Acupuncture, Inc. an educational property tax exemption under section 196.198, Florida Statutes. On the merits, Property Appraiser Crapo argues that the Academy does not qualify for the exemption because it is not an "educational institution" as defined in section 196.012(5)—and we agree. Procedurally, the Academy raises a tipsy-coachman argument¹ urging us to affirm the circuit court's ruling because an earlier Value Adjustment Board decision favoring the Academy was preclusive under the administrative finality doctrine—but we disagree. We therefore reverse the circuit court's judgment.

I. Facts

The Academy operates a not-for-profit private post-secondary school in downtown Gainesville that teaches and trains students in acupuncture, health sciences, and herbal studies. For years, while located in Broward County, the Academy received an educational tax exemption on its property. But when it moved to Gainesville in 2008 and applied for the same exemption, Property Appraiser Crapo denied it. He asserted that the Academy was not an "educational institution" under the tax code and did not qualify for the property tax exemption. The Academy petitioned the Alachua County VAB to resolve the dispute, and a special magistrate heard the case. The special magistrate concluded, with substantial hesitation, that the Academy qualified as an educational institution under section 196.012(5), and recommended that the VAB grant the exemption. The VAB did so, summarily granting the Academy's property tax exemption. Property Appraiser Crapo did not seek the de-novo hearing in circuit court authorized under section 194.036(3), Florida Statutes.

The Academy received the educational exemption on its Alachua County property from 2008 through 2013. In 2014, Property Appraiser Crapo again raised the education exemption issue. He issued a notice to the Academy disapproving its exemption for failing to meet the definition of an educational institution. The Academy responded by again petitioning the VAB. The VAB upheld the tax exemption, the same result as in 2008. This time, however, Property Appraiser Crapo filed suit in circuit court for de-novo determination of the issue. See § 194.036(3), Fla. Stat. The circuit court ruled that the Academy qualified for the exemption.

In addition to deciding the tax exemption issue, the circuit court considered the Academy's alternative administrative-finality argument. The Academy argued that Property Appraiser Crapo was prohibited from litigating the tax exemption issue because the underlying facts had not changed, and he lost the same issue before the VAB in 2008. But the circuit court rejected the Academy's decisional-finality argument under the theory that each tax year stands on its own.

Property Appraiser Crapo then appealed the property tax exemption issue to this Court, and the Academy cross-appealed on the administrative-finality issue. A three-judge panel affirmed the trial court's final judgment for the Academy based on administrative finality, holding that Property Appraiser Crapo could not revisit or challenge the Academy's tax exemption any more after the VAB's 2008 decision. The panel opinion did not reach the merits of Property Appraiser Crapo's argument against the Academy's tax exemption. Property Appraiser Crapo then filed a motion for rehearing en banc, which we granted. See Fla. R. App. P. 9.331(d).

II. Merits: The Exemption

Real property in Florida is annually assessed and subject to an ad valorem tax unless an exemption applies. Art. VII, § 4, Fla. Const.; §§ 192.042, 196.001(1), Fla. Stat.; see also Sowell v. Panama Commons, L.P. , 192 So. 3d 27, 30 (Fla. 2016). One of the available exemptions under Florida law applies to property used for educational purposes by an "educational institution." § 196.198, Fla. Stat.; see also Art. VII, § 3(a), Fla. Const. (allowing for exemptions on property used for educational purposes); Nat'l Ctr. for Constr. Educ. & Research Ltd., Corp. v. Crapo , 248 So. 3d 1256, 1257-58 (Fla. 1st DCA 2018). The tax code further defines an "educational institution" as follows:

"Educational institution" means a federal, state, parochial, church, or private school, college, or university conducting regular classes and courses of study required for eligibility to certification by, accreditation to, or membership in the State Department of Education of Florida, Southern Association of Colleges and Schools, or the Florida Council of Independent Schools ....

§ 196.012(5), Fla. Stat. (emphasis added).

The parties disagree about whether the Academy falls within the section-196.012(5) definition of an "educational institution" and thus qualifies for this particular exemption. We review such questions of statutory interpretation de novo. See State v. Purdy , 252 So. 3d 723, 725 (Fla. 2018). Statutes providing for an exemption to an ad valorem tax are construed strictly, such that any ambiguity is resolved against the claimed exemption. Nat'l Ctr. , 248 So. 3d at 1257-58 (citing Sowell , 192 So. 3d at 30 ). A claimant bears the burden of clearly showing its entitlement to a tax exemption. Id. at 1258.

In this case, no one disputes that the Academy is a state-licensed private post-secondary school that grants certificates and degrees in acupuncture, Chinese herbal studies, and health science. But Property Appraiser Crapo argues that the Academy is not entitled to the exemption because it is not credentialed by, and does not offer classes or courses as required for credentialing by, one of the three entities identified in section 196.012(5) : the State Department of Education of Florida, the Southern Association of Colleges and Schools, or the Florida Council of Independent Schools. Rather, the record evidence here only shows that the Academy's classes and courses satisfy licensing requirements of the Florida Commission for Independent Schools, which is not one of the entities the statute identifies. The circuit court concluded that Commission-issued licenses satisfy the statute's reference to certification by "the State Department of Education," but Property Appraiser Crapo argues that the Commission and Department are different entities for purposes of the exemption statute.

We cannot read section 196.012(5)'s reference to the "Department" as applying equally to the Commission, because Florida law distinguishes between Commission- and Department-certified schools. Although the education statute creating the Commission places it within the Department as an administrative matter—see sections 1005.21(1), 1001.22, Florida Statutes —the Department's and Commission's school-certification regimes are not referenced interchangeably. Under section 1005.06(1), for example, institutions under the Department's jurisdiction are distinguished as "not under the jurisdiction and purview of the commission." (Emphasis added.) The statute dealing with barbering schools requires "a license issued by the Commission ... pursuant to chapter 1005." § 476.178, Fla. Stat. But it also "shall not be construed to prevent certification [of barber training programs] by the Department of Education." Id. The same distinction between Commission licensing and Departmental certification is found in the cosmetology statute. § 477.023, Fla. Stat. It requires "a license issued by the Commission ... pursuant to chapter 1005," but then also allows for the Department to certify cosmetology training programs. Id. An educational assistance program for National Guard members refers to institutions "licensed by the Commission" separately from training programs leading to certifications approved by the Department of Education.

§ 250.10(7), Fla. Stat. The Massage Practice Act does not mention Commission licensing at all, but rather defines a "[b]oard-approved massage school" as being "licensed by the Department of Education." § 480.033(9), Fla. Stat. Additionally, section 1005.05, Florida Statutes, distinguishes between the Commission and the Department with respect to pre-program application requirements for nonpublic colleges, by instructing as follows:

Colleges under the jurisdiction of the Commission for Independent Education shall apply to the commission. Colleges that are not under the jurisdiction of the commission shall apply to the Department of Education.

§ 1005.05, Fla. Stat. These statutes undermine the Academy's argument that institutional licensing by the Commission is the same as certification by the Department.

In addition to having different school-approval regimes, we recognize that Florida law grants authority to the Commission independent from the Department, section 1005.21(1), Fla. Stat.; that Commission members are appointed through the Governor and Senate instead of via the Commissioner of Education, section 1005.21(2), Fla. Stat.; and that the Commission possesses its own rulemaking authority, section 1005.22(1)(e), Fla. Stat. The Commission's independence from the Department in these areas also indicates that their respective school-certification regimes operate on different tracks.

In light of these statutes, we agree with Property Appraiser Crapo that the Commission's licensure is not the same as the Department's certification within the meaning of the tax-exemption statute. On the record presented, we cannot conclude that the Academy's programs satisfy the Department's certification requirements under section 196.012(5) merely because the programs satisfy the Commission's licensing requirements. Because the Academy did...