Department of Revenue v. Nu-Life Health and Fitness Center
| Decision Date | 30 December 1992 |
| Docket Number | NU-LIFE,No. 92-4,92-4 |
| Citation | 623 So.2d 747 |
| Court | Florida District Court of Appeals |
| Parties | 18 Fla. L. Week. D186 DEPARTMENT OF REVENUE, State of Florida, Appellant, v.HEALTH AND FITNESS CENTER, Appellee. |
Robert A. Butterworth, Atty. Gen., and Leland L. McCharen, Asst. Atty. Gen., Tallahassee, for appellant.
Larry E. Levy, Tallahassee, for appellee.
The Florida Department of Revenue appeals an adverse final judgment in this action by Nu-Life Health and Fitness Center to contest tax assessments allegedly owed pursuant to chapter 212, Florida Statutes (1986-1988). The circuit court denied the Department's motion to dismiss for lack of subject matter jurisdiction and entered final judgment for Nu-Life on the merits of its complaint. The Department asserts error in the circuit court's ruling that the provisions in section 72.011(3), Florida Statutes (1989), specifying the jurisdictional prerequisites for filing an action in circuit court to contest the legality of a tax assessment made under chapter 212, are unconstitutional. It also asserts that the circuit court erroneously entered judgment for Nu-Life on the merits of its action. We reverse the ruling that section 72.011(3) is unconstitutional and remand with directions to dismiss the complaint for lack of subject matter jurisdiction based on Nu-Life's failure to comply with that section.
In December 1988, the Department issued two warrants for the collection of delinquent sales taxes under chapter 212 allegedly owed by Nu-Life for the months of January 1, 1986, through November 1, 1988. In February 1989, Nu-Life filed its complaint in circuit court, alleging that these assessments were illegal, null, and void. Nu-Life also alleged that the requirements in section 72.011(3)--that a taxpayer post a bond or tender a deposit in the court registry in the amount of the assessed taxes and penalties as a jurisdictional condition to its proceeding in circuit court--unconstitutionally deprived it of the right to reasonable access to courts as guaranteed in article I, section 21, of the Florida Constitution, and constituted an unlawful delegation of legislative authority to the executive director of the Department to determine whether to waive the deposit or bond requirement. The Department moved to dismiss the complaint on the ground that the circuit court lacked subject matter jurisdiction because Nu-Life had not paid the assessed taxes and had failed to follow any of the conditions to maintaining this suit as required by section 72.011(3).
After a pretrial hearing, the circuit court denied the Department's motion to dismiss. Agreeing with Nu-Life, the court ruled that section 72.011(3) is unconstitutional because it denies aggrieved taxpayers such as Nu-Life access to courts as provided in the Florida Constitution, and it unlawfully delegates legislative authority to determine when and under what conditions and circumstances a bond will be required. The court entered final judgment for Nu-Life, ruling that the challenged assessments were illegal, null, and void. 1
On appeal, the Department first challenges the circuit court's ruling that section 72.011(3) violates article I, section 21, of the Florida Constitution, governing access to courts. Section 72.011(3), Florida Statutes (1989), reads:
(3) In any action filed in circuit court contesting the legality of any tax, interest, or penalty assessed under a section or chapter specified in subsection (1), the plaintiff must:
(a) Pay to the applicable department the amount of the tax, penalty, and accrued interest assessed by such department which is not being contested by the taxpayer; and either
(b) 1. Tender into the registry of the court with the complaint the amount of the contested assessment complained of, including penalties and accrued interest, unless this requirement is waived in writing by the executive director of the applicable department; or
2. File with the complaint a cash bond or a surety bond for the amount of the contested assessment endorsed by a surety Failure to pay the uncontested amount as required in paragraph (a) shall result in dismissal of the action and imposition of an additional penalty in the amount of 25 percent of the tax assessed.
company authorized to do business in this state, or by any other security arrangement as may be approved by the court, and conditioned upon payment in full of the judgment, including the taxes, costs, penalties, and interest, unless this requirement is waived in writing by the executive director of the applicable department.
In North Port Bank v. State, Department of Revenue, 313 So.2d 683 (Fla.1975), the supreme court held that a similar statute did not violate the Florida constitutional provision for access to courts. Section 199.242(3), Florida Statutes (1975), required that prior to filing any court action contesting the legality of a tax or penalty assessed under chapter 199, unless the assessed taxes and penalties had been paid, the complainant must
tender into the court and file with the complaint the full amount of the assessment complained of, including penalties, or file with the complaint a cash bond or a surety bond endorsed by a surety company authorized to do business in this state or by such sureties as may be approved by the court, conditioned to satisfy any judgment or decree in full, including the taxes complained of, costs, and penalties.
(Emphasis added.) The court observed that, if construed literally and without regard to the constitutional requirement of access to courts, section 199.242(3) would deny the taxpayer access to courts specifically granted by the Florida Constitution. The court continued by stating, however, that courts have the judicial obligation to sustain legislative enactments whenever possible and upheld the validity of section 199.242(3) by construing its provision in a manner that avoided the apparent unconstitutional aspects of the literal statutory language. The court stated:
It seems logical and reasonable that, whenever a taxpayer feels the intangible taxes assessed are too high, the administrative remedies should first be exhausted; and, if the amount is still unsatisfactory, the taxpayer can either comply literally with Section 199.242(3), Florida Statutes, or, alternatively, petition the Court to fix the amount to deposit in the registry of the Court or to post as bond pending the outcome of the litigation. Immediately upon filing such petition for judicial review, if the Court finds the Petitioner has not literally complied with its above provision, the Court should hold a preliminary hearing to set such amounts and condition of the bond or funds to be deposited into the Court registry. Such assessments are considered prima facie correct and unless this presumption is overcome by the taxpayer to require reduction, the amounts claimed should be set by the Court as proper. If the taxpayer does not comply with the conditions set by the Court, the suit should be dismissed. Such dismissal could be appealed only if supersedeas fixed by the Court is posted to protect the state against loss occurring during litigation or caused by the delay.
Thus, in North Port Bank, the supreme court read section 199.242(3) as providing an alternative to literal compliance with the statute. If the taxpayer did not tender and file with the complaint the full amount of the assessment and penalties or file a cash or surety bond conditioned to satisfy any judgment or decree in full, including the taxes complained of, costs, and penalties, the taxpayer could petition the court to fix the amount to deposit in the registry of the court or fix the amount of the bond pending the outcome of the litigation.
Section 72.011(3) merely implements this aspect of the court's decision in North Port Bank. This section contains two alternatives to tendering the full amount of the contested assessment, including penalties and interest, for filing in the court registry, or filing a cash or surety bond conditioned on payment of the judgment, including the taxes, costs, penalties, and interest. The taxpayer may either obtain a written waiver of these requirements from the executive director of the Department or file a motion for an alternative security arrangement to be approved by the court. Thus, section 72.011(3), unlike section 199.242(3), the statute at issue in North Port Bank, contains two express alternatives, one of which is similar to, if not the same as, the alternative the supreme court read into section 199.242(3). The rationale of the supreme court's decision in North Port This conclusion is reinforced by the supreme court's decision in Bystrom v. Diaz, 514 So.2d 1072 (Fla.1987), wherein the taxpayers challenged a 1982 tax assessment. While the suit was pending, their 1984 taxes became delinquent. The tax collector moved to dismiss pursuant to the provision in section 194.171(5), Florida Statutes (1985), that a taxpayer may not maintain a suit contesting a tax assessment, and that such an action shall be dismissed unless all taxes on the property assessed in years after the action is brought that the taxpayer in good faith admits to owing are paid before they become delinquent. The motion also relied on the provisions in section 194.171(6) that the requirements of the foregoing section are jurisdictional and a court shall lose jurisdiction of the case if the taxpayer fails to comply therewith. (A similar provision is found in section 72.011(3).) The trial court granted the motion to dismiss, although the taxpayers had paid the 1984 taxes by the time the order was entered. On appeal, the taxpayers challenged the constitutionality of the statute on the ground that it violated their constitutional right of access to courts. The supreme court affirmed the trial court's decision and upheld the constitutionality of this statutory...
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