Department of Revenue v. Florida Home Builders Ass'n, 89-2788

• Decision Date: 21 June 1990
• Docket Number: No. 89-2788,89-2788
• Citation: 564 So.2d 173
• Parties: 15 Fla. L. Weekly D1664 DEPARTMENT OF REVENUE, Appellant, v. FLORIDA HOME BUILDERS ASSN., et al., Appellees.
• Court: Florida District Court of Appeals

Page 173

564 So.2d 173

15 Fla. L. Weekly D1664

DEPARTMENT OF REVENUE, Appellant, v. FLORIDA HOME BUILDERS ASSN., et al., Appellees.

No. 89-2788.

District Court of Appeal of Florida First District.

June 21, 1990.

Rehearing Denied Aug. 3, 1990.

Robert A. Butterworth, Atty. Gen., and Kevin J. O'Donnell, Asst. Atty. Gen., Tallahassee, for appellant.

Thomas M. Ervin, Jr. of Ervin, Varn, Jacobs, Odom & Ervin, Tallahassee, for appellees.

JOANOS, Judge.

The Department of Revenue has appealed a non-final order granting partial summary judgment in favor of appellees on their complaint to have Chapter 87-101, Laws of Florida, declared facially unconstitutional as impairing the obligation of contracts. We have jurisdiction, Rule 9.130(a)(3)(C)(iv), Florida Rules of Appellate Procedure, and affirm in part and reverse in part.

Section 212.059, Florida Statutes (1987), providing for levy of a tax on sales, use and other transactions on the sale and use of services, was created by Chapter 87-6, Laws of Florida. Chapter 87-6, Section 31(4) provided that

[i]n the case of written contracts which are signed prior to May 1, 1987, for constructing improvements to real property, prime contractors ... responsible for performing the contract shall not be required to remit any tax on services ... provided that: ... the purchase of the service occurs before June 30, 1988.

Chapter 87-6 was approved by the Governor, and filed with the Secretary of State on April 23, 1987. On May 12, 1987, the Governor sought an advisory opinion from the Florida Supreme Court on the constitutionality of the tax. The Supreme Court thereafter issued its advisory opinion that, except as to Section 31(4), Chapter 87-6 was facially constitutional. In re Advisory Opinion to the Governor, 509 So.2d 292 (Fla.1987).

With regard to Section 31(4), the court noted that it operated to apply the tax provisions to contracts signed prior to May 1, 1987, under which construction was not completed before June 30, 1988. The court went on to find:

The legislature filed the instant statute on April 23, 1987 and the Governor signed it into law on the following day. Once enacted into law, contractors were placed on notice that they should take their upcoming tax burden into consideration when entering into construction contracts after May 1, 1987. The act, however, does not limit its effect to this permissible burden. Instead, by retroactively placing a tax burden upon all construction contracts that are incomplete by June 30, 1988, and thereby adding an unknown, uncontemplated cost, it retroactively burdens contracts that were in existence before any party could reasonably have been on notice of the impending tax.

Advisory Opinion at 314. The court concluded that "[a] statute which retroactively turns otherwise profitable contracts into losing propositions" clearly constituted impairment of contracts, and that Section 31(4) was therefore facially unconstitutional. Advisory Opinion at 314-15.

The Legislature amended Section 212.059 by Chapter 87-101, Laws of Florida. Chapter 87-101, Section 18(4) amended Chapter 87-6, Section 31(4) to provide that

in the case of written contracts which are signed prior to May 1, 1987 ... for constructing improvements to real property, prime contractors ... responsible for performing the contract shall not be required to remit any tax on services ..., provided that the purchase of the service occurs before June 30, 1989.

Chapter 87-101 was approved by the Governor and filed with the Secretary of State on June 30, 1987.

In September 1987, appellees Florida Home Builders Association and Multicon Southeast, Inc. filed a nine-count complaint arguing that Chapter 87-101 was unconstitutional on various grounds. Appellees voluntarily dismissed eight of the nine counts when the services tax was repealed by Chapter 87-548, Laws of Florida. The remaining count alleged that Chapter 87-101, Section 18(4) unconstitutionally impaired certain contracts, namely, contracts entered into prior to May 1, 1987 but not completed by June 30, 1989, and contracts entered into between May 1, 1987 and the effective date of Chapter 87-101, July 1, 1987.

Appellees thereafter filed the instant motion for partial summary judgment alleging that, as a matter of law, Chapter 87-101 unconstitutionally impaired contracts in existence at the time of its enactment, relying primarily on Advisory Opinion. The trial court rejected the Department's argument in opposition that factual issues remained as to whether any of appellees' contracts had actually been rendered less profitable, and granted the motion, stating: "Chapter 87-101, Laws of Florida, is hereby declared unconstitutional and invalid as violative of Article I, Section 10, Florida Constitution (1968), to the extent it imposes or imposed a tax on construction services provided on contracts which existed prior to June 30, 1987."

The Department argues first that the trial court erred in granting summary judgment, in that factual issues regarding appellees' specific contracts remained to be resolved. The question of the constitutionality of a statute is a question of law for the court. Cates v. Graham, 427 So.2d 290, 291 (Fla. 3d DCA 1983), affirmed 451 So.2d 475 (Fla.1984). Appellees herein sought a declaration that Chapter 87-101 was facially unconstitutional, that is, that it could not be constitutionally applied to any factual situation. Voce v. State, 457 So.2d 541 (Fla. 4th DCA 1984), pet. for rev. den., 464 So.2d 556 (Fla.1985). Therefore, facts regarding appellees' specific contracts, while perhaps relevant to a contention that the law was unconstitutional as applied, were unnecessary to a determination of facial constitutionality. See, e.g., Advisory Opinion, which rendered an opinion on the facial constitutionality of Chapter 87-6 "without benefit of a record or a specific factual scenario," leaving future parties free to argue "that the act is unconstitutional as applied to their particular situation." Advisory Opinion at 301-02 (emphasis supplied). Unconstitutionality as applied was never an issue herein.

The Department further contends that the trial court erred in determining that Chapter 87-101 was unconstitutional as impairing the obligation of contracts. With regard to contracts entered into prior to May 1, 1987 but not completed by June 30, 1989, we cannot agree,...