Key Haven Associated Enterprises, Inc. v. Board of Trustees of Internal Imp. Trust Fund

• Decision Date: 16 December 1982
• Docket Number: No. 61027,61027
• Citation: 427 So. 2d 153
• Parties: KEY HAVEN ASSOCIATED ENTERPRISES, INC., Petitioner, v. BOARD OF TRUSTEES OF the INTERNAL IMPROVEMENT TRUST FUND, et al., Respondents.
• Court: Florida Supreme Court

Page 153

427 So.2d 153

18 ERC 2014

KEY HAVEN ASSOCIATED ENTERPRISES, INC., Petitioner, v.BOARD OF TRUSTEES OF the INTERNAL IMPROVEMENT TRUST FUND, et al., Respondents.

No. 61027.

Supreme Court of Florida.

Dec. 16, 1982.

Rehearing Denied March 9, 1983.

J. Riley Davis and Robert J. Paterno of Taylor, Brion, Buker & Greene, Tallahassee, Mallory H. Horton of Horton, Perse & Ginsberg, Miami, and David Paul Horan of Law Office of David Paul Horan, Key West, for petitioner.

Terry Cole, Asst. Secretary and Segundo J. Fernandez, Deputy Gen. Counsel, Florida Dept. of Environmental Regulation, Tallahassee, for respondents.

OVERTON, Justice.

This is a petition to review the decision of the First District Court of Appeal in Key Haven Associated Enterprises v. Board of Trustees, 400 So.2d 66(Fla. 1st DCA1981).The district court held that an action for inverse condemnation, based on the denial of a dredge-and-fill permit by the Department of Environmental Regulation(DER), may not be taken in a circuit court until all remedies provided in chapter 120, Florida Statutes(1975), including an appeal to the appropriate district court of appeal, have been exhausted.The district court, in this holding, expressly construed article X, section 6, Florida Constitution.We have jurisdiction.Art. V, § 3(b)(3), Fla. Const.We approve in part and disapprove in part the decision of the district court and hold that, under the facts of this case, Key Haven was required to exhaust all executive branch administrative remedies before instituting the circuit court action, but, under the specific circumstances in this case, would not have been required to seek direct review of the final executive branch action in the district court of appeal.Resolution of the issue in this case requires us to determine the appropriate forum in which to raise constitutional questions arising from administrative action or implementation of statutory provisions.

The present dispute evolves from the conflict between the implementation of legislation which has as its purpose the protection of our natural resources and the right to the beneficial use of private property.The facts as summarized are undisputed.Between 1964 and 1968, petitioner Key Haven, a land developer, purchased 185 acres of submerged shallow flatlands located in the Florida Keys from the governor and cabinet sitting as the Trustees of the Internal Improvement Fund (IIF), paying three hundred dollars per acre for the land.In 1972, four years after the last land purchase, Key Haven applied to the state, pursuant to the regulatory statutes, for a permit to dredge 679,000 cubic yards of limestone from a portion of its submerged lands and to use this material to fill the remaining land to create canal-front lots.In 1976, DER notified Key Haven of its intention to deny the application for the dredge-and-fill permit.

Key Haven sought and received a formal hearing under section 120.57(1), Florida Statutes(1975), in which it argued that the permit should be granted because the dredge-and-fill proposal conformed to the standards for preserving natural resources and water quality set out in chapters 253 and 403, Florida Statutes(1975).The Department of Administrative Hearings officer found, however, that Key Haven's proposed project would obliterate all aquatic life in the area so that the project did not meet the requirements of chapters 253 and 403.The hearing officer also found that, because the IIF trustees had not promised a permit to or misled Key Haven in any way, the state was not estopped from denying the permit even though the IIF trustees sold the submerged land to Key Haven with implied knowledge that the purchaser desired to improve the submerged land for beneficial use.DER issued a final order denying the dredge-and-fill permit.

At this stage of the proceedings, Key Haven decided not to seek review of DER's order by appealing to the IIF trustees pursuant to section 253.76, Florida Statutes(1975), and by thereafter appealing to the district court of appeal pursuant to section 120.68, Florida Statutes(1975).Instead, Key Haven filed suit in the circuit court, alleging that the denial of the dredge-and-fill permit, although proper under the requirements of chapters 253 and 403, constituted a taking of its property by inverse condemnation because the action totally denied it the use of its property for any beneficial purpose and because the IIF trustees sold the submerged lands to Key Haven's predecessor knowing of the intent to dredge and fill the land.Key Haven asserted that it was entitled to just compensation under article X, section 6, Florida Constitution.

DER filed a motion to dismiss, alleging that the circuit court lacked subject matter jurisdiction in the case.The trial court granted the motion to dismiss based on Coulter v. Davin, 373 So.2d 423(Fla. 2d DCA1979), andKasser v. Dade County, 344 So.2d 928(Fla. 3d DCA1977).The trial court found that Key Haven was essentially alleging that the "agency action constituted an unconstitutional taking of land," and determined that Key Haven was in the same posture as the petitioners in Coulter in that "both actions were attempts to collaterally attack the particular agency's denial of a permit."The trial judge relied on the holding in Coulter that "those constitutional issues which could have been raised by the party in a petition to the district court of appeal for review of the agency action are foreclosed and may not be subsequently asserted in a suit for relief brought in circuit court,"373 So.2d at 425, in dismissing the suit for inverse condemnation, finding that "the plaintiff has not exhausted his administrative remedies."The trial judge also found that "Key Haven's assertions of satisfaction with the denial of the permit are inconsistent with its position that that same action constitutes an unconstitutional taking of its property," citing Kasser v. Dade County.

Key Haven appealed to the First District Court of Appeal, which affirmed the trial court's order.The district court thoroughly reviewed the case law and judicial policy relating to the requirement that litigants exhaust available administrative remedies and observed that "all review processes afforded by the executive branch must ordinarily be exhausted before the judicial branch will consider intervention."Key Haven, 400 So.2d at 69.The district court reiterated the accepted rule that, once the executive branch remedies have been exhausted, "constitutional issues growing out of agency action" must be resolved by direct review of the agency action in district court, id. at 70, since "a party ordinarily will not be indulged a collateral attack on administrative action in circuit court."Id. at 68.The district court agreed with the trial court's reliance on Coulter and Kasser and with the trial court's determination that Key Haven was attempting to collaterally attack the agency action in circuit court.

Perceiving the inverse condemnation claim as, in reality, an attempt by Key Haven to litigate constitutional issues going to the merits of the agency action, the district court could see no reason for allowing Key Haven to avoid "the principles of primary administrative jurisdiction and exhaustion of administrative remedies," which would include an appeal of DER's action to the IIF trustees and judicial review of the agency action in the district court.Id. at 71.The district court found that the appropriate judicial forum in which to raise the unconstitutional taking of property claim was in the district court on direct review of the decision of the trustees, holding that "Chapter 120 remedies plainly were adequate, and the circuit court correctly declined 'to employ an extraordinary remedy to assist a litigant who has foregone an ordinary one which would have served adequately.' "Id. at 74(quotingState ex rel. Department of General Services v. Willis, 344 So.2d 580, 592-93(Fla. 1st DCA1977)).One of the reasons given by the district court for this conclusion was that a district court could direct the executive agency to make modifications in agency action that would make the action constitutional or could direct the agency to institute condemnation proceedings.Id. at 69, 72.

We agree in part and disagree in part.We agree that, before Key Haven could use the permit denial as a basis for an inverse condemnation claim, it was required to pursue a section 253.76 appeal to the IIF trustees.We disagree with the district court's conclusion that, upon an adverse ruling by the trustees, Key Haven's only option would be to exhaust the administrative process delineated in chapter 120 by seeking judicial review of the agency action in a district court of appeal under the provisions of section 120.68.

We hold that, once an applicant has appealed the denial of a permit through all review procedures available in the executive branch, the applicant may choose either to contest the validity of the agency action by petitioning for review in a district court, or, by accepting the agency action as completely correct, to seek a circuit court determination of whether that correct agency action constituted a total taking of a person's property without just compensation.We disagree, however, with Key Haven's contention that a party aggrieved by agency action is not in any way restricted in choosing a judicial forum in which to raise constitutional claims.

Constitutional Challenges to Administrative Action

We have expressly recognized that circuit courts have the power, in all circumstances to consider constitutional issues.Gulf Pines Memorial Park, Inc., v. Oakland Memorial Park, Inc., 361 So.2d 695(Fla.1978).However, we stated in Gulf Pines that, as a matter of judicial policy, "the circuit court should refrain from entertaining declaratory suits except in the most extraordinary cases, where the party seeking to bypass usual administrative...