Nicolai v. Fed. Hous. Fin. Agency

• Decision Date: 12 February 2013
• Docket Number: Case No. 8:12–cv–1335–T–33EAJ.
• Citation: 928 F.Supp.2d 1331
• Parties: Karen NICOLAI, as Clerk of the Circuit Court in and for Hernando County, Florida, and on behalf of all others similarly situated, Plaintiff, v. FEDERAL HOUSING FINANCE AGENCY, et al., Defendants.
• Court: U.S. District Court — Middle District of Florida

928 F.Supp.2d 1331

Karen NICOLAI, as Clerk of the Circuit Court in and for Hernando County, Florida, and on behalf of all others similarly situated, Plaintiff,

v.FEDERAL HOUSING FINANCE AGENCY, et al., Defendants.

Case No. 8:12–cv–1335–T–33EAJ.

United States District Court,

M.D. Florida,

Tampa Division.

Feb. 12, 2013.

George G. Angeliadis, The Hogan Law Firm, Brooksville, FL, Joshua R. Gale, Wiggins, Childs, Quinn & Pantazis, LLC, Deland, FL, for Plaintiff.

John F. Lauro, Michael Gregory Califano, Lauro Law Firm, Michael P. Matthews, Lauren Lisette Valiente, William F. Jung, Tampa, FL, Jill L. Nicholson, Chicago, IL, Asim Varma, Howard Cayne, Michael J. Ciatti, Michael Johnson, Washington, DC, for Defendants.

ORDER

VIRGINIA M. HERNANDEZ COVINGTON, District Judge.

This matter comes before the Court pursuant to Defendants Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac), and Federal Housing Finance Agency's (FHFA) Motion to Dismiss Plaintiff's Complaint (Doc. # 20), filed on October 11, 2012. Plaintiff Karen Nicolai filed a response in opposition to the motion on November 5, 2012. (Doc. # 31). After obtaining leave of Court (Doc. # 24), Defendants filed a reply to the response on November 29, 2012 (Doc. # 39). For the reasons stated below, the Court grants the motion to dismiss.

I. Legal Standard

A complaint must contain a short and plain statement of the claim showing that the pleader is entitled to relief. Fed.R.Civ.P. 8(a)(2). In reviewing a motion to dismiss, a trial court accepts as true all factual allegations in the complaint and construes the facts in the light most favorable to the plaintiff. Jackson v. BellSouth Telecomms., 372 F.3d 1250, 1262 (11th Cir.2004). However, courts are not “bound to accept as true a legal conclusion couched as a factual allegation.” Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986).

In Bell Atlantic Corp. v. Twombly, the Supreme Court articulated the standard by which claims should be evaluated on a motion to dismiss:

While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level.

550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal citations omitted).

In accordance with Twombly,Federal Rule of Civil Procedure 8(a) calls “for sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 663, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). A plausible claim for relief must include “factual content [that] allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

II. Analysis

As a threshold matter, regarding the issue of Nicolai's authority to bring this action, the Court finds that Nicolai has stated sufficient facts to survive a motion to dismiss on such grounds. State law vests Florida's Department of Revenue with the authority to administer the Transfer Tax central to this case. Fla. Stat. § 201.11. Nicolai claims that “the County Clerk is acting [and] ... is appointed as an agent for the Department of Revenue.... [A]s agents of the state, [county clerks] have a duty to ensure that the tax is paid.” (Doc. # 31 at 17). Accepting as true Nicolai's allegations concerning her authority to bring this action, Nicolai states a plausible claim regarding her authority to bring this action.

Central to this case is Florida Statute § 201.02, which requires the grantor in a real estate transaction to pay “the county Treasurer a real estate transfer tax when an interest for real estate is transferred to another party (the ‘Transfer Tax’).” (Doc. # 1 at ¶ 12). Even so, Nicolai alleges that “Defendants Fannie Mae and Freddie Mac have been grantors and grantees in many real estate transactions in Florida in which they have recorded documents of transfer with the Register of Deed and have not paid the Transfer Tax.” ( Id. at ¶ 13). As such, Nicolai claims “Plaintiffs have been damaged. Among other things, Plaintiffs are entitled to the Transfer Tax that should have been paid and statutory interest for failure to pay the Transfer Tax pursuant to Florida statute and law.” ( Id. at ¶ 16). Additionally, Nicolai claims that “Defendant FHFA is the Conservator of the Defendants Fannie Mae and Freddie Mac. To the extent that Defendant FHFA is responsible for the acts of Defendants Fannie Mae and Freddie Mac, Plaintiffs seek judgment against Defendant FHFA.” ( Id. at ¶ 18).

Fannie Mae and Freddie Mac (the Enterprises), together with the FHFA in its capacity as Conservator of the Enterprises, claim that “Clearly and broadly worded federal statutes mandate that Defendants ‘shall be exempt from all taxation ... imposed by any ... State, county, municipality, or local taxing authority’ with a single, narrow carve-out for direct, not-discriminatory taxation of real property.” (Doc. # 20 at 3) (citing 12 U.S.C. §§ 1452(e), 1723a(c)(2), and 4617(j)(2) (the Exemption Statutes)). Fannie Mae's charter provides:

The corporation, including its franchise, capital, reserves, surplus, mortgages or other security holdings, and income, shall be exempt from all taxation now or hereafter imposed by any State, territory, possession, Commonwealth, or dependency of the United States, or by the District of Columbia, or by any county, municipality, or local taxing authority, except that any real property of the corporation shall be subject to State, territorial, county, municipal, or local taxation to the same extent as other real property is taxed.

12 U.S.C. § 1723a(c)(2) (emphasis added). Freddie Mac's charter provides a similar exemption: “The Corporation, including its franchise, activities, capital, reserves, surplus, and income, shall be exempt from all taxation now or hereafter imposed ... by any State,” excepting taxation of “real property.” 12 U.S.C. § 1452(e). Similarly, the FHFA is exempted: “The Agency, ... shall be exempt from all taxation imposed by any State, county, municipality, or local taxing authority, except that any real property of the Agency shall be subject to ... taxation.” 12 U.S.C. § 4617(j)(2).

The parties agree that The Transfer Tax “is not a tax on real property; it is an excise tax....” (Doc. # 20 at 3; Doc. # 31 at 4). However, while the Enterprises and the FHFA claim that “the Transfer Tax falls within the sweep of the plain language of the Enterprises' exemption from all state and local taxation” (Doc. # 20 at 3) (internal quotation omitted), Nicolai claims that “[u]nder longstanding precedent, the exemption from ‘all taxation’ language is construed as comprising only ‘direct’ taxes on the federal government,” and therefore, the Transfer Tax, as an excise tax, is not covered by the Exemption Statutes (Doc. # 31 at 5). The Court disagrees with Nicolai's interpretation of the case law and, therefore, declines to so limit the unambiguous language found in the Exemption Statutes.

A. Statutory Interpretation

As Nicolai rightly points out, “A state's power to tax is of the ‘utmost importance’ and [is] vigorously protected ....” (Doc. # 31 at 7) (citing Bode v. Barrett, 344 U.S. 583, 585, 73 S.Ct. 468, 97 L.Ed. 567 (1953)). Accordingly, the Supreme Court “has repeatedly said that tax exemptions are not granted by implication.” Okla. Tax Comm'n v. United States, 319 U.S. 598, 606, 63 S.Ct. 1284, 87 L.Ed. 1612 (1943). Instead, such exemptions “must be unambiguously proved.” United States v. Wells Fargo Bank, 485 U.S. 351, 354, 108 S.Ct. 1179, 99 L.Ed.2d 368 (1988). However, if “the statutory language is unambiguous and the statutory scheme is coherent and consistent,” then the “inquiry must cease.” Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997) (internal quotation omitted). “It is well settled that the starting point for interpreting a statute is the language of the statute itself.” Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., Inc., 484 U.S. 49, 56, 108 S.Ct. 376, 98 L.Ed.2d 306 (1987) (internal quotation omitted).

The language of the Exemption Statutes is unambiguous. As another district court stated in a case substantially similar to the one now before the Court, “[T]he language here is sweeping and unambiguous. Fannie Mae and Freddie Mac ‘shall be exempt from all taxation’ imposed by [the State], with a single, narrow exception all agree is inapplicable here.” Hager v. Fed. Nat'l Mortg. Ass'n, 882 F.Supp.2d 107, 111–12 (D.D.C.2012). “ ‘All’ is an inclusive adjective that does not leave room for unmentioned exceptions. Indeed, the fact that one exception [for real property] is explicitly included further supports this conclusion.” Hertel v. Bank of Am., N.A., 897 F.Supp.2d 579, 582 (W.D.Mich.2012) (citing the Exemption Statutes). It is long established that “[w]here Congress explicitly enumerates certain exceptions to a general prohibition, additional exceptions are not to be implied, in the absence of evidence of a contrary legislative intent.” Andrus v. Glover Constr. Co., 446 U.S. 608, 616–17, 100 S.Ct. 1905, 64 L.Ed.2d 548 (1980) (citing Cont'l Cas. Co. v. United States, 314 U.S. 527, 533, 62 S.Ct. 393, 86 L.Ed. 426 (1942)). The Court has been presented with no such contrary legislative intent.

Nicolai also briefly argues that reading the exemption from “all taxation” to include exemption from the Transfer Tax makes the statutory scheme inconsistent. (Doc. # 31 at 15–16). Nicolai claims Congress “expressly exempted FHFA from paying penalties for ‘failure ... to pay any ... recording tax ... when due.’ ” ( Id.) Accordingly, Nicolai argues,...