Persaud Props. FL Invs. v. Town of Fort Myers Beach, Fla.
| Decision Date | 21 February 2023 |
| Docket Number | 2:21-cv-384-JLB-NPM |
| Parties | PERSAUD PROPERTIES FL INVESTMENTS, LLC, Plaintiff, v. TOWN OF FORT MYERS BEACH, FLORIDA, and ROGER HERNSTADT, Defendants. |
| Court | U.S. District Court — Middle District of Florida |
Plaintiff Persaud Properties FL Investments, LLC (“Persaud”) has sued the Town of Fort Myers Beach Florida (the “Town”) and the Town Manager, Roger Hernstadt (“Mr. Hernstadt”, and together with the Town, “Defendants”) for myriad due process and equal protection violations stemming from the Town's regulation of Persaud's use of its commercial property the Sunset Beach Tropical Grill (“Tropical Grill”). The Town and Mr. Hernstadt have moved to dismiss Persaud's operative complaint, and Persaud has responded. (Doc. 37; Doc. 40). After carefully reviewing the record, the Court GRANTS Defendants' Motion to Dismiss and dismisses Plaintiffs' Fourth Amended Complaint (Doc. 36) with prejudice.
BACKGROUND[1]
The Tropical Grill is a beachfront restaurant in the Town of Fort Myers Beach. (Doc. 36 at ¶¶ 7-8). In 1974 the owners of the Tropical Grill received zoning approval to serve alcohol on the property, including the beachfront portion of the Tropical Grill, which stretched to the shoreline of the Gulf of Mexico. (Id. at ¶ 8.) The owners thereafter obtained a Florida state license issued by the Division of Alcoholic Beverages and Tobacco (“DABT”), permitting the service of alcohol on the property, including the beach portion. (Id. at ¶ 9). In 1984, the Tropical Grill was sold to a new owner, and included in that sale was the state alcohol license and its attendant zoning approval to serve alcohol on the entirety of the Tropical Grill. (Id. at ¶ 10).
In 1995, the Town was incorporated, and with its incorporation came the enactment of various zoning regulations impacting the sale of alcohol on the land on which the Tropical Grill sits. (Id. at ¶ 11). The new zoning regulations effectively split the Tropical Grill into two parts. While the part of the property zoned in the “Downtown” area received approval to serve alcohol, the beach area of the property, zoned “Environmentally Critical,” did not. (Id. at ¶¶ 11-12). A portion of the Town's zoning regulations established that zoning approval to serve alcohol runs with the land. (Id. at ¶ 11(c)(1)). Thus, upon the sale of a property, the Tropical Grill retained its permission to serve alcohol on the entirety of the property. (Id.)
In 2012, the Town adopted Ordinance No. 12-03, which allowed current property owners in possession of “prior state alcohol licenses and zoning approval to serve alcohol on the beach” the option of having their property “grandfathered” in as a “non-conforming use.” (Id. at ¶ 13). The Town's Ordinance also prescribed that “[n]onconforming uses may continue until there is an abandonment [of the permitted location] for a continuous nine-month period.” (Id. at ¶ 11(c)(2)). The owners of the Tropical Grill elected to maintain their rights from the 1974 zoning approval and state license and continued to serve alcohol on the beach. (Id. at ¶ 14).
Two years later, on July 31, 2014, Persaud purchased the Tropical Grill in a sale which included the state liquor license and the grandfathered 1974 approval to serve alcohol on the entire property, including the beach. (Id. at ¶ 17). Three months after purchase, Persaud began extensive renovations on the property. (Id. at ¶ 18). Persaud requested that the DABT temporarily suspend its liquor license while the renovations were ongoing. (Id.) The DABT granted Persaud's request and placed its liquor license in inactive status. (Id.) But a four-month renovation plan stretched to more than nine months of work due, at least in part, to the Town's issuance of multiple stop-work orders, “which resulted in the increased time required for completion of the renovations.” (Id. at ¶¶ 19-21).
Persaud completed its extensive renovations to the Tropical Grill property approximately a year later. (Id. at ¶ 21). But Persaud had to obtain the Town's approval to reinstate the liquor license and begin selling alcohol. (Id. at ¶ 22). The Town, however, would not permit Persaud to resume the Tropical Grill's liquor sales unless Persaud limited such sales to the areas of the property zoned “Downtown.” (Id. at ¶ 23). Pointing to an ordinance that deemed any nonconforming liquor license “abandoned” if the property did not sell alcohol for nine months, the Town deemed Persaud's grandfathered liquor license abandoned. (Id. at ¶¶ 11(c)(2), 23). Despite the Town's prohibition on the sale of liquor on the beach portion of the Tropical Grill, Persaud pushed forward to re-open the Tropical Grill and applied for a state license limiting its sale of alcohol to the Downtown zoned area of the property. (Id. at ¶ 27). The license was activated on October 22, 2015. (Id. at ¶ 28). But the story does not end there.
On March 28, 2017, Persaud sued the Town in state court. (Doc. 1-4 at 3.) The Town removed the case to federal court, but the federal court remanded the case back to state court because Persaud had not exhausted its state law remedies. See Persaud Props. FL Invs., LLC v. Town of Fort Myers Beach, No. 2:17-cv-227-FTM-99CM, 2017 WL 4868908, at *3 (M.D. Fla. Oct. 26, 2017). Subsequently, Persaud filed an Amended Complaint, consisting solely of state law issues, in state court. (Doc. 1-4 at 171).
The state trial court entered a judgment finding that the Town had properly determined that Persaud had abandoned the nonconforming use of the property. (Doc. 1-6 at 145). Persaud appealed, however, and in a well-reasoned opinion authored by Judge Anthony Black, the Florida Second District Court of Appeal reversed and remanded, holding that Persaud is “entitled, under the applicable provisions of the Town's municipal code, to maintain the property's status as a grandfathered nonconforming use.” (Id. at 234-35). The Second District Court of Appeal reasoned that the plain language of the Town's ordinance requires a showing that Persaud intended to abandon its nonconforming use of the property- the sale of alcohol at the Tropical Grill-“with the intent that the cessation of such use be permanent.” (Id. at 234). And because there was no dispute that Persaud did not intend to abandon its nonconforming use permit, the trial court's entry of summary judgment in favor of the Town was in error as a matter of law. (Id. at 234). The Second District Court of Appeal therefore vacated the trial court's denial of Persaud's declaratory relief count and remanded to the trial court for entry of an order granting Persaud judgment on its declaratory relief count. (Id. at 235). Then, on February 26, 2021, the state trial court issued an order granting declaratory relief to Persaud, and Persaud's permission to sell liquor on the beach portion of its property was restored. (Id. at 246).
Persaud alleges that just after it filed suit against the Town in state court, “the Town launched a malicious, retaliatory, and orchestrated campaign” at the direction of Town Manager, Mr. Hernstadt. (Doc. 36 at ¶ 37). Specifically, the Town cited Persaud for numerous property violations related to signs, beach chairs, and parking lots, levied hundreds of thousands of dollars' worth of fines against Persaud, and placed liens on Persaud's property. (Id. at ¶¶ 38-39, 42). The conflicts between Persaud and the Town over the signs and parking spaces took similar form to Persaud's dispute with the Town over the liquor license. Namely, Persaud had been renting parking spaces to the general public and placing instructional signs on his property pursuant to zoning variances that, Persaud alleges, have not been honored by the Town. (Id. at ¶¶ 43-46). Further, Persaud has applied for permits consistent with the variances, but the Town has either denied its applications or granted it “special exceptions” that Persaud alleges placed unreasonable and unduly burdensome restrictions on the use. (Id.) Finally, Persaud rented beach chairs to the public believing that its license to the premises entitled it to rent the chairs, but the Town fined Persaud for such rentals and continues to fine Persaud even though Persaud has since abated any chair rental violations. (Id. at ¶¶ 47-48.)
Although there is no dispute between the parties that the nonconforming use permitting the sale of alcohol on the beach portion of the Tropical Grill was restored upon entry of the trial court's final judgment granting the declaratory relief requested by Persaud, and at no time was it completely deprived of the ability to sell alcohol at the Tropical Grill property, Persaud nevertheless continued with its litigation. (Doc. 22 at ¶¶ 4-5).
On April 16, 2021, Persaud filed a Second Amended Complaint in state court, seeking declaratory, injunctive, and monetary relief for the Town's refusal to restore its liquor license for the beach portion of the property upon the Tropical Grill's reopening after its renovations in 2015. (Doc. 3). The Town moved to dismiss and simultaneously removed the case to this Court. (Doc. 4).
Persaud then filed a Third Amended Complaint in this Court, seeking declaratory relief and damages against the Town under the Takings and Due Process Clauses of the United States and Florida Constitutions. (Doc. 15). The Town subsequently filed a Motion to Dismiss. (Doc. 22). The Court granted the Town's Motion to Dismiss and allowed Persaud leave to amend. (Doc. 35). Persaud's Fourth Amended Complaint is the operative complaint here. (See Doc. 36).
Defendants have moved to dismiss Persaud's Fourth Amended Complaint with prejudice. (Doc. 37 at 1). The Court presumes, based on Defendants' pleadings, that Defendants...
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