Persaud Props. FL Invs., LLC v. Town of Fort Myers Beach

• Decision Date: 25 March 2022
• Docket Number: Case No. 2:21-cv-384-JLB-NPM
• Citation: 593 F.Supp.3d 1129
• Parties: PERSAUD PROPERTIES FL INVESTMENTS, LLC, Plaintiff, v. TOWN OF FORT MYERS BEACH, FLORIDA, Defendant.
• Court: U.S. District Court — Middle District of Florida

593 F.Supp.3d 1129

PERSAUD PROPERTIES FL INVESTMENTS, LLC, Plaintiff,

v.TOWN OF FORT MYERS BEACH, FLORIDA, Defendant.

Case No. 2:21-cv-384-JLB-NPM

United States District Court, M.D. Florida, Fort Myers Division.

Signed March 25, 2022

Ehren J. Frey, Boatman Ricci, Naples, FL, Clayton W. Crevasse, Paul Anthony Giordano, Roetzel & Andress, LPA, Ft. Myers, FL, Michael E. Chionopoulos, Emily R. Hogentogler, Absolute Law, PA, Fort Myers, FL, Nicholas P. Sardelis, Jr., Sardelis and Bowles, LLP, Sarasota, FL, for Plaintiff.

Jeffrey L. Hochman, Hudson C. Gill, Johnson, Anselmo, Murdoch, Burke, Piper & Hochman, P.A., Fort Lauderdale, FL, for Defendant.

ORDER

JOHN L. BADALAMENTI, United States District Judge

This matter arises out of the Town of Fort Myers Beach's ("the Town") Motion to Dismiss Plaintiff Persaud Properties FL Investments, LLC's ("Persaud") Third Amended Complaint. Prior iterations of Persaud's complaint have been bandied about the Florida state court system since 2017, but the underlying claims have remained largely unchanged. Mindful of this case's labyrinthine record, this Court holds that, for the reasons outlined below, the Town's Motion to Dismiss Persaud's Third Amended Complaint (Doc. 22) is GRANTED IN PART AND DENIED IN PART . Persaud, should it so decide, is granted leave to amend its Third Amended Complaint consistent with this Order.

BACKGROUND

The Sunset Beach Tropical Grill ("the Grill") is a beachfront restaurant in the Town. (Doc. 15 at ¶¶ 6–7.) In 1974, the owners of the Grill received zoning approval to serve alcohol on the property, including the beachfront portion of the Grill, which stretches to the shoreline of the Gulf of Mexico. (Id. at ¶ 7.) These original owners obtained a Florida state license issued by the Division of Alcoholic Beverages and Tobacco ("DABT"), permitting the service of alcohol on the entire property. (Id. at ¶ 8.) In 1984, the Grill was sold. (Id. at ¶ 9.) Included in this sale was the state-issued alcohol license and its attendant zoning approval to serve alcohol on the entirety of the Grill's property. (Id. )

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 upon which the Grill sits. (Id. at ¶ 10.) The new zoning regulations effectively split the Grill into two parts. While the part of the property zoned in the "Downtown" area of the Town received approval to serve alcohol, the beach portion of the property, zoned "Environmentally Critical," did not. (Id. at ¶¶ 10–11.) Still, the Town's zoning regulations established that zoning approval to serve alcohol runs with the land. (Id. at ¶ 10(c)(1).) Thus, even if the Grill was sold, the new owners would retain the Town's permission to serve alcohol on both the Downtown and the Environmentally Critical portions of the Grill's property. (See id. )

In 2012, the Town adopted Ordinance No. 12-03, which allowed 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 "nonconforming use." (Id. at ¶ 12.) Ordinance No. 12-03 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 ¶ 10(c)(2).) The owners of the Grill elected to maintain their rights from the 1974 zoning approval and state license and continued to serve alcohol—a nonconforming use—on the beach portion of the property, along with the Downtown portion of it. (Id. at ¶ 13.)

Two years later, on July 31, 2014, Persaud purchased the 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. (Doc. 15 at ¶ 15.) Three months after purchase, Persaud began extensive renovations on the property. (Id. at ¶ 16.) Persaud requested that the DABT temporarily suspend its liquor license while the renovations were ongoing. (Id. ) On December 29, 2014, the DABT granted Persaud's request and placed its liquor license in inactive status. (Id. at ¶ 19.) But a four-month renovation plan stretched much longer due, at least in part, to the Town's issuance of multiple stop-work orders, which delayed renovations. (Id. at ¶ 18.)

Persaud completed its extensive renovations to the Grill property approximately a year after its liquor license was placed on inactive status. (Id. at ¶ 20.) To begin selling alcohol again, Persaud had to obtain the Town's approval. (Id. at ¶ 21.). The Town, however, would not permit Persaud to resume the Grill's liquor sales unless Persaud limited such sales to the areas of the property zoned "Downtown." (Id. at ¶ 22.) In other words, Persaud was prohibited from selling alcohol on the beach portion of its property.

Pointing to an ordinance that deemed any nonconforming liquor license "abandoned" if the property did not sell alcohol for nine months during the renovation period, the Town determined that Persaud's grandfathered liquor license was void. (Id. at ¶¶ 21–22.) With the Town's denial of the sale of liquor on the beach portion of the Grill, Persaud nevertheless pushed forward to re-open the Grill and applied for a license limiting its sale of alcohol to the Downtown zoned area of the property. (Id. at ¶ 26.) The license was activated on October 22, 2015. (Id. at ¶ 27.) But the story does not end there.

On March 28, 2017, Persaud sued the Town in Florida state court. (Doc. 1-4 at 3.) The complaint contained, among other things, both federal and state constitutional claims. The Town removed the case to this Court, but the case was remanded 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).¹ On remand to the state court, Persaud filed a First Amended Complaint, confining its claims to Florida constitutional issues. (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—the sale of alcohol on the beach portion—of the Grill because it had failed to sell alcohol on the property for the nine months. (Doc. 1-6 at 134.)

Persaud appealed, and in a well-reasoned opinion authored by Judge Anthony Black, the Florida Second District Court of Appeal ("Second DCA") 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 DCA 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 Grill—by choosing to not sell alcohol during the renovations that took longer than nine months. (Id. ) 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, the Second DCA held, was in error as a matter of law. (Id. at 234.) The Second DCA therefore vacated the trial court's denial of Persaud's declaratory relief count and reversed the trial court's entry of judgment "as to all other counts." (Id. at 235.) The Second DCA then remanded to the trial court with instructions to vacate its judgment as to all counts and directed the trial court to enter an order granting Persaud judgment on its declaratory relief count (count one). (Id. at 235.)

Thereafter, on February 26, 2021, the state trial court issued an order granting declaratory relief to Persaud, effectively restoring Persaud's permission to sell liquor on the beach portion of its property. (See id. at 246.)

The following is what the state court declared, which is the entirety of the declaratory relief count (under Florida law) as set forth in Persaud's First Amended Complaint:

a. An order declaring that Persaud is entitled to Town zoning sign off on a state application that permits the sale of alcohol on the Beach consistent with the 1974 COP License and Town approval issued in 2014;

b. An order confirming a continuing right to sell alcohol on the Beach as a nonconforming use;

c. An order declaring that Persaud has never abandoned its right to continue serving alcohol on the Beach;

d. An order declaring that the Town wrongfully refused to grant zoning approval in contravention of its Land Development Code and failed to follow the procedures mandated in the Land Development Code prior to revoking Persaud's grandfathered use[;]

e. An order granting such further relief that this Court deems just and proper.

(Doc. 1-6 at 246; Doc. 1-4 at 179, ¶ 60.)

Although the nonconforming use permitting the sale of alcohol on the beach portion of the Grill was restored upon entry of the trial court's final judgment, (Doc. 22), and although Persaud was at no time completely deprived of the ability to sell alcohol at the Grill, Persaud nevertheless continued with its litigation. (Doc. 1-6 at 251.)

On April 16, 2021, Persaud filed a Second Amended Complaint in state court, again seeking relief from the Town's refusal, six years earlier, to restore its liquor license for the beach portion of the Grill after its renovations. (Id. ) The Town moved to dismiss the Second Amended Complaint in state court, (Doc. 4), and then removed the case to this Court. (Doc. 1.).

Once back in this Court, Persaud filed a Third Amended Complaint, which is now the operative pleading, seeking declaratory relief and damages against the Town under the Takings Clauses of the United States and Florida Constitutions, and the Due Process Clause of the Florida Constitution. (Doc. 15.) The Town subsequently filed a Motion to Dismiss, which is the issue for adjudication before the Court. (Doc. 22.)

DISCUSSION

Though the Town does not say so explicitly in its motion, it is...