Reinish v. Clark, 1D98-3973.

• Decision Date: 20 July 2000
• Docket Number: No. 1D98-3973.,1D98-3973.
• Citation: 765 So.2d 197
• Parties: Stanley REINISH and Carol Reinish, Appellants, v. John K. CLARK, in his official capacity as Tax Collector of Palm Beach County and as representative of other county tax collectors in the State of Florida; Gary Nikolits, in his official capacity as Property Appraiser of Palm Beach County; and L.H. Fuchs, in his official capacity as Executive Director of Florida Department of Revenue, Appellees.
• Court: Florida District Court of Appeals

765 So.2d 197

Stanley REINISH and Carol Reinish, Appellants, v. John K. CLARK, in his official capacity as Tax Collector of Palm Beach County and as representative of other county tax collectors in the State of Florida; Gary Nikolits, in his official capacity as Property Appraiser of Palm Beach County; and L.H. Fuchs, in his official capacity as Executive Director of Florida Department of Revenue, Appellees.

No. 1D98-3973.

District Court of Appeal of Florida, First District.

July 20, 2000.

C. Oliver Burt, III of Burt & Pucillo, L.L.P., West Palm Beach; James K. Green of James K. Green, P.A., West Palm Beach; M. David Gelfand, New Orleans, Louisiana; Michael J. Freed, of Much, Shelist, Freed, Deneberg, Ament, Bell & Rubenstein, P.C., Chicago, Illinois; and Harry O. Thomas, of Katz, Kutter, Haigler, Alderman, Bryant & Yon, P.A., Tallahassee, for Appellants.

Robert A. Butterworth, Attorney General; Joseph C. Mellichamp, III, Senior Assistant Attorney General; and Jarrell L. Murchison, Assistant Attorney General, Tallahassee, for Appellees.

BROWNING, J.

Stanley and Carol Reinish, who were the plaintiffs in the lower court, appeal a final order dismissing their second amended complaint with prejudice. In his official capacity as Executive Director of the Florida Department of Revenue, L.H. Fuchs, one of the defendants below, cross-appeals those portions of the final order finding that the circuit court had subject-matter jurisdiction and that the Reinishes had standing to bring a facial challenge testing the validity of the Florida homestead tax exemption. Concluding that the trial court had jurisdiction pursuant to Chapter 86, Florida Statutes, and that the Reinishes had standing to bring a facial constitutional challenge, we affirm the lower court's rulings as to those issues raised on cross-appeal. Likewise, we conclude that the trial court correctly found the Reinishes' three theories of unconstitutionality to be without legal merit. Accordingly, we affirm the order dismissing the second amended complaint with prejudice.

JURISDICTION AND STANDING

In their second amended complaint, the Reinishes asserted circuit-court jurisdiction pursuant to Article V, section 20(c)(3), of the Florida Constitution, and section 26.012, Florida Statutes (1997), both of which address "cases involving legality of any tax assessment or toll"; and pursuant to sections 86.011, 86.021, and 86.061, Florida Statutes (1997), the Declaratory Judgments Act. Their action sought a declaration that the constitutional¹ and statutory² Florida homestead tax exemption provisions violate the federal Equal Protection Clause, the Privileges and Immunities Clause, and the "dormant" Commerce Clause to the extent that the homestead tax exemption is available only to certain permanent residents of Florida. In addition to a declaration of the rights of the parties and injunctive relief, the Reinishes sought an accounting by the defendants and a refund of such portions of the residential real estate taxes paid by the Reinishes and their class that they would not have been required to pay if the homestead tax exemption had been available to them.³

At the onset of this litigation and at all times pertinent to this action, the Reinishes have remained residents of Chicago, Illinois. Around September 1994, they bought a parcel of real estate in Palm Beach County, Florida, for use as a part-time residence. Since then, they have paid real estate taxes as assessed on the Florida property but have been ineligible to receive an exemption of the first $25,000 of assessed value because their use of the Florida property does not qualify it as a "permanent residence." § 196.031(3)(d), Fla. Stat. The Reinishes admit that they stay in the Florida property only about 4-5 months each year and reside in Illinois for the greater part of the year.

In the trial court, Executive Director Fuchs and the other defendants argued 1) that the Reinishes could not circumvent the jurisdictional requirements of section 194.171, Florida Statutes (1997), by seeking relief in the form of a refund under Chapter 86; and 2) that the Reinishes failed to allege that they had contested their assessment within 60 days from the date the assessment was certified for collection in any of the tax years in question. § 194.171(2), Fla. Stat. On that basis, the defendants moved to dismiss for lack of subject-matter jurisdiction. § 194.171(6), Fla. Stat. Furthermore, the defendants argued that the Reinishes lacked standing because they neither alleged compliance with the procedures governing the annual application for homestead tax exemption under section 196.011(1), Florida Statutes (1997), for creating a case or controversy; nor did they claim to have been denied the homestead tax exemption after filing a timely, written application for one.

The trial court found that it had subject-matter jurisdiction under Chapter 86. In support of this finding, the Reinishes properly rely on well-established case law holding that in actions such as this, where the facial constitutionality of a tax or tax exemption provision is challenged, "fulfilling the state's refund procedures is not a condition precedent to bringing a constitutionally-based refund action." Public Medical Assistance Trust Fund v. Hameroff, 689 So.2d 358, 359 (Fla. 1st DCA 1997), approved in pertinent part, 736 So.2d 1150 (Fla.1999); Department of Revenue v. Nemeth, 733 So.2d 970, 973-74 (Fla.1999). The Reinishes are neither challenging their assessment nor seeking an exemption for which they claim present entitlement. Rather, they are challenging the constitutional and statutory requirement of establishing a Florida "permanent residence" to be eligible for the homestead tax exemption. Situations such as this constitute an exception to the general rule that requires a party first to seek, and then be denied, a refund before suing for a tax refund. See Department of Revenue v. Kuhnlein, 646 So.2d 717, 720 (Fla.1994)

(rejecting State's argument that class action was barred jurisdictionally in circuit court because none of class representatives had applied for refund pursuant to statutory provisions); Hameroff, 689 So.2d at 359; State ex rel. Devlin v. Dickinson, 305 So.2d 848 (Fla. 1st DCA 1974). Given the reasoning set forth in the supreme court's Kuhnlein opinion, the trial court properly found jurisdiction over the instant action.

Kuhnlein, 646 So.2d at 717, as well as several earlier supreme court decisions, also supports the trial court's finding that the Reinishes have standing to challenge the Florida homestead tax exemption provisions. Florida does not adhere to the "rigid" doctrine of standing used in the federal system. See id. at 720. Rather, the general requirement for standing in Florida posits that "every case must involve a real controversy as to the issue or issues presented," so that "the parties must not be requesting an advisory opinion." Id. at 720-21. In a seminal 1952 decision, the supreme court set out the Florida rule:

Before any proceeding for declaratory relief should be entertained it should be clearly made to appear that there is a bona fide, actual, present practical need for the declaration; that the declaration should deal with a present, ascertained or ascertainable state of facts or present controversy as to a state of facts; that some immunity, power, privilege or right of the complaining party is dependent upon the facts or the law applicable to the facts; that there is some person or persons who have, or reasonably may have an actual, present, adverse and antagonistic interest in the subject matter, either in fact or law; that the antagonistic and adverse interests are all before the court by proper process or class representation and that the relief sought is not merely the giving of legal advice by the courts or the answers propounded from curiosity. These elements are necessary as being judicial in nature and therefore within the constitutional powers of the courts.

May v. Holley, 59 So.2d 636, 639 (Fla. 1952); Martinez v. Scanlan, 582 So.2d 1167 (Fla.1991). The Declaratory Judgments Act is "substantive and remedial," with a purpose "to settle and to afford relief from insecurity and uncertainty with respect to rights, status, and other equitable or legal relations," and the Act is "to be liberally administered and construed." § 86.101, Fla. Stat. (1997). Individuals can challenge the validity of a statute in a declaratory action. § 86.021, Fla. Stat. (1997).

We conclude that the Reinishes clearly have satisfied the standing requirements of May and its progeny. See Chiles v. Children A, B, C, D, E, and F, 589 So.2d 260, 263 n. 5 (Fla.1991)

("This Court has long held that a citizen and taxpayer can challenge the constitutional validity of an exercise of the legislature's taxing and spending power without having to demonstrate a special injury."). In determining that nothing in Florida law required the plaintiffs in Kuhnlein to pay the impact fee or to request a refund to gain standing, the supreme court found it sufficient "that these plaintiffs face penalties for failure to pay an allegedly unconstitutional tax." 646 So.2d at 720. Similarly, the Reinishes alleged that they have had to pay more than their lawful share of taxes because of a tax exemption that unconstitutionally discriminates against them based on their out-of-state residency. Their being assessed full property taxes annually, without the benefit of the homestead tax exemption, created a bona fide, actual, present, and practical need for the declaration sought.

STANDARD OF REVIEW

The challenged final order dismissing the second amended complaint for failure to state a claim is premised entirely upon the trial court's conclusion that the Florida homestead tax exemption does not, on its face, violate the United States Constitution on any of the grounds asserted by the plaintiffs. Therefore, the lower tribunal's rulings are...