Sailboat Bend Sober Living, LLC v. City of Fort Lauderdale

Decision Date14 August 2020
Docket NumberCase No. 19-60007-CIV-ALTMAN/Hunt
Citation479 F.Supp.3d 1298
CourtU.S. District Court — Southern District of Florida
Parties SAILBOAT BEND SOBER LIVING, LLC, et al., Plaintiffs, v. The CITY OF FORT LAUDERDALE, Defendant.

Allison Corban Doucette, Jon P. Tasso, Mitchell Adam Schermer, Ethan Jerome Loeb, Smolker Bartlett Loeb Hinds & Thompson, P.A., Tampa, FL, Steven G. Polin, Pro Hac Vice, Law Office of Steven G. Polin, Washington, DC, for Plaintiffs.

Michael Thomas Burke, Hudson Carter Gill, Johnson Anselmo Murdoch Burke Piper & Hochman PA, Fort Lauderdale, FL, for Defendant.

Before the Hon. Roy K. Altman:

ORDER

ROY K. ALTMAN UNITED STATES DISTRICT JUDGE

Sailboat Bend is a for-profit business—owned by a self-proclaimed "serial entrepreneur" and "real estate investor"—that offers housing to recovering addicts. Looking to skirt a host of fire-safety and zoning laws, Sailboat Bend filed this lawsuit, in which it accuses the City of Fort Lauderdale of disability discrimination. In particular, Sailboat Bend alleges: (1) that the City's zoning ordinance is facially discriminatory; (2) that the City failed to grant Sailboat Bend a reasonable accommodation by rejecting its request for an exemption from the fire code; and (3) that the City intentionally discriminated against Sailboat Bend (mainly) by prosecuting it for violations of the building and fire codes. But Sailboat Bend's accusations of discrimination find no support in the record. Instead, the undisputed facts demonstrate that, if anything, the City treated Sailboat Bend better than similarly situated groups of unrelated co-habitants. Because Sailboat Bend's thinly veiled attempt to dodge the costs of complying with the fire code fails, the City's Motion for Summary Judgment [ECF No. 53] (the "Motion") is GRANTED .

THE FACTS

Sailboat Bend Sober Living, LLC ("Sailboat Bend LLC") is owned, in part, by Carl Bergstrom ("Mr. Bergstrom") and Iryna Bergstrom ("Mrs. Bergstrom") (collectively, the "Bergstroms"). See City's Statement of Undisputed Material Facts [ECF No. 54] ("City's SOMF") ¶ 1. Mr. Bergstrom, a self-proclaimed "serial entrepreneur" and "real estate investor," owns (together with his wife) several single-family homes in Florida. Id. ¶ 12. The Bergstroms offer these homes for rent. Id. Sailboat Bend LLC, Mr. Bergstrom, and Mrs. Bergstrom (collectively, "Sailboat Bend" or the "Plaintiffs") bring this lawsuit against the City of Fort Lauderdale (the "City") based on the following events.

In early 2008, the Bergstroms began searching for a new investment property. Id. In March of that year, the Bergstroms purchased the property at 1110 SW 1st Street, Fort Lauderdale, Florida (the "Property" or "Sailboat Bend Home"). Id. ¶ 13. The Bergstroms bought the Property—as fifty-fifty partners with John and Astrid Puente, who are not parties to the case—for $144,000. Id. The purchase was seller-financed, and the buyers contributed "rather small amounts" of cash at closing, in what Mr. Bergstrom characterized as "kind of a sweetheart deal." Id. The owners operate the Property through Sailboat Bend LLC. Id. ¶ 19 n.1.

At the time of the purchase, the Property was in disarray and subject to a demolition-by-neglect order. Id. ¶ 15. In his attempt to make the Property suitable for rentals, Mr. Bergstrom spent three months renovating the Property. Id. Throughout these renovations, the Property's basic structure remained the same and consisted of (1) a main building with nine bedrooms, two bathrooms, one kitchen, and one living room; and (2) a detached structure with a single bedroom and bathroom. Id. ¶ 2. The Bergstroms have tabbed "full occupancy" of the Sailboat Bend Home at eleven tenants, though occupancy rates have fluctuated over the years. See Sailboat Bend's Response to Statement of Undisputed Material Facts [ECF No. 62] ("Sailboat Bend's Response to SOMF") ¶ 19.

When they bought the Property, the Bergstroms intended to operate Sailboat Bend Home as a for-profit business that would offer housing to people addicted to alcohol and other drugs. See City's SOMF ¶¶ 12, 14. The Property is located near a Salvation Army rehabilitation program, which has offered a steady stream of tenants. Id. ¶ 19. Since the business's inception in 2008, the owners have charged $150 per tenant per week—with tenants typically paying their rent in cash. Id. ¶¶ 18–19. Until 2017, tenants did not sign a lease or any other documents relating to their occupancy. Id. ¶ 19. There are no restrictions on how long a tenant can stay at the Property. Id. Indeed, while one tenant lived in the home for years, others "barely make it the first night." Id. The typical stay lasts no more than a few weeks or months. Id.

By all accounts, the parties’ relationship proceeded rather smoothly for the first four years of Sailboat Bend's operations. Id. ¶ 21. The tides changed, however, in April 2012, when the City received a citizen's complaint from someone who purported to be a resident of the Sailboat Bend Home. Id. The complainant reported (among other things) that the Property had exposed electrical boxes hanging from the ceiling; that it lacked fire alarms and smoke detectors; and that occupants in the home were "smoking heavily" and "nodding out," causing burn marks. Id.1

Following the complaint, the City opened an investigation that included inspections by both a Building and a Fire Inspector. Id. ¶ 22. After examining the Property, the Building Inspector opened two Building Code enforcement actions. Id. ¶ 23. The first, which was for "running a group home," was closed within a day once the Building Inspector determined that "the facility had a business tax [license] as motel with 7 units." Id. ¶ 24. The second was (primarily) for unpermitted work on the Property, including renovations to the kitchen, the bathrooms, and a detached structure, as well as—in what would later become a major source of contention—the installation of a central AC unit. Id. ¶¶ 23, 25–26. This second action required months of coordination before Mr. Bergstrom and the City finally reached the following two-pronged resolution: First , Mr. Bergstrom obtained or produced permits for all the unpermitted work at issue, except for the Property's central AC unit. Id. ¶ 25. Second , as to the AC unit, the parties recognized that there was no after-the-fact permit that would render the unit compliant. Id. ¶¶ 25–26. So, Mr. Bergstrom consulted with an engineer and, ultimately, decided to remove the unit altogether upon finding that a new system would be, in his words, "outrageously expensive." Id. ¶ 26.

During this same time (April 2012), a Fire Inspector examined the Property and, in a subsequent report, identified several code violations. Id. ¶¶ 29–30. First , the Fire Inspector's report noted that there were certain "small requirements that must be met in order to continue to occupy the house." Id. ¶ 29. Those requirements included (1) ensuring that all battery-powered smoke detectors functioned as designed, (2) testing the smoke detectors weekly and maintaining a log of those tests, and (3) installing code-compliant fire extinguishers on each floor of the building. Id. Second , the report pointed out that the Property's "use" was "under research" to determine "which code applies," and explained that "[a]fter the use has been defined there will be other fire and life safety requirements that will have to be met." Id. ¶ 28.2

As relevant here, there are three "uses" that determine "which code applies" for fire-safety purposes. These uses, set out below, are defined in the National Fire Protection Association's Life Safety Code (the "Life Safety Code" or "Fire Code"), and are incorporated into Florida law, See Fla. Stat. § 633.202(2) :

One- and Two-Family Dwellings are defined as "buildings containing not more than two dwelling units in which each dwelling unit is occupied by members of a single family with not more than three outsiders, if any, accommodated in rented rooms." Life Safety Code § 24.1.1.1 (2012).
Lodging or Rooming Houses are defined as "buildings that provide sleeping accommodations for a total of 16 or fewer persons on either a transient or permanent basis, with or without meals, but without separate cooking facilities for individual occupants." Id. § 26.1.1.1.
Residential Board and Care Occupancies are defined as "occupanc[ies] used for lodging and boarding of four or more residents, not related by blood or marriage to the owners or operators, for the purpose of providing personal care services." Id. § 3.3.188.12.

In short, one- or two-family dwellings have three or fewer unrelated persons; the other uses have more than three. Id. §§ 3.3.188.12, 24.1.1.1, 26.1.1.1. What's important to note here is that there are certain fire-safety requirements that apply to "Lodging or Rooming Houses" and "Residential Board and Care Occupancies"—but not to "One- and Two-Family Dwellings." In particular—and as relevant here—only the former two require the building to install an "automatic sprinkler system." See id. §§ 26.3.6, 32.2.3.5; Fla. Stat. § 633.208(8)(a).

Days after his initial inspection of the Sailboat Bend Home, the Fire Inspector conducted a follow-up inspection, at which he concluded that the Property should be classified as a "Lodging or Rooming House." Id. ¶ 30. Based on this classification, the Fire Inspector issued a new report, which listed various Fire Code violations, including—in what would become the second major source of contention between the parties—the absence of "an approved automatic sprinkler system." Id. The new report noted that the City would re-inspect the Property within thirty days. Id. ¶ 31. Although the parties agree that this re-inspection never occurred, they disagree as to why. Id. ; see also Sailboat Bend's Statement of Material Facts in Opposition to Summary Judgment [ECF No. 61] ("Sailboat Bend's SOMF") ¶ 50.

For its part, Sailboat Bend claims that, once it removed its central AC unit (the main point of...

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