Seven Hills, Inc. v. Bentley

• Decision Date: 12 February 2003
• Docket Number: No. 1D01-5114, No. 1D01-5118., No. 1D01-5081, No. 1D01-5086
• Citation: 848 So.2d 345
• Parties: SEVEN HILLS, INC., Adam Smith Enterprises, Inc., City of Altamonte Springs, Foundation to Fight Corruption, Inc. and Jimmy Hatcher, Appellants, v. W. Wallace BENTLEY, Sr., et al, Appellees.
• Court: Florida District Court of Appeals

848 So.2d 345

SEVEN HILLS, INC., Adam Smith Enterprises, Inc., City of Altamonte Springs, Foundation to Fight Corruption, Inc. and Jimmy Hatcher, Appellants, v. W. Wallace BENTLEY, Sr., et al, Appellees.

Nos. 1D01-5081, 1D01-5086, 1D01-5114, 1D01-5118.

District Court of Appeal of Florida, First District.

February 12, 2003.

Diane D. Tremor, P.A. and Chris H. Bentley, P.A., of Rose, Sundstrom & Bentley, LLP, Tallahassee, for Seven Hills, Inc. and Adam Smith Enterprises, Inc.

Carole Joy Barice, Esquire and James A. Fowler, Esquire, of Fowler, Barice, Feeney, & O'Quinn, P.A., Orlando, for City of Altamonte Springs.

Jimmy Hatcher, in proper person, Bristol, for Foundation to Fight Corruption.

Guyte P. McCord, III, Esq. of McCord, Bubsey, Ketchum & Donohue, LLP, Tallahassee and Loren E. Levy, Esq. and Larry E. Levy, Esq. of The Levy Firm, Tallahassee, for W. Wallace Bentley, Sr., et al.; William H. Hughes, III, Esq. of Pennington, Moore, Wilkinson, Bell & Dunbar, P.A., Tallahassee, for Interstate Fibernet, Inc.; and Sylvia H. Walbolt, Esq., Robert Pass, Esq., Lannie D. Hough, Jr., E. Kelly Bittick, Jr., and Carlton Fields, P.A., Tallahassee, for Florida Power Corporation and Progress Telecommunications Corporation.

LEWIS, J.

In this consolidated action, appellants, Seven Hills, Inc., Adam Smith Enterprises, Inc., and City of Altamonte Springs, challenge the trial court's approval of a class settlement in which all appellants are members. The settlement resolved the class claims that appellee Florida Power Corporation ("FPC") exceeded the scope of its written easements over approximately 6,293 parcels of land located throughout the State of Florida by installing fiber optic communications lines on its easements and by permitting other entities to use the communications capacity.

Appellants raise three issues on appeal. Appellants first argue that the trial court lacked subject matter jurisdiction in this action with regard to all real property located outside of the Second Judicial Circuit, thereby rendering the class settlement a nullity. We affirm on this issue and hold that because the underlying major question in this action did not involve title to the class members' property, the trial court did have subject matter jurisdiction. In their second argument, appellants contend that the trial court erred in certifying a settlement class under Florida Rule of Civil Procedure 1.220(b)(1)(A). Within this argument, appellants also contend that the trial court erred in making the settlement class mandatory. Although we conclude that the trial court erred in certifying the settlement class under rule 1.220(b)(1)(A), we find such error to be harmless and affirm as to the certification under Florida Rule of Civil Procedure 1.220(b)(2) and Florida Rule of Civil Procedure 1.220(b)(3). However, because the trial court relied solely on rule 1.220(b)(1)(A) in making the class mandatory, we reverse the Final Judgment and remand for further proceedings. Finally, appellants argue that the trial court erred in approving the class settlement. Because we reverse and remand the Final Judgment, we decline to address this third issue. As to appellants Foundation to Fight Corruption and Jimmy Hatcher, we affirm without further discussion the trial court's denial of their Motions to Intervene as appellants failed to object timely to the settlement and as Jimmy Hatcher was not a class member. Therefore, appellants' arguments are not cognizable on appeal.

FPC began acquiring its easements as early as the 1950s under its charter for electric transmission and distribution. The typical form of the easements granted FPC, its successors and assigns, the right:

to construct, operate and maintain for such period of time as it may use the same or until the use thereof is abandoned, a single pole, H-frame and/or tower line for the transmission and distribution of electricity, including necessary communication and other wires, poles, guys, anchors, ground connections, attachments, fixtures, equipment and accessories, desirable in connection therewith over, upon, and across the following described land ... together with the right to patrol, inspect, alter, improve, repair, rebuild or remove such lines, equipment and accessories, including the right to increase or decrease the number of wires and voltage, together with all the rights and privileges reasonably necessary or convenient for the enjoyment or use thereof for the purposes above described,....

Upon their realization that FPC had installed fiber optic strands in its electric lines on its easements in twenty-three counties, a group of plaintiffs, who owned land within the Second Judicial Circuit, filed a lawsuit against appellees, averring that, "[t]he allegations which follow concern the [d]efendants' improper use of electric transmission easements for the leasing and licensing to third persons of unrelated, non-electric general fiber optic telecommunications." In their complaint, the plaintiffs, who requested class certification pursuant to Florida Rule of Civil Procedure 1.220, sought a declaratory judgment establishing the rights of the parties pursuant to the easements and injunctive relief. The complaint also included a trespass count and an unlawful entry and unlawful detainer count. In their amended complaint, the plaintiffs added an unjust enrichment cause of action and a fourth defendant, Progress Telecommunications Corporation ("PTC"), which is wholly owned by the same parent corporation that owns FPC. Following PTC's incorporation in 1998, FPC transferred ownership of its fiber optic communications system to PTC.

On January 7, 2000, following the parties' unsuccessful first attempt at mediation, the trial court certified a mandatory class pursuant to Florida Rule of Civil Procedure 1.220(b)(1)(A), finding that "[a] class action is appropriate in the instant case because prosecution of separate claims by individual members of the class would create a risk of inconsistent or varying adjudications concerning individual members of the class which would establish incompatible standards of conduct for the defendant." While the defendants' appeal regarding the class certification was pending before this Court, the parties were referred back to mediation, which lasted three days and resulted in the settlement agreement. This Court then stayed further appellate proceedings and relinquished its jurisdiction to the trial court to consider settlement class certification and approval of the class settlement.

The FPC settlement class includes all persons, except the owners of public and railroad rights-of-way occupied or used by FPC or PTC, who, on February 1, 2001, owned in fee or owned a fee interest in real property located in Florida, as reflected in the public ownership records, over which property FPC owns an easement that does not expressly provide for the installation and use of fiber optic communications wire(s), and which is traversed by a right-of-way containing fiber optic wire(s) as of December 31, 2000. The agreement provides for a mandatory class in order to resolve the class members' declaratory and injunctive relief claims. However, class members were permitted to opt out of the damages portion of the class to pursue their own damages within a one-year safe harbor period without having to prove FPC's liability. For those class members who chose to remain in the damages portion of the class, FPC will pay each member $12,000 per linear mile (or $2.27 per foot) of FPC's easement right-of-way, which is to escalate at a rate of 6.425% per year from June 9, 2000, through the date that the final judgment becomes final. Pursuant to the agreement, FPC assumed the class members' responsibility of identifying and notifying the entire class.

Regarding telecommunications use, the settlement agreement declares that FPC has the right to use all of its easements for general telecommunications use, including the licensing or leasing of fiber optic wires or capacity or providing other telecommunications services to telecommunications providers and customers. The agreement sets forth that there shall be no restriction on the number of telecommunications wires utilized by appellees on the easements. These rights will continue even if electricity is no longer being transmitted over the electric transmission or distribution lines unless FPC and/or its successors and assigns legally abandon the easements. Yet, no new additional ground or subsurface structure may be erected for telecommunications use unrelated to electric transmission or distribution. The trial court preliminarily approved the settlement in May 2000, and required that notice of the settlement be provided to the class members. FPC subsequently notified all class members by mail and through publication. Out of 7,069 class members, only 134 opted out of the damages portion of the class, including appellants.

During the settlement fairness hearing, which was conducted on June 22, June 28, and November 13, 2001, Barry Diskin, an expert witness who is a real estate appraiser and Florida State University professor, opined that $12,000 per mile was a reasonable valuation. Harry Purnell, a practicing attorney, opined that the attorney's fees were reasonable as well. While appellants cross-examined appellees' witnesses, none of the appellants offered any evidence to refute such testimony.

Appellants, Seven Hills, Inc., Adam Smith Enterprises, Inc., and City of Altamonte Springs, filed timely objections to the settlement. Following lengthy arguments by all sides, the trial court entered its Final Judgment Approving Class Settlement and Setting Attorney's Fees on November 16, 2001. Regarding the propriety of class treatment, the trial court certified the settlement class under rules 1.220(b)(1)(A) and (b)(2) for purposes of declaratory and injunctive relief claims and under rule 1.220(b)(3) for purposes of damages claims. In...