Shands v. City of Marathon, 3D07-3288.

• Decision Date: 31 December 2008
• Docket Number: No. 3D07-3288.,3D07-3288.
• Citation: 999 So.2d 718
• Parties: Rodney SHANDS, Robert Shands, Kathryn Edwards, and Thomas Shands, Appellants, v. CITY OF MARATHON, etc., and the Marathon City Council, Appellees.
• Court: Florida District Court of Appeals

999 So.2d 718

Rodney SHANDS, Robert Shands, Kathryn Edwards, and Thomas Shands, Appellants, v. CITY OF MARATHON, etc., and the Marathon City Council, Appellees.

No. 3D07-3288.

District Court of Appeal of Florida, Third District.

December 31, 2008.

Steven Geoffrey Gieseler and Valerie A. Fernandez and Nicholas M. Gieseler (Stuart), for appellants.

Johnson, Anselmo, Murdoch, Burke, Piper & Hochman and Michael T. Burke, for appellees.

Before GERSTEN, C.J., and SUAREZ and CORTIÑAS, JJ.

SUAREZ, J.

Rodney Shands, Robert Shands, Kathryn Shands Edwards, and Thomas Shands, [collectively, "the Shands"] seek to reverse a final order granting the City of Marathon's ["City"] motion to dismiss in an inverse condemnation case. The trial court's order dismissed the Shands' state claim finding the cause of action to be a facial taking brought beyond the applicable four-year statute of limitations and also dismissed the Shands' federal claim as not ripe. We reverse and remand as the Shands' state claim is an as-applied taking claim, not a facial taking claim, and was brought within the appropriate four-year statute of limitations, and the federal claim is ripe.

Dr. R.E. Shands purchased the 7.9-acre Little Fat Deer Key in 1956, and seven acres of adjacent bay bottom in 1959, before any state land use policies existed. He died in 1963, and his wife inherited the property, now known as Shands Key. She conveyed title to their children, the appellants, in 1985. From the time it was purchased until 1986, Shands Key was within Monroe County jurisdiction and was zoned General Use.¹

In 1986, Monroe County adopted the State Comprehensive Plan and development regulations that altered Shands Key's zoning status to Conservation Offshore Island (OS), and placed it in the Future Land Use category.² When the City of Marathon incorporated in 1999, it adopted the 1986 Monroe County comprehensive land use plan, and Shands Key was within the City bounds. In 2005, the City adopted the City of Marathon Comprehensive Plan; the land use and zoning designations of Shands Key remained unchanged.³

In 2004, the Shands filed an application for a dock permit. The application was denied, referring to the City's prohibition on development in areas classified as high quality hammocks, or areas with known threatened or endangered species.⁴ The Shands then filed a Beneficial Use Determination (BUD) application as required by the City of Marathon Code of Ordinances, Article 18.⁵ The Special Master at the conclusion of the BUD hearing found that the Shands had reasonable economic investment-backed expectations that they could build a family residence on the Key, as planned in the late 1950s. The Special Master recommended that the City grant a building permit for a single family home exempt from the Rate Of Growth Ordinance (ROGO) requirements of 0.1 units per acre,⁶ or purchase the property for a mutually agreeable sum. After a public hearing, the Marathon City Council rejected the Special Master's recommendations and denied the Shands' BUD application.

The Shands then brought suit against the City, claiming that the City's acts resulted in an as-applied regulatory taking of their property without just compensation, in violation of state and federal law.⁷ The circuit court dismissed the Shands' state claim, in essence concluding that the cause of action was for a facial⁸ taking and, as such, was now barred by the four-year statute of limitation for inverse condemnation claims.⁹ The court also found that the Shands' federal claim was not ripe because the complaint failed to allege that the Shands had previously sought, and been denied, relief under state law. The Shands have appealed, and we reverse.

The initial issue presented is whether the Shands' property has been taken through inverse condemnation, and if so, to what extent.¹⁰ Is the taking solely as a result of the change in zoning classification of the property by the 1986 adoption by Monroe County of the State Comprehensive Plan, or is it by the City's 1999 adoption of Monroe County's current land development regulations ["LDRs"]?¹¹ To determine whether there is a taking, we must first analyze whether the landowner has been deprived of all or substantially all economic, beneficial or productive use of the property. Taylor v. Village of North Palm Beach, 659 So.2d 1167, 1170 (Fla. 4th DCA 1995) (citations omitted). If a taking has occurred, it then remains to be determined whether adequate compensation was provided.

Only two relatively narrow regulatory actions are deemed to be categorical, facial takings — those involving physical invasion of property (not the case here), or, as is the issue in this case, those resulting in a total regulatory taking. See Lucas, 505 U.S. at 1017, 112 S.Ct. 2886. A facial, or categorical, taking occurs when the mere enactment of the regulation precludes all development, and constitutes a taking of all economically beneficial use of a party's land. Lost Tree Village Corp. v. City of Vero Beach, 838 So.2d 561, 572 (Fla. 4th DCA 2002). The standard of proof for a facial taking is whether the regulation has resulted in deprivation of all economic use. Taylor, 659 So.2d at 1167. Deprivation of economic value is limited to "the extraordinary circumstance where there is no productive or economically beneficial use of the land" permitted. Lucas, 505 U.S. at 1017, 112 S.Ct. 2886. "The categorical rule of no use would not apply if the diminution in value were 95% rather than 100%." Lucas, 505 U.S. at 1019-20 n. 8, 112 S.Ct. 2886. Thus, if the land use regulations provide a mechanism by which a landowner can obtain a variance or transferrable development rights, then the regulations do not deny the landowner of all economically viable use of property and there is no facial taking. See Lucas, 505 U.S. at 1019-20 n. 8, 112 S.Ct. 2886 ("Anything less than a complete elimination of value or a total loss ... would require the kind of analysis applied in Penn Central.").¹²

In an as-applied taking claim, the landowner challenges the specific impact of the regulation on a particular property. The standard of proof for an as-applied taking is whether there has been a substantial deprivation of economic use or reasonable investment-backed expectations. Taylor, 659 So.2d at 1167. This requires a "fact-intensive inquiry of impact of the regulation on the economic viability of the landowner's property by analyzing permissible uses before and after enactment of the regulation." Id. at 1174 n. 1; see, Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978); see also Palazzolo v. Rhode Island, 533 U.S. 606, 617, 121 S.Ct. 2448, 150 L.Ed.2d 592 (2001) ("[w]here a regulation places limitations on land that fall short of eliminating all economically beneficial use, a taking nonetheless may have occurred, depending on a complex of factors including the regulation's economic effect on the landowner, the extent to which the regulation interferes with reasonable investment-backed expectations, and the character of the government action"); Glisson v. Alachua County, 558 So.2d 1030, 1037 (Fla. 1st DCA 1990) (holding that diminution in value of the property is not the test, rather, it is incumbent on the landowner to demonstrate that he has been denied all or a substantial portion of the beneficial uses of his property.); Golf Club of Plantation, Inc. v. City of Plantation, 717 So.2d 166, 170 (Fla. 4th DCA 1998) (overview of federal takings analysis).

The Shands assert an as-applied taking but use language applicable to a facial taking standard of proof ("all reasonable economic use"). The City argues a facial taking, yet the record indicates that not all economic value was or has been eliminated. We apply the analysis set forth in Lucas. First, were the Shands denied all economically beneficial use of the property as a result of the regulations? Lucas at 1015, 112 S.Ct. 2886. When Monroe County adopted the State Comprehensive Plan in 1986, the zoning designation of Shands Key was changed from GU to OS. See Art. VII, sec. 9.5-212, Monroe County Ordinance, No. 33-1986 (1986). The OS designation, however, permitted "low intensity residential uses ... that can be served by cisterns, generators and other self-contained facilities." Id.; see also sec. 9.5-241(a)(1), Monroe County Ordinance (1986) ("the following uses are permitted as of right in the Offshore Island District: Detached residential dwellings"). Transfer of Development Rights ["TDR"]¹³ and ROGO¹⁴ allocation points were also available. Thus, the mere enactment of the ordinances at issue did not eliminate all economically beneficial use of the property.¹⁵

Second, did the Shands have distinct investment-backed expectations? Lucas, 505 U.S. at 1019 n. 8, 112 S.Ct. 2886, citing to Penn Central Transp. Co. v. New York City, 438 U.S. at 104, 98 S.Ct. 2646. Although R.E. Shands bought the property in 1956 with the idea to eventually build a family home on it, the Shands family's "investment-backed expectations" were minimal at best. The Shands had no specific development plan and only recently sought a dock permit. To be sure, they had not pursued any development of the property since it was purchased in 1956. "A subjective expectation that land can be developed is no more than an expectancy and does not translate into a vested right to develop the property. ... If the landowners did not start development prior to the enactment of these land regulations, they acted at their own peril in relying on the absence of zoning ordinances." Monroe County v. Ambrose, 866 So.2d 707, 711 (Fla. 3d DCA 2003). Indeed, the Shands inherited the property, and have not shown any substantial personal financial investment in Shands Key. Although this is not a test for the legitimacy of a takings claim,¹⁶ it does emphasize the Shands' difficulty in demonstrating that they had any reasonable expectation of selling...