Shands v. City of Marathon

• Decision Date: 03 May 2023
• Docket Number: 3D21-1987
• Parties: Rodney Shands, et al., Appellants, v. City of Marathon, etc., et al., Appellees.
• Court: Florida District Court of Appeals

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Rodney Shands, et al., Appellants, v. City of Marathon, etc., et al., Appellees.

No. 3D21-1987

Florida Court of Appeals, Third District

May 3, 2023

Not final until disposition of timely filed motion for rehearing.

An appeal from the Circuit Court for Monroe County, Mark H Jones, Judge Lower Tribunal No. 07-99-M

Pacific Legal Foundation, Jeremy Talcott, and Robert H Thomas (Sacramento, CA), and Kathryn D. Valois (Palm Beach Gardens), for appellants.

Johnson, Anselmo, Murdoch, Burke, Piper &Hochman, P.A. and Michael T. Burke, and Hudson C. Gill (Fort Lauderdale), for appellees.

Before EMAS, HENDON, and MILLER, JJ.

MILLER, J.

This inverse condemnation appeal presents a novel issue regarding the role that transferred development rights ("TDRs") occupy in adjudicating a per se as-applied regulatory taking claim advanced under the landmark case of Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). Appellants, the children of the late Dr. R.E. Shands, are the owners of Shands Key, an offshore island in the Florida Keys. Dr. Shands acquired the property in 1956, and, upon his death, title to the island passed to his wife. She, in turn, conveyed the property to appellants. In 1986, Monroe County changed Shands Key's zoning status from "General Use" to "Conservation Offshore Island." In 1999, appellee, the City of Marathon, incorporated and adopted Monroe County's regulations. An application to construct a dock to allow for increased island access was denied, and the zoning authority effectively foreclosed any use of the property, other than for beekeeping or personal camping. After unsuccessfully pursuing administrative avenues for relief, appellants filed suit, alleging a regulatory taking. They then sought partial summary judgment on the basis that the regulation, as applied, deprived them of all economically beneficial use of their property. Finding that an award of TDRs and Building Permit Allocation System ("BPAS") points, considered in tandem with the residual land value derived from personal recreation and beekeeping, precluded a per se as-applied claim, the trial court denied the motion. The primary issue on appeal is the propriety of that ruling.^[1]

PROCEDURAL HISTORY

This dispute underscores the "cryptic and convoluted" nature of contemporary regulatory takings jurisprudence. See Ganson v. City of Marathon, 222 So.3d 17, 20 (Fla. 3d DCA 2016) (Shepherd, J., dissenting). This is the third time this case has come before this court. The salient facts precipitating the filing of suit are as follows:

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.

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. 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.

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. The Shands then filed a Beneficial Use Determination (BUD) application as required by the City of Marathon Code of Ordinances, Article 18. 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, 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.

Shands v. City of Marathon (Shands II), 261 So.3d 750, 751-52 (Fla. 3d DCA 2019) (quoting Shands v. City of Marathon (Shands I), 999 So.2d 718, 720-22 (Fla. 3d DCA 2008)).

Some additional procedural history is necessary. In the parties' first appeal, this court reversed a trial court order dismissing the case on statute of limitations grounds. Shands I, 999 So.2d at 720. There, the court determined appellants' challenge was "as applied," rather than "categorical [or] facial," and therefore not barred by the statute of limitations. Id. at 72526. In support of this characterization, the court reviewed the relevant ordinance and noted that it provided for "low intensity residential uses . . . that can be served by cisterns, generators and other self-contained facilities," and "[d]etached residential dwellings." Id. at 724. It further observed that TDRs, including ROGO allocation points, were available.^[2] Id.

On remand, the City successfully moved for summary judgment on the complaint, contending that the availability of TDRs and BPAS points rendered the facts indistinguishable from Beyer v. City of Marathon, 197 So.3d 563 (Fla. 3d DCA 2013). This court once again reversed on appeal, finding the City failed to establish the value of the TDRs associated with the property. See Shands II, 261 So.3d at 753.

Following the second remand, appellants moved for partial summary judgment, alleging they had raised a viable per se, as-applied challenge under Lucas. In support of their motion, appellants attached sworn testimony establishing that the zoning change effectively limited the use of the property to beekeeping or personal camping. This limitation, they argued, rendered the property "economically idle" under Lucas. 505 U.S. at 1019.

Invoking Shands I and II and other precedent, the City countered summary judgment on the ground that the award of TDRs, including the allocation of BPAS points, infused the property with value, precluded a per se finding under Lucas.^[3] The trial court denied the motion. The case subsequently proceeded to a two-day non-jury trial, at the conclusion of which the court found appellants failed to establish a taking under the ad hoc multi-factored analysis set forth in Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978). This appeal followed.^[4]

STANDARD OF REVIEW

Our review is de novo, as it entails the denial of partial summary judgment and resultant claim preclusion. Shands II, 261 So.3d at 752. This case was decided under Florida's "old" summary judgment standard. As we explained in Feldman v. Schocket:

Pursuant to the old standard, summary judgment was proper "if there [was] no genuine issue of material fact and if the moving party [was] entitled to a judgment as a matter of law." In accordance with this test, "the existence of any competent evidence creating an issue of fact, however credible or incredible, substantial or trivial, stop[ped] the inquiry and preclude[d] summary judgment, so long as the 'slightest doubt' [was] raised."

47 Fla.L.Weekly D1930-31 (Fla. 3d DCA Sept. 21, 2022) (alterations in original) (first quoting Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla. 2000); and then quoting Bruce J. Berman &Peter D. Webster, Berman's Florida Civil Procedure § 1.510:5 (2020 ed.)).

ANALYSIS

The Takings Clause of the Fifth Amendment, applicable to the states through the Fourteenth Amendment, commands "[N]or shall private property be taken for public use, without just compensation." Amend. V, U.S. Const. Similarly, the Florida Constitution provides that "[n]o private property shall be taken except for a public purpose and with full compensation therefor paid." Art. X, § 6(a), Fla. Const. As the Supreme Court has explained, "[t]he aim of the Clause is to prevent the government 'from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.'" E. Enters. v. Apfel, 524 U.S. 498, 522 (1998) (quoting Armstrong v. United States, 364 U.S. 40, 49 (1960)). Importantly, the Clause "does not proscribe the taking of property; it proscribes taking without just compensation." Florida Dept. of Transp. v. Mallards Cove, LLP, 159 So.3d 927, 932 (Fla. 2d DCA 2015) (quoting Williamson Cnty. Reg'l Plan. Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172, 194 (1985)); see also Cedar Point Nursery v. Hassid, 141 S.Ct. 2063, 2071 (2021) (quoting Discourses on Davila, in 6 Works of John Adams 280 (C. Adams ed. 1851)) ("[P]roperty must be secured, or liberty cannot exist.").

The Fifth Amendment was historically understood to apply only to "direct government appropriation or physical invasion of private property." Lingle v. Chevron U.S.A Inc., 544 U.S. 528, 537 (2005). Over a century ago, however, the Supreme Court inaugurated the concept of regulatory takings in the case of Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922). In Mahon, the Court recognized that the Takings Clause extended to overly burdensome regulations of property. Writing for an 8-1 Court, Justice Oliver Wendell Holmes observed...