State, Dept. of Agriculture and Consumer Services v. Mid-Florida Growers, Inc., MID-FLORIDA

• Decision Date: 08 March 1989
• Docket Number: No. 88-1369,MID-FLORIDA,88-1369
• Citation: 14 Fla. L. Weekly 650,541 So.2d 1243
• Court: Florida District Court of Appeals
• Parties: 14 Fla. L. Weekly 650 STATE of Florida, DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES, Appellant, v.GROWERS, INC., and Himrod & Himrod Citrus Nursery, a partnership composed of Joe Himrod and Joe B. Himrod, Appellees.

Page 1243

541 So.2d 1243

14 Fla. L. Weekly 650

STATE of Florida, DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES, Appellant, v. MID-FLORIDA GROWERS, INC., and Himrod & Himrod Citrus Nursery, a partnership composed of Joe Himrod and Joe B. Himrod, Appellees.

No. 88-1369.

District Court of Appeal of Florida Second District.

March 8, 1989.

Harry L. Michaels, Asst. General Counsel, Dept. of Agriculture and Consumer Services, Robert A. Butterworth, Atty. Gen., Louis F. Hubener and Beverly McLear, Asst. Attys. Gen. Dept. of Legal Affairs, Tallahassee, for appellant.

M. Stephen Turner and David K. Miller of Broad and Cassell, Tallahassee, for appellees.

ALTENBERND, Judge.

The Department appeals a final judgment which awards damages to two citrus nursery owners in an inverse condemnation proceeding. The final judgment compensates the nursery owners both for the Department's destruction of their existing nursery stock in October 1984 and for subsequent lost or retarded production of new stock. We affirm the jury's award to compensate the nursery owners for the destruction of their existing nursery stock. We reverse the jury's award of damages for subsequent lost production. In reversing this award, however, we authorize the nursery owners to file additional pleadings upon remand in the lower court in an effort to recover damages for a temporary taking under the guidelines described in First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304, 107 S.Ct. 2378, 96 L.Ed.2d 250 (1987). Because the issues presented by this case are matters of great public importance, we also certify two questions to the Florida Supreme Court.

From October 7 to October 19, 1984, the Department burned the entire nursery stock at nurseries operated by Mid-Florida Growers, Inc., and Himrod & Himrod Citrus Nursery. On August 5, 1985, Mid-Florida and Himrod filed this lawsuit against the Department alleging inverse condemnation. A bench trial on the issue of liability took place on September 24, 1986. The trial judge ruled that the burning of the nurseries' citrus stock constituted a taking and that the nursery owners were entitled to full compensation under article X, section 6, Florida Constitution. That decision was affirmed by both this court and the Florida Supreme Court. State, Dep't of Agriculture v. Mid-Florida Growers, 505 So.2d 592 (Fla. 2d DCA 1987), aff'd, 521 So.2d 101 (Fla.1988), cert. denied, 488 U.S. 870, 109 S.Ct. 180, 102 L.Ed.2d 149 (1988). This opinion will not restate the additional facts provided in those opinions.

Between March 22 and March 24, 1988, the issue of compensation for both nursery owners was tried by jury. The jury returned a verdict for Mid-Florida Growers, which awarded $739,462.00 for the value of the destroyed nursery stock. Additionally, the jury awarded $105,717.00 as the "amount of any lost or retarded production of new stock" sustained by Mid-Florida. Since the Department had made a partial payment of $188,372.40 on April 9, 1985, to Mid-Florida, the lower court entered judgment for compensation in the amount of $966,177.95. ¹ A similar verdict was rendered in favor of Himrod. The jury awarded Himrod $602,568.00 for the value of the destroyed nursery stock, and an additional $128,352.00 for lost production. The Department had previously paid Himrod $59,127.24. Thus, the lower court entered judgment in favor of Himrod for $977,281.00.

The Department presents three issues: First, it argues that the trial court erred in allowing the jury to consider evidence based upon market prices after the date of the taking. Second, assuming that future market prices were properly introduced into evidence, the Department argues that the plaintiffs' expert miscalculated the damages. Finally, the Department argues that damages for lost future production are not recoverable as a constitutional right.

I. THE CITRUS NURSERY GROWTH CYCLE

In order to evaluate this case, it is helpful to understand the process of growing new citrus stock. This is an unusual eminent domain case. The Department did not take a parcel of real property by inverse condemnation. Instead, the Department destroyed personal property. ² In many respects, the nursery stock involved in this case is similar to the property along any assembly line in any factory. The Department essentially destroyed all component parts and finished products of the two nursery owners and prohibited them from starting up their factories for a period of weeks.

Each nursery in this case grows containerized product inside greenhouses. This is a relatively new method for starting citrus. It allows the nursery to avoid freeze damage to its stock and to receive the higher prices for its product which typically follow grove-damaging freezes. The containerized citrus is easier to handle and to plant than trees grown outdoors using the more traditional bare-foot method.

The nursery begins its assembly line by planting seeds in falts which contain approximately 100 cells. Most of the seeds germinate and produce seedlings. The plants are grown in the seedling stage for three to four months.

After the plants have reached the end of the seedling stage, they are transplanted into four-inch containers. They are grown in these containers for approximately another three to four months. This stage of growth is frequently referred to as the liner stage. The liners are grown until the stems are approximately pencil size.

The liners are grown strictly as root stock. The fruit they would bear is unacceptable. As a result, bud stock is removed from trees with desirable fruit. The buds are grafted to the liners to produce budded trees.

The final stage of production involves the budded trees. They are grown in the nursery for another six to nine months. The budded trees can be transplanted to six-inch pots or three-gallon containers. The larger pot allows for a larger tree, a longer shelf life, and a higher price.

The total time to produce a marketable tree varies from ten months to twenty-two months. On the average, it takes approximately sixteen months to produce a marketable budded tree.

A typical greenhouse, like any factory, has a maximum output. Mid-Florida's nursery, for example, starts approximately 35,000 trees every quarter. As a batch of seedlings moves up the production line to become liners, a new batch of seedlings is begun. The total production capacity of the Mid-Florida greenhouse is approximately 140,000 seedlings, liners, and budded trees. The Department destroyed all of the product within the nursery in all three stages of development.

II. THE DEPARTMENT'S THREE-FOLD EXERCISE OF POLICE POWERS

Analytically, this case involves three distinct exercises of police power. First, the Department entered an emergency order in September 1984, which placed a general quarantine upon nursery sales. The quarantine remained in effect until April 1, 1985. The quarantine had a significant impact upon a wide range of citrus nurseries and citrus groves. During the quarantine, citrus nursery stock could not be legally sold in Florida. We emphasize that no court in this case has ruled that the quarantine between September 1984 and April 1985 constituted a taking. We do not rule upon this constitutional question. We simply observe that the issue is unresolved. The constitutionality of a temporary, nondestructive quarantine to protect a major state industry would require a substantially different analysis than the analysis involved for the destruction of these healthy citrus trees. See Graham v. Estuary Properties, Inc., 399 So.2d 1374 (Fla.), cert. denied, 454 U.S. 1083, 102 S.Ct. 640, 70 L.Ed.2d 618 (1981); Morton v. Gardner, 513 So.2d 725 (Fla. 3d DCA 1987); Flake v. State, Dep't of Agriculture, 383 So.2d 285 (Fla. 5th DCA 1980).

Second, the Department entered specific "immediate final orders" designating Mid-Florida and Himrod as "eradication areas." By virtue of these orders, their healthy citrus stock was burned. This specific action has been declared a taking, even though it was a valid exercise of police power. State, Dep't of Agriculture v Mid-Florida Growers, 521 So.2d 101 (Fla.1988).

Finally, the Department, in conjunction with the United States Department of Agriculture, conducted a decontamination of the greenhouses after the citrus stock was burned. Although the Department burned the citrus stock in this case by mid-October 1984, the decontamination was not completed until mid-December 1984. Thus, at a minimum, the nursery owners were temporarily shut down for approximately two months after the burning of their healthy stock because of the decontamination action. ³

The trial court's order determining liability did not expressly find the decontamination process to be a taking. Because the plaintiffs did not amend their complaint to seek damages for lost production until after the bench trial on liability, the trial court had no occasion to analyze carefully the issue of decontamination as a taking.

From the record in this case, it appears that the decontamination process only occurred in nurseries where the Department also destroyed the stock under an "immediate final order." It is at least possible that the Department could have disrupted a nursery's production to decontaminate the nursery without destroying healthy citrus plants. Thus, the act of decontamination may be analyzed as either an action incidental to the destruction of the citrus plants or as a separate action placing a temporary restriction on the nursery's production. In either case, the decontamination is only relevant to the claim for lost production.

III. THE TWO COMPETING THEORIES OF FULL COMPENSATION

Both sides agree that the nursery owners are entitled to "full compensation" for the destruction of their citrus product. Art. X, § 6, Fla. Const. As might be expected, however, the two sides provide dramatically different approaches to full compensation.

Concerning the...