Vlx Properties, Inc. v. Southern States Utilities, Inc.

Decision Date21 July 2000
Docket Number99-3314,5
CourtFlorida District Court of Appeals

Appeal from the Circuit Court for Volusia County, Edwin P.B. Sanders, Judge.

Bruce A. Hanna and C. Allen Watts of Cobb Cole & Bell, Daytona Beach, for Appellant.

Gordon H. Harris and Tracy A. Marshall and Kent Hipp of Gray, Harris & Robinson, P.A., Orlando, for Appellees.


VLX Properties, Inc. (VLX) appeals a final judgment rendered in favor of Southern States Utilities, Inc. (SSU) denying VLX's petition for inverse condemnation. VLX contends that the lower court erred in concluding as a matter of law that it had to prove ouster or deprivation of all reasonable use of its property in order to recover. We reverse because the lower court applied the wrong legal standard to the facts of this case.

We are aware of the general rule that the "trial court's determination of liability in an inverse condemnation suit is presumed correct and its findings will not be disturbed on appeal if supported by competent substantial evidence." Department of Agric. & Consumer Servs. v. Mid-Florida Growers, Inc., 521 So. 2d 101, 104 (Fla. 1988) (citations omitted). However, the issue that we must resolve in these proceedings is one of law and this requires that we review the lower court's decision de novo. See Rittman v. Allstate Ins. Co., 727 So. 2d 391 (Fla. 1st DCA 1999).

This is the second time the parties to this litigation have appealed to this court issues relating to the underlying inverse condemnation action. See VLX Properties, Inc. v. Southern States Utils., Inc., 701 So. 2d 391 (Fla. 5th DCA 1997) (VLX-I). We will not burden this opinion with all of the facts involved in the prior appeal other than to recite those facts that are relevant to the instant appeal. We note that the factual findings in the trial court's order of March 13, 1996, that were reviewed by this court in VLX-I were not challenged by either party in the prior appeal. Therefore, those factual findings constitute the law of this case. See, e.g., Couture Fashions, Inc. v. Romay, 461 So. 2d 235 (Fla. 1st DCA 1984); see also Mulato v. Mulato, 734 So. 2d 477 (Fla. 4th DCA 1999); Thomas v. Perkins, 723 So. 2d 293 (Fla. 3d DCA 1998); School Bd. of Seminole County v. Unemployment Appeals Comm'n, 522 So. 2d 556 (Fla. 5th DCA 1988).

VLX is currently the owner of certain property that includes part of a pond called James Pond which is located in the Glen Abbey subdivision. VLX purchased this property from Lawyers Title Investment Fund, Inc. (LTIF), which owned multiple parcels of land in the Glen Abbey subdivision including nine holes of the golf course which it had contracted to sell to Glen Abbey Golf Course, Inc. (GAGC). SSU is a utility company with eminent domain powers which owns and operates a wastewater treatment plant which it acquired from Deltona Utilities. At the time of the acquisition, Deltona Utilities was ordered by the Department of Environmental Regulation to find an environmentally sound method for disposing of its wastewater. Thus, in June of 1990, SSU entered into an Easement and Reclaimed Water Delivery Agreement with GAGC which granted to SSU the right to discharge reclaimed water onto its golf course. Included within the confines of the golf course was a part of James Pond which was to be used pursuant to the agreement as a holding pond for SSU's reclaimed water. The other portion of the pond was included in the tract of land LTIG subsequently conveyed to VLX for development into single family residences.

Since LTIF still owned nine holes of the golf course, LTIF entered into a Joinder and Consent Addendum to the Delivery Agreement that permitted SSU to discharge its reclaimed water over the nine holes of the golf course prior to closing on the purchase agreement with GAGC. However, due to a scrivener's error, the legal description in the delivery agreement and the addendum included not only the golf course, but lands owned by LTIF that were not under contract to GAGC including the land and part of James Pond that LTIG subsequently conveyed to VLX.

Sometime around the middle of 1995, SSU began delivering its reclaimed water to holding ponds located on the golf course. VLX contends that SSU directly discharged water into James Pond. SSU contends, on the other hand, that it discharged water into other holding ponds on the golf course which spilled over into James Pond during periods of high rainfall. The findings contained in the March 12, 1996, judgment specifically state that "the discharge of reclaimed water into James Pond contributed to the flooding of James Pond," indicating that VLX's contention is correct. The other findings contained in that order include the following:

2. VLX has shown that Defendant, Southern States Utilities, Inc. ("SSU"), entered upon private property for more than a momentary period, under color of legal authority, and devoted that property to a public use. The Court finds that the area devoted to a public use includes all of James Pond . . . .

3. The Court finds that the presence of reclaimed water has impaired the water quality of James Pond. The Court finds that the level of solids has increased, the oxygen content has been affected, and the levels of nitrogen, phosphorous and sediment have increased. . . . However, there was insufficient evidence to make a finding as to the extent of any injurious effect that may have resulted from the discharge of reclaimed water into James Pond. Moreover, the Court does find that the presence of reclaimed water in James Pond did not oust the owner or deprive the owner of all reasonable and beneficial use of the property.

. . . .

10. As to whether the taking was permanent or temporary, the Court determines that this is a question of law rather than a question of fact. The Court finds that the taking was a permanent taking.

Based on these findings, the lower court entered the judgment under review wherein the court held that VLX's claim for inverse condemnation was based on flooding of James Pond which required VLX to establish that substantial periodic flooding was expected to recur that denied VLX any reasonable use of its property. As for the inverse condemnation claim for water quality impairment, the court likewise held that VLX had to prove loss of any reasonable use of its property. We agree, however, with VLX's assertion that this is not a case in which flooding caused the taking, but rather a case where the taking caused the flooding. Therefore, the lower court erred in applying the legal standard applicable to cases involving flooding in determining that VLX is not entitled to recover.

Historically, a distinction has been made between categories of takings in inverse condemnation cases. For example, taking may occur by physical occupation, flooding, governmental regulation, and taking of access rights.1 The importance of these distinctions is that different legal standards may apply to each category of taking. Lamentably, the lines of demarcation between the types of takings and the standards applicable to each have become somewhat blurred as the law of inverse condemnation2 has continued to evolve. This has resulted in some decisions that are confusing and contradictory.3 Florida Eminent Domain Practice and Procedure 13.6, at 13-11 (5th ed. 2000). But rather than "bemoan the confusing state of case law when the taking issue is concerned," Florida Eminent Domain Practice and Procedure 13.6, at 13-11 (5th ed. 2000), we find that it is much more appropriate to apply the concept of taking by refocusing attention on the different types of takings and the standards applicable to each.

The standard this court has applied to flooding cases provides that a cause of action for inverse condemnation may exist when substantial periodic flooding occurs and is expected to recur, and such flooding denies the owner any reasonable use of his or her property. See Associates of Meadow Lake, Inc. v. City of Edgewater, 706 So. 2d 50, 52 (Fla. 5th DCA), review denied, 725 So. 2d 1107 (Fla. 1998).4Decisions that have not recognized a cause of action for temporary takings generally apply the rule which provides that to support a claim for inverse condemnation associated with flooding, the flooding must be an actual and permanent invasion of the land that amounts to an appropriation of the property and not merely an injury to it. See, e.g., Diamond K Corp. v. Leon County, 677 So. 2d 90 (Fla. 1st DCA 1996); South Florida Water Management Dist. v. Steadman Stahl, P.A. Pension Fund, 558 So. 2d 1087 (Fla. 4th DCA), review denied, 574 So. 2d 143 (Fla. 1990). We find that the rule applied in Associates of Meadow Lake, Inc. is more in line with the emerging law that recognizes the right to compensation for temporary takings. See, e.g., Tampa-Hillsborough County Expressway Auth. v. A.G.W.S., Corp. 640 So. 2d 54, 58 (Fla. 1994) ("Moreover, a temporary deprivation may constitute a taking.") (citation omitted); South Florida Water Management Dist. v. Basore of Florida, Inc., 723 So. 2d 287 (Fla. 4th DCA 1998), review denied, 740 So. 2d 527 (Fla. 1999); City of Miami v. Keshbro, Inc., 717 So. 2d 601, 603 n.5 (Fla. 3d DCA 1998) ("Temporary takings are compensable. . . ."), review granted, 729 So. 2d 392 (Fla. 1999); City of St. Petersburg v. Bowen, 675 So. 2d 626 (Fla. 2d DCA), review denied, 680 So. 2d 421 (Fla. 1996). This is the standard that the trial court applied in the instant case. This was error because this is not a taking by flooding.

The taking in this case constitutes a physical taking which occurs when the government physically occupies the property. See Florida Game & Fresh Water Fish Comm'n v. Flotilla, Inc., 636 So. 2d 761 (Fla. 2d DCA), review denied, 645 So. 2d 452 (Fla. 1994); see also Martin v. City of Monticello, 632 So....

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