Ward v. Downtown Development Authority

• Court: U.S. Court of Appeals — Eleventh Circuit
• Writing for the Court: Before HATCHETT and CLARK; CLARK
• Citation: Ward v. Downtown Development Authority, 786 F.2d 1526 (11th Cir. 1986)
• Decision Date: 21 April 1986
• Docket Number: No. 85-5133,85-5133
• Parties: Alice WARD and Mary Smith, Plaintiffs-Appellants, v. DOWNTOWN DEVELOPMENT AUTHORITY, William Farkas, Executive Director Downtown Development Authority, Carlos Gonzalez, and Harold Rodgers, Defendants-Appellees.

Page 1526

786 F.2d 1526

54 USLW 2611

Alice WARD and Mary Smith, Plaintiffs-Appellants, v. DOWNTOWN DEVELOPMENT AUTHORITY, William Farkas, Executive Director Downtown Development Authority, Carlos Gonzalez, and Harold Rodgers Defendants-Appellees.

No. 85-5133.

United States Court of Appeals Eleventh Circuit.

April 21, 1986.

Sharon Bourassa-Diaz, Peter H. Barber, Legal Aid Service of Broward, County, Inc., Ft. Lauderdale, Fla., for plaintiffs-appellants.

Raymond O. Holton, Jr., Ft. Lauderdale, Fla., for Development Authority.

Ariel Raab, Ft. Lauderdale, Fla., Paige Stover, Clearwater, Fla., for Gonzalez & Rogers.

Appeal from the United States District Court for the Southern District of Florida.

Before HATCHETT and CLARK, Circuit Judges, and ALLGOOD ^*, Senior District Judge.

CLARK, Circuit Judge:

I. INTRODUCTION

Appellants Alice Ward and Mary Smith appeal from the district court's dismissal of their equal protection, Fifth Amendment taking, procedural due process, and pendent state law claims against the Downtown Development Authority ("DDA") and its agents, Carlos Gonzalez and Harold Rodgers, for failure to state any claim for which relief could be granted.

II. FACTUAL BACKGROUND

Appellants are former tenants of the Shady Grove Apartments ("Apartments") in Fort Lauderdale, Florida. The DDA is a governmental entity created by the Florida legislature to eliminate slums and blight in the downtown area of Fort Lauderdale. In April, 1984, the DDA purchased the Apartments to further development of a performing arts center and retained the former owners, Gonzalez and Rodgers, as managing agents. Appellants claim that the acquisition was not preceded or accompanied by a public hearing or any assurance that residents displaced by the development would have access to adequate alternative accommodations.

The contract for sale and purchase entered into by the DDA and the former owners required that Gonzalez and Rodgers obtain from each tenant a statement to the effect that his or her only interest in the property was the right to possess his or her apartment pursuant to any existing lease or oral agreement and that such interest would expire on or before October 30, 1985. The appellants, who had no lease and were month-to-month tenants at will, signed the requested statements. On October 11, 1984, Gonzalez and Rodgers, on behalf of the DDA, notified appellants to vacate their apartments by October 31, 1984. Appellants vacated their apartments pursuant to this notice without receiving any relocation assistance from the DDA.

On October 31, 1984, appellants filed a complaint requesting equitable relief and damages to redress violations of their rights under the Fifth and Fourteenth Amendments to the Constitution, 42 U.S.C. Sec. 1983 and Chapter 65-1541 of the Laws of Florida, Special Laws of 1965, as amended by Chapter 69-1056 ("DDA Act"). Specifically, they alleged that appellees had taken their possessory interests in the Apartments without just compensation, denied them the relocation assistance provided in the DDA Act without due process of law, and violated the DDA Act. Appellants eventually amended their complaint and, on January 2, 1985, the district court dismissed the amended complaint for failure to establish the elements of any claim for which the court could grant relief.

In dismissing appellants' amended complaint, the district court ruled that the expectancy of a tenant at will in the continuation of that tenancy is so uncertain and speculative that it cannot be considered a compensable property interest under the Fifth and Fourteenth Amendments. In response to appellants' claim that the failure to provide relocation assistance violated due process and equal protection of law, the court stated that Sec. 1983 provides a right of action only for a violation of those rights secured by the United States Constitution and not for a denial of state-created rights. Finally, having concluded that appellants' federal claims were not meritorious, the district court declined to exercise pendent jurisdiction over appellants' state law claims. This appeal followed.

III. ISSUES

The issues raised on appeal are (1) whether continued occupancy as tenant at will is a property interest protected by the Fifth and Fourteenth Amendments from uncompensated taking by the DDA; (2) whether appellants claim that they were deprived of property without due process of law when they were displaced by the DDA without the statutorily required assurance of adequate alternative accommodations states a claim under 42 U.S.C. Sec. 1983; (3) whether appellants claim that they were denied equal protection of the law when they were displaced without the assurance of adequate alternative accommodations accorded by the DDA to others similarly situated states a claim under Sec. 1983; and (4) whether the district court properly dismissed appellants' state law claims.

We hold that the district court erred in dismissing appellants' amended complaint and remand for further proceedings.

IV. RATIONALE FOR OUR DECISION

We note at the outset that we should reverse the dismissal of appellants' complaint unless it appears beyond doubt that appellants can prove no set of facts in support of their claims that would entitle them to relief. Hishon v. King & Spaulding, 467 U.S. 69, 104 S.Ct. 2229, 2233, 81 L.Ed.2d 59 (1984). We accept the allegations of appellants as true. Id.

A. Fifth Amendment Taking Claim

The Fifth Amendment to the United States Constitution, which applies to states and localities by operation of the Fourteenth Amendment, provides that private property shall not be taken for public use without just compensation. Appellants claim that their possessory interests in the Apartments were taken without just compensation. Specifically, they argue that they enjoyed a protectable property interest in their tenancy at will, which interest was contractually extended through October 30, 1985, by the acknowledgment they signed at the request of the DDA and its agents and that this property was taken without just compensation when they were required to vacate the Apartments on October 31, 1984.

We reject appellants' contention that simple principles of contract law dictate that the agreement they signed at the behest of the DDA ¹ created a property interest in remaining in possession of their apartments until October 30, 1985. This agreement is simply an acknowledgment that limits the right of possession to the terms of any oral lease agreement and the potential length of occupation to a specified period. It does not create in the tenant any interest not already established by the oral agreement.

Contrary to the district court's holding, however, a month-to-month tenancy at will is a compensable property interest under Florida law. The court in Pensacola Scrap Processors, Inc. v. State Road Department, 188 So.2d 38 (Fla. 1st Dist.Ct.App.1966), cert. denied, 192 So.2d 494 (Fla.1966), recognized that any tenancy, no matter the duration, is a property interest that can be the subject of a compensable taking. The court explained that the fact that the tenancy was of potentially short duration did not change the nature of the interest. Rather, the length of the lease is relevant only to determine the amount of compensation that must be paid. See also United States v. Petty Motor Co., 327 U.S. 372, 380-81, 66 S.Ct. 596, 601, 90 L.Ed. 729 (1946).

Nonetheless, appellees argue that, as appellants were given more than the 15-day notice of termination required to terminate a month-to-month tenancy pursuant to Fla.Stat.Ann. Sec. 83.03 (West Supp.1985), any compensable interest they had in their apartments ceased to exist as of the end of the notice period. See id. Were the landlord in this case a private person or entity, legally sufficient notice to vacate would indeed terminate the tenant's interest as of the end of the notice period.

However, the landlord here is a state entity whose power to acquire property and displace tenants is circumscribed by any conditions set forth in the legislative grant of its authority. Section 21 of the DDA Act requires that the DDA take certain steps prior to approving a "renewal project." It must (1) determine by resolution that the area affected is a slum or blighted area; (2) submit the renewal plan to the city planning board for review and recommendations as to the conformity of the renewal project with the general plan for development of the city; (3) hold a public hearing on the renewal project; and (4) find that "a feasible method exists for the location of families who will be displaced from the renewal area in decent, safe and sanitary dwelling accommodations within their means and without undue hardship to such families." ² Thus, if the Apartments were acquired as part of a renewal project, the DDA could not terminate appellants' tenancy at will simply by giving the required notice but had also to meet the requirements of Sec. 21. The DDA completed the first two of the above requirements but neglected to hold a public hearing or make any provision for feasible relocation of persons displaced by the acquisition and demolition of the Apartments. Appellants' property interest in their tenancy at will therefore continued so long as these conditions were not met, and if the district court finds that their interest was prematurely cut off, they will be entitled to just compensation therefor. ³

This case is similar in all relevant respects to Jeffries v. Georgia Residential Finance Authority, 678 F.2d 919 (11th Cir.1982), cert. denied, 459 U.S. 971, 103 S.Ct. 302, 74 L.Ed.2d 283 (1982). In that case, tenants evicted from federally subsidized housing without any determination that "good cause" for the evictions existed argued that they had thereby been deprived of property without due process. The landlord argued, inter alia, that the tenants had no property interest in continued occupancy because the lease...