Zipperer v. City of Fort Myers

• Decision Date: 03 January 1995
• Docket Number: No. 15,N,O,No. 17,No. 10,No. 93-3546,10,15,17,93-3546
• Citation: 41 F.3d 619
• Parties: John O. ZIPPERER, Jr., an individual, Plaintiff-Appellant, v. CITY OF FORT MYERS, a chartered municipality and political subdivision of the State of Florida; Fort Myers City Council, as Governing Authority of Improvement Districtortheast Colonial Sewer and Water Assessment District; Fort Myers City Council, as the Governing Authority of Improvement Districtmni Interstate Park; Fort Myers City Council, as the Governing Authority of Improvement District; Improvement Districtortheast Colonial Sewer and Water Assessment District; Improvement Districtmni Interstate Park; Improvement District; Lee County, a political subdivision of the State of Florida; Colonial Road Extension Improvement Special District Board, as the Governing Authority of the Defendant Special District known as Colonial Road Extension Improvement Special District; Colonial Road Extension Improvement Special District, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 619

41 F.3d 619

John O. ZIPPERER, Jr., an individual, Plaintiff-Appellant, v. CITY OF FORT MYERS, a chartered municipality and political subdivision of the State of Florida; Fort Myers City Council, as Governing Authority of Improvement District No 10, Northeast Colonial Sewer and Water Assessment District Fort Myers City Council, as the Governing Authority of Improvement District No. 15, Omni Interstate Park; Fort Myers City Council, as the Governing Authority of Improvement District No. 17; Improvement District No. 10 Northeast Colonial Sewer and Water Assessment District Improvement District No. 15, Omni Interstate Park; Improvement District No. 17; Lee County, a political subdivision of the State of Florida; Colonial Road Extension Improvement Special District Board, as the Governing Authority of the Defendant Special District known as Colonial Road Extension Improvement Special District; Colonial Road Extension Improvement Special District, Defendants-Appellees.

No. 93-3546.

United States Court of Appeals, Eleventh Circuit.

Jan. 3, 1995.

John H. Rains, III, Annis, Mitcheel, Cockey, Edwards & Roehn, Tampa, FL, for appellant.

John S. Turner, Lee County Attorney's Office, Fort Myers, FL, for Lee County.

Jacqueline W. Hubbard, City of Fort Myers, City Attorney's Office, Theodore L. Tripp, Jr., Garvin & Tripp, P.A., Fort Myers, FL, for City of Fort Myers.

Kathleen E. Moore, Office of the Atty. Gen., Tallahassee, FL, amicus, State of Fla.

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

Before HATCHETT and BLACK, Circuit Judges, and YOUNG ^*, Senior District Judge.

BLACK, Circuit Judge:

John Zipperer, the mortgagee of property located in Fort Myers, Florida, (the mortgaged land) brought this action against the City of Fort Myers (the City), Lee County (the County), and the districts contained therein (the Districts), (collectively, the Appellees) to challenge the lien priority of special assessments imposed on the mortgaged land. Zipperer claims that the prioritization of the special assessment liens over his mortgage violated his due process rights, because the Appellees did not give him actual notice of the imposition of these liens. The Appellees contend that the lien priority given to the special assessments did not deprive Zipperer of any property interest, and therefore, actual notice was not required before imposing and prioritizing the lien on the mortgaged land. The district court found no due process violation, and granted summary judgment in favor of the Appellees. We affirm.

I. FACTS AND PROCEDURAL HISTORY

In August 1986, Zipperer loaned $8,900,000 to Gerald DeSimone. The loan was secured by a mortgage in favor of Zipperer on land which DeSimone owned in Fort Myers, Florida. Zipperer promptly recorded the mortgage in the Lee County Official Record Book. Soon after, DeSimone requested that the City of Fort Myers make certain improvements on the mortgaged land, which the City was authorized to do under Florida law. ¹

Pursuant to the powers given to it under Florida Statutes Sec. 170, the City passed resolutions to establish Districts within the City, and make improvements in the Districts. The mortgaged land was included in the Districts. According to the resolutions, the following improvements were to be made in the Districts: (1) water and sewer facilities at an estimated cost of $13,000,000; (2) roadways and paving at an estimated cost of $10,900,000; and (3) other public improvements at an estimated cost of $6,017,000. After paying for the improvements with government bonds, the City Council levied special assessments on a pro-rata acreage basis on the land located within the Districts and confirmed the assessments as first liens.

Before making the improvements, the City sent written notice to DeSimone advising him of the nature and costs of the proposed improvements, the special assessments, and his opportunity to appear before the City Council to be heard as to any issues concerning the improvements. The City did not directly notify Zipperer of the hearings or improvements, although the information was published in the local newspaper. After the improvements were confirmed, DeSimone failed to pay his pro-rata assessment installment for the improvements on the mortgaged land. In 1989, the City filed a lien on the mortgaged property for the unpaid assessments. Although the City provided DeSimone with actual notice of the filing of the lien and its priority status, it gave no notice to Zipperer.

In April 1990, Zipperer foreclosed on the mortgaged land, and subsequently purchased it. Zipperer then sued the Appellees challenging the lien prioritization of the special assessments on the mortgaged land because the Appellees did not give actual notice of the imposition to Zipperer. He claims that the special assessments and their lien prioritization impaired the value of his property interest without any opportunity to be heard, in violation of the Due Process Clause of the Fourteenth Amendment. Zipperer ultimately sought to have the special assessments subordinated in priority to his prior recorded mortgage.

The Appellees filed a motion for summary judgment as to the due process claim, and a motion to dismiss based on jurisdictional grounds. The district court found no violation of due process occurred, and issued an order granting summary judgment in favor of the Appellees. In this appeal, we address at length only the due process issue. ²

II. STANDARD OF REVIEW

We review a grant of summary judgment de novo. Vernon v. Resolution Trust Corp., 907 F.2d 1101, 1104 (11th Cir.1990). On review, we apply the same standards that bound the district court on the summary judgment motion below. Earley v. Champion Int'l Corp., 907 F.2d 1077, 1080 (11th Cir.1990). Any reasonable dispute of material fact must be resolved in favor of the nonmoving party. Barnes v. Southwest Forest Industries, Inc., 814 F.2d 607, 609 (11th Cir.1987).

III. DISCUSSION

A. The Tax Injunction Act

As a preliminary matter, this court has jurisdiction pursuant to 28 U.S.C. Sec. 1331 as a federal question action arising under the Constitution, and we reject Appellees' contention that the Tax Injunction Act, 28 U.S.C. Sec. 1341, bars federal court jurisdiction. Section 1341, which deprives federal courts of jurisdiction to enjoin, suspend or restrain the assessment, levy or collection of any tax under state law except where no plain, speedy and efficient remedy is available in state courts, is inapplicable in the instant case.

First, we note that the Florida Supreme Court has rejected the argument that special assessments are considered taxes under the Florida Constitution. Boca Raton v. State, 595 So.2d 25, 29 (Fla.1992) (declaring that "a legally imposed special assessment is not a tax"). Thus, although Appellees cite several provisions under the Florida Constitution and Florida Statutes which afford taxpayers remedies when challenging state taxes ³, these provisions afford no remedies to individuals when challenging special assessments. Consequently, Zipperer has no "plain, speedy and efficient remedy" in the Florida courts.

Second, Zipperer requests that we determine whether a lien prioritization without adequate notice violates constitutionally protected interests of a mortgagee, but he does not request that we "enjoin, suspend or restrain" the collection of any tax. See Director of Revenue, State of Colorado v. U.S., 392 F.2d 307, 311 (10th Cir.1968) (holding that the Tax Injunction Act does not bar a federal court from hearing the case where the only question is one of lien priorities and no one seeks to suspend the collection of state taxes.) For these reasons, this Court has jurisdiction over Zipperer's constitutional due process claim.

B. Procedural Due Process

Procedural due process requires notice and an opportunity to be heard before any governmental deprivation of a property interest. Donaldson v. Clark, 819 F.2d 1551, 1558 (11th Cir.1987) (en banc) (citing Boddie v. Connecticut, 401 U.S. 371, 378-79, 91 S.Ct. 780, 786, 28 L.Ed.2d 113 (1971). Thus, to determine if a procedural due process violation occurred in this case, we must resolve: (1) whether Zipperer had a constitutionally protected property interest; (2) whether he was deprived of that interest; and (3) if he was deprived of a constitutionally protected property interest, whether the Appellees failed to use constitutionally sufficient procedures before that deprivation occurred. Kentucky Dept. of Corrections v. Thompson, 490 U.S. 454, 460, 109 S.Ct. 1904, 1908, 104 L.Ed.2d 506 (1989); Logan v. Zimmerman Brush Co., 455 U.S. 422, 432-33, 102 S.Ct. 1148, 1156, 71 L.Ed.2d 265 (1982).

1. A Mortgage is a Constitutionally Protected Property Interest.

Property interests are not created by the Constitution, but are defined by existing rules or understandings that stem from an independent source such as state law. Board of Regents v. Roth, 408 U.S. 564, 577-78, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972). Florida courts have determined that a mortgage can be a constitutionally protected property right. In Sarasota County v. Andrews, 573 So.2d 113 (Fla. 2d DCA 1991), the court found that a county's attempt to assert that a lien created by an ordinance was superior in right to a prior recorded mortgage, was a substantial impairment of the first mortgage lien for federal and state constitutional purposes. Id. at 115. Although Sarasota was decided under a contract impairment analysis, it nevertheless stands for the proposition that a mortgagee, who is in essence a party to a security contract, has a property right in preservation of its mortgage interest. See also Mailman Development Corp. v. Segall, 403 So.2d 1137, 1138 (Fla. 4th DCA 1981) (holding that a "mortgagee should not be required to accept a substituted security interest since a mortgagee lien is a property right....").

Moreover, Florida law gives a...