IN THE SUPREME COURT OF FLORIDA Case No. SC First DCA Case No.: 1D ARIOLA, L.L.C., et al., Petitioners,

Transcription

1 IN THE SUPREME COURT OF FLORIDA Case No. SC First DCA Case No.: 1D ARIOLA, L.L.C., et al., Petitioners, v. CHRIS JONES, Property Appraiser for Escambia County, Florida, and JANET HOLLEY, Tax Collector for Escambia County, Florida, Respondents PETITIONERS REPLY BRIEF ON THE MERITS DANNY L. KEPNER Florida Bar No: SHELL, FLEMING, DAVIS & MENGE Post Office Box 1831 Pensacola, Florida Telephone: (850) Facsimile: (850) TALBOT D ALEMBERTE Florida Bar No.: PATSY PALMER Florida Bar No.: D ALEMBERTE & PALMER, PLLC Post Office Box Tallahassee, Florida Telephone: (850) dalemberte@dalemberteandpalmer.com palmer@dalemberteandpalmer.com Counsel for Petitioners

2 TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES... iii SUMMARY OF ARGUMENT... 1 ARGUMENT... 2 I. RESPONDENTS CONSTITUTIONALITY CHALLENGE IS WITHOUT MERIT... 2 A. Respondents Lack Standing to Raise Challenges to the Constitutionality of Taxing Statutes... 2 B. The Legislature Acted Within its Broad Discretion to Adopt this Taxing Plan for Private Leases of Government Property... 4 C. The Taxing Statutes Do Not Violate Equal Protection Requirements... 6 II. NEITHER ARCHER NOR WILLIAMS ADDRESSED THE ISSUE OF EQUITABLE OWNERSHIP... 8 A. The Context Explains Why the Comments Were Made... 9 B. The Context Did Not Involve an If Clause in the Statute III. IV. CREATION OF A CONDOMINIUM UNIT ON A LEASEHOLD DOES NOT TRANSFER OWNERSHIP OF THE UNIT S IMPROVEMENTS TO THE LESSEE CASES CITED BY RESPONDENTS DO NOT ADDRESS FACTS LIKE THOSE PRESENT HERE CONCLUSION CERTIFICATE OF SERVICE CERTIFICATE OF COMPLIANCE ii

3 Cases TABLE OF AUTHORITIES 1108 Ariola, LLC v. Jones, 71 So. 3d 892 (Fla. 1st DCA 2011)...2, 15 Archer v. Marshall, 355 So. 2d 781 (Fla. 1978)... 5, 8, 9, 10 Bancroft Inv. Corp. v. City of Jacksonville, 27 So. 2d 162 (Fla. 1946)...14 Barnett v. Dept. of Management Services, 931 So. 2d 121 (Fla. 1st DCA 2006), rev. dism., 953 So. 2d 461 (Fla. 2007)...13 Barr v. Watts, 70 So. 2d 347 (Fla. 1953)... 4 Bell v. Bryan, 505 So. 2d 690 (Fla. 1st DCA), rev. den., 513 So. 2d 1060 (Fla. 1987)... 13, 15 Canaveral Port Authority v. Dept. of Revenue, 690 So. 2d 1226 (Fla. 1996)... 4 City of Hollywood v. Lombardi, 770 So. 2d 1196 (Fla. 2000)... 5 Edgewater Enterprises, Inc. v. Holler, 426 So. 2d 980 (Fla. 5th DCA 1982)...11 Escambia County v. Bell, 717 So. 2d 85 (Fla. 1st DCA 1988)... 3 First Union National Bank v. Ford, 636 So. 2d 523 (Fla. 5th DCA 1993)...13 Gay v. Jemison, 52 So. 2d 137 (Fla. 1951)...14 iii

4 Hialeah, Inc. v. Dade County, 480 So. 2d 998 (Fla. 3d DCA), rev. den., 500 So. 2d 544 (Fla. 1986)...13 LaFountain v. Kelly, 732 So. 2d 503 (Fla. 1st DCA 1999)...11 Leon County Educ. Facilities Auth. v. Hartsfield, 698 So. 2d 526 (Fla. 1997)...13 Marathon Air Services, Inc., v. Higgs 575 So. 2d 1340 (Fla. 3d DCA 1991)...14 Markham v. Broward County, 825 So. 2d 472 (Fla. 4th DCA 2002)... 5 Metropolitan Dade County v. Brothers of the Good Shepherd, Inc., 714 So. 2d 573 (Fla. 3d DCA 1998)...13 Nikolits v. Runway 5-23 Hanger Condominium Association, Inc., 847 So. 2d 1054 (Fla. 4th DCA 2003)...12 Nordlinger v. Hahn, 505 U.S. 1 (1992)... 8 Offutt Housing Co. v. County of Sarpy, 351 U.S. 253 (1956)...14 Parker v. Hertz Corp., 544 So. 2d 249 (Fla. 2d DCA 1989)... 13, 14 Robbins v. Welbaum, 664 So. 2d 1 (Fla. 3d DCA 1995)...14 State ex rel. Atlantic Coast Line Ry. Co. v. State Board of Equalizers, 84 Fla. 592 So. 681 (1922)... 3 The Crossings at Fleming Island Comty. Dev. Dist. v. Echeverri, 991 So. 2d 793 (Fla. 2008)... 3 iv

5 Ward v. Brown, 919 So. 2d 462 (Fla. 1st DCA 2005), rev. den., 923 So. 2d 1165 (Fla. 2006)... 12, 13, 15 Williams v. Jones, 326 So. 2d 425 (Fla. 1975)... passim Williams v. Vermont, 472 U.S. 14 (1985)... 8 Legislative Enactments Chapter , Laws of Florida... 5 Statutes Fla. Stat (3)... 2 Fla. Stat (2)(b)... 6, 12, 14 Fla. Stat (7)...6, 9 Fla. Stat (1)(d)(2005)...5, 6 Fla. Stat v

6 SUMMARY OF ARGUMENT Although Petitioners disagree with the trial court s conclusion that they equitably own the leasehold improvements at issue in this case, the Final Summary Judgment (R ) (hereinafter Judgment ) appropriately dealt with a number of the contentions Respondents argued there and have repeated here. Neither of the Respondents has standing to challenge the constitutionality of the two statutes which direct the method of taxing leaseholds of County-owned property on Pensacola Beach. 1 In any event, the statutes are not unconstitutional. Cases decided by this Court in the 1970s, which dealt with Santa Rosa Island leases, did not address equitable ownership of improvements or the statutes at issue here, which were adopted in The County s joinder in condominium declarations does not constitute a conveyance of ownership to the unit lessees, so as to render the land or the improvements subject to ad valorem taxation. 3 The various cases cited by Respondents on the equitable ownership issue are distinguishable on the facts from the present case. Since none of the leases is perpetual and there are no options to purchase for nominal value, the leases do not convey any ownership interest at all. 1 See discussion in the Judgment at (R ). 2 See discussion in the Judgment at (R , and ). 3 See discussion in the Judgment at (R ). 1

7 ARGUMENT I. RESPONDENTS CONSTITUTIONALITY CHALLENGE IS WITHOUT MERIT Respondents begin their Answer Brief argument by asserting how Petitioners leasehold property should be taxed, rather than how it is taxed. There are numerous references in that brief to this Court s decisions on constitutionality challenges to different statutes enacted in the 1970s, but none of those decisions deals with the statutes at issue here which were adopted in A. Respondents Lack Standing to Raise Challenges to the Constitutionality of Taxing Statutes. The trial court held that Respondents lack standing to raise constitutional challenges to these statutes (R ), and the District Court did not disturb that ruling Ariola, LLC v. Jones, 71 So. 3d 892, 893 (Fla. 1st DCA 2011). Respondents argue that the Tax Collector has the right to challenge the constitutionality of taxing statutes because her official duties do not involve granting or denying tax exemptions. 4 This argument, taken to its logical conclusion in this case, is that the Property Appraiser is free to ignore the statutes by putting leasehold property on the tax roll, and the Tax Collector simply sends out bills pursuant to the Property Appraiser s decisions, thereby implementing the Property 4 So long as collection of the tax is an issue, the local tax collector is required to be a party to a taxpayer s action challenging the assessment (3), Fla. Stat. 2

8 appraiser s interpretation of the statutes. 5 But this Court has held that the Property Appraiser is not free to declare taxing statutes unconstitutional and has no standing to challenge them in the courts. The Crossings at Fleming Island Community Dev. Dist. v. Echeverri, 991 So. 2d 793, 803 (Fla. 2008). The Crossings decision was based on the ruling in State ex rel. Atlantic Coast Line Railway Co. v. State Board of Equalizers, 84 Fla. 592, 94 So. 681 (1922), that a public official may not defend his nonperformance of a statutory duty by challenging the constitutionality of the statute. The Crossings, 991 So. 2d at 797. It is without question that tax collectors, like other county officials are constitutional officers whose duties are imposed by, and their powers derived from, statutes. Escambia County v. Bell, 717 So. 2d 85, 88 (Fla. 1st DCA 1988) (citations omitted). Respondents argument is thus contrary to the public policy relied on by The Crossings: that a taxing official cannot be allowed to nullify a statute. 991 So. 2d at 798. In The Crossings, this Court also noted that Atlantic Coast Line found that to allow a public official to refuse to obey a law would be the doctrine of nullification, pure and simple. The Crossings, 991 So. 2d at Janet Holley, Tax Collector, testified that she was not involved in determining whether the Pensacola Beach improvements should be included on the tax rolls (R ) or whether the statutes were constitutional. (R ). She sent out bills which included taxes on improvements because they were on the tax roll (R 407), prepared by the Property Appraiser (R ). 3

9 as follows: The trial court addressed Respondents alternative public funds argument The disbursement of public funds exception recognized in Barr v. Watts, 70 So. 2d at , 6 is not applicable here. The statutes challenged by the Defendants do not require any public official to disburse public funds and the challenges to the statutes constitutionality are not for the urgent purpose of protecting any public funds that would otherwise be disbursed causing immediate harm to a public body. Id., at 351. This exception has no applicability to the facts in this case. (R 6256). 7 The Tax Collector has no standing to mount a constitutional challenge to the statutes. B. The Legislature Acted Within its Broad Discretion to Adopt this Taxing Plan for Private Leases of Government Property Petitioners do not concede that Respondents have the right to challenge the taxing statutes, but Petitioners fully support the Legislature s decision, as this Court has done in its cases. The analysis should focus on the viability of the statutes, as they relate to property owned by a county, not by a city or some other municipal agency. 8 6 Barr v. Watts, 70 So. 2d 347 (Fla. 1953). 7 Not only is there no disbursement of public funds required by these statutes, the statutes as written actually prohibit the Tax Collector from collecting real property taxes on leasehold land and improvements owned by the county. 8 County-owned property is immune from ad valorem taxation unless the Florida Legislature waives that immunity, but city property is taxable unless used for a proper public purpose. Canaveral Port Authority v. Dept. of Revenue, 690 So. 2d 4

10 The statutes here represent a comprehensive plan for taxing property leased by the government to private persons and entities. These statutes, which significantly altered Florida s approach to this subject, were enacted as Ch , Laws of Florida, five years after this Court s decision in Williams v. Jones, 326 So. 2d 425 (Fla. 1975) and two years after Archer v. Marshall, 355 So. 2d 781 (Fla. 1978). The Legislature is presumed to know the judicial construction of a law when enacting a new version of that law. City of Hollywood v. Lombardi, 770 So. 2d 1196, 1202 (Fla. 2000). Fla. Stat (1)(d)(2005) defines certain property as intangible personal property, including all leasehold or other possessory interests in real property owned by any political subdivision of the state, which are undeveloped or predominately used for residential or commercial purposes and upon which rental payments are due. In the Williams case, it was pointed out that the Legislature had not defined the interests of such lessees as either tangible or intangible personal property. Williams, 326 So. 2d at 431. Chapter resolved the matter by stating clearly the leaseholds (or other possessory interests) are intangible, if used as indicated and rent is paid. All the leaseholds in the present case fall within that definition. 1226, 1228 (Fla. 1996). See also, Markham v. Broward County, 825 So. 2d 472, (Fla. 4th DCA 2002). 5

11 Section (2)(b) declares that the leaseholds or other interests defined in Section (1)(d) are taxed only at the intangible personal property rate. Three exclusions are evident. Ad valorem tax can be levied on the leasehold if the lessee pays no rent, or the initial lease term is 100 years or more, exclusive of renewals (7). The third exclusion is that, if lessee owns the improvements, those improvements are subject to local ad valorem tax. C. The Taxing Statutes Do Not Violate Equal Protection Requirements. Respondents quote dictum from this Court s decision in Williams that levying intangible tax on the leaseholds on Santa Rosa Island would undoubtedly violate the equal protection provisions of the Florida and U.S. Constitutions. 326 So. 2d at 432. Of course, there was no statute levying intangible tax at that time; the tax being considered in Williams was county ad valorem tax. The statement in question is dictum, not a holding. The comprehensive plan at issue here treats two groups of lessees as equivalent to property owners: those who pay no rent, and those whose initial lease term is 100 years or more. For any such lessees, no one can claim discrimination -- they are treated as if they own the property, for tax purposes. No Petitioner is in either of these categories. The statutory plan also deals with personal property, buildings, or other real property improvements owned by the lessee, taxing those items the same as any 6

12 other owner of such property. It is this provision that is the focal point for the present litigation. If petitioners do not own the improvements, such items must be taxed just as the leasehold itself, as intangible personal property. Respondents rely on Williams to assert that this tax unconstitutionally favors Petitioners over other residents who own the land on which their improvements are affixed. Careful analysis debunks that claim. There are significant distinctions between ownership of fee simple title and possession of a leasehold (or other possessory interest), and these reasonably justify a different tax rate, notwithstanding the comment in Williams. These leaseholders, unlike fee simple owners: (1) pay rent, (2) have possession for a limited time, (3) have no enforceable right to renew their leases [see discussion infra], (4) must build improvements and replace them if destroyed, (5) must insure the property, (6) must deliver the premises in reasonable condition at the end of the lease, and (7) may not remove any permanent improvements. It also should be noted that some of the leases here allow the Santa Rosa Island Authority to audit the lessees business records because the rent varies with the lessee s income from the property -- but a fee simple owner has no such oversight. Leases covering more than 600 of the parcels in this case have no renewal provisions at all (See, Judgment, R 6218), so their use for a limited time (unlike a fee simple owner) is well documented. 7

13 The Equal Protection Clause does not forbid classification. It simply keeps government decisionmakers from treating differently people who are in all relevant respects, alike. Nordlinger v. Hahn, 505 U.S. 1, 10 (1992). In general, the Equal Protection Clause is satisfied so long as there is a plausible reason for the classification. Id. [I]n structuring internal taxation schemes the States have large leeway in making classifications and drawing lines which in their judgment produce reasonable systems of taxation. Williams v. Vermont, 472 U.S. 14, 22 (1985). The statutes here ensure that ad valorem taxes are levied where actual ownership exists or is reasonably deemed by the Legislature to exist. But the Legislature also made a classification that is both reasonable and respectful of local government when it directed that -- where the leases are for an initial term less than 100 years, rent is paid, and lessee does not own the improvements -- taxation will be through intangible tax. This upholds the local government decision to set rental income at a level that it deems fair under the circumstances, without adding the additional burden of ad valorem taxation. All similarly situated lessees are treated equally. The Equal Protection argument must fail. II. NEITHER ARCHER NOR WILLIAMS ADDRESSED THE ISSUE OF EQUITABLE OWNERSHIP Respondents argue that both Archer and Williams declare that those who 8

14 hold 99-year leases on Santa Rosa Island are the owners of the property. 9 The obiter dictum comments in each case must be viewed in the context in which they were made; and careful attention must be given to what the Court did not say in each opinion. A. The Context Explains Why the Comments Were Made. In the Williams case, this Court was asked to determine whether the Legislature had overstepped its authority when it adopted a statute that directed that private leases of government property with an initial term of 99 years or more would be taxed as if the leaseholder owned it in fee simple. 326 So. 2d at 426. This Court concluded that, based upon the length of the leases, 10 treating a lessee like an owner, for tax purposes, was not an unreasonable classification by the Legislature. Id. In Archer, the issue was whether Escambia County had been unjustly enriched by the leaseholders constructing improvements, the title to which, by the terms set out in every lease, vests forthwith in the County. Justice Hatchett s opinion for the Court concluded -- without evidentiary support -- that the improvements would be expected to be destroyed before the end of the lease; it is 9 In Williams, the 99-year leases are described as tantamount to ownership, 326 So. 2d at 436; and in Archer, the wording is equivalent of fee simple ownership, 355 So. 2d at In 1980, the Legislature moved the cut-off line one year further out -- to 100 years. Section (7), Fla. Stat. 9

15 in that context the statement is made that the leaseholders have the equivalent of fee simple ownership. Archer, 355 So. 2d at There is no issue in the present case about unjust enrichment of the County, or a statute requiring ad valorem taxation of Petitioners leaseholds, as was the situation in Archer. Thus, the Court s comment in Williams (and later in Archer) about the length of the leases cannot be taken as an announcement that the Santa Rosa Island leases from 1975 forward must be deemed to grant ownership to the lessees for tax purposes, forever prohibiting the Legislature from adopting a different approach to taxation of these leaseholds. B. The Context Did Not Involve an If Clause in the Statute The statutes at issue in Williams and Archer authorized the assessment of ad valorem taxes on the leaseholds, based upon the value of the land and the improvements. The present statute taxes the leasehold only as intangible personal property, but also declares that, if a lessee owns personal property, buildings or other real property improvements, such are not exempt from ad valorem taxation. In neither Williams nor Archer is there any analysis of the specific terms of 11 In the present case, an affidavit was submitted showing several buildings in Escambia County over 99 years of age. On the basis of that sworn testimony, the trial court said: The record before this Court contains proof that improvements made upon Plaintiffs properties may not be destroyed prior to the end of the leases. (R 6247). 10

16 the lease agreements to determine who has the ultimate benefit of ownership of the improvements. If, during the initial lease term, the structures are damaged or deteriorated, lessee must repair them; they may not be removed. The County ultimately will have possession and be able to lease the property, with its improvements, again. The trial court looked at this issue carefully and concluded that the leases emphasize that the ultimate benefit of ownership remains in the County. (R 6234). If, before the end of the initial term, the lessee expresses the desire to renew the lease, the County will be able to set whatever rental amount it chooses, since most of the leases say that renewal is on like covenants, provisions and conditions as are in this lease contained. See, Dennis Tackett affidavit (R ). Since none of the renewal options specifies either the amount of the rent to be paid during the renewal term or a definite procedure to establish the amount of such rent, the option is too indefinite to be legally binding and enforceable. LaFountain v. Kelly, 732 So. 2d 503, 505 (Fla. 1st DCA 1999); Edgewater Enterprises, Inc. v. Holler, 426 So. 2d 980, 983 Fla. 5th DCA 1982). Note, too, that over 600 leases have no renewal provision at all (R 5759; 6218). In the present case, if a lessee seeks to renew the lease, the rental amount set by the County (through its agency, Santa Rosa Island Authority), could be so onerous that the lessee would be unable to renew; so this is nothing like the 11

17 automatic renewals deemed to result in perpetual leases in Ward v. Brown, 919 So. 2d 462 (Fla. 1st DCA 2005), rev. den., 923 So. 2d 1165 (Fla. 2006). III. CREATION OF A CONDOMINIUM ON A LEASEHOLD DOES NOT TRANSFER OWNERSHIP OF THE UNIT S IMPROVEMENTS TO THE LESSEE Respondents assert in various places in the Answer Brief that creation of condominiums on Pensacola Beach has transferred ownership interests to the lessees of condominium units, thus making these improvements subject to ad valorem taxes. This argument was rejected by the trial judge, who reviewed the condominium documents and concluded that each unit owner s interest is in a lease with Santa Rosa Island Authority (R 6242). The trial court cited to Nikolits v. Runway 5-23 Hanger Condominium Association, Inc., 847 So. 2d 1054, 1055 (Fla. 4th DCA 2003), where the Fourth District dealt with the same argument and concluded that Section does not address who owns the land and improvements (R 6242). The condominium declaration in Nikolits stated that each member had a leasehold condominium only; the Court held that the lessor, the State of Florida, owned the property. 847 So. 2d at Petitioners urge this Court to apply the same analysis to dispense with Respondents condominium ownership argument here. Chapter 718 does not override the leases to grant ownership in the lessees that can be subjected to ad valorem tax under Section (2)(b), Fla. Stat. 12

18 IV. CASES CITED BY RESPONDENTS DO NOT ADDRESS FACTS LIKE THOSE PRESENT HERE The District Court certified the question whether Petitioners could be equitable owners of leasehold improvements in the absence of either a perpetual lease (e.g., Ward) or an option to purchase for nominal value (e.g., Leon County Educ. Facilities Auth. v. Hartsfield, 698 So. 2d 526 (Fla. 1997)). As demonstrated in Petitioners Initial Brief, a number of other cases are consistent with Leon County. 12 In the Answer Brief, Respondents have cited various cases, arguing that equitable ownership can be established in other ways. Every case cited is easily distinguished. In Parker v. Hertz Corp., 544 So. 2d 249 (Fla. 2d DCA 1989), title to the building in question was in Hertz the entire time, and that court distinguished Bell v. Bryan, 505 So. 2d 690 (Fla. 1st DCA), rev. den., 513 So. 2d 1060 (Fla. 1987), because in Bell, title to the improvements on Pensacola Beach remained in the county. Two other features are vastly different from the instant case: (1) if the lessor (a county agency) prematurely terminated the lease, a payment was due to 12 For example: see, Hialeah, Inc. v. Dade County, 480 So. 2d 998 (Fla. 3d DCA), rev. den., 500 So. 2d 544 (Fla. 1986); First Union National Bank v. Ford, 636 So. 2d 523 (Fla. 5th DCA 1993); Barnett v. Dept. of Management Services, 931 So. 2d 121 (Fla. 1st DCA 2006), rev. den., 953 So. 2d 461 (Fla. 2007), and Metropolitan Dade County v. Brothers of the Good Shepherd, Inc., 714 So. 2d 573 (Fla. 3d DCA 1998) (Charity with no option to purchase structure subject to 99-year lease held not to be equitable owner). 13

19 Hertz, representing the undepreciated balance of the building s cost; and (2) Hertz paid no rent. Note that the absence of rent required that the property be subjected to ad valorem taxes, and equitable ownership issues are irrelevant. Section (2)(b), Fla. Stat. Bancroft Inv. Corp. v. City of Jacksonville, 27 So. 2d 162 (Fla. 1946) involved an installment sales contract, not a lease; and not surprisingly, the purchaser, which was given possession (subject to receiving title, once the purchase price had been fully paid) was held to be the equitable owner of the property. Bancroft supports Petitioners arguments, not Respondents. Robbins v. Welbaum, 664 So. 2d 1 (Fla. 3d DCA 1995) involved no lease, but a trust instrument. There is no trust instrument at issue in this case and Welbaum provides no authority to support the decision below. Offutt Housing Co. v. County of Sarpy, 351 U.S. 253 (1956) did not construe Florida law and Gay v. Jemison, 52 So. 2d 137 (Fla. 1951) involved sales tax for construction materials, not ad valorem taxation. The lease in Marathon Air Services, Inc., v. Higgs, 575 So. 2d 1340 (Fla. 3d DCA 1991), as in Parker, provided that title to the building was held by the lessee, the private entity which constructed it. The lease was on the land only, so the corporation was required to pay the ad valorem taxes levied on the building it owned. 14

20 This brings us back to the cases of Bell and Ward. In Bell, as in the present case, ownership of the permanent improvements was clearly vested in the county and there was no justification for declaring that the lessees were owners. We can find no basis in law or reason for determining that the improvements on the real property are not as much a part of the leasehold as the real property itself. Bell, 505 So. 2d at In stark contrast, the leases of the seven plaintiffs in Ward provided that the improvements are required to be conveyed to Santa Rosa County at the termination of the lease. 919 So. 2d at 464, n. 1. Because the Ward court concluded that the leases there were perpetual, and there is no end to the lease, lessees were deemed to be equitable owners of these improvements. Bell considered the equitable ownership argument (See, 1108 Ariola, 71 So. 3d at 897, 898), and rejected it. This Court should follow reason and the law, approve Bell, and distinguish Ward as inapplicable here. CONCLUSION Because Petitioners have no equitable ownership and are required to pay intangible taxes, Petitioners urge the Court to quash the decision below, to direct the entry of a permanent injunction against assessing and collecting ad valorem taxes on the leasehold improvements, and further to direct refunds of all taxes and interest paid by Petitioners to Respondent Holley for parcels on Pensacola Beach, commencing with tax year 2004 and thereafter. 15

21 CERTIFICATE OF SERVICE I hereby certify that true and correct copies of this brief have been furnished by electronic mail and by U. S. Mail on this 16th day of July, 2012 to: Elliott Messer Thomas M. Findley Messer, Caparello & Self, P.A Centennial Place Tallahassee, Florida emesser@lawfla.com tfindley@lawfla.com Katie L. Dearing Robert B. George Liles, Gavin, Costantino, George & Dearing, P.A. 25 Water Street, Suite 1500 Jacksonville, Florida kdearing@lilesgavin.com _/s/ Danny L. Kepner DANNY L. KEPNER Florida Bar No: SHELL, FLEMING, DAVIS & MENGE Post Office Box 1831 Pensacola, Florida Telephone: (850) Facsimile: (850) dkepner@shellfleming.com TALBOT D ALEMBERTE Florida Bar No.: PATSY PALMER Florida Bar No.: D ALEMBERTE & PALMER, PLLC Post Office Box Tallahassee, Florida Telephone: (850) dalemberte@dalemberteandpalmer.com palmer@dalemberteandpalmer.com Counsel for Petitioners 16

22 CERTIFICATE OF COMPLIANCE I hereby certify that this brief is prepared in Times New Roman, 14-point font, pursuant to Fla. R. App. P (a)(c). /s/ Danny L. Kepner DANNY L. KEPNER Florida Bar No: SHELL, FLEMING, DAVIS & MENGE Post Office Box 1831 Pensacola, Florida Telephone: (850) Facsimile: (850) dkepner@shellfleming.com 17