IN THE SUPREME COURT OF FLORIDA. Case Number: SC CITY OF PALM BAY, Petitioner, WELLS FARGO BANK, N.A., Respondent.

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1 IN THE SUPREME COURT OF FLORIDA Case Number: SC CITY OF PALM BAY, Petitioner, v. WELLS FARGO BANK, N.A., Respondent. On Discretionary Review from the Fifth District Court of Appeal Fifth DCA Case No.: 5D BRIEF OF CITY OF CASSELBERRY, FLORIDA, CITY OF PALM COAST, FLORIDA, AND CITY OF WINTER PARK, FLORIDA, AS AMICI CURIAE ON BEHALF OF PETITIONER, CITY OF PALM BAY ERIN J. O LEARY Florida Bar No CATHERINE D. REISCHMANN City Attorney for City of Casselberry Florida Bar No WILLIAM REISCHMANN City Attorney for City of Palm Coast Florida Bar No USHER L. BROWN City Attorney for City of Winter Park Florida Bar No BROWN, GARGANESE, WEISS & D AGRESTA, P.A. 111 North Orange Ave., Suite 2000 P.O. Box 2873 Orlando, Florida Ph Fax

2 TABLE OF CONTENTS TABLE OF CITATIONS... iii STATEMENT OF THE IDENTITY OF AMICI CURIAE AND THEIR INTEREST IN THE CASE... 1 SUMMARY OF THE ARGUMENT... 3 ARGUMENT... 4 I. Municipalities in Florida possess home rule powers that enable them to exercise any power for municipal purposes, except when expressly prohibited by law. Those broad powers include the power to adopt superpriority code enforcement lien ordinances II. Section , Florida Statutes, permits municipalities to recover from code violators the costs incurred in bringing code enforcement violation into compliance. Without superpriority liens, municipalities will be unable to recover these statutorily authorized costs from many violators. The costs of bringing these properties into compliance will, instead, be absorbed by the municipal taxpayers, thereby causing a result that frustrates the provisions of section III. Without superpriority liens, mortgagors will be unfairly advantaged by municipalities actions in bringing foreclosed homes into compliance with city codes. The mortgagors will reap the benefits of the city s actions in repairing the property and preserving the mortgagor s collateral - but will not be accountable for the costs of said repairs. That result will negatively impact municipalities and their citizens CONCLUSION CERTIFICATE OF SERVICE CERTIFICATE OF COMPLIANCE ii

3 TABLE OF CITATIONS Cases City of Hollywood v. Mulligan, 934 So. 2d 1238 (Fla. 2006)... 5 Tallahassee Mem l Reg. Med. Ctr. v. Tallahassee Med. Ctr., 681 So. 2d 826 (Fla. 1 st DCA 1996)... 5 Shetler v. State, 681 So. 2d 730 (Fla. 2d DCA 2003)... 6 Other Authorities Art. VIII, 2(b), Fla. Const Art. VIII, 2(c), Fla. Const Casselberry, Fla., Code Ch. 2, Art. IV, Div. 2, 2-153(e) (Ord. No )... 1 Palm Bay, Fla., Code Title V, Ch. 52, (Ord. No )...passim Palm Coast, Fla., Code Ch. 2, Art. V, Div. 1, Subdiv. 1, 2-211(e) (Ord. No )... 1 Winter Park, Fla., Code Ch. 2, Art. III, Div. 4, 2-108(e) (Ord. No )... 1 Ch. 166, Fla. Stat.... 4, 5, , Fla. Stat , Fla. Stat , Fla. Stat , Fla. Stat (4), Fla. Stat iii

4 162.08, Fla. Stat , Fla. Stat.... 3, 6, 7, 8, (1), Fla. Stat (2)(a), Fla. Stat (3), Fla. Stat , Fla. Stat , Fla. Stat.... 4, , Fla. Stat.... 2, 6, 11 Fla. R. App. P (a)(2) iv

5 STATEMENT OF THE IDENTITY OF THE AMICI CURIAE AND THEIR INTEREST IN THE CASE The City of Casselberry, Florida, is a municipal corporation located in Central Florida, ten miles north of downtown Orlando, in the southernmost portion of Seminole County. The City of Palm Coast, Florida, is a municipal corporation located in Northeast Florida, equidistant from Jacksonville and Orlando, in the eastern portion of Flagler County. The City of Winter Park, Florida, is a municipal corporation located in Central Florida, just north of Orlando, in Orange County. Casselberry, Palm Coast, and Winter Park are all located within the jurisdictional boundaries of the Fifth District Court of Appeal, and therefore, are bound by decisions rendered by the Fifth District Court of Appeal. Casselberry, Palm Coast, and Winter Park each have very active code enforcement programs, and in furtherance of those programs, have adopted and codified ordinances granting liens imposed by their code enforcement boards superpriority over all other liens. See Casselberry, Fla., Code Ch. 2, Art. IV, Div. 2, 2-153(e) (Ord. No ); Palm Coast, Fla., Code Ch. 2, Art. V, Div. 1, Subdiv. 1, 2-211(e) (Ord. No ); Winter Park, Fla., Code Ch. 2, Art. III, Div. 4, 2-108(e) (Ord. No ). The cities code provisions are substantially similar to Palm Bay Ordinance 97-07, which is at issue in this case, 1

6 and which the Fifth District Court declared to be in conflict with section , Florida Statutes. Compare id. with Palm Bay, Fla., Code Title V, Ch. 52, (Ord. No ). In reliance upon their code provisions, Casselberry, Palm Coast, and Winter Park have filed liens against real properties to recover the costs they expended in repairing those properties in order to bring them into compliance with their codes. Additionally, the Cities have asserted the superpriority of their code enforcement liens in foreclosure proceedings. The Fifth District Court s decision in this case adversely impacts Casselberry, Palm Coast, and Winter Park because it calls into question the validity of their ordinances and the actions they each have taken in reliance upon those ordinances. Accordingly, the Cities of Casselberry, Palm Coast, and Winter Park respectfully request that they be heard in this case as Amici Curiae in support of the City of Palm Bay. 2

7 SUMMARY OF THE ARGUMENT Municipal superpriority liens are a vital tool in municipal code enforcement efforts. They serve to maintain the health, safety, and welfare of citizens by ensuring that properties remain in compliance with the city code. Municipalities are permitted to adopt these superpriority liens under the broad home rule powers granted to them under the Florida Constitution and Florida Statutes. Under section , Florida Statutes, municipalities may recover from code violators the costs they expend bringing properties into compliance with their codes. Superpriority liens assist cities in recovering these costs because without the superpriority liens, cities liens would likely not be paid. As a result, the citizens of the municipalities would be forced to fund repairs to properties owned by other individuals. Such a result is in derogation of section Furthermore, without superpriority liens, mortgagors will be able to reap the benefits of cities repairing foreclosed properties i.e., their collateral at the city s expense. If cities cannot recover these funds, they may be forced to curtail the number of properties they are able to repair. If fewer properties are repaired, negative effects upon the surrounding neighborhood could result, which in turn could cause more foreclosures. In sum, if cities are unable to recover the costs of repairs, there could in turn be a snowball effect of negative effects upon the health, safety, and welfare of the municipality. 3

8 ARGUMENT I. Municipalities in Florida possess home rule powers that enable them to exercise any power for municipal purposes, except when expressly prohibited by law. These broad powers include the power to adopt superpriority code enforcement lien ordinances. Under Article VIII, section 2(b) of the Florida Constitution, municipalities possess governmental, corporate and proprietary powers [that] enable them to conduct municipal government, perform municipal functions and render municipal services. Additionally, municipalities may exercise any power for municipal purposes except as otherwise provided by law. Art. VIII, 2(b), Fla. Const. These powers, which are commonly referred to as municipal home rule powers, are codified as chapter 166, Florida Statutes (the Municipal Home Rules Powers Act or MHRPA ). Section of the MHRPA provides in pertinent part: (1) As provided in s. 2(b), Art. VIII of the State Constitution, municipalities shall have the governmental, corporate, and proprietary powers to enable them to conduct municipal government, perform municipal functions, and render municipal services, and may exercise any power for municipal purposes, except when expressly prohibited by law. (2) Municipal purpose means any activity or power which may be exercised by the state or its political subdivisions. (3) The Legislature recognizes that pursuant to the grant of power set forth in s. 2(b), Art. VIII of the State Constitution, the legislative body of each municipality has the power to enact legislation concerning any subject matter upon which the state Legislature may act, except: (a) The subjects of annexation, merger, and exercise of extraterritorial power, which require general or special law pursuant to s. 2(c), Art. VIII of the State Constitution; 4

9 (b) Any subject expressly prohibited by the constitution; (c) Any subject expressly preempted to state or county government by the constitution or by general law; and (d) Any subject preempted to a county pursuant to a county charter adopted under the authority of ss. 1(g), 3, and 6(e), Art. VIII of the State Constitution. The provisions of this section shall be so construed as to secure for municipalities the broad exercise of home rule powers granted by the constitution. It is the further intent of the Legislature to extend to municipalities the exercise of powers for municipal governmental, corporate, or proprietary purposes not expressly prohibited by the constitution, general or special law, or county charter and to remove any limitations, judicially imposed or otherwise, on the exercise of home rule powers other than those so expressly prohibited , Fla. Stat. (emphasis added). Under these home rule powers, a municipality may legislate concurrently with the Legislature on any subject as long as the subject has not been expressly preempted to the State and is not in conflict with state law. See City of Hollywood v. Mulligan, 934 So. 2d 1238, 1243 (Fla. 2006) (citations omitted); Tallahassee Mem l Reg. Med. Ctr. v. Tallahassee Med. Ctr., 681 So. 2d 826 (Fla. 1 st DCA 1996). Preemption occurs when the legislature takes a topic or field in which local government might otherwise establish appropriate local laws, and reserves that topic for regulation exclusively by the legislature. Mulligan, 934 So. 2d at 1243 (citation omitted). Express preemption cannot be made by implication nor by inference. Id. at 1243 (citations omitted). A conflict between local legislation and state legislation occurs if the local action cannot coexist with the state legislation 5

10 without frustrating its purpose. See Shetler v. State, 681 So. 2d (Fla. 2d DCA 2003). The Cities of Casselberry, Palm Coast, and Winter Park ( Amici Cities ) are not here to reargue the points already made by Palm Bay in its Brief on the Merits. As the City of Palm Bay demonstrated therein, Palm Bay Ordinance is not preempted by either section , Florida Statutes or Chapter 162, Florida Statutes. Additionally, as Palm Bay further demonstrated, Ordinance does not conflict with section The Amici Cities are instead here to assert that section , Florida Statutes, permits municipalities to recover the costs of repair incurred in bringing a code enforcement violation into compliance with the city code, and that municipalities superpriority liens enable them to recover those statutorily authorized costs. The Amici Cities will also alert this Court to the potential effect if the certified question is answered in the negative and the Fifth District Court s decision is permitted to stand. 6

11 II. Section , Florida Statutes, permits municipalities to recover from code violators the costs incurred in bringing code enforcement violations into compliance. Without superpriority liens, municipalities will be unable to recover these statutorily authorized costs from many violators. The costs of bringing these properties into compliance will, instead, be absorbed by the municipal taxpayers, thereby causing a result that frustrates the provisions of section The Local Government Code Enforcement Act ( Code Enforcement Act ), which is codified as sections through , Florida Statutes, was intended to promote, protect, and improve the health, safety, and welfare of the citizens of the counties and municipalities of this state by authorizing the creation of administrative boards with authority to impose administrative fines and other noncriminal penalties to provide an equitable, expeditious, effective, and inexpensive method of enforcing any codes and ordinances in force in counties and municipalities, where a pending or repeated violation continues to exist , Fla. Stat. Under the Code Enforcement Act, municipalities have the option to create or abolish code enforcement boards; additionally, they have the option to adopt a code enforcement procedure that uses code enforcement boards, magistrates, or both to hold hearings and assess fines against violators of their respective municipal codes , Fla. Stat. The Code Enforcement Act specifies the procedures to be followed when a violation of a municipal code is found to exist, and enumerates the powers possessed by code enforcement boards and code enforcement magistrates , Fla. Stat. Importantly, the Code Enforcement Act also provides that municipalities are permitted to recover 7

12 the costs they incur in bringing properties into compliance , Fla. Stat. Section (1), Florida Statutes provides: [I]f the violation is a violation described in s (4), the enforcement board shall notify the local governing body, which may make all reasonable repairs which are required to bring the property into compliance and charge the violator with the reasonable cost of the repairs along with the fine imposed pursuant to this section (1), Fla. Stat.; see also (2)(a), Fla. Stat. ( A fine imposed pursuant to this section... may include all costs of repairs pursuant to subsection (1). ). Under section (3), Florida Statutes, fines and costs of repair are reduced to liens against the land on which the violation exists and are enforceable in the same manner as a court judgment. Casselberry, Palm Coast, and Winter Park adopted their superpriority liens in an attempt to give teeth to their code enforcement efforts and in an effort to ensure that they recover the costs they are forced to incur repairing noncompliant properties. Although precise statistics are not available, it is safe to say that many homes located within the Amici Cities are financed and impaired by mortgage liens. When those homes fall into a state of disrepair, the city must, for the health, safety, and welfare of its citizens, take action to bring those properties back into compliance. The city s actions in repairing the noncompliant properties thus also obviously procures a benefit upon the homeowners or mortgagors if the home is in foreclosure. 8

13 Under the Fifth District Court s holding, the city may never recover those costs of repair. If the home is in a state of disrepair and the homeowner has failed to take any action in response to the city s code enforcement proceedings to correct the disrepair, the homeowner will most likely disregard any lien imposed upon the property. If the home thereafter moves into foreclosure and if the mortgage was recorded before the code enforcement lien which would most likely be the case unless the home was recently refinanced it is likely that the city would never recover its costs of repair. This is so because even though its collateral was preserved by the city s actions in bringing the property into compliance, the mortgagor would not be required to satisfy the lien. Mortgagors would have no incentive to repair the property because they know the cities will do it and they (the mortgagors) will not have to pay the costs of the repairs. The costs of the repairs, therefore, would be thrust upon the city s taxpayers, which is contrary to section III. Without superpriority liens, mortgagors will be unfairly advantaged by municipalities actions in bringing foreclosed homes into compliance with city codes. The mortgagors will reap the benefits of the city s actions in repairing the property and preserving the mortgagor s collateral - but will not be accountable for the costs of said repairs. That result will negatively impact municipalities and their citizens. As stated above, code enforcement actions are intended to benefit the health, safety, and welfare of city as a whole. They are not intended to benefit individual 9

14 homeowners or mortgagors, and they are not intended to make all citizens of the municipality responsible for the cost of repairing another individual s property. The only way for code enforcement actions to serve the intended purpose of causing the property to be brought into compliance is if there is a consequence for failing to repair any violations. There is no such consequence if the city s code enforcement lien does not have superpriority status. As stated above, mortgagors would have no incentive to ever try to repair property in foreclosure if they know the city will eventually do it and will be forced to bear the expense of it. Additionally, cities facing fiscal shortfalls may be forced to scale back their repair efforts if they are not able to recoup the costs of repairs they are forced to incur. That in turn could cause an increase in the number of noncompliant properties, which could lead to the degradation of neighborhoods. That effect could in turn lead to a decrease in property values, which could cause others to walk away from homes if they are trying to sell them, but are unable to sell them for a price that is adequate to cover the mortgage on the property. These possible effects would obviously negatively impact the health, safety, and welfare of the citizens. Moreover, these potential effects establish this truly is a local issue that is properly addressed by municipalities adoption of superpriority ordinances under their home rule powers. 10

15 CONCLUSION Amici curiae, the cities of Casselberry, Palm Coast, and Winter Park, respectfully request that this Court reverse the Fifth District Court of Appeal s decision and rule that the provisions of Palm Bay Ordinance do not conflict with section , Florida Statutes. Additionally, the Amici Cities request that this Court answer the certified question in the affirmative. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing was furnished via Federal Express this day of August, 2011, to: Matthew J. Conigliaro, Esquire, Carlton Fields, P.A., Attorneys for Respondent, P.O. Box 2861, Saint Petersburg, Florida ; Steven L. Brannock, Esquire, Brannock & Humphries, Attorneys for Petitioner, 100 S. Ashley Dr., Ste. 1130, Tampa, Florida ; Andrew Patrick Lannon, Esquire, Acting City Attorney, City of Palm Bay, 5240 Babcock St. NE, Ste. 201, Palm Bay, Florida ; Scott E. Rudacille, Esquire, Kirk Pinkerton, Attorneys for Amicus Curiae City of Palmetto, th Ave. W, Ste. 102, Bradenton, Florida ; and Edward Guedes, Esquire, Weiss Serota Helfman, Attorneys for Florida 11

16 League of Cities, 2525 Ponce De Leon Blvd., Ste. 700, Coral Gables, Florida ERIN J. O LEARY Florida Bar No CATHERINE D. REISCHMANN City Attorney for City of Casselberry Florida Bar No WILLIAM REISCHMANN City Attorney for City of Palm Coast Florida Bar No USHER L. BROWN City Attorney for City of Winter Park Florida Bar No BROWN, GARGANESE, WEISS & D AGRESTA, P.A. 111 North Orange Ave., Suite 2000 P.O. Box 2873 Orlando, Florida Ph Fax CERTIFICATE OF COMPLIANCE I HEREBY CERTIFY that this brief was prepared using Times New Roman 14-point font and that this brief complies with all requirements of Florida Rule of Appellate Procedure 9.210(a)(2). ERIN J. O LEARY Florida Bar No

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