IN THE SUPREME COURT OF FLORIDA ERVIN HIGGS, as Property Appraiser of Monroe County, Florida, CASE NO. SC04-1808 Petitioner, Lower Tribunals: Third District Court of Appeal v. Case No.: 3D03-1508 ISLAMORADA, VILLAGE OF ISLANDS Twentieth Judicial Circuit Court Case No. CAP-02-06 Respondent. / ON DISCRETIONARY REVIEW FROM THE THIRD DISTRICT COURT OF APPEAL MIAMI, FLORIDA PETITIONER S AMENDED BRIEF ON JURISDICTION SHERRI L. JOHNSON FBN: 0134775 JOHN C. DENT, JR. FBN: 0099242 DENT & ASSOCIATES, P.A. 330 S. Orange Avenue Sarasota, Florida 34236 (941) 952-1070 Attorneys for Petitioner Ervin Higgs, as Property Appraiser of Monroe County
TABLE OF CONTENTS PAGE TABLE OF CONTENTS... i TABLE OF AUTHORITIES... ii STATEMENT OF THE CASE AND FACTS... 1 SUMMARY OF ARGUMENT... 3 ARGUMENT... 4 I. THE THIRD DISTRICT S DECISION EXPRESSLY AND DIRECTLY CONFLICTS WITH THIS COURT S DECISION IN WILLIAMS V. JONES, 326 SO.2D 425 (FLA. 1976)...4 II. III. IV. THE INSTANT DECISION EXPRESSLY AND DIRECTLY CONFLICTS WITH THE DECISION OF THE SECOND DISTRICT COURT OF APPEAL IN SUN N LAKE OF SEBRING IMPROVEMENT DISTRICT V. MCINTYRE... 5 THE INSTANT DECISION EXPRESSLY AND DIRECTLY CONFLICTS WITH THE FIFTH DISTRICT S DECISION IN GREATER ORLANDO AVIATION AUTHORITY V. CROTTY... 7 THE THIRD DISTRICT COURT OF APPEAL S DECISION EXPRESSLY AFFECTS A CLASS OF CONSTITUTIONAL OFFICERS; SPECIFICALLY, THE PROPERTY APPRAISERS OF ALL COUNTIES IN THE STATE OF FLORIDA... 7 CONCLUSION... 10 CERTIFICATE OF SERVICE... 10 CERTIFICATE OF COMPLIANCE... 11 ii
TABLE OF AUTHORITIES CASES PAGE Department of Revenue v. City of Gainesville, 859 So.2d 595 (Fla.1st DCA 2003)... 3, 8, 9 Greater Orlando Aviation Authority v. Crotty, 775 So.2d 978 (Fla. 5th DCA 2001)... 3, 7, 9 Page v. City of Fernandina Beach, 714 So.2d 1070 (Fla. 1st DCA 1998)... 2, 3 Sun n Lake of Sebring Improvement District v. McIntyre, 800 So.2d 715 (Fla. 2d DCA 2001)... 5, 6, 9 Williams v. Jones, 326 So.2d 425 (Fla. 1976)... 3, 4, 5, 8 CONSTITUTIONS AND STATUTES 196.199(2)(a), Florida Statutes... 8 Article VII, 3(a), Fla. Const... 1, 8 Section 189.403(1), Fla. Stat... 6 Section 196.199(1)(c), Fla. Stat... 1, 8 Section 196.199(1), Fla. Stat... 6 Section 196.199, Fla. Stat.... 5 iii
STATEMENT OF THE CASE AND FACTS Petitioner, Ervin Higgs, as Monroe County Property Appraiser, filed an action to overturn the decision of the 2001 Monroe County Value Adjustment Board, which granted Respondent Islamorada s property known as The Plantation Yacht Harbor Marina [hereinafter the Marina ] an exemption from ad valorem taxation. It was undisputed that the Marina was owned and operated by the Respondent, Islamorada, Village of Islands, a municipality. However, in 2001, most of the boat slips at the Marina were leased to persons who were not residents of Islamorada. In addition, the Village charged rates that were competitive with other marinas in the Florida Keys, and were set so as to generate a positive cash flow for Islamorada. The revenues generated by the Marina were deposited into Islamorada s general fund. As such, the Property Appraiser determined that the Marina was not entitled to an exemption from ad valorem taxation pursuant to article VII, 3(a) of the Florida Constitution and 196.199(1)(c), Florida Statutes because the Marina was not used exclusively for municipal or public purposes, but rather was operated by the municipality as a proprietary, profit-making venture. The trial court entered a Final Summary Judgment for the Property Appraiser, in which the court agreed with the Property Appraiser that the totality of the circumstances indicates to the court that the Marina was being used by the Village of Islamorada for governmental-proprietary purposes, as opposed to 1
governmental-governmental purposes. Islamorada appealed the trial court s Final Summary Judgment in favor of the Property Appraiser to the Third District Court of Appeal, which reversed the trial court and remanded with directions to enter summary judgment in favor of Islamorada. The Third District cited with approval the language from the First District Court of Appeal in Page v. City of Fernandina Beach, 714 So.2d 1070, 1076 (Fla. 1st DCA 1998), in which the court stated that when a city operates a marina it owns, marina property it has not leased to a nongovernmental entity is exempt from ad valorem taxation. The court noted that, in the instant case, the Marina was operated without the involvement of a nongovernmental lessee or operator. Thus, based on the language in Page, the court held that the Marina was exempt from ad valorem taxation. The Property Appraiser filed a Motion for Rehearing En Banc and for Certification, which were both denied after an oral argument before the entire court. However, four of the ten judges of the Third District wrote a dissent in favor of reversing the panel opinion and affirming the trial court s decision in favor of the Property Appraiser. In the dissent, Judges Fletcher, Schwartz, Gersten and Shepherd concluded that the Marina was not a municipal use and was not entitled to a tax exemption. The dissenting judges noted that a finding that the marina was being used for a municipal use would require the court to ignore the holdings in Crotty, Page and City of Gainesville. The dissent further noted that: 2
If the marina does not pay property taxes it is not carrying its share of the costs of services provided by Monroe County and the various relevant taxing districts serving Monroe County (and the Village). The marina s fair share of taxes thus becomes the burden of the other Monroe County taxpayers. The Property Appraiser has thus filed a Notice to invoke the discretionary jurisdiction of this Court. SUMMARY OF ARGUMENT The instant case expressly and directly conflicts with this Court s decision in Williams v. Jones, wherein this Court held that a governmental, municipal or public purpose includes only governmental-governmental, and not governmental-proprietary uses. The decision also expressly and directly conflicts with decisions of the Second and Fifth District Courts of Appeal, which declined to hold that municipal property that is used by a municipality for proprietary purposes is exempt. In addition, the instant case expressly affects the Property Appraisers of the State of Florida, who must determine whether municipal property is exempt from taxation. The instant case suggests that property owned and used by a municipality is per se serving a municipal or public purpose, even if the municipality is using it for profit-making purposes. Thus, the decision will directly impact all Property Appraisers in the State, as each Property Appraiser must determine whether the municipal property within their county is taxable or exempt. 3
ARGUMENT I. THE THIRD DISTRICT S DECISION EXPRESSLY AND DIRECTLY CONFLICTS WITH THIS COURT S DECISION IN WILLIAMS V. JONES, 326 SO.2D 425 (FLA. 1976). By holding that a municipally owned and operated recreational facility that competes with other similar facilities and operates for a profit is exempt from taxation, the instant case expressly and directly conflicts with this Court s holding in Williams v. Jones, 326 So.2d 425 (Fla. 1976). In Williams v. Jones, this Court considered whether the operation of commercial enterprises such as barbershops, plumbing businesses, beauty shops, laundries, rental cottages, motels, restaurants and campgrounds by a lessee of governmental property constituted a governmental, municipal or public purpose. See id. at 428. The Court found that these businesses were purely proprietary and for profit. See id. at 433. The Court thus held that they did not serve a governmental, municipal or public purpose. In so holding, the Court noted that no rational basis existed for distinguishing between the commercial establishments operated by lessees on governmental property from commercial establishments operated for profit on nongovernmental property. See id. Both the marina in the instant case and the campground and other businesses involved in Williams v. Jones were operated for profit and in competition with other similar businesses on private property. The only difference between the 4
campground involved in Williams v. Jones and the marina in the instant case is that the campground was operated by a lessee of governmental property while the marina in the instant case was operated by a municipality. However, 196.199, Florida Statutes does not distinguish between the two. According to that statute, municipal property, whether operated by the municipality or a private entity, is exempt if used for a governmental, municipal or public purpose. This Court held that the campground at issue in Williams v. Jones did not serve a public purpose. Thus, by holding that a marina is exempt, even though it is operated for a profit, and in competition with other private marinas, the Third District s decision expressly and directly conflicts with this Court s decision in Williams v. Jones. II. THE INSTANT DECISION EXPRESSLY AND DIRECTLY CONFLICTS WITH THE DECISION OF THE SECOND DISTRICT COURT OF APPEAL IN SUN N LAKE OF SEBRING IMPROVEMENT DISTRICT V. MCINTYRE. The Third District s decision also expressly and directly conflicts with Sun n Lake of Sebring Improvement District v. McIntyre, 800 So.2d 715 (Fla. 2d DCA 2001), wherein the Second District Court of Appeal held that a municipally owned and operated recreational facility does not necessarily serve a public purpose. In Sun n Lake, Highlands County created the Sun n Lake of Sebring Improvement District, which owned and operated a country club and recreational facilities such as a golf course, tennis courts, pro shop and restaurant. See id. at 719. The Second 5
District held that pursuant to 189.403(1) and 196.199(1), Florida Statutes, the special district was to be treated as a municipality, and the property was to be exempt if used for a public purpose. See id. at 722. The Second District reversed the trial court s summary judgment, though, which had found that the recreational facilities were exempt from taxation. See id. at 723. The Second District explained that although a municipally owned and operated recreational facility may serve an exclusively public purpose, a summary judgment was inappropriate because the record did not contain sufficient facts from which the court could determine whether the property was used exclusively for public purposes. Thus, according to the Second District, a municipally owned and operated recreational facility is not automatically entitled to exemption merely because it is not operated by a nongovernmental lessee. By holding that the marina in the instant case was exempt from taxation merely because it was not operated by a nongovernmental lessee, the Third District s decision expressly and directly conflicts with the Second District s decision in Sun n Lake of Sebring Improvement District v. McIntyre. III. THE INSTANT DECISION EXPRESSLY AND DIRECTLY CONFLICTS WITH THE FIFTH DISTRICT S DECISION IN GREATER ORLANDO AVIATION AUTHORITY V. CROTTY. In Greater Orlando Aviation Authority v. Crotty, 775 So.2d 978, 981 (Fla. 5th DCA 2001), the Fifth District held that a municipally owned and operated 6
hotel was not exempt from taxation because it was used for proprietary profitmaking purposes, it competed with other hotels, and it served persons other than the citizens of Orlando. In the instant case, the Third District s decision expressly and directly conflicts with the decision in GOAA because, despite the fact that the marina, like the hotel in GOAA, was operated for a profit, competed with other private marinas and served non-citizens, the Third District held that it was exempt from taxation. The Third District based its decision on the fact that the marina was operated by the municipality, not a nongovernmental lessee. However, the hotel in GOAA was also operated by a municipality the City of Orlando. Thus, the decisions are in direct conflict. IV. THE THIRD DISTRICT COURT OF APPEAL S DECISION EXPRESSLY AFFECTS A CLASS OF CONSTITUTIONAL OFFICERS; SPECIFICALLY, THE PROPERTY APPRAISERS OF ALL COUNTIES IN THE STATE OF FLORIDA. The Property Appraisers of the State of Florida are charged with determining which property is entitled to be exempt from ad valorem taxation under Florida law. Although the requirements for a municipal property exemption are set forth in article VII, 3(a) of the Florida Constitution and 196.199(1)(c), Florida Statutes, the application of the law set forth therein has proven difficult. With municipal services constantly expanding, the determination of what constitutes a municipal or public purpose has become very difficult to make. 7
In Williams v. Jones, 326 So.2d 425 (Fla. 1976), this Court explained that the exemptions contemplated by 196.199(2)(a), Florida Statutes (for property leased from a municipality) related to governmental-governmental functions, as opposed to governmental-proprietary functions. In other words, property owned by a municipality but leased to a nongovernmental entity is considered to be used for a municipal or public purpose only if it is used for a purely governmental purpose, and not for proprietary, profit-making purposes. Although the requirements for a municipal property exemption are the same whether the property is used by the municipality itself or leased to a non-governmental operator, some courts have drawn a distinction between the two. In the instant case and in Department of Revenue v. City of Gainesville, 859 So.2d 595 (Fla. 1st DCA 2003), the Third and First Districts seem to suggest that property owned by a municipality is exempt, even it is used by the municipality for proprietary, profitmaking purposes, and that the standard set forth by this Court in Williams v. Jones only applies to property that is owned by a municipality and leased to a nongovernmental operator. On the other hand, in Greater Orlando Aviation Authority v. Crotty, 775 So.2d 978 (Fla. 5th DCA 2001) and Sun n Lake of Sebring Improvement District v. McIntyre, 800 So.2d 715 (Fla. 2d DCA 2001), the Second and Fifth Districts did not automatically exempt municipal property that was used as a hotel and for 8
recreational facilities. This latter view seems to be more in harmony with the Constitution and statutes, which do not distinguish between the requirements for exemption of municipal property that is used by the municipality itself, and for municipal property that is leased to a nongovernmental operator. However, with the state of the law as it is, the Property Appraisers cannot be sure what standard to apply to municipal property that is both owned and operated by a municipality. Even the appellate judges cannot agree. In the instant case, four of the ten judges who heard the Property Appraiser s Motion for Rehearing En Banc wrote a dissent arguing that the marina was taxable. Likewise, in City of Gainesville, Judge Ervin stated that he believed it entirely unlikely that the supreme court intended the governmental-proprietary classification discussed in pertinent Florida Supreme Court decisions should be limited to only leasehold interests of governmentally owned property. City of Gainesville, 859 So.2d at 603. Thus, Judge Ervin believed the issue should be certified to the Supreme Court of Florida as a question of great public importance. Id. at 608. Although the Third District denied the Property Appraiser s Motion for Certification in the instant case, the fact that, on rehearing en banc, the Third District was split 6 4 demonstrates how important it is for this Court to clarify the law on this issue. 9
CONCLUSION WHEREFORE, Petitioner Ervin Higgs, as Property Appraiser of Monroe County, Florida, respectfully requests that this Court accept jurisdiction over this case and reverse the decision of the Third District Court of Appeal. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing was furnished by U.S. Mail to Edward G. Guedes, Esq. and Nina L. Boniske, Esq., Weiss Serota Helfman Pastoriza Guedes Cole & Boniske, P.A., 2665 South Bayshore Drive, Suite 420, Miami, FL 33133 on this 15th day of October, 2004. DENT & ASSOCIATES, P.A. 330 South Orange Avenue Post Office Box 3259 Sarasota, Florida 34230 Phone: (941) 952-1070 Fax: (941) 952-1094 Attorneys for Petitioner Ervin A. Higgs as Property Appraiser of Monroe County SHERRI L. JOHNSON Florida Bar No. 0134775 JOHN C. DENT, JR. Florida Bar No. 0099242 10
CERTIFICATE OF COMPLIANCE Counsel for Petitioner Ervin Higgs, as Property Appraiser of Monroe County, Florida, certifies that Petitioner s Amended Brief on Jurisdiction, is typed in 14 point (proportionately spaced) Times New Roman font. DENT & ASSOCIATES, P.A. 330 South Orange Avenue Post Office Box 3259 Sarasota, Florida 34230 Phone: (941) 952-1070 Fax: (941) 952-1094 Attorneys for Petitioner Ervin A. Higgs as Property Appraiser of Monroe County SHERRI L. JOHNSON Florida Bar No. 0134775 JOHN C. DENT, JR. Florida Bar No. 0099242 N:\H08-5840\Brief on Jurisdiction.doc 11
APPENDIX 12
INDEX TO APPENDIX 1. Opinion filed by Third District Court of Appeal on November 19, 2003 2. Opinion on Motion for Rehearing En Banc filed by Third District Court of Appeal on August 11, 2004 13