First DCA - Circuit Court can't Apply Equitable Estoppel in Cert Review

In Clay County v. Kendall Land Development, Inc., the First District quashed a circuit court decision that overturned a local concurrency-based denial on estoppel grounds.

This is one of those cases where the facts may disguise the real problem. Clay County has a fairly restrictive concurrency provision, and a concurrency certificate issued for a plat application has to be "vested" by gaining preliminary plat approval within 6 months and final plat approval within 2 years. The developer got a concurrency certificate, but didn't get the preliminary plat done within 6 months (which was December 2004), basically claiming that it could keep its certificate by meeting only the latter condition. One of its employees queried the County in January 2005 (after or on the preliminary plat deadline) and a general "OK' on the concurrency issue. As the platting process moved forward, the developer was told that concurrency would be a problem. The difference: fair share payments of over $600,000 instead of just below $192,000.

The developer administratively appealed the determination that it did not have concurrency and would have to pay the higher amount and lost. The circuit court, however, found that the county had misapplied the law of estoppel and should have been estopped by the January 2005 to the limited extent that the County was required to allow the developer to proceed based upon the fair share that would have been due then, if the developer had been told to reapply in January rather than in September 2006 when the whole issue came to light.

Now, there are bad facts here for estoppel law, but the circuit court was trying to do fundamental justice on the basis that if the developer lost the opportunity to apply for a new concurrency certificate when it would have been much cheaper because the County appeared to go along with its interpretation of the timing requirement.

The Fifth District has none of it. Repeatedly indicating that it was dealing with "an experienced developer," the District court destroys the lower court's jurisdiction to deal with equitable issues that are mishandled at the administrative level:

As we have noted, one “clearly established principle of law” is that, on first-tier certiorari review, a circuit court is limited to determining whether the administrative findings and judgment are supported by competent substantial evidence. Whether the record also contains competent substantial evidence that would support some other result is irrelevant. E.g., Dusseau v. Metro. Dade County Bd. of County Comm’rs, 794 So. 2d 1270, 1275 (Fla. 2001) (quoting from Fla. Power & Light Co. v. City of Dania, 761 So. 2d 1089, 1093 (Fla. 2000)); G.B.V. Int’l, 787 So. 2d at 845; Educ. Dev. Ctr., Inc. v. City of West Palm Beach Zoning Bd. of Appeals, 541 So. 2d 106, 108 (Fla. 1989). Here, rather than merely determining whether the hearing
officer’s findings that Kendale did not reasonably rely on the January 2005
misstatement by the Chief Planner or any other act or omission of the County
and his decision that Kendale had failed to prove entitlement to the defense
of equitable estoppel were supported by competent substantial evidence, the
trial court conducted an independent review of the record, concluding that
competent substantial evidence supported a conclusion that the County was
equitably estopped to deny Kendale a CRC. This constituted “a violation of a
clearly established principle of law resulting in a miscarriage of justice” and, therefore, a departure from the essential requirements of law. G.B.V. Int’l, 787 So. 2d at 845; Fla. Power & Light Co. v. City of Dania, 761 So. 2d 1089, 1093 (Fla. 2000).

We have also noted that another “clearly established principle of law” is that, when
considering a petition for writ of certiorari, a court has only two options--it may either deny the petition or grant it, and quash the order at which the petition is directed. G.B.V. Int’l, 787 So. 2d at 843-44 (citing cases). The court may not enter any judgment on the merits of the underlying controversy, or direct the lower
tribunal to enter any particular order. Id. Here, the trial court entered judgment on the merits, fashioning what it believed to be an equitable remedy. This, too, constituted “a violation of a clearly established principle of law resulting in a miscarriage of justice” and, therefore, a departure from the essential requirements of law. G.B.V. Int’l, 787 So. 2d at 845; Fla. Power & Light Co., 761 So. 2d at 1093.

The problem is that the lower court was actually saying that the hearing officer misconstrued the scope of his authority to deal with the equitable estoppel claim made by the developer and therefore departed from the essential requirements of law in not providing appropriate relief.

That kind of determination requires the reviewing court to examine the record closely to see if it was applied properly to the law. This is a particular problem when (a) equitable principles -which are inherently fact based-- are involved, and (b) where there are confusing or overlapping legal principles. Under the First District's holding, it doesn't matter if the lower tribunal got the law wrong so long as there is competent substantial evidence to support its decision under the wrong legal interpretation.

This difficult (crazy?) result flows from the simple fact that certiorari is flatly insufficient to provide the "one means of effective judicial review" that due process guarantees.

Said it once, said it twice and again. We need a statute providing effective judicial review under the model of 120.68, and we also need a statute that provides minimum standards for the conduct of local hearings and the issuance of administrative orders.

PRACTICE TIP: Get your case out of the administrative process and into circuit court as a declaratory or injunctive action. In this case, for example, the developer could have filed a declaratory action to determine the scope of the ability of the hearing officer to consider and apply equitable estoppel principles, and arguably to estopp the county (note: equitable powers per se are beyond the jurisdication and power of admininstrative officers).

It was the inadquacy of cert review and the resulting multiplicity of suits on different grounds under the pre-1972 APA that led to its amendment and the provision of the "rich arsenal of remedies" under the modern act. It very well may be that only an explosion of suits in circuit court attacking the jurisdiction of local boards, the processes in local ordinances, asking local procedures to be determined inadequate, and suing for prohibition, quo waranto and related writs will demonstrate the clear need for legislative reform.

This is not a "pro-developer" or "pro-neighbor" issue: noone gets a fair shake under the current system.

Finally, be aware: In the last year we've seen two cases that involved concurrency and fair share issues-this case and the D.R. Horton case from Jacksonville . They are the tip of the iceberg. Local governments statewide refuse to either fund their adopted level of service or lower them to affordable levels. The state's funding for non-SIES roads is dramatically inadequate. In the next two years we will see concurrency become a political and economic crisis on the scale of the 2004 hurrican season, and the result is going to be hundreds of lawsuits.

Sometimes, a Developer Does Have a Collateral Attack on a Quasi-Judicial Denial

In Palazzo Las Olas Group LLC v. City of Ft Lauderdale, the 4th District threw out the circuit court's dismissal of a lawsuit filed by a frustrated developer over the city's denial of a site plan for a project that had been the subject of an RFP issued by the city's Community Revitalization Agency and also to long negotiations with the City.

The circuit court agreed with the city that the developer's only remedy was certiorari review of the denial. The 4th District disagreed, holding that under the facts of the case the developer had collateral estoppel and various other claims that could not have been addressed in the certiorari review process.

The facts may be pretty close to unique (if almost predictable): The City, through the CRA had a parking garage near the beach at the end of Las Olas Blvd. It wanted the property redeveloped, so put out an RFP. It seems that the terms of the RFP looked for a use of the property that would require amendments, variances, or conditions on the ultimate site plan approval from the standard terms of the zoning ordinance. The developer wins the RFP, gets the land under contract and starts negotiating the details of the site plan and conditions.

In the meantime, politics being what they are, opposition arises. Ultimately the elected mayor and some of the council are elected and clearly oppose the project. The developer claims that the mayor drove the staff to take positions that delayed staff completeness and otherwise abused the process until the opposition counsel members took office so they could vote to deny the project.

Project gets denied, cert gets denied, developer files multicount complaint, the essence of which is estoppel, bad faith, etc. Developer claims to have $5M tied up into the project based on City's representations not only that it wanted the project, but that it wanted the project in a form that required the variances/exceptions that later justified the denial.

The circuit court bought the argument that cert is the only remedy and dismissed the complaint with prejudice. The 4th, while suspecting that some of the claims will be resolved on summary judgment or judgment on the pleadings, disagreed with respect to most of the claims. Here's the language that we'll need to know for later:

While we agree that Palazzo could only obtain a reversal of the Commission’s
actual decision denying it site plan approval via a petition for writ of
certiorari, we do not believe that this bars the pursuit of other civil
remedies.

First, during certiorari proceedings seeking to challenge the denial of the site plan, the issues that can be addressed are extremely limited. In such a proceeding, the circuit court would be limited "to determin[ing] (1) whether the agency afforded procedural due process; (2) whether the agency observed the essential requirements of law; and (3) whether competent, substantial evidence supported the agency’s findings and judgment." See, e.g., Powell v. City of Sarasota, 953 So. 2d 5, 6 (Fla. 2d DCA 2006). Consequently, the circuit court could never reach issues concerning whether the City had contractually agreed to waive certain permitting requirements as alleged by Palazzo or whether, based upon the City’s actions, the City was equitably estopped from denying site plan approval. Cf. Citrus County v. Fla. Rock Indus., Inc., 726 So. 2d 383, 387 (Fla. 5th DCA 1999) (holding "common law issues" concerning whether County was estopped from denying permit because of its acquiescence over the years, the permit applicant’s good faith reliance on actions of County, and the permit applicant’s commitment of resources had no place in administrative permitting process or in certiorari review of decision denying permit).

Second, much of what underlies Palazzo’s civil claims, and particularly counts I and III, is an allegation that as a consequence of the City’s own actions it is now estopped from denying site plan approval. Florida’s courts have long recognized that local government entities must deal fairly with their citizens and that, in the absence of fair dealing, the doctrine of equitable estoppel may be invoked.

. . .

Consistent with these principles, there are Florida cases suggesting that a civil suit will lie against a governmental entity where it has engaged in alleged unfair dealing. In Sundstrom v. Collier County, 385 So. 2d 1158 (Fla. 2d DCA 1980), the owner of real property obtained a building permit and spent money to commence work on the project. Thereafter, the zoning board issued a stop-work order. The property owner failed to timely seek certiorari review and, instead, filed a petition for writ of mandamus. The trial court dismissed the petition with prejudice as a consequence of the owner’s failure to timely seek review of the order via the filing of a petition for writ of certiorari. The appellate court agreed that mandamus was not the appropriate remedy, but nonetheless reversed the dismissal with prejudice because the owner should have been afforded the opportunity to "state a cause of action in equity for equitable estoppel, declaratory relief, or an injunction." Id. at 1159. And, Florida Rock Industries, 726 So. 2d at 383, Town of Largo v. Imperial Homes Corp., 309 So. 2d at 571, and Town of Longboat Key v. Mezrah, 467 So. 2d 488 (Fla. 2d DCA 1985), each involved the circumstance where a property owner/applicant brought a civil action for declaratory relief and/or an injunction, asserting that the governmental entities’ prior conduct was such that it was estopped from taking the complained-of action. And, in Florida Rock Industries, the property owner simultaneously filed a petition for writ of certiorari, seeking review of the order on its application for determination of vested rights, and a civil complaint, seeking declaratory relief and alleging equitable estoppel. 726 So. 2d at 386.

Having considered the above authorities and principals and the limitations of certiorari review, we hold that while any direct challenge seeking to overturn the Commission’s decision denying site plan approval had to be sought via the filing of a petition for writ of certiorari, this did not preclude Palazzo from bringing a civil suit, wherein it sought relief on matters beyond those appropriately addressed during the certiorari proceeding. The trial cour

Wow. The Court is holding that if you have a valid legal issue that lies outside the scope of certiorari relief, you get to plead a separate cause of action. This has long been recognized in cases involving notice, and also where the relief is under a different statute than the decision was taken under. (see Omnipoint III - the 3d DCA case on remand, and various takings cases).

The interesting fight here ultimately will be the issue of estoppel versus "you can't contract away the police power." A second issue may become the kind of "inequitable conduct" that may lead to estoppel, as the Court seems to be broadening the potential scope. Historically, good faith reliance could be founded only on a lawfully issued statement or decision. Here, the 4th DCA is permitting a "course of conduct" pleading to establish a legally sufficient basis for pleading estoppel.

It will be interesting to see whether this case settles quickly, or only after the circuit court has another go-round at the issues.

Collateral Estoppel in Local Administrative Decisions

In Atlantic Shores v. 507 South Street Corporation, here's the link, the court held that an objecting neighbor could not litigate a height definition issue in the approval of a redevelopment site plan where it had raised and lost the same issue in a seperate administrative proceeding regarding a certificate of appropriateness and had not pursued its administrative remedies in the other case. The court treated this as a form of collateral estoppel.

Critical to the determination was that the hieght issue raised in the second proceeding was the same issue: one of the criteria in the city comission's consideration of whether the plan conformed to the same standards that applied in the certificate of appropriateness. Because the issue was the same, the objector could not relitigate it in the later proceeding having had (and not followed) the opportunity to fully litigate and appeal it earlier.