Opinion
Case No. 5D99-3314.
Opinion filed July 21, 2000.
Appeal from the Circuit Court for Volusia County, Edwin P.B. Sanders, Judge.
Bruce A. Hanna and C. Allen Watts of Cobb Cole Bell, Daytona Beach, for Appellant.
Gordon H. Harris and Tracy A. Marshall and Kent Hipp of Gray, Harris Robinson, P.A., Orlando, for Appellees.
VLX Properties, Inc. (VLX) appeals a final judgment rendered in favor of Southern States Utilities, Inc. (SSU) denying VLX's petition for inverse condemnation. VLX contends that the lower court erred in concluding as a matter of law that it had to prove ouster or deprivation of all reasonable use of its property in order to recover. We reverse because the lower court applied the wrong legal standard to the facts of this case.
We are aware of the general rule that the "trial court's determination of liability in an inverse condemnation suit is presumed correct and its findings will not be disturbed on appeal if supported by competent substantial evidence." Department of Agric. Consumer Servs. v. Mid-Florida Growers, Inc., 521 So.2d 101, 104 (Fla. 1988) (citations omitted). However, the issue that we must resolve in these proceedings is one of law and this requires that we review the lower court's decision de novo. See Rittman v. Allstate Ins. Co., 727 So.2d 391 (Fla. 1st DCA 1999).
This is the second time the parties to this litigation have appealed to this court issues relating to the underlying inverse condemnation action. See VLX Properties, Inc. v. Southern States Utils., Inc., 701 So.2d 391 (Fla. 5th DCA 1997) (VLX-I). We will not burden this opinion with all of the facts involved in the prior appeal other than to recite those facts that are relevant to the instant appeal. We note that the factual findings in the trial court's order of March 13, 1996, that were reviewed by this court in VLX-I were not challenged by either party in the prior appeal. Therefore, those factual findings constitute the law of this case. See, e.g., Couture Fashions, Inc. v. Romay, 461 So.2d 235 (Fla. 1st DCA 1984); see also Mulato v. Mulato, 734 So.2d 477 (Fla. 4th DCA 1999); Thomas v. Perkins, 723 So.2d 293 (Fla. 3d DCA 1998); School Bd. of Seminole County v. Unemployment Appeals Comm'n, 522 So.2d 556 (Fla. 5th DCA 1988).
VLX is currently the owner of certain property that includes part of a pond called James Pond which is located in the Glen Abbey subdivision. VLX purchased this property from Lawyers Title Investment Fund, Inc. (LTIF), which owned multiple parcels of land in the Glen Abbey subdivision including nine holes of the golf course which it had contracted to sell to Glen Abbey Golf Course, Inc. (GAGC). SSU is a utility company with eminent domain powers which owns and operates a wastewater treatment plant which it acquired from Deltona Utilities. At the time of the acquisition, Deltona Utilities was ordered by the Department of Environmental Regulation to find an environmentally sound method for disposing of its wastewater. Thus, in June of 1990, SSU entered into an Easement and Reclaimed Water Delivery Agreement with GAGC which granted to SSU the right to discharge reclaimed water onto its golf course. Included within the confines of the golf course was a part of James Pond which was to be used pursuant to the agreement as a holding pond for SSU's reclaimed water. The other portion of the pond was included in the tract of land LTIG subsequently conveyed to VLX for development into single family residences.
Since LTIF still owned nine holes of the golf course, LTIF entered into a Joinder and Consent Addendum to the Delivery Agreement that permitted SSU to discharge its reclaimed water over the nine holes of the golf course prior to closing on the purchase agreement with GAGC. However, due to a scrivener's error, the legal description in the delivery agreement and the addendum included not only the golf course, but lands owned by LTIF that were not under contract to GAGC including the land and part of James Pond that LTIG subsequently conveyed to VLX.
Sometime around the middle of 1995, SSU began delivering its reclaimed water to holding ponds located on the golf course. VLX contends that SSU directly discharged water into James Pond. SSU contends, on the other hand, that it discharged water into other holding ponds on the golf course which spilled over into James Pond during periods of high rainfall. The findings contained in the March 12, 1996, judgment specifically state that "the discharge of reclaimed water into James Pond contributed to the flooding of James Pond," indicating that VLX's contention is correct. The other findings contained in that order include the following:
2. VLX has shown that Defendant, Southern States Utilities, Inc. ("SSU"), entered upon private property for more than a momentary period, under color of legal authority, and devoted that property to a public use. The Court finds that the area devoted to a public use includes all of James Pond. . . .
3. The Court finds that the presence of reclaimed water has impaired the water quality of James Pond. The Court finds that the level of solids has increased, the oxygen content has been affected, and the levels of nitrogen, phosphorous and sediment have increased. . . . However, there was insufficient evidence to make a finding as to the extent of any injurious effect that may have resulted from the discharge of reclaimed water into James Pond. Moreover, the Court does find that the presence of reclaimed water in James Pond did not oust the owner or deprive the owner of all reasonable and beneficial use of the property.
. . . .
10. As to whether the taking was permanent or temporary, the Court determines that this is a question of law rather than a question of fact. The Court finds that the taking was a permanent taking.
Based on these findings, the lower court entered the judgment under review wherein the court held that VLX's claim for inverse condemnation was based on flooding of James Pond which required VLX to establish that substantial periodic flooding was expected to recur that denied VLX any reasonable use of its property. As for the inverse condemnation claim for water quality impairment, the court likewise held that VLX had to prove loss of any reasonable use of its property. We agree, however, with VLX's assertion that this is not a case in which flooding caused the taking, but rather a case where the taking caused the flooding. Therefore, the lower court erred in applying the legal standard applicable to cases involving flooding in determining that VLX is not entitled to recover.
Historically, a distinction has been made between categories of takings in inverse condemnation cases. For example, taking may occur by physical occupation, flooding, governmental regulation, and taking of access rights. The importance of these distinctions is that different legal standards may apply to each category of taking. Lamentably, the lines of demarcation between the types of takings and the standards applicable to each have become somewhat blurred as the law of inverse condemnation has continued to evolve. This has resulted in some decisions that are confusing and contradictory. But rather than "bemoan the confusing state of case law when the taking issue is concerned," Florida Eminent Domain Practice and Procedure § 13.6, at 13-11 (5th ed. 2000), we find that it is much more appropriate to apply the concept of taking by refocusing attention on the different types of takings and the standards applicable to each.
We do not intend this list to be all inclusive, but illustrative. See Florida Eminent Domain Practice and Procedure § 13.6, at 13-11 — 13-13 (5th ed. 2000). For examples of recent cases that make distinctions between types of takings see Lee County v. Kiesel, 705 So.2d 1013, 1015 (Fla. 2d DCA 1998) ("But this was not a regulatory taking. Rather, this case involved an actual physical intrusion to an appurtenant right . . . ."); andFlorida Game Fresh Water Fish Comm'n v. Flotilla, Inc., 636 So.2d 761 (Fla. 2d DCA) (distinguishing regulatory taking from physical taking), review denied, 645 So.2d 452 (Fla. 1994).
Inverse condemnation is a cause of action by a property owner to recover the value of property that has been de facto taken by an agency having the power of eminent domain where no formal exercise of that power has been undertaken. See City of Pompano Beach v. Yardarm Restaurant, Inc., 641 So.2d 1377 (Fla. 4th DCA 1994), review denied, 651 So.2d 1197 (Fla. 1995).
A good example is discussed in Florida Eminent Domain Practice and Procedure:
See, for example, the confusion in the decision of Sarasota Welfare Home, Inc. v. City of Sarasota, 666 So.2d 171 (Fla. 2d DCA 1995), involving an inverse condemnation claim for real property taken by a physical encroachment (a utility pipe buried mistakenly on private property). The District Court of Appeal, Second District, in dicta, defined a "taking" as occurring "when an owner is denied substantially all economically beneficial or productive use of the owner's land." 666 So.2d at 173. That definition is taken from the Supreme Court's ruling in Tampa-Hillsborough County Expressway Authority v. A.G.W.S. Corp., 640 So.2d 54 (Fla. 1994), a regulatory taking case. The two inverse situations of physical encroachment and regulatory infringement are completely different. Physical takings do not require a showing of denial of economic use. Storer Cable T.V. of Florida, Inc. v. Summerwinds Apartments Associates., Ltd., 493 So.2d 417 (Fla. 1986). In Lee County v. Kiesel, 705 So.2d 1013 (Fla. 2d DCA 1998), the District Court of Appeal, Second District, has corrected its error by distinguishing between the two tests.
Florida Eminent Domain Practice and Procedure § 13.6, at 13-11 (5th ed. 2000).
The standard this court has applied to flooding cases provides that a cause of action for inverse condemnation may exist when substantial periodic flooding occurs and is expected to recur, and such flooding denies the owner any reasonable use of his or her property. See Associates of Meadow Lake, Inc. v. City of Edgewater, 706 So.2d 50, 52 (Fla. 5th DCA), review denied, 725 So.2d 1107 (Fla. 1998). This is the standard that the trial court applied in the instant case. This was error because this is not a taking by flooding.
This court's decision in Associates of Meadow Lake, Inc. recognized that a temporary taking may be compensable in a flooding case. The case is premised on the decision rendered by the United States Supreme Court in First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304 (1987). InFirst English, a zoning regulation prevented the property owner from having any reasonable use of his property for a period of time. The Court held that a cause of action may exist for this temporary taking.
Decisions that have not recognized a cause of action for temporary takings generally apply the rule which provides that to support a claim for inverse condemnation associated with flooding, the flooding must be an actual and permanent invasion of the land that amounts to an appropriation of the property and not merely an injury to it. See, e.g., Diamond K Corp. v. Leon County, 677 So.2d 90 (Fla. 1st DCA 1996); South Florida Water Management Dist. v. Steadman Stahl, P.A. Pension Fund, 558 So.2d 1087 (Fla. 4th DCA),review denied, 574 So.2d 143 (Fla. 1990). We find that the rule applied in Associates of Meadow Lake, Inc. is more in line with the emerging law that recognizes the right to compensation for temporary takings. _See, e.g., Tampa-Hillsborough County Expressway Auth. v. A.G.W.S., Corp. 640 So.2d 54, 58 (Fla. 1994) ("Moreover, a temporary deprivation may constitute a taking.") (citation omitted); South Florida Water Management Dist. v. Basore of Florida, Inc., 723 So.2d 287 (Fla. 4th DCA 1998), review denied, 740 So.2d 527 (Fla. 1999); City of Miami v. Keshbro, Inc. , 717 So.2d 601, 603 n. 5 (Fla. 3d DCA 1998) ("Temporary takings are compensable. . . ."), review granted, 729 So.2d 392 (Fla. 1999); City of St. Petersburg v. Bowen, 675 So.2d 626 (Fla. 2d DCA), review denied, 680 So.2d 421 (Fla. 1996).
The taking in this case constitutes a physical taking which occurs when the government physically occupies the property. See Florida Game Fresh Water Fish Comm'n v. Flotilla, Inc., 636 So.2d 761 (Fla. 2d DCA), review denied, 645 So.2d 452 (Fla. 1994);see also Martin v. City of Monticello, 632 So.2d 236 (Fla. 1st DCA 1994). Physical occupation is generally considered a "per se" taking and occurs when the government "deprives the owner of his `bundle' of private property rights, including the right to possess and dispose, as well as the right to prevent the government from using the occupied area." Florida Game Fresh Water Fish Comm'n, 636 So.2d at 764, (citing Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982). This rule applies regardless of any showing of economic injury or the size of the encroachment. See Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982); Storer Cable T.V. of Florida, Inc. v. Summerwinds Apartments Assocs., Ltd, 493 So.2d 417 (Fla. 1986). When a physical taking occurs, the owner is entitled to compensation. Loretto. The extent of the occupation and economic loss are matters that relate to a determination of the amount of compensation. Id.
In Martin, a case similar to the instant case, the city constructed a sewage treatment system which included many acres of wetland owned by the appellant. This system was designed to discharge more than one inch of treated effluent per acre per week onto appellants' property on a continuing basis. The court found "such a continuing invasion of appellants' property to constitute a taking of the fee simple interest in the . . . parcel." 632 So.2d at 237. The court remanded the case to the trial court to conduct a trial to determine the fair market value of the appellant's property.
In Loretto, a New York statute required landlords to allow a cable company to install equipment on the landlord's property. The appellant owned an apartment building on which the cable company had installed cables and two large silver boxes on a portion of the roof and the side of the building. The Court held that the installation of the equipment pursuant to the statute effected a taking even though only a very small portion of the property was occupied by the cable company's equipment. In concluding "a permanent physical occupation authorized by government is a taking without regard to the public interests that it may serve," 458 U.S. at 426, the court distinguished physical occupation from other types of takings and noted that physical invasions are distinguished from other types of takings:
Although this Court's most recent cases have not addressed the precise issue before us, they have emphasized that physical invasion cases are special and have not repudiated the rule that any permanent physical occupation is a taking. The cases state or imply that a physical invasion is subject to a balancing process, but they do not suggest that a permanent physical occupation would ever be exempt from the Takings Clause.
. . . [A] permanent physical occupation is a government action of such a unique character that it is a taking without regard to other factors that a court might ordinarily examine.
. . . .
In short, when the "character of the governmental action" is a permanent physical occupation of property, our cases uniformly have found a taking to the extent of the occupation, without regard to whether the action achieves an important public benefit or has only minimal economic impact on the owner.
458 U.S. at 432, 434-435 (citations omitted) (footnote omitted).
We find that the argument raised by SSU that VLX did not establish its claim of water impairment is without merit. Since we have found that the taking in this case is based on physical occupation which entitles VLX to compensation, any water impairment is an element of damages, not liability. Furthermore, SSU's reliance on the decision in Schick v. Florida Department of Agriculture, 504 So.2d 1318 (Fla. 1st DCA), review denied, 513 So.2d 1060 (Fla. 1987) is misplaced. The court in Schick provided the following definition of a taking in inverse condemnation cases:
[1] entering upon private property for more than a momentary period and, [2] under the warrant or color of legal authority, [3] devoting it to a public use, or [4] otherwise appropriating or injuriously affecting it in such a way as substantially to oust the owner and deprive him of all beneficial enjoyment thereof.
Id. at 1319 (quoting Poe v. State Road Dep't, 127 So.2d 898, 900 (Fla. 1st DCA 1961)). We find that these elements should be applied in the disjunctive rather than the conjunctive. Thus, a taking under Schick may occur when the first three elements are established or when the last element is established. See Bakus v. Broward County, 634 So.2d 641, 642 (Fla. 4th DCA 1993) ("[T]o establish a claim for inverse condemnation, appellants were required to demonstrate either (1) a continuing physical invasion of the property or (2) a substantial ouster and deprivation of all beneficial use of the property.") (citations omitted), review denied, 649 So.2d 232 (Fla. 1994); Poe v. State Road Dep't, 127 So.2d 898 (Fla. 1st DCA 1961) (distinguishing physical invasion cases from other types of takings).
The findings made by the lower court in the instant case clearly show that the first three elements of the Schick standard have been established and that a taking occurred in this case for which VLX should be compensated. The lower court specifically found that SSU "entered upon private property for more than a momentary period, under color of legal authority, and devoted that property to a public use." These three elements typically apply to physical occupation cases. The fourth element in Schick may apply to other types of takings such as regulatory takings where the appropriate inquiry is "directed to the extent of the interference or deprivation of . . . economic use of [the] property." Department of Transp. v. Weisenfeld, 617 So.2d 1071, 1073 (Fla. 5th DCA 1993); approved, 640 So.2d 73 (Fla. 1994); see Tampa-Hillsborough County Expressway Auth. v. A.G.W.S. Corp., 640 So.2d 54, 58 (Fla. 1994) ("A taking occurs where regulation denies substantially all economically beneficial or productive use of land."); Lee County v. Kiesel, 705 So.2d 1013 (Fla. 2d DCA 1998); Florida Game Fresh Water Fish Comm'n.
We conclude that the findings in the March 1996 order quoted above satisfy the elements of a taking by physical occupation of VLX's property that entitles VLX to compensation. We reverse the lower court's judgment and remand this case back to the trial court for further proceedings to determine the amount of compensation owed to VLX and for entry of judgment in its favor.
REVERSED and REMANDED.
DAUKSCH and PLEUS, JJ., concur.