176 So. 3d 1258
Fla.2015Background
- Florida Development Finance Corporation (FDFC) sought validation of up to $2 billion in PACE (Property Assessed Clean Energy) bonds to finance residential energy/hurricane improvements, repayable via voluntary special non-ad valorem assessments on participating properties.
- FDFC filed a bond-validation complaint attaching a master bond resolution, form indenture, model interlocal agreement, and a model financing agreement; some attached documents referenced FDFC levying assessments and judicial foreclosure as a remedy.
- Robert Reynolds, a Leon County property owner, intervened and objected that (1) FDFC lacks authority to levy assessments (only local governments may do so), (2) the financing documents improperly allowed judicial foreclosure rather than the statutory ‘‘uniform method’’ of collection under chapter 197, and (3) admission of an amended financing agreement at the hearing violated due process / rendered the matter unripe.
- The trial court validated the bonds but conditioned validation on assessment collection complying with chapter 197 and on clarifying that local governments (not FDFC) impose assessments; the court admitted an amended financing agreement at the hearing but the FDFC board had not formally adopted it.
- On appeal, the Florida Bankers Association (FBA) raised a contractual-impairment challenge but was dismissed for lack of standing because it did not show taxpayer, citizen, or property-owner status in affected localities; Reynolds’ challenges proceeded.
- The Florida Supreme Court affirmed validation but remanded for FDFC to amend and adopt bond documents removing (a) any delegation or claim that FDFC levies the assessments and (b) any references to judicial foreclosure as a remedy; the amended documents must be filed after board approval.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of FBA to appeal | FBA argued PACE impairs contracts and sought to appeal validation though it did not appear below | FDFC argued FBA lacked taxpayer/citizen/property-owner status and showed no injury | Appeal by FBA dismissed for lack of standing |
| Admission of amended financing agreement / due process & ripeness | Reynolds argued admitting an amended agreement at hearing denied due process and made the proceeding unripe because interlocal agreements were not executed | FDFC argued amendment was permissible, notice was sufficient, and validation may precede execution of interlocal agreements | Rejected — notice and opportunity to be heard were adequate; validation was ripe under bond-validation statutes |
| Authority to levy non-ad valorem assessments | Reynolds argued PACE and FDFC statutes do not authorize FDFC to levy assessments; only local governments may do so, so documents delegating that power are unlawful | FDFC originally included delegation language but stipulated it would not levy assessments and local governments would impose them | Court held FDFC lacks statutory authority to levy assessments; directed remand to remove any references to FDFC levying/delegated power to levy assessments |
| Judicial foreclosure as remedy for nonpayment | Reynolds argued statutes require the chapter 197 uniform collection method and do not permit judicial foreclosure | FDFC amended some language but some documents still referenced foreclosure; all parties agreed collection must follow chapter 197 | Court held judicial foreclosure is not an authorized remedy; remand directed to delete all references to foreclosure from bond documents |
Key Cases Cited
- Meyers v. City of St. Cloud, 78 So.2d 402 (Fla. 1955) (standing of property owners/taxpayers in bond validations)
- Reynolds v. Leon County Energy Improvement Dist., 176 So.3d 254 (Fla. 2015) (precedent receding from Meyers on standing)
- Rich v. State, 663 So.2d 1321 (Fla. 1995) (distinguishing Meyers as taxpayer/property-owner context)
- Keys Citizens for Responsible Gov’t, Inc. v. Fla. Keys Aqueduct Auth., 795 So.2d 940 (Fla. 2001) (notice and scope in bond-validation proceedings)
- Strand v. Escambia Cnty., 992 So.2d 150 (Fla. 2008) (standards of review for bond validation)
- Ingram v. City of Palmetto, 112 So. 861 (Fla. 1927) (limits on post-filing amendments in bond petitions)